The information in this preliminary prospectus supplement is not complete and
may be changed. Neither this preliminary prospectus supplement nor the
accompanying prospectus is an offer to sell these securities nor is it
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT
MAY BE AMENDED OR COMPLETED, DATED MARCH 4, 2005
PRELIMINARY PROSPECTUS SUPPLEMENT
(TO ACCOMPANY PROSPECTUS DATED MARCH 4, 2005)
$2,215,657,000 (APPROXIMATE)
(OFFERED CERTIFICATES)
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2005-C17
WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC.
(DEPOSITOR)
- --------------------------------------------------------------------------------
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE S-42 OF THIS
PROSPECTUS SUPPLEMENT AND ON PAGE 14 OF THE ACCOMPANYING PROSPECTUS.
Neither the offered certificates nor the underlying mortgage loans are insured
or guaranteed by any government agency or instrumentality.
The offered certificates will represent interests in the trust fund only. They
will not represent obligations of any other party. The offered certificates
will not be listed on any national securities exchange or any automated
quotation system of any registered securities association.
This prospectus supplement may be used to offer and sell the offered
certificates only if it is accompanied by the prospectus dated March 4, 2005.
- --------------------------------------------------------------------------------
THE TRUST FUND:
o As of March 11, 2005, the mortgage loans included in the trust fund will have
an aggregate principal balance of approximately $2,808,561,259.
o The trust fund will consist of a pool of 229 fixed rate mortgage loans.
o The mortgage loans are secured by first liens on commercial and multifamily
properties.
o All of the mortgage loans were originated or acquired by Wachovia Bank,
National Association, Countrywide Commercial Real Estate Finance, Inc.,
Citigroup Global Markets Realty Corp. and Artesia Mortgage Capital
Corporation.
THE CERTIFICATES:
o The trust fund will issue twenty-six classes of certificates.
o Only the nine classes of offered certificates described in the following
table are being offered by this prospectus supplement and the
accompanying prospectus.
EXPECTED
ORIGINAL PERCENTAGE OF PASS-THROUGH S&P/MOODY'S/
CERTIFICATE CUT-OFF DATE RATE ASSUMED FINAL FITCH
CLASS BALANCE(1) POOL BALANCE DESCRIPTION DISTRIBUTION DATE(2) CUSIP NO. RATING(3)
- ---------------- ----------------- --------------- -------------- ---------------------- ----------- -------------
Class A-1 ...... $ 133,240,000 4.744% Fixed October 15, 2009 AAA/Aaa/AAA
Class A-2 ...... $ 290,000,000 10.326% Fixed March 15, 2010 AAA/Aaa/AAA
Class A-3 ...... $ 82,400,000 2.934% Fixed February 15, 2012 AAA/Aaa/AAA
Class A-PB ..... $ 235,000,000 8.367% Fixed September 15, 2014 AAA/Aaa/AAA
Class A-4 ...... $1,130,969,000 40.269% Fixed February 15, 2015 AAA/Aaa/AAA
Class A-J ...... $ 193,088,000 6.875% Fixed March 15, 2015 AAA/Aaa/AAA
Class B ........ $ 77,236,000 2.750% Fixed(4) March 15, 2015 AA/Aa2/AA
Class C ........ $ 24,574,000 0.875% Fixed(4) March 15, 2015 AA-/Aa3/AA-
Class D ........ $ 49,150,000 1.750% Fixed(4) March 15, 2015 A/A2/A
- --------------------------------------------------------------------------------
(Footnotes explaining the table are on page S-2)
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE OFFERED CERTIFICATES OR HAS
DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Wachovia Capital Markets, LLC, Countrywide Securities Corporation and Citigroup
Global Markets, Inc. are acting as co-lead managers for this offering.
Countrywide Securities Corporation is acting as sole bookrunner with respect to
% of the Class certificates. Citigroup Global Markets Inc. is acting as
sole bookrunner with respect to % of the Class certificates. Wachovia Capital
Markets, LLC is acting as sole bookrunner with respect to the remainder of the
Class certificates and all other classes of offered certificates. ABN AMRO
Incorporated, Credit Suisse First Boston LLC and Goldman, Sachs & Co. are acting
as co-managers for this offering. Wachovia Capital Markets, LLC, Countrywide
Securities Corporation, Citigroup Global Markets, Inc., ABN AMRO Incorporated,
Credit Suisse First Boston LLC and Goldman, Sachs & Co. are required to purchase
the offered certificates from us, subject to certain conditions. The
underwriters will offer the offered certificates to the public from time to time
in negotiated transactions or otherwise at varying prices to be determined at
the time of sale. We expect to receive from this offering approximately % of the
initial certificate balance of the offered certificates, plus accrued interest
from March 1, 2005, before deducting expenses.
We expect that delivery of the offered certificates will be made in book-entry
form on or about March 30, 2005.
WACHOVIA SECURITIES
COUNTRYWIDE SECURITIES CORPORATION
CITIGROUP
ABN AMRO INCORPORATED CREDIT SUISSE FIRST BOSTON GOLDMAN, SACHS & CO.
March , 2005
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-C17
GEORGRAPHIC OVERVIEW OF MORTGAGE POOL(1)
NEW YORK FLORIDA COLORADO IOWA
8 properties 28 properties 3 properties 4 properties
$244,942,391 $151,885,266 $44,207,000 $39,019,035
8.7% of total 5.4% of total 1.6% of total 1.4% of total
MASSACHUSETTS KENTUCKY ARIZONA ILLINOIS
14 properties 1 property 4 properties 6 properties
$345,896,799 $3,900,000 $43,579,697 $75,818,770
12.3% of total 0.1% of total 1.6% of total 2.7% of total
CONNECTICUT ALABAMA UTAH MINNESOTA
3 properties 6 properties 2 properties 6 properties
$6,786,589 $60,129,514 $18,000,000 $23,949,572
0.2% of total 2.1% of total 0.6% of total 0.9% of total
NEW JERSEY TENNESSEE SOUTHERN CALIFORNIA(2) WISCONSIN
5 properties 6 properties 16 properties 3 properties
$110,353,653 $43,755,800 $187,088,986 $19,267,395
3.9% of total 1.6% of total 6.7% of total 0.7% of total
DISTRICT OF COLUMBIA MISSISSIPPI CALIFORNIA INDIANA
5 properties 2 properties 20 properties 3 properties
$177,259,053 $7,360,000 $283,038,986 $21,349,503
6.3% of total 0.3% of total 10.1% of total 0.8% of total
MARYLAND ARKANSAS NORTHERN CALIFORNIA(2) MICHIGAN
4 properties 1 property 4 properties 6 properties
$67,924,011 $2,431,000 $95,950,000 $42,889,081
2.4% of total 0.1% of total 3.4% of total 1.5% of total
WEST VIRGINIA LOUISIANA NEVADA PENNSYLVANIA
1 property 2 properties 12 properties 8 properties
$2,596,312 $6,242,000 $96,328,277 $43,800,469
0.1% of total 0.2% of total 3.4% of total 1.6% of total
VIRGINIA TEXAS IDAHO
10 properties 48 properties 1 property
$171,430,483 $224,543,504 $2,991,046
6.1% of total 8.0% of total 0.1% of total
NORTH CAROLINA OKLAHOMA WASHINGTON
5 properties 14 properties 8 properties
$55,849,234 $71,182,822 $50,185,106
2.0% of total 2.5% of total 1.8% of total
SOUTH CAROLINA KANSAS SOUTH DAKOTA
3 properties 2 properties 2 properties
$13,569,341 $23,571,397 $5,126,249
0.5% of total 0.8% of total 0.2% of total
GEORGIA NEW MEXICO MISSOURI
12 properties 6 properties 2 properties
$63,373,235 $28,100,564 $31,977,420
2.3% of total 1.0% of total 1.1% of total
MORTGAGED PROPERTIES BY PROPERTY TYPE
Retail 24.9%
Multifamily 15.5%
Hospitality 10.1%
Mixed Use 5.2%
Industrial 2.9%
Special Purpose 1.8%
Self Storage 0.7%
Land 0.4%
Office 38.4%
GEORGRAPHIC OVERVIEW OF MORTGAGED PROPERTIES
(1) Because this table presents information relating to the mortgaged properties
and not the mortgage loans, the information for mortgage loans secured by more
than one mortgaged property is based on allocated loan amounts (allocating the
mortgage loan principal balance to each of those properties mortgaged by the
appraised values of the mortgaged properties or the allocated loan amount as
detailed in the related mortgage loan documents).
(2) For purposes of determining whether a mortgaged property is located in
Northern or Southern California, mortgaged properties located north of San Luis
Obispo County, Kern County and San Bernadino County were included in Northern
California and mortgaged properties located in and south of such counties were
included in Southern California.
[ ] >10.0%
of Cut-Off Date Pool Balance
[ ] >5.0-10.0%
of Cut-Off Date Pool Balance
[ ] >1.0-5.0%
of Cut-Off Date Pool Balance
[ ] <=1.0%
of Cut-Off Date Pool Balance
[PHOTO OMITTED]
One & Two International
[PHOTO OMITTED]
Digital Realty Trust Portfolio, Various
[PHOTO OMITTED]
450 West 33rd Street, New York, NY
[PHOTO OMITTED]
Olympia Portfolio, Various
[PHOTO OMITTED]
Tharaldson Pool I-B, Various
[PHOTO OMITTED]
111 Massachusetts Avenue, Washington, DC
[PHOTO OMITTED]
Residence Inn Portfolio, Various
[PHOTO OMITTED]
MetroPlace III & IV, Fairfax, VA
[PHOTO OMITTED]
Tharaldson Pool I-A, Various
[PHOTO OMITTED]
1001 Connecticut Avenue & 1701 K Street, Washington DC
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 prospectus before investing in any of the offered
certificates.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THE INFORMATION IN THIS DOCUMENT
MAY ONLY BE ACCURATE AS OF THE DATE OF THIS DOCUMENT. IF THE DESCRIPTIONS OF THE
OFFERED CERTIFICATES VARY BETWEEN THE ACCOMPANYING PROSPECTUS AND THIS
PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THIS PROSPECTUS
SUPPLEMENT.
This prospectus supplement begins with several introductory sections
describing the offered certificates and the trust fund in abbreviated form:
o SUMMARY OF PROSPECTUS SUPPLEMENT, commencing on page S-5 of this
prospectus supplement, which gives a brief introduction of the key
features of the offered certificates and a description of the mortgage
loans included in the trust fund; and
o RISK FACTORS, commencing on page S-42 of this prospectus supplement, which
describes risks that apply to the offered certificates which are in
addition to those described in the prospectus.
This prospectus supplement and the accompanying prospectus include cross
references to sections in these materials where you can find further related
discussions. The Tables of Contents in this prospectus supplement and the
accompanying prospectus identify the pages where these sections are located.
You can find a listing of the pages where capitalized terms used in this
prospectus supplement are defined under the caption "INDEX OF DEFINED TERMS"
beginning on page S-272 in this prospectus supplement.
In this prospectus supplement, the terms "depositor," "we," "us" and "our"
refer to Wachovia Commercial Mortgage Securities, Inc.
WE DO NOT INTEND THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
TO BE AN OFFER OR SOLICITATION:
o if used in a jurisdiction in which such offer or solicitation is not
authorized;
o if the person making such offer or solicitation is not qualified to do
so; or
o if such offer or solicitation is made to anyone to whom it is unlawful to
make such offer or solicitation.
This prospectus supplement and the accompanying prospectus may be used by
us, Wachovia Capital Markets, LLC, our affiliate, and any other of our
affiliates when required under the federal securities laws in connection with
offers and sales of offered certificates in furtherance of market-making
activities in offered certificates. Wachovia Capital Markets, LLC or any such
other affiliate may act as principal or agent in these transactions. Sales will
be made at prices related to prevailing market prices at the time of sale or
otherwise.
S-1
(Footnotes to table on the front cover)
- ----------------
(1) Subject to a permitted variance of plus or minus 5.0%.
(2) The "Assumed Final Distribution Date" has been determined on the basis of
the assumptions set forth in "DESCRIPTION OF THE CERTIFICATES--Assumed
Final Distribution Date; Rated Final Distribution Date" in this prospectus
supplement and a 0% CPR (as defined in "YIELD AND MATURITY
CONSIDERATIONS--Weighted Average Life" in this prospectus supplement). The
"Rated Final Distribution Date" is the distribution date to occur in March
2042. See "DESCRIPTION OF THE CERTIFICATES--Assumed Final Distribution
Date; Rated Final Distribution Date" and "RATINGS" in this prospectus
supplement.
(3) By each of Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., Moody's Investors Service, Inc. and Fitch,
Inc. See "RATINGS" in this prospectus supplement.
(4) The pass-through rate applicable to the Class B, Class C and Class D
certificates for any distribution date will be subject to a maximum rate
equal to the applicable weighted average net mortgage rate (calculated as
described herein) for that date.
S-2
TABLE OF CONTENTS
PAGE
------
SUMMARY OF PROSPECTUS SUPPLEMENT....................................... S-5
OVERVIEW OF THE CERTIFICATES........................................... S-6
THE PARTIES............................................................ S-8
IMPORTANT DATES AND PERIODS............................................ S-10
THE CERTIFICATES....................................................... S-11
THE MORTGAGE LOANS..................................................... S-27
RISK FACTORS........................................................... S-42
DESCRIPTION OF THE MORTGAGE POOL....................................... S-94
General .............................................................. S-94
Mortgage Loan History................................................. S-96
Certain Terms and Conditions of the Mortgage Loans..................... S-96
Assessments of Property Condition...................................... S-102
Co-Lender Loans........................................................ S-103
Mezzanine Loans........................................................ S-115
Additional Mortgage Loan Information................................... S-115
Twenty Largest Mortgage Loans.......................................... S-146
The Mortgage Loan Sellers.............................................. S-199
Underwriting Standards................................................. S-200
Assignment of the Mortgage Loans; Repurchases and Substitutions........ S-201
Representations and Warranties; Repurchases and Substitutions.......... S-203
Repurchase or Substitution of Cross-Collateralized Mortgage Loans...... S-206
Changes in Mortgage Pool Characteristics............................... S-207
SERVICING OF THE MORTGAGE LOANS......................................... S-208
General................................................................ S-208
The Master Servicer and the Special Servicer........................... S-209
Servicing and Other Compensation and Payment of Expenses............... S-212
Modifications, Waivers and Amendments.................................. S-214
The Controlling Class Representative................................... S-216
Defaulted Mortgage Loans; REO Properties; Purchase Option.............. S-220
Inspections; Collection of Operating Information....................... S-221
DESCRIPTION OF THE CERTIFICATES......................................... S-223
General................................................................ S-223
Registration and Denominations......................................... S-223
Certificate Balances and Notional Amounts.............................. S-225
Pass-Through Rates..................................................... S-228
Distributions.......................................................... S-231
Subordination; Allocation of Losses and Certain Expenses............... S-242
P&I Advances........................................................... S-245
Appraisal Reductions................................................... S-247
Reports to Certificateholders; Available Information................... S-249
Assumed Final Distribution Date; Rated Final Distribution Date......... S-253
Voting Rights.......................................................... S-254
Termination............................................................ S-254
The Trustee............................................................ S-255
S-3
PAGE
------
YIELD AND MATURITY CONSIDERATIONS ...................................... S-257
Yield Considerations .................................................. S-257
Weighted Average Life ................................................. S-260
USE OF PROCEEDS ........................................................ S-265
MATERIAL FEDERAL INCOME TAX CONSEQUENCES ............................... S-265
General ............................................................... S-265
Taxation of the Offered Certificates .................................. S-265
ERISA CONSIDERATIONS ................................................... S-266
LEGAL INVESTMENT ....................................................... S-269
METHOD OF DISTRIBUTION ................................................. S-269
LEGAL MATTERS .......................................................... S-271
RATINGS ................................................................ S-271
INDEX OF DEFINED TERMS ................................................. S-272
ANNEX A-1 Certain Characteristics of the Mortgage Loans and Mortgaged
Properties................................................... A-1
ANNEX A-1A Certain Characteristics of the Mortgage Loans and Mortgaged
Properties in Loan Group 1 .................................. A-1A
ANNEX A-1B Certain Characteristic of the Mortgage Loans and Mortgaged
Properties in Loan Group 2 ................................... A-1B
ANNEX A-2 Certain Information Regarding Multifamily Mortgaged Properties. A-2
ANNEX A-3 Reserve Account Information ................................... A-3
ANNEX A-4 Commercial Tenant Schedule ..................................... A-4
ANNEX A-5 Certain Characteristics of the Mortgage Loans and Mortgaged
Properties (Crossed and Portfolios) ............................ A-5
ANNEX A-6 Choice Center Debt Service Payment Schedule .................... A-6
ANNEX B Form of Distribution Date Statement ............................ B-1
ANNEX C Class X-P Reference Rate Schedule .............................. C-1
ANNEX D Class A-PB Planned Principal Balance Schedule .................. D-1
S-4
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. TO UNDERSTAND THE TERMS OF
THE OFFERED CERTIFICATES, YOU MUST CAREFULLY READ THIS ENTIRE PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
o THIS SUMMARY PROVIDES AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOWS AND
OTHER INFORMATION TO AID YOUR UNDERSTANDING AND IS QUALIFIED BY THE FULL
DESCRIPTION OF THESE CALCULATIONS, CASH FLOWS AND OTHER INFORMATION IN
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.
o WE PROVIDE INFORMATION IN THIS PROSPECTUS SUPPLEMENT ON THE CERTIFICATES
THAT ARE NOT OFFERED BY THIS PROSPECTUS SUPPLEMENT ONLY TO ENHANCE YOUR
UNDERSTANDING OF THE OFFERED CERTIFICATES. WE ARE NOT OFFERING THE
NON-OFFERED CERTIFICATES PURSUANT TO THIS PROSPECTUS SUPPLEMENT.
o FOR PURPOSES OF MAKING DISTRIBUTIONS TO THE CLASS A-1, CLASS A-2, CLASS
A-3, CLASS A-PB, CLASS A-4 AND CLASS A-1A CERTIFICATES, THE POOL OF
MORTGAGE LOANS WILL BE DEEMED TO CONSIST OF 2 DISTINCT LOAN GROUPS, LOAN
GROUP 1 AND LOAN GROUP 2.
o UNLESS OTHERWISE STATED, ALL PERCENTAGES OF THE MORTGAGE LOANS INCLUDED IN
THE TRUST FUND, OR OF ANY SPECIFIED GROUP OF MORTGAGE LOANS INCLUDED IN
THE TRUST FUND, REFERRED TO IN THIS PROSPECTUS SUPPLEMENT ARE CALCULATED
USING THE AGGREGATE PRINCIPAL BALANCE OF THE MORTGAGE LOANS INCLUDED IN
THE TRUST FUND AS OF THE CUT-OFF DATE (WHICH IS MARCH 11, 2005, WITH
RESPECT TO 222 MORTGAGE LOANS, MARCH 1, 2005, WITH RESPECT TO 1 MORTGAGE
LOAN, MARCH 4, 2005, WITH RESPECT TO 2 MORTGAGE LOANS AND MARCH 6, 2005,
WITH RESPECT TO 4 MORTGAGE LOANS), AFTER GIVING EFFECT TO PAYMENTS DUE ON
OR BEFORE SUCH DATE WHETHER OR NOT RECEIVED. THE CUT-OFF DATE BALANCE OF
EACH MORTGAGE LOAN INCLUDED IN THE TRUST FUND AND EACH CUT-OFF DATE
CERTIFICATE BALANCE IN THIS PROSPECTUS SUPPLEMENT ASSUMES THE TIMELY
RECEIPT OF PRINCIPAL SCHEDULED TO BE PAID (IF ANY) ON EACH MORTGAGE LOAN
AND NO DEFAULTS, DELINQUENCIES OR PREPAYMENTS ON ANY MORTGAGE LOAN ON OR
BEFORE THE RELATED CUT-OFF DATE. PERCENTAGES OF MORTGAGED PROPERTIES ARE
REFERENCES TO THE PERCENTAGES OF THE AGGREGATE PRINCIPAL BALANCE OF ALL
THE MORTGAGE LOANS INCLUDED IN THE TRUST FUND, OR OF ANY SPECIFIED GROUP
OF MORTGAGE LOANS INCLUDED IN THE TRUST FUND, AS OF THE CUT-OFF DATE
REPRESENTED BY THE AGGREGATE PRINCIPAL BALANCE OF THE RELATED MORTGAGE
LOANS AS OF THE CUT-OFF DATE.
o TWO (2) MORTGAGE LOANS, THE ONE & TWO INTERNATIONAL PLACE MORTGAGE LOAN
AND THE 450 WEST 33RD STREET MORTGAGE LOAN, ARE EACH PART OF A SPLIT LOAN
STRUCTURE WHERE ONE (1) COMPANION LOAN THAT IS PART OF THIS SPLIT LOAN
STRUCTURE IS OR WILL BE PARI PASSU IN RIGHT OF ENTITLEMENT TO PAYMENT WITH
THE RELATED MORTGAGE LOAN. SEVEN (7) MORTGAGE LOANS ARE EACH PART OF A
SPLIT LOAN STRUCTURE IN WHICH THE RELATED COMPANION LOANS ARE SUBORDINATE
TO THE RELATED MORTGAGE LOANS. AMOUNTS ATTRIBUTABLE TO ANY COMPANION LOAN
WILL NOT BE ASSETS OF THE TRUST FUND AND WILL BE BENEFICIALLY OWNED BY THE
HOLDER OF SUCH COMPANION LOAN.
o ALL NUMERICAL OR STATISTICAL INFORMATION CONCERNING THE MORTGAGE LOANS
INCLUDED IN THE TRUST FUND IS PROVIDED ON AN APPROXIMATE BASIS AND
EXCLUDES INFORMATION ON THE SUBORDINATE COMPANION LOANS.
S-5
OVERVIEW OF THE CERTIFICATES
The table below lists certain summary information concerning the Wachovia
Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates,
Series 2005-C17, which we are offering pursuant to the accompanying prospectus
and this prospectus supplement. Each certificate represents an interest in the
mortgage loans included in the trust fund and the other assets of the trust
fund. The table also describes the certificates that are not offered by this
prospectus supplement (other than the Class Z, Class R-I and Class R-II
certificates) which have not been registered under the Securities Act of 1933,
as amended, and which will be sold to investors in private transactions.
CLOSING DATE
CERTIFICATE PERCENTAGE
BALANCE OR OF CUT-OFF PASS-THROUGH
NOTIONAL DATE POOL CREDIT RATE
CLASS AMOUNT(1) BALANCE SUPPORT DESCRIPTION
- ------------------- ----------------- ------------ ------------ --------------
Class A-1 ......... $ 133,240,000 4.744% 20.000% Fixed
Class A-2 ......... $ 290,000,000 10.326% 20.000% Fixed
Class A-3 ......... $ 82,400,000 2.934% 20.000% Fixed
Class A-PB ........ $ 235,000,000 8.367% 20.000% Fixed
Class A-4 ......... $ 1,130,969,000 40.269% 20.000% Fixed
Class A-J ......... $ 193,088,000 6.875% 13.125% Fixed
Class B ........... $ 77,236,000 2.750% 10.375% Fixed(4)
Class C ........... $ 24,574,000 0.875% 9.500% Fixed(4)
Class D ........... $ 49,150,000 1.750% 7.750% Fixed(4)
Class A-1A ....... $ 375,240,000 13.361% 20.000% Fixed
Class E .......... $ 28,086,000 1.000% 6.750% Fixed(4)
Class F .......... $ 28,085,000 1.000% 5.750% WAC(6)
Class G .......... $ 31,597,000 1.125% 4.625% WAC(6)
Class H .......... $ 38,618,000 1.375% 3.250% WAC(6)
Class J .......... $ 7,021,000 0.250% 3.000% Fixed(4)
Class K .......... $ 10,532,000 0.375% 2.625% Fixed(4)
Class L .......... $ 14,043,000 0.500% 2.125% Fixed(4)
Class M .......... $ 7,021,000 0.250% 1.875% Fixed(4)
Class N .......... $ 7,022,000 0.250% 1.625% Fixed(4)
Class O .......... $ 7,021,000 0.250% 1.375% Fixed(4)
Class P .......... $ 38,618,258 1.375% 0.000% Fixed(4)
Class X-P ........ $ 2,701,179,000 N/A N/A WAC-IO
Class X-C ........ $ 2,808,561,258 N/A N/A WAC-IO
INITIAL WEIGHTED CASH FLOW
PASS- AVERAGE OR PRINCIPAL EXPECTED
THROUGH LIFE WINDOW S&P/MOODY'S/FITCH
CLASS RATE (YEARS)(2) (MON./YR.)(2) RATING(3)
- ------------------- ----------- ------------ ------------------ ------------------
Class A-1 ......... % 2.65 04/05 - 10/09 AAA/Aaa/AAA
Class A-2 ......... % 4.86 10/09 - 03/10 AAA/Aaa/AAA
Class A-3 ......... % 6.81 12/11 - 02/12 AAA/Aaa/AAA
Class A-PB ........ % 7.46 03/10 - 09/14 AAA/Aaa/AAA
Class A-4 ......... % 9.77 09/14 - 02/15 AAA/Aaa/AAA
Class A-J ......... % 9.92 02/15 - 03/15 AAA/Aaa/AAA
Class B ........... % 9.96 03/15 - 03/15 AA/Aa2/AA
Class C ........... % 9.96 03/15 - 03/15 AA--/Aa3/AA--
Class D ........... % 9.96 03/15 - 03/15 A/A2/A
Class A-1A ....... % (5) (5) AAA/Aaa/AAA
Class E .......... % (5) (5) A--/A3/A--
Class F .......... % (5) (5) BBB+/Baa1/BB+
Class G .......... % (5) (5) BBB/Baa2/BBB
Class H .......... % (5) (5) BBB--/Baa3/BBB--
Class J .......... % (5) (5) BB+/Ba1/BB+
Class K .......... % (5) (5) BB/Ba2/BB
Class L .......... % (5) (5) BB--/Ba3/BB--
Class M .......... % (5) (5) B+/B1/B+
Class N .......... % (5) (5) B/B2/B
Class O .......... % (5) (5) B--/B3/B--
Class P .......... % (5) (5) NR
Class X-P ........ % (7) (7) AAA/Aaa/AAA
Class X-C ........ % (7) (7) AAA/Aaa/AAA
- ----------
(1) Subject to a permitted variance of plus or minus 5.0%.
(2) Based on no prepayments and the other assumptions set forth under "YIELD
AND MATURITY CONSIDERATIONS--Weighted Average Life" in this prospectus
supplement.
(3) By each of Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. Moody's Investors Service, Inc. and Fitch,
Inc. See "RATINGS" in this prospectus supplement.
(4) The pass-through rates applicable to the Class B, Class C, Class D, Class
E, Class J, Class K, Class L, Class M, Class N, Class O and Class P
certificates for any distribution date will be subject to a maximum rate
equal to the applicable weighted average net mortgage rate (calculated as
described in this prospectus supplement) for that date.
(5) Not offered by this prospectus supplement. Any information we provide
herein regarding the terms of these certificates is provided only to
enhance your understanding of the offered certificates.
(6) The pass-through rate applicable to the Class F, Class G and Class H
certificates for any distribution date will be equal to the applicable
weighted average net mortgage rate (calculated as described in this
prospectus supplement) for that date.
S-6
(7) The Class X-C and Class X-P certificates are not offered by this
prospectus supplement. Any information we provide in this prospectus
supplement regarding the terms of these certificates is provided only to
enhance your understanding of the offered certificates. The Class X-C and
Class X-P certificates will not have certificate balances and their
holders will not receive distributions of principal, but these holders are
entitled to receive payments of the aggregate interest accrued on the
notional amount of the Class X-C or Class X-P certificates, as the case
may be, as described in this prospectus supplement. The interest rates
applicable to the Class X-C and Class X-P certificates for each
distribution date will be as described in this prospectus supplement. See
"DESCRIPTION OF THE CERTIFICATES -- Pass-Through Rates" in this prospectus
supplement.
[ ] Offered certificates
[ ] Private certificates
S-7
THE PARTIES
THE TRUST FUND................ The trust fund will be created on or about
the closing date pursuant to a pooling and
servicing agreement, dated as of March 1, 2005,
by and among the depositor, the master
servicer, the special servicer and the trustee.
THE DEPOSITOR................. Wachovia Commercial Mortgage Securities, Inc.
We are a wholly owned subsidiary of Wachovia
Bank, National Association, which is one of the
mortgage loan sellers, the master servicer, and
an affiliate of one of the underwriters. Our
principal executive office is located at 301
South College Street, Charlotte, North Carolina
28288-0166 and our telephone number is (704)
374-6161. Neither we nor any of our affiliates
have insured or guaranteed the offered
certificates. For more detailed information,
see "THE DEPOSITOR" in the accompanying
prospectus.
On the closing date, we will sell the mortgage
loans and related assets to be included in the
trust fund to the trustee to create the trust
fund.
THE ISSUER.................... The trust fund to be established under the
pooling and servicing agreement. For more
detailed information, see "DESCRIPTION OF THE
CERTIFICATES" in this prospectus supplement and
the accompanying prospectus.
THE MORTGAGE LOAN SELLERS..... Wachovia Bank, National Association,
Countrywide Commercial Real Estate Finance,
Inc., Citigroup Global Markets Realty Corp. and
Artesia Mortgage Capital Corporation. For more
information, see "DESCRIPTION OF THE MORTGAGE
POOL--The Mortgage Loan Sellers" in this
prospectus supplement. The mortgage loan
sellers will sell and assign to us on the
closing date the mortgage loans to be included
in the trust fund. See "DESCRIPTION OF THE
MORTGAGE POOL--Representations and Warranties;
Repurchases and Substitutions" in this
prospectus supplement.
Wachovia Bank, National Association originated
or acquired 152 of the mortgage loans to be
included in the trust fund, representing 64.3%
of the cut-off date pool balance of all the
mortgage loans to be included in the trust fund
(128 mortgage loans in loan group 1 or 62.5%
and 24 mortgage loans in loan group 2 or
75.7%). Countrywide Commercial Real Estate
Finance, Inc. originated 15 of the mortgage
loans to be included in the trust fund,
representing 14.4% of the cut-off date pool
balance of all the mortgage loans to be
included in the trust fund (14 mortgage loans
in loan group 1 or 16.2% and 1 mortgage loan in
loan group 2 or 2.4%). Citigroup Global Markets
Realty Corp. originated 21 of the mortgage
loans to be included in the trust fund,
representing 13.3% of the cut-off date pool
balance of all the mortgage loans to be
included in the trust fund (18 mortgage loans
in loan group 1
S-8
or 13.3% and 3 mortgage loans in loan group 2
or 13.2%). Artesia Mortgage Capital Corporation
originated 41 of the mortgage loans to be
included in the trust fund, representing 8.0%
of the cut-off date pool balance of all the
mortgage loans to be included in the trust fund
(36 mortgage loans in loan group 1 or 7.9% and
5 mortgage loans in loan group 2 or 8.6%).
THE MASTER SERVICER........... Wachovia Bank, National Association. The
master servicer is our affiliate, one of the
mortgage loan sellers and an affiliate of one
of the underwriters. The master servicer will
be primarily responsible for collecting
payments and gathering information with respect
to the mortgage loans included in the trust
fund and the companion loans which are not part
of the trust fund.
See "SERVICING OF THE MORTGAGE LOANS--The
Master Servicer and the Special Servicer" in
this prospectus supplement.
THE SPECIAL SERVICER.......... Initially, Allied Capital Corporation. The
special servicer will be responsible for
performing certain servicing functions with
respect to the mortgage loans included in the
trust fund and the companion loans which are
not part of the trust fund that, in general,
are in default or as to which default is
imminent.
Some holders of certificates (initially the
holder of the Class P certificates with respect
to each mortgage loan other than the Cabrillo
Palisades whole loan and the Great Wolf Resorts
whole loan) will have the right to replace the
special servicer and to select a representative
who may advise and direct the special servicer
and whose approval is required for certain
actions by the special servicer under certain
circumstances. With respect to the Cabrillo
Palisades whole loan and the Great Wolf Resorts
whole loan, except during the continuance of a
control appraisal period under the related
intercreditor agreement, the holder of the
subordinate companion loan related to the
Cabrillo Palisades whole loan or the Great Wolf
Resorts whole loan, as applicable may appoint
or remove the special servicer with respect to
the Cabrillo Palisades whole loan or the Great
Wolf Resorts whole loan, subject to certain
conditions. See "SERVICING OF THE MORTGAGE
LOANS--The Master Servicer and the Special
Servicer" and "--The Controlling Class
Representative" in this prospectus supplement.
It is anticipated that Allied Capital
Corporation or an affiliate of Allied Capital
Corporation, will purchase certain non-offered
classes of certificates (including the Class P
certificates). See "SERVICING OF THE MORTGAGE
LOANS--The Master Servicer and the Special
Servicer" in this prospectus supplement.
S-9
THE TRUSTEE................... Wells Fargo Bank, N.A. The trustee will be
responsible for (among other things)
distributing payments to certificateholders and
delivering to certificateholders certain
reports on the mortgage loans included in the
trust fund and the certificates. See
"DESCRIPTION OF THE CERTIFICATES--The Trustee"
in this prospectus supplement.
THE UNDERWRITERS.............. Wachovia Capital Markets, LLC, Countrywide
Securities Corporation, Citigroup Global
Markets Inc., ABN AMRO Incorporated, Credit
Suisse First Boston LLC and Goldman, Sachs &
Co. Wachovia Capital Markets, LLC is our
affiliate and is an affiliate of Wachovia Bank,
National Association, which is the master
servicer and one of the mortgage loan sellers.
Countrywide Securities Corporation is an
affiliate of Countrywide Commercial Real Estate
Finance, Inc., one of the mortgage loan
sellers. Citigroup Global Markets, Inc. is an
affiliate of Citigroup Global Markets Realty
Corp., one of the mortgage loan sellers.
Wachovia Capital Markets, LLC, Countrywide
Securities Corporation and Citigroup Global
Markets Inc. are acting as co-lead managers for
this offering. Countrywide Securities
Corporation is acting as sole bookrunner with
respect to % of the Class certificates.
Citigroup Global Markets Inc. is acting as sole
bookrunner with respect to % of the Class
certificates. Wachovia Capital Markets, LLC is
acting as sole bookrunner with respect to the
remainder of the Class certificates and all
other classes of offered certificates. ABN AMRO
Incorporated, Credit Suisse First Boston LLC
and Goldman, Sachs & Co. are acting as
co-managers for this offering.
IMPORTANT DATES AND PERIODS
CLOSING DATE.................. On or about March 30, 2005.
CUT-OFF DATE.................. For 222 mortgage loans, representing 94.5% of
the mortgage pool (190 mortgage loans in loan
group 1 or 94.0% and 32 mortgage loans in loan
group 2 or 97.6%), March 11, 2005; for 1
mortgage loan, representing 0.3% of the
mortgage pool (0.3% of loan group 1), March 1,
2005; for 2 mortgage loans, representing 1.2%
of the mortgage pool (1.4% of loan group 1),
March 4, 2005; and for 4 mortgage loans,
representing 4.0% of the mortgage pool (3
mortgage loans in loan group 1 or 4.3% and 1
mortgage loan in loan group 2 or 2.4%), March
6, 2005. The cut-off date balance of each
mortgage loan included in the trust fund and
each cut-off date certificate balance in this
prospectus supplement assumes the timely
receipt of principal scheduled to be paid (if
any) on each mortgage loan and no defaults,
delinquencies or prepayments on any mortgage
loan as of the related cut-off date.
S-10
DISTRIBUTION DATE............. The fourth business day following the related
determination date, commencing in April 2005.
DETERMINATION DATE............ The 11th day of each month, or if such 11th
day is not a business day, the next succeeding
business day, commencing in April 2005.
COLLECTION PERIOD............. For any distribution date, the period
beginning on the 12th day in the immediately
preceding month (or the day after the
applicable cut-off date in the case of the
first collection period) through and including
the 11th day of the month in which the
distribution date occurs. Notwithstanding the
foregoing, in the event that the last day of a
collection period is not a business day, any
payments with respect to the mortgage loans
which relate to such collection period and are
received on the business day immediately
following such last day will be deemed to have
been received during such collection period and
not during any other collection period.
THE CERTIFICATES
OFFERED CERTIFICATES.......... We are offering to you the following 9
classes of certificates of our Commercial
Mortgage Pass-Through Certificates, Series
2005-C17 pursuant to this prospectus
supplement:
Class A-1
Class A-2
Class A-3
Class A-PB
Class A-4
Class A-J
Class B
Class C
Class D
PRIORITY OF DISTRIBUTIONS..... On each distribution date, the owners of the
certificates will be entitled to distributions
of payments or other collections on the
mortgage loans that the master servicer
collected or that the master servicer and/or
the trustee advanced during or with respect to
the related collection period after deducting
certain fees and expenses. For purposes of
making certain distributions to the Class A-1,
Class A-2, Class A-3, Class A-PB, Class A-4 and
Class A-1A certificates, the mortgage pool will
be deemed to consist of 2 loan groups:
o Loan group 1 will consist of (i) all of the
mortgage loans that are not secured by
multifamily properties, and (ii) 4 mortgage
loans that are secured by multifamily
properties; and
o Loan group 2 will consist of 33 mortgage
loans that are secured by multifamily
properties.
S-11
Annex A to this prospectus supplement sets
forth the loan group designation for each
mortgage loan. The trustee will distribute
amounts to the extent that the money is
available, in the following order of priority,
to pay:
-----------------------------------------------
Interest, concurrently (i) pro rata, on the
Class A-1, Class A-2, Class A-3, Class A-PB
and Class A-4 certificates from the portion of
money available attributable to mortgage loans
in loan group 1, (ii) on the Class A-1A
certificates from the portion of money
available attributable to mortgage loans in
loan group 2, and (iii) pro rata, on the Class
X-C and Class X-P certificates from any and
all money attributable to the mortgage pool;
provided, however, if on any distribution
date, the money available on such distribution
date is insufficient to pay in full the total
amount of interest to be paid to any of the
classes as described above, money available
with respect to the entire mortgage pool will
be allocated among all those classes pro rata.
-----------------------------------------------
-----------------------------------------------
Principal of the Class A-PB certificates, up
to the principal distribution amount related
to loan group 1, until the certificate balance
of the Class A-PB certificates is reduced to
the planned principal balance set forth in the
table on Annex D to this prospectus
supplement, and, after the Class A-1A
certificate balance has been reduced to zero,
the principal distribution amount relating to
loan group 2 remaining after payments to the
Class A-1A certificates have been made, until
the certificate balance of the Class A-PB
certificates is reduced to the planned
principal balance set forth in the table on
Annex D to this prospectus supplement.
-----------------------------------------------
-----------------------------------------------
After distributions of principal have been
made from the principal distribution amount
relating to loan group 1 to the Class A-PB
certificates as set forth in the priority
immediately preceding, principal of the Class
A-1 certificates, up to the remaining
principal distribution amount relating to loan
group 1 and, after the Class A-1A certificate
balance has been reduced to zero, the
principal distribution amount relating to loan
group 2 remaining after payments to the Class
A-1A certificates and the Class A-PB
certificates have been made, until their
certificate balance is reduced to zero.
-----------------------------------------------
S-12
-----------------------------------------------
After distributions of principal have been
made from the principal distribution amount
relating to loan group 1 to the Class A-PB and
Class A-1 certificates as set forth in the
immediately preceding priorities, principal of
the Class A-2 certificates, up to the
remaining principal distribution amount
relating to loan group 1 and, after the Class
A-1A certificate balance has been reduced to
zero, the principal distribution amount
relating to loan group 2 remaining after
payments to the Class A-1A, Class A-PB and
Class A-1 certificates have been made, until
their certificate balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
After distributions of principal have been
made from the principal distribution amount
relating to loan group 1 to the Class A-PB,
Class A-1 and Class A-2 certificates as set
forth in the immediately preceding priorities,
principal of the Class A-3 certificates, up to
the remaining principal distribution amount
relating to loan group 1 and, after the Class
A-1A certificate balance has been reduced to
zero, the principal distribution amount
relating to loan group 2 remaining after
payments to the Class A-1A, Class A-PB, Class
A-1 and Class A-2 certificates have been made,
until their certificate balance is reduced to
zero.
-----------------------------------------------
-----------------------------------------------
After distributions of principal have been
made from the principal distribution amount
related to loan group 1 to the Class A-PB,
Class A-1, Class A-2 and Class A-3
certificates as set forth in the immediately
preceding priorities, principal of the Class
A-PB certificates, up to the remaining
principal distribution amount relating to loan
group 1 and, after the Class A-1A certificate
balance has been reduced to zero, the
principal distribution amount relating to loan
group 2 remaining after payments to the Class
A-1A, Class A-1, Class A-2 and Class A-3
certificates have been made, until their
certificate balance is reduced to zero.
-----------------------------------------------
S-13
-----------------------------------------------
After distributions of principal have been
made from the principal distribution amount
related to loan group 1 to the Class A-1,
Class A-2, Class A-3 and Class A-PB
certificates as set forth in the immediately
preceding priorities, principal of the Class
A-4 certificates, up to the remaining
principal distribution amount relating to loan
group 1 and, after the Class A-1A certificate
balance has been reduced to zero, the
principal distribution amount relating to loan
group 2 remaining after payments to the Class
A-1A, Class A-PB, Class A-1, Class A-2 and
Class A-3 certificates have been made, until
their certificate balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
Principal of the Class A-1A certificates, up
to the principal distribution amount relating
to loan group 2 and, after the Class A-1,
Class A-2, Class A-3, Class A-PB and Class A-4
certificate balances have been reduced to
zero, the principal distribution amount
relating to loan group 1 remaining after
payments to the Class A-1, Class A-2, Class
A-3, Class A-PB and Class A-4 certificates
have been made, until their certificate
balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
Reimbursement to the Class A-1, Class A-2,
Class A-3, Class A-PB, Class A-4 and Class
A-1A certificates, pro rata, for any realized
loss and trust fund expenses borne by such
classes.
-----------------------------------------------
-----------------------------------------------
Interest on the Class A-J certificates.
-----------------------------------------------
-----------------------------------------------
Principal of the Class A-J certificates, up to
the principal distribution amount, until their
certificate balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
Reimbursement to the Class A-J certificates
for any realized losses and trust fund
expenses borne by such class.
-----------------------------------------------
S-14
-----------------------------------------------
Interest on the Class B certificates.
-----------------------------------------------
-----------------------------------------------
Principal of the Class B certificates, up to
the principal distribution amount, until their
certificate balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
Reimbursement to the Class B certificates for
any realized losses and trust fund expenses
borne by such class.
-----------------------------------------------
-----------------------------------------------
Interest on the Class C certificates.
-----------------------------------------------
-----------------------------------------------
Principal of the Class C certificates, up to
the principal distribution amount, until their
certificate balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
Reimbursement to the Class C certificates for
any realized losses and trust fund expenses
borne by such class.
-----------------------------------------------
-----------------------------------------------
Interest on the Class D certificates.
-----------------------------------------------
-----------------------------------------------
Principal of the Class D certificates, up to
the principal distribution amount, until their
certificate balance is reduced to zero.
-----------------------------------------------
-----------------------------------------------
Reimbursement to the Class D certificates for
any realized losses and trust fund expenses
borne by such class.
-----------------------------------------------
If, on any distribution date, the certificate
balances of the Class A-J through Class P
certificates have been reduced to zero, but any
two or more of the Class A-1, Class A-2, Class
A-3, Class A-PB, Class A-4 and Class A-1A
certificates remain outstanding, distributions
of principal (other than distributions of
principal otherwise allocable to reduce the
certificate balance of the Class A-PB
certificates to the planned principal amount
set forth in the table on Annex D to this
prospectus supplement) and interest will be
made, pro rata, to the outstanding Class A-1,
Class A-2, Class A-3, Class
S-15
A-PB, Class A-4 and Class A-1A certificates.
See "DESCRIPTION OF THE CERTIFICATES--
Distributions" in this prospectus supplement.
No companion loan will be part of the trust
fund, and amounts received with respect to any
companion loan will not be available for
distributions to holders of any certificates.
INTEREST...................... On each distribution date, each class of
certificates (other than the Class Z, Class R-I
and Class R-II certificates) will be entitled
to receive:
o for each class of these certificates, one
month's interest at the applicable
pass-through rate accrued during the
calendar month prior to the related
distribution date, on the certificate
balance or notional amount, as applicable,
of each class of these certificates
immediately prior to that distribution date;
o plus any interest that this class of
certificates was entitled to receive on all
prior distribution dates to the extent not
received;
o minus (other than in the case of the Class
X-C and Class X-P certificates) that class'
share of any shortfalls in interest
collections due to prepayments on mortgage
loans included in the trust fund that are
not offset by certain payments made by the
master servicer; and
o minus (other than in the case of the Class
X-C and Class X-P certificates) that class'
allocable share of any reduction in interest
accrued on any mortgage loan as a result of
a modification that reduces the related
mortgage rate and allows the reduction in
accrued interest to be added to the stated
principal balance of the mortgage loan.
As reflected in the chart under "--Priority of
Distributions" above, so long as funds are
sufficient on any distribution date to make
distributions of all interest on that
distribution date to the Class A-1, Class A-2,
Class A-3, Class A-PB, Class A-4, Class A-1A,
Class X-C and Class X-P certificates, interest
distributions on the Class A-1, Class A-2,
Class A-3, Class A-PB and Class A-4
certificates will be based upon amounts
available relating to mortgage loans in loan
group 1 and interest distributions on the Class
A-1A certificates will be based upon amounts
available relating to mortgage loans in loan
group 2.
See "DESCRIPTION OF THE CERTIFICATES--
Certificate Balances and Notional Amounts" and
"--Distributions" in this prospectus
supplement.
The Class X-C and Class X-P certificates will
be entitled to distributions of interest only
on their respective notional amounts. The
notional amounts of each of these classes of
S-16
certificates are calculated as described under
"DESCRIPTION OF THE CERTIFICATES--Certificate
Balances and Notional Amounts" in this
prospectus supplement.
The Class X-C and Class X-P certificates will
accrue interest at a rate as described under
"--Pass-Through Rates" below.
The certificates (other than the Class Z, Class
R-I and Class R-II certificates) will accrue
interest on the basis of a 360-day year
consisting of twelve 30-day months.
The interest accrual period with respect to any
distribution date and any class of certificates
(other than the Class Z, Class R-I and Class
R-II certificates) is the calendar month
preceding the month in which such distribution
date occurs.
As reflected in the chart under "--Priority of
Distributions" beginning on page S-11 above, on
each distribution date, the trustee will
distribute interest to the holders of the
offered certificates and the Class X-C and
Class X-P certificates:
o first, pro rata, to the Class X-C, Class
X-P, Class A-1, Class A-2, Class A-3, Class
A-PB, Class A-4 and Class A-1A certificates
as described above under "--Priority of
Distributions", and then to each other class
of offered certificates in alphabetical
order; and
o only to the extent funds remain after the
trustee makes all distributions of interest
and principal required to be made on such
date to each class of certificates with a
higher priority of distribution.
You may, in certain circumstances, also receive
distributions of prepayment premiums and yield
maintenance charges collected on the mortgage
loans included in the trust fund. These
distributions are in addition to the
distributions of principal and interest
described above. See "DESCRIPTION OF THE
CERTIFICATES--Distributions" in this prospectus
supplement.
PASS-THROUGH RATES............ The pass-through rate for each class of
certificates (other than the Class X-C, Class
X-P, Class Z, Class R-I and Class R-II
certificates) on each distribution date is set
forth above under "OVERVIEW OF THE
CERTIFICATES" in this prospectus supplement.
The pass-through rate applicable to the Class
X-C certificates and Class X-P certificates is
described under "DESCRIPTION OF THE
CERTIFICATES--Pass-Through Rates" in this
prospectus supplement.
The weighted average net mortgage rate for each
distribution date is the weighted average of
the net mortgage rates for the mortgage loans
included in the trust fund as of the beginning
of the related collection period, weighted on
the basis of their respective stated principal
balances immediately following
S-17
the preceding distribution date; provided that,
for the purpose of determining the weighted
average net mortgage rate only, if the mortgage
rate for any mortgage loan included in the
trust fund has been modified 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, the weighted average net
mortgage rate for that mortgage loan will be
calculated without regard to that event. The
net mortgage rate for each mortgage loan
included in the trust fund will generally
equal:
o the mortgage interest rate in effect for
that mortgage loan as of the closing date;
minus
o the applicable administrative cost rate, as
described in this prospectus supplement.
For the purpose of calculating the weighted
average net mortgage rate, the mortgage rate of
each mortgage loan will be deemed adjusted as
described under "DESCRIPTION OF THE
CERTIFICATES--Pass-Through Rates" in this
prospectus supplement.
The stated principal balance of each mortgage
loan included in the trust fund will generally
equal the principal balance of that mortgage
loan as of the cut-off date, reduced as of any
date of determination (to not less than zero)
by:
o the portion of the principal distribution
amount for the related distribution date
that is attributable to that mortgage loan;
and
o the principal portion of any realized loss
incurred in respect of that mortgage loan
during the related collection period.
The stated principal balance of any mortgage
loan as to which the mortgage rate is reduced
through a modification may be increased in
certain circumstances by the amount of the
resulting interest reduction. See "DESCRIPTION
OF THE CERTIFICATES--Pass-Through Rates" in
this prospectus supplement.
PRINCIPAL DISTRIBUTIONS....... On the closing date, each class of
certificates (other than the Class X-C, Class
X-P, Class Z, Class R-I and Class R-II
certificates) will have the certificate balance
set forth above under "OVERVIEW OF THE
CERTIFICATES". The certificate balance for each
class of certificates entitled to receive
principal may be reduced by:
o distributions of principal; and
o allocations of realized losses and trust
fund expenses.
The certificate balance or notional amount of a
class of certificates may be increased in
certain circumstances by the allocation of any
increase in the stated principal balance of
S-18
any mortgage loan resulting from the reduction
of the related mortgage rate through
modification. See "DESCRIPTION OF THE
CERTIFICATES--Certificate Balances and Notional
Amounts" in this prospectus supplement.
The Class X-C and Class X-P certificates do not
have principal balances and will not receive
distributions of principal.
As reflected in the chart under "--Priority of
Distributions" above:
o generally, the Class A-1, Class A-2, Class
A-3, Class A-PB and Class A-4 certificates
will only be entitled to receive
distributions of principal collected or
advanced in respect of mortgage loans in
loan group 1 until the certificate balance
of the Class A-1A certificates has been
reduced to zero, and the Class A-1A
certificates will only be entitled to
receive distributions of principal collected
or advanced in respect of mortgage loans in
loan group 2 until the certificate principal
balance of the Class A-4 certificates has
been reduced to zero; provided, however, the
Class A-1, Class A-2, Class A-3 and Class
A-4 certificates will not be entitled to
distributions of principal from either loan
group 1 or loan group 2 until the
certificate principal balance of the Class
A-PB certificates is reduced to the planned
principal balance set forth on Annex D to
this prospectus supplement;
o principal is distributed to each class of
certificates entitled to receive
distributions of principal in the order
described in "DESCRIPTION OF THE
CERTIFICATES--Distributions" in this
prospectus supplement;
o principal is only distributed on a related
class of certificates to the extent funds
remain after the trustee makes all
distributions of principal and interest on
those classes of certificates with a higher
priority of distribution as described under
"DESCRIPTION OF THE CERTIFICATES--
Distributions" in this prospectus
supplement;
o generally, no class of certificates is
entitled to distributions of principal until
the certificate balance of each class of
certificates with a higher priority of
distribution as described under "DESCRIPTION
OF THE CERTIFICATES--Distributions" in this
prospectus supplement has been reduced to
zero; and
o in no event will holders of the Class A-J,
Class B, Class C or Class D certificates or
the classes of non-offered certificates
(other than the Class A-1A certificates) be
entitled to receive any payments of
principal until the certificate balances of
the Class A-1, Class A-2, Class
S-19
A-3, Class A-PB, Class A-4 and Class A-1A
certificates have all been reduced to zero.
The amount of principal to be distributed for
each distribution date generally will be an
amount equal to:
o the scheduled principal payments (other than
balloon payments) due on the mortgage loans
included in the trust fund during the
related collection period whether or not
those scheduled payments are actually
received;
o balloon payments actually received with
respect to mortgage loans included in the
trust fund during the related collection
period;
o prepayments received with respect to the
mortgage loans included in the trust fund
during the related collection period;
o all liquidation proceeds, insurance
proceeds, condemnation awards and repurchase
and substitution amounts received during the
related collection period that are allocable
to principal; and
o for purposes of making distributions to the
Class A-1, Class A-2, Class A-3, Class A-PB,
Class A-4 and Class A-1A certificates, the
principal distribution amount for each loan
group on any distribution date will be equal
to the sum of the collections specified
above but only to the extent such amounts
relate to the mortgage loans comprising the
specified loan group.
However, if the master servicer or the trustee
reimburses itself out of general collections on
the mortgage pool for any advance that it or
the special servicer has determined is not
recoverable out of collections on the related
mortgage loan, and certain advances that are
determined not to be reimbursed currently in
connection with the work-out of a mortgage
loan, then such advances (together with accrued
interest thereon) will be deemed, to the
fullest extent permitted pursuant to the terms
of the pooling and servicing agreement, to be
reimbursed first out of payments and other
collections of principal otherwise
distributable on the principal balance
certificates, prior to, in the case of
nonrecoverable advances only, being deemed
reimbursed out of payments and other
collections of interest otherwise distributable
on the certificates.
SUBORDINATION; ALLOCATION OF
LOSSES AND CERTAIN EXPENSES.. Credit support for any class of certificates
(other than the Class Z, Class R-I and Class
R-II certificates) is provided by the
subordination of payments and allocation of any
losses to such classes of certificates which
have a later priority of distribution (other
than the Class X-C and Class X-P certificates)
and, with respect to the Class A-1, Class A-2,
Class
S-20
A-3, Class A-PB, Class A-4, and Class A-1A
certificates, the Class A-J certificates. The
certificate balance of a class of certificates
(other than the Class X-C, Class X-P, Class Z,
Class R-I and Class R-II certificates) will be
reduced on each distribution date by any losses
on the mortgage loans that have been realized
and certain additional trust fund expenses
actually allocated to that class of
certificates on that distribution date.
Losses on the mortgage loans that have been
realized and additional trust fund expenses
will be allocated without regard to loan group
and will first be allocated to the certificates
(other than the Class A-1A, Class X-C, Class
X-P, Class Z, Class R-I and Class R-II
certificates) that are not offered by this
prospectus supplement and then to the offered
certificates and the Class A-1A certificates as
indicated on the following table.
ORDER OF
PERCENTAGE APPLICATION
ORIGINAL OF CUT-OFF OF LOSSES
CERTIFICATE DATE POOL AND
CLASS DESIGNATION BALANCE BALANCE EXPENSES
- --------------------------------- ----------------- ------------ ------------
Class A-1 ..................... $ 133,240,000 4.744% 6
Class A-2 ..................... $ 290,000,000 10.326% 6
Class A-3 ..................... $ 82,400,000 2.934% 6
Class A-PB .................... $ 235,000,000 8.367% 6
Class A-4 ..................... $1,130,969,000 40.269% 6
Class A-1A .................... $ 375,240,000 13.361% 6
Class A-J ..................... $ 193,088,000 6.875% 5
Class B ....................... $ 77,236,000 2.750% 4
Class C ....................... $ 24,574,000 0.875% 3
Class D ....................... $ 49,150,000 1.750% 2
Other non-offered
certificates (excluding
the Class A-1A, Class
X-C, Class X-P, Class
R-I, Class R-II and
Class Z certificates) ....... $ 217,664,258 7.750% 1
Any losses realized on the mortgage loans
included in the trust fund or additional trust
fund expenses allocated in reduction of the
certificate balance of any class of sequential
pay certificates will result in a corresponding
reduction in the notional amount of the Class
X-C certificates and, with respect to the Class
A-2, Class A-3, Class A-PB, Class A-4, Class
A-J, Class B, Class C, Class D, Class E, Class
F, Class G and Class H certificates and
portions of the Class A-1 and Class A-1A
certificates, a corresponding reduction in the
notional amount of the Class X-P certificates.
Any losses and expenses that are associated
with each co-lender loan will be allocated in
accordance with the related intercreditor
agreement. Specifically, with regard to the
mortgage loans with pari passu companion loans,
any losses and expenses that are associated
with the applicable
S-21
whole loan will be allocated in accordance with
the terms of the related intercreditor
agreement, pro rata between each related
mortgage loan (and therefore to the
certificates other than the Class X-C, Class
X-P, Class Z, Class R-I and Class R-II
certificates) and its related pari passu
companion loan. Further, with regard to the
mortgage loans with subordinate companion
loans, any losses and expenses that are
associated with the applicable whole loan will
be allocated, in accordance with the terms of
the related intercreditor agreement, generally,
first, to the subordinate companion loan, and
second, to the related mortgage loan. The
portions of those losses and expenses that are
allocated to the mortgage loans that are
included in the trust fund will be allocated
among the Series 2005-C17 certificates in the
manner described above. See "DESCRIPTION OF THE
CERTIFICATES--Subordination; Allocation of
Losses and Certain Expenses" in this prospectus
supplement.
PREPAYMENT PREMIUMS; YIELD
MAINTENANCE CHARGES.......... On each distribution date, any prepayment
premium or yield maintenance charge actually
collected during the related collection period
on a mortgage loan included in the trust fund
will be distributed to the holders of each
class of offered certificates and the Class
A-1A, Class E, Class F, Class G and Class H
certificates then entitled to distributions as
follows:
The holders of each class of offered
certificates and the Class A-1A, Class E, Class
F, Class G and Class H certificates then
entitled to distributions of principal with
respect to the related loan group on that
distribution date will generally be entitled to
a portion of prepayment premiums or yield
maintenance charges equal to the product of:
o the amount of those prepayment premiums or
yield maintenance charges;
o a fraction (in no event greater than one),
the numerator of which is equal to the
excess, if any, of the pass-through rate of
that class of certificates over the relevant
discount rate, and the denominator of which
is equal to the excess, if any, of the
mortgage interest rate of the prepaid
mortgage loan over the relevant discount
rate; and
o a fraction, the numerator of which is equal
to the amount of principal distributable on
that class of certificates on that
distribution date, and the denominator of
which is the principal distribution amount
for that distribution date.
If there is more than one class of certificates
entitled to distributions of principal with
respect to the related loan group on any
particular distribution date on which a
prepayment premium or yield maintenance charge
is distributable, the aggregate amount of that
prepayment premium or yield maintenance charge
will be allocated among all such classes up to,
and on a pro rata basis in accordance with, the
S-22
foregoing entitlements.
The portion, if any, of the prepayment premiums
or yield maintenance charges remaining after
any payments described above will be
distributed as follows: (a) on or before the
distribution date in March 2012, 20% to the
holders of the Class X-P certificates and 80%
to the holders of the Class X-C certificates
and (b) thereafter, 100% to the holders of the
Class X-C certificates.
The "discount rate" applicable to any class of
offered certificates and the Class A-1A, Class
E, Class F, Class G and Class H certificates
will equal the yield (when compounded monthly)
on the U.S. Treasury issue with a maturity date
closest to the maturity date for the prepaid
mortgage loan or mortgage loan for which title
to the related mortgaged property was acquired
by the trust fund.
o In the event that there are two or more such
U.S. Treasury issues with the same coupon,
the issue with the lowest yield will be
utilized; and
o In the event that there are two or more such
U.S. Treasury issues with maturity dates
equally close to the maturity date for the
prepaid mortgage loan, the issue with the
earliest maturity date will be utilized.
EXAMPLES OF ALLOCATION OF PREPAYMENT PREMIUMS OR
YIELD MAINTENANCE CHARGES
Mortgage interest rate ......................... 8%
Pass-through rate for applicable class ......... 6%
Discount rate .................................. 5%
ALLOCATION
PERCENTAGE FOR ALLOCATION PERCENTAGE ALLOCATION PERCENTAGE
APPLICABLE CLASS FOR CLASS X-P FOR CLASS X-C
- ------------------ ----------------------- ----------------------
6% -- 5% (100% -- 33 1/3%) x (100% - 33 1/3%) x
- --------- = 33 1/3%
8% -- 5% 20% = 13 1/3% 80% = 53 1/3%
See "DESCRIPTION OF THE CERTIFICATES--
Distributions--Allocation of Prepayment
Premiums and Yield Maintenance Charges".
ALLOCATION OF
ADDITIONAL INTEREST........... On each distribution date, any additional
interest collected in respect of a mortgage
loan in the trust fund with an anticipated
repayment date during the related collection
period will be distributed to the holders of
the Class Z certificates. In each case, this
interest will not be available to provide
credit support for other classes of
certificates or offset any interest shortfalls.
ADVANCING OF PRINCIPAL
AND INTEREST.................. The master servicer is required to advance
delinquent scheduled payments of principal and
interest with respect to any mortgage loan
included in the trust fund unless the master
servicer or the special servicer determines
that the advance would not be recoverable from
proceeds of the related
S-23
mortgage loan. If the master servicer fails to
do so, the trustee is required to make a
principal and interest cash advance of such
scheduled payment of principal and interest.
The master servicer will not be required to
advance balloon payments due at maturity in
excess of regular periodic payments, interest
in excess of the mortgage loan's regular
interest rate or prepayment premiums or yield
maintenance charges. The amount of the interest
portion of any advance will be subject to
reduction to the extent that an appraisal
reduction of the related mortgage loan has
occurred.
These cash advances are only intended to
maintain a regular flow of scheduled principal
and interest payments on the certificates and
are not intended to guarantee or insure against
losses. In other words, the advances are
intended to provide liquidity (rather than
credit enhancement) to certificateholders. To
the extent described in this prospectus
supplement, the trust fund will pay interest to
the master servicer or the trustee, as the case
may be, on the amount of any principal and
interest cash advance calculated at the prime
rate (provided, that no principal and/or
interest cash advance shall accrue interest
until after the expiration of any applicable
grace or cure period for the related scheduled
payment) and will reimburse the master servicer
or the trustee for any principal and interest
cash advances that are later determined to be
not recoverable. Any principal and/or interest
cash advance on any pari passu companion loan
will not be recoverable by the master servicer
from the trust fund. Neither the master
servicer nor the trustee will be required to
make an advance with respect to any subordinate
companion loan. Additionally, the Trustee will
not be required to make an advance with respect
to any companion loan. See "DESCRIPTION OF THE
CERTIFICATES--P&I Advances" in this prospectus
supplement.
OPTIONAL TERMINATION OF
THE TRUST FUND............... The trust fund may be terminated when the
aggregate principal balance of the mortgage
loans included in the trust fund is less than
1.0% of the aggregate principal balance of the
pool of mortgage loans included in the trust
fund as of the cut-off date. See "DESCRIPTION
OF THE CERTIFICATES--Termination" in this
prospectus supplement and in the accompanying
prospectus.
The trust fund may also be terminated when the
Class A-1, Class A-2, Class A-3, Class A-PB,
Class A-4, Class A-1A, Class A-J, Class B,
Class C and Class D certificates have been paid
in full and all of the remaining certificates,
other than the Class Z certificates and the
REMIC residual certificates are held by a
single certificateholder. See "DESCRIPTION OF
THE CERTIFICATES--Termination" in this
prospectus supplement.
S-24
REGISTRATION AND
DENOMINATION.................. The offered certificates will initially be
registered in the name of Cede & Co., as
nominee for The Depository Trust Company in the
United States, or in Europe through Clearstream
Banking societe anonyme or Euroclear Bank S.A./
N.V., as operator of the Euroclear System. You
will not receive a definitive certificate
representing your interest in the trust fund,
except in the limited circumstances described
in the accompanying prospectus. See
"DESCRIPTION OF THE CERTIFICATES--Book-Entry
Registration and Definitive Certificates" in
the accompanying prospectus.
Beneficial interests in the Class A-1, Class
A-2, Class A-3, Class A-PB, Class A-4, Class
A-J, Class B, Class C and Class D certificates
will be offered in minimum denominations of
$10,000 actual principal amount and in integral
multiples of $1 in excess of those amounts.
MATERIAL FEDERAL INCOME TAX
CONSEQUENCES................. Two separate real estate mortgage investment
conduit elections will be made with respect to
most of the trust fund ("REMIC I" and "REMIC
II", each a "REMIC"). The offered certificates
will evidence regular interests in a REMIC and
generally will be treated as debt instruments
of such REMIC. The Class R-I certificates will
represent the residual interests in REMIC I,
and the Class R-II certificates will represent
the residual interests in REMIC II. The Class Z
certificateholders' entitlement to any
additional interest that has accrued on a
related mortgage loan that provides for the
accrual of such additional interest if the
unamortized principal amount of such mortgage
loan is not repaid on the anticipated repayment
date set forth in the related mortgage note
will be treated as a grantor trust (as
described in the related prospectus) for United
States federal income tax purposes.
The offered certificates will be treated as
newly originated debt instruments for federal
income tax purposes. You will be required to
report income with respect to the offered
certificates using the accrual method of
accounting, even if you otherwise use the cash
method of accounting. It is anticipated that
the Class certificates will be treated as
having been issued at a premium, that the Class
certificates will be treated as having been
issued with a de minimis amount of original
issue discount and that the Class certificates
will be treated as having been issued with
original issue discount for federal income tax
reporting purposes.
For further information regarding the federal
income tax consequences of investing in the
offered certificates, see "MATERIAL FEDERAL
INCOME TAX CONSEQUENCES" in this prospectus
supplement and in the accompanying prospectus.
S-25
ERISA CONSIDERATIONS.......... Subject to important considerations described
under "ERISA CONSIDERATIONS" in this prospectus
supplement and the accompanying prospectus, the
following certificates may be eligible for
purchase by persons investing assets of
employee benefit plans, individual retirement
accounts, or other retirement plans and
accounts:
Class A-1
Class A-2
Class A-3
Class A-PB
Class A-4
Class A-J
Class B
Class C
Class D
This is based on individual prohibited
transaction exemptions granted to each of
Wachovia Capital Markets, LLC, Countrywide
Securities Corporation, Citigroup Global
Markets, Inc., ABN AMRO Incorporated, Credit
Suisse First Boston LLC and Goldman, Sachs &
Co. by the U.S. Department of Labor. See "ERISA
CONSIDERATIONS" in this prospectus supplement
and in the accompanying prospectus.
LEGAL INVESTMENT.............. The offered certificates will not constitute
"mortgage related securities" for purposes of
the Secondary Mortgage Market Enhancement Act
of 1984, as amended. If your investment
activities are subject to legal investment laws
and regulations, regulatory capital
requirements, or review by regulatory
authorities, then you may be subject to
restrictions on investment in the offered
certificates. You should consult your own legal
advisers for assistance in determining the
suitability of and consequences to you of the
purchase, ownership and sale of the offered
certificates.
See "LEGAL INVESTMENT" in this prospectus
supplement and in the accompanying prospectus.
S-26
RATINGS....................... The offered certificates will not be issued
unless they have received the following ratings
from Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.,
Moody's Investors Service, Inc. and Fitch,
Inc.:
EXPECTED RATING FROM
CLASS S&P/MOODY'S/FITCH
- ---------------------- ---------------------
Class A-1 .......... AAA/Aaa/AAA
Class A-2 .......... AAA/Aaa/AAA
Class A-3 .......... AAA/Aaa/AAA
Class A-PB ......... AAA/Aaa/AAA
Class A-4 .......... AAA/Aaa/AAA
Class A-J .......... AAA/Aaa/AAA
Class B ............ AA/Aa2/AA
Class C ............ AA--/Aa3/AA--
Class D ............ A/A2/A
The ratings on the offered certificates address
the likelihood of timely receipt of interest
and ultimate receipt of principal by the rated
final distribution date by the holders of
offered certificates. They do not address the
likely actual rate of prepayments. The rate of
prepayments, if different than originally
anticipated, could adversely affect the yield
realized by holders of the offered
certificates. In addition, ratings adjustments
may result from a change in the financial
position of the trustee as back-up liquidity
provider. See "RATINGS" in this prospectus
supplement and in the accompanying prospectus
for a discussion of the basis upon which
ratings are given, the limitations and
restrictions on the ratings, and conclusions
that should not be drawn from a rating.
THE MORTGAGE LOANS
GENERAL....................... It is expected that the mortgage loans to be
included in the trust fund will have the
following approximate characteristics as of the
cut-off date. All information presented in this
prospectus supplement (including cut-off date
balance per square foot/unit/room,
loan-to-value ratios and debt service coverage
ratios) with respect to the 7 mortgage loans
with subordinate companion loans is calculated
without regard to the related subordinate
companion loans, as the case may be. With
respect to loan numbers 1 and 2, unless
otherwise specified, the calculations of loan
balance per square foot, loan-to-value ratios
and debt service coverage ratios were based on
the aggregate indebtedness of these mortgage
loans and the related pari passu companion
loans, if any. All percentages of the mortgage
loans, or any specified group of mortgage
loans, referred to in this prospectus
supplement are approximate percentages.
S-27
The totals in the following tables may not add
up to 100% due to rounding.
ALL MORTGAGE LOAN LOAN
LOANS GROUP 1 GROUP 2
--------------------- --------------------- --------------------
Number of mortgage
loans ......................... 229 196 33
Number of crossed loan
pools(1) ...................... 13 12 2
Number of mortgaged
properties .................... 291 258 33
Aggregate balance of all
mortgage loans ................ $2,808,561,259 $2,433,320,810 $375,240,449
Number of mortgage loans
with balloon payments(2) ...... 148 116 32
Aggregate balance of
mortgage loans with
balloon payments(2) ........... $2,223,603,223 $1,875,837,775 $347,765,449
Number of mortgage loans
with anticipated
repayment dates(3) ............ 38 38 0
Aggregate balance of
mortgage loans with
anticipated repayment
dates(3) ...................... $ 257,117,677 $ 257,117,677 $ 0
Number of fully
amortizing mortgage loans ..... 6 6 0
Aggregate balance of fully
amortizing mortgage
loans ......................... $ 26,215,109 $ 26,215,109 $ 0
Number of non-amortizing
mortgage loans ................ 37 36 1
Aggregate balance of
non-amortizing
mortgage loans ................ $ 301,625,250 $ 274,150,250 $ 27,475,000
Average mortgage loan
balance ....................... $ 12,264,460 $ 12,414,902 $ 11,370,923
Minimum mortgage loan
balance ....................... $ 1,157,979 $ 1,157,979 $ 1,772,482
Maximum mortgage loan
balance ....................... $ 216,000,000 $ 216,000,000 $ 28,000,000
Maximum balance for a
group of
cross-collateralized and
cross-defaulted loans ......... $154,335,917(4) $ 154,335,917(4) $ 28,000,000(5)
Weighted average cut-off
date loan-to-value
ratio(6) ...................... 70.1% 69.3% 74.8%
Minimum cut-off date
loan-to-value ratio ........... 26.5% 26.5% 66.4%
S-28
ALL MORTGAGE LOAN LOAN
LOANS GROUP 1 GROUP 2
------------- ----------- ------------
Maximum cut-off date
loan-to-value ratio .......... 81.0% 81.0% 80.0%
Weighted average
underwritten debt
service coverage ratio(7)..... 1.53x 1.56x 1.31x
Minimum underwritten
debt service coverage
ratio ........................ 1.20x 1.20x 1.20x
Maximum underwritten
debt service coverage
ratio ........................ 4.59x 4.59x 1.73x
Weighted average
loan-to-value ratio at
stated maturity or
anticipated repayment
date(6) ...................... 59.9% 58.8% 67.0%
Weighted average
mortgage interest rate ....... 5.420% 5.433% 5.334%
Minimum mortgage
interest rate ................ 4.620% 4.620% 4.930%
Maximum mortgage
interest rate ................ 6.880% 6.880% 5.840%
Weighted average
remaining term to
maturity or anticipated
repayment date (months) ...... 111 111 108
Minimum remaining term
to maturity or
anticipated repayment
date (months) ................ 50 55 50
Maximum remaining term
to maturity or
anticipated repayment
date (months) ................ 262 262 120
Weighted average
occupancy rate(8) ............ 92.4% 92.0% 95.0%
------ ------ ------
----------
(1) One (1) group of crossed loan pools
consists of mortgage loans in both loan
groups.
(2) Does not include mortgage loans with
anticipated repayment dates or mortgage
loans that are interest-only for their
entire term.
(3) Does not include mortgage loans that are
interest-only for their entire term.
(4) Consists of a group of 6 individual
mortgage loans (loan numbers 11, 16, 18,
45, 63 and 84).
(5) Loan group 2 contains 1 mortgage loan
(loan number 24), which is crossed with 1
mortgage loan (loan number 60) in loan
group 1.
(6) For purposes of determining the
loan-to-value ratio of 1 mortgage loan
(loan number 57), representing 0.5% of
the cut-off date pool balance, such ratio
was adjusted by taking into account an
amount available under a letter of
credit.
(7) For purposes of determining the debt
service coverage ratio of 4 mortgage
loans (loan numbers 57, 58, 82 and 169),
representing 1.3% of the cut-off date
pool balance, such ratio was adjusted by
taking into account an amount available
in cash reserves or under a letter of
credit.
(8) Excludes 19 mortgage loans secured by
hospitality properties, representing
10.1% of the mortgage pool (11.7% of loan
group 1) and 1 mortgage loan secured by a
special purpose property, representing
1.5% of the mortgage pool (1.7% of loan
group 1).
S-29
SECURITY FOR THE MORTGAGE
LOANS IN THE TRUST FUND...... Generally, all of the mortgage loans included
in the trust fund are non-recourse obligations
of the related borrowers.
o No mortgage loan included in the trust fund
is insured or guaranteed by any government
agency or private insurer.
o All of the mortgage loans included in the
trust fund are secured by first lien fee
mortgages and/or leasehold mortgages on
commercial properties or multifamily
properties.
PROPERTY TYPES................ The following table describes the mortgaged
properties securing the mortgage loans expected
to be included in the trust fund as of the
cut-off date:
MORTGAGED PROPERTIES BY PROPERTY TYPE(1)
PERCENTAGE OF PERCENTAGE OF
NUMBER OF AGGREGATE PERCENTAGE OF CUT-OFF DATE CUT-OFF DATE
MORTGAGED CUT-OFF DATE CUT-OFF DATE GROUP 1 GROUP 2
PROPERTY TYPE PROPERTIES BALANCE POOL BALANCE BALANCE BALANCE
- -------------------------------------- ------------ ----------------- --------------- --------------- --------------
Office ............................... 39 $1,079,253,946 38.4% 44.4% 0.0%
Retail ............................... 114 699,471,581 24.9 28.7 0.0
Retail - Anchored ................... 91 581,374,195 20.7 23.9 0.0
Retail - Unanchored ................. 15 78,980,225 2.8 3.2 0.0
Retail - Shadow Anchored(2) ......... 8 39,117,161 1.4 1.6 0.0
Multifamily .......................... 37 434,740,449 15.5 2.4 100.0
Hospitality(3) ....................... 56 285,026,438 10.1 11.7 0.0
Mixed Use ............................ 5 147,352,188 5.2 6.1 0.0
Industrial ........................... 29 80,460,737 2.9 3.3 0.0
Special Purpose(4) ................... 5 51,799,250 1.8 2.1 0.0
Self Storage ......................... 3 20,364,780 0.7 0.8 0.0
Land(5) .............................. 3 10,091,890 0.4 0.4 0.0
--- -------------- ----- ----- -----
TOTAL ............................... 291 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
- ----------
(1) Because this table presents information relating to the mortgaged
properties and not the mortgage loans, the information for mortgage loans
secured by more than one mortgaged property is based on allocated loan
amounts (allocating the mortgage loan principal balance to each of those
properties by the appraised values of the mortgaged properties or the
allocated loan amount as detailed in the related mortgage loan documents).
(2) A mortgaged property is classified as shadow anchored if it is located in
close proximity to an anchored retail property.
(3) With regard to 1 mortgage loan (loan number 5), the mortgaged property
includes the fee interest in land which the ground tenant has improved and
leased as 13 limited service hotels, the source of funds for which
mortgaged loan is the ground rent payments made to the related borrower.
The 13 hotels are not part of the loan collateral for that mortgaged loan,
but the loan collateral for another mortgaged loan (loan number 3) does
include those 13 hotels.
(4) Specifically, 2 mortgaged properties that are operated as parking garages
and 3 mortgaged properties that are used for childcare.
(5) Specifically, the fee interest in land which the ground tenant has
improved and leased as an unanchored retail building or restaurant.
Neither of the retail building or restaurant is part of the loan
collateral, and the sources of funds for loan repayment are the ground
rent payments made to the related borrower.
[GRAPHIC OMITTED]
Retail 24.9%
Multifamily 15.5%
Hospitality 10.1%
Mixed Use 5.2%
Industrial 2.9%
Special Purpose 1.8%
Self Storage 0.7%
Land 0.4%
Office 38.4%
S-30
GEOGRAPHIC CONCENTRATIONS..... The mortgaged properties are located
throughout 38 states and the District of
Columbia. The following table describes the
number and percentage of mortgaged properties
in states which have concentrations of
mortgaged properties above 5.0%:
MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1)
NUMBER OF AGGREGATE PERCENTAGE OF
MORTGAGED CUT-OFF DATE CUT-OFF DATE
STATE PROPERTIES BALANCE POOL BALANCE
- ----------------------- ------------ ---------------- --------------
MA .................. 14 $ 345,896,799 12.3%
CA .................. 20 283,038,986 10.1
Southern(2) ....... 16 187,088,986 6.7
Northern(2) ....... 4 95,950,000 3.4
NY .................. 8 244,942,391 8.7
TX .................. 48 224,543,504 8.0
DC .................. 5 177,259,053 6.3
VA .................. 10 171,430,483 6.1
FL .................. 28 151,885,266 5.4
Other ............... 158 1,209,564,778 43.1
--- -------------- -----
TOTAL ............. 291 $2,808,561,259 100.0%
=== ============== =====
----------
(1) Because this table presents information
relating to the mortgaged properties and
not the mortgage loans, the information
for mortgage loans secured by more than
one mortgaged property is based on
allocated loan amounts (allocating the
mortgage loan principal balance to each
of those properties by the appraised
values of the mortgaged properties) or
the allocated loan amount as detailed in
the related mortgage loan documents.
(2) For purposes of determining whether a
mortgaged property is located in Northern
California or Southern California,
mortgaged properties located north of San
Luis Obispo County, Kern County and San
Bernardino County were included in
Northern California and mortgaged
properties located in and south of such
counties were included in Southern
California.
S-31
LOAN GROUP 1
MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1)
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE
MORTGAGED CUT-OFF DATE GROUP 1
STATE PROPERTIES BALANCE BALANCE
- ----------------------- ------------ ---------------- --------------
MA .................. 12 $ 330,246,799 13.6%
CA .................. 18 250,038,986 10.3
Southern(2) ....... 15 182,088,986 7.5
Northern(2) ....... 3 67,950,000 2.8
NY .................. 8 244,942,391 10.1
TX .................. 45 183,018,504 7.5
DC .................. 4 162,779,619 6.7
VA .................. 7 153,149,433 6.3
Other ............... 164 1,109,145,079 45.6
--- -------------- -----
TOTAL ............. 258 $2,433,320,810 100.0%
=== ============== =====
----------
(1) Because this table presents information
relating to the mortgaged properties and
not the mortgage loans, the information
for mortgage loans secured by more than
one mortgaged property is based on
allocated loan amounts (allocating the
mortgage loan principal balance to each
of those properties by the appraised
values of the mortgaged properties) or
the allocated loan amount as detailed in
the related mortgage loan documents.
(2) For purposes of determining whether a
mortgaged property is located in Northern
California or Southern California,
mortgaged properties located north of San
Luis Obispo County, Kern County and San
Bernardino County were included in
Northern California and mortgaged
properties located in and south of such
counties were included in Southern
California.
LOAN GROUP 2
MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1)
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE
MORTGAGED CUT-OFF DATE GROUP 2
STATE PROPERTIES BALANCE BALANCE
- ----------------------- ------------ -------------- --------------
TX .................. 3 $ 41,525,000 11.1%
AL .................. 2 38,676,355 10.3
FL .................. 2 34,475,414 9.2
CO .................. 2 34,207,000 9.1
CA .................. 2 33,000,000 8.8
Northern(2) ....... 1 28,000,000 7.5
Southern(2) ....... 1 5,000,000 1.3
TN .................. 2 32,600,000 8.7
MN .................. 4 18,964,628 5.1
Other ............... 16 141,792,051 37.8
-- ------------ -----
TOTAL ............. 33 $375,240,449 100.0%
== ============ =====
----------
(1) Because this table presents information
relating to the mortgaged properties and
not the mortgage loans, the information
for mortgage loans secured by more than
one mortgaged property is based on
allocated loan amounts (allocating the
mortgage loan principal balance to each
of those properties by the appraised
values of the mortgaged properties) or
the allocated loan amount as detailed in
the related mortgage loan documents.
(2) For purposes of determining whether a
mortgaged property is located in Northern
California or Southern California,
mortgaged properties located north of San
Luis Obispo County, Kern County and San
Bernardino County were included in
Northern California and mortgaged
properties located in and south of such
counties were included in Southern
California.
S-32
PAYMENT TERMS................. All of the mortgage loans included in the
trust fund accrue interest at a fixed rate,
other than mortgage loans providing for an
anticipated repayment date, which provide for
an increase of fixed interest after a certain
date.
o Payments on the mortgage loans included in
the trust fund are due on the 11th day of
the month, except that payments on 1
mortgage loan, representing 0.3% of the
mortgage pool (0.3% of loan group 1), are
due on the 1st day of the month, payments on
2 mortgage loans, representing 1.2% of the
mortgage pool (1.4% of loan group 1), are
due on the 4th day of the month, and
payments on 4 mortgage loans, representing
4.0% of the mortgage pool (3 mortgage loans
in loan group 1 or 4.3% and 1 mortgage loan
in group 2 or 2.4%), are due on the 6th day
of the month. No mortgage loan has a grace
period that extends payment beyond the 11th
day of any calendar month.
o As of the cut-off date, 228 of the mortgage
loans, representing 99.7% of the mortgage
pool (195 mortgage loans in loan group 1 or
99.6% and all of the mortgage loans in loan
group 2), accrue interest on an actual/360
basis and 1 of the mortgage loan,
representing 0.3% of the mortgage pool (0.4%
of loan group 1), accrues interest on a
30/360 basis. Ninety-two (92) of the
mortgage loans, representing 52.1% of the
mortgage pool (70 mortgage loans in loan
group 1 or 48.7% and 22 mortgage loans in
loan group 2 or 73.7%), have periods during
which only interest is due and periods in
which principal and interest are due.
Thirty-seven (37) mortgage loans,
representing 10.7% of the mortgage pool (36
mortgage loans in loan group 1 or 11.3% and
1 mortgage loan in loan group 2 or 7.3%),
provide that only interest is due until
maturity or the anticipated repayment date.
One (1) mortgage loan, representing 1.5% of
the mortgage pool (1.8% of loan group 1),
provides that only interest is due until
maturity unless certain financial conditions
are not met, in which case principal and
interest are due for the remaining term of
such loan.
The following tables set forth additional
characteristics of the mortgage loans that we
anticipate to be included in the trust fund as
of the cut-off date:
S-33
RANGE OF CUT-OFF DATE BALANCES
PERCENTAGE OF PERCENTAGE OF
AGGREGATE PERCENTAGE OF CUT-OFF DATE CUT-OFF DATE
RANGE OF CUT-OFF DATE NUMBER CUT-OFF DATE CUT-OFF DATE GROUP 1 GROUP 2
BALANCES ($) OF LOANS BALANCE POOL BALANCE BALANCE BALANCE
- ---------------------------------- ---------- ----------------- --------------- --------------- --------------
- - 2,000,000 ...................... 19 $ 31,066,229 1.1% 1.1% 1.0%
2,000,001 - 3,000,000 ............ 37 96,941,215 3.5 3.9 0.8
3,000,001 - 4,000,000 ............ 33 116,925,703 4.2 4.7 0.9
4,000,001 - 5,000,000 ............ 24 104,576,667 3.7 3.7 3.7
5,000,001 - 6,000,000 ............ 14 76,131,499 2.7 2.5 4.3
6,000,001 - 7,000,000 ............ 8 51,212,466 1.8 1.6 3.6
7,000,001 - 8,000,000 ............ 11 84,289,340 3.0 3.5 0.0
8,000,001 - 9,000,000 ............ 8 68,209,804 2.4 1.7 7.0
9,000,001 - 10,000,000 ........... 7 66,031,995 2.4 1.9 5.1
10,000,001 - 15,000,000 .......... 16 193,087,063 6.9 4.5 22.1
15,000,001 - 20,000,000 .......... 9 151,149,902 5.4 4.3 12.7
20,000,001 - 25,000,000 .......... 14 314,399,238 11.2 9.2 24.1
25,000,001 - 30,000,000 .......... 10 281,312,549 10.0 9.3 14.8
30,000,001 - 35,000,000 .......... 2 66,868,735 2.4 2.7 0.0
35,000,001 - 40,000,000 .......... 3 112,144,476 4.0 4.6 0.0
40,000,001 - 45,000,000 .......... 3 128,640,495 4.6 5.3 0.0
45,000,001 - 50,000,000 .......... 3 143,443,083 5.1 5.9 0.0
50,000,001 - 55,000,000 .......... 3 161,000,000 5.7 6.6 0.0
55,000,001 - 60,000,000 .......... 1 57,844,828 2.1 2.4 0.0
70,000,001 - 75,000,000 .......... 1 75,000,000 2.7 3.1 0.0
75,000,001 - 80,000,000 .......... 1 79,785,970 2.8 3.3 0.0
80,000,001 - 216,000,000 ......... 2 348,500,000 12.4 14.3 0.0
-- -------------- ----- ----- -----
TOTAL ........................... 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
RANGE OF MORTGAGE RATES
PERCENTAGE OF PERCENTAGE OF
AGGREGATE PERCENTAGE OF CUT-OFF DATE CUT-OFF DATE
RANGE OF MORTGAGE NUMBER CUT-OFF DATE CUT-OFF DATE GROUP 1 GROUP 2
RATES (%) OF LOANS BALANCE POOL BALANCE BALANCE BALANCE
- ----------------------- ---------- ----------------- --------------- --------------- --------------
4.620 - 5.249 ......... 51 $1,109,311,000 39.5% 39.9% 36.9%
5.250 - 5.499 ......... 72 659,484,984 23.5 20.1 45.2
5.500 - 5.749 ......... 71 642,681,020 22.9 24.6 11.5
5.750 - 5.999 ......... 20 259,182,208 9.2 9.7 6.5
6.000 - 6.249 ......... 4 68,041,046 2.4 2.8 0.0
6.500 - 6.749 ......... 1 4,000,000 0.1 0.2 0.0
6.750 - 6.999 ......... 10 65,861,000 2.3 2.7 0.0
-- -------------- ----- ----- -----
TOTAL ................ 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
S-34
RANGE OF UNDERWRITTEN DSC RATIOS*
AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
RANGE OF DSCR (X) OF LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE
- --------------------- ---------- ----------------- --------------- ----------------- ----------------
1.20 - 1.24 ......... 49 $ 668,302,756 23.8% 20.1% 48.0%
1.25 - 1.29 ......... 40 384,202,356 13.7 13.6 14.2
1.30 - 1.34 ......... 23 328,678,455 11.7 12.2 8.6
1.35 - 1.39 ......... 21 194,072,683 6.9 6.7 8.0
1.40 - 1.44 ......... 13 184,839,836 6.6 7.1 3.1
1.45 - 1.49 ......... 9 121,107,964 4.3 4.5 2.8
1.50 - 1.54 ......... 11 129,892,214 4.6 3.7 10.4
1.55 - 1.59 ......... 10 96,962,875 3.5 3.3 4.2
1.60 - 1.64 ......... 2 11,700,000 0.4 0.5 0.0
1.65 - 1.69 ......... 1 4,380,000 0.2 0.2 0.0
1.70 - 1.74 ......... 5 33,232,856 1.2 1.2 0.8
1.75 - 1.79 ......... 3 226,747,688 8.1 9.3 0.0
1.85 - 1.89 ......... 3 53,596,399 1.9 2.2 0.0
1.90 - 1.94 ......... 3 5,120,533 0.2 0.2 0.0
2.05 - 2.09 ......... 2 66,940,318 2.4 2.8 0.0
2.10 - 2.14 ......... 1 40,000,000 1.4 1.6 0.0
2.15 - 2.19 ......... 1 3,000,000 0.1 0.1 0.0
2.20 - 2.24 ......... 6 17,582,760 0.6 0.7 0.0
2.25 - 2.29 ......... 4 9,707,000 0.3 0.4 0.0
2.30 - 3.79 ......... 21 225,994,564 8.0 9.3 0.0
3.80 - 4.59 ......... 1 2,500,000 0.1 0.1 0.0
-- -------------- ----- ----- -----
TOTAL .............. 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
- ----------
* For purposes of determining the debt service coverage ratio of 4 mortgage
loans (loan numbers 57, 58, 82 and 169), representing 1.3% of the mortgage
pool (3 mortgage loans in group 1 or 1.0% and 1 mortgage loan in group 2
or 3.5%), such ratio was adjusted taking into account an amount available
in cash reserves or under a letter of credit. See "DESCRIPTION OF THE
MORTGAGE POOL--Additional Mortgage Loan Information" in this prospectus
supplements.
RANGE OF CUT-OFF DATE LTV RATIOS*
AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
RANGE OF CUT-OFF DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
LTV RATIOS (%) OF LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE
- ----------------------- ---------- ----------------- --------------- ----------------- ----------------
25.01 - 30.00 ......... 1 $ 2,500,000 0.1% 0.1% 0.0%
30.01 - 35.00 ......... 1 27,000,000 1.0 1.1 0.0
35.01 - 40.00 ......... 1 3,900,000 0.1 0.2 0.0
40.01 - 50.00 ......... 7 63,078,209 2.2 2.6 0.0
50.01 - 55.00 ......... 25 202,378,538 7.2 8.3 0.0
55.01 - 60.00 ......... 13 56,359,136 2.0 2.3 0.0
60.01 - 65.00 ......... 11 364,304,362 13.0 15.0 0.0
65.01 - 70.00 ......... 26 351,427,595 12.5 11.9 16.7
70.01 - 75.00 ......... 55 748,472,643 26.6 25.7 33.0
75.01 - 80.00 ......... 87 943,140,776 33.6 31.0 50.2
80.01 - 81.01 ......... 2 46,000,000 1.6 1.9 0.0
-- -------------- ----- ----- -----
TOTAL ................ 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
- ----------
* For purposes of determining the loan-to-value ratio of 1 mortgage loan
(loan number 57), representing 0.5% of the mortgage pool (0.5% of loan
group 1), such ratio was adjusted by taking into account an amount
available under a letter of credit.
S-35
RANGE OF REMAINING TERMS TO MATURITY DATE
OR ANTICIPATED REPAYMENT DATE*
AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
RANGE OF REMAINING TERMS NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
(MONTHS) OF LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE
- -------------------------- ---------- ---------------- --------------- ----------------- ----------------
0 - 60 ................... 25 $ 306,665,129 10.9% 11.6% 6.7%
61 - 84 .................. 6 144,060,000 5.1 3.7 14.7
85 - 108 ................. 3 57,122,684 2.0 2.3 0.0
109 - 120 ................ 186 2,262,118,338 80.5 80.8 78.6
121 - 156 ................ 2 7,180,000 0.3 0.3 0.0
169 - 180 ................ 2 8,300,000 0.3 0.3 0.0
205 - 216 ................ 1 2,990,861 0.1 0.1 0.0
229 - 240 ................ 2 5,906,624 0.2 0.2 0.0
253 - 264 ................ 2 14,217,623 0.5 0.6 0.0
--- -------------- ----- ----- -----
TOTAL ................... 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
- ----------
* With respect to the mortgage loans with anticipated repayment dates, the
remaining term to maturity was calculated as of the related anticipated
repayment date.
AMORTIZATION TYPES
AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
AMORTIZATION TYPE OF LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE
- -------------------------------------------- ---------- ----------------- --------------- ----------------- ----------------
Interest-only, Amortizing Balloon* ......... 63 $1,263,248,000 45.0% 40.5% 73.7%
Amortizing Balloon ......................... 85 960,355,223 34.2 36.5 18.9
Interest-only, Amortizing ARD* ............. 29 199,578,000 7.1 8.2 0.0
Interest-only, Balloon ..................... 9 177,775,000 6.3 7.3 0.0
Interest-only, ARD ......................... 28 123,850,250 4.4 4.0 7.3
Amortizing ARD ............................. 9 57,539,677 2.0 2.4 0.0
Fully Amortizing ........................... 6 26,215,109 0.9 1.1 0.0
-- -------------- ----- ----- -----
TOTAL ..................................... 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
- ----------
* These mortgage loans require payments of interest only for a period of 5
to 60 months from origination prior to the commencement of payments of
principal and interest with respect to the mortgage pool and loan group 1,
and a period of 7 to 36 months for loan group 2.
S-36
Balloon loans have amortization schedules
significantly longer than their terms to
maturity and have substantial principal
payments due on their maturity dates, unless
prepaid earlier.
Mortgage loans providing for anticipated
repayment dates generally fully or
substantially amortize through their terms to
maturity. However, if such a mortgage loan is
not prepaid by a date specified in its related
mortgage note, interest will accrue at a higher
rate and the related borrower will be required
to apply all cash flow generated by the
mortgaged property in excess of its regular
debt service payments and certain other
permitted expenses and reserves to repay
principal on the mortgage loan.
In addition, because the fixed periodic payment
on the mortgage loans is determined assuming
interest is calculated on a "30/360 basis," but
interest actually accrues and is applied on the
majority of the mortgage loans on an "actual/
360 basis," there will be less amortization,
absent prepayments, of the principal balance
during the term of the related mortgage loan,
resulting in a higher final payment on such
mortgage loan. This will occur even if a
mortgage loan is a "fully amortizing" mortgage
loan.
See "DESCRIPTION OF THE MORTGAGE POOL-- Certain
Terms and Conditions of the Mortgage Loans" in
this prospectus supplement.
PREPAYMENT RESTRICTIONS....... All of the mortgage loans included in the
trust fund restrict or prohibit voluntary
prepayments of principal in some manner for
some period of time.
TYPES OF PREPAYMENT RESTRICTIONS
AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
PREPAYMENT NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
RESTRICTION TYPE OF LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE
- -------------------------------------- ---------- ----------------- --------------- ----------------- ----------------
Lockout/Defeasance ................... 202 $2,544,937,882 90.6% 92.1% 80.7%
Lockout/Yield Maintenance ............ 24 192,023,377 6.8 4.9 19.3
Yield Maintenance .................... 2 69,000,000 2.5 2.8 0.0
Yield Maintenance/Defeasance ......... 1 2,600,000 0.1 0.1 0.0
--- -------------- ----- ----- -----
TOTAL ............................... 229 $2,808,561,259 100.0% 100.0% 100.0%
=== ============== ===== ===== =====
See "DESCRIPTION OF THE MORTGAGE POOL--
Additional Mortgage Loan Information" in this
prospectus supplement. The ability of the
master servicer or special servicer to waive or
modify the terms of any mortgage loan relating
to the payment of a prepayment premium or yield
maintenance charge will be limited as described
in this prospectus supplement. See "SERVICING
OF THE MORTGAGE LOANS--Modifications, Waivers
and Amendments" in this prospectus supplement.
We make no representations as to the
enforceability of the provisions of any
mortgage notes requiring the payment of a
prepayment premium or
S-37
yield maintenance charge or limiting
prepayments to defeasance or the ability of the
master servicer or special servicer to collect
any prepayment premium or yield maintenance
charge.
