Filed Pursuant to Rule 424B5 Registration File No.: 333-120922 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 APRIL 21, 2005 PRELIMINARY PROSPECTUS SUPPLEMENT (TO ACCOMPANY PROSPECTUS DATED APRIL 21, 2005) $1,196,957,000 (APPROXIMATE) (OFFERED CERTIFICATES) WACHOVIA BANK COMMERCIAL MORTGAGE TRUST COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-C18 WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC. (DEPOSITOR) - -------------------------------------------------------------------------------- YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE S-41 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 April 21, 2005. - -------------------------------------------------------------------------------- THE TRUST FUND: o As of May 11, 2005, the mortgage loans included in the trust fund will have an aggregate principal balance of approximately $1,405,371,542. o The trust fund will consist of a pool of 72 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 by Wachovia Bank, National Association. THE CERTIFICATES: o The trust fund will issue 26 classes of certificates. o Only the 9 classes of offered certificates described in the following table are being offered by this prospectus supple ment and the accompanying prospectus. ORIGINAL PERCENTAGE OF PASS-THROUGH EXPECTED CERTIFICATE CUT-OFF DATE RATE ASSUMED FINAL S&P/MOODY'S CLASS BALANCE(1) POOL BALANCE DESCRIPTION DISTRIBUTION DATE(2) CUSIP NO. RATING(3) - -------------------- --------------- --------------- -------------- ---------------------- ----------- ------------ Class A-1 .......... $ 41,041,000 2.920% Fixed March 15, 2010 AAA/Aaa Class A-2 .......... $122,149,000 8.692% Fixed May 15, 2010 AAA/Aaa Class A-3 .......... $174,126,000 12.390% Fixed April 15, 2012 AAA/Aaa Class A-PB ......... $ 81,472,000 5.797% Fixed December 15, 2014 AAA/Aaa Class A-4 .......... $616,552,000 43.871% Fixed(4) April 15, 2015 AAA/Aaa Class A-J .......... $ 89,592,000 6.375% Fixed(4) April 15, 2015 AAA/Aaa Class B ............ $ 31,621,000 2.250% Fixed(4) April 15, 2015 AA/Aa2 Class C ............ $ 12,297,000 0.875% Fixed(4) May 15, 2015 AA-/Aa3 Class D ............ $ 28,107,000 2.000% Fixed(4) May 15, 2015 A/A2 (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 is acting as sole lead manager for this offering. Wachovia Capital Markets, LLC is acting as sole bookrunner with respect to the offered certificates. Countrywide Securities Corporation, Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Greenwich Capital Markets, Inc. are acting as co-managers for the offering. Wachovia Capital Markets, LLC, Countrywide Securities Corporation, Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Greenwich Capital Markets, Inc. 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 May 1, 2005, before deducting expenses. We expect that delivery of the offered certificates will be made in book-entry form on or about May 19, 2005. WACHOVIA SECURITIES COUNTRYWIDE SECURITIES CORPORATION CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO. RBS GREENWICH CAPITAL May , 2005 WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Commercial Mortgage Pass-Through Certificates, Series 2005-C18 Geographic Overview of Mortgage Pool(1) [MAP OF THE UNITED STATES OMITTED] WASHINGTON 2 properties $15,300,000 1.1% of total UTAH 1 property $3,000,000 0.2% of total NORTHERN CALIFORNIA(2) 2 properties $42,975,000 3.1% of total CALIFORNIA 8 properties $234,240,000 16.7% of total SOUTHERN CALIFORNIA(2) 6 properties $191,265,000 13.6% of total ARIZONA 3 properties $101,150,000 7.2% of total COLORADO 2 properties $22,396,429 1.6% of total NEW MEXICO 2 properties $10,000,000 0.7% of total KANSAS 1 property $3,600,000 0.3% of total TEXAS 3 properties $36,770,000 2.6% of total ARKANSAS 1 property $5,857,500 0.4% of total LOUISIANA 1 property $2,923,000 0.2% of total TENNESSEE 1 property $1,639,286 0.1% of total ALABAMA 1 property $7,700,000 0.5% of total KENTUCKY 1 property $4,705,578 0.3% of total NEBRASKA 1 property $6,200,000 0.4% of total NORTH DAKOTA 1 property $8,988,970 0.6% of total ILLINOIS 1 property $15,242,500 1.1% of total WISCONSIN 1 property $2,497,335 0.2% of total INDIANA 1 property $7,500,000 0.5% of total MICHIGAN 1 property $2,397,565 0.2% of total OHIO 2 properties $5,396,264 0.4% of total PENNSYLVANIA 4 properties $32,240,127 2.3% of total NEW YORK 6 properties $241,302,964 17.2% of total MASSACHUSETTS 3 properties $255,325,302 18.2% of total CONNECTICUT 2 properties $47,800,000 3.4% of total NEW JERSEY 2 properties $32,294,586 2.3% of total MARYLAND 1 property $41,000,000 2.9% of total VIRGINIA 2 properties $30,191,342 2.1% of total NORTH CAROLINA 6 properties $56,200,000 4.0% of total SOUTH CAROLINA 3 properties $20,288,000 1.4% of total GEORGIA 2 properties $20,387,773 1.5% of total FLORIDA 22 properties $130,837,123 9.3% of total MORTGAGED PROPERTIES BY PROPERTY TYPE [PIE CHART OMITTED] Retail 20.1% Multifamily 16.6% Mixed Use 8.0% Self Storage 2.7% Hospitality 2.5% Industrial 1.1% Land 0.1% Office 48.9% GEOGRAPHIC 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) (PHOTO OMITTED) One & Two International Place, Boston, MA (PHOTO OMITTED) (PHOTO OMITTED) Kadima Medical Office Pool, Various 450 West 33rd Street, New York, NY (PHOTO OMITTED) (PHOTO OMITTED) Park Place II, Irvine, CA Happy Valley Towne Center, Phoenix, AZ (PHOTO OMITTED) (PHOTO OMITTED) Mercantile Bank & Trust Building, Baltimore, MD 590 Fifth Avenue, New York, NY (PHOTO OMITTED) (PHOTO OMITTED) Extra Space Self Storage Portfolio #3, Various (PHOTO OMITTED) (PHOTO OMITTED) Cypress Lake at Stonebriar, Frisco, TX Casa Paloma, Chandler, AZ 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-41 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-260 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 April 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., and Moody's Investors Service, Inc. See "RATINGS" in this prospectus supplement. (4) The pass-through rate applicable to the Class A-4, Class A-J, 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 for the related date. S-2 TABLE OF CONTENTS 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-41 DESCRIPTION OF THE MORTGAGE POOL .................................................... S-90 General ............................................................................ S-90 Mortgage Loan History .............................................................. S-91 Certain Terms and Conditions of the Mortgage Loans ................................. S-91 Assessments of Property Condition .................................................. S-96 Co-Lender Loans .................................................................... S-96 Mezzanine Loans .................................................................... S-100 Additional Mortgage Loan Information ............................................... S-100 Twenty Largest Mortgage Loans ...................................................... S-130 The Mortgage Loan Seller ........................................................... S-186 Underwriting Standards ............................................................. S-186 Assignment of the Mortgage Loans; Repurchases and Substitutions .................... S-187 Representations and Warranties; Repurchases and Substitutions ...................... S-190 Repurchase or Substitution of Cross-Collateralized Mortgage Loans .................. S-192 Changes in Mortgage Pool Characteristics ........................................... S-193 SERVICING OF THE MORTGAGE LOANS ..................................................... S-194 General ............................................................................ S-194 The Master Servicer and the Special Servicer ....................................... S-195 Servicing of the One & Two International Place Loan and the 450 West 33rd Street Loan S-199 Servicing and Other Compensation and Payment of Expenses ........................... S-200 Modifications, Waivers and Amendments .............................................. S-202 The Controlling Class Representative ............................................... S-204 Defaulted Mortgage Loans; REO Properties; Purchase Option .......................... S-205 Inspections; Collection of Operating Information ................................... S-207 DESCRIPTION OF THE CERTIFICATES ..................................................... S-209 General ............................................................................ S-209 Registration and Denominations ..................................................... S-209 Certificate Balances and Notional Amounts .......................................... S-211 Pass-Through Rates ................................................................. S-214 Distributions ...................................................................... S-217 Subordination; Allocation of Losses and Certain Expenses ........................... S-228 P&I Advances ....................................................................... S-231 Appraisal Reductions ............................................................... S-234 Reports to Certificateholders; Available Information ............................... S-235 Assumed Final Distribution Date; Rated Final Distribution Date ..................... S-239 Voting Rights ...................................................................... S-240 Termination ........................................................................ S-241 The Trustee ........................................................................ S-242 The Fiscal Agent ................................................................... S-242 YIELD AND MATURITY CONSIDERATIONS ................................................... S-244 Yield Considerations ............................................................... S-244 Weighted Average Life .............................................................. S-247 S-3 USE OF PROCEEDS ......................................................................... S-252 MATERIAL FEDERAL INCOME TAX CONSEQUENCES................................................. S-253 General ................................................................................ S-253 Taxation of the Offered Certificates ................................................... S-253 ERISA CONSIDERATIONS .................................................................... S-254 LEGAL INVESTMENT ........................................................................ S-257 METHOD OF DISTRIBUTION .................................................................. S-257 LEGAL MATTERS ........................................................................... S-258 RATINGS ................................................................................. S-258 INDEX OF DEFINED TERMS .................................................................. S-260 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 Characteristics 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 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 ..................................... 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 MAY 11, 2005, WITH RESPECT TO ALL OF THE 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 1 COMPANION LOAN THAT IS PART OF EACH SPLIT LOAN STRUCTURE IS PARI PASSU IN RIGHT OF ENTITLEMENT TO PAYMENT WITH THE RELATED MORTGAGE LOAN. CERTAIN OTHER 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-C18, 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 PERCENTAGE INITIAL WEIGHTED CASH FLOW CERTIFICATE OF CUT-OFF PASS-THROUGH PASS- AVERAGE OR PRINCIPAL EXPECTED BALANCE OR DATE POOL CREDIT RATE THROUGH LIFE WINDOW S&P/MOODY'S CLASS NOTIONAL AMOUNT(1) BALANCE SUPPORT DESCRIPTION RATE (YEARS)(2) (MON./YR.)(2) RATING(3) - ----------------- ------------------- ----------- ------------ -------------- --------- ----------- ------------------ ------------ Class A-1 ....... $ 41,041,000 2.920% 20.000% Fixed % 3.31 06/05 - 03/10 AAA/Aaa Class A-2 ....... $ 122,149,000 8.692% 20.000% Fixed % 4.92 03/10 - 05/10 AAA/Aaa Class A-3 ....... $ 174,126,000 12.390% 20.000% Fixed % 6.84 01/12 - 04/12 AAA/Aaa Class A-PB ...... $ 81,472,000 5.797% 20.000% Fixed % 7.35 05/10 - 12/14 AAA/Aaa Class A-4 ....... $ 616,552,000 43.871% 20.000% Fixed(4) % 9.79 12/14 - 04/15 AAA/Aaa Class A-J ....... $ 89,592,000 6.375% 13.625% Fixed(4) % 9.91 04/15 - 04/15 AAA/Aaa Class B ......... $ 31,621,000 2.250% 11.375% Fixed(4) % 9.91 04/15 - 04/15 AA/Aa2 Class C ......... $ 12,297,000 0.875% 10.500% Fixed(4) % 9.98 04/15 - 05/15 AA-/Aa3 Class D ......... $ 28,107,000 2.000% 8.500% Fixed(4) % 9.99 05/15 - 05/15 A/A2 Class A-1A ..... $ 88,957,000 6.330% 20.000% Fixed(4) % (6) (6) AAA/Aaa Class E ........ $ 14,054,000 1.000% 7.500% WAC(5) % (6) (6) A-/A3 Class F ........ $ 19,324,000 1.375% 6.125% WAC(5) % (6) (6) BBB+/Baa1 Class G ........ $ 12,297,000 0.875% 5.250% WAC(5) % (6) (6) BBB/Baa2 Class H ........ $ 24,594,000 1.750% 3.500% WAC(5) % (6) (6) BBB-/Baa3 Class J ........ $ 5,270,000 0.375% 3.125% Fixed(4) % (6) (6) BB+/Ba1 Class K ........ $ 7,027,000 0.500% 2.625% Fixed(4) % (6) (6) BB/Ba2 Class L ........ $ 5,270,000 0.375% 2.250% Fixed(4) % (6) (6) BB-/Ba3 Class M ........ $ 3,514,000 0.250% 2.000% Fixed(4) % (6) (6) B+/B1 Class N ........ $ 3,513,000 0.250% 1.750% Fixed(4) % (6) (6) B/B2 Class O ........ $ 5,270,000 0.375% 1.375% Fixed(4) % (6) (6) B-/B3 Class P ........ $ 19,324,542 1.375% 0.000% Fixed(4) % (6) (6) NR/NR Class X-P ...... $1,355,235,000 N/A N/A WAC-IO(7) % (7) (7) AAA/Aaa Class X-C ...... $1,405,371,542 N/A N/A WAC-IO(7) % (7) (7) 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., and Moody's Investors Service, Inc. See "RATINGS" in this prospectus supplement. (4) The pass-through rates applicable to the Class A-4, Class A-1A, Class A-J, Class B, Class C, Class D, 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) The pass-through rate applicable to the Class E, 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). (6) 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. 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 May 1, 2005, by and among the depositor, the master servicer, the special servicer, the trustee and the fiscal agent. THE DEPOSITOR................. Wachovia Commercial Mortgage Securities, Inc. We are a wholly owned subsidiary of Wachovia Bank, National Association, which is the mortgage loan seller, the master servicer, the master servicer under the pooling and servicing agreement entered into in connection with the issuance of the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17, under which the One & Two International Place whole loan and the 450 West 33rd Street whole loan are serviced, 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 SELLER...... Wachovia Bank, National Association. For more information, see "DESCRIPTION OF THE MORTGAGE POOL--The Mortgage Loan Seller" in this prospectus supplement. The mortgage loan seller 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. THE MASTER SERVICER........... Wachovia Bank, National Association. Wachovia Bank, National Association is our affiliate, the mortgage loan seller 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; provided, however, the One & Two International Place whole loan and the 450 West 33rd Street whole loan will be serviced under the pooling and servicing agreement entered into in connection with the issuance of S-8 the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17. The master servicer under the 2005-C17 pooling and servicing agreement is Wachovia Bank, National Association. See "SERVICING OF THE MORTGAGE LOANS--The Master Servicer and the Special Servicer" in this prospectus supplement. THE SPECIAL SERVICER.......... GMAC Commercial Mortgage 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; provided, however, the One & Two International Place whole loan and the 450 West 33rd Street whole loan are specially serviced (during those periods where special servicing is required) under the pooling and servicing agreement entered into in connection with the issuance of the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17. The special servicer under the 2005-C17 pooling and servicing agreement is Allied Capital Corporation. Some holders of certificates (initially the holder of the Class P certificates with respect to each mortgage loan other than the One & Two International Place whole loan and the 450 West 33rd Street 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. 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 Hyperion Capital Management, Inc. or an affiliate 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. THE TRUSTEE................... LaSalle Bank National Association. 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 FISCAL AGENT.............. ABN AMRO Bank N.V., a Netherlands banking corporation and indirect corporate parent of the trustee. S-9 THE UNDERWRITERS.............. Wachovia Capital Markets, LLC, Countrywide Securities Corporation, Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Greenwich Capital Markets, Inc. Wachovia Capital Markets, LLC is our affiliate and is an affiliate of Wachovia Bank, National Association, which is the master servicer, the mortgage loan seller and the master servicer under the pooling and servicing agreement entered into in connection with the issuance of the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17, under which the One & Two International Place whole loan and the 450 West 33rd Street whole loan are serviced. Wachovia Capital Markets, LLC is acting as sole lead manager for this offering. Countrywide Securities Corporation, Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Greenwich Capital Markets, Inc. are acting as co-managers for this offering. Wachovia Capital Markets, LLC is acting as sole bookrunner with respect to the offered certificates. IMPORTANT DATES AND PERIODS CLOSING DATE.................. On or about May 19, 2005. CUT-OFF DATE.................. May 11, 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. DISTRIBUTION DATE............. The fourth business day following the related determination date, commencing in June 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 June 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. S-10 THE CERTIFICATES OFFERED CERTIFICATES.......... We are offering to you the following 9 classes of certificates of our Commercial Mortgage Pass-Through Certificates, Series 2005-C18 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, the trustee and/or the fiscal agent 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) 9 mortgage loans that are secured by multifamily properties; and o Loan group 2 will consist of 11 mortgage loans that are secured by multifamily properties. 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: S-11 ---------------------------------------------- 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 and 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-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-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-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. ---------------------------------------------- ---------------------------------------------- Interest on the Class B certificates. ---------------------------------------------- S-14 ---------------------------------------------- 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 A-PB, Class A-4 and Class A-1A certificates. See "DESCRIPTION OF THE CERTIFICATES-- Distributions" in this prospectus supplement. S-15 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 certificates are calculated as described under "DESCRIPTION OF THE CERTIFICATES--Certificate Balances and Notional Amounts" in this prospectus supplement. S-16 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 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 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 S-17 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 any mortgage loan resulting from the reduction of the related mortgage rate through modification. See "DESCRIPTION S-18 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 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 A-3, Class A-PB, Class A-4 and Class A-1A certificates have all been reduced to zero. S-19 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; and o all liquidation proceeds, insurance proceeds, condemnation awards and repurchase and substitution amounts received during the related collection period that are allocable to principal. 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, the trustee or the fiscal agent 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 those 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 offered 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 alphabetical class designation (other than the Class X-C and Class X-P certificates) and, with respect to the Class A-1, Class A-2, Class 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, S-20 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 .............. $ 41,041,000 2.920% 6 Class A-2 .............. $122,149,000 8.692% 6 Class A-3 .............. $174,126,000 12.390% 6 Class A-PB ............. $ 81,472,000 5.797% 6 Class A-4 .............. $616,552,000 43.871% 6 Class A-1A ............. $ 88,957,000 6.330% 6 Class A-J .............. $ 89,592,000 6.375% 5 Class B ................ $ 31,621,000 2.250% 4 Class C ................ $ 12,297,000 0.875% 3 Class D ................ $ 28,107,000 2.000% 2 Non-offered certificates (excluding the Class A-1A, Class R-I, Class R-II, Class X-C, Class X-P and Class Z certificates) ........ $119,457,542 8.500% 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, any losses and expenses that are associated with each of the mortgage loans secured by the One & Two International Place mortgaged property and the 450 West 33rd Street mortgaged property will be allocated in accordance with the terms of the related S-21 intercreditor agreement, pro rata between the 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 the related pari passu companion 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-C18 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 foregoing entitlements. S-22 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 May 2012, 5% to the holders of the Class X-P certificates and 95% 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 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 US 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 US 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% = 33 1/3% (100% - 33 1/3%) x (100% - 33 1/3%) x -------- 5% = 3 1/3% 95% = 63 1/3% 8% - 5% See "DESCRIPTION OF THE CERTIFICATES-- Distributions--Allocation of Prepayment Premiums and Yield Maintenance Charges" in this prospectus supplement. 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. 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 mortgage loan. The master servicer will not be required to advance balloon payments due at maturity in excess of S-23 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. If the master servicer fails to make a required advance, the trustee will be required to make the advance, unless the trustee determines that such advance would not be recoverable from proceeds of the related mortgage loan. If the trustee fails to make a required advance, the fiscal agent will be required to make the advance. Notwithstanding the foregoing, with respect to each of the One & Two International Place mortgage loan and the 450 West 33rd Street mortgage loan, advances with respect to delinquent payments of principal and/or interest will be governed by the 2005-C17 pooling and servicing agreement under similar (although not identical) arrangements as described above with respect to the other mortgage loans included in the trust fund; provided that in the event that the master servicer under the 2005-C17 pooling and servicing agreement fails to make a required advance of delinquent principal and/or interest (i.e., an advance that is determined to be recoverable) with respect to either the One & Two International Place mortgage loan or the 450 West 33rd Street mortgage loan, as the case may be, the master servicer will be required to make that advance unless the master servicer determines that this advance would not be recoverable. See "DESCRIPTION OF THE CERTIFICATES--P&I Advances" in this prospectus supplement. 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, the trustee or the fiscal agent, 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, the trustee or the fiscal agent for any principal and interest cash advances that are later determined to be not recoverable. Neither the master servicer, the trustee nor the fiscal agent will be required to make an advance with respect to any companion loan. See "DESCRIPTION OF THE CERTIFICATES--P&I Advances" in this prospectus supplement. S-24 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, Class R-I and Class R-II certificates) are held by a single certificateholder. See "DESCRIPTION OF THE CERTIFICATES--Termination" in this prospectus supplement. 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 the trust fund ("REMIC I" and "REMIC II"). 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. S-25 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 and Class certificates will be treated as having been issued at a premium, and that the Class and Class certificates will be 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. 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, Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Greenwich Capital Markets, Inc. by the US Department of Labor. See "ERISA CONSIDERATIONS" in this prospectus supplement and in the accompanying prospectus. LEGAL INVESTMENT.............. The Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4, Class A-J, Class B and Class C certificates will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"), so long as they are rated in one of the two highest rating categories by Moody's or S&P or another nationally recognized statistical rating organization. The other classes of certificates will not constitute "mortgage related securities" for purposes of SMMEA. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by S-26 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. 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., and Moody's Investors Service, Inc.: EXPECTED RATING CLASS FROM S&P/MOODY'S - ----------------------- ----------------- Class A-1 ........... AAA/Aaa Class A-2 ........... AAA/Aaa Class A-3 ........... AAA/Aaa Class A-PB .......... AAA/Aaa Class A-4 ........... AAA/Aaa Class A-J ........... AAA/Aaa Class B ............. AA/Aa2 Class C ............. AA-/Aa3 Class D ............. A/A2 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 or the fiscal agent 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 3 mortgage loans with subordinate companion loans is calculated without regard to the related subordinate companion loans. Unless otherwise specified, the calculations of loan balance per square foot/ unit/room, 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, S-27 if any (but not any subordinate companion loan). All percentages of the mortgage loans, or any specified group of mortgage loans, referred to in this prospectus supplement are approximate percentages. The totals in the following tables may not add up to 100% due to rounding. ALL LOAN LOAN MORTGAGE GROUP GROUP LOANS 1 2 ------------------- ------------------- ---------------- Number of Mortgage Loans ...................... 72 61 11 Number of Crossed Loan Pools(1) ................... 1 1 0 Number of Mortgaged Properties ................. 88 77 11 Aggregate balance of all Mortgage Loans ............. $ 1,405,371,542 $ 1,316,413,770 $ 88,957,773 Number of Mortgage Loans with Balloon Payments(2) ................ 56 45 11 Aggregate balance of Mortgage Loans with Balloon Payments(2) ........ $ 1,191,044,542 $ 1,102,086,770 $ 88,957,773 Number of Mortgage Loans with Anticipated Repayment Date(3) .......... 1 1 0 Aggregate balance of Mortgage Loans with Anticipated Repayment Date(3) .................... $ 29,000,000 $ 29,000,000 $ 0 Number of Fully Amortizing Mortgage Loans ...................... 0 0 0 Aggregate balance of Fully Amortizing Mortgage Loans ............. $ 0 $ 0 $ 0 Number of Interest Only Mortgage Loans(4) .......... 15 15 0 Aggregate balance of Interest Only Mortgage Loans(4) ................... $ 185,327,000 $ 185,327,000 $ 0 Average mortgage loan balance .................... $ 19,519,049 $ 21,580,554 $ 8,087,070 Minimum mortage loan balance .................... $ 1,498,302 $ 1,498,302 $ 3,000,000 Maximum mortgage loan balance .................... $ 216,000,000 $ 216,000,000 $ 18,000,000 Maximum balance for a group of cross-collateralized and cross-defaulted mortgage loans(1) .......... $ 32,550,000 $ 32,550,000 $ 0 Weighted average LTV ratio ...................... 71.7% 71.6% 72.1% Minimum LTV ratio .......... 49.4% 49.4% 50.8% Maximum LTV ratio .......... 89.9% 89.9% 79.9% Weighted average LTV at Maturity or Anticipated Repayment Date ........... 64.4% 64.5% 63.4% Weighted Average DSCR....... 1.43x 1.44x 1.29x Minimum DSCR ............... 1.09x 1.09x 1.20x S-28 ALL LOAN LOAN MORTGAGE GROUP GROUP LOANS 1 2 ---------- ---------- ---------- Maximum DSCR .............. 2.67x 2.67x 1.56x Weighted average Mortgage Loan interest rate ...................... 5.333% 5.337% 5.276% Minimum Mortgage Loan interest rate ............. 4.850% 4.850% 5.000% Maximum Mortgage Loan interest rate ............. 6.410% 6.410% 5.790% Weighted average remaining term to Maturity or Anticipated Repayment Date ............ 107 108 96 Minimum remaining term to Maturity or anticipated Repayment Date (months) ............. 58 58 58 Maximum remaining term to Maturity or Anticipated Repayment Date (months) ............. 120 120 120 Weighted average occupancy rate(5) ......... 93.1% 93.1% 92.9% ---------- (1) Consists of a group of 5 individual mortgage loans (loan numbers 35, 39, 44, 56 and 61). (2) Does not include mortgage loans with anticipated repayment dates or that are interest-only for their entire term. (3) Does not include mortgage loans that are interest-only for their entire term. (4) Includes mortgage loans with anticipated repayment dates that are Interest-Only for the entire period until the anticipated repayment date. (5) Does not include 4 mortgage loans secured by hospitality properties, representing 2.5% for the mortgage pool (2.7% of loan group 1). In certain cases, occupancy includes space for which leases have been executed, but the tenant has not taken occupancy. 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. S-29 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 .............................. 30 $ 687,278,428 48.9% 52.2% 0.0% Retail .............................. 22 281,834,298 20.1 21.4 0.0 Retail--Anchored ................... 19 267,673,578 19.0 20.3 0.0 Retail--Shadow Anchored(2) ......... 2 10,967,264 0.8 0.8 0.0 Retail--Unanchored ................. 1 3,193,456 0.2 0.2 0.0 Multifamily ......................... 20 232,732,773 16.6 10.9 100.0 Mixed Use ........................... 3 112,481,825 8.0 8.5 0.0 Self Storage ........................ 7 38,487,480 2.7 2.9 0.0 Hospitality ......................... 4 34,956,349 2.5 2.7 0.0 Industrial .......................... 1 16,102,087 1.1 1.2 0.0 Land(3) ............................. 1 1,498,302 0.1 0.1 0.0 -- -------------- ----- ----- ----- TOTAL .............................. 88 $1,405,371,542 100.0% 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) Specifically, the fee interest in land which the ground tenant has improved and leased as a bank branch. The bank branch is not part of the loan collateral, and the sources of funds for loan repayment are the ground rent payments made to the related borrower. [PIE CHART OMITTED] Retail 20.1% Multifamily 16.6% Mixed Use 8.0% Self Storage 2.7% Hospitality 2.5% Industrial 1.1% Land 0.1% Office 48.9% S-30 GEOGRAPHIC CONCENTRATIONS..... The mortgaged properties are located throughout 31 states. 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 ............. 3 $ 255,325,302 18.2% NY ............. 6 241,302,964 17.2 CA ............. 8 234,240,000 16.7 Southern(2) .. 6 191,265,000 13.6 Northern(2) .. 2 42,975,000 3.1 FL ............. 22 130,837,123 9.3 AZ ............. 3 101,150,000 7.2 Other .......... 46 442,516,155 31.5 -- -------------- ----- TOTAL ........ 88 $1,405,371,542 100.0% == ============== ===== ---------- (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 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 .................. 3 $ 255,325,302 19.4% NY .................. 6 241,302,964 18.3 CA .................. 7 216,240,000 16.4 Southern(2) ......... 5 173,265,000 13.2 Northern(2) ......... 2 42,975,000 3.3 FL .................. 22 130,837,123 9.9 AZ .................. 3 101,150,000 7.7 Other ............... 36 371,558,382 28.2 -- -------------- ----- TOTAL ............... 77 $1,316,413,770 100.0% == ============== ===== ---------- (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 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 - ------------------ ------------ -------------- ---------------- NC ............. 2 $19,500,000 21.9% CA ............. 1 $18,000,000 20.2 Southern(2) .. 1 $18,000,000 20.2 WA ............. 2 $15,300,000 17.2 GA ............. 1 $10,787,773 12.1 AL ............. 1 $ 7,700,000 8.7 NE ............. 1 $ 6,200,000 7.0 Other .......... 3 $11,470,000 12.9 - ----------- ----- TOTAL ........ 11 $88,957,773 100.0% == =========== ===== ---------- (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. 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. 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, all of the mortgage loans accrue interest on an actual/360 basis. Thirty-five (35) of the mortgage loans, representing 75.6% of the mortgage pool (27 mortgage loans in loan group 1 or 76.0% and 8 mortgage loans in loan group 2 or 69.3%), have periods during which only interest is due and periods in which principal and interest are due. Fifteen (15) of the mortgage loans, representing 13.2% of the mortgage pool (14.1% of loan group 1), provide that only interest is due until maturity or the anticipated repayment date. 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-32 RANGE OF CUT-OFF DATE BALANCES NUMBER AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF RANGE OF OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE BALANCES ($) LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE - ------------------------------------ ------------- ----------------- --------------- ----------------- ---------------- (less than) 2,000,000 ... ......... 1 $ 1,498,302 0.1% 0.1% 0.0% 2,000,001 -- 3,000,000 ............. 7 19,214,163 1.4 1.2 3.4 3,000,001 -- 4,000,000 ............. 5 18,083,372 1.3 1.4 0.0 4,000,001 -- 5,000,000 ............. 6 27,243,069 1.9 1.4 9.5 5,000,001 -- 6,000,000 ............. 7 39,925,500 2.8 2.6 6.7 6,000,001 -- 7,000,000 ............. 4 25,841,323 1.8 1.0 14.8 7,000,001 -- 8,000,000 ............. 3 22,700,000 1.6 1.1 8.7 8,000,001 -- 9,000,000 ............. 4 33,708,150 2.4 1.9 9.3 9,000,001 -- 10,000,000 ............ 2 19,578,428 1.4 1.5 0.0 10,000,001 -- 15,000,000 ........... 6 71,237,773 5.1 3.6 27.3 15,000,001 -- 20,000,000 ........... 13 220,246,463 15.7 15.4 20.2 20,000,001 -- 25,000,000 ........... 1 24,975,000 1.8 1.9 0.0 25,000,001 -- 30,000,000 ........... 6 168,120,000 12.0 12.8 0.0 35,000,001 -- 40,000,000 ........... 1 40,000,000 2.8 3.0 0.0 40,000,001 -- 45,000,000 ........... 1 41,000,000 2.9 3.1 0.0 55,000,001 -- 60,000,000 ........... 1 56,000,000 4.0 4.3 0.0 80,000,001 (greater than) ......... 4 576,000,000 41.0 43.8 0.0 -- -------------- ----- ----- ----- TOTAL ............................. 72 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== RANGE OF MORTGAGE RATES NUMBER AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE RANGE OF MORTGAGE RATES (%) LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE - ----------------------------- ------------- ----------------- --------------- ----------------- ---------------- 4.850 -- 5.249 .............. 24 $ 576,917,253 41.1% 41.4% 36.5% 5.250 -- 5.499 .............. 28 568,878,774 40.5 39.7 51.5 5.500 -- 5.749 .............. 9 131,979,599 9.4 9.4 8.7 5.750 -- 5.999 .............. 8 96,514,357 6.9 7.1 3.4 6.000 -- 6.249 .............. 1 16,102,087 1.1 1.2 0.0 6.250 -- 6.499 .............. 2 14,979,473 1.1 1.1 0.0 -- -------------- ----- ----- ----- TOTAL ...................... 72 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== S-33 RANGE OF UNDERWRITTEN DSC RATIOS NUMBER AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF RANGE OF OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE UNDERWRITTEN DSCRS (X) LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE - ------------------------ ------------- ----------------- --------------- ----------------- ---------------- 1.05 -- 1.09 ........... 1 $ 27,500,000 2.0% 2.1% 0.0% 1.20 -- 1.24 ........... 23 477,537,318 34.0 32.7 53.3 1.25 -- 1.29 ........... 6 78,769,825 5.6 6.0 0.0 1.30 -- 1.34 ........... 7 145,773,971 10.4 8.7 35.4 1.35 -- 1.39 ........... 2 22,500,000 1.6 1.7 0.0 1.40 -- 1.44 ........... 5 141,397,264 10.1 10.5 3.4 1.45 -- 1.49 ........... 3 61,317,335 4.4 4.7 0.0 1.50 -- 1.54 ........... 5 43,618,199 3.1 3.3 0.0 1.55 -- 1.59 ........... 5 83,175,000 5.9 5.8 7.9 1.60 -- 1.64 ........... 2 16,250,000 1.2 1.2 0.0 1.70 -- 1.74 ........... 2 12,470,000 0.9 0.9 0.0 1.75 -- 1.79 ........... 5 237,075,631 16.9 18.0 0.0 1.85 -- 1.89 ........... 1 15,242,500 1.1 1.2 0.0 2.00 -- 2.04 ........... 1 2,899,000 0.2 0.2 0.0 2.05 -- 2.09 ........... 1 2,923,000 0.2 0.2 0.0 2.10 -- 2.14 ........... 1 15,065,000 1.1 1.1 0.0 2.30 -- 2.67 ........... 2 21,857,500 1.6 1.7 0.0 -- -------------- ----- ----- ----- TOTAL ................. 72 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== RANGE OF CUT-OFF DATE LTV RATIOS NUMBER AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF RANGE OF OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%) LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE - ----------------------------- ------------- ----------------- --------------- ----------------- ---------------- 40.01 -- 50.00 .............. 1 $ 16,000,000 1.1% 1.2% 0.0% 50.01 -- 55.00 .............. 3 15,600,000 1.1 0.4 11.2 55.01 -- 60.00 .............. 4 33,336,973 2.4 2.5 0.0 60.01 -- 65.00 .............. 8 257,574,480 18.3 19.6 0.0 65.01 -- 70.00 .............. 13 262,784,931 18.7 18.9 15.4 70.01 -- 75.00 .............. 12 327,221,317 23.3 23.5 20.2 75.01 -- 80.00 .............. 25 432,803,841 30.8 29.3 53.1 80.01 -- 85.00 .............. 5 32,550,000 2.3 2.5 0.0 85.01 -- 90.00 .............. 1 27,500,000 2.0 2.1 0.0 -- -------------- ----- ----- ----- TOTAL ...................... 72 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== RANGE OF REMAINING TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE* NUMBER AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF RANGE OF REMAINING OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE TERMS (MONTHS) LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE - -------------------- ------------- ---------------- --------------- ----------------- ---------------- 0 -- 60 ............ 17 $ 149,605,928 10.6% 9.1% 32.9% 61 -- 84 ........... 6 190,707,500 13.6 13.9 8.7 109 -- 120 ......... 49 1,065,058,114 75.8 77.0 58.4 -- -------------- ----- ----- ----- TOTAL ............. 72 $1,405,371,542 100.0% 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. S-34 AMORTIZATION TYPES NUMBER AGGREGATE PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE AMORTIZATION TYPE LOANS BALANCE POOL BALANCE GROUP 1 BALANCE GROUP 2 BALANCE - -------------------------------- ------------- ----------------- --------------- ----------------- ---------------- Interest-only, Amortizing Balloon* ...................... 34 $1,033,348,000 73.5% 73.8% 69.3% Amortizing Balloon ............. 22 157,696,542 11.2 9.9 30.7 Interest-only, Balloon ......... 9 108,627,500 7.7 8.3 0.0 Interest-only, ARD ............. 6 76,699,500 5.5 5.8 0.0 Interest-only, Amortizing ARD* .......................... 1 29,000,000 2.1 2.2 0.0 -- -------------- ----- ----- ----- TOTAL ......................... 72 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== - ---------- * These mortgage loans require payments of interest-only for a period of 12 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 12 to 48 months with respect to loan group 2. 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 this type of 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. S-35 TYPES OF PREPAYMENT RESTRICTIONS PERCENTAGE OF PERCENTAGE OF AGGREGATE PERCENTAGE OF CUT-OFF DATE CUT-OFF DATE NUMBER OF CUT-OFF DATE CUT-OFF DATE GROUP 1 GROUP 2 PREPAYMENT RESTRICTION TYPE MORTGAGE LOANS BALANCE POOL BALANCE BALANCE BALANCE - --------------------------------- ---------------- ----------------- --------------- --------------- -------------- Prohibit prepayment for most of the term of the mortgage loan; but permit defeasance after a date specified in the related mortgage note for most or all of the remaining term* ......... 60 $1,271,914,720 90.5% 92.3% 63.5% Prohibit prepayment until a date specified in the related mortgage note and then impose a yield maintenance charge for most of the remaining term* ................ 11 129,456,823 9.2 7.4 36.5 Impose a yield maintenance charge for most or all of the remaining term* ................ 1 4,000,000 0.3 0.3 0.0 -- -------------- ----- ----- ----- TOTAL .......................... 72 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== - ---------- * For the purposes hereof, "remaining term" refers to either remaining term to maturity or anticipated repayment date, as applicable. 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 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.................... Sixty (60) of the mortgage loans included in the trust fund as of the cut-off date, representing 90.5% of the mortgage pool (52 mortgage loans in loan group 1 or 92.3% and 8 of the mortgage loans in loan group 2 or 63.5%), 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 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 S-36 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 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 loan. No companion loan is included in the trust fund. S-37 NUMBER OF MORTGAGE LOANS / % OF % OF MORTGAGE NUMBER OF CUT-OFF INITIAL LOAN LOAN MORTGAGED LOAN DATE POOL GROUP LOAN NAME SELLER PROPERTIES GROUP BALANCE(1) BALANCE BALANCE - ---------------------- ---------- ------------ ------- ----------------- --------- --------- One & Two International Place ............... Wachovia 1/1 1 $ 216,000,000 15.4% 16.4% 450 West 33rd Street .............. Wachovia 1/1 1 132,500,000 9.4 10.1% Kadima Medical Office Pool ......... Wachovia 1/17 1 127,500,000 9.1 9.7% Park Place II ........ Wachovia 1/1 1 100,000,000 7.1 7.6% Happy Valley Towne Center ........ Wachovia 1/1 1 56,000,000 4.0 4.3% Mercantile Bank & Trust Building ...... Wachovia 1/1 1 41,000,000 2.9 3.1% 590 Fifth Avenue ..... Wachovia 1/1 1 40,000,000 2.8 3.0% Extra Space Self Storage Portfolio #3 .................. Wachovia 5/5 1 32,550,000 2.3 2.5% Cypress Lake at Wachovia 1/1 1 29,770,000 2.1 2.3% Stonebriar .......... Casa Paloma Shopping Center...... Wachovia 1/1 1 29,050,000 2.1 2.2% --------- --------------- ---- TOTAL (1-10): ........ 14/30 $ 804,370,000 57.2% ========= =============== ==== Copaco Center ........ Wachovia 1/1 1 $ 29,000,000 2.1% 2.2% 2700 Broadway ........ Wachovia 1/1 1 27,500,000 2.0 2.1% Fullerton Towers ..... Wachovia 1/1 1 26,800,000 1.9 2.0% Courthouse Place ..... Wachovia 1/1 1 26,000,000 1.9 2.0% Kensington Place ..... Wachovia 1/1 1 24,975,000 1.8 1.9% Springtown Shopping Center...... Wachovia 1/1 1 19,760,000 1.4 1.5% Resort at University Park Apartments...... Wachovia 1/1 1 19,300,000 1.4 1.5% Prospect Plaza ....... Wachovia 1/1 1 18,800,000 1.3 1.4% La Serena Wachovia 1/1 2 18,000,000 1.3 20.2% Apartments .......... Sandpiper Village Apartments .......... Wachovia 1/1 1 18,000,000 1.3 1.4% --------- --------------- ---- TOTAL (11-20): ....... 10/10 $ 228,135,000 16.2% --------- --------------- ---- TOTAL (1-20): ........ 24/40 $1,032,505,000 73.5% ========= =============== ==== WEIGHTED WEIGHTED LOAN AVERAGE AVERAGE WEIGHTED BALANCE PER WEIGHTED CUT-OFF LTV RATIO AVERAGE PROPERTY SF/UNIT/ AVERAGE DATE LTV AT MATURITY MORTGAGE LOAN NAME TYPE ROOM(2) DSCR(2) RATIO(2) OR ARD(2) RATE - ---------------------- -------------------- ------------- ---------- ---------- ------------- ----------- One & Two International Place ............... Office -- CBD $ 233 1.77x 61.7% 53.7% 5.205% 450 West 33rd Street .............. Office -- CBD $ 158 1.22x 68.8% 59.3% 5.100% Kadima Medical Office Pool ......... Office -- Medical $ 160 1.40x 75.0% 64.8% 5.272% Park Place II ........ Mixed Use -- $ 364 1.20x 79.6% 75.1% 5.390% Retail/Office Happy Valley Towne Center ........ Retail -- Anchored $ 82 1.32x 72.6% 65.4% 5.790% Mercantile Bank & Trust Building ...... Office -- CBD $ 101 1.55x 77.4% 71.6% 5.260% 590 Fifth Avenue ..... Office -- CBD $ 409 1.20x 74.2% 67.6% 5.390% Extra Space Self Storage Portfolio #3 .................. Self Storage $ 83 1.58x 82.0% 82.0% 4.950% Cypress Lake at Multifamily -- $ 63,072 1.45x 77.9% 77.9% 5.420% Stonebriar .......... Conventional Casa Paloma Shopping Center...... Retail -- Anchored $ 223 1.47x 69.8% 69.8% 5.630% TOTAL (1-10): ........ 1.45X 71.1% 64.1% 5.287% Copaco Center ........ Retail -- Anchored $ 70 1.32x 69.0% 62.9% 5.400% 2700 Broadway ........ Retail -- Anchored $ 1,100 1.09x 89.9% 89.9% 5.410% Fullerton Towers ..... Office -- Suburban $ 119 1.21x 75.8% 68.7% 5.130% Courthouse Place ..... Office -- Suburban $ 228 1.26x 80.0% 71.6% 5.500% Kensington Place ..... Multifamily -- $140,309 1.57x 75.3% 63.2% 5.660% Independent Living Springtown Shopping Center...... Retail -- Anchored $ 72 1.20x 79.7% 70.0% 5.590% Resort at University Park Apartments...... Multifamily -- $ 77,200 1.20x 69.3% 64.4% 5.490% Conventional Prospect Plaza ....... Retail -- Anchored $ 133 1.25x 78.7% 70.0% 5.220% La Serena Multifamily -- $ 95,745 1.32x 72.0% 67.6% 5.000% Apartments .......... Conventional Sandpiper Village Apartments .......... Multifamily -- $ 85,714 1.21x 79.6% 70.6% 5.090% Conventional TOTAL (11-20): ....... 1.26X 77.1% 70.2% 5.363% TOTAL (1-20): ........ 1.41X 72.4% 65.4% 5.304% - -------- (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 that includes 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 such mortgage loan and the related pari passu companion loan. 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-38 CO-LENDER LOANS............... Five (5) mortgage loans to be included in the trust fund that were originated by Wachovia Bank, National Association, representing approximately 27.0% of the mortgage pool (4 mortgage loans in loan group 1 or 28.3% and 1 mortgage loan in loan group 2 or 8.7%), are, in each case, evidenced by one of two or more notes which are secured by one or more mortgaged real properties. In each case, the related companion loan(s) will not be part of the trust fund. Two (2) 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 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. The remaining co-lender loans (loan numbers 21, 40 and 41) are part of split loan structures in which the related companion loans are subordinate to the related mortgage loans. Each of these mortgage loans and its related companion loans are subject to intercreditor agreements. The intercreditor agreement for each of the One & Two International Place mortgage loan and the 450 West 33rd Street mortgage loan generally allocates 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 remaining mortgage loans that are part of a split loan structure generally allocate collections in respect of that mortgage loan first, to the related mortgage loan, and then to amounts due on the related subordinate companion loans. No companion loan is included in the trust fund. The master servicer and special servicer will service and administer each of these mortgage loans and its related companion loans (other than the One & Two International Place mortgage loan and the 450 West 33rd Street mortgage loan 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. The One & Two International Place mortgage loan and the 450 West 33rd Street mortgage loan and their related companion loans will be serviced under the pooling and servicing agreement entered into in connection with the issuance of the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass Through Certificates, Series 2005-C17. The master servicer under the 2005-C17 pooling and servicing agreement is Wachovia Bank, National Association and the special servicer under the 2005-C17 pooling and servicing agreement is Allied Capital Corporation. The terms of the 2005-C17 pooling and servicing agreement are generally similar (but are not identical) to the terms of the pooling and servicing agreement for this transaction. See "SERVICING OF THE S-39 MORTGAGE LOANS--Servicing of the One & Two International Place Loan and the 450 West 33rd Street Loan" in this prospectus supplement. With respect to 3 mortgage loans (loan numbers 21, 40 and 41), 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 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. S-40 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 S-41 to the 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. 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 A-4, Class A-J, Class B, Class C and Class D 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 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 S-42 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. 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 that 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 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 S-43 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 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. S-44 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. 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, the trustee or the fiscal agent, as applicable, will be entitled to receive interest on unreimbursed advances and unreimbursed servicing expenses. The right of the master servicer, the trustee or the fiscal agent 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 S-45 subordinated to those of the holders of the offered certificates with an earlier payment priority (and, with respect to the Class A-J certificates, 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, the fiscal agent 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. The interests of those certificateholders may be in 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. Five (5) of the mortgage loans, representing 27.0% of the mortgage pool (4 mortgage loans in loan group 1 or 28.3% and 1 mortgage loan in loan group 2 or 8.7%), are each evidenced by multiple promissory notes. With respect to 2 of these mortgage loans, representing 24.8% of the mortgage pool (26.5% 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. In the case of the One & Two International Place whole loan and the 450 West 33rd Street whole loan, the related pari passu companion note is included S-46 in the trust fund created in connection with the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17 commercial mortgage securitization. In each case, the holders of the pari passu companion notes (or, if applicable, the holders of beneficial interests in the pari passu companion notes) have certain control, consultation and/or consent rights with respect to the servicing and/or administration of these loans. With respect to the other 3 mortgage loans evidenced by multiple promissory notes, the related mortgage loans are each part of a split loan structure where one promissory note 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 addition, such holders of 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. 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. S-47 POTENTIAL CONFLICTS OF INTEREST................... The master servicer is the mortgage loan seller and is an affiliate of the depositor and one of the underwriters. In addition, Wachovia Bank, National Association is also the master servicer under the pooling and servicing agreement executed in connection with the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17 commercial mortgage securitization under which the One & Two International Place mortgage loan and the 450 West 33rd Street mortgage loan are being serviced. These affiliations could cause conflicts with the master servicer's duties to the trust 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. With respect to 1 mortgage loan (loan number 9), representing 2.1% of the mortgage pool (2.2% of loan group 1), Wachovia Bank, National Association is the mortgagee under a second mortgage secured by the related mortgaged property and a pledge of the equity interest in the borrower, which is subject to the terms of a subordination and standstill agreement. 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 or the holder of certain other indebtedness secured by the mortgaged property. See "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans" in this prospectus supplement. In addition, with respect to 2 mortgage loans (loan numbers 12 and 18), representing 3.2% of the mortgage pool (1 mortgage loan in loan group 1 or 2.0% and 1 mortgage loan in loan group 2 or 20.2%), an affiliate of Wachovia Bank, National Association owns an approximately 85% preferred equity interest in each related borrower and may acquire the remaining equity interests in the related borrowers upon the satisfaction of certain conditions in the mortgage loan documents. As a result, a conflict could have arisen during the origination process as a result of Wachovia Bank, National Association being the originator of the related mortgage loans as well as the owner of the equity interests in each related borrower. In addition, a conflict may arise between Wachovia Bank, National Association's duties to the trust under the pooling and servicing agreement and its affiliate's equity interest in the related borrower. 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 any relationship that the master servicer or any affiliate thereof may have with the related borrower. In addition, the special servicer (and any related sub-servicer) S-48 will be involved in determining whether to modify or foreclose a defaulted mortgage loan. The special servicer is not affiliated with the master servicer or the related borrower. The special servicer (and any related sub-servicer) will 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; 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 S-49 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) the mortgage loan seller. 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 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. S-50 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; 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; S-51 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. For example, in the case of the Park Place II mortgage loan (loan number 4), 4 of the 5 largest tenants, representing in the aggregate 53.4% of the rent at the related mortgaged property, have leases that expire 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. 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. 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; S-52 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" (i.e., 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 which 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 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 and Mixed-Use Facilities" and "--Special Risks Associated with Self Storage Facilities" below. S-53 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, the fiscal agent 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 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 (e.g., age, condition, design, access to transportation and ability to offer certain amenities, such as sophisticated building systems); S-54 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. Included in the mortgage loans secured in whole or in part by office properties is the Kadima Medical Office Pool loan, which is secured by 17 medical office properties, and the Cattleridge Medical Center loan, together representing approximately 9.5% of the mortgage pool (10.1% of loan group 1). The performance of a medical office property may depend on (i) the proximity of such property to a hospital or other health care establishment and (ii) reimbursements for patient fees from private or government-sponsored insurers. Issues related to reimbursements (ranging from non-payment to delays in payment) from such insurers could adversely impact cash flow at such mortgaged properties. Office properties secure 14 of the mortgage loans included in the trust fund as of the cut-off date, representing 48.9% of the mortgage pool (52.2% of loan group 1). In addition, 2 mortgage loans, representing 7.6% of the mortgage pool (8.2% of loan group 1) are secured by mortgaged properties which contain both office and retail components. 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 (e.g., population decreases or changes in average age or income) and/or changes in consumer preference (e.g., 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 S-55 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, 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 22 of the mortgage loans included in the trust fund as of the cut-off date, representing 20.1% of the mortgage pool (21.4% of loan group 1). In addition, 3 mortgage loans, representing 8.0% of the mortgage pool (8.5% of loan group 1) are secured by mortgaged properties which contain either (i) retail and office components or (ii) retail and land components. 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; S-56 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. 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 20 of the mortgage loans included in the trust fund as of the cut-off date, representing 16.6% of the mortgage pool (9 mortgage loans in loan group 1 or 10.9% and all of the mortgage loans in loan group 2). 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 S-57 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 7 of the mortgage loans included in the trust fund as of the cut-off date, representing 2.7% of the mortgage pool (2.9% of loan group 1). 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 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; S-58 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 (e.g., 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 "--Terrorist Attacks and Military Conflicts May Adversely Affect Your Investment" in this prospectus supplement. Hospitality properties secure 4 of the mortgage loans included in the trust fund as of the cut-off date, representing 2.5% of the mortgage pool (2.7% 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 lawsuits due to an environmental impairment or difficulty in bringing its operations into compliance with environmental laws; S-59 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 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 S-60 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. With respect to 1 mortgage loan (loan number 13), representing 1.9% of the mortgage pool (2.0% of loan group 1), the related borrower has obtained a pollution legal environmental insurance policy with respect to the related mortgaged property. This policy was issued by the Chubb Group, which as of April 20, 2005, had a financial strength S-61 rating of "A2" from Moody's. Further, with respect to 1 mortgage loan (loan number 10), representing 2.1% of the mortgage pool (2.2% of loan group 1), the related borrower was required to obtain an environmental collateral protection and liability policy with respect to the related mortgaged property. This policy was issued by a subsidiary of the Zurich-American Insurance Group, which, as of April 20, 2005, had a financial strength rating of "A+" from S&P. 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 the 450 West 33rd Street mortgage loan (loan number 2), representing 9.4% of the mortgage pool (10.1% of loan group 1), while the environmental assessment revealed no evidence of recognized environmental conditions at the mortgaged property, the report identified certain technical reporting defaults and recommended certain actions by the related borrower. For example, the building's eight emergency generators have not been registered with the New York City Department of Environmental Protection. The failure to register these generators represents a technical reporting default, and the report recommended that those emergency generators be registered. In addition, there are five storage tanks at the related mortgaged property that store diesel fuel for the on-site emergency generators. These tanks include two 5,000-gallon above-ground storage tanks and a 3,000-gallon underground storage tank. Evidence of minor lubricating oil leakage was noted next to the emergency generators, and the environmental assessment recommended repair of the equipment. In addition, the environmental assessment recommended the removal of four 55-gallon drums of waste glycol which were stored on the roof of the building. No reserve was taken in connection with the environmental remediation. 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 S-62 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.................... All of the mortgage loans 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 the respective maturity date. Seven (7) of these mortgage loans, representing 7.5% of the mortgage pool (8.0% of loan group 1), 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. For additional description of risks associated S-63 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 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: S-64 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 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 450 West 33rd Street mortgage loan and the Kadima Medical Office Pool mortgage loan (loan numbers 2 and 3, respectively), which collectively represent 18.5% of the mortgage pool (19.8% of loan group 1) are not cross-collateralized or cross-defaulted but the sponsors of each such mortgage loan are affiliated. See "DESCRIPTION OF THE MORTGAGE POOL--Twenty Largest Mortgage Loans--450 West 33rd Street" and "--Kadima Medical Office Pool" in this prospectus supplement. No group, individual borrower, sponsor concentration or borrower concentration represents more than 18.5% of the mortgage pool (19.8% of loan group 1). 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. MORTGAGED PROPERTIES BY GEOGRAPHIC CONCENTRATION(1) NUMBER OF AGGREGATE PERCENTAGE OF MORTGAGED CUT-OFF DATE CUT-OFF DATE STATE PROPERTIES BALANCE POOL BALANCE - ----------------------- ------------ ----------------- -------------- MA .................. 3 $ 255,325,302 18.2% NY .................. 6 241,302,964 17.2 CA .................. 8 234,240,000 16.7 Southern(2) ....... 6 191,265,000 13.6 Northern(2) ....... 2 42,975,000 3.1 FL .................. 22 130,837,123 9.3 AZ .................. 3 101,150,000 7.2 Other ............... 46 442,516,155 31.5 -- -------------- ----- 88 $1,405,371,542 100.0% == ============== ===== ---------- (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 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-65 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 .................. 3 $ 255,325,302 19.4% NY .................. 6 241,302,964 18.3 CA .................. 7 216,240,000 16.4 Southern(2) ....... 5 173,265,000 13.2 Northern(2) ....... 2 42,975,000 3.3 FL .................. 22 130,837,123 9.9 AZ .................. 3 101,150,000 7.7 Other ............... 36 371,558,382 28.2 -- -------------- ----- 77 $1,316,413,770 100.0% == ============== ===== ---------- (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 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 - ----------------------- ------------ -------------- ---------------- NC .................. 2 $19,500,000 21.9% CA .................. 1 18,000,000 20.2 Southern(2) ....... 1 18,000,000 20.2 WA .................. 2 15,300,000 17.2 GA .................. 1 10,787,773 12.1 AL .................. 1 7,700,000 8.7 NE .................. 1 6,200,000 7.0 Other ............... 3 11,470,000 12.9 - ----------- ----- 11 $88,957,773 100.0% == =========== ===== ---------- (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 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 S-66 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 15.4% of the mortgage pool (16.4% 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 2.3% of the mortgage pool (2.5% 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, 45.0% of the mortgage pool (48.0% 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, 57.2% of the mortgage pool (61.1% of loan group 1). CONCENTRATIONS OF MORTGAGED PROPERTY TYPES SUBJECT THE TRUST FUND TO INCREASED RISK OF DECLINE IN PARTICULAR INDUSTRIES........ 