DEFEASANCE.................... Two hundred three (203) of the mortgage loans
included in the trust fund as of the cut-off
date, representing 90.7% of the mortgage pool
(176 mortgage loans in loan group 1 or 92.3%
and 27 mortgage loans in loan group 2 or
80.7%), permit the borrower, under certain
conditions, to substitute United States
government obligations as collateral for the
related mortgage loans (or a portion thereof)
following their respective lock-out or yield
maintenance periods. Upon substitution, the
related mortgaged property (or, in the case of
a mortgage loan secured by multiple mortgaged
properties, one or more of such mortgaged
properties) will no longer secure the related
mortgage loan. The payments on the defeasance
collateral are required to be at least equal to
an amount sufficient to make, when due, all
payments on the related mortgage loan or
allocated to the related mortgaged property;
provided that in the case of certain mortgage
loans, these defeasance payments may cease at
the beginning of the open prepayment period
with respect to that mortgage loan, and the
final payment on the defeasance collateral on
such early prepayment date would fully prepay
the mortgage loan. Defeasance may not occur
prior to the second anniversary of the issuance
of the certificates. See "DESCRIPTION OF THE
MORTGAGE POOL--Certain Terms and Conditions of
the Mortgage Loans--Prepayment Provisions" in
this prospectus supplement.
TWENTY LARGEST
MORTGAGE LOANS................ The following table describes certain
characteristics of the twenty largest mortgage
loans or groups of cross-collateralized
mortgage loans in the trust fund by aggregate
principal balance as of the cut-off date. With
respect to the loans referred to as the One &
Two International Place mortgage loan and the
450 West 33rd Street mortgage loan in the
immediately following table, the loan balance
per square foot, the debt service coverage
ratio and the loan-to-value ratio set forth in
such table, in each case, are based on the
aggregate combined principal balance of each of
the One & Two International Place mortgage loan
and the 450 West 33rd Street mortgage loan, as
the case may be, and its related pari passu
companion loans. No companion loan is included
in the trust fund.
S-38
NUMBER OF % OF
MORTGAGE % OF APPLICABLE
LOANS/ CUT-OFF CUT-OFF
MORTGAGE NUMBER OF CUT-OFF DATE DATE
LOAN MORTGAGED LOAN DATE POOL LOAN GROUP
LOAN NAME SELLER PROPERTIES GROUP BALANCE (1) BALANCE BALANCE
- --------------------------- ------------- ------------ ------- ----------------- --------- ------------
One & Two
International Place....... Wachovia 1/1 1 $ 216,000,000 7.7% 8.9%
Digital Realty Trust
Portfolio ................ Citigroup 6/6 1 154,335,917 5.5 6.3
450 West 33rd Street ...... Wachovia 1/1 1 132,500,000 4.7 5.4
Olympia Portfolio ......... Wachovia 23/24 1 85,700,000 3.1 3.5
Tharaldson Pool I-B ....... Countrywide 1/13 1 79,785,970 2.8 3.3
111 Massachusetts
Avenue ................... Wachovia 1/1 1 75,000,000 2.7 3.1
Residence Inn
Portfolio #1 ............. Wachovia 10/10 1 65,861,000 2.3 2.7
Tharaldson Pool I-A ....... Countrywide 1/25 1 57,844,828 2.1 2.4
MetroPlace III & IV ....... Wachovia 1/1 1 55,000,000 2.0 2.3
1001 Connecticut
Avenue & 1701
K Street ................. Wachovia 1/1 1 53,000,000 1.9 2.2
----- -------------- ----
46/83 $ 975,027,715 34.7%
===== ============== ====
Eastmont Town Center....... Countrywide 1/1 1 $ 53,000,000 1.9% 2.2%
Great Wolf Resorts
Pool ..................... Citigroup 1/2 1 49,843,594 1.8 2.0
Falchi Building ........... Wachovia 1/1 1 47,000,000 1.7 1.9
Gardner Tanenbaum
Pool ..................... Countrywide 1/8 1 43,200,000 1.5 1.8
Cabrillo Palisades ........ Wachovia 1/1 1 43,000,000 1.5 1.8
201 West Madison .......... Countrywide 1/1 1 42,440,495 1.5 1.7
One Fair Oaks ............. Wachovia 1/1 1 40,000,000 1.4 1.6
Cadbury Schweppes ......... Wachovia 1/1 1 36,000,000 1.3 1.5
Santa Teresa Portfolio..... Countrywide 2/19 1 33,878,000 1.2 1.4
Choice Center ............. Wachovia 1/1 1 32,516,547 1.2 1.3
----- ------- -------------- ----
11/36 $ 420,878,636 15.0%
----- ============== ====
57/119 $1,395,906,351 49.7%
====== ============== ====
LOAN CUT-OFF LTV
BALANCE PER DATE RATIO AT
PROPERTY SF/UNIT/ LTV MATURITY MORTGAGE
LOAN NAME TYPE ROOM(2) DSCR(2) RATIO(2) OR ARD(2) RATE
- --------------------------- ---------------------- ---------------- --------------- ---------- ----------- -----------
One & Two
International Place....... Office - CBD $ 233 1.77 x 61.7% 53.7% 5.205%
Digital Realty Trust
Portfolio ................ Office/Mixed Use $ 109 1.55 x 67.3% 56.7% 5.649%
450 West 33rd Street ...... Office - CBD $ 158 1.22 x 68.8% 59.3% 5.100%
Olympia Portfolio ......... Retail/Office $ 210 1.25 x 75.0% 58.6% 5.692%
Hospitality - Limited
Tharaldson Pool I-B ....... Service $ 55,561 2.36 x 54.3% 34.5% 5.158%
111 Massachusetts
Avenue ................... Office - CBD $ 270 1.34 x 76.5% 65.0% 5.200%
Residence Inn Hospitality -
Portfolio #1 ............. Extended Stay $ 57,824 1.43 x 71.1% 58.6% 6.880%
Hospitality - Limited
Tharaldson Pool I-A ....... Service $ 42,553(3) 2.09 x 54.5% 34.6% 5.158%
MetroPlace III & IV ....... Office - Suburban $ 162 1.53 x 64.6% 56.2% 5.210%
1001 Connecticut
Avenue & 1701
K Street ................. Office - CBD $ 242 1.27 x 77.9% 71.9% 5.060%
1.58X 66.5% 55.0% 5.402%
Mixed Use -
Eastmont Town Center....... Office/Retail $ 90 1.31x(4) 71.1% 52.3% 6.240%
Great Wolf Resorts Hospitality - Full
Pool ..................... Service $ 88,690 3.08 x 42.0% 32.4% 5.835%
Mixed Use -
Falchi Building ........... Office/Industrial $ 74 1.21 x 82.5% 76.9% 5.800%
Gardner Tanenbaum Industrial -
Pool ..................... Warehouse/Flex $ 40 1.40 x 76.6% 63.9% 5.460%
Multifamily -
Cabrillo Palisades ........ Conventional $ 116,531 1.49 x 67.5% 67.5% 5.570%
Special Purpose -
201 West Madison .......... Parking $ 110 1.38 x 74.6% 62.4% 5.500%
One Fair Oaks ............. Office - Suburban $ 187 2.10 x 74.6% 74.6% 4.780%
Cadbury Schweppes ......... Office - Flex $ 241 1.29 x 75.0% 62.7% 5.260%
Santa Teresa Portfolio..... Industrial/Office $ 32 1.26 x 76.8% 72.8% 5.870%
Choice Center ............. Office - Suburban $ 145 1.43 x 74.8% 56.3% 5.300%
1.62X 70.9% 61.4% 5.595%
1.60X 67.8% 56.9% 5.460%
- ----------
(1) In the case of a concentration of cross-collateralized mortgage loans, the
aggregate principal balance.
(2) Each of the One & Two International Place mortgage loan and the 450 West
33rd Street mortgage loan are part of a split loan structure containing a
pari passu companion loan that is not included in the trust fund. With
respect to these mortgage loans, unless otherwise specified, the
calculations of LTV ratios, DSC ratios and loan balance per square foot
are based on the aggregate indebtedness of each of these mortgage loans
together with the related pari passu companion loans.
(3) Calculation excludes the Mortgaged Properties which are leased fee
interest.
(4) DSC Ratio calculation assumes a 22-year amortization schedule and the
approval of the Alameda County Behavioral Health Care Services lease.
For more information on the twenty largest
mortgage loans in the trust fund, see
"DESCRIPTION OF THE MORTGAGE POOL--Twenty
Largest Mortgage Loans" in this prospectus
supplement.
S-39
CO-LENDER LOANS............... Eight (8) mortgage loans to be included in
the trust that were originated by Wachovia
Bank, National Association, representing
approximately 16.0% of the aggregate principal
balance of the pool of mortgage loans as of the
cut-off date (18.4% of loan group 1), are, in
each case, evidenced by one of two notes which
are secured by a single mortgaged real
property. One (1) mortgage loan to be included
in the trust that was originated by Citigroup
Global Markets Realty Corp., representing
approximately 1.8% of the aggregate principal
balance of the pool of mortgage loans as of the
cut-off date (2.0% of loan group 1), is
evidenced by one of two notes which are secured
by the same mortgaged real property. In each
case, the related companion loan(s) will not be
part of the trust fund. Two (2) of such
mortgage loans, loan numbers 1 and 2 (the One &
Two International Place mortgage loan and the
450 West 33rd Street mortgage loan) are each
part of a split loan structure where one (1)
companion loan that is part of this split loan
structure is pari passu in right of entitlement
to payment with the related mortgage loan. In
each case, the related companion loan(s) will
not be part of the trust fund. Each of these
mortgage loans and its related companion
loan(s) are subject to intercreditor
agreements.
The intercreditor agreements for each of the
One & Two International Place mortgage loan and
the 450 West 33rd Street mortgage loan
generally allocate collections in respect of
such mortgage loans to the related mortgage
loan and the related pari passu companion loan,
on a pro rata basis. The intercreditor
agreements for each of the mortgage loans with
subordinate companion loans generally allocate
collections in respect of such mortgage loans,
first, to the related mortgage loan, and
second, to the related subordinate companion
loan. No companion loan is included in the
trust fund. The master servicer and special
servicers will service and administer these
mortgage loans and their related companion
loans, pursuant to the pooling and servicing
agreement and the related intercreditor
agreement, for so long as the related mortgage
loan is part of the trust fund.
With respect to 4 mortgage loans (loan numbers
80, 130, 125 and 145), the related
intercreditor agreement allows the trust fund
and the related companion loan to receive
separate collections of principal and interest
prior to any material defaults.
Amounts attributable to any companion loan will
not be assets of the trust fund, and will be
beneficially owned by the holder of such
companion loan. See "DESCRIPTION OF THE
MORTGAGE POOL--Co-Lender Loans" in this
prospectus supplement.
See "DESCRIPTION OF THE MORTGAGE POOL--
Co-Lender Loans" and "SERVICING OF THE MORTGAGE
S-40
LOANS" in this prospectus supplement for a
description of certain rights of the holders of
these companion loans to direct or consent to
the servicing of the related mortgage loans.
In addition to the mortgage loans described
above, certain of the mortgaged properties or
the equity interests in the related borrowers
are subject to, or are permitted to become
subject to, additional debt. In certain cases,
this additional debt is secured by the related
mortgaged properties. See "RISK FACTORS--
Additional Debt on Some Mortgage Loans
Creates Additional Risks" in this prospectus
supplement.
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RISK FACTORS
o You should carefully consider, among other things, the following risk
factors (as well as the risk factors set forth under "RISK FACTORS" in the
accompanying prospectus) before making your investment decision.
Additional risks are described elsewhere in this prospectus supplement
under separate headings in connection with discussions regarding
particular aspects of the mortgage loans included in the trust fund or the
certificates.
o The risks and uncertainties described below are not the only ones relating
to your certificates. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair your
investment.
o This prospectus supplement contains forward-looking statements that
involve risk and uncertainties. Actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including risks described below and elsewhere in this
prospectus supplement.
o If any of the following risks are realized, your investment could be
materially and adversely affected.
THE OFFERED CERTIFICATES
ONLY TRUST FUND ASSETS ARE
AVAILABLE TO PAY YOU......... Neither the offered certificates nor the
mortgage loans will be guaranteed or insured by
us or any of our affiliates, by any
governmental agency or instrumentality or by
any other person. If the assets of the trust
fund, primarily the mortgage loans, are
insufficient to make payments on the offered
certificates, no other assets will be available
for payment of the deficiency. See "RISK
FACTORS--The Assets of the Trust Fund May Not
Be Sufficient to Pay Your Certificates" in the
accompanying prospectus.
PREPAYMENTS WILL AFFECT
YOUR YIELD.................... Prepayments. The yield to maturity on the
offered certificates will depend on the rate
and timing of principal payments (including
both voluntary prepayments, in the case of
mortgage loans that permit voluntary
prepayment, and involuntary prepayments, such
as prepayments resulting from casualty or
condemnation, defaults, liquidations or
repurchases for breaches of representations or
warranties or other sales of defaulted mortgage
loans which in either case may not require any
accompanying prepayment premium or yield
maintenance charge) on the mortgage loans
included in the trust fund and how such
payments are allocated among the offered
certificates entitled to distributions of
principal.
In addition, upon the occurrence of certain
limited events, a party may be required or
permitted to repurchase or purchase a mortgage
loan from the trust fund and the money paid
would be passed through to the holders of the
certificates with the same effect as if such
mortgage loan had been prepaid in full (except
that no prepayment premium or yield maintenance
charge would be payable with respect to
purchase or repurchase). In addition, certain
mortgage loans may permit prepayment without an
accompanying prepayment premium or yield
maintenance charge if the mortgagee elects to
apply casualty or condemnation proceeds to the
S-42
mortgage loan. We cannot make any
representation as to the anticipated rate of
prepayments (voluntary or involuntary) on the
mortgage loans or as to the anticipated yield
to maturity of any certificate.
In addition, because the amount of principal
that will be distributed to the Class A-1,
Class A-2, Class A-3, Class A-PB, Class A-4 and
Class A-1A certificates will generally be based
upon the particular loan group in which the
related mortgage loan is deemed to be a part,
the yield on the Class A-1, Class A-2, Class
A-3, Class A-PB and Class A-4 certificates will
be particularly sensitive to prepayments on
mortgage loans in loan group 1 and the yield on
the Class A-1A certificates will be
particularly sensitive to prepayments on
mortgage loans in loan group 2.
In addition, one (1) mortgage loan (loan number
13) provides that payments of interest only are
due until maturity unless the related mortgaged
property fails to achieve certain financial
conditions, upon which failure payments of both
principal and interest will become due for all
or part the remaining term of that mortgage
loan. Any payments of principal received with
respect to this mortgage loan will allocated
among the offered certificates entitled to
distributions of principal. No prepayment
premium or yield maintenance charge will be
applicable to this payment of principal.
See "YIELD AND MATURITY CONSIDERATIONS" in this
prospectus supplement and "YIELD
CONSIDERATIONS" in the accompanying prospectus.
Yield. In general, if you purchase an offered
certificate at a premium and principal
distributions on that offered certificate 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 you
had predicted at the time of purchase.
Conversely, if you purchase an offered
certificate at a discount and principal
distributions on that offered certificate occur
at a rate slower than you anticipated at the
time of purchase, your actual yield to maturity
may be lower than you had predicted at the time
of purchase.
The yield on the Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O and
Class P certificates could be adversely
affected if mortgage loans with higher mortgage
interest rates pay faster than mortgage loans
with lower mortgage interest rates, since those
classes bear interest at a rate equal to, based
upon or limited by the weighted average net
mortgage rate of the mortgage loans.
In addition, because there can be no assurances
with respect to losses, prepayments and
performance of the mortgage loans, there can be
no assurance that distributions of principal on
the Class A-PB certificates will be made in
conformity
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with the schedule attached on Annex D to this
prospectus supplement.
Interest Rate Environment. Mortgagors generally
are less likely to prepay if prevailing
interest rates are at or above the rates borne
by their mortgage loans. On the other hand,
mortgagors are generally more likely to prepay
if prevailing interest rates fall significantly
below the mortgage interest rates of their
mortgage loans. Mortgagors are generally less
likely to prepay mortgage loans with a lockout
period, yield maintenance charge or prepayment
premium provision, to the extent enforceable,
than similar mortgage loans without such
provisions, with shorter lockout periods or
with lower yield maintenance charges or
prepayment premiums.
Performance Escrows. In connection with the
origination of some of the mortgage loans, the
related borrowers were required to escrow funds
or post a letter of credit related to obtaining
certain performance objectives. In general,
such funds will be released to the related
borrower upon the satisfaction of certain
conditions. If the conditions are not
satisfied, although the master servicer will be
directed in the pooling and servicing agreement
(in accordance with the servicing standard) to
hold the escrows, letters of credit or proceeds
of such letters of credit as additional
collateral and not use the funds to reduce the
principal balance of the related mortgage loan,
in the event such funds are required to be used
to reduce the principal balance of such
mortgage loans, such amounts will be passed
through to the holders of the certificates as
principal prepayments.
With respect to the Eastmont Town Center
mortgage loan (loan number 8), representing
1.9% of the mortgage pool (2.2% of loan group
1), $4,200,000 was held back in escrow until
the related mortgaged property achieves a 1.25x
debt service coverage ratio and a 75% loan to
value ratio on the entire loan amount. The
related loan documents require that if the
above tests have not been satisfied by the 36th
month following the origination of the mortgage
loan U.S. treasuries will be purchased with the
$4,200,000 that was held back (as specified in
the loan documents) and the monthly proceeds
from such treasuries will be applied towards
the payment of the scheduled monthly debt
service (but will not be used to prepay the
mortgage loan).
Premiums. Provisions requiring prepayment
premiums and yield maintenance charges may not
be enforceable in some states and under federal
bankruptcy law, and may constitute interest for
usury purposes. Accordingly, we cannot provide
assurance that the obligation to pay such
premium or 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
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certificateholders as, a prepayment, we cannot
provide assurance that a court would not
interpret such provisions as requiring a
prepayment premium or yield maintenance charge
and possibly determine that such provisions are
unenforceable or usurious under applicable law.
Prepayment premiums and yield maintenance
charges are generally not charged for
prepayments resulting from casualty or
condemnation and would not be paid in
connection with repurchases of mortgage loans
for breaches of representations or warranties
or a material document defect. No prepayment
premium or yield maintenance charge will be
required for prepayments in connection with a
casualty or condemnation unless, in the case of
certain of the mortgage loans, an event of
default has occurred and is continuing.
Pool Concentrations. Principal payments
(including prepayments) on the mortgage loans
included in the trust fund or in a particular
group will occur at different rates. In
addition, mortgaged properties can be released
from the trust fund as a result of prepayments,
defeasance, repurchases, casualties or
condemnations. As a result, the aggregate
balance of the mortgage loans concentrated in
various property types in the trust fund or in
a particular loan group changes over time. You
therefore may be exposed to varying
concentration risks as the mixture of property
types and relative principal balance of the
mortgage loans associated with certain property
types changes. See the table entitled "Range of
Remaining Terms to Maturity or Anticipated
Repayment Date for All Mortgage Loans as of the
Cut-Off Date" under "DESCRIPTION OF THE
MORTGAGE POOL--Additional Mortgage Loan
Information" in this prospectus supplement for
a description of the respective maturity dates
of the mortgage loans included in the trust
fund and in each loan group. Because principal
on the certificates (other than the Class X-C,
Class X-P, Class Z, Class R-I and Class R-II
certificates) is payable in sequential order to
the extent described under "DESCRIPTION OF THE
CERTIFICATES--Distributions" in this prospectus
supplement, classes that have a lower priority
of distributions are more likely to be exposed
to the risk of changing concentrations
discussed under "--Special Risks Associated
With High Balance Mortgage Loans" below than
classes with a higher sequential priority.
OPTIONAL EARLY TERMINATION OF
THE TRUST FUND MAY RESULT IN
AN ADVERSE IMPACT ON YOUR
YIELD OR MAY RESULT IN A
LOSS.......................... The offered certificates will be subject to
optional early termination by means of the
purchase of the mortgage loans in the trust
fund. We cannot assure you that the proceeds
from a sale of the mortgage loans will be
sufficient to distribute the outstanding
certificate balance plus accrued interest and
any undistributed shortfalls in interest
accrued
S-45
on the certificates that are subject to the
termination. Accordingly, the holders of
offered certificates affected by such a
termination may suffer an adverse impact on the
overall yield on their certificates, may
experience repayment of their investment at an
unpredictable and inopportune time or may even
incur a loss on their investment. See
"DESCRIPTION OF THE CERTIFICATES--Termination"
in this prospectus supplement.
BORROWER DEFAULTS MAY ADVERSELY
AFFECT YOUR YIELD............ The aggregate amount of distributions on the
offered certificates, the yield to maturity of
the offered certificates, the rate of principal
payments on the offered certificates and the
weighted average life of the offered
certificates will be affected by the rate and
timing of delinquencies and defaults on the
mortgage loans included in the trust fund.
Delinquencies on the mortgage loans included in
the trust fund, 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 in this prospectus supplement, but no
interest will accrue on such shortfall during
the period of time such payment is delinquent.
If you calculate your anticipated yield based
on an assumed default rate and an assumed
amount of losses on the mortgage pool that are
lower than the default rate and the amount of
losses actually experienced, and if such losses
are allocated to your class of certificates,
your actual yield to maturity will be lower
than the yield so calculated and could, under
certain scenarios, be negative. The timing of
any loss on a liquidated mortgage loan also
will affect the actual yield to maturity of the
offered certificates to which all or a portion
of such loss is allocable, even if the rate of
defaults and severity of losses are consistent
with your expectations. In general, the earlier
you bear a loss, the greater the effect on your
yield to maturity. See "YIELD AND MATURITY
CONSIDERATIONS" in this prospectus supplement
and "YIELD CONSIDERATIONS" in the accompanying
prospectus.
Even if losses on the mortgage loans included
in the trust fund are allocated to a particular
class of offered certificates, such losses may
affect the weighted average life and yield to
maturity of other certificates. Losses on the
mortgage loans, to the extent not allocated to
such class of offered certificates, may result
in a higher percentage ownership interest
evidenced by such certificates than would
otherwise have resulted absent such loss. The
consequent effect on the weighted average life
and yield to maturity of the offered
certificates will depend upon the
characteristics of the remaining mortgage
loans.
S-46
ADDITIONAL COMPENSATION AND
CERTAIN REIMBURSEMENTS TO
THE SERVICER WILL AFFECT
YOUR RIGHT TO RECEIVE
DISTRIBUTIONS................ To the extent described in this prospectus
supplement, the master servicer or the trustee,
as applicable, will be entitled to receive
interest on unreimbursed advances and
unreimbursed servicing expenses. The right of
the master servicer the trustee to receive such
payments of interest is senior to the rights of
certificateholders to receive distributions on
the certificates and, consequently, may result
in additional trust fund expenses being
allocated to the offered certificates that
would not have resulted absent the accrual of
such interest. In addition, the special
servicer will receive a fee with respect to
each specially serviced mortgage loan and any
collections thereon, including specially
serviced mortgage loans which have been
returned to performing status. This will result
in shortfalls which will be allocated to the
offered certificates.
SUBORDINATION OF SUBORDINATE
OFFERED CERTIFICATES......... As described in this prospectus supplement,
unless your certificates are Class A-1, Class
A-2, Class A-3, Class A-PB, Class A-4, Class
A-1A, Class X-C or Class X-P certificates, your
rights to receive distributions of amounts
collected or advanced on or in respect of the
mortgage loans will be subordinated to those of
the holders of the offered certificates with an
earlier payment priority (and, with respect to
the Class A-J, the Class A-1, Class A-2, Class
A-3, Class A-PB, Class A-4 and Class A-1A
certificates).
See "DESCRIPTION OF THE CERTIFICATES--
Distributions--Application of the Available
Distribution Amount" and "DESCRIPTION OF THE
CERTIFICATES--Subordination; Allocation of
Losses and Certain Expenses" in this prospectus
supplement.
YOUR LACK OF CONTROL OVER
THE TRUST FUND CAN CREATE
RISKS........................ You and other certificateholders generally do
not have a right to vote and do not have the
right to make decisions with respect to the
administration of the trust fund. See
"SERVICING OF THE MORTGAGE LOANS--General" in
this prospectus supplement. Those decisions are
generally made, subject to the express terms of
the pooling and servicing agreement, by the
master servicer, the trustee or the special
servicer, as applicable. Any decision made by
one of those parties in respect of the trust
fund, even if that decision is determined to be
in your best interests by that party, may be
contrary to the decision that you or other
certificateholders would have made and may
negatively affect your interests.
Under certain circumstances, the consent or
approval of less than all certificateholders
will be required to take, and will bind all
certificateholders to, certain actions relating
to the trust fund. The interests of those
certificateholders may be in
S-47
conflict with those of the other
certificateholders. For example,
certificateholders of certain classes that are
subordinate in right of payment may direct the
actions of the special servicer with respect to
troubled mortgage loans and related mortgaged
properties. In certain circumstances, the
holder of a companion loan, mezzanine loan or
subordinate debt may direct the actions of the
special servicer with respect to the related
mortgage loan and the holder of a companion
loan, mezzanine loan or subordinate debt will
have certain consent rights relating to
foreclosure or modification of the related
loans. The interests of such holder of a
companion loan, mezzanine loan or subordinate
debt may be in conflict with those of the
certificateholders.
Nine (9) of the mortgage loans, representing
17.7% of the mortgage pool (20.5% of loan group
1), are each evidenced by multiple promissory
notes. With respect to 2 of these mortgage
loans, representing 12.4% of the mortgage pool
(14.3% of loan group 1), the related mortgage
loans are evidenced by promissory notes that
are pari passu in right of payment. In each
case, the trust fund is comprised of only one
of the pari passu notes. With respect to 7 of
these mortgage loans, representing 5.3% of the
mortgage pool (6.1% of loan group 1), the
related mortgage loans are evidenced by one
promissory note that is subordinate in right of
payment to the other promissory note. In each
case, the trust fund does not include the
subordinate companion note. In each case, the
holders of the subordinate companion notes
and/or the pari passu companion notes (or, if
applicable, the holders of beneficial interests
in the pari passu companion notes and/or the
subordinate companion notes) have certain
control, consultation and/or consent rights
with respect to the servicing and/or
administration of these loans. In addition,
such holders of the subordinate companion loans
and/or the pari passu companion loans notes
and/or the subordinate companion notes may have
been granted various rights and powers pursuant
to the related intercreditor agreement or other
similar agreement, including cure rights and
purchase options with respect to the related
mortgage loans. In some cases, the foregoing
rights and powers may be assignable or may be
exercised through a representative or designee.
Accordingly, these rights may potentially
conflict with the interests of the
certificateholders.
Additionally, less than all of the
certificateholders may amend the pooling and
servicing agreement in certain circumstances.
See "SERVICING OF THE MORTGAGE LOANS--The
Controlling Class Representative" in this
prospectus supplement and "DESCRIPTION OF THE
CERTIFICATES--Voting Rights" in this prospectus
supplement and the accompanying prospectus.
S-48
LIQUIDITY FOR CERTIFICATES
MAY BE LIMITED............... There is currently no secondary market for
the offered certificates. While each
underwriter has advised us that it intends to
make a secondary market in one or more classes
of the offered certificates, none of them are
under any obligation to do so. No secondary
market for your certificates may develop. If a
secondary market does develop, there can be no
assurance that it will be available for the
offered certificates or, if it is available,
that it will provide holders of the offered
certificates with liquidity of investment or
continue for the life of your certificates.
Lack of liquidity could result in a substantial
decrease in the market value of your
certificates. Your certificates will not be
listed on any securities exchange or traded in
any automated quotation system of any
registered securities association such as
NASDAQ.
BOOK-ENTRY REGISTRATION....... Your certificates will be initially
represented by one or more certificates
registered in the name of Cede & Co., as the
nominee for DTC, and will not be registered in
your name. As a result, you will not be
recognized as a certificateholder, or holder of
record of your certificates.
POTENTIAL CONFLICTS
OF INTEREST................... The master servicer is an affiliate of the
depositor and is one of the underwriters and
one of the mortgage loan sellers. These
affiliations could cause conflicts with the
master servicer's duties to the trust fund
under the pooling and servicing agreement.
However, the pooling and servicing agreement
provides that the mortgage loans shall be
administered in accordance with the servicing
standard described in this prospectus
supplement without regard to an affiliation
with any other party to the pooling and
servicing agreement. See "SERVICING OF THE
MORTGAGE LOANS--General" in this prospectus
supplement.
Wachovia Bank, National Association, which is
the master servicer, or one of its affiliates,
is also the initial holder of certain companion
loans with respect to 2 mortgage loans, the One
& Two International Place mortgage loan and the
450 West 33rd Street mortgage loan,
representing 12.4% of the mortgage pool (14.3%
of loan group 1). In addition, Wachovia Bank,
National Association is also an equity owner of
Capital Lease, LP, the holder of the companion
loan with respect to the Cadbury Schweppes
mortgage loan. Accordingly, a conflict may
arise between Wachovia Bank, National
Association's duties to the trust under the
Pooling and Servicing Agreement and its or its
affiliate's interest as a holder of a companion
loan. See "DESCRIPTION OF THE MORTGAGE
POOL--Co-Lender Loans" in this prospectus
supplement. This could cause a conflict between
Wachovia Bank, National Association's duties to
the trust under the pooling and servicing
agreement and its or its affiliate's interest
as a holder of those interests.
Further, Capital Lease, LP, the holder of the
companion loan with respect to the Cadbury
Schweppes mortgage loan, is
S-49
also the sponsor of the related borrower. The
Cadbury Schweppes mortgage loan represents 1.3%
of the mortgage pool (1.5% of loan group 1).
Pursuant to the related intercreditor
agreement, the mortgagee will be required to
seek the consent of Capital Lease, LP as holder
of the subordinate companion loan related to
the Cadbury Schweppes mortgage loan in
connection with certain modifications and/or
waivers of the Cadbury Schweppes whole loan
which materially and adversely affects the
holder of the subordinate companion loan.
Accordingly, a conflict may result.
The special servicer will (and any related
sub-servicer may) be involved in determining
whether to modify or foreclose a defaulted
mortgage loan. The special servicer or an
affiliate of the special servicer may purchase
certain other non-offered certificates
(including the controlling class and the Class
Z certificates). The special servicer or its
affiliate may serve as the initial controlling
class representative. The special servicer or
its affiliates may acquire non-performing loans
or interests in non-performing loans, which may
include REO properties that compete with the
mortgaged properties securing mortgage loans in
the trust fund. The special servicer or its
affiliates own and are in the business of
acquiring assets similar in type to the assets
of the trust fund. The special servicer or its
affiliates may also make loans on properties
that may compete with the mortgaged properties
and may also advise other clients that own or
are in the business of owning properties that
compete with the mortgaged properties or that
own loans like the mortgage loans included in
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. See "SERVICING OF THE MORTGAGE
LOANS--Modifications, Waivers and Amendments"
in this prospectus supplement.
This could cause a conflict between the special
servicer's duties to the trust fund under the
pooling and servicing agreement and its
interest as a holder of a certificate. However,
the pooling and servicing agreement provides
that the mortgage loans shall be administered
in accordance with the servicing standard
without regard to ownership of any certificate
by the master servicer, the special servicer or
any affiliate of the special servicer. See
"SERVICING OF THE MORTGAGE LOANS--General" in
this prospectus supplement.
In addition, the related property managers and
borrowers may experience conflicts of interest
in the management and/or ownership of the
mortgaged properties securing the mortgage
loans because:
o a substantial number of the mortgaged
properties are managed by property managers
affiliated with the respective borrowers;
S-50
o these property managers also may manage
and/or franchise additional properties,
including properties that may compete with
the mortgaged properties;
o affiliates of the property manager and/or
the borrowers, or the property managers
and/or the borrowers themselves also may own
other properties, including competing
properties; or
o the mortgaged property is self managed.
In addition, certain mortgage loans included in
the trust fund may have been refinancings of
debt previously held by (or by an affiliate of)
one of the mortgage loan sellers.
RECENT TERRORIST ATTACKS AND
MILITARY CONFLICTS MAY
ADVERSELY AFFECT
YOUR INVESTMENT.............. On September 11, 2001, the United States was
subjected to multiple terrorist attacks which
resulted in considerable uncertainty in the
world financial markets. The full impact of
these events is not yet known, but could
include, among other things, increased
volatility in the price of securities including
your certificates. The terrorist attacks may
also adversely affect the revenues or costs of
operation of the mortgaged properties. The
terrorist attacks on the World Trade Center and
the Pentagon suggest an increased likelihood
that large public areas such as shopping malls
or large office buildings could become the
target of terrorist attacks in the future. The
possibility of such attacks could (i) lead to
damage to one or more of the mortgaged
properties if any such attacks occur, (ii)
result in higher costs for security and
insurance premiums, particularly for large
properties, which could adversely affect the
cash flow at those mortgaged properties, or
(iii) impact leasing patterns or shopping
patterns which could adversely impact leasing
revenue and mall traffic and percentage rent.
As a result, the ability of the mortgaged
properties to generate cash flow may be
adversely affected. See "--Insurance Coverage
on Mortgaged Properties May Not Cover Special
Hazard Losses" below.
Terrorist attacks in the United States,
incidents of terrorism occurring outside the
United States and military conflict in Iraq and
elsewhere may significantly reduce air travel
throughout the United States, and, therefore,
continue to have a negative effect on revenues
in areas heavily dependent on tourism. Any
decrease in air travel may have a negative
effect on certain of the mortgaged properties,
including hotel mortgaged properties and those
mortgaged properties located in tourist areas,
which could reduce the ability of such
mortgaged properties to generate cash flow.
It is uncertain what continued effect armed
conflict involving the United States, including
the recent war between the United States and
Iraq or any future conflict with any other
country, will have on domestic and world
financial markets, economies, real estate
markets, insurance costs or business
S-51
segments. Foreign or domestic conflicts of any
kind could have an adverse effect on the
mortgaged properties.
Accordingly, these disruptions, uncertainties
and costs could materially and adversely affect
your investment in the certificates.
THE MORTGAGE LOANS
RISKS ASSOCIATED WITH COMMERCIAL
LENDING MAY BE DIFFERENT THAN
FOR RESIDENTIAL LENDING...... Commercial and multifamily lending is
generally viewed as exposing a lender (and your
investment in the trust fund) to a greater risk
of loss than lending which is secured by
single-family residences, in part because it
typically involves making larger loans to
single borrowers or groups of related
mortgagors. In addition, unlike loans which are
secured by single-family residences, repayment
of loans secured by commercial and multifamily
properties depends upon the ability of the
related real estate project:
o to generate income sufficient to pay debt
service, operating expenses and leasing
commissions and to make necessary repairs,
tenant improvements and capital
improvements; and
o in the case of loans that do not fully
amortize over their terms, to retain
sufficient value to permit the borrower to
pay off the loan at maturity through a sale
or refinancing of the mortgaged property.
FUTURE CASH FLOW AND PROPERTY
VALUES ARE NOT PREDICTABLE... A number of factors, many beyond the control
of the property owner, may affect the ability
of an income producing real estate project to
generate sufficient net operating income to pay
debt service and/or to maintain its value.
Among these factors are:
o economic conditions generally and in the
area of the project;
o the age, quality, functionality and design
of the project;
o the degree to which the project competes
with other projects in the area;
o changes or continued weakness in specific
industry segments;
o increases in operating costs;
o the willingness and ability of the owner to
provide capable property management and
maintenance;
o the degree to which the project's revenue is
dependent upon a single tenant or user, a
small group of tenants, tenants concentrated
in a particular business or industry and the
competition to any such tenants;
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o an increase in the capital expenditures
needed to maintain the properties or make
improvements;
o a decline in the financial condition of a
major tenant;
o the location of a mortgaged property;
o whether a mortgaged property can be easily
converted (or converted at all) to
alternative uses;
o an increase in vacancy rates;
o perceptions regarding the safety,
convenience and attractiveness of such
properties;
o vulnerability to litigation by tenants and
patrons; and
o environmental contamination.
Many of the mortgaged properties securing
mortgage loans included in the trust fund have
leases that expire or may be subject to tenant
termination rights prior to the maturity date
of the related mortgage loan. Certain of such
loans may be leased entirely to a single
tenant. If leases are not renewed or replaced,
if tenants default, if rental rates fall and/or
if operating expenses increase, the borrower's
ability to repay the loan may be impaired and
the resale value of the property, which is
substantially dependent upon the property's
ability to generate income, may decline.
With respect to 1 mortgage loan (loan number
12), representing 1.5% of the mortgage pool
(1.8% of loan group 1), 6 of 8 mortgaged
properties are leased wholly to a single
tenant, 5 of which have early termination
rights prior to the maturity date of the
mortgage loan. See "DESCRIPTION OF THE MORTGAGE
POOL--Twenty Largest Mortgage Loans--Gardner
Tanenbaum Pool" in this prospectus supplement.
Even if borrowers successfully renew leases or
relet vacated space, the costs associated with
reletting, including tenant improvements,
leasing commissions and free rent, can exceed
the amount of any reserves maintained for that
purpose and reduce cash from the mortgaged
properties. Although some of the mortgage loans
included in the trust fund require the borrower
to maintain escrows for leasing expenses, there
is no guarantee that these reserves will be
sufficient. In addition, there are other
factors, including changes in zoning or tax
laws, restrictive covenants, tenant exclusives
and rights of first refusal to lease or
purchase, the availability of credit for
refinancing and changes in interest-rate levels
that may adversely affect the value of a
project and/or the borrower's ability to sell
or refinance without necessarily affecting the
ability to generate current income. In
addition, certain of the mortgaged properties
may be leased in whole or in part by
government-sponsored tenants who may have
certain rights to cancel their leases or reduce
the rent payable with respect to such leases at
any time for, among other reasons, lack of
appropriations.
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Other factors are more general in nature, such
as:
o national, regional or local economic
conditions (including plant and military
installation closings, industry slowdowns
and unemployment rates);
o local real estate conditions (such as an
oversupply of retail space, office space or
multifamily housing);
o demographic factors;
o consumer confidence;
o consumer tastes and preferences; and
o changes in building codes and other
applicable laws.
The volatility of net operating income will be
influenced by many of the foregoing factors, as
well as by:
o the length of tenant leases;
o the creditworthiness of tenants;
o in the case of rental properties, the rate
at which new rentals occur;
o the property's "operating leverage" (for
example, the percentage of total property
expenses in relation to revenue, the ratio
of fixed operating expenses to those that
vary with revenues and the level of capital
expenditures required to maintain the
property and to retain or replace tenants);
and
o a decline in the real estate market or in
the financial condition of a major tenant
will tend to have a more immediate effect on
the net operating income of property with
short-term revenue sources, such as
short-term or month-to-month leases, and may
lead to higher rates of delinquency or
defaults.
SOME MORTGAGED PROPERTIES MAY
NOT BE READILY CONVERTIBLE
TO ALTERNATIVE USES.......... Some of the mortgaged properties securing the
mortgage loans included in the trust fund may
not be readily convertible (or convertible at
all) to alternative uses if those properties
were to become unprofitable for any reason. For
example, a mortgaged property may not be
readily convertible (or convertible at all) due
to restrictive covenants related to such
mortgaged property, including, in the case of
mortgaged properties that are part of a
condominium regime, the use and other
restrictions imposed by the condominium
declaration and other related documents,
especially in a situation where a mortgaged
property does not represent the entire
condominium regime. In addition, mortgaged
properties that have been designated as
historic sites may be difficult to convert to
alternative uses. In addition, converting
commercial properties to alternate uses
generally requires substantial capital
expenditures. The liquidation value of any
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mortgaged property, subject to limitations of
the kind described above or other limitations
on convertibility of use, may be substantially
less than would be the case if the property
were readily adaptable to other uses.
See "--Special Risks Associated with
Industrial, Parking Garage and Mixed Use
Facilities" and "--Special Risks Associated
with Self Storage Facilities" below.
LOANS NOT INSURED
OR GUARANTEED................. Generally, the mortgage loans included in the
trust fund will not be an obligation of, or be
insured or guaranteed by, any governmental
entity, by any private mortgage insurer, or by
the depositor, any mortgage loan seller, the
underwriters, the master servicer, the special
servicer, the trustee or any of their
respective affiliates.
We have not evaluated the significance of the
recourse provisions of mortgage loans that may
permit recourse against the related borrower or
another person in the event of a default.
Accordingly, you should assume all of the
mortgage loans included in the trust fund are
nonrecourse loans, and that recourse in the
case of default will be limited to the related
mortgaged property.
However, in certain circumstances a mortgage
loan seller will be obligated to repurchase or
substitute a mortgage loan sold by it if:
o there is a defect or omission with respect
to certain of the documents relating to such
mortgage loan and such defect or omission
materially and adversely affects the value
of a mortgage loan or the interests of the
trust fund therein or the interests of any
certificateholder; or
o certain of their respective representations
or warranties concerning such mortgage loan
are breached, and such breach materially and
adversely affects the value of such mortgage
loan, the interests of the trust fund
therein or the interests of any
certificateholder and is not cured as
required.
We cannot provide assurance that the applicable
mortgage loan seller will be in a financial
position to make such a repurchase or
substitution.
RISKS RELATING TO CERTAIN
PROPERTY TYPES............... Particular types of income properties are
exposed to particular risks. For instance:
SPECIAL RISKS ASSOCIATED WITH
OFFICE PROPERTIES............ Office properties may require their owners to
expend significant amounts of cash to pay for
general capital improvements, tenant
improvements and costs of re-leasing space.
Office properties that are not equipped to
accommodate the needs of modern businesses may
become functionally obsolete and thus
non-competitive. In addition, a large number of
S-55
factors may adversely affect the value of
office properties, including:
o the quality of an office building's
tenants;
o the physical attributes of the building in
relation to competing buildings (for
example, age, condition, design, access to
transportation and ability to offer certain
amenities, such as sophisticated building
systems);
o the physical attributes of the building with
respect to the technological needs of the
tenants, including the adaptability of the
building to changes in the technological
needs of the tenants;
o the desirability of the area as a business
location;
o the presence of competing properties; and
o the strength and nature of the local economy
(including labor costs and quality, tax
environment and quality of life for
employees).
Moreover, the cost of refitting office space
for a new tenant is often higher than the cost
of refitting other types of properties for new
tenants.
Office properties secure 38 of the mortgage
loans included in the trust fund as of the
cut-off date, representing 38.4% of the
mortgage pool (44.4% of loan group 1).
SPECIAL RISKS ASSOCIATED WITH
SHOPPING CENTERS AND OTHER
RETAIL PROPERTIES............ Shopping centers are affected by the health
of the retail industry, which is currently
undergoing a consolidation and is experiencing
changes due to the growing market share of
"off-price" retailing, including the popularity
of home shopping networks, shopping via
internet web sites and telemarketing. A
particular shopping center may be adversely
affected by the bankruptcy or decline in
drawing power of an anchor, shadow anchor or
major tenant, a shift in consumer demand due to
demographic changes (for example, population
decreases or changes in average age or income)
and/or changes in consumer preference (for
example, to discount retailers).
In the case of retail properties, the failure
of an anchor, shadow anchor or major tenant to
renew its lease, the termination of an anchor,
shadow anchor or major tenant's lease, the
bankruptcy or economic decline of an anchor,
shadow anchor or major tenant, or the cessation
of the business of an anchor, shadow anchor or
major tenant at its store, notwithstanding that
such tenant may continue payment of rent after
"going dark," may have a particularly negative
effect on the economic performance of a
shopping center property given the importance
of anchor tenants, shadow anchor tenants and
major tenants in attracting traffic to other
stores within the same shopping center. In
addition,
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the failure of one or more major tenants, such
as an anchor or shadow anchor tenant, to
operate from its premises may entitle other
tenants to rent reductions or the right to
terminate their leases. See "--The Failure of a
Tenant Will Have a Negative Impact on Single
Tenant and Tenant Concentration Properties"
below.
Retail properties, including shopping centers,
secure 114 of the mortgage loans included in
the trust fund as of the cut-off date,
representing 24.9% of the mortgage pool (28.7%
of loan group 1).
SPECIAL RISKS ASSOCIATED
WITH MULTIFAMILY PROJECTS.... Multifamily projects are part of a market
that, in general, is characterized by low
barriers to entry. Thus, a particular apartment
market with historically low vacancies could
experience substantial new construction and a
resultant oversupply of units in a relatively
short period of time. Since multifamily
apartment units are typically leased on a
short-term basis, the tenants who reside in a
particular project within such a market may
easily move to alternative projects with more
desirable amenities or locations.
A large number of factors may adversely affect
the value and successful operation of a
multifamily property, including:
o the physical attributes of the apartment
building (for example, its age, appearance
and construction quality);
o the location of the property (for example,
a change in the neighborhood over time);
o the ability of management to provide
adequate maintenance and insurance;
o the types of services and amenities that
the property provides;
o the property's reputation;
o the level of mortgage interest rates (which,
if relatively low, may encourage tenants to
purchase rather than lease housing);
o the tenant mix, such as the tenant
population being predominantly students or
being heavily dependent on workers from a
particular business or personnel from a
local military base;
o dependence upon governmental programs that
provide rent subsidies to tenants pursuant
to tenant voucher programs or tax credits to
developers to provide certain types of
development;
o the presence of competing properties;
o adverse local or national economic
conditions; and
o state and local regulations.
S-57
Furthermore, multifamily projects may be
subject to various tax credit, city, state and
federal housing subsidies, rent stabilization
or similar programs. The limitations and
restrictions imposed by these programs could
result in realized losses on the mortgage
loans. In addition, in the event that the
program is cancelled, it could result in less
income for the project. These programs may
include:
o rent limitations that could adversely affect
the ability of borrowers to increase rents
to maintain the condition of their mortgaged
properties and satisfy operating expenses;
and
o tenant income restrictions that may reduce
the number of eligible tenants in those
mortgaged properties and result in a
reduction in occupancy rates.
The differences in rents between subsidized or
supported properties and other multifamily
rental properties in the same area may not be a
sufficient economic incentive for some eligible
tenants to reside at a subsidized or supported
property that may have fewer amenities or be
less attractive as a residence. As a result,
occupancy levels at a subsidized or supported
property may decline, which may adversely
affect the value and successful operation of
such property.
Multifamily properties secure 37 of the
mortgage loans included in the trust fund as of
the cut-off date, representing 15.5% of the
mortgage pool (4 mortgage loans in loan group 1
or 2.4% and all mortgage loans in loan group
2).
SPECIAL RISKS ASSOCIATED WITH
HOSPITALITY PROPERTIES....... Hospitality properties are affected by
various factors, including:
o location;
o quality;
o management ability;
o amenities;
o franchise affiliation (or lack thereof);
o continuing expenditures for modernizing,
refurbishing and maintaining existing
facilities prior to the expiration of their
anticipated useful lives;
o a deterioration in the financial strength
or managerial capabilities of the owner and
operator of a hotel;
o changes in travel patterns caused by changes
in access, energy prices, strikes,
relocation of highways, the construction of
additional highways or other factors;
o adverse economic conditions, either local,
regional or national, which may limit the
amount that may be charged for a room and
may result in a reduction in occupancy
levels; and
S-58
o construction of competing hotels or motels,
which may also limit the amount that may be
charged for a room and may result in a
reduction in occupancy levels.
Because hotel rooms generally are rented for
short periods of time, hospitality properties
tend to be affected more quickly by adverse
economic conditions and competition than other
commercial properties. All of the mortgage
loans secured by hotel properties are
affiliated with a franchise or hotel management
company through a franchise or management
agreement. The performance of a hotel property
affiliated with a franchise or hotel management
company depends in part on:
o the continued existence and financial
strength of the franchisor or hotel
management company;
o the public perception of the franchise or
hotel chain service mark; and
o the duration of the franchise licensing or
management agreements.
Any provision in a franchise agreement or
management agreement providing for termination
because of a bankruptcy of a franchisor or
manager generally will not be enforceable.
Replacement franchises may require
significantly higher fees.
The transferability of franchise license
agreements is restricted. In the event of a
foreclosure, the lender or its agent would not
have the right to use the franchise license
without the franchisor's consent. Conversely,
in the case of certain mortgage loans, the
lender may be unable to remove a franchisor or
a hotel management company that it desires to
replace following a foreclosure.
Furthermore, the ability of a hotel to attract
customers, and some of such hotel's revenues,
may depend in large part on its having a liquor
license. Such a license may not be transferable
(for example, in connection with a
foreclosure).
Moreover, the hotel and lodging industry is
generally seasonal in nature; different seasons
affect different hotels depending on type and
location. This seasonality can be expected to
cause periodic fluctuations in a hospitality
property's room and restaurant revenues,
occupancy levels, room rates and operating
expenses.
In addition, the events of September 11, 2001,
have had an adverse impact on the tourism and
convention industry. See "--Recent Terrorist
Attacks and Military Conflicts May Adversely
Affect Your Investment" in this prospectus
supplement.
Hospitality properties secure 19 of the
mortgage loans included in the trust fund as of
the cut-off date, representing 10.1% of the
mortgage pool (11.7% of loan group 1).
S-59
SPECIAL RISKS ASSOCIATED WITH
INDUSTRIAL, PARKING GARAGE AND
MIXED USE FACILITIES......... Industrial, parking garage and mixed use
facilities present risks not associated with
other properties. Significant factors
determining the value of industrial properties
include:
o the quality of tenants;
o building design and adaptability; and
o the location of the property.
Concerns about the quality of tenants,
particularly major tenants, are similar in both
office properties and industrial properties,
although industrial properties are more
frequently dependent on a single tenant.
In addition, properties used for many
industrial purposes are more prone to
environmental concerns than other property
types.
Aspects of building site design and
adaptability affect the value of an industrial
property or a parking garage facility. Site
characteristics which are valuable to an
industrial property or a parking garage
facility include clear ceiling heights, column
spacing, zoning restrictions, number of bays
and bay depths, divisibility, truck turning
radius and overall functionality and
accessibility. In addition, because of the
unique construction requirements of many
industrial properties and parking garage
facilities, any vacant industrial property or a
parking garage facility may not be easily
converted to other uses. Location is also
important to an industrial property or a
parking garage facility. An industrial property
requires the availability of labor sources,
proximity to supply sources and customers and
accessibility to rail lines, major roadways and
other distribution channels
Industrial properties may be adversely affected
by reduced demand for industrial space
occasioned by a decline in a particular
industry segment (for example, a decline in
defense spending), and a particular industrial
property that suited the needs of its original
tenant may be difficult to relet to another
tenant or may become functionally obsolete
relative to newer properties. In addition,
lease terms with respect to industrial
properties are generally for shorter periods of
time than with respect to other properties and
may result in a substantial percentage of
leases expiring in the same year at any
particular industrial property.
Industrial properties and mixed use facilities
secure 10 of the mortgage loans included in the
trust fund as of the cut-off date, representing
8.1% of the aggregate principal balance of the
pool of mortgage loans as of the cut-off date
(9.4% of loan group 1).
Parking garage facilities present risks not
associated with other properties. Aspects of
building site design and adaptability affect
the value of a parking garage facility,
including overall functionality, accessibility
and location. In addition, if
S-60
a parking garage facility became unprofitable,
it may not be readily convertible to an
alternative use. Converting such property to an
alternative use may require substantial capital
expenditures. Parking garage facilities secure
2 of the mortgage loans (loan numbers 14 and
108) included in the trust fund as of the
cut-off date, representing 1.7% of the
aggregate principal balance of the pool of the
mortgage loans as of the cut-off date (2.0% of
loan group 1).
SPECIAL RISKS ASSOCIATED WITH
SELF STORAGE FACILITIES...... The self storage facilities market contains
low barriers to entry. In addition, due to the
short-term nature of self-storage leases, self
storage properties also may be subject to more
volatility in terms of supply and demand than
loans secured by other types of properties.
Because of the construction utilized in
connection with certain self storage
facilities, it might be difficult or costly to
convert such a facility to an alternative use.
Thus, liquidation value of self storage
properties may be substantially less than would
be the case if the same were readily adaptable
to other uses.
In addition, it is difficult to assess the
environmental risks posed by such facilities
due to tenant privacy, anonymity and
unsupervised access to such facilities.
Therefore, such facilities may pose additional
environmental risks to investors. The
environmental site assessments discussed in
this prospectus supplement did not include an
inspection of the contents of the self storage
units included in the self storage properties.
We therefore cannot provide assurance that all
of the units included in the self storage
properties are free from hazardous substances
or other pollutants or contaminants or will
remain so in the future. See "--Environmental
Laws May Adversely Affect the Value of and Cash
Flow from a Mortgaged Property" below.
Self storage properties secure 3 of the
mortgage loans included in the trust fund as of
the cut-off date, representing 0.7% of the
mortgage pool (0.8% of loan group 1).
ENVIRONMENTAL LAWS MAY
ADVERSELY AFFECT THE VALUE
OF AND CASH FLOW FROM A
MORTGAGED PROPERTY........... If an adverse environmental condition exists
with respect to a mortgaged property securing a
mortgage loan included in the trust fund, the
trust fund may be subject to certain risks
including the following:
o a reduction in the value of such mortgaged
property which may make it impractical or
imprudent to foreclose against such
mortgaged property;
o the potential that the related borrower may
default on the related mortgage loan due to
such borrower's inability to pay high
remediation costs or costs of defending
S-61
lawsuits due to an environmental impairment
or difficulty in bringing its operations
into compliance with environmental laws;
o liability for clean-up costs or other
remedial actions, which could exceed the
value of such mortgaged property or the
unpaid balance of the related mortgage loan;
and
o the inability to sell the related mortgage
loan in the secondary market or to lease
such mortgaged property to potential
tenants.
Under certain federal, state and local laws,
federal, state and local agencies may impose a
statutory lien over affected property to secure
the reimbursement of remedial costs incurred by
these agencies to correct adverse environmental
conditions. This lien may be superior to the
lien of an existing mortgage. Any such lien
arising with respect to a mortgaged property
securing a mortgage loan included in the trust
fund would adversely affect the value of such
mortgaged property and could make impracticable
the foreclosure by the special servicer on such
mortgaged property in the event of a default by
the related borrower.
Under various federal, state and local laws,
ordinances and regulations, a current or
previous owner or operator of real property, as
well as certain other types of parties, may be
liable for the costs of investigation, removal
or remediation of hazardous or toxic substances
on, under, adjacent to or in such property. The
cost of any required investigation, delineation
and/or remediation and the owner's liability
therefor is generally not limited under
applicable laws. Such liability could exceed
the value of the property and/or the aggregate
assets of the owner. Under some environmental
laws, a secured lender (such as the trust fund)
may be found to be an "owner" or "operator" of
the related mortgaged property if it is
determined that the lender actually
participated in the hazardous waste management
of the borrower, regardless of whether the
borrower actually caused the environmental
damage. In such cases, a secured lender may be
liable for the costs of any required
investigation, removal or remediation of
hazardous substances. The trust fund's
potential exposure to liability for
environmental costs will increase if the trust
fund, or an agent of the trust fund, actually
takes possession of a mortgaged property or
control of its day-to-day operations. See
"CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND
LEASES--Environmental Considerations" in the
accompanying prospectus, and "DESCRIPTION OF
THE MORTGAGE POOL--Assessments of Property
Condition--Environmental Assessments" in this
prospectus supplement.
A third-party environmental consultant
conducted an environmental site assessment (or
updated a previously conducted environmental
site assessment) with respect to each
S-62
mortgaged property securing a mortgage loan
included in the trust fund. Such assessments do
not generally include invasive environmental
testing. In each case where the environmental
site assessment or update revealed a material
adverse environmental condition or circumstance
at any mortgaged property, then (depending on
the nature of the condition or circumstance)
one or more of the following actions has been
or is expected to be taken:
o an environmental consultant investigated
those conditions and recommended no further
investigations or remediation;
o an environmental insurance policy, having
the characteristics described below, was
obtained from a third-party insurer;
o either (i) an operations and maintenance
program, including, in several cases, with
respect to asbestos-containing materials,
lead-based paint, microbial matter and/or
radon, or periodic monitoring of nearby
properties, has been or is expected to be
implemented in the manner and within the
time frames specified in the related loan
documents, or (ii) remediation in accordance
with applicable law or regulations has been
performed, is currently being performed or
is expected to be performed either by the
borrower or by the party responsible for the
contamination;
o an escrow or reserve was established to
cover the estimated cost of remediation,
with each remediation required to be
completed within a reasonable time frame in
accordance with the related loan documents;
or
o the related borrower or other responsible
party having financial resources reasonably
estimated to be adequate to address the
related condition or circumstance is
required to take (or is liable for the
failure to take) actions, if any, with
respect to those circumstances or conditions
that have been required by the applicable
governmental regulatory authority or any
environmental law or regulation.
We cannot provide assurance, however, that the
environmental assessments identified all
environmental conditions and risks, that the
related borrowers will implement all
recommended operations and maintenance plans,
that such plans will adequately remediate the
environmental condition, or that any
environmental indemnity, insurance or escrow
will fully cover all potential environmental
conditions and risks. In addition, the
environmental condition of the underlying real
properties could be adversely affected by
tenants or by the condition of land or
operations in the vicinity of the properties,
such as underground storage tanks.
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We cannot provide assurance, however, that
should such coverage be needed, coverage would
be available or uncontested, that the terms and
conditions of such coverage would be met, that
coverage would be sufficient for the claims at
issue or that coverage would not be subject to
certain deductibles.
In addition, some of the related borrowers have
provided an environmental indemnification in
favor of the mortgagee.
With respect to 9 mortgage loans (loan numbers
11, 16, 18, 45, 63, 84, 138, 189 and 197),
representing 5.8% of the mortgage pool (6.7% of
loan group 1), the related borrower obtained a
pollution legal liability policy, with respect
to the related mortgaged property. The premium
for each policy was paid in full at origination
and at issuance, the respective issuer each has
a financial strength rating of "AAA" from S&P
and "Aaa" from Moody's.
With respect to 1 mortgage loan (loan number
47), representing 0.6% of the mortgage pool
(0.7% of loan group 1), the related borrower
obtained an environmental collateral protection
and liability policy, with respect to the
related mortgaged property. The premium for the
policy was paid in full at origination and at
issuance, the issuer has a financial strength
rating of "A+" from S&P.
The pooling and servicing agreement will
require that the special servicer obtain an
environmental site assessment of a mortgaged
property securing a mortgage loan included in
the trust fund prior to taking possession of
the property through foreclosure or otherwise
or assuming control of its operation. Such
requirement effectively precludes enforcement
of the security for the related mortgage note
until a satisfactory environmental site
assessment is obtained (or until any required
remedial action is thereafter taken), but will
decrease the likelihood that the trust fund
will become liable for a material adverse
environmental condition at the mortgaged
property. However, we cannot give assurance
that the requirements of the pooling and
servicing agreement will effectively insulate
the trust fund from potential liability for a
materially adverse environmental condition at
any mortgaged property. See "DESCRIPTION OF THE
POOLING AND SERVICING AGREEMENTS--Realization
Upon Defaulted Mortgage Loans," "RISK
FACTORS--Environmental Liability May Affect the
Lien on a Mortgaged Property and Expose the
Lender to Costs" and "CERTAIN LEGAL ASPECTS OF
MORTGAGE LOANS AND LEASES--Environmental
Considerations" in the accompanying prospectus.
SPECIAL RISKS ASSOCIATED WITH
BALLOON LOANS AND ANTICIPATED
REPAYMENT DATE LOANS......... Two hundred twenty-three (223) of the
mortgage loans, representing 99.1% of the
mortgage pool (190 mortgage loans in loan group
1 or 98.9% and all mortgage loans in loan group
S-64
2), provide for scheduled payments of principal
and/or interest based on amortization schedules
significantly longer than their respective
remaining terms to maturity or provide for
payments of interest-only until the respective
maturity date and, in each case, a balloon
payment on their respective maturity dates.
Sixty-six (66) of these mortgage loans included
in the trust fund as of the cut-off date,
representing 13.6% of the mortgage pool (65
mortgage loans in loan group 1 or 14.5% and 1
mortgage loan in loan group 2 or 7.3%), are
anticipated repayment date loans, which provide
that if the principal balance of the loan is
not repaid on a date specified in the related
mortgage note, the loan will accrue interest at
an increased rate.
o A borrower's ability to make a balloon
payment or repay its anticipated repayment
date loan on the anticipated repayment date
typically will depend upon its ability
either to refinance fully the loan or to
sell the related mortgaged property at a
price sufficient to permit the borrower to
make such payment.
o Whether or not losses are ultimately
sustained, any delay in the collection of a
balloon payment on the maturity date or
repayment on the anticipated repayment date
that would otherwise be distributable on
your certificates will likely extend the
weighted average life of your certificates.
o The ability of a borrower to effect a
refinancing or sale will be affected by a
number of factors, including (but not
limited to) the value of the related
mortgaged property, the level of available
mortgage rates at the time of sale or
refinancing, the borrower's equity in the
mortgaged property, the financial condition
and operating history of the borrower and
the mortgaged property, rent rolling status,
rent control laws with respect to certain
residential properties, tax laws, prevailing
general and regional economic conditions and
the availability of credit for loans secured
by multifamily or commercial properties, as
the case may be.
We cannot assure you that each borrower under a
balloon loan or an anticipated repayment date
loan will have the ability to repay the
principal balance of such mortgage loan on the
related maturity date or anticipated repayment
date, as applicable. In addition, fully
amortizing mortgage loans which pay interest on
an "actual/360" basis but have fixed monthly
payments may, in fact, have a small balloon
payment due at maturity. For additional
description of risks associated with balloon
loans, see "RISK FACTORS--Balloon Payments on
Mortgage Loans Result in Heightened Risk of
Borrower Default" in the accompanying
prospectus.
In order to maximize recoveries on defaulted
mortgage loans, the pooling and servicing
agreement permits the special servicer to
extend and modify mortgage loans that are
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in material default or as to which a payment
default (including the failure to make a
balloon payment) is imminent; subject, however,
to the limitations described under "SERVICING
OF THE MORTGAGE LOANS--Modifications, Waivers
and Amendments" in this prospectus supplement.
We cannot provide assurance, however, that any
such extension or modification will increase
the present value of recoveries in a given
case. Any delay in collection of a balloon
payment that would otherwise be distributable
on your certificates, whether such delay is due
to borrower default or to modification of the
related mortgage loan, will likely extend the
weighted average life of your certificates. See
"YIELD AND MATURITY CONSIDERATIONS" in this
prospectus supplement and "YIELD
CONSIDERATIONS" in the accompanying prospectus.
ADVERSE CONSEQUENCES ASSOCIATED
WITH BORROWER CONCENTRATION,
BORROWERS UNDER COMMON
CONTROL AND
RELATED BORROWERS............. Certain borrowers under the mortgage loans
included in the trust fund are affiliated or
under common control with one another. In such
circumstances, any adverse circumstances
relating to a borrower or an affiliate thereof
and affecting one of the related mortgage loans
or mortgaged properties could also affect other
mortgage loans or mortgaged properties of the
related borrower. In particular, the bankruptcy
or insolvency of any such borrower or affiliate
could have an adverse effect on the operation
of all of the mortgaged properties of that
borrower and its affiliates and on the ability
of such related mortgaged properties to produce
sufficient cash flow to make required payments
on the mortgage loans. For example, if a person
that owns or directly or indirectly controls
several mortgaged properties experiences
financial difficulty at one mortgaged property,
they could defer maintenance at one or more
other mortgaged properties in order to satisfy
current expenses with respect to the mortgaged
property experiencing financial difficulty, or
they could attempt to avert foreclosure by
filing a bankruptcy petition that might have
the effect of interrupting payments for an
indefinite period on all the related mortgage
loans. In particular, such person experiencing
financial difficulty or becoming subject to a
bankruptcy proceeding may have an adverse
effect on the funds available to make
distributions on the certificates and may lead
to a downgrade, withdrawal or qualification (if
applicable) of the ratings of the certificates.
Mortgaged properties owned by related borrowers
are likely to:
o have common management, increasing the risk
that financial or other difficulties
experienced by the property manager could
have a greater impact on the pool of
mortgage loans included in the trust fund;
and
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o have common general partners or managing
members which would increase the risk that a
financial failure or bankruptcy filing would
have a greater impact on the pool of
mortgage loans included in the trust fund.
The Tharaldson concentration consists of 2
mortgage loans (loan numbers 3 and 5), which
collectively represent 4.9% of the mortgage
pool (5.7% of loan group 1). These 2 mortgage
loans are not cross-collateralized or
cross-defaulted but have common non-recourse
carveout guarantors, and one or more principals
of the related borrowers under each mortgage
loan are the same. The sponsor of each mortgage
loan in the Tharaldson concentration is Gary
Tharaldson. See "DESCRIPTION OF THE MORTGAGE
POOL--Twenty Largest Mortgage Loans--Tharaldson
Pool I-A Loan" and "--Tharaldson Pool I-B Loan"
in this prospectus supplement.
The Gravely and Zuckerman concentration
consists of 2 mortgage loans (loan numbers 7
and 23), which collectively represent 2.9% of
the mortgage pool (3.4% of loan group 1). These
2 mortgage loans are not cross-collateralized
or cross-defaulted but have common non-recourse
carveout guarantors, and one or more principals
of the related borrowers under each mortgage
loan are the same. The sponsors of each
mortgage loan in the Gravely and Zuckerman
concentration are Charles A. Gravely and/or
Shelton Zuckerman. See "DESCRIPTION OF THE
MORTGAGE POOL--Twenty Largest Mortgage
Loans--1001 Connecticut Loan & 1701 K Street
Loan" in this prospectus supplement.
The Westland Mall mortgage loan and Marshall
Town Center mortgage loan, (loan numbers 44 and
54), which collectively represent 1.2% of the
mortgage pool (1.4% of loan group 1) are not
cross-collateralized or cross-defaulted but one
or more principals of the related borrowers
under each such mortgage loan are the same. The
sponsor of each such mortgage loan is Garo
Kholamian.
With respect to 65 mortgage loans (the Digital
Realty Trust Portfolio mortgage loans, the
Olympia Portfolio mortgage loans, the Residence
Inn Portfolio #1 mortgage loans, the Davis
Pacific Portfolio mortgage loans, the Santa
Teresa Portfolio mortgage loans, the Spokane
Integrated Medical Portfolio mortgage loans,
the Provo Portfolio mortgage loans, the East
Capital Portfolio mortgage loans, the Bernstein
Portfolio mortgage loans, the Cole Portfolio
mortgage loans, the Continental Portfolio
mortgage loans, the Regency Portfolio mortgage
loans and the Kindercare Portfolio mortgage
loans), which collectively represent 16.8% of
the mortgage pool (62 mortgage loans in loan
group 1 or 17.5% and 3 mortgage loans in loan
group 2 or 12.3%), each concentration
represents a portfolio of cross-collateralized
and cross-defaulted mortgage loans. Each such
portfolio of mortgage loans have common
non-recourse carveout guarantors, and one or
more principals of the related borrowers under
each mortgage loan are the same. See
"DESCRIPTION OF THE
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MORTGAGE POOL--Twenty Largest Mortgage
Loans--Olympia Portfolio Loans", "--Residence
Inn Portfolio #1 Loans", "--Gardner Tanenbaum
Pool Loan" and "--Digital Realty Trust
Portfolio Loans" in this prospectus supplement.
No group, individual, borrower concentration or
sponsor concentration represents more than 7.7%
of the mortgage pool (1 mortgage loan in loan
group 1 or 8.9%).
THE GEOGRAPHIC CONCENTRATION OF
MORTGAGED PROPERTIES SUBJECTS
THE TRUST FUND TO A GREATER
EXTENT TO STATE AND
REGIONAL CONDITIONS........... Except as indicated in the following tables,
less than 5.0% of the mortgage loans, by
cut-off date pool or loan group balance, are
secured by mortgaged properties in any one
state or the District of Columbia.
MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1)
NUMBER OF AGGREGATE PERCENTAGE OF
MORTGAGED CUT-OFF DATE CUT-OFF DATE
STATE PROPERTIES BALANCE POOL BALANCE
- ------------------------ ------------ ---------------- --------------
MA ................... 14 $ 345,896,799 12.3%
CA ................... 20 283,038,986 10.1
Southern (2) ....... 16 187,088,986 6.7
Northern (2) ....... 4 95,950,000 3.4
NY ................... 8 244,942,391 8.7
TX ................... 48 224,543,504 8.0
DC ................... 5 177,259,053 6.3
VA ................... 10 171,430,483 6.1
FL ................... 28 151,885,266 5.4
Other ................ 158 1,209,564,778 43.1
--- -------------- -----
TOTAL .............. 291 $2,808,561,259 100.0%
=== ============== =====
----------
(1) Because this table presents information
relating to the mortgaged properties and
not the mortgage loans, the information
for mortgage loans secured by more than
one mortgaged property is based on
allocated loan amounts (allocating the
mortgage loan principal balance to each
of those properties by the appraised
values of the mortgaged properties) or
the allocated loan amount as detailed in
the related mortgage loan documents.
(2) For purposes of determining whether a
mortgaged property is located in Northern
California or Southern California,
mortgaged properties located north of San
Luis Obispo County, Kern County and San
Bernardino County were included in
Northern California and mortgaged
properties located in and south of such
counties were included in Southern
California.
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LOAN GROUP 1
MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1)
NUMBER OF AGGREGATE PERCENTAGE OF
MORTGAGED CUT-OFF DATE CUT-OFF DATE
STATE PROPERTIES BALANCE GROUP 1 BALANCE
- ----------------------- ------------ ---------------- ----------------
MA .................. 12 $ 330,246,799 13.6%
CA .................. 18 250,038,986 10.3
Southern(2) ....... 15 182,088,986 7.5
Northern(2) ....... 3 67,950,000 2.8
NY .................. 8 244,942,391 10.1
TX .................. 45 183,018,504 7.5
DC .................. 4 162,779,619 6.7
VA .................. 7 153,149,433 6.3
Other ............... 164 1,109,145,079 45.6
--- -------------- -----
TOTAL: ............ 258 $2,433,320,810 100.0%
=== ============== =====
----------
(1) Because this table presents information
relating to the mortgaged properties and
not the mortgage loans, the information
for mortgage loans secured by more than
one mortgaged property is based on
allocated loan amounts (allocating the
mortgage loan principal balance to each
of those properties by the appraised
values of the mortgaged properties) or
the allocated loan amount as detailed in
the related mortgage loan documents.
(2) For purposes of determining whether a
mortgaged property is located in Northern
California or Southern California,
mortgaged properties located north of San
Luis Obispo County, Kern County and San
Bernardino County were included in
Northern California and mortgaged
properties located in and south of such
counties were included in Southern
California.
LOAN GROUP 2
MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1)
NUMBER OF AGGREGATE PERCENTAGE OF
MORTGAGED CUT-OFF DATE CUT-OFF DATE
STATE PROPERTIES BALANCE GROUP 2 BALANCE
- ----------------------- ------------ -------------- ----------------
TX .................. 3 $ 41,525,000 11.1%
AL .................. 2 38,676,355 10.3
FL .................. 2 34,475,414 9.2
CO .................. 2 34,207,000 9.1
CA .................. 2 33,000,000 8.8
Northern(2) ......... 1 28,000,000 7.5
Southern(2) ......... 1 5,000,000 1.3
TN .................. 2 32,600,000 8.7
MN .................. 4 18,964,628 5.1
Other ............... 16 141,792,051 37.8
-- ------------ -----
TOTAL: .............. 33 $375,240,449 100.0%
== ============ =====
----------
(1) Because this table presents information
relating to the mortgaged properties and
not the mortgage loans, the information
for mortgage loans secured by more than
one mortgaged property is based on
allocated loan amounts (allocating the
mortgage loan principal balance to each
of those properties by the appraised
values of the mortgaged properties) or
the allocated loan amount as detailed in
the related mortgage loan documents.
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(2) For purposes of determining whether a
mortgaged property is located in Northern
California or Southern California,
mortgaged properties located north of San
Luis Obispo County, Kern County and San
Bernardino County were included in
Northern California and mortgaged
properties located in and south of such
counties were included in Southern
California.
The concentration of mortgaged properties in a
specific state or region will make the
performance of the trust fund as a whole more
sensitive to the following in the state or
region where the mortgagors and the mortgaged
properties are located:
o economic conditions;
o conditions in the real estate market;
o changes in governmental rules and fiscal
policies;
o acts of God or terrorism (which may result
in uninsured losses); and
o other factors which are beyond the control
of the mortgagors.
SPECIAL RISKS ASSOCIATED WITH
HIGH BALANCE MORTGAGE LOANS.. Several of the mortgage loans included in the
trust fund, individually or together with other
such mortgage loans with which they are
cross-collateralized, have principal balances
as of the cut-off date that are substantially
higher than the average principal balance of
the mortgage loans in the trust fund as of the
cut-off date.
In general, concentrations in a mortgage pool
of loans with larger-than-average balances can
result in losses that are more severe, relative
to the size of the pool, than would be the case
if the aggregate balance of the pool were more
evenly distributed.
o The largest single mortgage loan included in
the trust fund as of the cut-off date
represents 7.7% of the mortgage pool (8.9%
of loan group 1).
o The largest group of cross-collateralized
mortgage loans included in the trust fund as
of the cut-off date represents, in the
aggregate, 5.5% of the mortgage pool (6.3%
of loan group 1).
o The 5 largest mortgage loans or groups of
cross-collateralized mortgage loans included
in the trust fund as of the cut-off date
represent, in the aggregate, 23.8% of the
mortgage pool (27.5% of loan group 1).
o The 10 largest mortgage loans or groups of
cross-collateralized mortgage loans included
in the trust fund as of the cut-off date
represent, in the aggregate, 34.7% of the
mortgage pool (40.1% of loan group 1).
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CONCENTRATIONS OF MORTGAGED PROPERTY
TYPES SUBJECT THE TRUST FUND TO
INCREASED RISK OF DECLINE IN A
PARTICULAR INDUSTRY.......... A concentration of mortgaged property types
can increase the risk that a decline in a
particular industry or business would have a
disproportionately large impact on a pool of
mortgage loans. For example, if there is a
decline in tourism, the hotel industry might be
adversely affected, leading to increased losses
on loans secured by hospitality properties as
compared to the mortgage loans secured by other
property types.
In that regard:
o mortgage loans included in the trust fund
and secured by office properties represent
as of the cut-off date 38.4% of the mortgage
pool (44.4% of loan group 1);
o mortgage loans included in the trust fund
and secured by retail properties represent
as of the cut-off date 24.9% of the mortgage
pool (28.7% of loan group 1);
o mortgage loans included in the trust fund
and secured by multifamily properties
represent as of the cut-off date 15.5% of
the mortgage pool (4 mortgage loans in loan
group 1 or 2.4% and all mortgage loans in
loan group 2);
o mortgage loans included in the trust fund
and secured by hospitality properties
represent as of the cut-off date 10.1% of
the mortgage pool (11.7% of loan group 1);
o mortgage loans included in the trust fund
and secured by mixed use properties
represent as of the cut-off date 5.2% of the
mortgage pool (6.1% of loan group 1);
o mortgage loans included in the trust fund
and secured by industrial properties
represent as of the cut-off date 2.9% of the
mortgage pool (3.3% of loan group 1);
o mortgage loans included in the trust fund
and secured by special purpose use
properties represent as of the cut-off date
1.8% of the mortgage pool (2.1% of loan
group 1);
o mortgage loans included in the trust fund
and secured by self-storage facilities
represent as of the cut-off date 0.7% of the
mortgage pool (0.8% of loan group 1); and
o mortgage loans included in the trust fund
and secured by land represent as of the
cut-off date 0.4% of the mortgage pool (0.4%
of loan group 1).
WE HAVE NOT REUNDERWRITTEN ANY
OF THE MORTGAGE LOANS........ We have not reunderwritten the mortgage loans
included in the trust fund. Instead, we have
relied on the representations and warranties
made by the mortgage loan sellers, and the
mortgage loan sellers' respective obligations
to repurchase, cure or substitute a mortgage
loan in the event that a representation or
warranty was not true when made and such breach
materially and adversely affects the value of
the
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mortgage loan, the interest of the trust fund
or the interests of any certificateholder.
These representations and warranties do not
cover all of the matters that we would review
in underwriting a mortgage loan and you should
not view them as a substitute for
reunderwriting the mortgage loans. If we had
reunderwritten the mortgage loans included in
the trust fund, it is possible that the
reunderwriting process may have revealed
problems with a mortgage loan not covered by
representations or warranties given by the
mortgage loan sellers. In addition, we cannot
provide assurance that the mortgage loan
sellers will be able to repurchase or
substitute a mortgage loan if a representation
or warranty has been breached. See "DESCRIPTION
OF THE MORTGAGE POOL--Representations and
Warranties; Repurchases and Substitutions" in
this prospectus supplement.
FORECLOSURE ON MORTGAGED
PROPERTIES MAY RESULT IN
ADVERSE TAX CONSEQUENCES..... One or more of the REMICs relating to the
assets of the trust fund might become subject
to federal (and possibly state or local) tax on
certain of its net income from the operation
and management of a mortgaged property
subsequent to the trust fund's acquisition of a
mortgaged property pursuant to a foreclosure or
deed-in-lieu of foreclosure. Any such tax would
substantially reduce net proceeds available for
distribution to you. See "MATERIAL FEDERAL
INCOME TAX CONSEQUENCES--Taxation of Owners of
REMIC Regular Certificates," and "--Taxation of
Owners of REMIC Residual Certificates" in the
accompanying prospectus. In addition, if the
trust fund were to acquire one or more
mortgaged properties pursuant to a foreclosure
or deed in lieu of foreclosure, upon
acquisition of those mortgaged properties, the
trust fund may in certain jurisdictions,
particularly in New York, be required to pay
state or local transfer or excise taxes upon
liquidation of such properties. Such state or
local taxes may reduce net proceeds available
for distribution to the certificateholders.
INSURANCE COVERAGE ON MORTGAGED
PROPERTIES MAY NOT COVER
SPECIAL HAZARD LOSSES........ The master servicer (with respect to mortgage
loans that are not specially serviced mortgage
loans) and/or special servicer (with respect to
specially serviced mortgage loans) will
generally be required to cause the borrower on
each mortgage loan included in the trust fund
and serviced by it to maintain such insurance
coverage on the related mortgaged property as
is required under the related mortgage,
including hazard insurance; provided that each
of the master servicer and/or the special
servicer may satisfy its obligation to cause
hazard insurance to be maintained with respect
to any mortgaged property by acquiring a
blanket or master single interest insurance
policy. In general, the standard form of fire
and extended coverage policy covers physical
damage to or
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destruction of the improvements on the related
mortgaged property by fire, lightning,
explosion, smoke, windstorm and hail, and riot,
strike and civil commotion, subject to the
conditions and exclusions specified in each
policy. The mortgage loans generally do not
require earthquake insurance.
Although the policies covering the mortgaged
properties are underwritten by different
insurers under different state laws in
accordance with different applicable state
forms, and therefore do not contain identical
terms and conditions, most such policies
typically may not cover any physical damage
resulting from:
o war;
o terrorism;
o revolution;
o governmental actions;
o floods, and other water-related causes;
o earth movement (including earthquakes,
landslides and mud flows);
o wet or dry rot;
o vermin;
o domestic animals;
o sink holes or similarly occurring soil
conditions; and
o other kinds of risks not specified in the
preceding paragraph.
In light of the September 11, 2001, terrorist
attacks in New York City and the Washington,
D.C. area, many reinsurance companies (which
assume some of the risk of policies sold by
primary insurers) indicated that they intended
to eliminate coverage for acts of terrorism
from their reinsurance policies. Without that
reinsurance coverage, primary insurance
companies would have to assume that risk
themselves, which may cause them to eliminate
such coverage in their policies, increase the
amount of the deductible for acts of terrorism
or charge higher premiums for such coverage. In
order to offset this risk, Congress passed the
Terrorism Risk Insurance Act of 2002, which
established the Terrorism Insurance Program.
The Terrorism Insurance Program is administered
by the Secretary of the Treasury and was
established to provide financial assistance
from the United States government to insurers
in the event of another terrorist attack that
is the subject of an insurance claim. The
Terrorism Risk Insurance Act of 2002 requires
the Treasury Department to establish procedures
for the Terrorism Insurance Program under which
the federal share of compensation will be equal
to 90% of that portion of insured losses that
exceeds an applicable insurer deductible
required to be paid during each program year.
The federal share in the aggregate in any
program year
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may not exceed $100 billion. An insurer that
has paid its deductible is not liable for the
payment of any portion of total annual United
States-wide losses that exceed $100 billion,
regardless of the terms of the individual
insurance contracts.
The Terrorism Insurance Program required that
each insurer for policies in place prior to
November 26, 2002, provide its insureds with a
statement of the proposed premiums for
terrorism coverage, identifying the portion of
the risk that the federal government will
cover, within 90 days after November 26, 2002.
Insureds had 30 days to accept the continued
coverage and pay the premium. If an insured
authorizes the exclusion or does not pay the
premium, insurance for acts of terrorism may be
excluded from the policy. All policies for
insurance issued after November 26, 2002, must
make similar disclosure and provide a similar
opportunity for the insured to purchase
coverage. The Terrorism Risk Insurance Act of
2002 does not require insureds to purchase the
coverage nor does it stipulate the pricing of
the coverage.
Through December 2005, insurance carriers are
required under the program to provide terrorism
coverage in their basic "all-risk" policies. On
June 18, 2004, the Secretary of the Treasury
announced its decision to extend this mandatory
participation through December 2005. Any
commercial property and casualty terrorism
insurance exclusion that was in force on
November 26, 2002, is automatically voided to
the extent that it excludes losses that would
otherwise be insured losses, subject to the
immediately preceding paragraph. Any state
approval of such types of exclusions in force
on November 26, 2002, is also voided.
However, the Terrorism Insurance Program
applies to United States risks only and to acts
that are committed by an individual or
individuals acting on behalf of a foreign
person or foreign interest as an effort to
influence or coerce United States civilians or
the United States government. Further, the act
must be certified as an "act of terrorism" by
the federal government, which decision is not
subject to judicial review. It remains unclear
what acts will fall under the purview of the
Terrorism Insurance Program.
Furthermore, because the Terrorism Insurance
Program has only been recently passed into law,
there can be no assurance that it or state
legislation will substantially lower the cost
of obtaining terrorism insurance.
Finally, the Terrorism Insurance Program
terminates as described above. There can be no
assurance that such temporary program will
create any long-term changes in the
availability and cost of such insurance.
Moreover, there can be no assurance that
subsequent terrorism insurance legislation will
be passed upon its expiration.
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No assurance can be given that the mortgaged
properties will continue to have the benefit of
insurance against terrorist acts. In addition,
no assurance can be given that the coverage for
such acts, if obtained or maintained, will be
broad enough to cover the particular act of
terrorism that may be committed or that the
amount of coverage will be sufficient to repair
and restore the mortgaged property or to repay
the mortgage loan in full. The insufficiency of
insurance coverage in any respect could have a
material and adverse affect on your
certificates.
Pursuant to the terms of the pooling and
servicing agreement, the master servicer or the
special servicer may not be required to
maintain insurance covering terrorist or
similar acts, nor will it be required to call a
default under a mortgage loan, if the related
borrower fails to maintain such insurance (even
if required to do so under the related loan
documents) if the special servicer has
determined, in consultation with the
controlling class representative, in accordance
with the servicing standard that either:
o such insurance is not available at
commercially reasonable rates and that such
hazards are not at the time commonly insured
against for properties similar to the
mortgaged property and located in or around
the region in which such mortgaged property
is located; or
o such insurance is not available at any
rate.
In addition, with respect to certain mortgage
loans, the mortgagee may have waived the right
to require terrorism insurance or may have
limited the circumstances under which terrorism
insurance is required. For example, with
respect to 1 mortgage loan (loan number 6),
representing 2.0% of the mortgage pool (2.3% of
loan group 1), the related borrower is not
required to carry terrorism insurance in excess
of a maximum annual premium amount.
Any losses incurred with respect to mortgage
loans included in the trust fund due to
uninsured risks or insufficient hazard
insurance proceeds could adversely affect
distributions on your certificates.
ADDITIONAL DEBT ON SOME MORTGAGE
LOANS CREATES
ADDITIONAL RISKS.............. In general, the borrowers are:
o required to satisfy any existing
indebtedness encumbering the related
mortgaged property as of the closing of the
related mortgage loan; and
o prohibited from encumbering the related
mortgaged property with additional secured
debt without the mortgagee's prior approval.
Except as provided below, none of the mortgage
loans included in the trust fund, other than
the mortgage loans with companion loans, are
secured by mortgaged properties that
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secure other loans outside the trust fund, and,
except as provided below none of the related
entities with a controlling ownership interest
in the borrower may pledge its interest in that
borrower as security for mezzanine debt.
With respect to 1 mortgage loan (loan number
26), representing approximately 1.0% of the
mortgage pool (7.3% of loan group 2), there is
existing subordinated debt secured by the
mortgaged property and also secured by
partnership interests in the related borrower
which is subordinated only by the terms of the
subordinate mortgage, but is not subject to an
intercreditor agreement and/or a subordination
and standstill agreement.
With respect to 5 mortgage loans (loan numbers
59, 64, 76, 95 and 183), representing 1.5% of
the mortgage pool (11.3% of loan group 2), the
related borrower, under certain circumstances,
may encumber the related mortgaged property
with subordinate debt subject to the terms of a
subordination and standstill agreement to be
entered into in favor of the mortgagee and the
satisfaction of certain financial conditions.
With respect to 4 mortgage loans (loan numbers
3, 6, 71 and 194), representing approximately
5.2% of the mortgage pool (6.0% of loan group
1), the related borrower, under certain
circumstances, may incur additional unsecured
indebtedness other than in the ordinary course
of business and without the consent of the
mortgagee.
With respect to 2 mortgage loans (loan numbers
34 and 73), representing approximately 1.2% of
the mortgage pool (1 mortgage loan in loan
group 1 or 1.0% and 1 mortgage loan in loan
group 2 or 2.4%), the related mortgage loan
documents provide that, under certain
circumstances, (a) the related borrower may
encumber the related mortgaged property with
subordinate debt in the future and/or (b) the
entities with a controlling interest in the
related borrower may pledge their interest in
the borrower as security for mezzanine debt in
the future, subject to the terms of a
subordination and standstill agreement to be
entered into in favor of the mortgagee and the
satisfaction of certain financial conditions.
With respect to 3 mortgage loans (loan numbers
2, 44 and 48), representing approximately 6.0%
of the mortgage pool (2 mortgage loans in loan
group 1 or 6.2% and 1 mortgage loan in loan
group 2 or 4.3%), the ownership interests of
the direct or indirect owners of the related
borrower have been pledged as security for
mezzanine debt, subject to the terms of an
intercreditor agreement entered into in favor
of the mortgagee.
With respect to 24 mortgage loans (loan numbers
8, 12, 20, 21, 39, 41, 44, 53, 55, 69, 77, 78,
82, 101, 105, 112, 115, 118, 134, 146, 166,
174, 198 and 212), representing approximately
11.6% of the mortgage pool (17 mortgage loans
in loan group 1 or 10.5% and 7 mortgage loans
in loan group 2 or 18.9%),
S-76
the related loan documents provide that, under
certain circumstances, ownership interests in
the related borrowers may be pledged as
security for mezzanine debt in the future,
subject to the terms of a subordination and
standstill agreement and/or an intercreditor
agreement to be entered into in favor of the
mortgagee and the satisfaction of certain
financial conditions.
Two (2) mortgage loans (loan numbers 49 and
108), representing 0.8% of the mortgage pool
(0.9% of loan group 1), have existing unsecured
debt.
In addition, 28 mortgage loans (loan numbers
66, 85, 90, 94, 103, 113, 124, 129, 133, 135,
137, 142, 147, 151, 154, 155, 156, 157, 158,
159, 160, 164, 178, 181, 185, 202, 219 and
221), representing 4.3% of the mortgage pool
(4.9% of loan group 1), do not prohibit the
related borrower from incurring additional
unsecured debt or an owner of an interest in
the related borrower from pledging its
ownership interest in the related borrower as
security for mezzanine debt because the related
borrower is not required by either the mortgage
loan documents or related organizational
documents to be a special purpose entity.
Secured subordinated debt encumbering any
mortgaged property may increase the difficulty
of refinancing the related mortgage loan at
maturity and the possibility that reduced cash
flow could result in deferred maintenance.
Also, in the event that the holder of the
subordinated debt has filed for bankruptcy or
been placed in involuntary receivership,
foreclosure by any senior lienholder (including
the trust fund) on the mortgaged property could
be delayed. In addition, substantially all of
the mortgage loans permit the related borrower
to incur limited indebtedness in the ordinary
course of business or for capital improvements
that is not secured by the related mortgaged
property which is generally limited to a
specified percentage of the outstanding
principal balance of the related mortgage loan.
Further, certain of the mortgage loans included
in the trust fund do not prohibit limited
partners or other owners of non-controlling
interests in the related borrower from pledging
their interests in the borrower as security for
mezzanine debt.
In addition, certain mortgage loans, which may
include the mortgage loans previously described
in this risk factor, permit the related
borrower to incur, or do not prohibit the
related borrower from incurring, unsecured debt
to an affiliate of, or owner of an interest in,
the borrower or to an affiliate of such an
owner, subject to certain conditions under the
related mortgage loan documents. Further,
certain of the mortgage loans permit additional
liens on the related mortgaged properties for
(1) assessments, taxes or other similar charges
or (2) liens which in the aggregate constitute
an immaterial and insignificant monetary amount
with respect to the net value of the related
borrower's assets. A default by the borrower on
such additional indebtedness could impair
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the borrower's financial condition and result
in the bankruptcy or receivership of the
borrower which would cause a delay in the
foreclosure by the trust fund on the mortgaged
property. It may not be evident that a borrower
has incurred any such future subordinate second
lien debt until the related mortgage loan
otherwise defaults. In cases in which one or
more subordinate liens are imposed on a
mortgaged property or the borrower incurs other
indebtedness, the trust fund is subject to
additional risks, including, without
limitation, the following:
o the risk that the necessary maintenance of
the mortgaged property could be deferred to
allow the borrower to pay the required debt
service on the subordinate financing and
that the value of the mortgaged property may
fall as a result;
o the risk that the borrower may have a
greater incentive to repay the subordinate
or unsecured indebtedness first;
o the risk that it may be more difficult for
the borrower to refinance the mortgage loan
or to sell the mortgaged property for
purposes of making any balloon payment upon
the maturity of the mortgage loan;
o the existence of subordinated debt
encumbering any mortgaged property may
increase the difficulty of refinancing the
related mortgage loan at maturity and the
possibility that reduced cash flow could
result in deferred maintenance; and
o the risk that, in the event that the holder
of the subordinated debt has filed for
bankruptcy or been placed in involuntary
receivership, foreclosing on the mortgaged
property could be delayed and the trust fund
may be subjected to the costs and
administrative burdens of involvement in
foreclosure or bankruptcy proceedings or
related litigation.
See "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
AND LEASES--Subordinate Financing" and "--
Due-on-Sale and Due-on-Encumbrance" in the
accompanying prospectus and "DESCRIPTION OF THE
MORTGAGE POOL--Certain Terms and Conditions of
the Mortgage Loans--Other Financing" and
"--Due-on-Sale and Due-on-Encumbrance
Provisions" in this prospectus supplement.
Mezzanine debt is debt that is incurred by the
owner of equity in one or more borrowers and is
secured by a pledge of the equity ownership
interests in such borrowers. Because mezzanine
debt is secured by the obligor's equity
interest in the related borrowers, such
financing effectively reduces the obligor's
economic stake in the related mortgaged
property. The existence of mezzanine debt may
reduce cash flow on the borrower's mortgaged
property after the payment of debt service and
may increase the likelihood that the owner of a
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borrower will permit the value or income
producing potential of a mortgaged property to
fall and may create a greater risk that a
borrower will default on the mortgage loan
secured by a mortgaged property whose value or
income is relatively weak.
Generally, upon a default under mezzanine debt,
the holder of such mezzanine debt would be
entitled to foreclose upon the equity in the
related mortgagor, which has been pledged to
secure payment of such mezzanine debt. Although
such transfer of equity may not trigger the due
on sale clause under the related mortgage loan,
it could cause the obligor under such mezzanine
debt to file for bankruptcy, which could
negatively affect the operation of the related
mortgaged property and such borrower's ability
to make payments on the related mortgage loan
in a timely manner.
Additionally, some intercreditor agreements
with respect to certain mezzanine debt may give
the holder of the mezzanine debt the right to
cure certain defaults and, upon a default, to
purchase the related mortgage loan for an
amount equal to the then-current outstanding
balance of such loan. Some intercreditor
agreements relating to mezzanine debt may also
limit the special servicer's ability to enter
into certain modifications of the mortgage loan
without the consent of the related mezzanine
lender.
See "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
AND LEASES--Due-on-Sale and Due-on-Encumbrance"
in the accompanying prospectus and "DESCRIPTION
OF THE MORTGAGE POOL--Certain Terms and
Conditions of the Mortgage Loans--Other
Financing" and "--Due-on-Sale and
Due-on-Encumbrance Provisions" in this
prospectus supplement.
Although the assets of the trust fund do not
include the companion loans related to the
mortgage loans which have companion loans, the
related borrower is still obligated to make
interest and principal payments on those
additional obligations. As a result, the trust
fund is subject to additional risks, including:
o the risk that the necessary maintenance of
the related mortgaged property could be
deferred to allow the borrower to pay the
required debt service on the subordinate or
pari passu obligations and that the value of
the mortgaged property may fall as a result;
and
o the risk that it may be more difficult for
the borrower to refinance the mortgage loan
or to sell the mortgaged property for
purposes of making any balloon payment on
the entire balance of both the loans
contained in the loan pair upon the maturity
of the mortgage loans.
In addition, although nine (9) of the mortgage
loans have companion loans that are subordinate
to the related mortgage loan, each of the One &
Two International Place
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mortgage loan and the 450 West 33rd Street
mortgage loan, representing 12.4% of the
mortgage pool (14.3% of loan group 1), has a
companion loan that is pari passu with the
mortgage loan. See "DESCRIPTION OF THE MORTGAGE
POOL--Twenty Largest Mortgage Loans" and
"--Co-Lender Loans" in this prospectus
supplement.
THE BORROWER'S FORM OF ENTITY
MAY CAUSE SPECIAL RISKS...... Most of the borrowers are legal entities
rather than individuals. Mortgage loans made to
legal entities may entail risks of loss greater
than those of mortgage loans made to
individuals. For example, a legal entity, as
opposed to an individual, may be more inclined
to seek legal protection from its creditors
under the bankruptcy laws. Unlike individuals
involved in bankruptcies, most of the entities
generally do not have personal assets and
creditworthiness at stake. The bankruptcy of a
borrower, or a general partner or managing
member of a borrower, may impair the ability of
the mortgagee to enforce its rights and
remedies under the related mortgage.
Many of the borrowers are not special purpose
entities structured to limit the possibility of
becoming insolvent or bankrupt, and therefore
may be more likely to become insolvent or the
subject of a voluntary or involuntary
bankruptcy proceeding because such borrowers
may be:
o operating entities with businesses distinct
from the operation of the property with the
associated liabilities and risks of
operating an ongoing business; or
o individuals that have personal liabilities
unrelated to the property.
With respect to 23 of the mortgage loans (the
Olympia Portfolio loans), the related borrowers
are not special purpose entities; however, the
terms of the related mortgage loan documents
restrict the borrowers from incurring any
additional debt.