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. S-67 In that regard: o mortgage loans included in the trust fund and secured by office properties represent as of the cut-off date 48.9% of the mortgage pool (52.2% of loan group 1); o mortgage loans included in the trust fund and secured by retail properties represent as of the cut-off date 20.1% of the mortgage pool (21.4% of loan group 1); o mortgage loans included in the trust fund and secured by multifamily properties represent as of the cut-off date 16.6% of the mortgage pool (9 mortgage loans in loan group 1 or 10.9% and all of the mortgage loans in loan group 2); o mortgage loans included in the trust fund and secured by industrial and mixed-use facilities represent as of the cut-off date 9.1% of the mortgage pool (9.8% 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 2.7% of the mortgage pool (2.9% of loan group 1); and o mortgage loans included in the trust fund and secured by hospitality properties represent as of the cut-off date 2.5% of the mortgage pool (2.7% 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 seller, and the mortgage loan seller's 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 mortgage loan, the interest of the trust 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 seller. In addition, we cannot provide assurance that the mortgage loan seller 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 S-68 management of a mortgaged property subsequent to the trust'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 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 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 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); S-69 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 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. S-70 Through December 2005, insurance carriers are required under the program to provide terrorism coverage in their basic "all-risk" policies. 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, there can be no assurance that the Terrorism Insurance Program 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. 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 S-71 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. With respect to 6 mortgage loans (loan numbers 52, 58, 62, 66, 67 and 68), representing 1.6% of the mortgage pool (1.7% of loan group 1), the tenant at the mortgaged property is permitted to self-insure and may not carry insurance coverage for acts of terrorism. In addition, certain of the mortgaged properties may contain pad sites that are ground leased to the tenant. The borrower may not be required to obtain insurance on the related improvements. 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 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 9), representing approximately 2.1% of the mortgage pool (2.2% of loan group 1), there is existing subordinate debt secured by the mortgaged property and a pledge of the equity interests in the borrower, subject to the terms of a subordination and standstill agreement in favor of the mortgagee, and the holder of the subordinate debt has certain cure rights with respect to defaults of the mortgage loan. One (1) mortgage loan (loan number 12), representing 1.9% of the mortgage pool (1 mortgage loan in loan group 1 or 2.0%), provides that under certain circumstances the related borrower may encumber the related mortgaged property with subordinate debt in the future with the consent of the mortgagee. With respect to 1 mortgage loan (loan number 29), representing approximately 0.9% of the mortgage pool (0.9% of loan group 1), 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, (b) the entities with a controlling interest S-72 in the related borrower may pledge their interest in the borrower as security for mezzanine debt in the future and/or (c) the related borrower may incur additional unsecured indebtedness other than in the ordinary course of business, subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee. With respect to 1 mortgage loan (loan number 70) representing approximately 0.2% of the mortgage pool (0.2% of loan group 1), the loan documents provide that the borrower may incur additional unsecured debt. With respect to 3 mortgage loans (loan numbers 2, 3 and 13), representing approximately 20.4% of the mortgage pool (3 mortgage loans in loan group 1 or 21.7%), 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 15 mortgage loans (loan numbers 4, 5, 6, 10, 13, 14, 16, 18, 32, 33, 43, 52, 62, 66 and 69), representing approximately 25.4% of the mortgage pool (12 mortgage loans in loan group 1 or 24.4% and 3 mortgage loans in loan group 2 or 40.2%), 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 to be entered into in favor of the mortgagee. 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 S-73 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 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 S-74 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 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 S-75 the entire balance of both the loans contained in the loan pair upon the maturity of the mortgage loans. In addition, although 3 of the mortgage loans have companion loans that are subordinate to the related mortgage loan, each of the One & Two International Place mortgage loan and the 450 West 33rd Street mortgage loan, representing 24.8% of the mortgage pool (26.5% 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. However, 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 S-76 certificates. See "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES--Bankruptcy Laws" in the accompanying prospectus. In addition, with respect to 7 mortgage loans (loan numbers 9, 13, 16, 31, 37, 46 and 69), representing 7.3% of the mortgage pool (6 mortgage loans in loan group 1 or 7.4% and 1 mortgage loan in loan group 2 or 7.0%), 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. CONDOMINIUM AGREEMENTS ENTAIL CERTAIN RISKS................ Two (2) mortgage loans (loan numbers 3 and 11), representing 2.2% of the mortgage pool (2.4% of loan group 1) by allocated loan amount with respect to loan number 3, are subject to the terms of one or more condominium agreements. In addition, with respect to 1 mortgage loan (loan number 2), representing 9.4% of the mortgage pool (10.1% of loan group 1), the related borrower may request that the related mortgaged property be submitted to a condominium agreement. See "DESCRIPTION OF THE MORTGAGE POOL--Twenty Largest Mortgage Loans--450 West 33rd Street." Due to the nature of condominiums, a default on the part of the related borrower will not allow the mortgagee the same flexibility in realizing on the collateral as is generally available with respect to commercial properties that are not condominiums. The rights of other unit owners, the condominium documents and the state and local laws applicable to condominium units must be considered and respected. Consequently, servicing and realizing upon the collateral could subject the certificateholders to greater delay, expense and risk than a loan secured by a commercial property that is not a condominium. 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 S-77 certain protections available to the mortgagee). As part of a restructuring plan, a court also may reduce the amount of secured indebtedness to then current value of the mortgaged property, which would make the mortgagee a general unsecured creditor for the difference between 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 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. S-78 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 have a sponsor that has previously filed bankruptcy. In each case, the related entity or person has emerged from bankruptcy. However, we cannot assure you that such sponsors will not be more likely than other sponsors 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 the One & Two International Place mortgage loan (loan number 1) representing 15.4% of the mortgage pool (16.4% of loan group 1), the previous owner declared bankruptcy in connection with the previous debt in 2004. The dispute regarding the previous debt was resolved and the bankruptcy was discharged. 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 liquidation sale. Information regarding the values of the mortgaged properties at the date of such report is presented under "DESCRIPTION OF THE MORTGAGE 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. In addition, with respect to the Kadima Medical Office Pool mortgage loan (loan number 3), representing 9.1% of the mortgage pool (9.7% of loan group 1), the related appraisal valued the mortgaged properties on a portfolio basis (i.e., if the mortgaged properties were marketed by a single owner and sold to a single buyer) and which resulted in a higher value than the aggregate value when the appraisal valued each mortgaged property separately. As a result, the allocated appraised value for each mortgaged property is higher than the individual appraised value of each mortgaged property securing the related mortgage loan. There can be no assurance that the mortgaged properties will be sold as a pool rather than individually, however. If the individual appraised values are aggregated the resulting appraised value is $149,740,000, the cut-off date loan-to-value ratio is 85.1% and the maturity date loan-to-value ratio is 73.6%. See "DESCRIPTION OF THE MORTGAGE POOL--Twenty Largest Mortgage Loans--Kadima Medical Office Pool". S-79 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, 1 mortgage loan (loan number 11) representing 2.0% of the mortgage pool (2.1% of loan group 1), is subject to a condominium declaration where the related 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. S-80 COMPLIANCE WITH APPLICABLE LAWS AND 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 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 S-81 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... One (1) group of mortgage loans, the Extra Space Self Storage Portfolio #3 concentration (loan numbers 35, 39, 44, 56 and 61), representing in the aggregate 2.3% of the mortgage pool (2.5% of loan group 1) is cross-collateralized and cross-defaulted with each of the other mortgage loans in such group. In addition, some mortgage loans are secured by first lien deeds of trust or mortgages, as applicable, on multiple properties securing obligations of one borrower or the joint and several obligations of multiple borrowers. For example, the Kadima Medical Office Pool mortgage loan (loan number 3), representing 9.1% of the mortgage pool (9.7% of loan group 1) is secured by 17 mortgaged properties located in 8 states. 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 S-82 Loans; Certain Multi-Property Mortgage Loans" in this 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............... Three (3) mortgage loans (loan numbers 58, 67 and 68), representing 0.7% of the mortgage pool (0.8% of loan group 1), permit the related borrowers 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 require mortgagee consent and will have to meet certain conditions, including loan-to-value tests, debt service coverage tests, and 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 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. SINGLE TENANTS AND CONCENTRATION OF TENANTS SUBJECT THE TRUST FUND TO INCREASED RISK....... Certain 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. 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, S-83 and it may be necessary to expend substantial amounts of capital to make the space acceptable to new tenants. Nineteen (19) of the mortgaged properties securing mortgage loans included in the trust fund, representing 6.5% of the mortgage pool (6.9% of loan group 1 by allocated loan amount), are leased wholly to a single tenant or are wholly owner occupied. For example, with respect to 1 mortgage loan (loan number 11), representing 2.0% of the mortgage pool (2.1% of loan group 1), the mortgaged property is 100% leased to Columbia University. See "DESCRIPTION OF THE MORTGAGE POOL--Twenty Largest Mortgage Loans--2700 Broadway" in this prospectus supplement. In addition, with respect to the Mercantile Bank & Trust Building mortgage loan (loan number 6), 86.1% of the mortgaged property is leased to 2 tenants. See "DESCRIPTION OF THE MORTGAGE POOL--Twenty Largest Mortgage Loans--Mercantile Bank & Trust Building". 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 2 mortgage loans (loan numbers 3 and 51), representing 9.5% of the mortgage pool (10.1% of loan group 1), the mortgaged properties are occupied by tenants operating in the medical field. See "DESCRIPTION OF THE MORTGAGE POOL--Twenty Largest Mortgage Loans--Kadima Medical Office Pool" in the prospectus supplement. 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. 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 S-84 respective affiliates. In addition, certain borrowers, managers and their respective affiliates may be or have been subject to investigation, civil penalty, criminal penalty or enforcement. 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. For example, Joseph Chetrit, a partial owner of indirect ownership interests in the borrowers related to the Kadima Medical Office Pool loan and the 450 West 33rd Street loan, pleaded guilty in 1990 to the felony of entry of goods by false statements (pursuant to Title 18 of the United States Code, Sections 542 and 2) in connection with importing fabric into the United States. In addition, with respect to the Kadima Medical Office Pool mortgage loan, the borrower is a defendant in a personal injury lawsuit. The lawsuit is expected to be covered by the borrower's general liability insurance, and no reserves were taken in connection with the litigation. In addition, with respect to 1 mortgage loan (loan number 65), representing 0.2% of the mortgage pool (3.4% of loan group 2), the sponsor of the borrower previously failed to pay payroll taxes with respect to a company that is unaffiliated with the borrower. The IRS has secured a personal judgment against the sponsor in the amount of $892,666.22, which amount includes late fees and certain other charges. Although we have been informed by the borrower that the IRS has not currently placed a lien on the mortgaged property or his equity ownership in the borrower, there can be no assurance that the IRS will not take any action against the mortgaged property or the sponsor's interest in the borrower. Any such action could lead to an interruption of cash flow or a prepayment (without payment of any yield maintenance charge or prepayment premium) during a period of time when prepayment would otherwise have been prohibited. 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 S-85 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. In addition, the Kadima Medical Office Pool loan and the Happy Valley Towne Center loan are each managed by the related borrower or an affiliate of the related borrower, which could result in a conflict of interest, such as after an event of default. 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 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................... Four (4) mortgaged properties, representing 9.1% of the mortgage pool (9.7% of loan group 1) by allocated loan amount, are secured in whole or in part by leasehold S-86 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. One 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 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 S-87 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. MORTGAGE LOAN SELLER MAY NOT BE ABLE TO MAKE A REQUIRED REPURCHASE OR SUBSTITUTION OF A DEFECTIVE MORTGAGE LOAN...... The 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 seller will have the financial ability to effect such repurchases or substitutions. In addition, the mortgage loan seller 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 S-88 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-89 DESCRIPTION OF THE MORTGAGE POOL GENERAL The pool of mortgage loans included in the Trust Fund (the "Mortgage Pool") is expected to consist of 72 fixed rate mortgage loans (the "Mortgage Loans"), with an aggregate principal balance (the "Cut-Off Date Pool Balance") of $1,405,371,542. The "Cut-Off Date" for all of the Mortgage Loans is May 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) 9 Mortgage Loans that are secured by multifamily properties. Loan Group 1 is expected to consist of 61 Mortgage Loans, with an aggregate Cut-Off Date Balance of $1,316,413,770 (the "Cut-Off Date Group 1 Balance"). Loan Group 2 will consist of 11 Mortgage Loans that are secured by multifamily properties with an aggregate Cut-Off Date Balance of $88,957,773 (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-1 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 $1,498,302 to $216,000,000. The Mortgage Loans in the Mortgage Pool have an average Cut-Off Date Balance of $19,519,049. The Cut-Off Date Balances of the Mortgage Loans in Loan Group 1 range from $1,498,302 to $216,000,000. The Mortgage Loans in Loan Group 1 have an average Cut-Off Date Balance of $21,580,554. The Cut-Off Date Balances of the Mortgage Loans in Loan Group 2 range from $3,000,000 to $18,000,000. The Mortgage Loans in Loan Group 2 have an average Cut-Off Date Balance of $8,087,070. 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/room/unit, loan-to-value ratios and debt service coverage ratios) with respect to the Co-Lender Loans are calculated without regard to the related Companion Loans; 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 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 4 Mortgaged Properties, representing 9.1% of the Cut-Off Date Pool Balance (9.7% of the Cut-Off Date Group 1 Balance by allocated loan amount) in whole or in part 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-90 MORTGAGED PROPERTIES BY PROPERTY TYPE(1) % 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 ................................ 30 $ 687,278,428 48.9% 52.2% 0.0% Retail ................................ 22 281,834,298 20.1 21.4 0.0 Retail -- Anchored ................... 19 267,673,578 19.0 20.3 0.0 Retail -- Shadow Anchored(2) ......... 2 10,967,264 0.8 0.8 0.0 Retail -- Unanchored ................. 1 3,193,456 0.2 0.2 0.0 Multifamily ........................... 20 232,732,773 16.6 10.9 100.0 Mixed Use ............................. 3 112,481,825 8.0 8.5 0.0 Self Storage .......................... 7 38,487,480 2.7 2.9 0.0 Hospitality ........................... 4 34,956,349 2.5 2.7 0.0 Industrial ............................ 1 16,102,087 1.1 1.2 0.0 Land(3) ............................... 1 1,498,302 0.1 0.1 0.0 -- -------------- ----- ----- ----- 88 $1,405,371,542 100.0% 100.0% 100.0% == ============== ===== ===== ===== - ---------- (1) Because this table presents information relating to the Mortgaged Properties and not the Mortgage Loans, the information for the 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) A Mortgaged Property is classified as shadow anchored if it is located in close proximity to an anchored retail property. (3) Specifically, the fee interest in land which the ground tenant has improved and leased as a bank branch. The bank branch is not part of the loan collateral, and the sources of funds for loan repayment are the ground rent payments made to the related borrower. [PIE CHART OMITTED] Retail 20.1% Multifamily 16.6% Mixed Use 8.0% Self Storage 2.7% Hospitality 2.5% Industrial 1.1% Land 0.1% Office 48.9% MORTGAGE LOAN HISTORY All of the Mortgage Loans will be acquired on the Closing Date by the Depositor from the Mortgage Loan Seller. Wachovia Bank, National Association ("Wachovia"), in its capacity as a Mortgage Loan Seller, originated all of the Mortgage Loans to be included in the Trust Fund. 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. All of the Mortgage Loans accrue interest on the basis (an "Actual/360 basis") of the actual number of days elapsed over a 360-day year. Thirty-five (35) of the Mortgage Loans, representing 75.6% of the Cut-Off Date Pool Balance (27 Mortgage Loans in Loan Group 1 or 76.0% of the Cut-Off Date Group 1 Balance and 8 Mortgage Loans S-91 in Loan Group 2 or 69.3% 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. Fifteen (15) of the Mortgage Loans, representing 13.2% of the Cut-Off Date Pool Balance (14.1% of the Cut-Off Date Group 1 Balance), are interest-only for their entire term. 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. 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. No Mortgage Loan has a grace period that extends payment beyond the 11th day of any calendar month. Amortization. All of the Mortgage Loans (the "Balloon Loans"), 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"). Fifteen (15) of the Mortgage Loans, representing 13.2% of the Cut-Off Date Pool Balance (14.1% of the Cut-Off Date Group 1 Balance), provide for interest-only Periodic Payments for the entire term and do not amortize. Seven (7) of the Balloon Loans (the "ARD Loans"), representing 7.5% of the Cut-Off Date Pool Balance (8.0% of the Cut-Off Date Group 1 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. Six (6) of the ARD Loans, representing 5.5% of the Cut-Off Date Pool Balance (5.8% of the Cut-Off Date Group 1 Balance), 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 holders of the Class Z Certificates. Generally, Additional Interest will not be included in the calculations 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. Thirty-five (35) of the Balloon Loans and ARD Loans, representing 75.6% of the Cut-Off Date Pool Balance (27 Mortgage Loans in Loan Group 1 or 76.0% of the Cut-Off Date Group 1 Balance and 8 Mortgage Loans in Loan Group 2 or 69.3% of the Cut-Off Date Group 2 Balance), provide for monthly payments of interest only for the first 12 to 60 months in the case of Loan Group 1 and in the case of Loan Group 2 the first 12 to 48 months 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. Fifteen (15) of the Balloon Loans and ARD Loans, representing 13.2% of the Cut-Off Date Pool Balance (14.1% of the Cut-Off Date Group 1 Balance), provide for monthly payments of interest only until maturity or ARD and do not provide for any amortization of principal. One (1) of the ARD Loans, representing 2.1% of the Cut-Off Date Pool Balance (2.2% 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, all of 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 or all of the remaining term (60 Mortgage Loans, or 90.5% of the Cut-Off Date Pool Balance (52 Mortgage Loans in Loan Group 1 or 92.3% of the Cut-Off Date Group 1 Balance and 8 Mortgage Loans in Loan Group 2 or 63.5% of the Cut-Off Date Group 2 S-92 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 (11 Mortgage Loans, or 9.2% of the Cut-Off Date Pool Balance (8 Mortgage Loans in Loan Group 1 or 7.4% of the Cut-Off Date Group 1 Balance and 3 Mortgage Loans in Loan Group 2 or 36.5% of the Cut-Off Date Group 2 Balance)); (iii) impose a yield maintenance charge for most or all of the remaining term (1 Mortgage Loan, or 0.3% of the Cut-Off Date Pool Balance (0.3% 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 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. Sixty (60) of the Mortgage Loans, representing 90.5% of the Cut-Off Date Pool Balance (52 Mortgage Loans in Loan Group 1 or 92.3% of the Cut-Off Date Group 1 Balance and 8 Mortgage Loans in Loan Group 2 or 63.5% 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 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 S-93 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. 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. With respect to 1 Mortgage Loan (loan number 9), representing approximately 2.1% of the Cut-Off Date Pool Balance (2.2% of the Cut-Off Date Group 1 Balance), there is existing subordinated debt secured by the Mortgaged Property and a pledge of the equity interests in the borrower, subject to the terms of a subordination and standstill agreement in favor of the mortgage, and the holder of the subordinate debt has certain cure rights with respect to defaults of the mortgage loan. One (1) Mortgage Loan (loan number 12), representing 1.9% of the Cut-Off Date Pool Balance (2.0% of the Cut-Off Date Group 1 Balance), provide that under certain circumstances the related borrower may encumber the related Mortgaged Property with subordinate debt in the future with the consent of the mortgagee. With respect to 1 Mortgage Loans (loan number 29), representing approximately 0.9% of the Cut-Off Date Pool Balance (0.9% of the Cut-Off Date Group 1 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, (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 and/or (c) the related borrower may incur additional unsecured indebtedness other than in the ordinary course of business, subject to the terms of a subordination and standstill agreement to be entered into in favor of the mortgagee. With respect to 1 Mortgage Loan (loan number 70), representing approximately 0.2% of the Cut-Off Date Pool Balance (0.2% of the Cut-Off Date Group 1 Balance), the loan documents provide that the borrower may incur additional unsecured debt. With respect to 3 Mortgage Loans (loan numbers 2, 3 and 13), representing approximately 20.4% of the Cut-Off Date Pool Balance (21.7% of the Cut-Off Date Group 1 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. With respect to 15 Mortgage Loans (loan numbers 4, 5, 6, 10, 13, 14, 16, 18, 32, 33, 43, 52, 62, 66 and 69), representing approximately 25.4% of the Cut-Off Date Pool Balance (12 Mortgage Loans in Loan Group 1 or 24.4% of the Cut-Off Date Group 1 Balance and 3 Mortgage Loan in Loan Group 2 or 40.2% 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 to be 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 S-94 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. 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. One (1) group of Mortgage Loans (loan numbers 35, 39, 44, 56 and 61); representing 2.3% of the Cut-Off Date Pool Balance (2.5% of the Cut-Off Date Group 1 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 cross-default and cross-collateralization provisions for each group of 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. 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. 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. Substitutions. Certain of the Mortgage Loans permit the related borrowers to substitute Mortgaged Properties of like kind of quality for the properties securing the related Mortgage Loans, upon mortgagee consent and subject to certain conditions, including loan-to-value tests, debt service coverage tests, 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 S-95 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 Seller 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 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. In connection with the origination of all of the Mortgage Loans, except for loan number 72, representing 0.1% of the Cut-Off Date Pool Balance (0.1% of the Cut-Off Date Group 1 Balance), 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. 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, none of the Mortgaged Properties 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. CO-LENDER LOANS General. Five (5) Mortgage Loans (loan number 1, the "One & Two International Place Loan", loan number 2, the "450 West 33rd Street Loan", loan number 21, the "Home Market Foods Loan", loan number 40, the "Autumn Wood Apartments Loan" and loan number 41, the "Fall Creek Harbour Shopping Center Loan") (collectively, the "Co-Lender Loans") originated by Wachovia Bank, National Association 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". S-96 The One & Two International Place Loan is part of a split loan structure, which has 1 companion loan (the "One & Two International Place Pari Passu Companion Loan") that is pari passu in right of entitlement to payment with the One & Two International Place Loan. The One & Two International Place Pari Passu 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 15.4% of the Cut-Off Date Pool Balance (16.4% of the Cut-Off Date Group 1 Balance). The One & Two International Place Pari Passu Companion Loan will not be included in the Trust Fund. See "--One & Two International Place Loan" below. The 450 West 33rd Street Loan is part of a split loan structure, which has 1 companion loan (the "450 West 33rd Street Pari Passu Companion Loan" that is pari passu in right of entitlement to payment with the 450 West 33rd Street Loan. The 450 West 33rd Street Pari Passu 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 9.4% of the Cut-Off Date Pool Balance (10.1% 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. Three (3) Mortgage Loans (each of the Autumn Wood Apartments Loan, the Fall Creek Harbour Shopping Center Loan and the Home Market Foods Loan (collectively, the "Mezz Cap Loans")) are part of split loan structures, which in each case, have 1 companion loan (together, 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 One & Two International Place Pari Passu Companion Loan, the 450 West 33rd Street Pari Passu Companion Loan and the Mezz Cap Companion Loans are referred to herein as the "Companion Loans". None of the Companion Loans are included in the Trust Fund. The One & Two International Place Pari Passu Companion Loan and the 450 West 33rd Street Pari Passu 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". The One & Two International Place Whole Loan, the 450 West 33rd Street Whole Loan and each Mezz Cap Whole Loan are referred to in this prospectus supplement individually as a "Whole Loan" and collectively as the "Whole Loans". The trust fund relating to the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17 transaction (the "2005-C17 Transaction" and the related trust fund, the "2005-C17 Trust Fund") is the holder of the One & Two International Place Pari Passu Companion Loan and the 450 West 33rd Street Pari Passu Companion Loan. Entities that are not affiliated with the Mortgage Loan Seller are the holders of each Mezz Cap 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 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 450 West 33rd Street Loan, the terms of the related intercreditor agreement (the "450 West 33rd Street Intercreditor Agreement", and together with the One & Two International Place Intercreditor Agreement, 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 Mezz Cap Loans, the terms of the related intercreditor agreements (each a "Mezz Cap Intercreditor Agreement" and collectively, the "Mezz Cap Intercreditor Agreements") provide that the Mezz Cap Companion Loans are subordinate in certain respects to the related Mezz Cap Loans. The Pari Passu Loan Intercreditor Agreements and each Mezz Cap Intercreditor Agreement are individually referred to in this prospectus supplement as an "Intercreditor Agreement" and collectively as the "Intercreditor Agreements". S-97 The following table presents certain information with respect to the Co-Lender Loans: CUT-OFF DATE CUT-OFF DATE PRINCIPAL WHOLE LOAN WHOLE LOAN PRINCIPAL BALANCE OF BALANCE OF UNDERWRITTEN CUT-OFF DATE MORTGAGE LOAN MORTGAGE LOAN WHOLE LOAN DSCR LTV - -------------------------------------------- ---------------------- --------------- -------------- ------------- One & Two International Place .............. $216,000,000 $432,000,000 1.77x 61.7% 450 West 33rd Street ....................... $132,500,000 $265,000,000 1.22x 68.8% Home Market Foods .......................... $ 16,102,087 $ 17,176,587 1.16x 79.9% Autumn Wood Apartments ..................... $ 7,700,000 $ 8,170,000 1.10x 69.2% Fall Creek Harbour Shopping Center ......... $ 7,500,000 $ 7,925,000 1.12x 82.6% Pari Passu Loans Servicing Provisions of the Pari Passu Loan Intercreditor Agreements. With respect to the Pari Passu Loans, the 2005-C17 Master Servicer and the 2005-C17 Special Servicer will administer each Pari Passu Loan and its related Pari Passu Companion Loan pursuant to the 2005-C17 Pooling Agreement and the related Pari Passu Intercreditor Agreement for so long as such Pari Passu Loan is part of the 2005-C17 Trust Fund. The holder of each Pari Passu Companion Loan or an advisor on its behalf will generally share all of the rights that the 2005-C17 Controlling Class Representative has with respect to directing the 2005-C17 Master Servicer and/or 2005-C17 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 2005-C17 Master Servicer, the 2005-C17 Special Servicer, the 2005-C17 Trustee, the Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent to payments and reimbursements as set forth in the Pooling and Servicing Agreement and the 2005-C17 Pooling Agreement, as applicable) 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. 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 Mezz Cap Loan or 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 Mezz Cap Loan or the related loan documents adversely affects the lien priority of the related mortgage or constitutes certain material modifications specified in the related Mezz Cap Intercreditor Agreement; provided, however, 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 S-98 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 for which the borrower under the related Mezz Cap Loan is responsible. 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 the 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, Trustee or Fiscal Agent, 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; 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. S-99 Application of Amounts Paid to Trust Fund. On or before each distribution date, amounts payable to the trust fund 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; and in the case of the One & Two International Place Loan and the 450 West 33rd Street Loan, such amounts will be applied and distributed in accordance with the 2005-C17 Pooling Agreement. 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 and A-5 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 and A-5, unless otherwise specified, such numerical and statistical information excludes any Subordinate Companion 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 Loan. 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 and A-5 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 and A-5: (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 S-100 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 35 Mortgage Loans, representing 75.6% of the Cut-Off Date Pool Balance (27 Mortgage Loans in Loan Group 1 or 76.0% of the Cut-Off Date Group 1 Balance and 8 Mortgage Loans in Loan Group 2 or 69.3% 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. In general, the Mortgage Loan Seller 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 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 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 Seller 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 Seller 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% 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 S-101 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 Seller 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 Seller recharacterized as capital expenditures those items reported by borrowers as operating expenses (thus increasing "net cash flow") where the Mortgage Loan Seller 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 Seller nor the Depositor verified their accuracy. (ii) 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 Seller. The appraisal related to the Kadima Medical Office Pool Loan shows appraised values based on both a portfolio basis and an individual property basis. Unless otherwise stated herein, the portfolio value was used. (iii) 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 Seller. The appraisal related to the Kadima Medical Office Pool Loan shows appraised values based on both a portfolio basis and an individual property basis. Unless otherwise stated herein, the portfolio value was used. (iv) References to "Loan per Sq. Ft., Unit, Pad 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, pads, 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. (v) 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. (vi) References to "weighted averages" or "WA" are references to averages weighted on the basis of the Cut-Off Date Balances of the related Mortgage Loans. (vii) References to "Underwritten Replacement Reserves" represent estimated annual capital costs, as used by the Mortgage Loan Seller in determining Net Cash Flow. (viii) 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) 0.00155%, which percentage S-102 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. (ix) 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). (x) 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. (xi) 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 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. (xii) 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. (xiii) 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. (xiv) 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). (xv) References to "NA" indicate that, with respect to a particular category of data, such data is not applicable. (xvi) References to "NAV" indicate that, with respect to a particular category of data, such data is not available. (xvii) References to "Capital Imp. Reserve" are references to funded reserves escrowed for repairs, replacements and corrections of issues outlined in the engineering reports. (xviii) 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. S-103 (xix) 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. (xx) The sum in any column of any of the following tables may not equal the indicated total due to rounding. S-104 MORTGAGED PROPERTIES BY PROPERTY TYPE FOR ALL MORTGAGE LOANS(1) % BY WTD. AVG. NUMBER OF AGGREGATE CUT-OFF AVERAGE MAXIMUM CUT-OFF MORTGAGED CUT-OFF DATE POOL CUT-OFF CUT-OFF DATE PROPERTY TYPE PROPERTIES DATE BALANCE BALANCE DATE BALANCE DATE BALANCE LTV RATIO - ------------------------- ------------ ----------------- ----------- -------------- -------------- ----------- Office .................. 30 $ 687,278,428 48.9% $22,909,281 $216,000,000 68.8% Retail .................. 22 281,834,298 20.1 $12,810,650 $ 56,000,000 73.8% Retail - Anchored ...... 19 267,673,578 19.0 $14,088,083 $ 56,000,000 74.1% Retail - Shadow Anchored(4) ........... 2 10,967,264 0.8 $ 5,483,632 $ 8,470,000 69.0% Retail - Unanchored..... 1 3,193,456 0.2 $ 3,193,456 $ 3,193,456 66.9% Multifamily ............. 20 232,732,773 16.6 $11,636,639 $ 29,770,000 73.6% Mixed Use ............... 3 112,481,825 8.0 $37,493,942 $100,000,000 79.4% Self Storage ............ 7 38,487,480 2.7 $ 5,498,211 $ 9,600,000 79.0% Hospitality ............. 4 34,956,349 2.5 $ 8,739,087 $ 15,976,876 62.8% Industrial .............. 1 16,102,087 1.1 $16,102,087 $ 16,102,087 74.9% Land(5) ................. 1 1,498,302 0.1 $ 1,498,302 $ 1,498,302 74.9% -- -------------- ----- 88 $1,405,371,542 100.0% $15,970,131 $216,000,000 71.7% == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING WTD. AVG. MINIMUM MAXIMUM LTV TERM TO CUT-OFF CUT-OFF CUT-OFF WTD. AVG. WTD. AVG. RATIO AT MATURITY DATE DSC DATE DSC DATE DSC OCCUPANCY MORTGAGE PROPERTY TYPE MATURITY(2) (MOS.)(2) RATIO RATIO RATIO RATE(3) RATE - ------------------------- ------------- ----------- ----------- ---------- ---------- --------------- ---------- Office .................. 60.6% 113 1.49x 1.20x 2.67x 92.4% 5.246% Retail .................. 68.7% 111 1.43x 1.09x 2.51x 97.8% 5.430% Retail - Anchored ...... 69.0% 111 1.42x 1.09x 2.51x 97.9% 5.430% Retail - Shadow Anchored(4) ........... 66.5% 120 1.67x 1.44x 1.74x 100.0% 5.430% Retail - Unanchored..... 56.0% 118 1.34x 1.34x 1.34x 84.2% 5.490% Multifamily ............. 66.4% 98 1.32x 1.20x 1.57x 91.5% 5.311% Mixed Use ............... 74.1% 87 1.21x 1.20x 1.28x 89.6% 5.392% Self Storage ............ 77.1% 68 1.61x 1.51x 1.78x 87.9% 5.084% Hospitality ............. 50.2% 112 1.61x 1.50x 1.77x N/A 6.124% Industrial .............. 58.3% 119 1.30x 1.30x 1.30x 100.0% 6.100% Land(5) ................. 62.3% 119 1.22x 1.22x 1.22x 100.0% 5.320% 64.4% 107 1.43X 1.09X 2.67X 93.1% 5.333% - ------- (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 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 4 Mortgage Loans secured by hospitality properties, representing 2.5% 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) Specifically, the fee interest in land which the ground tenant has improved and leased as a bank branch. The bank branch is not part of the loan collateral, and the sources of funds for the 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-105 MORTGAGED PROPERTIES BY PROPERTY TYPE FOR LOAN GROUP 1 MORTGAGE LOANS(1) % BY NUMBER OF AGGREGATE CUT-OFF AVERAGE MAXIMUM MORTGAGED CUT-OFF DATE GROUP 1 CUT-OFF CUT-OFF PROPERTY TYPE PROPERTIES DATE BALANCE BALANCE DATE BALANCE DATE BALANCE - ------------------------- ------------ ----------------- -------------- -------------- -------------- Office .................. 30 $ 687,278,428 52.2% $22,909,281 $216,000,000 Retail .................. 22 281,834,298 21.4 $12,810,650 $ 56,000,000 Retail - Anchored ...... 19 267,673,578 20.3 $14,088,083 $ 56,000,000 Retail - Shadow Anchored(4) ........... 2 10,967,264 0.8 $ 5,483,632 $ 8,470,000 Retail - Unanchored..... 1 3,193,456 0.2 $ 3,193,456 $ 3,193,456 Multifamily ............. 9 143,775,000 10.9 $15,975,000 $ 29,770,000 Mixed Use ............... 3 112,481,825 8.5 $37,493,942 $100,000,000 Self Storage ............ 7 38,487,480 2.9 $ 5,498,211 $ 9,600,000 Hospitality ............. 4 34,956,349 2.7 $ 8,739,087 $ 15,976,876 Industrial .............. 1 16,102,087 1.2 $16,102,087 $ 16,102,087 Land(5) ................. 1 1,498,302 0.1 $ 1,498,302 $ 1,498,302 -- -------------- ----- 77 $1,316,413,770 100.0% $17,096,283 $216,000,000 == ============== ===== WTD. AVG. STATED WTD. AVG. WTD. AVG. REMAINING WTD. AVG. MINIMUM MAXIMUM CUT-OFF LTV TERM TO CUT-OFF CUT-OFF CUT-OFF WTD. AVG. WTD. AVG. DATE RATIO AT MATURITY DATE DSC DATE DSC DATE DSC OCCUPANCY MORTGAGE PROPERTY TYPE LTV RATIO MATURITY(2) (MOS.)(2) RATIO RATIO RATIO RATE(3) RATE - ------------------------- ----------- ------------- ----------- ----------- ---------- ---------- ----------- ---------- Office .................. 68.8% 60.6% 113 1.49x 1.20x 2.67x 92.4% 5.246% Retail .................. 73.8% 68.7% 111 1.43x 1.09x 2.51x 97.8% 5.430% Retail - Anchored ...... 74.1% 69.0% 111 1.42x 1.09x 2.51x 97.9% 5.430% Retail - Shadow Anchored(4) ........... 69.0% 66.5% 120 1.67x 1.44x 1.74x 100.0% 5.430% Retail - Unanchored..... 66.9% 56.0% 118 1.34x 1.34x 1.34x 84.2% 5.490% Multifamily ............. 74.6% 68.2% 100 1.33x 1.20x 1.57x 90.6% 5.333% Mixed Use ............... 79.4% 74.1% 87 1.21x 1.20x 1.28x 89.6% 5.392% Self Storage ............ 79.0% 77.1% 68 1.61x 1.51x 1.78x 87.9% 5.084% Hospitality ............. 62.8% 50.2% 112 1.61x 1.50x 1.77x N/A 6.124% Industrial .............. 74.9% 58.3% 119 1.30x 1.30x 1.30x 100.0% 6.100% Land(5) ................. 74.9% 62.3% 119 1.22x 1.22x 1.22x 100.0% 5.320% 71.6% 64.5% 108 1.44X 1.09X 2.67X 93.1% 5.337% - ------- (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 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 4 Mortgage Loans secured by hospitality properties, representing 2.7% 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) Specifically, the fee interest in land which the ground tenant has improved and leased as a bank branch. The bank branch is not part of the loan collateral, and the sources of funds for the loan repayment are the ground rent payments made to the related borrower. S-106 MORTGAGED PROPERTIES BY PROPERTY TYPE FOR LOAN GROUP 2 MORTGAGE LOANS(1) % BY NUMBER OF AGGREGATE CUT-OFF AVERAGE MAXIMUM MORTGAGED CUT-OFF DATE GROUP 2 CUT-OFF CUT-OFF PROPERTY TYPE PROPERTIES DATE BALANCE BALANCE DATE BALANCE DATE BALANCE - --------------------- ------------ -------------- -------------- -------------- -------------- Multifamily ......... 11 $88,957,773 100.0% $8,087,070 $18,000,000 -- ----------- ----- 11 $88,957,773 100.0% $8,087,070 $18,000,000 == =========== ===== WTD. AVG. STATED WTD. AVG. WTD. AVG. REMAINING WTD. AVG. MINIMUM MAXIMUM CUT-OFF LTV TERM TO CUT-OFF CUT-OFF CUT-OFF WTD. AVG. WTD. AVG. DATE RATIO AT MATURITY DATE DSC DATE DSC DATE DSC OCCUPANCY MORTGAGE PROPERTY TYPE LTV RATIO MATURITY(2) (MOS.)(2) RATIO RATIO RATIO RATE RATE - --------------------- ----------- ------------- ----------- ----------- ---------- ---------- ----------- ---------- Multifamily ......... 72.1% 63.4% 96 1.29x 1.20x 1.56x 92.9% 5.276% 72.1% 63.4% 96 1.29x 1.20x 1.56x 92.9% 5.276% - ------- (1) Because this table presents information relating to the Mortgaged Properties and not the Mortgage Loans, the information for Mortgage Loans secured by more than one Mortgaged Property is based on allocated amounts (allocating the Mortgage Loan principal balance to each of those properties by the appraised values of the Mortgaged Properties or the allocated loan amount as detailed in the related Mortgage Loan documents). (2) Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-107 RANGE OF CUT-OFF DATE BALANCES FOR ALL MORTGAGE LOANS AGGREGATE % OF AVERAGE RANGE OF CUT-OFF NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE DATE BALANCES ($) LOANS BALANCE POOL BALANCE BALANCE - ----------------------------- ----------- ----------------- -------------- -------------- < 2,000,000 ................. 1 $ 1,498,302 0.1% $ 1,498,302 2,000,001 - 3,000,000 ....... 7 19,214,163 1.4 $ 2,744,880 3,000,001 - 4,000,000 ....... 5 18,083,372 1.3 $ 3,616,674 4,000,001 - 5,000,000 ....... 6 27,243,069 1.9 $ 4,540,511 5,000,001 - 6,000,000 ....... 7 39,925,500 2.8 $ 5,703,643 6,000,001 - 7,000,000 ....... 4 25,841,323 1.8 $ 6,460,331 7,000,001 - 8,000,000 ....... 3 22,700,000 1.6 $ 7,566,667 8,000,001 - 9,000,000 ....... 4 33,708,150 2.4 $ 8,427,038 9,000,001 - 10,000,000 ...... 2 19,578,428 1.4 $ 9,789,214 10,000,001 - 15,000,000 ..... 6 71,237,773 5.1 $ 11,872,962 15,000,001 - 20,000,000 ..... 13 220,246,463 15.7 $ 16,942,036 20,000,001 - 25,000,000 ..... 1 24,975,000 1.8 $ 24,975,000 25,000,001 - 30,000,000 ..... 6 168,120,000 12.0 $ 28,020,000 35,000,001 - 40,000,000 ..... 1 40,000,000 2.8 $ 40,000,000 40,000,001 - 45,000,000 ..... 1 41,000,000 2.9 $ 41,000,000 55,000,001 - 60,000,000 ..... 1 56,000,000 4.0 $ 56,000,000 80,000,001 > ................ 4 576,000,000 41.0 $144,000,000 -- -------------- ----- 72 $1,405,371,542 100.0% $ 19,519,049 == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. TERM TO WTD. AVG. RANGE OF CUT-OFF CUT-OFF DATE DATE LTV LTV RATIO AT MATURITY CUT-OFF DATE WTD. AVG. DATE BALANCES ($) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO MORTGAGE RATE - ----------------------------- -------------- ----------- -------------- ---------- -------------- -------------- < 2,000,000 ................ $ 1,498,302 74.9% 62.3% 119 1.22x 5.320% 2,000,001 - 3,000,000 ....... $ 3,000,000 64.2% 58.8% 100 1.67x 5.415% 3,000,001 - 4,000,000 ....... $ 4,000,000 68.5% 62.1% 81 1.60x 5.500% 4,000,001 - 5,000,000 ....... $ 5,000,000 79.7% 71.1% 108 1.30x 5.207% 5,000,001 - 6,000,000 ....... $ 6,000,000 69.4% 60.8% 103 1.53x 5.447% 6,000,001 - 7,000,000 ....... $ 7,000,000 66.6% 59.7% 104 1.51x 5.472% 7,000,001 - 8,000,000 ....... $ 7,700,000 74.1% 65.4% 106 1.24x 5.480% 8,000,001 - 9,000,000 ....... $ 8,738,150 71.7% 67.6% 90 1.56x 5.557% 9,000,001 - 10,000,000 ...... $ 9,978,428 78.2% 75.4% 58 1.42x 5.098% 10,000,001 - 15,000,000 ..... $ 13,500,000 72.0% 62.7% 104 1.32x 5.358% 15,000,001 - 20,000,000 ..... $ 19,760,000 71.3% 64.3% 105 1.48x 5.313% 20,000,001 - 25,000,000 ..... $ 24,975,000 75.3% 63.2% 120 1.57x 5.660% 25,000,001 - 30,000,000 ..... $ 29,770,000 76.9% 73.4% 108 1.30x 5.417% 35,000,001 - 40,000,000 ..... $ 40,000,000 74.2% 67.6% 118 1.20x 5.390% 40,000,001 - 45,000,000 ..... $ 41,000,000 77.4% 71.6% 80 1.55x 5.260% 55,000,001 - 60,000,000 ..... $ 56,000,000 72.6% 65.4% 120 1.32x 5.790% 80,000,001 > ................ $216,000,000 69.4% 61.1% 111 1.46x 5.228% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-108 RANGE OF CUT-OFF DATE BALANCES FOR LOAN GROUP 1 MORTGAGE LOANS % BY AGGREGATE CUT-OFF DATE AVERAGE RANGE OF CUT-OFF NUMBER OF CUT-OFF DATE GROUP 1 CUT-OFF DATE DATE BALANCES ($) LOANS BALANCE BALANCE BALANCE - ----------------------------- ----------- ----------------- -------------- -------------- < 2,000,000 ................. 1 $ 1,498,302 0.1% $ 1,498,302 2,000,001 - 3,000,000 ....... 6 16,214,163 1.2 $ 2,702,361 3,000,001 - 4,000,000 ....... 5 18,083,372 1.4 $ 3,616,674 4,000,001 - 5,000,000 ....... 4 18,773,069 1.4 $ 4,693,267 5,000,001 - 6,000,000 ....... 6 33,925,500 2.6 $ 5,654,250 6,000,001 - 7,000,000 ....... 2 12,641,323 1.0 $ 6,320,661 7,000,001 - 8,000,000 ....... 2 15,000,000 1.1 $ 7,500,000 8,000,001 - 9,000,000 ....... 3 25,408,150 1.9 $ 8,469,383 9,000,001 - 10,000,000 ...... 2 19,578,428 1.5 $ 9,789,214 10,000,001 - 15,000,000 ..... 4 46,950,000 3.6 $ 11,737,500 15,000,001 - 20,000,000 ..... 12 202,246,463 15.4 $ 16,853,872 20,000,001 - 25,000,000 ..... 1 24,975,000 1.9 $ 24,975,000 25,000,001 - 30,000,000 ..... 6 168,120,000 12.8 $ 28,020,000 35,000,001 - 40,000,000 ..... 1 40,000,000 3.0 $ 40,000,000 40,000,001 - 45,000,000 ..... 1 41,000,000 3.1 $ 41,000,000 55,000,001 - 60,000,000 ..... 1 56,000,000 4.3 $ 56,000,000 80,000,001 > ................ 4 576,000,000 43.8 $144,000,000 -- -------------- ----- 61 $1,316,413,770 100.0% $ 21,580,554 == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. TERM TO WTD. AVG. RANGE OF CUT-OFF CUT-OFF DATE DATE LTV LTV RATIO AT MATURITY CUT-OFF DATE WTD. AVG. DATE BALANCES ($) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO MORTGAGE RATE - ----------------------------- -------------- ----------- -------------- ---------- -------------- -------------- < 2,000,000 ................. $ 1,498,302 74.9% 62.3% 119 1.22x 5.320% 2,000,001 - 3,000,000 ....... $ 3,000,000 66.7% 60.9% 107 1.71x 5.345% 3,000,001 - 4,000,000 ....... $ 4,000,000 68.5% 62.1% 81 1.60x 5.500% 4,000,001 - 5,000,000 ....... $ 5,000,000 79.7% 71.0% 104 1.33x 5.253% 5,000,001 - 6,000,000 ....... $ 6,000,000 69.3% 60.8% 100 1.58x 5.492% 6,000,001 - 7,000,000 ....... $ 6,400,000 69.8% 63.6% 89 1.63x 5.592% 7,000,001 - 8,000,000 ....... $ 7,500,000 78.7% 68.1% 119 1.25x 5.455% 8,000,001 - 9,000,000 ....... $ 8,738,150 70.2% 65.8% 100 1.68x 5.605% 9,000,001 - 10,000,000 ...... $ 9,978,428 78.2% 75.4% 58 1.42x 5.098% 10,000,001 - 15,000,000 ..... $ 12,500,000 68.9% 63.2% 96 1.33x 5.374% 15,000,001 - 20,000,000 ..... $ 19,760,000 71.3% 64.0% 109 1.50x 5.341% 20,000,001 - 25,000,000 ..... $ 24,975,000 75.3% 63.2% 120 1.57x 5.660% 25,000,001 - 30,000,000 ..... $ 29,770,000 76.9% 73.4% 108 1.30x 5.417% 35,000,001 - 40,000,000 ..... $ 40,000,000 74.2% 67.6% 118 1.20x 5.390% 40,000,001 - 45,000,000 ..... $ 41,000,000 77.4% 71.6% 80 1.55x 5.260% 55,000,001 - 60,000,000 ..... $ 56,000,000 72.6% 65.4% 120 1.32x 5.790% 80,000,001 > ................ $216,000,000 69.4% 61.1% 111 1.46x 5.228% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-109 RANGE OF CUT-OFF DATE BALANCES FOR LOAN GROUP 2 MORTGAGE LOANS % BY AGGREGATE CUT-OFF AVERAGE CUT-OFF DATE CUT-OFF RANGE OF CUT-OFF NUMBER OF DATE GROUP 2 DATE DATE BALANCES ($) LOANS BALANCE BALANCE BALANCE - -------------------------- ----------- ------------- --------- ------------- 2,000,001 - 3,000,000 .. 1 $ 3,000,000 3.4% $ 3,000,000 4,000,001 - 5,000,000 .. 2 8,470,000 9.5 $ 4,235,000 5,000,001 - 6,000,000 .. 1 6,000,000 6.7 $ 6,000,000 6,000,001 - 7,000,000 .. 2 13,200,000 14.8 $ 6,600,000 7,000,001 - 8,000,000 .. 1 7,700,000 8.7 $ 7,700,000 8,000,001 - 9,000,000 .. 1 8,300,000 9.3 $ 8,300,000 10,000,001 - 15,000,000 .. 2 24,287,773 27.3 $12,143,886 15,000,001 - 20,000,000 .. 1 18,000,000 20.2 $18,000,000 - ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. WTD. AVG. STATED WTD. AVG. MAXIMUM CUT-OFF WTD. AVG. REMAINING CUT-OFF CUT-OFF DATE LTV TERM TO DATE WTD. AVG. RANGE OF CUT-OFF DATE LTV RATIO AT MATURITY DSC MORTGAGE DATE BALANCES ($) BALANCE RATIO MATURITY* (MOS.)* RATIO RATE - -------------------------- ------------- ----------- ----------- ----------- ---------- ---------- 2,000,001 - 3,000,000 .. $ 3,000,000 50.8% 47.4% 60 1.44x 5.790% 4,000,001 - 5,000,000 .. $ 4,320,000 79.5% 71.3% 119 1.23x 5.106% 5,000,001 - 6,000,000 .. $ 6,000,000 70.0% 60.8% 120 1.24x 5.190% 6,000,001 - 7,000,000 .. $ 7,000,000 63.4% 55.9% 119 1.39x 5.358% 7,000,001 - 8,000,000 .. $ 7,700,000 65.3% 60.1% 82 1.23x 5.530% 8,000,001 - 9,000,000 .. $ 8,300,000 76.1% 73.0% 59 1.20x 5.410% 10,000,001 - 15,000,000 .. $13,500,000 78.1% 61.8% 120 1.30x 5.326% 15,000,001 - 20,000,000 .. $18,000,000 72.0% 67.6% 58 1.32x 5.000% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-110 MORTGAGED PROPERTIES BY STATE FOR ALL MORTGAGE LOANS(1) % BY AGGREGATE CUT-OFF AVERAGE NUMBER OF CUT-OFF DATE CUT-OFF MORTGAGED DATE POOL DATE STATE PROPERTIES BALANCE BALANCE BALANCE - ---------------------- ------------ ----------------- --------- -------------- MA ................... 3 $ 255,325,302 18.2% $85,108,434 NY ................... 6 241,302,964 17.2 $40,217,161 CA ................... 8 234,240,000 16.7 $29,280,000 Southern(3) ......... 6 191,265,000 13.6 $31,877,500 Northern(3) ......... 2 42,975,000 3.1 $21,487,500 FL ................... 22 130,837,123 9.3 $ 5,947,142 AZ ................... 3 101,150,000 7.2 $33,716,667 NC ................... 6 56,200,000 4.0 $ 9,366,667 CT ................... 2 47,800,000 3.4 $23,900,000 MD ................... 1 41,000,000 2.9 $41,000,000 TX ................... 3 36,770,000 2.6 $12,256,667 NJ ................... 2 32,294,586 2.3 $16,147,293 PA ................... 4 32,240,127 2.3 $ 8,060,032 VA ................... 2 30,191,243 2.1 $15,095,622 CO ................... 2 22,396,429 1.6 $11,198,214 GA ................... 2 20,387,773 1.5 $10,193,886 SC ................... 3 20,288,000 1.4 $ 6,762,667 WA ................... 2 15,300,000 1.1 $ 7,650,000 IL ................... 1 15,242,500 1.1 $15,242,500 NM ................... 2 10,000,000 0.7 $ 5,000,000 ND ................... 1 8,988,970 0.6 $ 8,988,970 AL ................... 1 7,700,000 0.5 $ 7,700,000 IN ................... 1 7,500,000 0.5 $ 7,500,000 NE ................... 1 6,200,000 0.4 $ 6,200,000 AR ................... 1 5,857,500 0.4 $ 5,857,500 OH ................... 2 5,396,264 0.4 $ 2,698,132 KY ................... 1 4,705,578 0.3 $ 4,705,578 KS ................... 1 3,600,000 0.3 $ 3,600,000 UT ................... 1 3,000,000 0.2 $ 3,000,000 LA ................... 1 2,923,000 0.2 $ 2,923,000 WI ................... 1 2,497,335 0.2 $ 2,497,335 MI ................... 1 2,397,565 0.2 $ 2,397,565 TN ................... 1 1,639,286 0.1 $ 1,639,286 -- -------------- ----- 88 $1,405,371,542 100.0% $15,970,131 == ============== ===== WTD. AVG. WTD. AVG. STATED WTD. AVG. MAXIMUM CUT-OFF WTD. AVG. REMAINING CUT-OFF CUT-OFF DATE LTV TERM TO DATE WTD. AVG. DATE LTV RATIO AT MATURITY DSC MORTGAGE STATE BALANCE RATIO MATURITY(2) (MOS.)(2) RATIO RATE - ---------------------- --------------- ----------- ------------- ----------- ---------- ---------- MA ................... $216,000,000 63.8% 55.0% 116 1.71x 5.268% NY ................... $132,500,000 73.2% 65.3% 117 1.23x 5.239% CA ................... $100,000,000 74.4% 69.3% 93 1.41x 5.281% Southern(3) ......... $100,000,000 73.8% 69.9% 86 1.41x 5.249% Northern(3) ......... $ 24,975,000 77.1% 66.3% 120 1.42x 5.421% FL ................... $ 16,500,000 71.8% 63.0% 104 1.51x 5.494% AZ ................... $ 56,000,000 71.5% 66.1% 119 1.36x 5.610% NC ................... $ 13,500,000 72.7% 63.0% 112 1.35x 5.342% CT ................... $ 29,000,000 72.8% 65.7% 118 1.29x 5.329% MD ................... $ 41,000,000 77.4% 71.6% 80 1.55x 5.260% TX ................... $ 29,770,000 75.6% 74.8% 60 1.48x 5.468% NJ ................... $ 25,044,643 75.0% 64.8% 119 1.40x 5.272% PA ................... $ 19,760,000 78.1% 67.4% 119 1.25x 5.582% VA ................... $ 26,000,000 79.9% 70.8% 119 1.25x 5.486% CO ................... $ 19,300,000 70.1% 64.4% 119 1.23x 5.460% GA ................... $ 10,787,773 80.8% 73.6% 91 1.37x 5.146% SC ................... $ 10,750,000 71.1% 64.9% 87 1.24x 5.148% WA ................... $ 8,300,000 65.0% 60.8% 86 1.36x 5.369% IL ................... $ 15,242,500 70.2% 70.2% 83 1.87x 4.850% NM ................... $ 5,680,000 79.1% 71.8% 119 1.22x 5.245% ND ................... $ 8,988,970 75.0% 64.8% 119 1.40x 5.272% AL ................... $ 7,700,000 65.3% 60.1% 82 1.23x 5.530% IN ................... $ 7,500,000 78.1% 67.0% 118 1.24x 5.550% NE ................... $ 6,200,000 76.5% 66.9% 119 1.20x 5.400% AR ................... $ 5,857,500 55.8% 55.8% 59 2.51x 4.870% OH ................... $ 2,899,000 66.2% 61.0% 118 1.75x 5.172% KY ................... $ 4,705,578 75.0% 64.8% 119 1.40x 5.272% KS ................... $ 3,600,000 68.2% 63.3% 60 1.52x 5.450% UT ................... $ 3,000,000 50.8% 47.4% 60 1.44x 5.790% LA ................... $ 2,923,000 65.0% 65.0% 117 2.07x 4.850% WI ................... $ 2,497,335 69.4% 58.3% 119 1.49x 5.640% MI ................... $ 2,397,565 63.9% 54.1% 119 1.78x 5.900% TN ................... $ 1,639,286 75.0% 64.8% 119 1.40x 5.272% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- (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 and, in the case of Kadima Medical Office Pool Loan, allocated portfolio appraised values). (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-111 MORTGAGED PROPERTIES BY STATE FOR LOAN GROUP 1 MORTGAGE LOANS(1) % BY AGGREGATE CUT-OFF AVERAGE NUMBER OF CUT-OFF DATE CUT-OFF MORTGAGED DATE GROUP 1 DATE STATE PROPERTIES BALANCE BALANCE BALANCE - ---------------------- ------------ ----------------- --------- -------------- MA ................... 3 $ 255,325,302 19.4% $85,108,434 NY ................... 6 241,302,964 18.3 $40,217,161 CA ................... 7 216,240,000 16.4 $30,891,429 Southern(3) ......... 5 173,265,000 13.2 $34,653,000 Northern(3) ......... 2 42,975,000 3.3 $21,487,500 FL ................... 22 130,837,123 9.9 $ 5,947,142 AZ ................... 3 101,150,000 7.7 $33,716,667 CT ................... 2 47,800,000 3.6 $23,900,000 MD ................... 1 41,000,000 3.1 $41,000,000 TX ................... 3 36,770,000 2.8 $12,256,667 NC ................... 4 36,700,000 2.8 $ 9,175,000 NJ ................... 2 32,294,586 2.5 $16,147,293 PA ................... 4 32,240,127 2.4 $ 8,060,032 VA ................... 2 30,191,243 2.3 $15,095,622 CO ................... 2 22,396,429 1.7 $11,198,214 SC ................... 2 16,138,000 1.2 $ 8,069,000 IL ................... 1 15,242,500 1.2 $15,242,500 GA ................... 1 9,600,000 0.7 $ 9,600,000 ND ................... 1 8,988,970 0.7 $ 8,988,970 IN ................... 1 7,500,000 0.6 $ 7,500,000 AR ................... 1 5,857,500 0.4 $ 5,857,500 NM ................... 1 5,680,000 0.4 $ 5,680,000 OH ................... 2 5,396,264 0.4 $ 2,698,132 KY ................... 1 4,705,578 0.4 $ 4,705,578 KS ................... 1 3,600,000 0.3 $ 3,600,000 LA ................... 1 2,923,000 0.2 $ 2,923,000 WI ................... 1 2,497,335 0.2 $ 2,497,335 MI ................... 1 2,397,565 0.2 $ 2,397,565 TN ................... 1 1,639,286 0.1 $ 1,639,286 -- -------------- ----- 77 $1,316,413,770 100.0% $17,096,283 == ============== ===== WTD. AVG. WTD. AVG. STATED WTD. AVG. MAXIMUM CUT-OFF WTD. AVG. REMAINING CUT-OFF CUT-OFF DATE LTV TERM TO DATE WTD. AVG. DATE LTV RATIO AT MATURITY DSC MORTGAGE STATE BALANCE RATIO MATURITY(2) (MOS.)(2) RATIO RATE - ---------------------- --------------- ----------- ------------- ----------- ---------- ---------- MA ................... $216,000,000 63.8% 55.0% 116 1.71x 5.268% NY ................... $132,500,000 73.2% 65.3% 117 1.23x 5.239% CA ................... $100,000,000 74.6% 69.4% 96 1.42x 5.304% Southern(3) ......... $100,000,000 74.0% 70.2% 89 1.42x 5.275% Northern(3) ......... $ 24,975,000 77.1% 66.3% 120 1.42x 5.421% FL ................... $ 16,500,000 71.8% 63.0% 104 1.51x 5.494% AZ ................... $ 56,000,000 71.5% 66.1% 119 1.36x 5.610% CT ................... $ 29,000,000 72.8% 65.7% 118 1.29x 5.329% MD ................... $ 41,000,000 77.4% 71.6% 80 1.55x 5.260% TX ................... $ 29,770,000 75.6% 74.8% 60 1.48x 5.468% NC ................... $ 12,500,000 71.6% 65.2% 108 1.37x 5.371% NJ ................... $ 25,044,643 75.0% 64.8% 119 1.40x 5.272% PA ................... $ 19,760,000 78.1% 67.4% 119 1.25x 5.582% VA ................... $ 26,000,000 79.9% 70.8% 119 1.25x 5.486% CO ................... $ 19,300,000 70.1% 64.4% 119 1.23x 5.460% SC ................... $ 10,750,000 68.8% 63.5% 78 1.24x 5.174% IL ................... $ 15,242,500 70.2% 70.2% 83 1.87x 4.850% GA ................... $ 9,600,000 81.7% 81.7% 59 1.51x 4.950% ND ................... $ 8,988,970 75.0% 64.8% 119 1.40x 5.272% IN ................... $ 7,500,000 78.1% 67.0% 118 1.24x 5.550% AR ................... $ 5,857,500 55.8% 55.8% 59 2.51x 4.870% NM ................... $ 5,680,000 78.9% 71.7% 119 1.21x 5.310% OH ................... $ 2,899,000 66.2% 61.0% 118 1.75x 5.172% KY ................... $ 4,705,578 75.0% 64.8% 119 1.40x 5.272% KS ................... $ 3,600,000 68.2% 63.3% 60 1.52x 5.450% LA ................... $ 2,923,000 65.0% 65.0% 117 2.07x 4.850% WI ................... $ 2,497,335 69.4% 58.3% 119 1.49x 5.640% MI ................... $ 2,397,565 63.9% 54.1% 119 1.78x 5.900% TN ................... $ 1,639,286 75.0% 64.8% 119 1.40x 5.272% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- (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 and, in the case of the Kadima Medical Office Pool Loan, allocated portfolio appraised values). (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-112 MORTGAGED PROPERTIES BY STATE FOR LOAN GROUP 2 MORTGAGE LOANS(1) % BY AGGREGATE CUT-OFF AVERAGE NUMBER OF CUT-OFF DATE CUT-OFF MORTGAGED DATE GROUP 2 DATE STATE PROPERTIES BALANCE BALANCE BALANCE - ---------------------- ------------ -------------- --------- ------------- NC ................... 2 $19,500,000 21.9% $ 9,750,000 CA ................... 1 18,000,000 20.2 $18,000,000 Southern(3) ......... 1 18,000,000 20.2 $18,000,000 WA ................... 2 15,300,000 17.2 $ 7,650,000 GA ................... 1 10,787,773 12.1 $10,787,773 AL ................... 1 7,700,000 8.7 $ 7,700,000 NE ................... 1 6,200,000 7.0 $ 6,200,000 NM ................... 1 4,320,000 4.9 $ 4,320,000 SC ................... 1 4,150,000 4.7 $ 4,150,000 UT ................... 1 3,000,000 3.4 $ 3,000,000 - ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. WTD. AVG. STATED WTD. AVG. MAXIMUM CUT-OFF WTD. AVG. REMAINING CUT-OFF CUT-OFF DATE LTV TERM TO DATE WTD. AVG. DATE LTV RATIO AT MATURITY DSC MORTGAGE STATE BALANCE RATIO MATURITY(2) (MOS.)(2) RATIO RATE - ---------------------- -------------- ----------- ------------- ----------- ---------- ---------- NC ................... $13,500,000 74.6% 58.9% 120 1.31x 5.287% CA ................... $18,000,000 72.0% 67.6% 58 1.32x 5.000% Southern(3) ......... $18,000,000 72.0% 67.6% 58 1.32x 5.000% WA ................... $ 8,300,000 65.0% 60.8% 86 1.36x 5.369% GA ................... $10,787,773 79.9% 66.5% 119 1.24x 5.320% AL ................... $ 7,700,000 65.3% 60.1% 82 1.23x 5.530% NE ................... $ 6,200,000 76.5% 66.9% 119 1.20x 5.400% NM ................... $ 4,320,000 79.3% 71.9% 119 1.23x 5.160% SC ................... $ 4,150,000 79.8% 70.7% 119 1.23x 5.050% UT ................... $ 3,000,000 50.8% 47.4% 60 1.44x 5.790% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- (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) 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-113 RANGE OF UNDERWRITTEN DSC RATIOS FOR ALL MORTGAGE LOANS AS OF THE CUT-OFF DATE % OF AGGREGATE CUT-OFF AVERAGE CUT-OFF DATE CUT-OFF RANGE OF UNDERWRITTEN NUMBER OF DATE POOL DATE DSC RATIOS (X) LOANS BALANCE BALANCE BALANCE - ----------------------- ----------- ----------------- --------- -------------- 1.05 - 1.09 ........... 1 $ 27,500,000 2.0% $27,500,000 1.20 - 1.24 ........... 23 477,537,318 34.0 $20,762,492 1.25 - 1.29 ........... 6 78,769,825 5.6 $13,128,304 1.30 - 1.34 ........... 7 145,773,971 10.4 $20,824,853 1.35 - 1.39 ........... 2 22,500,000 1.6 $11,250,000 1.40 - 1.44 ........... 5 141,397,264 10.1 $28,279,453 1.45 - 1.49 ........... 3 61,317,335 4.4 $20,439,112 1.50 - 1.54 ........... 5 43,618,199 3.1 $ 8,723,640 1.55 - 1.59 ........... 5 83,175,000 5.9 $16,635,000 1.60 - 1.64 ........... 2 16,250,000 1.2 $ 8,125,000 1.70 - 1.74 ........... 2 12,470,000 0.9 $ 6,235,000 1.75 - 1.79 ........... 5 237,075,631 16.9 $47,415,126 1.85 - 1.89 ........... 1 15,242,500 1.1 $15,242,500 2.00 - 2.04 ........... 1 2,899,000 0.2 $ 2,899,000 2.05 - 2.09 ........... 1 2,923,000 0.2 $ 2,923,000 2.10 - 2.14 ........... 1 15,065,000 1.1 $15,065,000 2.30 - 3.79 ........... 2 21,857,500 1.6 $10,928,750 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. WTD. AVG. STATED MAXIMUM CUT-OFF WTD. AVG. REMAINING WTD. AVG. CUT-OFF DATE LTV TERM TO CUT-OFF WTD. AVG. RANGE OF UNDERWRITTEN DATE LTV RATIO AT MATURITY DATE MORTGAGE DSC RATIOS (X) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO RATE - ----------------------- -------------- ----------- ----------- ----------- ----------- ---------- 1.05 - 1.09 ........... $ 27,500,000 89.9% 89.9% 120 1.09x 5.410% 1.20 - 1.24 ........... $132,500,000 74.2% 66.9% 105 1.21x 5.289% 1.25 - 1.29 ........... $ 26,000,000 77.5% 68.6% 119 1.27x 5.286% 1.30 - 1.34 ........... $ 56,000,000 72.5% 63.8% 108 1.32x 5.562% 1.35 - 1.39 ........... $ 16,500,000 76.2% 65.0% 119 1.39x 5.537% 1.40 - 1.44 ........... $127,500,000 74.2% 64.4% 114 1.40x 5.298% 1.45 - 1.49 ........... $ 29,770,000 73.7% 73.3% 90 1.46x 5.528% 1.50 - 1.54 ........... $ 15,976,876 71.6% 63.9% 90 1.52x 5.558% 1.55 - 1.59 ........... $ 41,000,000 73.3% 65.1% 97 1.56x 5.412% 1.60 - 1.64 ........... $ 12,500,000 64.5% 61.2% 105 1.61x 5.281% 1.70 - 1.74 ........... $ 8,470,000 67.4% 66.3% 100 1.73x 5.548% 1.75 - 1.79 ........... $216,000,000 62.2% 54.1% 115 1.77x 5.258% 1.85 - 1.89 ........... $ 15,242,500 70.2% 70.2% 83 1.87x 4.850% 2.00 - 2.04 ........... $ 2,899,000 65.0% 65.0% 117 2.01x 4.890% 2.05 - 2.09 ........... $ 2,923,000 65.0% 65.0% 117 2.07x 4.850% 2.10 - 2.14 ........... $ 15,065,000 64.1% 64.1% 82 2.11x 4.850% 2.30 - 3.79 ........... $ 16,000,000 51.1% 51.1% 102 2.63x 5.060% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-114 RANGE OF UNDERWRITTEN DSC RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE CUT-OFF DATE % BY AGGREGATE CUT-OFF AVERAGE CUT-OFF DATE CUT-OFF RANGE OF UNDERWRITTEN NUMBER OF DATE GROUP 1 DATE DSC RATIOS (X) LOANS BALANCE BALANCE BALANCE - ----------------------- ----------- ----------------- --------- -------------- 1.05 - 1.09 ........... 