Any borrower, even a special purpose entity
structured to be bankruptcy-remote, as an owner
of real estate will be subject to certain
potential liabilities and risks. We cannot
provide assurances that any borrower will not
file for bankruptcy protection or that
creditors of a borrower or a corporate or
individual general partner or managing member
of a borrower will not initiate a bankruptcy or
similar proceeding against such borrower or
corporate or individual general partner or
managing member.
Furthermore, with respect to any related
borrowers, creditors of a common parent in
bankruptcy may seek to consolidate the assets
of such borrowers with those of the parent.
Consolidation of the assets of such borrowers
would likely have an adverse effect on the
funds available to make distributions on your
certificates, and may lead to a downgrade,
withdrawal or qualification of the ratings of
your
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certificates. See "CERTAIN LEGAL ASPECTS OF
MORTGAGE LOANS AND LEASES--Bankruptcy Laws" in
the accompanying prospectus.
In addition, with respect to 40 mortgage loans,
representing 15.1% of the mortgage pool (31
mortgage loans in loan group 1 or 11.4% and 9
mortgage loans in loan group 2 or 39.4%), the
borrowers own the related mortgaged property as
tenants in common. As a result, the related
mortgage loans may be subject to prepayment,
including during periods when prepayment might
otherwise be prohibited, as a result of
partition. Although some of the related
borrowers have purported to waive any right of
partition, we cannot assure you that any such
waiver would be enforced by a court of
competent jurisdiction. In addition,
enforcement of remedies against
tenant-in-common borrowers may be prolonged if
the tenant-in-common borrowers become insolvent
or bankrupt at different times because each
time a tenant-in-common borrower files for
bankruptcy, the bankruptcy court stay is
reinstated.
BANKRUPTCY PROCEEDINGS ENTAIL
CERTAIN RISKS................ Under federal bankruptcy law, the filing of a
petition in bankruptcy by or against a borrower
will stay the sale of the mortgaged property
owned by that borrower, as well as the
commencement or continuation of a foreclosure
action. In addition, even if a court determines
that the value of the mortgaged property is
less than the principal balance of the mortgage
loan it secures, the court may prevent a
mortgagee from foreclosing on the mortgaged
property (subject to certain protections
available to the mortgagee). As part of a
restructuring plan, a court also may reduce the
amount of secured indebtedness to the
then-current value of the mortgaged property,
which would make the mortgagee a general
unsecured creditor for the difference between
the then-current value and the amount of its
outstanding mortgage indebtedness. A bankruptcy
court also may: (1) grant a debtor a reasonable
time to cure a payment default on a mortgage
loan; (2) reduce periodic payments due under a
mortgage loan; (3) change the rate of interest
due on a mortgage loan; or (4) otherwise alter
the mortgage loan's repayment schedule.
Moreover, the filing of a petition in
bankruptcy by, or on behalf of, a junior
lienholder may stay the senior lienholder from
taking action to foreclose on the junior lien.
Additionally, the borrower's trustee or the
borrower, as debtor-in-possession, has certain
special powers to avoid, subordinate or
disallow debts. In certain circumstances, the
claims of the trustee may be subordinated to
financing obtained by a debtor-in-possession
subsequent to its bankruptcy.
Under federal bankruptcy law, the mortgagee
will be stayed from enforcing a borrower's
assignment of rents and leases. Federal
bankruptcy law also may interfere with the
master servicer's or special servicer's ability
to enforce lockbox
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requirements. The legal proceedings necessary
to resolve these issues can be time consuming
and costly and may significantly delay or
diminish the receipt of rents. Rents also may
escape an assignment to the extent they are
used by the borrower to maintain the mortgaged
property or for other court authorized
expenses.
Additionally, pursuant to subordination
agreements for certain of the mortgage loans,
the subordinate lenders may have agreed that
they will not take any direct actions with
respect to the related subordinated debt,
including any actions relating to the
bankruptcy of the borrower, and that the holder
of the mortgage loan will have all rights to
direct all such actions. There can be no
assurance that in the event of the borrower's
bankruptcy, a court will enforce such
restrictions against a subordinated lender.
In its decision in In re 203 North LaSalle
Street Partnership, 246 B.R. 325 (Bankr. N.D.
Ill. March 10, 2000), the United States
Bankruptcy Court for the Northern District of
Illinois refused to enforce a provision of a
subordination agreement that allowed a first
mortgagee to vote a second mortgagee's claim
with respect to a Chapter 11 reorganization
plan on the grounds that pre-bankruptcy
contracts cannot override rights expressly
provided by the Bankruptcy Code. This holding,
which one court has already followed,
potentially limits the ability of a senior
lender to accept or reject a reorganization
plan or to control the enforcement of remedies
against a common borrower over a subordinated
lender's objections.
As a result of the foregoing, the trustee's
recovery with respect to borrowers in
bankruptcy proceedings may be significantly
delayed, and the aggregate amount ultimately
collected may be substantially less than the
amount owed.
Certain of the mortgage loans may have a
borrower, a principal or a sponsor of the
related borrower that has previously filed
bankruptcy. In each case, the related entity or
person has emerged from bankruptcy. However, we
cannot assure you that such borrowers,
principals and sponsors will not be more likely
than others, to utilize their rights in
bankruptcy in the event of any threatened
action by the mortgagee to enforce its rights
under the related loan documents. For example,
with respect to 1 mortgage loan (loan number 1)
representing 7.7% of the mortgage pool (8.9% of
loan group 1), the previous borrower declared
bankruptcy in connection with the previous
lender in 2004. The dispute regarding the
previous debt was resolved and the bankruptcy
was discharged and is not appealable.
INSPECTIONS AND APPRAISALS
MAY NOT ACCURATELY REFLECT
VALUE OR CONDITION OF
MORTGAGED PROPERTY............ In general, appraisals represent only the
analysis and opinion of qualified experts and
are not guaranties of present or future value,
and may determine a value of a property that is
significantly higher than the amount that can
be obtained from the sale of a mortgaged
property under a distress or
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liquidation sale. Information regarding the
values of the mortgaged properties at the date
of such report is presented under "DESCRIPTION
OF THE MORTGAGE POOL--Additional Mortgage Loan
Information" in this prospectus supplement for
illustrative purposes only. Any engineering
reports or site inspections obtained in
connection with this offering represent only
the analysis of the individual engineers or
site inspectors preparing such reports at the
time of such report, and may not reveal all
necessary or desirable repairs, maintenance or
capital improvement items.
THE MORTGAGED PROPERTIES MAY NOT
BE IN COMPLIANCE WITH CURRENT
ZONING LAWS.................. The mortgaged properties securing the
mortgage loans included in the trust fund are
typically subject to building and zoning
ordinances and codes affecting the construction
and use of real property. Since the zoning laws
applicable to a mortgaged property (including,
without limitation, density, use, parking and
set-back requirements) are usually subject to
change by the applicable regulatory authority
at any time, the improvements upon the
mortgaged properties may not, currently or in
the future, comply fully with all applicable
current and future zoning laws. Such changes
may limit the ability of the related borrower
to rehabilitate, renovate and update the
premises, and to rebuild or utilize the
premises "as is" in the event of a casualty
loss with respect thereto. Such limitations may
adversely affect the cash flow of the mortgaged
property following such loss. 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.
RESTRICTIONS ON CERTAIN OF THE
MORTGAGED PROPERTIES MAY
LIMIT THEIR USE.............. Certain of the mortgaged properties securing
mortgage loans included in the trust fund which
are non-conforming may not be "legal
non-conforming" uses. The failure of a
mortgaged property to comply with zoning laws
or to be a "legal non-conforming" use may
adversely affect the market value of the
mortgaged property or the borrower's ability to
continue to use it in the manner it is
currently being used.
In addition, certain of the mortgaged
properties are subject to certain use
restrictions imposed pursuant to restrictive
covenants, governmental requirements,
reciprocal easement agreements or operating
agreements or, in the case of those mortgaged
properties that are condominiums, condominium
declarations or other condominium use
restrictions or regulations, especially in a
situation where the mortgaged property does not
represent the entire condominium building. For
example, 2 mortgage loans (loan numbers 100 and
104)
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representing 0.4% of the mortgage pool (0.5% of
loan group 1) is subject to a condominium
declaration where the mortgaged property does
not represent the entire condominium building.
Such use restrictions include, for example,
limitations on the character of the
improvements or the properties, limitations
affecting noise and parking requirements, among
other things, and limitations on the borrowers'
right to operate certain types of facilities
within a prescribed radius. These limitations
could adversely affect the ability of the
related borrower to lease the mortgaged
property on favorable terms, thus adversely
affecting the borrower's ability to fulfill its
obligations under the related mortgage loan.
COMPLIANCE WITH APPLICABLE
LAWSAND REGULATIONS MAY
RESULT IN LOSSES............. A borrower may be required to incur costs to
comply with various existing and future
federal, state or local laws and regulations
applicable to the related mortgaged property
securing a mortgage loan included in the trust
fund. Examples of these laws and regulations
include zoning laws and the Americans with
Disabilities Act of 1990, which requires all
public accommodations to meet certain federal
requirements related to access and use by
disabled persons. See "CERTAIN LEGAL ASPECTS OF
MORTGAGE LOANS AND LEASES--Americans with
Disabilities Act" in the accompanying
prospectus. The expenditure of such costs or
the imposition of injunctive relief, penalties
or fines in connection with the borrower's
noncompliance could negatively impact the
borrower's cash flow and, consequently, its
ability to pay its mortgage loan.
ENFORCEABILITY OF DUE-ON-SALE
CLAUSES AND ASSIGNMENTS OF
LEASES AND RENTS IS LIMITED.. The mortgages securing the mortgage loans
included in the trust fund generally contain
due-on-sale clauses, which permit the
acceleration of the maturity of the related
mortgage loan if the borrower sells, transfers
or conveys the related mortgaged property or
its interest in the mortgaged property without
the consent of the mortgagee. There also may be
limitations on the enforceability of such
clauses. The mortgages also generally include a
debt-acceleration clause, which permits the
acceleration of the related mortgage loan upon
a monetary or non-monetary default by the
borrower. The courts of all states will
generally enforce clauses providing for
acceleration in the event of a material payment
default, but may refuse the foreclosure of a
mortgaged property when acceleration of the
indebtedness would be inequitable or unjust or
the circumstances would render acceleration
unconscionable. However, certain of the
mortgage loans included in the trust fund
permit one or more transfers of the related
mortgaged property or transfer of a controlling
interest in the related borrower to
pre-approved transferees or pursuant to
pre-approved conditions set forth in the
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related mortgage loan documents without the
mortgagee's approval. In addition, certain of
the mortgage loans may not restrict the
transfer of limited partnership interests or
non-managing member interests in the related
borrower. See "CERTAIN LEGAL ASPECTS OF
MORTGAGE LOANS AND LEASES--Due-on-Sale and
Due-on-Encumbrance" in the accompanying
prospectus.
The mortgage loans included in the trust fund
may also be secured by an assignment of leases
and rents pursuant to which the borrower
typically assigns its right, title and interest
as landlord under the leases on the related
mortgaged property and the income derived
therefrom to the mortgagee as further security
for the related mortgage loan, while retaining
a license to collect rents for so long as there
is no default. In the event the borrower
defaults, the license terminates and the
mortgagee is entitled to collect the rents.
Such assignments are typically not perfected as
security interests prior to the mortgagee's
taking possession of the related mortgaged
property and/or appointment of a receiver. Some
state laws may require that the mortgagee take
possession of the mortgaged property and obtain
a judicial appointment of a receiver before
becoming entitled to collect the rents. In
addition, if bankruptcy or similar proceedings
are commenced by or in respect of the borrower,
the mortgagee's ability to collect the rents
may be adversely affected. See "CERTAIN LEGAL
ASPECTS OF MORTGAGE LOANS AND LEASES--Leases
and Rents" in the accompanying prospectus.
LIMITATIONS ON THE BENEFITS OF
CROSS-COLLATERALIZED AND
CROSS-DEFAULTED PROPERTIES... Thirteen (13) groups of mortgage loans, the
Olympia Portfolio concentration (loan numbers
94, 103, 113, 124, 129, 133, 135, 137, 142,
154, 155, 156, 157, 158, 159, 160, 164, 178,
181, 185, 202, 219 and 221), representing in
the aggregate 3.1% of the mortgage pool (23
mortgage loans in loan group 1 or 3.5%), the
Digital Realty Trust Portfolio concentration
(loan numbers 11, 16, 18, 45, 63 and 84),
representing in the aggregate 5.5% of the
mortgage pool (6 mortgage loans in loan group 1
or 6.3%), the Residence Inn Portfolio #1
concentration (loan numbers 42, 83, 91, 107,
110, 120, 138, 143, 165 and 196), representing
in the aggregate 2.3% of the mortgage pool (10
mortgage loans in loan group 1 or 2.7%), the
Davis Pacific Portfolio concentration (loan
numbers 24 and 60), representing in the
aggregate 1.4% of the mortgage pool (1 mortgage
loan in loan group 1 or 0.5% and 1 mortgage
loan in loan group 2 or 7.5%), the Provo
Portfolio concentration (loan numbers 64 and
95), representing in the aggregate 0.6% of the
mortgage pool (2 mortgage loans in loan group 2
or 4.8%), the East Capital Portfolio
concentration (loan numbers 80 and 130),
representing in the aggregate 0.4% of the
mortgage pool (2 mortgage loans in loan group 1
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or 0.5%), the Bernstein Portfolio concentration
(loan numbers 126, 152 and 153), representing
in the aggregate 0.4% of the mortgage pool (3
mortgage loans in loan group 1 or 0.5%), the
Cole Portfolio concentration (loan numbers 215,
218, 222, 226, 227 and 228), representing in
the aggregate 0.3% of the mortgage pool (6
mortgage loans in loan group 1 or 0.4%), the
Regency Portfolio concentration (loan numbers
149 and 204), representing in the aggregate
0.2% of the mortgage pool (2 mortgage loans in
loan group 1 or 0.3%), the Kindercare Portfolio
concentration (loan numbers 223, 224 and 229),
representing in the aggregate 0.1% of the
mortgage pool (3 mortgage loans in loan group 1
or 0.2%), the Santa Teresa Portfolio
concentration (loan numbers 20 and 134),
representing in the aggregate 1.2% of the
mortgage pool (2 mortgage loans in loan group 1
or 1.4%), the Spokane Integrated Medical
Portfolio concentration (loan numbers 49 and
108), representing in the aggregate 0.8% of the
mortgage pool (2 mortgage loans in loan group 1
or 0.9%), and the Continental Portfolio
concentration (loan numbers 102 and 209),
representing in the aggregate 0.3% of the
mortgage pool (2 mortgage loans in loan group 1
or 0.3%) are groups of mortgage loans that are
cross-collateralized and cross-defaulted with
each of the other mortgage loans in their
respective groups. In addition, some mortgage
loans are secured by first lien deeds of trust
or mortgages, as applicable, on multiple
properties securing the joint and several
obligations of multiple borrowers. Such
arrangements could be challenged as fraudulent
conveyances by creditors of any of the related
borrowers or by the representative of the
bankruptcy estate of any related borrower if
one or more of such borrowers becomes a debtor
in a bankruptcy case. Generally, under federal
and most state fraudulent conveyance statutes,
a lien granted by any such borrower could be
voided if a court determines that:
o such borrower was insolvent at the time of
granting the lien, was rendered insolvent by
the granting of the lien, was left with
inadequate capital or was not able to pay
its debts as they matured; and
o such borrower did not, when it allowed its
mortgaged property to be encumbered by the
liens securing the indebtedness represented
by the other cross-collateralized loans,
receive "fair consideration" or "reasonably
equivalent value" for pledging such
mortgaged property for the equal benefit of
the other related borrowers.
We cannot provide assurances that a lien
granted by a borrower on a cross-collateralized
loan to secure the mortgage loan of another
borrower, or any payment thereon, would not be
avoided as a fraudulent conveyance. See
"DESCRIPTION OF THE MORTGAGE POOL--Certain
Terms and Conditions of the Mortgage
Loans--Cross-Default and
Cross-Collateralization of Certain Mortgage
Loans; Certain Multi-Property Mortgage Loans"
in this
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prospectus supplement and Annex A-5 to this
prospectus supplement for more information
regarding the cross-collateralized loans. No
mortgage loan included in the trust fund (other
than the mortgage loans with companion loans)
is cross-collateralized with a mortgage loan
not included in the trust fund.
SUBSTITUTION OF MORTGAGED
PROPERTIES MAY LEAD TO
INCREASED RISKS................ Sixty (60) mortgage loans representing 12.6% of
the mortgage pool (14.5% of loan group 1),
permit the related borrower the right to
substitute mortgaged properties of like kind
and quality for the properties currently
securing the related mortgage loans. As a
result, it is possible that the mortgaged
properties that secure the mortgage loans may
not secure such mortgage loans for their entire
term. Any substitution will have to meet
certain conditions, including loan-to-value
tests and debt service coverage tests, the
related borrower will be required to obtain
written confirmation from the rating agencies
that any ratings of the certificates will not,
as a result of the proposed substitution, be
downgraded, qualified or withdrawn, and the
related borrower will provide an opinion of
counsel that the REMIC status of the trust fund
will not be adversely impacted by the proposed
substitution. Nevertheless, the replacement
property may differ from the substituted
property with respect to certain
characteristics. See "DESCRIPTION OF THE
MORTGAGE POOL--Twenty Largest Mortgage Loans--
Olympia Portfolio Loan","--Residence Inn
Portfolio #1 Loans", "--Tharaldson Pool I-A
Loan" and "--Tharaldson Pool I-B Loan".
SINGLE TENANTS AND
CONCENTRATION OF TENANTS
SUBJECT THE TRUST FUND TO
INCREASED RISK............... Ninety-four (94) of the mortgaged properties
securing mortgage loans included in the trust
fund, representing 14.3% of the mortgage pool
(16.6% of loan group 1), are leased wholly to a
single tenant or are wholly owner occupied.
Certain other of the mortgaged properties are
leased in large part to a single tenant or are
in large part owner occupied. Any default by a
major tenant could adversely affect the related
borrower's ability to make payments on the
related mortgage loan. We cannot provide
assurances that any major tenant will continue
to perform its obligations under its lease (or,
in the case of an owner-occupied mortgaged
property, under the related mortgage loan
documents).
With respect to certain of the mortgage loans,
the related borrower has given to certain
tenants a right of first refusal in the event a
sale is contemplated or an option to purchase
all or a portion of the mortgaged property and
this provision, if not waived, may impede the
mortgagee's ability to sell the related
mortgaged property at foreclosure or adversely
affect the foreclosure proceeds.
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In addition, certain of the mortgaged
properties that are leased to single tenants or
a major tenant may have leases that terminate
or grant the tenant early termination rights
prior to the maturity date of the related
mortgage loan. Mortgaged properties leased to a
single tenant, or a small number of tenants,
are more likely to experience interruptions of
cash flow if a tenant fails to renew its lease
because there may be less or no rental income
until new tenants are found and it may be
necessary to expend substantial amounts of
capital to make the space acceptable to new
tenants.
With respect to 1 mortgage loan (loan number
4), representing 2.7% of the mortgage pool
(3.1% of loan group 1), the General Services
Administration ("GSA"), occupies approximately
154,040 square feet, or approximately 55.4% of
the net rentable area. The GSA leases expire in
February 2009, November 2014 and January 2015.
See "DESCRIPTION OF THE MORTGAGE POOL--Twenty
Largest Mortgage Loans--111 Massachusetts
Avenue" in this prospectus supplement.
With respect to 1 mortgage loan (loan number
12), representing 1.5% of the mortgage pool
(1.8% of loan group 1), 6 of 8 mortgaged
properties are leased wholly to a single
tenant, 5 of which tenants have early
termination rights prior to the maturity date
of the mortgage loan. See "DESCRIPTION OF THE
MORTGAGE POOL--Twenty Mortgage Loans--Gardner
Tanenbaum Pool" in this prospectus supplement.
Retail and office properties also may be
adversely affected if there is a concentration
of particular tenants among the mortgaged
properties or of tenants in a particular
business or industry. For example, with respect
to 50 mortgage loans representing 5.5% of the
aggregate principal balance with the pool of
mortgage loans as of the cut-off date (6.4% of
loan group 1), the single tenant of each
mortgaged property is Walgreens.
For further information regarding certain
significant tenants at the mortgaged
properties, see Annex A-4 to this prospectus
supplement.
THE FAILURE OF A TENANT WILL
HAVE A NEGATIVE IMPACT ON
SINGLE TENANT AND TENANT
CONCENTRATION PROPERTIES..... The bankruptcy or insolvency of a major
tenant or sole tenant, or a number of smaller
tenants, in retail, industrial and office
properties may adversely affect the income
produced by a mortgaged property. Under the
Bankruptcy Code, a tenant has the option of
assuming or rejecting any unexpired lease. If
the tenant rejects the lease, the landlord's
claim for breach of the lease would be a
general unsecured claim against the tenant
(absent collateral securing the claim) and the
amounts the landlord could claim would be
limited.
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LITIGATION MAY HAVE ADVERSE
EFFECT ON BORROWERS.......... From time to time, there may be legal
proceedings pending, threatened or ongoing
against the borrowers, managers, sponsors and
their respective affiliates relating to the
business of, or arising out of the ordinary
course of business of, the borrowers, managers,
sponsors and their respective affiliates, and
certain of the borrowers, managers, sponsors
and their respective affiliates are subject to
legal proceedings relating to the business of,
or arising out of the ordinary course of
business of, the borrowers, managers, sponsors
or their respective affiliates. It is possible
that such proceedings may have a material
adverse effect on any borrower's ability to
meet its obligations under the related mortgage
loan and, thus, on distributions on your
certificates.
With respect to the 1 mortgage loan (loan
number 8), representing 1.9% of the mortgage
pool (2.2% of loan group 1), the current
principals of the related borrower and the
previous owner of the related mortgaged
property are defendants in a potential class
action lawsuit (class action status has not yet
been granted) filed on February 18, 2004. The
action was commenced by an investor in certain
investor notes issued by Bayside Mortgage and
Loan Company, Inc. in 1990 and collateralized
by a mortgage note secured by the related
mortgaged property. Two additional investors
have since joined in the lawsuit. The investors
in the investor notes have not been paid since
July 1994. Parties unrelated to the sponsor
hold approximately $4.6 million in investor
notes, while the sponsor holds the remaining
approximately $2.4 million in investor notes.
The related mortgage note was assigned by
Bayside Mortgage and Loan Company, Inc. to one
of its principals, and subsequently assigned in
January 1996 to Eastmont Town Center Company
LLC, which foreclosed on the related mortgage
loan. No cash flow has been distributed to the
sponsor since foreclosure, and all net cash
flows have been reinvested in the related
mortgaged property. The operating agreement of
Eastmont Town Center Company LLC provides for
distribution of the net sale proceeds to
holders of the investor notes who agree to
settle their claims. The lawsuit claims fraud
and seeks to set aside the foreclosure. If the
lawsuit is successful, the plaintiffs may be
entitled to damages in addition to principal
and accrued interest due on the investor notes,
and the setting aside of the foreclosure could
jeopardize the related borrower's title to the
related mortgaged property. First American
Title Insurance Company issued a title policy
insuring against the overturning of the
foreclosure, but collection on the policy could
have the same effect as an involuntary
prepayment of the related mortgage loan. Until
such litigation is resolved, all cash flows
after debt service and reserves from the
mortgaged property will be held by the master
servicer, and at origination the sponsor
delivered a guarantee of any losses incurred by
the related mortgaged arising from such
litigation.
S-89
With respect to 2 mortgage loans (loan numbers
3 and 5), representing 4.9% of the mortgage
pool (5.7% of loan group 1), Gary Tharaldson
(the sponsor of the both mortgage loans) and 48
other individuals, together with the Tharaldson
Motels, Inc. Employee Stock Ownership Plan and
Trust, are defendants in a breach-of-duty
lawsuit filed on December 30, 2004 and
generally intended to force the reformation of
the terms and conditions under which the
employee stock ownership plan in 1999 acquired,
and became committed to pay for, the
controlling interest in Tharaldson Motels Inc.
The plaintiff alleged that the employee stock
ownership plan overpaid for its purchase of the
shares of Tharaldson Motels, Inc. from Gary
Tharaldson and his family members and that
proper disclosure was not made in connection
with such stock purchase. Although currently
none of the related borrowers, are named in the
lawsuit, there can be no assurance that the
outcome of such litigation will not have a
material adverse affect on the related mortgage
loans.
POOR PROPERTY MANAGEMENT WILL
LOWER THE PERFORMANCE OF THE
RELATED MORTGAGED PROPERTY... The successful operation of a real estate
project depends upon the property manager's
performance and viability. The property manager
is responsible for:
o responding to changes in the local market;
o planning and implementing the rental
structure;
o operating the property and providing
building services;
o managing operating expenses; and
o assuring that maintenance and capital
improvements are carried out in a timely
fashion.
Properties deriving revenues primarily from
short-term sources, such as short-term leases,
are generally more management intensive than
properties leased to creditworthy tenants under
long-term leases.
The failure of a property manager that manages
a number of mortgaged properties as described
above to properly manage the related mortgaged
properties or any financial difficulties with
respect to this property manager could have a
significant negative impact on the continued
income generation from these mortgaged
properties and therefore the performance of the
related mortgage loans. See "--Adverse
Consequences Associated with Borrower
Concentration, Borrowers Under Common Control
and Related Borrowers" above and "DESCRIPTION
OF THE MORTGAGE POOL--Twenty Largest Mortgage
Loans" in this prospectus supplement.
We cannot provide assurance regarding the
performance of any operators, leasing agents
and/or property managers or persons who may
become operators and/or property managers upon
the expiration or termination of management
S-90
agreements or following any default or
foreclosure under a mortgage loan. In addition,
the property managers are usually operating
companies and unlike limited purpose entities,
may not be restricted from incurring debt and
other liabilities in the ordinary course of
business or otherwise.
We make no representation or warranty as to the
skills of any present or future managers.
Additionally, we cannot provide assurance that
the property managers will be in a financial
condition to fulfill their management
responsibilities throughout the terms of their
respective management agreements.
CONDEMNATIONS OF MORTGAGED
PROPERTIES MAY RESULT
IN LOSSES..................... From time to time, there may be condemnations
pending or threatened against one or more of
the mortgaged properties securing mortgage
loans included in the trust fund. The proceeds
payable in connection with a total condemnation
may not be sufficient to restore the related
mortgaged property or to satisfy the remaining
indebtedness of the related mortgage loan. The
occurrence of a partial condemnation may have a
material adverse effect on the continued use
of, or income generation from, the affected
mortgaged property. Therefore, we cannot give
assurances that the occurrence of any
condemnation will not have a negative impact
upon distributions on your certificates.
THE STATUS OF A GROUND LEASE MAY
BE UNCERTAIN IN A BANKRUPTCY
PROCEEDING................... Eleven (11) mortgage loans included in the
trust fund, representing 8.9% of the mortgage
pool (10 mortgage loans in loan group 1 or 9.9%
and 1 mortgage loan in loan group 2 or 2.7%),
are secured in whole or in part by leasehold
interests. Leasehold mortgage loans are subject
to certain risks not associated with mortgage
loans secured by a lien on the fee estate of
the borrower. The most significant of these
risks is that if the related leasehold interest
were to be terminated upon a lease default, the
mortgagee would lose its security in the loan.
Generally, each related ground lease requires
the lessor thereunder to give the mortgagee
notice of the borrower's defaults under the
ground lease and an opportunity to cure them,
permits the leasehold interest to be assigned
to the mortgagee or a purchaser at a
foreclosure sale (in some cases only upon the
consent of the lessor) and contains certain
other protective provisions typically included
in a "mortgageable" ground lease.
In addition, pursuant to Section 365(h) of the
Bankruptcy Code, ground lessees in possession
under a ground lease that has commenced have
the right to continue in a ground lease even
though the representative of their bankrupt
ground lessor rejects the lease. The leasehold
mortgages generally provide that the borrower
may not elect to treat the ground lease as
terminated on account of any such rejection by
the ground lessor without the prior approval of
the holder of the mortgage note or otherwise
prohibit the borrower from terminating the
ground lease. In a bankruptcy of a ground
S-91
lessee/borrower, the ground lessee/borrower
under the protection of the Bankruptcy Code has
the right to assume (continue) or reject
(breach and/or terminate) any or all of its
ground leases. If the ground lessor and the
ground lessee/ borrower are concurrently
involved in bankruptcy proceedings, the trustee
may be unable to enforce the bankrupt ground
lessee/ borrower's right to continue in a
ground lease rejected by a bankrupt ground
lessor. In such circumstances, a ground lease
could be terminated notwithstanding lender
protection provisions contained therein or in
the related mortgage. Further, in a recent
decision by the United States Court of Appeals
for the Seventh Circuit (Precision Indus. v.
Qualitech Steel SBQ, LLC, 327 F.3d 537 (7th
Cir. 2003)), the court ruled with respect to an
unrecorded lease of real property that where a
statutory sale of the fee interest in leased
property occurs under Section 363(f) of the
Bankruptcy Code (11 U.S.C. Section 363(f)) upon
the bankruptcy of a landlord, such sale
terminates a lessee's possessory interest in
the property, and the purchaser assumes title
free and clear of any interest, including any
leasehold estates. Pursuant to Section 363(e)
of the Bankruptcy Code (11 U.S.C. Section
363(a)), a lessee may request the bankruptcy
court to prohibit or condition the statutory
sale of the property so as to provide adequate
protection of the leasehold interest; however,
the court ruled that this provision does not
ensure continued possession of the property,
but rather entitles the lessee to compensation
for the value of its leasehold interest,
typically from the sale proceeds. While there
are certain circumstances under which a "free
and clear" sale under Section 363(f) of the
Bankruptcy Code would not be authorized
(including that the lessee could not be
compelled in a legal or equitable proceeding to
accept a monetary satisfaction of his
possessory interest, and that none of the other
conditions of Section 363(f)(1)-(4) of the
Bankruptcy Code otherwise permits the sale), we
cannot provide assurances that those
circumstances would be present in any proposed
sale of a leased premises. As a result, we
cannot provide assurances that, in the event of
a statutory sale of leased property pursuant to
Section 363(f) of the Bankruptcy Code, the
lessee may be able to maintain possession of
the property under the ground lease. In
addition, we cannot provide assurances that the
lessee and/or the mortgagee will be able to
recuperate the full value of the leasehold
interest in bankruptcy court.
In addition, certain of the mortgaged
properties securing the mortgage loans are
subject to operating leases. The operating
lessee then sublets space in the mortgaged
property to sub-tenants. Therefore, the cash
flow from the rented mortgaged property will be
subject to the bankruptcy risks with respect to
the operating lessee.
S-92
MORTGAGE LOAN SELLERS MAY
NOT BE ABLE TO MAKE A
REQUIRED REPURCHASE OR
SUBSTITUTION OF A
DEFECTIVE MORTGAGE LOAN...... Each mortgage loan seller is the sole
warranting party in respect of the mortgage
loans sold by such mortgage loan seller to us.
Neither we nor any of our affiliates (except,
in certain circumstances, for Wachovia Bank,
National Association in its capacity as a
mortgage loan seller) are obligated to
repurchase or substitute any mortgage loan in
connection with either a breach of any mortgage
loan seller's representations and warranties or
any document defects, if such mortgage loan
seller defaults on its obligation to do so. We
cannot provide assurances that the mortgage
loan sellers will have the financial ability to
effect such repurchases or substitutions.
In addition, one or more of the mortgage loan
sellers may have acquired a portion of the
mortgage loans included in the trust fund in
one or more secondary market purchases. Such
purchases may be challenged as fraudulent
conveyances. Such a challenge if successful,
may have a negative impact on the distributions
on your certificates. See "DESCRIPTION OF THE
MORTGAGE POOL--Assignment of the Mortgage
Loans; Repurchases and Substitutions" and
"--Representations and Warranties; Repurchases
and Substitutions" in this prospectus
supplement and "DESCRIPTION OF THE POOLING AND
SERVICING AGREEMENTS-- Representations and
Warranties; Repurchases" in the accompanying
prospectus.
ONE ACTION JURISDICTION MAY
LIMIT THE ABILITY OF THE
SPECIAL SERVICER TO FORECLOSE
ON THE MORTGAGED PROPERTY.... Some states (including California) have laws
that prohibit more than one judicial action to
enforce a mortgage obligation, and some courts
have construed the term judicial action
broadly. Accordingly, the 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 this rule could be
applicable. In the case of either a
cross-collateralized and cross-defaulted
mortgage loan or a multi-property mortgage 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 the states where judicial
foreclosure is the only permitted method of
foreclosure. As a result, the special servicer
may incur delay and expense in foreclosing on
mortgaged properties located in states affected
by one action rules. See "CERTAIN LEGAL ASPECTS
OF MORTGAGE LOANS AND LEASES--Foreclosure" in
the accompanying prospectus.
S-93
DESCRIPTION OF THE MORTGAGE POOL
GENERAL
The pool of mortgage loans (each, a "Mortgage Loan") included in the Trust
Fund (the "Mortgage Pool") is expected to consist of 229 fixed rate mortgage
loans (the "Mortgage Loans"), with an aggregate principal balance (the "Cut-Off
Date Pool Balance") of $2,808,561,259. The "Cut-Off Date" for (i) 1 of the
Mortgage Loans is March 1, 2005, (ii) 2 of the Mortgage Loans is March 4, 2005,
(iii) 4 of the Mortgage Loans is March 6, 2005 and (iv) 222 of the Mortgage
Loans is March 11, 2005. The "Cut-Off Date Balance" of each Mortgage Loan will
equal the unpaid principal balance thereof as of the related Cut-Off Date, after
reduction for all payments of principal due on or before such date, whether or
not received. The Mortgage Pool will be deemed to consist of 2 loan groups
("Loan Group 1" and "Loan Group 2" and, collectively, the "Loan Groups"). Loan
Group 1 will consist of (i) all of the Mortgage Loans that are not secured by
multifamily properties, and (ii) 4 Mortgage Loans that are secured by
multifamily properties. Loan Group 1 is expected to consist of 196 Mortgage
Loans with an aggregate Cut-Off Date Balance of $2,433,320,810 (the "Cut-Off
Date Group 1 Balance"). Loan Group 2 will consist of 33 Mortgage Loans that are
secured by multifamily properties. Loan Group 2 is expected to consist of 33
Mortgage Loans with an aggregate Cut-Off Date Balance of $375,240,449 (the
"Cut-Off Date Group 2 Balance" and, together with the Cut-Off Date Group 1
Balance the "Cut-Off Date Group Balances"). Annex A to this prospectus
supplement sets forth the Loan Group designation with respect to each Mortgage
Loan. The Cut-Off Date Balances of all of the Mortgage Loans in the Mortgage
Pool range from $1,157,979 to $216,000,000. The Mortgage Loans in the Mortgage
Pool have an average Cut-Off Date Balance of $12,264,460. The Cut-Off Date
Balances of the Mortgage Loans in Loan Group 1 range from $1,157,979 to
$216,000,000. The Cut-Off Date Balances of the Mortgage Loans in Loan Group 2
range from $1,772,482 to $28,000,000. References to percentages of Mortgaged
Properties referred to in this prospectus supplement without further description
are references to the percentages of the Cut-Off Date Pool Balance represented
by the aggregate Cut-Off Date Balance of the related Mortgage Loans and
references to percentages of Mortgage Loans in a particular Loan Group without
further description are references to the related Cut-Off Date Group Balance.
The descriptions in this prospectus supplement of the Mortgage Loans and the
Mortgaged Properties are based upon the pool of Mortgage Loans as it is expected
to be constituted as of the close of business on the Closing Date, assuming that
(1) all scheduled principal and/or interest payments due on or before the
Cut-Off Date will be made, and (2) there will be no principal prepayments on or
before the Cut-Off Date. All percentages of the Mortgage Loans or any specified
group of Mortgage Loans referred to in this prospectus supplement are
approximate percentages. All numerical and statistical information presented in
this prospectus supplement (including Cut-Off Date Balances, loan balances per
square foot, loan-to-value ratios and debt service coverage ratios) with respect
to the Co-Lender Loans are calculated without regard to the related Subordinate
Companion Loan; provided that, with respect to the One & Two International Place
Loan and the 450 West 33rd Street Loan, numerical and statistical information
presented herein with respect to loan balance per square foot, loan-to-value
ratios and debt service coverage ratios include the related Pari Passu Loans
(but not any related Subordinate Companion Loans) as well as the Mortgage Loans
themselves.
All of the Mortgage Loans are evidenced by a promissory note (each a
"Mortgage Note") and are secured by a mortgage, deed of trust or other similar
security instrument (each, a "Mortgage") that creates a first mortgage lien on a
fee simple estate or, with respect to 11 Mortgage Loans, representing 8.9% of
the Cut-Off Date Pool Balance (10 Mortgage Loans in Loan Group 1 or 9.9% of the
Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 2.7% of the
Cut-Off Date Group 2 Balance), on a portion or all of a leasehold estate in an
income-producing real property (each, a "Mortgaged Property").
Set forth below are the number of Mortgage Loans, and the approximate
percentage of the Cut-Off Date Pool Balance represented by such Mortgage Loans
that are secured by Mortgaged Properties operated for each indicated purpose:
S-94
MORTGAGED PROPERTIES BY PROPERTY TYPE(1)
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE PERCENTAGE OF PERCENTAGE OF
MORTGAGED CUT-OFF DATE POOL CUT-OFF DATE CUT-OFF DATE
PROPERTY TYPE PROPERTIES BALANCE BALANCE GROUP 1 BALANCE GROUP 2 BALANCE
- --------------------------------------- ------------ ----------------- -------------- ----------------- ----------------
Office ................................ 39 $1,079,253,946 38.4% 44.4% 0.0%
Retail ................................ 114 699,471,581 24.9 28.7 0.0
Retail -- Anchored ................... 91 581,374,195 20.7 23.9 0.0
Retail -- Unanchored ................. 15 78,980,225 2.8 3.2 0.0
Retail -- Shadow Anchored(2) ......... 8 39,117,161 1.4 1.6 0.0
Multifamily ........................... 37 434,740,449 15.5 2.4 100.0
Hospitality(3) ........................ 56 285,026,438 10.1 11.7 0.0
Mixed Use ............................. 5 147,352,188 5.2 6.1 0.0
Industrial ............................ 29 80,460,737 2.9 3.3 0.0
Special Purpose(4) .................... 5 51,799,250 1.8 2.1 0.0
Self Storage .......................... 3 20,364,780 0.7 0.8 0.0
Land(5) ............................... 3 10,091,890 0.4 0.4 0.0
--- -------------- ----- ----- -----
TOTAL: ............................... 291 $2,808,561,259 100.0 % 100.0% 100.0%
=== ============== ============ ===== =====
- ----------
(1) Because this table presents information relating to the mortgaged
properties and not the mortgage loans, the information for mortgage loans
secured by more than one mortgaged property is based on allocated loan
amounts (allocating the mortgage loan principal balance to each of those
properties by the appraised values of the mortgaged properties or the
allocated loan amount as detailed in the related mortgage loan documents).
(2) A mortgaged property is classified as shadow anchored if it is located in
close proximity to an anchored retail property.
(3) With regard to 1 Mortgage Loan (loan number 5), the Mortgaged Property
includes the fee interest in land which the ground tenant has improved and
leased as 13 limited service hotels, the source of funds for which
Mortgage Loan is the ground rent payments made to the related borrower.
The 13 hotels are not part of the loan collateral for that Mortgage Loan,
but the loan collateral for another Mortgage Loan (loan number 3) does
include those 13 hotels.
(4) Specifically, 2 Mortgaged Properties that are operated as parking garages,
and 3 Mortgaged Properties that are used for childcare.
(5) Specifically, the fee interest in land which the ground tenant has
improved and leased as an anchored retail building or restaurant. Neither
of the retail building or restaurant is part of the loan collateral, and
the sources of funds for loan repayment are the ground rent payments made
to the related borrower.
S-95
[GRAPHIC OMITTED]
Office 38.4%
Retail 24.9%
Multifamily 15.5%
Hospitality 10.1%
Mixed Use 5.2%
Industrial 2.9%
Special Purpose 1.8%
Self Storage 0.7%
Land 0.4%
MORTGAGE LOAN HISTORY
All of the Mortgage Loans will be acquired on the Closing Date by the
Depositor from the Mortgage Loan Sellers. Wachovia Bank, National Association
("Wachovia"), in its capacity as a Mortgage Loan Seller, originated or acquired
152 of the Mortgage Loans to be included in the Trust Fund representing 64.3% of
the Cut-Off Date Pool Balance (128 Mortgage Loans in Loan Group 1 or 62.5% of
the Cut-Off Date Group 1 Balance and 24 Mortgage Loans in Loan Group 2 or 75.7%
of the Cut-Off Date Group 2 Balance). Countrywide Commercial Real Estate
Finance, Inc. ("Countrywide") originated 15 of the Mortgage Loans to be included
in the Trust Fund representing 14.4% of the Cut-Off Date Pool Balance (14
Mortgage Loans in Loan Group 1 or 16.2% of the Cut-Off Date Group 1 Balance and
1 Mortgage Loan in Loan Group 2 or 2.4% of the Cut-Off Date Group 2 Balance).
Citigroup Global Markets Realty Corp. ("Citigroup") originated 21 of the
Mortgage Loans to be included in the Trust Fund representing 13.3% of the
Cut-Off Date Pool Balance (18 Mortgage Loans in Loan Group 1 or 13.3% of the
Cut-Off Date Group 1 Balance and 3 Mortgage Loans in Loan Group 2 or 13.2% of
the Cut-Off Date Group 2 Balance). Artesia Mortgage Capital Corporation
("Artesia") originated 41 of the Mortgage Loans to be included in the Trust Fund
representing 8.0% of the Cut-Off Date Pool Balance (36 Mortgage Loans in Loan
Group 1 or 7.9% of the Cut-Off Date Group 1 Balance and 5 Mortgage Loans in Loan
Group 2 or 8.6% of the Cut-Off Date Group 2 Balance). None of the Mortgage Loans
were 30 days or more delinquent as of the Cut-Off Date, and no Mortgage Loan has
been 30 days or more delinquent during the 12 months preceding the Cut-Off Date
(or since the date of origination if such Mortgage Loan has been originated
within the past 12 months).
CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
Mortgage Rates; Calculations of Interest. All of the Mortgage Loans bear
interest at rates (each a "Mortgage Rate") that will remain fixed for their
remaining terms, provided, however, that after the applicable Anticipated
Repayment Date, the interest rate on the related ARD Loans will increase as
described in this prospectus supplement. See "--Amortization" below. Two hundred
twenty-eight (228) of the Mortgage Loans, representing 99.7% of the Cut-Off Date
Pool Balance (195 Mortgage Loans in Loan Group 1 or 99.6% and all of the
Mortgage Loans in Loan Group 2), accrue interest on the basis (an "Actual/360
basis") of the actual number of days elapsed over a 360 day year. One (1) of the
Mortgage Loans, representing 0.3% of the Cut-Off Date Pool Balance (0.4% of
Cut-Off Date Group 1 Balance), accrue interest on the basis (a "30/360 basis")
of a 360-day year consisting of 12 thirty-day months. Ninety-two of the Mortgage
Loans, representing 52.1% of the Cut-Off Date Pool Balance (70 Mortgage Loans in
Loan Group 1 or 48.7% of the Cut-Off Date Group 1 Balance and 22 Mortgage Loans
in Loan Group 2 or 73.7% of the Cut-Off Date Group 2 Balance), have periods
during which only interest is due and periods in which principal and interest
are due. Thirty-seven (37) of the Mortgage Loans, representing 10.7% of the
Cut-Off Date Pool Balance (36 Mortgage Loans in Loan Group 1 or 11.3% of the
Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 7.3% of the
Cut-Off Date Group 2 Balance), are interest-only for their entire term. One (1)
of the Mortgage Loans, representing 1.5% of the Cut-Off Date Pool Balance (1.8%
of the Cut-Off Date Group 1 Balance) provides that only interest is due until
maturity unless certain financial conditions are not met, in which case
principal and interest are due for the remaining term of such Mortgage Loan.
Mortgage Loan Payments. Scheduled payments of principal and/or interest
other than Balloon Payments (the "Periodic Payments") on all of the Mortgage
Loans are due monthly.
S-96
Due Dates. Generally, the Periodic Payment for each Mortgage Loan is due on
the date (each such date, a "Due Date") occurring on the 11th day of the month
(or in the case of 1 Mortgage Loan, the 1st day of the month or in the case of 2
mortgage loans, the 4th day of the month, or in the case of 4 mortgage loans,
the 6th day of the month). No Mortgage Loan has a grace period that extends
payment beyond the 11th day of any calendar month.
Amortization. Two hundred twenty-three (223) of the Mortgage Loans (the
"Balloon Loans") (including the ARD Loans), representing 99.1% of the Cut-Off
Date Pool Balance (190 Mortgage Loans in Loan Group 1 or 98.9% of the Cut-Off
Date Group 1 Balance and all of the Mortgage Loans in Loan Group 2) provide for
Periodic Payments based on amortization schedules significantly longer than
their respective terms to maturity, in each case with payments on their
respective scheduled maturity dates of principal amounts outstanding (each such
amount, together with the corresponding payment of interest, a "Balloon
Payment"). One (1) such amortizing Mortgage Loan (loan number 8), representing
1.9% of Cut-Off Date Pool Balance (2.2% of Cut-Off Date Group 1 Balance),
provides for amortization on a 22-year schedule unless certain financial
conditions are not met, in which case the Mortgage Loan will amortize on a
30-year schedule for all or part of the remaining term. Thirty-seven (37) of
these Balloon Loans, representing 10.7% of the Cut-Off Date Pool Balance (36
Mortgage Loans in Loan Group 1 or 11.3% of the Cut-Off Date Group 1 Balance and
1 Mortgage Loan in Loan Group 2 or 7.3% of the Cut-off Date Group 2 Balance),
provide for interest-only Periodic Payments for the entire term and do not
amortize. One (1) such interest-only Mortgage Loan (loan number 13),
representing 1.5% of the Cut-Off Date Pool Balance (1.8% of Cut-Off Date Group 1
Balance), provides that if certain financial conditions are not met, the
Mortgage Loan will amortize during all or part the remaining term. Six of the
Mortgage Loans (the "Fully Amortizing Loans"), representing 0.9% of the Cut-Off
Date Pool Balance (1.1% of the Cut-Off Date Group 1 Balance), fully or
substantially amortize through their respective remaining terms to maturity. In
addition, because the fixed periodic payments on the Fully Amortizing Loans are
determined assuming interest is calculated on a 30/360 basis, but interest
actually accrues and is applied on the Fully Amortizing Loans on an Actual/360
basis, there will be less amortization, absent prepayments, of the related
principal balances during the terms of the Fully Amortizing Loans, resulting in
a higher final payment on the Fully Amortizing Loans.
Sixty-six (66) of the Balloon Loans (the "ARD Loans"), representing 13.6%
of the Cut-Off Date Pool Balance (65 Mortgage Loans in Loan Group 1 or 14.5% of
the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan Group 2 or 7.3% of
the Cut-Off Date Group 2 Balance), provide that if the unamortized principal
amount thereof is not repaid on a date set forth in the related Mortgage Note
(the "Anticipated Repayment Date"), the Mortgage Loan will accrue additional
interest (the "Additional Interest") at the rate set forth therein and the
borrower will be required to apply excess monthly cash flow (the "Excess Cash
Flow") generated by the Mortgaged Property (as determined in the related loan
documents) to the repayment of principal outstanding on the Mortgage Loan. On or
before the Anticipated Repayment Date, the ARD Loans generally require the
related borrower to enter into a cash management agreement whereby all Excess
Cash Flow will be deposited directly into a lockbox account. With respect to 28
of the ARD Loans, representing 4.4% of the Cut-Off Date Pool Balance (27
Mortgage Loans in Loan Group 1 or 4.0% of the Cut-Off Date Group 1 Balance and 1
Mortgage Loan in Loan Group 2 or 7.3% of the Cut-Off Date Group 2 Balance), such
ARD Loans provide for monthly payments of interest only until the related
Anticipated Repayment Date and do not provide for any amortization of principal
before the related Anticipated Repayment Date. Any amount received in respect of
Additional Interest will be distributed to the Class Z Certificates. Generally,
Additional Interest will not be included in the calculation of the Mortgage Rate
for a Mortgage Loan, and will only be paid after the outstanding principal
balance of the Mortgage Loan together with all interest thereon at the Mortgage
Rate has been paid. With respect to such Mortgage Loans, no Prepayment Premiums
or Yield Maintenance Charges will be due in connection with any principal
prepayment after the Anticipated Repayment Date.
Ninety-two (92) of the Balloon Loans and ARD Loans, representing 52.1% of
the Cut-Off Date Pool Balance (70 Mortgage Loans in Loan Group 1 or 48.7% of the
Cut-Off Date Group 1 Balance and 22 Mortgage Loans in Loan Group 2 or 73.7% of
the Cut-Off Date Group 2 Balance), provide for monthly payments of interest-only
for the first 5 to 60 months for Loan Group 1 and the first 7 to 36 months for
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Loan Group 2 of their respective terms followed by payments which amortize a
portion of the principal balance of the Mortgage Loans by their related maturity
dates or Anticipated Repayment Dates, as applicable, but not the entire
principal balance of the Mortgage Loans. Thirty-seven (37) of the Balloon Loans
and ARD Loans, representing 10.7% of the Cut-Off Date Pool Balance (36 Mortgage
Loans in Loan Group 1 or 11.3% of the Cut-Off Date Group 1 Balance and 1
Mortgage Loan in Loan Group 2 or 7.3% of the Cut-Off Date Group 2 Balance),
provide for monthly payments of interest-only until maturity or ARD and do not
provide for any amortization of principal. Nine (9) of the ARD Loans,
representing 2.0% of the Cut-Off Date Pool Balance (2.4% of the Cut-Off Date
Group 1 Balance), provide for payments throughout their respective terms which
amortize a portion of the principal balance by their related Anticipated
Repayment Dates, but not the entire principal balance of the Mortgage Loans.
Prepayment Provisions. As of the Cut-Off Date, all of the Mortgage Loans
restrict or prohibit voluntary principal prepayment. In general, the Mortgage
Loans either (i) prohibit voluntary prepayment of principal until a date
specified in the related Mortgage Note, but permit defeasance after a date
specified in the related Mortgage Note for most of the remaining term (202
Mortgage Loans or 90.6% of the Cut-Off Date Pool Balance, (175 Mortgage Loans in
Loan Group 1 or 92.1% of the Cut-Off Date Group 1 Balance and 27 Mortgage Loans
in Loan Group 2 or 80.7% of the Cut-Off Date Group 2 Balance)); (ii) prohibit
voluntary prepayment of principal for a period ending on a date specified in the
related Mortgage Note, and thereafter impose a Yield Maintenance Charge for most
of the remaining term (24 Mortgage Loans or 6.8% of the Cut-Off Date Pool
Balance (18 Mortgage Loans in Loan Group 1 or 4.9% of the Cut-Off Date Group 1
Balance and 6 Mortgage Loans in Loan Group 2 or 19.3% of the Cut-Off Date Group
2 Balance)); (iii) impose a Yield Maintenance Charge for the majority of the
loan term (2 Mortgage Loans or 2.5% of the Cut-Off Date Pool Balance (2.8% of
the Cut-Off Date Group 1 Balance)); or (iv) impose a Yield Maintenance Charge
until a date specified in the related Mortgage Note, and thereafter permit
defeasance for most of the remaining term (1 Mortgage Loan or 0.1% of the
Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance)); provided
that, for purposes of each of the foregoing, "remaining term" refers to either
the remaining term to maturity or the Anticipated Repayment Date, as applicable,
of the related Mortgage Loan. See "--Additional Mortgage Loan Information" in
this prospectus supplement. Prepayment Premiums and Yield Maintenance Charges,
if and to the extent collected, will be distributed as described under
"DESCRIPTION OF THE CERTIFICATES--Distributions--Allocation of Prepayment
Premiums and Yield Maintenance Charges" in this prospectus supplement. The
Depositor makes no representation as to the enforceability of the provisions of
any Mortgage Note requiring the payment of a Prepayment Premium or Yield
Maintenance Charge, or of the collectability of any Prepayment Premium or Yield
Maintenance Charge.
Certain state laws limit the amounts that a mortgagee may collect from a
borrower as an additional charge in connection with the prepayment of a mortgage
loan. The Mortgage Loans generally do not require the payment of Prepayment
Premiums or Yield Maintenance Charges in connection with a prepayment, in whole
or in part, of the related Mortgage Loan as a result of or in connection with a
total casualty or condemnation. Furthermore, the enforceability, under the laws
of a number of states, of provisions providing for payments comparable to the
Prepayment Premiums and/or Yield Maintenance Charges upon an involuntary
prepayment is unclear. No assurance can be given that, at the time a Prepayment
Premium or Yield Maintenance Charge is required to be made on a Mortgage Loan in
connection with an involuntary prepayment, any obligation to pay such Prepayment
Premium or Yield Maintenance Charge will be enforceable under applicable state
law.
The Mortgage Loans included in the Trust Fund (other than certain of the
Artesia Mortgage Loans) provide that, in the event of a partial prepayment of
such Mortgage Loan due to the receipt of insurance proceeds or a condemnation
award in connection with a casualty or condemnation, the monthly debt service
payment of such Mortgage Loan will remain unchanged. See "RISK
FACTORS--Prepayments Will Affect Your Yield" in this prospectus supplement.
Two hundred three (203) of the Mortgage Loans, or 90.7% of the Cut-Off Date
Pool Balance (176 Mortgage Loans in Loan Group 1 or 92.3% of the Cut-Off Date
Group 1 Balance and 27 Mortgage Loans in Loan Group 2 or 80.7% of the Cut-Off
Date Group 2 Balance), provide that, in general, under certain conditions, the
related borrower will have the right, no earlier than two years following the
Closing Date, to substitute a pledge of Defeasance Collateral in exchange for a
release of the related Mortgaged
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Property (or a portion thereof) from the lien of the related Mortgage without
the prepayment of the Mortgage Loan or the payment of the applicable Prepayment
Premium or Yield Maintenance Charge. Mortgage Loans secured by more than one
Mortgaged Property which provide for partial defeasance generally require that,
among other things, (i) prior to the release of a related Mortgaged Property (or
a portion thereof), a specified percentage (generally between 115% and 125% of
the allocated loan amount for such Mortgaged Property) be defeased and (ii) that
certain debt service coverage ratios and loan-to-value ratio tests be satisfied
with respect to the remaining Mortgaged Properties after the defeasance. In
general, "Defeasance Collateral" is required to consist of United States
government obligations that provide for payments on or prior, but as close as
possible, to all successive Due Dates and the scheduled maturity date (or the
Anticipated Repayment Date in the case of the ARD Loans) (provided, that in the
case of certain Mortgage Loans, such defeasance payments may cease at the
beginning of the open prepayment period with respect to such Mortgage Loan, and
the final payment on the Defeasance Collateral may be sufficient to fully prepay
the Mortgage Loan), with each such payment being equal to or greater than (with
any excess to be returned to the borrower (in some cases, after the related
Mortgage Loan is paid in full)) the Periodic Payment due on such date or (i) in
the case of a Balloon Loan on the scheduled maturity date, the Balloon Payment,
or (ii) in the case of an ARD Loan, the principal balance on its Anticipated
Repayment Date. The Pooling and Servicing Agreement requires the Master Servicer
or the Special Servicer to require each borrower that proposes to prepay its
Mortgage Loan to pledge Defeasance Collateral in lieu of making a prepayment, to
the extent the related Mortgage Loan documents enable the Master Servicer or the
Special Servicer, as applicable, to make such requirement, but in each case
subject to certain conditions, including that the defeasance would not have an
adverse effect on the REMIC status of any of the REMICs (accordingly, no
defeasance would be required or permitted prior to the second anniversary of the
Closing Date). The cash amount a borrower must expend to purchase, or deliver to
the Master Servicer in order for the Master Servicer to purchase, such
Defeasance Collateral may be in excess of the principal balance of the related
Mortgage Loan. There can be no assurances that a court would not interpret such
portion of the cash amount that exceeds the principal balance as a form of
prepayment consideration and would not take it into account for usury purposes.
In some states some forms of prepayment consideration are unenforceable.
In addition, the Gardner Tanenbaum Pool Mortgage Loan (loan number 12),
representing 1.5% of the Cut-Off Date Pool Balance (1.8% of the Cut-Off Date
Group 1 Balance), is secured by 8 Mortgaged Properties and permits release from
the lien of the mortgage from 2 Mortgaged Properties that are subject to
purchase options by the related tenant. In the event that the purchase option is
exercised, the borrower will be required to use the proceeds of the purchase
option to partially defease the Mortgage Loan in the principal amount equal to
125% of the allocated loan amount of the released Mortgaged Property. In the
event that the exercise price is not sufficient to purchase the Defeasance
Collateral necessary to effect the partial defeasance, the such proceeds will be
held as collateral for the Mortgage Loan, the Mortgaged Properties will be
released, and excess cash flow from the remaining Mortgaged Properties will be
trapped (in accordance with the related Mortgage Loan documents) until there is
sufficient cash to purchase the full amount of Defeasance Collateral. The Master
Servicer or the Special Servicer, as applicable, will be required to use such
proceeds to purchase Defeasance Collateral to the extent of available funds,
notwithstanding the fact that such funds are not sufficient to fully defease
125% of the allocated loan amount, and trap excess cash until enough funds are
available to purchase additional United States government obligations.
Neither the Master Servicer nor the Special Servicer is permitted to waive
or modify the terms of any Mortgage Loan prohibiting voluntary prepayments
during a Lockout Period or requiring the payment of a Prepayment Premium or
Yield Maintenance Charge except under the circumstances described in "SERVICING
OF THE MORTGAGE LOANS--Modifications, Waivers and Amendments" in this prospectus
supplement.
Other Financing. With limited exceptions, all of the Mortgage Loans
prohibit the related borrower from encumbering the Mortgaged Property with
additional secured debt without the mortgagee's prior consent and, also with
limited exceptions, prohibit the entities with a controlling interest in the
related borrower from pledging their interests in such borrower as security for
mezzanine debt.
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With respect to 1 Mortgage Loan (loan number 26), representing
approximately 1.0% of the Cut-Off Date Pool Balance (7.3% of the Cut-Off Date
Group 2 Balance), there is existing subordinated debt secured by the Mortgaged
Property and also secured by the partnership interests in the related borrower
which is subordinated only by the terms of the subordinate mortgage, but is not
subject to an intercreditor agreement and/or a subordination and standstill
agreement.
With respect to 5 Mortgage Loans (loan numbers 59, 64, 76, 95 and 183),
representing approximately 1.5% of the Cut-Off Date Pool Balance (11.3% of the
Cut-Off Date Group 2 Balance), the related borrower, under certain
circumstances, may encumber the related Mortgaged Property with subordinate debt
subject to the terms of a subordination and standstill agreement to be entered
into in favor of the mortgagee and the satisfaction of certain financial
conditions.
With respect to 4 Mortgage Loans (loan numbers 3, 6, 71, and 194),
representing approximately 5.2% of the Cut-Off Date Pool Balance (6.0% of the
Cut-Off Date Group 1 Balance), the related borrower, under certain
circumstances, may incur additional unsecured indebtedness other than in the
ordinary course of business and without the consent of the mortgagee.
With respect to 2 Mortgage Loans (loan numbers 34 and 73), representing
approximately 1.2% of the Cut-Off Date Pool Balance (1 Mortgage Loan in Loan
Group 1 or 1.0% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan
Group 2 or 2.4% of the Cut-Off Date Group 2 Balance), the related Mortgage Loan
documents provide that under certain circumstances (a) the related borrower may
encumber the related Mortgaged Property with subordinate debt in the future
and/or (b) the entities with a controlling interest in the related borrower may
pledge their interest in the borrower as security for mezzanine debt in the
future, subject to the terms of a subordination and standstill agreement to be
entered into in favor of the mortgagee and the satisfaction of certain financial
conditions.
With respect to 3 Mortgage Loans (loan numbers 2, 44 and 48), representing
approximately 6.0% of the Cut-Off Date Pool Balance (2 Mortgage Loans in Loan
Group 1 or 6.2% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan
Group 2 or 4.3% of the Cut-Off Date Group 2 Balance), the ownership interests of
the direct or indirect owners of the related borrower have been pledged as
security for mezzanine debt subject to the terms of an intercreditor agreement
entered into in favor of the mortgagee. See "RISK FACTORS--Additional Debt on
Some Mortgage Loans Creates Additional Risks" in this prospectus supplement.
Further, certain of the Mortgage Loans included in the Trust Fund do not
prohibit limited partners or other owners of non-controlling interests in the
related borrower from pledging their interests in the borrower as security for
mezzanine debt. See "RISK FACTORS--Additional Debt on Some Mortgage Loans
Creates Additional Risks" in this prospectus supplement.
With respect to 24 Mortgage Loans (loan numbers 8, 12, 20, 21, 39, 41, 44,
53, 55, 69, 77, 78, 82, 101, 105, 112, 115, 118, 134, 146, 166, 174, 198 and
212), representing approximately 11.6% of the Cut-Off Date Pool Balance (17
Mortgage Loans in Loan Group 1 or 10.5% of the Cut-Off Date Group 1 Balance and
7 Mortgage Loans in Loan Group 2 or 18.9% of the Cut-Off Date Group 2 Balance),
the related Mortgage Loan documents provide that, under certain circumstances,
ownership interests in the related borrowers may be pledged as security for
mezzanine debt in the future, subject to the terms of a subordination and
standstill agreement and/or an intercreditor agreement to be entered into in
favor of the mortgagee and the satisfaction of certain financial conditions.
With respect to 2 Mortgage Loans (loan numbers 49 and 108), representing
approximately 0.8% of the Cut-Off Date Pool Balance (0.9% of the Cut-Off Date
Group 1 Balance), the related borrower has existing unsecured subordinate debt
to third parties.
In addition, 28 Mortgage Loans (loan numbers 66, 85, 90, 94, 103, 113, 124,
129, 133, 135, 137, 142, 147, 151, 154, 155, 156, 157, 158, 159, 160, 164, 178,
181, 185, 202, 219 and 221), representing 4.3% of the Cut-Off Date Pool Balance
(4.9% of the Cut-Off Date Group 1 Balance), do not prohibit the related borrower
from incurring additional unsecured debt or an owner of an interest in the
related borrower from pledging its ownership interest in the related borrower as
security for mezzanine debt because the related borrower is not required by
either the Mortgage Loan documents or related organizational documents to be a
special purpose entity.
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In addition, with respect to the Co-Lender Loans, the related Mortgaged
Property also secures one or more Companion Loans. See "--Co-Lender Loans" in
this prospectus supplement.
Nonrecourse Obligations. The Mortgage Loans are generally nonrecourse
obligations of the related borrowers and, upon any such borrower's default in
the payment of any amount due under the related Mortgage Loan, the holder
thereof may look only to the related Mortgaged Property for satisfaction of the
borrower's obligations. In addition, in those cases where recourse to a borrower
or guarantor is purportedly permitted, the Depositor has not undertaken an
evaluation of the financial condition of any such person, and prospective
investors should therefore consider all of the Mortgage Loans to be nonrecourse.
Due-On-Sale and Due-On-Encumbrance Provisions. Substantially all of the
Mortgages contain "due-on-sale" and "due-on-encumbrance" clauses that, in
general, permit the holder of the Mortgage to accelerate the maturity of the
related Mortgage Loan if the borrower sells or otherwise transfers or encumbers
the related Mortgaged Property or prohibit the borrower from doing so without
the consent of the holder of the Mortgage. However, certain of the Mortgage
Loans may permit one or more transfers of the related Mortgaged Property or the
transfer of a controlling interest in the related borrower to pre-approved
transferees or pursuant to pre-approved conditions without the approval of the
mortgagee, and certain Mortgage Loans may not prohibit transfers of limited
partnership interests or non-managing member interests in the related borrowers.
As provided in, and subject to, the Pooling and Servicing Agreement, the Special
Servicer will determine, in a manner consistent with the servicing standard
described under "SERVICING OF THE MORTGAGE LOANS--General" in this prospectus
supplement whether to exercise any right the mortgagee may have under any such
clause to accelerate payment of the related Mortgage Loan upon, or to withhold
its consent to, any transfer or further encumbrance of the related Mortgaged
Property.
Cross-Default and Cross-Collateralization of Certain Mortgage Loans;
Certain Multi-Property Mortgage Loans. Thirteen (13) groups of Mortgage Loans
(the Olympia Portfolio concentration, the Digital Realty Trust Portfolio
concentration, the Residence Inn Portfolio #1 concentration, the Davis Pacific
Portfolio concentration, the Provo Portfolio concentration, the East Capital
Portfolio concentration, the Bernstein Portfolio concentration, the Cole
Portfolio concentration, the Regency Portfolio concentration, the Kindercare
Portfolio concentration, the Santa Teresa Portfolio concentration, the Spokane
Integrated Medical Portfolio concentration and the Continental Portfolio
concentration) representing 16.8% in aggregate of the Cut-Off Date Pool Balance
(62 Mortgage Loans in Loan Group 1 or 17.5% of the Cut-Off Date Group 1 Balance
and 3 Mortgage Loans in Loan Group 2 or 12.3% of the Cut-Off Date Group 2
Balance) are groups of Mortgage Loans that are cross-collateralized and
cross-defaulted with the other Mortgage Loans in such group as indicated in
Annex A-5. Although the Mortgage Loans within each group of cross-collateralized
and cross-defaulted Mortgage Loans are cross-collateralized and cross-defaulted
with the other Mortgage Loans in such group, the Mortgage Loans in one group are
not cross-collateralized or cross-defaulted with the Mortgage Loans in any other
group. The related Mortgage Loan documents for each group of Mortgage Loans
generally provide that the cross-default and cross-collateralization provisions
for each such group of cross-collateralized and/or cross-defaulted Mortgage
Loans may be terminated in the event one of the Mortgage Loans is defeased
without a simultaneous defeasance of the other Mortgage Loans; provided that the
Rating Agencies confirm that such release would not result in a downgrading of
any of the current ratings of any Class of Certificates and certain loan to
value ratio and debt service coverage ratio tests are satisfied. With respect to
the Digital Realty Trust Portfolio concentration, in addition to the above
requirements, the remaining Mortgage Loans must also be partially defeased
subject to certain terms and conditions set forth in the related Mortgage Loan
documents. With respect to the Residence Inn Portfolio #1 concentration and the
Spokane Integrated Medical Portfolio concentration, the related Mortgage Loan
documents provide that at least 1 of the related Mortgage Loans may not be
defeased without a simultaneous defeasance of the remaining mortgage loans.
As of the Closing Date, no Mortgage Loan, except the Co-Lender Loans, will
be cross-collateralized or cross-defaulted with any loan that is not included in
the Mortgage Pool. The Master Servicer or the Special Servicer, as the case may
be, will determine whether to enforce the cross-default and
cross-collateralization rights upon a mortgage loan default with respect to any
of these Mortgage Loans.
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The Certificateholders will not have any right to participate in or control any
such determination. No other Mortgage Loans are subject to
cross-collateralization or cross-default provisions.
Partial Releases. Certain of the Mortgage Loans permit a partial release of
a portion of the related Mortgaged Property not material to the underwriting of
the Mortgage Loan at the time of origination, without any prepayment or
defeasance of the Mortgage Loan.
Ten (10) of the Mortgage Loans (loan numbers 29, 44, 55, 61, 90, 96, 100,
112, 130 and 151), representing 3.7% of the Cut-Off Date Pool Balance (4.3% of
the Cut-Off Date Group 1 Balance) permit releases of certain unimproved,
non-income producing parcels.
In addition, the 4 Ground Leased Parcels -- Cranberry, PA Mortgage Loan
(loan number 144), representing 0.1% of the Cut-Off Date Pool Balance (0.2% of
the Cut-Off Date Group 1 Balance) permits a partial release of one or more of
the pads constituting the Mortgaged Property upon the satisfaction of certain
conditions, including, without limitation: (i) satisfaction of certain financial
tests including debt service coverage ratio and loan-to-value tests, (ii)
payment of release price (through partial defeasance or deposit of cash deposit)
equal to the amount set forth in the related Mortgage Loan documents
(approximately 125% of the value of the release pad(s)) and (iii) delivery of
rating agency confirmations that the release will not result in a withdrawal,
qualification or downgrade of any rating or ratings assigned to any Class of
Certificates.
Further, the Great Wolf Resorts Mortgage Loan (loan number 9), representing
1.8% of the Cut-Off Date Pool Balance (2.0% of the Cut-Off Date Group 1 Balance)
permits a non-material portion of one of properties constituting the Mortgaged
Property designated for condominium development to be released upon the
satisfaction of certain conditions, including, without limitation: (i)
satisfaction of certain financial tests including a debt service coverage ratio
test and (ii) and delivery of rating agency confirmations that the release will
not result in a withdrawal, qualification or downgrade of any rating or ratings
assigned to any Class of Certificates
Substitutions. Sixty (60) of the Mortgage Loans representing 12.6% of the
Cut-Off Date Balance (14.5% of the Cut-Off Date Group 1 Balance) permit the
related borrower to substitute Mortgaged Properties of like kind and quality for
the properties securing the related Mortgage Loans, subject to certain
conditions, including loan to value tests, debt service coverage tests and the
provision of an opinion of counsel that the proposed substitution will not
adversely affect the REMIC status of the Trust Fund and written confirmation
from the Rating Agencies that any ratings of the Certificates will not, as a
result of the proposed substitution, be downgraded, qualified or withdrawn. See
"RISK FACTORS--Substitution of Mortgaged Properties" in this prospectus
supplement.
ASSESSMENTS OF PROPERTY CONDITION
Property Inspections. Generally, the Mortgaged Properties were inspected by
or on behalf of the Mortgage Loan Sellers in connection with the origination or
acquisition of the related Mortgage Loans to assess their general condition. No
inspection revealed any patent structural deficiency or any deferred maintenance
considered material and adverse to the value of the Mortgaged Property as
security for the related Mortgage Loan, except in such cases where adequate
reserves have been established.
Appraisals. All of the Mortgaged Properties were appraised by a
state-certified appraiser or an appraiser belonging to the Appraisal Institute
in accordance with the Federal Institutions Reform, Recovery and Enforcement Act
of 1989. The primary purpose of each appraisal was to provide an opinion as to
the market value of the related Mortgaged Property. There can be no assurance
that another appraiser would have arrived at the same opinion of market value.
Environmental Assessments. A "Phase I" environmental site assessment was
performed by independent environmental consultants with respect to each
Mortgaged Property in connection with the origination of the related Mortgage
Loans. "Phase I" environmental site assessments generally do not include
environmental testing. In certain cases, environmental testing, including in
some cases a "Phase II" environmental site assessment as recommended by such
"Phase I" assessment, was performed. Generally, in each case where environmental
assessments recommended corrective action, the originator of the Mortgage Loan
determined that the necessary corrective action had been undertaken in a
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satisfactory manner, was being undertaken in a satisfactory manner or that such
corrective action would be adequately addressed post-closing. In some instances,
the originator required that reserves be established to cover the estimated cost
of such remediation or an environmental insurance policy was obtained from a
third party. See also "RISK FACTORS--Environmental Laws May Adversely Affect the
Value of and Cash Flow from a Mortgaged Property" in this prospectus supplement.
Engineering Assessments. Except with respect to 3 Mortgage Loans,
representing 1.6% of the Cut-Off Date Pool Balance (1.8% of the Cut-Off Date
Group 1 Balance), in connection with the origination of all of the Mortgage
Loans, a licensed engineer or architect inspected the related Mortgaged Property
to assess the condition of the structure, exterior walls, roofing, interior
structure and mechanical and electrical systems. The resulting reports indicated
deferred maintenance items and/or recommended capital improvements on the
Mortgaged Properties. Generally, with respect to a majority of Mortgaged
Properties, the related borrowers were required to deposit with the lender an
amount equal to at least 100% of the licensed engineer's estimated cost of the
recommended repairs, corrections or replacements to assure their completion;
provided, however, with respect to Mortgage Loans originated by Artesia Mortgage
Capital Corporation, such reserves are generally not required for repairs when
the estimated cost is less than $10,000.
Earthquake Analyses. An architectural and/or engineering consultant
performed an analysis on certain Mortgaged Properties located in areas
considered to be an earthquake risk, which includes California, in order to
evaluate the structural and seismic condition of the property and to assess,
based primarily on statistical information, the maximum probable loss for the
property in an earthquake scenario. The resulting reports concluded that in the
event of an earthquake, 2 Mortgaged Properties securing 2 Mortgage Loans,
representing 0.8% of the Cut-Off Date Pool Balance (0.9% of the Cut-Off Date
Group 1 Balance) are likely to suffer a probable maximum loss in excess of 20%
of the amount of the estimated replacement cost of the improvements located on
the related Mortgaged Property. With respect to 1 of these 2 Mortgaged Loans
(loan number 74), representing 0.3% of the Cut-Off Date Pool Balance (0.4% of
the Cut-Off Date Group 1 Balance), the Mortgaged Property has earthquake
insurance in place.
CO-LENDER LOANS
General
Eight (8) Mortgage Loans (loan number 1, the "One & Two International Place
Loan", loan number 2, the "450 West 33rd Street Loan", loan number 13, the
"Cabrillo Palisades Loan", loan number 17, the "Cadbury Schweppes Loan", loan
number 80, the "Marathon Center Loan", loan number 125, the "Firewheel Corners
Loan", loan number 130, the "Market Fair Shopping Center Loan" and loan number
145, the "Kmart Plaza Edgewood Loan" (collectively, the "Wachovia Co-Lender
Loans")) originated by Wachovia Bank, National Association, and one (1) Mortgage
Loan (loan number 9, the "Great Wolf Resorts Loan" also referred to herein as
(the "Citigroup Co-Lender Loan") originated by Citigroup Global Markets Realty
Corp. (the Citigroup Co-Lender Loan, together with the Wachovia Co-Lender Loans,
the "Co-Lender Loans"), are each evidenced by one of two or more notes each
secured by a single mortgage and a single assignment of leases and rents. In
addition to the Co-Lender Loans, certain other mortgage loans have additional
debt. See "RISK FACTORS--Additional Debt on Some Mortgage Loans Creates
Additional Risks".
The One & Two International Place Loan is part of a split loan structure,
which has 1 companion loan (the "One & Two International Place Companion Loan")
that is pari passu in right of entitlement to payment with the One & Two
International Place Loan. The One & Two International Place Companion Loan and
the One & Two International Place Loan are referred to collectively herein as
the "One & Two International Place Whole Loan". The One & Two International
Place Loan has a Cut-Off Date Balance of $216,000,000, representing 7.7% of the
Cut-Off Date Pool Balance (8.9% of the Cut-Off Date Group 1 Balance). The One &
Two International Place Companion Loan will not be included in the Trust Fund.
The 450 West 33rd Street Loan is part of a split loan structure, which has
1 companion loan (the "450 West 33rd Street Companion Loan" that is pari passu
in right of entitlement to payment with the 450 West
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33rd Street Loan. The 450 West 33rd Street Companion Loan and the 450 West 33rd
Street Loan are referred to collectively herein as the "450 West 33rd Street
Whole Loan". The 450 West 33rd Street Loan has a Cut-Off Date Balance of
$132,500,000, representing 4.7% of the Cut-Off Date Pool Balance (5.4% of the
Cut-Off Date Group 1 Balance). The 450 West 33rd Street Pari Passu Companion
Loan will not be included in the Trust Fund. See "--450 West 33rd Street Loan"
below.
The Cabrillo Palisades Loan is part of a split loan structure, which has 1
companion loan (the "Cabrillo Palisades Companion Loan") that is subordinate in
its right of entitlement to payment to the Cabrillo Palisades Loan. See
"--Cabrillo Palisades Loan" below.
The Cadbury Schweppes Loan is part of a split loan structure, which has 1
companion loan (the "Cadbury Schweppes Companion Loan") that is subordinate in
its right of entitlement to payment to the Cadbury Schweppes Loan.
Notwithstanding the immediately preceding sentence, the holder of the Cadbury
Schweppes Companion Loan has agreed to subordinate its interests in certain
respects to the Cadbury Schweppes Loan, subject to its prior right to receive
proceeds of a claim for accelerated future rent payments payable upon a default
under the related lease (a "Defaulted Lease Claim"). Capital Lease, LP
("Caplease"), an affiliate of the related borrower, is the holder of the Cadbury
Schweppes Companion Loan, but may elect to sell the Cadbury Schweppes Companion
Loan at any time. See "RISK FACTORS--Potential Conflicts of Interest" in this
prospectus supplement. In addition, Wachovia Bank, National Association owns an
equity interest in Caplease and provides financing to Caplease secured by, among
other things, the Cadbury Schweppes Companion Loan. See "--Cadbury Schweppes
Loan" below.
The Firewheel Corners Loan is part of a split loan structure, which has 1
companion loan (the "Firewheel Corners Companion Loan") that is subordinate in
its right of entitlement to payment to the Firewheel Corners Loan. See
"--Firewheel Corners Loan" below.
Three (3) Mortgage Loans ((the Market Fair Shopping Center Loan, the
Marathon Center Loan and the Kmart Plaza Edgewood Loan) (collectively, the "Mezz
Cap Loans")) are part of split loan structures, which in each case, have 1
companion loan (collectively, the "Mezz Cap Companion Loans") that is
subordinate in its right of entitlement to payment to the related Mezz Cap Loan.
See "--Mezz Cap Loans" below.
The Great Wolf Resorts Loan is part of a split loan structure, which has 1
companion loan (the "Great Wolf Resorts Companion Loan") that is subordinate in
its right of entitlement to payment to the Great Wolf Resorts Loan. See "--Great
Wolf Resorts Loan" below.
The 450 West 33rd Street Companion Loan, the One & Two International Place
Companion Loan, the Cabrillo Palisades Companion Loan, the Cadbury Schweppes
Companion Loan, the Firewheel Corners Companion Loan, the Mezz Cap Companion
Loans and the Great Wolf Resorts Companion Loan are referred to herein as the
"Companion Loans". None of the Companion Loans are included in the Trust Fund.
The One & Two International Place Companion Loan and the 450 West 33rd Street
Companion Loan are collectively referred to herein as the "Pari Passu Companion
Loans" and the One & Two International Place Loan and the 450 West 33rd Street
Loan are collectively referred to as the "Pari Passu Loans". The Companion
Loans, except for the Pari Passu Companion Loans, are collectively referred to
herein as the "Subordinate Companion Loans". The Mezz Cap Loans together with
their respective Mezz Cap Companion Loans are referred to herein as the "Mezz
Cap Whole Loans", and the Cabrillo Palisades Loan and the Cabrillo Palisades
Companion Loans are referred to herein as the "Cabrillo Palisades Whole Loan",
the Cadbury Schweppes Loan together with the Cadbury Schweppes Companion Loan is
referred to herein as the "Cadbury Schweppes Whole Loan", the Firewheel Corners
Loan and the Firewheel Corners Companion Loans are referred to herein as the
"Firewheel Corners Whole Loan", the Great Wolf Resorts Loan and the Great Wolf
Resorts Companion Loans are referred to herein as the "Great Wolf Resorts Whole
Loan" (together with the Mezz Cap Whole Loans, the 450 West 33rd Street Whole
Loan, the One & Two International Place Whole Loan, the Cabrillo Palisades Whole
Loan, the Cadbury Schweppes Whole Loan and the Firewheel Corners Whole Loan, the
"Whole Loans").
Wachovia Bank, National Association (or one of its affiliates) is the
initial holder of the One & Two International Place Companion Loan, the 450 West
33rd Street Companion Loan, and the Firewheel
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Corners Companion Loan. Citigroup Global Realty Markets Inc. (or one of its
affiliates) is the initial holder of the Great Wolf Resorts Companion Loan. In
addition, Wachovia Bank, National Association is an equity owner of Capital
Lease, L.P., the initial holder of the Cadbury Schweppes Companion Loan.
Entities that are not affiliated with the Mortgage Loan Sellers are the holders
of the Mezz Cap Companion Loans and the Cabrillo Palisades Companion Loan.
With respect to the One & Two International Place Loan, the terms of the
related intercreditor agreement (the "One & Two International Place
Intercreditor Agreement") provide that the One & Two International Place Loan
and the One & Two International Place Companion Loans are of equal priority with
each other and no portion of either loan will have priority or preference over
the other. With respect to the 450 West 33rd Street Loan, the terms of the
related intercreditor agreement (the "450 West 33rd Street Intercreditor
Agreement", together with the One & Two International Place Intercreditor
Agreement, collectively the "Pari Passu Loan Intercreditor Agreements") provide
that the 450 West 33rd Street Loan and the 450 West 33rd Street Pari Passu
Companion Loan are of equal priority with each other and no portion of either
loan will have priority or preference over the other.
With respect to the Cabrillo Palisades Loan, the terms of the related
intercreditor agreement (the "Cabrillo Palisades Intercreditor Agreement")
provide that the Cabrillo Palisades Companion Loan is subordinate in certain
respects to the Cabrillo Palisades Loan. With respect to the Cadbury Schweppes
Loan, the terms of the related intercreditor agreement (the "Cadbury Schweppes
Intercreditor Agreement") provide that the Cadbury Schweppes Companion Loan is
subordinate in certain respects to the Cadbury Schweppes Loan. With respect to
the Firewheel Corners Loan, the terms of the related intercreditor agreement
(the "Firewheel Corners Intercreditor Agreement") provide that the Firewheel
Corners Companion Loan is subordinate in certain respects to the Firewheel
Corners Loan. With respect to the Great Wolf Resorts Loan, the terms of the
related intercreditor agreement (the "Great Wolf Resorts Intercreditor
Agreement") provide that the Great Wolf Resorts Companion Loan is subordinate in
certain respects to the Great Wolf Resorts Loan.
With respect to the Mezz Cap Loans, the terms of the related intercreditor
agreements (collectively, the "Mezz Cap Intercreditor Agreements", and together
with the 450 West 33rd Street Intercreditor Agreement, the One & Two
International Plaza Intercreditor Agreement, the Cabrillo Palisades
Intercreditor Agreement, the Cadbury Schweppes Intercreditor Agreement, the
Firewheel Corners Intercreditor Agreement and the Great Wolf Resorts
Intercreditor Agreement, the "Intercreditor Agreements") provide that the Mezz
Cap Companion Loans are subordinate in certain respects to the related Mezz Cap
Loans.
The following table presents certain information with respect to the
Co-Lender Loans:
CUT-OFF DATE
PRINCIPAL CUT-OFF DATE CUT-OFF DATE
BALANCE PRINCIPAL PRINCIPAL WHOLE LOAN WHOLE LOAN
OF MORTGAGE BALANCE OF BALANCE UNDERWRITTEN CUT-OFF DATE
MORTGAGE LOANS LOAN SENIOR COMPONENTS OF WHOLE LOAN DSCR LTV
- --------------------------------------- --------------- ------------------- --------------- -------------- -------------
One & Two International Place ......... $216,000,000 $432,000,000 $432,000,000 1.77x 61.7%
450 West 33rd Street .................. $132,500,000 $265,000,000 $265,000,000 1.22x 68.8%
Great Wolf Resorts .................... $ 49,843,594 $ 49,843,594 $ 74,794,028 1.84x 63.0%
Cabrillo Palisades .................... $ 43,000,000 $ 43,000,000 $ 51,000,000 1.26x 80.0%
Cadbury Schweppes ..................... $ 36,000,000 $ 36,000,000 $ 40,047,559 1.02x 83.4%
Marathon Center ....................... $ 8,219,562 $ 8,219,562 $ 8,733,970 1.08x 84.8%
Firewheel Corners ..................... $ 4,400,000 $ 4,400,000 $ 4,680,000 1.09x 85.1%
Market Fair Shopping Center ........... $ 4,239,459 $ 4,239,459 $ 4,524,041 1.07x 79.4%
Kmart Plaza Edgewood .................. $ 3,900,000 $ 3,900,000 $ 4,190,000 1.06x 72.2%
Pari Passu Loans
Servicing Provisions of the Pari Passu Loan Intercreditor Agreements.
With respect to the Pari Passu Loans, the Master Servicer and the Special
Servicer will administer each Pari Passu Loan and its related Pari Passu
Companion Loan pursuant to the Pooling and Servicing Agreement and the related
Pari Passu Loan Intercreditor Agreement for so long as such Pari Passu Loan is
part of the trust. The
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holder of each Pari Passu Companion Loan or an advisor on its behalf will
generally share all of the rights that the Controlling Class Representative has
with respect to directing the Master Servicer and/or Special Servicer with
respect to the servicing of the related Pari Passu Loan. See "SERVICING OF THE
MORTGAGE LOANS--The Controlling Class Representative" in this prospectus
supplement.
Application of Payments. Pursuant to each Pari Passu Loan Intercreditor
Agreement, all payments, proceeds and other recoveries on or in respect of a
Pari Passu Loan and/or the related Pari Passu Companion Loan (subject in each
case to the rights of the Master Servicer, the Special Servicer and the Trustee
to payments and reimbursements as set forth in the Pooling and Servicing
Agreement) will be applied to such Pari Passu Loan and the related Pari Passu
Companion Loan on a pro rata basis according to their respective principal
balances.
Cabrillo Palisades Loan
Servicing Provisions of the Cabrillo Palisades Intercreditor Agreement.
With respect to the Cabrillo Palisades Whole Loan, the Master Servicer and the
Special Servicer will service and administer the Cabrillo Palisades Whole Loan
pursuant to the Pooling and Servicing Agreement and the related Intercreditor
Agreement for so long as the Cabrillo Palisades Loan is part of the trust. If
the principal amount of the Cabrillo Palisades Companion Loan, less any existing
related Appraisal Reduction Amount (determined based on the collateral value
described in the related Intercreditor Agreement), is not less than or equal to
25% of the original principal amount of the Cabrillo Palisades Companion Loan,
the holder of the Cabrillo Palisades Companion Loan, or an advisor on its
behalf, will be entitled to advise and direct the Master Servicer and/or Special
Servicer with respect to certain matters, including among things, foreclosure or
material modifications of the Cabrillo Palisades Whole Loan. However, no advice
or direction may require or cause the Master Servicer or the Special Servicer to
violate any provision of the Pooling and Servicing Agreement, including the
Master Servicer's and the Special Servicer's obligation to act in accordance
with the Servicing Standard. See "SERVICING OF THE MORTGAGE LOANS--The
Controlling Class Representative" in this prospectus supplement.
In the event of any monetary default, or to the extent of Master Servicer's
knowledge thereof, a non-monetary default, the holder of the Cabrillo Palisades
Companion Loan will be entitled to cure (i) a monetary default within five (5)
business days of receipt of notice thereof and (ii) a non-monetary default
within thirty (30) days of receipt of notice thereof. In addition, the holder of
the Cabrillo Palisades Companion Loan has the right, by written notice to the
holder of the Cabrillo Palisades Loan delivered within forty-five (45) days of
the expiration of any cure period provided to the holder of the Cabrillo
Palisades Companion Loan described in the preceding sentence but prior to a cure
of the related default or any waiver in writing by the Master Servicer of the
related default, to purchase the Cabrillo Palisades Loan from the trust subject
to the terms and conditions contained in the related Intercreditor Agreement.
The purchase price will include, among other things, an amount equal to the
unpaid principal balance of the Cabrillo Palisades Loan, together with all
unpaid interest on the Cabrillo Palisades Loan at the related mortgage rate
(excluding default interest and any prepayment premium) and any unreimbursed
advances, expenses and interest on advances related to the Cabrillo Palisades
Loan.
Application of Payments. Pursuant to the Cabrillo Palisades Intercreditor
Agreement, to the extent described below, the right of the holder of the
Cabrillo Palisades Companion Loan to receive payments with respect to the
related Cabrillo Palisades Companion Loan is subordinate to the payment rights
of the trust to receive payments with respect to the Cabrillo Palisades Loan.
Prior to the occurrence and continuation of a monetary default or a
non-monetary event of default resulting in the mortgage loan becoming a
specially serviced mortgage loan, after payment or reimbursement of servicing
fees, expenses, costs and advances (and interest thereon), all payments and
proceeds (of whatever nature) received with respect to the Cabrillo Palisades
Loan and Cabrillo Palisades Companion Loan (excluding certain reserves, escrows,
insurance proceeds and awards otherwise required to be applied under the related
loan documents or released to the related borrower) will be paid in the
following manner:
first, to the holder of the Cabrillo Palisades Loan in an amount equal to
all accrued and unpaid interest due with respect to the Cabrillo Palisades Loan;
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second, to the holder of the Cabrillo Palisades Companion Loan in an amount
equal to all accrued and unpaid interest due with respect to the Cabrillo
Palisades Companion Loan;
third, to the holder of the Cabrillo Palisades Loan in an amount equal to
its pro rata portion of the principal payments received with respect to the
Cabrillo Palisades Loan;
fourth, to the holder of the Cabrillo Palisades Companion Loan in an amount
equal to its pro rata portion of the principal payments received with respect to
the Cabrillo Palisades Companion Loan;
fifth, to the holder of the Cabrillo Palisades Loan and the holder of the
Cabrillo Palisades Companion Loan, pro rata, based upon any unreimbursed costs
and expenses owing to each such holder, respectively, up to the amount of any
such unreimbursed costs and expenses;
sixth, to the holder of the Cabrillo Palisades Loan and the holder of the
Cabrillo Palisades Companion Loan, pro rata, in an amount equal to any
prepayment premium actually paid and allocable to the Cabrillo Palisades Whole
Loan;
seventh, to the holder of the Cabrillo Palisades Loan and the holder of the
Cabrillo Palisades Companion Loan, pro rata, based upon any default interest
accrued under each note and actually paid and allocable to the Cabrillo
Palisades Whole Loan; and
eighth, any excess, pro rata, to the holder of the Cabrillo Palisades Loan
and the holder of the Cabrillo Palisades Companion Loan based upon the current
balance of each such loan, provided that if the balances of each such loan equal
zero, then based upon the initial balances of each such loan.
Following the occurrence and during the continuation of a monetary default
or a non-monetary event of default resulting in the mortgage loan becoming a
specially serviced mortgage loan, after payment or reimbursement of servicing
fees, expenses, costs and advances (and interest thereon), all payments and
proceeds (of whatever nature) received with respect to the Cabrillo Palisades
Loan and Cabrillo Palisades Companion Loan (excluding certain reserves, escrows,
insurance proceeds and awards otherwise required to be applied under the related
loan documents or released to the related borrower) will be paid in the
following manner:
first, to the holder of the Cabrillo Palisades Loan in an amount equal to
all accrued and unpaid interest due with respect to the Cabrillo Palisades Loan;
second, to the holder of the Cabrillo Palisades Loan, in an amount equal to
the Cabrillo Palisades Loan principal balance, until the unpaid principal
balance of such Cabrillo Palisades Loan has been paid in full;
third, to the holder of the Cabrillo Palisades Companion Loan in an amount
equal to all accrued and unpaid interest on the Cabrillo Palisades Companion
Loan plus all unreimbursed advances made by the holder of the Cabrillo Palisades
Companion Loan to pay interest on the Cabrillo Palisades Loan and/or Cabrillo
Palisades Companion Loan;
fourth, to the holder of the Cabrillo Palisades Companion Loan in an amount
equal to all unreimbursed advances made by the holder of the Cabrillo Palisades
Companion Loan to pay principal on the Cabrillo Palisades Loan and/or Cabrillo
Palisades Companion Loan and in an amount equal to the Cabrillo Palisades
Companion Loan principal balance until both such advances and the principal
balance are paid in full;
fifth, to the holder of the Cabrillo Palisades Loan in an amount equal to
any prepayment premium actually paid and allocable to the Cabrillo Palisades
Loan;
sixth, to the holder of the Cabrillo Palisades Companion Loan in an amount
equal to any prepayment premium actually paid and allocable to the Cabrillo
Palisades Companion Loan;
seventh, to the holder of the Cabrillo Palisades Loan in an amount equal to
any unpaid default interest accrued on the Cabrillo Palisades Loan;
eighth, to the holder of the Cabrillo Palisades Companion Loan in an amount
equal to any unpaid default interest accrued on the Cabrillo Palisades Companion
Loan;
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ninth, to the holder of the Cabrillo Palisades Loan and the holder of the
Cabrillo Palisades Companion Loan, pro rata, based upon the amount of any
unreimbursed costs and expenses respectively owing to the holder of the Cabrillo
Palisades Loan and the holder of the Cabrillo Palisades Companion Loan, up to
the amount of any such unreimbursed costs and expenses; and
tenth, any excess, pro rata, to the holder of the Cabrillo Palisades Loan
and the holder of the Cabrillo Palisades Companion Loan based upon the current
balance of each such loan, provided that if the balances of each such loan equal
zero, then based upon the initial balances of each such loan.
Cadbury Schweppes Loan
Servicing Provisions of the Cadbury Schweppes Intercreditor Agreement. With
respect to the Cadbury Schweppes Loan, the Master Servicer and Special Servicer
will service and administer the Cadbury Schweppes Loan and the Cadbury Schweppes
Companion Loan pursuant to the Pooling Agreement and the Cadbury Schweppes
Intercreditor Agreement for so long as such Mortgage Loan is part of the trust.
However, upon an event of default which does not constitute a payment default
but is limited to a default in the performance by the related borrower of its
obligations under its lease, or the failure to reimburse a servicing advance
made to fulfill such obligations, the Master Servicer will generally be required
to make servicing advances to cure any such borrower default and prevent a
default under the lease, subject to customary standards of recoverability, and
will be prohibited from foreclosing on the Mortgaged Property so long as any
such advance, together with interest thereon, would be recoverable. Further, the
Special Servicer will not be permitted to amend the Cadbury Schweppes Loan or
the Cadbury Schweppes Companion Loan in a manner materially adverse to the
holder of the Cadbury Schweppes Companion Loan without the consent of the holder
of the Cadbury Schweppes Companion Loan. If the principal amount of the Cadbury
Schweppes Companion Loan, less any existing Appraisal Reduction Amount is not
less than 25%, of the original principal balance of the Cadbury Schweppes
Companion Loan minus any principal payments allocated to and received on the
Cadbury Schweppes Companion Loan, the holder of the Cadbury Schweppes Companion
Loan will be entitled to advise and direct the Master Servicer and/or Special
Servicer with respect to certain matters, provided that, at all times, the
holder of the Cadbury Schweppes Companion Loan will have the sole and exclusive
right to file and/or pursue a Defaulted. Lease Claim against the credit tenant
as described in the related Intercreditor Agreement. The holder of the Cadbury
Schweppes Companion Loan will be entitled to advise the Special Servicer with
respect to certain matters related to the Cadbury Schweppes Loan and the Cadbury
Schweppes Companion Loan. See "SERVICING OF THE MORTGAGE LOANS--The Controlling
Class Representative" in this prospectus supplement.
In the event of (a) any payment of principal or interest on the Cadbury
Schweppes Mortgage Loan becomes ninety (90) or more days delinquent; (b) the
acceleration of the Cadbury Schweppes Whole Loan; (c) the principal balance of
the Cadbury Schweppes Mortgage Loan is not paid at maturity or (d) a borrower
bankruptcy, under the circumstances and within the time periods specified in the
Intercreditor Agreement,, the holder of the Cadbury Schweppes Companion Loan
will be entitled to purchase the Cadbury Schweppes Loan from the trust for a
purchase price equal to the sum of (i) the principal balance of the Cadbury
Schweppes Loan, together with accrued and unpaid interest thereon through the
date of purchase, (ii) unreimbursed advances together with accrued and unpaid
interest thereon and (iii) any other amounts payable under the related loan
documents and the related Intercreditor Agreement.