1 $ 27,500,000 2.1% $27,500,000 1.20 - 1.24 ........... 16 430,079,545 32.7 $26,879,972 1.25 - 1.29 ........... 6 78,769,825 6.0 $13,128,304 1.30 - 1.34 ........... 5 114,273,971 8.7 $22,854,794 1.35 - 1.39 ........... 2 22,500,000 1.7 $11,250,000 1.40 - 1.44 ........... 4 138,397,264 10.5 $34,599,316 1.45 - 1.49 ........... 3 61,317,335 4.7 $20,439,112 1.50 - 1.54 ........... 5 43,618,199 3.3 $ 8,723,640 1.55 - 1.59 ........... 4 76,175,000 5.8 $19,043,750 1.60 - 1.64 ........... 2 16,250,000 1.2 $ 8,125,000 1.70 - 1.74 ........... 2 12,470,000 0.9 $ 6,235,000 1.75 - 1.79 ........... 5 237,075,631 18.0 $47,415,126 1.85 - 1.89 ........... 1 15,242,500 1.2 $15,242,500 2.00 - 2.04 ........... 1 2,899,000 0.2 $ 2,899,000 2.05 - 2.09 ........... 1 2,923,000 0.2 $ 2,923,000 2.10 - 2.14 ........... 1 15,065,000 1.1 $15,065,000 2.30 - 3.79 ........... 2 21,857,500 1.7 $10,928,750 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. WTD. AVG. STATED MAXIMUM CUT-OFF WTD. AVG. REMAINING WTD. AVG. CUT-OFF DATE LTV TERM TO CUT-OFF WTD. AVG. RANGE OF UNDERWRITTEN DATE LTV RATIO AT MATURITY DATE MORTGAGE DSC RATIOS (X) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO RATE - ----------------------- -------------- ----------- ----------- ----------- ----------- ---------- 1.05 - 1.09 ........... $ 27,500,000 89.9% 89.9% 120 1.09x 5.410% 1.20 - 1.24 ........... $132,500,000 74.1% 66.9% 106 1.21x 5.285% 1.25 - 1.29 ........... $ 26,000,000 77.5% 68.6% 119 1.27x 5.286% 1.30 - 1.34 ........... $ 56,000,000 72.1% 63.8% 114 1.32x 5.678% 1.35 - 1.39 ........... $ 16,500,000 76.2% 65.0% 119 1.39x 5.537% 1.40 - 1.44 ........... $127,500,000 74.7% 64.8% 115 1.40x 5.287% 1.45 - 1.49 ........... $ 29,770,000 73.7% 73.3% 90 1.46x 5.528% 1.50 - 1.54 ........... $ 15,976,876 71.6% 63.9% 90 1.52x 5.558% 1.55 - 1.59 ........... $ 41,000,000 75.3% 66.9% 95 1.56x 5.421% 1.60 - 1.64 ........... $ 12,500,000 64.5% 61.2% 105 1.61x 5.281% 1.70 - 1.74 ........... $ 8,470,000 67.4% 66.3% 100 1.73x 5.548% 1.75 - 1.79 ........... $216,000,000 62.2% 54.1% 115 1.77x 5.258% 1.85 - 1.89 ........... $ 15,242,500 70.2% 70.2% 83 1.87x 4.850% 2.00 - 2.04 ........... $ 2,899,000 65.0% 65.0% 117 2.01x 4.890% 2.05 - 2.09 ........... $ 2,923,000 65.0% 65.0% 117 2.07x 4.850% 2.10 - 2.14 ........... $ 15,065,000 64.1% 64.1% 82 2.11x 4.850% 2.30 - 3.79 ........... $ 16,000,000 51.1% 51.1% 102 2.63x 5.060% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-115 RANGE OF UNDERWRITTEN DSC RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE CUT-OFF DATE AGGREGATE % BY AVERAGE RANGE OF UNDERWRITTEN NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE DSC RATIOS(X) OF LOANS BALANCE GROUP 2 BALANCE BALANCE - ----------------------- ---------- -------------- ----------------- -------------- 1.20 - 1.24 ........... 7 $47,457,773 53.3% $ 6,779,682 1.30 - 1.34 ........... 2 31,500,000 35.4 $15,750,000 1.40 - 1.44 ........... 1 3,000,000 3.4 $ 3,000,000 1.55 - 1.59 ........... 1 7,000,000 7.9 $ 7,000,000 - ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF UNDERWRITTEN CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE DSC RATIOS(X) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------- -------------- -------------- -------------- ---------- -------------- ---------- 1.20 - 1.24 ........... $10,787,773 75.1% 66.8% 103 1.22x 5.326% 1.30 - 1.34 ........... $18,000,000 74.0% 63.5% 85 1.33x 5.141% 1.40 - 1.44 ........... $ 3,000,000 50.8% 47.4% 60 1.44x 5.790% 1.55 - 1.59 ........... $ 7,000,000 51.9% 46.2% 119 1.56x 5.320% $18,000,000 72.1% 63.4% 96 1.29X 5.276% - ------- * 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 % BY AVERAGE RANGE OF CUT-OFF DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%) OF LOANS BALANCE POOL BALANCE BALANCE - ----------------------- ---------- ----------------- -------------- -------------- 40.01 - 50.00 ......... 1 $ 16,000,000 1.1% $16,000,000 50.01 - 55.00 ......... 3 15,600,000 1.1 $ 5,200,000 55.01 - 60.00 ......... 4 33,336,973 2.4 $ 8,334,243 60.01 - 65.00 ......... 8 257,574,480 18.3 $32,196,810 65.01 - 70.00 ......... 13 262,784,931 18.7 $20,214,225 70.01 - 75.00 ......... 12 327,221,317 23.3 $27,268,443 75.01 - 80.00 ......... 25 432,803,841 30.8 $17,312,154 80.01 - 85.00 ......... 5 32,550,000 2.3 $ 6,510,000 85.01 - 90.00 ......... 1 27,500,000 2.0 $27,500,000 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE LTV RATIOS (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------- -------------- -------------- -------------- ---------- -------------- ---------- 40.01 - 50.00 ......... $ 16,000,000 49.4% 49.4% 118 2.67x 5.130% 50.01 - 55.00 ......... $ 7,000,000 52.7% 42.7% 108 1.55x 5.626% 55.01 - 60.00 ......... $ 12,500,000 58.4% 51.1% 108 1.79x 5.723% 60.01 - 65.00 ......... $216,000,000 62.0% 54.8% 111 1.77x 5.193% 65.01 - 70.00 ......... $132,500,000 68.8% 61.2% 116 1.31x 5.322% 70.01 - 75.00 ......... $127,500,000 73.6% 65.5% 108 1.36x 5.384% 75.01 - 80.00 ......... $100,000,000 78.3% 70.8% 101 1.30x 5.375% 80.01 - 85.00 ......... $ 9,600,000 82.0% 82.0% 59 1.58x 4.950% 85.01 - 90.00 ......... $ 27,500,000 89.9% 89.9% 120 1.09x 5.410% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-116 RANGE OF LTV RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE CUT-OFF DATE AGGREGATE % BY AVERAGE RANGE OF CUT-OFF DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%) OF LOANS BALANCE GROUP 1 BALANCE BALANCE - ----------------------- ---------- ----------------- ----------------- -------------- 40.01 - 50.00 ......... 1 $ 16,000,000 1.2% $16,000,000 50.01 - 55.00 ......... 1 5,600,000 0.4 $ 5,600,000 55.01 - 60.00 ......... 4 33,336,973 2.5 $ 8,334,243 60.01 - 65.00 ......... 8 257,574,480 19.6 $32,196,810 65.01 - 70.00 ......... 11 249,084,931 18.9 $22,644,085 70.01 - 75.00 ......... 11 309,221,317 23.5 $28,111,029 75.01 - 80.00 ......... 19 385,546,069 29.3 $20,291,898 80.01 - 85.00 ......... 5 32,550,000 2.5 $ 6,510,000 85.01 - 90.00 ......... 1 27,500,000 2.1 $27,500,000 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE LTV RATIOS (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------- -------------- -------------- -------------- ---------- -------------- ---------- 40.01 - 50.00 ......... $ 16,000,000 49.4% 49.4% 118 2.67x 5.130% 50.01 - 55.00 ......... $ 5,600,000 54.6% 35.7% 120 1.59x 5.920% 55.01 - 60.00 ......... $ 12,500,000 58.4% 51.1% 108 1.79x 5.723% 60.01 - 65.00 ......... $216,000,000 62.0% 54.8% 111 1.77x 5.193% 65.01 - 70.00 ......... $132,500,000 68.8% 61.2% 117 1.31x 5.318% 70.01 - 75.00 ......... $127,500,000 73.7% 65.4% 111 1.36x 5.406% 75.01 - 80.00 ......... $100,000,000 78.3% 71.4% 100 1.30x 5.383% 80.01 - 85.00 ......... $ 9,600,000 82.0% 82.0% 59 1.58x 4.950% 85.01 - 90.00 ......... $ 27,500,000 89.9% 89.9% 120 1.09x 5.410% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * 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 AGGREGATE % BY AVERAGE RANGE OF CUT-OFF DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%) OF LOANS BALANCE GROUP 2 BALANCE BALANCE - ----------------------- ---------- -------------- ----------------- -------------- 50.01 - 55.00 ......... 2 $10,000,000 11.2% $ 5,000,000 65.01 - 70.00 ......... 2 13,700,000 15.4 $ 6,850,000 70.01 - 75.00 ......... 1 18,000,000 20.2 $18,000,000 75.01 - 80.00 ......... 6 47,257,773 53.1 $ 7,876,295 - ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE LTV RATIOS (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------- -------------- -------------- -------------- ---------- -------------- ---------- 50.01 - 55.00 ......... $ 7,000,000 51.6% 46.6% 101 1.52x 5.461% 65.01 - 70.00 ......... $ 7,700,000 67.3% 60.4% 99 1.23x 5.381% 70.01 - 75.00 ......... $18,000,000 72.0% 67.6% 58 1.32x 5.000% 75.01 - 80.00 ......... $13,500,000 77.8% 66.1% 109 1.25x 5.311% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-117 RANGE OF LTV RATIOS FOR ALL MORTGAGE LOANS AS OF THE MATURITY OR ANTICIPATED REPAYMENT DATE AGGREGATE % BY AVERAGE RANGE OF MATURITY DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%)* OF LOANS BALANCE POOL BALANCE BALANCE - ------------------------ ---------- ----------------- -------------- -------------- 30.01 - 40.00 .......... 1 $ 5,600,000 0.4% $ 5,600,000 40.01 - 50.00 .......... 6 44,519,389 3.2 $ 7,419,898 50.01 - 55.00 .......... 4 246,874,441 17.6 $61,718,610 55.01 - 60.00 .......... 9 190,897,642 13.6 $21,210,849 60.01 - 65.00 .......... 14 265,560,302 18.9 $18,968,593 65.01 - 70.00 .......... 19 317,319,270 22.6 $16,701,014 70.01 - 75.00 .......... 11 144,780,500 10.3 $13,161,864 75.01 - 80.00 .......... 2 129,770,000 9.2 $64,885,000 80.01 - 85.00 .......... 5 32,550,000 2.3 $ 6,510,000 85.01 - 90.00 .......... 1 27,500,000 2.0 $27,500,000 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF MATURITY DATE CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE LTV RATIOS (%)* BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ------------------------ -------------- -------------- -------------- ---------- -------------- ---------- 30.01 - 40.00 .......... $ 5,600,000 54.6% 35.7% 120 1.59x 5.920% 40.01 - 50.00 .......... $ 16,000,000 54.0% 47.5% 115 2.00x 5.663% 50.01 - 55.00 .......... $216,000,000 61.9% 53.6% 116 1.75x 5.271% 55.01 - 60.00 .......... $132,500,000 69.0% 58.9% 112 1.29x 5.224% 60.01 - 65.00 .......... $127,500,000 72.3% 63.9% 114 1.43x 5.312% 65.01 - 70.00 .......... $ 56,000,000 74.7% 67.8% 110 1.30x 5.446% 70.01 - 75.00 .......... $ 41,000,000 77.6% 71.3% 98 1.39x 5.260% 75.01 - 80.00 .......... $100,000,000 79.2% 75.7% 78 1.26x 5.397% 80.01 - 85.00 .......... $ 9,600,000 82.0% 82.0% 59 1.58x 4.950% 85.01 - 90.00 .......... $ 27,500,000 89.9% 89.9% 120 1.09x 5.410% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. RANGE OF LTV RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE MATURITY OR ANTICIPATED REPAYMENT DATE AGGREGATE % BY AVERAGE RANGE OF MATURITY DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%)* OF LOANS BALANCE GROUP 1 BALANCE BALANCE - ------------------------ ---------- ----------------- ----------------- -------------- 30.01 - 40.00 .......... 1 $ 5,600,000 0.4% $ 5,600,000 40.01 - 50.00 .......... 4 34,519,389 2.6 $ 8,629,847 50.01 - 55.00 .......... 4 246,874,441 18.8 $61,718,610 55.01 - 60.00 .......... 8 177,397,642 13.5 $22,174,705 60.01 - 65.00 .......... 12 251,860,302 19.1 $20,988,358 65.01 - 70.00 .......... 16 282,331,497 21.4 $17,645,719 70.01 - 75.00 .......... 8 128,010,500 9.7 $16,001,313 75.01 - 80.00 .......... 2 129,770,000 9.9 $64,885,000 80.01 - 85.00 .......... 5 32,550,000 2.5 $ 6,510,000 85.01 - 90.00 .......... 1 27,500,000 2.1 $27,500,000 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF MATURITY DATE CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE LTV RATIOS (%)* BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ------------------------ -------------- -------------- -------------- ---------- -------------- ---------- 30.01 - 40.00 .......... $ 5,600,000 54.6% 35.7% 120 1.59x 5.920% 40.01 - 50.00 .......... $ 16,000,000 54.8% 47.8% 118 2.14x 5.721% 50.01 - 55.00 .......... $216,000,000 61.9% 53.6% 116 1.75x 5.271% 55.01 - 60.00 .......... $132,500,000 68.4% 59.0% 111 1.29x 5.216% 60.01 - 65.00 .......... $127,500,000 72.5% 64.1% 115 1.44x 5.308% 65.01 - 70.00 .......... $ 56,000,000 74.6% 67.8% 112 1.30x 5.481% 70.01 - 75.00 .......... $ 41,000,000 77.6% 71.2% 99 1.41x 5.261% 75.01 - 80.00 .......... $100,000,000 79.2% 75.7% 78 1.26x 5.397% 80.01 - 85.00 .......... $ 9,600,000 82.0% 82.0% 59 1.58x 4.950% 85.01 - 90.00 .......... $ 27,500,000 89.9% 89.9% 120 1.09x 5.410% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-118 RANGE OF LTV RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE MATURITY OR ANTICIPATED REPAYMENT DATE AGGREGATE % BY AVERAGE RANGE OF MATURITY DATE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE LTV RATIOS (%)* OF LOANS BALANCE GROUP 2 BALANCE BALANCE - ------------------------ ---------- -------------- ----------------- -------------- 40.01 - 50.00 .......... 2 $10,000,000 11.2% $ 5,000,000 55.01 - 60.00 .......... 1 13,500,000 15.2 $13,500,000 60.01 - 65.00 .......... 2 13,700,000 15.4 $ 6,850,000 65.01 - 70.00 .......... 3 34,987,773 39.3 $11,662,591 70.01 - 75.00 .......... 3 16,770,000 18.9 $ 5,590,000 - ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF MATURITY DATE CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE LTV RATIOS (%)* BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ------------------------ -------------- -------------- -------------- ---------- -------------- ---------- 40.01 - 50.00 .......... $ 7,000,000 51.6% 46.6% 101 1.52x 5.461% 55.01 - 60.00 .......... $13,500,000 76.7% 58.0% 120 1.34x 5.330% 60.01 - 65.00 .......... $ 7,700,000 67.3% 60.4% 99 1.23x 5.381% 65.01 - 70.00 .......... $18,000,000 75.2% 67.1% 88 1.27x 5.170% 70.01 - 75.00 .......... $ 8,300,000 77.9% 72.2% 89 1.22x 5.257% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. RANGE OF MORTGAGE RATES FOR ALL MORTGAGE LOANS AGGREGATE % BY AVERAGE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE RANGE OF MORTGAGE RATES (%) OF LOANS BALANCE POOL BALANCE BALANCE - ----------------------------- ---------- ----------------- -------------- -------------- 4.850 - 5.249 ............... 24 $ 576,917,253 41.1% $24,038,219 5.250 - 5.499 ............... 28 568,878,774 40.5 $20,317,099 5.500 - 5.749 ............... 9 131,979,599 9.4 $14,664,400 5.750 - 5.999 ............... 8 96,514,357 6.9 $12,064,295 6.000 - 6.249 ............... 1 16,102,087 1.1 $16,102,087 6.250 - 6.499 ............... 2 14,979,473 1.1 $ 7,489,736 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE RANGE OF MORTGAGE RATES (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------------- -------------- -------------- -------------- ---------- -------------- ---------- 4.850 - 5.249 ............... $216,000,000 67.5% 60.5% 108 1.56x 5.115% 5.250 - 5.499 ............... $127,500,000 75.8% 69.2% 102 1.32x 5.357% 5.500 - 5.749 ............... $ 29,050,000 75.1% 67.5% 117 1.36x 5.600% 5.750 - 5.999 ............... $ 56,000,000 69.0% 59.5% 115 1.42x 5.844% 6.000 - 6.249 ............... $ 16,102,087 74.9% 58.3% 119 1.30x 6.100% 6.250 - 6.499 ............... $ 8,738,150 58.8% 46.1% 119 1.66x 6.343% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-119 RANGE OF MORTGAGE RATES FOR LOAN GROUP 1 MORTGAGE LOANS AGGREGATE % BY AVERAGE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE RANGE OF MORTGAGE RATES (%) OF LOANS BALANCE GROUP 1 BALANCE BALANCE - ----------------------------- ---------- ----------------- ----------------- -------------- 4.850 - 5.249 ............... 20 $ 544,447,253 41.4% $27,222,363 5.250 - 5.499 ............... 23 523,091,001 39.7 $22,743,087 5.500 - 5.749 ............... 8 124,279,599 9.4 $15,534,950 5.750 - 5.999 ............... 7 93,514,357 7.1 $13,359,194 6.000 - 6.249 ............... 1 16,102,087 1.2 $16,102,087 6.250 - 6.499 ............... 2 14,979,473 1.1 $ 7,489,736 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE RANGE OF MORTGAGE RATES (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------------- -------------- -------------- -------------- ---------- -------------- ---------- 4.850 - 5.249 ............... $216,000,000 67.1% 60.1% 109 1.57x 5.118% 5.250 - 5.499 ............... $127,500,000 76.0% 69.8% 102 1.33x 5.358% 5.500 - 5.749 ............... $ 29,050,000 75.7% 68.0% 119 1.37x 5.604% 5.750 - 5.999 ............... $ 56,000,000 69.5% 59.8% 117 1.42x 5.845% 6.000 - 6.249 ............... $ 16,102,087 74.9% 58.3% 119 1.30x 6.100% 6.250 - 6.499 ............... $ 8,738,150 58.8% 46.1% 119 1.66x 6.343% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. RANGE OF MORTGAGE RATES FOR LOAN GROUP 2 MORTGAGE LOANS AGGREGATE % BY AVERAGE NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE RANGE OF MORTGAGE RATES (%) OF LOANS BALANCE GROUP 2 BALANCE BALANCE - ----------------------------- ---------- -------------- ----------------- -------------- 5.000 - 5.249 ............... 4 $32,470,000 36.5% $8,117,500 5.250 - 5.499 ............... 5 45,787,773 51.5 $9,157,555 5.500 - 5.749 ............... 1 7,700,000 8.7 $7,700,000 5.750 - 5.999 ............... 1 3,000,000 3.4 $3,000,000 - ----------- ----- 11 $88,957,773 100.0% $8,087,070 == =========== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE RANGE OF MORTGAGE RATES (%) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------------- -------------- -------------- -------------- ---------- -------------- ---------- 5.000 - 5.249 ............... $18,000,000 73.6% 67.3% 85 1.28x 5.063% 5.250 - 5.499 ............... $13,500,000 73.5% 62.1% 108 1.31x 5.350% 5.500 - 5.749 ............... $ 7,700,000 65.3% 60.1% 82 1.23x 5.530% 5.750 - 5.999 ............... $ 3,000,000 50.8% 47.4% 60 1.44x 5.790% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-120 RANGE OF ORIGINAL TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE FOR ALL MORTGAGE LOANS RANGE OF ORIGINAL TERMS AGGREGATE % BY AVERAGE TO MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE REPAYMENT DATE (MONTHS) OF LOANS BALANCE POOL BALANCE BALANCE - ------------------------------- ---------- ---------------- -------------- -------------- 0 - 60 ........................ 17 $ 149,605,928 10.6% $ 8,800,349 61 - 84 ....................... 6 190,707,500 13.6 $31,784,583 109 - 120 ..................... 49 1,065,058,114 75.8 $21,735,880 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING WTD. AVG. RANGE OF ORIGINAL TERMS MAXIMUM CUT-OFF WTD. AVG. TERM TO CUT-OFF WTD. AVG. TO MATURITY OR ANTICIPATED CUT-OFF DATE DATE LTV LTV RATIO MATURITY DATE DSC MORTGAGE REPAYMENT DATE (MONTHS) BALANCE RATIO AT MATURITY* (MOS.)* RATIO RATE - ------------------------------- -------------- ----------- -------------- ----------- ---------- ---------- 0 - 60 ........................ $ 29,770,000 73.6% 71.5% 59 1.45x 5.219% 61 - 84 ....................... $100,000,000 76.4% 72.2% 82 1.40x 5.278% 109 - 120 ..................... $216,000,000 70.5% 62.1% 118 1.44x 5.358% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * 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 % BY RANGE OF ORIGINAL TERMS AGGREGATE CUT-OFF DATE AVERAGE TO MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE GROUP 1 CUT-OFF DATE REPAYMENT DATE (MONTHS) OF LOANS BALANCE BALANCE BALANCE - ------------------------------- ---------- ---------------- -------------- -------------- 0 - 60 ........................ 14 $ 120,305,928 9.1% $ 8,593,281 61 - 84 ....................... 5 183,007,500 13.9 $36,601,500 109 - 120 ..................... 42 1,013,100,341 77.0 $24,121,437 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING WTD. AVG. RANGE OF ORIGINAL TERMS MAXIMUM CUT-OFF WTD. AVG. TERM TO CUT-OFF WTD. AVG. TO MATURITY OR ANTICIPATED CUT-OFF DATE DATE LTV LTV RATIO MATURITY DATE DSC MORTGAGE REPAYMENT DATE (MONTHS) BALANCE RATIO AT MATURITY* (MOS.)* RATIO RATE - ------------------------------- -------------- ----------- -------------- ----------- ---------- ---------- 0 - 60 ........................ $ 29,770,000 74.2% 72.6% 59 1.49x 5.224% 61 - 84 ....................... $100,000,000 76.8% 72.7% 82 1.41x 5.268% 109 - 120. .................... $216,000,000 70.4% 62.1% 118 1.44x 5.362% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-121 RANGE OF ORIGINAL TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE FOR LOAN GROUP 2 MORTGAGE LOANS % BY RANGE OF ORIGINAL TERMS AGGREGATE CUT-OFF DATE AVERAGE TO MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE GROUP 2 CUT-OFF DATE REPAYMENT DATE (MONTHS) OF LOANS BALANCE BALANCE BALANCE - ------------------------------- ---------- -------------- -------------- -------------- 0 - 60 ........................ 3 $29,300,000 32.9% $9,766,667 61 - 84 ....................... 1 7,700,000 8.7 $7,700,000 109 - 120 ..................... 7 51,957,773 58.4 $7,422,539 - ----------- ----- 11 $88,957,773 100.0% $8,087,070 == =========== ===== WTD. AVG. STATED WTD. AVG. REMAINING RANGE OF ORIGINAL TERMS MAXIMUM CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG. TO MATURITY OR ANTICIPATED CUT-OFF DATE DATE LTV LTV RATIO MATURITY CUT-OFF DATE MORTGAGE REPAYMENT DATE (MONTHS) BALANCE RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ------------------------------- -------------- ----------- -------------- ---------- -------------- ---------- 0 - 60 ........................ $18,000,000 71.0% 67.1% 58 1.30x 5.197% 61 - 84 ....................... $ 7,700,000 65.3% 60.1% 82 1.23x 5.530% 109 - 120 ..................... $13,500,000 73.7% 61.7% 119 1.30x 5.282% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * 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 TERMS AGGREGATE % BY AVERAGE TO MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE REPAYMENT DATE (MONTHS) OF LOANS BALANCE POOL BALANCE BALANCE - ------------------------------- ---------- ---------------- -------------- -------------- 0 - 60 ........................ 17 $ 149,605,928 10.6% $ 8,800,349 61 - 84 ....................... 6 190,707,500 13.6 $31,784,583 109 - 120 ..................... 49 1,065,058,114 75.8 $21,735,880 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING RANGE OF REMAINING TERMS MAXIMUM CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG. TO MATURITY OR ANTICIPATED CUT-OFF DATE DATE LTV LTV RATIO MATURITY CUT-OFF DATE MORTGAGE REPAYMENT DATE (MONTHS) BALANCE RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ------------------------------- -------------- ----------- -------------- ---------- -------------- ---------- 0 - 60 ........................ $ 29,770,000 73.6% 71.5% 59 1.45x 5.219% 61 - 84 ....................... $100,000,000 76.4% 72.2% 82 1.40x 5.278% 109 - 120 ..................... $216,000,000 70.5% 62.1% 118 1.44x 5.358% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-122 RANGE OF REMAINING TERMS TO MATURITY OR ANTICIPATED REPAYMENT DATE FOR LOAN GROUP 1 MORTGAGE LOANS AS OF THE CUT-OFF DATE % BY RANGE OF REMAINING TERMS AGGREGATE CUT-OFF DATE AVERAGE TO MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE GROUP 1 CUT-OFF DATE REPAYMENT DATE (MONTHS) OF LOANS BALANCE BALANCE BALANCE - ----------------------------- ---------- ---------------- -------------- -------------- 0 - 60 ...................... 14 $ 120,305,928 9.1% $ 8,593,281 61 - 84 ..................... 5 183,007,500 13.9 $36,601,500 109 - 120 ................... 42 1,013,100,341 77.0 $24,121,437 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. STATED REMAINING RANGE OF REMAINING TERMS MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. TO MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ----------------------------- -------------- -------------- -------------- ---------- -------------- ---------- 0 - 60 ...................... $ 29,770,000 74.2% 72.6% 59 1.49x 5.224% 61 - 84 ..................... $100,000,000 76.8% 72.7% 82 1.41x 5.268% 109 - 120 ................... $216,000,000 70.4% 62.1% 118 1.44x 5.362% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- * 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 % BY RANGE OF REMAINING TERMS AGGREGATE CUT-OFF DATE AVERAGE TO MATURITY OR ANTICIPATED NUMBER CUT-OFF DATE GROUP 2 CUT-OFF DATE REPAYMENT DATE (MONTHS) OF LOANS BALANCE BALANCE BALANCE - ------------------------------ ---------- -------------- -------------- -------------- 0 - 60 ....................... 3 $29,300,000 32.9% $9,766,667 61 - 84 ...................... 1 7,700,000 8.7 $7,700,000 109 - 120 .................... 7 51,957,773 58.4 $7,422,539 - ----------- ----- 11 $88,957,773 100.0% $8,087,070 == =========== ===== WTD. AVG. STATED REMAINING RANGE OF REMAINING TERMS MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. TO MATURITY OR ANTICIPATED CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE REPAYMENT DATE (MONTHS) BALANCE LTV RATIO AT MATURITY* (MOS.)* DSC RATIO RATE - ------------------------------ -------------- -------------- -------------- ---------- -------------- ---------- 0 - 60 ....................... $18,000,000 71.0% 67.1% 58 1.30x 5.197% 61 - 84 ...................... $ 7,700,000 65.3% 60.1% 82 1.23x 5.530% 109 - 120 .................... $13,500,000 73.7% 61.7% 119 1.30x 5.282% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-123 RANGE OF REMAINING AMORTIZATION TERMS FOR ALL MORTGAGE LOANS AS OF THE CUT-OFF DATE AGGREGATE % BY AVERAGE REMAINING AMORTIZATION NUMBER CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE TERMS (MONTHS)(1) OF LOANS BALANCE POOL BALANCE BALANCE - --------------------------- ---------- ----------------- -------------- -------------- 229 - 264 ................. 1 $ 5,600,000 0.4% $ 5,600,000 265 - 300 ................. 6 64,098,352 4.6 $ 10,683,059 301 - 348 ................. 2 260,000,000 18.5 $130,000,000 349 - 360 ................. 48 890,346,190 63.4 $ 18,548,879 Non-amortizing ............ 15 185,327,000 13.2 $ 12,355,133 -- -------------- ----- 72 $1,405,371,542 100.0% $ 19,519,049 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. REMAINING AMORTIZATION CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE TERMS (MONTHS)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) DSC RATIO RATE - --------------------------- -------------- -------------- ---------------- ----------- -------------- ---------- 229 - 264 ................. $ 5,600,000 54.6% 35.7% 120 1.59x 5.920% 265 - 300 ................. $ 16,102,087 68.7% 53.1% 119 1.47x 5.948% 301 - 348 ................. $132,500,000 71.9% 62.0% 118 1.31x 5.185% 349 - 360 ................. $216,000,000 71.6% 64.3% 106 1.41x 5.352% Non-amortizing ............ $ 29,770,000 73.4% 73.4% 91 1.68x 5.216% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- The weighted average remaining amortization term for all Mortgage Loans (excluding non-amortizing loans) is 349 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 % BY AGGREGATE CUT-OFF DATE AVERAGE REMAINING AMORTIZATION NUMBER CUT-OFF DATE GROUP 1 CUT-OFF DATE TERMS (MONTHS)(1) OF LOANS BALANCE BALANCE BALANCE - --------------------------- ---------- ----------------- -------------- -------------- 229 - 264 ................. 1 $ 5,600,000 0.4% $ 5,600,000 265 - 300 ................. 5 50,598,352 3.8 $ 10,119,670 301 - 348 ................. 2 260,000,000 19.8 $130,000,000 349 - 360 ................. 38 814,888,418 61.9 $ 21,444,432 Non-amortizing ............ 15 185,327,000 14.1 $ 12,355,133 -- -------------- ----- 61 $1,316,413,770 100.0% $ 21,580,554 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. REMAINING AMORTIZATION CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE TERMS (MONTHS)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) DSC RATIO RATE - --------------------------- -------------- -------------- ---------------- ----------- -------------- ---------- 229 - 264 ................. $ 5,600,000 54.6% 35.7% 120 1.59x 5.920% 265 - 300 ................. $ 16,102,087 66.6% 51.8% 119 1.51x 6.114% 301 - 348 ................. $132,500,000 71.9% 62.0% 118 1.31x 5.185% 349 - 360 ................. $216,000,000 71.6% 64.3% 107 1.42x 5.360% Non-amortizing ............ $ 29,770,000 73.4% 73.4% 91 1.68x 5.216% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- The weighted average remaining amortization term for all Loan Group 1 Mortgage Loans (excluding non-amortizing loans) is 348 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-124 RANGE OF REMAINING AMORTIZATION TERMS FOR LOAN GROUP 2 MORTGAGE LOANS AS OF THE CUT-OFF DATE % BY AGGREGATE CUT-OFF DATE AVERAGE REMAINING AMORTIZATION NUMBER CUT-OFF DATE GROUP 2 CUT-OFF DATE TERMS (MONTHS)(1) OF LOANS BALANCE BALANCE BALANCE - ------------------------- ---------- -------------- -------------- -------------- 265 - 300 ............... 1 $13,500,000 15.2% $13,500,000 349 - 360 ............... 10 75,457,773 84.8 $ 7,545,777 -- ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. REMAINING AMORTIZATION CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE TERMS (MONTHS)(1) BALANCE LTV RATIO AT MATURITY(2) (MOS.)(2) DSC RATIO RATE - ------------------------- -------------- -------------- ---------------- ----------- -------------- ---------- 265 - 300 ............... $13,500,000 76.7% 58.0% 120 1.34x 5.330% 349 - 360 ............... $18,000,000 71.2% 64.3% 92 1.29x 5.266% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- The weighted average remaining amortization term for all Loan Group 2 Mortgage Loans (excluding non-amortizing loans) is 351 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 % BY AGGREGATE CUT-OFF DATE AVERAGE NUMBER CUT-OFF DATE POOL CUT-OFF DATE AMORTIZATION TYPES OF LOANS BALANCE BALANCE BALANCE - ------------------------------------- ---------- ----------------- -------------- -------------- Interest-only, Amortizing Balloon(2) ......................... 34 $1,033,348,000 73.5% $30,392,588 Amortizing Balloon .................. 22 157,696,542 11.2 $ 7,168,025 Interest-only, Balloon .............. 9 108,627,500 7.7 $12,069,722 Interest-only, ARD .................. 6 76,699,500 5.5 $12,783,250 Interest-only, Amortizing ARD(2)..... 1 29,000,000 2.1 $29,000,000 -- -------------- ----- 72 $1,405,371,542 100.0% $19,519,049 == ============== ===== WTD. AVG. STATED REMAINING MAXIMUM WTD. AVG. WTD. AVG. TERM TO WTD. AVG. WTD. AVG. CUT-OFF DATE CUT-OFF DATE LTV RATIO MATURITY CUT-OFF DATE MORTGAGE AMORTIZATION TYPES BALANCE LTV RATIO AT MATURITY(1) (MOS.)(1) DSC RATIO RATE - ------------------------------------- -------------- -------------- ---------------- ----------- -------------- ---------- Interest-only, Amortizing Balloon(2) ......................... $216,000,000 71.5% 63.8% 109 1.39x 5.295% Amortizing Balloon .................. $ 24,975,000 71.0% 58.3% 110 1.45x 5.706% Interest-only, Balloon .............. $ 29,770,000 71.9% 71.9% 75 1.82x 5.077% Interest-only, ARD .................. $ 29,050,000 75.5% 75.5% 114 1.49x 5.411% Interest-only, Amortizing ARD(2)..... $ 29,000,000 69.0% 62.9% 118 1.32x 5.400% $216,000,000 71.7% 64.4% 107 1.43x 5.333% - ------- (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 12 to 60 months from origination prior to the commencement of payments of principal and interest. S-125 AMORTIZATION TYPES FOR LOAN GROUP 1 MORTGAGE LOANS % BY AGGREGATE CUT-OFF DATE AVERAGE NUMBER OF CUT-OFF DATE GROUP 1 CUT-OFF DATE AMORTIZATION TYPES LOANS BALANCE BALANCE BALANCE - ----------------------------- ----------- ----------------- -------------- -------------- Interest-only, Amortizing Balloon(2) ................. 26 $ 971,678,000 73.8% $37,372,231 Amortizing Balloon .......... 19 130,408,770 9.9 $ 6,863,619 Interest-only, Balloon ...... 9 108,627,500 8.3 $12,069,722 Interest-only, ARD .......... 6 76,699,500 5.8 $12,783,250 Interest-only, Amortizing ARD(2) ..................... 1 29,000,000 2.2 $29,000,000 -- -------------- ----- 61 $1,316,413,770 100.0% $21,580,554 == ============== ===== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. LTV TERM TO WTD. AVG. WTD. AVG. CUT-OFF DATE DATE LTV RATIO AT MATURITY CUT-OFF DATE MORTGAGE AMORTIZATION TYPES BALANCE RATIO MATURITY(1) (MOS.)(1) DSC RATIO RATE - ----------------------------- -------------- ----------- --------------- ----------- -------------- ---------- Interest-only, Amortizing Balloon(2) ................. $216,000,000 71.6% 63.7% 111 1.40x 5.299% Amortizing Balloon .......... $ 24,975,000 70.1% 57.9% 109 1.48x 5.776% Interest-only, Balloon ...... $ 29,770,000 71.9% 71.9% 75 1.82x 5.077% Interest-only, ARD .......... $ 29,050,000 75.5% 75.5% 114 1.49x 5.411% Interest-only, Amortizing ARD(2) ..................... $ 29,000,000 69.0% 62.9% 118 1.32x 5.400% $216,000,000 71.6% 64.5% 108 1.44x 5.337% - ------- (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 12 to 60 months from origination prior to the commencement of payments of principal and interest. AMORTIZATION TYPES FOR LOAN GROUP 2 MORTGAGE LOANS % BY AGGREGATE CUT-OFF DATE AVERAGE NUMBER OF CUT-OFF DATE GROUP 2 CUT-OFF DATE AMORTIZATION TYPES LOANS BALANCE BALANCE BALANCE - ----------------------------- ----------- -------------- -------------- -------------- Interest-only, Amortizing Balloon(2) ................. 8 $61,670,000 69.3% $7,708,750 Amortizing Balloon .......... 3 27,287,773 30.7 $9,095,924 - ----------- ----- 11 $88,957,773 100.0% $8,087,070 == =========== ===== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. LTV TERM TO WTD. AVG. WTD. AVG. CUT-OFF DATE DATE LTV RATIO AT MATURITY CUT-OFF DATE MORTGAGE AMORTIZATION TYPES BALANCE RATIO MATURITY(1) (MOS.)(1) DSC RATIO RATE - ----------------------------- -------------- ----------- --------------- ----------- -------------- ---------- Interest-only, Amortizing Balloon(2) ................. $18,000,000 70.7% 64.8% 89 1.29x 5.231% Amortizing Balloon .......... $13,500,000 75.1% 60.2% 113 1.31x 5.377% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- (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 12 to 48 months from origination prior to the commencement of payments of principal and interest. S-126 RANGE OF OCCUPANCY RATES FOR ALL MORTGAGE LOANS AGGREGATE % BY AVERAGE RANGE OF NUMBER OF CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE OCCUPANCY RATES (%)(1) LOANS BALANCE POOL BALANCE BALANCE - ------------------------ ----------- ----------------- -------------- -------------- 75.00 - 79.99 .......... 1 $ 10,750,000 0.8% $10,750,000 80.00 - 84.99 .......... 8 184,191,021 13.1 $23,023,878 85.00 - 89.99 .......... 8 360,787,773 25.7 $45,098,472 90.00 - 94.99 .......... 13 187,854,916 13.4 $14,450,378 95.00 - 99.99 .......... 16 390,771,428 27.8 $24,423,214 100.00 - 100.00 ........ 22 236,060,056 16.8 $10,730,003 -- -------------- ---- 68 $1,370,415,193 97.5% $20,153,165 == ============== ==== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. LTV TERM TO WTD. AVG. WTD. AVG. RANGE OF CUT-OFF DATE DATE LTV RATIO AT MATURITY CUT-OFF DATE MORTGAGE OCCUPANCY RATES (%)(1) BALANCE RATIO MATURITY(2) (MOS.)(2) DSC RATIO RATE - ------------------------ -------------- ----------- --------------- ----------- -------------- ---------- 75.00 - 79.99 .......... $ 10,750,000 63.2% 59.4% 58 1.22x 5.030% 80.00 - 84.99 .......... $132,500,000 70.5% 62.5% 112 1.27x 5.151% 85.00 - 89.99 .......... $216,000,000 68.2% 61.1% 105 1.55x 5.287% 90.00 - 94.99 .......... $ 29,770,000 71.1% 66.1% 103 1.50x 5.382% 95.00 - 99.99 .......... $127,500,000 74.6% 66.9% 111 1.36x 5.358% 100.00 - 100.00 ........ $ 41,000,000 75.1% 68.0% 105 1.44x 5.359% $216,000,000 71.9% 64.8% 107 1.43x 5.313% - ------- (1) Occupancy rates were calculated based upon rent rolls made available to the 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 4 Mortgage Loans secured by hospitality properties representing 2.5% of the Cut-Off Date Pool Balance. (2) Calculated with respect to the Anticipated Repayment Date for ARD Loans. RANGE OF OCCUPANCY RATES FOR LOAN GROUP 1 MORTGAGE LOANS % BY AGGREGATE CUT-OFF DATE AVERAGE RANGE OF NUMBER OF CUT-OFF DATE GROUP 1 CUT-OFF DATE OCCUPANCY RATES (%)(1) LOANS BALANCE BALANCE BALANCE - ------------------------ ----------- ----------------- -------------- -------------- 75.00 - 79.99 .......... 1 $ 10,750,000 0.8% $10,750,000 80.00 - 84.99 .......... 7 177,991,021 13.5 $25,427,289 85.00 - 89.99 .......... 4 331,000,000 25.1 $82,750,000 90.00 - 94.99 .......... 10 170,534,916 13.0 $17,053,492 95.00 - 99.99 .......... 14 368,621,428 28.0 $26,330,102 100.00 - 100.00 ........ 21 222,560,056 16.9 $10,598,098 -- -------------- ---- 57 $1,281,457,420 97.3% $22,481,709 == ============== ==== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. LTV TERM TO WTD. AVG. WTD. AVG. RANGE OF CUT-OFF DATE DATE LTV RATIO AT MATURITY CUT-OFF DATE MORTGAGE OCCUPANCY RATES (%)(1) BALANCE RATIO MATURITY(2) (MOS.)(2) DSC RATIO RATE - ------------------------ -------------- ----------- --------------- ----------- -------------- ---------- 75.00 - 79.99 .......... $ 10,750,000 63.2% 59.4% 58 1.22x 5.030% 80.00 - 84.99 .......... $132,500,000 70.3% 62.3% 111 1.27x 5.143% 85.00 - 89.99 .......... $216,000,000 67.9% 60.8% 106 1.57x 5.272% 90.00 - 94.99 .......... $ 29,770,000 71.7% 67.0% 101 1.51x 5.397% 95.00 - 99.99 .......... $127,500,000 74.6% 66.8% 114 1.36x 5.379% 100.00 - 100.00 ........ $ 41,000,000 75.0% 68.6% 104 1.45x 5.361% $216,000,000 71.9% 64.9% 108 1.44x 5.315% - ------- (1) Occupancy rates were calculated based upon rent rolls made available to the 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 4 Mortgage Loans secured by hospitality properties representing 2.7% of the Cut-Off Date Group 1 Balance. (2) Calculated with respect to the Anticipated Repayment Date for ARD Loans. S-127 RANGE OF OCCUPANCY RATES FOR LOAN GROUP 2 MORTGAGE LOANS % BY AGGREGATE CUT-OFF DATE AVERAGE RANGE OF NUMBER OF CUT-OFF DATE GROUP 2 CUT-OFF DATE OCCUPANCY RATES (%) LOANS BALANCE BALANCE BALANCE - --------------------- ----------- -------------- -------------- -------------- 80.00 - 84.99 ....... 1 $ 6,200,000 7.0% $ 6,200,000 85.00 - 89.99 ....... 4 29,787,773 33.5 $ 7,446,943 90.00 - 94.99 ....... 3 17,320,000 19.5 $ 5,773,333 95.00 - 99.99 ....... 2 22,150,000 24.9 $11,075,000 100.00 - 100.00 ..... 1 13,500,000 15.2 $13,500,000 - ----------- ----- 11 $88,957,773 100.0% $ 8,087,070 == =========== ===== WTD. AVG. STATED WTD. AVG. REMAINING MAXIMUM CUT-OFF WTD. AVG. TERM TO WTD. AVG. WTD. AVG. RANGE OF CUT-OFF DATE DATE LTV LTV RATIO AT MATURITY CUT-OFF DATE MORTGAGE OCCUPANCY RATES (%) BALANCE RATIO MATURITY* (MOS.)* DSC RATIO RATE - --------------------- -------------- ----------- -------------- ---------- -------------- ---------- 80.00 - 84.99 ....... $ 6,200,000 76.5% 66.9% 119 1.20x 5.400% 85.00 - 89.99 ....... $10,787,773 72.1% 64.7% 87 1.25x 5.447% 90.00 - 94.99 ....... $ 7,000,000 65.0% 57.7% 119 1.37x 5.235% 95.00 - 99.99 ....... $18,000,000 73.5% 68.2% 69 1.30x 5.009% 100.00 - 100.00 ..... $13,500,000 76.7% 58.0% 120 1.34x 5.330% $18,000,000 72.1% 63.4% 96 1.29x 5.276% - ------- * Calculated with respect to the Anticipated Repayment Date for ARD Loans. PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION* PREPAYMENT RESTRICTION MAY-2005 MAY-2006 MAY-2007 MAY-2008 MAY-2009 - -------------------------------- --------------- --------------- --------------- --------------- --------------- Locked Out ..................... 99.72% 98.44% 15.50% 8.46% 0.00% Defeasance ..................... 0.00 0.00 79.23 83.34 90.43 Yield Maintenance .............. 0.28 1.56 5.27 8.19 9.57 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% ---------- ---------- ---------- ---------- ---------- Mortgage Pool Balance Outstanding (in millions) ..... $1,405.37 $ 1,402.89 $ 1,398.29 $ 1,389.61 $ 1,373.05 ---------- ---------- ---------- ---------- ---------- % of Initial Pool Balance ...... 100.00% 99.82% 99.50% 98.88% 97.70% PREPAYMENT RESTRICTION MAY-2010 MAY-2011 MAY-2012 MAY-2013 MAY-2014 MAY-2015 - -------------------------------- --------------- --------------- ------------- ------------- ------------- --------- Locked Out ..................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Defeasance ..................... 91.56 91.48 90.08 90.00 89.91 0.00 Yield Maintenance .............. 8.44 8.52 7.12 7.19 7.27 0.00 Prepayment Premium ............. 0.00 0.00 0.00 0.00 0.00 0.00 Open ........................... 0.00 0.00 2.80 2.81 2.81 0.00 ---------- ---------- -------- -------- -------- ------ Total .......................... 100.00% 100.00% 100.00% 100.00% 100.00% 0.00% ---------- ---------- -------- -------- -------- ------ Mortgage Pool Balance Outstanding (in millions) ..... $1,209.37 $ 1,190.60 $ 990.79 $ 972.55 $ 953.31 $ 0.00 ---------- ---------- -------- -------- -------- ------- % of Initial Pool Balance ...... 86.05% 84.72% 70.50% 69.20% 67.83% 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 each ARD Loan will be repaid in full on its Anticipated Repayment Date). S-128 PERCENTAGE OF LOAN GROUP 1 BY PREPAYMENT RESTRICTION* PREPAYMENT RESTRICTION MAY-2005 MAY-2006 MAY-2007 MAY-2008 MAY-2009 - -------------------------------- --------------- --------------- --------------- --------------- --------------- Locked Out ..................... 99.70% 99.70% 14.82% 7.32% 0.00% Defeasance ..................... 0.00 0.00 82.01 86.38 92.22 Yield Maintenance .............. 0.30 0.30 3.16 6.30 7.78 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% ---------- ---------- ---------- ---------- ---------- Mortgage Pool Balance Outstanding (in millions) ..... $1,316.41 $ 1,314.40 $ 1,310.60 $ 1,303.04 $ 1,287.83 ---------- ---------- ---------- ---------- ---------- % of Cut-Off Date Group 1 Balance ....................... 100.00% 99.85% 99.56% 98.98% 97.83% PREPAYMENT RESTRICTION MAY-2010 MAY-2011 MAY-2012 MAY-2013 MAY-2014 MAY-2015 - -------------------------------- --------------- --------------- ------------- ------------- ------------- --------- Locked Out ..................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Defeasance ..................... 91.67 91.58 90.19 90.11 90.03 0.00 Yield Maintenance .............. 8.33 8.42 6.87 6.94 7.02 0.00 Prepayment Premium ............. 0.00 0.00 0.00 0.00 0.00 0.00 Open ........................... 0.00 0.00 2.94 2.95 2.95 0.00 ---------- ---------- -------- -------- -------- ------ Total .......................... 100.00% 100.00% 100.00% 100.00% 100.00% 0.00% ---------- ---------- -------- -------- -------- ------ Mortgage Pool Balance Outstanding (in millions) ..... $1,153.22 $ 1,135.51 $ 943.87 $ 926.69 $ 908.54 $ 0.00 ---------- ---------- -------- -------- -------- ------- % of Cut-Off Date Group 1 Balance ....................... 87.60% 86.26% 71.70% 70.39% 69.02% 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 each ARD Loan will be repaid in full on its Anticipated Repayment Date). PERCENTAGE OF LOAN GROUP 2 BY PREPAYMENT RESTRICTION* PREPAYMENT RESTRICTION MAY-2005 MAY-2006 MAY-2007 MAY-2008 MAY-2009 - -------------------------------- ------------ ------------- ------------- ------------- ------------- Locked Out ..................... 100.00% 79.70% 25.60% 25.64% 0.00% Defeasance ..................... 0.00 0.00 37.69 37.70 63.33 Yield Maintenance .............. 0.00 20.30 36.71 36.66 36.67 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% ------- ------- ------- ------- ------- Mortgage Pool Balance Outstanding (in millions) ..... $ 88.96 $ 88.48 $ 87.69 $ 86.56 $ 85.23 --------- -------- -------- -------- -------- % of Cut-Off Date Group 2 Balance ....................... 100.00% 99.47% 98.57% 97.31% 95.81% PREPAYMENT RESTRICTION MAY-2010 MAY-2011 MAY-2012 MAY-2013 MAY-2014 MAY-2015 - -------------------------------- ------------- ------------- ------------- ------------- ------------- --------- Locked Out ..................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Defeasance ..................... 89.42 89.39 87.76 87.71 87.65 0.00 Yield Maintenance .............. 10.58 10.61 12.24 12.29 12.35 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 0.00 0.00 ------- ------- ------- ------- ------- ------ Total .......................... 100.00% 100.00% 100.00% 100.00% 100.00% 0.00% ------- ------- ------- ------- ------- ------ Mortgage Pool Balance Outstanding (in millions) ..... $ 56.15 $ 55.09 $ 46.91 $ 45.87 $ 44.76 $ 0.00 -------- -------- -------- -------- -------- ------- % of Cut-Off Date Group 2 Balance ....................... 63.12% 61.93% 52.73% 51.56% 50.32% 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 each ARD Loan will be repaid in full on its Anticipated Repayment Date). S-129 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 LOANS/ % OF % OF NUMBER OF CUT-OFF INITIAL LOAN MORTGAGE MORTGAGED LOAN DATE POOL GROUP LOAN NAME LOAN SELLER PROPERTIES GROUP BALANCE(1) BALANCE BALANCE - ------------------------------ ------------- ------------ ------- ----------------- --------- --------- One & Two International Place ....................... Wachovia 1/1 1 $ 216,000,000 15.4% 16.4% 450 West 33rd Street ......... Wachovia 1/1 1 132,500,000 9.4 10.1% Kadima Medical Office Pool ........................ Wachovia 1/17 1 127,500,000 9.1 9.7% Park Place II ................ Wachovia 1/1 1 100,000,000 7.1 7.6% Happy Valley Towne Center ...................... Wachovia 1/1 1 56,000,000 4.0 4.3% Mercantile Bank & Trust Building .................... Wachovia 1/1 1 41,000,000 2.9 3.1% 590 Fifth Avenue ............. Wachovia 1/1 1 40,000,000 2.8 3.0% Extra Space Self Storage Portfolio #3 ................ Wachovia 5/5 1 32,550,000 2.3 2.5% Cypress Lake at Stonebriar .................. Wachovia 1/1 1 29,770,000 2.1 2.3% Casa Paloma Shopping Center ...................... Wachovia 1/1 1 29,050,000 2.1 2.2% ----- -------------- ---- TOTAL (1-10): 14/30 $ 804,370,000 57.2% ===== ============== ==== Copaco Center ................ Wachovia 1/1 1 $ 29,000,000 2.1% 2.2% 2700 Broadway ................ Wachovia 1/1 1 27,500,000 2.0 2.1% Fullerton Towers ............. Wachovia 1/1 1 26,800,000 1.9 2.0% Courthouse Place ............. Wachovia 1/1 1 26,000,000 1.9 2.0% Kensington Place ............. Wachovia 1/1 1 24,975,000 1.8 1.9% Springtown Shopping Center ...................... Wachovia 1/1 1 19,760,000 1.4 1.5% Resort at University Park Apartments .................. Wachovia 1/1 1 19,300,000 1.4 1.5% Prospect Plaza ............... Wachovia 1/1 1 18,800,000 1.3 1.4% La Serena Apartments ......... Wachovia 1/1 2 18,000,000 1.3 20.2% Sandpiper Village Apartments .................. Wachovia 1/1 1 18,000,000 1.3 1.4% ----- -------------- ---- TOTAL (11-20): 10/10 $ 228,135,000 16.2% ----- -------------- ---- TOTAL (1-20): 24/40 $1,032,505,000 73.5% ===== ============== ==== WEIGHTED LOAN WEIGHTED AVERAGE BALANCE AVERAGE LTV WEIGHTED PER SF/ WEIGHTED CUT-OFF RATIO AT AVERAGE UNIT/ AVERAGE DATE LTV MATURITY MORTGAGE LOAN NAME PROPERTY TYPE ROOM(2) DSCR(2) RATIO(2) OR ARD(2) RATE - ------------------------------ ----------------------------------- ----------- ---------- ---------- ----------- ----------- One & Two International Place ....................... Office -- CBD $ 233 1.77x 61.7% 53.7% 5.205% 450 West 33rd Street ......... Office -- CBD $ 158 1.22x 68.8% 59.3% 5.100% Kadima Medical Office Pool ........................ Office -- Medical $ 160 1.40x 75.0% 64.8% 5.272% Park Place II ................ Mixed Use -- Retail/Office $ 364 1.20x 79.6% 75.1% 5.390% Happy Valley Towne Center ...................... Retail -- Anchored $ 82 1.32x 72.6% 65.4% 5.790% Mercantile Bank & Trust Building .................... Office -- CBD $ 101 1.55x 77.4% 71.6% 5.260% 590 Fifth Avenue ............. Office -- CBD $ 409 1.20x 74.2% 67.6% 5.390% Extra Space Self Storage Portfolio #3 ................ Self Storage $ 83 1.58x 82.0% 82.0% 4.950% Cypress Lake at Stonebriar .................. Multifamily -- Conventional $ 63,072 1.45x 77.9% 77.9% 5.420% Casa Paloma Shopping Center ...................... Retail -- Anchored $ 223 1.47x 69.8% 69.8% 5.630% TOTAL (1-10): 1.45X 71.1% 64.1% 5.287% Copaco Center ................ Retail -- Anchored $ 70 1.32x 69.0% 62.9% 5.400% 2700 Broadway ................ Retail -- Anchored $ 1,100 1.09x 89.9% 89.9% 5.410% Fullerton Towers ............. Office -- Suburban $ 119 1.21x 75.8% 68.7% 5.130% Courthouse Place ............. Office -- Suburban $ 228 1.26x 80.0% 71.6% 5.500% Kensington Place ............. Multifamily -- Independent Living $140,309 1.57x 75.3% 63.2% 5.660% Springtown Shopping Center ...................... Retail -- Anchored $ 72 1.20x 79.7% 70.0% 5.590% Resort at University Park Apartments .................. Multifamily -- Conventional $ 77,200 1.20x 69.3% 64.4% 5.490% Prospect Plaza ............... Retail -- Anchored $ 133 1.25x 78.7% 70.0% 5.220% La Serena Apartments ......... Multifamily -- Conventional $ 95,745 1.32x 72.0% 67.6% 5.000% Sandpiper Village Apartments .................. Multifamily -- Conventional $ 85,714 1.21x 79.6% 70.6% 5.090% TOTAL (11-20): 1.26X 77.1% 70.2% 5.363% TOTAL (1-20): 1.41x 72.4% 65.4% 5.304% - -------- (1) In the case of a concentration of cross-collateralized Mortgage Loans, the aggregate principal balance. (2) Two (2) Mortgage Loans (loan numbers 1 and 2), representing in the aggregate 24.8% of the Cut-Off Date Pool Balance (26.5% of the Cut-Off Date Group 1 Balance), are each part of a pari passu split loan structure. With respect to these Mortgage Loans, unless otherwise specified, the calculations of LTV ratios, DSC ratios and loan balance per SF were based on the aggregate indebtedness of each such Mortgage Loan and the related Pari Passu Companion Loan. S-130
One & Two International Place - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $216,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 15.4% 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 116 / 360 LOCKBOX Yes SHADOW RATING (S&P/MOODY'S)(1) BBB-/Baa3 UP-FRONT RESERVES INSURANCE Yes ENGINEERING(2) $2,158,900 OUTSTANDING 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 and Moody's 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 repairs not later than January 2008. Further, the borrower is required to undertake diligence to determine necessary elevator modernization requirements not later than January 2009 and January 2011 for One International Place and Two International Place, respectively. Based upon conclusions resulting from that diligence, the borrower is required to post necessary reserves to complete any 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) The Rent Concession reserve may not be diminished until such time as cumulative rent concessions are not greater than $5,000,000. As of the closing date of the loan, 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, Massachusetts 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-131 - -------------------------------------------------------------------------------- TENANT SUMMARY - -------------------------------------------------------------------------------- NET % OF NET RATINGS(1) RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - ----------------------------------- ------------------- ----------- ---------- Deutsche/Scudder, Stevens ......... Aa3/AA-/AA- 378,490 20.4% Ropes & Gray ...................... NR/NR/NR 322,754 17.4 Choate, Hall & Stewart ............ NR/NR/NR 155,324 8.4 PricewaterhouseCoopers ............ NR/NR/NR 88,279 4.8 State Street Bank ................. Aa3/AA-/AA- 62,076 3.4 Non-major tenants ................. 651,967 35.2 Vacant ............................ 193,611 10.5 --------- ----- TOTAL ............................. 1,852,501 100.0% ========= ===== - ------------------------------------------------------------------------------------------- % OF DATE OF ACTUAL ACTUAL LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - ----------------------------------- ---------- ------------- ---------- ------------------- Deutsche/Scudder, Stevens ......... $35.87 $13,574,748 17.9% May 2009 Ropes & Gray ...................... $44.30 14,296,524 18.8 December 2010 Choate, Hall & Stewart ............ $44.00 6,834,256 9.0 September 2015 PricewaterhouseCoopers ............ $36.50 3,222,192 4.2 April 2005 State Street Bank ................. $40.96 2,542,620 3.3 Multiple Spaces(2) Non-major tenants ................. $54.44 35,495,627 46.7 Vacant ............................ 0 0.0 ----------- ----- TOTAL ............................. $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-132 THE LOAN. The One & Two International Place Loan (the "One & Two International Place Loan") represents a pari passu interest in a $432,000,000 mortgage loan (the "One & Two International Place Whole Loan"), which One & Two International Place Whole Loan is evidenced by two notes, an A-2 note (the "One & Two International Place Note") in the original principal amount of $216,000,000 and an A-1 note (the "One & Two International Place Pari Passu Note") in the original principal amount of $216,000,000, which One & Two International Place Pari Passu Note evidences a loan (the "One & Two International Place Pari Passu Companion Loan") which is pari passu in payment priority with the One & Two International Place Loan. The One & Two International Place Pari Passu Companion Loan will not be an asset of the trust, however, the One & Two International Place Loan and the One & Two International Place Pari Passu Companion Loan will be governed by an intercreditor and servicing agreement, and will be serviced pursuant to the terms of the 2005-C17 Pooling Agreement as described under "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans" in this prospectus supplement. The One & Two International Place Whole Loan is secured by a first priority mortgage (the "One & Two International Place Mortgage"), subject to permitted encumbrances, on the borrower's fee interest in the real property known as One & Two International Place located in Boston, Massachusetts. The One & Two International Place Loan represents approximately 15.4% of the Cut-Off Date Pool Balance. The One & Two International Place Whole Loan was originated on January 10, 2005. The One & Two International Place Loan has an outstanding principal balance as of the Cut-Off Date of $216,000,000, and the One & Two International Place Pari Passu Companion Loan has an outstanding principal balance as of the Cut-Off Date of $216,000,000. The One & Two International Place Note and the One & Two International Place Pari Passu Note each bear interest at 5.205% per annum. The One & Two International Place Whole Loan has a remaining term of 116 months and matures on January 11, 2015. The One & Two International Place Whole 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 BORROWER. The borrower is, collectively, Fort Hill Square 1 Owner LLC and Fort Hill Square 2 Owner LLC, each a Delaware limited liability company and each a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the One & Two International Place Whole Loan. The sponsor of the borrower is Prudential Property Investment Separate Account ("PRISA"). GUARANTY AND INDEMNIFICATION. The One & Two International Place Whole Loan is generally non-recourse. The One & Two International Place Whole Loan is fully recourse to the borrower in the event of: (i) any proceeding, action, petition or filing under the bankruptcy code or any similar state or federal law shall be filed by, consented to or acquiesced in by or with respect to the borrower or (ii) the borrower or any of its affiliates contests or in any material way interferes with the mortgagee's pursuit of any of its remedies under any of the Mortgage Loan documents other than assertion of a good faith defense to any action brought by the mortgagee. Under certain limited circumstances, the One & Two International Place Whole Loan is recourse to the borrower for losses or damages arising out of certain circumstances, including, but not limited to: (i) fraud or intentional misrepresentation by the borrower, or any other person, in connection with the Mortgage Loan documents, (ii) misappropriation by the borrower of tenant security deposits or rents collected more than one month in advance, (iii) a breach by the borrower of the single-purpose bankruptcy remote covenants set forth in the Mortgage Loan documents, (iv) damages arising from the existence of hazardous or toxic substances at the Mortgaged Property or the failure by the borrower to comply with environmental laws, (v) the borrower's misapplication or conversion of casualty insurance proceeds or condemnation awards, (vi) intentional damage, arson or waste with respect to the Mortgaged Property resulting from the gross negligence of the borrower or any of its affiliates, and (vii) any transfer of all or any part of the Mortgaged Property or any interest therein or in the borrower in violation of the provisions of the Mortgage Loan documents. There is no guarantor with respect to the One & Two International Place Loan. THE PROPERTY. The Mortgaged Property is approximately 1,852,501 square feet configured as two office towers situated on approximately 2.5 acres. The Mortgaged Property was constructed 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, occupying approximately 322,754 S-133 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. INSURANCE. The borrower, at its sole cost and expense, is required to keep the Mortgaged Property insured against loss or damage by fire and other risks under a comprehensive all risk insurance policy, in each case: (1) in an amount equal to at least 100% of the insurable replacement value of the improvements (exclusive of the real property and footings and foundations); provided, however, the borrower is only required to maintain terrorism insurance equal to the lesser of (a) the amount of coverage the borrower is required to maintain as set forth above or (b) the maximum amount of coverage that the borrower can obtain by paying an annual premium not in excess of two times the property and casualty insurance premium paid by the borrower for the immediately preceding twelve month insurance coverage period (exclusive of any premium for terrorism insurance during such immediately preceding twelve month insurance coverage period); and (2) providing that such policy will contain an "Ordinance or Law Coverage" or "Enforcement" endorsement if any of the improvements or the use of the Mortgaged Property will at any time constitute legal nonconforming structures or uses. All policies of insurance are required to be issued by one or more financially sound and responsible insurance companies meeting the Rating Agency and financial requirements set forth in the loan documents. CASUALTY AND CONDEMNATION. The One & Two International Place Loan documents provide that if the Mortgaged Property is damaged or destroyed, in whole or in part, by fire or other casualty, or if any portion of the Mortgaged Property is taken by any governmental authority through eminent domain or otherwise, the borrower is required to promptly proceed with the repair or rebuilding of the improvements as nearly as possible substantially to the condition the Mortgaged Property was in immediately prior to such fire, other casualty or taking (a "One & Two International Place Restoration"). Insurance proceeds shall be disbursed to the borrower to be used for the One & Two International Place Restoration provided certain conditions are satisfied, including: (a) the lender is reasonably satisfied that the debt service coverage ratio, after substantial completion of the One & Two International Place Restoration, will be at least 1.40x, (b) less than thirty percent (30%) of the reasonably estimated fair market value of the Mortgaged Property is damaged or destroyed, (c) each lease of a tenant (or affiliate of such tenant) where such tenant or such affiliate leases, in the aggregate, 50,000 square feet or more of the total gross leasable areas of the Mortgaged Property physically affected by such destruction shall continue in full force and effect, (d) the lender is reasonably satisfied that the One & Two International Place Restoration can be completed six (6) months prior to the maturity date of the One & Two International Place Loan, and (e) the lender is reasonably satisfied that the One & Two International Place Restoration can be completed within 18 months of the damage to or destruction of the Mortgaged Property. With respect to a condemnation award if such award is in an amount in excess of five percent of the One & Two International Place Whole Loan, the lender shall have the option to apply such condemnation award toward the payment of the One & Two International Place Whole Loan or to allow such award to be used for the One & Two International Place Restoration. If any of the conditions under the One & Two International Place Loan documents are not satisfied, insurance proceeds may be applied by the mortgagee to the repayment of the One & Two International Place Whole Loan. To the extent not required to be disbursed by the mortgagee for the restoration of the Mortgaged Property, any award or payment may be applied to the repayment of the One & Two International Place Whole Loan whether or not then due and payable. The ability of the mortgagee to apply any condemnation award or insurance proceeds to the restoration of the Mortgaged Property or to a prepayment of the One & Two International Place Loan may be subject to the provisions of any leases that are not subordinate to the mortgage securing the One & Two International Place Loan, which may also require any condemnation awards and insurance proceeds be applied to restoration rather than to the prepayment of the One & Two International Place Loan. If the lender elects, and has the right to so elect under the provisions of the mortgage securing the One & Two International Place Loan, to apply insurance proceeds to reduce the debt rather than making such insurance proceeds available to the borrower for the One & Two International Place Restoration, then the borrower is permitted to prepay the remaining unpaid principal balance of the One & Two International Place Whole Loan, S-134 interest accrued thereon through and including the payment date on which such prepayment occurs and any other fees and expenses then owing to the mortgagee without any penalty or the payment of any prepayment fee. TRANSFER OF THE PROPERTY AND INTERESTS IN THE BORROWER. The One & Two International Place Loan documents provide that the borrower will not permit, without the consent of the mortgagee, any sale, assignment, conveyance, transfer or other disposition of, or any mortgage, lien or other encumbrance on, all or any part of the Mortgaged Property or any interest in such property or any interest in the borrower (any of the foregoing, a "Transfer"). A merger, acquisition, sale or other corporate combination involving The Prudential Insurance Company of America, a New Jersey Corporation ("Prudential") that is approved by the Insurance Commissioner of the State of New Jersey is not prohibited, and there is no prohibition on Transfers affecting direct or indirect interests in Prudential or PRISA (collectively, the foregoing are referred to as a "Prudential Corporate Transaction"); provided that, notwithstanding the occurrence of any Prudential Corporate Transaction, PRISA shall at all times be and remain the equity investor in RGC Boston LLC, a Delaware limited liability company which is the sole member of each borrower ("Venture") and as of the date of such Prudential Corporate Transaction, PRISA shall be a commingled fund owning not less than $2,000,000,000 of real estate assets. Venture must at all times remain the sole member of each borrower notwithstanding the Transfers that are specifically permitted. However, in addition to a Prudential Corporate Transaction, the following transfers of interests in the borrower are specifically permitted by the loan documents: (i) Transfers of the direct or indirect interests in Venture; provided that such Transfer does not result in a Transfer of Prudential's interests in Venture that is not specifically listed herein; (ii) the Transfer by Prudential or PRISA, as the case may be, of any interest in Fort Hill Square 1 LLC or Fort Hill Square 2 LLC (the two members of Venture other than PRISA) which are acquired by Prudential after the One & Two International Place Loan closing date; (iii) the Transfer by Prudential or PRISA, as the case may be, of its interest in Venture to a "qualified transferee" (as defined in the One & Two International Place Mortgage) upon approval of the lender not to be unreasonably withheld, conditioned or delayed; (iv) the Transfer of Prudential's or PRISA's, as the case may be, interest in Venture to another member in Venture or a third party (other than a third party which is a "qualified transferee"); provided that each of the requirements for a sale of the Mortgaged Property are satisfied (as appropriately modified to reflect that the purchaser is not going to be a new mortgage borrower and that legal title to the Mortgaged Property is not being conveyed); (v) subject also to the satisfaction of the requirements of the immediately preceding clause if the Transfer is made by Prudential or PRISA, as the case may be, the Transfer, in one or a series of transactions, of not more than 49% of the stock, limited partnership interests or non-managing membership interests (as the case may be) in the direct or indirect interests in Venture; provided that such Transfer does not result in a change in control in the management and day-to-day operations of the Mortgaged Property and such Transfers do not result in more than forty-nine percent (49%) of the undivided ownership interests in the borrower or the Mortgaged Property being held by any person and its affiliates who together owned less than a forty-nine percent (49%) undivided ownership interest as of the closing date of the One & Two International Place Loan Notwithstanding the general prohibition on Transfers, the borrower shall be permitted to sell the Mortgaged Property provided the borrower satisfies certain conditions, including: (i) the mortgagee shall have, in its reasonable discretion, consented to the sale and each Rating Agency shall have delivered written confirmation that the then current rating issued by such Rating Agency in any Certificate will not, as a result of the proposed sale, be downgraded, qualified or withdrawn; (ii) the borrower pays the lender, concurrently with the closing of such sale, a non-refundable assumption fee in an amount equal to 0.50% of the then outstanding principal amount of the One & Two International Place Whole Loan plus all out-of-pocket costs and expenses of the mortgagee; (iii) the purchaser assumes all of the obligations under the One & Two International Place Whole Loan documents and, prior to or concurrently with the closing of such sale, the purchaser executes such documents and agreements as the mortgagee shall reasonably require to evidence and effectuate such assumption and delivers such legal opinions as the mortgagee may reasonably require; (iv) the borrower delivers to the mortgagee endorsements to the lender's title insurance policy and hazard insurance policy endorsements or certificates and other similar materials as the lender may reasonably deem necessary; (v) the borrower executes and delivers to the lender a release of the lender, its officers, directors, employees and agents, from all claims and liability relating to the transactions evidenced by the documents, through and including the date of the closing of the sale; (vi) the purchaser of the Mortgaged Property is a single purpose bankruptcy remote entity and the mortgagee receives a non-consolidation opinion relating to the purchaser, which opinion is in form and substance acceptable to the mortgagee and the Rating Agencies; and (vii) such sale is not construed so as to relieve the borrower of any personal liability under the One & Two International Place Whole Loan documents for any acts or events occurring or obligations arising prior to or simultaneously with the closing of such sale. S-135 LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are required to be deposited into a lock box account (the "One & Two International Place Lockbox") maintained with Wachovia Bank, National Association (the "One & Two International Place Lockbox Bank") in the name of the borrower for the benefit of the mortgagee. Other than during a One & Two International Place Lockbox Period, all available funds on deposit in the One & Two International Place Lockbox will be transferred on every business day to an account of the borrower. At any time during the term of the One & Two International Place Loan, (i) if the debt service coverage ratio (tested quarterly except during the continuance of a One & Two International Place Lockbox Period, in which event the debt service coverage ratio shall be tested monthly), as computed by the mortgagee, for the succeeding 12-month period is less than 1.15x or (ii) upon the occurrence of an event of default under the loan documents (a "One & Two International Place Lockbox Period"), the One & Two International Place Lockbox Bank shall transfer funds on every business day to a cash collateral account (the "One & Two International Place Cash Collateral Account") maintained by the One & Two International Place Lockbox Bank in the name of the mortgagor for the benefit of the mortgagee. The One & Two International Place Lockbox Bank shall apply such funds from the One & Two International Place Cash Collateral Account as set forth in the loan documents to pay, in order, the following: a reserve for taxes and insurance, monthly debt service payment, a reserve for replacement costs and tenant improvements and leasing commissions with the remainder disbursed to the borrower provided no event of default exists under the loan documents. ESCROWS. The loan documents provide that the borrower is required to make (a) monthly deposits of real estate taxes and insurance premiums to a taxes and insurance reserve; (b) monthly deposits in the amount of $15,260 into a reserve for replacement costs, and (c) during any One & Two International Place Lockbox Period, monthly deposits in the amount of $228,900 for tenant improvements and leasing commissions. On the closing date of the One & Two International Place Whole Loan, the borrower was required to make the following reserve deposits: (w) $22,334,679 for the payment of certain tenant improvement and leasing commissions known to be payable under certain specified leases at the Mortgaged Property as more specifically set forth in the One & Two International Place Mortgage, (x) $5,000,000 which represents a portion of the amount that would be paid by tenants during free rent periods or prior to their rent commencement dates under its leases, (y) $2,158,900 for the payment of certain engineering and parking garage repairs and deposits for elevator upgrades, and (z) $70,850 which represents 1/12th of the basic carrying costs. ADDITIONAL DEBT. The loan documents prohibit the borrower from incurring any additional debt, secured or unsecured, except for (a) the One & Two International Place Whole Loan and (b) unsecured trade and operational debt which (i) is not evidenced by a note, (ii) is incurred in the ordinary course of the operation of the Mortgaged Property, and (iii) does not exceed in the aggregate four percent (4%) of the outstanding principal balance of the One & Two International Place Whole Loan. MANAGEMENT. The Mortgaged Property is managed by The Chiofaro Company, Inc. The loan documents permit the Mortgaged Property to be managed by (a) any management company which is majority owned by, and controlled by, The Chiofaro Company, Inc.; provided that there is no change in control of The Chiofaro Company, Inc. from that which existed as of the closing date of the One & Two International Place Whole Loan, (b) any management company which is majority owned by, and controlled by, either or both of Donald J. Chiofaro, Sr. or Theodore Oatis or (c) a reputable and experienced management company approved by the lender and for which each Rating Agency shall have delivered written confirmation that the then current rating issued by such Rating Agency for any Certificate will not, as a result of retaining the proposed property manager to manage the Mortgaged Property, be downgraded, qualified or withdrawn. INTERCREDITOR AGREEMENT. The holders of (a) the One & Two International Place Note and (b) the One & Two International Place Pari Passu Note are parties to an intercreditor and servicing agreement dated as of January 10, 2005 which sets forth the priority of payments and rights of such holders. See "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans" in this prospectus supplement. S-136 450 West 33rd Street - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $132,500,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 9.4% 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 118 / 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) Springing 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, New York 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-137 - ------------------------------------------------------------------------------------------------------------------------- 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-138 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 9.4% of the Cut-Off Date Pool Balance. The 450 West 33rd Street Loan was originated on March 3, 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 3, 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 3, 2005 (the "450 West 33rd Street Pari Passu Loan"), with an original principal balance of $132,500,000. The 450 West 33rd Street Pari Passu Loan will not be an asset of the Trust Fund. The 450 West 33rd Street Loan and the 450 West 33rd Street Pari Passu Loan will be governed by an intercreditor and servicing agreement and will be serviced pursuant to the terms of the pooling and servicing agreement entered into in connection with the issuance of the Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C17, as described in this prospectus supplement under "DESCRIPTION OF THE MORTGAGE POOL--Co-Lender Loans." The 450 West 33rd Street Loan has a remaining term of 118 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. 