Applications of Payments. Pursuant to the Cadbury Schweppes Intercreditor
Agreement, to the extent described below, the right of the holder of the Cadbury
Schweppes Companion Loan to receive payments with respect to the Cadbury
Schweppes Companion Loan (other than payments in respect of Defaulted Lease
Claims) is subordinated to the payment rights of the trust to receive payments
with respect to the Cadbury Schweppes Loan. All payments and proceeds of the
Cadbury Schweppes Loan and the Cadbury Schweppes Companion Loan (including,
among other things, regular payments, insurance proceeds and liquidation
proceeds), other than in respect of Defaulted Lease Claims, whether before or
after the occurrence of an event of default with respect to the Cadbury
Schweppes Loan, will be applied first, in the event of liquidation of the real
property, a determination that applicable servicing advances are nonrecoverable,
or a lease acceleration or termination, first to reimbursement of servicing
advances
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together with interest thereon. All remaining amounts (or all amounts if no such
liquidation, nonrecoverability determination or lease acceleration or
termination has occurred), will be paid in the following manner:
first, to the holder of the Cadbury Schweppes Loan, in an amount equal to
interest due with respect to the Cadbury Schweppes Loan at the pre-default
interest rate thereon;
second, to the holder of the Cadbury Schweppes Loan, in an amount equal to
the portion of any scheduled payments of principal allocable to the Cadbury
Schweppes Loan (including, following acceleration, the full principal balance
thereof);
third, to fund any applicable reserves or other amounts required under the
terms of the loan documents for the Cadbury Schweppes Whole Loan or to pay taxes
or insurance and any insurance proceeds required to repair the related mortgaged
property;
fourth, to the holder of the Cadbury Schweppes Companion Loan, in an amount
equal to amounts then due with respect to the Cadbury Schweppes Companion Loan
(including reimbursement of any advances made by or on behalf of the holder of
the Cadbury Schweppes Companion Loan, interest due with respect to the Cadbury
Schweppes Companion Loan at the pre-default interest rate thereon and any
scheduled payments of principal allocable to the related Cadbury Schweppes
Companion Loan);
fifth, to reimburse the Master Servicer, Special Servicer or the holder of
the Cadbury Schweppes Companion Loan pro rata for any outstanding advances made
by either such party on the Cadbury Schweppes Loan or the Cadbury Schweppes
Companion Loan, to the extent then deemed to be nonrecoverable and not
previously reimbursed;
sixth, sequentially to the Cadbury Schweppes Loan and then the Cadbury
Schweppes Companion Loan, in each case until paid in full, any unscheduled
payments of principal with respect thereto;
seventh, to any prepayment premiums (allocated pro rata based on the
principal then prepaid);
eighth, to any default interest, first to the default interest accrued on
the Cadbury Schweppes Loan and then to the default interest accrued on the
Cadbury Schweppes Companion Loan; and
ninth, any excess will be paid to the related borrower or as otherwise
specified in the related loan documents.
Proceeds of Defaulted Lease Claims generally will be applied first to
payment of amounts due under the Cadbury Schweppes Companion Loan, and
thereafter will be payable to holder of the Cadbury Schweppes Loan. If any
excess amount is paid by the related borrower, and not otherwise applied in
accordance with the foregoing seven clauses, such amount will be paid to the
holder of the Cadbury Schweppes Loan and the holder of the Cadbury Schweppes
Companion Loan in accordance with the terms of the related Intercreditor
Agreement.
Firewheel Corners Loan
Servicing Provisions of the Firewheel Corners Intercreditor Agreement. With
respect to the Firewheel Corners Whole Loan, the Master Servicer and the Special
Servicer will service and administer the Firewheel Corners Whole Loan pursuant
to the Pooling and Servicing Agreement and the related Intercreditor Agreement
for so long as the Firewheel Corners Loan is part of the trust. The Master
Servicer and/or the Special Servicer may not enter into any amendment, deferral,
extension, modification, increase, renewal, replacement, consolidation,
supplement or waiver of the related loan documents without obtaining the prior
written consent of the holder of the Firewheel Corners Companion Loan if such
proposed amendment, deferral, extension, modification, increase, renewal,
replacement, consolidation, supplement or waiver of the related loan documents
adversely affects the lien priority of the related mortgage or constitutes
certain material modifications specified in the related Intercreditor Agreement,
provided, however, that such consent right will expire when the repurchase
period described in the next paragraph expires. See "SERVICING OF THE MORTGAGE
LOANS--The Controlling Class Representative" in this prospectus supplement.
In the event (i) any payment of principal or interest on either or both of
the Firewheel Corners Loan or the Firewheel Corners Companion Loan becomes
ninety (90) or more days delinquent; (ii) the
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principal balance of the Firewheel Corners Loan and/or Firewheel Corners
Companion Loan has been accelerated; (iii) the principal balance of either or
both of the Firewheel Corners Loan or Firewheel Corners Companion Loan is not
paid at maturity, (iv) the related borrower files a petition for bankruptcy or
is otherwise the subject of a bankruptcy proceeding or (v) any other event where
the cash flow payment under the Firewheel Corners Companion Loan has been
interrupted and the cash flow waterfall under the related Intercreditor
Agreement converted to sequential payments, the holder of the Firewheel Corners
Companion Loan will be entitled to purchase the Firewheel Corners Loan from the
Trust Fund for a period of thirty (30) days after its receipt of a repurchase
option notice, subject to certain conditions set forth in the related
Intercreditor Agreement. The purchase price will include, among other things, an
amount equal to the unpaid principal balance of the Firewheel Corners Loan,
together with all unpaid interest on the Firewheel Corners Loan at the related
mortgage rate (excluding default interest or other late payment charges) and any
unreimbursed advances, expenses and interest on advances related to the
Firewheel Corners Loan.
Application of Payments. Pursuant to the Firewheel Corners Intercreditor
Agreement and prior to the occurrence of (i) the acceleration of the Firewheel
Corners Loan or the Firewheel Corners Companion Loan (ii) a monetary event of
default or (iii) an event of default triggered by the bankruptcy of the
borrower, the related borrower will make separate monthly payments of principal
and interest to the Master Servicer and the holder of the Firewheel Corners
Companion Loan. Any escrow and reserve payments required in respect of the
Firewheel Corners Loan or Firewheel Corners Companion Loan will be paid to the
Master Servicer.
Following the occurrence and during the continuance of (i) the acceleration
of the Firewheel Corners Loan or Firewheel Corners Companion Loan, (ii) a
monetary event of default or (iii) an event of default triggered by the
bankruptcy of the borrower, and subject to certain rights of the holder of the
Firewheel Corners Companion Loan from the Trust Fund, all payments and proceeds
(of whatever nature excluding certain reserves, escrows, insurance proceeds and
awards otherwise required to be applied under the related loan documents or
released to the related borrower) on such Firewheel Corners Companion Loan will
be subordinated to all payments due on the related Firewheel Corners Loan and
the amounts with respect to such Firewheel Corners Whole Loan will be paid in
the following manner:
first, to the Master Servicer, Special Servicer or Trustee, up to the
amount of any unreimbursed costs and expenses paid by such entity, including
unreimbursed advances and interest thereon;
second, to the Master Servicer and the Special Servicer, in an amount equal
to accrued and unpaid servicing fees and other servicing compensation earned by
such entity;
third, to the holder of the Firewheel Corners Loan, in an amount equal to
interest due with respect to the Firewheel Corners Loan;
fourth, to the holder of the Firewheel Corners Loan, in an amount equal to
the principal balance of the Firewheel Corners Loan until paid in full;
fifth, to the holder of the Firewheel Corners Loan , in an amount equal to
any prepayment premium, to the extent actually paid, allocable to the Firewheel
Corners Loan;
sixth, to the holder of the Firewheel Corners Companion Loan, up to the
amount of any unreimbursed costs and expenses paid by the holder of the
Firewheel Corners Companion Loan and accrued and unpaid servicing fees with
respect to the Firewheel Corners Whole Loan;
seventh, to the holder of the Firewheel Corners Companion Loan, in an
amount equal to interest due with respect to the Firewheel Corners Companion
Loan;
eighth, to the holder of the Firewheel Corners Companion Loan, in an amount
equal to the principal balance of the Firewheel Corners Companion Loan until
paid in full;
ninth, to the holder of the Firewheel Corners Companion Loan, in an amount
equal to any prepayment premium, to the extent actually paid, allocable to the
Firewheel Corners Companion Loan;
tenth, to the holder of the Firewheel Corners Loan and the holder of the
Firewheel Corners Companion Loan, in an amount equal to any unpaid default
interest (in excess of amounts paid pursuant
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to items set forth in clauses (third) through (seventh) above) accrued on the
Firewheel Corners Loan and the Firewheel Corners Companion Loan, respectively;
eleventh, any amounts actually collected or recovered on the Firewheel
Corners Whole Loan that represent late payment charges, other than a prepayment
premium or default interest, that are not payable to the servicer or trustee
pursuant to the securitization servicing agreements in respect of the Firewheel
Corners Whole Loan shall be paid to the holder of the Firewheel Corners Loan and
the holder of the Firewheel Corners Companion Loan on a pro rata basis based on
the initial balance of the respective loans; and
twelfth, any excess, to the holder of the Firewheel Corners Loan and the
holder of the Firewheel Corners Companion Loan, pro rata, based upon the
outstanding principal balances, provide that if the principal balance of the
Firewheel Corners Companion Loan is equal to zero, then based upon the initial
principal balances.
Great Wolf Resorts Loan
Servicing Provisions of the Great Wolf Resorts Intercreditor Agreement.
With respect to the Great Wolf Resorts Whole Loan, the Master Servicer and the
Special Servicer will service and administer the Great Wolf Resorts Whole Loan
pursuant to the Pooling and Servicing Agreement and the related Intercreditor
Agreement for so long as the Great Wolf Resorts Loan, is part of the trust. If
the principal amount of the Great Wolf Companion Loan, less any existing related
Appraisal Reduction Amount, is not less than 25% of the original principal
amount of the Great Wolf Resorts Companion Loan, the holder of the Great Wolf
Resorts Companion Loan, or an advisor on its behalf, will be entitled to advise
and direct the Master Servicer and/or the Special Servicer with respect to
certain matters, including, among other things, foreclosure or material
modifications of the Great Wolf Resorts Loan. However, no advice or direction
may require or cause the Master Servicer or the Special Servicer to violate any
provision of the Pooling and Servicing Agreement, including the Master
Servicer's and the Special Servicer's obligation to act in accordance with the
Servicing Standard. See "SERVICING OF THE MORTGAGE LOANS--The Controlling Class
Representative" in this prospectus supplement.
In the event of any monetary default under the Great Wolf Resorts Loan, the
holder of the Great Wolf Resorts Companion Loan will be entitled to (i) cure
such monetary default within ten (10) business days following the expiration of
the cure period afforded the related borrower under the mortgage loan documents
(or if no such cure period or written notice of such monetary default is
afforded such borrower, then within seven (7) calendar days following receipt of
written notice of the occurrence of such monetary default by the holder of the
Great Wolf Resorts Companion Loan). With respect to any monetary defaults which
occur in consecutive months, the cure period described above (seven (7) or ten
(10) days, as applicable) shall apply only to the monetary default which occurs
in the first of such consecutive months, and in order to prevent the monetary
defaults of the related borrower in the succeeding consecutive months from
constituting an event of default under the related mortgage loan documents, the
holder of the Great Wolf Resorts Companion Loan shall be required in such
succeeding consecutive months to make the payment due under the Great Wolf
Resorts Loan within three (3) business days following the expiration of the cure
period afforded the borrower under the related mortgage loan documents (or if no
such cure period or written notice of such monetary default is afforded to the
related borrower, then within three (3) business days following the occurrence
of any monetary default under the related mortgage loan documents). In addition,
the holder of the Great Wolf Resorts Companion Loan has the right, by written
notice to the holder of the Great Wolf Resorts Loan delivered at any time the
Great Wolf Resorts Loan is being serviced by the Special Servicer and, among
other things, the monthly payments under the Great Wolf Resorts Loan are at
least forty-five (45) days delinquent, to purchase the Great Wolf Resorts Loan
from the trust after the expiration of the cure period subject to the terms and
conditions contained in the Great Wolf Resorts Intercreditor Agreement. The
purchase price will include, among other things, an amount equal to the unpaid
principal balance of the Great Wolf Resorts Loan, together with all unpaid
interest on the Great Wolf Resorts Loan at the related mortgage rate (excluding
any default interest which may be due and payable, late changes and any
prepayment consideration due under the related mortgage loan documents) and any
unreimbursed servicing expenses, advances and interest on advances for which the
borrower under the Great Wolf Resorts Loan is responsible.
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Application of Payments. Pursuant to the Great Wolf Resorts Intercreditor
Agreement, to the extent described below, the right of the holder of the Great
Wolf Resorts Companion Loan to receive payments with respect to the related
Great Wolf Resorts Companion Loan is subordinate to the payment rights of the
trust to receive payments with respect to the Great Wolf Resorts Loan.
Prior to the occurrence and continuation of a monetary default or a
material non-monetary event of default with respect to the Great Wolf Resorts
Loan, and other than during any period when such mortgage loan becomes a
specially serviced mortgage loan pursuant to the Great Wolf Resorts
Intercreditor Agreement, all payments and proceeds (of whatever nature) received
with respect to the Great Wolf Resorts Loan and the related Great Wolf Resorts
Companion Loan (excluding certain reserves, escrows, insurance proceeds and
awards otherwise required to be applied under the related loan documents or
released to the related borrower and after payment or reimbursement of any
advances, advance interest or other costs, fees or expenses related to or
allocable to the Great Wolf Resorts Whole Loan) will be paid in the following
manner:
first, to the holder of the Great Wolf Resorts Loan in an amount equal to
all accrued and unpaid interest due with respect to the Great Wolf Resorts Loan;
second, to the holder of the Great Wolf Resorts Loan in an amount equal to
principal payments due with respect to the Great Wolf Resorts Loan;
third, to the holder of the Great Wolf Resorts Loan up to the amount of any
unreimbursed costs and expenses paid by the holder of the Great Wolf Resorts
Loan, including any recovered costs not reimbursed to such holder (or paid or
advanced by the Servicer or the Trustee on its behalf and not previously paid or
reimbursed) pursuant to the Great Wolf Resorts Intercreditor Agreement or the
Pooling and Servicing Agreement;
fourth, to the holder of the related Great Wolf Resorts Companion Loan in
an amount equal to all accrued and unpaid interest due with respect to such
Great Wolf Resorts Companion Loan;
fifth, to the holder of the Great Wolf Resorts Companion Loan in an amount
equal to principal payments due with respect to the Great Wolf Resorts Companion
Loan;
sixth, any unscheduled principal payment on the Great Wolf Resorts Whole
Loan shall be paid, (i) first, to the Great Wolf Resorts Loan holder until such
time as the unpaid principal amount of the Great Wolf Resorts Loan has been
reduced to zero and all accrued and unpaid interest and all other amounts due in
respect of the Great Wolf Resorts Loan have been paid in full (including any
prepayment consideration being paid in accordance with the principal payments to
which it relates); and (ii) second, to the Great Wolf Resorts Companion Loan
holder until such time as the unpaid principal amount of Great Wolf Resorts
Companion Loan has been reduced to zero (including any prepayment consideration
being paid in accordance with the principal payments to which it relates); and
seventh, any remaining amounts shall be paid, (i) first to the holder of
the Great Wolf Resorts Companion Loan, to the extent not paid under clause (c)
above, up to the amount of any unreimbursed costs and expenses paid or
reimbursed by such Great Wolf Resorts Companion Loan holder (or paid or advanced
by the Servicer or the Trustee on its behalf and not previously paid or
reimbursed) with respect to the Great Wolf Resorts Whole Loan or the Pooling and
Servicing Agreement, and (ii) second, any remaining amount in accordance with
the related loan agreement with respect to the Great Wolf Resorts Whole Loan.
Notwithstanding the foregoing, in the event that the holder of the Great Wolf
Resorts Companion Loan has previously made a cure payment pursuant to the Great
Wolf Resorts Intercreditor Agreement in respect of any monetary default and the
related borrower subsequently makes the payment for which the monetary default
exists, such payment shall be remitted to the holder of the Great Wolf Resorts
Companion Loan to reimburse it for such cure payment, so long as no amounts
would be payable at such time to the holder of the Great Wolf Resorts Loan under
the foregoing clauses (first) through (third) and payments are not required to
be applied following an event of default as described below.
Following the occurrence and continuation of a monetary default or a
material non-monetary event of default with respect to the Great Wolf Resorts
Loan and during any period when such mortgage loan becomes a specially serviced
mortgage loan pursuant to the Great Wolf Resorts Intercreditor Agreement,
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and subject to the holder of the related Great Wolf Resorts Companion Loan
holder's right to purchase the Great Wolf Resorts Loan from the trust, all
payments and proceeds (of whatever nature) received with respect to the Great
Wolf Resorts Loan and the related Great Wolf Resorts Companion Loan (excluding
certain reserves, escrows, insurance proceeds and rewards otherwise required to
be applied under the related loan documents or released to the related borrower
), after payment or reimbursement of any amounts due, payable or reimbursable
with respect to the Great Wolf Resorts Whole Loan under the Pooling and
Servicing Agreement will be paid in the following manner:
first, to the holder of the Great Wolf Resorts Loan in an amount equal to
all accrued and unpaid interest due with respect to the Great Wolf Resorts Loan;
second, to the holder of the Great Wolf Resorts Loan in an amount equal to
the Great Wolf Resorts Loan principal balance, until such time as the unpaid
principal amount of such Great Wolf Resorts Loan has been reduced to zero and
all accrued and unpaid interest and all other amounts due in respect of the
Great Wolf Resorts Loan have been paid in full (other than amounts described in
clauses (sixth) and (seventh) below);
third, to the holder of the Great Wolf Resorts Loan up to the amount of any
unreimbursed costs and expenses paid by such holder of the Great Wolf Resorts
Loan including any recovered costs not reimbursed to the holder of the Great
Wolf Resorts Loan (or paid or advanced by the Servicer or the Trustee on its
behalf and not previously paid or reimbursed) pursuant to the Great Wolf Resorts
Intercreditor Agreement or the Pooling and Servicing Agreement;
fourth, to the holder of the Great Wolf Resorts Companion Loan, in an
amount equal to the accrued and unpaid interest on the Great Wolf Resorts
Companion Loan principal balance;
fifth, to the holder of the Great Wolf Resorts Companion Loan, in an amount
equal to the Great Wolf Resorts Companion Loan principal balance, until such
time as the unpaid principal amount of the Great Wolf Resorts Companion Loan has
been reduced to zero and all accrued and unpaid interest and all other amounts
due in respect the Great Wolf Resorts Companion Loan have been paid in full
(other than amounts described in clauses (sixth) and (seventh) below);
sixth, (i) first, to the holder to the Great Wolf Resorts Loan, any
prepayment consideration attributable to the Great Wolf Resorts Loan, to the
extent due and payable by the related borrower, computed on the prepaid amounts
of the Great Wolf Resorts Loan principal balance, and (ii) second, to the holder
of the Great Wolf Resorts Companion Loan, any prepayment consideration
attributable to the Great Wolf Resorts Companion Loan, to the extent due and
payable by the related borrower, computed on the prepaid amounts of the Great
Wolf Resorts Companion Loan principal balance;
seventh, to the extent any default interest on the Great Wolf Resorts Whole
Loan is not required to be paid to the Servicer or used to offset interest on
advances under the Pooling and Servicing Agreement, any such default interest in
excess of the interest paid in accordance with clauses (first) and (sixth)
above, (i) first, to the holder of the Great Wolf Resorts Loan such amounts at
the Great Wolf Resorts Loan default rate and (ii) then, to the holder of Great
Wolf Resorts Companion Loan such amounts at the Great Wolf Resorts Companion
Loan default rate; and
eighth, if any excess amount is paid by the related borrower, and not
otherwise applied in accordance with the foregoing clauses, such remaining
amount shall be paid as follows: (i) first, to the holder of the Great Wolf
Resorts Companion Loan, up to the amount of any unreimbursed costs and expenses
(including any protective advances and any cure payments pursuant to the Great
Wolf Resorts Intercreditor Agreement) paid or reimbursed by such holder of the
Great Wolf Resorts Companion Loan (or paid or advanced by the Servicer or the
Trustee on its behalf and not previously paid or reimbursed) with respect to the
Great Wolf Resorts Whole Loan pursuant to the Great Wolf Resorts Intercreditor
Agreement or the Pooling and Servicing Agreement, and (ii) second, any remaining
amount (other than late payment charges and default interest received from the
related borrower required under the Pooling and Servicing Agreement to be paid
to the Servicer) to the holder of the Great Wolf Resorts Loan and the holder to
the Great Wolf Resorts Companion Loan on a pro rata basis in accordance with
their respective percentage interests in the Great Wolf Resorts Whole Loan.
If the related mortgaged property securing the Great Wolf Resorts Whole
Loan shall become an REO Property, then, for purposes of calculating the
remittances to be made to the respective holders of
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the Great Wolf Resorts Loan and the Great Wolf Resorts Companion Loan and
others, as well as for purposes of any other relevant calculations hereunder,
the Great Wolf Resorts Whole Loan shall be deemed to have remained outstanding,
the related mortgage loan documents shall be deemed to have remained in full
force and effect, and amounts collected on the related mortgaged property shall
be applied as provided above as if the Great Wolf Resorts Whole Loan remained
outstanding.
Mezz Cap Loans
Servicing Provisions of the Mezz Cap Intercreditor Agreements. With respect
to the Mezz Cap Loans, the Master Servicer and Special Servicer will service and
administer each Mezz Cap Loan and the related Mezz Cap Companion Loan pursuant
to the Pooling and Servicing Agreement and the related Intercreditor Agreements
for so long as such Mezz Cap Loan is part of the Trust Fund. The Master Servicer
and/or the Special Servicer may not enter into any amendment, deferral,
extension, modification, increase, renewal, replacement, consolidation,
supplement or waiver of the related loan documents without obtaining the prior
written consent of the holder of the related Mezz Cap Companion Loan if such
proposed amendment, deferral, extension, modification, increase, renewal,
replacement, consolidation, supplement or waiver of the related loan documents
adversely affects the lien priority of the related mortgage or constitutes
certain material modifications specified in the related Intercreditor Agreement,
provided, however, that such consent right will expire when the repurchase
period described in the next paragraph expires. See "SERVICING OF THE MORTGAGE
LOANS--The Controlling Class Representative" in this prospectus supplement.
In the event that (i) any payment of principal or interest on a Mezz Cap
Loan or Mezz Cap Companion Loan becomes ninety (90) or more days delinquent,
(ii) the principal balance of a Mezz Cap Loan or Mezz Cap Companion Loan has
been accelerated, (iii) the principal balance of a Mezz Cap Loan or Mezz Cap
Companion Loan is not paid at maturity, (iv) the borrower declares bankruptcy or
(v) any other event where the cash flow payment under a Mezz Cap Companion Loan
has been interrupted and payments are made pursuant to the event of default
waterfall, the holder of such Mezz Cap Companion Loan will be entitled to
purchase the related Mezz Cap Loan from the Trust Fund for a period of thirty
(30) days after its receipt of a repurchase option notice, subject to certain
conditions set forth in the related Mezz Cap Intercreditor Agreement. The
purchase price will generally equal the unpaid principal balance of the related
Mezz Cap Loan, together with all unpaid interest on the related Mezz Cap Loan
(other than default interest and late payment charges) at the related mortgage
rate and any outstanding servicing expenses, advances and interest on advances.
Unless the borrower or an affiliate is purchasing a Mezz Cap Loan, no prepayment
consideration will be payable in connection with the purchase of such Mezz Cap
Loan.
Application of Payments. Pursuant to the related Mezz Cap Intercreditor
Agreement and prior to the occurrence of (i) the acceleration of a Mezz Cap Loan
or Mezz Cap Companion Loan, (ii) a monetary event of default or (iii) an event
of default triggered by the bankruptcy of the borrower, the related borrower
will make separate monthly payments of principal and interest to the Master
Servicer and the holder of the related Mezz Cap Companion Loan. Any escrow and
reserve payments required in respect of a Mezz Cap Loan or Mezz Cap Companion
Loan will be paid to the Master Servicer.
Following the occurrence and during the continuance of (i) the acceleration
of a Mezz Cap Loan or Mezz Cap Companion Loan, (ii) a monetary event of default
or (iii) an event of default triggered by the bankruptcy of the borrower, and
subject to certain rights of the holder of a Mezz Cap Companion Loan to purchase
the related Mezz Cap Loan from the Trust Fund, all payments and proceeds (of
whatever nature) on such Mezz Cap Companion Loan will be subordinated to all
payments due on related Mezz Cap Loan and the amounts with respect to such Whole
Loan will be paid (excluding certain reserves, escrows, insurance proceeds and
awards otherwise required to be applied under the related loan documents or
released to the related borrower) in the following manner:
first, to the Master Servicer, Special Servicer or Trustee, up to the
amount of any unreimbursed costs and expenses paid by such entity, including
unreimbursed advances and interest thereon;
second, to the Master Servicer and the Special Servicer, in an amount equal
to the accrued and unpaid servicing fees and other servicing compensation earned
by such entity;
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third, to the holder of the related Mezz Cap Loan, in an amount equal to
accrued and unpaid interest with respect to the related Mezz Cap Loan;
fourth, to the holder of the related Mezz Cap Loan, in an amount equal to
the principal balance of the related Mezz Cap Loan until paid in full;
fifth, to the holder of the related Mezz Cap Loan, in an amount equal to
any prepayment premium, to the extent actually paid, allocable to the related
Mezz Cap Loan;
sixth, to the holder of the related Mezz Cap Companion Loan, up to the
amount of any unreimbursed costs and expenses paid by the holder of such Mezz
Cap Companion Loan and then to accrued and unpaid servicing fees with respect to
the Mezz Cap Companion Loan;
seventh, to the holder of the related Mezz Cap Companion Loan, in an amount
equal to accrued and unpaid interest with respect to such Mezz Cap Companion
Loan;
eighth, to the holder of the related Mezz Cap Companion Loan, in an amount
equal to the principal balance of such Mezz Cap Companion Loan until paid in
full;
ninth, to the holder of the related Mezz Cap Companion Loan, in an amount
equal to any prepayment premium, to the extent actually paid, allocable to such
Mezz Cap Companion Loan;
tenth, to the holder of the related Mezz Cap Loan and the holder of the
related Mezz Cap Companion Loan, in an amount equal to any unpaid excess default
interest accrued on the related Mezz Cap Loan and such Mezz Cap Companion Loan,
respectively;
eleventh, any amounts collected or recovered on the Mezz Cap Whole Loan
that represent late payment charges, other than a prepayment premium or default
interest, that are not payable to any servicer in respect of the Mezz Cap Loan
or Mezz Cap Companion Loan are payable to the holder of the Mezz Cap Loan and
Mezz Cap Companion Loan on a pro rata basis based on the initial balance of each
such loan, respectively; and
twelfth, any excess, to the holder of the related Mezz Cap Loan and the
holder of the related Mezz Cap Companion Loan, pro rata, based upon the initial
principal balances of the related loans.
Application of Amounts Paid to Trust Fund. On or before each distribution
date, amounts payable to the trust as holder of any Co-Lender Loan pursuant to
the Intercreditor Agreements will be included in the Available Distribution
Amount for such Distribution Date to the extent described in this prospectus
supplement and amounts payable to the holder of the related Companion Loan will
be distributed to the holder net of fees and expenses on such Companion Loan.
MEZZANINE LOANS
With respect to the Mortgage Loans with existing mezzanine debt, the holder
of each mezzanine loan generally has the right to purchase the related Mortgage
Loan from the Trust Fund if certain defaults on the related Mortgage Loan occur
and, in some cases, may have the right to cure certain defaults occurring on the
related Mortgage Loan. The purchase price required to be paid in connection with
such a purchase is generally equal to the outstanding principal balance of the
related Mortgage Loan, together with accrued and unpaid interest on, and all
unpaid servicing expenses, advances and interest on advances relating to, such
Mortgage Loan. The lenders for this mezzanine debt are generally not affiliates
of the related Mortgage Loan borrower. Upon a default under the mezzanine debt,
the holder of the mezzanine debt may foreclose upon the ownership interests in
the related borrower.
ADDITIONAL MORTGAGE LOAN INFORMATION
The Mortgage Pool. For a detailed presentation of certain of the
characteristics of the Mortgage Loans and the Mortgaged Properties, on an
individual basis, see Annexes A-1, A-1A, A-1B, A-2, A-3, A-4, A-5 and A-6 to
this prospectus supplement. For purposes of numerical and statistical
information set forth in this prospectus supplement and Annexes A-1, A-1A, A-1B,
A-2, A-3, A-4, A-5, and A-6, unless otherwise specified, such numerical and
statistical information excludes any Subordinate Companion
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Loans. For purposes of the calculation of DSC Ratios and LTV Ratios with respect
to the One & Two International Place Loan and the 450 West 33rd Street Loan,
such ratios are calculated based upon the aggregate indebtedness of such
Mortgage Loan and the related Pari Passu Companion Loans (but excluding the
related Subordinate Companion Loans). Certain of the Mortgage Loans may have
previously computed interest on a floating rate basis, but have been converted
to a fixed rate prior to the Closing Date. With respect to these Mortgage Loans,
all calculations in this prospectus supplement will be computed on the basis of
the date any such Mortgage Loan was converted to a fixed rate, rather than the
date of origination. Certain additional information regarding the Mortgage Loans
is contained under "--Assignment of the Mortgage Loans; Repurchases and
Substitutions" and "--Representations and Warranties; Repurchases and
Substitutions" in this prospectus supplement, and under "DESCRIPTION OF THE
TRUST FUNDS" and "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES" in the
accompanying prospectus.
In the schedule and tables set forth in Annexes A-1, A-1A, A-1B, A-2, A-3,
A-4, A-5 and A-6 to this prospectus supplement, cross-collateralized Mortgage
Loans are not grouped together; instead, references are made under the heading
"Cross Collateralized and Cross Defaulted Loan Flag" with respect to the other
Mortgage Loans with which they are cross-collateralized.
Each of the following tables sets forth certain characteristics of the
Mortgage Pool presented, where applicable, as of the Cut-Off Date. For purposes
of the tables and Annexes A-1, A-1A, A-1B, A-2, A-3, A-4, A-5 and A-6:
(i) References to "DSC Ratio" and "DSCR" are references to debt service
coverage ratios. Debt service coverage ratios are used by income property
lenders to measure the ratio of (a) cash currently generated by a property
that is available for debt service (that is, cash that remains after average
cost of non-capital expenses of operation, tenant improvements, leasing
commissions, replacement reserves and furniture, fixture and equipment
reserves during the term of the Mortgage Loan) to (b) required debt service
payments. However, debt service coverage ratios only measure the current, or
recent, ability of a property to service mortgage debt. The DSC Ratio for any
Mortgage Loan is the ratio of "Net Cash Flow" produced by the related
Mortgaged Property to the annualized amount of debt service that will be
payable under that Mortgage Loan commencing after the origination date. The
Net Cash Flow for a Mortgaged Property is the "net cash flow" of such
Mortgaged Property as set forth in, or determined by the applicable Mortgage
Loan Seller on the basis of, Mortgaged Property operating statements,
generally unaudited, and certified rent rolls (as applicable) supplied by the
related borrower in the case of multifamily, mixed use, retail, industrial,
residential health care, self-storage and office properties (each a "Rental
Property"); provided, however, for purposes of calculating the DSC Ratios and
DSCR provided herein (i) with respect to 92 Mortgage Loans, representing
52.1% of the Cut-Off Date Pool Balance (70 Mortgage Loans in Loan Group 1 or
48.7% of the Cut-Off Date Group 1 Balance and 22 Mortgage Loans in Loan Group
2 or 73.7% of the Cut-Off Date Group 2 Balance), where Periodic Payments are
interest-only for a certain amount of time after origination after which date
the Mortgage Loan amortizes principal for the remaining term of the loan the
debt service used is the annualized amount of debt service that will be
payable under the Mortgage Loan commencing after the amortization period
begins and (ii) with respect to 4 Mortgage Loans (loan numbers 57, 58, 82 and
169), representing 1.3% of the Cut-Off Date Pool Balance (3 Mortgage Loans in
Loan Group 1 or 1.0% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan
in Loan Group 2 or 3.5% of the Cut-Off Date Group 2 Balance), for purposes of
determining the debt service coverage ratio, such ratio was adjusted by
taking into account amounts available under certain letters of credit or cash
reserves. In general, the Mortgage Loan Sellers relied on either full-year
operating statements, rolling 12-month operating statements and/or applicable
year-to-date financial statements, if available, and on rent rolls for all
Rental Properties that were current as of a date not earlier than six (6)
months prior to the respective date of origination in determining Net Cash
Flow for the Mortgaged Properties.
In general, "net cash flow" is the revenue derived from the use and
operation of a Mortgaged Property less operating expenses (such as utilities,
administrative expenses, repairs and maintenance, tenant improvement costs,
leasing commissions, management fees and advertising), fixed expenses (such as
insurance, real estate taxes and, if applicable, ground lease payments) and
replacement reserves and an
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allowance for vacancies and credit losses. Net Cash Flow does not reflect
interest expenses and non-cash items such as depreciation and amortization, and
generally does not reflect capital expenditures, but does reflect reserves for
replacements and an allowance for vacancies and credit losses.
In determining the "revenue" component of Net Cash Flow for each Rental
Property, the applicable Mortgage Loan Seller generally relied on the most
recent rent roll and/or other known, signed tenant leases, executed extension
options, or other indications of anticipated income (generally supported by cash
reserves or letters of credit) supplied and, where the actual vacancy shown
thereon and the market vacancy was less than 5.0%, assumed a 5.0% vacancy in
determining revenue from rents, except that in the case of certain
non-multifamily properties, space occupied by such anchor or single tenants or
other large creditworthy tenants may have been disregarded (or a rate of less
than 5.0% has been assumed) in performing the vacancy adjustment due to the
length of the related leases or creditworthiness of such tenants, in accordance
with the respective Mortgage Loan Seller's underwriting standards. Where the
actual or market vacancy was not less than 5.0%, the applicable Mortgage Loan
Seller determined revenue from rents by generally relying on the most recent
rent roll and/or other known, signed leases, executed lease extension options,
or other indications of anticipated income (generally supported by cash reserves
or letters of credit) supplied and the greater of (a) actual historical vacancy
at the related Mortgaged Property, (b) historical vacancy at comparable
properties in the same market as the related Mortgaged Property, and (c) 5.0%.
In determining rental revenue for multifamily and self storage properties, the
Mortgage Loan Sellers generally either reviewed rental revenue shown on the
certified rolling 12-month operating statements, the rolling 3-month operating
statements for multifamily properties or annualized the rental revenue and
reimbursement of expenses shown on rent rolls or operating statements with
respect to the prior one-to-twelve month periods. For the other Rental
Properties, the Mortgage Loan Sellers generally annualized rental revenue shown
on the most recent certified rent roll (as applicable), after applying the
vacancy factor, without further regard to the terms (including expiration dates)
of the leases shown thereon. In the case of hospitality properties, gross
receipts were generally determined based upon the average occupancy not to
exceed 75.0% and daily rates achieved during the prior two-to-three year annual
reporting period. In the case of residential health care facilities, receipts
were based on historical occupancy levels, historical operating revenues and
then-current occupancy rates. Occupancy rates for the private health care
facilities were generally within then-current market ranges, and vacancy levels
were generally a minimum of 5.0%. In general, any non-recurring items and
non-property related revenue were eliminated from the calculation except in the
case of residential health care facilities.
In determining the "expense" component of Net Cash Flow for each Mortgaged
Property, the Mortgage Loan Sellers generally relied on rolling 12-month
operating statements and/or full-year or year-to-date financial statements
supplied by the related borrower, except that (a) if tax or insurance expense
information more current than that reflected in the financial statements was
available, the newer information was used, (b) property management fees were
generally assumed to be 1.0% to 7.0% of effective gross revenue (except with
respect to full service hospitality properties, where a minimum of 3.0% of gross
receipts was assumed, with respect to limited service hospitality properties,
where a minimum of 4.0% of gross receipts was assumed, and with respect to
single tenant properties, where fees as low as 1.0% of effective gross receipts
were assumed), (c) assumptions were made with respect to reserves for leasing
commissions, tenant improvement expenses and capital expenditures and (d)
expenses were assumed to include annual replacement reserves. See
"--Underwriting Standards--Escrow Requirements--Replacement Reserves" in this
prospectus supplement. In addition, in some instances, the Mortgage Loan Sellers
recharacterized as capital expenditures those items reported by borrowers as
operating expenses (thus increasing "net cash flow") where the Mortgage Loan
Sellers determined appropriate.
The borrowers' financial information used to determine Net Cash Flow was in
most cases borrower certified, but unaudited, and neither the Mortgage Loan
Sellers nor the Depositor verified their accuracy.
(i) References to "Cut-Off Date LTV" and "Cut-Off Date LTV Ratio" are
references to the ratio, expressed as a percentage, of the Cut-Off Date
Balance of a Mortgage Loan to the appraised value of the related Mortgaged
Property as shown on the most recent third-party appraisal thereof available
to the Mortgage Loan Sellers; provided, however, that with respect to 1
Mortgage Loan
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(loan number 57), representing 0.5% of the Cut-Off Date Principal Balance
(0.5% of the Cut-Off Date Group 1 Balance) for purposes of calculating any
such loan-to-value ratios, such ratios were adjusted taking into account
amounts available under a letter of credit.
(ii) References to "Maturity Date LTV Ratio" and "LTV at ARD or Maturity"
are references to the ratio, expressed as a percentage, of the expected
balance of a Balloon Loan on its scheduled maturity date (or ARD Loan on its
Anticipated Repayment Date) (prior to the payment of any Balloon Payment or
principal prepayments) to the appraised value of the related Mortgaged
Property as shown on the most recent third-party appraisal thereof available
to the Mortgage Loan Sellers; provided, however, that with respect to 1
Mortgage Loan (loan number 57), representing 0.5% of the Cut-Off Date
Principal Balance (0.5% of the Cut-Off Date Group 1 Balance) for purposes of
calculating any such loan-to-value ratios, such ratios were adjusted by
taking into account an amount available under a letter of credit.
(iii) References to "Loan per Sq. Ft., Unit or Room" are, for each
Mortgage Loan secured by a lien on a multifamily property, hospitality
property or assisted living facility or other healthcare property,
respectively, references to the Cut-Off Date Balance of such Mortgage Loan
divided by the number of dwelling units, guest rooms, respectively, that the
related Mortgaged Property comprises, and, for each Mortgage Loan secured by
a lien on a retail, industrial/warehouse, self-storage or office property,
references to the Cut-Off Date Balance of such Mortgage Loan divided by the
net rentable square foot area of the related Mortgaged Property.
(iv) References to "Year Built" are references to the year that a
Mortgaged Property was originally constructed or substantially renovated.
With respect to any Mortgaged Property which was constructed in phases, the
"Year Built" refers to the year that the first phase was originally
constructed.
(v) References to "weighted averages" are references to averages weighted
on the basis of the Cut-Off Date Balances of the related Mortgage Loans.
(vi) References to "Underwritten Replacement Reserves" represent
estimated annual capital costs, as used by the Mortgage Loan Sellers in
determining Net Cash Flow.
(vii) References to "Administrative Cost Rate" for each Mortgage Loan
represent the sum of (a) the Master Servicing Fee Rate for such Mortgage
Loan, and (b) 0.0004%, which percentage represents the trustee fee rate with
respect to each Mortgage Loan. The Administrative Cost Rate for each Mortgage
Loan is set forth on Annex A-1 hereto.
(vii) References to "Remaining Term to Maturity" represent, with respect
to each Mortgage Loan, the number of months remaining from the Cut-Off Date
to the stated maturity date of such Mortgage Loan (or the remaining number of
months to the Anticipated Repayment Date with respect to each ARD Loan).
(ix) References to "Remaining Amortization Term" represent, with respect
to each Mortgage Loan, the number of months remaining from the later of the
Cut-Off Date and the end of any interest-only period, if any, to the month in
which such Mortgage Loan would fully or substantially amortize in accordance
with such loan's amortization schedule without regard to any Balloon Payment,
if any, due on such Mortgage Loan.
(x) References to "L ( )" or "Lockout" or "Lockout Period" represent,
with respect to each Mortgage Loan, the period during which prepayments of
principal are prohibited and no substitution of Defeasance Collateral is
permitted. The number indicated in the parentheses indicates the number of
monthly payments of such period (calculated for each Mortgage Loan from the
date of its origination). References to "O ( )" represent the number of
monthly payments for which (a) no Prepayment Premium or Yield Maintenance
Charge is assessed and (b) defeasance is no longer required. References to
"YM ( )" represent the period for which the Yield Maintenance Charge is
assessed. "3% ( )", "2% ( )" and "1% ( )" each represents the period for
which a Prepayment Premium is assessed and the respective percentage used in
the calculation thereof. The periods, if any, between consecutive Due Dates
occurring prior to the maturity date or Anticipated Repayment Date, as
S-118
applicable, of a Mortgage Loan during which the related borrower will have
the right to prepay such Mortgage Loan without being required to pay a
Prepayment Premium or a Yield Maintenance Charge (each such period, an "Open
Period") with respect to all of the Mortgage Loans have been calculated as
those Open Periods occurring immediately prior to the maturity date or
Anticipated Repayment Date, as applicable, of such Mortgage Loan as set forth
in the related Mortgage Loan documents.
(xi) References to "D ( )" or "Defeasance" represent, with respect to
each Mortgage Loan, the period (in months) during which the related holder of
the Mortgage has the right to require the related borrower, in lieu of a
principal prepayment, to pledge to such holder Defeasance Collateral.
(xii) References to "Occupancy Percentage" are, with respect to any
Mortgaged Property, references as of the most recently available rent rolls
to (a) in the case of multifamily properties and assisted living facilities,
the percentage of units or pads rented, (b) in the case of office and retail
properties, the percentage of the net rentable square footage rented and is
exclusive of hospitality properties, and (c) in the case of self-storage
facilities, either the percentage of the net rentable square footage rented
or the percentage of units rented (depending on borrower reporting), and is
exclusive of hospitality properties.
(xiii) References to "Original Term to Maturity" are references to the
term from origination to maturity for each Mortgage Loan (or the term from
origination to the Anticipated Repayment Date with respect to each ARD Loan).
(xiv) References to "NA" indicate that, with respect to a particular
category of data, such data is not applicable.
(xv) References to "NAV" indicate that, with respect to a particular
category of data, such data is not available.
(xvi) References to "Capital Imp. Reserve" are references to funded
reserves escrowed for repairs, replacements and corrections of issues
outlined in the engineering reports.
(xvii) References to "Replacement Reserve" are references to funded
reserves escrowed for ongoing items such as repairs and replacements,
including, in the case of hospitality properties, reserves for furniture,
fixtures and equipment. In certain cases, however, the subject reserve will
be subject to a maximum amount, and once such maximum amount is reached, such
reserve will not thereafter be funded, except, in some such cases, to the
extent it is drawn upon.
(xviii) References to "TI/LC Reserve" are references to funded reserves
escrowed for tenant improvement allowances and leasing commissions. In
certain cases, however, the subject reserve will be subject to a maximum
amount, and once such maximum amount is reached, such reserve will not
thereafter be funded, except, in some such cases, to the extent it is drawn
upon.
(xix) The sum in any column of any of the following tables may not equal
the indicated total due to rounding.
S-119
MORTGAGED PROPERTIES BY PROPERTY TYPE FOR ALL MORTGAGE LOANS(1)
NUMBER OF AGGREGATE % OF AVERAGE HIGHEST
MORTGAGED CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
PROPERTY TYPE PROPERTIES BALANCE POOL BALANCE BALANCE BALANCE
- -------------------------- ------------ ----------------- -------------- -------------- --------------
Office ................... 39 $1,079,253,946 38.4% $27,673,178 $216,000,000
Retail ................... 114 699,471,581 24.9 $ 6,135,716 $ 29,250,000
Retail -- Anchored ...... 91 581,374,195 20.7 $ 6,388,727 $ 29,250,000
Retail -- Unanchored..... 15 78,980,225 2.8 $ 5,265,348 $ 26,962,757
Retail -- Shadow
Anchored(4) ............ 8 39,117,161 1.4 $ 4,889,645 $ 9,200,000
Multifamily .............. 37 434,740,449 15.5 $11,749,742 $ 43,000,000
Hospitality(5) ........... 56 285,026,438 10.1 $ 5,089,758 $ 27,798,196
Mixed Use ................ 5 147,352,188 5.2 $29,470,438 $ 53,000,000
Industrial ............... 29 80,460,737 2.9 $ 2,774,508 $ 14,200,000
Special Purpose(6) ....... 5 51,799,250 1.8 $10,359,850 $ 42,440,495
Self Storage ............. 3 20,364,780 0.7 $ 6,788,260 $ 13,000,000
Land(7) .................. 3 10,091,890 0.4 $ 3,363,963 $ 3,907,504
--- -------------- -----
291 $2,808,561,259 100.0% $ 9,651,413 $216,000,000
=== ============== =====
WTD. AVG.
STATED
REMAINING WTD.
WTD. AVG. WTD. AVG. TERM TO WTD. MINIMUM WTD. AVG. AVG.
CUT-OFF DATE LTV RATIO AT MATURITY AVG. DSC DSC MAXIMUM OCCUPANCY MORTGAGE
PROPERTY TYPE LTV RATIO MATURITY(2) (MOS.)(2) RATIO RATIO DSC RATIO RATE(3) RATE
- -------------------------- -------------- -------------- ----------- ---------- --------- ----------- ----------- -----------
Office ................... 69.6% 61.0% 110 1.56x 1.20x 3.42x 88.9% 5.232%
Retail ................... 72.7% 60.9% 119 1.42x 1.20x 3.07x 96.8% 5.486%
Retail -- Anchored ...... 72.9% 62.6% 115 1.41x 1.20x 3.07x 96.9% 5.476%
Retail -- Unanchored..... 70.1% 52.9% 133 1.50x 1.20x 2.51x 96.2% 5.585%
Retail -- Shadow
Anchored(4) ............ 74.3% 50.7% 138 1.36x 1.22x 1.55x 95.8% 5.441%
Multifamily .............. 73.5% 66.7% 102 1.35x 1.20x 4.59x 94.6% 5.348%
Hospitality(5) ........... 57.3% 41.4% 118 2.14x 1.29x 3.08x NA 5.757%
Mixed Use ................ 72.5% 61.0% 100 1.34x 1.21x 3.31x 91.8% 5.873%
Industrial ............... 75.0% 63.6% 98 1.36x 1.26x 1.91x 89.4% 5.593%
Special Purpose(6) ....... 72.9% 61.5% 113 1.41x 1.38x 1.91x 100.0% 5.531%
Self Storage ............. 67.6% 56.6% 120 1.32x 1.26x 1.45x 90.4% 5.652%
Land(7) .................. 70.8% 59.4% 118 1.31x 1.23x 1.37x 100.0% 5.568%
70.1% 59.9% 111 1.53X 1.20X 4.59X 92.4% 5.420%
- -------
(1) Because this table presents information relating to the Mortgaged
Properties and not the Mortgage Loans, the information for Mortgage Loans
secured by more than one Mortgaged Property is based on allocated amounts
(allocating the Mortgage Loan principal balance to each of those
properties by the appraised values of the Mortgaged Properties or the
allocated loan amount as detailed in the related Mortgage Loan
documents).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(3) Occupancy Rates were calculated based upon rent rolls made available to
the applicable Mortgage Loan Seller by the related borrowers as of the
rent roll date set forth on Annex A-1 to this prospectus supplement but
excludes 19 Mortgage Loans secured by hospitality properties and 1
Mortgage Loan secured by a special purpose property, representing 11.7%
of the Cut-Off Date Pool Balance.
(4) A Mortgaged Property is classified as shadow anchored if it is located in
close proximity to an anchored retail property.
(5) With regard to 1 Mortgage Loan (loan number 5), the mortgaged property
includes the fee interest in land which the ground tenant has improved
and leased as 13 limited service hotels, the source of funds for which
Mortgage Loan is the ground rent payments made to the related borrower.
The 13 hotels are not part of the loan collateral for that Mortgage Loan,
but the loan collateral for another Mortgage Loan (loan number 3) does
include those 13 hotels.
(6) Specifically, 2 mortgaged properties that are operated as parking
garages, and 3 mortgaged properties that are used for childcare.
(7) Specifically, the fee interest in land which the ground tenant has
improved and leased as an anchored retail building or a restaurant.
Neither of the retail building or restaurant is part of the loan
collateral, and the sources of funds for loan repayment are the ground
rent payments made to the related borrower.
The sum of aggregate percentage calculations may not equal 100% due to
rounding.
S-120
MORTGAGED PROPERTIES BY PROPERTY TYPE FOR LOAN GROUP 1 MORTGAGE LOANS(1)
NUMBER OF AGGREGATE % OF AVERAGE HIGHEST
MORTGAGED CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
PROPERTY TYPE PROPERTIES BALANCE GROUP 1 BALANCE BALANCE BALANCE
- -------------------------- ------------ ----------------- ----------------- -------------- --------------
Office ................... 39 $1,079,253,946 44.4% $27,673,178 $216,000,000
Retail ................... 114 699,471,581 28.7 $ 6,135,716 $ 29,250,000
Retail -- Anchored ...... 91 581,374,195 23.9 $ 6,388,727 $ 29,250,000
Retail -- Unanchored..... 15 78,980,225 3.2 $ 5,265,348 $ 26,962,757
Retail -- Shadow
Anchored(4) ............ 8 39,117,161 1.6 $ 4,889,645 $ 9,200,000
Hospitality(5) ........... 56 285,026,438 11.7 $ 5,089,758 $ 27,798,196
Mixed Use ................ 5 147,352,188 6.1 $29,470,438 $ 53,000,000
Industrial ............... 29 80,460,737 3.3 $ 2,774,508 $ 14,200,000
Multifamily .............. 4 59,500,000 2.4 $14,875,000 $ 43,000,000
Special Purpose(6) ....... 5 51,799,250 2.1 $10,359,850 $ 42,440,495
Self Storage ............. 3 20,364,780 0.8 $ 6,788,260 $ 13,000,000
Land(7) .................. 3 10,091,890 0.4 $ 3,363,963 $ 3,907,504
--- -------------- -----
258 $2,433,320,810 100.0% $ 9,431,476 $216,000,000
=== ============== =====
WTD. AVG.
STATED
REMAINING WTD.
WTD. AVG. WTD. AVG. TERM TO WTD. MINIMUM MAXIMUM WTD. AVG. AVG.
CUT-OFF DATE LTV RATIO AT MATURITY AVG. DSC DSC DSC OCCUPANCY MORTGAGE
PROPERTY TYPE LTV RATIO MATURITY(2) (MOS.)(2) RATIO RATIO RATIO RATE(3) RATE
- -------------------------- -------------- -------------- ----------- ---------- --------- --------- ----------- -----------
Office ................... 69.6% 61.0% 110 1.56x 1.20x 3.42x 88.9% 5.232%
Retail ................... 72.7% 60.9% 119 1.42x 1.20x 3.07x 96.8% 5.486%
Retail -- Anchored ...... 72.9% 62.6% 115 1.41x 1.20x 3.07x 96.9% 5.476%
Retail -- Unanchored..... 70.1% 52.9% 133 1.50x 1.20x 2.51x 96.2% 5.585%
Retail -- Shadow
Anchored(4) ............ 74.3% 50.7% 138 1.36x 1.22x 1.55x 95.8% 5.441%
Hospitality(5) ........... 57.3% 41.4% 118 2.14x 1.29x 3.08x NA 5.757%
Mixed Use ................ 72.5% 61.0% 100 1.34x 1.21x 3.31x 91.8% 5.873%
Industrial ............... 75.0% 63.6% 98 1.36x 1.26x 1.91x 89.4% 5.593%
Multifamily .............. 65.2% 64.9% 63 1.61x 1.29x 4.59x 92.2% 5.435%
Special Purpose(6) ....... 72.9% 61.5% 113 1.41x 1.38x 1.91x 100.0% 5.531%
Self Storage ............. 67.6% 56.6% 120 1.32x 1.26x 1.45x 90.4% 5.652%
Land(7) .................. 70.8% 59.4% 118 1.31x 1.23x 1.37x 100.0% 5.568%
69.3% 58.8% 111 1.56X 1.20X 4.59X 92.0% 5.433%
- -------
(1) Because this table presents information relating to the Mortgaged
Properties and not the Mortgage Loans, the information for Mortgage Loans
secured by more than one Mortgaged Property is based on allocated amounts
(allocating the Mortgage Loan principal balance to each of those
properties by the appraised values of the Mortgaged Properties or the
allocated loan amount as detailed in the related Mortgage Loan
documents).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(3) Occupancy Rates were calculated based upon rent rolls made available to
the applicable Mortgage Loan Seller by the related borrowers as of the
rent roll date set forth on Annex A-1 to this prospectus supplement but
excludes 19 Mortgage Loans secured by hospitality properties and 1
Mortgage Loan secured by a special purpose property, representing 13.5%
of the Cut-Off Date Group 1 Balance.
(4) A Mortgaged Property is classified as shadow anchored if it is located in
close proximity to an anchored retail property.
(5) With regard to 1 Mortgage Loan (loan number 5), the mortgaged property
includes the fee interest in land which the ground tenant has improved
and leased as 13 limited service hotels, the source of funds for which
Mortgage Loan is the ground rent payments made to the related borrower.
The 13 hotels are not part of the loan collateral for that Mortgage Loan,
but the loan collateral for another Mortgage Loan (loan number 3) does
include those 13 hotels.
(6) Specifically, 2 mortgaged properties that are operated as parking
garages, and 3 mortgaged properties that are used for childcare.
(7) Specifically, the fee interest in land, which the ground tenant has
improved and leased as an anchored retail building or a restaurant.
Neither the retail building nor the restaurant is part of the loan
collateral, and the sources of funds for loan repayment are the ground
rent payments made to the related borrower.
S-121
MORTGAGED PROPERTIES BY PROPERTY TYPE FOR LOAN GROUP 2 MORTGAGE LOANS(1)
NUMBER OF AGGREGATE % OF AVERAGE HIGHEST
MORTGAGED CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
PROPERTY TYPE PROPERTIES BALANCE GROUP 2 BALANCE BALANCE BALANCE
- --------------------- ------------ -------------- ----------------- -------------- --------------
Multifamily ......... 33 $375,240,449 100.0% $11,370,923 $28,000,000
-- ------------ -----
33 $375,240,449 100.0% $11,370,923 $28,000,000
== ============ =====
WTD. AVG.
STATED
REMAINING
WTD. AVG. WTD. AVG. TERM TO WTD. MINIMUM MAXIMUM WTD. AVG. WTD. AVG.
CUT-OFF DATE LTV RATIO AT MATURITY AVG. DSC DSC DSC OCCUPANCY MORTGAGE
PROPERTY TYPE LTV RATIO MATURITY(2) (MOS.)(2) RATIO(2) RATIO RATIO RATE(3) RATE
- --------------------- -------------- -------------- ----------- ---------- --------- --------- ----------- ----------
Multifamily ......... 74.8% 67.0% 108 1.31x 1.20x 1.73x 95.0% 5.334%
74.8% 67.0% 108 1.31x 1.20x 1.73x 95.0% 5.334%
- -------
(1) Because this table presents information relating to the Mortgaged
Properties and not the Mortgage Loans, the information for Mortgage Loans
secured by more than one Mortgaged Property is based on allocated amounts
(allocating the Mortgage Loan principal balance to each of those
properties by the appraised values of the Mortgaged Properties or the
allocated loan amount as detailed in the related Mortgage Loan
documents).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(3) Occupancy Rates were calculated based upon rent rolls made available to
the applicable Mortgage Loan Seller by the related borrowers as of the
rent roll date set forth on Annex A-1 to this prospectus supplement.
S-122
RANGE OF CUT-OFF DATE BALANCES FOR ALL MORTGAGE LOANS
AGGREGATE % OF
RANGE OF CUT-OFF NUMBER OF CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF
DATE BALANCES ($) LOANS BALANCE POOL BALANCE DATE BALANCE
- ------------------------------------------------ ----------- ----------------- -------------- -----------------
(less than or equal to) 2,000,000 ............. 19 $ 31,066,229 1.1% $ 1,635,065
2,000,001 -- 3,000,000....................... 37 96,941,215 3.5 $ 2,620,033
3,000,001 -- 4,000,000....................... 33 116,925,703 4.2 $ 3,543,203
4,000,001 -- 5,000,000....................... 24 104,576,667 3.7 $ 4,357,361
5,000,001 -- 6,000,000....................... 14 76,131,499 2.7 $ 5,437,964
6,000,001 -- 7,000,000....................... 8 51,212,466 1.8 $ 6,401,558
7,000,001 -- 8,000,000....................... 11 84,289,340 3.0 $ 7,662,667
8,000,001 -- 9,000,000....................... 8 68,209,804 2.4 $ 8,526,226
9,000,001 -- 10,000,000....................... 7 66,031,995 2.4 $ 9,433,142
10,000,001 -- 15,000,000....................... 16 193,087,063 6.9 $ 12,067,941
15,000,001 -- 20,000,000....................... 9 151,149,902 5.4 $ 16,794,434
20,000,001 -- 25,000,000....................... 14 314,399,238 11.2 $ 22,457,088
25,000,001 -- 30,000,000....................... 10 281,312,549 10.0 $ 28,131,255
30,000,001 -- 35,000,000....................... 2 66,868,735 2.4 $ 33,434,368
35,000,001 -- 40,000,000....................... 3 112,144,476 4.0 $ 37,381,492
40,000,001 -- 45,000,000....................... 3 128,640,495 4.6 $ 42,880,165
45,000,001 -- 50,000,000....................... 3 143,443,083 5.1 $ 47,814,361
50,000,001 -- 55,000,000....................... 3 161,000,000 5.7 $ 53,666,667
55,000,001 -- 60,000,000....................... 1 57,844,828 2.1 $ 57,844,828
70,000,001 -- 75,000,000....................... 1 75,000,000 2.7 $ 75,000,000
75,000,001 -- 80,000,000....................... 1 79,785,970 2.8 $ 79,785,970
80,000,001 -- 216,000,000....................... 2 348,500,000 12.4 $174,250,000
-- -------------- -----
229 $2,808,561,259 100.0% $ 12,264,460
=== ============== =====
WTD. AVG.
STATED
REMAINING
WTD. AVG. WTD. AVG. TERM TO
RANGE OF CUT-OFF HIGHEST CUT-OFF CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. WTD. AVG.
DATE BALANCES ($) DATE BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO MORTGAGE RATE
- ------------------------------------------ ----------------- -------------- -------------- ---------- ----------- --------------
(less than or equal to) 2,000,000 ....... $ 2,000,000 61.4% 51.0% 106 1.90x 5.351%
2,000,001 -- 3,000,000................. $ 3,000,000 63.2% 54.1% 116 1.80x 5.483%
3,000,001 -- 4,000,000................. $ 4,000,000 68.8% 54.9% 121 1.49x 5.671%
4,000,001 -- 5,000,000................. $ 5,000,000 72.0% 57.4% 122 1.41x 5.640%
5,000,001 -- 6,000,000................. $ 6,000,000 74.6% 59.2% 120 1.40x 5.638%
6,000,001 -- 7,000,000................. $ 7,000,000 73.1% 62.6% 111 1.52x 5.241%
7,000,001 -- 8,000,000................. $ 7,915,939 73.7% 61.3% 114 1.43x 5.683%
8,000,001 -- 9,000,000................. $ 9,000,000 72.5% 56.2% 120 1.32x 5.619%
9,000,001 -- 10,000,000................. $ 10,000,000 71.4% 63.8% 109 1.46x 5.320%
10,000,001 -- 15,000,000................. $ 14,479,433 72.1% 62.5% 112 1.29x 5.400%
15,000,001 -- 20,000,000................. $ 19,456,803 74.3% 64.7% 109 1.32x 5.476%
20,000,001 -- 25,000,000................. $ 24,297,238 75.8% 67.8% 108 1.30x 5.469%
25,000,001 -- 30,000,000................. $ 29,718,000 71.9% 66.6% 102 1.66x 5.328%
30,000,001 -- 35,000,000................. $ 34,352,188 74.7% 59.7% 107 1.38x 5.479%
35,000,001 -- 40,000,000................. $ 40,000,000 70.6% 63.5% 97 1.60x 5.214%
40,000,001 -- 45,000,000................. $ 43,200,000 72.9% 64.6% 99 1.42x 5.510%
45,000,001 -- 50,000,000................. $ 49,843,594 64.8% 56.0% 98 2.07x 5.763%
50,000,001 -- 55,000,000................. $ 55,000,000 71.1% 60.1% 107 1.37x 5.500%
55,000,001 -- 60,000,000................. $ 57,844,828 54.5% 34.6% 119 2.09x 5.158%
70,000,001 -- 75,000,000................. $ 75,000,000 76.5% 65.0% 120 1.34x 5.200%
75,000,001 -- 80,000,000................. $ 79,785,970 54.3% 34.5% 119 2.36x 5.158%
80,000,001 -- 216,000,000................. $216,000,000 64.4% 55.8% 119 1.56x 5.165%
$216,000,000 70.1% 59.9% 111 1.53X 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-123
RANGE OF CUT-OFF DATE BALANCES FOR LOAN GROUP 1 MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF AVERAGE
CUT-OFF DATE CUT-OFF
RANGE OF CUT-OFF NUMBER OF DATE GROUP 1 DATE
DATE BALANCES ($) LOANS BALANCE BALANCE BALANCE
- ------------------------------------------------ ----------- ----------------- --------- ---------------
(less than or equal to) 2,000,000 ............. 17 $ 27,343,746 1.1% $ 1,608,456
2,000,001 -- 3,000,000....................... 36 94,091,215 3.9 $ 2,613,645
3,000,001 -- 4,000,000....................... 32 113,730,297 4.7 $ 3,554,072
4,000,001 -- 5,000,000....................... 21 90,569,041 3.7 $ 4,312,811
5,000,001 -- 6,000,000....................... 11 60,038,853 2.5 $ 5,458,078
6,000,001 -- 7,000,000....................... 6 37,812,466 1.6 $ 6,302,078
7,000,001 -- 8,000,000....................... 11 84,289,340 3.5 $ 7,662,667
8,000,001 -- 9,000,000....................... 5 42,009,804 1.7 $ 8,401,961
9,000,001 -- 10,000,000....................... 5 46,872,910 1.9 $ 9,374,582
10,000,001 -- 15,000,000....................... 9 110,022,216 4.5 $ 12,224,691
15,000,001 -- 20,000,000....................... 6 103,473,547 4.3 $ 17,245,591
20,000,001 -- 25,000,000....................... 10 224,002,238 9.2 $ 22,400,224
25,000,001 -- 30,000,000....................... 8 225,837,549 9.3 $ 28,229,694
30,000,001 -- 35,000,000....................... 2 66,868,735 2.7 $ 33,434,368
35,000,001 -- 40,000,000....................... 3 112,144,476 4.6 $ 37,381,492
40,000,001 -- 45,000,000....................... 3 128,640,495 5.3 $ 42,880,165
45,000,001 -- 50,000,000....................... 3 143,443,083 5.9 $ 47,814,361
50,000,001 -- 55,000,000....................... 3 161,000,000 6.6 $ 53,666,667
55,000,001 -- 60,000,000....................... 1 57,844,828 2.4 $ 57,844,828
70,000,001 -- 75,000,000....................... 1 75,000,000 3.1 $ 75,000,000
75,000,001 -- 80,000,000....................... 1 79,785,970 3.3 $ 79,785,970
80,000,001 -- 216,000,000....................... 2 348,500,000 14.3 $174,250,000
-- -------------- -----
196 $2,433,320,810 100.0% $ 12,414,902
=== ============== =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING
CUT-OFF DATE LTV TERM TO WTD. AVG. WTD. AVG.
RANGE OF CUT-OFF DATE LTV RATIO AT MATURITY DSC MORTGAGE
DATE BALANCES ($) BALANCE RATIO MATURITY* (MOS.)* RATIO RATE
- ------------------------------------------ --------------- ----------- ----------- ---------- ----------- ----------
(less than or equal to) 2,000,000 ....... $ 2,000,000 59.4% 49.7% 104 1.97x 5.324%
2,000,001 -- 3,000,000................. $ 3,000,000 62.8% 53.7% 116 1.80x 5.492%
3,000,001 -- 4,000,000................. $ 4,000,000 68.5% 54.6% 121 1.50x 5.682%
4,000,001 -- 5,000,000................. $ 4,800,000 71.3% 56.3% 123 1.43x 5.693%
5,000,001 -- 6,000,000................. $ 6,000,000 74.2% 57.5% 121 1.39x 5.772%
6,000,001 -- 7,000,000................. $ 6,808,374 73.8% 62.8% 109 1.55x 5.267%
7,000,001 -- 8,000,000................. $ 7,915,939 73.7% 61.3% 114 1.43x 5.683%
8,000,001 -- 9,000,000................. $ 9,000,000 72.5% 50.4% 136 1.35x 5.842%
9,000,001 -- 10,000,000................. $ 10,000,000 68.5% 62.1% 106 1.49x 5.299%
10,000,001 -- 15,000,000................. $ 14,466,482 71.9% 62.0% 112 1.27x 5.487%
15,000,001 -- 20,000,000................. $ 19,456,803 73.8% 63.4% 114 1.34x 5.573%
20,000,001 -- 25,000,000................. $ 24,297,238 75.2% 66.7% 112 1.33x 5.502%
25,000,001 -- 30,000,000................. $ 29,718,000 71.4% 65.9% 99 1.72x 5.286%
30,000,001 -- 35,000,000................. $ 34,352,188 74.7% 59.7% 107 1.38x 5.479%
35,000,001 -- 40,000,000................. $ 40,000,000 70.6% 63.5% 97 1.60x 5.214%
40,000,001 -- 45,000,000................. $ 43,200,000 72.9% 64.6% 99 1.42x 5.510%
45,000,001 -- 50,000,000................. $ 49,843,594 64.8% 56.0% 98 2.07x 5.763%
50,000,001 -- 55,000,000................. $ 55,000,000 71.1% 60.1% 107 1.37x 5.500%
55,000,001 -- 60,000,000................. $ 57,844,828 54.5% 34.6% 119 2.09x 5.158%
70,000,001 -- 75,000,000................. $ 75,000,000 76.5% 65.0% 120 1.34x 5.200%
75,000,001 -- 80,000,000................. $ 79,785,970 54.3% 34.5% 119 2.36x 5.158%
80,000,001 -- 216,000,000................. $216,000,000 64.4% 55.8% 119 1.56x 5.165%
$216,000,000 69.3% 58.8% 111 1.56X 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-124
RANGE OF CUT-OFF DATE BALANCES FOR LOAN GROUP 2 MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF AVERAGE
CUT-OFF DATE CUT-OFF
RANGE OF CUT-OFF NUMBER OF DATE GROUP 2 DATE
DATE BALANCES ($) LOANS BALANCE BALANCE BALANCE
- ----------------------------------------- ----------- --------------- --------- -------------
(less than or equal to) 2,000,000 ....... 2 $ 3,722,482 1.0% $ 1,861,241
2,000,001 -- 3,000,000 ............... 1 2,850,000 0.8 $ 2,850,000
3,000,001 -- 4,000,000 ............... 1 3,195,406 0.9 $ 3,195,406
4,000,001 -- 5,000,000 ............... 3 14,007,626 3.7 $ 4,669,209
5,000,001 -- 6,000,000 ............... 3 16,092,646 4.3 $ 5,364,215
6,000,001 -- 7,000,000 ............... 2 13,400,000 3.6 $ 6,700,000
8,000,001 -- 9,000,000 ............... 3 26,200,000 7.0 $ 8,733,333
9,000,001 -- 10,000,000 ............... 2 19,159,085 5.1 $ 9,579,543
10,000,001 -- 15,000,000 ............... 7 83,064,847 22.1 $11,866,407
15,000,001 -- 20,000,000 ............... 3 47,676,355 12.7 $15,892,118
20,000,001 -- 25,000,000 ............... 4 90,397,000 24.1 $22,599,250
25,000,001 -- 28,000,000 ................ 2 55,475,000 14.8 $27,737,500
- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING
CUT-OFF DATE LTV TERM TO WTD. AVG. WTD. AVG.
RANGE OF CUT-OFF DATE LTV RATIO AT MATURITY DSC MORTGAGE
DATE BALANCES ($) BALANCE RATIO MATURITY* (MOS.)* RATIO RATE
- ----------------------------------------- ------------- ----------- ----------- ---------- ----------- ----------
(less than or equal to) 2,000,000 ....... $ 1,950,000 76.1% 60.8% 120 1.34x 5.548%
2,000,001 -- 3,000,000 ............... $ 2,850,000 76.0% 66.1% 118 1.73x 5.190%
3,000,001 -- 4,000,000 ............... $ 3,195,406 79.9% 66.3% 119 1.28x 5.270%
4,000,001 -- 5,000,000 ............... $ 5,000,000 76.2% 65.0% 118 1.33x 5.302%
5,000,001 -- 6,000,000 ............... $ 5,650,000 75.9% 65.4% 118 1.42x 5.142%
6,000,001 -- 7,000,000 ............... $ 7,000,000 70.9% 62.4% 119 1.43x 5.169%
8,000,001 -- 9,000,000 ............... $ 9,000,000 72.5% 65.5% 95 1.27x 5.262%
9,000,001 -- 10,000,000 ............... $10,000,000 78.5% 67.9% 117 1.38x 5.372%
10,000,001 -- 15,000,000 ............... $14,479,433 72.3% 63.3% 113 1.31x 5.284%
15,000,001 -- 20,000,000 ............... $16,176,355 75.3% 67.5% 97 1.27x 5.267%
20,000,001 -- 25,000,000 ............... $24,240,000 77.3% 70.4% 100 1.25x 5.388%
25,000,001 -- 28,000,000 ................ $28,000,000 73.7% 69.6% 117 1.38x 5.500%
$28,000,000 74.8% 67.0% 108 1.31X 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-125
MORTGAGED PROPERTIES BY STATE FOR ALL MORTGAGE LOANS(1)
% OF
AGGREGATE CUT-OFF AVERAGE
NUMBER OF CUT-OFF DATE CUT-OFF
MORTGAGED DATE POOL DATE
STATE PROPERTIES BALANCE BALANCE BALANCE
- ---------------------- ------------ ----------------- --------- --------------
MA ................... 14 $ 345,896,799 12.3% $24,706,914
CA ................... 20 283,038,986 10.1 $14,151,949
Southern(3) ......... 16 187,088,986 6.7 $11,693,062
Northern(3) ......... 4 95,950,000 3.4 $23,987,500
NY ................... 8 244,942,391 8.7 $30,617,799
TX ................... 48 224,543,504 8.0 $ 4,677,990
DC ................... 5 177,259,053 6.3 $35,451,811
VA ................... 10 171,430,483 6.1 $17,143,048
FL ................... 28 151,885,266 5.4 $ 5,424,474
NJ ................... 5 110,353,653 3.9 $22,070,731
NV ................... 12 96,328,277 3.4 $ 8,027,356
OH ................... 15 83,950,686 3.0 $ 5,596,712
IL ................... 6 75,818,770 2.7 $12,636,462
OK ................... 14 71,182,822 2.5 $ 5,084,487
MD ................... 4 67,924,011 2.4 $16,981,003
GA ................... 12 63,373,235 2.3 $ 5,281,103
AL ................... 6 60,129,514 2.1 $10,021,586
NC ................... 5 55,849,234 2.0 $11,169,847
WA ................... 8 50,185,106 1.8 $ 6,273,138
CO ................... 3 44,207,000 1.6 $14,735,667
PA ................... 8 43,800,469 1.6 $ 5,475,059
TN ................... 6 43,755,800 1.6 $ 7,292,633
AZ ................... 4 43,579,697 1.6 $10,894,924
MI ................... 6 42,889,081 1.5 $ 7,148,180
IA ................... 4 39,019,035 1.4 $ 9,754,759
MO ................... 2 31,977,420 1.1 $15,988,710
NM ................... 6 28,100,564 1.0 $ 4,683,427
MN ................... 6 23,949,572 0.9 $ 3,991,595
KS ................... 2 23,571,397 0.8 $11,785,699
IN ................... 3 21,349,503 0.8 $ 7,116,501
WI ................... 3 19,267,395 0.7 $ 6,422,465
UT ................... 2 18,000,000 0.6 $ 9,000,000
SC ................... 3 13,569,341 0.5 $ 4,523,114
MS ................... 2 7,360,000 0.3 $ 3,680,000
CT ................... 3 6,786,589 0.2 $ 2,262,196
LA ................... 2 6,242,000 0.2 $ 3,121,000
SD ................... 2 5,126,249 0.2 $ 2,563,124
KY ................... 1 3,900,000 0.1 $ 3,900,000
ID ................... 1 2,991,046 0.1 $ 2,991,046
WV ................... 1 2,596,312 0.1 $ 2,596,312
AR ................... 1 2,431,000 0.1 $ 2,431,000
-- -------------- -----
291 $2,808,561,259 100.0% $ 9,651,413
=== ============== =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING
CUT-OFF DATE LTV TERM TO WTD. AVG. WTD. AVG.
DATE LTV RATIO AT MATURITY DSC MORTGAGE
STATE BALANCE RATIO MATURITY(2) (MOS.)(2) RATIO RATE
- ---------------------- --------------- ----------- ------------- ----------- ----------- ----------
MA ................... $216,000,000 65.0% 57.5% 116 1.69x 5.341%
CA ................... $ 53,000,000 70.0% 60.7% 107 1.42x 5.628%
Southern(3) ......... $ 43,000,000 68.6% 61.4% 105 1.48x 5.509%
Northern(3) ......... $ 53,000,000 72.7% 59.3% 110 1.29x 5.860%
NY ................... $132,500,000 67.7% 59.4% 108 1.51x 5.285%
TX ................... $ 34,352,188 68.8% 57.9% 113 1.56x 5.536%
DC ................... $ 75,000,000 76.7% 67.4% 102 1.30x 5.137%
VA ................... $ 55,000,000 71.4% 60.4% 112 1.59x 5.207%
FL ................... $ 24,240,000 73.2% 60.6% 116 1.35x 5.643%
NJ ................... $ 46,599,490 74.7% 63.3% 118 1.56x 5.406%
NV ................... $ 29,250,000 67.0% 52.2% 118 1.74x 5.596%
OH ................... $ 20,800,000 71.4% 62.2% 116 1.58x 5.411%
IL ................... $ 42,440,495 74.7% 63.8% 110 1.39x 5.412%
OK ................... $ 14,200,000 73.3% 61.5% 111 1.52x 5.390%
MD ................... $ 32,516,547 72.3% 58.5% 104 1.47x 5.404%
GA ................... $ 13,000,000 75.4% 62.6% 118 1.26x 5.386%
AL ................... $ 22,500,000 75.2% 67.2% 88 1.30x 5.482%
NC ................... $ 27,375,000 73.8% 59.9% 111 1.83x 5.196%
WA ................... $ 16,100,000 67.9% 58.8% 113 1.40x 5.431%
CO ................... $ 21,557,000 75.7% 66.7% 118 1.25x 5.191%
PA ................... $ 13,344,831 68.1% 56.9% 117 1.64x 5.556%
TN ................... $ 22,100,000 73.8% 67.1% 90 1.46x 5.273%
AZ ................... $ 22,800,000 71.8% 64.7% 88 1.35x 5.123%
MI ................... $ 27,798,196 48.1% 36.1% 118 2.67x 5.771%
IA ................... $ 19,456,803 70.8% 59.4% 114 1.37x 5.657%
MO ................... $ 22,500,000 74.5% 65.0% 117 1.28x 5.336%
NM ................... $ 8,854,309 67.6% 60.4% 95 1.54x 6.083%
MN ................... $ 6,400,000 70.6% 51.9% 122 1.47x 5.164%
KS ................... $ 22,045,397 42.8% 33.9% 114 3.05x 5.791%
IN ................... $ 16,000,000 74.5% 62.9% 116 1.25x 5.304%
WI ................... $ 8,219,562 78.5% 70.1% 79 1.21x 5.199%
UT ................... $ 11,000,000 72.3% 64.3% 120 1.35x 5.260%
SC ................... $ 7,360,000 76.7% 67.4% 98 1.39x 5.451%
MS ................... $ 4,000,000 57.0% 37.5% 118 1.48x 6.684%
CT ................... $ 2,711,219 63.4% 55.8% 117 1.81x 5.538%
LA ................... $ 4,050,000 67.9% 59.3% 116 1.63x 6.343%
SD ................... $ 3,061,787 54.5% 34.6% 119 2.09x 5.158%
KY ................... $ 3,900,000 67.2% 54.1% 179 1.20x 6.000%
ID ................... $ 2,991,046 44.0% 40.0% 58 1.70x 6.180%
WV ................... $ 2,596,312 66.6% 55.5% 119 1.55x 5.380%
AR ................... $ 2,431,000 54.0% 54.0% 118 2.37x 5.100%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
(1) Because this table presents information relating to the Mortgaged
Properties and not the Mortgage Loans, the information for Mortgage Loans
secured by more than one Mortgaged Property is based on allocated amounts
(allocating the Mortgage Loan principal balance to each of these
properties by the appraised values of the Mortgaged Properties or the
allocated loan amount as detailed in the related Mortgage Loan
documents).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(3) For purposes of determining whether a Mortgaged Property is in Northern
California or Southern California, Mortgaged Properties north of San Luis
Obispo County, Kern County and San Bernardino County were included in
Northern California and Mortgaged Properties in or south of such counties
were included in Southern California.
S-126
MORTGAGED PROPERTIES BY STATE FOR LOAN GROUP 1 MORTGAGE LOANS(1)
% OF
AGGREGATE CUT-OFF AVERAGE
NUMBER OF CUT-OFF DATE CUT-OFF
MORTGAGED DATE GROUP 1 DATE
STATE PROPERTIES BALANCE BALANCE BALANCE
- ---------------------- ------------ ----------------- --------- --------------
MA ................... 12 $ 330,246,799 13.6% $27,520,567
CA ................... 18 250,038,986 10.3 $13,891,055
Southern(3) ......... 15 182,088,986 7.5 $12,139,266
Northern(3) ......... 3 67,950,000 2.8 $22,650,000
NY ................... 8 244,942,391 10.1 $30,617,799
TX ................... 45 183,018,504 7.5 $ 4,067,078
DC ................... 4 162,779,619 6.7 $40,694,905
VA ................... 7 153,149,433 6.3 $21,878,490
FL ................... 26 117,409,852 4.8 $ 4,515,764
NJ ................... 5 110,353,653 4.5 $22,070,731
NV ................... 12 96,328,277 4.0 $ 8,027,356
OH ................... 15 83,950,686 3.5 $ 5,596,712
MD ................... 4 67,924,011 2.8 $16,981,003
IL ................... 5 66,818,770 2.7 $13,363,754
OK ................... 13 62,023,737 2.5 $ 4,771,057
GA ................... 11 50,373,235 2.1 $ 4,579,385
WA ................... 7 48,235,106 2.0 $ 6,890,729
PA ................... 8 43,800,469 1.8 $ 5,475,059
MI ................... 6 42,889,081 1.8 $ 7,148,180
IA ................... 4 39,019,035 1.6 $ 9,754,759
NC ................... 3 38,576,752 1.6 $12,858,917
AZ ................... 3 34,579,697 1.4 $11,526,566
MO ................... 2 31,977,420 1.3 $15,988,710
NM ................... 6 28,100,564 1.2 $ 4,683,427
KS ................... 2 23,571,397 1.0 $11,785,699
AL ................... 4 21,453,160 0.9 $ 5,363,290
WI ................... 3 19,267,395 0.8 $ 6,422,465
SC ................... 3 13,569,341 0.6 $ 4,523,114
TN ................... 4 11,155,800 0.5 $ 2,788,950
CO ................... 1 10,000,000 0.4 $10,000,000
MS ................... 2 7,360,000 0.3 $ 3,680,000
CT ................... 3 6,786,589 0.3 $ 2,262,196
LA ................... 2 6,242,000 0.3 $ 3,121,000
IN ................... 2 5,349,503 0.2 $ 2,674,752
SD ................... 2 5,126,249 0.2 $ 2,563,124
MN ................... 2 4,984,944 0.2 $ 2,492,472
KY ................... 1 3,900,000 0.2 $ 3,900,000
ID ................... 1 2,991,046 0.1 $ 2,991,046
WV ................... 1 2,596,312 0.1 $ 2,596,312
AR ................... 1 2,431,000 0.1 $ 2,431,000
-- -------------- -----
258 $2,433,320,810 100.0% $ 9,431,476
=== ============== =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING
CUT-OFF DATE LTV TERM TO WTD. AVG. WTD. AVG.
DATE LTV RATIO AT MATURITY DSC MORTGAGE
STATE BALANCE RATIO MATURITY(2) (MOS.)(2) RATIO RATE
- ---------------------- --------------- ----------- ------------- ----------- ----------- ----------
MA ................... $216,000,000 64.4% 56.9% 116 1.71x 5.345%
CA ................... $ 53,000,000 69.0% 59.5% 106 1.44x 5.650%
Southern(3) ......... $ 43,000,000 68.4% 61.2% 105 1.49x 5.521%
Northern(3) ......... $ 53,000,000 70.6% 55.1% 108 1.31x 5.997%
NY ................... $132,500,000 67.7% 59.4% 108 1.51x 5.285%
TX ................... $ 34,352,188 68.1% 55.3% 112 1.59x 5.565%
DC ................... $ 75,000,000 77.6% 68.5% 101 1.30x 5.115%
VA ................... $ 55,000,000 70.7% 59.8% 112 1.61x 5.177%
FL ................... $ 18,171,810 71.8% 58.2% 116 1.36x 5.628%
NJ ................... $ 46,599,490 74.7% 63.3% 118 1.56x 5.406%
NV ................... $ 29,250,000 67.0% 52.2% 118 1.74x 5.596%
OH ................... $ 20,800,000 71.4% 62.2% 116 1.58x 5.411%
MD ................... $ 32,516,547 72.3% 58.5% 104 1.47x 5.404%
IL ................... $ 42,440,495 75.1% 63.3% 118 1.41x 5.469%
OK ................... $ 14,200,000 72.4% 60.7% 110 1.55x 5.381%
GA ................... $ 10,573,923 76.4% 62.6% 118 1.28x 5.370%
WA ................... $ 16,100,000 67.7% 58.9% 113 1.41x 5.420%
PA ................... $ 13,344,831 68.1% 56.9% 117 1.64x 5.556%
MI ................... $ 27,798,196 48.1% 36.1% 118 2.67x 5.771%
IA ................... $ 19,456,803 70.8% 59.4% 114 1.37x 5.657%
NC ................... $ 27,375,000 73.2% 56.9% 107 2.08x 5.082%
AZ ................... $ 22,800,000 72.7% 65.8% 80 1.38x 5.080%
MO ................... $ 22,500,000 74.5% 65.0% 117 1.28x 5.336%
NM ................... $ 8,854,309 67.6% 60.4% 95 1.54x 6.083%
KS ................... $ 22,045,397 42.8% 33.9% 114 3.05x 5.791%
AL ................... $ 7,661,835 77.3% 64.4% 117 1.30x 5.820%
WI ................... $ 8,219,562 78.5% 70.1% 79 1.21x 5.199%
SC ................... $ 7,360,000 76.7% 67.4% 98 1.39x 5.451%
TN ................... $ 4,600,000 61.2% 52.5% 107 1.90x 5.841%
CO ................... $ 10,000,000 79.1% 68.2% 119 1.26x 5.360%
MS ................... $ 4,000,000 57.0% 37.5% 118 1.48x 6.684%
CT ................... $ 2,711,219 63.4% 55.8% 117 1.81x 5.538%
LA ................... $ 4,050,000 67.9% 59.3% 116 1.63x 6.343%
IN ................... $ 2,846,027 66.4% 50.2% 119 1.30x 5.526%
SD ................... $ 3,061,787 54.5% 34.6% 119 2.09x 5.158%
MN ................... $ 3,100,000 61.6% 13.1% 135 1.59x 5.234%
KY ................... $ 3,900,000 67.2% 54.1% 179 1.20x 6.000%
ID ................... $ 2,991,046 44.0% 40.0% 58 1.70x 6.180%
WV ................... $ 2,596,312 66.6% 55.5% 119 1.55x 5.380%
AR ................... $ 2,431,000 54.0% 54.0% 118 2.37x 5.100%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
(1) Because this table presents information relating to the Mortgaged
Properties and not the Mortgage Loans, the information for Mortgage Loans
secured by more than one Mortgaged Property is based on allocated amounts
(allocating the Mortgage Loan principal balance to each of these
properties by the appraised values of the Mortgaged Properties or the
allocated loan amount as detailed in the related Mortgage Loan
documents).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(3) For purposes of determining whether a Mortgaged Property is in Northern
California or Southern California, Mortgaged Properties north of San Luis
Obispo County, Kern County and San Bernardino County were included in
Northern California and Mortgaged Properties in or south of such counties
were included in Southern California.
S-127
MORTGAGED PROPERTIES BY STATE FOR LOAN GROUP 2 MORTGAGE LOANS(1)
% OF
AGGREGATE CUT-OFF AVERAGE
NUMBER OF CUT-OFF DATE CUT-OFF
MORTGAGED DATE GROUP 2 DATE
STATE PROPERTIES BALANCE BALANCE BALANCE
- ---------------------- ------------ -------------- --------- --------------
TX ................... 3 $ 41,525,000 11.1% $13,841,667
AL ................... 2 38,676,355 10.3 $19,338,177
FL ................... 2 34,475,414 9.2 $17,237,707
CO ................... 2 34,207,000 9.1 $17,103,500
CA ................... 2 33,000,000 8.8 $16,500,000
Northern(3) ......... 1 28,000,000 7.5 $28,000,000
Southern(3) ......... 1 5,000,000 1.3 $ 5,000,000
TN ................... 2 32,600,000 8.7 $16,300,000
MN ................... 4 18,964,628 5.1 $ 4,741,157
VA ................... 3 18,281,051 4.9 $ 6,093,684
UT ................... 2 18,000,000 4.8 $ 9,000,000
NC ................... 2 17,272,482 4.6 $ 8,636,241
IN ................... 1 16,000,000 4.3 $16,000,000
MA ................... 2 15,650,000 4.2 $ 7,825,000
DC ................... 1 14,479,433 3.9 $14,479,433
GA ................... 1 13,000,000 3.5 $13,000,000
OK ................... 1 9,159,085 2.4 $ 9,159,085
AZ ................... 1 9,000,000 2.4 $ 9,000,000
IL ................... 1 9,000,000 2.4 $ 9,000,000
WA ................... 1 1,950,000 0.5 $ 1,950,000
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING
CUT-OFF DATE LTV TERM TO WTD. AVG. WTD. AVG.
DATE LTV RATIO AT MATURITY DSC MORTGAGE
STATE BALANCE RATIO MATURITY(2) (MOS.)(2) RATIO RATE
- ---------------------- -------------- ----------- ------------- ----------- ----------- ----------
TX ................... $27,475,000 71.9% 69.0% 117 1.45x 5.410%
AL ................... $22,500,000 74.1% 68.7% 72 1.30x 5.295%
FL ................... $24,240,000 78.0% 68.8% 116 1.34x 5.695%
CO ................... $21,557,000 74.7% 66.3% 117 1.24x 5.142%
CA ................... $28,000,000 77.5% 69.3% 115 1.24x 5.459%
Northern(3) ......... $28,000,000 77.6% 69.4% 115 1.24x 5.530%
Southern(3) ......... $ 5,000,000 76.9% 68.2% 118 1.21x 5.060%
TN ................... $22,100,000 78.1% 72.1% 84 1.31x 5.079%
MN ................... $ 6,400,000 73.0% 62.2% 118 1.44x 5.146%
VA ................... $ 8,200,000 77.2% 65.9% 118 1.40x 5.457%
UT ................... $11,000,000 72.3% 64.3% 120 1.35x 5.260%
NC ................... $15,500,000 75.0% 66.5% 118 1.26x 5.452%
IN ................... $16,000,000 77.2% 67.2% 115 1.24x 5.230%
MA ................... $10,000,000 78.3% 69.6% 118 1.41x 5.239%
DC ................... $14,479,433 66.4% 55.3% 119 1.24x 5.380%
GA ................... $13,000,000 71.6% 62.7% 118 1.20x 5.450%
OK ................... $ 9,159,085 79.6% 66.7% 116 1.31x 5.450%
AZ ................... $ 9,000,000 68.2% 60.7% 119 1.25x 5.290%
IL ................... $ 9,000,000 71.8% 67.5% 50 1.21x 4.990%
WA ................... $ 1,950,000 73.6% 56.4% 120 1.25x 5.700%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
(1) Because this table presents information relating to the Mortgaged
Properties and not the Mortgage Loans, the information for Mortgage Loans
secured by more than one Mortgaged Property is based on allocated amounts
(allocating the Mortgage Loan principal balance to each of these
properties by the appraised values of the Mortgaged Properties or the
allocated loan amount as detailed in the related Mortgage Loan
documents).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(3) For purposes of determining whether a Mortgaged Property is in Northern
California or Southern California, Mortgaged Properties north of San Luis
Obispo County, Kern County and San Bernardino County were included in
Northern California and Mortgaged Properties in or south of such counties
were included in Southern California.
S-128
RANGE OF UNDERWRITTEN DSC RATIOS FOR ALL MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF AVERAGE
RANGE OF UNDERWRITTEN NUMBER OF CUT-OFF DATE DATE POOL CUT-OFF DATE
DSC RATIOS (X) LOANS BALANCE BALANCE BALANCE
- -------------------------- ----------- ----------------- ----------- --------------
1.20 - 1.24 .............. 49 $ 668,302,756 23.8% $13,638,832
1.25 - 1.29 .............. 40 384,202,356 13.7 $ 9,605,059
1.30 - 1.34 .............. 23 328,678,455 11.7 $14,290,368
1.35 - 1.39 .............. 21 194,072,683 6.9 $ 9,241,556
1.40 - 1.44 .............. 13 184,839,836 6.6 $14,218,449
1.45 - 1.49 .............. 9 121,107,964 4.3 $13,456,440
1.50 - 1.54 .............. 11 129,892,214 4.6 $11,808,383
1.55 - 1.59 .............. 10 96,962,875 3.5 $ 9,696,288
1.60 - 1.64 .............. 2 11,700,000 0.4 $ 5,850,000
1.65 - 1.69 .............. 1 4,380,000 0.2 $ 4,380,000
1.70 - 1.74 .............. 5 33,232,856 1.2 $ 6,646,571
1.75 - 1.79 .............. 3 226,747,688 8.1 $75,582,563
1.85 - 1.89 .............. 3 53,596,399 1.9 $17,865,466
1.90 - 1.94 .............. 3 5,120,533 0.2 $ 1,706,844
2.05 - 2.09 .............. 2 66,940,318 2.4 $33,470,159
2.10 - 2.14 .............. 1 40,000,000 1.4 $40,000,000
2.15 - 2.19 .............. 1 3,000,000 0.1 $ 3,000,000
2.20 - 2.24 .............. 6 17,582,760 0.6 $ 2,930,460
2.25 - 2.29 .............. 4 9,707,000 0.3 $ 2,426,750
2.30 - 3.79 .............. 21 225,994,564 8.0 $10,761,646
3.80 - 4.59 .............. 1 2,500,000 0.1 $ 2,500,000
-- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING WTD. AVG.
RANGE OF UNDERWRITTEN CUT-OFF DATE DATE LTV LTV RATIO AT TERM TO WTD. AVG. MORTGAGE
DSC RATIOS (X) BALANCE RATIO MATURITY* MATURITY (MOS.)* DSC RATIO RATE
- -------------------------- -------------- ----------- -------------- ------------------ ----------- ----------
1.20 - 1.24 .............. $132,500,000 74.9% 64.2% 113 1.22x 5.375%
1.25 - 1.29 .............. $ 53,000,000 75.5% 65.1% 103 1.27x 5.417%
1.30 - 1.34 .............. $ 75,000,000 73.8% 61.6% 113 1.32x 5.591%
1.35 - 1.39 .............. $ 42,440,495 72.4% 60.3% 120 1.36x 5.557%
1.40 - 1.44 .............. $ 43,200,000 74.2% 61.5% 114 1.42x 5.620%
1.45 - 1.49 .............. $ 43,000,000 70.6% 64.4% 90 1.47x 5.419%
1.50 - 1.54 .............. $ 55,000,000 68.6% 60.7% 116 1.52x 5.410%
1.55 - 1.59 .............. $ 29,000,000 73.5% 68.1% 119 1.56x 5.583%
1.60 - 1.64 .............. $ 7,700,000 66.3% 46.3% 120 1.61x 6.026%
1.65 - 1.69 .............. $ 4,380,000 67.4% 56.0% 120 1.69x 5.350%
1.70 - 1.74 .............. $ 18,171,810 59.2% 49.5% 112 1.72x 5.845%
1.75 - 1.79 .............. $216,000,000 61.3% 53.3% 118 1.77x 5.199%
1.85 - 1.89 .............. $ 46,599,490 71.7% 60.0% 116 1.85x 5.652%
1.90 - 1.94 .............. $ 2,596,184 46.4% 36.8% 119 1.91x 5.326%
2.05 - 2.09 .............. $ 57,844,828 55.3% 38.2% 119 2.09x 5.188%
2.10 - 2.14 .............. $ 40,000,000 74.6% 74.6% 59 2.10x 4.780%
2.15 - 2.19 .............. $ 3,000,000 62.5% 62.5% 118 2.16x 5.300%
2.20 - 2.24 .............. $ 4,032,000 55.0% 55.0% 115 2.22x 5.463%
2.25 - 2.29 .............. $ 3,387,000 55.2% 55.2% 116 2.26x 5.345%
2.30 - 3.79 .............. $ 79,785,970 51.5% 42.4% 106 2.68x 5.229%
3.80 - 4.59 .............. $ 2,500,000 26.5% 26.5% 118 4.59x 5.250%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-129
RANGE OF UNDERWRITTEN DSC RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF AVERAGE
RANGE OF UNDERWRITTEN NUMBER OF CUT-OFF DATE DATE GROUP 1 CUT-OFF DATE
DSC RATIOS (X) LOANS BALANCE BALANCE BALANCE
- -------------------------- ----------- ----------------- -------------- --------------
1.20 - 1.24 .............. 38 $ 488,226,323 20.1% $12,848,061
1.25 - 1.29 .............. 34 330,887,727 13.6 $ 9,731,992
1.30 - 1.34 .............. 20 296,343,015 12.2 $14,817,151
1.35 - 1.39 .............. 17 164,130,037 6.7 $ 9,654,708
1.40 - 1.44 .............. 11 173,067,354 7.1 $15,733,396
1.45 - 1.49 .............. 8 110,607,964 4.5 $13,825,996
1.50 - 1.54 .............. 8 91,028,810 3.7 $11,378,601
1.55 - 1.59 .............. 8 81,377,461 3.3 $10,172,183
1.60 - 1.64 .............. 2 11,700,000 0.5 $ 5,850,000
1.65 - 1.69 .............. 1 4,380,000 0.2 $ 4,380,000
1.70 - 1.74 .............. 4 30,382,856 1.2 $ 7,595,714
1.75 - 1.79 .............. 3 226,747,688 9.3 $75,582,563
1.85 - 1.89 .............. 3 53,596,399 2.2 $17,865,466
1.90 - 1.94 .............. 3 5,120,533 0.2 $ 1,706,844
2.05 - 2.09 .............. 2 66,940,318 2.8 $33,470,159
2.10 - 2.14 .............. 1 40,000,000 1.6 $40,000,000
2.15 - 2.19 .............. 1 3,000,000 0.1 $ 3,000,000
2.20 - 2.24 .............. 6 17,582,760 0.7 $ 2,930,460
2.25 - 2.29 .............. 4 9,707,000 0.4 $ 2,426,750
2.30 - 3.79 .............. 21 225,994,564 9.3 $10,761,646
3.80 - 4.59 .............. 1 2,500,000 0.1 $ 2,500,000
-- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING WTD. AVG.