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 news gathering 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 internet. 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. There are 3 existing mezzanine loans in the aggregate amount of $85,000,000. The mezzanine loans are not assets of the Trust and are secured by a pledge of the equity interests of the borrower. FREE RELEASE. The loan documents allow a release of the air rights above the Mortgaged Property without any consideration upon certain conditions, including, but not limited to: (i) no event of default exists, (ii) the borrower provides an opinion of counsel that the release of the air rights will not adversely effect the REMIC status of the Trust Fund and (iii) the borrower provides evidence that the remaining Mortgaged Property will be in compliance with all applicable laws. S-139 MANAGEMENT. Newmark & 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-140 Kadima Medical Office Pool - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $127,500,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 9.1% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR Cindy Dolgin and Meyer Chetrit TYPE OF SECURITY Various MORTGAGE RATE 5.2723529% MATURITY DATE April 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 36 ORIGINAL TERM / AMORTIZATION 120 / 324 REMAINING TERM / AMORTIZATION 119 / 324 LOCKBOX Yes UP-FRONT RESERVES TAX/INSURANCE Yes ENGINEERING $197,905 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes GROUND RENT $ 6,311 REPLACEMENT $13,348 TI/LC $33,369 ADDITIONAL FINANCING Mezzanine Debt $12,500,000 CUT-OFF DATE BALANCE $127,500,000 CUT-OFF DATE BALANCE/SF $160 CUT-OFF DATE LTV 75.0% MATURITY DATE LTV 64.8% UW DSCR ON NCF 1.40x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 17 LOCATION Various, Various PROPERTY TYPE Office -- Medical SIZE (SF) 796,653 OCCUPANCY AS OF FEBRUARY 1, 2005 96.9% YEAR BUILT / YEAR RENOVATED Various / NA APPRAISED VALUE* $170,000,000 PROPERTY MANAGEMENT KND Management Co., Inc. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $19,476,370 UW TOTAL EXPENSES $ 6,099,135 UW NET OPERATING INCOME (NOI) $13,377,235 UW NET CASH FLOW (NCF) $12,372,491 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Based upon the collective portfolio value and not on the value of the individual Mortgaged Properties. See "RISK FACTORS -- The Mortgage Loans -- Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property" in this prospectus supplement. S-141 - -------------------------------------------------------------------------------------------------- NET ALLOCATED YEAR RENTABLE LOAN PROPERTY CITY STATE BUILLT AREA AMOUNT - -------------------------------------- -------------- -------- -------- ---------- --------------- Morristown Professional Building ..... Morristown NJ 1980 154,089 $ 25,044,643 2300 Westchester Avenue Building ..... Bronx NY 1988 83,408 23,902,964 Davis Square Center .................. Somerville MA 1990 100,219 23,223,214 Kadima Medical Building -- Minot, ND ................................. Minot ND 1995 114,000 8,988,970 Emerson Medical Complex .............. Jacksonville FL 1997 50,651 9,256,468 Verona Professional Building ......... Verona NJ 1970 61,468 7,249,943 South Hill Medical Center ............ Southgate KY 1989 56,126 4,705,578 Orlando II Clinic .................... Maitland FL 1993 25,000 3,324,107 Orlando IV Clinic .................... Orlando FL 1986 21,251 3,733,929 Orlando III Clinic ................... Orlando FL 1992 22,000 3,460,714 Park Meadows Clinic .................. Lone Tree CO 1995 19,477 3,096,429 Orlando I Clinic ..................... Kissimmee FL 1993 16,500 2,367,857 Tampa II Clinic ...................... Tampa FL 1994 16,200 2,138,390 Regency Square Clinic ................ Jacksonville FL 1992 15,713 1,956,244 Tampa I Clinic ....................... Brandon FL 1995 16,200 1,934,173 Germantown Clinic .................... Memphis TN 1996 12,480 1,639,286 San Jose Clinic ...................... Jacksonville FL 1990 11,871 1,477,092 ------- ------------- TOTAL ................................ 796,653 $ 127,500,000 ======= ============= - -------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------ ALLOCATED PORTFOLIO RELEASE APPRAISED ALLOCATED PROPERTY UW NCF PRICE OCCUPANCY(1) VALUE(2) LTV - -------------------------------------- -------------- ---------- --------------- --------------- ----------- Morristown Professional Building ..... $ 2,124,004 NA 100.0% $ 32,580,012 76.9% 2300 Westchester Avenue Building ..... 2,537,865 NA 91.9% 27,644,703 86.5% Davis Square Center .................. 2,075,774 NA 100.0% 27,536,310 84.3% Kadima Medical Building -- Minot, ND ................................. 823,636 115% 100.0% 13,038,635 68.9% Emerson Medical Complex .............. 867,486 NA 100.0% 12,251,669 75.6% Verona Professional Building ......... 689,344 NA 95.4% 9,951,774 72.9% South Hill Medical Center ............ 651,822 NA 75.0% 8,419,003 55.9% Orlando II Clinic .................... 418,968 115% 100.0% 6,049,419 54.9% Orlando IV Clinic .................... 397,315 115% 94.4% 5,593,274 66.8% Orlando III Clinic ................... 361,738 115% 100.0% 5,483,363 63.1% Park Meadows Clinic .................. 306,019 115% 100.0% 4,268,431 72.5% Orlando I Clinic ..................... 281,511 115% 100.0% 4,255,946 55.6% Tampa II Clinic ...................... 195,590 115% 100.0% 2,934,083 72.9% Regency Square Clinic ................ 178,036 115% 100.0% 2,871,428 68.1% Tampa I Clinic ....................... 174,597 115% 100.0% 2,671,246 72.4% Germantown Clinic .................... 154,484 115% 100.0% 2,281,368 71.9% San Jose Clinic ...................... 134,304 115% 100.0% 2,169,336 68.1% ------------ ------------- TOTAL ................................ $ 12,372,491 96.9% $ 170,000,000 75.0% ============ ============= - ------------------------------------------------------------------------------------------------------------ (1) As of February 1, 2005. (2) Based upon the collective portfolio value and not on the value of the individual Mortgage Properties. See "RISK FACTORS -- The Mortgage Loans -- Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property". S-142 - ------------------------------------------------------------------------------------ TENANT SUMMARY - ------------------------------------------------------------------------------------ NET % OF NET RATINGS(1) RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - ----------------------------------------- ------------------- ----------- ---------- TOP 10 TENANTS .......................... Trinity Hospitals ....................... NR/NR/NR 114,000 14.3% Morristown Memorial Hospital ............ NR/NR/NR 83,151 10.4 Physician Associates of FL .............. NR/NR/NR 81,363 10.2 Harvard Vanguard Medical Associates ............................ NR/NR/NR 64,670 8.1 Montefiore Medical Center ............... NR/NR/NR 52,907 6.6 Univ. of FL Jacksonville Healthcare ..... NR/NR/NR 29,086 3.7 Baptist Health Properties, Inc. ......... NR/NR/NR 27,584 3.5 Mountainside Hospital ................... NR/NR/NR 20,276 2.5 Exempla Health Care ..................... NR/NR/NR 19,477 2.4 Physician Associates, LLC ............... NR/NR/NR 17,090 2.1 ------- ----- TOTAL TOP 10 TENANTS .................. 509,604 64.0% NON-MAJOR TENANTS ....................... 262,277 32.9 ------- ----- OCCUPIED COLLATERAL TOTAL ............... 771,881 96.9% Vacant Space ............................ 24,772 3.1 ------- ----- COLLATERAL TOTAL ........................ 796,653 100.0% ======= ===== - ------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------- % OF DATE OF ACTUAL ACTUAL LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - ----------------------------------------- ---------- ------------- ---------- ------------------- TOP 10 TENANTS .......................... Trinity Hospitals ....................... $ 9.18 $ 1,046,360 6.5% June 2009 Morristown Memorial Hospital ............ $24.53 2,039,694 12.6 February 2012 Physician Associates of FL .............. $20.53 1,670,551 10.3 April 2008 Harvard Vanguard Medical Associates ............................ $22.47 1,453,188 9.0 November 2009 Montefiore Medical Center ............... $41.15 2,177,136 13.5 March 2008 Univ. of FL Jacksonville Healthcare ..... $17.91 521,032 3.2 Multiple Spaces(2) Baptist Health Properties, Inc. ......... $13.95 384,860 2.4 February 2008 Mountainside Hospital ................... $22.69 460,062 2.8 June 2012 Exempla Health Care ..................... $19.01 370,297 2.3 July 2007 Physician Associates, LLC ............... $12.99 222,079 1.4 December 2005 ----------- ----- TOTAL TOP 10 TENANTS .................. $20.30 $10,345,259 64.0% NON-MAJOR TENANTS ....................... $22.17 5,815,473 36.0 ----------- ----- OCCUPIED COLLATERAL TOTAL ............... $20.94 $16,160,732 100.0% =========== ===== Vacant Space ............................ COLLATERAL TOTAL ........................ - ------------------------------------------------------------------------------------------------- (1) Certain ratings are those of the parent company whether or not the parent guarantees the lease. (2) Under the terms of multiple leases, 13,411 square feet expire in March 2006, 6,121 square feet expire in May 2008 and 9,554 square feet expire in July 2009. May not equal 100% due to rounding. - ------------------------------------------------------------------------------------------------------------------------- LEASE EXPIRATION SCHEDULE - ------------------------------------------------------------------------------------------------------------------------- # OF WA BASE CUMULATIVE % % OF ACTUAL CUMULATIVE % LEASES RENT/SF TOTAL SF % OF TOTAL OF SF RENT OF ACTUAL RENT YEAR EXPIRING EXPIRING EXPIRING SF EXPIRING* ROLLING* ROLLING* ROLLING* - -------------- ---------- ---------- ---------- -------------- -------------- ------------- --------------- 2005 13 $ 21.32 48,205 6.1% 6.1% 6.4% 6.4% 2006 9 $ 20.16 28,891 3.6% 9.7% 3.6% 10.0% 2007 17 $ 20.84 74,274 9.3% 19.0% 9.6% 19.5% 2008 21 $ 23.68 234,813 29.5% 48.5% 34.4% 54.0% 2009 11 $ 15.29 210,271 26.4% 74.9% 19.9% 73.8% 2010 6 $ 28.53 19,685 2.5% 77.3% 3.5% 77.3% 2011 1 $ 23.00 1,200 0.2% 77.5% 0.2% 77.5% 2012 3 $ 23.91 112,526 14.1% 91.6% 16.7% 94.1% 2013 2 $ 25.89 29,438 3.7% 95.3% 4.7% 98.9% 2014 1 $ 22.00 2,131 0.3% 95.6% 0.3% 99.1% 2015 2 $ 13.17 10,447 1.3% 96.9% 0.9% 100.0% Thereafter 0 $ 0.00 0 0.0% 96.9% 0.0% 100.0% Vacant 0 N/A 24,772 3.1% 100.0% 0.0% 100.0% - ------------------------------------------------------------------------------------------------------------------------- * Calculated based on approximate square footage occupied by each tenant. S-143 THE LOAN. The Mortgage Loan (the "Kadima Medical Office Pool Loan") is secured by first deeds of trust or mortgages encumbering 17 medical office properties located in Florida (9 Mortgaged Properties), New Jersey (2 Mortgaged Properties), Colorado (1 Mortgaged Property), Kentucky (1 Mortgaged Property), Massachusetts (1 Mortgaged Property), New York (1 Mortgaged Property), North Dakota (1 Mortgaged Property) and Tennessee (1 Mortgaged Property). The Kadima Medical Office Pool Loan represents approximately 9.1% of the Cut-Off Date Pool Balance. The Kadima Medical Office Pool Loan was originated on March 15, 2005, and has a principal balance as of the Cut-Off Date of $127,500,000. The Kadima Medical Office Pool Loan provides for interest-only payments for the first 36 months of its term, and thereafter, fixed monthly payments of principal and interest. The Kadima Medical Office Pool Loan has a remaining term of 119 months and matures on April 11, 2015. The Kadima Medical Office Pool 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 Kadima Medical Properties LLC, a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Kadima Medical Office Pool Loan. The sponsors of the borrower are Meyer Chetrit and Cindy Dolgin. Meyer Chetrit is a principal of The Chetrit Group, which has acquired or developed more than 10 million square feet of office and industrial space and 4,500 apartment units during the past 10 years. Cindy Dolgin is a member of the Dolgin Family, a Brooklyn-based family that has been active in commercial real estate for over 100 years. THE PROPERTIES. The Mortgaged Properties consist of 17 medical office buildings containing, in the aggregate, 796,653 square feet of office space. Many of the Mortgaged Properties are located in close proximity to a hospital or academic facility. Seven (7) of the Mortgaged Properties are single-tenant properties. As of February 1, 2005, the occupancy rate for the Mortgaged Properties securing the Kadima Medical Office Pool Loan was approximately 96.9%. The largest tenant is Trinity Hospitals, occupying approximately 114,000 square feet, or approximately 14.3% of the net rentable area. Trinity Hospitals operates approximately 50 hospitals and 400 outpatient facilities. The Trinity Hospitals lease expires in June 2009. The second largest tenant is Morristown Memorial Hospital, occupying approximately 83,151 square feet, or approximately 10.4% of the net rentable area. Morristown Memorial Hospital is adjacent to the Mortgaged Property and contains the Carol G. Simon Cancer Center. The Morristown Memorial Hospital lease expires in February 2012. The third largest tenant is Physician Associates of FL ("Physicians Associates"), occupying approximately 81,363 square feet, or approximately 10.2% of the net rentable area. Physicians Associates is a private medical group with approximately 60 physicians specializing in family practice, internal medicine, obstetrics, gynecology and pediatrics. The Physician Associates lease expires in April 2008. LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are deposited into a mortgagee-designated lock box account. MEZZANINE DEBT. There is an existing mezzanine loan in the amount of $12,500,000. The mezzanine loan is not an asset of the Trust Fund and is secured by a pledge of the equity interests in the borrower. MANAGEMENT. KND Management Co., Inc., an affiliate of one of the sponsors, is the property manager for the Mortgaged Properties securing the Kadima Medical Office Pool Loan. KND Management Co., Inc. currently manages approximately 5.0 million square feet of commercial space throughout the United States. S-144 Park Place II - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $100,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 7.1% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR Maguire Properties, L.P. TYPE OF SECURITY Fee MORTGAGE RATE 5.390% MATURITY DATE April 11, 2012 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 36 ORIGINAL TERM / AMORTIZATION 84 / 360 REMAINING TERM / AMORTIZATION 83 / 360 LOCKBOX Yes UP-FRONT RESERVES INSURANCE Yes ENGINEERING $83,500 NEW CENTURY TI REIMBURSEMENT(1) $3,660,160 NEW CENTURY RENT RESERVE(2) $183,163 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $2,289 TI/LC $11,444 ADDITIONAL FINANCING(3) None CUT-OFF DATE BALANCE $100,000,000 CUT-OFF DATE BALANCE/SF $364 CUT-OFF DATE LTV 79.6% MATURITY DATE LTV 75.1% UW DSCR ON NCF 1.20x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) The up-front New Century TI Reimbursement relates to pending tenant improvement expenses with respect to the New Century lease that are obligations of the borrower. (2) The up-front New Century Rent Reserve will be released to the borrower upon New Century paying full, unabated rent. (3) Future mezzanine debt permitted. The sponsor of the borrowers may pledge the equity interests in the borrowers as additional collateral for certan pre-existing debt facilities. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Irvine, California PROPERTY TYPE Mixed Use -- Office/Retail SIZE (SF) 274,647 OCCUPANCY AS OF MARCH 1, 2005 89.1% YEAR BUILT / YEAR RENOVATED 1995 / NA APPRAISED VALUE $125,700,000 PROPERTY MANAGEMENT Maguire Properties, L.P. UW ECONOMIC OCCUPANCY 93.5% UW REVENUES $11,946,959 UW TOTAL EXPENSES $3,558,479 UW NET OPERATING INCOME (NOI) $8,388,480 UW NET CASH FLOW (NCF) $8,089,346 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-145 - ------------------------------------------------------------------------------------ TENANT SUMMARY - ------------------------------------------------------------------------------------ NET % OF NET RATINGS* RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - ----------------------------------------- ------------------- ----------- ---------- New Century Financial Corporation ....... NR / BB / NR 79,636 29.0% Sport Chalet ............................ NR / NR / NR 35,049 12.8 Quick Loan Funding ...................... NR / NR / NR 25,918 9.4 WL Homes ................................ NR / NR / NR 17,369 6.3 Mother's Market ......................... NR / NR / NR 10,576 3.9 Non-major tenants ....................... 76,182 27.7 Vacant .................................. 29,917 10.9 ------- ----- TOTAL ................................... 274,647 100.0% ======= ===== - ------------------------------------------------------------------------------------ - --------------------------------------------------------------------------------------------- % OF ACTUAL ACTUAL DATE OF LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - ----------------------------------------- ---------- ------------- ---------- --------------- New Century Financial Corporation ....... $ 27.60 $2,197,954 32.5% April 2010 Sport Chalet ............................ $ 13.97 489,635 7.3 December 2015 Quick Loan Funding ...................... $ 28.20 730,888 10.8 November 2008 WL Homes ................................ $ 27.00 468,963 6.9 June 2008 Mother's Market ......................... $ 19.80 209,405 3.1 September 2011 Non-major tenants ....................... $ 34.87 2,656,217 39.3 Vacant .................................. 0 0.0 ---------- ----- TOTAL ................................... $6,753,061 100.0% ========== ===== - --------------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. - ---------------------------------------------------------------------------------------------------------------------- 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 3 $33.66 5,010 1.8% 1.8% 2.5% 2.5% 2006 3 $38.32 6,471 2.4% 4.2% 3.7% 6.2% 2007 5 $35.95 17,498 6.4% 10.6% 9.3% 15.5% 2008 4 $28.66 48,079 17.5% 28.1% 20.4% 35.9% 2009 6 $33.37 13,448 4.9% 33.0% 6.6% 42.5% 2010 5 $28.09 86,112 31.4% 64.3% 35.8% 78.4% 2011 2 $22.67 13,326 4.9% 69.2% 4.5% 82.8% 2012 2 $38.07 8,520 3.1% 72.3% 4.8% 87.6% 2013 0 $ 0.00 0 0.0% 72.3% 0.0% 87.6% 2014 0 $ 0.00 0 0.0% 72.3% 0.0% 87.6% 2015 1 $13.97 35,049 12.8% 85.0% 7.3% 94.9% Thereafter 2 $30.84 11,217 4.1% 89.1% 5.1% 100.0% Vacant 0 N/A 29,917 10.9% 100.0% 0.0% 100.0% - ---------------------------------------------------------------------------------------------------------------------- * Calculated based on the approximate square footage occupied by each tenant S-146 THE LOAN. The Mortgage Loan (the "Park Place II Loan") is secured by a first mortgage encumbering a mixed-use office and retail center located in Irvine, California. The Park Place II Loan represents approximately 7.1% of the Cut-Off Date Pool Balance. The Park Place II Loan was originated on March 15, 2005, and has a principal balance as of the Cut-Off Date of $100,000,000. The Park Place II Loan provides for interest-only payments for the first 36 months of its term, and thereafter, fixed monthly payments of principal and interest. The Park Place II Loan has a remaining term of 83 months and matures on April 11, 2012. The Park Place II 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 BORROWERS. The borrowers are Maguire Properties -- Park Place Parking, LLC, Maguire Properties -- 3121 Michelson, LLC and Maguire Properties -- Park Place Shops, LLC, each a single purpose entity. Legal counsel to each of the borrowers delivered a non-consolidation opinion in connection with the origination of the Park Place II Loan. The sponsor of the borrowers is Maguire Properties, L.P. ("Maguire"), an affiliate of Maguire Properties, Inc. Maguire is a commercial property investment and management company that owns the most Class A office space in the Los Angeles central business district and currently holds more than 10.0 million square feet of office and mixed-use properties. THE PROPERTY. The Mortgaged Property is an approximately 274,647 square foot mixed-use office and retail building situated on approximately 15.0 acres. The Mortgaged Property was constructed in 1995. The Mortgaged Property is located in Irvine, California, within the Los Angeles-Long Beach-Santa Ana, California metropolitan statistical area. As of March 1, 2005, the occupancy rate for the Mortgaged Property securing the Park Place II Loan was approximately 89.1%. The largest tenant is New Century Financial Corporation ("NEW"), occupying approximately 79,636 square feet, or approximately 29.0% of the net rentable area. NEW is a real estate investment trust and mortgage finance company operating in the United States. The NEW lease expires in April 2010. The second largest tenant is Sport Chalet, Inc. ("Sport Chalet"), occupying approximately 35,049 square feet, or approximately 12.8% of the net rentable area. Sport Chalet operates approximately 31 full-service, specialty sporting goods stores primarily in California and Nevada. The Sport Chalet lease expires in December 2015. The third largest tenant is Quick Loan Funding, occupying approximately 25,918 square feet, or approximately 9.4% of the net rentable area. Quick Loan Funding is a mortgage lending institution that provides loan programs which include refinancing, cash-out, conforming, FHA, VA, jumbo fixed and adjustable loans. The Quick Loan Funding lease expires in November 2008. LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are deposited into a mortgagee-designated lock box account. FREE RELEASE. The borrower may obtain the release of a certain parcel without payment of any release price upon the satisfaction of certain conditions, including, without limitation: (i) the borrower provides evidence that the proposed use of the release parcel will not violate any of the restrictions included in any lease at the remaining Mortgaged Property, (ii) the borrower provides evidence that the remaining Mortgaged Property will be in compliance with all applicable laws, (iii) the borrower provides an opinion of counsel that the proposed release will not adversely effect the REMIC status of the Trust Fund and (iv) no event of default has occurred and is continuing. MANAGEMENT. Maguire, the sponsor of the borrower, is the property manager for the Mortgaged Property securing the Park Place II Loan. S-147 Happy Valley Towne Center - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $56,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 4.0% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR Lee T. Hanley and Nancy R. Hanley TYPE OF SECURITY Leasehold MORTGAGE RATE 5.790% MATURITY DATE May 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 36 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 120 / 360 LOCKBOX Springing UP-FRONT RESERVES TAX/INSURANCE Yes SPORT CHALET(1) $2,900,000 TI REIMBURSEMENT(2) $1,459,530 RENT COLLECTIONS(3) $3,540,470 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes ADDITIONAL FINANCING(4) None CUT-OFF DATE BALANCE $56,000,000 CUT-OFF DATE BALANCE/SF $82 CUT-OFF DATE LTV 72.6% MATURITY DATE LTV 65.4% UW DSCR ON NCF 1.32x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) The up-front Sport Chalet Reserve relates to pending tenant improvement expenses with respect to the Sport Chalet lease that are obligations of the borrower. (2) The up-front TI Reimbursement relates to outstanding tenant improvement expenses that are obligations of the borrower. (3) The up-front Rent Collections Reserve will be released upon monthly base rent exceeding $515,000 collections from tenants that are open for business. (4) Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Phoenix, Arizona PROPERTY TYPE Retail -- Anchored SIZE (SF) 679,588 OCCUPANCY AS OF APRIL 13, 2005 95.8%* YEAR BUILT / YEAR RENOVATED 2005 / NA APPRAISED VALUE $77,100,000 PROPERTY MANAGEMENT Vestar Properties, Inc. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $9,283,551 UW TOTAL EXPENSES $3,900,403 UW NET OPERATING INCOME (NOI) $5,383,148 UW NET CASH FLOW (NCF) $5,193,144 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Includes space that has been leased but the related tenants have not taken occupancy. S-148 - ------------------------------------------------------------------------------------------------------------------------------- TENANT SUMMARY - ------------------------------------------------------------------------------------------------------------------------------- NET % OF NET ACTUAL % OF RATINGS* RENTABLE RENTABLE RENT ACTUAL DATE OF LEASE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA PSF ACTUAL RENT RENT EXPIRATION - --------------------------------- ------------------- ----------- ---------- ---------- ------------- ---------- -------------- Wal-Mart (Ground Lease) ......... Aa2 / AA / AA 207,928 30.6% $ 3.32 $ 690,000 11.0% January 2025 Lowe's Home Improvement (Ground Lease) ........................ A2 / A+ / A 166,992 24.6 $ 2.74 458,000 7.3 October 2030 Sport Chalet . .................. NR / NR / NR 42,000 6.2 $13.50 567,000 9.1 October 2015 Circuit City . .................. NR / NR / NR 33,443 4.9 $16.50 551,810 8.8 February 2020 Linens N' Things ................ NR / NR / NR 28,052 4.1 $15.00 420,780 6.7 March 2015 Non-major tenants . ............. 172,440 25.4 $20.64 3,558,687 57.0 Vacant .......................... 28,733 4.2 0 0.0 ------- ----- ----------- ----- TOTAL ........................... 679,588 100.0% $ 6,246,276 100.0% ======= ===== =========== ===== - ------------------------------------------------------------------------------------------------------------------------------- * 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 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 16 $31.17 37,023 5.4% 5.4% 18.5% 18.5% 2011 0 $ 0.00 0 0.0% 5.4% 0.0% 18.5% 2012 1 $34.00 1,442 0.2% 5.7% 0.8% 19.3% 2013 0 $ 0.00 0 0.0% 5.7% 0.0% 19.3% 2014 0 $ 0.00 0 0.0% 5.7% 0.0% 19.3% 2015 11 $15.92 152,770 22.5% 28.1% 38.9% 58.2% Thereafter 9 $ 5.68 459,620 67.6% 95.8% 41.8% 100.0% Vacant 0 N/A 28,733 4.2% 100.0% 0.0% 100.0% - --------------------------------------------------------------------------------------------------------------------------- * Calculated based on approximate square footage occupied by each tenant. S-149 THE LOAN. The Mortgage Loan (the "Happy Valley Towne Center Loan") is secured by a first mortgage encumbering a leasehold interest in an anchored retail center located in Phoenix, Arizona. The Happy Valley Towne Center Loan represents approximately 4.0% of the Cut-Off Date Pool Balance. The Happy Valley Towne Center Loan was originated on April 13, 2005, and has a principal balance as of the Cut-Off Date of $56,000,000. The Happy Valley Towne Center Loan provides for interest-only payments for the first 36 months of its term, and thereafter, fixed monthly payments of principal and interest. The Happy Valley Towne Center Loan has a remaining term of 120 months and matures on May 11, 2015. The Happy Valley Towne Center Loan may be prepaid on or after February 11, 2015, and permits defeasance with United States government obligations beginning two years after the Closing Date. THE BORROWER. The borrower is Vestar Arizona XXXI, L.L.C., a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Happy Valley Towne Center Loan. The sponsors of the borrower are Lee T. Hanley and Nancy R. Hanley. Lee T. Hanley is a founding member of Vestar Development Company ("Vestar"), a retail development company based in Phoenix, Arizona, that was formed in 1979 and was the development company for the Mortgaged Property securing the Happy Valley Towne Center Loan. Vestar has 3 regional offices located in Phoenix, Arizona, Long Beach, California and El Cajon, California. THE PROPERTY. The Mortgaged Property is an approximately 679,588 square foot anchored retail center situated on approximately 71.5 acres. The Mortgaged Property was constructed in 2005. The Mortgaged Property is located in Phoenix, Arizona. As of April 13, 2005, the occupancy rate for the Mortgaged Property securing the Happy Valley Towne Center Loan (including space that is being built-out for tenants that have executed leases but have not taken occupancy) was approximately 95.8%. The largest tenant is Wal-Mart, occupying approximately 207,928 square feet, or approximately 30.6% of the net rentable area. Wal-Mart is the largest discount retailer in the United States. Wal-Mart ground leases its space from the borrower and the Wal-Mart improvements do not secure the Happy Valley Towne Center Loan. As of April 11, 2005, Wal-Mart was rated "Aa2" (Moody's) and "AA" (S&P). The Wal-Mart ground lease expires in January 2025. The second largest tenant is Lowe's Home Improvement ("Lowe's"), occupying approximately 166,992 square feet, or approximately 24.6% of the net rentable area. Lowe's is the second largest home improvement retailer in the United States with approximately 950 stores in 45 states. Lowe's ground leases its space from the borrower and the Lowe's improvements do not secure the Happy Valley Towne Center Loan. As of April 12, 2005, Lowe's was rated "A2" (Moody's) and "A+" (S&P). The Lowe's ground lease expires in October 2030. The third largest tenant is Sport Chalet, occupying approximately 42,000 square feet, or approximately 6.2% of the net rentable area. Sport Chalet operates approximately 31 full-service, specialty sporting goods stores primarily in California and Nevada. The Sport Chalet lease expires in October 2015. LOCK BOX ACCOUNT. At any time during the term of the Happy Valley Towne Center Loan, (i) if the debt service coverage ratio, as computed by the mortgagee, is less than 1.10x, or (ii) upon the occurrence of an event of default under the loan documents, all tenant payments due under the applicable tenant leases are deposited into a mortgagee-designated lock box account. MANAGEMENT. Vestar Properties, Inc., an affiliate of the borrower, is the property manager for the Mortgaged Property securing the Happy Valley Towne Center Loan. Vestar Properties, Inc. is a commercial real estate management company with 11 million square feet of real estate under management in Arizona and Southern California. S-150 Mercantile Bank & Trust Building - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $41,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.9% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR HGGP Capital, LLC TYPE OF SECURITY Fee MORTGAGE RATE 5.260% MATURITY DATE January 11, 2012 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 24 ORIGINAL TERM / AMORTIZATION 84 / 360 REMAINING TERM / AMORTIZATION 80 / 360 LOCKBOX Yes UP-FRONT RESERVES TAX/INSURANCE Yes REPLACEMENT $50,000 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $6,931 TI/LC(1) Springing ADDITIONAL FINANCING(2) None CUT-OFF DATE BALANCE $41,000,000 CUT-OFF DATE BALANCE/SF $101 CUT-OFF DATE LTV 77.4% MATURITY DATE LTV 71.6% UW DSCR ON NCF 1.55x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Beginning in January 2009, the borrower will be required to fund a tenant improvement and leasing commission reserve with payments of $29,167 per month for the remaining loan term. (2) Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Baltimore, Maryland PROPERTY TYPE Office -- CBD SIZE (SF) 404,089 OCCUPANCY AS OF JANUARY 25, 2005 100.0% YEAR BUILT / YEAR RENOVATED 1970 / 1999 APPRAISED VALUE $53,000,000 PROPERTY MANAGEMENT Harbor Group Management Co. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $8,566,185 UW TOTAL EXPENSES $4,030,116 UW NET OPERATING INCOME (NOI) $4,536,069 UW NET CASH FLOW (NCF) $4,212,817 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-151 - ------------------------------------------------------------------------------------------------------------------------- TENANT SUMMARY - ------------------------------------------------------------------------------------------------------------------------- RATINGS* NET % OF NET % OF DATE OF MOODY'S/ RENTABLE RENTABLE ACTUAL ACTUAL LEASE TENANT S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION - --------------------------------- -------------- ----------- ---------- ---------- ------------- ---------- -------------- Mercantile Bank & Trust ......... NR / A+ / NR 202,822 50.2% $21.63 $4,386,280 52.5% December 2014 Venable, LLP. ................... NR / NR / NR 140,649 34.8 $19.97 2,809,232 33.6 April 2011 Grant Thornton LLP .............. NR / NR / NR 16,744 4.1 $17.43 291,848 3.5 December 2013 Kaiser Permanente.. ............. NR / NR / A 15,000 3.7 $23.46 351,900 4.2 August 2010 Adelberg Rudow .................. NR / NR / NR 14,007 3.5 $18.25 255,628 3.1 June 2006 Non-major tenants ............... 14,867 3.7 $17.83 265,111 3.2 Vacant . ........................ 0 0.0 0 0.0 ------- ----- ---------- ----- TOTAL ........................... 404,089 100.0% $8,359,999 100.0% ======= ===== ========== ===== - ------------------------------------------------------------------------------------------------------------------------ * 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 YEAR ROLLING ROLLING ROLLING SF ROLLING* ROLLING* RENT ROLLING* RENT ROLLING* - -------------- --------- ----------- ---------- ------------- ------------ --------------- -------------- 2005 3 $14.00 90 0.0% 0.0% 0.0% 0.0% 2006 3 $14.40 17,748 4.4% 4.4% 3.1% 3.1% 2007 2 $23.50 10,763 2.7% 7.1% 3.0% 6.1% 2008 0 $ 0.00 0 0.0% 7.1% 0.0% 6.1% 2009 1 $40.00 273 0.1% 7.1% 0.1% 6.2% 2010 1 $23.46 15,000 3.7% 10.9% 4.2% 10.4% 2011 3 $19.97 140,649 34.8% 45.7% 33.6% 44.0% 2012 0 $ 0.00 0 0.0% 45.7% 0.0% 44.0% 2013 1 $17.43 16,744 4.1% 49.8% 3.5% 47.5% 2014 2 $21.63 202,822 50.2% 100.0% 52.5% 100.0% 2015 0 $ 0.00 0 0.0% 100.0% 0.0% 100.0% Thereafter 0 $ 0.00 0 0.0% 100.0% 0.0% 100.0% Vacant 0 N/A 0 0.0% 100.0% 0.0% 100.0% - ---------------------------------------------------------------------------------------------------------------------- * Calculated based on the approximate square footage occupied by each tenant S-152 THE LOAN. The Mortgage Loan (the "Mercantile Bank & Trust Building Loan") is secured by a first mortgage encumbering an office building located in Baltimore, Maryland. The Mercantile Bank & Trust Building Loan represents approximately 2.9% of the Cut-Off Date Pool Balance. The Mercantile Bank & Trust Building Loan was originated on December 13, 2004, and has a principal balance as of the Cut-Off Date of $41,000,000. The Mercantile Bank & Trust Building Loan provides for interest-only payments for the first 24 months of its term, and thereafter, fixed monthly payments of principal and interest. The Mercantile Bank & Trust Building Loan has a remaining term of 80 months and matures on January 11, 2012. The Mercantile Bank & Trust Building Loan may be prepaid on or after November 11, 2011, and permits defeasance with United States government obligations beginning three years after the first payment date. THE BORROWER. The borrower is Hopkins Plaza Financial Associates, LLC, a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Mercantile Bank & Trust Building Loan. The sponsor is HGGP Capital, LLC. HGGP Capital, LLC is an affiliate of Harbor Group International, a real estate investment company that has acquired or developed more than 11 million square feet of commercial space valued in excess of $1 billion. THE PROPERTY. The Mortgaged Property is an approximately 404,089 square foot office building situated on approximately 1.4 acres. The Mortgaged Property was constructed in 1970 and renovated in 1999. The Mortgaged Property is located in Baltimore, Maryland. As of January 25, 2005, the occupancy rate for the Mortgaged Property securing the Mercantile Bank & Trust Building Loan was approximately 100%. The largest tenant is Mercantile Bank & Trust ("Mercantile"), occupying approximately 202,822 square feet, or approximately 50.2% of the net rentable area. Mercantile, with more than $14 billion in assets, is a regional bank holding company with its headquarters in Baltimore, Maryland. As of April 11, 2005, Mercantile was rated "A+" (S&P). The Mercantile lease expires in December 2014. The second largest tenant is Venable, LLP occupying approximately 140,649 square feet, or approximately 34.8% of the net rentable area. Venable, LLP is a law firm that serves corporate, institutional, governmental, nonprofit and individual clients throughout the United States. The Venable, LLP lease expires in April 2011. The third largest tenant is Grant Thornton LLP, occupying approximately 16,744 square feet, or approximately 4.1% of the net rentable area. Grant Thornton LLP provides accounting and consulting services to public and private clients throughout the United States. The Grant Thornton LLP lease expires in December 2013. LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are deposited into a mortgagee-designated lock box account. MANAGEMENT. Harbor Group Management Co. is the property manager for the Mortgaged Property securing the Mercantile Bank & Trust Building Loan. Harbor Group Management Co. is a full service management company with approximately 6 million square feet of commercial space and 6,000 apartment units under management. S-153 590 Fifth Avenue - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $40,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.8% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Stanley Chera, Jeffrey Feil and Joseph Nakash TYPE OF SECURITY Fee MORTGAGE RATE 5.390% MATURITY DATE March 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 48 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 118 / 360 LOCKBOX Yes UP-FRONT RESERVES TAX Yes FREE RENT RESERVE $112,292 ONGOING MONTHLY RESERVES TAX Yes REPLACEMENT $1,634 TI/LC $10,211 PAYLESS SHOES LEASE* Springing ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $40,000,000 CUT-OFF DATE BALANCE/SF $409 CUT-OFF DATE LTV 74.2% MATURITY DATE LTV 67.6% UW DSCR ON NCF 1.20x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * In the event the borrower does not complete the buyout of the Payless Shoes Lease by June 1, 2005, the borrower will be required to deliver a letter of credit in an amount of $3,900,000, subject to adjustment based on market rents pursuant to the terms of the loan documents. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION New York, New York PROPERTY TYPE Office -- CBD SIZE (SF) 97,717 OCCUPANCY AS OF MARCH 7, 2005 99.6% YEAR BUILT / YEAR RENOVATED 1987 / NA APPRAISED VALUE $53,900,000 PROPERTY MANAGEMENT Jeffrey Management Corp. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $5,586,654 UW TOTAL EXPENSES $2,225,529 UW NET OPERATING INCOME (NOI) $3,361,125 UW NET CASH FLOW (NCF) $3,219,165 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-154 - --------------------------------------------------------------------------------- TENANT SUMMARY - --------------------------------------------------------------------------------- NET % OF NET RATINGS(1) RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - -------------------------------------- ------------------- ----------- ---------- Strategic Insight Mutual Fund Research and Consulting, LLC ................ NR/NR/NR 13,788 14.1% Career Blazer ........................ NR/NR/NR 12,178 12.5 Citra Trading ........................ NR/NR/NR 8,167 8.4 Payless Shoes(3) ..................... NR/BB-/NR 6,618 6.8 Diascience Co ........................ NR/NR/NR 5,974 6.1 Non-major tenants .................... 50,583 51.8 Vacant ............................... 409 0.4 ------ ----- TOTAL ................................ 97,717 100.0% ====== ===== - --------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- % OF DATE OF ACTUAL ACTUAL LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - -------------------------------------- ---------- ------------- ---------- ------------------- Strategic Insight Mutual Fund Research and Consulting, LLC ................ $ 48.00 $ 661,824 12.4% December 2007 Career Blazer ........................ $ 45.51 554,208 10.4 Multiple Spaces(2) Citra Trading ........................ $ 40.00 326,680 6.1 May 2014 Payless Shoes(3) ..................... $152.60 1,009,907 18.9 April 2009 Diascience Co ........................ $ 49.00 292,726 5.5 March 2011 Non-major tenants .................... $ 49.59 2,508,557 46.9 Vacant ............................... 0 0.0 ----------- ----- TOTAL ................................ $ 5,353,902 100.0% =========== ===== - ---------------------------------------------------------------------------------------------- (1) Certain ratings are those of the parent whether or not the parent guarantees the lease. (2) Under the terms of multiple leases, 230 square feet expire monthly and 11,948 square feet expire in September 2008. (3) The borrower is currently negotiating with Payless Shoes to terminate its lease and replace Payless Shoes with certain other tenants. See "The Property" below. - ------------------------------------------------------------------------------------------------------------------------------ LEASE EXPIRATION SCHEDULE - ------------------------------------------------------------------------------------------------------------------------------ # OF WA BASE CUMULATIVE % LEASES RENT/SF TOTAL SF % OF TOTAL CUMULATIVE % OF ACTUAL OF ACTUAL RENT YEAR ROLLING ROLLING ROLLING SF ROLLING* % OF SF ROLLING* RENT ROLLING* ROLLING* - -------------- --------- ----------- ---------- ------------- ------------------ --------------- --------------- 2005 3 $ 16.92 2,284 2.3% 2.3% 0.7% 0.7% 2006 1 $ 47.00 4,900 5.0% 7.4% 4.3% 5.0% 2007 5 $ 51.30 20,321 20.8% 28.1% 19.5% 24.5% 2008 2 $ 44.41 17,501 17.9% 46.1% 14.5% 39.0% 2009 2 $123.71 9,318 9.5% 55.6% 21.5% 60.5% 2010 0 $ 0.00 0 0.0% 55.6% 0.0% 60.5% 2011 2 $ 51.34 9,795 10.0% 65.6% 9.4% 69.9% 2012 1 $ 53.83 2,200 2.3% 67.9% 2.2% 72.1% 2013 3 $ 49.94 17,922 18.3% 86.2% 16.7% 88.9% 2014 1 $ 40.00 8,167 8.4% 94.6% 6.1% 95.0% 2015 1 $ 55.00 4,900 5.0% 99.6% 5.0% 100.0% Thereafter 0 $ 0.00 0 0.0% 99.6% 0.0% 100.0% Vacant 0 N/A 409 0.4% 100.0% 0.0% 100.0% - ------------------------------------------------------------------------------------------------------------------------------ * Calculated based on the approximate square footage occupied by each tenant S-155 THE LOAN. The Mortgage Loan (the "590 Fifth Avenue Loan") is secured by a first mortgage encumbering an office building located in New York, New York. The 590 Fifth Avenue Loan represents approximately 2.8% of the Cut-Off Date Pool Balance. The 590 Fifth Avenue Loan was originated on March 1, 2005, and has a principal balance as of the Cut-Off Date of $40,000,000. The 590 Fifth Avenue Loan provides for interest-only payments for the first 48 months of its term, and thereafter, fixed monthly payments of principal and interest. The 590 Fifth Avenue Loan has a remaining term of 118 months and matures on March 11, 2015. The 590 Fifth 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 590 Fifth Avenue LLC, a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the 590 Fifth Avenue Loan. The sponsors are Jeffrey Feil, Stanley Chera and Joseph Nakash. Jeffrey Feil is the principal of the Feil Organization, a New York based real estate company with ownership interests in over 8.5 million square feet of retail properties, 5 million square feet of office properties and 5,000 residential rental units. THE PROPERTY. The Mortgaged Property is an approximately 97,717 square foot office building situated on approximately 0.1 acres. The Mortgaged Property was constructed in 1987. The Mortgaged Property is located in New York, New York. As of March 7, 2005, the occupancy rate for the Mortgaged Property securing the 590 Fifth Avenue Loan was approximately 99.6%. The largest tenant is Strategic Insight Mutual Fund Research and Consulting, LLC ("Strategic Insight"), occupying approximately 13,788 square feet, or approximately 14.1% of the net rentable area. Strategic Insight provides products and services for the asset management business in the United States and globally. The Strategic Insight lease expires in December 2007. The second largest tenant is Career Blazer, occupying approximately 12,178 square feet, or approximately 12.5% of the net rentable area. Career Blazer is a provider of employment for both temporary and permanent positions in the Northeast and Mid-Atlantic regions. The Career Blazer leases expire in September 2008 (except with respect to 230 square feet, which is leased month-to-month). The third largest tenant is Citra Trading, occupying approximately 8,167 square feet, or approximately 8.4% of the net rentable area. Citra Trading is a family owned jewelry business dealing in gold, pearls, diamonds and gemstones. The Citra Trading lease expires in May 2014. The borrower is currently negotiating with Payless Shoes, a ground floor retail tenant, to terminate its lease and replace it with Kay Jewelers, Lush Cosmetics and DGNY LLC (an existing tenant who will expand into the second floor space). The borrower expects to complete the buyout of the Payless Shoes space by June 1, 2005. In the event the borrower does not complete the Payless Shoes buyout by June 1, 2005, the borrower will be required to deliver a letter of credit to the mortgagee in an amount equal to ten times the difference between the current rent and the market rent for the Payless Shoes space. The mortgagee will be entitled to hold the letter of credit until such time as the debt service coverage ratio at the Mortgaged Property exceeds 1.20x or the Payless Shoes space is leased at a market rent. LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are deposited into a mortgagee-designated lock box account. MANAGEMENT. Jeffrey Management Corp., an affiliate of the sponsor, is the property manager for the Mortgaged Property securing the 590 Fifth Avenue Loan. S-156 Extra Space Self Storage Portfolio #3 - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $32,550,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.3% NUMBER OF MORTGAGE LOANS 5 LOAN PURPOSE Acquisition SPONSOR Extra Space Storage LLC TYPE OF SECURITY Fee MORTGAGE RATE 4.950% MATURITY DATE April 11, 2010 AMORTIZATION TYPE Interest Only INTEREST ONLY PERIOD 60 ORIGINAL TERM / AMORTIZATION 60 / IO REMAINING TERM / AMORTIZATION 59 / IO LOCKBOX Springing UP-FRONT RESERVES TAX/INSURANCE Yes ENGINEERING $32,188 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $4,676 ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $32,550,000 CUT-OFF DATE BALANCE/SF $83 CUT-OFF DATE LTV 82.0% MATURITY DATE LTV 82.0% UW DSCR ON NCF 1.58x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 5 LOCATION Various, Various PROPERTY TYPE Self Storage SIZE (SF) 392,520 OCCUPANCY AS OF MARCH 15, 2005 88.6% YEAR BUILT / YEAR RENOVATED Various / NA APPRAISED VALUE $39,710,000 PROPERTY MANAGEMENT Extra Space Management, LLC UW ECONOMIC OCCUPANCY 88.4% UW REVENUES $4,480,780 UW TOTAL EXPENSES $1,873,782 UW NET OPERATING INCOME (NOI) $2,606,998 UW NET CASH FLOW (NCF) $2,550,830 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-157 - ------------------------------------------------------------------------------------------ EXTRA SPACE SELF STORAGE PORTFOLIO #3 SUMMARY - ------------------------------------------------------------------------------------------ CUT-OFF DATE CUT-OFF DATE NO. OF SQUARE BALANCE PER PROPERTY NAME BALANCE YEAR BUILT UNITS FOOTAGE SQUARE FOOT - ---------------------------- -------------- ------------ -------- --------- -------------- Extra Space Self Storage #3 - Atlanta, GA. ........ $ 9,600,000 1996 783 75,937 $126 Extra Space Self Storage #3 - Orlando (South John Young Parkway), FL ....................... 8,200,000 1999 687 86,583 $ 95 Extra Space Self Storage #3 - Orlando (Metrowest Boulevard), FL ....................... 6,400,000 2000 845 87,765 $ 73 Extra Space Self Storage #3 - Orlando (Lake Underhill Road), FL ................ 4,600,000 2002 436 69,385 $ 66 Extra Space Self Storage #3 - Ocoee, FL ........... 3,750,000 1987 572 72,850 $ 51 ------------ --- ------ TOTAL ...................... $ 32,550,000 3,323 392,520 $ 83 ============ ===== ======= - ------------------------------------------------------------------------------------------ - -------------------------------------------------------------------------------------------------------- APPRAISED APPRAISED VALUE PER PROPERTY NAME OCCUPANCY UW NCF VALUE SF LTV DSCR - ---------------------------- ----------- -------------- --------------- ---------- ---------- ---------- Extra Space Self Storage #3 - Atlanta, GA. ........ 81.6% $ 717,646 $11,750,000 $155 81.7% 1.51x Extra Space Self Storage #3 - Orlando (South John Young Parkway), FL ....................... 97.0% 613,759 10,000,000 $115 82.0% 1.51x Extra Space Self Storage #3 - Orlando (Metrowest Boulevard), FL ....................... 83.1% 554,517 7,800,000 $ 89 82.1% 1.75x Extra Space Self Storage #3 - Orlando (Lake Underhill Road), FL ................ 84.2% 362,092 5,600,000 $ 81 82.1% 1.59x Extra Space Self Storage #3 - Ocoee, FL ........... 96.6% 302,816 4,560,000 $ 63 82.2% 1.63x ---------- ----------- TOTAL ...................... 88.6% $2,550,830 $39,710,000 $101 82.0% 1.58X ========== =========== - -------------------------------------------------------------------------------------------------------- S-158 THE LOAN. The Mortgage Loans (the "Extra Space Self Storage Portfolio #3 Loans") are secured by first deeds of trust encumbering 5 self storage properties located in Florida (4 Mortgaged Properties) and Georgia (1 Mortgaged Property). The Extra Space Self Storage Portfolio #3 Loans represent approximately 2.3% of the Cut-Off Date Pool Balance. The Extra Space Self Storage Portfolio #3 Loans were originated on March 21, 2005, and have an aggregate principal balance as of the Cut-Off Date of $32,550,000. Each Extra Space Self Storage Portfolio #3 Loan is cross-collateralized and cross-defaulted with each of the other Extra Space Self Storage Portfolio #3 Loans. Each Extra Space Self Storage Portfolio #3 Loan provides for interest-only payments for the entire loan term. Each of the Extra Space Self Storage Portfolio #3 Loans has a remaining term of 59 months and matures on April 11, 2010. The Extra Space Self Storage Portfolio Loans may be prepaid on or after February 11, 2010, and permit defeasance with United States government obligations beginning two years after the Closing Date. THE BORROWER. The borrower is Extra Space Properties Twenty LLC, a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Extra Space Self Storage Portfolio #3 Loans. The sponsor for the borrower is Extra Space Storage LLC. Extra Space Storage LLC is a publicly traded self-storage operator with a portfolio of approximately 130 facilities in 16 states. THE PROPERTIES. The Mortgaged Properties consist of 5 self storage facilities containing, in the aggregate, 392,520 square feet of storage space. Each Mortgaged Property contains regular storage and/or climate controlled units. As of March 15, 2005, the occupancy rate for the Mortgaged Properties securing the Extra Space Self Storage Portfolio #3 Loans was approximately 88.6%. LOCK BOX ACCOUNT. At any time during the term of the Extra Space Self Storage Portfolio #3 Loans, (i) if the debt service coverage ratio, as computed by the mortgagee, is less than 1.15x for a 12 consecutive month period or (ii) upon the occurrence of an event of default under the loan documents, the borrower must notify the tenants that any and all tenant payments due under the applicable tenant leases shall be directly deposited into a mortgagee-designated lock box account. MANAGEMENT. Extra Space Management, LLC, an affiliate of the sponsor, is the property manager for the Mortgaged Properties securing the Extra Space Self Storage Portfolio #3 Loans. S-159 Cypress Lake at Stonebriar - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $29,770,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.1% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR Harold Tomlinson TYPE OF SECURITY Fee MORTGAGE RATE 5.420% MATURITY DATE May 11, 2010 AMORTIZATION TYPE Interest Only INTEREST ONLY PERIOD 60 ORIGINAL TERM / AMORTIZATION 60 / IO REMAINING TERM / AMORTIZATION 60 / IO LOCKBOX None UP-FRONT RESERVES TAX/INSURANCE No ENGINEERING $3,750 ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $29,770,000 CUT-OFF DATE BALANCE/UNIT $63,072 CUT-OFF DATE LTV 77.9% MATURITY DATE LTV 77.9% UW DSCR ON NCF 1.45x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Frisco, Texas PROPERTY TYPE Multifamily - Conventional SIZE (UNITS) 472 OCCUPANCY AS OF MARCH 17, 2005 93.2% YEAR BUILT / YEAR RENOVATED 2002 / NA APPRAISED VALUE $38,200,000 PROPERTY MANAGEMENT GREP, Dallas, LP UW ECONOMIC OCCUPANCY 75.6% UW REVENUES $4,893,023 UW TOTAL EXPENSES $2,465,964 UW NET OPERATING INCOME (NOI) $2,427,059 UW NET CASH FLOW (NCF) $2,332,859 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-160 - ----------------------------------------------------------------------------------------------- UNIT MIX - ----------------------------------------------------------------------------------------------- APPROXIMATE NO. OF UNIT SIZE APPROXIMATE UNIT MIX UNITS (SF) NRA (SF) % OF NRA RENTAL RATE - ------------------- -------- ------------ ------------ ---------- ------------------- 1 BR/1 BA ......... 184 733 134,876 30.5% $ 845 2 BR/1 BA ......... 48 874 41,952 9.5 $ 963 2 BR/2 BA ......... 216 1,059 228,744 51.7 $ 1,113* 3 BR/2 BA ......... 24 1,521 36,504 8.3 $ 1,670 --- ------- ----- TOTAL ............. 472 937 442,076 100.0% $1,021 / $1.09 /SF === ======= ===== - ----------------------------------------------------------------------------------------------- * The rental rate excludes one guest unit which is rented on a per-night basis. S-161 THE LOAN. The Mortgage Loan (the "Cypress Lake at Stonebriar Loan") is secured by a first mortgage encumbering a 472-unit multifamily complex located in Frisco, Texas. The Cypress Lake at Stonebriar Loan represents approximately 2.1% of the Cut-Off Date Pool Balance. The Cypress Lake at Stonebriar Loan was originated on April 20, 2005, and has a principal balance as of the Cut-Off Date of $29,770,000. The Cypress Lake at Stonebriar Loan provides for interest-only payments for the entire loan term. The Cypress Lake at Stonebriar Loan has a remaining term of 60 months and matures on May 11, 2010. The Cypress Lake at Stonebriar Loan may be prepaid on or after March 11, 2010, and permits defeasance with United States government obligations beginning two years after the Closing Date. THE BORROWER. The borrower is Frisco Stonebriar, Ltd., a special purpose entity. Legal counsel to the borrower delivered a non-consolidation opinion in connection with the origination of the Cypress Lake at Stonebriar Loan. The sponsor is Harold Tomlinson. Harold Tomlinson is the founder of Tomlinson Construction Corporation, a multi-family property developer in Texas and Florida. THE PROPERTY. The Mortgaged Property is a 472-unit garden-style apartment complex consisting of 24 buildings situated on approximately 27.7 acres. The Mortgaged Property was constructed in 2002. The Mortgaged Property is located in Frisco, Texas within the Dallas-Fort Worth-Arlington, Texas metropolitan statistical area. The Mortgaged Property includes two community swimming pools, whirlpool/spa, a fitness center, children's playground area, clubhouse, indoor basketball court, car-care center, picnic area and a leasing office. As of March 17, 2005, the occupancy rate for the Mortgaged Property securing the Cypress Lake at Stonebriar Loan was approximately 93.2%. LOCKBOX. The loan documents do not require a lock box account. PROPERTY MANAGEMENT. GREP, Dallas, LP is the property manager for the Mortgaged Property securing the Cypress Lake at Stonebriar Loan. Greystar currently manages more than 5,000 units within the Dallas-Fort Worth metropolitan area. S-162 Casa Paloma Shopping Center - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $29,050,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.1% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Marc J. Paul, Robert A. Robotti and Secured California Investments, Inc. TYPE OF SECURITY Fee MORTGAGE RATE 5.630% MATURITY DATE March 11, 2015 AMORTIZATION TYPE Interest Only ARD INTEREST ONLY PERIOD 120 ORIGINAL TERM / AMORTIZATION 120 / IO REMAINING TERM / AMORTIZATION 118 / IO LOCKBOX Yes UP-FRONT RESERVES TAX/INSURANCE Yes ONGOING MONTHLY RESERVES TAX/INSURANCE Yes ADDITIONAL FINANCING Secured Subordinate Debt* $ 6,400,000 CUT-OFF DATE BALANCE $29,050,000 CUT-OFF DATE BALANCE/SF $223 CUT-OFF DATE LTV 69.8% MATURITY DATE LTV 69.8% UW DSCR ON NCF 1.47x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * The secured subordinate debt is also secured by a pledge of the equity interests in the borrower. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Chandler, Arizona PROPERTY TYPE Retail -- Anchored SIZE (SF) 130,096 OCCUPANCY AS OF MARCH 1, 2005 91.0% YEAR BUILT / YEAR RENOVATED 1999 / NA APPRAISED VALUE $41,600,000 PROPERTY MANAGEMENT CB Richard Ellis Inc. UW ECONOMIC OCCUPANCY 92.0% UW REVENUES $3,630,382 UW TOTAL EXPENSES $1,129,236 UW NET OPERATING INCOME (NOI) $2,501,146 UW NET CASH FLOW (NCF) $2,400,247 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-163 - ----------------------------------------------------------------------------------- TENANT SUMMARY - ----------------------------------------------------------------------------------- NET % OF NET RATINGS* RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - ------------------------------------- ---------------------- ----------- ---------- AJ's Fine Foods ..................... NR / NR / NR 26,500 20.4% Creative Leather Furniture .......... NR / NR / NR 13,249 10.2 Showcase Home Entertainment ......... NR / NR / NR 12,000 9.2 Gap/Gap Kids ........................ Baa3 / BBB- / BBB- 9,000 6.9 Banana Republic ..................... Baa3 / BBB- / BBB- 7,000 5.4 Non-major tenants ................... 50,587 38.9 Vacant .............................. 11,760 9.0 ------- ----- TOTAL ............................... 130,096 100.0% ======= ===== - ---------------------------------------------------------------------------------------- % OF DATE OF ACTUAL ACTUAL LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - ------------------------------------- ---------- ------------- ---------- -------------- AJ's Fine Foods ..................... $ 11.20 $ 296,800 11.2% April 2025 Creative Leather Furniture .......... $ 15.50 205,359 7.7 March 2010 Showcase Home Entertainment ......... $ 20.25 243,000 9.2 February 2010 Gap/Gap Kids ........................ $ 20.00 180,000 6.8 March 2006 Banana Republic ..................... $ 20.35 142,450 5.4 April 2008 Non-major tenants ................... $ 31.38 1,587,433 59.8 Vacant .............................. 0 0.0 ----------- ----- TOTAL ............................... $ 2,655,042 100.0% =========== ===== - ---------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. - ------------------------------------------------------------------------------------------------------------------- LEASE EXPIRATION SCHEDULE - ------------------------------------------------------------------------------------------------------------------- % OF CUMULATIVE WA BASE % OF TOTAL CUMULATIVE ACTUAL % OF ACTUAL # OF LEASES RENT/SF TOTAL SF SF % OF SF RENT RENT YEAR ROLLING ROLLING ROLLING ROLLING* ROLLING* ROLLING* ROLLING* - -------------- ------------- ----------- ---------- ------------ ------------ ---------- ------------ 2005 1 $37.82 1,205 0.9% 0.9% 1.7% 1.7% 2006 2 $21.92 10,225 7.9% 8.8% 8.4% 10.2% 2007 0 $ 0.00 0 0.0% 8.8% 0.0% 10.2% 2008 4 $27.14 12,109 9.3% 18.1% 12.4% 22.5% 2009 3 $29.16 6,644 5.1% 23.2% 7.3% 29.8% 2010 10 $24.92 51,498 39.6% 62.8% 48.3% 78.2% 2011 3 $27.84 10,155 7.8% 70.6% 10.6% 88.8% 2012 0 $ 0.00 0 0.0% 70.6% 0.0% 88.8% 2013 0 $ 0.00 0 0.0% 70.6% 0.0% 88.8% 2014 0 $ 0.00 0 0.0% 70.6% 0.0% 88.8% 2015 0 $ 0.00 0 0.0% 70.6% 0.0% 88.8% Thereafter 1 $11.20 26,500 20.4% 91.0% 11.2% 100.0% Vacant 0 N/A 11,760 9.0% 100.0% 0.0% 100.0% - ------------------------------------------------------------------------------------------------------------------- * Calculated based on the approximate square footage occupied by each tenant S-164 THE LOAN. The Mortgage Loan (the "Casa Paloma Loan") is secured by a first mortgage encumbering an anchored retail center located in Chandler, Arizona. The Casa Paloma Loan represents approximately 2.1% of the Cut-Off Date Pool Balance. The Casa Paloma Loan was originated on March 10, 2005, and has a principal balance as of the Cut-Off Date of $29,050,000. The Casa Paloma Loan provides for interest-only payments for the entire loan term. The Casa Paloma Loan has a remaining term of 118 months to its anticipated repayment date of March 11, 2015. The Casa Paloma Loan may be prepaid with a yield maintenance premium beginning two years after the Closing Date. THE BORROWER. The borrowers are SCI Casa Paloma Fund, LLC, SCI Casa Paloma Fund 1, LLC, SCI Casa Paloma Fund 2, LLC, SCI Casa Paloma Fund 3, LLC, SCI Casa Paloma Fund 4, LLC, SCI Casa Paloma Fund 5, LLC, SCI Casa Paloma Fund 6, LLC, SCI Casa Paloma Fund 7, LLC, SCI Casa Paloma Fund 8, LLC, SCI Casa Paloma Fund 9, LLC, SCI Casa Paloma Fund 10, LLC, SCI Casa Paloma Fund 11, LLC, SCI Casa Paloma Fund 12, LLC, SCI Casa Paloma Fund 13, LLC, SCI Casa Paloma Fund 14, LLC, SCI Casa Paloma Fund 15, LLC, SCI Casa Paloma Fund 16, LLC, SCI Casa Paloma Fund 17, LLC, SCI Casa Paloma Fund 18, LLC, SCI Casa Paloma Fund 19, LLC, SCI Casa Paloma Fund 20, LLC, SCI Casa Paloma Fund 21, LLC, SCI Casa Paloma Fund 22, LLC, SCI Casa Paloma Fund 23, LLC, SCI Casa Paloma Fund 24, LLC and SCI Casa Paloma Fund 25, LLC, each a special purpose entity. Legal counsel to each of the borrowers delivered a non-consolidation opinion in connection with the origination of the Casa Paloma Loan. The sponsors of the borrowers are Secured California Investments, Inc., Marc J. Paul and Robert A. Robotti, the principals of SCI Real Estate Investments Inc. SCI Real Estate Investments Inc. is an integrated real estate investment company headquartered in Southern California that acquires and manages investment properties primarily in the southwest portion of the United States. THE PROPERTY. The Mortgaged Property is an approximately 130,096 square foot anchored retail building situated on approximately 16.8 acres. The Mortgaged Property was constructed in 1999. The Mortgaged Property is located in Chandler, Arizona, within the Phoenix-Mesa-Scottsdale, Arizona metropolitan statistical area. As of March 1, 2005, the occupancy rate for the Mortgaged Property securing the Casa Paloma Loan was approximately 91.0%. The largest tenant is AJ's Fine Foods, occupying approximately 26,500 square feet, or approximately 20.4% of the net rentable area. AJ's Fine Foods, owned by Bashas' Inc., is a gourmet-style grocery with 11 locations in the metro Phoenix area. The AJ's Fine Foods lease expires in April 2025. The second largest tenant is Creative Leather Furniture ("Creative Leather"), occupying approximately 13,249 square feet, or approximately 10.2% of the net rentable area. Creative Leather was founded in Tempe, Arizona. The Creative Leather lease expires in March 2010. The third largest tenant is Showcase Home Entertainment ("Showcase"), a subsidiary of Tweeter Home Entertainment Group, Inc., occupying approximately 12,000 square feet, or approximately 9.2% of the net rentable area. Showcase sells mid to high-end audio and video equipment in more than 170 stores. The Showcase lease expires in February 2010. LOCK BOX ACCOUNT. All tenant payments due under the applicable tenant leases are deposited into a mortgagee-designated lock box account. HYPER-AMORTIZATION. Commencing on the anticipated repayment date of March 11, 2015, if the Casa Paloma Loan is not paid in full, the Casa Paloma Loan enters into a hyper-amortization period through March 11, 2020. The interest rate applicable to the Casa Paloma Loan during such hyper-amortization period will increase to 3.0% over the mortgage rate or 3.0% over the treasury rate, as specified in the loan documents. SECURED SUBORDINATE DEBT/MEZZANINE DEBT. There is an existing mezzanine loan in the amount of $6,400,000. The mezzanine loan is not an asset of the Trust Fund and is secured by the Mortgaged Property and a pledge of the equity interests of the borrower. FREE RELEASE. The borrower may obtain the release of an unimproved parcel without payment of any release price upon the satisfaction of certain conditions, including, without limitation: (i) the borrower provides evidence that the proposed use of the release parcel will not violate any of the restrictions included in any lease at the remaining Mortgaged Property, (ii) the borrower provides evidence that the remaining Mortgaged Property will be in compliance with all applicable laws, (iii) the borrower provides an opinion of counsel that the proposed release will not adversely effect the REMIC status of the Trust Fund and (iv) no event of default has occurred and is continuing. MANAGEMENT. CB Richard Ellis Inc. is the property manager for the Mortgaged Property securing the Casa Paloma Loan. CB Richard Ellis Inc. is a national, full-service retail and commercial real estate firm with over $14 billion in assets under management. S-165 Copaco Center - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $29,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.1% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Joshua Kagan TYPE OF SECURITY Fee MORTGAGE RATE 5.400% MATURITY DATE March 11, 2015 AMORTIZATION TYPE ARD INTEREST ONLY PERIOD 48 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 118 / 360 LOCKBOX Yes UP-FRONT RESERVES TAX Yes ENGINEERING $156,250 REPLACEMENT $24,985 ONGOING MONTHLY RESERVES TAX Yes REPLACEMENT(1) Springing ADDITIONAL FINANCING(2) None CUT-OFF DATE BALANCE $29,000,000 CUT-OFF DATE BALANCE/SF $70 CUT-OFF DATE LTV 69.0% MATURITY DATE LTV 62.9% UW DSCR ON NCF 1.32x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) In the event amounts on deposit in the up-front Replacement Reserve are less than $24,985, a monthly replacement reserve of $1,041 will be required, up to a maximum amount of $24,985. (2) Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Bloomfield, Connecticut PROPERTY TYPE Retail -- Anchored SIZE (SF) 416,942 OCCUPANCY AS OF MARCH 7, 2005 100.0% YEAR BUILT / YEAR RENOVATED 1965 / 2003 APPRAISED VALUE $42,000,000 PROPERTY MANAGEMENT Amcap, Incorporated UW ECONOMIC OCCUPANCY 97.2% UW REVENUES $3,628,461 UW TOTAL EXPENSES $896,701 UW NET OPERATING INCOME (NOI) $2,731,760 UW NET CASH FLOW (NCF) $2,570,336 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-166 - ------------------------------------------------------------------------------------------------------------------------------- TENANT SUMMARY - ------------------------------------------------------------------------------------------------------------------------------- NET % OF NET % OF DATE OF RATINGS* RENTABLE RENTABLE ACTUAL ACTUAL LEASE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION - --------------------------------- ------------------- ----------- ---------- ---------- ------------- ---------- --------------- Lowe's Home Improvement (Ground Lease) ........................ A2/A+/A 160,000 38.4% $ 4.06 $ 649,600 20.6% May 2024 Burlington Coat Factory ......... NR/NR/NR 81,500 19.5 $ 5.41 440,915 14.0 September 2009 Super Stop & Shop ............... Ba2/BB/BB 65,000 15.6 $ 9.98 648,700 20.6 April 2020 Dollar Tree ..................... NR/NR/NR 11,900 2.9 $ 7.50 89,250 2.8 July 2009 Copaco Liquor ................... NR/NR/NR 10,913 2.6 $10.00 109,130 3.5 February 2009 Non-major tenants ............... 87,629 21.0 $13.86 1,214,751 38.5 Vacant .......................... 0 0.0 0 0.0 ------- ----- ---------- ----- TOTAL ........................... 416,942 100.0% $3,152,346 100.0% ======= ===== ========== ===== - ------------------------------------------------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. S-167 2700 Broadway - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $27,500,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 2.0% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR Jack Dushey TYPE OF SECURITY Fee MORTGAGE RATE 5.410% MATURITY DATE May 11, 2015 AMORTIZATION TYPE Interest Only ARD INTEREST ONLY PERIOD 120 ORIGINAL TERM / AMORTIZATION 120 / IO REMAINING TERM / AMORTIZATION 120 / IO LOCKBOX Yes SHADOW RATING (MOODY'S)* A2 ONGOING MONTHLY RESERVES TAX Yes REPLACEMENT $417 ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $27,500,000 CUT-OFF DATE BALANCE/SF $1,100 CUT-OFF DATE LTV 89.9% MATURITY DATE LTV 89.9% UW DSCR ON NCF 1.09x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Moody's has confirmed that the 2700 Broadway loan has, in the context of its inclusion in the trust, credit characteristics consistent with an investment grade obligation. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION New York, New York PROPERTY TYPE Retail -- Anchored SIZE (SF) 25,000 OCCUPANCY AS OF MARCH 1, 2005 100.0% YEAR BUILT / YEAR RENOVATED 2005 / NA APPRAISED VALUE $30,600,000 PROPERTY MANAGEMENT Self-managed UW ECONOMIC OCCUPANCY 100.0% UW REVENUES $1,717,000 UW TOTAL EXPENSES $85,180 UW NET OPERATING INCOME (NOI) $1,631,820 UW NET CASH FLOW (NCF) $1,628,070 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-168 - --------------------------------------------------------------------------------------------------------------------------- TENANT SUMMARY - --------------------------------------------------------------------------------------------------------------------------- NET % OF NET % OF DATE OF RATINGS* RENTABLE RENTABLE ACTUAL ACTUAL LEASE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION - ----------------------------- ------------------- ----------- ---------- ---------- ------------- ----------- ------------- Columbia University ......... NR/AAA/NR 25,000 100.0% $ 68.68 $ 1,717,000 100.0% October 2053 Vacant ...................... 0 0.0 0 0.0 ------ ----- ----------- ----- TOTAL ....................... 25,000 100.0% $ 1,717,000 100.0% ====== ===== =========== ===== - --------------------------------------------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. S-169 Fullerton Towers - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $26,800,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.9% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Robert M. Anderson and Arthur B. Birtcher TYPE OF SECURITY Fee MORTGAGE RATE 5.130% MATURITY DATE March 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 48 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 118 / 360 LOCKBOX None UP-FRONT RESERVES INSURANCE Yes ENGINEERING $120,808 REPLACEMENT $453,649 TI/LC $300,000 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes TI/LC(1) $8,333 ADDITIONAL FINANCING(2) None CUT-OFF DATE BALANCE $26,800,000 CUT-OFF DATE BALANCE/SF $119 CUT-OFF DATE LTV 75.8% MATURITY DATE LTV 68.7% UW DSCR ON NCF 1.21x - -------------------------------------------------------------------------------- (1) The borrower is required to deposit $8,333 per month until March 11, 2006, and $16,667 per month thereafter. (2) Future secured debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Fullerton, California PROPERTY TYPE Office - Suburban SIZE (SF) 226,019 OCCUPANCY AS OF JANUARY 25, 2005 97.4% YEAR BUILT / YEAR RENOVATED 1968 / NA APPRAISED VALUE $35,350,000 PROPERTY MANAGEMENT Birtcher Anderson Properties, Inc. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $4,318,206 UW TOTAL EXPENSES $1,874,018 UW NET OPERATING INCOME (NOI) $2,444,188 UW NET CASH FLOW (NCF) $2,127,162 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-170 - ---------------------------------------------------------------------------------- TENANT SUMMARY - ---------------------------------------------------------------------------------- NET % OF NET RATINGS(1) RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - --------------------------------------- ------------------- ----------- ---------- Moreno Insurance ...................... NR/NR/NR 35,211 15.6% Executive Suite (MASTER LEASE) ........ NR/NR/NR 22,172 9.8 Arcadis ............................... NR/NR/NR 12,552 5.6 Public Defender ....................... NR/NR/NR 11,086 4.9 US Credit Bureau ...................... NR/NR/NR 10,905 4.8 Non-major tenants ..................... 128,117 56.7 Vacant ................................ 5,976 2.6 ------- ----- TOTAL ................................. 226,019 100.0% ======= ===== - ---------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- % OF DATE OF ACTUAL ACTUAL LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - --------------------------------------- ---------- ------------- ---------- ------------------- Moreno Insurance ...................... $18.58 $ 654,146 15.6% May 2007 Executive Suite (MASTER LEASE) ........ $23.29 516,386 12.3 February 2010 Arcadis ............................... $18.98 238,283 5.7 Multiple Spaces(2) Public Defender ....................... $20.42 226,376 5.4 January 2008 US Credit Bureau ...................... $20.22 220,509 5.2 June 2010 Non-major tenants ..................... $18.31 2,346,030 55.8 Vacant ................................ 0 0.0 ---------- ----- TOTAL ................................. $4,201,730 100.0% ========== ===== - ----------------------------------------------------------------------------------------------- (1) Certain ratings are those of the parent whether or not the parent guarantees the lease. (2) Under the terms of multiple leases, 11,117 square feet expire in September 2005 and 1,435 square feet expire in May 2006. S-171 Courthouse Place - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $26,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.9% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Victor K. Tolkan, Julia S. Tolkan and U2 50-50 G, LLC TYPE OF SECURITY Fee MORTGAGE RATE 5.500% MATURITY DATE April 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 36 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 119 / 360 LOCKBOX Yes UP-FRONT RESERVES TAX/INSURANCE Yes TI/LC(1) $1,095,000 ARLINGTON COUNTY POLICE(2) $500,000 DEBT SERVICE $285,230 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $1,343 ADDITIONAL FINANCING(3) Mezzanine Debt $2,000,000 CUT-OFF DATE BALANCE $26,000,000 CUT-OFF DATE BALANCE/SF $228 CUT-OFF DATE LTV 80.0% MATURITY DATE LTV 71.6% UW DSCR ON NCF 1.26x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) The Up-front Tenant Improvement and Leasing Commission Reserve required in lieu of ongoing Reserves. (2) The Arlington County Police reserve will be released when the Arlington County Police Department commences payment of full, unabated rent and the mortgagee receives an acceptable estoppel. (3) Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Arlington, Virginia PROPERTY TYPE Office -- Suburban SIZE (SF) 113,908 OCCUPANCY* AS OF MARCH 31, 2005 96.6% YEAR BUILT / YEAR RENOVATED 1986 / NA APPRAISED VALUE $32,500,000 PROPERTY MANAGEMENT Penzance Management, LLC UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $3,392,164 UW TOTAL EXPENSES $1,057,813 UW NET OPERATING INCOME (NOI) $2,334,351 UW NET CASH FLOW (NCF) $2,227,223 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Includes space that is subject to a letter of intent but the related tenant has not taken occupancy. S-172 - ----------------------------------------------------------------------------------- TENANT SUMMARY - ----------------------------------------------------------------------------------- NET % OF NET RATINGS* RENTABLE RENTABLE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA - ---------------------------------------- ------------------- ----------- ---------- Govolution, Inc. ....................... NR/NR/NR 15,246 13.4% Bean Kinney & Korman, PC ............... NR/NR/NR 14,536 12.8 Laughlin, Marinaccio & Owens ........... NR/NR/NR 11,288 9.9 SPSS, Inc. ............................. NR/NR/NR 9,732 8.5 National Association of Health ......... NR/NR/NR 9,339 8.2 Non-major tenants ...................... 49,843 43.8 Vacant ................................. 3,924 3.4 ------- ----- TOTAL .................................. 113,908 100.0% ======= ===== - ----------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- % OF DATE OF ACTUAL ACTUAL LEASE TENANT RENT PSF ACTUAL RENT RENT EXPIRATION - ---------------------------------------- ---------- ------------- ---------- -------------- Govolution, Inc. ....................... $26.25 $ 400,208 12.7% January 2012 Bean Kinney & Korman, PC ............... $29.50 428,812 13.6 November 2006 Laughlin, Marinaccio & Owens ........... $28.77 324,756 10.3 November 2013 SPSS, Inc. ............................. $28.77 279,990 8.9 August 2008 National Association of Health ......... $28.70 268,029 8.5 October 2009 Non-major tenants ...................... $29.08 1,449,240 46.0 Vacant ................................. 0 0.0 ----------- ----- TOTAL .................................. $ 3,151,035 100.0% =========== ===== - ------------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. S-173 Kensington Place - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $24,975,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.8% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Renaissance Senior Living II, LLC TYPE OF SECURITY Fee MORTGAGE RATE 5.660% MATURITY DATE May 11, 2015 AMORTIZATION TYPE Balloon ORIGINAL TERM / AMORTIZATI ON 120 / 360 REMAINING TERM / AMORTIZAT ION 120 / 360 LOCKBOX None UP-FRONT RESERVES ENGINEERING $115,788 ADDITIONAL FINANCING* None CUT-OFF DATE BALANCE $24,975,000 CUT-OFF DATE BALANCE/UNIT $140,309 CUT-OFF DATE LTV 75.3% MATURITY DATE LTV 63.2% UW DSCR ON NCF 1.57x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Walnut Creek, California PROPERTY TYPE Multifamily -- Independent Living SIZE (UNITS) 178 OCCUPANCY AS OF JANUARY 24, 2005 94.9% YEAR BUILT / YEAR RENOVATED 1988 / NA APPRAISED VALUE $33,150,000 PROPERTY MANAGEMENT Renaissance Senior Living Management II, Inc. UW ECONOMIC OCCUPANCY 94.9% UW REVENUES $6,649,821 UW TOTAL EXPENSES $3,850,631 UW NET OPERATING INCOME (NOI) $2,799,190 UW NET CASH FLOW (NCF) $2,721,404 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-174 - ----------------------------------------------------------------------------------------------------------------- UNIT MIX - ----------------------------------------------------------------------------------------------------------------- NO. OF APPROXIMATE APPROXIMATE % OF UNIT MIX UNITS UNIT SIZE (SF) NRA (SF) NRA RENTAL RATE - ----------------------------- -------- ---------------- ------------- ---------- ---------------------- 1 BR/1 BA (Windsor) ......... 116 480 55,680 61.1% $3,300 1 BR/1 BA (Tudor) ........... 58 560 32,480 35.6 $3,700 2 BR/1 BA ................... 2 803 1,606 1.8 $4,780 2 BR/2 BA ................... 2 712 1,424 1.6 $4,640 --- ------ ----- TOTAL ....................... 178 512 91,190 100.0% $3,462 / $6.76 / SF === ====== ===== - ----------------------------------------------------------------------------------------------------------------- S-175 Springtown Shopping Center - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $19,760,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.4% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR Lewis J. Brandolini III TYPE OF SECURITY Fee MORTGAGE RATE 5.590% MATURITY DATE April 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 24 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 119 / 360 LOCKBOX Springing UP-FRONT RESERVES TAX/INSURANCE Yes ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $1,526 TI/LC Springing ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $19,760,000 CUT-OFF DATE BALANCE/SF $72 CUT-OFF DATE LTV 79.7% MATURITY DATE LTV 70.0% UW DSCR ON NCF 1.20x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Reading, Pennsylvania PROPERTY TYPE Retail -- Anchored SIZE (SF) 275,460 OCCUPANCY AS OF MARCH 1, 2005 99.6% YEAR BUILT / YEAR RENOVATED 1990 / NA APPRAISED VALUE $24,800,000 PROPERTY MANAGEMENT Brandolini Property Management, Inc. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $2,374,634 UW TOTAL EXPENSES $ 632,487 UW NET OPERATING INCOME (NOI) $1,742,147 UW NET CASH FLOW (NCF) $1,627,194 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-176 - ------------------------------------------------------------------------------------------------------------------------------- TENANT SUMMARY - ------------------------------------------------------------------------------------------------------------------------------- NET % OF NET % OF DATE OF RATINGS* RENTABLE RENTABLE ACTUAL ACTUAL LEASE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA RENT PSF ACTUAL RENT RENT EXPIRATION - --------------------------------- ------------------- ----------- ---------- ---------- ------------- ---------- -------------- Lowe's Home Improvement ......... A2 / A+ / A 161,000 58.4% $ 3.57 $ 575,000 30.2% February 2024 Giant Food Store ................ NR / NR / NR 53,800 19.5 $10.00 538,000 28.3 February 2041 CVS ............................. A3 / A- / A- 11,840 4.3 $ 8.50 100,640 5.3 February 2006 Advance Auto Parts .............. NR / NR / NR 8,400 3.0 $ 9.20 77,280 4.1 April 2007 Lemoyne Sleeper. ................ NR / NR / NR 5,000 1.8 $15.50 77,500 4.1 January 2009 Non-major tenants ............... 34,220 12.4 $15.66 535,963 28.1 Vacant .......................... 1,200 0.4 0 0.0 ------- ----- ----------- ----- TOTAL . ......................... 275,460 100.0% $ 1,904,383 100.0% ======= ===== =========== ===== - ------------------------------------------------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. S-177 Resort at University Park Apartments - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $19,300,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.4% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR Anthony O. Zanze and Mark R. Hamilton TYPE OF SECURITY Fee MORTGAGE RATE 5.490% MATURITY DATE April 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 60 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 119 / 360 LOCKBOX Springing UP-FRONT RESERVES INSURANCE Yes HOLDBACK RESERVE $300,000 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $4,688 ADDITIONAL FINANCING* None CUT-OFF DATE BALANCE $19,300,000 CUT-OFF DATE BALANCE/UNIT $77,200 CUT-OFF DATE LTV 69.3% MATURITY DATE LTV 64.4% UW DSCR ON NCF 1.20x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Colorado Springs, Colorado PROPERTY TYPE Multifamily - Conventional SIZE (UNITS) 250 OCCUPANCY AS OF MARCH 15, 2005 82.4% YEAR BUILT / YEAR RENOVATED 2003 / NA APPRAISED VALUE $27,850,000 PROPERTY MANAGEMENT Omni Apartment Communities, Inc. UW ECONOMIC OCCUPANCY 69.7% UW REVENUES $2,499,968 UW TOTAL EXPENSES $868,107 UW NET OPERATING INCOME (NOI) $1,631,861 UW NET CASH FLOW (NCF) $1,575,611 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-178 - -------------------------------------------------------------------------------------------------------- UNIT MIX - -------------------------------------------------------------------------------------------------------- NO. OF APPROXIMATE APPROXIMATE UNIT MIX UNITS UNIT SIZE (SF) NRA (SF) % OF NRA RENTAL RATE - --------------------- -------- ---------------- ------------ ---------- ---------------------- 1 BR/1 BA ......... 100 798 79,800 32.9% $ 963 2 BR/2 BA ......... 150 1,084 162,600 67.1 $1,235 --- ------- ----- TOTAL ............. 250 970 242,400 100.0% $1,126 / $1.16 / SF === ======= ===== - -------------------------------------------------------------------------------------------------------- S-179 Prospect Plaza - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $18,800,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.3% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR DLC Management Corporation and Delphi Commercial Properties, Inc. TYPE OF SECURITY Fee MORTGAGE RATE 5.220% MATURITY DATE April 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 36 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 119 / 360 LOCKBOX Springing UP-FRONT RESERVES TAX Yes ENGINEERING $10,625 ONGOING MONTHLY RESERVES TAX Yes REPLACEMENT $1,645 TI/LC Springing ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $18,800,000 CUT-OFF DATE BALANCE/SF $133 CUT-OFF DATE LTV 78.7% MATURITY DATE LTV 70.0% UW DSCR ON NCF 1.25x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION West Hartford, Connecticut PROPERTY TYPE Retail -- Anchored SIZE (SF) 141,049 OCCUPANCY AS OF MARCH 31, 2005 100.0% YEAR BUILT / YEAR RENOVATED 1966 / 1994 APPRAISED VALUE $23,900,000 PROPERTY MANAGEMENT DLC Management Corporation UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $2,504,941 UW TOTAL EXPENSES $ 814,186 UW NET OPERATING INCOME (NOI) $1,690,755 UW NET CASH FLOW (NCF) $1,555,460 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-180 - ----------------------------------------------------------------------------------------------------------------------------- TENANT SUMMARY - ----------------------------------------------------------------------------------------------------------------------------- NET % OF NET ACTUAL % OF DATE OF RATINGS* RENTABLE RENTABLE RENT ACTUAL LEASE TENANT MOODY'S/S&P/FITCH AREA (SF) AREA PSF ACTUAL RENT RENT EXPIRATION - ------------------------------- ------------------- ----------- ---------- ---------- ------------- ---------- -------------- Shaw's Supermarket ............ Baa2 / BBB / BBB 70,000 49.6% $ 4.85 $ 339,500 17.7% July 2008 Joey'z Shopping Spree ......... NR / NR / NR 12,000 8.5 $ 16.75 201,000 10.5 November 2015 Hometown Buffet ............... NR / B / NR 9,745 6.9 $ 14.00 136,430 7.1 December 2010 Dots .......................... NR / NR / NR 6,625 4.7 $ 20.50 135,813 7.1 January 2015 Pretty Woman .................. NR / NR / NR 6,400 4.5 $ 25.38 162,432 8.5 April 2011 Non-major tenants ............. 36,279 25.7 $ 25.94 941,102 49.1 Vacant ........................ 0 0.0 0 0.0 ------- ----- ---------- ----- TOTAL ......................... 141,049 100.0% $1,916,276 100.0% ======= ===== ========== ===== - ----------------------------------------------------------------------------------------------------------------------------- * Certain ratings are those of the parent whether or not the parent guarantees the lease. S-181 La Serena Apartments - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $18,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.3% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Acquisition SPONSOR James A. Rosten, Rochelle M. Rosten, WilliamMcMorrow, Rosten Family Trust dated 7/10/01, James A. Rosten Living Trust dated 11/25/88 and Robert E. Hart TYPE OF SECURITY Fee MORTGAGE RATE 5.000% MATURITY DATE March 11, 2010 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 12 ORIGINAL TERM / AMORTIZATION 60 / 360 REMAINING TERM / AMORTIZATION 58 / 360 LOCKBOX None UP-FRONT RESERVES INSURANCE Yes ENGINEERING $78,250 FIRE DAMAGED UNITS(1) $325,407 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $3,917 ADDITIONAL FINANCING(2) None CUT-OFF DATE BALANCE $18,000,000 CUT-OFF DATE BALANCE/UNIT $95,745 CUT-OFF DATE LTV 72.0% MATURITY DATE LTV 67.6% UW DSCR ON NCF 1.32x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) The up-front Fire Damaged Units Reserve relates to costs associated with the repair of fire damaged units. Insurance proceeds were used to fund the repairs. This up-front reserve was required to mitigate any potential cost overruns. The repairs are substantially complete. (2) Future mezzanine debt permitted. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Santa Ana, California PROPERTY TYPE Multifamily - Conventional SIZE (UNITS) 188 OCCUPANCY* AS OF FEBRUARY 22, 2005 96.3% YEAR BUILT / YEAR RENOVATED 1971 / 2005 APPRAISED VALUE $25,000,000 PROPERTY MANAGEMENT Kennedy-Wilson Properties, Ltd. UW ECONOMIC OCCUPANCY 95.0% UW REVENUES $2,529,600 UW TOTAL EXPENSES $946,854 UW NET OPERATING INCOME (NOI) $1,582,746* UW NET CASH FLOW (NCF) $1,535,746* - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * Assumes apartments damaged by fire have been rebuilt and relet at market rates. S-182 - ----------------------------------------------------------------------------------------------------- UNIT MIX - ----------------------------------------------------------------------------------------------------- NO. OF APPROXIMATE APPROXIMATE % OF UNIT MIX UNITS UNIT SIZE (SF) NRA (SF) NRA RENTAL RATE - ------------------- -------- ---------------- ------------- ---------- -------------------- 1 BR/1 BA ......... 156 730 113,880 77.6% $ 999 2 BR/2 BA ......... 32 1,030 32,960 22.4 $1,400 --- ------- ----- TOTAL ............. 188 781 146,840 100.0% $1,067 / $137 / SF === ======= ===== - ----------------------------------------------------------------------------------------------------- S-183 Sandpiper Village Apartments - -------------------------------------------------------------------------------- LOAN INFORMATION - -------------------------------------------------------------------------------- MORTGAGE LOAN SELLER Wachovia CUT-OFF DATE BALANCE $18,000,000 PERCENTAGE OF CUT-OFF DATE POOL BALANCE 1.3% NUMBER OF MORTGAGE LOANS 1 LOAN PURPOSE Refinance SPONSOR William F. Raymond TYPE OF SECURITY Fee MORTGAGE RATE 5.090% MATURITY DATE May 11, 2015 AMORTIZATION TYPE Balloon INTEREST ONLY PERIOD 36 ORIGINAL TERM / AMORTIZATION 120 / 360 REMAINING TERM / AMORTIZATION 120 / 360 LOCKBOX None UP-FRONT RESERVES TAX/INSURANCE Yes ENGINEERING* $1,005,734 ONGOING MONTHLY RESERVES TAX/INSURANCE Yes REPLACEMENT $4,375 ADDITIONAL FINANCING None CUT-OFF DATE BALANCE $18,000,000 CUT-OFF DATE BALANCE/UNIT $85,714 CUT-OFF DATE LTV 79.6% MATURITY DATE LTV 70.6% UW DSCR ON NCF 1.21x - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- * The up-front Engineering Reserve relates to all of the costs of certain deferred maintenance matters and termite damage repairs. - -------------------------------------------------------------------------------- PROPERTY INFORMATION - -------------------------------------------------------------------------------- NUMBER OF MORTGAGED PROPERTIES 1 LOCATION Vacaville, California PROPERTY TYPE Multifamily - Conventional SIZE (UNITS) 210 OCCUPANCY AS OF MARCH 18, 2005 90.0% YEAR BUILT / YEAR RENOVATED 1986 / NA APPRAISED VALUE $22,600,000 PROPERTY MANAGEMENT Sequoia Equities, Inc. UW ECONOMIC OCCUPANCY 92.9% UW REVENUES $2,435,656 UW TOTAL EXPENSES $ 961,807 UW NET OPERATING INCOME (NOI) $1,473,849 UW NET CASH FLOW (NCF) $1,421,349 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- S-184 - ---------------------------------------------------------------------------------------------------------- UNIT MIX - ---------------------------------------------------------------------------------------------------------- NO. OF APPROXIMATE APPROXIMATE UNIT MIX UNITS UNIT SIZE (SF) NRA (SF) % OF NRA RENTAL RATE - ----------------------- -------- ---------------- ------------ ---------- ---------------------- 1 BR/1 BA.. ......... 94 708 66,552 37.5% $ 925 2 BR/1 BA.. ......... 32 875 28,000 15.8 $1,075 2 BR/2 BA. .......... 84 986 82,824 46.7 $1,205 -- ------ ----- TOTAL ............... 210 845 177,376 100.0% $1,060 / $1.25 / SF === ======= ===== - ---------------------------------------------------------------------------------------------------------- S-185 THE MORTGAGE LOAN SELLER The Depositor will acquire the Mortgage Loans from the Mortgage Loan Seller on or prior to the Closing Date pursuant to a mortgage loan purchase agreement (the "Mortgage Loan Purchase Agreement"). The Mortgage Loan Seller originated the Mortgage Loans as described above under "--Mortgage Loan History". All of the Mortgage Loans (the "Mortgage Loans") were originated 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 $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. All information concerning the Mortgage Loans contained in or used in the preparation of this prospectus supplement is as underwritten by Wachovia. UNDERWRITING STANDARDS General. The 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. The Mortgage Loan Seller's commercial real estate finance or commercial mortgage banking operation is staffed by real estate professionals. The 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 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, the 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. The 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. The 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 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. In some instances, one or more provisions of the guidelines were waived or modified by the Mortgage Loan Seller where it was determined not to adversely affect the Mortgage Loans originated by it in any material respect. Loan Approval. Prior to commitment, all Mortgage Loans must be approved by the Mortgage Loan Seller's credit committee in accordance with its credit policies. Debt Service Coverage Ratio and LTV Ratio. The 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, the 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 S-186 circumstances the actual debt service coverage ratios, loan-to-value ratios and amortization periods for the Mortgage Loans originated by the Mortgage Loan Seller may vary from these guidelines. Escrow Requirements. Generally, the 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 the 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. The Mortgage Loan Seller may waive this escrow requirement under certain circumstances. o Insurance--If the property is insured under an individual policy (i.e., 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. The 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 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 S-187 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, ground lessor estoppel, environmental insurance policy 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. Notwithstanding the foregoing, with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan, the 2005-C17 Trustee will hold the original documents related to the One & Two International Place Loan and the 450 West 33rd Street Loan for the benefit of the 2005-C17 Trust Fund and the Trust Fund, other than the related Mortgage Notes which will be held by the Trustee under the Pooling and Servicing Agreement. 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 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, the Trustee or the Fiscal Agent plus any interest thereon and on any related P&I Advances or (2) other than with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan, 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 Internal Revenue Code of 1986, as amended (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 S-188 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. 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 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 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, which approval may not be unreasonably withheld or delayed; (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 any 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. Notwithstanding the foregoing, no substitutions will be permitted for the One & Two International Place Loan and the 450 West 33rd Street Loan included in the Trust Fund. S-189 REPRESENTATIONS AND WARRANTIES; REPURCHASES AND SUBSTITUTIONS In the Mortgage Loan Purchase Agreement, the Mortgage Loan Seller has represented and warranted with respect to each Mortgage Loan (subject to certain exceptions specified in the 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 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; (iii) immediately prior to the sale, transfer and assignment to the Depositor, the Mortgage Loan Seller had good 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 or security 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; (vii) each related assignment of Mortgage and assignment of assignment of leases from the Mortgage Loan Seller to the Trustee constitutes the legal, valid and binding first priority assignment from the 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 interferes with the current use of the Mortgaged S-190 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, 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; (xii) one or more environmental site assessments or updates thereof were performed by an environmental consulting firm independent of the Mortgage Loan Seller and the 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 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); and (xiii) an appraisal of the related Mortgaged Property was conducted in connection with the origination of such Mortgage Loan; and such appraisal satisfied either (A) the requirements of the "Uniform Standards of Professional Appraisal Practice" as adopted by the Appraisal Standards Board of the Appraisal Foundation, or (B) the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, in either case as in effect on the date such Mortgage Loan was originated. In the case of a breach of any of the representations and warranties in the Mortgage Loan Purchase Agreement that materially and adversely affects the value of a Mortgage Loan, the interests of the trust therein or the interests of any Certificateholder, the 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 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 (other than with respect to the One & Two International Place Loan and the 450 West 33rd Street S-191 Loan, for which no substitution is permitted) 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 Mortgage Loan Seller generally has an additional 90-day period to cure such breach if it is diligently proceeding with such cure. The 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 the Mortgage Loan Seller's representations and warranties regarding the Mortgage Loans. There can be no assurance that the Mortgage Loan Seller will have the financial resources to repurchase any Mortgage Loan at any particular time. The Mortgage Loan Seller is the sole warranting party in respect of the Mortgage Loans sold by the 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 the Mortgage Loan Seller's representations and warranties if the Mortgage Loan Seller defaults on its obligation to do so. 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 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 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 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 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 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 S-192 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. S-193 SERVICING OF THE MORTGAGE LOANS GENERAL Wachovia Bank, National Association ("Wachovia"), as Master Servicer, either directly or through sub-servicers, is required to service and administer the Mortgage Loans (other than the One & Two International Place Loan and the 450 West 33rd Street Loan) for the benefit of the Certificateholders, and the Companion Loans (other than the One & Two International Place Pari Passu Companion Loan and the 450 West 33rd Street Pari Passu Companion Loan) 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 Wachovia 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 or, if a Co-Lender Loan (other than the One & Two International Place Loan and the 450 West 33rd Street Loan) and its related Companion Loan(s) (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 Wachovia or any affiliate thereof, may have with the related borrower, the Mortgage Loan Seller or any other party to the Pooling and Servicing Agreement or any affiliate thereof; (ii) the ownership of any Certificate or Companion Loan by Wachovia or by any affiliate thereof; (iii) the right of Wachovia 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 Wachovia or any affiliate thereof for others of any other mortgage loans or real property; (vi) any obligation of Wachovia, 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 Wachovia or any affiliate thereof has extended to any obligor or any affiliate thereof on a Mortgage Note (the foregoing referred to as the "Wachovia Servicing Standard"). GMAC Commercial Mortgage Corporation, as Special Servicer, for so long as it is the Special Servicer, will be required to service and administer the Mortgage Loans and any REO Properties that it is obligated to service and administer pursuant to the Pooling and Servicing Agreement, on behalf of the Trustee and in the best interests of and for the benefit of the Certificateholders (or, with respect to a Loan Pair, in the best interests of and for the benefit of the Certificateholders and the holder of the related Companion Loan), as determined by the Special Servicer in its good faith and reasonable judgment, in accordance with applicable law, the terms of the Pooling and Servicing Agreement and the terms of the respective Mortgage Loan documents (and in the case of a mezzanine loan or a Companion Loan, the terms of the related Intercreditor Agreement) and, to the extent consistent with the foregoing, further as follows: (a) with the same skill, care and diligence as is normal and usual in its mortgage servicing and REO property management activities on behalf of third parties or on behalf of itself, whichever is higher, with respect to mortgage loans and REO Properties that are comparable to the Mortgage Loans, (b) with a view to the timely collection of all scheduled payments of principal and interest under the Mortgage Loans or, if a Mortgage Loan comes into and continues in default and if, in the good faith and reasonable judgment of the Special Servicer, no satisfactory arrangements can be made for the collection of the delinquent payments, the maximization of the recovery on such Mortgage Loan to the Certificateholders (as a collective whole) (or, if a Loan Pair is involved, with a view to the maximization of recovery on such Loan Pair to the Certificateholders and the holder of the related Companion Loan (as a collective whole)), on a present value basis (the relevant discounting of anticipated collections that will be S-194 distributable to the Certificateholders (or, in the case of a Loan Pair, to the Certificateholders and the holder of the related Companion Loan) to be performed at the related Net Mortgage Rate (or, in the case of a Loan Pair, at the weighted average of the Net Mortgage Rates for such Loan Pair); and (c) without regard to: (i) any other relationship that the Special Servicer or any of its affiliates may have with the related borrower; (ii) the ownership of any Certificate or interest in any Companion Loan by the Special Servicer or any of its affiliates; (iii) the Special Servicer's obligation to direct the Master Servicer to make Advances; and (iv) the right of the Special Servicer to receive reimbursement of costs, or the sufficiency of any compensation payable to it under the Pooling and Servicing Agreement or with respect to any particular transaction (the foregoing, collectively, the "GMAC Servicing Standard"). "Servicing Standard" means (a) with respect to Wachovia Bank, National Association (or any successor master servicer and/or any special servicer other than GMAC Commercial Mortgage Corporation), the Wachovia Servicing Standard and (b) with respect to GMAC Commercial Mortgage Corporation, the GMAC Servicing Standard. Generally, for purposes of the servicing provisions described in this section, the term Mortgage Loan excludes the One & Two International Place Loan and the 450 West 33rd Street Loan. See "--Servicing of the One & Two International Place Loan and the 450 West 33rd Street Loan" below for a description of the servicing of the One & Two International Place Loan and the 450 West 33rd Street Loan. 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 (other than the One & Two International Place Loan and the 450 West 33rd Street Loan). 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 (but excluding the One & Two International Place Loan and the 450 West 33rd Street Loan and their respective 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 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 S-195 Mortgage Loans (other than Specially Serviced Mortgage Loans and the 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, our affiliate, the Mortgage Loan Seller and an affiliate of one of the Underwriters. With respect to 2 Mortgage Loans (loan numbers 12 and 18), representing 3.2% of the Cut-Off Date Pool Balance (1 Mortgage Loan in Loan Group 1 or 2.0% and 1 Mortgage Loan in Loan Group 2 or 20.2%), an affiliate of Wachovia Bank, National Association owns an approximately 85% preferred equity interest in each related borrower. In addition, Wachovia Bank, National Association is the master servicer under the 2005-C17 Pooling Agreement pursuant to which the One & Two International Place Whole Loan and the 450 West 33rd Street Whole Loan are being serviced. Wachovia Bank, National Association's principal servicing offices are located at NC 1075, 8739 Research Drive URP4, Charlotte, North Carolina 28262. As of March 31, 2005, Wachovia Bank, National Association and its affiliates were responsible for master or primary servicing approximately 15,825 commercial and multifamily loans, totaling approximately $146 billion in aggregate outstanding principal amounts, including loans securitized in mortgage-backed securitization transactions. The information set forth in this prospectus supplement concerning Wachovia Bank, National Association 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. Initially, the "Special Servicer" will be GMAC Commercial Mortgage Corporation with respect to the Mortgage Loans. GMAC Commercial Mortgage Corporation, a California corporation will be responsible for special servicing any Specially Serviced Mortgage Loans (other than the One & Two International Place Loan, the 450 West 33rd Street Loan and any related REO Properties) and REO Properties. The principal executive offices of the Special Servicer are located at 550 California Street, 12th Floor, San Francisco, California 94014. The Special Servicer and its subsidiaries and affiliates are involved in the real estate investment and management business and engage principally in (i) acquiring, developing, managing and repositioning commercial and multifamily residential real estate properties, (ii) acquiring (often in partnership with financial institutions or real estate funds) and managing portfolios of mortgage loans and other real estate assets, (iii) investing in unrated and non investment grade rated commercial mortgage backed securities as to which GMAC Commercial Mortgage Corporation has the right to be special servicer, and (iv) making high yielding real estate related loans and equity investments. As of February 28, 2005, the Special Servicer and its affiliates were responsible for performing certain special servicing functions with respect to commercial and multifamily loans totaling approximately $99.1 billion. GMAC Commercial Mortgage Corporation will make no representations as to the validity or sufficiency of the Pooling and Servicing Agreement, the Certificates, the Mortgage Loans or this prospectus supplement. The Special Servicer and its respective 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 GMAC Commercial Mortgage Corporation has been provided by GMAC Commercial Mortgage 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, 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 (the "Controlling Class Representative") who may advise the S-196 Special Servicer and whose approval is required for certain actions by the Special Servicer under certain circumstances. 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. 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 Sequential Pay Certificates bearing the latest payment priority. 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 (other than the One & Two International Place Loan and the 450 West 33rd Street Loan) or Companion Loan (other than the One & Two International Place Pari Passu Companion Loan and the 450 West 33rd Street Pari Passu Companion Loan) as to which (a) the related mortgagor has (i) failed to make within 60 days of the date due any Balloon Payment; provided, however, that if the Mortgagor continues to make its Assumed Scheduled Payment and diligently pursues refinancing, a Servicing Transfer Event shall not occur until 60 days following such default (or, if the Mortgagor has produced a written refinancing commitment that is reasonably acceptable to the Special Servicer and the Controlling Class Representative has given its consent (which consent shall be deemed denied if not granted within 10 business days), 120 days following such default; provided that if such refinancing does not occur or such refinancing commitment is terminated during the time period specified in such written refinancing commitment, a Servicing Transfer Event will be deemed to occur at the end of the time period specified in the written refinancing commitment or upon termination of such refinancing commitment, as applicable), 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) 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 would continue unremedied beyond the applicable grace period under the terms of the Mortgage Loan (or, if no grace period is specified, for 60 days; provided 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) is likely to occur and is likely to remain unremedied for at least 60 days; (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 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 S-197 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; (g) the Master Servicer shall have force placed insurance against damages or losses arising from acts of terrorism due to the failure of the related borrower to maintain or cause such insurance to be maintained and (1) subsequent to such force placement such borrower fails to maintain or cause to be maintained insurance coverage against damages for losses arising from acts of terrorism for a period of 60 days (or such shorter time period as the Controlling Class Representative may consent to) or (2) the Master Servicer fails to have been reimbursed from any Servicing Advances made in connection with the force placement of such insurance coverage (unless the circumstances giving rise to such forced placement of such insurance coverage have otherwise been cured and the Master Servicer has been reimbursed for any Servicing Advances made in connection with the forced placement of such insurance coverage); or (h) 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 (other than the One & Two International Place Loan and the 450 West 33rd Street 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 (other than the One & Two International Place Pari Passu Companion Loan or the 450 West 33rd Street Pari Passu Companion Loan) becomes specially serviced, then the Co-Lender Loan will become a Specially Serviced Mortgage Loan. If a Co-Lender Loan (other than the One & Two International Place Loan or the 450 West 33rd Street 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 (other than the One & Two International Place Loan or the 450 West 33rd Street 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 (other than the One & Two International Place Loan or the 450 West 33rd Street Loan) or Companion Loan (other than the One & Two International Place Pari Passu Companion Loan or the 450 West 33rd Street Pari Passu 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): S-198 (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 (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 OF THE ONE & TWO INTERNATIONAL PLACE LOAN AND THE 450 WEST 33RD STREET LOAN The One & Two International Place Loan and the 450 West 33rd Street Loan, and any related REO Property, are being serviced under the pooling and servicing agreement which governs the 2005-C17 Transaction (the "2005-C17 Pooling Agreement"). Accordingly, the master servicer under the 2005-C17 Pooling Agreement (the "2005-C17 Master Servicer") will generally make advances and remit collections on the One & Two International Place Loan and the 450 West 33rd Street Loan to or on behalf of the Trust Fund. The servicing arrangements under the 2005-C17 Pooling Agreement are generally similar (but are not identical) to the servicing arrangements under the Pooling and Servicing Agreement. In that regard: o Wachovia Bank, National Association is the 2005-C17 Master Servicer under the 2005-C17 Pooling Agreement and the special servicer under the 2005-C17 Pooling Agreement (the "2005-C17 Special Servicer") with respect to each of the mortgage loans serviced under the 2005-C17 Pooling Agreement is Allied Capital Corporation. o The 2005-C17 Trustee is Wells Fargo Bank, N.A. (the "2005-C17 Trustee"), who will be the mortgagee of record for the One & Two International Place Loan and the 450 West 33rd Street Loan. o The Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent under the Pooling and Servicing Agreement will have no obligation or authority to (a) supervise the 2005-C17 Master Servicer, the 2005-C17 Special Servicer or the 2005-C17 Trustee or (b) except as described below, make servicing advances with respect to the One & Two International Place Loan or the 450 West 33rd Street Loan. The obligation of the Master Servicer to provide information and collections to the Trustee and the Certificateholders with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan is dependent on its receipt of the corresponding information and collection from the 2005-C17 Master Servicer or the 2005-C17 Special Servicer. o Pursuant to the 2005-C17 Pooling Agreement, the liquidation fee, the special servicing fee and the workout fee with respect to the One & Two International Place Loan or the 450 West 33rd Street Loan will be generally the same as under the Pooling and Servicing Agreement. o The Master Servicer will be required to make P&I Advances with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan that the 2005-C17 Master Servicer is required but fails to make, unless the 2005-C17 Master Servicer or the Master Servicer, after receiving the necessary information from the 2005-C17 Master Servicer, has determined that such advance would not be recoverable from collections on the One & Two International Place Loan or the 450 West 33rd Street Loan. S-199 o If the 2005-C17 Master Servicer determines that a servicing advance it made with respect to the One & Two International Place Loan or the 450 West 33rd Street Loan or the related Mortgaged Property is nonrecoverable, it will be entitled to be reimbursed from general collections on all Mortgage Loans. 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 0.04% to 0.08%. As of the Cut-Off Date the weighted average Master Servicing Fee Rate will be approximately 0.04052% 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 unless otherwise specified. The One & Two International Place Loan and the 450 West 33rd Street Loan will be serviced by the 2005-C17 Master Servicer. 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 not owned by the Trust Fund) 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 0.02% per annum) received by the Master Servicer during such Collection Period on such Mortgage Loan and (b) investment 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. S-200 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 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 and other 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 Prepayment Interest Excesses collected from borrowers on Mortgage Loans. In addition, to the extent the 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. S-201 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, the Trustee and the Fiscal Agent 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 during the Collection Period in which such reimbursement is made 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 (other than the One & Two International Place Loan and the 450 West 33rd Street 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 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 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. S-202 Notwithstanding clause (b) of the preceding paragraph and, with respect to the Co-Lender Loans (other than the One & Two International Place Loan and the 450 West 33rd Street Loan), 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/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 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 any 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 (other than the One & Two International Place Loan and the 450 West 33rd Street Loan), 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 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, the One & Two International Place Loan and/or the 450 West 33rd Street 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 S-203 holder of the Co-Lender Loan and certain Companion Loans, 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, and other than with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan, 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 the related property manager for Mortgage Loans having an outstanding principal balance of greater than $5,000,000; (x) any termination of, or modification of, any applicable franchise agreements related to any Mortgage Loan secured by a hotel; (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 S-204 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. Hyperion Capital Management, Inc., or an affiliate of the Special Servicer, will be the initial Controlling Class Representative. Pursuant to the 2005-C17 Pooling Agreement and the Pari Passu Loan Intercreditor Agreements, with respect to the Pari Passu Loans, the Controlling Class Representative will generally share with the controlling class representative under the 2005-C17 Pooling Agreement (the "2005-C17 Controlling Class Representative") the rights given to the 2005-C17 Controlling Class Representative under the 2005-C17 Pooling Agreement to direct the 2005-C17 Master Servicer and/or 2005-C17 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 2005-C17 Controlling Class Representative is required to give its consent or advice or otherwise take any action with respect to a Pari Passu Loan, the 2005-C17 Controlling Class Representative will generally be required to confer with the Controlling Class Representative regarding such advice or consent. In the event that the 2005-C17 Controlling Class Representative and the Controlling Class Representative disagree with respect to such advice, consent or action, the related Pari Passu Loan Intercreditor Agreement and the 2005-C17 Pooling Agreement provide that the 2005-C17 Controlling Class Representative and the Controlling Class Representative 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 2005-C17 Controlling Class Representative and the Controlling Class Representative in accordance with the related Pari Passu Loan Intercreditor Agreement. 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. 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, 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 (other than the One & Two International Place Loan and the 450 West 33rd Street 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, S-205 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 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 S-206 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 (other than the Mortgaged Property related to the One & Two International Place Loan or the 450 West 33rd Street Loan) as soon as practicable after the related Mortgage Loan 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 (other than the Mortgaged Property related to the One & Two International Place Loan or the 450 West 33rd Street 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 (and, in the case of the Master Servicer, at its expense) to inspect or cause to be inspected the Mortgaged Property S-207 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 with respect to Specially Serviced Mortgage Loans and REO Properties or the Master Servicer with respect to all other Mortgage Loans 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 (other than the Mortgaged Property related to the One & Two International Place Loan or the 450 West 33rd Street Loan) 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. S-208 DESCRIPTION OF THE CERTIFICATES GENERAL The Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass-Through Certificates, Series 2005-C18 (the "Certificates") will be issued pursuant to a pooling and servicing agreement, dated as of May 1, 2005, among the Depositor, the Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent (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 Seller 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 (together, the "Class X Certificates" and, together 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 Certificates (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 Offered 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 S-209 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. S-210 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, the Trustee or the Fiscal Agent 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 ........................ $ 41,041,000 2.920% Class A-2 Certificates ........................ $122,149,000 8.692% Class A-3 Certificates ........................ $174,126,000 12.390% Class A-PB Certificates ....................... $ 81,472,000 5.797% Class A-4 Certificates ........................ $616,552,000 43.871% Class A-1A Certificates ....................... $ 88,957,000 6.330% Class A-J Certificates ........................ $ 89,592,000 6.375% Class B Certificates .......................... $ 31,621,000 2.250% Class C Certificates .......................... $ 12,297,000 0.875% Class D Certificates .......................... $ 28,107,000 2.000% Non-Offered Certificates (other than the Class A-1A Certificates) ..................... $119,457,542 8.500% 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 S-211 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 $1,405,371,542 (subject to a permitted variance of plus or minus 5.0%). The Notional Amount of the Class X-P Certificates will generally equal: (i) until the Distribution Date in November 2005, the sum of (a) the lesser of $40,268,000 and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of $88,782,000 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; (ii) after the Distribution Date in November 2005, through and including the Distribution Date in May 2006, the sum of (a) the lesser of $39,247,000 and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of $88,542,000 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; (iii) after the Distribution Date in May 2006, through and including the Distribution Date in November 2006, the sum of (a) the lesser of $16,301,000 and the Certificate Balance of the Class A-1 Certificates, (b) the lesser of $86,734,000 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; (iv) after the Distribution Date in November 2006, through and including the Distribution Date in May 2007, the sum of (a) the lesser of $111,046,000 and the Certificate Balance of the Class A-2 Certificates, (b) the lesser of $84,649,000 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; (v) after the Distribution Date in May 2007, through and including the Distribution Date in November 2007, the sum of (a) the lesser of $83,493,000 and the Certificate Balance of the Class A-2 Certificates, (b) the lesser of $82,520,000 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, Class G and Class H Certificates; (vi) after the Distribution Date in November 2007, through and including the Distribution Date in May 2008, the sum of (a) the lesser of $56,613,000 and the Certificate Balance of the Class A-2 Certificates, (b) the lesser of $80,447,000 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 and Class G Certificates and (d) the lesser of $18,866,000 and the Certificate Balance of the Class H Certificates; (vii) after the Distribution Date in May 2008, through and including the Distribution Date in November 2008, the sum of (a) the lesser of $27,511,000 and the Certificate Balance of the Class A-2 Certificates, (b) the lesser of $78,372,000 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 $5,633,000 and the Certificate Balance of the Class H Certificates; S-212 (viii) after the Distribution Date in November 2008, through and including the Distribution Date in May 2009, the sum of (a) the lesser of $173,147,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $76,348,000 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, Class E and Class F Certificates and (d) the lesser of $5,136,000 and the Certificate Balance of the Class G Certificates; (ix) after the Distribution Date in May 2009, through and including the Distribution Date in November 2009, the sum of (a) the lesser of $134,139,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $74,368,000 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 $12,107,000 and the Certificate Balance of the Class F Certificates; (x) after the Distribution Date in November 2009, through and including the Distribution Date in May 2010, the sum of (a) the lesser of $25,849,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $50,724,000 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 $252,000 and the Certificate Balance of the Class F Certificates; (xi) after the Distribution Date in May 2010, through and including the Distribution Date in November 2010, the sum of (a) the lesser of $8,471,000 and the Certificate Balance of the Class A-3 Certificates, (b) the lesser of $49,456,000 and the Certificate Balance of the Class A-1A Certificates, (c) the lesser of $74,347,000 and the Certificate Balance of the Class A-PB Certificates, (d) the aggregate Certificate Balances of the Class A-4, Class A-J, Class B, Class C and Class D Certificates and (e) the lesser of $3,995,000 and the Certificate Balance of the Class E Certificates; (xii) after the Distribution Date in November 2010, through and including the Distribution Date in May 2011, the sum of (a) the lesser of $59,013,000 and the Certificate Balance of the Class A-PB Certificates, (b) the lesser of $48,226,000 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 $22,235,000 and the Certificate Balance of the Class D Certificates; (xiii) after the Distribution Date in May 2011, through and including the Distribution Date in November 2011, the sum of (a) the lesser of $36,000,000 and the Certificate Balance of the Class A-PB Certificates, (b) the lesser of $42,057,000 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 $12,740,000 and the Certificate Balance of the Class D Certificates; (xiv) after the Distribution Date in November 2011, through and including the Distribution Date in May 2012, the sum of (a) the lesser of $491,656,000 and the Certificate Balance of the Class A-4 Certificates, (b) the lesser of $40,962,000 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 $3,778,000 and the Certificate Balance of the Class D Certificates; and (xv) after the Distribution Date in May 2012, $0. The initial Notional Amount of the Class X-P Certificates will be $1,355,235,000. 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 S-213 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 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 or 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 (as defined below) 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 May 2012, the "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; S-214 (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 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 May 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 May 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 May 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 S-215 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 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 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 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, 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 Amounts, and such amount has not been included as part of the Principal Distribution Amount, 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 S-216 "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 June 2005. DISTRIBUTIONS General. Except as described below with respect to the Class Z Certificates, 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 June 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); and (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; (b) all P&I Advances made by the Master Servicer, the Trustee or the Fiscal Agent with respect to such Distribution Date; (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 (other than any Compensation Interest Payment made on any Companion Loan); 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. S-217 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" in the name 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 will be used to make distributions on the Certificates. 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 in respect of the Mortgage Loans 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 holders of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-PB S-218 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 Group 2 Principal Distribution Amount remaining after payments to the Class A-1A S-219 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 Certificates) 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; S-220 (14) after all Classes of Certificates with an earlier alphabetical and numerical designation 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 alphabetical and numerical designation 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 alphabetical and numerical designation 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 alphabetical and numerical designation 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; (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; S-221 (26) after all Classes of Certificates with an earlier alphabetical and numerical designation 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 alphabetical and numerical designation 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 alphabetical and numerical designation 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 alphabetical and numerical designation 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; (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; S-222 (38) after all Classes of Certificates with an earlier alphabetical and numerical designation 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 alphabetical and numerical designation 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 alphabetical and numerical designation 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 alphabetical and numerical designation 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; (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; S-223 (50) after all Classes of Certificates with an earlier alphabetical and numerical designation 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 alphabetical and numerical designation 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" equals with respect to each Class of Sequential Pay Certificates for each Distribution Date, the Accrued Certificate Interest in respect of such Class of Certificates for such Distribution Date, reduced (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 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. S-224 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. This allocation will cause a Prepayment Interest Shortfall with respect to the One & Two International Place Whole Loan to be allocated pro rata between the One & Two International Place Pari Passu Loan and the One & Two International Place Loan, with any Prepayment Interest Shortfall allocated to the One & Two International Place Loan, net of amounts payable by the Master Servicer, to be included in the Net Aggregate Prepayment Interest Shortfall. Further, a Prepayment Interest Shortfall with respect to the 450 West 33rd Street Loan will be allocated pro rata between the 450 West 33rd Street Pari Passu Loan and the 450 West 33rd Street Loan with any Prepayment Interest Shortfall allocated to the 450 West 33rd Street Loan, net of amounts payable by the Master Servicer, to 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", respectively). On each Distribution Date after the Certificate Balances of either the Class A-4 Certificates or Class A-1A Certificates has 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, the Trustee, the Fiscal Agent or the 2005-C17 Master Servicer, as applicable: (a) 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, 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, the Trustee, the Fiscal Agent or the 2005-C17 Master Servicer, as applicable, prior to such Collection Period; (b) 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; (c) 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; (d) 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 S-225 Mortgage Pool, as applicable in the Mortgage Pool, and Substitution Shortfall Amounts with respect to Mortgage Loans in the Mortgage Pool or such Loan Group, as applicable, and, to the extent not otherwise included in clause (a), (b) or (c) above, payments and other amounts that were received on or in respect of 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 (e) 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 S-226 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 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 (other than the Mortgaged Property related to the One & Two International Place Loan or the 450 West 33rd Street Loan) 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 or a related Companion Loan, if applicable. 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) S-227 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 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 May 2012, 5% to the holders of the Class X-P Certificates and 95% 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 S-228 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 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 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 and Class X 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 each case, in reduction of their respective Certificate Balances) as follows, but, with respect to the Classes of Sequential Pay Certificates, 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 S-229 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 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. Any losses and expenses with respect to the One & Two International Place Whole Loan will be allocated in accordance with the related Intercreditor Agreement pro rata to the One & Two International Place Loan and the One & Two International Place Pari Passu Companion Loan. Any losses and expenses with respect to the 450 West 33rd Street Whole Loan will be allocated in accordance with the related Intercreditor Agreement pro rata to the 450 West 33rd Street Loan and the 450 West 33rd Street Pari Passu Companion Loan. "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 on that nonrecoverable Advance) 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 or Workout Fees paid to the Special Servicer, (ii) any interest paid to the Master Servicer, the Trustee and/or the Fiscal Agent 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 and/or the Fiscal Agent 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 S-230 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 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 below, to make advances (each, a "P&I Advance") out of its own funds or, subject to the replacement thereof as provided in the Pooling and Servicing Agreement, 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 (other than the One & Two International Place Loan and the 450 West 33rd Street Loan, as provided below) 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, the Trustee or the Fiscal Agent, 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, in such case, subject to the recoverability standard described below. Pursuant to the terms of the Pooling and Servicing Agreement, if the Trustee fails to make a P&I Advance required to be made, the Fiscal Agent shall then be required to make such P&I Advance, subject to the recoverability standard described below. Neither the Master Servicer, the Trustee nor the Fiscal Agent will be required to make any P&I Advances with respect to any Companion Loan. In general, neither the Master Servicer, the Trustee nor the Fiscal Agent will be required to make any P&I Advances with respect to the One & Two International Place Loan or the 450 West 33rd Street Loan under the Pooling and Servicing Agreement. Those advances will be made by the 2005-C17 Master Servicer in accordance with the 2005-C17 Pooling Agreement on generally the same S-231 terms and conditions as are applicable under the Pooling and Servicing Agreement. Furthermore, the amount of principal and interest advances to be made with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan may be reduced by an appraisal reduction amount as calculated under the 2005-C17 Pooling Agreement, which amount will be calculated in a manner generally the same as an Appraisal Reduction Amount. If the 2005-C17 Master Servicer fails to make a required principal and interest advance on the One & Two International Place Loan or the 450 West 33rd Street Loan pursuant to the 2005-C17 Pooling Agreement (other than based on a determination that such advance will not be recoverable out of collections on the One & Two International Place Loan or the 450 West 33rd Street Loan, as the case may be), the Master Servicer will be required to make the P&I Advances on the One & Two International Place Loan or the 450 West 33rd Street Loan, as the case may be, so long as it has received all information necessary to make a recoverability determination. If the Master Servicer fails to make the required P&I Advance, the Trustee is required to make such P&I Advance, subject to the same limitations, and with the same rights, as described above for the Master Servicer. If the Trustee fails to make the required P&I Advance, the Fiscal Agent is required to make such P&I Advance, subject to the same limitations, and with the same rights, as described above for the Master Servicer. The Master Servicer, the Trustee and the Fiscal Agent may conclusively rely on the non-recoverability determination of the 2005-C17 Master Servicer. If any principal and interest advances are made with respect to the One & Two International Place Loan or the 450 West 33rd Street Loan under the 2005-C17 Pooling Agreement or under the Pooling and Servicing Agreement, the party making that advance will be entitled to be reimbursed with interest thereon as set forth in the 2005-C17 Pooling Agreement or the Pooling and Servicing Agreement, as applicable, including in the event that the 2005-C17 Master Servicer has made a principal and interest advance on the One & Two International Place Loan or the 450 West 33rd Street Loan that it or the 2005-C17 Special Servicer subsequently determines is not recoverable from expected collections on the One & Two International Place Loan or the 450 West 33rd Street Loan, as applicable, from general collections on all Mortgage Loans in the Trust. The Master Servicer (or the Trustee or the Fiscal Agent) 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 in the form of late payments, insurance and condemnation proceeds or liquidation proceeds, or any other recovery of the related Mortgage Loan or REO Property ("Related Proceeds"). Neither the Master Servicer, the Trustee nor the Fiscal Agent is obligated to make any P&I Advance that it determines, in accordance with the Servicing Standard (in the case of the Master Servicer) or its good faith business judgment (in the case of the Trustee or the Fiscal Agent), would, if made, not be recoverable from Related Proceeds (a "Nonrecoverable P&I Advance"), and the Master Servicer (or the Trustee or the Fiscal Agent) is entitled to recover, from general funds on deposit in the Certificate Account, any P&I Advance made that it determines to be a Nonrecoverable P&I Advance plus interest at the Reimbursement Rate. In addition, each of the Master Servicer, the Trustee and the Fiscal Agent will be entitled to recover any Advance (together with interest thereon) that is outstanding at the time that the related Mortgage Loan is modified in connection with such Mortgage Loan becoming a Corrected Mortgage Loan and is not repaid in full in connection with such modification but instead becomes an obligation of the borrower to pay such amounts in the future (such Advance, a "Workout-Delayed Reimbursement Amount") out of principal collections in the Certificate Account. Any amount that constitutes all or a portion of any Workout-Delayed Reimbursement Amount may at any time be determined to constitute a nonrecoverable Advance and thereafter shall be recoverable as any other nonrecoverable Advance. A Workout-Delayed Reimbursement Amount will constitute a nonrecoverable Advance when the person making such determination, and taking into account factors such as all other outstanding Advances, either (a) has determined in accordance with the Servicing Standard (in the case of the Master Servicer or the Special Servicer) or its good faith business judgment (in the case of the Trustee or the Fiscal Agent) that such Workout-Delayed Reimbursement Amount would not ultimately be recoverable from Related Proceeds, or (b) has determined in accordance with the Servicing Standard (in the case of the Master Servicer or the Special Servicer) or its good faith business judgment (in the case of the Trustee or the Fiscal Agent) that such Workout-Delayed Reimbursement Amount, along with any other Workout-Delayed Reimbursement Amounts and nonrecoverable Advances, would not ultimately S-232 be recoverable out of principal collections in the Certificate Account. In addition, any such person may update or change its recoverability determinations (but not reverse any other person's determination that an Advance is nonrecoverable) at any time and may obtain at the expense of the Trust any analysis, appraisals or market value estimates or other information for such purposes. Absent bad faith, any such determination that an Advance is nonrecoverable will be conclusive and binding on the Certificateholders, the Master Servicer, the Trustee and the Fiscal Agent. Any requirement of the Master Servicer, the Trustee or the Fiscal Agent to make an Advance in the Pooling and Servicing Agreement is intended solely to provide liquidity for the benefit of the Certificateholders and not as credit support or otherwise to impose on any such person the risk of loss with respect to one or more Mortgage Loans. See "DESCRIPTION OF THE CERTIFICATES--Advances in Respect of Delinquencies" and "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--Certificate Account" in the prospectus. In connection with the recovery by the Master Servicer, the Trustee or the Fiscal Agent of any P&I Advance made by it or the recovery by the Master Servicer, the Trustee or the Fiscal Agent of any reimbursable servicing expense (which may include nonrecoverable advances to the extent deemed to be in the best interest of the Certificateholders) incurred by it (each such P&I Advance or expense, an "Advance"), the Master Servicer, the Trustee or the Fiscal Agent, as applicable, is entitled to be paid interest compounded annually at a per annum rate equal to the Reimbursement Rate. Such interest will be paid contemporaneously with the reimbursement of the related Advance first out of late payment charges and default interest received on the related Mortgage Loan in the Collection Period in which such reimbursement is made and then from general collections on the Mortgage Loans then on deposit in the Certificate Account; provided, however, no P&I Advance shall accrue interest until after the expiration of any applicable grace period for the related Periodic Payment. In addition, to the extent the Master Servicer receives late payment charges or default interest on a Mortgage Loan for which interest on Advances related to such Mortgage Loan has been paid from general collections on deposit in the Certificate Account 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. The "Reimbursement Rate" is equal to the "prime rate" published in the "Money Rates" Section of The Wall Street Journal, as such "prime rate" may change from time to time, accrued on the amount of such Advance from the date made to but not including the date of reimbursement. To the extent not offset or covered by amounts otherwise payable on the Non-Offered Certificates, interest accrued on outstanding Advances will result in a reduction in amounts payable on the Offered Certificates, subject to the distribution priorities described in this prospectus supplement. Upon a determination that a previously made Advance is not recoverable, instead of obtaining reimbursement out of general collections immediately, the Master Servicer, the Trustee or the Fiscal Agent, as applicable, may, in its sole discretion, elect to obtain reimbursement for such nonrecoverable Advance over time (not to exceed 12 months or such longer period of time as agreed to by the Master Servicer and the Controlling Class Representative, each in its sole discretion) and the unreimbursed portion of such Advance will accrue interest at the prime rate. At any time after such a determination to obtain reimbursement over time, the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as applicable, may, in its sole discretion, decide to obtain reimbursement immediately. The fact that a decision to recover such nonrecoverable Advances over time, or not to do so, benefits some Classes of Certificateholders to the detriment of other Classes shall not, with respect to the Master Servicer or the Special Servicer, constitute a violation of the Servicing Standard or contractual duty under the Pooling and Servicing Agreement and/or with respect to the Trustee or the Fiscal Agent, constitute a violation of any fiduciary duty to Certificateholders or contractual duty under the Pooling and Servicing Agreement. The Master Servicer, the Trustee or the Fiscal Agent, as applicable, will be required to give S&P and Moody's at least 15 days notice prior to any such reimbursement to it of nonrecoverable Advances from amounts in the Certificate Account allocable to interest on the Mortgage Loans, unless the Master Servicer, the Trustee or the Fiscal Agent, as applicable, makes a determination not to give such notice in accordance with the terms of the Pooling and Servicing Agreement. If the Master Servicer, the Trustee or the Fiscal Agent, as applicable, reimburses itself out of general collections on the Mortgage Pool for any Advance that it has determined is not recoverable out of S-233 collections on the related Mortgage Loan or reimburses itself out of general collections, related to principal only, on the Mortgage Pool for any Workout-Delayed Reimbursement Amount, then that Advance or Workout-Delayed Reimbursement Amount (together, in each case, 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 the Principal Distribution Amount otherwise distributable on the applicable Certificates (prior to, in the case of nonrecoverable Advances only, being deemed reimbursed out of payments and other collections of interest on the underlying Mortgage Loans otherwise distributable on the applicable Certificates), thereby reducing the Principal Distribution Amount of such Certificates. To the extent any Advance is determined to be nonrecoverable and to the extent of each Workout-Delayed Reimbursement Amount, if the Advance or Workout-Delayed Reimbursement Amount is reimbursed out of the Principal Distribution Amount as described above and the item for which the Advance or Workout-Delayed Reimbursement Amount was originally made is subsequently collected from payments or other collections on the related Mortgage Loan, then the Principal Distribution Amount for the Distribution Date corresponding to the Collection Period in which this item was recovered will be increased by the lesser of (a) the amount of the item and (b) any previous reduction in the Principal Distribution Amount for a prior Distribution Date pursuant to this paragraph. APPRAISAL REDUCTIONS Other than with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan, upon the earliest of the date (each such date, a "Required Appraisal Date") that (1) any Mortgage Loan is 60 days delinquent in respect of any Periodic Payments, (2) any REO Property is acquired on behalf of the Trust in respect of any Mortgage Loan, (3) any Mortgage Loan has been modified by the Special Servicer to reduce the amount of any Periodic Payment, other than a Balloon Payment, (4) a receiver is appointed and continues in such capacity in respect of the Mortgaged Property securing any Mortgage Loan, (5) a borrower with respect to any Mortgage Loan becomes subject to any bankruptcy proceeding, (6) a Balloon Payment with respect to any Mortgage Loan has not been paid on its scheduled maturity date, unless the Master Servicer has, on or prior to 60 days following the scheduled maturity 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 Required Appraisal Loan) or (7) any Mortgage Loan is outstanding 60 days after the third anniversary of an extension of its scheduled maturity date (each such Mortgage, including an REO Mortgage Loan, a "Required Appraisal Loan"), the Special Servicer is required to obtain (within 60 days of the applicable Required Appraisal Date) an appraisal of the related Mortgaged Property prepared in accordance with 12 CFR Section 225.62 and conducted in accordance with the standards of the Appraisal Institute by a Qualified Appraiser (or with respect to any Mortgage Loan with an outstanding principal balance less than $2 million, an internal valuation performed by the Special Servicer), unless such an appraisal had previously been obtained within the prior twelve months. A "Qualified Appraiser" is an independent appraiser, selected by the Special Servicer or the Master Servicer, that is a member in good standing of the Appraisal Institute, and that, if the state in which the subject Mortgaged Property is located certifies or licenses appraisers, is certified or licensed in such state, and in each such case, who has a minimum of five years experience in the subject property type and market. The cost of such appraisal will be advanced by the Master Servicer, subject to the Master Servicer's right to be reimbursed therefor out of Related Proceeds or, if not reimbursable therefrom, out of general funds on deposit in the Certificate Account. As a result of any such appraisal, it may be determined that an "Appraisal Reduction Amount" exists with respect to the related Required Appraisal Loan, such determination to be made by the Master Servicer as described below. The Appraisal Reduction Amount for any Required Appraisal Loan will equal the excess, if any, of (a) the sum (without duplication), as of the first Determination Date immediately succeeding the Master Servicer's obtaining knowledge of the occurrence of the Required Appraisal Date if no new appraisal is required or the date on which the appraisal or internal valuation, if applicable, is obtained and each Determination Date thereafter so long as the related Mortgage Loan remains a Required Appraisal Loan, of (i) the Stated Principal Balance of such Required Appraisal Loan and any Companion Loans related thereto, (ii) to the extent not previously advanced by or on behalf of the Master Servicer, the Trustee or the Fiscal Agent, S-234 all unpaid interest on the Required Appraisal Loan through the most recent Due Date prior to such Determination Date at a per annum rate equal to the related Net Mortgage Rate (exclusive of any portion thereof that constitutes Additional Interest), (iii) all accrued but unpaid Servicing Fees and all accrued but unpaid Additional Trust Fund Expenses in respect of such Required Appraisal Loan, (iv) all related unreimbursed Advances (plus accrued interest thereon) made by or on behalf of the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent with respect to such Required Appraisal Loan and (v) all currently due and unpaid real estate taxes and reserves owed for improvements and assessments, insurance premiums, and, if applicable, ground rents in respect of the related Mortgaged Property, over (b) an amount equal to the sum of (i) all escrows, reserves and letters of credit held for the purposes of reserves (provided such letters of credit may be drawn upon for reserve purposes under the related Mortgage Loan documents) held with respect to such Required Appraisal Loan, plus (ii) 90% of the appraised value (net of any prior liens and estimated liquidation expenses) of the related Mortgaged Property as determined by such appraisal less any downward adjustments made by the Special Servicer (without implying any obligation to do so) based upon its review of the Appraisal and such other information as the Special Servicer deems appropriate. If the Special Servicer has not obtained a new appraisal (or performed an internal valuation, if applicable) within the time limit described above, the Appraisal Reduction Amount for the related Mortgage Loan will equal 25% of the principal balance of such Mortgage Loan, to be adjusted upon receipt of the new appraisal (or internal valuation, if applicable). As a result of calculating an Appraisal Reduction Amount with respect to a Mortgage Loan, the P&I Advance for such Mortgage Loan for the related Distribution Date will be reduced, which will have the effect of reducing the amount of interest available for distribution to the Subordinate Certificates in reverse order of entitlement to distribution with respect to such Classes. See "--P&I Advances" above. With respect to the One & Two International Place Loan and the 450 West 33rd Street Loan, the appraisal reduction amount will be calculated under the 2005-C17 Pooling Agreement in a manner generally the same as an Appraisal Reduction Amount as described above. See "SERVICING OF THE MORTGAGE LOANS--Servicing of the One & Two International Place Loan and the 450 West 33rd Street Loan" in this prospectus supplement. For the purpose of calculating P&I Advances only, the aggregate Appraisal Reduction Amounts will be allocated to the Certificate Balance of each Class of Sequential Pay Certificates in reverse order of payment priorities (except with respect to the Class A Certificates, to which such Appraisal Reduction Amounts will be allocated pro rata). REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION Trustee Reports. Based solely on information provided in monthly reports prepared by the Master Servicer and the Special Servicer (and subject to the limitations with respect thereto) and delivered to the Trustee, the Trustee is required to provide or make available either electronically (on the Trustee's internet website initially located at "www.etrustee.net") or by first class mail on each Distribution Date to each Certificateholder: (a) A statement (a "Distribution Date Statement"), substantially in the form of Annex B to this prospectus supplement, setting forth, among other things, for each Distribution Date: (i) the amount of the distribution to the holders of each Class of REMIC Regular Certificates in reduction of the Certificate Balance thereof; (ii) the amount of the distribution to the holders of each Class of REMIC Regular Certificates allocable to Distributable Certificate Interest; (iii) the amount of the distribution to the holders of each Class of REMIC Regular Certificates allocable to Prepayment Premiums and Yield Maintenance Charges; (iv) the amount of the distribution to the holders of each Class of REMIC Regular Certificates in reimbursement of previously allocated Realized Losses and Additional Trust Fund Expenses; (v) the Available Distribution Amount for such Distribution Date; (vi) (a) the aggregate amount of P&I Advances (including any such advances made on the One & Two International Place Loan or 450 West 33rd Street Loan under the 2005-C17 Pooling S-235 Agreement) made in respect of such Distribution Date with respect to the Mortgage Pool and each Loan Group, and (b) the aggregate amount of servicing advances with respect to the Mortgage Pool and each Loan Group as of the close of business on the related Determination Date; (vii) the aggregate unpaid principal balance of the Mortgage Pool and each Loan Group outstanding as of the close of business on the related Determination Date; (viii) the aggregate Stated Principal Balance of the Mortgage Pool and each Loan Group outstanding immediately before and immediately after such Distribution Date; (ix) the number, aggregate unpaid principal balance, weighted average remaining term to maturity or Anticipated Repayment Date and weighted average Mortgage Rate of the Mortgage Loans in the Mortgage Pool and each Loan Group as of the close of business on the related Determination Date; (x) the number and aggregate Stated Principal Balance (immediately after such Distribution Date) (and with respect to each delinquent Mortgage Loan, a brief description of the reason for delinquency, if known by the Master Servicer or Special Servicer, as applicable) of Mortgage Loans (a) delinquent 30-59 days, (b) delinquent 60-89 days, (c) delinquent 90 days or more, and (d) as to which foreclosure proceedings have been commenced; (xi) as to each Mortgage Loan referred to in the preceding clause (x) above: (a) the loan number thereof, (b) the Stated Principal Balance thereof immediately following such Distribution Date and (c) a brief description of any loan modification; (xii) with respect to any Mortgage Loan as to which a liquidation event occurred during the related Collection Period (other than a payment in full), (a) the loan number thereof, (b) the aggregate of all liquidation proceeds and other amounts received in connection with such liquidation event (separately identifying the portion thereof allocable to distributions on the Certificates), and (c) the amount of any Realized Loss in connection with such liquidation event; (xiii) with respect to any REO Property included in the Trust Fund as to which the Special Servicer has determined, in accordance with the Servicing Standard, that all payments or recoveries with respect to such property have been ultimately recovered (a "Final Recovery Determination") was made during the related Collection Period, (a) the loan number of the related Mortgage Loan, (b) the aggregate of all liquidation proceeds and other amounts received in connection with such Final Recovery Determination (separately identifying the portion thereof allocable to distributions on the Certificates), and (c) the amount of any Realized Loss in respect of the related REO Property in connection with such Final Recovery Determination; (xiv) the Accrued Certificate Interest in respect of each Class of REMIC Regular Certificates for such Distribution Date; (xv) any unpaid Distributable Certificate Interest in respect of each Class of REMIC Regular Certificates after giving effect to the distributions made on such Distribution Date; (xvi) the Pass-Through Rate for each Class of REMIC Regular Certificates for such Distribution Date; (xvii) the Principal Distribution Amount, the Loan Group 1 Principal Distribution Amount and the Loan Group 2 Principal Distribution Amount for such Distribution Date (and, in the case of any principal prepayment or other unscheduled collection of principal received during the related Collection Period, the loan number for the related Mortgage Loan and the amount of such prepayment or other collection of principal); (xviii) the aggregate of all Realized Losses incurred during the related Collection Period and all Additional Trust Fund Expenses incurred during the related Collection Period; (xix) the aggregate of all Realized Losses and Additional Trust Fund Expenses that were allocated to each Class on such Distribution Date; S-236 (xx) the Certificate Balance of each Class of REMIC Regular Certificates (other than the Class X-C and Class X-P Certificates) and the Notional Amount of the Class X-C and Class X-P Certificates immediately before and immediately after such Distribution Date, separately identifying any reduction therein due to the allocation of Realized Losses and Additional Trust Fund Expenses on such Distribution Date; (xxi) the certificate factor for each Class of REMIC Regular Certificates immediately following such Distribution Date; (xxii) the aggregate amount of interest on P&I Advances (including any such advances made on the One & Two International Place Loan or 450 West 33rd Street Loan under the 2005-C17 Pooling Agreement) paid to the Master Servicer, the Trustee or the Fiscal Agent (or the 2005-C17 Master Servicer, as applicable) with respect to the Mortgage Pool and each Loan Group during the related Collection Period; (xxiii) the aggregate amount of interest on servicing advances paid to the Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent with respect to the Mortgage Pool and each Loan Group during the related Collection Period; (xxiv) the aggregate amount of servicing fees and Trustee Fees paid to the Master Servicer, the Special Servicer and the Trustee, as applicable, during the related Collection Period; (xxv) the loan number for each Required Appraisal Loan and any related Appraisal Reduction Amount as of the related Determination Date; (xxvi) the original and then current credit support levels for each Class of REMIC Regular Certificates; (xxvii) the original and then current ratings for each Class of REMIC Regular Certificates; (xxviii) the aggregate amount of Prepayment Premiums and Yield Maintenance Charges collected with respect to the Mortgage Pool and each Loan Group during the related Collection Period; (xxix) the amounts, if any, actually distributed with respect to the Class R-I Certificates, Class R-II Certificates and Class Z Certificates on such Distribution Date; and (xxx) the value of any REO Property included in the Trust Fund at the end of the Collection Period, based on the most recent appraisal or valuation. (b) A "CMSA Loan Periodic Update File" and a "CMSA Property File" (in electronic form and substance as provided by the Master Servicer and/or the Special Servicer) setting forth certain information (with respect to CMSA Loan Periodic Update File, as of the related Determination Date) with respect to the Mortgage Loans and the Mortgaged Properties, respectively. (c) A "CMSA Collateral Summary File" and a "CMSA Bond File" setting forth certain information with respect to the Mortgage Loans and the Certificates, respectively. (d) A "CMSA Reconciliation of Funds Report" setting forth certain information with respect to the Mortgage Loans and the Certificates. The Master Servicer and/or the Special Servicer is required to deliver (in electronic format acceptable to the Trustee and Master Servicer) to the Trustee prior to each Distribution Date and the Trustee is required to provide or make available electronically or by first class mail to each Certificateholder, the Depositor, the Underwriters and each Rating Agency on each Distribution Date, the following reports: (a) CMSA Delinquent Loan Status Report; (b) CMSA Historical Loan Modification and Corrected Mortgage Loan Report; (c) CMSA Historical Liquidation Report; (d) CMSA REO Status Report; S-237 (e) CMSA Servicer Watch List/Portfolio Review Guidelines; (f) CMSA Operating Statement Analysis Report; (g) CMSA NOI Adjustment Worksheet; (h) CMSA Comparative Financial Status Report; (i) CMSA Loan Level Reserve/LOC Report; and (j) CMSA Advance Recovery Report. Each of the reports referenced as CMSA reports will be in the form prescribed in the standard Commercial Mortgage Securities Association ("CMSA") investor reporting package. Forms of these reports are available at the CMSA's website located at "www.cmbs.org". The reports identified in clauses (a), (b), (c), (d), (i) and (j) above are referred to in this prospectus supplement as the "Unrestricted Servicer Reports", and the reports identified in clauses (e), (f), (g) and (h) above are referred to in this prospectus supplement as the "Restricted Servicer Reports". In addition, within a reasonable period of time after the end of each calendar year, the Trustee is required to send to each person who at any time during the calendar year was a Certificateholder of record, a report summarizing on an annual basis (if appropriate) certain items provided to Certificateholders in the monthly Distribution Date Statements and such other information as may be required to enable such Certificateholders to prepare their federal income tax returns. Such information is required to include the amount of original issue discount accrued on each Class of Certificates and information regarding the expenses of the Trust Fund. Such requirements shall be deemed to be satisfied to the extent such information is provided pursuant to applicable requirements of the Code in force from time to time. The information that pertains to Specially Serviced Trust Fund Assets reflected in reports will be based solely upon the reports delivered by the Special Servicer or the Master Servicer to the Trustee prior to the related Distribution Date. Absent manifest error, none of the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent will be responsible for the accuracy or completeness of any information supplied to it by a mortgagor or third party that is included in any reports, statements, materials or information prepared or provided by the Master Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as applicable. Book-Entry Certificates. Until such time as definitive Offered Certificates are issued in respect of the Book-Entry Certificates, the foregoing information will be available to the holders of the Book-Entry Certificates only to the extent it is forwarded by or otherwise available through DTC and its Participants. Any beneficial owner of a Book-Entry Certificate who does not receive information through DTC or its Participants may request that the Trustee reports be mailed directly to it by written request to the Trustee (accompanied by evidence of such beneficial ownership) at the Corporate Trust Office of the Trustee. The manner in which notices and other communications are conveyed by DTC to its Participants, and by its Participants to the holders of the Book-Entry Certificates, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. The Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent and the Depositor are required to recognize as Certificateholders only those persons in whose names the Certificates are registered on the books and records of the Certificate Registrar. Information Available Electronically. On or prior to each Distribution Date, the Trustee will make available to the general public via its internet website initially located at "www.etrustee.net", (i) the related Distribution Date Statement, (ii) the CMSA Loan Periodic Update File, CMSA Loan Setup File, CMSA Bond File and CMSA Collateral Summary File, (iii) the Unrestricted Servicer Reports, (iv) as a convenience for the general public (and not in furtherance of the distribution thereof under the securities laws), this prospectus supplement, the accompanying prospectus and the Pooling and Servicing Agreement, and (v) any other items at the request of the Depositor. In addition, on each Distribution Date, the Trustee will make available via its internet website, on a restricted basis, (i) the Restricted Servicer Reports and (ii) the CMSA Property File. The Trustee shall provide access to such restricted reports, upon receipt of a certification in the form attached to the Pooling S-238 and Servicing Agreement, to Certificate Owners and prospective transferees, and upon request to any other Privileged Person and to any other person upon the direction of the Depositor. The Trustee and Master Servicer make no representations or warranties as to the accuracy or completeness of any report, document or other information made available on its internet website and assumes no responsibility therefor. In addition, the Trustee and the Master Servicer may disclaim responsibility for any information distributed by the Trustee or the Master Servicer, as the case may be, for which it is not the original source. The Master Servicer may make available each month via the Master Servicer's internet website, initially located at "www.wachovia.com" (i) to any interested party, the Unrestricted Servicer Reports, the CMSA Loan Setup File and the CMSA Loan Periodic Update File, and (ii) to any Privileged Person, with the use of a password provided by the Master Servicer to such Privileged Person, the Restricted Servicer Reports and the CMSA Property File. For assistance with the Master Servicer's internet website, investors may call (800) 326-1334. "Privileged Person" means any Certificateholder or any person identified to the Trustee or the Master Servicer, as applicable, as a prospective transferee of an Offered Certificate or any interests therein (that, with respect to any such holder or Certificate Owner or prospective transferee, has provided to the Trustee or the Master Servicer, as applicable, a certification in the form attached to the Pooling and Servicing Agreement), any Rating Agency, the Mortgage Loan Seller, any holder of a Companion Loan, the Depositor and its designees, the Underwriters or any party to the Pooling and Servicing Agreement. In connection with providing access to the Trustee's internet website or the Master Servicer's internet website, the Trustee or the Master Servicer, as applicable, may require registration and the acceptance of a disclaimer. Neither the Trustee nor the Master Servicer shall be liable for the dissemination of information in accordance with the Pooling and Servicing Agreement. Other Information. The Pooling and Servicing Agreement requires that the Master Servicer or the Special Servicer make available at its offices primarily responsible for administration of the Trust Fund, during normal business hours, or send the requesting party at the expense of such requesting party, for review by any holder or Certificate Owner owning an Offered Certificate or an interest therein or any person identified by the Trustee to the Master Servicer or Special Servicer, as the case may be, as a prospective transferee of an Offered Certificate or an interest therein, originals or copies of, among other things, the following items: (a) the Pooling and Servicing Agreement and any amendments thereto, (b) all Distribution Date Statements delivered to holders of the relevant Class of Offered Certificates since the Closing Date, (c) all officer's certificates delivered by the Master Servicer since the Closing Date as described under "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS-- Evidence as to Compliance" in the prospectus, (d) all accountants' reports delivered with respect to the Master Servicer since the Closing Date as described under "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--Evidence as to Compliance" in the prospectus, (e) the most recent property inspection report prepared by or on behalf of the Master Servicer in respect of each Mortgaged Property, (f) the most recent Mortgaged Property annual operating statements and rent roll, if any, collected by or on behalf of the Master Servicer, (g) any and all modifications, waivers and amendments of the terms of a Mortgage Loan entered into by the Special Servicer, (h) the Mortgage File relating to each Mortgage Loan, and (i) any and all officers' certificates and other evidence prepared by the Master Servicer or the Special Servicer to support its determination that any Advance was or, if made, would not be recoverable from Related Proceeds. Copies of any and all of the foregoing items will be available from the Master Servicer or Special Servicer, as the case may be, upon request; however, the Master Servicer or Special Servicer, as the case may be, will be permitted to require (other than from the Rating Agencies) a certification from the person seeking such information (covering among other matters, confidentiality) and payment of a sum sufficient to cover the reasonable costs and expenses of providing such information to Certificateholders, Certificate Owners and their prospective transferees, including, without limitation, copy charges and reasonable fees for employee time and for space. ASSUMED FINAL DISTRIBUTION DATE; RATED FINAL DISTRIBUTION DATE The "Assumed Final Distribution Date" with respect to any Class of REMIC Regular Certificates is the Distribution Date on which the Certificate Balance of such Class of Certificates would be reduced to S-239 zero based on the assumption that no Mortgage Loan is voluntarily prepaid prior to its stated maturity date (except for the ARD Loans which are assumed to be paid in full on their respective Anticipated Repayment Dates) and otherwise based on the "Table Assumptions" set forth under "YIELD AND MATURITY CONSIDERATIONS--Weighted Average Life" in this prospectus supplement, which Distribution Date shall in each case be as follows: ASSUMED FINAL CLASS DESIGNATION DISTRIBUTION DATE - -------------------------------------------------------- ------------------ Class A-1 .............................................. March 15, 2010 Class A-2 .............................................. May 15, 2010 Class A-3 .............................................. April 15, 2012 Class A-PB ............................................. December 15, 2014 Class A-4 .............................................. April 15, 2015 Class A-J .............................................. April 15, 2015 Class B ................................................ April 15, 2015 Class C ................................................ May 15, 2015 Class D ................................................ May 15, 2015 The Assumed Final Distribution Dates set forth above were calculated without regard to any delays in the collection of Balloon Payments and without regard to a reasonable liquidation time with respect to any Mortgage Loans that may be delinquent. Accordingly, in the event of defaults on the Mortgage Loans, the actual final Distribution Date for one or more Classes of the Offered Certificates may be later, and could be substantially later, than the related Assumed Final Distribution Date(s). In addition, the Assumed Final Distribution Dates set forth above were calculated on the basis of a 0% CPR (as defined in this prospectus supplement) (except that it is assumed that the ARD Loans pay their respective principal balances on their related Anticipated Repayment Dates) and no losses on the Mortgage Loans. Because the rate of principal payments (including prepayments) on the Mortgage Loans can be expected to exceed the scheduled rate of principal payments, and could exceed such scheduled rate by a substantial amount, and because losses may occur in respect of the Mortgage Loans, the actual final Distribution Date for one or more Classes of the Offered Certificates may be earlier, and could be substantially earlier, than the related Assumed Final Distribution Date(s). The rate of principal payments (including prepayments) on the Mortgage Loans will depend on the characteristics of the Mortgage Loans, as well as on the prevailing level of interest rates and other economic factors, and no assurance can be given as to actual principal payment experience. Finally, the Assumed Final Distribution Dates were calculated assuming there would not be an early termination of the Trust Fund. See "YIELD AND MATURITY CONSIDERATIONS" and "DESCRIPTION OF THE MORTGAGE POOL" in this prospectus supplement and "YIELD CONSIDERATIONS" and "DESCRIPTION OF THE TRUST FUNDS" in the accompanying prospectus. The "Rated Final Distribution Date" with respect to each Class of Offered Certificates is the Distribution Date in April 2042, the first Distribution Date that follows the second anniversary of the end of the amortization term for the Mortgage Loan that, as of the Cut-Off Date, has the longest remaining amortization term. The rating assigned by a Rating Agency to any Class of Offered Certificates entitled to receive distributions in respect of principal reflects an assessment of the likelihood that Certificateholders of such Class will receive, on or before the Rated Final Distribution Date, all principal distributions to which they are entitled. See "RATINGS" in this prospectus supplement. VOTING RIGHTS At all times during the term of the Pooling and Servicing Agreement, 100% of the voting rights for the Certificates (the "Voting Rights") will be allocated among the respective Classes of Certificates as follows: (i) 4% in the aggregate in the case of the Class X Certificates (allocated, pro rata, between the Classes of Class X Certificates based on Notional Amount) and (ii) in the case of any Class of Sequential Pay Certificates, a percentage equal to the product of 96% and a fraction, the numerator of which is equal to the aggregate Certificate Balance of such Class of Certificates (as adjusted by treating any Appraisal S-240 Reduction Amount as a Realized Loss solely for the purposes of adjusting Voting Rights) and the denominator of which is equal to the aggregate Certificate Balances of all Classes of Sequential Pay Certificates, determined as of the Distribution Date immediately preceding such time; provided, however, that the treatment of any Appraisal Reduction Amount as a Realized Loss shall not reduce the Certificate Balances of any Class for the purpose of determining the Controlling Class, the Controlling Class Representative or the Majority Subordinate Certificateholder. The holders of the Class R-I, Class R-II and Class Z Certificates will not be entitled to any Voting Rights. Voting Rights allocated to a Class of Certificates will be allocated among the related Certificateholders in proportion to the percentage interests in such Class evidenced by their respective Certificates. 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. In addition, if either the Master Servicer or the Special Servicer is the holder of any Sequential Pay Certificate, neither of the Master Servicer or Special Servicer, in its capacity as a Certificateholder, will have Voting Rights with respect to matters concerning compensation affecting the Master Servicer or the Special Servicer. See "DESCRIPTION OF THE CERTIFICATES--Voting Rights" in the prospectus. TERMINATION The obligations created by the Pooling and Servicing Agreement will terminate following the earlier of (i) the final payment (or advance in respect thereof) or other liquidation of the last Mortgage Loan or REO Property subject thereto, and (ii) the purchase of all of the Mortgage Loans and all of the REO Properties, if any, remaining in the Trust Fund by the Master Servicer, the Special Servicer or any single Certificateholder (so long as such Certificateholder is not an affiliate of the Depositor or a Mortgage Loan Seller) that is entitled to greater than 50% of the Voting Rights allocated to the Class of Sequential Pay Certificates with the lowest payment priority then outstanding (or if no Certificateholder is entitled to greater than 50% of the Voting Rights of such Class, the Certificateholder with the largest percentage of Voting Rights allocated to such Class) (the "Majority Subordinate Certificateholder") and distribution or provision for distribution thereof to the Certificateholders. Written notice of termination of the Pooling and Servicing Agreement will be given to each Certificateholder, and the final distribution will be made only upon surrender and cancellation of the Certificates at the office of the Trustee or other registrar for the Certificates or at such other location as may be specified in such notice of termination. Any such purchase by the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder of all the Mortgage Loans and all of the REO Properties, if any, remaining in the Trust Fund is required to be made at a price equal to (i) the aggregate Purchase Price of all the Mortgage Loans (other than REO Mortgage Loans) then included in the Trust Fund, plus (ii) the fair market value of all REO Properties then included in the Trust Fund, as determined by an independent appraiser selected by the Master Servicer and approved by the Trustee (which may be less than the Purchase Price for the corresponding REO Loan), minus (iii) if the purchaser is the Master Servicer, the aggregate of amounts payable or reimbursable to the Master Servicer under the Pooling and Servicing Agreement. Such purchase will effect early retirement of the then outstanding Offered Certificates, but the right of the Master Servicer, the Special Servicer or the Majority Subordinate Certificateholder to effect such purchase is subject to the requirement that the aggregate principal balance of the Mortgage Loans is less than 1% of the Cut-Off Date Pool Balance. The purchase price paid in connection with the purchase of all Mortgage Loans and REO Properties remaining in the Trust Fund, exclusive of any portion thereof payable or reimbursable to any person other than the Certificateholders, will constitute part of the Available Distribution Amount for the final Distribution Date. The Available Distribution Amount for the final Distribution Date will be distributed by the Trustee generally as described under "--Distributions--Application of the Available Distribution Amount" in this prospectus supplement except that the distributions of principal on any Class of Sequential Pay Certificates described thereunder will be made, subject to available funds and the distribution priorities described thereunder, in an amount equal to the entire Certificate Balance of such Class remaining outstanding. An exchange by any Certificateholder of all of the then outstanding Certificates (other than the Class Z Certificates and the REMIC Residual Certificates) for all of the Mortgage Loans and each REO S-241 Property remaining in the Trust Fund may be made: (i) if the then outstanding Certificates (other than the Class Z Certificates and the REMIC Residual Certificates) are held by a single Certificateholder, (ii) after 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 (iii) by giving written notice to each of the parties to the Pooling and Servicing Agreement no later than 30 days prior to the anticipated date of exchange. In the event that such Certificateholder elects to exchange its Certificates for all of the Mortgage Loans and each REO Property remaining in the Trust Fund, such Certificateholder must deposit in the Certificate Account, in immediately available funds, an amount equal to all amounts then due and owing to the Master Servicer, the Special Servicer, the Trustee, the Fiscal Agent, the Certificate Registrar, the REMIC Administrator and their respective agents under the Pooling and Servicing Agreement. For purposes of the foregoing provisions relating to termination of the Trust, with respect to the One & Two International Place Loan and the 450 West 33rd Street Loan, the term REO Property refers to the Trust's beneficial interest in the related REO Property under the 2005-C17 Pooling Agreement. THE TRUSTEE LaSalle Bank National Association (the "Trustee") is acting as trustee pursuant to the Pooling and Servicing Agreement. See "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--The Trustee," "--Duties of the Trustee," "--Certain Matters Regarding the Trustee" and "--Resignation and Removal of the Trustee" in the accompanying prospectus. As compensation for its services, the Trustee will be entitled to receive monthly, from general funds on deposit in the Distribution Account, the Trustee Fee. The "Trustee Fee" for each Mortgage Loan and each REO Loan for any Distribution Date equals one month's interest for the most recently ended calendar month (calculated on the basis of a 360-day year consisting of twelve 30-day months), accrued at the Trustee Fee rate on the Stated Principal Balance of such Mortgage Loan or REO Loan, as the case may be, outstanding immediately following the prior Distribution Date (or, in the case of the initial Distribution Date, as of the Closing Date). The Trustee Fee rate is a per annum rate set forth in the Pooling and Servicing Agreement. In addition, the Trustee will be entitled to recover from the Trust Fund all reasonable unanticipated expenses and disbursements incurred or made by the Trustee in accordance with any of the provisions of the Pooling and Servicing Agreement, but not including expenses incurred in the ordinary course of performing its duties as Trustee under the Pooling and Servicing Agreement, and not including any such expense, disbursement or advance as may arise from its willful misconduct, negligence or bad faith. The Trustee will not be entitled to any fee with respect to any Companion Loan. The Trustee also has certain duties with respect to REMIC Administration (in such capacity, the "REMIC Administrator"). See "MATERIAL FEDERAL INCOME TAX CONSEQUENCES--Taxation of Owners of REMIC Residual Certificates--Reporting and Other Administrative Matters" in the prospectus. The Trustee is also authorized to invest or direct the investment of funds held in the Distribution Account, the Interest Reserve Account, the Additional Interest Account and the Gain-on-Sale Reserve Account 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 Trustee 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. THE FISCAL AGENT ABN AMRO Bank N.V. (the "Fiscal Agent"), a banking corporation organized under the laws of The Netherlands, will act as Fiscal Agent pursuant to the Pooling and Servicing Agreement. In the event that the Master Servicer and the Trustee fail to make a required advance, the Fiscal Agent will be required to make such advance; provided that the Fiscal Agent will not be obligated to make any advance that it determines to be nonrecoverable. The Fiscal Agent will be entitled to rely conclusively on any determination by the Master Servicer or the Trustee, as applicable, that an advance, if made, would be nonrecoverable. The Fiscal Agent will be entitled to reimbursement for each advance made by it in the S-242 same manner and to the same extent as, but prior to, the Trustee and the Master Servicer. The Fiscal Agent will make no representation as to the validity or sufficiency of the Pooling and Servicing Agreement, the Certificates, the Mortgage Loans or related documents or the sufficiency of this prospectus supplement. The duties and obligations of the Fiscal Agent will consist only of making advances as described in "-- P&I Advances" in this prospectus supplement. The Fiscal Agent will not be liable except for the performance of such duties and obligations. S-243 YIELD AND MATURITY CONSIDERATIONS YIELD CONSIDERATIONS General. The yield on any Offered Certificate will depend on, among other things, (a) the price at which such Certificate is purchased by an investor and (b) the rate, timing and amount of distributions on such Certificate. The rate, timing and amount of distributions on any Offered Certificate will in turn depend on, among other things, (i) the Pass-Through Rate for such Certificate, (ii) the rate and timing of principal payments (including principal prepayments) and other principal collections on the Mortgage Loans and the extent to which such amounts are to be applied in reduction of the Certificate Balance, (iii) the rate, timing and severity of Realized Losses and Additional Trust Fund Expenses and the extent to which such losses and expenses are allocable in reduction of the Certificate Balance, and (iv) the timing and severity of any Net Aggregate Prepayment Interest Shortfalls and the extent to which such shortfalls allocable are in reduction of the Distributable Certificate Interest payable on the related Class. Rate and Timing of Principal Payment. The yield to holders of any Offered Certificates purchased at a discount or premium will be affected by the rate and timing of principal payments made in reduction of the Certificate Balance of any Class of Sequential Pay Certificates. As described in this prospectus supplement, the Loan Group 1 Principal Distribution Amount (and, after the Class A-1A Certificates