RANGE OF UNDERWRITTEN CUT-OFF DATE DATE LTV LTV RATIO AT TERM TO WTD. AVG. MORTGAGE
DSC RATIOS (X) BALANCE RATIO MATURITY* MATURITY (MOS.)* DSC RATIO RATE
- -------------------------- -------------- ----------- -------------- ------------------ ----------- ----------
1.20 - 1.24 .............. $132,500,000 74.6% 62.8% 114 1.22x 5.377%
1.25 - 1.29 .............. $ 53,000,000 75.9% 65.0% 103 1.27x 5.429%
1.30 - 1.34 .............. $ 75,000,000 73.7% 61.0% 116 1.32x 5.628%
1.35 - 1.39 .............. $ 42,440,495 71.7% 59.1% 120 1.37x 5.603%
1.40 - 1.44 .............. $ 43,200,000 74.0% 61.0% 114 1.41x 5.641%
1.45 - 1.49 .............. $ 43,000,000 70.1% 63.8% 90 1.48x 5.466%
1.50 - 1.54 .............. $ 55,000,000 67.9% 57.9% 114 1.52x 5.407%
1.55 - 1.59 .............. $ 29,000,000 73.8% 69.6% 119 1.56x 5.646%
1.60 - 1.64 .............. $ 7,700,000 66.3% 46.3% 120 1.61x 6.026%
1.65 - 1.69 .............. $ 4,380,000 67.4% 56.0% 120 1.69x 5.350%
1.70 - 1.74 .............. $ 18,171,810 57.6% 47.9% 111 1.72x 5.907%
1.75 - 1.79 .............. $216,000,000 61.3% 53.3% 118 1.77x 5.199%
1.85 - 1.89 .............. $ 46,599,490 71.7% 60.0% 116 1.85x 5.652%
1.90 - 1.94 .............. $ 2,596,184 46.4% 36.8% 119 1.91x 5.326%
2.05 - 2.09 .............. $ 57,844,828 55.3% 38.2% 119 2.09x 5.188%
2.10 - 2.14 .............. $ 40,000,000 74.6% 74.6% 59 2.10x 4.780%
2.15 - 2.19 .............. $ 3,000,000 62.5% 62.5% 118 2.16x 5.300%
2.20 - 2.24 .............. $ 4,032,000 55.0% 55.0% 115 2.22x 5.463%
2.25 - 2.29 .............. $ 3,387,000 55.2% 55.2% 116 2.26x 5.345%
2.30 - 3.79 .............. $ 79,785,970 51.5% 42.4% 106 2.68x 5.229%
3.80 - 4.59 .............. $ 2,500,000 26.5% 26.5% 118 4.59x 5.250%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-130
RANGE OF UNDERWRITTEN DSC RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF AVERAGE
RANGE OF UNDERWRITTEN NUMBER OF CUT-OFF DATE DATE GROUP 2 CUT-OFF DATE
DSC RATIOS (X) LOANS BALANCE BALANCE BALANCE
- -------------------------- ----------- -------------- -------------- --------------
1.20 - 1.24 .............. 11 $180,076,433 48.0% $16,370,585
1.25 - 1.29 .............. 6 53,314,628 14.2 $ 8,885,771
1.30 - 1.34 .............. 3 32,335,440 8.6 $10,778,480
1.35 - 1.39 .............. 4 29,942,646 8.0 $ 7,485,662
1.40 - 1.44 .............. 2 11,772,482 3.1 $ 5,886,241
1.45 - 1.49 .............. 1 10,500,000 2.8 $10,500,000
1.50 - 1.54 .............. 3 38,863,404 10.4 $12,954,468
1.55 - 1.59 .............. 2 15,585,414 4.2 $ 7,792,707
1.70 - 1.73 .............. 1 2,850,000 0.8 $ 2,850,000
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
WTD. AVG. STATED
HIGHEST CUT-OFF WTD. AVG. REMAINING WTD. AVG. WTD. AVG.
RANGE OF UNDERWRITTEN CUT-OFF DATE DATE LTV LTV RATIO AT TERM TO DSC MORTGAGE
DSC RATIOS (X) BALANCE RATIO MATURITY* MATURITY (MOS.)* RATIO RATE
- -------------------------- -------------- ----------- -------------- ------------------ ----------- ----------
1.20 - 1.24 .............. $28,000,000 75.9% 67.7% 109 1.23x 5.369%
1.25 - 1.29 .............. $22,500,000 73.3% 65.4% 103 1.26x 5.343%
1.30 - 1.34 .............. $16,176,355 75.3% 67.1% 88 1.33x 5.244%
1.35 - 1.39 .............. $11,000,000 76.5% 67.0% 119 1.35x 5.304%
1.40 - 1.44 .............. $10,000,000 77.7% 68.6% 118 1.44x 5.312%
1.45 - 1.49 .............. $10,500,000 76.4% 70.3% 83 1.45x 4.930%
1.50 - 1.54 .............. $27,475,000 70.2% 67.2% 119 1.52x 5.417%
1.55 - 1.59 .............. $10,235,414 71.7% 60.5% 119 1.56x 5.254%
1.70 - 1.73 .............. $ 2,850,000 76.0% 66.1% 118 1.73x 5.190%
$28,000,000 74.8% 67.0% 108 1.31X 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF LTV RATIOS FOR ALL MORTGAGE LOANS AS OF THE CUT-OFF DATE
AGGREGATE % OF AVERAGE
RANGE OF CUT-OFF DATE NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
LTV RATIOS (%) LOANS BALANCE POOL BALANCE BALANCE
- ----------------------- ----------- ----------------- -------------- --------------
25.01 - 30.00 ......... 1 $ 2,500,000 0.1% $ 2,500,000
30.01 - 35.00 ......... 1 27,000,000 1.0 $27,000,000
35.01 - 40.00 ......... 1 3,900,000 0.1 $ 3,900,000
40.01 - 50.00 ......... 7 63,078,209 2.2 $ 9,011,173
50.01 - 55.00 ......... 25 202,378,538 7.2 $ 8,095,142
55.01 - 60.00 ......... 13 56,359,136 2.0 $ 4,335,318
60.01 - 65.00 ......... 11 364,304,362 13.0 $33,118,578
65.01 - 70.00 ......... 26 351,427,595 12.5 $13,516,446
70.01 - 75.00 ......... 55 748,472,643 26.6 $13,608,594
75.01 - 80.00 ......... 87 943,140,776 33.6 $10,840,699
80.01 - 81.01 ......... 2 46,000,000 1.6 $23,000,000
-- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
WTD. AVG. REMAINING
HIGHEST CUT-OFF WTD. AVG. TERM TO WTD. AVG.
RANGE OF CUT-OFF DATE CUT-OFF DATE DATE LTV LTV RATIO AT MATURITY WTD. AVG. MORTGAGE
LTV RATIOS (%) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO RATE
- ----------------------- -------------- ----------- -------------- ---------- ----------- ----------
25.01 - 30.00 ......... $ 2,500,000 26.5% 26.5% 118 4.59x 5.250%
30.01 - 35.00 ......... $ 27,000,000 34.6% 34.6% 120 3.42x 4.880%
35.01 - 40.00 ......... $ 3,900,000 35.8% 35.8% 118 3.31x 5.290%
40.01 - 50.00 ......... $ 49,843,594 42.8% 33.6% 115 2.76x 5.851%
50.01 - 55.00 ......... $ 79,785,970 54.1% 40.0% 116 2.21x 5.187%
55.01 - 60.00 ......... $ 18,171,810 55.9% 46.5% 112 1.95x 5.452%
60.01 - 65.00 ......... $216,000,000 62.2% 53.2% 120 1.66x 5.333%
65.01 - 70.00 ......... $132,500,000 68.4% 59.6% 112 1.37x 5.417%
70.01 - 75.00 ......... $ 53,000,000 73.5% 62.2% 109 1.45x 5.499%
75.01 - 80.00 ......... $ 75,000,000 77.9% 67.7% 106 1.29x 5.427%
80.01 - 81.01 ......... $ 29,000,000 80.7% 77.0% 120 1.42x 5.459%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-131
RANGE OF LTV RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE CUT-OFF DATE
AGGREGATE % OF
RANGE OF CUT-OFF DATE NUMBER OF CUT-OFF DATE CUT-OFF DATE AVERAGE CUT-OFF
LTV RATIOS (%) LOANS BALANCE GROUP 1 BALANCE DATE BALANCE
- -------------------------- ----------- ----------------- ----------------- -----------------
25.01 - 30.00 ............ 1 $ 2,500,000 0.1% $ 2,500,000
30.01 - 35.00 ............ 1 27,000,000 1.1 $27,000,000
35.01 - 40.00 ............ 1 3,900,000 0.2 $ 3,900,000
40.01 - 50.00 ............ 7 63,078,209 2.6 $ 9,011,173
50.01 - 55.00 ............ 25 202,378,538 8.3 $ 8,095,142
55.01 - 60.00 ............ 13 56,359,136 2.3 $ 4,335,318
60.01 - 65.00 ............ 11 364,304,362 15.0 $33,118,578
65.01 - 70.00 ............ 21 288,723,161 11.9 $13,748,722
70.01 - 75.00 ............ 44 624,472,470 25.7 $14,192,556
75.01 - 80.00 ............ 70 754,604,934 31.0 $10,780,070
80.01 - 81.01 ............ 2 46,000,000 1.9 $23,000,000
-- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED
REMAINING
WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
RANGE OF CUT-OFF DATE HIGHEST CUT-OFF CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
LTV RATIOS (%) DATE BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- -------------------------- ----------------- -------------- -------------- ---------- ----------- ----------
25.01 - 30.00 ............ $ 2,500,000 26.5% 26.5% 118 4.59x 5.250%
30.01 - 35.00 ............ $ 27,000,000 34.6% 34.6% 120 3.42x 4.880%
35.01 - 40.00 ............ $ 3,900,000 35.8% 35.8% 118 3.31x 5.290%
40.01 - 50.00 ............ $ 49,843,594 42.8% 33.6% 115 2.76x 5.851%
50.01 - 55.00 ............ $ 79,785,970 54.1% 40.0% 116 2.21x 5.187%
55.01 - 60.00 ............ $ 18,171,810 55.9% 46.5% 112 1.95x 5.452%
60.01 - 65.00 ............ $216,000,000 62.2% 53.2% 120 1.66x 5.333%
65.01 - 70.00 ............ $132,500,000 68.3% 58.8% 111 1.36x 5.432%
70.01 - 75.00 ............ $ 53,000,000 73.5% 61.6% 111 1.48x 5.534%
75.01 - 80.00 ............ $ 75,000,000 77.9% 67.4% 105 1.29x 5.449%
80.01 - 81.01 ............ $ 29,000,000 80.7% 77.0% 120 1.42x 5.459%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF LTV RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE CUT-OFF DATE
% OF
AGGREGATE CUT-OFF AVERAGE
RANGE OF CUT-OFF DATE NUMBER OF CUT-OFF DATE DATE GROUP 2 CUT-OFF DATE
LTV RATIOS (%) LOANS BALANCE BALANCE BALANCE
- ----------------------- ----------- -------------- -------------- --------------
65.01 - 70.00 ......... 5 $ 62,704,433 16.7% $12,540,887
70.01 - 75.00 ......... 11 124,000,173 33.0 $11,272,743
75.01 - 80.00 ......... 17 188,535,842 50.2 $11,090,344
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
WTD. AVG. REMAINING
HIGHEST CUT-OFF WTD. AVG. TERM TO WTD. AVG.
RANGE OF CUT-OFF DATE CUT-OFF DATE DATE LTV LTV RATIO AT MATURITY WTD. AVG. MORTGAGE
LTV RATIOS (%) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO RATE
- ----------------------- -------------- ----------- -------------- ---------- ----------- ----------
65.01 - 70.00 ......... $27,475,000 68.7% 63.3% 119 1.42x 5.348%
70.01 - 75.00 ......... $22,500,000 73.2% 65.5% 99 1.31x 5.320%
75.01 - 80.00 ......... $28,000,000 78.0% 69.2% 110 1.28x 5.339%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-132
RANGE OF LTV RATIOS FOR ALL MORTGAGE LOANS AS OF THE MATURITY DATE OR
ANTICIPATED REPAYMENT DATE
RANGE OF MATURITY DATE OR AGGREGATE % OF AVERAGE
ANTICIPATED REPAYMENT NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
DATE LTV RATIOS (%) OF LOANS BALANCE POOL BALANCE BALANCE
- ----------------------------- ---------- ----------------- -------------- --------------
0.00 - 5.00 ................. 6 $ 26,215,109 0.9% $ 4,369,185
20.01 - 30.00 ............... 1 2,500,000 0.1 $ 2,500,000
30.01 - 40.00 ............... 13 238,112,484 8.5 $18,316,345
40.01 - 50.00 ............... 9 54,832,777 2.0 $ 6,092,531
50.01 - 55.00 ............... 31 404,041,134 14.4 $13,033,585
55.01 - 60.00 ............... 50 438,807,770 15.6 $ 8,776,155
60.01 - 65.00 ............... 46 634,536,340 22.6 $13,794,268
65.01 - 70.00 ............... 52 578,872,441 20.6 $11,132,162
70.01 - 75.00 ............... 20 401,643,204 14.3 $20,082,160
80.01 - 81.01 ............... 1 29,000,000 1.0 $29,000,000
-- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF MATURITY DATE OR HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
ANTICIPATED REPAYMENT CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
DATE LTV RATIOS (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ----------------------------- -------------- -------------- -------------- ---------- ----------- ----------
0.00 - 5.00 ................. $ 8,590,242 67.4% 0.0% 238 1.27x 5.725%
20.01 - 30.00 ............... $ 2,500,000 26.5% 26.5% 118 4.59x 5.250%
30.01 - 40.00 ............... $ 79,785,970 49.0% 34.4% 118 2.51x 5.339%
40.01 - 50.00 ............... $ 18,171,810 54.7% 45.9% 118 1.68x 5.473%
50.01 - 55.00 ............... $216,000,000 62.5% 53.3% 117 1.69x 5.466%
55.01 - 60.00 ............... $132,500,000 69.6% 58.0% 116 1.39x 5.407%
60.01 - 65.00 ............... $ 75,000,000 74.1% 62.9% 118 1.40x 5.518%
65.01 - 70.00 ............... $ 43,000,000 75.7% 67.5% 107 1.32x 5.410%
70.01 - 75.00 ............... $ 53,000,000 78.0% 72.7% 78 1.43x 5.264%
80.01 - 81.01 ............... $ 29,000,000 81.0% 81.0% 120 1.55x 5.500%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-133
RANGE OF LTV RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE MATURITY DATE OR
ANTICIPATED REPAYMENT DATE
% OF
RANGE OF MATURITY DATE OR AGGREGATE CUT-OFF DATE AVERAGE
ANTICIPATED REPAYMENT NUMBER CUT-OFF DATE GROUP 1 CUT-OFF DATE
DATE LTV RATIOS (%) OF LOANS BALANCE BALANCE BALANCE
- ----------------------------- ---------- ----------------- -------------- --------------
0.00 - 5.00 ................. 6 $ 26,215,109 1.1% $ 4,369,185
20.01 - 30.00 ............... 1 2,500,000 0.1 $ 2,500,000
30.01 - 40.00 ............... 13 238,112,484 9.8 $18,316,345
40.01 - 50.00 ............... 9 54,832,777 2.3 $ 6,092,531
50.01 - 55.00 ............... 31 404,041,134 16.6 $13,033,585
55.01 - 60.00 ............... 47 417,028,337 17.1 $ 8,872,943
60.01 - 65.00 ............... 38 560,262,522 23.0 $14,743,751
65.01 - 70.00 ............... 34 362,175,244 14.9 $10,652,213
70.01 - 75.00 ............... 16 339,153,204 13.9 $21,197,075
80.01 - 81.01 ............... 1 29,000,000 1.2 $29,000,000
-- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF MATURITY DATE OR HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
ANTICIPATED REPAYMENT CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
DATE LTV RATIOS (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ----------------------------- -------------- -------------- -------------- ---------- ----------- ----------
0.00 - 5.00 ................. $ 8,590,242 67.4% 0.0% 238 1.27x 5.725%
20.01 - 30.00 ............... $ 2,500,000 26.5% 26.5% 118 4.59x 5.250%
30.01 - 40.00 ............... $ 79,785,970 49.0% 34.4% 118 2.51x 5.339%
40.01 - 50.00 ............... $ 18,171,810 54.7% 45.9% 118 1.68x 5.473%
50.01 - 55.00 ............... $216,000,000 62.5% 53.3% 117 1.69x 5.466%
55.01 - 60.00 ............... $132,500,000 69.7% 58.1% 116 1.39x 5.411%
60.01 - 65.00 ............... $ 75,000,000 74.4% 62.9% 118 1.41x 5.546%
65.01 - 70.00 ............... $ 43,000,000 75.8% 67.1% 108 1.32x 5.459%
70.01 - 75.00 ............... $ 53,000,000 77.9% 72.9% 74 1.46x 5.243%
80.01 - 81.01 ............... $ 29,000,000 81.0% 81.0% 120 1.55x 5.500%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF LTV RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE MATURITY DATE OR
ANTICIPATED REPAYMENT DATE
% OF
RANGE OF MATURITY DATE OR AGGREGATE CUT-OFF DATE AVERAGE
ANTICIPATED REPAYMENT NUMBER CUT-OFF DATE GROUP 2 CUT-OFF DATE
DATE LTV RATIOS (%) OF LOANS BALANCE BALANCE BALANCE
- ----------------------------- ---------- -------------- -------------- --------------
55.01 - 60.00 ............... 3 $ 21,779,433 5.8% $ 7,259,811
60.01 - 65.00 ............... 8 74,273,818 19.8 $ 9,284,227
65.01 - 70.00 ............... 18 216,697,197 57.7 $12,038,733
70.01 - 72.97 ............... 4 62,490,000 16.7 $15,622,500
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
REMAINING
RANGE OF MATURITY DATE OR HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
ANTICIPATED REPAYMENT CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
DATE LTV RATIOS (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ----------------------------- -------------- -------------- -------------- ---------- ----------- ----------
55.01 - 60.00 ............... $14,479,433 67.6% 56.4% 119 1.32x 5.333%
60.01 - 65.00 ............... $13,000,000 71.6% 62.6% 119 1.35x 5.309%
65.01 - 70.00 ............... $28,000,000 75.4% 68.1% 106 1.31x 5.330%
70.01 - 72.97 ............... $24,240,000 79.0% 72.0% 99 1.29x 5.379%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-134
RANGE OF MORTGAGE RATES FOR ALL MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF DATE AVERAGE
NUMBER CUT-OFF DATE POOL CUT-OFF DATE
RANGE OF MORTGAGE RATES (%) OF LOANS BALANCE BALANCE BALANCE
- ------------------------------- ---------- ----------------- -------------- --------------
4.620 - 5.249 ................. 51 $1,109,311,000 39.5% $21,751,196
5.250 - 5.499 ................. 72 659,484,984 23.5 $ 9,159,514
5.500 - 5.749 ................. 71 642,681,020 22.9 $ 9,051,845
5.750 - 5.999 ................. 20 259,182,208 9.2 $12,959,110
6.000 - 6.249 ................. 4 68,041,046 2.4 $17,010,262
6.500 - 6.749 ................. 1 4,000,000 0.1 $ 4,000,000
6.750 - 6.880 ................. 10 65,861,000 2.3 $ 6,586,100
-- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
REMAINING
HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
RANGE OF MORTGAGE RATES (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ------------------------------- -------------- -------------- -------------- ---------- ----------- ----------
4.620 - 5.249 ................. $216,000,000 67.1% 58.3% 106 1.66x 5.114%
5.250 - 5.499 ................. $ 43,200,000 73.7% 63.5% 115 1.40x 5.353%
5.500 - 5.749 ................. $ 46,599,490 71.9% 61.8% 113 1.43x 5.614%
5.750 - 5.999 ................. $ 49,843,594 69.1% 55.5% 111 1.64x 5.830%
6.000 - 6.249 ................. $ 53,000,000 68.6% 52.0% 120 1.34x 6.202%
6.500 - 6.749 ................. $ 4,000,000 65.0% 36.3% 120 1.64x 6.520%
6.750 - 6.880 ................. $ 20,625,000 71.8% 59.2% 116 1.43x 6.880%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-135
RANGE OF MORTGAGE RATES FOR LOAN GROUP 1 MORTGAGE LOANS
AGGREGATE % OF AVERAGE
NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
RANGE OF MORTGAGE RATES (%) OF LOANS BALANCE GROUP 1 BALANCE BALANCE
- -------------------------------- ---------- ----------------- ----------------- --------------
4.620 - 5.249 .................. 38 $ 970,984,998 39.9% $25,552,237
5.250 - 5.499 .................. 57 489,948,941 20.1 $ 8,595,595
5.500 - 5.749 .................. 67 599,542,616 24.6 $ 8,948,397
5.750 - 5.999 .................. 19 234,942,208 9.7 $12,365,379
6.000 - 6.249 .................. 4 68,041,046 2.8 $17,010,262
6.500 - 6.749 .................. 1 4,000,000 0.2 $ 4,000,000
6.750 - 6.880 .................. 10 65,861,000 2.7 $ 6,586,100
-- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED
REMAINING
HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. DSC MORTGAGE
RANGE OF MORTGAGE RATES (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* RATIO RATE
- -------------------------------- -------------- -------------- -------------- ---------- --------------- ----------
4.620 - 5.249 .................. $216,000,000 65.9% 57.0% 107 1.71x 5.113%
5.250 - 5.499 .................. $ 43,200,000 74.0% 62.9% 116 1.42x 5.342%
5.500 - 5.749 .................. $ 46,599,490 71.5% 61.4% 113 1.44x 5.619%
5.750 - 5.999 .................. $ 49,843,594 67.9% 53.8% 110 1.69x 5.829%
6.000 - 6.249 .................. $ 53,000,000 68.6% 52.0% 120 1.34x 6.202%
6.500 - 6.749 .................. $ 4,000,000 65.0% 36.3% 120 1.64x 6.520%
6.750 - 6.880 .................. $ 20,625,000 71.8% 59.2% 116 1.43x 6.880%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF MORTGAGE RATES FOR LOAN GROUP 2 MORTGAGE LOANS
AGGREGATE % OF AVERAGE
NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
RANGE OF MORTGAGE RATES (%) OF LOANS BALANCE GROUP 2 BALANCE BALANCE
- ----------------------------- ---------- -------------- ----------------- --------------
4.930 - 5.249 ............... 13 $138,326,001 36.9% $10,640,462
5.250 - 5.499 ............... 15 169,536,043 45.2 $11,302,403
5.500 - 5.749 ............... 4 43,138,404 11.5 $10,784,601
5.750 - 5.840 ............... 1 24,240,000 6.5 $24,240,000
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
REMAINING
HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY DSC MORTGAGE
RANGE OF MORTGAGE RATES (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* RATIO RATE
- ----------------------------- -------------- -------------- -------------- ---------- ----------- ----------
4.930 - 5.249 ............... $22,100,000 75.5% 67.8% 98 1.31x 5.120%
5.250 - 5.499 ............... $27,475,000 72.9% 65.4% 113 1.33x 5.384%
5.500 - 5.749 ............... $28,000,000 77.0% 67.8% 116 1.29x 5.542%
5.750 - 5.840 ............... $24,240,000 80.0% 72.1% 115 1.24x 5.840%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-136
RANGE OF ORIGINAL TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE
FOR ALL MORTGAGE LOANS
RANGE OF ORIGINAL TERM TO AGGREGATE % OF AVERAGE
MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
REPAYMENT DATE (MONTHS) OF LOANS BALANCE POOL BALANCE BALANCE
- ------------------------------ ---------- ---------------- -------------- --------------
0 - 60 ....................... 25 $ 306,665,129 10.9% $12,266,605
61 - 84 ...................... 6 144,060,000 5.1 $24,010,000
85 - 108 ..................... 2 49,261,482 1.8 $24,630,741
109 - 120 .................... 187 2,269,979,539 80.8 $12,138,928
121 - 156 .................... 2 7,180,000 0.3 $ 3,590,000
169 - 180 .................... 2 8,300,000 0.3 $ 4,150,000
205 - 216 .................... 1 2,990,861 0.1 $ 2,990,861
229 - 240 .................... 2 5,906,624 0.2 $ 2,953,312
253 - 264 .................... 2 14,217,623 0.5 $ 7,108,812
--- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF ORIGINAL TERM TO HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ------------------------------ -------------- -------------- -------------- ---------- ----------- ----------
0 - 60 ....................... $ 47,000,000 73.1% 70.5% 59 1.59x 5.299%
61 - 84 ...................... $ 53,000,000 77.8% 71.8% 83 1.28x 5.106%
85 - 108 ..................... $ 32,516,547 76.4% 61.0% 96 1.40x 5.378%
109 - 120 .................... $216,000,000 69.0% 58.4% 118 1.54x 5.452%
121 - 156 .................... $ 4,080,000 73.9% 37.0% 141 1.26x 5.360%
169 - 180 .................... $ 4,400,000 74.0% 61.1% 179 1.21x 5.878%
205 - 216 .................... $ 2,990,861 59.8% 0.0% 215 1.25x 5.600%
229 - 240 .................... $ 4,600,000 69.8% 0.0% 240 1.22x 5.809%
253 - 264 .................... $ 8,590,242 68.4% 0.0% 262 1.28x 5.814%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF ORIGINAL TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE
FOR LOAN GROUP 1 MORTGAGE LOANS
RANGE OF ORIGINAL TERM TO AGGREGATE % OF AVERAGE
MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
REPAYMENT DATE (MONTHS) OF LOANS BALANCE GROUP 1 BALANCE BALANCE
- ------------------------------ ---------- ---------------- ----------------- --------------
0 - 60 ....................... 23 $ 281,488,774 11.6% $12,238,642
61 - 84 ...................... 3 88,960,000 3.7 $29,653,333
85 - 108 ..................... 2 49,261,482 2.0 $24,630,741
109 - 120 .................... 159 1,975,015,446 81.2 $12,421,481
121 - 156 .................... 2 7,180,000 0.3 $ 3,590,000
169 - 180 .................... 2 8,300,000 0.3 $ 4,150,000
205 - 216 .................... 1 2,990,861 0.1 $ 2,990,861
229 - 240 .................... 2 5,906,624 0.2 $ 2,953,312
253 - 264 .................... 2 14,217,623 0.6 $ 7,108,812
--- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED WTD. AVG.
REMAINING CUT-OFF
RANGE OF ORIGINAL TERM TO MAXIMUM WTD. AVG. WTD. AVG. TERM TO DATE WTD. AVG.
MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY DSC MORTGAGE
REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* RATIO RATE
- ------------------------------ -------------- -------------- -------------- ----------- ---------- ----------
0 - 60 ....................... $ 47,000,000 73.1% 70.7% 59 1.62x 5.319%
61 - 84 ...................... $ 53,000,000 78.6% 72.4% 82 1.28x 5.036%
85 - 108 ..................... $ 32,516,547 76.4% 61.0% 96 1.40x 5.378%
109 - 120 .................... $216,000,000 68.2% 57.2% 118 1.58x 5.463%
121 - 156 .................... $ 4,080,000 73.9% 37.0% 141 1.26x 5.360%
169 - 180 .................... $ 4,400,000 74.0% 61.1% 179 1.21x 5.878%
205 - 216 .................... $ 2,990,861 59.8% 0.0% 215 1.25x 5.600%
229 - 240 .................... $ 4,600,000 69.8% 0.0% 240 1.22x 5.809%
253 - 264 .................... $ 8,590,242 68.4% 0.0% 262 1.28x 5.814%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-137
RANGE OF ORIGINAL TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE
FOR LOAN GROUP 2 MORTGAGE LOANS
RANGE OF ORIGINAL TERM TO AGGREGATE % OF AVERAGE
MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
REPAYMENT DATE (MONTHS) OF LOANS BALANCE GROUP 2 BALANCE BALANCE
- ------------------------------ ---------- -------------- ----------------- --------------
0 - 60 ....................... 2 $ 25,176,355 6.7% $12,588,177
61 - 84 ...................... 3 55,100,000 14.7 $18,366,667
109 - 120 .................... 28 294,964,094 78.6 $10,534,432
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
REMAINING
RANGE OF ORIGINAL TERM TO HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ------------------------------ -------------- -------------- -------------- ---------- ----------- ----------
0 - 60 ....................... $16,176,355 73.4% 68.2% 56 1.29x 5.074%
61 - 84 ...................... $22,500,000 76.4% 70.7% 83 1.29x 5.218%
109 - 120 .................... $28,000,000 74.6% 66.2% 117 1.32x 5.378%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF REMAINING TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE
FOR ALL MORTGAGE LOANS AS OF THE CUT-OFF DATE
RANGE OF REMAINING TERM TO AGGREGATE % OF AVERAGE
MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
REPAYMENT DATE (MONTHS) OF LOANS BALANCE POOL BALANCE BALANCE
- ------------------------------- ---------- ---------------- -------------- --------------
0 - 60 ........................ 25 $ 306,665,129 10.9% $12,266,605
61 - 84 ....................... 6 144,060,000 5.1 $24,010,000
85 - 108 ...................... 3 57,122,684 2.0 $19,040,895
109 - 120 ..................... 186 2,262,118,338 80.5 $12,161,927
121 - 156 ..................... 2 7,180,000 0.3 $ 3,590,000
169 - 180 ..................... 2 8,300,000 0.3 $ 4,150,000
205 - 216 ..................... 1 2,990,861 0.1 $ 2,990,861
229 - 240 ..................... 2 5,906,624 0.2 $ 2,953,312
253 - 262 ..................... 2 14,217,623 0.5 $ 7,108,812
--- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF REMAINING TERM TO HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY DSC MORTGAGE
REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* RATIO RATE
- ------------------------------- -------------- -------------- -------------- ---------- ----------- ----------
0 - 60 ........................ $ 47,000,000 73.1% 70.5% 59 1.59x 5.299%
61 - 84 ....................... $ 53,000,000 77.8% 71.8% 83 1.28x 5.106%
85 - 108 ...................... $ 32,516,547 76.6% 61.8% 97 1.39x 5.443%
109 - 120 ..................... $216,000,000 69.0% 58.4% 118 1.55x 5.451%
121 - 156 ..................... $ 4,080,000 73.9% 37.0% 141 1.26x 5.360%
169 - 180 ..................... $ 4,400,000 74.0% 61.1% 179 1.21x 5.878%
205 - 216 ..................... $ 2,990,861 59.8% 0.0% 215 1.25x 5.600%
229 - 240 ..................... $ 4,600,000 69.8% 0.0% 240 1.22x 5.809%
253 - 262 ..................... $ 8,590,242 68.4% 0.0% 262 1.28x 5.814%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-138
RANGE OF REMAINING TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE
FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE CUT-OFF DATE
RANGE OF ORIGINAL TERM TO AGGREGATE % OF AVERAGE
MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
REPAYMENT DATE (MONTHS) OF LOANS BALANCE GROUP 1 BALANCE BALANCE
- ------------------------------ ---------- ---------------- ----------------- --------------
0 - 60 ....................... 23 $ 281,488,774 11.6% $12,238,642
61 - 84 ...................... 3 88,960,000 3.7 $29,653,333
85 - 108 ..................... 3 57,122,684 2.3 $19,040,895
109 - 120 .................... 158 1,967,154,244 80.8 $12,450,343
121 - 156 .................... 2 7,180,000 0.3 $ 3,590,000
169 - 180 .................... 2 8,300,000 0.3 $ 4,150,000
205 - 216 .................... 1 2,990,861 0.1 $ 2,990,861
229 - 240 .................... 2 5,906,624 0.2 $ 2,953,312
253 - 262 .................... 2 14,217,623 0.6 $ 7,108,812
--- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF ORIGINAL TERM TO HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY DSC MORTGAGE
REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* RATIO RATE
- ------------------------------ -------------- -------------- -------------- ---------- ----------- ----------
0 - 60 ....................... $ 47,000,000 73.1% 70.7% 59 1.62x 5.319%
61 - 84 ...................... $ 53,000,000 78.6% 72.4% 82 1.28x 5.036%
85 - 108 ..................... $ 32,516,547 76.6% 61.8% 97 1.39x 5.443%
109 - 120 .................... $216,000,000 68.2% 57.2% 118 1.58x 5.462%
121 - 156 .................... $ 4,080,000 73.9% 37.0% 141 1.26x 5.360%
169 - 180 .................... $ 4,400,000 74.0% 61.1% 179 1.21x 5.878%
205 - 216 .................... $ 2,990,861 59.8% 0.0% 215 1.25x 5.600%
229 - 240 .................... $ 4,600,000 69.8% 0.0% 240 1.22x 5.809%
253 - 262 .................... $ 8,590,242 68.4% 0.0% 262 1.28x 5.814%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF REMAINING TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE
FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE CUT-OFF DATE
RANGE OF REMAINING TERM TO AGGREGATE % OF AVERAGE
MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
REPAYMENT DATE (MONTHS) OF LOANS BALANCE GROUP 2 BALANCE BALANCE
- ------------------------------- ---------- -------------- ----------------- --------------
0 - 60 ........................ 2 $ 25,176,355 6.7% $12,588,177
61 - 84 ....................... 3 55,100,000 14.7 $18,366,667
109 - 120 ..................... 28 294,964,094 78.6 $10,534,432
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
REMAINING
RANGE OF REMAINING TERM TO HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE
- ------------------------------- -------------- -------------- -------------- ---------- ----------- ----------
0 - 60 ........................ $16,176,355 73.4% 68.2% 56 1.29x 5.074%
61 - 84 ....................... $22,500,000 76.4% 70.7% 83 1.29x 5.218%
109 - 120 ..................... $28,000,000 74.6% 66.2% 117 1.32x 5.378%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-139
RANGE OF REMAINING AMORTIZATION TERMS
FOR ALL MORTGAGE LOANS AS OF THE CUT-OFF DATE
RANGE OF AGGREGATE % OF AVERAGE
REMAINING AMORTIZATION NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
TERMS (MONTHS)(1) OF LOANS BALANCE POOL BALANCE BALANCE
- --------------------------- ---------- ---------------- -------------- --------------
133 - 144 ................. 1 $ 3,100,000 0.1% $ 3,100,000
193 - 228 ................. 2 6,990,861 0.2 $ 3,495,431
229 - 264 ................. 8 213,258,522 7.6 $26,657,315
265 - 300 ................. 49 256,484,284 9.1 $ 5,234,373
301 - 348 ................. 3 176,361,201 6.3 $58,787,067
349 - 360 ................. 128 1,818,224,593 64.7 $14,204,880
Varies .................... 1 32,516,547 1.2 $32,516,547
Non-amortizing ............ 37 301,625,250 10.7 $ 8,152,034
--- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
REMAINING AMORTIZATION CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
TERMS (MONTHS)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) DSC RATIO RATE
- --------------------------- -------------- -------------- ---------------- ----------- ----------- ----------
133 - 144 ................. $ 3,100,000 66.0% 0.0% 144 1.28x 5.280%
193 - 228 ................. $ 4,000,000 62.8% 20.8% 161 1.47x 6.126%
229 - 264 ................. $ 79,785,970 60.0% 35.8% 132 1.91x 5.493%
265 - 300 ................. $ 49,843,594 66.0% 52.1% 117 1.71x 6.025%
301 - 348 ................. $132,500,000 70.5% 60.3% 119 1.24x 5.166%
349 - 360 ................. $216,000,000 72.8% 63.5% 110 1.40x 5.380%
Varies .................... $ 32,516,547 74.8% 56.3% 98 1.43x 5.300%
Non-amortizing ............ $ 43,000,000 64.0% 64.0% 93 2.10x 5.243%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
The weighted average remaining amortization term for all Mortgage Loans
(excluding non-amortizing loans and the loan which varies) is 341 months.
(1) The remaining amortization term shown for any Mortgage Loan that is
interest-only for part of its term does not include the number of months
during which it is interest-only, but rather is the number of months
remaining at the end of such interest-only period.
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF REMAINING AMORTIZATION TERMS
FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE CUT-OFF DATE
RANGE OF AGGREGATE % OF AVERAGE
REMAINING AMORTIZATION NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
TERMS (MONTHS)(1) OF LOANS BALANCE GROUP 1 BALANCE BALANCE
- -------------------------- ---------- ---------------- ----------------- --------------
133 - 144 ................ 1 $ 3,100,000 0.1% $ 3,100,000
193 - 228 ................ 2 6,990,861 0.3 $ 3,495,431
229 - 264 ................ 8 213,258,522 8.8 $26,657,315
265 - 300 ................ 48 254,534,284 10.5 $ 5,302,798
301 - 348 ................ 3 176,361,201 7.2 $58,787,067
349 - 360 ................ 97 1,472,409,144 60.5 $15,179,476
Varies ................... 1 32,516,547 1.3 $32,516,547
Non-amortizing ........... 36 274,150,250 11.3 $ 7,615,285
-- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED
REMAINING
RANGE OF HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG.
REMAINING AMORTIZATION CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY WTD. AVG. MORTGAGE
TERMS (MONTHS)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) DSC RATIO RATE
- -------------------------- -------------- -------------- ---------------- ----------- ----------- ----------
133 - 144 ................ $ 3,100,000 66.0% 0.0% 144 1.28x 5.280%
193 - 228 ................ $ 4,000,000 62.8% 20.8% 161 1.47x 6.126%
229 - 264 ................ $ 79,785,970 60.0% 35.8% 132 1.91x 5.493%
265 - 300 ................ $ 49,843,594 65.9% 52.1% 117 1.71x 6.027%
301 - 348 ................ $132,500,000 70.5% 60.3% 119 1.24x 5.166%
349 - 360 ................ $216,000,000 72.2% 62.7% 110 1.42x 5.394%
Varies ................... $ 32,516,547 74.8% 56.3% 98 1.43x 5.300%
Non-amortizing ........... $ 43,000,000 63.4% 63.4% 90 2.16x 5.220%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
The weighted average remaining amortization term for all Loan Group 1 Mortgage
Loans (excluding non-amortizing loans and the loan which varies) is 338 months.
(1) The remaining amortization term shown for any Mortgage Loan that is
interest-only for part of its term does not include the number of months
during which it is interest-only, but rather is the number of months
remaining at the end of such interest-only period.
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-140
RANGE OF REMAINING AMORTIZATION TERMS
FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE CUT-OFF DATE
% OF AVERAGE
RANGE OF AGGREGATE CUT-OFF CUT-OFF
REMAINING AMORTIZATION NUMBER CUT-OFF DATE DATE GROUP 2 DATE
TERMS (MONTHS)(1) OF LOANS BALANCE BALANCE BALANCE
- --------------------------- ---------- -------------- -------------- -------------
265 - 300 ................. 1 $ 1,950,000 0.5% $ 1,950,000
349 - 360 ................. 31 345,815,449 92.2 $11,155,337
Non-amortizing ............ 1 27,475,000 7.3 $27,475,000
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
HIGHEST WTD. AVG. REMAINING
RANGE OF CUT-OFF CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
REMAINING AMORTIZATION DATE DATE LTV LTV RATIO MATURITY DSC MORTGAGE
TERMS (MONTHS)(1) BALANCE RATIO AT MATURITY(2) (MOS.)(2) RATIO RATE
- --------------------------- ------------- ----------- ---------------- ----------- ----------- ----------
265 - 300 ................. $ 1,950,000 73.6% 56.4% 120 1.25x 5.700%
349 - 360 ................. $28,000,000 75.2% 66.8% 107 1.30x 5.321%
Non-amortizing ............ $27,475,000 69.8% 69.8% 119 1.52x 5.470%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
The weighted average remaining amortization term for all Loan Group 2 Mortgage
Loans (excluding non-amortizing loans) is 359 months.
(1) The remaining amortization term shown for any Mortgage Loan that is
interest-only for part of its term does not include the number of months
during which it is interest-only, but rather is the number of months
remaining at the end of such interest-only period.
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
AMORTIZATION TYPES FOR ALL MORTGAGE LOANS
AVERAGE
AGGREGATE % OF CUT-OFF
NUMBER CUT-OFF DATE CUT-OFF DATE DATE
AMORTIZATION TYPES OF LOANS BALANCE POOL BALANCE BALANCE
- ----------------------------- ---------- ----------------- -------------- --------------
Interest-only, Amortizing
Balloon(2) ................. 63 $1,263,248,000 45.0% $20,051,556
Amortizing Balloon .......... 85 960,355,223 34.2 $11,298,297
Interest-only, Amortizing
ARD(2) ..................... 29 199,578,000 7.1 $ 6,882,000
Interest-only, Balloon ...... 9 177,775,000 6.3 $19,752,778
Interest-only, ARD .......... 28 123,850,250 4.4 $ 4,423,223
Amortizing ARD .............. 9 57,539,677 2.0 $ 6,393,297
Fully Amortizing ............ 6 26,215,109 0.9 $ 4,369,185
-- -------------- -----
229 $2,808,561,259 100.0% $12,264,460
=== ============== =====
WTD. AVG.
STATED
HIGHEST WTD. AVG. REMAINING
CUT-OFF CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
DATE DATE LTV LTV RATIO MATURITY DSC MORTGAGE
AMORTIZATION TYPES BALANCE RATIO AT MATURITY(1) (MOS.)(1) RATIO RATE
- ----------------------------- --------------- ----------- ---------------- ----------- ----------- ----------
Interest-only, Amortizing
Balloon(2) ................. $216,000,000 71.6% 62.5% 112 1.39x 5.369%
Amortizing Balloon .......... $ 79,785,970 68.7% 56.0% 112 1.61x 5.494%
Interest-only, Amortizing
ARD(2) ..................... $ 36,000,000 75.2% 63.1% 109 1.26x 5.557%
Interest-only, Balloon ...... $ 43,000,000 66.0% 66.0% 82 2.16x 5.142%
Interest-only, ARD .......... $ 27,475,000 61.1% 61.1% 109 2.02x 5.389%
Amortizing ARD .............. $ 16,744,935 75.1% 63.1% 106 1.36x 5.622%
Fully Amortizing ............ $ 8,590,242 67.4% 0.0% 238 1.27x 5.725%
$216,000,000 70.1% 59.9% 111 1.53x 5.420%
- -------
(1) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(2) These Mortgage Loans require payments of interest-only for a period of 5
to 60 months from origination prior to the commencement of payments of
principal and interest.
S-141
AMORTIZATION TYPES FOR LOAN GROUP 1 MORTGAGE LOANS
% OF AVERAGE
AGGREGATE CUT-OFF CUT-OFF
NUMBER CUT-OFF DATE DATE GROUP 1 DATE
AMORTIZATION TYPES OF LOANS BALANCE BALANCE BALANCE
- ----------------------------- ---------- ----------------- -------------- --------------
Interest-only, Amortizing
Balloon(2) ................. 41 $ 986,551,000 40.5% $24,062,220
Amortizing Balloon .......... 75 889,286,775 36.5 $11,857,157
Interest-only, Amortizing
ARD(2) ..................... 29 199,578,000 8.2 $ 6,882,000
Interest-only, Balloon ...... 9 177,775,000 7.3 $19,752,778
Interest-only, ARD .......... 27 96,375,250 4.0 $ 3,569,454
Amortizing ARD .............. 9 57,539,677 2.4 $ 6,393,297
Fully Amortizing ............ 6 26,215,109 1.1 $ 4,369,185
-- -------------- -----
196 $2,433,320,810 100.0% $12,414,902
=== ============== =====
WTD. AVG.
STATED
HIGHEST WTD. AVG. REMAINING
CUT-OFF CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
DATE DATE LTV LTV RATIO AT MATURITY DSC MORTGAGE
AMORTIZATION TYPES BALANCE RATIO MATURITY(1) (MOS.)(1) RATIO RATE
- ----------------------------- --------------- ----------- -------------- ----------- ----------- ----------
Interest-only, Amortizing
Balloon(2) ................. $216,000,000 70.5% 61.1% 113 1.41x 5.382%
Amortizing Balloon .......... $ 79,785,970 68.3% 55.4% 113 1.63x 5.507%
Interest-only, Amortizing
ARD(2) ..................... $ 36,000,000 75.2% 63.1% 109 1.26x 5.557%
Interest-only, Balloon ...... $ 43,000,000 66.0% 66.0% 82 2.16x 5.142%
Interest-only, ARD .......... $ 23,900,000 58.7% 58.7% 106 2.16x 5.366%
Amortizing ARD .............. $ 16,744,935 75.1% 63.1% 106 1.36x 5.622%
Fully Amortizing ............ $ 8,590,242 67.4% 0.0% 238 1.27x 5.725%
$216,000,000 69.3% 58.8% 111 1.56x 5.433%
- -------
(1) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(2) These Mortgage Loans require payments of interest-only for a period of 5
to 60 months from origination prior to the commencement of payments of
principal and interest.
AMORTIZATION TYPES FOR LOAN GROUP 2 MORTGAGE LOANS
% OF AVERAGE
AGGREGATE CUT-OFF CUT-OFF
NUMBER CUT-OFF DATE DATE GROUP 2 DATE
AMORTIZATION TYPES OF LOANS BALANCE BALANCE BALANCE
- ----------------------------- ---------- -------------- -------------- --------------
Interest-only, Amortizing
Balloon(2) ................. 22 $276,697,000 73.7% $12,577,136
Amortizing Balloon .......... 10 71,068,449 18.9 $ 7,106,845
Interest-only, ARD .......... 1 27,475,000 7.3 $27,475,000
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
HIGHEST WTD. AVG. REMAINING
CUT-OFF CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
DATE DATE LTV LTV RATIO AT MATURITY DSC MORTGAGE
AMORTIZATION TYPES BALANCE RATIO MATURITY(1) (MOS.)(1) RATIO RATE
- ----------------------------- -------------- ----------- -------------- ----------- ----------- ----------
Interest-only, Amortizing
Balloon(2) ................. $28,000,000 75.5% 67.7% 108 1.28x 5.323%
Amortizing Balloon .......... $16,176,355 74.1% 63.2% 105 1.35x 5.326%
Interest-only, ARD .......... $27,475,000 69.8% 69.8% 119 1.52x 5.470%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
(1) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
(2) These Mortgage Loans require payments of interest-only for a period of 7
to 36 months from origination prior to the commencement of payments of
principal and interest.
S-142
RANGE OF OCCUPANCY RATES FOR ALL MORTGAGE LOANS
AGGREGATE % OF AVERAGE
NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE
RANGE OF OCCUPANCY RATES(%)(1) OF LOANS BALANCE POOL BALANCE BALANCE
- -------------------------------- ---------- ----------------- -------------- --------------
65.00 - 69.99 .................. 2 $ 29,170,000 1.0% $14,585,000
70.00 - 74.99 .................. 3 74,915,659 2.7 $24,971,886
75.00 - 79.99 .................. 3 133,718,000 4.8 $44,572,667
80.00 - 84.99 .................. 7 196,262,671 7.0 $28,037,524
85.00 - 89.99 .................. 14 436,685,825 15.5 $31,191,845
90.00 - 94.99 .................. 26 461,109,849 16.4 $17,734,994
95.00 - 99.99 .................. 37 582,636,395 20.7 $15,746,930
100.00 - 100.00 ................ 117 566,595,926 20.2 $ 4,842,700
--- -------------- -----
209 $2,481,094,325 88.30% $11,871,265
=== ============== =====
WTD. AVG.
STATED
REMAINING
HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY DSC MORTGAGE
RANGE OF OCCUPANCY RATES(%)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) RATIO RATE
- -------------------------------- -------------- -------------- ---------------- ----------- ----------- ----------
65.00 - 69.99 .................. $ 27,375,000 73.5% 72.8% 62 2.26x 4.850%
70.00 - 74.99 .................. $ 55,000,000 68.4% 59.6% 112 1.47x 5.309%
75.00 - 79.99 .................. $ 75,000,000 77.6% 70.2% 106 1.37x 5.414%
80.00 - 84.99 .................. $132,500,000 67.8% 58.0% 117 1.28x 5.224%
85.00 - 89.99 .................. $216,000,000 68.1% 58.6% 110 1.59x 5.380%
90.00 - 94.99 .................. $ 47,000,000 73.8% 65.7% 105 1.33x 5.460%
95.00 - 99.99 .................. $ 36,144,476 72.2% 62.5% 110 1.45x 5.352%
100.00 - 100.00 ................ $ 40,000,000 71.4% 60.4% 114 1.53x 5.427%
$216,000,000 71.5% 62.0% 110 1.46x 5.380%
- -------
(1) Occupancy rates were calculated based upon rent rolls made available to
the applicable Mortgage Loan Seller by the related borrowers as of the
rent roll date set forth on Annex A-1 to this prospectus supplement, but
excludes 19 Mortgage Loans secured by hospitality properties and 1
Mortgage Loan secured by a special purpose property, representing 11.7%
of the Cut-off Date Pool Balance (13.5% of the Cut-Off Group 1 Balance).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
RANGE OF OCCUPANCY RATES FOR LOAN GROUP 1 MORTGAGE LOANS
% OF
AGGREGATE CUT-OFF AVERAGE
NUMBER CUT-OFF DATE DATE GROUP 1 CUT-OFF DATE
RANGE OF OCCUPANCY RATES (%)(1) OF LOANS BALANCE BALANCE BALANCE
- --------------------------------- ---------- ----------------- -------------- --------------
65.00 - 69.99 ................... 2 $ 29,170,000 1.2% $14,585,000
70.00 - 74.99 ................... 3 74,915,659 3.1 $24,971,886
75.00 - 79.99 ................... 3 133,718,000 5.5 $44,572,667
80.00 - 84.99 ................... 6 187,262,671 7.7 $31,210,445
85.00 - 89.99 ................... 11 419,516,603 17.2 $38,137,873
90.00 - 94.99 ................... 16 321,853,684 13.2 $20,115,855
95.00 - 99.99 ................... 24 408,432,220 16.8 $17,018,009
100.00 - 100.00 ................. 111 530,985,039 21.8 $ 4,783,649
--- -------------- ----
176 $2,105,853,877 86.5% $11,965,079
=== ============== ====
WTD. AVG.
STATED
REMAINING
HIGHEST WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY DSC MORTGAGE
RANGE OF OCCUPANCY RATES (%)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) RATIO RATE
- --------------------------------- -------------- -------------- ---------------- ----------- ----------- ----------
65.00 - 69.99 ................... $ 27,375,000 73.5% 72.8% 62 2.26x 4.850%
70.00 - 74.99 ................... $ 55,000,000 68.4% 59.6% 112 1.47x 5.309%
75.00 - 79.99 ................... $ 75,000,000 77.6% 70.2% 106 1.37x 5.414%
80.00 - 84.99 ................... $132,500,000 67.7% 57.6% 121 1.28x 5.235%
85.00 - 89.99 ................... $216,000,000 67.8% 58.3% 110 1.61x 5.381%
90.00 - 94.99 ................... $ 47,000,000 74.0% 65.7% 100 1.33x 5.494%
95.00 - 99.99 ................... $ 36,144,476 70.8% 60.1% 114 1.51x 5.369%
100.00 - 100.00 ................. $ 40,000,000 71.0% 59.9% 113 1.54x 5.433%
$216,000,000 70.9% 61.1% 110 1.49x 5.388%
- -------
(1) Occupancy rates were calculated based upon rent rolls made available to
the applicable Mortgage Loan Seller by the related borrowers as of the
rent roll dates set forth on Annex A-1 to this prospectus supplement, but
excludes 19 Mortgage Loans secured by hospitality properties and 1
Mortgage Loan secured by a special purpose property representing 11.7% of
the Cut-off Date Pool Balance (13.5% of the Cut-Off Date Group 1
Balance).
(2) Calculated with respect to the Anticipated Repayment Date for ARD Loans.
S-143
RANGE OF OCCUPANCY RATES FOR LOAN GROUP 2 MORTGAGE LOANS
% OF AVERAGE
AGGREGATE CUT-OFF CUT-OFF
NUMBER CUT-OFF DATE DATE GROUP 2 DATE
RANGE OF OCCUPANCY RATES (%) OF LOANS BALANCE BALANCE BALANCE
- --------------------------------- ---------- -------------- -------------- -------------
80.00 - 84.99 ................... 1 $ 9,000,000 2.4% $ 9,000,000
85.00 - 89.99 ................... 3 17,169,222 4.6 $ 5,723,074
90.00 - 94.99 ................... 10 139,256,165 37.1 $13,925,616
95.00 - 99.99 ................... 13 174,204,175 46.4 $13,400,321
100.00 - 100.00 ................. 6 35,610,887 9.5 $ 5,935,148
-- ------------ -----
33 $375,240,449 100.0% $11,370,923
== ============ =====
WTD. AVG.
STATED
HIGHEST WTD. AVG. REMAINING
CUT-OFF CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG.
DATE DATE LTV LTV RATIO MATURITY DSC MORTGAGE
RANGE OF OCCUPANCY RATES (%) BALANCE RATIO AT MATURITY* (MOS.)* RATIO RATE
- --------------------------------- ------------- ----------- -------------- ---------- ----------- ----------
80.00 - 84.99 ................... $ 9,000,000 71.8% 67.5% 50 1.21x 4.990%
85.00 - 89.99 ................... $11,200,000 76.3% 65.9% 113 1.22x 5.351%
90.00 - 94.99 ................... $28,000,000 73.4% 65.7% 117 1.32x 5.382%
95.00 - 99.99 ................... $24,240,000 75.5% 68.0% 101 1.31x 5.311%
100.00 - 100.00 ................. $10,000,000 77.4% 67.8% 118 1.38x 5.334%
$28,000,000 74.8% 67.0% 108 1.31x 5.334%
- -------
* Calculated with respect to the Anticipated Repayment Date for ARD Loans.
PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION(1)(2)
DATE MARCH--2005 MARCH--2006 MARCH--2007 MARCH--2008 MARCH--2009
- ---------------------------------- --------------- --------------- --------------- --------------- ---------------
Locked Out ....................... 97.45% 97.16% 19.49% 13.37% 0.17%
Defeasance ....................... 0.00 0.00 74.39 79.31 90.17
Yield Maintenance ................ 2.55 2.84 6.12 7.32 9.34
Prepayment Premium ............... 0.00 0.00 0.00 0.00 0.00
Open ............................. 0.00 0.00 0.00 0.00 0.32
---------- ---------- ---------- ---------- ----------
Total ............................ 100.00% 100.00% 100.00% 100.00% 100.00%
---------- ---------- ---------- ---------- ----------
Mortgage Pool Balance
Outstanding (in millions) ....... $ 2,808.56 $ 2,789.62 $ 2,764.13 $ 2,729.04 $ 2,686.80
---------- ---------- ---------- ---------- ----------
% of Initial Pool Balance ........ 100.00% 99.33% 98.42% 97.17% 95.66%
========== ========== ========== ========== ==========
DATE MARCH--2010 MARCH--2011 MARCH--2012 MARCH--2013 MARCH--2014 MARCH--2015
- ---------------------------------- --------------- --------------- --------------- --------------- --------------- ------------
Locked Out ....................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance ....................... 92.06 92.00 91.42 90.07 90.54 29.24
Yield Maintenance ................ 7.94 8.00 8.44 8.60 8.83 70.76
Prepayment Premium ............... 0.00 0.00 0.00 0.00 0.00 0.00
Open ............................. 0.00 0.00 0.14 1.33 0.63 0.00
---------- ---------- ---------- ---------- ---------- -------
Total ............................ 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
---------- ---------- ---------- ---------- ---------- -------
Mortgage Pool Balance
Outstanding (in millions) ....... $ 2,346.32 $ 2,301.78 $ 2,122.24 $ 2,060.15 $ 1,980.54 $ 27.09
---------- ---------- ---------- ---------- ---------- --------
% of Initial Pool Balance ........ 83.54% 81.96% 75.56% 73.35% 70.52% 0.96%
========== ========== ========== ========== ========== ========
- -------
(1) Prepayment provisions in effect as a percentage of outstanding loan
balances as of the indicated date assuming no prepayments on the Mortgage
Loans (and assuming that an ARD Loan will be repaid in full on its
Anticipated Repayment Date), if any.
(2) Based upon the assumptions set forth in footnote (1) above, after March
2015, the outstanding loan balances represent less than 0.96% of the
Cut-Off Date Pool Balance.
S-144
PERCENTAGE OF LOAN GROUP 1 BY PREPAYMENT RESTRICTION(1)(2)
DATE MARCH--2005 MARCH--2006 MARCH--2007 MARCH--2008 MARCH--2009
- ------------------------------- --------------- --------------- --------------- --------------- ---------------
Locked Out .................... 97.06% 96.72% 14.69% 8.54% 0.12%
Defeasance .................... 0.00 0.00 79.38 84.82 92.05
Yield Maintenance ............. 2.94 3.28 5.93 6.64 7.83
Prepayment Premium ............ 0.00 0.00 0.00 0.00 0.00
Open .......................... 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- ----------
Total ......................... 100.00% 100.00% 100.00% 100.00% 100.00%
---------- ---------- ---------- ---------- ----------
Group 1 Balance
Outstanding (in millions) .... $ 2,433.32 $ 2,415.44 $ 2,391.33 $ 2,359.45 $ 2,322.11
---------- ---------- ---------- ---------- ----------
% of Initial Group 1 Balance .. 100.00% 99.27% 98.27% 96.96% 95.43%
========== ========== ========== ========== ==========
DATE MARCH--2010 MARCH--2011 MARCH--2012 MARCH--2013 MARCH--2014 MARCH--2015
- ------------------------------- --------------- --------------- --------------- --------------- --------------- ------------
Locked Out .................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance .................... 94.23 94.18 93.86 92.37 93.57 29.24
Yield Maintenance ............. 5.77 5.82 5.98 6.10 6.29 70.76
Prepayment Premium ............ 0.00 0.00 0.00 0.00 0.00 0.00
Open .......................... 0.00 0.00 0.16 1.53 0.14 0.00
---------- ---------- ---------- ---------- ---------- -------
Total ......................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
---------- ---------- ---------- ---------- ---------- -------
Group 1 Balance
Outstanding (in millions) .... $ 2,010.08 $ 1,970.55 $ 1,847.15 $ 1,789.68 $ 1,714.94 $ 27.09
---------- ---------- ---------- ---------- ---------- --------
% of Initial Group 1 Balance .. 82.61% 80.98% 75.91% 73.55% 70.48% 1.11%
========== ========== ========== ========== ========== ========
- -------
(1) Prepayment provisions in effect as a percentage of outstanding loan
balances as of the indicated date assuming no prepayments on the Mortgage
Loans (and assuming that an ARD Loan will be repaid in full on its
Anticipated Repayment Date), if any.
(2) Based upon the assumptions set forth in footnote (1) above, after March
2015, the outstanding loan balances represent less than 1.11% of the
Cut-Off Date Group 1 Balance.
PERCENTAGE OF LOAN GROUP 2 BY PREPAYMENT RESTRICTION*
DATE MARCH--2005 MARCH--2006 MARCH--2007 MARCH--2008 MARCH--2009
- ------------------------------- ------------- ------------- ------------- ------------- -------------
Locked Out .................... 100.00% 100.00% 50.23% 44.20% 0.49%
Defeasance .................... 0.00 0.00 42.40 44.15 78.22
Yield Maintenance ............. 0.00 0.00 7.37 11.66 18.96
Prepayment Premium ............ 0.00 0.00 0.00 0.00 0.00
Open .......................... 0.00 0.00 0.00 0.00 2.33
-------- -------- -------- -------- --------
Total ......................... 100.0% 100.0% 100.0% 100.0% 100.0%
-------- -------- -------- -------- --------
Group 2 Balance
Outstanding (in millions) .... $ 375.24 $ 374.18 $ 372.80 $ 369.59 $ 364.69
-------- -------- -------- -------- --------
% of Initial Group 2 Balance .. 100.00% 99.72% 99.35% 98.50% 97.19%
======== ======== ======== ======== ========
DATE MARCH--2010 MARCH--2011 MARCH--2012 MARCH--2013 MARCH--2014 MARCH--2015
- ------------------------------- ------------- ------------- ------------- ------------- ------------- ------------
Locked Out .................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance .................... 79.10 79.01 75.00 74.87 70.96 0.00
Yield Maintenance ............. 20.90 20.99 25.00 25.13 25.26 0.00
Prepayment Premium ............ 0.00 0.00 0.00 0.00 0.00 0.00
Open .......................... 0.00 0.00 0.00 0.00 3.77 0.00
-------- -------- -------- -------- -------- ------
Total ......................... 100.0% 100.0% 100.0% 100.0% 100.0% 0.00%
-------- -------- -------- -------- -------- ------
Group 2 Balance
Outstanding (in millions) .... $ 336.25 $ 331.23 $ 275.09 $ 270.47 $ 265.60 $ 0.00
-------- -------- -------- -------- -------- -------
% of Initial Group 2 Balance .. 89.61% 88.27% 73.31% 72.08% 70.78% 0.00%
======== ======== ======== ======== ======== =======
- -------
* Prepayment provisions in effect as a percentage of outstanding loan
balances as of the indicated date assuming no prepayments on the Mortgage
Loans (and assuming that an ARD Loan will be repaid in full on its
Anticipated Repayment Date), if any.
S-145
TWENTY LARGEST MORTGAGE LOANS
The following table and summaries describe the twenty largest Mortgage
Loans or groups of cross-collateralized Mortgage Loans in the Mortgage Pool by
Cut-Off Date Balance:
NUMBER OF
MORTGAGE % OF % OF
LOANS/ CUT-OFF APPLICABLE
NUMBER OF CUT-OFF DATE CUT-OFF DATE
MORTGAGE MORTGAGED LOAN DATE POOL LOAN GROUP
LOAN NAME LOAN SELLER PROPERTIES GROUP BALANCE(1) BALANCE BALANCE
- ------------------- ------------- ------------ ------- ----------------- --------- --------------
One & Two
International
Place ............ Wachovia 1/1 1 $ 216,000,000 7.7% 8.9%
Digital Realty
Trust
Portfolio ........ Citigroup 6/6 1 154,335,917 5.5 6.3
450 West 33rd
Street ........... Wachovia 1/1 1 132,500,000 4.7 5.4
Olympia
Portfolio ........ Wachovia 23/24 1 85,700,000 3.1 3.5
Tharaldson Pool
I-B .............. Countrywide 1/13 1 79,785,970 2.8 3.3
111
Massachusetts
Avenue ........... Wachovia 1/1 1 75,000,000 2.7 3.1
Residence Inn
Portfolio #1 ..... Wachovia 10/10 1 65,861,000 2.3 2.7
Tharaldson Pool
I-A .............. Countrywide 1/25 1 57,844,828 2.1 2.4
MetroPlace III
& IV ............. Wachovia 1/1 1 55,000,000 2.0 2.3
1001
Connecticut
Avenue &
1701 K Street..... Wachovia 1/1 1 53,000,000 1.9 2.2
----- -------------- ----
46/83 $ 975,027,715 34.7%
===== ============== ====
Eastmont Town
Center ........... Countrywide 1/1 1 $ 53,000,000 1.9% 2.2%
Great Wolf
Resorts Pool...... Citigroup 1/2 1 49,843,594 1.8 2.0
Falchi Building.... Wachovia 1/1 1 47,000,000 1.7 1.9
Gardner
Tanenbaum
Pool ............. Countrywide 1/8 1 43,200,000 1.5 1.8
Cabrillo
Palisades ........ Wachovia 1/1 1 43,000,000 1.5 1.8
201 West
Madison .......... Countrywide 1/1 1 42,440,495 1.5 1.7
One Fair Oaks ..... Wachovia 1/1 1 40,000,000 1.4 1.6
Cadbury
Schweppes ........ Wachovia 1/1 1 36,000,000 1.3 1.5
Santa Teresa
Portfolio ........ Countrywide 2/19 1 33,878,000 1.2 1.4
Choice Center ..... Wachovia 1/1 1 32,516,547 1.2 1.3
----- -------------- ----
11/36 $ 420,878,636 15.0%
===== ============== ====
57/119 $1,395,906,351 49.7%
====== ============== ====
LOAN LTV
BALANCE CUT-OFF RATIO AT
PROPERTY PER SF/ DATE MATURITY MORTGAGE
LOAN NAME TYPE UNIT/ROOM(2) DSCR(2) LTV RATIO(2) OR ARD(2) RATE
- ------------------- ------------------- ---------------- --------------- -------------- ----------- -----------
One & Two
International
Place ............ Office - CBD $ 233 1.77x 61.7% 53.7% 5.205%
Digital Realty
Trust Office/Mixed
Portfolio ........ Use $ 109 1.55x 67.3% 56.7% 5.649%
450 West 33rd
Street ........... Office - CBD $ 158 1.22x 68.8% 59.3% 5.100%
Olympia
Portfolio ........ Retail/Office $ 210 1.25x 75.0% 58.6% 5.692%
Tharaldson Pool Hospitality -
I-B .............. Limited Service $ 55,561 2.36x 54.3% 34.5% 5.158%
111
Massachusetts
Avenue ........... Office - CBD $ 270 1.34x 76.5% 65.0% 5.200%
Residence Inn Hospitality -
Portfolio #1 ..... Extended Stay $ 57,824 1.43x 71.1% 58.6% 6.880%
Tharaldson Pool Hospitality -
I-A .............. Limited Service $ 42,553(3) 2.09x 54.5% 34.6% 5.158%
MetroPlace III Office -
& IV ............. Suburban $ 162 1.53x 64.6% 56.2% 5.210%
1001
Connecticut
Avenue &
1701 K Street..... Office - CBD $ 242 1.27x 77.9% 71.9% 5.060%
1.58X 66.5% 55.0% 5.402%
Eastmont Town Mixed Use -
Center ........... Office/Retail $ 90 1.31x(4) 71.1% 52.3% 6.240%
Great Wolf Hospitality -
Resorts Pool...... Full Service $ 88,690 3.08x 42.0% 32.4% 5.835%
Mixed Use -
Falchi Building.... Office/Industrial $ 74 1.21x 82.5% 76.9% 5.800%
Gardner
Tanenbaum Industrial -
Pool ............. Warehouse/Flex $ 40 1.40x 76.6% 63.9% 5.460%
Cabrillo Multifamily -
Palisades ........ Conventional $ 116,531 1.49x 67.5% 67.5% 5.570%
201 West Special Purpose
Madison .......... - Parking $ 110 1.38x 74.6% 62.4% 5.500%
Office -
One Fair Oaks ..... Suburban $ 187 2.10x 74.6% 74.6% 4.780%
Cadbury
Schweppes ........ Office - Flex $ 241 1.29x 75.0% 62.7% 5.260%
Santa Teresa Industrial/
Portfolio ........ Office $ 32 1.26x 76.8% 72.8% 5.870%
Office -
Choice Center ..... Suburban $ 145 1.43x 74.8% 56.3% 5.300%
1.62X 70.9% 61.4% 5.595%
1.60X 67.8% 56.9% 5.460%
- ---------
(1) In the case of a concentration of cross-collateralized Mortgage Loans,
the aggregate principal balance.
(2) The One & Two International Place Loan and the 450 West 33rd Street Loan
(loan numbers 1 and 2), representing 12.4% of the Cut-Off Date Pool
Balance (14.3% of the Cut-Off Date Group 1 Balance), are each part of
split loan structures with Pari Passu Companion Loans which are not
included in the Trust Fund. With respect to these Mortgage Loans, unless
otherwise specified, the calculations of LTV ratios, DSC ratios and loan
balance per square foot were based on the aggregate indebtedness of these
Mortgage Loans and the related Pari Passu Companion Loans.
(3) Calculation excludes the Mortgaged Properties which are leased fee
interest.
(4) DSC Ratio calculation assumes a 22-year amortization schedule and the
approval of the Alameda County Behavioral Health Care Services Lease.
S-146
One & Two International Place
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $216,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 7.7%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Acquisition
SPONSOR Prudential Property Investment Separate
Account ("PRISA")
TYPE OF SECURITY Fee
MORTGAGE RATE 5.205%
MATURITY DATE January 11, 2015
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 24
ORIGINAL TERM/AMORTIZATION 120/360
REMAINING TERM/AMORTIZATION 118/360
LOCKBOX Yes
SHADOW RATING (S&P/MOODY'S/FITCH)(1) BBB-/Baa3/BBB-
UP-FRONT RESERVES
INSURANCE Yes
ENGINEERING(2) $2,158,900
TI/LC(3) $22,334,679
RENT CONCESSION(4) $5,000,000
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $15,260
TI/LC Springing
ADDITIONAL FINANCING Pari Passu Debt $216,000,000
PARI PASSU NOTES(5)
-----------------------
CUT-OFF DATE BALANCE $432,000,000
CUT-OFF DATE BALANCE/SF $233
CUT-OFF DATE LTV 61.7%
MATURITY DATE LTV 53.7%
UW DSCR ON NCF 1.77x
- --------------------------------------------------------------------------------
(1) S&P, Moody's and Fitch have confirmed that the One & Two International
Place Loan has, in the context of its inclusion in the trust, credit
characteristics consistent with an investment grade obligation.
(2) In addition to the up-front reserves for Engineering, the borrower is
required to complete parking garage repairs, or otherwise post a
$3,000,000 escrow for the same not later than January 2008. Further, the
borrower is required to undertake diligence to determine necessary
elevator modernization requirements by not later than January 2009 and
January 2011 for One International Place and Two International Place,
respectively. Based upon conclusions resultant from that diligence, the
borrower is required to post necessary reserves to complete any such
required elevator modernization.
(3) The borrower deposited $22,334,679 into a Tenant Improvement and Leasing
Reserve which is a prefunded reletting reserve that represents 100% of all
borrower TI/LC obligations with respect to existing tenants.
(4) This Rent Concession reserve may not be diminished until such time as
cumulative rent concessions are not greater than $5,000,000. At closing,
the total of such concessions was $8,927,858.
(5) LTV ratios, DSC ratios and Cut-Off Date Balance/SF were derived based on
the aggregate indebtedness of the One & Two International Place Loan and
the One & Two International Place Pari Passu Loan.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Boston, MA
PROPERTY TYPE Office -- CBD
SIZE (SF) 1,852,501
OCCUPANCY AS OF JANUARY 31, 2005 89.6%
YEAR BUILT/YEAR RENOVATED 1987/NA
APPRAISED VALUE $700,000,000
PROPERTY MANAGEMENT The Chiofaro Company, Inc.
UW ECONOMIC OCCUPANCY 92.5%
UW REVENUES $90,592,807
UW TOTAL EXPENSES $37,103,624
UW NET OPERATING INCOME (NOI) $53,489,183
UW NET CASH FLOW (NCF) $50,540,583
- --------------------------------------------------------------------------------
S-147
- ------------------------------------------------------------------------------------------------------------------------------------
TENANT SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
NET % OF NET % OF DATE OF
RATINGS(1) RENTABLE RENTABLE ACTUAL ACTUAL LEASE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION
- ------------------------------------------------------------------------------------------------------------------------------------
Deutsche/Scudder, Stevens ...... Aa3/AA-/AA- 378,490 20.4% $ 35.87 $13,574,748 17.9% May 2009
Ropes & Gray ................... NR/NR/NR 322,754 17.4 $ 44.30 14,296,524 18.8 December 2010
Choate, Hall & Stewart ......... NR/NR/NR 155,324 8.4 $ 44.00 6,834,256 9.0 September 2015
PricewaterhouseCoopers ......... NR/NR/NR 88,279 4.8 $ 36.50 3,222,192 4.2 April 2005
State Street Bank .............. Aa3/AA-/AA- 62,076 3.4 $ 40.96 2,542,620 3.3 Multiple Spaces(2)
Non-major tenants .............. 651,967 35.2 $ 54.44 35,495,627 46.7
Vacant ......................... 193,611 10.5 0 0.0
------- ----- ----------- -----
TOTAL .......................... 1,852,501 100.0% $75,965,967 100.0%
========= ===== =========== =====
(1) Certain ratings are those of the parent whether or not the parent
guarantees the lease.
(2) Under the terms of multiple leases, 7,900 square feet expire in June 2005,
and 54,176 square feet expire in June 2007.
- ----------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
- ----------------------------------------------------------------------------------------------------------------------
# OF WA BASE CUMULATIVE % OF ACTUAL CUMULATIVE %
LEASES RENT/SF TOTAL SF % OF TOTAL % OF SF RENT OF ACTUAL RENT
YEAR ROLLING ROLLING ROLLING SF ROLLING* ROLLING* ROLLING* ROLLING*
- ----------------------------------------------------------------------------------------------------------------------
2005 6 $ 39.08 104,401 5.6% 5.6% 5.4% 5.4%
2006 10 $ 65.17 79,660 4.3% 9.9% 6.8% 12.2%
2007 28 $ 49.72 194,430 10.5% 20.4% 12.7% 24.9%
2008 16 $ 51.34 47,234 2.5% 23.0% 3.2% 28.1%
2009 12 $ 37.01 417,067 22.5% 45.5% 20.3% 48.4%
2010 14 $ 46.83 408,187 22.0% 67.5% 25.2% 73.6%
2011 2 $ 82.30 32,453 1.8% 69.3% 3.5% 77.1%
2012 3 $ 50.10 19,505 1.1% 70.3% 1.3% 78.4%
2013 6 $ 48.61 57,027 3.1% 73.4% 3.6% 82.1%
2014 4 $ 53.10 62,207 3.4% 76.8% 4.3% 86.4%
2015 4 $ 43.88 195,320 10.5% 87.3% 11.3% 97.7%
Thereafter 1 $ 42.50 41,399 2.2% 89.5% 2.3% 100.0%
Vacant 0 N/A 193,611 10.5% 100.0% 0.0% 100.0%
- ----------------------------------------------------------------------------------------------------------------------
* Calculated based on the approximate square footage occupied by each
tenant.
S-148
THE LOAN. The Mortgage Loan (the "One & Two International Place Loan") is
secured by a first mortgage encumbering an office building located in Boston,
Massachusetts. The One & Two International Place Loan represents approximately
7.7% of the Cut-Off Date Pool Balance. The One & Two International Place Loan
was originated on January 10, 2005, and has a principal balance as of the
Cut-Off Date of $216,000,000. The One & Two International Place Loan provides
for interest-only payments for the first 24 months of its term, and thereafter,
fixed monthly payments of principal and interest based on a 30-year schedule.
The One & Two International Place Loan, which is evidenced by a pari passu note
dated January 10, 2005, is a portion of a whole loan with an original principal
balance of $432,000,000. The other loan related to the One & Two International
Place Loan is evidenced by a separate note, dated January 10, 2005 (the "One &
Two International Place Pari Passu Loan"), with an original principal balance of
$216,000,000.
The One & Two International Place Loan has a remaining term of 118 months and
matures on January 11, 2015. The One & Two International Place Loan may be
prepaid on or after October 11, 2014 and permits defeasance with United States
government obligations beginning two years after the Closing Date.
THE BORROWERS. The borrowers are Fort Hill Square 1 Owner LLC and Fort Hill
Square 2 Owner LLC, each a special purpose entity. Legal counsel to the
borrowers delivered a non-consolidation opinion in connection with the
origination of the One & Two International Place Loan. The sponsor is Prudential
Property Investment Separate Account ("PRISA"). which acquired a majority stake
in the Mortgaged Property through the real estate investment arm of the
Prudential Insurance Company of America, Prudential Real Estate Investors
("PREI"). PREI provides global real estate investment management services in the
United States, Europe, Asia and Latin America. PREI is ranked among the largest
real estate investment managers.
THE PROPERTY. The Mortgaged Property is an approximately 1,852,501 square foot
office building situated on approximately 2.5 acres. The Mortgaged Property was
designed by the architectural firm Johnson Burgee and was developed by The
Chiofaro Company, Inc. ("Chiofaro") in 1987. The Mortgaged Property is located
in Boston, Massachusetts. As of January 31, 2005, the occupancy rate for the
Mortgaged Property securing the One & Two International Place Loan was
approximately 89.6%.
The largest tenant is Deutsche/Scudder, Stevens ("Deutsche/Scudder"), occupying
approximately 378,490 square feet, or approximately 20.4% of the net rentable
area. Deutsche/Scudder is the asset management arm of Deutsche Bank AG
("Deutsche Bank"), and has over $699 billion of assets under management, 8,000
employees and 20 offices worldwide. Deutsche Asset Management is one of the
largest retail asset managers in the Asia Pacific region. As of February 27,
2005, Deutsche Bank was rated "AA-" (S&P), "Aa3" (Moody's) and "AA-" (Fitch).
The Deutsche/ Scudder lease expires in May 2009. The second largest tenant is
Ropes & Gray ("Ropes & Gray"), occupying approximately 322,754 square feet, or
approximately 17.4% of the net rentable area. Ropes & Gray is a leading national
law firm with over 750 lawyers and professionals, offices in Boston, New York,
Palo Alto, San Francisco, and Washington, D.C., and conference centers in London
and Providence. Ropes & Gray represents interests across a broad spectrum of
industries in corporate law and litigation matters, as well as offer counsel on
labor and employment issues, tax and benefits, creditors' rights, and private
client services. The Ropes & Gray lease expires in December 2010. The third
largest tenant is Choate, Hall & Stewart LLP ("Choate, Hall & Stewart"),
occupying approximately 155,324 square feet, or approximately 8.4% of the net
rentable area. Choate, Hall & Stewart has maintained a position as one of the
nation's leading law firms for over a century. Choate, Hall & Stewart's areas of
core concentration are Corporate Law, Litigation, Intellectual Property, Trusts
and Estates, Real Estate, and Healthcare. The Choate, Hall & Stewart lease
expires in September 2015.
LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are
deposited into a mortgagee designated lock box account.
MANAGEMENT. Chiofaro, the original developer of the Mortgaged Property, is the
property manager for the Mortgaged Property securing the One & Two International
Place Loan. Chiofaro is one of New England's leading developers and operators of
first class commercial and research and development projects.
S-149
Digital Realty Trust Portfolio
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Citigroup
CUT-OFF DATE BALANCE $154,335,917
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 5.5%
NUMBER OF MORTGAGE LOANS 6
LOAN PURPOSE Refinance
SPONSOR Digital Realty Trust,
L.P. and Digital Realty Trust, Inc.
TYPE OF SECURITY Fee
MORTGAGE RATE 5.649%
MATURITY DATE November 11, 2014
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 120/360
REMAINING TERM/AMORTIZATION 116/356
LOCKBOX Yes
UP-FRONT RESERVES
TAX Yes
REPLACEMENT $29,539
TI/LC(1) $1,850,313
QWEST SPACE TI/LC(2) $2,400,000
CEC PREPAID RENT(3) $314,625
ENGINEERING $55,000
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $29,539
TI/LC $177,236
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $154,335,917
CUT-OFF DATE BALANCE/SF $109
CUT-OFF DATE LTV 67.3%
MATURITY DATE LTV 56.7%
UW DSCR ON NCF 1.55x
- --------------------------------------------------------------------------------
(1) The funds escrowed in the upfront TI/LC Reserve may be used for tenant
improvement allowances and leasing commissions for tenants of the 6
Mortgaged Properties (with amounts allocated to each Mortgaged Property)
subject to the terms of the mortgage loan documents. The American
Intercontinental University ("CEC") tenant at the Webb at LBJ property is
entitled to $1,273,077 in tenant improvement allowances per the terms of
the CEC lease. The Systems Management Specialists ("SMS") tenant at the
Brea Office Building property is entitled to $400,000 for tenant
improvement allowances per the terms of the SMS lease.
(2) Qwest Communications Corporation ("Qwest") leases 78,540 sf at 36
Northeast Second Street on the second, third and fourth floor of the
building and is a dark but paying tenant on the third and fourth floor
(52,360 sf). Upon loan closing, the mortgagee required an upfront escrow
totaling $2,400,000 to address tenant improvement and leasing commission
costs associated with the dark but paying Qwest tenant space on the third
and fourth floor and thereafter, for releasing costs associated with the
currently built out tenant space that Qwest occupies on the second floor.
(3) The CEC tenant at the Webb at LBJ property leases 50,463 sf under a lease
that expires June 30, 2016. CEC's space includes phase I (30,463 sf),
phase II (10,000 sf) and phase III (10,000 sf). As of the loan's closing
date, the tenant was paying rent for the phase I space; however, rent for
phase II and III tenant space were not being paid and will respectively
commence on July 1, 2005 and July 1, 2006. The mortgagee escrowed 100% of
phase II and III gross rental payments from the loan's closing date
through the date that the CEC lease commences which totaled $314,625.
Future releases of the escrow will commence on July 1, 2005 and will total
$88,875 (i.e., the "First Prepaid Rent Disbursement") from the CEC Prepaid
Rent Reserve Account provided that the phase II CEC lease is in full force
and effect, the tenant is in occupancy and the tenant has commenced paying
rent. Provided that the mortgagee shall have previously released the First
Prepaid Rent Disbursement to borrower in accordance with the loan
agreement, the mortgagee shall disburse any remaining amounts (i.e.,
$225,750 plus accrued interest) on deposit in the CEC Prepaid Rent Reserve
Account to the borrower for the phase III tenant space after July 1, 2006,
subject to the aforementioned release criteria.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 6
LOCATION Various
PROPERTY TYPE Office/Mixed Use
SIZE (SF) 1,421,884
OCCUPANCY AS OF JANUARY 14, 2005 93.6%
YEAR BUILT/YEAR RENOVATED Various
APPRAISED VALUE $229,200,000
PROPERTY MANAGEMENT Various
UW ECONOMIC OCCUPANCY 89.0%
UW REVENUES $30,476,142
UW TOTAL EXPENSES $11,212,518
UW NET OPERATING INCOME (NOI) $19,263,624
UW NET CASH FLOW (NCF) $16,685,634
- --------------------------------------------------------------------------------
S-150
- ------------------------------------------------------------------------------------------
DIGITAL REALTY TRUST PORTFOLIO SUMMARY
- ------------------------------------------------------------------------------------------
ALLOCATED CUT-OFF DATE
CUT-OFF DATE BALANCE
PROPERTY NAME CITY STATE BALANCE PER SF
- ------------------------------------------------------------------------------------------
Hudson Corporate Center......... Weehawken NJ $ 46,599,490 $ 149
Comverse Office Building ....... Wakefield MA 36,144,476 $ 93
Webb at LBJ .................... Dallas TX 34,352,188 $ 94
36 Northeast Second Street ..... Miami FL 18,171,810 $ 112
Siemens Building ............... Farmers Branch TX 11,152,015 $ 89
Brea Office Building ........... Brea CA 7,915,939 $ 115
-------------
$ 154,335,917 $ 109
=============
- ------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
UNDERWRITTEN
YEAR NET APPRAISED
PROPERTY NAME BUILT NRA (SF) OCCUPANCY* CASH FLOW VALUE
- ---------------------------------------------------------------------------------------------------
Hudson Corporate Center......... 1950 311,950 87.4% $ 6,010,295 $ 62,700,000
Comverse Office Building ....... 1957 388,000 99.7% 3,417,856 58,600,000
Webb at LBJ .................... 1966 365,449 94.5% 3,201,594 46,000,000
36 Northeast Second Street ..... 1925 162,140 81.2% 2,186,529 33,000,000
Siemens Building ............... 1999 125,538 100.0% 1,029,934 18,300,000
Brea Office Building ........... 1980 68,807 100.0% 839,426 10,600,000
------- ------------ -------------
1,421,884 93.6% $ 16,685,634 $ 229,200,000
========= ============ =============
- ---------------------------------------------------------------------------------------------------
* Occupancy as of January 14, 2005.
- ----------------------------------------------------------------------------------
TENANT SUMMARY
- ----------------------------------------------------------------------------------
NET % OF NET
RATINGS(1) RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- ----------------------------------------------------------------------------------
Comverse Technology ................... NR/BB-/NR 367,033 25.8%
Savvis, Inc. .......................... NR/NR/NR 258,375 18.2
SBC Services, Inc. .................... A2/A/A+ 141,663 10.0
Siemens Subscriber Networks, Inc. ..... Aa3/AA-/AA- 125,538 8.8
Burlington Coat Factory ............... NR/NR/NR 80,000 5.6
Qwest Communications Corporation ...... Caa2/BB-/B+ 78,540 5.5
Non-major tenants ..................... 279,584 19.7
Vacant ................................ 91,151 6.4
------- -----
TOTAL ................................. 1,421,884 100.0%
========= =====
- -------------------------------------------------------------------------------------------------
% OF DATE OF
ACTUAL ACTUAL LEASE
TENANT RENT PSF ACTUAL RENT RENT EXPIRATION
- -------------------------------------------------------------------------------------------------
Comverse Technology ................... $ 18.41 $ 6,758,060 25.2% February 2011
Savvis, Inc. .......................... $ 26.27 6,788,733 25.3 Multiple Spaces(2)
SBC Services, Inc. .................... $ 23.00 3,258,249 12.2 November 2010
Siemens Subscriber Networks, Inc. ..... $ 20.00 2,510,760 9.4 April 2010
Burlington Coat Factory ............... $ 4.75 380,000 1.4 January 2009
Qwest Communications Corporation ...... $ 23.19 1,820,988 6.8 December 2013
Non-major tenants ..................... $ 18.88 5,278,446 19.7
Vacant ................................ 0 0.0
------------ -----
TOTAL ................................. $ 26,795,236 100.0%
============ =====
- -------------------------------------------------------------------------------------------------
(1) Certain ratings are those of the parent whether or not the parent
guarantees the lease.
(2) Under the terms of multiple leases, 23,805 square feet expire in August
2009, and 234,570 square feet expire in August 2013.
- --------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
- --------------------------------------------------------------------------------------------------------
# OF WA BASE CUMULATIVE CUMULATIVE %
LEASES RENT/SF TOTAL SF % OF TOTAL % OF SF % OF ACTUAL OF ACTUAL RENT
YEAR ROLLING ROLLING ROLLING SF ROLLING* ROLLING* RENT ROLLING* ROLLING*
- --------------------------------------------------------------------------------------------------------
2005 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2006 1 $ 15.00 19,923 1.4% 1.4% 1.1% 1.1%
2007 1 $ 16.00 3,000 0.2% 1.6% 0.2% 1.3%
2008 0 $ 0.00 0 0.0% 1.6% 0.0% 1.3%
2009 4 $ 10.94 111,117 7.8% 9.4% 4.5% 5.8%
2010 3 $ 20.80 301,167 21.2% 30.6% 23.4% 29.2%
2011 3 $ 18.93 402,275 28.3% 58.9% 28.4% 57.6%
2012 1 $ 42.55 5,226 0.4% 59.3% 0.8% 58.5%
2013 4 $ 25.15 363,313 25.6% 84.8% 34.1% 92.6%
2014 3 $ 18.63 74,249 5.2% 90.0% 5.2% 97.7%
2015 0 $ 0.00 0 0.0% 90.0% 0.0% 97.7%
Thereafter 1 $ 12.06 50,463 3.5% 93.6% 2.3% 100.0%
Vacant 0 NA 91,151 6.4% 100.0% 0.0% 100.0%
- --------------------------------------------------------------------------------------------------------
* Calculated based on the approximate square footage occupied by each
tenant.
S-151
THE LOAN. The 6 Mortgage Loans (the "Digital Realty Trust Portfolio Loans") are
collectively secured by first mortgages or deeds of trust encumbering 2 office
properties located in Massachusetts and Texas; 3 telecommunications facilities
located in California, Florida and New Jersey and 1 mixed use property located
in Dallas, Texas. The Digital Realty Trust Portfolio Loans represent
approximately 5.5% of the Cut-Off Date Pool Balance. The Digital Realty Trust
Portfolio Loans were originated on November 3, 2004, and have an aggregate
principal balance as of the Cut-Off Date of $154,335,917. Each of the Digital
Realty Trust Portfolio Loans is cross-collateralized and cross-defaulted with
each of the other Digital Realty Trust Portfolio Loans.
The Digital Realty Trust Portfolio Loans have a remaining term of 116 months and
mature on November 11, 2014. The Digital Realty Trust Portfolio Loans may be
prepaid on or after September 11, 2014, and each Digital Realty Trust Portfolio
Loan permits defeasance with United States government obligations beginning two
years after the Closing Date.
THE BORROWERS. The borrowers are Global Weehawken Acquisition Company, LLC, GIP
Wakefield, LLC, Global Webb, L.P., Global Miami Acquisition Company, LLC, GIP
Alpha, L.P., and Global Brea, LLC, each a special purpose entity. A
non-consolidation opinion was delivered in connection with the origination of
each of the Digital Realty Trust Portfolio Loans. The sponsors are Digital
Realty Trust, L.P. and Digital Realty Trust, Inc. ("Digital") and Global
Innovation Partners, LLC ("GI Partners"). Digital conducts its business
activities through Digital Realty Trust, L.P., its operating partnership.
Digital is a newly formed, publicly traded REIT which owns, acquires,
repositions and manages technology related commercial real estate. Digital's
portfolio is primarily located in eleven major metropolitan areas including
Silicon Valley, San Francisco, Dallas, Boston, Los Angeles, New York, London,
Denver and Miami. Digital's common stock is listed on the NYSE under "DLR". GI
Partners is a private equity fund that was formed to pursue investment
opportunities that intersect the real estate and technology industries.
Investors in GI Partners include CalPERS (the majority investor in GI Partners
at the time of Digital's initial public offering) and CB Richard Ellis.
Concurrent with Digital's initial public offering, GI Partners owned over 40% of
the ownership interests in Digital Realty Trust, L.P.
THE PROPERTIES. The Mortgaged Properties consist of 2 office properties, 3
telecommunications facilities and 1 mixed use property totalling approximately
1,421,884 square feet. As of January 14, 2005, the weighted average occupancy
rate for the Mortgaged Properties securing the Digital Realty Trust Portfolio
Loans was approximately 93.6%.
The largest tenant is Comverse Technology ("Comverse"), occupying approximately
367,033 square feet in two buildings, or 94.6% of the total net rentable area at
the Comverse Office Building property. Comverse is a provider of software and
systems enabling network-based multimedia enhanced communications services with
wireless and wire line telecommunications network operators in more than 100
countries. This property serves as Comverse's U.S. headquarters. Comverse is
rated "BB-" (S&P). The Comverse lease expires in February 2011. The second
largest tenant is Savvis, Inc. ("Savvis") occupying 234,570 square feet, or
75.2% of the total net rentable area at the Hudson Corporate Center property and
23,805 square feet, or 14.7% of the total net rentable area at the 36 Northeast
Second Street property. Savvis provides access, data transport, and related
network services to more than 1,900 medium and large businesses and ISPs. Its
network supports ATM (asynchronous transfer mode), IP (Internet protocol), and
frame relay technologies, using private network access points that allow traffic
to bypass public Internet-access points and spans more than 100 cities in
approximately 45 countries. The Savvis leases expire in August 2013 at the
Hudson Corporate Center property and in August 2009 at the 36 Northeast Second
Street property. The third largest tenant is SBC Services, Inc. ("SBC"),
occupying 141,663 square feet, or 38.8% of the net rentable area at the Webb at
LBJ property. SBC is the second largest U.S. local telephone service provider.
Its recent acquisition of AT&T Wireless has made its `Cingular' brand one of the
nation's leading wireless carriers. Other services include long-distance and DSL
broadband services. SBC is rated "A2" (Moody's), "A" (S&P) and "A+" (Fitch). The
SBC lease expires in November 2010.
LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are
deposited into a mortgagee designated lock box account.
MANAGEMENT. CB Richard Ellis, CB Richard Ellis-N.E. Partners, LP, Capstar
Commercial Real Estate Services, Ltd., and Lincoln Property Company of Florida,
Inc. are the property managers for the Mortgaged Properties securing the Digital
Realty Trust Portfolio Loans.
S-152
450 West 33rd Street
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $132,500,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 4.7%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Jacob Chetrit & Arbor Realty SR, Inc.
TYPE OF SECURITY Fee
MORTGAGE RATE 5.100%
MATURITY DATE March 11, 2015
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 36
ORIGINAL TERM/AMORTIZATION 120/324
REMAINING TERM/AMORTIZATION 120/324
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $22,125
TI/LC $14,000,000
RENT RESERVE(1) $2,010,000
OUTSTANDING TI/LC(2) $1,662,530
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $27,871
TI/LC(3) $69,677
ADDITIONAL FINANCING Pari Passu Debt $132,500,000
Mezzanine Debt $85,000,000
PARI PASSU
NOTES(4)
------------
CUT-OFF DATE BALANCE $265,000,000
CUT-OFF DATE BALANCE/SF $158
CUT-OFF DATE LTV 68.8%
MATURITY DATE LTV 59.3%
UW DSCR ON NCF 1.22x
- --------------------------------------------------------------------------------
(1) Escrowed at closing to cover the free rent period or rent concessions for
Coach and St. Vincent's, respectively.
(2) Escrowed at closing for landlord obligations currently outstanding for
tenant improvements and leasing commissions related to Coach, St.
Vincent's and NY Clearing House.
(3) Beginning in September 2009, the borrower will be required to fund the
escrow account with $69,677 per month for the remaining loan term.
(4) LTV ratios, DSC ratio and Cut-Off Date Balance/SF were derived based on
the aggregate indebtedness of the 450 West 33rd Street Loan and the 450
West 33rd Street Pari Passu Loan.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION New York, NY
PROPERTY TYPE Office - CBD
SIZE (SF) 1,672,237
OCCUPANCY AS OF MARCH 1, 2005 84.5%
YEAR BUILT/YEAR RENOVATED 1969/1990
APPRAISED VALUE $385,000,000
PROPERTY MANAGEMENT Newmark & Company Real
Estate, Inc.
UW ECONOMIC OCCUPANCY 83.4%
UW REVENUES $41,194,147
UW TOTAL EXPENSES $18,918,036
UW NET OPERATING INCOME (NOI) $22,276,111
UW NET CASH FLOW (NCF) $22,025,275
- --------------------------------------------------------------------------------
S-153
- -------------------------------------------------------------------------------------------------------------------------
TENANT SUMMARY
- -------------------------------------------------------------------------------------------------------------------------
NET % OF NET % OF
RATINGS* RENTABLE RENTABLE ACTUAL ACTUAL DATE OF LEASE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION
- -------------------------------------------------------------------------------------------------------------------------
Associated Press .......... NR/NR/NR 290,752 17.4% $ 27.45 $ 7,980,289 25.3% November 2019
Thirteen/WNET ............. NR/NR/NR 204,791 12.2 $ 21.95 4,495,092 14.2 November 2018
Lerner NY ................. Baa2/BBB/NR 163,093 9.8 $ 26.72 4,357,881 13.8 June 2015
The Daily News ............ NR/NR/NR 140,950 8.4 $ 18.42 2,596,035 8.2 June 2011
City of New York .......... NR/NR/NR 129,874 7.8 $ 16.69 2,167,732 6.9 December 2016
Non-major tenants ......... 482,732 28.9 $ 20.64 9,962,520 31.6
Vacant .................... 260,045 15.6 0 0.0
------- ----- ----------- -----
TOTAL ..................... 1,672,237 100.0% $31,559,549 100.0%
========= ===== =========== =====
- -------------------------------------------------------------------------------------------------------------------------
* Certain ratings are those of the parent whether or not the parent
guarantees the lease.