have been retired, any remaining Loan Group 2 Principal Distribution Amount) for each Distribution Date will generally be distributable first to reduce the Certificate Balance of the Class A-PB Certificates to the Class A-PB Planned Principal Balance, then to the Class A-1 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-2 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-3 Certificates until the Certificate Balance thereof is reduced to zero, then to the Class A-PB Certificates until the Certificate Balance thereof has been reduced to zero and then, to the Class A-4 Certificates until the Certificate Balance thereof is reduced to zero. The Loan Group 2 Principal Distribution Amount (and, after the Class A-4 Certificates have been retired, any remaining Loan Group 1 Principal Distribution Amount) for each Distribution Date will generally be distributable first to the Class A-1A Certificates. After those distributions, the remaining Principal Distribution Amount with respect to the Mortgage Pool will generally be distributable entirely in respect of the Class A-J, Class B, Class C, Class D and then the Non-Offered Certificates (other than the Class A-1A, Class X and Class Z Certificates), in that order, in each case until the Certificate Balance of such Class of Certificates is reduced to zero. Consequently, the rate and timing of principal payments that are distributed or otherwise result in reduction of the Certificate Balance of any Class of Offered Certificates, will be directly related to the rate and timing of principal payments on or in respect of the Mortgage Loans, which will in turn be affected by the amortization schedules thereof, the dates on which Balloon Payments are due, any extension of maturity dates by the Master Servicer, the 2005-C17 Master Servicer or the 2005-C17 Special Servicer, and the rate and timing of principal prepayments and other unscheduled collections thereon (including for this purpose, collections made in connection with liquidations of Mortgage Loans due to defaults, casualties or condemnations affecting the Mortgaged Properties, or purchases of Mortgage Loans out of the Trust Fund). Furthermore, 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 that the related Mortgage Loan is deemed to be in, 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. With respect to the Class A-PB Certificates, the extent to which the planned balances are achieved and the sensitivity of the Class A-PB Certificates to principal prepayments on the Mortgage Loans will depend in part on the period of time during which the Class A-1, Class A-2, Class A-3 and Class A-1A Certificates remain outstanding. In particular, once such Classes of Certificates are no longer outstanding, 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. Accordingly, the Class A-PB Certificates will become more sensitive to the rate of prepayments on the Mortgage Loans than they were when the Class A-1, Class A-2, Class A-3 and Class A-1A Certificates were outstanding. In addition, although the borrowers under ARD Loans may have certain incentives to repay ARD Loans S-244 on their Anticipated Repayment Dates, there can be no assurance that the related borrowers will be able to repay the ARD Loans on their Anticipated Repayment Date. The failure of a borrower to repay the ARD Loans on their Anticipated Repayment Dates will not be an event of default under the terms of the ARD Loans, and pursuant to the terms of the Pooling and Servicing Agreement, neither the Master Servicer nor the Special Servicer will be permitted to take any enforcement action with respect to a borrower's failure to pay Additional Interest or principal in excess of the principal component of the constant Periodic Payment, other than requests for collection, until the scheduled maturity of the ARD Loans; provided that the Master Servicer or the Special Servicer, as the case may be, may take action to enforce the Trust Fund's right to apply Excess Cash Flow to principal in accordance with the terms of the ARD Loans' documents. In addition, if the Master Servicer, the Trustee or the Fiscal Agent, as applicable, 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, then that Advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed first out of the Principal Distribution Amount otherwise distributable on the Certificates (prior to being deemed reimbursed out of payments and other collections of interest on the underlying Mortgage Loans otherwise distributable on the Certificates), thereby reducing the Principal Distribution Amount of the Offered Certificates. Any such reduction in the amount distributed as principal of the Certificates may adversely affect the weighted average lives and yields to maturity of one or more Classes of Certificates and, after a Final Recovery Determination has been made, will create Realized Losses. Prepayments and, assuming the respective stated maturity dates therefor have not occurred, liquidations and purchases of the Mortgage Loans, will result in distributions on the Certificates of amounts that would otherwise be distributed over the remaining terms of the Mortgage Loans. Defaults on the Mortgage Loans, particularly at or near their stated maturity dates, may result in significant delays in payments of principal on the Mortgage Loans (and, accordingly, on the Offered Certificates that are Sequential Pay Certificates) while work-outs are negotiated or foreclosures are completed. See "SERVICING OF THE MORTGAGE LOANS--Modifications, Waivers and Amendments" in this prospectus supplement and "DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS--Realization Upon Defaulted Mortgage Loans" and "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES--Foreclosure" in the prospectus. The extent to which the yield to maturity of any Class of Offered Certificates may vary from the anticipated yield will depend upon the degree to which such Certificates are purchased at a discount or premium and when, and to what degree, payments of principal on the Mortgage Loans (and which of the Loan Groups such Mortgage Loan is deemed to be in) with respect to the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4 and Class A-1A Certificates in turn are distributed or otherwise result in reduction of the Certificate Balance of such Certificates. An investor should consider, in the case of any Offered Certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on the Mortgage Loans could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of any Offered Certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments could result in an actual yield to such investor that is lower than the anticipated yield. In general, the earlier a payment of principal on the Mortgage Loans is distributed to or otherwise results in reduction of the principal balance of an Offered Certificate purchased at a discount or premium, the greater will be the effect on an investor's yield to maturity. As a result, the effect on an investor's yield of principal payments on the Mortgage Loans occurring at a rate higher (or lower) than the rate anticipated by the investor during any particular period would not be fully offset by a subsequent like reduction (or increase) in the rate of such principal payments. Because the rate of principal payments on the Mortgage Loans will depend on future events and a variety of factors (as described more fully below), no assurance can be given as to such rate or the rate of principal prepayments in particular. The Depositor is not aware of any relevant publicly available or authoritative statistics with respect to the historical prepayment experience of a large group of mortgage loans comparable to the Mortgage Loans. Losses and Shortfalls. The yield to holders of the Offered Certificates will also depend on the extent to which such holders are required to bear the effects of any losses or shortfalls on the Mortgage Loans. Losses and other shortfalls on the Mortgage Loans will, with the exception of any Net Aggregate S-245 Prepayment Interest Shortfalls, generally be borne by the respective Classes of Sequential Pay Certificates (other than the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4 and Class A-1A Certificates, which share such losses and shortfalls pro rata) to the extent of amounts otherwise distributable in respect of such Certificates, in reverse alphabetical order of their Class designations. Realized Losses and Additional Trust Fund Expenses will be allocated, as and to the extent described in this prospectus supplement, to the holders of the respective Classes of Sequential Pay Certificates other than the Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4 and Class A-1A Certificates (in reduction of the Certificate Balance of each such Class), in reverse payment priorities. In the event of a reduction of the Certificate Balances of all such Classes of Certificates, such losses and shortfalls will then be borne, pro rata, by 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 (and the Class X Certificates with respect to shortfalls of interest). As more fully described under "DESCRIPTION OF THE CERTIFICATES--Distributions--Distributable Certificate Interest" in this prospectus supplement, Net Aggregate Prepayment Interest Shortfalls will generally be borne by the respective Classes of REMIC Regular Certificates (other than the Class X Certificates) on a pro rata basis. Pass-Through Rate. The yield on the Class A-4, Class A-J, Class B, Class C and Class D Certificates could be adversely affected if Mortgage Loans with higher interest rates pay faster than Mortgage Loans with lower interest rates since these Classes bear interest at a rate limited by, based upon, or equal to, the Weighted Average Net Mortgage Rate of the Mortgage Loans. Certain Relevant Factors. The rate and timing of principal payments and defaults and the severity of losses on the Mortgage Loans may be affected by a number of factors, including, without limitation, prevailing interest rates, the terms of the Mortgage Loans (for example, due-on-sale clauses, Lockout Periods, provisions requiring the payment of Prepayment Premiums, Yield Maintenance Charges and amortization terms that require Balloon Payments), the demographics and relative economic vitality of the areas in which the Mortgaged Properties are located and the general supply and demand for rental units, hotel/motel guest rooms, health care facility beds, mobile home park pads or comparable commercial space, as applicable, in such areas, the quality of management of the Mortgaged Properties, the servicing of the Mortgage Loans, possible changes in tax laws and other opportunities for investment. See "RISK FACTORS--The Mortgage Loans", "--Prepayments Will Affect Your Yield" and "DESCRIPTION OF THE MORTGAGE POOL" in this prospectus supplement and "YIELD CONSIDERATIONS--Prepayment Considerations" in the accompanying prospectus. The rate of prepayment on the Mortgage Pool is likely to be affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. When the prevailing market interest rate is below a mortgage interest rate, the related borrower may have an incentive to refinance its mortgage loan. As of the Cut-Off Date, all of the Mortgage Loans may be prepaid at any time after the expiration of any applicable Lockout Period, subject, in some cases, to the payment of a Prepayment Premium or a Yield Maintenance Charge. A requirement that a prepayment be accompanied by a Prepayment Premium or Yield Maintenance Charge may not provide a sufficient economic disincentive to deter a borrower from refinancing at a more favorable interest rate. Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some borrowers may sell or refinance Mortgaged Properties in order to realize their equity therein, to meet cash flow needs or to make other investments. In addition, some borrowers may be motivated by federal and state tax laws (which are subject to change) to sell Mortgaged Properties prior to the exhaustion of tax depreciation benefits. The Depositor makes no representation as to the particular factors that will affect the rate and timing of prepayments and defaults on the Mortgage Loans, as to the relative importance of such factors, as to the percentage of the principal balance of the Mortgage Loans that will be prepaid or as to whether a default will have occurred as of any date or as to the overall rate of prepayment or default on the Mortgage Loans. Delay in Payment of Distributions. Because monthly distributions will not be made to Certificateholders until a date that is scheduled to be up to 15 days following the Due Dates for the Mortgage Loans during the related Collection Period, the effective yield to the holders of the Offered Certificates will be S-246 lower than the yield that would otherwise be produced by the applicable Pass-Through Rates and purchase prices (assuming such prices did not account for such delay). Unpaid Distributable Certificate Interest. As described under "DESCRIPTION OF THE CERTIFICATES--Distributions--Application of the Available Distribution Amount" in this prospectus supplement, if the portion of the Available Distribution Amount distributable in respect of interest on any Class of Offered Certificates on any Distribution Date is less than the Distributable Certificate Interest then payable for such Class, the shortfall will be distributable to holders of such Class of Certificates on subsequent Distribution Dates, to the extent of available funds. Any such shortfall will not bear interest, however, and will therefore negatively affect the yield to maturity of such Class of Certificates for so long as it is outstanding. Optional Termination. Any optional termination of the Trust Fund would have an effect similar to a prepayment in full of the Mortgage Loans (without, however, the payment of any Prepayment Premiums or Yield Maintenance Charges) and, as a result, investors in any Certificates purchased at a premium might not fully recoup their initial investment. See "DESCRIPTION OF THE CERTIFICATES--Termination" in this prospectus supplement. WEIGHTED AVERAGE LIFE The weighted average life of any 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 Certificate refers to the average amount of time that will elapse from the assumed Closing Date until each dollar allocable to principal of such Certificate is distributed to the investor. The weighted average life of any such Offered Certificate will be influenced by, among other things, the rate at which principal on the Mortgage Loans is paid or otherwise collected or advanced and applied to pay principal of such Offered Certificate, which may be in the form of scheduled amortization, voluntary prepayments, insurance and condemnation proceeds and liquidation proceeds. As described in this prospectus supplement, the Loan Group 1 Principal Distribution Amount (and, after the Class A-1A Certificates have been retired, any remaining Loan Group 2 Principal Distribution Amount) for each Distribution Date will generally be distributable first to reduce the Certificate Balance of the Class A-PB Certificates to the Class A-PB Planned Principal Balance, then to the Class A-1 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-2 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-3 Certificates until the Certificate Balance thereof is reduced to zero, then, to the Class A-PB Certificates until the Certificate Balance thereof has been reduced to zero and then, to the Class A-4 Certificates until the Certificate Balance thereof is reduced to zero. The Loan Group 2 Principal Distribution Amount (and, after the Class A-4 Certificates have been retired, any remaining Loan Group 1 Principal Distribution Amount) for each Distribution Date will generally be distributable first to the Class A-1A Certificates. After those distributions, the remaining Principal Distribution Amount with respect to the Mortgage Pool will generally be distributable entirely in respect of the Class A-J Certificates, the Class B Certificates, the Class C Certificates and the Class D Certificates in that order, in each case until the Certificate Balance of such Class of Certificates is reduced to zero. The tables below indicate the percentage of the initial Certificate Balance of each Class of Offered Certificates that would be outstanding after each of the dates shown and the corresponding weighted average life of each such Class of Offered Certificates. To the extent that the Mortgage Loans or the Certificates have characteristics that differ from those assumed in preparing the tables, 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 may mature earlier or later than indicated by the tables. With respect to the Class A-PB Certificates, although based on the Table Assumptions (as defined below), the Certificate Balance of the Class A-PB Certificates on each Distribution Date would be reduced to the Class A-PB Planned Principal Amount for such Distribution Date, there is no assurance that the Mortgage Loans will perform in conformity with the Table Assumptions. Therefore, there can be no assurance that the Certificate 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, Class A-2 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 S-247 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. Accordingly, the Mortgage Loans will not prepay at any constant rate nor will the Mortgage Loans prepay at the same rate, and it is highly unlikely that the Mortgage Loans will prepay in a manner consistent with the assumptions described above. In addition, variations in the actual prepayment experience and in the balance of the Mortgage Loans that actually prepay may increase or decrease the percentages of initial Certificate Balances (and shorten or extend the weighted average lives) shown in the following tables. Investors are urged to conduct their own analyses of the rates at which the Mortgage Loans may be expected to prepay. Prepayments on mortgage loans may be measured by a prepayment standard or model. The model used in this prospectus supplement is the "Constant Prepayment Rate" or "CPR" model. The CPR model represents an assumed constant annual rate of prepayment each month, expressed as a per annum percentage of the then scheduled principal balance of the pool of mortgage loans. As used in the tables set forth below, the column headed "0% CPR" assumes that none of the Mortgage Loans is prepaid in whole or in part before maturity or the Anticipated Repayment Date, as the case may be. The columns headed "25% CPR", "50% CPR", "75% CPR" and "100% CPR", respectively, assume that prepayments are made each month at those levels of CPR on the Mortgage Loans that are eligible for prepayment under the Table Assumptions set forth in the next paragraph (each such scenario, a "Scenario"). There is no assurance, however, that prepayments on the Mortgage Loans will conform to any level of CPR, and no representation is made that the Mortgage Loans will prepay at the levels of CPR shown or at any other prepayment rate. The tables below were derived from calculations based on the following assumptions (the "Table Assumptions"): (i) no Mortgage Loan prepays during any applicable Lockout Period or any period during which Defeasance Collateral is permitted or required to be pledged or any period during which a yield maintenance charge or prepayment premium is required (otherwise, in the case of each table, each Mortgage Loan is assumed to prepay at the indicated level of CPR, with each prepayment being applied on the first day of the applicable month in which it is assumed to be received), (ii) the Pass-Through Rates and initial Certificate Balances of the respective Classes of Sequential Pay Certificates are as described in this prospectus supplement, (iii) there are no delinquencies or defaults with respect to, and no modifications, waivers or amendments of the terms of, the Mortgage Loans, (iv) there are no Realized Losses, Additional Trust Fund Expenses or Appraisal Reduction Amounts with respect to the Mortgage Loans or the Trust Fund, (v) scheduled interest and principal payments on the Mortgage Loans are timely received, (vi) ARD Loans pay in full on their Anticipated Repayment Dates, (vii) all Mortgage Loans have Due Dates on the first day of each month and accrue interest on the respective basis described in this prospectus supplement (i.e., a 30/360 basis or an Actual/360 basis), (viii) all prepayments are accompanied by a full month's interest and there are no Prepayment Interest Shortfalls, (ix) there are no breaches of the Mortgage Loan Seller's representations and warranties regarding its Mortgage Loans, (x) all applicable Prepayment Premiums and Yield Maintenance Charges are collected, (xi) no party entitled thereto exercises its right of optional termination of the Trust Fund and no party entitled thereto will exercise its option to purchase any Mortgage Loan from the Trust Fund described in this prospectus supplement, (xii) the borrowers under any Mortgage Loans which permit the borrower to choose between defeasance or a yield maintenance charge choose to be subject to a yield maintenance charge, (xiii) distributions on the Certificates are made on the 15th day (each assumed to be a business day) of each month, commencing in June 2005, and (xiv) the Closing Date for the sale of the Offered Certificates is May 19, 2005. The tables set forth below indicate the resulting weighted average lives of each Class of Offered Certificates and set forth the percentages of the initial Certificate Balance of such Class of Offered Certificates that would be outstanding after each of the dates shown in each case assuming the indicated level of CPR. For purposes of the following tables, the weighted average life of an Offered Certificate is determined by (i) multiplying the amount of each principal distribution thereon by the number of years from the assumed Closing Date of such Certificate to the related Distribution Date, (ii) summing the results and (iii) dividing the sum by the aggregate amount of the reductions in the principal balance of such Certificate. S-248 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS A-1 CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 95 95 95 95 95 05/15/07 ................................. 86 86 86 86 86 05/15/08 ................................. 67 67 67 67 67 05/15/09 ................................. 30 30 30 30 30 05/15/10 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 3.31 3.30 3.29 3.28 3.25 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS A-2 CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 4.92 4.91 4.90 4.88 4.73 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS A-3 CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 100 100 100 100 100 05/15/12 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 6.84 6.83 6.81 6.78 6.57 S-249 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS A-PB CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 78 78 78 78 78 05/15/12 ................................. 57 54 51 47 23 05/15/13 ................................. 36 26 16 8 2 05/15/14 ................................. 13 0 0 0 0 05/15/15 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 7.35 7.11 6.97 6.86 6.65 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS A-4 CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 100 100 100 100 100 05/15/12 ................................. 100 100 100 100 100 05/15/13 ................................. 100 100 100 100 100 05/15/14 ................................. 100 100 98 98 97 05/15/15 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 9.79 9.76 9.73 9.69 9.51 S-250 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS A-J CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 100 100 100 100 100 05/15/12 ................................. 100 100 100 100 100 05/15/13 ................................. 100 100 100 100 100 05/15/14 ................................. 100 100 100 100 100 05/15/15 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 9.91 9.91 9.91 9.91 9.73 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 100 100 100 100 100 05/15/12 ................................. 100 100 100 100 100 05/15/13 ................................. 100 100 100 100 100 05/15/14 ................................. 100 100 100 100 100 05/15/15 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 9.91 9.91 9.91 9.91 9.74 S-251 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS C CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 100 100 100 100 100 05/15/12 ................................. 100 100 100 100 100 05/15/13 ................................. 100 100 100 100 100 05/15/14 ................................. 100 100 100 100 100 05/15/15 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 9.98 9.92 9.91 9.91 9.74 PERCENTAGES OF THE CLOSING DATE CERTIFICATE BALANCE OF THE CLASS D CERTIFICATES 0% CPR DURING LOCKOUT, DEFEASANCE AND YIELD MAINTENANCE OTHERWISE AT INDICATED CPR ------------------------------------------------ DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR - ------------------------------------------ -------- --------- --------- --------- --------- Initial Date ............................. 100 100 100 100 100 05/15/06 ................................. 100 100 100 100 100 05/15/07 ................................. 100 100 100 100 100 05/15/08 ................................. 100 100 100 100 100 05/15/09 ................................. 100 100 100 100 100 05/15/10 ................................. 100 100 100 100 100 05/15/11 ................................. 100 100 100 100 100 05/15/12 ................................. 100 100 100 100 100 05/15/13 ................................. 100 100 100 100 100 05/15/14 ................................. 100 100 100 100 100 05/15/15 ................................. 0 0 0 0 0 Weighted Average Life (in years) ......... 9.99 9.99 9.96 9.91 9.74 USE OF PROCEEDS Substantially all of the proceeds from the sale of the Offered Certificates will be used by the Depositor to purchase the Mortgage Loans and to pay certain expenses in connection with the issuance of the Certificates. S-252 MATERIAL FEDERAL INCOME TAX CONSEQUENCES GENERAL The following summary of the anticipated material federal income tax consequences of the purchase, ownership and disposition of Offered Certificates is based on the advice of Cadwalader, Wickersham & Taft LLP, counsel to the Depositor. This summary is based on laws, regulations, including the REMIC regulations promulgated by the Treasury Department (the "REMIC Regulations"), rulings and decisions now in effect or (with respect to the regulations) proposed, all of which are subject to change either prospectively or retroactively. This summary does not address the federal income tax consequences of an investment in Offered Certificates applicable to all categories of investors, some of which (for example, banks and insurance companies) may be subject to special rules. Prospective investors should consult their tax advisors regarding the federal, state, local and other tax consequences to them of the purchase, ownership and disposition of Offered Certificates. For federal income tax purposes, two separate REMIC elections ("REMIC I" and "REMIC II") will be made with respect to segregated asset pools that make up the Trust Fund, other than any Additional Interest on the ARD Loans. Upon the issuance of the Offered Certificates, Cadwalader, Wickersham & Taft LLP will deliver its opinion generally to the effect that, assuming (1) the making of appropriate elections, (2) compliance with all provisions of the Pooling and Servicing Agreement, (3) compliance with the 2005-C17 Pooling Agreement and other related documents and any amendments thereto and the continued qualification of the REMICs formed thereunder and (4) compliance with applicable changes in the Code, for federal income tax purposes, each such REMIC will qualify as a REMIC under the Code. For federal income tax purposes, the REMIC Regular Certificates will represent ownership of the "regular interests" in one of such REMICs and generally will be treated as newly originated debt instruments of such REMIC. See "MATERIAL FEDERAL INCOME TAX CONSEQUENCES--REMICs" in the accompanying prospectus. The portion of the Trust Fund consisting of Additional Interest and the Additional Interest Account will be treated as a grantor trust for federal income tax purposes, and the Class Z Certificates will represent undivided beneficial interests in the related assets. See "MATERIAL FEDERAL INCOME TAX CONSEQUENCES--REMICs" and "--Grantor Trust Funds" in the accompanying prospectus. TAXATION OF THE OFFERED CERTIFICATES Based on expected issue prices, it is anticipated that the Class and Class Certificates will be treated as having been issued at a premium, and that the Class and Class Certificates will be issued with original issue discount for federal income tax reporting purposes. Whether any holder of a Class of Offered Certificates will be treated as holding a Certificate with amortizable bond premium will depend on such Certificateholder's purchase price and the distributions remaining to be made on such Certificate at the time of its acquisition by such Certificateholder. Holders of each such Class of Certificates should consult their own tax advisors regarding the possibility of making an election to amortize such premium. See "MATERIAL FEDERAL INCOME TAX CONSEQUENCES--Taxation of Owners of REMIC Regular Certificates--Premium" in the accompanying prospectus. The prepayment assumption that will be used in determining the rate of accrual of original issue discount, if any, or amortization of amortizable bond premium for federal income tax purposes will be based on the assumption that subsequent to the date of any determination the Mortgage Loans will pay at a rate equal to a CPR of 0%, except that it is assumed that the ARD Loans will pay their respective outstanding principal balances on their related Anticipated Repayment Dates. No representation is made that the Mortgage Loans will pay at that rate or at any other rate. See "MATERIAL FEDERAL INCOME TAX CONSEQUENCES--REMICs" and "--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount" in the accompanying prospectus. The Internal Revenue Service (the "IRS") has issued regulations (the "OID Regulations") under Sections 1271 to 1275 of the Code generally addressing the treatment of debt instruments issued with original issue discount. Purchasers of the Offered Certificates should be aware that the OID Regulations and Section 1272(a)(6) of the Code do not adequately address certain issues relevant to, or are not S-253 applicable to, securities such as the Offered Certificates. The OID Regulations in some circumstances permit the holder of a debt instrument to recognize original issue discount under a method that differs from that used by the issuer. Accordingly, it is possible that the holder of an Offered Certificate if such Offered Certificate were treated as issued with original issue discount may be able to select a method for recognizing original issue discount that differs from that used by the Trustee in preparing reports to the Certificateholders and the IRS. Prospective purchasers of Offered Certificates are advised to consult their tax advisors concerning the tax treatment of such Certificates. The Offered Certificates will be treated as "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code for a "real estate investment trust" ("REIT"). In addition, interest (including original issue discount) on the Offered Certificates will be interest described in Section 856(c)(3)(B) of the Code for a REIT. However, the Offered Certificates will generally only be considered assets described in Section 7701(a)(19)(C) of the Code for a domestic building and loan association to the extent that the Mortgage Loans are secured by multifamily properties (approximately 16.6% of the Cut-Off Date Pool Balance) and, accordingly, investment in the Offered Certificates may not be suitable for certain thrift institutions. The Offered Certificates will not qualify under the foregoing sections to the extent of any Mortgage Loan that has been defeased with US government obligations. A portion of the Prepayment Premiums and Yield Maintenance Charges actually collected will be distributed to the holders of the Offered Certificates as described in this prospectus supplement. It is not entirely clear under the Code when the amount of a Yield Maintenance Charge or Prepayment Premium should be taxed to the holder of an Offered Certificate, but it is not expected, for federal income tax reporting purposes, that Yield Maintenance Charges or Prepayment Premiums will be treated as giving rise to any income to the holders of the Offered Certificates prior to the Master Servicer's actual receipt of a Yield Maintenance Charge or Prepayment Premium, as the case may be. It is not entirely clear whether Yield Maintenance Charges or Prepayment Premiums give rise to ordinary income or capital gains and Certificateholders should consult their own tax advisors concerning this character issue and the treatment of Yield Maintenance Charges and Prepayment Premiums in general. The Treasury Department has issued final regulations that make certain modifications to the withholding, backup withholding and information reporting rules. Prospective non-United States investors are urged to consult their tax advisors regarding these regulations. For further information regarding the federal income tax consequences of investing in the Offered Certificates, see "MATERIAL FEDERAL INCOME TAX CONSEQUENCES--REMICs" in the accompanying prospectus. ERISA CONSIDERATIONS The following description is general in nature, is not intended to be all-inclusive, is based on the law and practice in force at the date of this document and is subject to any subsequent changes therein. In view of the individual nature of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Code consequences, each potential investor that is a Plan (as described below) is advised to consult its own legal advisor with respect to the specific ERISA and Code consequences of investing in the Offered Certificates and to make its own independent decision. The following is merely a summary and should not be construed as legal advice. A fiduciary of any employee benefit plan or other retirement plan or arrangement, including individual retirement accounts and annuities, Keogh plans and collective investment funds, separate accounts and general accounts in which such plans, accounts or arrangements are invested, that is subject to ERISA or Section 4975 of the Code (a "Plan") should carefully review with its legal advisors whether the purchase or holding of Offered Certificates could give rise to a transaction that is prohibited or is not otherwise permitted either under ERISA or Section 4975 of the Code or whether there exists any statutory or administrative exemption applicable thereto. Other employee benefit plans, including governmental plans (as defined in Section 3(32) of ERISA) and church plans (as defined in Section 3(33) of ERISA and provided no election has been made under Section 410(d) of the Code), while not subject to the foregoing provisions of ERISA or the Code, may be subject to materially similar provisions of applicable federal, state or local law ("Similar Law"). S-254 The US Department of Labor has issued individual exemptions to each of the Underwriters (Prohibited Transaction Exemption ("PTE") 96-22 (April 3, 1996) to Wachovia Corporation, and its subsidiaries and its affiliates, which include Wachovia Capital Markets, LLC ("Wachovia Securities"), PTE 2000-55 (November 13, 2000) to Countrywide Securities Corporation, PTE 89-90 (October 17, 1989) to Credit Suisse First Boston LLC ("Credit Suisse First Boston"), PTE 90-29 (May 24, 1990) to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and PTE 90-59 (September 6, 1990) to Greenwich Capital Markets, Inc. ("Greenwich Capital")) (each, an "Exemption" and collectively, the "Exemptions"), each of which generally exempts from the application of the prohibited transaction provisions of Sections 406(a) and (b) and 407(a) of ERISA, and the excise taxes imposed on such prohibited transactions pursuant to Sections 4975(a) and (b) of the Code, the purchase, sale and holding of mortgage pass-through certificates underwritten by an Underwriter, as hereinafter defined, provided that certain conditions set forth in the Exemptions are satisfied. For purposes of this discussion, the term "Underwriter" shall include (a) Wachovia Securities, (b) Countrywide Securities Corporation, (c) Credit Suisse First Boston, (d) Merrill Lynch, (e) Greenwich Capital, (f) any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Wachovia Securities, Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch or Greenwich Capital, and (g) any member of the underwriting syndicate or selling group of which Wachovia Securities, Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch and Greenwich Capital or a person described in (f) is a manager or co-manager with respect to the Offered Certificates. The obligations covered by the Exemptions include mortgage loans such as the Mortgage Loans. The Exemptions would apply to the acquisition, holding and resale of the Offered Certificates by a Plan only if specific conditions (certain of which are described below) are met. The Exemptions would not apply directly to governmental plans, certain church plans and other employee benefit plans that are not subject to the prohibited transaction provisions of ERISA or the Code but that may be subject to Similar Law. The Exemptions set forth five general conditions that, among others, must be satisfied for a transaction involving the purchase, sale and holding of the Offered Certificates by a Plan to be eligible for exemptive relief thereunder. First, the acquisition of the Offered Certificates by a Plan must be on terms, including the price paid for the Certificates, that are at least as favorable to the Plan as they would be in an arm's-length transaction with an unrelated party. Second, the Offered Certificates at the time of acquisition by the Plan must be rated in one of the four highest generic rating categories by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), Moody's Investors Service, Inc. ("Moody's") or Fitch, Inc. ("Fitch") or any successor thereto (each, an "NRSRO"). Third, the Trustee cannot be an affiliate of any other member of the Restricted Group, other than an Underwriter. The "Restricted Group" consists of each of the Underwriters, the Depositor, the Master Servicer, the Special Servicer, the Trustee, any sub-servicer and any obligor with respect to Mortgage Loans constituting more than 5.0% of the aggregate unamortized principal balance of the Mortgage Loans as of the date of initial issuance of the Offered Certificates, and any of their affiliates. Fourth, the sum of all payments made to and retained by any Underwriter in connection with the distribution or placement of the Offered Certificates must represent not more than reasonable compensation for underwriting such Certificates; the sum of all payments made to and retained by the Depositor pursuant to the assignment of the Mortgage Loans to the Trust Fund must represent not more than the fair market value of such obligations; and the sum of all payments made to and retained by the Master Servicer, the Special Servicer or any sub-servicer must represent not more than reasonable compensation for such person's services under the Pooling and Servicing Agreement and reimbursement of such person's reasonable expenses in connection therewith. Fifth, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act. A fiduciary of a Plan contemplating purchasing any Class of the Offered Certificates must make its own determination that, at the time of such purchase, such Certificates satisfy the general conditions set forth above. The Exemptions also require that the Trust Fund meet the following requirements: (i) the Trust Fund must consist solely of assets of the type that have been included in other investment pools; (ii) certificates in such other investment pools must have been rated in one of the four highest generic rating categories by S&P, Moody's or Fitch for at least one year prior to the Plan's acquisition of the Offered Certificates; S-255 and (iii) certificates in such other investment pools must have been purchased by investors other than Plans for at least one year prior to any Plan's acquisition of the Offered Certificates. If the general conditions of the Exemptions are satisfied, the Exemptions may provide an exemption from the restrictions imposed by Sections 406(a) and 407(a) of ERISA (as well as the excise taxes imposed by Sections 4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of the Code) in connection with (i) the direct or indirect sale, exchange or transfer of the Offered Certificates in the initial issuance of Certificates between the Depositor or an Underwriter and a Plan when the Depositor, an Underwriter, the Trustee, the Fiscal Agent, the Master Servicer, the Special Servicer, a sub-servicer or an obligor with respect to Mortgage Loans is a "Party in Interest," as defined in the accompanying prospectus, with respect to the investing Plan, (ii) the direct or indirect acquisition or disposition in the secondary market of the Offered Certificates by a Plan and (iii) the holding of Offered Certificates by a Plan. However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of the Offered Certificate on behalf of an "Excluded Plan" by any person who has discretionary authority or renders investment advice with respect to the assets of such Excluded Plan. For purposes hereof, an "Excluded Plan" is a Plan sponsored by any member of the Restricted Group. If certain specific conditions of the Exemptions are also satisfied, each such Exemption may provide relief from the restrictions imposed by reason of Sections 406(b)(1) and (b)(2) of ERISA and the taxes imposed by Section 4975(c)(1)(E) of the Code to an obligor with respect to Mortgage Loans acting as a fiduciary with respect to the investment of a Plan's assets in the Offered Certificates (or such obligor's affiliate) only if, among other requirements (i) such obligor is an obligor with respect to 5% or less of the fair market value of the obligations or receivables contained in the trust, (ii) the investing Plan is not an Excluded Plan, (iii) a Plan's investment in each Class of the Offered Certificates does not exceed 25% of all of the Certificates of that Class outstanding at the time of the acquisition, (iv) immediately after the acquisition, no more than 25% of the assets of the Plan are invested in certificates representing an interest in trusts (including the Trust Fund) containing assets sold or serviced by the Depositor or the Master Servicer and (v) in the case of the acquisition of the Offered Certificates in connection with their initial issuance, at least 50% of each Class of Offered Certificates in which Plans have invested and at least 50% of the aggregate interest in the Trust Fund is acquired by persons independent of the Restricted Group. The Exemptions also apply to transactions in connection with the servicing, management and operation of the Trust Fund, provided that, in addition to the general requirements described above, (a) such transactions are carried out in accordance with the terms of a binding pooling and servicing agreement, (b) the pooling and servicing agreement is provided to, or described in all material respects in the prospectus or private placement memorandum provided to, investing Plans before their purchase of Certificates issued by the Trust Fund and (c) the terms and conditions for the defeasance of a mortgage obligation and substitution of a new mortgage obligation, as so described, have been approved by an NRSRO and do not result in any Offered Certificates receiving a lower credit rating from the NRSRO than the current rating. The Pooling and Servicing Agreement is a pooling and servicing agreement as defined in the Exemptions. The Pooling and Servicing Agreement provides that all transactions relating to the servicing, management and operations of the Trust Fund must be carried out in accordance with the Pooling and Servicing Agreement. Before purchasing any Class of Offered Certificate, a fiduciary of a Plan should itself confirm that the specific and general conditions of the Exemptions and the other requirements set forth in the Exemptions would be satisfied. Any Plan fiduciary considering the purchase of Offered Certificates should consult with its counsel with respect to the applicability of the Exemptions and other issues and determine on its own whether all conditions have been satisfied and whether the Offered Certificates are an appropriate investment for a Plan under ERISA and the Code (or, in the case of governmental plans and certain church plans, under Similar Law) with regard to ERISA's general fiduciary requirements, including investment prudence and diversification and the exclusive benefit rule. Each purchaser of the Offered Certificates with the assets of one or more Plans shall be deemed to represent that each such Plan qualifies as an "accredited investor" as defined in Rule 501(a)(1) of Regulation D under the Securities Act. No Plan may purchase S-256 or hold an interest in any Class of Offered Certificates unless (a) such Certificates are rated in one of the top four generic rating categories by at least one NRSRO at the time of such purchase or (b) such Plan is an insurance company general account that represents and warrants that it is eligible for, and meets all of the requirements of, Sections I and III of Prohibited Transaction Class Exemption 95-60. THE SALE OF OFFERED CERTIFICATES TO A PLAN IS IN NO RESPECT A REPRESENTATION OR WARRANTY BY THE DEPOSITOR, THE UNDERWRITERS OR ANY OTHER PERSON THAT THIS INVESTMENT MEETS ALL RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY PLANS GENERALLY OR ANY PARTICULAR PLAN, THAT THE EXEMPTIONS WOULD APPLY TO THE ACQUISITION OF THIS INVESTMENT BY PLANS IN GENERAL OR ANY PARTICULAR PLAN, OR THAT THIS INVESTMENT IS APPROPRIATE FOR PLANS GENERALLY OR ANY PARTICULAR PLAN. LEGAL INVESTMENT The Class A-1, Class A-2, Class A-3, Class A-PB, Class A-4, Class A-J, Class B and Class C Certificates (the "SMMEA Certificates") will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended, so long as they are rated in one of the two highest rating categories of Moody's, S&P or another nationally recognized statistical rating organization. The other Classes of Certificates will not constitute "mortgage related securities" for purposes of SMMEA and as a result, the appropriate characterization of those Classes of Offered Certificates under various legal investment restrictions, and the ability of investors subject to these restrictions to purchase those Classes of Offered Certificates, are subject to significant interpretive uncertainties. Except as to the status of certain Classes of the Offered Certificates as "mortgage related securities", no representations are made as to the proper characterization of the Offered Certificates for legal investment, financial institution regulatory, or other purposes, or as to the ability of particular investors to purchase the Certificates under applicable legal investment restrictions. Investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the Offered Certificates constitute legal investments for them or are subject to investment, capital or other restrictions. See "LEGAL INVESTMENT" in the accompanying prospectus. METHOD OF DISTRIBUTION Subject to the terms and conditions set forth in the underwriting agreement (the "Underwriting Agreement") among the Depositor and Wachovia Securities, Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch and Greenwich Capital (collectively, the "Underwriters"), the Depositor has agreed to sell to each of Wachovia Securities, Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch and Greenwich Capital, and each of Wachovia Securities, Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch and Greenwich Capital has agreed to purchase, severally but not jointly, the respective Certificate Balances as applicable, of each Class of the Offered Certificates as set forth below, subject in each case to a variance of 5%: WACHOVIA COUNTRYWIDE SECURITIES CREDIT SUISSE CLASS SECURITIES CORPORATION FIRST BOSTON MERRILL LYNCH GREENWICH CAPITAL - -------------------- --------------- ------------------------ -------------- --------------- ------------------ Class A-1 .......... $ $ $ $ $ Class A-2 .......... $ $ $ $ $ Class A-3 .......... $ $ $ $ $ Class A-PB ......... $ $ $ $ $ Class A-4 .......... $ $ $ $ $ Class A-J .......... $ $ $ $ $ Class B ............ $ $ $ $ $ Class C ............ $ $ $ $ $ Class D ............ $ $ $ $ $ Wachovia Securities is acting as sole lead manager for this offering and Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch and Greenwich Capital are acting as co-managers for this offering. Wachovia Securities is acting as sole bookrunner with respect to the Offered Certificates. S-257 Proceeds to the Depositor from the sale of the Offered Certificates, before deducting expenses payable by the Depositor, will be approximately $ , which includes accrued interest. Distribution of the Offered Certificates will be made by each Underwriter from time to time in negotiated transactions or otherwise at varying prices to be determined at the time of sale. Wachovia Securities or one of its affiliates may purchase a portion of certain Classes of the Offered Certificates, purchase certain Offered Certificates for its own account or sell certain Offered Certificates to one of its affiliates. Sales of the Offered Certificates may also occur on the Closing Date and other dates after the Closing Date, as agreed upon in negotiated transactions with various purchasers. Each Underwriter may effect such transactions by selling the Offered Certificates to or through dealers, and such dealers may receive compensation in the form of underwriting discounts, concessions or commissions from such Underwriter. In connection with the purchase and sale of the Offered Certificates, Wachovia Securities, Countrywide Securities Corporation, Credit Suisse First Boston, Merrill Lynch and Greenwich Capital may be deemed to have received compensation from the Depositor in the form of underwriting discounts. Each Underwriter and any dealers that participate with any Underwriter in the distribution of the Offered Certificates may be deemed to be underwriters and any profit on the resale of the Offered Certificates positioned by them may be deemed to be underwriting discounts and commissions under the Securities Act. Purchasers of the Offered Certificates, including dealers, may, depending on the facts and circumstances of such purchases, be deemed to be "underwriters" within the meaning of the Securities Act in connection with reoffers and sales by them of Offered Certificates. Certificateholders should consult with their legal advisors in this regard prior to any such reoffer or sale. The Depositor also has been advised by the Underwriters that each of them, through one or more of its affiliates, currently intends to make a market in the Offered Certificates; however, none of the Underwriters has any obligation to do so, any market making may be discontinued at any time and there can be no assurance that an active secondary market for the Offered Certificates will develop. See "RISK FACTORS--Liquidity for Certificates May Be Limited" in this prospectus supplement and "RISK FACTORS--Your Ability to Resell Certificates May Be Limited Because of Their Characteristics" in the accompanying prospectus. This prospectus supplement and the accompanying prospectus may be used by the Depositor, Wachovia Securities, an affiliate of the Depositor, and any other affiliate of the Depositor when required under the federal securities laws in connection with offers and sales of the Offered Certificates or in furtherance of market-making activities in the Offered Certificates. Wachovia Securities or any such other affiliate may act as principal or agent in such transactions. Such sales will be made at prices related to prevailing market prices at the time of sale or otherwise. The Depositor has agreed to indemnify each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act against, or make contributions to each Underwriter and each such controlling person with respect to, certain liabilities, including liabilities under the Securities Act. Wachovia Securities, one of the Underwriters, is an affiliate of the Depositor and Wachovia Bank, National Association, which is the Mortgage Loan Seller and the Master Servicer. LEGAL MATTERS Certain legal matters will be passed upon for the Depositor by Cadwalader, Wickersham & Taft LLP, Charlotte, North Carolina. Certain legal matters will be passed upon for the Underwriters by Dechert LLP, Charlotte, North Carolina. RATINGS The Offered Certificates are required as a condition of their issuance to have received the following ratings from S&P and Moody's (collectively, the "Rating Agencies"): S-258 EXPECTED RATINGS FROM CLASS S&P/MOODY'S - -------------------------------------------- ---------------------- Class A-1 ............................... AAA/Aaa Class A-2 ............................... AAA/Aaa Class A-3 ............................... AAA/Aaa Class A-PB .............................. AAA/Aaa Class A-4 ............................... AAA/Aaa Class A-J ............................... AAA/Aaa Class B ................................. AA/Aa2 Class C ................................. AA-/Aa3 Class D ................................. A/A2 The ratings on the Offered Certificates address the likelihood of timely receipt by holders thereof of all distributions of interest to which they are entitled and distributions of principal by the Rated Final Distribution Date set forth on the cover page of this prospectus supplement. The ratings take into consideration the credit quality of the Mortgage Pool, structural and legal aspects associated with the Offered Certificates, and the extent to which the payment stream from the Mortgage Pool is adequate to make payments required under the Offered Certificates. In addition, rating adjustments may result from a change in the financial position of the Trustee or the Fiscal Agent as back-up liquidity provider. A security rating does not represent any assessment of the yield to maturity that investors may experience. In addition, a rating does not address (i) the likelihood or frequency of voluntary or mandatory prepayments of Mortgage Loans, (ii) the degree to which such prepayments might differ from those originally anticipated, (iii) payment of Additional Interest or net default interest, (iv) whether and to what extent payments of Prepayment Premiums or Yield Maintenance Charges will be received or the corresponding effect on yield to investors or (v) whether and to what extent Net Aggregate Prepayment Interest Shortfalls will be realized or allocated to Certificateholders. There can be no assurance that any rating agency not requested to rate the Offered Certificates will not nonetheless issue a rating to any or all Classes thereof and, if so, what such rating or ratings would be. A rating assigned to any Class of Offered Certificates by a rating agency that has not been requested by the Depositor to do so may be lower than the rating assigned thereto by any of the Rating Agencies. The ratings on the Offered Certificates should be evaluated independently from similar ratings on other types of securities. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. See "RISK FACTORS-- Ratings Do Not Guarantee Payment and Do Not Address Prepayment Risks" in the accompanying prospectus. S-259 INDEX OF DEFINED TERMS PAGE 1% ( ) ............................................................S-103 2% ( ) ............................................................S-103 2005-C17 Controlling Class Representative .........................S-205 2005-C17 Master Servicer ..........................................S-199 2005-C17 Pooling Agreement ........................................S-199 2005-C17 Special Servicer .........................................S-199 2005-C17 Transaction ...............................................S-97 2005-C17 Trust Fund ................................................S-97 2005-C17 Trustee ..................................................S-199 3% ( ) ............................................................S-103 450 West 33rd Street Intercreditor Agreement .......................S-97 450 West 33rd Street Loan ..........................................S-96 450 West 33rd Street Pari Passu Companion Loan .....................S-97 450 West 33rd Street Whole Loan ....................................S-97 590 Fifth Avenue Loan .............................................S-156 Accrued Certificate Interest ......................................S-224 Actual/360 basis ...................................................S-91 Additional Interest ................................................S-92 Additional Interest Account .......................................S-218 Additional Trust Fund Expenses ....................................S-230 Administrative Cost Rate ..........................................S-102 Advance ...........................................................S-233 Anticipated Repayment Date .........................................S-92 AP ................................................................S-139 Appraisal Reduction Amount ........................................S-234 ARD Loans ..........................................................S-92 Assumed Final Distribution Date ..............................S-2, S-239 Assumed Scheduled Payment .........................................S-226 Autumn Wood Apartments Loan ........................................S-96 Available Distribution Amount .....................................S-217 Balloon Loans ......................................................S-92 Balloon Payment ....................................................S-92 Breach ............................................................S-192 Capital Imp. Reserve ..............................................S-103 Casa Paloma Loan ..................................................S-165 Certificate Account ...............................................S-218 Certificate Balance ...............................................S-211 Certificate Deferred Interest .....................................S-213 Certificateholders ................................................S-217 Certificates ......................................................S-209 Choate, Hall & Stewart ............................................S-134 Class .............................................................S-209 Class A Certificates ..............................................S-209 Class A-PB Planned Principal Balance ..............................S-226 Class X Certificates ..............................................S-209 Class X-C Components ..............................................S-214 Class X-C Strip Rate ..............................................S-214 Class X-P Components ..............................................S-215 Class X-P Strip Rate ..............................................S-215 Clearstream .......................................................S-209 Clearstream Participants ..........................................S-211 CMSA ..............................................................S-238 CMSA Bond File ....................................................S-237 CMSA Collateral Summary File ......................................S-237 CMSA Loan Periodic Update File ....................................S-237 CMSA Property File ................................................S-237 CMSA Reconciliation of Funds Report ...............................S-237 Code ..............................................................S-188 Co-Lender Loans ....................................................S-96 Collection Period .................................................S-216 Companion Loans ....................................................S-97 Compensating Interest Payment .....................................S-200 Constant Prepayment Rate ..........................................S-248 Controlling Class .................................................S-197 Controlling Class Representative ..................................S-196 Core Material Documents ...........................................S-188 Corrected Mortgage Loan ...........................................S-198 CPR ...............................................................S-248 Creative Leather ..................................................S-165 Credit Suisse First Boston ........................................S-255 Crossed Group .....................................................S-192 Crossed Loan ......................................................S-192 Custodian .........................................................S-187 Cut-Off Date .......................................................S-90 Cut-Off Date Balance ...............................................S-90 Cut-Off Date Group 1 Balance .......................................S-90 Cut-Off Date Group 2 Balance .......................................S-90 Cut-Off Date Group Balances ........................................S-90 Cut-Off Date LTV ..................................................S-102 Cut-Off Date LTV Ratio ............................................S-102 Cut-Off Date Pool Balance ..........................................S-90 Cypress Lake at Stonebriar Loan ...................................S-162 D ( ) .............................................................S-103 Defaulted Mortgage Loan ...........................................S-205 Defeasance ........................................................S-103 Defeasance Collateral ..............................................S-93 Defect ............................................................S-192 Depositaries ......................................................S-209 Determination Date ................................................S-217 Deutsche Bank .....................................................S-133 Deutsche/Scudder ..................................................S-133 Discount Rate .....................................................S-228 Distributable Certificate Interest ................................S-224 Distribution Account ..............................................S-218 Distribution Date .................................................S-217 Distribution Date Statement .......................................S-235 S-260 PAGE DSC Ratio .........................................................S-100 DSCR ..............................................................S-100 DTC ...............................................................S-209 Due Date ...........................................................S-92 ERISA .............................................................S-254 Euroclear Operator ................................................S-209 Euroclear Participants ............................................S-211 Euroclear System ..................................................S-209 Excess Cash Flow ...................................................S-92 Excluded Plan .....................................................S-256 Exemption .........................................................S-255 Exemptions ........................................................S-255 Extra Space Self Storage Portfolio #3 Loans .......................S-159 Fall Creek Harbour Shopping Center Loan ............................S-96 Final Recovery Determination ......................................S-236 Fiscal Agent ......................................................S-242 Fitch .............................................................S-255 Form 8-K ..........................................................S-193 Gain-on-Sale Reserve Account ......................................S-218 GMAC Servicing Standard ...........................................S-195 Greenwich Capital .................................................S-255 Happy Valley Towne Center Loan ....................................S-150 Home Market Foods Loan .............................................S-96 Indirect Participants .............................................S-210 Intercreditor Agreement ............................................S-97 Intercreditor Agreements ...........................................S-97 Interest Accrual Period ...........................................S-216 Interest Reserve Account ..........................................S-218 Interest Reserve Amount ...........................................S-218 Interest Reserve Loans ............................................S-218 IRS ...............................................................S-253 L ( ) .............................................................S-103 Lerner ............................................................S-139 Liquidation Fee ...................................................S-201 Loan Group 1 .......................................................S-90 Loan Group 1 Principal Distribution Amount ........................S-225 Loan Group 2 .......................................................S-90 Loan Group 2 Principal Distribution Amount ........................S-225 Loan Groups ........................................................S-90 Loan Pair .........................................................S-194 