- ------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
- ------------------------------------------------------------------------------------------------------------
WA BASE CUMULATIVE CUMULATIVE %
# OF LEASES RENT/SF TOTAL SF % OF TOTAL % OF SF % OF ACTUAL OF ACTUAL RENT
YEAR ROLLING ROLLING ROLLING SF ROLLING* ROLLING* RENT ROLLING* ROLLING*
- ------------------------------------------------------------------------------------------------------------
2005 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2006 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2007 1 $ 14.00 17,800 1.1% 1.1% 0.8% 0.8%
2008 0 $ 0.00 0 0.0% 1.1% 0.0% 0.8%
2009 0 $ 0.00 0 0.0% 1.1% 0.0% 0.8%
2010 0 $ 0.00 0 0.0% 1.1% 0.0% 0.8%
2011 6 $ 18.77 241,803 14.5% 15.5% 14.4% 15.2%
2012 3 $ 19.22 81,308 4.9% 20.4% 5.0% 20.1%
2013 6 $ 12.38 93,564 5.6% 26.0% 3.7% 23.8%
2014 0 $ 0.00 0 0.0% 26.0% 0.0% 23.8%
2015 4 $ 26.22 199,794 11.9% 37.9% 16.6% 40.4%
Thereafter 9 $ 24.18 777,923 46.5% 84.4% 59.6% 100.0%
Vacant 0 N/A 260,045 15.6% 100.0% 0.0% 100.0%
- ------------------------------------------------------------------------------------------------------------
* Calculated based on the approximate square footage occupied by each
tenant.
S-154
THE LOAN. The Mortgage Loan (the "450 West 33rd Street Loan") is secured by a
first mortgage encumbering an office building located in New York, New York. The
450 West 33rd Street Loan represents approximately 4.7% of the Cut-Off Date Pool
Balance. The 450 West 33rd Street Loan was originated on March 1, 2005, and has
a principal balance as of the Cut-Off Date of $132,500,000. The 450 West 33rd
Street Loan provides for interest-only payments for the first 36 months of its
term, and thereafter, fixed monthly payments of principal and interest.
The 450 West 33rd Street Loan, which is evidenced by a pari passu note dated
March 1, 2005, is a portion of a whole loan with an original principal balance
of $265,000,000. The other loan related to the 450 West 33rd Street Loan is
evidenced by a separate note, dated March 1, 2005 (the "450 West 33rd Street
Pari Passu Loan"), with an original principal balance of $132,500,000.
The 450 West 33rd Street Loan has a remaining term of 120 months and matures on
March 11, 2015. The 450 West 33rd Street Loan may be prepaid on or after
December 11, 2014 and permits defeasance with United States government
obligations beginning two years after the Closing Date.
THE BORROWER. The borrower is 450 Partners LLC, a special purpose entity. Legal
counsel to the borrower delivered a non-consolidation opinion in connection with
the origination of the 450 West 33rd Street Loan. The sponsors are Jacob Chetrit
and Arbor Realty SR, Inc. Jacob Chetrit is an experienced real estate developer
with major holdings in New York City and additional holdings around the country.
The Chetrit Group has acquired and operated more than 4,500 apartment units and
10 million square feet of office and industrial space over the past 10 years.
Arbor Realty SR, Inc. is a specialized real estate finance company investing in
real estate-related bridge and mezzanine loans, preferred equity and, in limited
cases, discounted mortgage notes and other real estate-related assets, which are
collectively referred to as structured finance investments.
THE PROPERTY. The Mortgaged Property is an approximately 1,672,237 square foot
office building situated on approximately 3.1 acres. The Mortgaged Property was
constructed in 1969 and renovated in 1990. The Mortgaged Property is located in
New York, New York. As of March 1, 2005, the occupancy rate for the Mortgaged
Property securing the 450 West 33rd Street Loan was approximately 84.5%.
The largest tenant is the Associated Press ("AP"), occupying approximately
290,752 square feet, or approximately 17.4% of the net rentable area. AP is the
world's largest newsgathering organization, with approximately 242 news bureaus
serving more than 120 countries. The AP currently serves more than 1,500
newspapers and 5,000 broadcast outlets in the United States. Abroad, AP services
are printed and broadcast in 112 countries. The company provides news, photos,
graphics, and audiovisual services that reach people daily through print, radio,
television, and the Web. The AP lease expires in November 2019. The second
largest tenant is Thirteen/WNET ("Thirteen") occupying approximately 204,791
square feet, or approximately 12.2% of the net rentable area. Thirteen provides
non-commercial, educational, public television and is celebrating four decades
of educational television, community partnership and new media innovation. The
Thirteen lease expires in November 2018. The third largest tenant is Lerner NY
("Lerner"), occupying approximately 163,093 square feet, or approximately 9.8%
of the net rentable area. Lerner caters to women looking for urban apparel
including jeans, dresses, and coordinates as well as accessories including
sunglasses, costume jewelry, and hosiery at moderate prices. The Lerner lease is
guaranteed by The Limited, Inc. As of March 1, 2005, The Limited, Inc. was rated
"BBB" (S&P) and "Baa2" (Moody's). The Lerner lease expires in June 2015.
LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are
deposited into a mortgagee designated lock box account.
MEZZANINE DEBT. Three Mezzanine loans in the aggregate amount of $85,000,000,
were originated on March 1, 2005. The mezzanine loans are not assets of the
Trust and are secured by a pledge of the equity interests of the borrower.
MANAGEMENT. Newmark and Company Real Estate, Inc. ("Newmark") is the property
manager for the Mortgaged Property securing the 450 West 33rd Street Loan.
Newmark is headquartered in Manhattan and provides comprehensive real estate
services to many of the world's most prominent corporations, property owners,
investors and developers. Newmark manages and/or leases approximately 50 million
square feet of commercial space nationally.
S-155
Olympia Portfolio
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $85,700,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 3.1%
NUMBER OF MORTGAGE LOANS 23
LOAN PURPOSE Refinance
SPONSOR William E Touloumis
TYPE OF SECURITY Fee
WA MORTGAGE RATE 5.692%
MATURITY DATE February 11, 2015
AMORTIZATION TYPE ARD
INTEREST ONLY PERIOD 6
ORIGINAL TERM/AMORTIZATION 120/300
REMAINING TERM/AMORTIZATION 119/300
LOCKBOX Springing
UP-FRONT RESERVES None
ONGOING MONTHLY RESERVES
TAX/INSURANCE Springing
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $85,700,000
CUT-OFF DATE BALANCE/SF $210
CUT-OFF DATE LTV 75.0%
MATURITY DATE LTV 58.6%
UW DSCR ON NCF 1.25x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 24
LOCATION Various
PROPERTY TYPE Retail/Office
SIZE (SF) 409,058
OCCUPANCY AS OF VARIOUS DATES 98.2%
YEAR BUILT/YEAR RENOVATED Various
APPRAISED VALUE $114,260,000
PROPERTY MANAGEMENT Olympia Development Group, Inc.
UW ECONOMIC OCCUPANCY 97.4%
UW REVENUES $8,728,363
UW TOTAL EXPENSES $596,411
UW NET OPERATING INCOME (NOI) $8,131,952
UW NET CASH FLOW (NCF) $8,009,468
- --------------------------------------------------------------------------------
S-156
- -------------------------------------------------------------------------------------------------
OLYMPIA PORTFOLIO SUMMARY
- -------------------------------------------------------------------------------------------------
GENERAL SPECIFIC
CUT-OFF DATE PROPERTY PROPERTY
PROPERTY NAME BALANCE YEAR BUILT TYPE TYPE
- -------------------------------------------------------------------------------------------------
Olympia Retail Plaza at Dunedin, FL ......... $ 7,062,000 1998 Retail Anchored
Olympia Temple Terrace Publix Shopping
Center ..................................... 6,000,000 1999 Retail Anchored
Olympia Walgreens -- Sarasota (Tamiami
Trail), FL ................................. 5,211,000 1999 Retail Anchored
Olympia Walgreens -- Temple Terrace,
FL ......................................... 4,418,000 1998 Retail Anchored
Olympia Walgreens -- Bradenton, FL .......... 4,305,000 1998 Retail Anchored
Olympia Walgreens -- Merritt Island, FL ..... 4,161,000 1998 Retail Anchored
Olympia Walgreens -- Naples, FL ............. 4,093,000 1998 Retail Anchored
Olympia Walgreens -- Lilburn, GA ............ 4,078,000 2000 Retail Anchored
Olympia Walgreens -- Brooksville, FL ........ 3,965,000 2001 Retail Anchored
Olympia Walgreens -- Sarasota (Bee
Ridge Road), FL ............................ 3,625,000 1995 Retail Anchored
Olympia Walgreens -- Tampa, FL .............. 3,550,000 2001 Retail Anchored
Olympia Walgreens -- New Smyrna
Beach, FL .................................. 3,550,000 1999 Retail Anchored
Olympia Walgreens -- Marietta, GA ........... 3,546,500 2002 Retail Anchored
Olympia Walgreens -- Lehigh Acres, FL ....... 3,432,500 2002 Retail Anchored
Olympia Walgreens -- Seminole, FL ........... 3,399,000 1996 Retail Anchored
Olympia Walgreens -- Decatur, GA ............ 3,399,000 2001 Retail Anchored
Olympia Walgreens -- Ocoee, FL .............. 3,361,000 2001 Retail Anchored
Olympia Walgreens -- Homosassa, FL .......... 2,983,000 1997 Retail Anchored
Olympia Walgreens -- Oldsmar, FL ............ 2,870,000 1998 Retail Anchored
Olympia Walgreens -- Lake Wales, FL ......... 2,832,000 1997 Retail Anchored
Olympia Medical/Office Pool ................. 2,402,000 Various Office Various
Medical Associates of Pinellas Building ..... 1999 Office Medical
Olympia Office Center ....................... 1998 Office Suburban
Olympia Retail Plaza at Daytona
Beach, FL .................................. 1,795,000 1990 Retail Anchored
Olympia Applebees -- Lithia Springs, GA...... 1,662,000 2003 Retail Unanchored
-----------
$85,700,000
===========
- -------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CUT-OFF DATE UNDERWRITTEN
SQUARE BALANCE NET
PROPERTY NAME FOOTAGE PER SF LARGEST TENANT OCCUPANCY CASH FLOW
- ----------------------------------------------------------------------------------------------------------------------------------
Olympia Retail Plaza at Dunedin, FL ......... 28,176 $ 251 Walgreens 100.0% $ 665,558
Olympia Temple Terrace Publix Shopping
Center ..................................... 48,769 $ 123 Publix 100.0% 569,130
Olympia Walgreens -- Sarasota (Tamiami
Trail), FL ................................. 17,145 $ 304 Walgreens 100.0% 507,516
Olympia Walgreens -- Temple Terrace,
FL ......................................... 15,120 $ 292 Walgreens 100.0% 415,600
Olympia Walgreens -- Bradenton, FL .......... 15,930 $ 270 Walgreens 100.0% 406,038
Olympia Walgreens -- Merritt Island, FL ..... 15,120 $ 275 Walgreens 100.0% 391,250
Olympia Walgreens -- Naples, FL ............. 15,930 $ 257 Walgreens 100.0% 371,884
Olympia Walgreens -- Lilburn, GA ............ 15,120 $ 270 Walgreens 100.0% 371,894
Olympia Walgreens -- Brooksville, FL ........ 15,120 $ 262 Walgreens 100.0% 371,894
Olympia Walgreens -- Sarasota (Bee
Ridge Road), FL ............................ 16,496 $ 220 Walgreens 100.0% 341,337
Olympia Walgreens -- Tampa, FL .............. 15,120 $ 235 Walgreens 100.0% 321,442
Olympia Walgreens -- New Smyrna
Beach, FL .................................. 15,120 $ 235 Walgreens 100.0% 322,469
Olympia Walgreens -- Marietta, GA ........... 15,120 $ 235 Walgreens 100.0% 321,442
Olympia Walgreens -- Lehigh Acres, FL ....... 15,120 $ 227 Walgreens 100.0% 311,762
Olympia Walgreens -- Seminole, FL ........... 15,930 $ 213 Walgreens 100.0% 318,575
Olympia Walgreens -- Decatur, GA ............ 13,905 $ 244 Walgreens 100.0% 308,964
Olympia Walgreens -- Ocoee, FL .............. 15,120 $ 222 Walgreens 100.0% 305,016
Olympia Walgreens -- Homosassa, FL .......... 15,930 $ 187 Walgreens 100.0% 279,172
Olympia Walgreens -- Oldsmar, FL ............ 15,120 $ 190 Walgreens 100.0% 270,109
Olympia Walgreens -- Lake Wales, FL ......... 15,930 $ 178 Walgreens 100.0% 267,119
Olympia Medical/Office Pool ................. 27,968 $ 86 Various 100.0% 254,204
Medical Associates of Pinellas Building ..... 13,984 Medical Associates of Pinellas 100.0%
Olympia Office Center ....................... 13,984 American Vacation Resorts 100.0%
Olympia Retail Plaza at Daytona
Beach, FL .................................. 21,226 $ 85 Walgreens 65.1% 162,297
Olympia Applebees -- Lithia Springs, GA...... 4,523 $ 367 Applebees 100.0% 154,795
------ ----------
409,058 $ 210 98.2% $8,009,468
======= ==========
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
APPRAISED CUT-OFF
APPRAISED VALUE DATE UW NCF
PROPERTY NAME VALUE PER SF LTV DSCR
- ----------------------------------------------------------------------------------------------
Olympia Retail Plaza at Dunedin, FL ......... $ 9,350,000 $ 332 75.5% 1.25x
Olympia Temple Terrace Publix Shopping
Center ..................................... 7,500,000 $ 154 80.0% 1.26x
Olympia Walgreens -- Sarasota (Tamiami
Trail), FL ................................. 6,900,000 $ 402 75.5% 1.30x
Olympia Walgreens -- Temple Terrace,
FL ......................................... 5,850,000 $ 387 75.5% 1.25x
Olympia Walgreens -- Bradenton, FL .......... 5,700,000 $ 358 75.5% 1.26x
Olympia Walgreens -- Merritt Island, FL ..... 5,510,000 $ 364 75.5% 1.25x
Olympia Walgreens -- Naples, FL ............. 5,420,000 $ 340 75.5% 1.21x
Olympia Walgreens -- Lilburn, GA ............ 5,400,000 $ 357 75.5% 1.21x
Olympia Walgreens -- Brooksville, FL ........ 5,250,000 $ 347 75.5% 1.25x
Olympia Walgreens -- Sarasota (Bee
Ridge Road), FL ............................ 4,800,000 $ 291 75.5% 1.25x
Olympia Walgreens -- Tampa, FL .............. 4,700,000 $ 311 75.5% 1.21x
Olympia Walgreens -- New Smyrna
Beach, FL .................................. 4,700,000 $ 311 75.5% 1.21x
Olympia Walgreens -- Marietta, GA ........... 4,700,000 $ 311 75.5% 1.21x
Olympia Walgreens -- Lehigh Acres, FL ....... 4,550,000 $ 301 75.4% 1.21x
Olympia Walgreens -- Seminole, FL ........... 4,500,000 $ 282 75.5% 1.25x
Olympia Walgreens -- Decatur, GA ............ 4,500,000 $ 324 75.5% 1.21x
Olympia Walgreens -- Ocoee, FL .............. 4,450,000 $ 294 75.5% 1.21x
Olympia Walgreens -- Homosassa, FL .......... 3,950,000 $ 248 75.5% 1.25x
Olympia Walgreens -- Oldsmar, FL ............ 3,800,000 $ 251 75.5% 1.25x
Olympia Walgreens -- Lake Wales, FL ......... 3,750,000 $ 235 75.5% 1.26x
Olympia Medical/Office Pool ................. 3,180,000 $ 114 75.5% 1.41x
Medical Associates of Pinellas Building ..... 1,980,000 $ 142
Olympia Office Center ....................... 1,200,000 $ 86
Olympia Retail Plaza at Daytona
Beach, FL .................................. 3,600,000 $ 170 49.9% 1.25x
Olympia Applebees -- Lithia Springs, GA...... 2,200,000 $ 486 75.5% 1.24x
------------
$114,260,000 $ 279 75.0% 1.25X
============
- ----------------------------------------------------------------------------------------------
S-157
THE LOAN. The 23 Mortgage Loans (the "Olympia Portfolio Loans") are secured by
23 mortgages or first deeds of trust encumbering 22 retail properties and 2
office properties, located in Florida (19 properties) and Georgia (4
properties). The Olympia Portfolio Loans represent approximately 3.1% of the
Cut-Off Date Pool Balance. The Olympia Portfolio Loans were originated on
December 15, 2004, and have a principal balance as of the Cut-Off Date of
$85,700,000. Each of the Olympia Portfolio Loans is cross-collateralized and
cross-defaulted with each of the other Olympia Portfolio Loans. Each Olympia
Portfolio Loan provides for interest-only payments for the first 6 months of its
term, and thereafter, fixed monthly payments of principal and interest.
The Olympia Portfolio Loans each have a remaining term of 119 months and mature
on February 11, 2015. The Olympia Portfolio Loans may be prepaid on or after
December 11, 2014, and permit defeasance with United States government
obligations beginning two years after the Closing Date.
THE BORROWER. The borrower for 21 of the Olympia Portfolio Loans is Olympia
Development Group, Inc., for 1 of the Olympia Portfolio Loans is Seabreeze
Plaza Partnership, and for 1 of the Olympia Portfolio Loans is
Russell/Touloumis I, LLC. None of the borrowers is a special purpose entity.
The sponsor of each of the borrowers is William E. Touloumis. Mr. Touloumis is
President of Olympia Development, Inc., and is an experienced developer with
ties to Walgreens that date back to 1980. Olympia Development Group, Inc. is a
vertically integrated real estate company focused on providing new stores for
Walgreens both for sale and lease.
THE PROPERTIES. The Olympia Portfolio Loans consist of 22 retail properties and
2 office properties, containing, in the aggregate, approximately 409,058 square
feet. The 24 Mortgaged Properties are located in Georgia and Florida. As of
various dates in 2004, the occupancy for the Mortgaged Properties securing the
Olympia Portfolio Loans was approximately 98.2%.
LOCK BOX ACCOUNT. If each of the Olympia Portfolio Loans is not repaid in full
on February 11, 2015, the borrower must notify the tenants that any and all
tenant payments due under the applicable tenant leases shall be directly
deposited into a mortgage designated lock box account.
SUBSTITUTION. The borrower may substitute one or more of the Mortgaged
Properties for properties of like kind and quality -upon mortgagee consent and
satisfaction of certain conditions set forth under the loan documents, including
without limitation; (i) the satisfaction of certain loan-to-value and debt
service coverage tests, (ii) the borrower provides an opinion of counsel that
the proposed substitution will not adversely affect the REMIC status of the
Trust Fund and (iii) a written confirmation from the Rating Agencies that any
ratings of the Certificates will not, as a result of the proposed substitution,
be downgraded, qualified or withdrawn.
MANAGEMENT. Olympia Development Group, Inc., the borrower for 21 of the Olympia
Portfolio Loans, is the property manager for each of the Mortgaged Properties
securing the Olympia Portfolio Loans.
S-158
Tharaldson Pool I-B
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Countrywide
CUT-OFF DATE BALANCE $79,785,970
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.8%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Gary Tharaldson
TYPE OF SECURITY Leasehold
MORTGAGE RATE 5.158%
MATURITY DATE February 11, 2015
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 120/240
REMAINING TERM/AMORTIZATION 119/239
LOCKBOX Yes
SHADOW RATING (S&P/MOODY'S/FITCH)(1) BBB+/A2/BBB
UP-FRONT RESERVES
TAX Yes
REPLACEMENT(2) $420,000
OTHER(3) $393,123
ONGOING MONTHLY RESERVES
TAX Yes
REPLACEMENT(4) 4% FF&E
ADDITIONAL FINANCING(5) None
CUT-OFF DATE BALANCE $79,785,970
CUT-OFF DATE BALANCE/ROOM $55,561
CUT-OFF DATE LTV 54.3%
MATURITY DATE LTV 34.5%
UW DSCR ON NCF 2.36x
- --------------------------------------------------------------------------------
(1) S&P, Moody's and Fitch have confirmed that the Tharaldson Pool 1-B Loan
has, in the context of its inclusion in the trust, credit characteristics
consistent with an investment grade obligation.
(2) 3 months of FF&E calculated at 4% of annual gross revenue; amounts in this
reserve are not released -- borrower pays actual FF&E costs directly
without reimbursement.
(3) Upon the closing of the loan, 3 months of ground rent payments.
(4) Capped at 3 months.
(5) The borrower is permitted to incur future unsecured debt in the amount of
$6,000,000 from its affiliate, other than in the ordinary course of
business.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 13
LOCATION Various
PROPERTY TYPE Hospitality -- Limited Service
SIZE (ROOMS) 1,436
OCCUPANCY AS OF NOVEMBER 30, 2004 75.0%
YEAR BUILT/YEAR RENOVATED Various/NA
APPRAISED VALUE $146,900,000
PROPERTY MANAGEMENT Tharaldson Property
Management, Inc.
UW ECONOMIC OCCUPANCY 77.5%
UW REVENUES $40,255,633
UW TOTAL EXPENSES $25,103,499
UW NET OPERATING INCOME (NOI) $15,152,133
UW NET CASH FLOW (NCF) $15,152,133
- --------------------------------------------------------------------------------
S-159
- --------------------------------------------------------------------------------
THARALDSON POOL I-B SUMMARY
- --------------------------------------------------------------------------------
CUT-OFF
CUT-OFF DATE
DATE YEAR NUMBER BALANCE
PROPERTY NAME BALANCE BUILT OF ROOMS PER ROOM
- --------------------------------------------------------------------------------
Las Vegas Residence Inn ......... $ 9,773,781 2004 160 $61,086
Las Vegas Courtyard ............. 9,075,654 2004 146 $62,162
Palmdale Residence Inn .......... 8,078,329 2001 90 $89,759
Las Vegas Holiday Inn Express ... 7,679,400 2004 139 $55,247
Las Vegas Fairfield Inn & Suites 7,479,935 2004 142 $52,676
Montgomeryville Courtyard ....... 6,881,540 2004 102 $67,466
Palmdale Courtyard .............. 6,582,343 2000 90 $73,137
Cheektowaga Residence Inn ....... 6,283,145 2002 113 $55,603
El Paso Residence Inn ........... 4,388,228 2003 96 $45,711
Woodlands Residence Inn II ...... 4,338,362 2002 96 $45,191
Tulsa Residence Inn ............. 4,089,031 2000 90 $45,434
Willowbrook Residence Inn ....... 2,842,375 2002 96 $29,608
Tulsa Springhill Suites ......... 2,293,847 2000 76 $30,182
----------- ---
TOTAL ........................... $79,785,970 1,436 $55,561
=========== =====
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
APPRAISED
UW APPRAISED VALUE
PROPERTY NAME OCCUPANCY* NET CASH FLOW VALUE PER ROOM
- ----------------------------------------------------------------------------------------
Las Vegas Residence Inn ......... 69.2% $ 1,736,111 $ 17,500,000 $109,375
Las Vegas Courtyard ............. 65.2% 1,809,072 16,300,000 $111,644
Palmdale Residence Inn .......... 91.7% 1,557,559 14,400,000 $160,000
Las Vegas Holiday Inn Express ... 68.9% 1,294,647 13,400,000 $ 96,403
Las Vegas Fairfield Inn & Suites 71.0% 1,313,978 13,700,000 $ 96,479
Montgomeryville Courtyard ....... 73.3% 1,370,100 12,200,000 $119,608
Palmdale Courtyard .............. 87.2% 1,187,567 11,700,000 $130,000
Cheektowaga Residence Inn ....... 80.3% 1,006,724 11,100,000 $ 98,230
El Paso Residence Inn ........... 89.8% 1,034,954 8,400,000 $ 87,500
Woodlands Residence Inn II ...... 71.0% 878,215 8,300,000 $ 86,458
Tulsa Residence Inn ............. 80.2% 717,812 7,600,000 $ 84,444
Willowbrook Residence Inn ....... 70.5% 829,802 8,200,000 $ 85,417
Tulsa Springhill Suites ......... 70.7% 415,592 4,100,000 $ 53,947
----------- ------------
TOTAL ........................... 75.0% $15,152,133 $146,900,000 $102,298
=========== ============
- ----------------------------------------------------------------------------------------
* As of November 30, 2004
- -----------------------------------------------------------------------------------------------------------------------------
THARALDSON POOL I-B SUMMARY
- -----------------------------------------------------------------------------------------------------------------------------
CUT-OFF DATE 2002 2003 TTM UW
PROPERTY NAME BALANCE REVPAR REVPAR REVPAR* UW OCC UW ADR REVPAR
- -----------------------------------------------------------------------------------------------------------------------------
Las Vegas Residence Inn .............. $ 9,773,781 NA NA $ 71.73 78.0% $ 102.00 $ 79.56
Las Vegas Courtyard .................. 9,075,654 NA NA $ 62.19 76.1% $ 101.12 $ 77.08
Palmdale Residence Inn ............... 8,078,329 $ 92.82 $ 94.94 $ 104.92 87.0% $ 116.00 $ 100.92
Las Vegas Holiday Inn Express ........ 7,679,400 NA NA $ 62.63 75.0% $ 88.00 $ 66.00
Las Vegas Fairfield Inn & Suites ..... 7,479,935 NA NA $ 69.72 75.4% $ 88.86 $ 66.96
Montgomeryville Courtyard ............ 6,881,540 NA NA $ 82.75 77.0% $ 107.00 $ 82.39
Palmdale Courtyard ................... 6,582,343 $ 73.57 $ 82.33 $ 90.77 81.0% $ 106.00 $ 85.86
Cheektowaga Residence Inn ............ 6,283,145 NA $ 60.92 $ 69.47 79.0% $ 89.00 $ 70.31
El Paso Residence Inn ................ 4,388,228 NA $ 70.07 $ 80.85 88.0% $ 91.00 $ 80.08
Woodlands Residence Inn II ........... 4,338,362 $ 48.71 $ 50.13 $ 66.15 71.0% $ 94.36 $ 66.99
Tulsa Residence Inn .................. 4,089,031 $ 61.13 $ 57.57 $ 63.58 80.2% $ 81.83 $ 65.64
Willowbrook Residence Inn ............ 2,842,375 $ 23.46 $ 51.62 $ 66.58 71.0% $ 95.20 $ 67.59
Tulsa Springhill Suites .............. 2,293,847 $ 47.19 $ 45.14 $ 47.71 71.5% $ 69.78 $ 49.91
-----------
TOTAL ................................ $79,785,970 $ 57.61 $ 64.18 $ 71.67 77.5% $ 95.05 $ 73.91
===========
- -----------------------------------------------------------------------------------------------------------------------------
* Several of the properties opened during the trailing twelve months as
follows: the Las Vegas Residence Inn, Las Vegas Courtyard, Montgomeryville
Courtyard, Las Vegas Holiday Inn Express, and Las Vegas Fairfield Inn &
Suites opened in April 2004, August 2004, March 2004, December 2003, and
December 2003, respectively.
S-160
THE LOAN. The Mortgage Loan ("Tharaldson Pool I-B Loan") is secured by the
leasehold interests in 13 Mortgaged Properties. The Mortgaged Properties are
located in California (2 Mortgaged Properties), Nevada (4 Mortgaged Properties),
New York (1 Mortgaged Property), Oklahoma (2 Mortgaged Properties), Pennsylvania
(1 Mortgaged Property) and Texas (3 Mortgaged Properties). The Mortgaged
Properties are ground leased from the borrowers (and in the case of the Mortgage
Property located in Pennsylvania, a payment guarantor) under the Tharaldson Pool
I-A loan (loan number 5), which are affiliates of the Tharaldson Pool I-B Loan
borrowers. The Tharaldson Pool I-B Loan represents approximately 2.8% of the
Cut-Off Date Pool Balance. The Tharaldson Pool I-B Loan was originated on
January 31, 2005, and has an aggregate principal balance as of the Cut-Off Date
of $79,785,970. All of the mortgages and deeds of trust securing the Tharaldson
Pool I-B Loan are cross-collateralized and cross-defaulted with each other.
The Tharaldson Pool I-B Loan has a remaining term of 119 months and matures on
February 11, 2015. The Tharaldson Pool I-B Loan may be prepaid on or after
November 11, 2014, and permits defeasance with United States government
obligations beginning two years after the Closing Date.
THE BORROWERS. The borrowers on the Tharaldson Pool I-B Loans consist of 12
special purpose entities which individually own the Mortgaged Properties. Each
of the special purpose entities are directly or indirectly controlled by Gary
Tharaldson. Legal counsel to the borrowers delivered a non-consolidation opinion
in connection with the Tharaldson Pool I-B Loan. The sponsor of the borrowers is
Mr. Tharaldson, founder and president of Tharaldson Motels, Inc. ("TMI"), which
builds and operates hotels across the country. Tharaldson Property Management,
Inc. ("TPM"), is a subsidiary of TMI and operates over 355 hotels in 36 states.
THE PROPERTIES. The Tharaldson Pool I-B consists of 13 hotels containing, in the
aggregate, 1,436 rooms. The 13 Mortgaged Properties are located in 6 states
throughout the United States. As of November 30, 2004, the year-to-date
occupancy rate for the Mortgaged Properties securing the Tharaldson Pool I-B
Loans was approximately 75.0%.
LOCK BOX ACCOUNT. All revenue with respect to the Mortgaged Properties
(including credit card receivables) will be deposited into a mortgagee
designated lockbox account and swept to the borrowers' account until a trigger
event occurs.
SUBSTITUTION. The borrower may substitute one or more of the Mortgaged
Properties with properties of like kind and quality upon satisfaction of certain
conditions set forth under the loan documents, including without limitation: (i)
the satisfaction of certain loan-to value and debt service coverage tests, (ii)
no substitute property may be located in the greater metropolitan areas of
Houston, Texas, the Woodlands, Texas, or Las Vegas, Nevada, and (iii) a written
confirmation from the Rating Agencies that any ratings of the Certificates will
not, as a result of the proposed substitution, be downgraded, qualified or
withdrawn.
PARTIAL DEFEASANCE. The borrowers may defease any individual property at 125% of
such individual property's allocated loan amount, provided that certain
conditions have been met.
MANAGEMENT. TPM is the property manager for each of the Mortgaged Properties
securing the Tharaldson Pool I-B Loan. TPM manages approximately 355 limited
service hotels in 36 states including the Mortgaged Properties and has been
managing limited service hotels since 1982.
LITIGATION. The Tharaldson Pool I-B Loan is subject to certain pending
litigation as described in the preliminary prospectus supplement under "RISK
FACTORS--Litigation May Have Adverse Effect on Borrowers".
S-161
111 Massachusetts Avenue
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $75,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.7%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Douglas Jemal
TYPE OF SECURITY Fee
MORTGAGE RATE 5.200%
MATURITY DATE March 11, 2015
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 12
ORIGINAL TERM/AMORTIZATION 120/360
REMAINING TERM/AMORTIZATION 120/360
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $4,375
TI/LC(1) $718,200
OTHER(2) $8,000,000
MASTER LEASE(3) $1,500,000
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $3,476
ROLLOVER(4) Springing
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $75,000,000
CUT-OFF DATE BALANCE/SF $270
CUT-OFF DATE LTV 76.5%
MATURITY DATE LTV 65.0%
UW DSCR ON NCF 1.34x
- --------------------------------------------------------------------------------
(1) Escrowed at closing for TI/LC costs associated with the anticipated GSA
lease for the 1st and 7th floors. These funds will be released upon the
commencement of the GSA paying full rent.
(2) Escrowed at closing, and to be held until such time as the GSA signs the
pending lease for the first and 7th floors and the GSA begins paying full
rent on this space equal to 35,910 square feet.
(3) Letter of credit posted at closing, which collateralizes the Master Lease
by the sponsor.
(4) To mitigate the risk associated with the 2009 rollover, the loan provides
for either i) a springing letter of credit in the amount of $1.8 million
or ii) a 100% cash flow sweep commencing January 2007 that would
accumulate to $1.8 million. The escrow would be released at such time as
the space expiring in 2009 is renewed or re-leased to a non-GSA tenant(s)
and such tenant(s) are in occupancy and paying rent.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Washington, DC
PROPERTY TYPE Office -- CBD
SIZE (SF) 278,040
OCCUPANCY AS OF FEBRUARY 28, 2005 77.0%
YEAR BUILT/YEAR RENOVATED 1983/NA
APPRAISED VALUE $98,000,000
Douglas Jemal Development
PROPERTY MANAGEMENT Corp.
UW ECONOMIC OCCUPANCY 95.0%
UW REVENUES $10,461,022
UW TOTAL EXPENSES $3,449,449
UW NET OPERATING INCOME (NOI) $7,011,573
UW NET CASH FLOW (NCF) $6,601,761
- --------------------------------------------------------------------------------
S-162
- -----------------------------------------------------------------------------------
TENANT SUMMARY
- -----------------------------------------------------------------------------------
NET % OF NET
RATINGS(1) RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- -----------------------------------------------------------------------------------
GSA (INS) .............................. Aaa/AAA/AAA 154,040 55.4%
Douglas Development Corporation(3) ..... NR/NR/NR 59,944 21.6
GSA (INS) (Pending Lease) .............. Aaa/AAA/AAA 35,910 12.9
Newstand ............................... NR/NR/NR 200 0.1
Vacant ................................. 27,946 10.1
------- -----
TOTAL .................................. 278,040 100.0%
======= =====
- -----------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
% OF
ACTUAL ACTUAL DATE OF LEASE
TENANT RENT PSF ACTUAL RENT RENT EXPIRATION
- ------------------------------------------------------------------------------------------------
GSA (INS) .............................. $ 42.82 $ 6,596,247 65.2% Multiple Spaces(2)
Douglas Development Corporation(3) ..... $ 33.77 2,024,072 20.0 February 2010
GSA (INS) (Pending Lease) .............. $ 41.54 1,491,701 14.7 July 2015
Newstand ............................... $ 48.00 9,600 0.1 MTM
Vacant ................................. 0 0.0
----------- -----
TOTAL .................................. $10,121,621 100.0%
=========== =====
- ------------------------------------------------------------------------------------------------
(1) Certain ratings are those of the parent whether or not the parent
guarantees the lease.
(2) Under the terms of multiple leases, 89,992 square feet expire in February
2009, 4,135 square feet expire in November 2014, and 59,913 square feet
expire in January 2015.
(3) Master lease to the sponsor of the borrower.
- ---------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
- ---------------------------------------------------------------------------------------------------------------
# OF WA BASE CUMULATIVE CUMULATIVE %
LEASES RENT/SF TOTAL SF % OF TOTAL % OF SF % OF ACTUAL OF ACTUAL RENT
YEAR ROLLING ROLLING ROLLING SF ROLLING(1) ROLLING(1) RENT ROLLING(1) ROLLING(1)
- ---------------------------------------------------------------------------------------------------------------
2005 1 $ 48.00 200 0.1% 0.1% 0.1% 0.1%
2006 0 $ 0.00 0 0.0% 0.1% 0.0% 0.1%
2007 0 $ 0.00 0 0.0% 0.1% 0.0% 0.1%
2008 0 $ 0.00 0 0.0% 0.1% 0.0% 0.1%
2009 5 $ 44.71 89,992 32.4% 32.4% 39.7% 39.8%
2010 2 $ 33.77 59,944 21.6% 54.0% 20.0% 59.8%
2011 0 $ 0.00 0 0.0% 54.0% 0.0% 59.8%
2012 0 $ 0.00 0 0.0% 54.0% 0.0% 59.8%
2013 0 $ 0.00 0 0.0% 54.0% 0.0% 59.8%
2014 1 $ 25.00 4,135 1.5% 55.5% 1.0% 60.9%
2015(2) 4 $ 41.34 95,823 34.5% 89.9% 39.1% 100.0%
Thereafter 0 $ 0.00 0 0.0% 89.9% 0.0% 100.0%
Vacant 0 NA 27,946 10.1% 100.0% 0.0% 100.0%
- ---------------------------------------------------------------------------------------------------------------
(1) Calculated based on the approximate square footage occupied by each
tenant.
(2) Includes 35,910 square feet pending lease to GSA (INS).
S-163
THE LOAN. The Mortgage Loan (the "111 Massachusetts Avenue Loan") is secured by
a first deed of trust encumbering an office building located in Washington, DC.
The 111 Massachusetts Avenue Loan represents approximately 2.7% of the Cut-Off
Date Pool Balance. The 111 Massachusetts Avenue Loan was originated on February
28, 2005, and has a principal balance as of the Cut-Off Date of $75,000,000. The
111 Massachusetts Avenue Loan provides for interest-only payments for the first
12 months of its term, and thereafter, fixed monthly payments of principal and
interest.
The 111 Massachusetts Avenue Loan has a remaining term of 120 months and matures
on March 11, 2015. The 111 Massachusetts Avenue Loan may be prepaid on or after
January 11, 2015 and permits defeasance with United States government
obligations beginning two years after the Closing Date.
THE BORROWER. The borrower is Jemal's Darth Vader L.L.C., a special purpose
entity. Legal counsel to the borrower delivered a non-consolidation opinion in
connection with the origination of the 111 Massachusetts Avenue Loan. The
sponsor is Douglas Jemal. Mr. Jemal founded the Douglas Development Corporation
in 1985, which has grown to manage over 150 properties and approximately 8
million square feet of commercial space.
THE PROPERTY. The Mortgaged Property is an approximately 278,040 square foot
office building on 0.8 acres. The Mortgaged Property was constructed in 1983.
The Mortgaged Property is located in Washington, DC. As of February 28, 2005,
the occupancy rate for the Mortgaged Property securing the 111 Massachusetts
Avenue Loan was approximately 77.0%.
The largest tenant is the U.S. Government ("GSA") occupying approximately
154,040 square feet, or approximately 55.4% of the net rentable area through
multiple leases. The GSA secures the buildings, products, services, technology
and other workplace essentials for federal agencies. The GSA leases expire in
February 2009, November 2014 and January 2015. As of February 15, 2005, the GSA
was rated "AAA" (S&P), "Aaa" (Moody's) and "AAA" (Fitch). The second largest
tenant is Douglas Development Corporation ("DDC") occupying approximately 59,944
square feet, or approximately 21.6% of the net rentable area. DDC, the sponsor's
real estate company, has provided a master lease that expires in February 2010,
from which it will be released when the GSA expands into this space and is
paying unabated rent, or the space is occupied by an additional tenant.
LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases
shall be directly deposited into a mortgagee designated lock box account.
MANAGEMENT. Douglas Jemal Development Corp., an affiliate of the sponsor, is the
property manager for the Mortgaged Property securing the 111 Massachusetts
Avenue Loan.
S-164
Residence Inn Portfolio #1
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $65,861,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.3%
NUMBER OF MORTGAGE LOANS 10
LOAN PURPOSE Refinance
SPONSOR Apple Hospitality Two, Inc.
TYPE OF SECURITY Fee
MORTGAGE RATE 6.880%
MATURITY DATE November 11, 2014
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 12
ORIGINAL TERM/AMORTIZATION 120/300
REMAINING TERM/AMORTIZATION 116/300
LOCKBOX None
UP-FRONT RESERVES None
ONGOING MONTHLY RESERVES
TAX/INSURANCE Springing
REPLACEMENT Springing
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $65,861,000
CUT-OFF DATE BALANCE/ROOM $57,824
CUT-OFF DATE LTV 71.1%
MATURITY DATE LTV 58.6%
UW DSCR ON NCF 1.43x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 10
LOCATION Various
PROPERTY TYPE Hospitality -- Extended Stay
SIZE (ROOMS) 1,139
OCCUPANCY AS OF DECEMBER 3, 200 79.4%
YEAR BUILT/YEAR RENOVATED Various
APPRAISED VALUE $92,680,000
PROPERTY MANAGEMENT Residence Inn by Marriott, Inc.
UW ECONOMIC OCCUPANCY 78.3%
UW REVENUES $30,523,806
UW TOTAL EXPENSES $21,129,330
UW NET OPERATING INCOME (NOI) $9,394,477
UW NET CASH FLOW (NCF) $7,868,286
- --------------------------------------------------------------------------------
S-165
- ----------------------------------------------------------------------------------
RESIDENCE INN PORTFOLIO #1 SUMMARY
- ----------------------------------------------------------------------------------
CUT-OFF
CUT-OFF NUMBER DATE
DATE YEAR YEAR OF BALANCE
PROPERTY NAME BALANCE BUILT RENOVATED ROOMS PER ROOM
- ----------------------------------------------------------------------------------
Residence Inn #1 --
Las Vegas, NV ........ $ 20,625,000 1989 2001 192 $ 107,422
Residence Inn #1 --
Santa Fe, NM ......... 8,050,000 1986 NA 120 $ 67,083
Residence Inn #1 --
Placentia, CA ........ 7,650,000 1988 2003 112 $ 68,304
Residence Inn #1 --
Birmingham, AL ....... 5,573,000 1986 2004 128 $ 43,539
Residence Inn #1 --
Akron, OH ............ 5,460,000 1987 2003 112 $ 48,750
Residence Inn #1 --
Danvers, MA .......... 4,620,000 1988 2003 96 $ 48,125
Residence Inn #1 --
Bossier City, LA ..... 4,050,000 1985 NA 72 $ 56,250
Residence Inn #1 --
Kalamazoo, MI ........ 3,938,000 1989 NA 83 $ 47,446
Residence Inn #1 --
Jackson, MS .......... 3,360,000 1986 2004 119 $ 28,235
Residence Inn #1 --
Memphis, TN .......... 2,535,000 1985 NA 105 $ 24,143
------------ ---
$ 65,861,000 1,139 $ 57,824
============ =====
- ----------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
APPRAISED CUT-OFF
APPRAISED VALUE DATE UW
PROPERTY NAME OCCUPANCY* UW NCF VALUE PER ROOM LTV DSCR
- ------------------------------------------------------------------------------------------------------
Residence Inn #1 --
Las Vegas, NV ........ 82.0% $ 2,485,283 $ 27,500,000 $ 143,229 75.0% 1.44x
Residence Inn #1 --
Santa Fe, NM ......... 77.2% 910,143 11,500,000 $ 95,833 70.0% 1.35x
Residence Inn #1 --
Placentia, CA ........ 79.8% 855,388 10,200,000 $ 91,071 75.0% 1.33x
Residence Inn #1 --
Birmingham, AL ....... 81.3% 701,701 7,430,000 $ 58,047 75.0% 1.50x
Residence Inn #1 --
Akron, OH ............ 80.9% 646,400 7,800,000 $ 69,643 70.0% 1.41x
Residence Inn #1 --
Danvers, MA .......... 79.4% 663,161 6,600,000 $ 68,750 70.0% 1.71x
Residence Inn #1 --
Bossier City, LA ..... 87.0% 437,193 5,400,000 $ 75,000 75.0% 1.29x
Residence Inn #1 --
Kalamazoo, MI ........ 83.5% 511,044 5,250,000 $ 63,253 75.0% 1.55x
Residence Inn #1 --
Jackson, MS .......... 78.3% 363,432 7,100,000 $ 59,664 47.3% 1.29x
Residence Inn #1 --
Memphis, TN .......... 65.8% 294,541 3,900,000 $ 37,143 65.0% 1.38x
----------- ------------
79.4% $ 7,868,286 $ 92,680,000 $ 81,370 71.1% 1.43X
=========== ============
- ------------------------------------------------------------------------------------------------------
* The Occupancy is an average of the YTD as of December 3, 2004.
- ------------------------------------------------------------------------------------------------------------------------------------
RESIDENCE INN PORTFOLIO #1 SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
CUT-OFF DATE 2002 2003 TTM UW UW UW
PROPERTY NAME BALANCE REVPAR REVPAR REVPAR OCC ADR REVPAR
- ------------------------------------------------------------------------------------------------------------------------------------
Residence Inn #1 -- Las Vegas, NV ....... $ 20,625,000 $ 85.88 $ 83.97 $ 95.08 80.0% $ 118.70 $ 94.96
Residence Inn #1 -- Santa Fe, NM ........ 8,050,000 $ 79.90 $ 69.00 $ 71.02 75.3% $ 94.27 $ 70.99
Residence Inn #1 -- Placentia, CA ....... 7,650,000 $ 72.26 $ 66.47 $ 72.29 79.5% $ 90.95 $ 72.31
Residence Inn #1 -- Birmingham, AL ...... 5,573,000 $ 56.95 $ 55.82 $ 61.83 79.1% $ 78.15 $ 61.82
Residence Inn #1 -- Akron, OH ........... 5,460,000 $ 66.34 $ 58.28 $ 64.66 78.8% $ 82.09 $ 64.69
Residence Inn #1 -- Danvers, MA ......... 4,620,000 $ 80.27 $ 59.11 $ 71.85 80.0% $ 94.49 $ 75.59
Residence Inn #1 -- Bossier City, LA .... 4,050,000 $ 65.68 $ 66.49 $ 68.03 85.0% $ 79.63 $ 67.69
Residence Inn #1 -- Kalamazoo, MI ....... 3,938,000 $ 72.79 $ 69.98 $ 75.56 80.0% $ 92.51 $ 74.01
Residence Inn #1 -- Jackson, MS ......... 3,360,000 $ 60.26 $ 56.10 $ 55.70 78.2% $ 74.18 $ 58.01
Residence Inn #1 -- Memphis, TN ......... 2,535,000 $ 59.28 $ 61.76 $ 59.17 69.0% $ 90.00 $ 62.10
------------
$ 65,861,000 $ 70.91 $ 65.80 $ 71.06 78.4% $ 91.52 $ 71.73
============
- ------------------------------------------------------------------------------------------------------------------------------------
S-166
THE LOAN. The 10 Mortgage Loans (the "Residence Inn Portfolio #1 Loans") are
secured by 10 first deeds of trust encumbering 10 hotels, each located in a
different state throughout the United States. The Residence Inn Portfolio #1
Loans represent approximately 2.3% of the Cut-Off Date Pool Balance. All of the
Residence Inn Portfolio #1 Loans were originated on November 10, 2004 and have
an aggregate principal balance as of the Cut-Off Date of $65,861,000. Each of
the Residence Inn Portfolio #1 Loans is cross-collateralized and cross-defaulted
with each of the other Residence Inn #1 Portfolio Loans. Each Residence Inn
Portfolio #1 Loan provides for interest-only payments for the first 12 months of
its term, and thereafter, fixed monthly payments of principal and interest.
The Residence Inn Portfolio #1 Loans each have a remaining term of 116 months
and mature on November 11, 2014. The Residence Inn Portfolio #1 Loans may be
prepaid on or after August 11, 2014, and permit defeasance with United States
government obligations beginning two years after the Closing Date.
THE BORROWER. The borrower for each Residence Inn Portfolio #1 Loan is AHT
Residence Inn II Limited Partnership, each a special purpose entity. Legal
counsel to the borrower delivered a non-consolidation opinion in connection with
the origination of each Residence Inn Portfolio #1 Loan. The sponsor of the
borrower is Apple Hospitality Two, Inc. ("Apple Hospitality"). Apple Hospitality
is an extended-stay real estate investment trust, with a portfolio of
approximately 66 hotels.
THE PROPERTIES. The Residence Inn Portfolio #1 Loans consists of 10 hotels
containing, in the aggregate, 1,139 rooms. The 10 Mortgaged Properties are
located in 10 states throughout the United States. As of December 3, 2004, the
year to date occupancy rate for the Mortgaged Properties securing the Residence
Inn Portfolio #1 Loans was approximately 79.4%.
LOCK BOX ACCOUNT. The loan documents do not require a lockbox account.
SUBSTITUTION. The borrower may substitute one or more of the Mortgaged
Properties for properties of like kind and quality upon mortgagee consent and
satisfaction of certain conditions set forth under the loan documents, including
without limitation; (i) the satisfaction of certain loan-to-value and debt
service coverage tests, (ii) the borrower provides an opinion of counsel that
the proposed substitution will not adversely affect the REMIC status of the
Trust Fund and (iii) a written confirmation from the Rating Agencies that any
ratings of the Certificates will not, as a result of the proposed substitution,
be downgraded, qualified or withdrawn.
MANAGEMENT. Residence Inn by Marriott, Inc., a wholly owned subsidiary of
Marriott International, Inc. ("Marriott"), is the property manager for the
Mortgaged Properties securing the Residence Inn Portfolio #1 Loans. Marriott
operates or franchises approximately 2,600 lodging properties located in 50
states, 63 countries and also manages 156 senior living communities across the
United States.
S-167
Tharaldson Pool I-A
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Countrywide
CUT-OFF DATE BALANCE $57,844,828
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.1%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Gary Tharaldson
TYPE OF SECURITY Fee
MORTGAGE RATE 5.158%
MATURITY DATE February 11, 2015
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 120/240
REMAINING TERM/AMORTIZATION 119/239
LOCKBOX Yes
SHADOW RATING AA+/Baa1/BBB+
(S&P/MOODY'S/FITCH)(1)
UP-FRONT RESERVES
TAX Yes
REPLACEMENT $280,000
ONGOING MONTHLY RESERVES
TAX Yes
REPLACEMENT(2) 4% FF&E
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $57,844,828
CUT-OFF DATE BALANCE/ROOM(3) $42,553
CUT-OFF DATE LTV 54.5%
MATURITY DATE LTV 34.6%
UW DSCR ON NCF 2.09x
- --------------------------------------------------------------------------------
(1) S&P, Moody's and Fitch have confirmed that the Tharaldson Pool 1-A Loan
has, in the context of its inclusion in the trust, credit characteristics
consistent with an investment grade obligation.
(2) Capped at 3 months.
(3) Excludes balances for Mortgaged Properties which are leased fee interests.
(4) The borrower has a fee interest in 25 Mortgaged Properties comprised of
27 limited service hotels.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES(4) 25
LOCATION Various
PROPERTY TYPE Hospitality -- Limited Service
SIZE (ROOMS) 1,095
OCCUPANCY AS OF NOVEMBER 30, 2004 74.3%
YEAR BUILT/YEAR RENOVATED Various/Various
APPRAISED VALUE $106,215,000
PROPERTY MANAGEMENT Tharaldson Property Management, Inc.
UW ECONOMIC OCCUPANCY 75.0%
UW REVENUES $26,269,457
UW TOTAL EXPENSES $16,537,369
UW NET OPERATING INCOME (NOI) $9,732,088
UW NET CASH FLOW (NCF) $9,732,088
- --------------------------------------------------------------------------------
S-168
- ------------------------------------------------------------------------------------------------------
THARALDSON POOL I-A SUMMARY
- ------------------------------------------------------------------------------------------------------
CUT-OFF DATE YEAR YEAR NUMBER OF
PROPERTY NAME BALANCE BUILT RENOVATED ROOMS
- ------------------------------------------------------------------------------------------------------
Peoria Residence Inn $ 5,704,697 1998 2004 90
Westchase Homewood Suites 5,233,960 1998 2004 96
Toledo Homewood Suites 4,468,014 1997 NA 78
Woodlands Residence Inn 3,877,598 1997 2004 90
Lansing Residence Inn 3,710,048 1996 2004 78
Grand Rapids Homewood Suites 3,241,305 1997 2004 78
Sioux Falls Residence Inn 3,061,787 1994 NA 66
Houston Towneplace Suites 2,999,952 1998 2004 94
Waco Residence Inn 2,820,434 1997 NA 78
Woodlands Courtyard 2,820,434 1997 2004 90
Cedar Rapids Residence Inn 2,702,750 1996 2004 66
Sioux Falls Fairfield Inn 2,064,462 1993 2003 63
Lansing Fairfield Inn 2,004,622 1996 2004 64
Mankato Fairfield Inn 1,884,944 1997 2004 64
Leased Fee Interest -- Las Vegas Residence 1,735,345 NA NA NA
Leased Fee Interest -- Montgomeryville Courtyard 1,396,254 NA NA NA
Leased Fee Interest -- Las Vegas Courtyard 1,226,709 NA NA NA
Leased Fee Interest -- Las Vegas Fairfield 1,226,709 NA NA NA
Leased Fee Interest -- Las Vegas Holiday Inn Express 1,117,004 NA NA NA
Leased Fee Interest -- Palmdale Residence & Courtyard 1,027,244 NA NA NA
Leased Fee Interest -- Woodlands Residence #2 897,592 NA NA NA
Leased Fee Interest -- Tulsa Residence & Springhill 797,860 NA NA NA
Leased Fee Interest -- Cheektowaga Residence 777,913 NA NA NA
Leased Fee Interest -- El Paso Residence Inn 598,395 NA NA NA
Leased Fee Interest -- Willowbrook Residence 448,796 NA NA NA
------------ -----
TOTAL $ 57,844,828 1,095
============ =====
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
CUT-OFF DATE BALANCE APPRAISED APPRAISED
PROPERTY NAME PER ROOM(1) OCCUPANCY(2) UW NCF VALUE VALUE PER ROOM
- ------------------------------------------------------------------------------------------------------------------------------------
Peoria Residence Inn $ 63,386 86.3% $ 968,278 $ 9,900,000 $ 110,000
Westchase Homewood Suites $ 54,520 78.9% 983,738 10,300,000 $ 107,292
Toledo Homewood Suites $ 57,282 80.8% 699,548 7,600,000 $ 97,436
Woodlands Residence Inn $ 43,084 64.5% 718,707 8,000,000 $ 88,889
Lansing Residence Inn $ 47,565 75.2% 559,372 6,300,000 $ 80,769
Grand Rapids Homewood Suites $ 41,555 71.3% 487,710 5,500,000 $ 70,513
Sioux Falls Residence Inn $ 46,391 82.9% 591,257 5,200,000 $ 78,788
Houston Towneplace Suites $ 31,914 73.2% 568,143 6,500,000 $ 69,149
Waco Residence Inn $ 36,159 80.4% 745,412 6,100,000 $ 78,205
Woodlands Courtyard $ 31,338 65.3% 496,048 6,300,000 $ 70,000
Cedar Rapids Residence Inn $ 40,951 82.9% 499,223 4,800,000 $ 72,727
Sioux Falls Fairfield Inn $ 32,769 71.1% 339,119 3,500,000 $ 55,556
Lansing Fairfield Inn $ 31,322 61.6% 255,862 3,400,000 $ 53,125
Mankato Fairfield Inn $ 29,452 63.5% 319,180 3,300,000 $ 51,563
Leased Fee Interest -- Las Vegas Residence NA NA 238,933 3,100,000 NA
Leased Fee Interest -- Montgomeryville Courtyard NA NA 193,500 2,200,000 NA
Leased Fee Interest -- Las Vegas Courtyard NA NA 166,290 2,200,000 NA
Leased Fee Interest -- Las Vegas Fairfield NA NA 166,290 2,200,000 NA
Leased Fee Interest -- Las Vegas Holiday Inn Express NA NA 150,536 2,000,000 NA
Leased Fee Interest -- Palmdale Residence & Courtyard NA NA 72,000 1,835,000 NA
Leased Fee Interest -- Woodlands Residence #2 NA NA 115,500 1,500,000 NA
Leased Fee Interest -- Tulsa Residence & Springhill NA NA 143,600 1,420,000 NA
Leased Fee Interest -- Cheektowaga Residence NA NA 108,000 1,200,000 NA
Leased Fee Interest -- El Paso Residence Inn NA NA 82,842 1,060,000 NA
Leased Fee Interest -- Willowbrook Residence NA NA 63,000 800,000 NA
---------- ------------- $ 79,178
TOTAL $ 42,553 74.3% $9,732,088 $ 106,215,000
========== =============
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Excludes balances for Mortgaged Properties which are leased fee interest.
(2) As of November 30, 2004.
S-169
- ------------------------------------------------------------------------------------------------
THARALDSON POOL I-A SUMMARY
- ------------------------------------------------------------------------------------------------
CUT-OFF DATE 2002 2003
PROPERTY NAME BALANCE REVPAR REVPAR
- ------------------------------------------------------------------------------------------------
Peoria Residence Inn $ 5,704,697 $ 69.09 $ 70.73
Westchase Homewood Suites 5,233,960 $ 75.58 $ 72.75
Toledo Homewood Suites 4,468,014 $ 65.88 $ 62.20
Woodlands Residence Inn 3,877,598 $ 76.23 $ 47.83
Lansing Residence Inn 3,710,048 $ 62.43 $ 61.26
Grand Rapids Homewood Suites 3,241,305 $ 58.30 $ 58.61
Sioux Falls Residence Inn 3,061,787 $ 63.41 $ 67.55
Houston Towneplace Suites 2,999,952 $ 50.60 $ 43.35
Waco Residence Inn 2,820,434 $ 66.72 $ 69.16
Woodlands Courtyard 2,820,434 $ 63.94 $ 44.20
Cedar Rapids Residence Inn 2,702,750 $ 64.64 $ 66.79
Sioux Falls Fairfield Inn 2,064,462 $ 44.94 $ 44.88
Lansing Fairfield Inn 2,004,622 $ 42.95 $ 41.86
Mankato Fairfield Inn 1,884,944 $ 42.57 $ 35.76
Leased Fee Interest -- Las Vegas Residence 1,735,345 NA NA
Leased Fee Interest -- Montgomeryville Courtyard 1,396,254 NA NA
Leased Fee Interest -- Las Vegas Courtyard 1,226,709 NA NA
Leased Fee Interest -- Las Vegas Fairfield 1,226,709 NA NA
Leased Fee Interest -- Las Vegas Holiday Inn Express 1,117,004 NA NA
Leased Fee Interest -- Palmdale Residence & Courtyard 1,027,244 NA NA
Leased Fee Interest -- Woodlands Residence #2 897,592 NA NA
Leased Fee Interest -- Tulsa Residence & Springhill 797,860 NA NA
Leased Fee Interest -- Cheektowaga Residence 777,913 NA NA
Leased Fee Interest -- El Paso Residence Inn 598,395 NA NA
Leased Fee Interest -- Willowbrook Residence 448,796 NA NA
------------
TOTAL $ 57,844,828 $ 61.52 $ 56.59
============
- ------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
TTM
PROPERTY NAME REVPAR UW OCC UW ADR UW REVPAR
- ---------------------------------------------------------------------------------------------------------
Peoria Residence Inn $ 76.20 85.0% $ 90.48 $ 76.91
Westchase Homewood Suites $ 75.25 79.0% $ 96.44 $ 76.19
Toledo Homewood Suites $ 66.54 81.3% $ 83.00 $ 67.23
Woodlands Residence Inn $ 56.58 67.0% $ 89.42 $ 59.91
Lansing Residence Inn $ 58.84 76.0% $ 79.30 $ 60.27
Grand Rapids Homewood Suites $ 57.76 72.5% $ 83.94 $ 60.82
Sioux Falls Residence Inn $ 67.52 83.4% $ 82.00 $ 68.06
Houston Towneplace Suites $ 46.25 74.6% $ 64.02 $ 47.78
Waco Residence Inn $ 69.72 81.0% $ 88.00 $ 71.28
Woodlands Courtyard $ 51.31 67.0% $ 78.81 $ 52.80
Cedar Rapids Residence Inn $ 66.83 81.0% $ 83.06 $ 67.28
Sioux Falls Fairfield Inn $ 43.05 71.7% $ 62.67 $ 44.90
Lansing Fairfield Inn $ 39.09 63.0% $ 64.00 $ 40.32
Mankato Fairfield Inn $ 40.68 66.0% $ 63.91 $ 42.18
Leased Fee Interest -- Las Vegas Residence NA NA NA NA
Leased Fee Interest -- Montgomeryville Courtyard NA NA NA NA
Leased Fee Interest -- Las Vegas Courtyard NA NA NA NA
Leased Fee Interest -- Las Vegas Fairfield NA NA NA NA
Leased Fee Interest -- Las Vegas Holiday Inn Express NA NA NA NA
Leased Fee Interest -- Palmdale Residence & Courtyard NA NA NA NA
Leased Fee Interest -- Woodlands Residence #2 NA NA NA NA
Leased Fee Interest -- Tulsa Residence & Springhill NA NA NA NA
Leased Fee Interest -- Cheektowaga Residence NA NA NA NA
Leased Fee Interest -- El Paso Residence Inn NA NA NA NA
Leased Fee Interest -- Willowbrook Residence NA NA NA NA
TOTAL $ 58.95 75.0% $ 80.05 $ 60.42
- ---------------------------------------------------------------------------------------------------------
S-170
THE LOAN. The Mortgage Loan ("Tharaldson Pool I-A Loan") is secured by the fee
interest in 25 Mortgaged Properties comprising 27 limited service hotels. With
respect to 14 limited service hotels (the "Hotel Collateral"), the borrowers own
the land and improvements. The Mortgaged Properties making up the Hotel
Collateral are located in Arizona (1 Mortgaged Property), Iowa (1 Mortgaged
Property), Michigan (3 Mortgaged Properties), Minnesota (1 Mortgaged Property),
Ohio (1 Mortgaged Property), South Dakota (2 Mortgaged Properties) and Texas (5
Mortgaged Properties). With respect to 12 limited service hotels, the borrowers
own only the land, and with respect to 1 limited service hotel, the payment
guarantor of the Tharaldson Pool I-A Loan owns only the land (collectively, the
"Ground Lease Collateral"). The Ground Lease Collateral is ground leased to the
borrowers under the Tharaldson Pool I-B Loan (loan number 3), which are
affiliates of the borrowers and the payment guarantor of the Tharaldson Pool I-A
Loan. The Mortgaged Properties making up the Ground Lease Collateral are located
in Nevada (4 Mortgaged Properties), Texas (3 Mortgaged Properties), California
(2 Mortgaged Properties), Oklahoma (2 Mortgaged Properties), New York (1
Mortgaged Property) and Pennsylvania (1 Mortgaged Property). The Tharaldson Pool
I-A Loan represents approximately 2.1% of the Cut-Off Balance. The Tharaldson
Pool I-A Loan was originated on January 31, 2005, and has an aggregate principal
balance as of the Cut-Off Date of $57,844,828.
The Tharaldson Pool I-A Loan has a remaining term of 119 months and matures on
February 11, 2015. The Tharaldson Pool I-A Loan may be prepaid on or after
November 11, 2014, and permits defeasance with United States government
obligations beginning two years after the Closing Date.
THE BORROWERS AND THE PAYMENT GUARANTOR. The borrowers consist of 13 special
purpose entities which individually own the Hotel Collateral, and 1 special
purpose entity which owns the underlying fee interest in all 10 parcels
(consisting of 12 limited service hotels) comprising the majority of the Ground
Lease Collateral. Tharaldson Asset Management, Inc., the payment guarantor, is
not a special purpose entity. The payment guarantor owns the underlying fee
interest in 1 parcel (consisting of the limited service hotel located in
Pennsylvania) comprising the remainder of the Ground Lease Collateral. The
payment guarantor guaranteed the borrowers' payment of the Tharaldson Pool I-A
Loan subject to certain non-recourse carve outs and exculpation clauses, and the
guaranty is limited to the guarantor's ownership fee interest in the
Pennsylvania property. Each of the borrowers and the payment guarantor is
directly or indirectly 100% owned by Tharaldson Motels, Inc. ("TMI"). TMI is
majority-owned by the Tharaldson Motels, Inc. Employee Stock Option Plan and
Trust. Legal counsel to the borrower delivered a non-consolidation opinion in
connection with the Tharaldson Pool I-A Loan. The sponsor of the borrowers is
Gary Tharaldson, founder and president of TMI, which builds and operates hotels
across the country. Tharaldson Property Management, Inc. ("TPM"), is a
subsidiary of TMI and operates over 355 hotels in 36 states.
THE PROPERTIES. The Hotel Collateral consists of 14 hotels containing, in the
aggregate, 1,095 rooms, and the Ground Lease Collateral consists of 13 hotels
containing, in the aggregate, 1,436 rooms. The 25 Mortgaged Properties are
located in 12 states throughout the United States. As of November 30, 2004, the
year-to-date occupancy rate for the Mortgaged Properties securing the Tharaldson
Pool I-A Loans was approximately 74.3%.
LOCK BOX ACCOUNT. All revenue with respect to the Mortgaged Properties
(including credit card receivables) will be deposited into a mortgagee
designated lockbox account and swept to the borrowers' account until a trigger
event occurs.
SUBSTITUTION. The borrower may substitute one or more of the Mortgaged
Properties with properties of like kind and quality upon satisfaction of certain
conditions set forth under the loan documents, including without limitation: (i)
the satisfaction of certain loan-to value and debt service coverage tests, (ii)
no substitute property may be located in the greater metropolitan areas of
Houston, Texas, the Woodlands, Texas, or Las Vegas, Nevada and (iii) a written
confirmation from the Rating Agencies that any ratings of the Certificates will
not, as a result of the proposed substitution, be downgraded, qualified or
withdrawn.
RELEASES. With respect to 2 Mortgaged Properties with an allocated loan amount
of $3,061,787 and $2,064,462, respectively, a third party has an option to
purchase the Mortgaged Properties (at a price equal to the applicable borrower's
cost of land, improvements and personal property less straight line depreciation
and in the case of a casualty, less the insurance proceeds received as a result
of the such casualty) if one of the following events occurs: (i) the borrower
changes the use of the Mortgaged Property (for example, as a 78-unit Courtyard
by Marriott, or as a 63-unit Fairfield Inn, as applicable, to the related
Mortgaged Property), (ii) the borrower closes the business being operated on the
Mortgaged Property for more than 90 days, or (iii) the improvements are
destroyed by fire or other casualty and are not restored within 1 year from the
date of such destruction. The title insurance policies covering these Mortgaged
Properties insure the mortgagee for any losses in connection with the exercise
of such options. If
S-171
the option is triggered, the borrower may (x) partially defease the Mortgage
Loan in an amount equal to 125% of the allocated loan amount for the Mortgaged
Property being released, if such defeasance otherwise meets the conditions under
the Mortgage Loan documents, or (y) substitute another mortgaged property for
such Mortgage Property (in accordance with the terms of the Mortgage Loan
documents). If the borrower does not either partially defease the Mortgage Loan
or substitute the Mortgaged Property (in accordance with the Mortgage Loan
documents), the borrower will be in default under the Mortgage Loan documents.
Nevertheless, the Mortgage Loan will not be declared in default if (A) certain
debt service coverage and loan-to-value tests are met (taking into account
proceeds received from the sale to the third party and any additional cash
received from the borrower and (B) such proceeds equal at least 100% of the
allocated loan amount of the related Mortgaged Property. In that case, such
proceeds will be held in escrow as additional collateral for the Mortgage Loan.
MANAGEMENT. TPM is the property manager for each of the Mortgaged Properties
securing the Tharaldson Pool I-A Loan. TPM manages approximately 355 limited
service hotels in 36 states including the Mortgaged Properties and has been
managing limited service hotels since 1982.
LITIGATION. The Tharaldson Pool I-A Loan is subject to certain pending
litigation as described in the preliminary prospectus supplement under "RISK
FACTORS--Litigation May Have Adverse Effect on Borrowers".
S-172
MetroPlace III & IV
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $55,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.0%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Acquisition
SPONSOR GE Pension Fund and Coakley Family Trust
TYPE OF SECURITY Fee
MORTGAGE RATE 5.210%
MATURITY DATE January 11, 2015
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 24
ORIGINAL TERM/AMORTIZATION 120/360
REMAINING TERM/AMORTIZATION 118/360
LOCKBOX None
UP-FRONT RESERVES
OTHER* $1,574,654
ONGOING MONTHLY RESERVES
REPLACEMENT Springing
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $55,000,000
CUT-OFF DATE BALANCE/SF $162
CUT-OFF DATE LTV 64.6%
MATURITY DATE LTV 56.2%
UW DSCR ON NCF 1.53x
- --------------------------------------------------------------------------------
* Escrowed at closing, these funds represent the free rent for recently
signed tenants.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Fairfax, VA
PROPERTY TYPE Office -- Suburban
SIZE (SF) 339,800
OCCUPANCY AS OF FEBRUARY 2, 2005 72.0%
YEAR BUILT/YEAR RENOVATED 2001/NA
APPRAISED VALUE $85,100,000
PROPERTY MANAGEMENT Polinger Company
UW ECONOMIC OCCUPANCY 90.0%
UW REVENUES $8,393,688
UW TOTAL EXPENSES $2,649,259
UW NET OPERATING INCOME (NOI) $5,744,429
UW NET CASH FLOW (NCF) $5,556,114
- --------------------------------------------------------------------------------
S-173
- --------------------------------------------------------------------------------
TENANT SUMMARY
- --------------------------------------------------------------------------------
NET % OF NET
RATINGS* RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- --------------------------------------------------------------------------------
GSA (INS) ........................ Aaa/AAA/AAA 93,817 27.6%
GSA (DEA) ........................ Aaa/AAA/AAA 70,626 20.8
Management Systems Designers ..... NR/NR/NR 44,844 13.2
SiloSmashers, Inc. ............... NR/NR/NR 35,400 10.4
Vacant ........................... 95,113 28.0
------ -----
TOTAL ............................ 339,800 100.0%
======= =====
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
% OF
ACTUAL ACTUAL
TENANT RENT PSF ACTUAL RENT RENT DATE OF LEASE EXPIRATION
- ------------------------------------------------------------------------------------------------
GSA (INS) ........................ $ 27.63 $2,592,185 38.7% February 2014
GSA (DEA) ........................ $ 27.44 1,937,977 28.9 February 2015
Management Systems Designers ..... $ 27.00 1,210,788 18.1 January 2013
SiloSmashers, Inc. ............... $ 27.00 955,800 14.3 October 2014
Vacant ........................... 0 0.0
---------- -----
TOTAL ............................ $6,696,750 100.0%
========== =====
- ------------------------------------------------------------------------------------------------
* Certain ratings are those of the parent whether or not the parent
guarantees the lease.
- -----------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
- -----------------------------------------------------------------------------------------------------------------------
# OF WA BASE CUMULATIVE CUMULATIVE %
LEASES RENT/SF TOTAL SF % OF TOTAL % OF SF % OF ACTUAL OF ACTUAL RENT
YEAR ROLLING ROLLING ROLLING SF ROLLING* ROLLING* RENT ROLLING* ROLLING*
- -----------------------------------------------------------------------------------------------------------------------
2005 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2006 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2007 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2008 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2009 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2010 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2011 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2012 0 $ 0.00 0 0.0% 0.0% 0.0% 0.0%
2013 1 $ 27.00 44,844 13.2% 13.2% 18.1% 18.1%
2014 4 $ 27.46 129,217 38.0% 51.2% 53.0% 71.1%
2015 1 $ 27.44 70,626 20.8% 72.0% 28.9% 100.0%
Thereafter 0 $ 0.00 0 0.0% 72.0% 0.0% 100.0%
Vacant 0 N/A 95,113 28.0% 100.0% 0.0% 100.0%
- -----------------------------------------------------------------------------------------------------------------------
* Calculated based on the approximate square footage occupied by each
tenant.
S-174
THE LOAN. The Mortgage Loan (the "MetroPlace III & IV Loan") is secured by a
first deed of trust encumbering an office building located in Fairfax, Virginia.
The MetroPlace III & IV Loan represents approximately 2.0% of the Cut-Off Date
Pool Balance. The MetroPlace III & IV Loan was originated on December 29, 2004,
and has a principal balance as of the Cut-Off Date of $55,000,000. The
MetroPlace III & IV Loan provides for interest-only payments for the first 24
months of its term, and thereafter, fixed monthly payments of principal and
interest.
The MetroPlace III & IV Loan has a remaining term of 118 months, and matures on
January 11, 2015. The MetroPlace III & IV Loan may be prepaid on or after
November 11, 2014, and permits defeasance with United States government
obligations beginning two years after the Closing Date.
THE BORROWER. The borrower is Prosperity Metro Plaza of Virginia, LLC, a special
purpose entity. Legal counsel to the borrower delivered a non-consolidation
opinion in connection with the origination of the MetroPlace III & IV Loan. The
sponsors are the GE Pension Fund and the Coakley Family Trust. The GE Pension
Fund is managed by GE Asset Management Incorporated, an investment management
firm managing over $180 billion in assets with more than 200 clients. The
Coakley Family owns the C.J. Coakley Company, Inc., one of the largest
commercial interior construction contractors in the Washington area and among
the top twenty in the country.
THE PROPERTY. The Mortgaged Property is an approximately 339,800 square foot
office building situated on approximately 3.5 acres. The Mortgaged Property was
constructed in 2001. The Mortgaged Property is located in Fairfax, Virginia,
within the Washington-Baltimore, DC-MD-VA metropolitan statistical area. As of
February 2, 2005, the occupancy rate for the Mortgaged Property securing the
MetroPlace III & IV Loan was approximately 72.0%.
The largest tenant is the U.S. Government -- U.S. Immigration and Naturalization
Service ("GSA-INS"). The GSA-INS occupies approximately 93,817 square feet, or
approximately 27.6% of the net rentable area. The GSA-INS directs individuals
through the U.S. citizenship process. As of February 15, 2005, the GSA-INS was
rated "Aaa" (Moody's), "AAA" (S&P) and "AAA" (Fitch). The GSA-INS lease expires
in February 2014. The second largest tenant is the U.S. Government -- U.S. Drug
Enforcement Administration ("GSA-DEA") occupying approximately 70,626 square
feet, or approximately 20.8% of the net rentable area. The GSA-DEA enforces the
controlled substances laws and regulations of the United States. As of February
15, 2005, the GSA-DEA was rated "Aaa" (Moody's), "AAA" (S&P) and "AAA" (Fitch).
The GSA-DEA lease expires in February 2015. The third largest tenant is
Management Systems Designers ("MSD"), occupying approximately 44,844 square
feet, or approximately 13.2% of the net rentable area. MSD is a leading
information technology services provider, which has provided IT solutions to
Federal Government clients for more than 24 years. The MSD lease expires in
January 2013.
LOCK BOX ACCOUNT. The loan documents do not require a lock box account.
MANAGEMENT. Polinger Company is the property manager for the Mortgaged Property
securing the MetroPlace III & IV Loan. Polinger Company provides property
management services for approximately 5 million square feet of commercial space
in the Washington, DC area.
S-175
1001 Connecticut Avenue & 1701 K Street
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $53,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.9%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Charles A. Gravely
TYPE OF SECURITY Fee
MORTGAGE RATE 5.060%
MATURITY DATE February 11, 2012
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 24
ORIGINAL TERM/AMORTIZATION 84/360
REMAINING TERM/AMORTIZATION 83/360
LOCKBOX None
UP-FRONT RESERVES
ENGINEERING $6,250
TI/LC $500,000
HOLDBACK RESERVE(1) $3,000,000
ONGOING MONTHLY RESERVES
TAX Yes
REPLACEMENT $3,823
TI/LC(2) Springing
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $53,000,000
CUT-OFF DATE BALANCE/SF $242
CUT-OFF DATE LTV 77.9%
MATURITY DATE LTV 71.9%
UW DSCR ON NCF 1.27x
- --------------------------------------------------------------------------------
(1) Escrowed at closing, and to be held until the base rental collections from
the property equal $569,000/month. The borrower will qualify for partial
release of the escrow, in the amount of $1.5 million, upon the achievement
of $561,000/month in base rental collections.
(2) If the TI/LC reserve drops below the initial $500,000 due to the use of
such funds for tenant improvements and leasing commissions, the borrower
is required to escrow up to $25,000 monthly to replace such funds until
the reserve again equals $500,000.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Washington, DC
PROPERTY TYPE Office -- CBD
SIZE (SF) 219,029
OCCUPANCY AS OF JANUARY 18, 2005 88.2%
YEAR BUILT/YEAR RENOVATED 1953/2001
APPRAISED VALUE $68,000,000
PROPERTY MANAGEMENT Zuckerman Gravely Management, Inc.
UW ECONOMIC OCCUPANCY 93.0%
UW REVENUES $7,200,789
UW TOTAL EXPENSES $2,366,204
UW NET OPERATING INCOME (NOI) $4,834,585
UW NET CASH FLOW (NCF) $4,357,037
- --------------------------------------------------------------------------------
S-176
- ------------------------------------------------------------------------------------
TENANT SUMMARY
- ------------------------------------------------------------------------------------
NET % OF NET
RATINGS RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- ------------------------------------------------------------------------------------
Down Under/Bravo Bravo .................. NR/NR/NR 9,107 4.2%
Dress Barn .............................. NR/NR/NR 9,056 4.1
Competitive Enterprise Institute ........ NR/NR/NR 8,971 4.1
Callahan & Associates ................... NR/NR/NR 7,052 3.2
ACEEE ................................... NR/NR/NR 6,128 2.8
Non-major tenants ....................... 152,769 69.7
Vacant .................................. 25,946 11.8
------- -----
TOTAL ................................... 219,029 100.0%
======= =====
- ------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
% OF
ACTUAL ACTUAL DATE OF LEASE
TENANT RENT PSF ACTUAL RENT RENT EXPIRATION
- -----------------------------------------------------------------------------------------------
Down Under/Bravo Bravo .................. $ 24.36 $ 221,847 3.4% March 2009
Dress Barn .............................. $ 53.23 482,053 7.3 Multiple Spaces*
Competitive Enterprise Institute ........ $ 32.87 294,877 4.5 November 2008
Callahan & Associates ................... $ 33.42 235,678 3.6 June 2008
ACEEE ................................... $ 35.31 216,354 3.3 May 2008
Non-major tenants ....................... $ 33.74 5,154,940 78.0
Vacant .................................. 0 0.0
----------- -----
TOTAL ................................... $ 6,605,749 100.0%
=========== =====
- -----------------------------------------------------------------------------------------------
* Under the terms of multiple leases, 4,701 square feet expire in December
2008, and 4,355 square feet expire in June 2009.
- --------------------------------------------------------------------------------------------------------------------
LEASE EXPIRATION SCHEDULE
- --------------------------------------------------------------------------------------------------------------------
WA BASE CUMULATIVE %
# OF LEASES RENT/SF TOTAL SF % OF TOTAL SF CUMULATIVE % % OF ACTUAL OF ACTUAL RENT
YEAR ROLLING ROLLING ROLLING ROLLING* OF SF ROLLING* RENT ROLLING* ROLLING*
- --------------------------------------------------------------------------------------------------------------------
2005 10 $ 33.08 12,191 5.6% 5.6% 6.1% 6.1%
2006 24 $ 35.95 33,119 15.1% 20.7% 18.0% 24.1%
2007 25 $ 34.00 33,471 15.3% 36.0% 17.2% 41.4%
2008 28 $ 35.14 64,136 29.3% 65.3% 34.1% 75.5%
2009 12 $ 30.89 34,326 15.7% 80.9% 16.1% 91.5%
2010 4 $ 32.48 10,955 5.0% 85.9% 5.4% 96.9%
2011 0 $ 0.00 0 0.0% 85.9% 0.0% 96.9%
2012 2 $ 41.82 4,885 2.2% 88.2% 3.1% 100.0%
2013 0 $ 0.00 0 0.0% 88.2% 0.0% 100.0%
2014 0 $ 0.00 0 0.0% 88.2% 0.0% 100.0%
2015 0 $ 0.00 0 0.0% 88.2% 0.0% 100.0%
Thereafter 0 $ 0.00 0 0.0% 88.2% 0.0% 100.0%
Vacant 0 NA 25,946 11.8% 100.0% 0.0% 100.0%
- --------------------------------------------------------------------------------------------------------------------
* Calculated based on the approximate square footage occupied by each
tenant.
S-177
THE LOAN. The Mortgage Loan (the "1001 Connecticut Avenue & 1701 K Street Loan")
is secured by a first deed of trust encumbering an office building located in
Washington, DC. The 1001 Connecticut Avenue & 1701 K Street Loan represents
approximately 1.9% of the Cut-Off Date Pool Balance. The 1001 Connecticut Avenue
& 1701 K Street Loan was originated on February 8, 2005, and has a principal
balance as of the Cut-Off Date of $53,000,000. The 1001 Connecticut Avenue &
1701 K Street Loan provides for interest-only payments for the first 24 months
of its term, and thereafter, fixed monthly payments of principal and interest.
The 1001 Connecticut Avenue & 1701 K Street Loan has a remaining term of 83
months, and matures on February 11, 2012. The 1001 Connecticut Avenue & 1701 K
Street Loan may be prepaid on or after December 11, 2011, and permits defeasance
with United States government obligations beginning two years after the Closing
Date.
THE BORROWER. The borrowers are 1001 Connecticut, LLC and 1701 K, LLC, each a
special purpose entity. Legal counsel to the borrower delivered a
non-consolidation opinion in connection with the origination of the 1001
Connecticut Avenue & 1701 K Street Loan. The sponsor of the borrowers is Charles
A. Gravely, a principal in Zuckerman-Gravely Development. Zuckerman Gravely
Development and its affiliates currently own 1.3 million square feet of
commercial space and have developed over two million square feet of office space
in the Washington, DC area.
THE PROPERTY. The Mortgaged Property is an approximately 219,029 square foot
office building situated on approximately 0.4 acres. The Mortgaged Property was
constructed in 1953 and renovated in 2001. The Mortgaged Property is located in
NW Washington, DC. As of January 18, 2005, the occupancy rate for the Mortgaged
Property securing the 1001 Connecticut Avenue & 1701 K Street Loan was
approximately 88.2%.
The largest tenant is Down Under/Bravo Bravo occupying approximately 9,107
square feet, or approximately 4.2% of the net rentable area. Down Under/Bravo
Bravo is a restaurant and nightclub. The Down Under/Bravo Bravo lease expires in
March 2009. The second largest tenant is Dress Barn occupying approximately
9,056 square feet, or approximately 4.1% of the net rentable area. Dress Barn is
a women's apparel specialty store, which offers career and casual fashion to the
working woman. The Dress Barn lease expires in December 2008, with respect to
4,701 square feet, and in June 2009, with respect to 4,355 square feet. The
third largest tenant is Competitive Enterprise Institute ("CEI"), occupying
approximately 8,971 square feet, or approximately 4.1% of the net rentable area.
CEI, founded in 1984, is a non-profit organization dedicated to the advancement
of limited government and free enterprise. The CEI lease expires in November
2008.
LOCK BOX ACCOUNT. The loan documents do not require a lock box account.
MANAGEMENT. Zuckerman Gravely Management, Inc., an affiliate of the sponsors, is
the property manager for the Mortgaged Property securing the 1001 Connecticut
Avenue & 1701 K Street Loan.
S-178
Eastmont Town Center
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Countrywide
CUT-OFF DATE BALANCE $53,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.9%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Jack Sumski,Marilyn Sumski, and
Jack andMarilyn Sumski 2004
Trust
TYPE OF SECURITY Fee
MORTGAGE RATE 6.240%
MATURITY DATE February 11, 2015
AMORTIZATION TYPE Balloon
INTEREST ONLY PERIOD 6
ORIGINAL TERM/AMORTIZATION 120/264
REMAINING TERM/AMORTIZATION(1) 119/264
LOCKBOX Yes
UP-FRONT RESERVES
OCCUPANCY(2) $4,200,000
ENGINEERING $2,500
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT(3) $12,167
TI/LC $31,500
OTHER(4) Yes
ADDITIONAL FINANCING(5) None
CUT-OFF DATE BALANCE $53,000,000
CUT-OFF DATE BALANCE/SF $90
CUT-OFF DATE LTV 71.1%
MATURITY DATE LTV 52.3%
UW DSCR ON NCF(6) 1.31x
- --------------------------------------------------------------------------------
(1) The Mortgage Loan documents require amortization on a 22 year schedule as
long as sufficient cash flow is available; however, the Mortgage Loan is
not in payment default even if payments are made on a 30 year amortization
schedule. At any time that the outstanding principal balance of the
Mortgage Loan is higher than the balance would be on a 22 year
amortization schedule, 100% of excess cash flow will be swept and applied
to reduce the mortgage loan balance to the amount it would be had it
amortized on a 22 year amortization schedule.
(2) $4,200,000 was held back at closing to be released only for tenant
improvements and leasing commissions associated with lender approved
leases and subject to 1.25x DSCR and 75% LTV.
(3) Capped at $125,000.
(4) The Mortgage Loan documents require a sweep of all excess cash flow until
certain related litigation has been resolved.
(5) Future mezzanine debt permitted.
(6) Calculated using a 22 year amortization schedule and assuming approval of
the Alameda County Behavioral Health Care Services lease.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Oakland, CA
PROPERTY TYPE Mixed Use -- Office/Retail
SIZE (SF) 585,973
OCCUPANCY AS OF OCTOBER 12, 2004 87.5%
YEAR BUILT/YEAR RENOVATED 1965/2004
APPRAISED VALUE $74,575,000
PROPERTY MANAGEMENT Eastmont Properties Company, LLC
UW ECONOMIC OCCUPANCY 89.5%
UW REVENUES $9,707,468
UW TOTAL EXPENSES $3,445,475
UW NET OPERATING INCOME (NOI) $6,261,993
UW NET CASH FLOW (NCF) $5,820,888
- --------------------------------------------------------------------------------
S-179
- ------------------------------------------------------------------------------------
TENANT SUMMARY
- ------------------------------------------------------------------------------------
% OF
NET
RATINGS(1) NET RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- ------------------------------------------------------------------------------------
Alameda County SSC ................... Aaa3/AAA/AAA 64,302 11.0%
Oakland Police Precinct .............. Aaa3/AAA/AAA 64,000 10.9
County of Alameda Adult and Aging..... Aaa3/AAA/AAA 55,000 9.4
Alameda County Behavioral Health
Care Services(2) ................... Aaa3/AAA/AAA 44,000 7.5
Alameda County Wellness Center ....... Aaa3/AAA/AAA 36,995 6.3
Non-Major tenants .................... 271,286 46.3
Vacant ............................... 50,390 8.6
------- -----
TOTAL ................................ 585,973 100.0%
======= =====
- ------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
% OF
ACTUAL RENT ACTUAL DATE OF LEASE
TENANT PSF ACTUAL RENT RENT EXPIRATION
- --------------------------------------------------------------------------------------------
Alameda County SSC ................... $ 16.77 $1,078,282 12.8% November 2014
Oakland Police Precinct .............. $ 9.00 576,000 6.8 December 2022
County of Alameda Adult and Aging..... $ 21.82 1,200,000 14.3 October 2023
Alameda County Behavioral Health
Care Services(2) ................... $ 21.00 924,000 11.0 December 2020
Alameda County Wellness Center ....... $ 16.32 603,758 7.2 March 2018
Non-Major tenants .................... $ 14.89 4,038,538 48.0
Vacant ............................... 0 0.0
---------- -----
TOTAL ................................ $8,420,578 100.0%
========== =====
- --------------------------------------------------------------------------------------------
(1) Certain ratings are those of the parent whether or not the parent
guarantees the lease.
(2) The borrower has a lease out for signature with Alameda County Behavioral
Health Care Services for approximately 44,000 square feet at rent of $1.75
psf per month which equates to $924,000 annually for 15 years with an
occupancy date of January 2006. The estimated landlord buildout for this
space is equal to $3,000,000 for which lender will release part of the
$4,200,000 holdback.
S-180
Great Wolf Resorts Pool
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Citigroup
CUT-OFF DATE BALANCE $49,843,594
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.8%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR GWR Operating Partnership, L.L.L.P.,
Great Wolf Resorts, Inc.
TYPE OF SECURITY Fee
MORTGAGE RATE 5.835%
MATURITY DATE January 11, 2015
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 120/300
REMAINING TERM/AMORTIZATION 118/298
LOCKBOX Yes
SHADOW RATING (S&P/MOODY'S/FITCH)(1) AAA/Aa3/AA-
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $62,350
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
FF&E(2) Springing
ADDITIONAL FINANCING Subordinate Debt $24,950,434
WHOLE
MORTGAGE
TRUST ASSET LOAN
---------------- -----------
CUT-OFF DATE BALANCE $49,843,594 $74,794,028
CUT-OFF DATE BALANCE/ROOM $88,690 $133,085
CUT-OFF DATE LTV 42.0% 63.0%
MATURITY DATE LTV 32.4% 50.4%
UW DSCR ON NCF 3.08x 1.84x
- --------------------------------------------------------------------------------
(1) S&P, Moody's and Fitch have confirmed that the Great Wolf Resorts Pool
Loan has, in the context of its inclusion in the trust, credit
characteristics consistent with an investment grade obligation.
(2) Upon the occurrence of certain trigger events, the borrower is required to
deposit 3.0% (during years 2-5 of the loan) or 3.5% (years 5 and
thereafter of the loan) of Gross Revenues (as defined in the mortgage loan
documents) into an FF&E account.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 2
LOCATION Traverse City, MI & Kansas City, KS
PROPERTY TYPE Hospitality -- Full Service
SIZE (ROOMS) 562
OCCUPANCY AS OF AUGUST 31, 2004 63.6%
YEAR BUILT 2003 (Traverse City, MI)
2002 (Kansas City, KS)
APPRAISED VALUE $118,700,000
PROPERTY MANAGEMENT Great Lakes Services, LLC
UW ECONOMIC OCCUPANCY 67.0%
UW REVENUES $41,699,767
UW TOTAL EXPENSES $28,324,071
UW NET OPERATING INCOME (NOI) $13,375,696
UW NET CASH FLOW (NCF) $11,707,706
- --------------------------------------------------------------------------------
S-181
- --------------------------------------------------------------------------------
GREAT WOLF RESORT -- TRAVERSE CITY, MI SUMMARY
- --------------------------------------------------------------------------------
TYPES OF ROOMS NO. OF ROOMS
- --------------------------------------------------------------------------------
Family Suite -- Double/Double .................... 163
Kid Cabin -- Bunk beds with Queen Bed ............ 38
Loft Suites -- Three Queen Beds .................. 16
Jacuzzi Suites ................................... 4
Kids Camp Suites ................................. 18
Majestic Bear Suites ............................. 12
Wolf Den Suites .................................. 30
-------
TOTAL .......................................... 281
=======
MEETING/BANQUET ROOMS SQUARE FEET
- --------------------------------------------------------------------------------
Northwest Territory Conference Room .............. 2,400
Fallen Timbers Conference Rooms (two) ............ 1,520
Symposium Room ................................... 2,070
Eagles Landing Boardroom ......................... 510
-------
TOTAL .......................................... 6,500
=======
FOOD AND BEVERAGE SEATING
- --------------------------------------------------------------------------------
Loose Moose ...................................... 120
Camp Critter ..................................... 135
Camp Critter Bar ................................. 16
Bear Claw Cafe ................................... 15
Waterpark Snack Bar .............................. 40
-------
TOTAL .......................................... 326
=======
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GREAT WOLF RESORT -- KANSAS CITY, KS SUMMARY
- --------------------------------------------------------------------------------
TYPES OF ROOMS NO. OF ROOMS
- --------------------------------------------------------------------------------
Loft Suites ........................... 16
Majestic/Royal Bear Suites ............ 14
Kid Cabin Suites ...................... 42
Jacuzzi Suites ........................ 6
Family Suites ......................... 162
Kid Camp Suites ....................... 17
Wolf Den Suites ....................... 24
--------
TOTAL ............................... 281
========
MEETING/BANQUET ROOMS SQUARE FEET
- --------------------------------------------------------------------------------
Northwest Territory A ................. 840
Northwest Territory B ................. 1,260
Fallen Timber ......................... 1,680
--------
TOTAL ............................... 3,780
========
FOOD AND BEVERAGE SEATING
- --------------------------------------------------------------------------------
Camp Critter Bar & Grille ............. 220
Pizza Hut Express ..................... 0
Bear Claw Cafe ........................ 0
Waterpark Snack Bar ................... 0
--------
TOTAL ............................... 220
========
- --------------------------------------------------------------------------------
S-182
Falchi Building
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $47,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.7%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Meyer Chetrit & Margaret Dolgin
TYPE OF SECURITY Fee
MORTGAGE RATE 5.800%
MATURITY DATE March 11, 2010
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 60/360
REMAINING TERM/AMORTIZATION 60/360
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
TI/LC $1,500,000
MASTER LEASE(1) $1,200,000
ENGINEERING $224,125
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $10,645
TI/LC $15,968
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $47,000,000
CUT-OFF DATE BALANCE/SF $74
CUT-OFF DATE LTV 79.7%
MATURITY DATE LTV 74.3%
UW DSCR ON NCF 1.21x
- --------------------------------------------------------------------------------
(1) Represents 2.5 years of the master lease obligations, with funds to be
released to the TI/LC escrow as third party leases are signed, thus
reducing the master lease obligation.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Long Island City, NY
PROPERTY TYPE Mixed Use -- Office/Industrial
SIZE (SF) 638,712
OCCUPANCY AS OF JANUARY 5, 2005 93.5%
YEAR BUILT/YEAR RENOVATED 1922/1995
APPRAISED VALUE $59,000,000
PROPERTY MANAGEMENT KND Management Co.
UW ECONOMIC OCCUPANCY 88.0%
UW REVENUES $6,492,779
UW TOTAL EXPENSES $2,171,219
UW NET OPERATING INCOME (NOI) $4,321,560
UW NET CASH FLOW (NCF) $4,004,713
- --------------------------------------------------------------------------------
S-183
- ----------------------------------------------------------------------------------------------------------------------------
TENANT SUMMARY
- ----------------------------------------------------------------------------------------------------------------------------
NET % OF NET % OF
RATINGS RENTABLE RENTABLE ACTUAL ACTUAL DATE OF LEASE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION
- ----------------------------------------------------------------------------------------------------------------------------
Aggregate Sales Inc. ......... NR/NR/NR 85,262 13.3% $ 5.78 $ 492,635 8.9% June 2006
A Touch of Class LTD ......... NR/NR/NR 70,067 11.0 $ 5.56 389,759 7.0 August 2018
Samuel Aaron ................. NR/NR/NR 67,789 10.6 $ 9.30 630,320 11.4 December 2009
Genal Strap/Vogue ............ NR/NR/NR 53,407 8.4 $ 7.20 384,468 6.9 December 2013
Dalow Industries ............. NR/NR/NR 40,595 6.4 $ 9.05 367,481 6.6 August 2013
Non-major tenants ............ 279,959 43.8 $ 11.71 3,278,864 59.1
Vacant ....................... 41,633 6.5 0 0.0
------- ----- ----------- -----
TOTAL ........................ 638,712 100.0% $ 5,543,527 100.0%
======= ===== =========== =====
- ----------------------------------------------------------------------------------------------------------------------------
S-184
Gardner Tanenbaum Pool
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Countrywide
CUT-OFF DATE BALANCE $43,200,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.5%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Justin C. Gardner; Richard I.
Tanenbaum
Fee and
TYPE OF SECURITY Leasehold
MORTGAGE RATE 5.460%
MATURITY DATE March 11, 2015
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 120/360
REMAINING TERM/AMORTIZATION 120/360
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $65,625
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT(1) Yes
TI/LC $22,456
ADDITIONAL FINANCING(2) None
CUT-OFF DATE BALANCE $43,200,000
CUT-OFF DATE BALANCE/SF $40
CUT-OFF DATE LTV 76.6%
MATURITY DATE LTV 63.9%
UW DSCR ON NCF 1.40x
- --------------------------------------------------------------------------------
(1) Funds escrowed monthly in the amount of $13,473 for loan years 1-3 and
$4,491 for loan years 4-10.
(2) Future mezzanine debt permitted.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 8
LOCATION Oklahoma
PROPERTY TYPE Industrial -- Warehouse/Flex
SIZE (SF) 1,077,873
OCCUPANCY AS OF DECEMBER 31, 2004 94.9%
YEAR BUILT/YEAR RENOVATED Various/Various
APPRAISED VALUE $56,400,000
PROPERTY MANAGEMENT Gar-Tan Management, LLC
UW ECONOMIC OCCUPANCY 88.9%
UW REVENUES $5,216,504
UW TOTAL EXPENSES $792,912
UW NET OPERATING INCOME (NOI) $4,423,592
UW NET CASH FLOW (NCF) $4,105,095
- --------------------------------------------------------------------------------
S-185
- --------------------------------------------------------------------------------
TENANT SUMMARY
- --------------------------------------------------------------------------------
NET % OF NET
RATINGS(1) RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- --------------------------------------------------------------------------------
ARINC, Inc. ....................... NR/NR/NR 174,145 16.2%
Manco Inc.(3) ..................... A2/A-/NR 219,900 20.4
IMAX Corporation(4)(5) ............ NR/NR/NR 200,000 18.6
L3 Communications Corporation ..... Ba3/BB+/CCC- 32,000 3.0
Simplex Grinnell LP(6) ............ Baa2/BBB-/BBB+ 25,000 2.3
Non-major tenants(5)(7) ........... NR/NR/NR 426,828 39.6
Vacant ............................ 0 0.0
------- -----
TOTAL ............................. 1,077,873 100.0%
========= =====
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
% OF
ACTUAL ACTUAL DATE OF LEASE
TENANT RENT PSF ACTUAL RENT(2) RENT EXPIRATION
- --------------------------------------------------------------------------------------------------
ARINC, Inc. ....................... $ 8.63 $ 1,502,784 27.4% September 2012
Manco Inc.(3) ..................... $ 4.47 982.584 17.9 June 2005, August 2010
IMAX Corporation(4)(5) ............ $ 3.43 686,580 12.5 February 2014
L3 Communications Corporation ..... $ 15.01 480,324 8.8 August 2016
Simplex Grinnell LP(6) ............ $ 7.38 184,512 3.4 June 2010
Non-major tenants(5)(7) ........... $ 3.86 1,646,901 30.0
Vacant ............................ 0 0.0
------------ -----
TOTAL ............................. $ 5,483,685 100.0%
============ =====
- --------------------------------------------------------------------------------------------------
(1) Certain ratings are those of the parent of the tenant whether or not the
parent guarantees the lease.
(2) The amortized capital expenditures were not included in the calculation of
NCF.
(3) Parent is Henkel Corporation. The tenant's ratings are based on the
parent. Lease expiration on 153,900 SF (base lease) is August 2010. Lease
expiration on 66,000 SF (expansion space) is June 2005. The Actual Rent
collected on the tenant's base lease includes $99,696 for amortized
capital expenditures that will be paid through August 2007.
(4) Tenant's Actual Rent includes $6,588 for amortized capital expenditures
that will be paid through the term of the tenant's lease.
(5) During the term of the lease the tenant has (and with respect to the
non-major tenants, certain of the non-major tenants have) a termination
option.
(6) Parent is Tyco International (US), Inc. The tenant's ratings are based on
the parent. The Actual Rent includes $22,512 for amortized capital
expenditures that will be paid through the term of the tenant's lease.
(7) Actual Rent includes $225,495 for amortized capital expenditure payments
that end at various months in 2008.
S-186
Cabrillo Palisades
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $43,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.5%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Acquisition
SPONSOR Henry Manoucheri
TYPE OF SECURITY Fee
MORTGAGE RATE 5.570%
MATURITY DATE February 11, 2010
AMORTIZATION TYPE(1) Interest Only
INTEREST ONLY PERIOD 60
ORIGINAL TERM/AMORTIZATION 60/IO
REMAINING TERM/AMORTIZATION 59/IO
LOCKBOX None
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $334,740
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $7,780
ADDITIONAL
FINANCING(2) Subordinate Debt $8,000,000
WHOLE
TRUST MORTGAGE
ASSET LOAN
----------- -----------
CUT-OFF DATE
BALANCE $43,000,000 $51,000,000
CUT-OFF DATE BALANCE/UNIT $116,531 $138,211
CUT-OFF DATE LTV 67.5% 80.0%
MATURITY DATE LTV 67.5% 80.0%
UW DSCR ON NCF 1.49x 1.26x
- --------------------------------------------------------------------------------
(1) The loan is structured as interest only; however scheduled quarterly
payments of principal in the amount of $526,960.78, will occur if the
annualized net cash flow, as defined in the Mortgage, is less than
$4,000,000 at the end of the 36th month of the loan term. In addition, if
at the end of the 48th month of the loan term, the annualized net cash
flow is less than $4,300,000, these quarterly principal payments of
$526,960.78 will continue for the final year of the loan term.
(2) In addition to the $8,000,000 B note, South Charles Investment Corporation
funded $14,080,000 of preferred equity, which is secured by a first
priority pledge and security interest in 100% of the membership interests
of the borrowing entity.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION San Diego, CA
PROPERTY TYPE Multifamily -- Conventional
SIZE (UNITS) 369
OCCUPANCY AS OF DECEMBER 22, 2004 93.5%
YEAR BUILT/YEAR RENOVATED 1959/NA
APPRAISED VALUE $63,750,000
PROPERTY MANAGEMENT Global Integrity Realty Corporation
UW ECONOMIC OCCUPANCY 96.0%
UW REVENUES $5,682,368
UW TOTAL EXPENSES $2,015,187
UW NET OPERATING INCOME (NOI) $3,667,181
UW NET CASH FLOW (NCF) $3,573,824
- --------------------------------------------------------------------------------
S-187
- ------------------------------------------------------------------------------------------------------
UNIT MIX
- ------------------------------------------------------------------------------------------------------
NO. OF APPROXIMATE APPROXIMATE
UNIT MIX UNITS UNIT SIZE (SF) NRA (SF) % OF NRA RENTAL RATE
- ------------------------------------------------------------------------------------------------------
2 BR/1.5 BA ......... 266 950 252,700 68.6% $1,187
3 BR/1.5 BA ......... 103 1,125 115,875 31.4 $1,479
--- ------- -----
TOTAL ............... 369 999 368,575 100.0% $1,269/$1.27/SF
=== ======= =====
- ------------------------------------------------------------------------------------------------------
S-188
201 West Madison
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Countrywide
CUT-OFF DATE BALANCE $42,440,495
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.5%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Refinance
SPONSOR Syndicated Equities Corporation;
John W. Hammerschlag; Richard Kaplan
TYPE OF SECURITY Fee and Leasehold
MORTGAGE RATE 5.500%
MATURITY DATE February 11, 2015
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 120/360
REMAINING TERM/AMORTIZATION 119/359
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
REPLACEMENT $618,750
TI/LC(1) $125,000
ENGINEERING $31,250
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT(2) $3,500
TI/LC(3) $286
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $42,440,495
CUT-OFF DATE BALANCE/SF $110
CUT-OFF DATE LTV 74.6%
MATURITY DATE LTV 62.4%
UW DSCR ON NCF 1.38x
- --------------------------------------------------------------------------------
(1) Escrowed for tenant improvement allowances for the Office Max lease.
(2) Funds are escrowed only if the reserve balance falls below $100,000.
(3) Increased to $1,898 monthly if Walgreens does not renew its lease by May
2012.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Chicago, IL
PROPERTY TYPE Special Purpose -- Parking
Garage/Retail
SIZE (SF) 385,310
OCCUPANCY NA
YEAR BUILT/YEAR RENOVATED 1998/NA
APPRAISED VALUE $56,900,000
PROPERTY MANAGEMENT Imperial Parking (U.S.), Inc.
UW ECONOMIC OCCUPANCY 85.4%
UW REVENUES $6,467,888
UW TOTAL EXPENSES $2,427,615
UW NET OPERATING INCOME (NOI) $4,040,273
UW NET CASH FLOW (NCF) $3,998,314
- --------------------------------------------------------------------------------
S-189
- ------------------------------------------------------------------------
TENANT SUMMARY
- ------------------------------------------------------------------------
% OF NET
RATINGS(1) NET RENTABLE RENTABLE
TENANT SUMMARY MOODY'S/S&P/FITCH AREA SF AREA
- ------------------------------------------------------------------------
Parking Garage(2) ........ NR/NR/NR 365,998 95.0%
Walgreens ................ Aa3/A+/NR 12,150 3.2
Office Max ............... Ba1/BB/NR 3,363 0.9
Tahn/65 Restaurant ....... NR/NR/NR 1,760 0.5
AWAN/Dunkin Donuts ....... NR/NR/NR 1,733 0.4
Nextel ................... Ba3/BB+/BB+ 306 0.1
Non-Major tenants(3) ..... 0 0.0
Vacant ................... 0 0.0
------- -----
TOTAL .................... 385,310 100.0%
======= =====
- ------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
% OF DATE OF LEASE
TENANT SUMMARY RENT PSF(2) ACTUAL RENT(2) ACTUAL RENT(2) EXPIRATION
- --------------------------------------------------------------------------------------------
Parking Garage(2) ........ $14.77 $5,406,715 86.1% N/A
Walgreens ................ $38.50 467,775 7.4 April 2028
Office Max ............... $53.50 179,921 2.9 April 2012
Tahn/65 Restaurant ....... $55.00 96,800 1.5 March 2008
AWAN/Dunkin Donuts ....... $55.00 95,315 1.5 May 2012
Nextel ................... $62.41 19,097 0.3 December 2006
Non-Major tenants(3) ..... 17,400 0.3
Vacant ................... 0 0.0
---------- -----
TOTAL .................... $16.31 $6,283,023 100.0%
=========== =====
- --------------------------------------------------------------------------------------------
(1) Certain ratings are those of the parent of the tenant whether or not the
parent guarantees the lease.
(2) The parking garage figures are based on TTM revenues received from the
operation of 1,108 parking spaces.
(3) Includes both the LaSalle Bank lease for operation of an automated teller
machine and the Metro Lights LLC lease for rights to advertise near the
garage entrances and exits.
S-190
One Fair Oaks
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $40,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.4%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Acquisition
SPONSOR Beacon Capital Strategic Partners
III, L.P.
TYPE OF SECURITY Fee
MORTGAGE RATE 4.780%
MATURITY DATE February 11, 2010
AMORTIZATION TYPE Interest Only
INTEREST ONLY PERIOD 60
ORIGINAL TERM/AMORTIZATION 60/IO
REMAINING TERM/AMORTIZATION 59/IO
LOCKBOX Yes
UP-FRONT RESERVES None
ONGOING MONTHLY RESERVES
TAX AND INSURANCE Springing
REPLACEMENT RESERVES Springing
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $40,000,000
CUT-OFF DATE BALANCE/SF $187
CUT-OFF DATE LTV 74.6%
MATURITY DATE LTV 74.6%
UW DSCR ON NCF 2.10x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Fairfax, VA
PROPERTY TYPE Office -- Suburban
SIZE (SF) 214,214
OCCUPANCY AS OF JANUARY 14, 2005 100.0%
YEAR BUILT/YEAR RENOVATED 1987/NA
APPRAISED VALUE $53,600,000
PROPERTY MANAGEMENT Beacon Capital Strategic Partners
III Property Management, LLC
UW ECONOMIC OCCUPANCY 95.0%
UW REVENUES $5,937,571
UW TOTAL EXPENSES $1,877,852
UW NET OPERATING INCOME (NOI) $4,059,718
UW NET CASH FLOW (NCF) $4,016,876
- --------------------------------------------------------------------------------
S-191
- ------------------------------------------------------------------------------------
TENANT SUMMARY
- ------------------------------------------------------------------------------------
NET % OF NET
RATINGS* RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- ------------------------------------------------------------------------------------
CACI Enterprise Solutions, Inc. ......... NR/BB/NR 214,214 100.0%
Vacant .................................. 0 0.0
------- -----
TOTAL ................................... 214,214 100.0%
======= =====
- ------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
ACTUAL % OF ACTUAL DATE OF LEASE
TENANT RENT PSF ACTUAL RENT RENT EXPIRATION
- -----------------------------------------------------------------------------------------------
CACI Enterprise Solutions, Inc. ......... $ 20.09 $ 4,303,559 100.0% December 2016
Vacant .................................. 0 0.0
----------- -----
TOTAL ................................... $ 4,303,559 100.0%
=========== =====
- -----------------------------------------------------------------------------------------------
* Certain ratings are those of the parent whether or not the parent
guarantees the lease.
S-192
Cadbury Schweppes
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $36,000,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.3%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Acquisition
SPONSOR Caplease Credit LLC
TYPE OF SECURITY Fee
MORTGAGE RATE 5.260%
MATURITY DATE March 11, 2015
AMORTIZATION TYPE ARD
INTEREST ONLY PERIOD 12
ORIGINAL TERM/AMORTIZATION 120/344
REMAINING TERM/AMORTIZATION 120/344
LOCKBOX Yes
UP-FRONT RESERVES
INSURANCE Yes
ENVIRONMENTAL(1) $500,000
RENT ESCROW(2) $11,500,000
ONGOING MONTHLY RESERVES
ROLLOVER RESERVE Springing
ADDITIONAL FINANCING Subordinate Debt $4,047,559
WHOLE
TRUST ASSET MORTGAGE LOAN
--------------------- ------------------
CUT-OFF DATE BALANCE $36,000,000 40,047,559
CUT-OFF DATE BALANCE/SF $241 $268
CUT-OFF DATE LTV 75.0% 83.4%
MATURITY DATE LTV 62.7% 62.7%
UW DSCR ON NCF 1.29x 1.02x
- --------------------------------------------------------------------------------
(1) Reserve held due to the existence of USTs at the Mortgaged Property. All
sums may be released upon satisfaction of certain terms as described in
the escrow agreements including a no further action letter issued by the
state.
(2) Reserve to be held until the tenant commences paying full unabated rent.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Whippany, NJ
PROPERTY TYPE Office -- Flex
SIZE (SF) 149,475
OCCUPANCY AS OF DECEMBER 13, 2004 100.0%
YEAR BUILT/YEAR RENOVATED 2005/NA
APPRAISED VALUE $48,000,000
PROPERTY MANAGEMENT Self-Managed
UW ECONOMIC OCCUPANCY 98.0%
UW REVENUES $3,498,074
UW TOTAL EXPENSES $92,461
UW NET OPERATING INCOME (NOI) $3,405,612
UW NET CASH FLOW (NCF) $3,149,176
- --------------------------------------------------------------------------------
S-193
- -----------------------------------------------------------------------------------------------------------------------------
TENANT SUMMARY
- -----------------------------------------------------------------------------------------------------------------------------
NET % OF NET
RATINGS* RENTABLE RENTABLE ACTUAL % OF DATE OF LEASE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT ACTUAL RENT EXPIRATION
- -----------------------------------------------------------------------------------------------------------------------------
Cadbury Schweppes ......... Baa2/BBB/BBB 149,475 100.0% $ 23.88 $3,569,463 100.0% March 2021
Vacant .................... 0 0.0 0 0.0
------- ----- ---------- -----
TOTAL ..................... 149,475 100.0% $3,569,463 100.0%
======= ===== ========== =====
- -----------------------------------------------------------------------------------------------------------------------------
* Certain ratings are those of the parent whether or not the parent
guarantees the lease.
S-194
Santa Teresa Portfolio
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Countrywide
CUT-OFF DATE BALANCE $33,878,000
PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.2%
NUMBER OF MORTGAGE LOANS 2
LOAN PURPOSE Refinance
SPONSOR Richard P. Tambone
TYPE OF SECURITY Fee and Leasehold
MORTGAGE RATE 5.870%
MATURITY DATE February 11, 2010
AMORTIZATION TYPE ARD
INTEREST ONLY PERIOD 12
ORIGINAL TERM/AMORTIZATION 60/360
REMAINING TERM/AMORTIZATION 59/360
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $31,938
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $15,243
TI/LC $20,565
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $33,878,000
CUT-OFF DATE BALANCE/SF $32
CUT-OFF DATE LTV 76.8%
MATURITY DATE LTV 72.8%
UW DSCR ON NCF 1.26x
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 19
LOCATION Various
PROPERTY TYPE Industrial/Office
SIZE (SF) 1,062,029
OCCUPANCY AS OF JANUARY 31, 2005 77.9%
YEAR BUILT/YEAR RENOVATED Various/Various
APPRAISED VALUE $44,130,000
PROPERTY MANAGEMENT Santa Barbara Realty Services, LLC
UW ECONOMIC OCCUPANCY 77.2%
UW REVENUES $4,949,809
UW TOTAL EXPENSES $1,504,826
UW NET OPERATING INCOME (NOI) $3,444,983
UW NET CASH FLOW (NCF) $3,036,853
- --------------------------------------------------------------------------------
S-195
- --------------------------------------------------------------------------------
TENANT SUMMARY
- --------------------------------------------------------------------------------
% OF NET
RATINGS NET RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- --------------------------------------------------------------------------------
ADC Telecommunications ........... NR/NR/NR 243,800 23.0%
Tally Genicom .................... NR/NR/NR 52,500 4.9
Aztec Imports, Inc. .............. NR/NR/NR 40,000 3.8
Morrison Express Corp. ........... NR/NR/NR 38,400 3.6
Emerson Electric Company ......... NR/NR/NR 38,268 3.6
Non-major tenants ................ NR/NR/NR 414,364 39.0
Vacant ........................... 234,697 22.1
------- -----
TOTAL ............................ 1,062,029 100.0%
========= =====
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
% OF
ACTUAL ACTUAL DATE OF LEASE
TENANT RENT PSF ACTUAL RENT RENT EXPIRATION
- --------------------------------------------------------------------------------------
ADC Telecommunications ........... $ 3.84 $ 936,192 24.4% October 2012
Tally Genicom .................... $ 3.60 189,000 4.9 August 2008
Aztec Imports, Inc. .............. $ 3.00 120,000 3.1 February 2006
Morrison Express Corp. ........... $ 3.00 115,200 3.0 May 2007
Emerson Electric Company ......... $ 4.33 165,750 4.3 September 2005
Non-major tenants ................ $ 5.59 2,314,256 60.3
Vacant ........................... 0 0.0
----------- -----
TOTAL ............................ $ 3,840,398 100.0%
=========== =====
- --------------------------------------------------------------------------------------
S-196
Choice Center
- --------------------------------------------------------------------------------
LOAN INFORMATION
- --------------------------------------------------------------------------------
MORTGAGE LOAN SELLER Wachovia
CUT-OFF DATE BALANCE $32,516,547
PERCENTAGE OF CUT-OFF DATE
POOL BALANCE 1.2%
NUMBER OF MORTGAGE LOANS 1
LOAN PURPOSE Acquisition
SPONSOR Capital Lease Funding, Inc.
TYPE OF SECURITY Fee
MORTGAGE RATE 5.300%
MATURITY DATE May 11, 2013
AMORTIZATION TYPE Balloon
ORIGINAL TERM/AMORTIZATION 101/365
REMAINING TERM/AMORTIZATION 98/362
LOCKBOX Yes
UP-FRONT RESERVES
TAX/INSURANCE Yes
ENGINEERING $68,750
ONGOING MONTHLY RESERVES
TAX/INSURANCE Yes
REPLACEMENT $9,516
TI/LC* Steps
ADDITIONAL FINANCING None
CUT-OFF DATE BALANCE $32,516,547
CUT-OFF DATE BALANCE/SF $145
CUT-OFF DATE LTV 74.8%
MATURITY DATE LTV 56.3%
UW DSCR ON NCF 1.43x
- --------------------------------------------------------------------------------
* Beginning in January 2008, the borrower must begin escrowing $39,583
monthly through December 2009, and beginning in January 2010, $50,000
monthly for the remainder of the loan term, with a maximum reserve of
$3,000,000. TI/LC reserve to be capped at $3,000,000.
- --------------------------------------------------------------------------------
PROPERTY INFORMATION
- --------------------------------------------------------------------------------
NUMBER OF MORTGAGED PROPERTIES 1
LOCATION Silver Spring, MD
PROPERTY TYPE Office - Suburban
SIZE (SF) 223,912
OCCUPANCY AS OF DECEMBER 2, 2004 99.0%
YEAR BUILT/YEAR RENOVATED 1971/2003
APPRAISED VALUE $43,500,000
PROPERTY MANAGEMENT Moore & Associates, Inc.
UW ECONOMIC OCCUPANCY 95.0%
UW REVENUES $5,195,700
UW TOTAL EXPENSES $1,788,530
UW NET OPERATING INCOME (NOI) $3,407,170
UW NET CASH FLOW (NCF) $3,101,444
- --------------------------------------------------------------------------------
S-197
- -------------------------------------------------------------------------------------
TENANT SUMMARY
- -------------------------------------------------------------------------------------
NET % OF NET
RATINGS* RENTABLE RENTABLE
TENANT MOODY'S/S&P/FITCH AREA (SF) AREA
- -------------------------------------------------------------------------------------
Choice Hotels International .............. Baa3/BBB/NR 158,727 70.9%
American Institutes for Research ......... NR/NR/NR 40,676 18.2
Sunburst Hospitality Corporation ......... NR/NR/NR 18,658 8.3
Communications Services for the Deaf ..... NR/NR/NR 3,582 1.6
AT& ...................................... Ba1/BB+/BB+ 0 0.0
Non-major tenants ........................ 0 0.0
Vacant ................................... 2,269 1.0
------- -----
TOTAL .................................... 223,912 100.0%
======= =====
- -------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
% OF
ACTUAL ACTUAL DATE OF LEASE
TENANT RENT PSF ACTUAL RENT RENT EXPIRATION
- ---------------------------------------------------------------------------------------------
Choice Hotels International .............. $ 21.97 $ 3,487,293 71.1% May 2013
American Institutes for Research ......... $ 21.26 864,969 17.6 October 2008
Sunburst Hospitality Corporation ......... $ 20.35 379,690 7.7 May 2013
Communications Services for the Deaf ..... $ 23.35 83,640 1.7 December 2006
AT& ...................................... 32,319 0.7 November 2006
Non-major tenants ........................ 54,836 1.1
Vacant ................................... 0 0.0
----------- -----
TOTAL .................................... $ 4,902,748 100.0%
=========== =====
- ---------------------------------------------------------------------------------------------
* Certain ratings are those of the parent whether or not the parent guarantees
the lease.
S-198
THE MORTGAGE LOAN SELLERS
The Depositor will acquire the Mortgage Loans from the Mortgage Loan
Sellers on or prior to the Closing Date pursuant to separate mortgage loan
purchase agreements (each, a "Mortgage Loan Purchase Agreement" and together,
the "Mortgage Loan Purchase Agreements"). The Mortgage Loan Sellers originated
or acquired the Mortgage Loans as described above under "--Mortgage Loan
History."
One hundred fifty-two (152) of the Mortgage Loans (the "Wachovia Mortgage
Loans"), representing 64.3% of the Cut-Off Date Pool Balance (128 Mortgage Loans
in Loan Group 1 or 62.5% of the Cut-Off Date Group 1 Balance and 24 Mortgage
Loans in Loan Group 2 or 75.7% of the Cut-Off Date Group 2 Balance), were
originated or acquired by Wachovia Bank, National Association ("Wachovia").
Wachovia is a national banking association whose principal offices are located
in Charlotte, North Carolina. Wachovia's business is subject to examination and
regulation by federal banking authorities and its primary federal bank
regulatory authority is the Office of the Comptroller of the Currency. Wachovia
is a wholly-owned subsidiary of Wachovia Corporation, which as of December 31,
2004, had total assets of approximately $493.3 billion. Wachovia is acting as
the Master Servicer. Wachovia Capital Markets, LLC is acting as an Underwriter
for this transaction and is an affiliate of Wachovia.
Fifteen (15) of the Mortgage Loans (the "Countrywide Mortgage Loans"),
representing 14.4% of the Cut-Off Date Pool Balance (14 Mortgage Loans in Loan
Group 1 or 16.2% of the Cut-Off Date Group 1 Balance and 1 Mortgage Loan in Loan
Group 2 or 2.4% of the Cut-Off Date Group 2 Balance) were originated by
Countrywide Real Estate Finance, Inc. ("Countrywide"), a California corporation,
whose principal offices are located in Calabasas, California. Countrywide
Securities Corporation is acting as an Underwriter for this transaction and is
an affiliate of Countrywide.
Twenty-one (21) of the Mortgage Loans (the "Citigroup Mortgage Loans"),
representing 13.3% of the Cut-Off Date Pool Balance (18 Mortgage Loans in Loan
Group 1 or 13.3% of the Cut-Off Date Group 1 Balance and 3 Mortgage Loans in
Loan Group 2 or 13.2% of the Cut-Off Date Group 2 Balance) were originated by
Citigroup Global Markets Realty Corp., a New York corporation, whose principal
offices are located in New York, New York, that is primarily engaged in the
business of purchasing and originating commercial mortgage loans. Citigroup is a
subsidiary of Citigroup Financial Products, Inc. An affiliate of Citigroup,
Citigroup Global Markets Inc. is acting as a co-lead manager for this
transaction.
Forty-one (41) of the Mortgage Loans (the "Artesia Mortgage Loans"),
representing 8.0% of the Cut-Off Date Pool Balance (36 Mortgage Loans in Loan
Group 1 or 7.9% of the Cut-Off Date Group 1 Balance and 5 Mortgage Loans in Loan
Group 2 or 8.6% of the Cut-Off Date Group 2 Balance) were originated by Artesia
Mortgage Capital Corporation ("Artesia"). Artesia is a Delaware corporation
engaged in the business of originating and securitizing U.S. commercial mortgage
loans. Its principal offices are located in the Seattle suburb of Issaquah,
Washington. Artesia is a wholly-owned subsidiary of Dexia Bank which is rated
"AA" by S&P, "Aa2" by Moody's and "AA+" by Fitch. Dexia Bank is part of Dexia
Group, a diversified financial services firm located in Brussels, Belgium, with
a balance sheet of 389 billion EUR ($527 billion) and a stock market
capitalization of approximately 19 billion EUR ($26 billion) as of December
2004.
Wachovia has no obligation to repurchase or substitute any of the
Countrywide Mortgage Loans, the Citigroup Mortgage Loans or the Artesia Mortgage
Loans. Citigroup has no obligation to repurchase or substitute any of the
Wachovia Mortgage Loans, the Countrywide Mortgage Loans or the Artesia Mortgage
Loans. Countrywide has no obligation to repurchase or substitute any of the
Wachovia Mortgage Loans, the Citigroup Mortgage Loans or the Artesia Mortgage
Loans. Artesia has no obligation to repurchase or substitute any of the Wachovia
Mortgage Loans, Countrywide Mortgage Loans or Citigroup Mortgage Loans.
All information concerning the Wachovia Mortgage Loans contained herein or
used in the preparation of this prospectus supplement is as underwritten by
Wachovia. All information concerning the Countrywide Mortgage Loans contained in
or used in the preparation of this prospectus supplement is as underwritten by
Countrywide. All information concerning the Citigroup Mortgage Loans contained
in or used in the preparation of this prospectus supplement is as underwritten
by Citigroup. All information concerning the Artesia Mortgage Loans contained
herein or used in the preparation of this prospectus supplement is as
underwritten by Artesia.
S-199
UNDERWRITING STANDARDS
General. Each Mortgage Loan Seller's commercial real estate finance or
commercial mortgage banking group has the authority, with the approval from the
appropriate credit committee, to originate fixed-rate, first lien mortgage loans
for securitization. Each Mortgage Loan Seller's commercial real estate finance
or commercial mortgage banking operation is staffed by real estate
professionals. Each Mortgage Loan Seller's loan underwriting group is an
integral component of the commercial real estate finance or commercial mortgage
banking group which also includes groups responsible for loan origination and
closing mortgage loans.
Upon receipt of a loan application, the respective Mortgage Loan Seller's
loan underwriters commence an extensive review of the borrower's financial
condition and creditworthiness and the real estate which will secure the loan.
Loan Analysis. Generally, each Mortgage Loan Seller performs both a credit
analysis and collateral analysis with respect to a loan applicant and the real
estate that will secure the loan. In general, credit analysis of the borrower
and the real estate includes a review of historical financial statements,
including rent rolls (generally unaudited), third party credit reports,
judgment, lien, bankruptcy and pending litigation searches and, if applicable,
the loan payment history of the borrower. Each Mortgage Loan Seller typically
performs a qualitative analysis which incorporates independent credit checks and
published debt and equity information with respect to certain principals of the
borrower as well as the borrower itself. Borrowers are generally required to be
single-purpose entities although they are generally not required to be
structured to limit the possibility of becoming insolvent or bankrupt. The
collateral analysis typically includes an analysis of the historical property
operating statements, rent rolls, operating budgets, a projection of future
performance, if applicable, and a review of tenant leases. Each Mortgage Loan
Seller generally requires third party appraisals, as well as environmental and
building condition reports. Each report is reviewed for acceptability by a staff
member of the applicable Mortgage Loan Seller or a third-party consultant for
compliance with program standards. Generally, the results of these reviews are
incorporated into the underwriting report. Two (2) Mortgage Loans (loan numbers
17 and 19), representing 2.4% of the Cut-Off Date Pool Balance (2.8% of Loan
Group 1), sold to the Depositor by Wachovia, were originated by Capital Lease
Funding, Inc. In each case the related Mortgage Loan Seller re-underwrote such
Mortgage Loan to the related Mortgage Loan Seller's underwriting guidelines. In
some instances, one or more provisions of the guidelines were waived or modified
by the related Mortgage Loan Seller where it was determined not to adversely
affect the Mortgage Loans originated or acquired by it in any material respect.
Loan Approval. Prior to commitment, all Mortgage Loans must be approved by
the applicable Mortgage Loan Seller's credit committee in accordance with its
credit policies.
Debt Service Coverage Ratio and LTV Ratio. Each Mortgage Loan Seller's
underwriting standards generally mandate minimum debt service coverage ratios
and maximum loan-to-value ratios. The debt service coverage ratio guidelines are
generally calculated based on net cash flow at the time of origination. In
addition, each Mortgage Loan Seller's underwriting guidelines generally permit a
maximum amortization period of 30 years and, with respect to loans with
interest-only periods, a maximum amortization period of 30 years following the
interest-only period. However, notwithstanding such guidelines, in certain
circumstances the actual debt service coverage ratios, loan-to-value ratios and
amortization periods for the Mortgage Loans originated by such Mortgage Loan
Seller may vary from these guidelines.
Escrow Requirements. Generally, each Mortgage Loan Seller requires most
borrowers to fund various escrows for taxes and insurance, capital expenses and
replacement reserves. Generally, the required escrows for mortgage loans
originated by each Mortgage Loan Seller are as follows:
o Taxes--Typically an initial deposit and monthly escrow deposits equal to
1/12th of the annual property taxes (based on the most recent property
assessment and the current millage rate) are required to provide the
Mortgage Loan Seller with sufficient funds to satisfy all taxes and
assessments. Each Mortgage Loan Seller may waive this escrow requirement
under certain circumstances.
S-200
o Insurance--If the property is insured under an individual policy (for
example, the property is not covered by a blanket policy), typically an
initial deposit and monthly escrow deposits equal to 1/12th of the annual
property insurance premium are required to provide the Mortgage Loan
Seller with sufficient funds to pay all insurance premiums. Each Mortgage
Loan Seller may waive this escrow requirement under certain circumstances.
o Replacement Reserves--Replacement reserves are generally calculated in
accordance with the expected useful life of the components of the property
during the term of the mortgage loan. An originator of a Mortgage Loan may
waive this escrow requirement under certain circumstances.
o Completion Repair/Environmental Remediation--Typically, a completion
repair or remediation reserve is required where an environmental or
engineering report suggests that such reserve is necessary. Upon funding
of the applicable Mortgage Loan, the Mortgage Loan Seller generally
requires that at least 110% of the estimated costs of repairs or
replacements be reserved and generally requires that repairs or
replacements be completed within a year after the funding of the
applicable Mortgage Loan.
o Tenant Improvement/Lease Commissions--In most cases, various tenants have
lease expirations within the Mortgage Loan term. To mitigate this risk,
special reserves may be required to be funded either at closing of the
Mortgage Loan and/or during the Mortgage Loan term to cover certain
anticipated leasing commissions or tenant improvement costs which might be
associated with re-leasing the space occupied by such tenants.
ASSIGNMENT OF THE MORTGAGE LOANS; REPURCHASES AND SUBSTITUTIONS
On the Closing Date, the Depositor will transfer the Mortgage Loans,
without recourse, to the Trustee for the benefit of the Certificateholders. In
connection with such transfer, the Depositor will require each Mortgage Loan
Seller to deliver to the Trustee or to a document custodian appointed by the
Trustee (a "Custodian"), among other things, the following documents with
respect to each Mortgage Loan originated or acquired by the applicable Mortgage
Loan Seller (the "Mortgage File"): (i) the original Mortgage Note, endorsed on
its face or by allonge attached thereto, without recourse, to the order of the
Trustee or in blank (or, if the original Mortgage Note has been lost, an
affidavit to such effect from the applicable Mortgage Loan Seller or another
prior holder, together with a copy of the Mortgage Note); (ii) the original or a
copy of the Mortgage, together with an original or copy of any intervening
assignments of the Mortgage, in each case (unless not yet returned by the
applicable recording office) with evidence of recording indicated thereon or
certified by the applicable recorder's office; (iii) the original or a copy of
any related assignment of leases and of any intervening assignments thereof (if
such item is a document separate from the Mortgage), in each case (unless not
yet returned by the applicable recording office) with evidence of recording
indicated thereon or certified by the applicable recorder's office; (iv) an
original assignment of the Mortgage in favor of the Trustee or in blank and
(subject to the completion of certain missing recording information) in
recordable form; (v) an original assignment of any related assignment of leases
(if such item is a document separate from the Mortgage) in favor of the Trustee
or in blank and (subject to the completion of certain missing recording
information) in recordable form; (vi) the original assignment of all unrecorded
documents relating to the Mortgage Loan, if not already assigned pursuant to
items (iv) or (v) above; (vii) originals or copies of all modification,
consolidation, assumption and substitution agreements in those instances in
which the terms or provisions of the Mortgage or Mortgage Note have been
modified or the Mortgage Loan has been assumed or consolidated; (viii) the
original or a copy of the policy or certificate of lender's title insurance
issued on the date of the origination of such Mortgage Loan, or, if such policy
has not been issued or located, an irrevocable, binding commitment (which may be
a marked version of the policy that has been executed by an authorized
representative of the title company or an agreement to provide the same pursuant
to binding escrow instructions executed by an authorized representative of the
title company) to issue such title insurance policy; (ix) any filed copies
(bearing evidence of filing) or other evidence of filing satisfactory to the
Trustee of any UCC financing statements, related amendments and continuation
statements in the possession of the applicable Mortgage Loan Seller; (x) an
original assignment in favor of the Trustee of any financing statement executed
and filed in favor of the applicable Mortgage Loan Seller in the relevant
jurisdiction; (xi) the original or copy of any ground lease, memorandum of
ground
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lease, ground lessor estoppel, environmental insurance policy, indemnity or
guaranty relating to such Mortgage Loan; (xii) any intercreditor agreement
relating to permitted debt (including mezzanine debt) of the mortgagor; (xiii)
copies of any loan agreement, escrow agreement, or security agreement relating
to such Mortgage Loan; (xiv) copies of franchise agreements and franchisor
comfort letters, if any, for hospitality properties and any applicable transfer
or assignment documents; and (xv) a copy of any letter of credit and related
transfer documents related to such Mortgage Loan.
As provided in the Pooling and Servicing Agreement, the Trustee or a
Custodian on its behalf is required to review each Mortgage File within a
specified period following its receipt thereof. If any of the documents
described in the preceding paragraph is found during the course of such review
to be missing from any Mortgage File or defective, and in either case such
omission or defect materially and adversely affects the value of the applicable
Mortgage Loan, the interest of the trust fund or the interests of any
Certificateholder, the applicable Mortgage Loan Seller, if it does not deliver
the document or cure the defect (other than omissions solely due to a document
not having been returned by the related recording office) within a period of 90
days following such Mortgage Loan Seller's receipt of notice thereof, will be
obligated pursuant to the applicable Mortgage Loan Purchase Agreement (the
relevant rights under which will be assigned by the Depositor to the Trustee) to
(1) repurchase the affected Mortgage Loan within such 90-day period at a price
(the "Purchase Price") generally equal to the sum of (i) the unpaid principal
balance of such Mortgage Loan, (ii) the unpaid accrued interest on such Mortgage
Loan (calculated at the applicable Mortgage Rate) to but not including the Due
Date in the Collection Period in which the purchase is to occur and (iii)
certain Additional Trust Fund Expenses in respect of such Mortgage Loan,
including but not limited to, servicing expenses that are reimbursable to the
Master Servicer, the Special Servicer or the Trustee plus any interest thereon
and on any related P&I Advances or (2) substitute a Qualified Substitute
Mortgage Loan for such Mortgage Loan and pay the Master Servicer for deposit
into the Certificate Account a shortfall amount equal to the difference between
the Purchase Price of the deleted Mortgage Loan calculated as of the date of
substitution and the Stated Principal Balance of such Qualified Substitute
Mortgage Loan as of the date of substitution (the "Substitution Shortfall
Amount"); provided that, unless the breach would cause the Mortgage Loan not to
be a qualified mortgage within the meaning of Section 860G(a)(3) of the Code,
the applicable Mortgage Loan Seller will generally have an additional 90-day
period to deliver the document or cure the defect, as the case may be, if it is
diligently proceeding to effect such delivery or cure and provided further, no
such document omission or defect (other than with respect to the Mortgage Note,
the Mortgage, the title insurance policy, the ground lease, any letter of
credit, any franchise agreement, comfort letter, and comfort letter transfer
document (the "Core Material Documents") will be considered to materially and
adversely affect the interests of the Certificateholders in, or the value of,
the affected Mortgage Loans unless the document with respect to which the
document omission or defect exists is required in connection with an imminent
enforcement of the mortgagee's rights or remedies under the related Mortgage
Loan, defending any claim asserted by any borrower or third party with respect
to the Mortgage Loan, establishing the validity or priority of any lien or any
collateral securing the Mortgage Loan or for any immediate significant servicing
obligation. With respect to material document defects other than those involving
the Core Material Documents, any applicable cure period may be extended if the
document involved is not needed imminently. Such extension will end upon 30 days
notice of such need as reasonably determined by the Master Servicer or Special
Servicer (with a possible 30 day extension if the Master Servicer or Special
Servicer agrees that the applicable Mortgage Loan Seller is diligently pursuing
a cure). All material document defects regardless of the document involved will
be cured no later than 2 years after the Closing Date; provided, however, that
the initial 90-day cure period described herein will not be reduced.
The foregoing repurchase or substitution obligation constitutes the sole
remedy available to the Certificateholders and the Trustee for any uncured
failure to deliver, or any uncured defect in, a constituent Mortgage Loan
document. Each Mortgage Loan Seller is solely responsible for its repurchase or
substitution obligation, and such obligations will not be the responsibility of
the Depositor.
The Pooling and Servicing Agreement requires the Trustee promptly to cause
each of the assignments described in clauses (iv), (v) and (x) of the third
preceding paragraph to be submitted for
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recording or filing, as applicable, in the appropriate public records. See
"DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--Assignment of Mortgage
Assets; Repurchases" in the prospectus.
A "Qualified Substitute Mortgage Loan" is a mortgage loan which must, on
the date of substitution: (i) have an outstanding Stated Principal Balance,
after application of all scheduled payments of principal and interest due during
or prior to the month of substitution, not in excess of the Stated Principal
Balance of the deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs; (ii) have a Mortgage Rate not less than
the Mortgage Rate of the deleted Mortgage Loan; (iii) have the same Due Date as
the deleted Mortgage Loan; (iv) accrue interest on the same basis as the deleted
Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve
30-day months); (v) have a remaining term to stated maturity not greater than,
and not more than two years less than, the remaining term to stated maturity of
the deleted Mortgage Loan; (vi) have an original loan-to-value ratio not higher
than that of the deleted Mortgage Loan and a current loan-to-value ratio not
higher than the then-current loan-to-value ratio of the deleted Mortgage Loan;
(vii) comply as of the date of substitution with all of the representations and
warranties set forth in the applicable Mortgage Loan Purchase Agreement; (viii)
have an environmental report with respect to the related Mortgaged Property
which will be delivered as a part of the related servicing file; (ix) have an
original debt service coverage ratio not less than the original debt service
coverage ratio of the deleted Mortgage Loan; (x) be determined by an opinion of
counsel to be a "qualified replacement mortgage" within the meaning of Section
860G(a)(4) of the Code; (xi) not have a maturity date after the date two years
prior to the Rated Final Distribution Date; (xii) not be substituted for a
deleted Mortgage Loan unless the Trustee has received prior confirmation in
writing by each Rating Agency that such substitution will not result in the
withdrawal, downgrade or qualification of the rating assigned by the Rating
Agency to any Class of Certificates then rated by the Rating Agency (the cost,
if any, of obtaining such confirmation to be paid by the applicable Mortgage
Loan Seller); (xiii) have a date of origination that is not more than 12 months
prior to the date of substitution; (xiv) have been approved by the Controlling
Class Representative; (xv) not be substituted for a deleted Mortgage Loan if it
would result in the termination of the REMIC status of any of the REMICs or the
imposition of tax on either of the REMICs other than a tax on income expressly
permitted or contemplated to be received by the terms of the Pooling and
Servicing Agreement; and (xvi) become a part of the same Loan Group as the
deleted Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more deleted Mortgage Loans, then the amounts described
in clause (i) shall be determined on the basis of aggregate principal balances
and the rates described in clause (ii) above and the remaining term to stated
maturity referred to in clause (v) above shall be determined on a weighted
average basis; provided that no individual Mortgage Loan shall have a Mortgage
Rate, net of the related Administrative Cost Rate, that is less than the highest
Pass-Through Rate of any Class of Sequential Pay Certificates then outstanding
bearing a fixed rate. When a Qualified Substitute Mortgage Loan is substituted
for a deleted Mortgage Loan, the applicable Mortgage Loan Seller will be
required to certify that such Mortgage Loan meets all of the requirements of the
above definition and shall send such certification to the Trustee.
REPRESENTATIONS AND WARRANTIES; REPURCHASES AND SUBSTITUTIONS
In each Mortgage Loan Purchase Agreement, the applicable Mortgage Loan
Seller has represented and warranted with respect to each Mortgage Loan (subject
to certain exceptions specified in each Mortgage Loan Purchase Agreement), as of
the Closing Date, or as of such other date specifically provided in the
representation and warranty, among other things, generally that:
(i) the information set forth in the schedule of Mortgage Loans attached
to the applicable Mortgage Loan Purchase Agreement (which contains certain of
the information set forth in Annex A-1 to this prospectus supplement) was
true and correct in all material respects as of the Cut-Off Date;
(ii) as of the date of its origination, such Mortgage Loan complied in
all material respects with, or was exempt from, all requirements of federal,
state or local law relating to the origination of such Mortgage Loan;
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(iii) immediately prior to the sale, transfer and assignment to the
Depositor, the applicable Mortgage Loan Seller had good and marketable title
to, and was the sole owner of, each Mortgage Loan, and is transferring the
Mortgage Loan free and clear of any and all liens, pledges, charges, security
interests or any other ownership interests of any nature encumbering such
Mortgage Loan;
(iv) the proceeds of such Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder by the mortgagee;
(v) each related Mortgage Note, Mortgage, assignment of leases, if any,
and other agreements executed in connection with such Mortgage Loan is the
legal, valid and binding obligation of the related mortgagor (subject to any
nonrecourse provisions therein and any state anti-deficiency or market value
limit deficiency legislation), enforceable in accordance with its terms,
except (a) that certain provisions contained in such Mortgage Loan documents
are or may be unenforceable in whole or in part under applicable state or
federal laws, but neither the application of any such laws to any such
provision nor the inclusion of any such provision renders any of the Mortgage
Loan documents invalid as a whole and such Mortgage Loan documents taken as a
whole are enforceable to the extent necessary and customary for the practical
realization of the rights and benefits afforded thereby, and (b) as such
enforcement may be limited by bankruptcy, insolvency, receivership,
reorganization, moratorium, redemption, liquidation or other laws affecting
the enforcement of creditors' rights generally, and by general principles of
equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(vi) as of the date of its origination, there was no valid offset,
defense, counterclaim, abatement or right to rescission with respect to any
of the related Mortgage Notes, Mortgage(s) or other agreements executed in
connection therewith, and, as of the Cut-Off Date, there was no valid offset,
defense, counterclaim or right to rescission with respect to such Mortgage
Note, Mortgage(s) or other agreements, except in each case, with respect to
the enforceability of any provisions requiring the payment of default
interest, late fees, additional interest, prepayment premiums or yield
maintenance charges and the applicable Mortgage Loan Seller has no knowledge
of any such rights, defenses or counterclaims having been asserted;
(vii) each related assignment of Mortgage and assignment of assignment of
leases from the applicable Mortgage Loan Seller to the Trustee constitutes
the legal, valid and binding first priority assignment from such Mortgage
Loan Seller (subject to the customary limitations set forth in (v) above);
(viii) the related Mortgage is a valid and enforceable first lien on the
related Mortgaged Property except for the exceptions set forth in paragraph
(v) above and (a) the lien of current real property taxes, ground rents,
water charges, sewer rents and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, none of which, individually or in the aggregate,
materially and adversely interferes with the current use of the Mortgaged
Property or the security intended to be provided by such Mortgage or with the
mortgagor's ability to pay its obligations under the Mortgage Loan when they
become due or materially and adversely affects the value of the Mortgaged
Property, (c) the exceptions (general and specific) and exclusions set forth
in the related title insurance policy or appearing of record, none of which,
individually or in the aggregate, materially and adversely interferes with
the current use of the Mortgaged Property or the security intended to be
provided by such Mortgage or with the mortgagor's ability to pay its
obligations under the Mortgage Loan when they become due or materially and
adversely affects the value of the Mortgaged Property, (d) other matters to
which like properties are commonly subject, none of which, individually or in
the aggregate, materially and adversely interferes with the current use of
the Mortgaged Property or the security intended to be provided by such
Mortgage or with the mortgagor's ability to pay its obligations under the
Mortgage Loan when they become due or materially and adversely affects the
value of the Mortgaged Property, (e) the right of tenants (whether under
ground leases, space leases or operating leases) at the Mortgaged Property to
remain following a foreclosure or similar proceeding (provided that such
tenants are performing under such leases) and (f) if such Mortgage Loan is
cross-collateralized with any other Mortgage Loan, the lien of the Mortgage
for such other Mortgage Loan, none of which,
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individually or in the aggregate, materially and adversely interferes with
the current use of the Mortgaged Property or the security intended to be
provided by such Mortgage or with the mortgagor's ability to pay its
obligations under the Mortgage Loan when they become due or materially and
adversely affects the value of the Mortgaged Property;
(ix) all real estate taxes and governmental assessments, or installments
thereof, which would be a lien on the Mortgaged Property and that prior to
the Cut-Off Date have become delinquent in respect of the related Mortgaged
Property have been paid, or an escrow of funds in an amount sufficient to
cover such payments has been established;
(x) as of the date of its origination, all insurance coverage required
under each related Mortgage, which insurance covered such risks as were
customarily acceptable to prudent commercial and multifamily mortgage lending
institutions lending on the security of property comparable to the related
Mortgaged Property in the jurisdiction in which such Mortgaged Property is
located, and with respect to a fire and extended perils insurance policy, was
in an amount (subject to a customary deductible) at least equal to the lesser
of (a) the replacement cost of improvements located on such Mortgaged
Property, or (b) the initial principal balance of the Mortgage Loan, and in
any event, the amount necessary to prevent operation of any co-insurance
provisions, and was in full force and effect with respect to each related
Mortgaged Property;
(xi) as of the Closing Date, each Mortgage Loan was not, and in the prior
12 months (or since the date of origination if such Mortgage Loan has been
originated within the past 12 months), has not been, 30 days or more past due
in respect of any Scheduled Payment; and
(xii) one or more environmental site assessments or updates thereof were
performed by an environmental consulting firm independent of the applicable
Mortgage Loan Seller and the applicable Mortgage Loan Seller's affiliates
with respect to each related Mortgaged Property during the 18-month period
preceding the origination of the related Mortgage Loan, and the applicable
Mortgage Loan Seller, having made no independent inquiry other than to review
the report(s) prepared in connection with the assessment(s) referenced
herein, has no actual knowledge and has received no notice of any material
and adverse environmental condition or circumstance affecting such Mortgaged
Property that was not disclosed in such report(s).
In the case of a breach of any of the representations and warranties in any
Mortgage Loan Purchase Agreement that materially and adversely affects the value
of a Mortgage Loan, the interests of the Trust Fund therein or the interests of
any Certificateholder, the applicable Mortgage Loan Seller, if it does not cure
such breach within a period of 90 days following its receipt of notice thereof,
is obligated pursuant to the applicable Mortgage Loan Purchase Agreement (the
relevant rights under which have been assigned by the Depositor to the Trustee)
to either substitute a Qualified Substitute Mortgage Loan and pay any
Substitution Shortfall Amount or to repurchase the affected Mortgage Loan within
such 90-day period at the applicable Purchase Price; provided that, unless the
breach would cause the Mortgage Loan not to be a qualified mortgage within the
meaning of Section 860G(a)(3) of the Code, the applicable Mortgage Loan Seller
generally has an additional 90-day period to cure such breach if it is
diligently proceeding with such cure. Each Mortgage Loan Seller is solely
responsible for its repurchase or substitution obligation, and such obligations
will not be the responsibility of the Depositor.
The foregoing substitution or repurchase obligation constitutes the sole
remedy available to the Certificateholders and the Trustee for any uncured
breach of any Mortgage Loan Seller's representations and warranties regarding
its Mortgage Loans. There can be no assurance that the applicable Mortgage Loan
Seller will have the financial resources to repurchase any Mortgage Loan at any
particular time. Each Mortgage Loan Seller is the sole warranting party in
respect of the Mortgage Loans sold by such Mortgage Loan Seller to the
Depositor, and none of the Depositor nor any of such party's affiliates (except
with respect to Wachovia Bank, National Association in its capacity as a
Mortgage Loan Seller) will be obligated to substitute or repurchase any such
affected Mortgage Loan in connection with a breach of a Mortgage Loan Seller's
representations and warranties if such Mortgage Loan Seller defaults on its
obligation to do so.
With respect to any Mortgage Loan which has become a Defaulted Mortgage
Loan under the Pooling and Servicing Agreement or with respect to which the
related Mortgaged Property has been foreclosed
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and which is the subject of a repurchase claim under the related Mortgage Loan
Purchase Agreement, the Special Servicer with the consent of the Controlling
Class Representative will be required to notify the related Mortgage Loan Seller
in writing of its intention to sell such Defaulted Mortgage Loan or such
foreclosed Mortgaged Property at least 45 days prior to commencing any such
action. Such Mortgage Loan Seller shall have 10 business days to determine
whether or not to consent to such sale. If such Mortgage Loan Seller does not
consent to such sale, the Special Servicer shall contract with a third party as
set forth in the Pooling and Servicing Agreement (a "Determination Party") as to
the merits of such sale. If the related Determination Party determines that the
proposed sale is reasonable, given the circumstances, and subsequent to such
sale, a court of competent jurisdiction determines that such Mortgage Loan
Seller was liable under the related Mortgage Loan Agreement and required to
repurchase such Defaulted Mortgage Loan or REO Property in accordance with the
terms thereof, then such Mortgage Loan Seller will be required to pay an amount
equal to the difference (if any) between the proceeds of the related action and
the price at which such Mortgage Loan Seller would have been obligated to pay
had such Mortgage Loan Seller repurchased such Defaulted Mortgage Loan or REO
Property in accordance with the terms thereof which shall generally include the
costs related to contracting with the Determination Party. In the event that (a)
the Special Servicer ignores the determination of the Determination Party and
liquidates the related Defaulted Mortgage Loan or REO Property and/or (b) a
court of competent jurisdiction determines that such Mortgage Loan Seller was
not obligated to repurchase the related Defaulted Mortgage or REO Property, the
costs of contracting with the Determination Party will constitute Additional
Trust Fund Expenses and the Mortgage Loan Seller will not be liable for any such
difference.
REPURCHASE OR SUBSTITUTION OF CROSS-COLLATERALIZED MORTGAGE LOANS
If (i) any Mortgage Loan is required to be repurchased or substituted for
in the manner described above in "--Assignment of the Mortgage Loans;
Repurchases and Substitutions" or "--Representations and Warranties; Repurchases
and Substitutions", (ii) such Mortgage Loan is cross-collateralized and
cross-defaulted with one or more other Mortgage Loans (each a "Crossed Loan"
and, collectively, a "Crossed Group"), and (iii) the applicable document
omission or defect (a "Defect") or breach of a representation and warranty (a
"Breach") does not constitute a Defect or Breach, as the case may be, as to each
other Crossed Loan in such Crossed Group (without regard to this paragraph),
then the applicable Defect or Breach, as the case may be, will be deemed to
constitute a Defect or Breach, as the case may be, as to any other Crossed Loan
in the Crossed Group for purposes of this paragraph, and the related Mortgage
Loan Seller will be required to repurchase or substitute for such other Crossed
Loan(s) in the related Crossed Group as provided above in "--Assignment of the
Mortgage Loans; Repurchases and Substitutions" or "--Representations and
Warranties; Repurchases and Substitutions" unless: (i) the debt service coverage
ratio for all of the remaining Crossed Loans for the four calendar quarters
immediately preceding the repurchase or substitution is not less than the debt
service coverage ratio for all such related Crossed Loans, including the
affected Crossed Loan, for the four calendar quarters immediately preceding the
repurchase or substitution, (ii) the loan-to-value ratio for any of the
remaining related Crossed Loans, determined at the time of repurchase or
substitution, is not greater than the loan-to-value ratio for all such related
Crossed Loans, including the affected Crossed Loan, determined at the time of
repurchase or substitution, and (iii) the Trustee receives an opinion of counsel
to the effect that such repurchase or substitution is permitted by the REMIC
provisions. In the event that the remaining Crossed Loans satisfy the
aforementioned criteria, the Mortgage Loan Seller may elect either to repurchase
or substitute for only the affected Crossed Loan as to which the related Breach
or Defect exists or to repurchase or substitute for all of the Crossed Loans in
the related Crossed Group.
To the extent that the related Mortgage Loan Seller repurchases or
substitutes for an affected Crossed Loan as described in the immediately
preceding paragraph while the Trustee continues to hold any related Crossed
Loans, the related Mortgage Loan Seller and the Depositor have agreed in the
related Mortgage Loan Purchase Agreement to forbear from enforcing any remedies
against the other's Primary Collateral (as defined below), but each is permitted
to exercise remedies against the Primary Collateral securing its respective
affected Crossed Loans, including, with respect to the Trustee, the Primary
Collateral securing Mortgage Loans still held by the Trustee, so long as such
exercise does not materially impair the ability of the other party to exercise
its remedies against its Primary Collateral. If
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the exercise of remedies by one party would materially impair the ability of the
other party to exercise its remedies with respect to the Primary Collateral
securing the Crossed Loans held by such party, then both parties have agreed in
the related Mortgage Loan Purchase Agreement to forbear from exercising such
remedies until the loan documents evidencing and securing the relevant Mortgage
Loans can be modified in a manner that complies with the Mortgage Loan Purchase
Agreement to remove the threat of material impairment as a result of the
exercise of remedies or some other accommodation can be reached. "Primary
Collateral" means the Mortgaged Property directly securing a Crossed Loan and
excluding any property as to which the related lien may only be foreclosed upon
by virtue of the cross collateralization features of such loans.
CHANGES IN MORTGAGE POOL CHARACTERISTICS
The descriptions in this prospectus supplement of the Mortgage Loans and
the Mortgaged Properties are based upon the Mortgage Pool as it is expected to
be constituted as of the close of business on the Closing Date, assuming that
(i) all scheduled principal and interest payments due on or before the Cut-Off
Date will be made, and (ii) there will be no principal prepayments on or before
the Cut-Off Date. Prior to the issuance of the Certificates, Mortgage Loans may
be removed from the Mortgage Pool as a result of prepayments, delinquencies,
incomplete documentation or otherwise, if the Depositor or the applicable
Mortgage Loan Seller deems such removal necessary, appropriate or desirable. A
limited number of other mortgage loans may be included in the Mortgage Pool
prior to the issuance of the Certificates, unless including such mortgage loans
would materially alter the characteristics of the Mortgage Pool as described in
this prospectus supplement. The Depositor believes that the information set
forth in this prospectus supplement will be representative of the
characteristics of the Mortgage Pool as it will be constituted at the time the
Certificates are issued, although the range of Mortgage Rates and maturities as
well as other characteristics of the Mortgage Loans described in this prospectus
supplement may vary.
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates on or shortly after the Closing Date and
will be filed, together with the Pooling and Servicing Agreement, with the
Securities and Exchange Commission within fifteen days after the initial
issuance of the Offered Certificates.
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SERVICING OF THE MORTGAGE LOANS
GENERAL
The Master Servicer and the Special Servicer, either directly or through
sub-servicers, are required to service and administer the Mortgage Loans for the
benefit of the Certificateholders, and the Companion Loans for the holder of
such Companion Loans, in accordance with applicable law, the terms of the
Pooling and Servicing Agreement, the terms of the related Intercreditor
Agreement, if applicable, and the terms of the respective Mortgage Loans and, if
applicable, the Companion Loans, to the extent consistent with the foregoing,
(a) in the same manner in which, and with the same care, skill, prudence and
diligence with which, the Master Servicer or the Special Servicer, as the case
may be, generally services and administers similar mortgage loans with similar
borrowers (i) for other third-parties, giving due consideration to customary and
usual standards of practice of prudent institutional commercial mortgage lenders
servicing their own loans, or (ii) held in its own portfolio, whichever standard
is higher, (b) with a view to the maximization of the recovery on such Mortgage
Loans on a net present value basis and the best interests of the
Certificateholders and the trust fund or, if a Co-Lender Loan and its related
Companion Loan (a "Loan Pair") are involved, with a view towards the
maximization of recovery on such Loan Pair to the Certificateholders, the holder
of the related Companion Loan and the Trust Fund (as a collective whole, taking
into account that the Subordinate Companion Loans are subordinate to the related
Mortgage Loans and that the Pari Passu Companion Loans are pari passu in right
of entitlement to payment to the related Mortgage Loan, to the extent set forth
in the related Intercreditor Agreement), and (c) without regard to (i) any
relationship that the Master Servicer or the Special Servicer, as the case may
be, or any affiliate thereof, may have with the related borrower, the Mortgage
Loan Sellers or any other party to the Pooling and Servicing Agreement or any
affiliate thereof; (ii) the ownership of any Certificate or Companion Loan by
the Master Servicer or the Special Servicer, as the case may be, or by any
affiliate thereof; (iii) the right of the Master Servicer or the Special
Servicer, as the case may be, to receive compensation or other fees for its
services rendered pursuant to the Pooling and Servicing Agreement; (iv) the
obligation of the Master Servicer to make Advances (as defined in this
prospectus supplement); (v) the ownership, servicing or management by the Master
Servicer or the Special Servicer or any affiliate thereof for others of any
other mortgage loans or real property; (vi) any obligation of the Master
Servicer, or any affiliate thereof, to repurchase or substitute a Mortgage Loan
as a Mortgage Loan Seller; (vii) any obligation of the Master Servicer or any
affiliate thereof to cure a breach of a representation and warranty with respect
to a Mortgage Loan; and (viii) any debt the Master Servicer or the Special
Servicer or any affiliate of either has extended to any obligor or any affiliate
thereof on a Mortgage Note (the foregoing referred to as the "Servicing
Standard").
The Master Servicer and the Special Servicer may appoint sub-servicers with
respect to the Mortgage Loans and Companion Loans; provided that the Master
Servicer and the Special Servicer will remain obligated under the Pooling and
Servicing Agreement for the servicing of the Mortgage Loans. The Trust Fund will
not be responsible for any fees owed to any sub-servicer retained by the Master
Servicer or the Special Servicer. Each sub-servicer retained thereby will be
reimbursed by the Master Servicer or the Special Servicer, as the case may be,
for certain expenditures which it makes, generally to the same extent the Master
Servicer or the Special Servicer would be reimbursed under the Pooling and
Servicing Agreement.
Set forth below, following the subsection captioned "--The Master Servicer
and the Special Servicer," is a description of certain pertinent provisions of
the Pooling and Servicing Agreement relating to the servicing of the Mortgage
Loans and the Companion Loans. Reference is also made to the prospectus, in
particular to the section captioned "DESCRIPTION OF THE POOLING AND SERVICING
AGREEMENTS", for important information in addition to that set forth in this
prospectus supplement regarding the terms and conditions of the Pooling and
Servicing Agreement as they relate to the rights and obligations of the Master
Servicer and the Special Servicer thereunder. The Special Servicer generally has
all of the rights to indemnity and reimbursement, and limitations on liability,
that the Master Servicer is described as having in the accompanying prospectus
and certain additional rights to indemnity as provided in the Pooling and
Servicing Agreement relating to actions taken at the direction of the
Controlling Class Representative (and, in certain circumstances, the holder of a
Subordinate Companion
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Loan), and the Special Servicer rather than the Master Servicer will perform the
servicing duties described in the prospectus with respect to Specially Serviced
Mortgage Loans and REO Properties (each as described in this prospectus
supplement). In addition to the circumstances for resignation of the Master
Servicer set forth in the accompanying prospectus, the Master Servicer and the
Special Servicer each has the right to resign at any other time provided that
(i) a willing successor thereto has been found, (ii) each of the Rating Agencies
confirms in writing that the successor's appointment will not result in a
withdrawal, qualification or downgrade of any rating or ratings assigned to any
class of Certificates, (iii) the resigning party pays all costs and expenses in
connection with such transfer, and (iv) the successor accepts appointment prior
to the effectiveness of such resignation. See "DESCRIPTION OF THE POOLING AND
SERVICING AGREEMENTS--Certain Matters Regarding the Master Servicer and the
Depositor" in the accompanying prospectus.
THE MASTER SERVICER AND THE SPECIAL SERVICER
Wachovia Bank, National Association, in its capacity as Master Servicer
under the Pooling and Servicing Agreement (in such capacity, the "Master
Servicer"), will be responsible for servicing the Mortgage Loans (other than
Specially Serviced Mortgage Loans and REO Properties). Although the Master
Servicer will be authorized to employ agents, including sub-servicers, to
directly service the Mortgage Loans for which it will be responsible, the Master
Servicer will remain liable for its servicing obligations under the Pooling and
Servicing Agreement.
Wachovia Bank, National Association is a wholly owned subsidiary of
Wachovia Corporation, is our affiliate, one of the Mortgage Loan Sellers and an
affiliate of one of the Underwriters. Wachovia Bank, National Association or one
of its affiliates is the holder of the One & Two International Place Companion
Loan, the 450 West 33rd Street Companion Loan and the Firewheel Corners
Companion Loan. Wachovia Bank, National Association is also an equity owner of
Capital Lease, LP, the holder of the companion loan with respect to the Cadbury
Schweppes Loan and the sponsor of the related borrower. The Master Servicer's
principal servicing offices are located at NC 1075, 8739 Research Drive URP4,
Charlotte, North Carolina 28262.
As of December 31, 2004, Wachovia Bank, National Association and its
affiliates were responsible for master or primary servicing approximately 15,531
commercial and multifamily loans, totaling approximately $141 billion in
aggregate outstanding principal amounts, including loans securitized in
mortgage-backed securitization transactions.
The information set forth in this prospectus supplement concerning the
Master Servicer has been provided by Wachovia Bank, National Association, and
neither the Depositor nor the Underwriters make any representation or warranty
as to the accuracy or completeness of such information. Wachovia Bank, National
Association (apart from its obligations as a Mortgage Loan Seller and except for
the information in the first three paragraphs under this heading) will make no
representations as to the validity or sufficiency of the Pooling and Servicing
Agreement, the Certificates, the Mortgage Loans, this prospectus supplement or
related documents.
Allied Capital Corporation, a Maryland corporation ("Allied Capital") will
initially be appointed as special servicer of the Mortgage Loans (in such
capacity, the "Special Servicer"). The Special Servicer will, among other
things, oversee the resolution of non-performing Mortgage Loans and act as
disposition manager of REO Properties. The following information has been
provided by the Special Servicer. None of the Depositor, the Trustee, the
Underwriters, or any of their respective affiliates takes any responsibility
therefor or makes any representation or warranty as to the accuracy of
completeness of the information.
The principal executive offices of Allied Capital are located at 1919
Pennsylvania Avenue N.W., Washington, D.C. 20006 and its telephone number is
(202) 331-1112. Allied Capital and several of its subsidiaries are involved in
the real estate investment, finance and management business. As of December 31,
2004, Allied Capital's CMBS portfolio included approximately 62 loans and REO
properties as underlying collateral in most states across the country with a
current face value of $1.0 billion, all of which are secured by commercial real
estate assets. Included in this managed portfolio are approximately $428 billion
of commercial real estate assets representing approximately 6,200 loans and REO
properties within 45 securitization transactions, for which Allied Capital acts
as special servicer.
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Allied Capital owns assets similar in type to the assets of the trust fund.
Accordingly, the assets of the special servicer 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 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 regarding the Special Servicer has been
provided by Allied Capital Corporation and neither the Depositor nor any
Underwriter makes any representation or warranty as to the accuracy or
completeness of such information.
With respect to the Mortgage Loans (other than the Great Wolf Resorts Loan
and the Cabrillo Palisades Loan), the Pooling and Servicing Agreement permits
the holder (or holders) of the majority of the Voting Rights allocated to the
Controlling Class to replace the Special Servicer and to select a representative
who may advise the Special Servicer and whose approval is required for certain
actions by the Special Servicer under certain circumstances. Each advisor
referred to above is referred to herein as the "Controlling Class
Representative". Notwithstanding anything contained in this prospectus
supplement to the contrary, the holders of the Companion Loans may have the
ability to exercise some or all of the rights of the Controlling Class and the
Controlling Class Representative as well as certain additional rights as more
fully described in "--The Controlling Class Representative" below including with
respect to (a) the Cabrillo Palisades Loan, the right to replace the Special
Servicer solely with respect to the Cabrillo Palisades Loan during any time that
no Cabrillo Palisades Control Appraisal Period exists and (b) the Great Wolf
Resorts Loan, the right to replace the Special Servicer solely with respect to
the Great Wolf Resorts Loan during any time that no Great Wolf Resorts control
appraisal period exists. The Controlling Class Representative with respect to
the Mortgage Loans is selected by holders of Certificates representing more than
50% of the Certificate Balance of the Controlling Class. See "--The Controlling
Class Representative" below. Such holder (or holders) will be required to pay
all out-of-pocket costs related to the transfer of servicing if the Special
Servicer is replaced other than due to an event of default, including without
limitation, any costs relating to Rating Agency confirmation and legal fees
associated with the transfer. The "Controlling Class" is the Class of Sequential
Pay Certificates, (i) which bears the latest payment priority and (ii) the
Certificate Balance of which is greater than 25% of its original Certificate
Balance; provided, however, that if no Class of Sequential Pay Certificates
satisfies clause (ii) above, the Controlling Class shall be the outstanding
Class of Certificates (other than the Class Z Certificates, the REMIC Residual
Certificates or the Class X Certificates) bearing the latest alphabetical Class
designation. The Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4 and
Class A-1A Certificates will be treated as one Class for determining the
Controlling Class.
The Special Servicer is responsible for servicing and administering any
Mortgage Loan or Companion Loan as to which (a) the related mortgagor has (i)
failed to make when due any Balloon Payment unless the Master Servicer has, on
or prior to the due date of such Balloon Payment, received a written commitment,
which is reasonably acceptable to the Special Servicer and for which the
Controlling Class Representative has provided its consent, to refinance such
Mortgage Loan or Companion Loan within 120 days after the due date of such
Balloon Payment or if Borrower continues to make its Assumed Scheduled Payment
and diligently pursues refinancing, within 60 days after such default, or (ii)
failed to make when due any Periodic Payment (other than a Balloon Payment), and
such failure has continued unremedied for 60 days; (b) the Master Servicer or
the Special Servicer (in the case of the Special Servicer, with the consent of
the Controlling Class Representative) has determined, in its good faith
reasonable judgment and in accordance with the Servicing Standard, based on
communications with the related mortgagor, that a default in making a Periodic
Payment (including a Balloon Payment) is likely to occur and is likely to remain
unremedied for at least 60 days or any other default under the applicable
Mortgage Loan documents that would (with respect to such other default)
materially impair the value of the Mortgaged Property as security for the
Mortgage Loan and, if applicable, Companion Loan or otherwise would materially
adversely affect the interests of Certificateholders (and, if applicable, the
holders of the Companion Loans) and is likely to continue unremedied beyond the
applicable grace period under the terms of the Mortgage Loan (or, if no grace
period is specified, for 60 days and provided,
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that a default that would give rise to an acceleration right without any grace
period shall be deemed to have a grace period equal to zero); (c) there shall
have occurred a default (other than as described in clause (a) above and, in
certain circumstances, the failure to maintain insurance for terrorist or
similar attacks or for other risks required by the mortgage loan documents to be
insured against pursuant to the terms of the Pooling and Servicing Agreement)
that the Master Servicer or the Special Servicer (in the case of the Special
Servicer, with the consent of the Controlling Class Representative) shall have
determined, in its good faith and reasonable judgment and in accordance with the
Servicing Standard, materially impairs the value of the Mortgaged Property as
security for the Mortgage Loan and, if applicable, Companion Loan or otherwise
materially adversely affects the interests of Certificateholders (and, if
applicable, the holders of the Companion Loans) and that continues unremedied
beyond the applicable grace period under the terms of the Mortgage Loan (or, if
no grace period is specified, for 60 days and provided that a default that gives
rise to an acceleration right without any grace period shall be deemed to have a
grace period equal to zero); (d) a decree or order under any bankruptcy,
insolvency or similar law shall have been entered against the related borrower
and such decree or order shall have remained in force, undischarged, undismissed
or unstayed for a period of 60 days; (e) the related borrower shall consent to
the appointment of a conservator or receiver or liquidator in any insolvency or
similar proceedings of or relating to such related borrower or of or relating to
all or substantially all of its property; (f) the related borrower shall admit
in writing its inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or (g) the Master Servicer shall have
received notice of the commencement of foreclosure or similar proceedings with
respect to the related Mortgaged Property (each event described in clauses (a)
through (g) above, a "Servicing Transfer Event").
In general, as long as a Co-Lender Loan is owned by the trust fund, each
related Companion Loan will be serviced and administered under the Pooling and
Servicing Agreement as if it were a Mortgage Loan and the holder of the related
promissory note were a Certificateholder. If a Companion Loan becomes specially
serviced, then the Co-Lender Loan will become a Specially Serviced Mortgage
Loan. If a Co-Lender Loan becomes a Specially Serviced Mortgage Loan, then the
related Companion Loan will become a Specially Serviced Mortgage Loan.
If any amounts due under a Co-Lender Loan or the related Subordinate
Companion Loans are accelerated after an event of default under the applicable
Mortgage Loan documents, the holder of the related Subordinate Companion Loan
will be entitled to purchase the related Mortgage Loan at the price described
under "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans" in this prospectus
supplement.
If a Servicing Transfer Event occurs with respect to any Mortgage Loan or a
related Companion Loan, the Master Servicer is in general required to transfer
its servicing responsibilities with respect to such Mortgage Loan and Companion
Loan to the Special Servicer. Notwithstanding such transfer, the Master Servicer
will continue to receive payments on such Mortgage Loan and/or Companion Loan
(including amounts collected by the Special Servicer), to make certain
calculations with respect to such Mortgage Loan and Companion Loan, and to make
remittances (including, if necessary, P&I Advances, as described in the Pooling
and Servicing Agreement) and prepare certain reports to the Trustee with respect
to such Mortgage Loan. If title to the related Mortgaged Property is acquired by
the Trust Fund (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 management thereof.
Mortgage Loans and Companion Loans serviced by the Special Servicer are
referred to in this prospectus supplement as "Specially Serviced Mortgage Loans"
and, together with any REO Properties, constitute "Specially Serviced Trust Fund
Assets". The Master Servicer has no responsibility for the Special Servicer's
performance of its duties under the Pooling and Servicing Agreement.
A Mortgage Loan or Companion Loan will cease to be a Specially Serviced
Mortgage Loan (and will become a "Corrected Mortgage Loan" as to which the
Master Servicer will re-assume servicing responsibilities):
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(a) with respect to the circumstances described in clause (a) of the
definition of Servicing Transfer Event, when the related borrower has made
three consecutive full and timely Periodic Payments under the terms of such
Mortgage Loan and, if applicable, Companion Loan (as such terms may be
changed or modified in connection with a bankruptcy or similar proceeding
involving the related borrower or by reason of a modification, waiver or
amendment granted or agreed to by the Special Servicer);
(b) with respect to any of the circumstances described in clauses (b),
(d), (e) and (f) of the definition of Servicing Transfer Event, when such
circumstances cease to exist in the good faith, reasonable judgment of the
Special Servicer, but, with respect to any bankruptcy or insolvency
proceedings described in clauses (d), (e) and (f) no later than the entry of
an order or decree dismissing such proceeding;
(c) with respect to the circumstances described in clause (c) of the
definition of Servicing Transfer Event, when such default is cured; and
(d) with respect to the circumstances described in clause (g) of the
definition of Servicing Transfer Event, when such proceedings are terminated;
so long as at that time no other Servicing Transfer Event then exists and
provided no additional default is foreseeable in the reasonable good faith
judgment of the Special Servicer.
SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
The principal compensation to be paid to the Master Servicer in respect of
its servicing activities is the Master Servicing Fee. The "Master Servicing Fee"
is payable monthly on a loan-by-loan basis from amounts received in respect of
interest on each Mortgage Loan and each Specially Serviced Mortgage Loan (and
from REO Revenue with respect to each REO Mortgage Loan), is calculated on the
basis of a 360-day year consisting of twelve 30-day months, accrues at the
related Master Servicing Fee Rate and is computed on the basis of the same
principal amount respecting which any related interest payment due on the
Mortgage Loan is computed. The "Master Servicing Fee Rate" is a per annum rate
ranging from 0.0400% to 0.0900%. As of the Cut-Off Date the weighted average
Master Servicing Fee Rate will be approximately 0.04092% per annum. The Master
Servicer will not be entitled to receive a separate fee with respect to a
Companion Loan unless such fee is expressly set forth in the related
Intercreditor Agreement. Otherwise, all references in this section to "Mortgage
Loans" will include the Companion Loans.
If a borrower prepays a Mortgage Loan on a date that is prior to its Due
Date in any Collection Period, the amount of interest (net of related Master
Servicing Fees and, if applicable, Additional Interest) that accrues on the
Mortgage Loan during such Collection Period will be less (such shortfall, a
"Prepayment Interest Shortfall") than the amount of interest (net of related
Master Servicing Fees and, if applicable, Additional Interest and without regard
to any Prepayment Premium or Yield Maintenance Charge actually collected) that
would have accrued on the Mortgage Loan through its Due Date. If such a
principal prepayment occurs during any Collection Period after the Due Date for
such Mortgage Loan in such Collection Period, the amount of interest (net of
related Master Servicing Fees) that accrues and is collected on the Mortgage
Loans during such Collection Period will exceed (such excess, a "Prepayment
Interest Excess") the amount of interest (net of related Master Servicing Fees,
and without regard to any Prepayment Premium or Yield Maintenance Charge
actually collected) that would have been collected on the Mortgage Loan during
such Collection Period if the borrower had not prepaid. Any Prepayment Interest
Excesses collected will be paid to the Master Servicer as additional servicing
compensation. However, with respect to each Distribution Date, the Master
Servicer is required to deposit into the Certificate Account (such deposit, a
"Compensating Interest Payment"), without any right of reimbursement therefor,
with respect to each Mortgage Loan (other than a Specially Serviced Mortgage
Loan and other than any Mortgage Loan on which the Special Servicer has waived a
prepayment restriction and other than any Companion Loan) that was subject to a
voluntary principal prepayment during the most recently ended Collection Period
creating a Prepayment Interest Shortfall, an amount equal to the lesser of (i)
the sum of (a) the Master Servicing Fee (up to a Master Servicing Fee Rate of
0.020% per annum) received by the Master Servicer during such Collection Period
on such Mortgage Loan and (b) investment
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income earned by the Master Servicer on the related principal prepayment during
the most recently ended Collection Period, and (ii) the amount of the related
Prepayment Interest Shortfall; provided, however, to the extent any such
Prepayment Interest Shortfall is the result of the Master Servicer's failure to
enforce the applicable Mortgage Loan documents, the amount in clause (a) shall
include the entire Master Servicing Fee on the applicable Mortgage Loan for such
Collection Period. Compensating Interest Payments will not cover shortfalls in
Mortgage Loan interest accruals that result from any liquidation of a defaulted
Mortgage Loan, or of any REO Property acquired in respect thereof, that occurs
during a Collection Period prior to the related Due Date therein or involuntary
prepayments.
The principal compensation to be paid to the Special Servicer in respect of
its special servicing activities is the Special Servicing Fee (together with the
Master Servicing Fee, the "Servicing Fees") and, under the circumstances
described in this prospectus supplement, Liquidation Fees and Workout Fees. The
"Special Servicing Fee" is calculated on the basis of a 360-day year consisting
of twelve 30-day months, accrues at a rate (the "Special Servicing Fee Rate")
equal to 0.25% per annum and is computed on the basis of the same principal
amount respecting which any related interest payment due on such Specially
Serviced Mortgage Loan or REO Mortgage Loan, as the case may be. However, earned
Special Servicing Fees are payable out of general collections on the Mortgage
Loans then on deposit in the certificate account. The Special Servicing Fee with
respect to any Specially Serviced Mortgage Loan (or REO Mortgage Loan), will
cease to accrue if such loan (or the related REO Property) is liquidated or if
such loan becomes a Corrected Mortgage Loan. The Special Servicer is entitled to
a "Liquidation Fee" with respect to each Specially Serviced Trust Fund Asset,
which Liquidation Fee generally will be in an amount equal to 1.00% of all
amounts received in respect of such Mortgage Loan or the related REO Property,
as applicable, payable by withdrawal from such amounts on deposit in the
Certificate Account. However, no Liquidation Fee will be payable in connection
with, or out of, insurance proceeds, condemnation proceeds or liquidation
proceeds resulting from the purchase of any Specially Serviced Trust Fund Asset
(i) by a Mortgage Loan Seller (as described under "DESCRIPTION OF THE MORTGAGE
POOL--Assignment of the Mortgage Loans; Repurchases and Substitutions" and
"--Representations and Warranties; Repurchases and Substitutions" in this
prospectus supplement) if purchased within the required time period set forth in
the related Mortgage Loan Purchase Agreement, (ii) by the Master Servicer, the
Special Servicer, the Majority Subordinate Certificateholder or the purchasing
Certificateholder as described under "DESCRIPTION OF THE
CERTIFICATES--Termination" in this prospectus supplement or (iii) in certain
other limited circumstances, including in connection with the purchase of the
Co-Lender Loans as described under "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender
Loans" in this prospectus supplement. The Special Servicer also is entitled to a
"Workout Fee" with respect to each Corrected Mortgage Loan, which is generally
equal to 1.00% of all payments of interest and principal received on such
Mortgage Loan for so long as it remains a Corrected Mortgage Loan, payable by
withdrawal from such amounts on deposit in the Certificate Account. If the
Special Servicer is terminated or resigns, it will retain the right to receive
any and all Workout Fees payable with respect to any Mortgage Loan that became a
Corrected Mortgage Loan during the period that it acted as Special Servicer and
remained a Corrected Mortgage Loan at the time of its termination or resignation
or if the Special Servicer resolved the circumstances and/or conditions
(including by way of a modification of the related Mortgage Loan documents)
causing the Mortgage Loan to be a Specially Serviced Mortgage Loan, but the
Mortgage Loan had not as of the time the Special Servicer is terminated or
resigns become a Corrected Mortgage Loan because the related borrower had not
made three consecutive monthly debt service payments and subsequently becomes a
Corrected Mortgage Loan as a result of making such three consecutive payments.
The successor Special Servicer will not be entitled to any portion of those
Workout Fees.
As additional servicing compensation, the Master Servicer and/or the
Special Servicer is entitled to retain all modification fees, assumption fees,
defeasance fees, assumption application fees, late payment charges and default
interest (to the extent not used to offset interest on Advances, Additional
Trust Fund Expenses (other than Special Servicing Fees, Workout Fees and/or
Liquidation Fees) and the cost of property inspections as provided in the
Pooling and Servicing Agreement and to the extent not otherwise allocated to the
Companion Loan in accordance with the related Intercreditor Agreement) and
Prepayment Interest Excesses collected from borrowers on Mortgage Loans. In
addition, to the extent the
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Master Servicer or the Special Servicer receives late payment charges or default
interest on a Mortgage Loan for which interest on Advances or Additional Trust
Fund Expenses (other than Special Servicing Fees, Workout Fees and/or
Liquidation Fees) related to such Mortgage Loan has been paid and not previously
reimbursed to the Trust Fund, such late payment charges or default interest will
be used to reimburse the Trust Fund for such payment of interest or Additional
Trust Fund Expenses. In addition, each of the Master Servicer and the Special
Servicer is authorized to invest or direct the investment of funds held in those
accounts maintained by it that relate to the Mortgage Loans or REO Properties,
as the case may be, in certain short-term United States government securities
and certain other permitted investment grade obligations, and the Master
Servicer and the Special Servicer each will be entitled to retain any interest
or other income earned on such funds held in those accounts maintained by it,
but shall be required to cover any losses on investments of funds held in those
accounts maintained by it, from its own funds without any right to
reimbursement, except in certain limited circumstances described in the Pooling
and Servicing Agreement.
Each of the Master Servicer and Special Servicer is, in general, required
to pay all ordinary expenses incurred by it in connection with its servicing
activities under the Pooling and Servicing Agreement, including the fees of any
sub-servicers retained by it, and is not entitled to reimbursement therefor
except as expressly provided in the Pooling and Servicing Agreement. However,
each of the Master Servicer and Special Servicer is permitted to pay certain of
such expenses (including certain expenses incurred as a result of a Mortgage
Loan default) directly out of the Certificate Account and at times without
regard to the Mortgage Loan with respect to which such expenses were incurred.
See "DESCRIPTION OF THE CERTIFICATES--Distributions" in this prospectus
supplement and "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--Certificate
Account" and "--Servicing Compensation and Payment of Expenses" in the
prospectus.
As and to the extent described in this prospectus supplement under
"DESCRIPTION OF THE CERTIFICATES--P&I Advances," each of the Master Servicer and
the Trustee is entitled to receive interest, at the Reimbursement Rate, on any
reimbursable servicing expenses incurred by it. Such interest will compound
annually and will be paid, contemporaneously with the reimbursement of the
related servicing expense, first out of late payment charges and default
interest received on the related Mortgage Loan and then from general collections
on the Mortgage Loans then on deposit in the Certificate Account. In addition,
to the extent the Master Servicer receives late payment charges or default
interest on a Mortgage Loan for which interest on servicing expenses related to
such Mortgage Loan has been paid from general collections on deposit in the
Certificate Account and not previously reimbursed, such late payment charges or
default interest will be used to reimburse the Trust Fund for such payment of
interest.
MODIFICATIONS, WAIVERS AND AMENDMENTS
The Pooling and Servicing Agreement permits the Special Servicer (subject,
with respect to the Co-Lender Loans, to certain rights of the holder of any
related Companion Loan) to modify, waive or amend any term of any Mortgage Loan
if (a) it determines, in accordance with the Servicing Standard, that it is
appropriate to do so and the Special Servicer determines that such modification,
waiver or amendment is not "significant" within the meaning of Treasury
Regulations Section 1.860G-2(b), and (b) except as described in the following
paragraph, such modification, waiver or amendment, will not (i) affect the
amount or timing of any related 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 in an amount not less than the fair market
value of the property released, (iv) if such Mortgage Loan is equal to or in
excess of 5% of the then-aggregate current principal balances of all Mortgage
Loans or $35,000,000, or is one of the ten largest Mortgage Loans by Stated
Principal Balance as of such date, permit the transfer of (A) the related
Mortgaged Property or any interest therein or (B) equity interests in the
related borrower or an equity
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owner of the borrower that would result, in the aggregate during the term of the
related Mortgage Loan, in a transfer greater than 49% of the total interest in
the borrower and/or any equity owner of the borrower or a transfer of voting
control in the borrower or an equity owner of the borrower without the prior
written confirmation from each Rating Agency (as applicable) that such change
will not result in the qualification, downgrade or withdrawal of the ratings
then assigned to the Certificates, (v) allow any additional lien on the related
Mortgaged Property if such Mortgage Loan is equal to or in excess of 2% of the
then- aggregate current principal balances of the Mortgage Loans or $20,000,000,
is one of the ten largest Mortgage Loans by Stated Principal Balance as of such
date, or with respect to S&P only, has an aggregate LTV that is equal to or
greater than 85% or has an aggregate DSCR that is less than 1.20x, without the
prior written confirmation from each Rating Agency (as applicable) that such
change will not result in the qualification, downgrade or withdrawal of the
ratings then assigned to the Certificates or (vi) in the good faith, reasonable
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 and, with respect to
the Co-Lender Loans, subject to certain rights of the holders of any related
Companion Loan, 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 Periodic 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) extend the maturity date of any Specially Serviced
Mortgage Loan (and the Master Servicer may extend the maturity of Mortgage Loans
(other than Specially Serviced Mortgage Loans) with an original maturity of five
years or less with Controlling Class approval for up to two six-month
extensions), and/or (v) accept a principal prepayment during any Lockout Period;
provided that (x) the related borrower is in default with respect to the
Specially Serviced Mortgage Loan or, in the reasonable, good faith judgment of
the Special Servicer, such default by the borrower is reasonably foreseeable,
(y) in the reasonable, good faith judgment of the Special Servicer, such
modification, would increase the recovery to Certificateholders (and the holders
of the Companion Loans, taken as a collective whole, as applicable) on a net
present value basis determined in accordance with the Servicing Standard and (z)
such modification, waiver or amendment does not result in a tax being imposed on
the Trust Fund or cause either REMIC relating to the assets of the Trust Fund to
fail to qualify as a REMIC at any time the Certificates are outstanding. In no
event, however, is the Special Servicer permitted to (i) extend the maturity
date of a Mortgage Loan beyond a date that is two years prior to the Rated Final
Distribution Date, (ii) reduce the Mortgage Rate of a Mortgage Loan to less than
the lesser of (a) the original Mortgage Rate of such Mortgage Loan, (b) the
highest Pass-Through Rate of any Class of Certificates (other than any Class X-C
or Class X-P Certificates) then outstanding, or (c) a rate below the
then-prevailing interest rate for comparable loans, as determined by the Special
Servicer, (iii) if the Mortgage Loan is secured by a ground lease (and not also
by the corresponding fee simple interest), extend the maturity date of such
Mortgage Loan beyond a date which is 20 years prior to the expiration of the
term of such ground lease or (iv) defer interest due on any Mortgage Loan in
excess of 10% of the Stated Principal Balance of such Mortgage Loan or defer the
collection of interest on any Mortgage Loan without accruing interest on such
deferred interest at a rate at least equal to the Mortgage Rate of such Mortgage
Loan. The Special Servicer will have the ability, subject to the Servicing
Standard described under "--General" above, to modify Mortgage Loans with
respect to which default is reasonably foreseeable, but which are not yet in
default.
The Special Servicer is required to notify the Trustee, the Master
Servicer, the Controlling Class Representative and the Rating Agencies and, with
respect to the Co-Lender Loans, subject to certain rights of the holders of the
related Companion Loans, of any material modification, waiver or amendment of
any term of any Specially Serviced Mortgage Loan, and to deliver to the Trustee
or the related Custodian (with a copy to the Master Servicer), for deposit in
the related Mortgage File, an original counterpart of the agreement related to
such modification, waiver or amendment, promptly (and in any event within ten
business days) following the execution thereof. Copies of each agreement whereby
any such modification, waiver or amendment of any term of any Specially Serviced
Mortgage Loan is effected
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are required to be available for review during normal business hours at the
offices of the Special Servicer. See "DESCRIPTION OF THE CERTIFICATES--Reports
to Certificateholders; Available Information" in this prospectus supplement.
For any Mortgage Loan other than a Specially Serviced Mortgage Loan and
subject to the rights of the Special Servicer, the Master Servicer is
responsible for any request by a borrower for the consent to modify, waive or
amend certain terms as specified in the Pooling and Servicing Agreement,
including, without limitation, (i) approving certain leasing activity, (ii)
approving certain substitute property managers, (iii) approving certain waivers
regarding the timing or need to audit certain financial statements, (iv)
approving certain modifications in connection with a defeasance permitted by the
terms of the applicable mortgage loan documents and (v) approving certain
consents with respect to right-of-ways and easements and consents to
subordination of the related Mortgage Loan to such easements or right-of-ways.
Generally, any modification, extension, waiver or amendment of the payment
terms of a Co-Lender Loan will be required to be structured so as to be
consistent with the allocation and payment priorities in the related loan
documents and the related Intercreditor Agreement, such that neither the Trust
as holder of the Co-Lender Loan, nor the holder(s) of the related Companion
Loans gain a priority over the other such holder that is not reflected in the
related loan documents and the related Intercreditor Agreement.
THE CONTROLLING CLASS REPRESENTATIVE
Subject to the succeeding paragraphs, the Controlling Class Representative
is entitled to advise the Special Servicer with respect to the following actions
of the Special Servicer, and the Special Servicer is not permitted to take any
of the following actions as to which the Controlling Class Representative, has
objected in writing within ten business days of being notified thereof (provided
that if such written objection has not been received by the Special Servicer
within such ten business day period, then the Controlling Class Representative's
approval will be deemed to have been given):
(i) any actual or proposed foreclosure upon or comparable conversion
(which may include acquisitions of an REO Property) of the ownership of
properties securing such of the Specially Serviced Mortgage Loans as come
into and continue in default;
(ii) any modification or waiver of any term of the related Mortgage Loan
Documents of a Mortgage Loan that relates to the Maturity Date, Mortgage
Rate, principal balance, amortization term, payment frequency or any
provision requiring the payment of a Prepayment Premium or Yield Maintenance
Charge (other than a modification consisting of the extension of the maturity
date of a Mortgage Loan for one year or less) or a material non-monetary
term;
(iii) any actual or proposed sale of an REO Property (other than in
connection with the termination of the Trust Fund as described under
"DESCRIPTION OF THE CERTIFICATES--Termination" in this prospectus supplement
or pursuant to a Purchase Option as described below under "--Defaulted
Mortgage Loans; REO Properties; Purchase Option");
(iv) any determination to bring an REO Property into compliance with
applicable environmental laws or to otherwise address hazardous materials
located at an REO Property;
(v) any acceptance of substitute or additional collateral or release of
material collateral for a Mortgage Loan unless required by the underlying
loan documents;
(vi) any waiver of a "due-on-sale" or "due-on-encumbrance" clause;
(vii) any release of any performance or "earn-out" reserves, escrows or
letters of credit;
(viii) any acceptance of an assumption agreement releasing a borrower
from liability under a Mortgage Loan (other than in connection with a
defeasance permitted under the terms of the applicable Mortgage Loan
documents);
(ix) any termination of, or modification of, any applicable franchise
agreements related to a Mortgage Loan secured by a hotel;
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(x) any termination of the related property manager for Mortgage Loans
having an outstanding principal balance of greater than $5,000,000;
(xi) any determination to allow a borrower not to maintain terrorism
insurance; and
(xii) any determination to decrease the time period referenced in clause
(g) of the definition of Servicing Transfer Event.
In addition, the Controlling Class Representative may direct the Special
Servicer to take, or to refrain from taking, such other actions as the
Controlling Class Representative may deem advisable or as to which provision is
otherwise made in the Pooling and Servicing Agreement; provided that no such
direction and no objection contemplated by the prior paragraph may (i) require
or cause the Special Servicer to violate any REMIC provisions, any provision of
the Pooling and Servicing Agreement or applicable law, including the Special
Servicer's obligation to act in accordance with the Servicing Standard, or (ii)
expose the Master Servicer, the Special Servicer, the Trust Fund or the Trustee
to liability, or materially expand the scope of the Special Servicer or its
responsibilities under the Pooling and Servicing Agreement or cause the Special
Servicer to act or fail to act in a manner which, in the reasonable judgment of
the Special Servicer, is not in the best interests of the Certificateholders
and, if applicable, the holders of each Companion Loan, taken as a collective
whole. Allied Capital will be the initial Controlling Class Representative with
respect to each Mortgage Loan.
Notwithstanding the second preceding paragraph set forth above, the holders
of the Cabrillo Palisades Companion Loan will have the right to direct and/or
consent to certain actions of the Master Servicer and/or the Special Servicer
with respect to the Cabrillo Palisades Whole Loan and the Controlling Class, and
the Controlling Class Representative will not have the consent and advice rights
described in this prospectus supplement. Generally, the holder of the Cabrillo
Palisades Companion Loan will be entitled to such rights, but only so long as no
Cabrillo Palisades control appraisal period is then in effect (taking into
consideration any Cabrillo Palisades reserve collateral, if applicable). These
rights include that the Special Servicer and/or the Master Servicer will be
required to consult with the holder of the Cabrillo Palisades Companion Loan or
its designee and the holder of the Cabrillo Palisades Companion Loan or its
designee shall have the right to object within 10 days thereafter in connection
with: (A) any modification or waiver of a monetary term of the loan and any
modification of, or waiver with respect to, the loan that would result in the
extension of the maturity date or extended maturity date thereof, a reduction in
the interest rate borne thereby or the monthly debt service payment or extension
fee payable thereon or a deferral or a forgiveness of interest on or principal
of the loan or a modification or waiver of any other monetary term of the loan
relating to the timing or amount of any payment of principal or interest (other
than default interest) or any other material sums due and payable under the loan
documents or a modification or waiver of any provision of the loan which
restricts the borrower or its equity owners from incurring additional
indebtedness, any consent to the placement of additional liens encumbering the
Mortgaged Property or the ownership interests in borrower or to the incurring of
additional indebtedness at any level or tier of ownership, or any modification
or waiver with respect to the obligation to deposit or maintain reserves or
escrows or to the amounts required to be deposited therein or any establishment
of additional material reserves not expressly provided for in the loan
documents, (B) any modification of, or waiver with respect to, the loan that
would result in a discounted pay off of the loan, (C) commencement or
termination of any foreclosure upon or comparable conversion of the ownership of
the Mortgaged Property or any acquisition of the Mortgaged Property by
deed-in-lieu of foreclosure or otherwise, (D) any sale of the Mortgaged Property
or any material portion thereof (other than pursuant to a purchase option
contained in the loan documents or in the Pooling Agreement) or, except, as
specifically permitted in the loan documents, the transfer of any direct or
indirect interest in borrower or any sale of the loan (other than pursuant to a
purchase option contained in the loan documents or in the Pooling Agreement),
(E) any action to bring the Mortgaged Property or REO Property into compliance
with any laws relating to hazardous materials, (F) any substitution or release
of collateral for the loan (other than in accordance with the terms of, or upon
satisfaction of, the loan), (G) any release of the borrower or any guarantor
from liability with respect to the loan, (H) any determination (x) not to
enforce a "due on sale" or "due on encumbrance" clause (unless such clause is
not exercisable under applicable law or such exercise is reasonably likely to
result in successful legal action by the borrower) or (y) to permit an
assumption of the loan, (I) any material changes to or waivers of any of the
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insurance requirements, (J) any determination to apply insurance proceeds or
recoveries for any damage, condemnation or taking or any deed in lieu of
condemnation to the payment of the debt and with respect to the approval of any
architects, contractors, plans and specifications or other material approvals
which lender may give or withhold, (K) any incurrence of additional debt by the
borrower or any mezzanine financing by any beneficial owner of the borrower
(other than the existing mezzanine loan), (L) the voting on any plan of
reorganization, restructuring or similar plan in the bankruptcy of the borrower,
and (M) any material modification of the mezzanine loan intercreditor agreement
related to the loan.
Notwithstanding the rights of the Controlling Class Representative detailed
above, the holder of the Cadbury Schweppes Companion Loan will have the right to
direct and/or consent to certain actions of the Master Servicer and/or the
Special Servicer with respect to the Cadbury Schweppes Whole Loan provided no
Cadbury Schweppes control appraisal period is then in effect. In addition, the
holder of the Cadbury Schweppes Companion Loan may exercise certain approval
rights relating to a modification of the Cadbury Schweppes Loan or the Cadbury
Schweppes Companion Loan that materially and adversely affects the holder of the
Cadbury Schweppes Companion Loan and certain other matters related to Defaulted
Lease Claims. See "DESCRIPTION OF THE MORTGAGE POOL--Co Lender Loans--Servicing
Provisions of the Cadbury Schweppes Intercreditor Agreement" in this prospectus
supplement.
Notwithstanding the foregoing, the holders of the Great Wolf Resorts
Companion Loan will have the right to direct and/or consent to certain actions
of the Master Servicer and/or the Special Servicer with respect to the Great
Wolf Resorts Whole Loan and the Controlling Class, and the Controlling Class
Representative will not have the consent and advice rights described in this
prospectus supplement. Generally, the holder of the Great Wolf Resorts Companion
Loan will be entitled to such rights, but only so long as no Great Wolf Resorts
control appraisal period is then in effect (taking into consideration any Great
Wolf Resorts reserve collateral, if applicable). These rights include that (i)
the Special Servicer and/or the Master Servicer will be required to consult with
the holder of such Great Wolf Resorts Companion Loan or its designee (A) upon
the occurrence of any event of default under the Great Wolf Resorts Whole Loan
and to consider alternative actions recommended by the holder of such Great Wolf
Resorts Companion Loan or its designee, (B) at any time (whether or not an event
of default has occurred) with respect to proposals to take any significant
action with respect to the Great Wolf Resorts Whole Loan or the Mortgaged
Property and to consider alternative actions recommended by the holder of Great
Wolf Resorts Companion Loan or its designee; and (ii) the holder of the Great
Wolf Resorts Companion Loan or its designee will be entitled to exercise rights
and powers with respect to the Great Wolf Resorts Whole Loan that are the same
as or similar to those of the Controlling Class Representative described above
and must be notified of, and give its prior written approval to the following
additional actions: (A) any modification or waiver of a monetary term of the
loan or any material non-monetary term of the loan, (B) of any foreclosure upon
or comparable conversion of the ownership of the Mortgaged Property or any
acquisition of the Mortgaged Property by deed in lieu of foreclosure or
otherwise, (C) any action (other than requiring the borrower to perform its
obligations under the mortgage loan documents) to bring the Mortgaged Property
or REO Property into compliance with any laws relating to hazardous materials,
(D) any substitution or release of collateral for the loan (other than in
accordance with the terms of or, with respect to release of collateral, upon
satisfaction of, the loan), (E) any release or substitution of the borrower or
any guarantor from liability with respect to the loan, (F) any determination (x)
not to enforce a "due on sale" or "due on encumbrance" clause (unless such
clause is not exercisable under applicable law or such exercise is reasonably
likely to result in successful legal action by the borrower) or (y) to permit an
assumption of the loan, (G) any modifications to, amendments of or waivers of
any of the insurance requirements or any renewal or replacement of the then
existing insurance policies with respect to the loans to the extent that such
renewal or replacement policy does not comply with the terms of the mortgage
loan documents to the extent any holder's approval is required under the
mortgage loan documents, (H) any incurrence of additional debt by the borrower
or any mezzanine financing by any beneficial owner of the borrower (other than
in accordance with the loan documents), (I) the adoption or approval of any plan
in the bankruptcy of the borrower, (J) any appointment of a replacement operator
of the Mortgaged Property (provided that the holder of such Great Wolf Resorts
Companion Loan shall not unreasonably withhold or delay any approval requested
pursuant to this clause (J), (K) any amendment, modification, entry into,
renewal, or waiver, termination
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or cancellation of, or delivery of a waiver or consent under or with regard to,
a lease or sublease with respect to the Mortgaged Property, (L) any proposed
subordination of the loans to any obligation, (M) any proposed sale of a
defaulted Great Wolf Resorts Companion Loan or REO property (other than in
connection with the termination of the trust funds) for less than par, or (N)
any approval of a material capital expenditure to the extent any holder's
approval is required under the mortgage loan documents.
Pursuant to the Pooling and Servicing Agreement and the Pari Passu Loan
Intercreditor Agreements, with respect to the Pari Passu Loans and
notwithstanding the rights of the Controlling Class Representative detailed
above, the holder of each Pari Passu Companion Loan will generally share with
the Controlling Class Representative the rights given to the Controlling Class
Representative under the Pooling and Servicing Agreement to direct the Master
Servicer and/or Special Servicer with respect to the servicing of the related
Pari Passu Loan and the related Pari Passu Companion Loan. In general, in the
event that the Controlling Class Representative is required to give its consent
or advice or otherwise take any action with respect to a Pari Passu Loan, the
Controlling Class Representative will generally be required to confer with the
holder of the related Pari Passu Companion Loan regarding such advice or
consent. In the event that the Controlling Class Representative and the holder
of the Pari Passu Companion Loan disagree with respect to such advice, consent
or action, the related Pari Passu Loan Intercreditor Agreement and the Pooling
and Servicing Agreement provide that the Controlling Class Representative and
the holder of the Pari Passu Companion Loan will contract with a third party
designated under the related Pari Passu Loan Intercreditor Agreement to resolve
such disagreement and the decision of such third party will be binding upon the
Controlling Class Representative and the holder of such Pari Passu Companion
Loan in accordance with the related Pari Passu Loan Intercreditor Agreement.
Notwithstanding the rights of the Controlling Class Representative detailed
above, the holder of the Firewheel Companion Loan may exercise certain consent
rights related to certain amendments, deferrals, extensions, modifications,
increases, renewals, replacements, consolidations, supplements or waivers of the
related loan documents if the same adversely affect the lien priority of the
related mortgage or constitute certain material modifications as specified in
the related Intercreditor Agreement prior to the expiration of the related
repurchase period. See "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans
Firewheel Corners Loan Servicing Provisions of the Firewheel Corners
Intercreditor Agreement" in this prospectus supplement.
Notwithstanding the rights of the Controlling Class Representative detailed
above, the holder of a Mezz Cap Companion Loan may exercise certain approval
rights relating to a modification of the related Mezz Cap Loan or such Mezz Cap
Companion Loan that materially and adversely affects the holder of such Mezz Cap
Companion Loan prior to the expiration of the related repurchase period. See
"DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans Mezz Cap Loans Servicing
Provisions of the Mezz Cap Intercreditor Agreements" in this prospectus
supplement.
Further, notwithstanding any of the control rights of the holders of the
Subordinate Companion Loans described above, generally no such control rights
contemplated by the prior paragraphs may require or cause the Master Servicer or
Special Servicer, as applicable, to violate any REMIC provisions, any provision
of the Pooling and Servicing Agreement or applicable law, including the Master
Servicer's or Special Servicer's obligation to act in accordance with the
Servicing Standard.
Limitation on Liability of the Controlling Class Representative. The
Controlling Class Representative will not have any liability to the
Certificateholders for any action taken, or for refraining from the taking of
any action, or for errors in judgment; provided, however, that the Controlling
Class Representative will not be protected against any liability to a
Controlling Class Certificateholder which would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence in the performance of duties or
by reason of reckless disregard of obligations or duties. By its acceptance of a
Certificate, each Certificateholder confirms its understanding that the
Controlling Class Representative may take actions that favor the interests of
one or more Classes of the Certificates over other Classes of the Certificates,
and that the Controlling Class Representative may have special relationships and
interests that conflict with those of holders of some Classes of the
Certificates; and each Certificateholder agrees to take no action against the
Controlling Class Representative or any of its respective officers, directors,
employees,
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principals or agents as a result of such a special relationship or conflict.
Generally, the holders of the Subordinate Companion Loans or their respective
designees, in connection with exercising the rights and powers described above
with respect to the related Co-Lender Loan will be entitled to substantially the
same liability limitations to which the Controlling Class Representative is
entitled.
DEFAULTED MORTGAGE LOANS; REO PROPERTIES; PURCHASE OPTION
The Pooling and Servicing Agreement contains provisions requiring, within
60 days after a Mortgage Loan becomes a Defaulted Mortgage Loan, the Special
Servicer to determine the fair value of the Mortgage Loan in accordance with the
Servicing Standard. A "Defaulted Mortgage Loan" is a Mortgage Loan (i) that is
delinquent sixty days or more with respect to a Periodic Payment (not including
the Balloon Payment) or (ii) that is delinquent in respect of its Balloon
Payment unless the Master Servicer has, on or prior to the due date of such
Balloon Payment, received written evidence from an institutional lender of such
lender's binding commitment to refinance such Mortgage Loan within 60 days after
the due date of such Balloon Payment (provided that if such refinancing does not
occur during such time specified in the commitment, the related Mortgage Loan
will immediately become a Defaulted Mortgage Loan), in either case such
delinquency to be determined without giving effect to any grace period permitted
by the related Mortgage Loan documents and without regard to any acceleration of
payments under the related Mortgage and Mortgage Note or (iii) as to which the
Master Servicer or Special Servicer has, by written notice to the related
mortgagor, accelerated the maturity of the indebtedness evidenced by the related
Mortgage Note. The Special Servicer will be permitted to change, from time to
time, its determination of the fair value of a Defaulted Mortgage Loan based
upon changed circumstances, new information or otherwise, in accordance with the
Servicing Standard; provided, however, that the Special Servicer will update its
determination of the fair value of a Defaulted Mortgage Loan at least once every
90 days.
In the event a Mortgage Loan becomes a Defaulted Mortgage Loan, the
Majority Subordinate Certificateholder will have an assignable option to
purchase (subject to, in certain instances, the rights of subordinated secured
creditors or mezzanine lenders to purchase the related Mortgage Loan (the
"Purchase Option") the Defaulted Mortgage Loan from the Trust Fund at a price
(the "Option Price") equal to (i) the outstanding principal balance of the
Defaulted Mortgage Loan as of the date of purchase, plus all accrued and unpaid
interest on such balance plus all related fees and expenses, if the Special
Servicer has not yet determined the fair value of the Defaulted Mortgage Loan,
or (ii) the fair value of the Defaulted Mortgage Loan as determined by the
Special Servicer, if the Special Servicer has made such fair value
determination. If the Purchase Option is not exercised by the Majority
Subordinate Certificateholder or any assignee thereof within 60 days of a
Mortgage Loan becoming a Defaulted Mortgage Loan, then the Majority Subordinate
Certificateholder shall assign the Purchase Option to the Special Servicer for
fifteen days. If the Purchase Option is not exercised by the Special Servicer or
its assignee within such fifteen day period, then the Purchase Option shall
revert to the Majority Subordinate Certificateholder.
Unless and until the Purchase Option with respect to a Defaulted Mortgage
Loan is exercised, the Special Servicer will be required to pursue such other
resolution strategies available under the Pooling and Servicing Agreement,
including workout and foreclosure, consistent with the Servicing Standard, but
the Special Servicer generally will not be permitted to sell the Defaulted
Mortgage Loan other than pursuant to the exercise of the Purchase Option.
If not exercised sooner, the Purchase Option with respect to any Defaulted
Mortgage Loan will automatically terminate upon (i) the related mortgagor's cure
of all defaults on the Defaulted Mortgage Loan, (ii) the acquisition on behalf
of the Trust Fund of title to the related Mortgaged Property by foreclosure or
deed-in-lieu of foreclosure or (iii) the modification or pay-off (full or
discounted) of the Defaulted Mortgage Loan in connection with a workout. In
addition, the Purchase Option with respect to a Defaulted Mortgage Loan held by
any person will terminate upon the exercise of the Purchase Option by any other
holder of the Purchase Option.
If (a) the Purchase Option is exercised with respect to a Defaulted
Mortgage Loan and the person expected to acquire the Defaulted Mortgage Loan
pursuant to such exercise is the Majority Subordinate Certificateholder, the
Special Servicer, or any affiliate of any of them (in other words, the Purchase
Option has not been assigned to another unaffiliated person) and (b) the Option
Price is based on the Special
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Servicer's determination of the fair value of the Defaulted Mortgage Loan, the
Trustee will be required to determine if the Option Price represents a fair
price for the Defaulted Mortgage Loan. In making such determination, the Trustee
will be entitled to rely on the most recent appraisal of the related Mortgaged
Property that was prepared in accordance with the terms of the Pooling and
Servicing Agreement and may rely upon the opinion and report of an independent
third party in making such determination, the cost of which will be advanced by
the Master Servicer.
If title to any Mortgaged Property is acquired by the Trustee on behalf of
the Certificateholders pursuant to foreclosure proceedings instituted by the
Special Servicer or otherwise, the Special Servicer, after notice to the
Controlling Class Representative, shall use its reasonable best efforts to sell
any REO Property as soon as practicable in accordance with the Servicing
Standard but prior to the end of the third calendar year following the year of
acquisition, unless (i) the Internal Revenue Service grants an extension of time
to sell such property (an "REO Extension") or (ii) it obtains an opinion of
counsel generally to the effect that the holding of the property for more than
three years after the end of the calendar year in which it was acquired will not
result in the imposition of a tax on the Trust Fund or cause any REMIC relating
to the assets of the Trust Fund to fail to qualify as a REMIC under the Code. If
the Special Servicer on behalf of the Trustee has not received an Extension or
such opinion of counsel and the Special Servicer is not able to sell such REO
Property within the period specified above, or if an REO Extension has been
granted and the Special Servicer is unable to sell such REO Property within the
extended time period, the Special Servicer shall auction the property pursuant
to the auction procedure set forth below.
The Special Servicer shall give the Controlling Class Representative, the
Master Servicer and the Trustee not less than five days' prior written notice of
its intention to sell any such REO Property, and shall auction the REO Property
to the highest bidder (which may be the Special Servicer) in accordance with the
Servicing Standard; provided, however, that the Master Servicer, Special
Servicer, Majority Subordinate Certificateholder, any independent contractor
engaged by the Master Servicer or the Special Servicer pursuant to the Pooling
and Servicing Agreement (or any officer or affiliate thereof) shall not be
permitted to purchase the REO Property at a price less than the outstanding
principal balance of such Mortgage Loan as of the date of purchase, plus all
accrued but unpaid interest and related fees and expenses, except in limited
circumstances set forth in the Pooling and Servicing Agreement; and provided,
further, that if the Special Servicer intends to bid on any REO Property, (i)
the Special Servicer shall notify the Trustee of such intent, (ii) the Trustee
shall promptly obtain, at the expense of the trust fund an appraisal of such REO
Property (or internal valuation in accordance with the procedures specified in
the Pooling and Servicing Agreement) and (iii) the Special Servicer shall not
bid less than the greater of (x) the fair market value set forth in such
appraisal (or internal valuation) or (y) the outstanding principal balance of
such Mortgage Loan, plus all accrued but unpaid interest and related fees and
expenses.
Subject to the REMIC provisions, the Special Servicer shall act on behalf
of the trust fund in negotiating and taking any other action necessary or
appropriate in connection with the sale of any REO Property or the exercise of
the Purchase Option, including the collection of all amounts payable in
connection therewith. Notwithstanding anything to the contrary herein, neither
the Trustee, in its individual capacity, nor any of its affiliates may bid for
any REO Property or purchase any Defaulted Mortgage Loan. Any sale of a
Defaulted Mortgage Loan (pursuant to the Purchase Option) or REO Property shall
be without recourse to, or representation or warranty by, the Trustee, the
Depositor, any Mortgage Loan Seller, the Special Servicer, the Master Servicer
or the trust fund. Notwithstanding the foregoing, nothing herein shall limit the
liability of the Master Servicer, the Special Servicer, or the Trustee to the
trust fund and the Certificateholders for failure to perform its duties in
accordance with the Pooling and Servicing Agreement. None of the Special
Servicer, the Master Servicer, the Depositor, or the Trustee shall have any
liability to the trust fund or any Certificateholder with respect to the price
at which a Defaulted Mortgage Loan is sold if the sale is consummated in
accordance with the terms of the Pooling and Servicing Agreement. The proceeds
of any sale after deduction of the expenses of such sale incurred in connection
therewith shall be deposited within one business day in the Certificate Account.
INSPECTIONS; COLLECTION OF OPERATING INFORMATION
The Special Servicer or the Master Servicer is required to perform or cause
to be performed a physical inspection of a Mortgaged Property as soon as
practicable after the related Mortgage Loan
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becomes a Specially Serviced Mortgage Loan or the related debt service coverage
ratio is below 1.00x; the expense of which will be payable first, out of penalty
interest and late payment charges otherwise payable to the Special Servicer or
the Master Servicer, as the case may be, and received in the Collection Period
during which such inspection related expenses were incurred, then at the Trust
Fund's expense. In addition, beginning in 2006, with respect to each Mortgaged
Property securing a Mortgage Loan with a principal balance (or allocated loan
amount) at the time of such inspection of more than or equal to $2,000,000, the
Master Servicer (with respect to each such Mortgaged Property securing a
Mortgage Loan other than a Specially Serviced Mortgage Loan) and the Special
Servicer (with respect to each Mortgaged Property securing a Specially Serviced
Mortgage Loan) is required at its expense to inspect or cause to be inspected
the Mortgaged Property every calendar year and with respect to each Mortgaged
Property securing a Mortgage Loan with a principal balance (or allocated loan
amount) at the time of such inspection of less than $2,000,000 once every other
calendar year; provided that the Master Servicer is not obligated to inspect any
Mortgaged Property that has been inspected by the Special Servicer in the
previous 6 months. The Special Servicer and the Master Servicer each will be
required to prepare a written report of each such inspection performed by it
that describes the condition of the Mortgaged Property and that specifies the
existence with respect thereto of any sale, transfer or abandonment or any
material change in its condition or value.
The Special Servicer or the Master Servicer is also required consistent
with the Servicing Standard to collect from the related borrower and review the
quarterly and annual operating statements of each Mortgaged Property and to
cause annual operating statements to be prepared for each REO Property.
Generally, the Mortgage Loans require the related borrower to deliver an annual
property operating statement. However, there can be no assurance that any
operating statements required to be delivered will in fact be delivered, nor is
the Master Servicer or Special Servicer likely to have any practical means of
compelling such delivery in the case of an otherwise performing Mortgage Loan.
Copies of the inspection reports and operating statements referred to above
are required to be available for review by Certificateholders during normal
business hours at the offices of the Special Servicer or the Master Servicer, as
applicable. See "DESCRIPTION OF THE CERTIFICATES--Reports to Certificateholders;
Available Information" in this prospectus supplement.
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DESCRIPTION OF THE CERTIFICATES
GENERAL
The Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage
Pass-Through Certificates, Series 2005-C17 (the "Certificates") will be issued
pursuant to a Pooling and Servicing Agreement, dated as of March 1, 2005, among
the Depositor, the Master Servicer, the Special Servicer the Trustee (the
"Pooling and Servicing Agreement"). The Certificates represent in the aggregate
the entire beneficial ownership interest in a trust fund (the "Trust Fund")
consisting primarily of: (i) the Mortgage Loans and all payments and other
collections in respect of such loans received or applicable to periods after the
applicable Cut-Off Date (exclusive of payments of principal and interest due,
and principal prepayments received, on or before the Cut-Off Date); (ii) any REO
Property acquired on behalf of the Trust Fund; (iii) such funds or assets as
from time to time are deposited in the Certificate Account, the Distribution
Account, the REO accounts, the Additional Interest Account, the Gain on Sale
Reserve Account and the Interest Reserve Account (see "DESCRIPTION OF THE
POOLING AND SERVICING AGREEMENTS--Certificate Account" in the prospectus); and
(iv) certain rights of the Depositor under each Mortgage Loan Purchase Agreement
relating to Mortgage Loan document delivery requirements and the representations
and warranties of the Mortgage Loan Sellers regarding the Mortgage Loans.
The Certificates consist of the following classes (each, a "Class")
designated as: (i) the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4
and Class A-1A Certificates (collectively, the "Class A Certificates"); (ii) the
Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K, Class L, Class M, Class N, Class O and Class P Certificates
(collectively, the "Subordinate Certificates"); and, together with the Class A
Certificates, the "Sequential Pay Certificates"); (iii) the Class X-C and Class
X-P Certificates (collectively, the "Class X Certificates" and collectively with
the Sequential Pay Certificates, the "REMIC Regular Certificates"); (iv) the
Class R-I and Class R-II Certificates (collectively, the "REMIC Residual
Certificates"); and (v) the Class Z Certificates.
Only the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4, Class A-J,
Class B, Class C and Class D Certificates (collectively, the "Offered
Certificates") are offered by this prospectus supplement. The Class A-1A, Class
E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class
O, Class P, Class X-C and Class X-P (collectively, the "Non-Offered
Certificates"), the Class Z Certificates and the REMIC Residual Certificates
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act")and are not offered by this prospectus supplement. Accordingly,
information in this prospectus supplement regarding the terms of the Non-Offered
Certificates, the Class Z Certificates and the REMIC Residual Certificates is
provided solely because of its potential relevance to a prospective purchaser of
an Offered Certificate.
REGISTRATION AND DENOMINATIONS
The Offered Certificates will be made available in book-entry format
through the facilities of The Depository Trust Company ("DTC"). The Class A-1,
Class A-2, Class A-3, Class A-PB, Class A-4, Class A-J, Class B, Class C and
Class D Certificates will be offered in denominations of not less than $10,000
actual principal amount and in integral multiples of $1 in excess thereof.
The holders of Offered Certificates may hold their Certificates through DTC
(in the United States) or Clearstream Banking, societe anonyme ("Clearstream")
or Euroclear Bank S.A./N.V., as operator (the "Euroclear Operator") of the
Euroclear System (the "Euroclear System") (in Europe) if they are participants
of such respective system ("Participants"), or indirectly through organizations
that are Participants in such systems. Clearstream and Euroclear Operator will
hold omnibus positions on behalf of the Clearstream Participants and the
Euroclear Participants, respectively, through customers' securities accounts in
the name of Clearstream and Euroclear Operator on the books of the respective
depositaries (collectively, the "Depositaries") which in turn will hold such
positions in customers' securities accounts in the Depositaries' names on the
books of DTC. DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" 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 Section 17A of
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the Securities Exchange Act of 1934, as amended. DTC was created to hold
securities for its Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic computerized
book-entries, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks, trust
companies and clearing corporations. Indirect 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 Participant, either
directly or indirectly ("Indirect Participants").
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Clearstream Participants and Euroclear Participants will occur
in accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly through Clearstream Participants or
Euroclear Participants, on the other, will be effected in DTC in accordance with
DTC rules on behalf of the relevant European international clearing system by
its Depositary; 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. If the
transaction complies with all relevant requirements, the Euroclear Operator or
Clearstream, as the case may be, will then deliver instructions to the
Depositary to take action to effect final settlement on its behalf.
Because of time-zone differences, it is possible that credits of securities
in Clearstream or the Euroclear Operator as a result of a transaction with a DTC
Participant will be made during the subsequent securities settlement processing,
dated the business day following the DTC settlement date, and such credits or
any transactions in such securities settled during such processing will be
reported to the relevant Clearstream Participant or Euroclear Participant on
such business day. Cash received in Clearstream or the Euroclear Operator as a
result of sales of securities by or through a Clearstream Participant or a
Euroclear Participant to a DTC Participant will be received with value on the
DTC settlement date, due to time zone differences may be available in the
relevant Clearstream or the Euroclear Operator cash account only as of the
business day following settlement in DTC.
The holders of Offered Certificates that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, Offered Certificates may do so only through Participants and
Indirect Participants. In addition, holders of Offered Certificates will receive
all distributions of principal and interest from the Trustee through the
Participants who in turn will receive them from DTC. Similarly, reports
distributed to Certificateholders pursuant to the Pooling and Servicing
Agreement and requests for the consent of Certificateholders will be delivered
to beneficial owners only through DTC, the Euroclear Operator, Clearstream and
their respective Participants. Under a book-entry format, holders of Offered
Certificates may experience some delay in their receipt of payments, reports and
notices, since such payments, reports and notices will be forwarded by the
Trustee to Cede & Co., as nominee for DTC. DTC will forward such payments,
reports and notices to its Participants, which thereafter will forward them to
Indirect Participants, Clearstream, the Euroclear Operator or holders of Offered
Certificates, as applicable.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Offered Certificates among Participants on whose behalf it acts with respect to
the Offered Certificates and to receive and transmit distributions of principal
of, and interest on, the Offered Certificates. Participants and Indirect
Participants with which the holders of Offered Certificates have accounts with
respect to the Offered Certificates similarly are required to make book-entry
transfers and receive and transmit such payments on behalf of their respective
holders of Offered Certificates. Accordingly, although the holders of Offered
Certificates will not possess the Offered Certificates, the Rules provide a
mechanism by which Participants will receive payments on Offered Certificates
and will be able to transfer their interest.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a holder of
Offered Certificates to pledge such Certificates to persons or entities that do
not participate in the DTC system, or to otherwise act with respect to such
Certificates, may be limited due to the lack of a physical certificate for such
Certificates.
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DTC has advised the Depositor that it will take any action permitted to be
taken by a holder of an Offered Certificate under the Pooling and Servicing
Agreement only at the direction of one or more Participants to whose accounts
with DTC the Offered Certificates are credited. DTC may take conflicting actions
with respect to other undivided interests to the extent that such actions are
taken on behalf of Participants whose holdings include such undivided interests.
Except as required by law, none of the Depositor, the Underwriters, the
Master Servicer or the Trustee will have any liability 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 interests.
Clearstream is a limited liability company (a societe anonyme) organized
under the laws of Luxembourg. Clearstream holds securities for its participating
organizations ("Clearstream Participants") and facilitates the clearance and
settlement of securities transactions between Clearstream Participants through
electronic book-entry changes in accounts of Clearstream Participants, thereby
eliminating the need for physical movement of certificates.
The Euroclear System was created in 1968 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. The Euroclear System is owned by Euroclear.
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 the Euroclear system, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System.
The information in this prospectus supplement concerning DTC, Clearstream
or the Euroclear Operator and their book-entry systems has been obtained from
sources believed to be reliable, but neither the Depositor nor any of the
Underwriters takes any responsibility for the accuracy or completeness thereof.
CERTIFICATE BALANCES AND NOTIONAL AMOUNTS
Subject to a permitted variance of plus or minus 5.0%, the respective
Classes of Sequential Pay Certificates described below will have the Certificate
Balances representing the approximate percentage of the Cut-Off Date Pool
Balance as set forth in the following table:
CLOSING DATE PERCENTAGE OF
CERTIFICATE CUT-OFF DATE
CLASS OF CERTIFICATES BALANCE POOL BALANCE
- ------------------------------------------------------------------- ----------------- --------------
Class A-1 Certificates ............................................ $ 133,240,000 4.744%
Class A-2 Certificates ............................................ $ 290,000,000 10.326%
Class A-3 Certificates ............................................ $ 82,400,000 2.934%
Class A-PB Certificates ........................................... $ 235,000,000 8.367%
Class A-4 Certificates ............................................ $1,130,969,000 40.269%
Class A-1A Certificates ........................................... $ 375,240,000 13.361%
Class A-J Certificates ............................................ $ 193,088,000 6.875%
Class B Certificates .............................................. $ 77,236,000 2.750%
Class C Certificates .............................................. $ 24,574,000 0.875%
Class D Certificates .............................................. $ 49,150,000 1.750%
Non-Offered Certificates (other than the Class X and the Class A-1A
Certificates) .................................................... $ 217,664,258 7.750%
The "Certificate Balance" of any Class of Sequential Pay Certificates
outstanding at any time represents the maximum amount that the holders thereof
are entitled to receive as distributions allocable
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to principal from the cash flow on the Mortgage Loans and the other assets in
the Trust Fund. The Certificate Balance of each Class of Sequential Pay
Certificates will be reduced on each Distribution Date by any distributions of
principal actually made on such Class of Certificates on such Distribution Date,
and further by any Realized Losses and Additional Trust Fund Expenses actually
allocated to such Class of Certificates on such Distribution Date.
The Class X-C and Class X-P Certificates do not have Certificate Balances,
but represent the right to receive the distributions of interest in amounts
equal to the aggregate interest accrued on the applicable notional amount (each,
a "Notional Amount") of the related Class of Class X-C and Class X-P
Certificates. On each Distribution Date, the Notional Amount of the Class X-C
Certificates generally will be equal to the aggregate outstanding Certificate
Balances of the Sequential Pay Certificates on such Distribution Date. The
initial Notional Amount of the Class X-C Certificates will equal approximately
$2,808,561,258 (subject to a permitted variance of plus or minus 5.0%).
The Notional Amount of the Class X-P Certificates will generally equal:
(1) until the Distribution Date in September 2005, the sum of (a) the
lesser of $117,549,000 and the Certificate Balance of the Class A-1
Certificates, (b) the lesser of $374,827,000 and the Certificate Balance of
the Class A-1A Certificates and (c) the aggregate Certificate Balances of the
Class A-2, Class A-3, Class A-PB, Class A-4, Class A-J, Class B, Class C,
Class D, Class E, Class F, Class G and Class H Certificates;
(2) after the Distribution Date in September 2005 through and including
the Distribution Date in March 2006, the sum of (a) the lesser of
$117,549,000 and the Certificate Balance of the Class A-1 Certificates, (b)
the lesser of $374,300,000 and the Certificate Balance of the Class A-1A
Certificates and (c) the aggregate Certificate Balances of the Class A-2,
Class A-3, Class A-PB, Class A-4, Class A-J, Class B, Class C, Class D, Class
E, Class F, Class G and Class H Certificates;
(3) after the Distribution Date in March 2006 through and including the
Distribution Date in September 2006, the sum of (a) the lesser of $66,566,000
and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of
$367,552,000 and the Certificate Balance of the Class A-1A Certificates and
(c) the aggregate Certificate Balances of the Class A-2, Class A-3, Class
A-PB, Class A-4, Class A-J, Class B, Class C, Class D, Class E, Class F,
Class G and Class H Certificates;
(4) after the Distribution Date in September 2006 through and including
the Distribution Date in March 2007, the sum of (a) the lesser of $9,178,000
and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of
$359,706,000 and the Certificate Balance of the Class A-1A Certificates and
(c) the aggregate Certificate Balances of the Class A-2, Class A-3, Class
A-PB, Class A-4, Class A-J, Class B, Class C, Class D, Class E, Class F,
Class G and Class H Certificates;
(5) after the Distribution Date in March 2007 through and including the
Distribution Date in September 2007, the sum of (a) the lesser of
$240,025,000 and the Certificate Balance of the Class A-2 Certificates, (b)
the lesser of $351,507,000 and the Certificate Balance of the Class A-1A
Certificates and (c) the aggregate Certificate Balances of the Class A-3,
Class A-PB, Class A-4, Class A-J, Class B, Class C, Class D, Class E, Class
F, Class G and Class H Certificates;
(6) after the Distribution Date in September 2007 through and including
the Distribution Date in March 2008, the sum of (a) the lesser of
$182,993,000 and the Certificate Balance of the Class A-2 Certificates, (b)
the lesser of $343,307,000 and the Certificate Balance of the Class A-1A
Certificates, (c) the aggregate Certificate Balances of the Class A-3, Class
A-PB, Class A-4, Class A-J, Class B, Class C, Class D, Class E, Class F and
Class G Certificates and (d) the lesser of $20,647,000 and the Certificate
Balance of the Class H Certificates;
(7) after the Distribution Date in March 2008 through and including the
Distribution Date in September 2008, the sum of (a) the lesser of
$125,945,000 and the Certificate Balance of the Class A-2 Certificates, (b)
the lesser of $334,744,000 and the Certificate Balance of the Class A-1A
Certificates, (c) the aggregate Certificate Balances of the Class A-3, Class
A-PB, Class A-4, Class A-J, Class B, Class C, Class D, Class E and Class F
Certificates and (d) the lesser of $26,106,000 and the Certificate Balance of
the Class G Certificates;
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(8) after the Distribution Date in September 2008 through and including
the Distribution Date in March 2009, the sum of (a) the lesser of $70,878,000
and the Certificate Balance of the Class A-2 Certificates, (b) the lesser of
$326,504,000 and the Certificate Balance of the Class A-1A Certificates, (c)
the aggregate Certificate Balances of the Class A-3, Class A-PB, Class A-4,
Class A-J, Class B, Class C, Class D, Class E and Class F Certificates and
(d) the lesser of $920,000 and the Certificate Balance of the Class G
Certificates;
(9) after the Distribution Date in March 2009 through and including the
Distribution Date in September 2009, the sum of (a) the lesser of $58,158,000
and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of
$299,678,000 and the Certificate Balance of the Class A-1A Certificates, (c)
the aggregate Certificate Balances of the Class A-PB, Class A-4, Class A-J,
Class B, Class C, Class D and Class E Certificates and (d) the lesser of
$4,794,000 and the Certificate Balance of the Class F Certificates;
(10) after the Distribution Date in September 2009 through and including
the Distribution Date in March 2010, the sum of (a) the lesser of $68,058,000
and the Certificate Balance of the Class A-PB Certificates, (b) the lesser of
$292,208,000 and the Certificate Balance of the Class A-1A Certificates, (c)
the aggregate Certificate Balances of the Class A-4, Class A-J, Class B,
Class C and Class D Certificates and (d) the lesser of $9,796,000 and the
Certificate Balance of the Class E Certificates;
(11) after the Distribution Date in March 2010 through and including the
Distribution Date in September 2010, the sum of (a) the lesser of $21,763,000
and the Certificate Balance of the Class A-PB Certificates, (b) the lesser of
$285,080,000 and the Certificate Balance of the Class A-1A Certificates, (c)
the aggregate Certificate Balances of the Class A-4, Class A-J, Class B and
Class C Certificates and (d) the lesser of $38,901,000 and the Certificate
Balance of the Class D Certificates;
(12) after the Distribution Date in September 2010 through and including
the Distribution Date in March 2011, the sum of (a) the lesser of
$1,108,517,000 and the Certificate Balance of the Class A-4 Certificates, (b)
the lesser of $278,260,000 and the Certificate Balance of the Class A-1A
Certificates, (c) the aggregate Certificate Balances of the Class A-J, Class
B and Class C Certificates and (d) the lesser of $19,732,000 and the
Certificate Balance of the Class D Certificates;
(13) after the Distribution Date in March 2011 through and including the
Distribution Date in September 2011, the sum of (a) the lesser of
$1,064,903,000 and the Certificate Balance of the Class A-4 Certificates, (b)
the lesser of $271,537,000 and the Certificate Balance of the Class A-1A
Certificates, (c) the aggregate Certificate Balances of the Class A-J, Class
B and Class C Certificates and (d) the lesser of $1,317,000 and the
Certificate Balance of the Class D Certificates;
(14) after the Distribution Date in September 2011 through and including
the Distribution Date in March 2012, the sum of (a) the lesser of
$966,236,000 and the Certificate Balance of the Class A-4 Certificates, (b)
the lesser of $229,791,000 and the Certificate Balance of the Class A-1A
Certificates, (c) the aggregate Certificate Balances of the Class A-J and
Class B Certificates and (d) the lesser of $8,307,000 and the Certificate
Balance of the Class C Certificates;
(15) after the Distribution Date in March 2012, $0.
The initial Notional Amount of the Class X-P Certificates will be
$2,701,179,000.
The Certificate Balance of any Class of Sequential Pay Certificates may be
increased by the amount, if any, of Certificate Deferred Interest added to such
Class Certificate Balance. With respect to any Mortgage Loan as to which the
Mortgage Rate has been reduced through a modification on any Distribution Date,
"Mortgage Deferred Interest" is the amount by which (a) interest accrued at such
reduced rate is less than (b) the amount of interest that would have accrued on
such Mortgage Loan at the Mortgage Rate before such reduction, to the extent
such amount has been added to the outstanding principal balance of such Mortgage
Loan. On each Distribution Date the amount of interest distributable to a Class
of Sequential Pay Certificates will be reduced by the amount of Mortgage
Deferred Interest allocable to such Class (any such amount, "Certificate
Deferred Interest"). With respect to the Sequential Pay Certificates,
Certificate Deferred Interest will be allocated from lowest payment priority to
highest (except with respect to the Class A-1, Class A-2, Class A-3, Class A-PB,
Class A-4 and Class A-1A
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Certificates, which amounts shall be applied pro rata (based on remaining Class
Certificate Balances) to such Classes). The Certificate Balance of each Class of
Sequential Pay Certificates to which Certificate Deferred Interest has been so
allocated on a Distribution Date will be increased by the amount of Certificate
Deferred Interest. Any increase in the Certificate Balance of a Class of
Sequential Pay Certificates will result in an increase in the Notional Amount of
the Class X-C Certificates, and to the extent there is an increase in the
Certificate Balance of the Class A-1, Class A-2, Class A-3, Class A-PB, Class
A-4, Class A-1A, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G
and Class H Certificates and subject to the limits described in the description
of the Notional Amount of the Class X-P Certificates above, the Class X-P
Certificates.
The REMIC Residual Certificates do not have Certificate Balances or
Notional Amounts, but represent the right to receive on each Distribution Date
any portion of the Available Distribution Amount for such date that remains
after the required distributions have been made on all the REMIC Regular
Certificates. It is not anticipated that any such portion of the Available
Distribution Amount will result in more than a de minimis distribution to the
REMIC Residual Certificates.
The Class Z Certificates do not have Certificate Balances or Notional
Amounts, but represent the right to receive on each Distribution Date any
amounts of Additional Interest received in the related Collection Period with
respect to each ARD Loan.
PASS-THROUGH RATES
The Pass-Through Rate applicable to the Class A-1, Class A-2, Class A-3,
Class A-PB, Class A-4, Class A-J, Class B, Class C and Class D Certificates for
each Distribution Date will equal the respective rate per annum set forth on the
front cover of this prospectus supplement. Each of the Class X-C Components and
the Class X-P Components will be deemed to have a Pass-Through Rate equal to the
Pass-Through Rate of the related Class of Certificates.
The Pass-Through Rate applicable to the Class X-C Certificates for the
initial Distribution Date will equal approximately % per annum.
The Pass-Through Rate applicable to the Class X-C Certificates for each
subsequent Distribution Date will equal the weighted average of the respective
Class X-C Strip Rates, at which interest accrues from time to time on the
respective components (the "Class X-C Components") of the Class X-C Certificates
outstanding immediately prior to such Distribution Date (weighted on the basis
of the outstanding balances of those Class X-C Components immediately prior to
the Distribution Date). Each Class X-C Component will be comprised of all or a
designated portion of the Certificate Balance of one of the Classes of
Sequential Pay Certificates. In general, the Certificate Balance of each Class
of Sequential Pay Certificates will constitute a separate Class X-C Component.
However, if a portion, but not all, of the Certificate Balance of any particular
Class of Sequential Pay Certificates is identified under "--Certificate Balances
and Notional Amounts" above as being part of the Notional Amount of the Class
X-P Certificates immediately prior to any Distribution Date, then the identified
portion of the Certificate Balance will also represent one or more separate
Class X-C Components for purposes of calculating the Pass-Through Rate of the
Class X-C Certificates, and the remaining portion of the Certificate Balance
will represent one or more other separate Class X-C Components for purposes of
calculating the Pass- Through Rate of the Class X-C Certificates. For each
Distribution Date through and including the Distribution Date in March 2012,
"Class X-C Strip Rate" for each Class X-C Component will be calculated as
follows:
(1) if such Class X-C Component consists of the entire Certificate Balance
of any Class of Sequential Pay Certificates, and if the Certificate
Balance does not, in whole or in part, also constitute a Class X-P
Component immediately prior to the Distribution Date, then the
applicable Class X-C Strip Rate will equal the excess, if any, of (a)
the Weighted Average Net Mortgage Rate for the Distribution Date, over
(b) the Pass-Through Rate in effect for the Distribution Date for the
applicable Class of Sequential Pay Certificates;
(2) if such Class X-C Component consists of a designated portion (but not
all) of the Certificate Balance of any Class of Sequential Pay
Certificates, and if the designated portion of the
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Certificate Balance does not also constitute a Class X-P Component
immediately prior to the Distribution Date, then the applicable Class X-C
Strip Rate will equal the excess, if any, of (a) the Weighted Average Net
Mortgage Rate for the Distribution Date, over (b) the Pass-Through Rate
in effect for the Distribution Date for the applicable Class of
Sequential Pay Certificates;
(3) if such Class X-C Component consists of a designated portion (but not
all) of the Certificate Balance of any Class of Sequential Pay
Certificates, and if the designated portion of the Certificate Balance
also constitutes a Class X-P Component immediately prior to the
Distribution Date, then the applicable Class X-C Strip Rate will equal
the excess, if any, of (a) the Weighted Average Net Mortgage Rate for
the Distribution Date, over (b) the sum of (i) the Class X-P Strip Rate
for the applicable Class X-P Component, and (ii) the Pass-Through Rate
in effect for the Distribution Date for the applicable Class of
Sequential Pay Certificates; and
(4) if such Class X-C Component consists of the entire Certificate Balance
of any Class of Sequential Pay Certificates, and if the Certificate
Balance also constitutes, in its entirety, a Class X-P Component
immediately prior to such Distribution Date, then the applicable Class
X-C Strip Rate will equal the excess, if any, of (a) the Weighted
Average Net Mortgage Rate for the Distribution Date, over (b) the sum
of (i) the Class X-P Strip Rate for the applicable Class X-P Component,
and (ii) the Pass-Through Rate in effect for the Distribution Date for
the applicable Class of Sequential Pay Certificates.
For each Distribution Date after the Distribution Date in March 2012, the
entire Certificate Balance of each Class of Sequential Pay Certificates will
constitute one or more separate Class X-C Components, and the applicable Class
X-C Strip Rate with respect to each such Class X-C Component for each
Distribution Date will equal the excess, if any, of (a) the Weighted Average Net
Mortgage Rate for the Distribution Date, over (b) the Pass-Through Rate in
effect for the Distribution Date for the related Class of Sequential Pay
Certificates.
The Pass-Through Rate applicable to the Class X-P Certificates for the
initial Distribution Date will equal approximately % per annum.
The Pass-Through Rate applicable to the Class X-P Certificates for each
subsequent Distribution Date will equal the weighted average of the respective
Class X-P Strip Rates, at which interest accrues from time to time on the
respective components (the "Class X-P Components") of the Class X-P Certificates
outstanding immediately prior to such Distribution Date (weighted on the basis
of the balances of those Class X-P Components immediately prior to the
Distribution Date). Each Class X-P Component will be comprised of all or a
designated portion of the Certificate Balance of a specified Class of Sequential
Pay Certificates. If all or a designated portion of the Certificate Balance of
any Class of Sequential Pay Certificates is identified under "--Certificate
Balances and Notional Amounts" above as being part of the Notional Amount of the
Class X-P Certificates immediately prior to any Distribution Date, then that
Certificate Balance (or designated portion thereof) will represent one or more
separate Class X-P Components for purposes of calculating the Pass-Through Rate
of the Class X-P Certificates. For each Distribution Date through and including
the Distribution Date in March 2012, the "Class X-P Strip Rate" for each Class
X-P Component included in the Notional Amount of the Class X-P Certificates will
equal (x) the lesser of (1) the Weighted Average Net Mortgage Rate for such
Distribution Date, and (2) the reference rate specified on Annex C to this
prospectus supplement for such Distribution Date minus 0.03% per annum, minus
(y) the Pass-Through Rate for such Component (but in no event will any Class X-P
Strip Rate be less than zero).
After the Distribution Date in March 2012, the Class X-P Certificates will
cease to accrue interest and will have a 0% Pass-Through Rate.
In the case of each Class of REMIC Regular Certificates interest at the
applicable Pass-Through Rate will be payable monthly on each Distribution Date
and will accrue during each Interest Accrual Period on the Certificate Balance
(or, in the case of the Class X Certificates, the respective Notional Amount) of
such Class of Certificates immediately following the Distribution Date in such
Interest Accrual Period (after giving effect to all distributions of principal
made on such Distribution Date). Interest on each Class of REMIC Regular
Certificates will be calculated on the basis of a 360-day year consisting of
twelve
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30-day months. With respect to any Class of REMIC Regular Certificates and any
Distribution Date, the "Interest Accrual Period" will be the preceding calendar
month which will be deemed to consist of 30 days.
The Class Z Certificates will not have a Pass-Through Rate or be entitled
to distributions in respect of interest other than Additional Interest with
respect to the Mortgage Loans.
The "Weighted Average Net Mortgage Rate" for each Distribution Date is the
weighted average of the Net Mortgage Rates for the Mortgage Loans as of the
commencement of the related Collection Period, weighted on the basis of their
respective Stated Principal Balances immediately following the preceding
Distribution Date; provided that, for the purpose of determining the Weighted
Average Net Mortgage Rate only, if the Mortgage Rate for any Mortgage Loan has
been modified 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, the Weighted Average Net Mortgage Rate for such
Mortgage Loan will be calculated without regard to such event. The "Net Mortgage
Rate" for each Mortgage Loan will generally equal (x) the Mortgage Rate in
effect for such Mortgage Loan, minus (y) the applicable Administrative Cost Rate
for such Mortgage Loan. Notwithstanding the foregoing, because no Mortgage Loan,
other than 1 Mortgage Loan (loan number 75), accrues interest on the basis of a
360-day year consisting of twelve 30-day months (which is the basis on which
interest accrues in respect of the REMIC Regular Certificates), then, solely for
purposes of calculating the Weighted Average Net Mortgage Rate for each
Distribution Date, the Mortgage Rate of each Mortgage Loan, other than 1
Mortgage Loan, representing 0.3% of the Cut-Off Date Pool Balance (0.4% of Loan
Group 1), which accrue interest on a 30/360 basis, in effect during any calendar
month will be deemed to be the annualized rate at which interest would have to
accrue in respect of such loan on a 30/360 basis in order to derive the
aggregate amount of interest (other than default interest) actually accrued in
respect of such loan during such calendar month; provided, however, that the
Mortgage Rate in effect during (a) December of each year that does not
immediately precede a leap year, and January of each year will be the per annum
rate stated in the related Mortgage Note unless the final Distribution Date
occurs in January or February immediately following such December or January and
(b) in February of each year will be determined inclusive of the one day of
interest retained from the immediately preceding January and, if applicable,
December. The "Stated Principal Balance" of each Mortgage Loan outstanding at
any time will generally be an amount equal to the principal balance thereof as
of the Cut-Off Date, (a) reduced on each Distribution Date (to not less than
zero) by (i) the portion of the Principal Distribution Amount for that date
which is attributable to such Mortgage Loan and (ii) the principal portion of
any Realized Loss incurred in respect of such Mortgage Loan during the related
Collection Period and (b) increased on each Distribution Date by any Mortgage
Deferred Interest added to the principal balance of such Mortgage Loan on such
Distribution Date. 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 a debtor. In addition, to the extent that
principal from general collections is used to reimburse nonrecoverable Advances
or Workout Delayed Reimbursement Amount, and such amount has not been included
as part of the Principal Distribution Amounts, such amount shall not reduce the
Stated Principal Balance (other than for purposes of computing the Weighted
Average Net Mortgage Rate). Notwithstanding the foregoing, if any Mortgage Loan
is paid in full, liquidated or otherwise removed from the Trust Fund, commencing
as of the first Distribution Date following the Collection Period during which
such event occurred, the Stated Principal Balance of such Mortgage Loan will be
zero. With respect to any Companion Loan on any date of determination, the
Stated Principal Balance shall equal the unpaid principal balance of such
Companion Loan.
The "Collection Period" for each Distribution Date is the period that
begins on the 12th day in the month immediately preceding the month in which
such Distribution Date occurs (or the day after the applicable Cut-Off Date in
the case of the first Collection Period) and ends on and includes the 11th day
in the same month as such Distribution Date. Notwithstanding the foregoing, in
the event that the last day of a Collection Period is not a business day, any
payments received with respect to the Mortgage Loans relating to such Collection
Period on the business day immediately following such day will be deemed to have
been received during such Collection Period and not during any other Collection
Period. The
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"Determination Date" will be, for any Distribution Date, the 11th day of each
month, or if such 11th day is not a business day, the next succeeding business
day, commencing in April 2005.
DISTRIBUTIONS
General. Distributions on the Certificates are made by the Trustee, to the
extent of the Available Distribution Amount, on the fourth business day
following the related Determination Date (each, a "Distribution Date"). Except
as described below, all such distributions will be made to the persons in whose
names the Certificates are registered (the "Certificateholders") at the close of
business on the last business day of the month preceding the month in which the
related Distribution Date occurs and shall be made by wire transfer of
immediately available funds, if such Certificateholder shall have provided
wiring instructions no less than five business days prior to such record date,
or otherwise by check mailed to the address of such Certificateholder as it
appears in the Certificate register. The final distribution on any Certificate
(determined without regard to any possible future reimbursement of any Realized
Loss or Additional Trust Fund Expense previously allocated to such Certificate)
will be made only upon presentation and surrender of such Certificate at the
location that will be specified in a notice of the pendency of such final
distribution. 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 in such Class. The first
Distribution Date on which investors in the Offered Certificates may receive
distributions will be the Distribution Date occurring in April 2005.
The Available Distribution Amount. The aggregate amount available for
distributions of interest and principal to Certificateholders (other than Class
R-I, Class R-II and Class Z Certificateholders) on each Distribution Date (the
"Available Distribution Amount") will, in general, equal the sum of the
following amounts:
(a) the total amount of all cash received on or in respect of the
Mortgage Loans and any REO Properties by the Master Servicer as of the close
of business on the last day of the related Collection Period and not
previously distributed with respect to the Certificates or applied for any
other permitted purpose, exclusive of any portion thereof that represents one
or more of the following:
(i) any Periodic Payments collected but due on a Due Date after the
related Collection Period;
(ii) any Prepayment Premiums and Yield Maintenance Charges;
(iii) all amounts in the Certificate Account that are payable or
reimbursable to any person other than the Certificateholders, including
any Servicing Fees and Trustee Fees on the Mortgage Loans or Companion
Loans;
(iv) any amounts deposited in the Certificate Account in error;
(v) any Additional Interest on the ARD Loans (which is separately
distributed to the Class Z Certificates);
(vi) if such Distribution Date occurs in February of any year or
during January of any year that is not a leap year, the Interest Reserve
Amounts with respect to the Mortgage Loans to be deposited in the
Interest Reserve Account and held for future distribution; and
(vii) any amounts distributable to the Companion Loan holders.
(b) all P&I Advances made by the Master Servicer or the Trustee with
respect to such Distribution Date other than, in the case of the Master
Servicer, any P&I Advances allocable to a pari passu Companion Loan;
(c) any Compensating Interest Payment made by the Master Servicer to
cover the aggregate of any Prepayment Interest Shortfalls experienced during
the related Collection Period; and
(d) if such Distribution Date occurs during March of any year or if such
Distribution Date is the final Distribution Date and occurs in February or,
if such year is not a leap year, in January, the aggregate of the Interest
Reserve Amounts then on deposit in the Interest Reserve Account in respect of
each Mortgage Loan.
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See "SERVICING OF THE MORTGAGE LOANS--Servicing and Other Compensation and
Payment of Expenses" and "DESCRIPTION OF THE CERTIFICATES--P&I Advances" in this
prospectus supplement and "DESCRIPTION OF THE POOLING AND SERVICING
AGREEMENTS--Certificate Account" in the accompanying prospectus.
Any Prepayment Premiums or Yield Maintenance Charges actually collected
will be distributed separately from the Available Distribution Amount. See
"--Distributions--Allocation of Prepayment Premiums and Yield Maintenance
Charges" in this prospectus supplement.
All amounts received by the trust fund with respect to any Co-Lender Loan
will be applied to amounts due and owing under the related loan (including for
principal and accrued and unpaid interest) in accordance with the provisions of
the related loan documents, the related Intercreditor Agreement and the Pooling
and Servicing Agreement.
Interest Reserve Account. The Trustee will establish and maintain an
"Interest Reserve Account" in the name of the Trustee for the benefit of the
holders of the Certificates. With respect to each Distribution Date occurring in
February and each Distribution Date occurring in any January which occurs in a
year that is not a leap year, there will be withdrawn from the Certificate
Account and deposited to the Interest Reserve Account in respect of each
Mortgage Loan (the "Interest Reserve Loans") which accrues interest on an
Actual/360 basis an amount equal to one day's interest at the related Mortgage
Rate on its Stated Principal Balance, as of the Due Date in the month in which
such Distribution Date occurs, to the extent a Periodic Payment or P&I Advance
is timely made in respect thereof for such Due Date (all amounts so deposited in
any consecutive January (if applicable) and February in respect of each Interest
Reserve Loan, the "Interest Reserve Amount"). With respect to each Distribution
Date occurring in March, or in the event the final Distribution Date occurs in
February or, if such year is not a leap year, in January, there will be
withdrawn from the Interest Reserve Account the amounts deposited from the
immediately preceding February and, if applicable, January, and such withdrawn
amount is to be included as part of the Available Distribution Amount for such
Distribution Date.
Certificate Account. The Master Servicer will establish and will maintain a
"Certificate Account" on behalf of the Trustee for the benefit of the
Certificateholders and will maintain the Certificate Account as an eligible
account pursuant to the terms of the Pooling and Servicing Agreement. Funds on
deposit in the Certificate Account to the extent of the Available Distribution
Amount will be used to make distributions on the Certificates. See "DESCRIPTION
OF THE TRUST FUNDS--Certificate Accounts" in the prospectus.
Distribution Account. The Trustee will establish and will maintain a
"Distribution Account" in the name of the Trustee for the benefit of the
Certificateholders and will maintain the Distribution Account as an eligible
account pursuant to the terms of the Pooling and Servicing Agreement. Funds on
deposit in the Distribution Account, to the extent of the Available Distribution
Amount, will be used to make distributions on the Certificates.
Gain on Sale Reserve Account. The Trustee will establish and will maintain
a "Gain on Sale Reserve Account" in the name of the Trustee for the benefit of
the Certificateholders. To the extent that gains realized on sales of Mortgaged
Properties, if any, are not used to offset Realized Losses previously allocated
to the Certificates, such gains will be held and applied to offset future
Realized Losses, if any.
Additional Interest Account. The Trustee will establish and will maintain
an "Additional Interest Account" in the name of the Trustee for the benefit of
the holders of the Class Z Certificates. Prior to the applicable Distribution
Date, an amount equal to the Additional Interest received during the related
Collection Period will be deposited into the Additional Interest Account.
Application of the Available Distribution Amount. On each Distribution
Date, the Trustee will (except as otherwise described under "--Termination"
below) apply amounts on deposit in the Distribution Account, to the extent of
the Available Distribution Amount, in the following order of priority:
(1) concurrently, to distributions of interest (i) from the portion of the
Available Distribution Amount for such Distribution Date attributable
to Mortgage Loans in Loan Group 1, to the
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holders of the Class A-1 Certificates, Class A-2 Certificates, Class A-3
Certificates, Class A-PB Certificates and Class A-4 Certificates, pro
rata, in accordance with the amounts of Distributable Certificate
Interest in respect of such classes of Certificates on such Distribution
Date, in an amount equal to all Distributable Certificate Interest in
respect of such Classes of Certificates for such Distribution Date and,
to the extent not previously paid, for all prior Distribution Dates, (ii)
from the portion of the Available Distribution Amount for such
Distribution Date attributable to Mortgage Loans in Loan Group 2, to the
holders of the Class A-1A Certificates in an amount equal to all
Distributable Certificate Interest in respect of such Class of
Certificates on such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates, and (iii) from the entire
Available Distribution Amount for such Distribution Date relating to the
entire Mortgage Pool, to the holders of the Class X-C Certificates and
the Class X-P Certificates, pro rata, in accordance with the amounts of
Distributable Certificate Interest in respect of such Classes of
Certificates on such Distribution Date, in an amount equal to all
Distributable Certificate Interest in respect of such Classes of
Certificates for such Distribution Date and, to the extent not previously
paid, for all prior Distribution Dates; provided, however, on any
Distribution Date where the Available Distribution Amount (or applicable
portion thereof) is not sufficient to make distributions in full to the
related Classes of Certificates as described above, the Available
Distribution Amount will be allocated among the above Classes of
Certificates without regard to Loan Group, pro rata, in accordance with
the respective amounts of Distributable Certificate Interest in respect
of such Classes of Certificates on such Distribution Date, in an amount
equal to all Distributable Certificate Interest in respect of each such
Class of Certificates for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(2) to distributions of principal to the holders of the Class A-PB
Certificates, in an amount equal to the Loan Group 1 Principal
Distribution Amount for such Distribution Date and, after the Class
A-1A Certificates have been retired, the Loan Group 2 Principal
Distribution Amount remaining after payments to the Class A-1A
Certificates have been made on such Distribution Date, until the
Certificate Balance of the Class A-PB Certificates is reduced to the
Class A-PB Planned Principal Balance set forth on Annex D to this
prospectus supplement;
(3) after distributions of principal have been made from the Loan Group 1
Principal Distribution Amount to the Class A-PB Certificates as set
forth in clause (2) above, to distributions of principal to the holders
of the Class A-1 Certificates in an amount (not to exceed the then
outstanding Certificate Balance of the Class A-1 Certificates) equal to
the remaining Loan Group 1 Principal Distribution Amount for such
Distribution Date and, after the Class A-1A Certificates have been
retired, the Loan Group 2 Principal Distribution Amount remaining after
payments to the Class A-1A Certificates have been made on such
Distribution Date, in each case, less any portion thereof distributed
in respect of the Class A-PB Certificates on such Distribution Date;
(4) after distributions of principal have been made from the Loan Group 1
Principal Distribution Amount to the Class A-PB Certificates and the
Class A-1 Certificates as set forth in clauses (2) and (3) above, to
distributions of principal to the holders of the Class A-2 Certificates
in an amount (not to exceed the then outstanding Certificate Balance of
the Class A-2 Certificates) equal to the remaining Loan Group 1
Principal Distribution Amount for such Distribution Date and, after the
Class A-1A Certificates have been retired, the Loan Group 2 Principal
Distribution Amount remaining after payments to the Class A-1A
Certificates have been made on such Distribution Date, in each case,
less any portion thereof distributed in respect of the Class A-PB
Certificates and the Class A-1 Certificates on such Distribution Date;
(5) after distributions of principal have been made from the Loan Group 1
Principal Distribution Amount to the Class A-PB Certificates, the Class
A-1 Certificates and the Class A-2 Certificates as set forth in clauses
(2), (3) and (4) above, to distributions of principal to the holders of
the Class A-3 Certificates in an amount (not to exceed the then
outstanding Certificate Balance of the Class A-3 Certificates) equal to
the remaining Loan Group 1 Principal Distribution Amount for such
Distribution Date and, after the Class A-1A Certificates have been
retired, the Loan
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Group 2 Principal Distribution Amount remaining after payments to the
Class A-1A Certificates have been made on such Distribution Date, in each
case, less any portion thereof distributed in respect of the Class A-PB
Certificates, the Class A-1 Certificates and the Class A-2 Certificates
on such Distribution Date;
(6) after distributions of principal have been made from the Loan Group 1
Principal Distribution Amount to the Class A-1, Class A-2, Class A-3
and Class A-PB Certificates as set forth in clauses (2), (3), (4) and
(5) above, to distributions of principal to the holders of the Class
A-PB Certificates in an amount (not to exceed the then outstanding
Certificate Balance of the Class A-PB Certificates) equal to the
remaining Loan Group 1 Principal Distribution Amount for such
Distribution Date and, after the Class A-1A Certificates have been
retired, the Loan Group 2 Principal Distribution Amount remaining after
payments to the Class A-1A Certificates have been made on such
Distribution Date, in each case, less any portion thereof distributed
in respect of the Class A-PB Certificates, the Class A-1 Certificates,
the Class A-2 Certificates and the Class A-3 Certificates on such
Distribution Date;
(7) after distributions of principal have been made from the Loan Group 1
Principal Distribution Amount to the Class A-1, Class A-2, Class A-3
and Class A-PB Certificates as set forth in clauses (2), (3), (4), (5)
and (6) above, to distributions of principal to the holders of the
Class A-4 Certificates in an amount (not to exceed the then outstanding
Certificate Balance of the Class A-4 Certificates) equal to the
remaining Loan Group 1 Principal Distribution Amount for such
Distribution Date and, after the Class A-1A Certificates have been
retired, the Loan Group 2 Principal Distribution Amount remaining after
payments to the Class A-1A Certificates have been made on such
Distribution Date, in each case, less any portion thereof distributed
in respect of the Class A-PB Certificates, the Class A-1 Certificates,
the Class A-2 Certificates and the Class A-3 Certificates on such
Distribution Date;
(8) to distributions of principal to the holders of the Class A-1A
Certificates in an amount (not to exceed the then outstanding
Certificate Balance of the Class A-1A Certificate) equal to the Loan
Group 2 Principal Distribution Amount for such Distribution and, after
the Class A-1, Class A-2, Class A-3, Class A-PB and Class A-4
Certificates have been retired, the Loan Group 1 Principal Distribution
Amount remaining after payments to the Class A-PB Certificates, Class
A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates and
the Class A-4 Certificates have been made on such Distribution Date;
(9) to distributions to the holders of the Class A-1 Certificates, Class
A-2 Certificates, Class A-3 Certificates, Class A-PB Certificates,
Class A-4 Certificates and Class A-1A Certificates, pro rata, in
accordance with the respective amounts of Realized Losses and
Additional Trust Fund Expenses, if any, previously allocated to such
Classes of Certificates and for which no reimbursement has previously
been received, to reimburse such holders for all such Realized Losses
and Additional Trust Fund Expenses, if any;
(10) to distributions of interest to the holders of the Class A-J
Certificates in an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date and, to the extent not previously paid, for all prior Distribution
Dates;
(11) after the Class A Certificates have been retired, to distributions of
principal to the holders of the Class A-J Certificates in an amount
(not to exceed the then outstanding Certificate Balance of the Class
A-J Certificates) equal to the Principal Distribution Amount for such
Distribution Date, less any portion thereof distributed in respect of
the Class A-1 Certificates, Class A-2 Certificates, Class A-3
Certificates, Class A-PB Certificates, Class A-4 Certificates and/or
Class A-1A Certificates on such Distribution Date;
(12) to distributions to the holders of the Class A-J Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(13) to distributions of interest to the holders of the Class B Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
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(14) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class B Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class B Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(15) to distributions to the holders of the Class B Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(16) to distributions of interest to the holders of the Class C Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(17) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class C Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class C Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(18) to distributions to the holders of the Class C Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(19) to distributions of interest to the holders of the Class D Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(20) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class D Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class D Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(21) to distributions to the holders of the Class D Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(22) to distributions of interest to the holders of the Class E Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(23) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class E Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class E Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(24) to distributions to the holders of the Class E Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
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(25) to distributions of interest to the holders of the Class F Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(26) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class F Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class F Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(27) to distributions to the holders of the Class F Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(28) to distributions of interest to the holders of the Class G Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(29) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class G Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class G Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(30) to distributions to the holders of the Class G Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(31) to distributions of interest to the holders of the Class H Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(32) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class H Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class H Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(33) to distributions to the holders of the Class H Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(34) to distributions of interest to the holders of the Class J Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(35) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class J Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class J Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(36) to distributions to the holders of the Class J Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
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(37) to distributions of interest to the holders of the Class K Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(38) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class K Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class K Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(39) to distributions to the holders of the Class K Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(40) to distributions of interest to the holders of the Class L Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(41) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class L Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class L Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(42) to distributions to the holders of the Class L Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(43) to distributions of interest to the holders of the Class M Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(44) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class M Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class M Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(45) to distributions to the holders of the Class M Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(46) to distributions of interest to the holders of the Class N Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(47) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class N Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class N Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(48) to distributions to the holders of the Class N Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
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(49) to distributions of interest to the holders of the Class O Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(50) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class O Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class O Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(51) to distributions to the holders of the Class O Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received;
(52) to distributions of interest to the holders of the Class P Certificates
in an amount equal to all Distributable Certificate Interest in respect
of such Class of Certificates for such Distribution Date and, to the
extent not previously paid, for all prior Distribution Dates;
(53) after all Classes of Certificates with an earlier priority of
distribution have been retired, to distributions of principal to the
holders of the Class P Certificates in an amount (not to exceed the
then outstanding Certificate Balance of the Class P Certificates) equal
to the Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of all Classes of
Certificates with an earlier alphabetical and numerical designation on
such Distribution Date;
(54) to distributions to the holders of the Class P Certificates to
reimburse such holders for all Realized Losses and Additional Trust
Fund Expenses, if any, previously allocated to such Class of
Certificates and for which no reimbursement has previously been
received; and
(55) to distributions to the holders of the REMIC Residual Certificates in
an amount equal to the balance, if any, of the Available Distribution
Amount remaining after the distributions to be made on such
Distribution Date as described in clauses (1) through (54) above;
provided that, on each Distribution Date, if any, after the aggregate of the
Certificate Balances of the Subordinate Certificates has been reduced to zero as
a result of the allocations of Realized Losses and Additional Trust Fund
Expenses, and in any event on the final Distribution Date in connection with a
termination of the Trust Fund (see "--Termination" below), the payments of
principal to be made as contemplated by clauses (3), (4), (5), (6), (7) and (8)
above with respect to the Class A-1 Certificates, the Class A-2 Certificates,
the Class A-3 Certificates, the Class A-PB Certificates, the Class A-4
Certificates and the Class A-1A Certificates will be so made to the holders of
the respective Classes of such Certificates which remain outstanding up to an
amount equal to, and pro rata as between such Classes in accordance with, the
respective then-outstanding Certificate Balances of such Classes of Certificates
and without regard to the Principal Distribution Amount for such date.
Distributable Certificate Interest. The "Distributable Certificate
Interest" in respect of each Class of REMIC Regular Certificates for each
Distribution Date equals the Accrued Certificate Interest in respect of such
Class of Certificates for such Distribution Date, reduced (other than in the
case of the Class X Certificates) (to not less than zero) by (i) such Class's
allocable share (calculated as described below) of the aggregate of any
Prepayment Interest Shortfalls resulting from principal prepayments made on the
Mortgage Loans during the related Collection Period that are not covered by the
Master Servicer's Compensating Interest Payment for such Distribution Date (the
aggregate of such Prepayment Interest Shortfalls that are not so covered, as to
such Distribution Date, the "Net Aggregate Prepayment Interest Shortfall") and
(ii) any Certificate Deferred Interest allocated to such Class of REMIC Regular
Certificates.
The "Accrued Certificate Interest" in respect of each Class of Sequential
Pay Certificates for each Distribution Date will equal one month's interest at
the Pass-Through Rate applicable to such Class of Certificates for such
Distribution Date accrued for the related Interest Accrual Period on the related
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Certificate Balance or Component Principal Balance, as applicable, outstanding
immediately prior to such Distribution Date. The "Accrued Certificate Interest"
in respect of the Class X-C and Class X-P Certificates for any Distribution Date
will equal the amount of one month's interest at the related Pass-Through Rate
on the Notional Amount of the Class X-C or Class X-P Certificates, as the case
may be, outstanding immediately prior to such Distribution Date. Accrued
Certificate Interest will be calculated on a 30/360 basis.
The portion of the Net Aggregate Prepayment Interest Shortfall for any
Distribution Date that is allocable to each Class of REMIC Regular Certificates
(other than the Class X Certificates) will equal the product of (a) such Net
Aggregate Prepayment Interest Shortfall, multiplied by (b) a fraction, the
numerator of which is equal to the Accrued Certificate Interest in respect of
such Class of Certificates for such Distribution Date, and the denominator of
which is equal to the aggregate Accrued Certificate Interest in respect of all
Classes of REMIC Regular Certificates (other than the Class X Certificates) for
such Distribution Date.
Any such Prepayment Interest Shortfalls allocated to the Certificates, to
the extent not covered by the Master Servicer's related Compensating Interest
Payment for such Distribution Date, will reduce the Distributable Certificate
Interest as described above.
With respect to each Co-Lender Loan, Prepayment Interest Shortfalls will be
allocated, first, to the related Subordinate Companion Loan, and, second, to the
related Mortgage Loan (and any related Pari Passu Companion Loan). The portion
of such Prepayment Interest Shortfall allocated to the related Mortgage Loan,
net of amounts payable, if any, by the Master Servicer, will be included in the
Net Aggregate Prepayment Interest Shortfall.
Principal Distribution Amount. So long as both the Class A-4 and Class A-1A
Certificates remain outstanding, the Principal Distribution Amount for each
Distribution Date will be calculated on a Loan Group by Loan Group basis (with
respect to Loan Group 1, the "Loan Group 1 Principal Distribution Amount" and
with respect to Loan Group 2, the "Loan Group 2 Principal Distribution Amount").
On each Distribution Date after the Certificate Balances of either the Class A-4
or Class A-1A Certificates have been reduced to zero, a single Principal
Distribution Amount will be calculated in the aggregate for both Loan Groups.
The "Principal Distribution Amount" for each Distribution Date with respect to a
Loan Group or the Mortgage Pool will generally equal the aggregate of the
following (without duplication) to the extent paid by the related borrower
during the related Collection Period or advanced by the Master Servicer or the
Trustee:
(i) the aggregate of the principal portions of all Scheduled Payments
(other than Balloon Payments) and of any Assumed Scheduled Payments due or
deemed due, on or in respect of the Mortgage Loans in such Loan Group or the
Mortgage Pool, as applicable, and excluding amounts on any Companion Loan for
their respective Due Dates occurring during the related Collection Period, to
the extent not previously paid by the related borrower or advanced by the
Master Servicer or Trustee as applicable, prior to such Collection Period;
(ii) the aggregate of all principal prepayments received on the Mortgage
Loans in such Loan Group or the Mortgage Pool, as applicable, during the
related Collection Period;
(iii) with respect to any Mortgage Loan in such Loan Group or the
Mortgage Pool, as applicable, as to which the related stated maturity date
occurred during or prior to the related Collection Period, any payment of
principal made by or on behalf of the related borrower during the related
Collection Period (including any Balloon Payment), net of any portion of such
payment that represents a recovery of the principal portion of any Scheduled
Payment (other than a Balloon Payment) due, or the principal portion of any
Assumed Scheduled Payment deemed due, in respect of such Mortgage Loan on a
Due Date during or prior to the related Collection Period and not previously
recovered;
(iv) the aggregate of the principal portion of all liquidation proceeds,
insurance proceeds, condemnation awards and proceeds of repurchases of
Mortgage Loans in such Loan Group or the Mortgage Pool, as applicable, and
Substitution Shortfall Amounts with respect to Mortgage Loans in such Loan
Group or the Mortgage Pool, as applicable, and, to the extent not otherwise
included in clause (i), (ii) or (iii) above, payments and other amounts that
were received on or in respect of
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Mortgage Loans in such Loan Group or the Mortgage Pool, as applicable, during
the related Collection Period and that were identified and applied by the
Master Servicer as recoveries of principal, in each case net of any portion
of such amounts that represents a recovery of the principal portion of any
Scheduled Payment (other than a Balloon Payment) due, or of the principal
portion of any Assumed Scheduled Payment deemed due, in respect of the
related Mortgage Loan on a Due Date during or prior to the related Collection
Period and not previously recovered; and
(v) if such Distribution Date is subsequent to the initial Distribution
Date, the excess, if any, of the Loan Group 1 Principal Distribution Amount,
the Loan Group 2 Principal Distribution Amount and the Principal Distribution
Amount, as the case may be, for the immediately preceding Distribution Date,
over the aggregate distributions of principal made on the Certificates on
such immediately preceding Distribution Date;
provided that the Principal Distribution Amount for any Distribution Date shall
be reduced by the amount of any reimbursements of (i) nonrecoverable Advances
plus interest on such nonrecoverable Advances that are paid or reimbursed from
principal collections on the Mortgage Loans in a period during which such
principal collections would have otherwise been included in the Principal
Distribution Amount for such Distribution Date and (ii) Workout-Delayed
Reimbursement Amounts plus interest on such amounts that are paid or reimbursed
from principal collections on the Mortgage Loans in a period during which such
principal collections would have otherwise been included in the Principal
Distribution Amount for such Distribution Date; provided, further, that in the
case of clauses (i) and (ii) above, if any of the amounts that were reimbursed
from principal collections on the Mortgage Loans are subsequently recovered on
the related Mortgage Loan, such recovery will increase the Principal
Distribution Amount for the Distribution Date related to the period in which
such recovery occurs.
Notwithstanding the foregoing, unless otherwise noted, where Principal
Distribution Amount is used in this prospectus supplement without specific
reference to any Loan Group, it refers to the Principal Distribution Amount with
respect to the entire Mortgage Pool.
Class A-PB Planned Principal Balance. The "Class A-PB Planned Principal
Balance" for any Distribution Date is the balance shown for such Distribution
Date in the table set forth in Annex D to this prospectus supplement. Such
balances were calculated using, among other things, the Table Assumptions. Based
on these assumptions, the Certificate Balance of the Class A-PB Certificates on
each Distribution Date would be reduced to the balance indicated for that
Distribution Date on the table. There is no assurance, however, that the
Mortgage Loans will perform in conformity with the Table Assumptions. Therefore,
there can be no assurance that the balance of the Class A-PB Certificates on any
Distribution Date will be equal to the balance that is specified for such
Distribution Date in the table. In particular, once the Certificate Balances of
the Class A-1A Certificates, Class A-1 Certificates, Class A-2 Certificates, and
Class A-3 Certificates have been reduced to zero, any remaining portion on any
Distribution Date of the Loan Group 1 Principal Distribution Amount and/or Loan
Group 2 Principal Distribution Amount, as applicable, will be distributed on the
Class A-PB Certificates until the Certificate Balance of the Class A-PB
Certificates is reduced to zero.
The "Scheduled Payment" due on any Mortgage Loan on any related Due Date is
the amount of the Periodic Payment (including Balloon Payments) that is or would
have been, as the case may be, due thereon on such date, without regard to any
waiver, modification or amendment of such Mortgage Loan granted or agreed to by
the Special Servicer or otherwise resulting from a bankruptcy or similar
proceeding involving the related borrower, without regard to the accrual of
Additional Interest on or the application of any Excess Cash Flow to pay
principal on an ARD Loan, without regard to any acceleration of principal by
reason of default, and with the assumption that each prior Scheduled Payment has
been made in a timely manner. The "Assumed Scheduled Payment" is an amount
deemed due (i) on any Balloon Loan that is delinquent in respect of its Balloon
Payment beyond the first Determination Date that follows its stated maturity
date and (ii) on an REO Mortgage Loan. The Assumed Scheduled Payment deemed due
on any such Balloon Loan on its stated maturity date and on each successive
related Due Date that it remains or is deemed to remain outstanding will equal
the Scheduled Payment that would have been due thereon on such date if the
related Balloon Payment had not come due but rather such Mortgage Loan had
continued to amortize in accordance with such loan's amortization schedule, if
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any, and to accrue interest at the Mortgage Rate in effect as of the Closing
Date. The Assumed Scheduled Payment deemed due on any REO Mortgage Loan on each
Due Date that the related REO Property remains part of the Trust Fund will equal
the Scheduled Payment that would have been due in respect of such Mortgage Loan
on such Due Date had it remained outstanding (or, if such Mortgage Loan was a
Balloon Loan and such Due Date coincides with or follows what had been its
stated maturity date, the Assumed Scheduled Payment that would have been deemed
due in respect of such Mortgage Loan on such Due Date had it remained
outstanding).
Distributions of the Principal Distribution Amount will constitute the only
distributions of principal on the Certificates. Reimbursements of previously
allocated Realized Losses and Additional Trust Fund Expenses 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.
Treatment of REO Properties. Notwithstanding that any Mortgaged Property
may be acquired as part of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise, the related Mortgage Loan will be treated, for
purposes of determining (i) distributions on the Certificates, (ii) allocations
of Realized Losses and Additional Trust Fund Expenses to the Certificates, and
(iii) the amount of Trustee Fees and Servicing Fees payable under the Pooling
and Servicing Agreement, as having remained outstanding until such REO Property
is liquidated. In connection therewith, operating revenues and other proceeds
derived from such REO Property (net of related operating costs) will be
"applied" by the Master Servicer as principal, interest and other amounts that
would have been "due" on such Mortgage Loan, and the Master Servicer will be
required to make P&I Advances in respect of such Mortgage Loan, in all cases as
if such Mortgage Loan had remained outstanding. References to "Mortgage Loan" or
"Mortgage Loans" in the definitions of "Principal Distribution Amount" and
"Weighted Average Net Mortgage Rate" are intended to include any Mortgage Loan
as to which the related Mortgaged Property has become an REO Property (an "REO
Mortgage Loan"). For purposes of this paragraph, the term Mortgage Loan includes
the Whole Loans.
Allocation of Prepayment Premiums and Yield Maintenance Charges. In the
event a borrower is required to pay any Prepayment Premium or Yield Maintenance
Charge, the amount of such payments actually collected (and, in the case of a
Co-Lender Loan, payable with respect to the related Mortgage Loan pursuant to
the related Intercreditor Agreement) will be distributed in respect of the
Offered Certificates and the Class A-1A, Class E, Class F, Class G and Class H
Certificates as set forth below. "Yield Maintenance Charges" are fees paid or
payable, as the context requires, as a result of a prepayment of principal on a
Mortgage Loan, which fees have been calculated (based on Scheduled Payments on
such Mortgage Loan) to compensate the holder of the Mortgage for reinvestment
losses based on the value of a discount rate at or near the time of prepayment;
provided, in most cases, a minimum fee is required by the Mortgage Loan
documents (usually calculated as a percentage of the outstanding principal
balance of the Mortgage Loan). Any other fees paid or payable, as the context
requires, as a result of a prepayment of principal on a Mortgage Loan, which are
calculated based upon a specified percentage (which may decline over time) of
the amount prepaid are considered "Prepayment Premiums".
Any Prepayment Premiums or Yield Maintenance Charges collected on a
Mortgage Loan during the related Collection Period will be distributed as
follows: on each Distribution Date and with respect to the collection of any
Prepayment Premiums or Yield Maintenance Charges on the Mortgage Loans, the
holders of each Class of Offered Certificates and the Class A-1A, Class E, Class
F, Class G and Class H Certificates then entitled to distributions of principal
with respect to the related Loan Group on such Distribution Date will be
entitled to an amount of Prepayment Premiums or Yield Maintenance Charges equal
to the product of (a) the amount of such Prepayment Premiums or Yield
Maintenance Charges; (b) a fraction (which in no event may be greater than one),
the numerator of which is equal to the excess, if any, of the Pass-Through Rate
of such Class of Certificates over the relevant Discount Rate (as defined
below), and the denominator of which is equal to the excess, if any, of the
Mortgage Rate of the prepaid Mortgage Loan over the relevant Discount Rate; and
(c) a fraction, the numerator of which is equal to the amount of principal
distributable on such Class of Certificates on such Distribution Date with
respect to the applicable Loan Group, and the denominator of which is the
Principal Distribution Amount with
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respect to the applicable Loan Group for such Distribution Date. If there is
more than one such Class of Certificates entitled to distributions of principal
with respect to the related Loan Group on any particular Distribution Date on
which a Prepayment Premium or Yield Maintenance Charge is distributable, the
aggregate amount of such Prepayment Premium or Yield Maintenance Charge will be
allocated among all such Classes up to, and on a pro rata basis in accordance
with, their respective entitlements thereto in accordance with, the first
sentence of this paragraph. The portion, if any, of the Prepayment Premiums or
Yield Maintenance Charges remaining after any such payments described above will
be distributed as follows: (a) on or before the Distribution Date in March 2012,
20% to the holders of the Class X-P Certificates and 80% to the holders of the
Class X-C Certificates and (b) thereafter, 100% to the holders of the Class X-C
Certificates.
The "Discount Rate" applicable to any Class of Offered Certificates and the
Class A-1A, Class E, Class F, Class G and Class H Certificates will equal the
yield (when compounded monthly) on the US Treasury issue with a maturity date
closest to the maturity date for the prepaid Mortgage Loan or REO Mortgage Loan.
In the event that there are two or more such US Treasury issues (a) with the
same coupon, the issue with the lowest yield will be utilized, and (b) with
maturity dates equally close to the maturity date for the prepaid Mortgage Loan
or REO Mortgage Loan, the issue with the earliest maturity date will be
utilized.
For an example of the foregoing allocation of Prepayment Premiums and Yield
Maintenance Charges, see "SUMMARY OF PROSPECTUS SUPPLEMENT" in this prospectus
supplement. The Depositor makes no representation as to the enforceability of
the provision of any Mortgage Note requiring the payment of a Prepayment Premium
or Yield Maintenance Charge, or of the collectability of any Prepayment Premium
or Yield Maintenance Charge. See "DESCRIPTION OF THE MORTGAGE POOL--Certain
Terms and Conditions of the Mortgage Loans--Prepayment Provisions" in this
prospectus supplement.
Distributions of Additional Interest. On each Distribution Date, any
Additional Interest collected on an ARD Loan (and, with respect to any Co-Lender
Loan, payable on the related Mortgage Loan pursuant to the terms of the related
Intercreditor Agreement) during the related Collection Period will be
distributed to the holders of the Class Z Certificates. There can be no
assurance that any Additional Interest will be collected on the ARD Loans.
SUBORDINATION; ALLOCATION OF LOSSES AND CERTAIN EXPENSES
The rights of holders of the Subordinate Certificates to receive
distributions of amounts collected or advanced on the Mortgage Loans will be
subordinated, to the extent described in this prospectus supplement, to the
rights of holders of the Class A, Class X-C and Class X-P Certificates and each
other such Class of Subordinate Certificates, if any, with a higher payment
priority. This subordination provided by the Subordinate Certificates is
intended to enhance the likelihood of timely receipt by the holders of the Class
A and Class X Certificates of the full amount of Distributable Certificate
Interest payable in respect of such Classes of Certificates on each Distribution
Date, and the ultimate receipt by the holders of each Class of the Class A
Certificates of principal in an amount equal to the entire related Certificate
Balance. Similarly, but to decreasing degrees, this subordination is also
intended to enhance the likelihood of timely receipt by the holders of the Class
A-J, Class B, Class C and Class D Certificates of the full amount of
Distributable Certificate Interest payable in respect of such Classes of
Certificates on each Distribution Date, and the ultimate receipt by the holders
of such Certificates of, in the case of each such Class thereof, principal equal
to the entire related Certificate Balance. The protection afforded (a) to the
holders of the Class D Certificates by means of the subordination of the
Non-Offered Certificates (other than the Class A-1A and the Class X
Certificates), (b) to the holders of the Class C Certificates by means of the
subordination of the Class D and the Non-Offered Certificates (other than the
Class A-1A and the Class X Certificates), (c) to the holders of the Class B
Certificates by means of the subordination of the Class C, the Class D and the
Non-Offered Certificates (other than the Class A-1A and the Class X
Certificates), (d) to the holders of the Class A-J Certificates by means of the
subordination of the Class B, Class C, Class D and the Non-Offered Certificates
(other than the Class A-1A and the Class X Certificates) and (e) to the holders
of the Class A and Class X Certificates by means of the subordination of the
Subordinate Certificates will be accomplished by (i) the application of the
Available Distribution
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Amount on each Distribution Date in accordance with the order of priority
described under "--Distributions--Application of the Available Distribution
Amount" above and (ii) by the allocation of Realized Losses and Additional Trust
Fund Expenses as described below. Until the first Distribution Date after the
aggregate of the Certificate Balances of the Subordinate Certificates has been
reduced to zero, the Class A-4 Certificates will receive principal payments only
after the Certificate Balance of each of the Class A-1, Class A-2, Class A-3 and
Class A-PB Certificates have been reduced to zero, the Class A-3 Certificates
will receive principal payments only after the Certificate Balance of each of
the Class A-1 and Class A-2 Certificates have been reduced to zero, and the
Certificate Balance of the Class A-PB Certificates has been reduced to the Class
A-PB Planned Principal Balance, the Class A-2 Certificates will receive
principal payments only after the Certificate Balance of the Class A-1
Certificates has been reduced to zero and the Certificate Balance of the Class
A-PB Certificates has been reduced to the Class A-PB Planned Principal Balance,
and the Class A-1 Certificates will receive principal payments only after the
Certificate Balance of the Class A-PB Certificates has been reduced to the Class
A-PB Planned Principal Balance. However, after the Distribution Date on which
the Certificate Balances of the Subordinate Certificates have been reduced to
zero, the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4 and Class A-1A
Certificates, to the extent such Certificates remain outstanding, will bear
shortfalls in collections and losses incurred in respect of the Mortgage Loans
pro rata in respect of distributions of principal and then the Class A-1, Class
A-2, Class A-3, Class A-PB, Class A-4, Class A-1A, Class X-C and Class X-P
Certificates, to the extent such Certificates remain outstanding, will bear such
shortfalls pro rata in respect of distributions of interest. No other form of
credit support will be available for the benefit of the holders of the Offered
Certificates.
Allocation to the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4
and Class A-1A Certificates, for so long as they are outstanding, of the entire
Principal Distribution Amount with respect to the related Loan Group for each
Distribution Date in accordance with the priorities described under "--
Distributions--Application of the Available Distribution Amount" above will have
the effect of reducing the aggregate Certificate Balance of the Class A-1, Class
A-2, Class A-3, Class A-PB, Class A-4 and Class A-1A Certificates at a
proportionately faster rate than the rate at which the aggregate Stated
Principal Balance of the Mortgage Pool will reduce. Thus, as principal is
distributed to the holders of such Class A-1, Class A-2, Class A-3, Class A-PB,
Class A-4 and Class A-1A Certificates, the percentage interest in the Trust Fund
evidenced by such Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4 and
Class A-1A Certificates will be decreased (with a corresponding increase in the
percentage interest in the Trust Fund evidenced by the Subordinate
Certificates), thereby increasing, relative to their respective Certificate
Balances, the subordination afforded such Class A-1, Class A-2, Class A-3, Class
A-PB, Class A-4 and Class A-1A Certificates by the Subordinate Certificates.
On each Distribution Date, following all distributions on the Certificates
to be made on such date, the aggregate of all Realized Losses and Additional
Trust Fund Expenses related to all Mortgage Loans (without regard to Loan
Groups) that have been incurred since the Cut-Off Date through the end of the
related Collection Period and that have not previously been allocated as
described below will be allocated among the respective Classes of Sequential Pay
Certificates in reduction of their respective Certificate Balances as follows,
but in the aggregate only to the extent the aggregate Certificate Balance of all
Classes of Sequential Pay Certificates remaining outstanding after giving effect
to the distributions on such Distribution Date exceeds the aggregate Stated
Principal Balance of the Mortgage Pool that will be outstanding immediately
following such Distribution Date: first, to the Class P Certificates, until the
remaining Certificate Balance of such Class of Certificates is reduced to zero;
second, to the Class O Certificates, until the remaining Certificate Balance of
such Class of Certificates is reduced to zero; third, to the Class N
Certificates, until the remaining Certificate Balance of such Class of
Certificates is reduced to zero; fourth, to the Class M Certificates, until the
remaining Certificate Balance of such Class of Certificates is reduced to zero;
fifth, to the Class L Certificates, until the remaining Certificate Balance of
such Class of Certificates is reduced to zero; sixth, to the Class K
Certificates, until the remaining Certificate Balance of such Class of
Certificates is reduced to zero; seventh, to the Class J Certificates, until the
remaining Certificate Balance of such Class of Certificates is reduced to zero;
eighth, to the Class H Certificates, until the remaining Certificate Balance of
such Class of Certificates is reduced to zero; ninth, to the Class G
Certificates, until the remaining Certificate Balance of such Class of
Certificates is reduced
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to zero; tenth, to the Class F Certificates, until the remaining Certificate
Balance of such Class of Certificates is reduced to zero; eleventh, to the Class
E Certificates, until the remaining Certificate Balance of such Class of
Certificates is reduced to zero; twelfth, to the Class D Certificates, until the
remaining Certificate Balance of such Class of Certificates is reduced to zero;
thirteenth, to the Class C Certificates, until the remaining Certificate Balance
of such Class of Certificates is reduced to zero; fourteenth, to the Class B
Certificates, until the remaining Certificate Balance of such Class of
Certificates is reduced to zero; fifteenth, to the Class A-J Certificates, until
the remaining Certificate Balance of such Class of Certificates is reduced to
zero; and, last, to the Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-PB Certificates, the Class A-4 Certificates
and the Class A-1A Certificates, pro rata, in proportion to their respective
outstanding Certificate Balances, until the remaining Certificate Balances of
such Classes of Certificates are reduced to zero.
Generally, any losses and expenses that are associated with the Co-Lender
Loans with Subordinate Companion Loans will be allocated in accordance with the
terms of the related Intercreditor Agreement first, to the related Subordinate
Companion Loan and second, to other related Mortgage Loan. The portion of those
losses and expenses allocated to each of the related Mortgage Loans will be
allocated among the Certificates in the manner described above. See "DESCRIPTION
OF THE MORTGAGE POOL--Co-Lender Loans" in this prospectus supplement.
"Realized Losses" are losses arising from the inability to collect all
amounts due and owing under any defaulted Mortgage Loan, including by reason of
the fraud or bankruptcy of the borrower or a casualty of any nature at the
related Mortgaged Property, to the extent not covered by insurance. The Realized
Loss in respect of a liquidated Mortgage Loan (or related REO Property) is an
amount generally equal to the excess, if any, of (a) the outstanding principal
balance of such Mortgage Loan as of the date of liquidation, together with (i)
all accrued and unpaid interest thereon to but not including the Due Date in the
Collection Period in which the liquidation occurred (exclusive of any related
default interest in excess of the Mortgage Rate, Additional Interest, Prepayment
Premium or Yield Maintenance Charges) and (ii) certain related unreimbursed
servicing expenses (including any unreimbursed interest on any Advances), over
(b) the aggregate amount of liquidation proceeds, if any, recovered in
connection with such liquidation. If any portion of the debt due under a
Mortgage Loan (other than Additional Interest and default interest in excess of
the Mortgage Rate) is forgiven, whether in connection with a modification,
waiver or amendment granted or agreed to by the Special Servicer or in
connection with the bankruptcy or similar proceeding involving the related
borrower, the amount so forgiven also will be treated as a Realized Loss. The
Realized Loss in respect of a Mortgage Loan for which a Final Recovery
Determination has been made includes nonrecoverable Advances (in each case,
including interest thereon) to the extent amounts have been paid from the
Principal Distribution Amount pursuant to the Pooling and Servicing Agreement.
"Additional Trust Fund Expenses" include, among other things, (i) any
Special Servicing Fees, Liquidation Fees, Determination Party fees (in certain
circumstances) or Workout Fees paid to the Special Servicer, (ii) any interest
paid to the Master Servicer and/or the Trustee in respect of unreimbursed
Advances (to the extent not otherwise offset by penalty interest and late
payment charges) and amounts payable to the Special Servicer in connection with
certain inspections of Mortgaged Properties required pursuant to the Pooling and
Servicing Agreement (to the extent not otherwise offset by penalty interest and
late payment charges otherwise payable to the Special Servicer and received in
the Collection Period during which such inspection related expenses were
incurred) and (iii) any of certain unanticipated expenses of the Trust Fund,
including certain indemnities and reimbursements to the Trustee of the type
described under "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--Certain
Matters Regarding the Trustee" in the prospectus, certain indemnities and
reimbursements to the Master Servicer, the Special Servicer and the Depositor of
the type described under "DESCRIPTION OF THE POOLING AND SERVICING
AGREEMENTS--Certain Matters Regarding the Master Servicer and the Depositor" in
the prospectus (the Special Servicer having the same rights to indemnity and
reimbursement as described thereunder with respect to the Master Servicer),
certain Rating Agency fees to the extent such fees are not paid by any other
party and certain federal, state and local taxes and certain tax related
expenses, payable from the assets of the Trust Fund and described under
"MATERIAL FEDERAL INCOME TAX CONSEQUENCES--Taxation of Owners of
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REMIC Residual Certificates--Prohibited Transactions Tax and Other Taxes" in the
prospectus and "SERVICING OF THE MORTGAGE LOANS--Defaulted Mortgage Loans; REO
Properties; Purchase Option" in this prospectus supplement. Additional Trust
Fund Expenses will reduce amounts payable to Certificateholders and, subject to
the distribution priorities described above, may result in a loss on one or more
Classes of Offered Certificates.
P&I ADVANCES
On or about each Distribution Date, the Master Servicer is obligated,
subject to the recoverability determination described in the second succeeding
paragraph, 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, from funds held in the Certificate Account that are not required to
be distributed to Certificateholders (or paid to any other Person pursuant to
the Pooling and Servicing Agreement) on such Distribution Date, in an amount
that is generally equal to the aggregate of all Periodic Payments (other than
Balloon Payments) and any Assumed Scheduled Payments, net of related Master
Servicing Fees, in respect of the Mortgage Loans (and the Pari Passu Companion
Loans that are being serviced by the Master Servicer and the Special Servicer,
as applicable) and any REO Loans during the related Collection Period, in each
case to the extent such amount was not paid by or on behalf of the related
borrower or otherwise collected (or previously advanced by the Master Servicer)
as of the close of business on the last day of the Collection Period. P&I
Advances are intended to maintain a regular flow of scheduled interest and
principal payments to the holders of the Class or Classes of Certificates
entitled thereto, rather than to insure against losses. The Master Servicer's
obligations to make P&I Advances in respect of any Mortgage Loan, subject to the
recoverability determination, will continue until liquidation of such Mortgage
Loan or disposition of any REO Property acquired in respect thereof. However, if
the Periodic Payment on any Mortgage Loan has been reduced in connection with a
bankruptcy or similar proceeding or a modification, waiver or amendment granted
or agreed to by the Special Servicer, the Master Servicer will be required to
advance only the amount of the reduced Periodic Payment (net of related
Servicing Fees) in respect of subsequent delinquencies. In addition, if it is
determined that an Appraisal Reduction Amount exists with respect to any
Required Appraisal Loan (as defined below), then, with respect to the
Distribution Date immediately following the date of such determination and with
respect to each subsequent Distribution Date for so long as such Appraisal
Reduction Amount exists, the Master Servicer or the Trustee, as applicable, will
be required in the event of subsequent delinquencies to advance in respect of
such Mortgage Loan only an amount equal to the sum of (i) the amount of the
interest portion of the P&I Advance that would otherwise be required without
regard to this sentence, minus the product of (a) such Appraisal Reduction
Amount and (b) the per annum Pass-Through Rate (i.e., for any month, one twelfth
of the Pass-Through Rate) applicable to the Class of Certificates, to which such
Appraisal Reduction Amount is allocated as described in "--Appraisal Reductions"
below and (ii) the amount of the principal portion of the P&I Advance that would
otherwise be required without regard to this sentence. Pursuant to the terms of
the Pooling and Servicing Agreement, if the Master Servicer fails to make a P&I
Advance required to be made, the Trustee will then be required to make such P&I
Advance, except any P&I Advance with respect to a Pari Passu Companion Loan, in
such case, subject to the recoverability standard described below. Neither the
Master Servicer nor the Trustee will be required to make a P&I Advance or any
other advance for any Balloon Payments, default interest, late payment charges,
Prepayment Premiums, Yield Maintenance Charges or Additional Interest.
Neither the Master Servicer nor the Trustee will be required to make any
P&I Advances with respect to any Subordinate Companion Loan. In addition, the
Trustee will not be required to make any P&I Advances with respect to any Pari
Passu Companion Loan. If the Master Servicer fails to make the required P&I
Advance, the Trustee is required to make such P&I Advance, except any P&I
Advance with respect to a Pari Passu Companion Loan, subject to the same
limitations, and with the same rights, as described above for the Master
Servicer.
The Master Servicer (or the Trustee) is entitled to recover any P&I Advance
made out of its own funds from any amounts collected in respect of the Mortgage
Loan (net of related Master Servicing Fees with respect to collections of
interest and net of related Liquidation Fees and Workout Fees with respect to
collections of principal) as to which such P&I Advance was made whether such
amounts are collected
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