Loan per Sq. Ft., Unit, Pad or Room ...............................S-102 Lockout ...........................................................S-103 Lockout Period ....................................................S-103 Lowe's ............................................................S-150 LTV at ARD or Maturity ............................................S-102 Maguire ...........................................................S-147 Majority Subordinate Certificateholder ............................S-241 Master Servicer ...................................................S-195 Master Servicing Fee ..............................................S-200 Master Servicing Fee Rate .........................................S-200 Maturity Date LTV Ratio ...........................................S-102 Mercantile ........................................................S-153 Mercantile Bank & Trust Building Loan .............................S-153 Merrill Lynch .....................................................S-255 Mezz Cap Companion Loans ...........................................S-97 Mezz Cap Intercreditor Agreement ...................................S-97 Mezz Cap Intercreditor Agreements" .................................S-97 Mezz Cap Loans .....................................................S-97 Mezz Cap Whole Loans ...............................................S-97 Moody's ...........................................................S-255 Mortgage ...........................................................S-90 Mortgage Deferred Interest ........................................S-213 Mortgage File .....................................................S-187 Mortgage Loan Purchase Agreement ..................................S-186 Mortgage Loans .......................................S-90, S-186, S-200 Mortgage Note ......................................................S-90 Mortgage Pool ......................................................S-90 Mortgage Rate ......................................................S-91 Mortgaged Property .................................................S-90 NA ................................................................S-103 NAV ...............................................................S-103 Net Aggregate Prepayment Interest Shortfall .......................S-224 Net Cash Flow .....................................................S-101 Net Mortgage Rate .................................................S-216 NEW ...............................................................S-147 Newmark ...........................................................S-140 Non-Offered Certificates ..........................................S-209 Nonrecoverable P&I Advance ........................................S-232 Notional Amount ...................................................S-212 NRSRO .............................................................S-255 O ( ) .............................................................S-103 Occupancy Percentage ..............................................S-103 Offered Certificates ..............................................S-209 OID Regulations ...................................................S-253 One & Two International Place Intercreditor Agreement ..............S-97 One & Two International Place Loan .................................S-96 One & Two International Place Mortgage ............................S-133 One & Two International Place Note ................................S-133 One & Two International Place Pari Passu Companion Loan ............S-97 One & Two International Place Pari Passu Note .....................S-133 One & Two International Place Restoration .........................S-134 S-261 PAGE One & Two International Place Whole Loan ...........................S-97 Open Period .......................................................S-103 Option Price ......................................................S-206 Original Term to Maturity .........................................S-103 Pari Passu Companion Loans .........................................S-97 Pari Passu Loan Intercreditor Agreements ...........................S-97 Pari Passu Loans ...................................................S-97 Park Place II Loan ................................................S-147 Participants ......................................................S-209 Periodic Payments ..................................................S-92 Plan ..............................................................S-254 Pooling and Servicing Agreement ...................................S-209 Prepayment Interest Excess ........................................S-200 Prepayment Interest Shortfall .....................................S-200 Prepayment Premiums ...............................................S-227 Primary Collateral ................................................S-193 Principal Distribution Amount .....................................S-225 PRISA .............................................................S-133 Privileged Person .................................................S-239 Prudential ........................................................S-135 Prudential Corporate Transaction ..................................S-135 PTE ...............................................................S-255 Purchase Option ...................................................S-206 Purchase Price ....................................................S-188 P&I Advance .......................................................S-231 Qualified Appraiser ...............................................S-234 Qualified Substitute Mortgage Loan ................................S-189 Rated Final Distribution Date ................................S-2, S-240 Rating Agencies ...................................................S-258 Realized Losses ...................................................S-230 Reimbursement Rate ................................................S-233 REIT ..............................................................S-254 Related Proceeds ..................................................S-232 Remaining Amortization Term .......................................S-103 Remaining Term to Maturity ........................................S-103 REMIC Administrator ...............................................S-242 REMIC I .....................................................S-25, S-253 REMIC II ....................................................S-25, S-253 REMIC Regular Certificates ........................................S-209 REMIC Regulations .................................................S-253 REMIC Residual Certificates .......................................S-209 Rental Property ...................................................S-101 REO Extension .....................................................S-206 REO Mortgage Loan .................................................S-227 REO Property ......................................................S-198 Replacement Reserve ...............................................S-103 Required Appraisal Date ...........................................S-234 Required Appraisal Loan ...........................................S-234 Restricted Group ..................................................S-255 Restricted Servicer Reports .......................................S-238 Rules .............................................................S-210 Scenario ..........................................................S-248 Scheduled Payment .................................................S-226 Securities Act ....................................................S-209 Sequential Pay Certificates .......................................S-209 Servicing Fees ....................................................S-200 Servicing Standard ................................................S-195 Servicing Transfer Event ..........................................S-198 Showcase ..........................................................S-165 Similar Law .......................................................S-254 SMMEA ..............................................................S-26 SMMEA Certificates ................................................S-257 Special Servicer ..................................................S-196 Special Servicing Fee .............................................S-201 Special Servicing Fee Rate ........................................S-201 Specially Serviced Mortgage Loans .................................S-198 Specially Serviced Trust Fund Assets ..............................S-198 Sport Chalet ......................................................S-147 Stated Principal Balance ..........................................S-216 Strategic Insight .................................................S-156 Subordinate Certificates ..........................................S-209 Subordinate Companion Loans ........................................S-97 Substitution Shortfall Amount .....................................S-188 S&P ...............................................................S-255 Table Assumptions ..........................................S-240, S-248 Terms and Conditions ..............................................S-211 Thirteen ..........................................................S-139 TI/LC Reserve .....................................................S-104 Transfer ..........................................................S-135 Trust Fund ........................................................S-209 Trustee ...........................................................S-242 Trustee Fee .......................................................S-242 Underwriter .......................................................S-255 Underwriters ......................................................S-257 Underwriting Agreement ............................................S-257 Underwritten Replacement Reserves .................................S-102 Unrestricted Servicer Reports .....................................S-238 Venture ...........................................................S-135 Vestar ............................................................S-150 Voting Rights .....................................................S-240 WA ................................................................S-102 Wachovia .............................................S-91, S-186, S-194 Wachovia Securities ...............................................S-255 Wachovia Servicing Standard .......................................S-194 Weighted Average Net Mortgage Rate ................................S-216 weighted averages .................................................S-102 Whole Loan .........................................................S-97 Whole Loans ........................................................S-97 Workout Fee .......................................................S-201 S-262 PAGE Workout-Delayed Reimbursement Amount ..............................S-232 Year Built ........................................................S-102 Yield Maintenance Charges .........................................S-227 YM ( ) ............................................................S-103 S-263 [THIS PAGE INTENTIONALLY LEFT BLANK.]
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C18 ANNEX A-1 CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES MORTGAGE LOAN LOAN GROUP NUMBER NUMBER PROPERTY NAME ADDRESS CITY - ------------------------------------------------------------------------------------------------------------------------------------ 1 1 One & Two International Place(1) 90-150 Oliver Street Boston 2 1 450 West 33rd Street(1) 450 West 33rd Street New York 3 1 Kadima Medical Office Pool(2) Various Various 3.1 Morristown Professional Building 95 Madison Avenue Morristown 3.2 2300 Westchester Avenue Building 2300 Westchester Avenue Bronx 3.3 Davis Square Center 20-40 Holland Street Somerville 3.4 Emerson Medical Complex 4545-4555 Emerson Street Jacksonville 3.5 Kadima Medical Building - Minot, ND 400 Burdick Expressway East Minot 3.6 Verona Professional Building 799 Bloomfield Avenue Verona 3.7 South Hill Medical Center 525 Alexandria Pike Southgate 3.8 Orlando IV Clinic 7300 Sand Lake Commons Boulevard Orlando 3.9 Orlando III Clinic 3400 Quadrangle Boulevard Orlando 3.10 Orlando II Clinic 300 North Lake Destiny Road Maitland 3.11 Park Meadows Clinic 8080 East Park Meadows Drive Lone Tree 3.12 Orlando I Clinic 200 Park Place Boulevard Kissimmee 3.13 Tampa II Clinic 12210 Bruce B. Downs Boulevard Tampa 3.14 Regency Square Clinic 9090 Regency Square North Jacksonville 3.15 Tampa I Clinic 220 Grand Regency Boulevard Brandon 3.16 Germantown Clinic 4815 Riverdale Road Memphis 3.17 San Jose Clinic 11261 San Jose Boulevard Jacksonville 4 1 Park Place II 2957-3041 and 3121 Michelson Drive Irvine 5 1 Happy Valley Towne Center 2400 West Happy Valley Road Phoenix 6 1 Mercantile Bank & Trust Building 2 Hopkins Plaza Baltimore 7 1 590 Fifth Avenue 590 Fifth Avenue New York 8 1 Cypress Lake at Stonebriar 8404 Warren Parkway Frisco 9 1 Casa Paloma Shopping Center 7131 West Ray Road Chandler 10 1 Copaco Center 335 Cottage Grove Road Bloomfield 11 1 2700 Broadway 2700 Broadway New York 12 1 Fullerton Towers 1400 and 1440 North Harbor Boulevard Fullerton 13 1 Courthouse Place 2000 North 14th Street Arlington 14 1 Kensington Place 1580 Geary Road Walnut Creek 15 1 Springtown Shopping Center 2643 Shillington Road Reading 16 1 Resort at University Park Apartments 4675 Alta Point Colorado Springs 17 1 Prospect Plaza 45 Kane Street West Hartford 18 2 La Serena Apartments 727 South Lyon Street Santa Ana 19 1 Sandpiper Village Apartments 999 Marshall Road Vacaville 20 1 Plaza at Wellington Green 2205-2495 State Road 7 Wellington 21 1 Home Market Foods 140 Morgan Drive Norwood 22 1 Serena Shores Apartments 4101 East Baseline Road Gilbert 23 1 Topanga and Victory 6325 & 6355 Topanga Canyon Boulevard Woodland Hills 24 1 Embassy Suites - Orlando, FL 191 East Pine Street Orlando 25 1 One Carlsbad Research Center 2382 and 2386 Faraday Avenue Carlsbad 26 1 Heritage Plaza Shopping Center 700-800 Army Trail Road Carol Stream 27 1 Bear Creek Village Shopping Center 36004-36164 Hidden Springs Road Wildomar 28 2 Flaherty Farm Apartments Flaherty Farms Avenue Wake Forest 29 1 The Summit 4101 Lake Boone Trail Raleigh 30 1 1369 Broadway 1369 Broadway New York 31 1 Sterling Square Apartments 1900 Windsor Hill Drive Matthews 32 2 The Pointes of Marietta 1275 Cunningham Road Marietta 33 1 Taylors Crossing 1 Pinecroft Drive Taylors 34 1 1900 Building 1900 West Commercial Boulevard Fort Lauderdale 35 1 Extra Space Self Storage #3 - Atlanta, GA 600 Virginia Avenue Atlanta 36 1 Hilton Garden Inn - Dania Beach, FL 180 SW 18th Avenue Dania Beach 37 1 Market Square - Phase II 13711 South Tamiami Trail Fort Myers 38 2 Amberview Apartments 32115 - 105th Place SE Auburn 39 1 Extra Space Self Storage #3 - Orlando (South John Young Parkway), FL 13125 South John Young Parkway Orlando 40 2 Autumn Wood Apartments 1000 Autumn Wood Drive Hoover 41 1 Fall Creek Harbour Shopping Center 10142 Brooks School Road Fishers 42 1 Sherwood Ridges Apartments 3736 Kings Court Winston-Salem 43 2 Celebration Park Apartments 32205 11th Place South Federal Way 44 1 Extra Space Self Storage #3 - Orlando (Metrowest Boulevard), FL 5603 Metrowest Boulevard Orlando 45 1 Courtyard by Marriott - Coral Springs, FL 620 North University Drive Coral Springs 46 2 Westbrook Manor Apartments 14735 W Plaza Omaha 47 1 The Madison 400 Washington Street Reading 48 2 The Quad Apartments 742 North McMillan Avenue Wilmington 49 1 Lowe's Home Improvement - Jonesboro, AR 2111 Fair Park Boulevard Jonesboro 50 1 Cuestas Apartments 2800 North Roadrunner Parkway Las Cruces 51 1 Cattle Ridge Medical Center 3333 Cattlemen Road Sarasota 52 1 Walgreens - Staten Island, NY 1551 Richmond Avenue Staten Island 53 1 Friarsgate Plaza Shopping Center 7949 Broad River Road Irmo 54 1 Albemarle Square Shopping Center 9009 Albermarle Road Charlotte 55 1 PNC Bank & Mariott Ground Lease 762 & 782 West Lancaster Avenue Wayne 56 1 Extra Space Self Storage #3 - Orlando (Lake Underhill Road), FL 11971 Lake Underhill Road Orlando 57 2 Sage Canyon 6134 4th Street NW Albuquerque 58 1 Walgreens - Glen Allen, VA 9801 Brook Road Glen Allen 59 2 Pines on Pelham 260 Pelham Road Greenville 60 1 Fairfield Inn Market Center 2110 Market Center Boulevard Dallas 61 1 Extra Space Self Storage #3 - Ocoee, FL 1101 Marshall Farms Road Ocoee 62 1 Walgreens - Shawnee Mission, KS 11021 Shawnee Mission Parkway Shawnee Mission 63 1 Kelly Road Self Storage 11181 Kelly Road Fort Myers 64 1 King's Plaza 7640-7690 Nob Hill Road Tamarac 65 2 Broadway Towers Apartments 230 East Broadway Salt Lake City 66 1 Walgreens - Georgetown, TX 3204 Williams Drive Georgetown 67 1 Walgreens - Pineville, LA 3400 Military Highway Pineville 68 1 Walgreens - Sidney, OH 1400 Michigan Street Sidney 69 1 Piggly Wiggly - Appleton, WI 520 East Northland Avenue Appleton 70 1 Massillon Marketplace 101 Massillon Marketplace Drive SW Massillon 71 1 Metro Storage - Phase II 23325 Van Born Road Taylor 72 1 Wachovia Bank Ground Lease Levittown Parkway and U.S. Route 13 Tullytown Borough MORTGAGE LOAN CROSS COLLATERALIZED AND CROSS GENERAL PROPERTY SPECIFIC PROPERTY NUMBER STATE ZIP CODE DEFAULTED LOAN FLAG LOAN ORIGINATOR TYPE TYPE - ----------------------------------------------------------------------------------------------------------------------------------- 1 MA 02110 Wachovia Office CBD 2 NY 10001 Wachovia Office CBD 3 Various Various Wachovia Office Medical 3.1 NJ 07960 Office Medical 3.2 NY 10462 Office Medical 3.3 MA 02144 Office Medical 3.4 FL 32207 Office Medical 3.5 ND 58701 Office Medical 3.6 NJ 07044 Office Medical 3.7 KY 41071 Office Medical 3.8 FL 32819 Office Medical 3.9 FL 32817 Office Medical 3.10 FL 32751 Office Medical 3.11 CO 80124 Office Medical 3.12 FL 34741 Office Medical 3.13 FL 33612 Office Medical 3.14 FL 32211 Office Medical 3.15 FL 33510 Office Medical 3.16 TN 38141 Office Medical 3.17 FL 32223 Office Medical 4 CA 92612 Wachovia Mixed Use Office/Retail 5 AZ 85027 Wachovia Retail Anchored 6 MD 21201 Wachovia Office CBD 7 NY 10036 Wachovia Office CBD 8 TX 75034 Wachovia Multifamily Conventional 9 AZ 85226 Wachovia Retail Anchored 10 CT 06002 Wachovia Retail Anchored 11 NY 10025 Wachovia Retail Anchored 12 CA 92835 Wachovia Office Suburban 13 VA 22201 Wachovia Office Suburban 14 CA 94596 Wachovia Multifamily Independent Living 15 PA 19608 Wachovia Retail Anchored 16 CO 80918 Wachovia Multifamily Conventional 17 CT 06119 Wachovia Retail Anchored 18 CA 92705 Wachovia Multifamily Conventional 19 CA 95687 Wachovia Multifamily Conventional 20 FL 33414 Wachovia Retail Anchored 21 MA 02062 Wachovia Industrial Flex 22 AZ 85234 Wachovia Multifamily Conventional 23 CA 91367 Wachovia Office Suburban 24 FL 32801 Wachovia Hospitality Full Service 25 CA 92008 Wachovia Office Suburban 26 IL 60188 Wachovia Retail Anchored 27 CA 92595 Wachovia Retail Anchored 28 NC 28587 Wachovia Multifamily Conventional 29 NC 27607 Wachovia Office Suburban 30 NY 10018 Wachovia Office CBD 31 NC 28105 Wachovia Multifamily Conventional 32 GA 30008 Wachovia Multifamily Conventional 33 SC 29687 Wachovia Multifamily Conventional 34 FL 33309 Wachovia Office Suburban 35 GA 30306 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 36 FL 33004 Wachovia Hospitality Limited Service 37 FL 33912 Wachovia Retail Shadow Anchored 38 WA 98092 Wachovia Multifamily Conventional 39 FL 32837 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 40 AL 35216 Wachovia Multifamily Conventional 41 IN 46038 Wachovia Mixed Use Retail/Office 42 NC 27106 Wachovia Multifamily Conventional 43 WA 98003 Wachovia Multifamily Conventional 44 FL 32811 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 45 FL 33071 Wachovia Hospitality Limited Service 46 NE 68137 Wachovia Multifamily Conventional 47 PA 19601 Wachovia Office Suburban 48 NC 28403 Wachovia Multifamily Conventional 49 AR 72401 Wachovia Retail Anchored 50 NM 88011 Wachovia Multifamily Conventional 51 FL 34232 Wachovia Office Medical 52 NY 10314 Wachovia Retail Anchored 53 SC 29063 Wachovia Retail Anchored 54 NC 28205 Wachovia Retail Anchored 55 PA 19087 Wachovia Mixed Use Retail/Land 56 FL 32825 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 57 NM 87107 Wachovia Multifamily Conventional 58 VA 23059 Wachovia Retail Anchored 59 SC 29615 Wachovia Multifamily Conventional 60 TX 75207 Wachovia Hospitality Limited Service 61 FL 34761 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 62 KS 66203 Wachovia Retail Anchored 63 FL 33908 Wachovia Self Storage Self Storage 64 FL 33321 Wachovia Retail Unanchored 65 UT 84111 Wachovia Multifamily Conventional 66 TX 78628 Wachovia Retail Anchored 67 LA 71360 Wachovia Retail Anchored 68 OH 45365 Wachovia Retail Anchored 69 WI 54911 Wachovia Retail Anchored 70 OH 44647 Wachovia Retail Shadow Anchored 71 MI 48180 Wachovia Self Storage Self Storage 72 PA 19055 Wachovia Land Retail MORTGAGE CUT-OFF DATE % OF AGGREGATE % OF AGGREGATE % OF AGGREGATE LOAN ORIGINAL LOAN LOAN BALANCE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE ORIGINATION FIRST PAY NUMBER BALANCE ($) ($) BALANCE GROUP 1 BALANCE GROUP 2 BALANCE DATE DATE - ---------------------------------------------------------------------------------------------------------------------------------- 1 216,000,000.00 216,000,000.00 15.37% 16.41% 01/10/05 02/11/05 2 132,500,000.00 132,500,000.00 9.43% 10.07% 03/03/05 04/11/05 3 127,500,000.00 127,500,000.00 9.07% 9.69% 03/15/05 05/11/05 3.1 25,044,642.86 3.2 23,902,963.76 3.3 23,223,214.29 3.4 9,256,467.70 3.5 8,988,970.24 3.6 7,249,942.85 3.7 4,705,577.94 3.8 3,733,928.57 3.9 3,460,714.29 3.10 3,324,107.14 3.11 3,096,428.57 3.12 2,367,857.14 3.13 2,138,390.07 3.14 1,956,243.76 3.15 1,934,172.78 3.16 1,639,285.71 3.17 1,477,092.33 4 100,000,000.00 100,000,000.00 7.12% 7.60% 03/15/05 05/11/05 5 56,000,000.00 56,000,000.00 3.98% 4.25% 04/13/05 06/11/05 6 41,000,000.00 41,000,000.00 2.92% 3.11% 12/13/04 02/11/05 7 40,000,000.00 40,000,000.00 2.85% 3.04% 03/01/05 04/11/05 8 29,770,000.00 29,770,000.00 2.12% 2.26% 04/20/05 06/11/05 9 29,050,000.00 29,050,000.00 2.07% 2.21% 03/10/05 04/11/05 10 29,000,000.00 29,000,000.00 2.06% 2.20% 03/11/05 04/11/05 11 27,500,000.00 27,500,000.00 1.96% 2.09% 04/15/05 06/11/05 12 26,800,000.00 26,800,000.00 1.91% 2.04% 03/02/05 04/11/05 13 26,000,000.00 26,000,000.00 1.85% 1.98% 03/18/05 05/11/05 14 24,975,000.00 24,975,000.00 1.78% 1.90% 04/20/05 06/11/05 15 19,760,000.00 19,760,000.00 1.41% 1.50% 04/05/05 05/11/05 16 19,300,000.00 19,300,000.00 1.37% 1.47% 04/06/05 05/11/05 17 18,800,000.00 18,800,000.00 1.34% 1.43% 04/01/05 05/11/05 18 18,000,000.00 18,000,000.00 1.28% 20.23% 02/24/05 04/11/05 19 18,000,000.00 18,000,000.00 1.28% 1.37% 04/14/05 06/11/05 20 16,500,000.00 16,500,000.00 1.17% 1.25% 02/16/05 04/11/05 21 16,125,000.00 16,102,087.23 1.15% 1.22% 03/29/05 05/11/05 22 16,100,000.00 16,100,000.00 1.15% 1.22% 03/31/05 05/11/05 23 16,000,000.00 16,000,000.00 1.14% 1.22% 03/02/05 04/11/05 24 16,000,000.00 15,976,876.23 1.14% 1.21% 04/04/05 05/11/05 25 15,400,000.00 15,400,000.00 1.10% 1.17% 03/23/05 05/11/05 26 15,242,500.00 15,242,500.00 1.08% 1.16% 03/18/05 05/11/05 27 15,065,000.00 15,065,000.00 1.07% 1.14% 03/01/05 04/11/05 28 13,500,000.00 13,500,000.00 0.96% 15.18% 04/15/05 06/11/05 29 12,500,000.00 12,500,000.00 0.89% 0.95% 04/04/05 05/11/05 30 12,000,000.00 12,000,000.00 0.85% 0.91% 04/20/05 06/11/05 31 11,700,000.00 11,700,000.00 0.83% 0.89% 03/30/05 05/11/05 32 10,800,000.00 10,787,772.89 0.77% 12.13% 04/01/05 05/11/05 33 10,750,000.00 10,750,000.00 0.76% 0.82% 03/01/05 04/11/05 34 10,000,000.00 9,978,428.16 0.71% 0.76% 02/23/05 04/11/05 35 9,600,000.00 9,600,000.00 0.68% 0.73% 03/21/05 05/11/05 36 8,750,000.00 8,738,150.09 0.62% 0.66% 03/18/05 05/11/05 37 8,470,000.00 8,470,000.00 0.60% 0.64% 04/14/05 06/11/05 38 8,300,000.00 8,300,000.00 0.59% 9.33% 03/31/05 05/11/05 39 8,200,000.00 8,200,000.00 0.58% 0.62% 03/21/05 05/11/05 40 7,700,000.00 7,700,000.00 0.55% 8.66% 03/03/05 04/11/05 41 7,500,000.00 7,500,000.00 0.53% 0.57% 02/17/05 04/11/05 42 7,500,000.00 7,500,000.00 0.53% 0.57% 03/17/05 05/11/05 43 7,000,000.00 7,000,000.00 0.50% 7.87% 04/07/05 05/11/05 44 6,400,000.00 6,400,000.00 0.46% 0.49% 03/21/05 05/11/05 45 6,250,000.00 6,241,322.74 0.44% 0.47% 03/31/05 05/11/05 46 6,200,000.00 6,200,000.00 0.44% 6.97% 03/23/05 05/11/05 47 6,000,000.00 6,000,000.00 0.43% 0.46% 04/20/05 06/11/05 48 6,000,000.00 6,000,000.00 0.43% 6.74% 04/12/05 06/11/05 49 5,857,500.00 5,857,500.00 0.42% 0.44% 01/14/05 05/11/05 50 5,680,000.00 5,680,000.00 0.40% 0.43% 03/31/05 05/11/05 51 5,600,000.00 5,600,000.00 0.40% 0.43% 04/20/05 06/11/05 52 5,400,000.00 5,400,000.00 0.38% 0.41% 04/20/05 06/11/05 53 5,388,000.00 5,388,000.00 0.38% 0.41% 04/04/05 05/11/05 54 5,000,000.00 5,000,000.00 0.36% 0.38% 04/04/05 05/11/05 55 5,000,000.00 4,981,825.33 0.35% 0.38% 02/11/05 03/11/05 56 4,600,000.00 4,600,000.00 0.33% 0.35% 03/21/05 05/11/05 57 4,320,000.00 4,320,000.00 0.31% 4.86% 03/31/05 05/11/05 58 4,200,000.00 4,191,243.18 0.30% 0.32% 02/18/05 04/11/05 59 4,150,000.00 4,150,000.00 0.30% 4.67% 03/31/05 05/11/05 60 4,000,000.00 4,000,000.00 0.28% 0.30% 03/18/05 05/11/05 61 3,750,000.00 3,750,000.00 0.27% 0.28% 03/21/05 05/11/05 62 3,600,000.00 3,600,000.00 0.26% 0.27% 04/20/05 06/11/05 63 3,550,000.00 3,539,915.76 0.25% 0.27% 02/24/05 04/11/05 64 3,200,000.00 3,193,455.82 0.23% 0.24% 02/16/05 04/11/05 65 3,000,000.00 3,000,000.00 0.21% 3.37% 04/20/05 06/11/05 66 3,000,000.00 3,000,000.00 0.21% 0.23% 04/20/05 06/11/05 67 2,923,000.00 2,923,000.00 0.21% 0.22% 01/13/05 03/11/05 68 2,899,000.00 2,899,000.00 0.21% 0.22% 01/31/05 03/11/05 69 2,500,000.00 2,497,334.90 0.18% 0.19% 04/08/05 05/11/05 70 2,500,000.00 2,497,263.60 0.18% 0.19% 03/29/05 05/11/05 71 2,400,000.00 2,397,564.72 0.17% 0.18% 04/08/05 05/11/05 72 1,500,000.00 1,498,301.79 0.11% 0.11% 03/24/05 05/11/05 INTEREST ORIGINAL REMAINING MORTGAGE LOAN INTEREST ACCURAL TERM TO TERM TO LOAN MATURITY DATE MORTGAGE ADMINISTRATIVE ACCRUAL METHOD MATURITY OR MATURITY OR NUMBER OR ARD RATE COST RATE METHOD DURING IO ARD (MOS.) ARD (MOS.) - --------------------------------------------------------------------------------------------------------------------------------- 1 01/11/15 5.2050% 0.04155% Actual/360 Actual/360 120 116 2 03/11/15 5.1000% 0.04155% Actual/360 Actual/360 120 118 3 04/11/15 5.2724% 0.04155% Actual/360 Actual/360 120 119 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 4 04/11/12 5.3900% 0.04155% Actual/360 Actual/360 84 83 5 05/11/15 5.7900% 0.04155% Actual/360 Actual/360 120 120 6 01/11/12 5.2600% 0.04155% Actual/360 Actual/360 84 80 7 03/11/15 5.3900% 0.04155% Actual/360 Actual/360 120 118 8 05/11/10 5.4200% 0.04155% Actual/360 Actual/360 60 60 9 03/11/15 5.6300% 0.04155% Actual/360 Actual/360 120 118 10 03/11/15 5.4000% 0.04155% Actual/360 Actual/360 120 118 11 05/11/15 5.4100% 0.04155% Actual/360 Actual/360 120 120 12 03/11/15 5.1300% 0.04155% Actual/360 Actual/360 120 118 13 04/11/15 5.5000% 0.04155% Actual/360 Actual/360 120 119 14 05/11/15 5.6600% 0.04155% Actual/360 120 120 15 04/11/15 5.5900% 0.04155% Actual/360 Actual/360 120 119 16 04/11/15 5.4900% 0.04155% Actual/360 Actual/360 120 119 17 04/11/15 5.2200% 0.04155% Actual/360 Actual/360 120 119 18 03/11/10 5.0000% 0.04155% Actual/360 Actual/360 60 58 19 05/11/15 5.0900% 0.04155% Actual/360 Actual/360 120 120 20 03/11/15 5.3900% 0.04155% Actual/360 Actual/360 120 118 21 04/11/15 6.1000% 0.04155% Actual/360 120 119 22 04/11/15 4.9500% 0.04155% Actual/360 Actual/360 120 119 23 03/11/15 5.1300% 0.07155% Actual/360 Actual/360 120 118 24 04/11/15 5.9900% 0.04155% Actual/360 120 119 25 04/11/10 5.3500% 0.04155% Actual/360 Actual/360 60 59 26 04/11/12 4.8500% 0.04155% Actual/360 Actual/360 84 83 27 03/11/12 4.8500% 0.04155% Actual/360 Actual/360 84 82 28 05/11/15 5.3300% 0.04155% Actual/360 120 120 29 04/11/15 5.3800% 0.04155% Actual/360 Actual/360 120 119 30 05/11/15 5.7200% 0.04155% Actual/360 Actual/360 120 120 31 04/11/12 5.3300% 0.04155% Actual/360 Actual/360 84 83 32 04/11/15 5.3200% 0.04155% Actual/360 120 119 33 03/11/10 5.0300% 0.04155% Actual/360 Actual/360 60 58 34 03/11/10 5.2400% 0.04155% Actual/360 60 58 35 04/11/10 4.9500% 0.04155% Actual/360 Actual/360 60 59 36 04/11/15 6.4100% 0.04155% Actual/360 120 119 37 05/11/15 5.4100% 0.04155% Actual/360 Actual/360 120 120 38 04/11/10 5.4100% 0.04155% Actual/360 Actual/360 60 59 39 04/11/10 4.9500% 0.04155% Actual/360 Actual/360 60 59 40 03/11/12 5.5300% 0.04155% Actual/360 Actual/360 84 82 41 03/11/15 5.5500% 0.04155% Actual/360 Actual/360 120 118 42 04/11/15 5.3600% 0.04155% Actual/360 Actual/360 120 119 43 04/11/15 5.3200% 0.04155% Actual/360 Actual/360 120 119 44 04/11/10 4.9500% 0.04155% Actual/360 Actual/360 60 59 45 04/11/15 6.2500% 0.04155% Actual/360 120 119 46 04/11/15 5.4000% 0.08155% Actual/360 Actual/360 120 119 47 05/11/15 5.9400% 0.04155% Actual/360 120 120 48 05/11/15 5.1900% 0.04155% Actual/360 Actual/360 120 120 49 04/11/10 4.8700% 0.04155% Actual/360 Actual/360 60 59 50 04/11/15 5.3100% 0.04155% Actual/360 Actual/360 120 119 51 05/11/15 5.9200% 0.04155% Actual/360 120 120 52 05/11/10 5.4500% 0.04155% Actual/360 60 60 53 04/11/15 5.4600% 0.04155% Actual/360 Actual/360 120 119 54 04/11/15 5.4600% 0.04155% Actual/360 Actual/360 120 119 55 02/11/15 5.2000% 0.04155% Actual/360 120 117 56 04/11/10 4.9500% 0.04155% Actual/360 Actual/360 60 59 57 04/11/15 5.1600% 0.04155% Actual/360 Actual/360 120 119 58 03/11/15 5.4000% 0.04155% Actual/360 120 118 59 04/11/15 5.0500% 0.04155% Actual/360 Actual/360 120 119 60 04/11/10 5.8400% 0.04155% Actual/360 Actual/360 60 59 61 04/11/10 4.9500% 0.04155% Actual/360 Actual/360 60 59 62 05/11/10 5.4500% 0.04155% Actual/360 60 60 63 03/11/15 5.7600% 0.04155% Actual/360 120 118 64 03/11/15 5.4900% 0.04155% Actual/360 120 118 65 05/11/10 5.7900% 0.04155% Actual/360 60 60 66 05/11/10 5.4500% 0.04155% Actual/360 60 60 67 02/11/15 4.8500% 0.04155% Actual/360 Actual/360 120 117 68 02/11/15 4.8900% 0.04155% Actual/360 Actual/360 120 117 69 04/11/15 5.6400% 0.04155% Actual/360 120 119 70 04/11/15 5.5000% 0.04155% Actual/360 120 119 71 04/11/15 5.9000% 0.04155% Actual/360 120 119 72 04/11/15 5.3200% 0.04155% Actual/360 120 119 MORTGAGE REMAINING ORIGINAL REMAINING MATURITY DATE OR LOAN IO PERIOD AMORT TERM AMORT TERM MONTHLY P&I ARD BALLOON ARD PREPAYMENT NUMBER (MOS.) (MOS.) (MOS.) PAYMENTS ($) BALANCE ($) LOAN PROVISIONS APPRAISED VALUE ($) - ------------------------------------------------------------------------------------------------------------------------------------ 1 20 360 360 1,186,746.76 187,848,579.58 N L(28),D(88),O(4) 700,000,000 2 34 324 324 753,921.17 114,058,938.94 N L(26),D(90),O(4) 385,000,000 3 35 324 324 738,656.71 110,182,873.84 N L(25),D(91),O(4) 170,000,000 3.1 32,580,012 3.2 27,644,703 3.3 27,536,310 3.4 12,251,669 3.5 13,038,635 3.6 9,951,774 3.7 8,419,003 3.8 5,593,274 3.9 5,483,363 3.10 6,049,419 3.11 4,268,431 3.12 4,255,946 3.13 2,934,083 3.14 2,871,428 3.15 2,671,246 3.16 2,281,368 3.17 2,169,336 4 35 360 360 560,906.73 94,370,328.38 N L(25),D(54),O(5) 125,700,000 5 36 360 360 328,225.17 50,393,569.58 N L(24),D(92),O(4) 77,100,000 6 20 360 360 226,657.53 37,957,079.22 N L(36),D(45),O(3) 53,000,000 7 46 360 360 224,362.69 36,423,457.48 N L(26),D(91),O(3) 53,900,000 8 60 IO IO IO 29,770,000.00 N L(24),D(33),O(3) 38,200,000 9 118 IO IO IO 29,050,000.00 Y L(26),YM1%(91),O(3) 41,600,000 10 46 360 360 162,843.93 26,411,649.41 Y L(26),D(57),O(37) 42,000,000 11 120 IO IO IO 27,500,000.00 Y L(24),D(93),O(3) 30,600,000 12 46 360 360 146,004.97 24,290,601.04 N L(26),D(91),O(3) 35,350,000 13 35 360 360 147,625.14 23,259,059.19 N L(25),D(92),O(3) 32,500,000 14 360 360 144,322.56 20,966,879.18 N L(24),D(93),O(3) 33,150,000 15 23 360 360 113,313.44 17,348,405.10 N L(25),D(91),O(4) 24,800,000 16 59 360 360 109,462.22 17,928,218.08 N L(25),D(92),O(3) 27,850,000 17 35 360 360 103,465.24 16,719,871.47 N L(25),D(91),O(4) 23,900,000 18 10 360 360 96,627.89 16,910,514.00 N L(12),YM2%(45),O(3) 25,000,000 19 36 360 360 97,620.38 15,964,467.78 N L(24),D(93),O(3) 22,600,000 20 10 360 360 92,549.61 14,086,636.56 N L(48),D(68),O(4) 21,350,000 21 300 299 104,881.52 12,528,817.96 N L(48),D(69),O(3) 21,500,000 22 35 360 360 85,936.97 14,235,362.94 N L(48),D(69),O(3) 22,900,000 23 118 IO IO IO 16,000,000.00 N L(26),D(87),O(7) 32,400,000 24 300 299 102,990.44 12,385,806.46 N L(25),D(92),O(3) 24,000,000 25 35 360 360 85,995.71 14,985,798.21 N L(25),D(32),O(3) 21,900,000 26 83 IO IO IO 15,242,500.00 N L(35),YM1%(45),O(4) 21,700,000 27 82 IO IO IO 15,065,000.00 N L(35),YM1%(45),O(4) 23,500,000 28 300 300 81,536.86 10,215,073.69 N L(24),D(92),O(4) 17,600,000 29 59 360 360 70,035.37 11,593,246.36 N L(49),YM1%(61),O(10) 21,100,000 30 24 360 360 69,800.22 10,568,391.26 N L(24),D(93),O(3) 15,700,000 31 23 360 360 65,188.79 10,845,183.90 N L(25),D(56),O(3) 15,255,000 32 360 359 60,107.11 8,970,819.99 N L(48),D(65),O(7) 13,500,000 33 10 360 360 57,905.58 10,102,945.49 N L(36),D(17),O(7) 17,000,000 34 360 358 55,158.45 9,255,910.35 N L(26),D(31),O(3) 13,350,000 35 59 IO IO IO 9,600,000.00 N L(25),D(32),O(3) 11,750,000 36 300 299 58,589.49 6,868,640.42 N L(48), D(68), O(4) 14,600,000 37 120 IO IO IO 8,470,000.00 Y L(24),YM1%(93),O(3) 12,200,000 38 23 360 360 46,658.88 7,961,122.37 N L(25),YM2%(31),O(4) 10,900,000 39 59 IO IO IO 8,200,000.00 N L(25),D(32),O(3) 10,000,000 40 16 360 360 43,864.80 7,092,548.92 N L(48),D(29),O(7) 11,800,000 41 10 360 360 42,819.75 6,431,312.23 N L(26),D(91),O(3) 9,600,000 42 23 360 360 41,927.74 6,548,345.02 N L(25),D(92),O(3) 9,470,000 43 35 360 360 38,958.31 6,238,657.50 N L(25),D(92),O(3) 13,500,000 44 59 IO IO IO 6,400,000.00 N L(25),D(32),O(3) 7,800,000 45 300 299 41,229.34 4,880,431.84 N L(47),YM1%(69),O(4) 10,900,000 46 23 360 360 34,814.91 5,418,564.75 N L(25),YM1%(91),O(4) 8,100,000 47 360 360 35,741.91 5,079,721.04 N L(36),D(81),O(3) 8,175,000 48 24 360 360 32,909.60 5,217,067.53 N L(24),D(92),O(4) 8,575,000 49 59 IO IO IO 5,857,500.00 Y L(48),D(8),O(4) 10,500,000 50 47 360 360 31,576.59 5,164,598.91 N L(48),D(69),O(3) 7,200,000 51 240 240 39,862.11 3,660,625.84 N L(24),D(93),O(3) 10,250,000 52 360 360 30,491.42 5,013,397.29 N L(24),D(33),O(3) 7,300,000 53 35 360 360 30,457.39 4,816,017.43 N L(35),YM1%(81),O(4) 6,735,000 54 35 360 360 28,264.09 4,469,207.59 N L(35),YM1%(81),O(4) 6,300,000 55 360 357 27,455.54 4,136,168.64 N L(27),D(89),O(4) 6,350,000 56 59 IO IO IO 4,600,000.00 N L(25),D(32),O(3) 5,600,000 57 47 360 360 23,614.96 3,917,466.84 N L(48),D(69),O(3) 5,450,000 58 360 358 23,584.29 3,497,767.50 N L(48),D(68),O(4) 5,300,000 59 35 360 360 22,405.08 3,677,375.40 N L(25),D(92),O(3) 5,200,000 60 11 360 360 23,572.11 3,793,671.72 N YM2%(50),O(10) 6,350,000 61 59 IO IO IO 3,750,000.00 N L(25),D(32),O(3) 4,560,000 62 360 360 20,327.61 3,342,265.09 N L(24),D(33),O(3) 5,280,000 63 300 298 22,354.73 2,726,977.23 N L(26),D(91),O(3) 5,700,000 64 360 358 18,149.18 2,672,467.23 N L(26),D(90),O(4) 4,770,000 65 360 360 17,583.49 2,798,519.84 N L(24),D(33),O(3) 5,900,000 66 360 360 16,939.68 2,785,220.57 N L(24),D(33),O(3) 4,325,000 67 117 IO IO IO 2,923,000.00 Y L(48),D(68),O(4) 4,500,000 68 117 IO IO IO 2,899,000.00 Y L(48),D(68),O(4) 4,460,000 69 360 359 14,415.10 2,097,344.28 N L(25),D(92),O(3) 3,600,000 70 360 359 14,194.73 2,088,318.46 N L(25),D(91),O(4) 3,700,000 71 360 359 14,235.28 2,029,307.02 N L(25),D(92),O(3) 3,750,000 72 360 359 8,348.21 1,245,947.18 N L(25),D(91),O(4) 2,000,000 MORTGAGE CUT-OFF LTV RATIO CUT-OFF DATE LOAN APPRAISAL DSCR DATE LTV AT MATURITY YEAR YEAR NUMBER OF UNIT OF LOAN AMOUNT OCCUPANCY NUMBER DATE (X) RATIO OR ARD BUILT RENOVATED UNITS MEASURE PER (UNIT) ($) RATE - ------------------------------------------------------------------------------------------------------------------------------------ 1 01/04/05 1.77 61.71% 53.67% 1987 1,852,501 Sq. Ft. 233 89.55% 2 02/01/05 1.22 68.83% 59.25% 1969 1990 1,672,237 Sq. Ft. 158 84.45% 3 03/15/05 1.40 75.00% 64.81% Various 796,653 Sq. Ft. 160 96.89% 3.1 03/15/05 1980 154,089 Sq. Ft. 100.00% 3.2 03/15/05 1988 83,408 Sq. Ft. 91.95% 3.3 03/15/05 1990 100,219 Sq. Ft. 100.00% 3.4 03/15/05 1997 50,651 Sq. Ft. 100.00% 3.5 03/15/05 1995 114,000 Sq. Ft. 100.00% 3.6 03/15/05 1970 61,468 Sq. Ft. 95.42% 3.7 03/15/05 1989 56,126 Sq. Ft. 74.97% 3.8 03/15/05 1986 21,251 Sq. Ft. 94.39% 3.9 03/15/05 1992 22,000 Sq. Ft. 100.00% 3.10 03/15/05 1993 25,000 Sq. Ft. 100.00% 3.11 03/15/05 1995 19,477 Sq. Ft. 100.00% 3.12 03/15/05 1993 16,500 Sq. Ft. 100.00% 3.13 03/15/05 1994 16,200 Sq. Ft. 100.00% 3.14 03/15/05 1992 15,713 Sq. Ft. 100.00% 3.15 03/15/05 1995 16,200 Sq. Ft. 100.00% 3.16 03/15/05 1996 12,480 Sq. Ft. 100.00% 3.17 03/15/05 1990 11,871 Sq. Ft. 100.00% 4 02/23/05 1.20 79.55% 75.08% 1995 274,647 Sq. Ft. 364 89.11% 5 12/01/05 1.32 72.63% 65.36% 2005 679,588 Sq. Ft. 82 95.77% 6 11/08/04 1.55 77.36% 71.62% 1970 1999 404,089 Sq. Ft. 101 100.00% 7 01/27/05 1.20 74.21% 67.58% 1987 97,717 Sq. Ft. 409 99.58% 8 03/11/05 1.45 77.93% 77.93% 2002 472 Units 63,072 93.22% 9 12/04/04 1.47 69.83% 69.83% 1999 130,096 Sq. Ft. 223 90.96% 10 01/20/05 1.32 69.05% 62.88% 1965 2003 416,942 Sq. Ft. 70 100.00% 11 03/01/05 1.09 89.87% 89.87% 2005 25,000 Sq. Ft. 1,100 100.00% 12 01/28/05 1.21 75.81% 68.71% 1968 226,019 Sq. Ft. 119 97.36% 13 11/02/04 1.26 80.00% 71.57% 1986 113,908 Sq. Ft. 228 96.56% 14 02/07/05 1.57 75.34% 63.25% 1988 178 Units 140,309 94.94% 15 02/17/05 1.20 79.68% 69.95% 1990 275,460 Sq. Ft. 72 99.56% 16 04/01/05 1.20 69.30% 64.37% 2003 250 Units 77,200 82.40% 17 02/01/05 1.25 78.66% 69.96% 1966 1994 141,049 Sq. Ft. 133 100.00% 18 12/17/04 1.32 72.00% 67.64% 1971 2005 188 Units 95,745 96.28% 19 02/08/05 1.21 79.65% 70.64% 1986 210 Units 85,714 90.00% 20 08/01/05 1.39 77.28% 65.98% 2005 57,205 Sq. Ft. 288 100.00% 21 12/15/04 1.30 74.89% 58.27% 1989 2004 184,624 Sq. Ft. 87 100.00% 22 02/24/05 1.29 70.31% 62.16% 1997 240 Units 67,083 92.92% 23 01/24/05 2.67 49.38% 49.38% 1966 159,286 Sq. Ft. 100 92.55% 24 01/21/05 1.53 66.57% 51.61% 2000 167 Rooms 95,670 80.39% 25 03/01/05 1.21 70.32% 68.43% 1986 98,928 Sq. Ft. 156 92.83% 26 02/09/05 1.87 70.24% 70.24% 1987 128,870 Sq. Ft. 118 100.00% 27 02/10/05 2.11 64.11% 64.11% 2004 81,218 Sq. Ft. 185 98.40% 28 03/08/05 1.34 76.70% 58.04% 1999 228 Units 59,211 100.00% 29 02/24/05 1.61 59.24% 54.94% 1989 1995 120,820 Sq. Ft. 103 99.30% 30 03/16/05 1.23 76.43% 67.31% 1928 2003 23,650 Sq. Ft. 507 96.62% 31 02/17/05 1.23 76.70% 71.09% 1989 256 Units 45,703 92.97% 32 01/07/05 1.24 79.91% 66.45% 1986 210 Units 51,370 89.05% 33 02/17/05 1.22 63.24% 59.43% 1974 2005 548 Units 19,617 78.83% 34 01/25/05 1.33 74.74% 69.33% 1988 1998 103,713 Sq. Ft. 96 97.74% 35 02/10/05 1.51 81.70% 81.70% 1996 75,937 Sq. Ft. 126 81.60% 36 02/10/05 1.77 59.85% 47.05% 2004 156 Rooms 56,014 70.86% 37 12/02/04 1.74 69.43% 69.43% 2004 65,753 Sq. Ft. 129 100.00% 38 03/04/05 1.20 76.15% 73.04% 1987 157 Units 52,866 88.54% 39 02/17/05 1.51 82.00% 82.00% 1999 86,583 Sq. Ft. 95 97.00% 40 04/01/05 1.23 65.25% 60.11% 1986 206 Units 37,379 88.83% 41 11/30/04 1.24 78.13% 66.99% 1999 2004 52,071 Sq. Ft. 144 89.09% 42 02/11/05 1.26 79.20% 69.15% 1976 1998 213 Units 35,211 89.67% 43 02/17/05 1.56 51.85% 46.21% 1968 248 Units 28,226 93.95% 44 02/17/05 1.75 82.05% 82.05% 2000 87,765 Sq. Ft. 73 83.10% 45 01/12/05 1.50 57.26% 44.77% 2000 110 Rooms 56,739 75.78% 46 01/12/05 1.20 76.54% 66.90% 1973 148 Units 41,892 80.41% 47 01/24/05 1.39 73.39% 62.14% 1924 1985 103,972 Sq. Ft. 58 90.61% 48 02/25/05 1.24 69.97% 60.84% 1998 136 Units 44,118 94.85% 49 10/26/04 2.51 55.79% 55.79% 1994 126,405 Sq. Ft. 46 100.00% 50 03/10/05 1.21 78.89% 71.73% 1998 104 Units 54,615 99.04% 51 03/09/05 1.59 54.63% 35.71% 2002 45,000 Sq. Ft. 124 100.00% 52 02/18/05 1.44 73.97% 68.68% 2000 14,490 Sq. Ft. 373 100.00% 53 03/08/05 1.29 80.00% 71.51% 1981 1996 67,810 Sq. Ft. 79 95.43% 54 03/03/05 1.24 79.37% 70.94% 1992 54,019 Sq. Ft. 93 100.00% 55 01/14/05 1.28 78.45% 65.14% 1987 6,000 Sq. Ft. 830 100.00% 56 02/16/05 1.59 82.14% 82.14% 2002 69,385 Sq. Ft. 66 84.20% 57 03/16/05 1.23 79.27% 71.88% 1986 2004 105 Units 41,143 93.33% 58 12/28/04 1.21 79.08% 66.00% 2004 14,820 Sq. Ft. 283 100.00% 59 02/17/05 1.23 79.81% 70.72% 1972 184 Units 22,554 97.83% 60 12/30/04 1.71 62.99% 59.74% 1995 117 Rooms 34,188 67.38% 61 02/16/05 1.63 82.24% 82.24% 1987 72,850 Sq. Ft. 51 96.60% 62 02/21/05 1.52 68.18% 63.30% 2001 15,120 Sq. Ft. 238 100.00% 63 01/07/05 1.75 62.10% 47.84% 2001 58,280 Sq. Ft. 61 90.49% 64 01/06/05 1.34 66.95% 56.03% 1998 2004 30,390 Sq. Ft. 105 84.17% 65 02/11/05 1.44 50.85% 47.43% 1985 94 Units 31,915 89.36% 66 02/16/05 1.41 69.36% 64.40% 2002 14,490 Sq. Ft. 207 100.00% 67 12/01/04 2.07 64.96% 64.96% 2004 14,280 Sq. Ft. 205 100.00% 68 11/30/04 2.01 65.00% 65.00% 2004 13,882 Sq. Ft. 209 100.00% 69 02/01/05 1.49 69.37% 58.26% 1981 1998 30,862 Sq. Ft. 81 100.00% 70 01/14/05 1.44 67.49% 56.44% 2004 22,716 Sq. Ft. 110 100.00% 71 08/15/04 1.78 63.94% 54.11% 1997 38,826 Sq. Ft. 62 84.00% 72 03/01/05 1.22 74.92% 62.30% NA-Land 4,510 Sq. Ft. 332 100.00% MORTGAGE LOAN OCCUPANCY MOST RECENT MOST RECENT MOST RECENT MOST RECENT UW NUMBER "AS OF" DATE MOST RECENT PERIOD REVENUES ($) EXPENSES ($) NOI ($) NCF ($) REVENUES ($) - ------------------------------------------------------------------------------------------------------------------------------------ 1 01/31/05 Aug. 1, 2003 - July 31, 2004 70,644,369 39,362,284 31,282,085 30,911,585 90,592,807 2 03/01/05 YTD 11/04 Annualized 29,855,041 17,619,290 12,235,751 11,984,916 41,194,147 3 02/01/05 3/1/04-12/31/04 Annualized 19,473,660 5,656,198 13,817,459 13,817,459 19,476,370 3.1 02/01/05 3/1/04-12/31/04 Annualized 4,377,413 1,848,132 2,529,281 2,529,281 4,234,865 3.2 02/01/05 3/1/04-12/31/04 Annualized 3,178,410 660,612 2,517,798 2,517,798 3,168,413 3.3 02/01/05 3/1/04-12/31/04 Annualized 3,200,160 982,434 2,217,726 2,217,726 3,283,857 3.4 02/01/05 3/1/04-12/31/04 Annualized 1,235,896 300,851 935,045 935,045 1,249,995 3.5 02/01/05 3/1/04-12/31/04 Annualized 1,569,654 433,980 1,135,674 1,135,674 1,673,852 3.6 02/01/05 3/1/04-12/31/04 Annualized 1,287,474 484,927 802,547 802,547 1,378,141 3.7 02/01/05 3/1/04-12/31/04 Annualized 985,648 321,170 664,477 664,477 1,024,695 3.8 02/01/05 3/1/04-12/31/04 Annualized 492,847 72,842 420,005 420,005 496,975 3.9 02/01/05 3/1/04-12/31/04 Annualized 478,760 68,911 409,849 409,849 457,778 3.10 02/01/05 3/1/04-12/31/04 Annualized 549,809 75,962 473,846 473,846 525,956 3.11 02/01/05 3/1/04-12/31/04 Annualized 512,628 119,582 393,046 393,046 443,068 3.12 02/01/05 3/1/04-12/31/04 Annualized 364,523 47,186 317,336 317,336 351,340 3.13 02/01/05 3/1/04-12/31/04 Annualized 304,927 57,275 247,652 247,652 270,221 3.14 02/01/05 3/1/04-12/31/04 Annualized 255,140 45,688 209,453 209,453 242,330 3.15 02/01/05 3/1/04-12/31/04 Annualized 256,962 60,467 196,495 196,495 252,078 3.16 02/01/05 3/1/04-12/31/04 Annualized 214,235 38,516 175,718 175,718 237,384 3.17 02/01/05 3/1/04-12/31/04 Annualized 209,174 37,663 171,511 171,511 185,422 4 03/01/05 2004 Annualized 10,152,665 2,040,977 8,111,688 8,084,223 11,946,959 5 04/13/05 9,283,551 6 01/25/05 2004 8,888,807 4,417,605 4,471,202 4,390,384 8,566,185 7 03/07/05 2004 4,767,279 2,250,218 2,517,061 2,497,518 5,586,654 8 03/17/05 T3 4,893,478 2,465,977 2,427,501 2,333,301 4,893,023 9 03/01/05 2004 3,375,854 1,066,435 2,309,419 2,296,409 3,630,382 10 03/07/05 Calendar Year 2004 3,211,702 1,088,539 2,123,163 2,060,622 3,628,461 11 03/01/05 Year 11 Rent 1,888,810 88,740 1,800,070 1,796,320 1,717,000 12 01/25/05 2004 Annualized 4,170,309 1,571,512 2,598,797 2,549,039 4,318,206 13 03/31/05 2004 2,900,932 993,042 1,907,890 1,890,804 3,392,164 14 01/24/05 2004 6,545,993 3,761,172 2,784,821 2,707,035 6,649,821 15 03/01/05 2004 2,391,502 542,649 1,848,853 1,804,779 2,374,634 16 03/15/05 T-12 3/05 2,489,711 1,034,283 1,455,428 1,399,178 2,499,968 17 03/31/05 2,504,941 18 02/22/05 2004 2,222,983 772,876 1,450,107 1,403,107 2,529,600 19 03/18/05 2004 2,428,936 979,531 1,449,405 1,396,905 2,435,656 20 02/15/05 2,158,341 21 03/29/05 2,143,327 22 03/03/05 2004 2,298,796 925,509 1,373,287 1,313,287 2,246,045 23 01/21/05 2004 3,602,188 1,408,513 2,193,675 2,157,040 4,077,919 24 02/01/05 T12 6,770,837 4,661,302 2,109,535 1,838,702 6,698,329 25 03/23/05 2004 1,593,655 575,298 1,018,357 990,657 2,060,448 26 03/10/05 2003 2,067,304 501,792 1,565,512 1,528,140 1,947,068 27 02/14/05 2,110,328 28 03/08/05 2004 1,420,334 28,407 1,391,927 1,334,927 1,399,495 29 03/07/05 2004 2,412,087 782,896 1,629,191 1,600,182 2,351,231 30 04/01/05 2004 1,359,233 432,236 926,997 924,632 1,476,159 31 03/28/05 2004 Actual 1,742,653 845,153 897,500 846,300 1,847,610 32 03/28/05 2004 1,733,771 776,391 957,380 904,880 1,729,309 33 02/24/05 Trailing 12 2,472,092 1,488,318 983,774 846,774 2,473,920 34 02/18/05 2004 2,279,546 1,044,778 1,234,768 1,212,988 2,117,722 35 03/15/05 2004 1,149,731 457,810 691,921 680,528 1,230,964 36 03/01/05 T12 4,799,731 3,477,151 1,322,580 1,178,588 4,799,970 37 12/16/04 1,174,603 38 03/15/05 T-6 2/05 1,372,830 646,223 726,607 687,357 1,384,322 39 03/15/05 T12 12/04 923,174 270,228 652,946 639,836 1,036,249 40 03/31/05 2004 Actual 1,371,975 784,497 587,478 535,978 1,374,357 41 02/08/05 2004 827,858 236,090 591,768 586,561 950,346 42 01/05/05 T-3 1,299,428 604,733 694,695 641,445 1,297,629 43 04/04/05 T-12 02/05 1,726,273 925,306 800,967 738,967 1,716,518 44 03/15/05 T12 12/04 744,178 289,240 454,938 441,773 964,449 45 12/31/04 2004 2,688,085 1,700,545 987,540 906,897 2,423,810 46 01/31/05 T-12 02/05 1,169,020 714,446 454,574 417,574 1,169,465 47 04/01/05 2004 1,128,749 676,508 452,241 428,282 1,383,437 48 02/03/05 2004 1,022,363 480,982 541,381 507,381 1,000,479 49 12/07/04 754,637 50 03/01/05 783,425 51 04/07/05 2004 1,106,725 235,043 871,682 867,182 1,081,575 52 03/22/05 2003 535,000 5,350 529,650 528,201 535,000 53 02/21/05 2004 629,750 128,181 501,569 494,788 627,450 54 02/21/05 2004 631,515 149,952 481,563 468,059 614,494 55 02/04/05 434,836 56 03/15/05 2004 615,959 231,444 384,515 376,936 661,493 57 03/03/05 671,679 58 02/16/05 347,974 59 03/30/05 T3 1,098,484 644,035 454,449 399,249 1,069,184 60 02/25/05 T12 2/05 2,079,343 1,473,033 606,310 523,177 2,028,514 61 03/15/05 2004 560,472 203,247 357,225 346,303 587,625 62 03/22/05 2003 376,000 3,760 372,240 370,728 376,034 63 12/31/04 T3 702,864 83,835 619,029 610,989 663,656 64 04/03/05 7 mo annualized 539,442 236,831 302,611 299,572 525,134 65 03/10/05 2004 903,458 538,596 364,862 341,362 846,046 66 03/22/05 2003 292,000 14,838 277,162 275,713 291,974 67 01/10/05 303,500 68 01/25/05 295,000 69 04/06/05 2004 291,872 17,474 274,398 271,311 277,432 70 03/10/05 312,950 71 08/15/04 TTM 448,253 138,664 309,589 305,380 448,253 72 03/01/05 124,740 MORTGAGE UW NET LARGEST LARGEST LOAN UW OPERATING UW NET CASH TENANT TENANT LARGEST TENANT NUMBER EXPENSES ($) INCOME ($) FLOW ($) LARGEST TENANT NAME SQ. FT. % OF NRA EXP. DATE - ----------------------------------------------------------------------------------------------------------------------------------- 1 37,103,624 53,489,183 50,540,583 Deutsche / Scudder, Stevens 378,490 20.43% 05/31/09 2 18,918,036 22,276,111 22,025,275 Associated Press 290,752 17.39% 11/30/19 3 6,099,135 13,377,235 12,372,491 Various Various Various Various 3.1 1,916,523 2,318,342 2,124,004 Morristown Memorial Hospital 83,151 53.96% 02/28/12 3.2 525,353 2,643,060 2,537,865 Montefiore Medical Center 52,907 63.43% 03/10/08 3.3 1,081,686 2,202,171 2,075,774 Harvard Vanguard Medical Associates 64,670 64.53% 11/30/09 3.4 318,629 931,367 867,486 Univ. of FL Jacksonville Healthcare 29,086 57.42% Multiple Spaces 3.5 706,438 967,414 823,636 Trinity Hospitals 114,000 100.00% 06/30/09 3.6 611,273 766,867 689,344 Mountainside Hospital 20,276 32.99% 06/30/12 3.7 302,087 722,609 651,822 Physician Associates, LLC 17,090 30.45% 12/31/05 3.8 72,858 424,117 397,315 Physician Associates of FL 20,058 94.39% 04/30/08 3.9 68,293 389,485 361,738 Physician Associates of FL 21,011 95.50% 04/30/08 3.10 75,458 450,498 418,968 Physician Associates of FL 24,250 97.00% 04/30/08 3.11 112,484 330,584 306,019 Exempla Health Care 19,477 100.00% 07/31/07 3.12 49,020 302,320 281,511 Physician Associates of FL 16,044 97.24% 04/30/08 3.13 54,199 216,021 195,590 Team Radiology Inc. 16,200 100.00% 03/31/08 3.14 44,477 197,853 178,036 Baptist Health Properties, Inc. 15,713 100.00% 02/29/08 3.15 57,050 195,028 174,597 MedPartners Acquisition Corp 16,200 100.00% 03/31/08 3.16 67,160 170,224 154,484 Physiotherapy Associates Inc. 12,480 100.00% 05/31/08 3.17 36,146 149,276 134,304 Baptist Health Properties, Inc. 11,871 100.00% 02/29/08 4 3,558,479 8,388,480 8,089,346 New Century 79,636 29.00% 04/30/10 5 3,900,403 5,383,148 5,193,144 Wal-Mart (Ground Lease) 207,928 30.60% 01/25/25 6 4,030,116 4,536,069 4,212,817 Mercantile Bank & Trust 202,822 50.19% 12/12/14 7 2,225,529 3,361,125 3,219,165 Strategic Insight 13,788 14.11% 12/31/07 8 2,465,964 2,427,059 2,332,859 9 1,129,236 2,501,146 2,400,247 AJ's Fine Foods 26,500 20.37% 04/14/25 10 896,701 2,731,760 2,570,336 Lowe's Home Improvement (Ground Lease) 160,000 38.37% 05/31/24 11 85,180 1,631,820 1,628,070 Columbia University 25,000 100.00% 10/31/53 12 1,874,018 2,444,188 2,127,162 Moreno Insurance 35,211 15.58% 05/31/07 13 1,057,813 2,334,351 2,227,223 Govolution, Inc 15,246 13.38% 01/31/12 14 3,850,631 2,799,190 2,721,404 15 632,487 1,742,147 1,627,194 Lowe's Home Improvement 161,000 58.45% 02/29/24 16 868,107 1,631,861 1,575,611 17 814,186 1,690,755 1,555,460 Shaw's Supermarket 70,000 49.63% 07/31/08 18 946,854 1,582,746 1,535,746 19 961,807 1,473,849 1,421,349 20 583,698 1,574,643 1,538,562 Office Depot 15,986 27.95% 12/31/14 21 456,827 1,686,500 1,630,465 Home Market Foods 112,677 61.03% 03/31/30 22 858,066 1,387,979 1,327,979 23 1,564,415 2,513,505 2,191,828 Roy's Woodland Hills 7,327 4.60% 09/30/14 24 4,604,286 2,094,043 1,893,093 25 681,506 1,378,941 1,245,102 Brent Rosencranz 15,948 16.12% Multiple Spaces 26 452,332 1,494,736 1,380,779 Jewel/Osco 64,922 50.38% 02/28/19 27 527,868 1,582,460 1,539,057 Stater Brothers 44,093 54.29% 01/31/25 28 27,990 1,371,505 1,314,505 29 784,405 1,566,825 1,354,223 Wyrick Robbins Yates & Ponton LLP 50,555 41.84% 07/31/09 30 417,062 1,059,098 1,032,645 Ecko Unlimited 12,000 50.74% 12/31/10 31 834,892 1,012,717 961,517 32 782,201 947,108 894,608 33 1,490,451 983,469 846,469 34 1,052,753 1,064,969 882,327 Department of Revenue 47,694 45.99% 11/30/08 35 501,925 729,039 717,646 36 3,408,590 1,391,380 1,247,381 37 329,575 845,028 795,110 CompUSA 22,092 33.60% 01/31/20 38 674,067 710,255 671,005 39 409,380 626,869 613,759 40 673,411 700,946 649,446 41 259,994 690,352 637,574 MODA 5,570 10.70% 04/30/09 42 608,667 688,962 635,712 43 924,953 791,564 729,564 44 396,767 567,682 554,517 45 1,582,871 840,939 743,987 46 629,094 540,371 503,371 47 674,869 708,567 595,314 G.S.A. 42,934 41.29% Multiple Spaces 48 477,916 522,563 488,563 49 22,639 731,998 715,565 Lowe's Home Improvement 126,405 100.00% 01/31/14 50 303,737 479,688 458,888 51 245,355 836,220 761,998 Aesculapian Management Company, LLC 45,000 100.00% 03/30/20 52 5,350 529,650 528,201 Walgreens 14,490 100.00% 10/31/61 53 127,691 499,759 472,586 Bi-Lo 44,570 65.73% 07/31/17 54 150,396 464,098 421,691 Food Lion 40,202 74.42% 05/26/12 55 5,001 429,835 421,435 PNC Bank 6,000 100.00% 06/30/07 56 291,822 369,671 362,092 57 302,679 369,000 348,000 58 3,480 344,494 343,012 Walgreens 14,820 100.00% 01/31/80 59 684,436 384,748 329,548 60 1,464,400 564,114 482,973 61 273,887 313,738 302,816 62 3,760 372,274 370,762 Walgreens 15,120 100.00% 09/30/61 63 186,803 476,853 468,813 64 204,183 320,951 291,560 Humana 4,638 15.26% 03/31/10 65 518,283 327,763 304,263 66 2,920 289,054 287,605 Walgreens 14,490 100.00% 07/31/77 67 9,105 294,395 292,967 Walgreens 14,280 100.00% 12/31/79 68 8,850 286,150 284,762 Walgreens 13,882 100.00% 10/31/79 69 16,532 260,900 257,814 Piggly Wiggly 30,862 100.00% 09/30/18 70 51,510 261,440 245,500 CiCi's Pizza 4,952 21.80% 04/30/14 71 139,178 309,075 304,866 72 2,495 122,245 122,245 Wachovia Bank, N.A. (Ground Lease) 4,510 100.00% 11/30/24 2ND MORTGAGE LARGEST 2ND LARGEST LOAN TENANT TENANT % OF 2ND LARGEST NUMBER 2ND LARGEST TENANT NAME SQ. FT. NRA (%) TENANT EXP. DATE 3RD LARGEST TENANT NAME - ------------------------------------------------------------------------------------------------------------------------------------ 1 Ropes & Gray 322,754 17.42% 12/31/10 Choate, Hall & Stewart 2 Thirteen/WNET 204,791 12.25% 11/19/18 Lerner NY 3 Various Various Various Various Various 3.1 Mid Atlantic Surgical 8,097 5.25% 12/31/07 Surgical Specialists 3.2 NYS Assc. for Retarded Children 14,916 17.88% 06/28/13 Cardinal Health 414, Inc. 3.3 Kindercare Learning Ctr 6,184 6.17% 08/31/05 World Media Foundation 3.4 Medical Partners Surgery Center, Ltd 14,522 28.67% 04/30/13 Shands Jacksonville Medical 3.5 3.6 Surburban Endoscopy Center , LLC 9,099 14.80% 12/31/12 Essex Testing Clinic, Inc 3.7 Commonwealth Orthopaedic Centers PSC 10,447 18.61% Multiple Spaces Gambro Healthcare 3.8 3.9 Family Meds, Inc. 989 4.50% 06/30/08 3.10 Family Meds, Inc. 750 3.00% 06/30/08 3.11 3.12 Family Meds, Inc. 456 2.76% 06/30/08 3.13 3.14 3.15 3.16 3.17 4 Sport Chalet 35,049 12.76% 12/31/15 Quick Loan Funding 5 Lowe's Home Improvement (Ground Lease) 166,992 24.57% 10/31/30 Sport Chalet 6 Venable, LLP 140,649 34.81% 04/30/11 Grant Thornton 7 Career Blazer 12,178 12.46% Multiple Spaces Citra Trading 8 9 Creative Leather Furniture 13,249 10.18% 03/10/10 Showcase Home Entertainment 10 Burlington Coat Factory 81,500 19.55% 09/30/09 Super Stop & Shop 11 12 Executive Suite (Master Lease) 22,172 9.81% 02/18/10 Arcadis 13 Bean Kinney & Korman, PC 14,536 12.76% 11/30/06 Laughlin, Marinaccio & Owens 14 15 Giant 53,800 19.53% 02/28/41 CVS 16 17 Joey'z Shopping Spree 12,000 8.51% 11/30/15 Hometown Buffet 18 19 20 Prudential/WCI 6,792 11.87% 02/28/10 Fidelity Investments 21 The Home Depot 71,947 38.97% 03/31/08 22 23 Fleming's/Woodland Hills 7,040 4.42% 08/31/14 Insurance Technical 24 25 Sunrise Medical 12,216 12.35% 12/11/07 Dot Hill Systems 26 Ace Hardware 17,600 13.66% 03/14/09 Blockbuster Video 27 Washington Mutual Bank 5,000 6.16% 12/31/14 Jack in the Box (Ground Lease) 28 29 American Board of Anesthesiology, Inc. 11,008 9.11% Multiple Spaces BWAY Corporation 30 T.R.I. Center 8,000 33.83% 12/31/10 Subway 31 32 33 34 Executive Suites 22,448 21.64% 07/31/09 Keiser College 35 36 37 Cost Plus, Inc. 18,365 27.93% 01/31/17 PETCO 38 39 40 41 J Bourn Gallery 3,630 6.97% 07/31/09 Geist Market 42 43 44 45 46 47 Reading Area Community College 13,227 12.72% Multiple Spaces Stevens & Lee 48 49 50 51 52 53 Dollar General 7,200 10.62% 04/30/07 Check into Cash 54 Expert Nails 3,000 5.55% 06/30/07 Sunrise Cleaners 55 Marriott (Ground Lease) 01/31/17 56 57 58 59 60 61 62 63 64 Back in Action 3,751 12.34% 05/14/09 Mishugas2, Inc. 65 66 67 68 69 70 Video Warehouse 3,732 16.43% 09/30/09 GameStop 71 72 72 3RD 3RD Mortgage LARGEST LARGEST MORTGAGE Loan TENANT TENANT % 3RD LARGEST LARGEST AFFILIATED SPONSOR FLAG LOAN Number SQ. FT OF NRA TENANT EXP. DATE LOCKBOX (> THAN 4% OF POOL) NUMBER - ------------------------------------------------------------------------------------------------------------------------------------ 1 155,324 8.38% 09/30/15 Day 1 Prudential Property Investment Separate Account ("PRISA") 1 2 163,093 9.75% 06/30/15 Day 1 Jacob Chetrit & Arbor Realty SR, Inc. 2 3 Various Various Various Day 1 Cindy Dolgin and Meyer Chetrit 3 3.1 6,470 4.20% 05/31/07 3.1 3.2 7,345 8.81% 06/16/05 3.2 3.3 5,278 5.27% 11/30/10 3.3 3.4 5,065 10.00% 10/31/09 3.4 3.5 3.5 3.6 7,314 11.90% 03/31/07 3.6 3.7 6,475 11.54% 10/31/07 3.7 3.8 3.8 3.9 3.9 3.10 3.10 3.11 3.11 3.12 3.12 3.13 3.13 3.14 3.14 3.15 3.15 3.16 3.16 3.17 3.17 4 25,918 9.44% 11/30/08 Day 1 Maguire Properties, L.P. 4 5 42,000 6.18% 10/31/15 Springing 5 6 16,744 4.14% 12/31/13 Day 1 6 7 8,167 8.36% 05/01/14 Day 1 7 8 8 9 12,000 9.22% 02/02/10 Day 1 9 10 65,000 15.59% 04/30/20 Day 1 10 11 Day 1 11 12 12,552 5.55% Multiple Spaces 12 13 11,288 9.91% 11/30/13 Day 1 13 14 14 15 11,840 4.30% 02/28/06 Springing 15 16 Springing 16 17 9,745 6.91% 12/31/10 Springing 17 18 18 19 19 20 6,144 10.74% 02/28/15 20 21 21 22 Day 1 22 23 4,271 2.68% 10/31/09 23 24 24 25 11,219 11.34% 04/30/06 25 26 6,000 4.66% 01/31/07 26 27 3,600 4.43% 03/31/25 27 28 28 29 10,201 8.44% 09/30/08 29 30 800 3.38% 12/31/10 30 31 31 32 32 33 33 34 19,591 18.89% 09/30/14 Springing 34 35 Springing 35 36 36 37 15,217 23.14% 10/31/19 Day 1 37 38 38 39 Springing 39 40 40 41 2,500 4.80% 07/31/09 41 42 42 43 43 44 Springing 44 45 45 46 46 47 7,092 6.82% 12/31/07 47 48 48 49 Springing 49 50 50 51 51 52 52 53 2,900 4.28% 10/31/07 53 54 2,540 4.70% 08/31/08 54 55 Springing 55 56 Springing 56 57 57 58 58 59 59 60 60 61 Springing 61 62 62 63 63 64 2,354 7.75% 08/31/09 64 65 65 66 66 67 Springing 67 68 Springing 68 69 69 70 1,600 7.04% 05/31/09 70 71 71 72 72 (1) Two Mortgage Loans, representing 24.8% of the Cut-Off Date Pool Balance, are part of a split loan structure and the related pari passu companion loans are not included in the trust fund. With respect to these Mortgage Loans, unless otherwise specified, the calculation of Balance per SF, LTV ratios and DSC ratios were based upon the aggregate indebtedness of these Mortgage Loans and the related pari passu companion loans. (2) The appraised value is based upon the collective portfolio value and not on the value of the individual Mortgaged Properties. See "Risk Factors - The Mortgage Loans - Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property" in the prospectus supplement. See "DESCRIPTION OF THE MORTGAGE POOL - Additional Mortgage Loan Information" in the prospectus supplement.
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C18 ANNEX A-1A CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES IN LOAN GROUP 1 - ---------- MORTGAGE LOAN LOAN GROUP NUMBER NUMBER PROPERTY NAME ADDRESS - ------------------------------------------------------------------------------------------------------------------------------------ 1 1 One & Two International Place(1) 90-150 Oliver Street 2 1 450 West 33rd Street(1) 450 West 33rd Street 3 1 Kadima Medical Office Pool(2) Various 3.1 Morristown Professional Building 95 Madison Avenue 3.2 2300 Westchester Avenue Building 2300 Westchester Avenue 3.3 Davis Square Center 20-40 Holland Street 3.4 Emerson Medical Complex 4545-4555 Emerson Street 3.5 Kadima Medical Building - Minot, ND 400 Burdick Expressway East 3.6 Verona Professional Building 799 Bloomfield Avenue 3.7 South Hill Medical Center 525 Alexandria Pike 3.8 Orlando IV Clinic 7300 Sand Lake Commons Boulevard 3.9 Orlando III Clinic 3400 Quadrangle Boulevard 3.10 Orlando II Clinic 300 North Lake Destiny Road 3.11 Park Meadows Clinic 8080 East Park Meadows Drive 3.12 Orlando I Clinic 200 Park Place Boulevard 3.13 Tampa II Clinic 12210 Bruce B. Downs Boulevard 3.14 Regency Square Clinic 9090 Regency Square North 3.15 Tampa I Clinic 220 Grand Regency Boulevard 3.16 Germantown Clinic 4815 Riverdale Road 3.17 San Jose Clinic 11261 San Jose Boulevard 4 1 Park Place II 2957-3041 and 3121 Michelson Drive 5 1 Happy Valley Towne Center 2400 West Happy Valley Road 6 1 Mercantile Bank & Trust Building 2 Hopkins Plaza 7 1 590 Fifth Avenue 590 Fifth Avenue 8 1 Cypress Lake at Stonebriar 8404 Warren Parkway 9 1 Casa Paloma Shopping Center 7131 West Ray Road 10 1 Copaco Center 335 Cottage Grove Road 11 1 2700 Broadway 2700 Broadway 12 1 Fullerton Towers 1400 and 1440 North Harbor Boulevard 13 1 Courthouse Place 2000 North 14th Street 14 1 Kensington Place 1580 Geary Road 15 1 Springtown Shopping Center 2643 Shillington Road 16 1 Resort at University Park Apartments 4675 Alta Point 17 1 Prospect Plaza 45 Kane Street 19 1 Sandpiper Village Apartments 999 Marshall Road 20 1 Plaza at Wellington Green 2205-2495 State Road 7 21 1 Home Market Foods 140 Morgan Drive 22 1 Serena Shores Apartments 4101 East Baseline Road 23 1 Topanga and Victory 6325 & 6355 Topanga Canyon Boulevard 24 1 Embassy Suites - Orlando, FL 191 East Pine Street 25 1 One Carlsbad Research Center 2382 and 2386 Faraday Avenue 26 1 Heritage Plaza Shopping Center 700-800 Army Trail Road 27 1 Bear Creek Village Shopping Center 36004-36164 Hidden Springs Road 29 1 The Summit 4101 Lake Boone Trail 30 1 1369 Broadway 1369 Broadway 31 1 Sterling Square Apartments 1900 Windsor Hill Drive 33 1 Taylors Crossing 1 Pinecroft Drive 34 1 1900 Building 1900 West Commercial Boulevard 35 1 Extra Space Self Storage #3 - Atlanta, GA 600 Virginia Avenue 36 1 Hilton Garden Inn - Dania Beach, FL 180 SW 18th Avenue 37 1 Market Square - Phase II 13711 South Tamiami Trail 39 1 Extra Space Self Storage #3 - Orlando (South John Young Parkway), FL 13125 South John Young Parkway 41 1 Fall Creek Harbour Shopping Center 10142 Brooks School Road 42 1 Sherwood Ridges Apartments 3736 Kings Court 44 1 Extra Space Self Storage #3 - Orlando (Metrowest Boulevard), FL 5603 Metrowest Boulevard 45 1 Courtyard by Marriott - Coral Springs, FL 620 North University Drive 47 1 The Madison 400 Washington Street 49 1 Lowe's Home Improvement - Jonesboro, AR 2111 Fair Park Boulevard 50 1 Cuestas Apartments 2800 North Roadrunner Parkway 51 1 Cattle Ridge Medical Center 3333 Cattlemen Road 52 1 Walgreens - Staten Island, NY 1551 Richmond Avenue 53 1 Friarsgate Plaza Shopping Center 7949 Broad River Road 54 1 Albemarle Square Shopping Center 9009 Albermarle Road 55 1 PNC Bank & Mariott Ground Lease 762 & 782 West Lancaster Avenue 56 1 Extra Space Self Storage #3 - Orlando (Lake Underhill Road), FL 11971 Lake Underhill Road 58 1 Walgreens - Glen Allen, VA 9801 Brook Road 60 1 Fairfield Inn Market Center 2110 Market Center Boulevard 61 1 Extra Space Self Storage #3 - Ocoee, FL 1101 Marshall Farms Road 62 1 Walgreens - Shawnee Mission, KS 11021 Shawnee Mission Parkway 63 1 Kelly Road Self Storage 11181 Kelly Road 64 1 King's Plaza 7640-7690 Nob Hill Road 66 1 Walgreens - Georgetown, TX 3204 Williams Drive 67 1 Walgreens - Pineville, LA 3400 Military Highway 68 1 Walgreens - Sidney, OH 1400 Michigan Street 69 1 Piggly Wiggly - Appleton, WI 520 East Northland Avenue 70 1 Massillon Marketplace 101 Massillon Marketplace Drive SW 71 1 Metro Storage - Phase II 23325 Van Born Road 72 1 Wachovia Bank Ground Lease Levittown Parkway and U.S. Route 13 (1) Two Mortgage Loans, representing 24.5% of the Cut-Off Date Pool Balance, are part of a split loan structure and the related pari passu companion loans are not included in the trust fund. With respect to these Mortgage Loans, unless otherwise specified, the calculation of Balance per SF, LTV ratios and DSC ratios were based upon the aggregate indebtedness of these Mortgage Loans and the related pari passu companion loans. (2) The appraised value is based upon the collective portfolio value and not on the value of the individual Mortgaged Properties. See "Risk Factors - The Mortgage Loans - Inspections and Appraisals May Not Accurately Reflect Value or Condition of Mortgaged Property" in the prospectus supplement. See "DESCRIPTION OF THE MORTGAGE POOL - Additional Mortgage Loan Information" in the prospectus supplement. MORTGAGE CROSS COLLATERALIZED GENERAL LOAN AND CROSS DEFAULTED LOAN PROPERTY SPECIFIC NUMBER CITY STATE ZIP CODE LOAN FLAG ORIGINATOR TYPE PROPERTY TYPE - ---------------------------------------------------------------------------------------------------------------------------------- 1 Boston MA 02110 Wachovia Office CBD 2 New York NY 10001 Wachovia Office CBD 3 Various Various Various Wachovia Office Medical 3.1 Morristown NJ 07960 Office Medical 3.2 Bronx NY 10462 Office Medical 3.3 Somerville MA 02144 Office Medical 3.4 Jacksonville FL 32207 Office Medical 3.5 Minot ND 58701 Office Medical 3.6 Verona NJ 07044 Office Medical 3.7 Southgate KY 41071 Office Medical 3.8 Orlando FL 32819 Office Medical 3.9 Orlando FL 32817 Office Medical 3.10 Maitland FL 32751 Office Medical 3.11 Lone Tree CO 80124 Office Medical 3.12 Kissimmee FL 34741 Office Medical 3.13 Tampa FL 33612 Office Medical 3.14 Jacksonville FL 32211 Office Medical 3.15 Brandon FL 33510 Office Medical 3.16 Memphis TN 38141 Office Medical 3.17 Jacksonville FL 32223 Office Medical 4 Irvine CA 92612 Wachovia Mixed Use Office/Retail 5 Phoenix AZ 85027 Wachovia Retail Anchored 6 Baltimore MD 21201 Wachovia Office CBD 7 New York NY 10036 Wachovia Office CBD 8 Frisco TX 75034 Wachovia Multifamily Conventional 9 Chandler AZ 85226 Wachovia Retail Anchored 10 Bloomfield CT 06002 Wachovia Retail Anchored 11 New York NY 10025 Wachovia Retail Anchored 12 Fullerton CA 92835 Wachovia Office Suburban 13 Arlington VA 22201 Wachovia Office Suburban 14 Walnut Creek CA 94596 Wachovia Multifamily Independent Living 15 Reading PA 19608 Wachovia Retail Anchored 16 Colorado Springs CO 80918 Wachovia Multifamily Conventional 17 West Hartford CT 06119 Wachovia Retail Anchored 19 Vacaville CA 95687 Wachovia Multifamily Conventional 20 Wellington FL 33414 Wachovia Retail Anchored 21 Norwood MA 02062 Wachovia Industrial Flex 22 Gilbert AZ 85234 Wachovia Multifamily Conventional 23 Woodland Hills CA 91367 Wachovia Office Suburban 24 Orlando FL 32801 Wachovia Hospitality Full Service 25 Carlsbad CA 92008 Wachovia Office Suburban 26 Carol Stream IL 60188 Wachovia Retail Anchored 27 Wildomar CA 92595 Wachovia Retail Anchored 29 Raleigh NC 27607 Wachovia Office Suburban 30 New York NY 10018 Wachovia Office CBD 31 Matthews NC 28105 Wachovia Multifamily Conventional 33 Taylors SC 29687 Wachovia Multifamily Conventional 34 Fort Lauderdale FL 33309 Wachovia Office Suburban 35 Atlanta GA 30306 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 36 Dania Beach FL 33004 Wachovia Hospitality Limited Service 37 Fort Myers FL 33912 Wachovia Retail Shadow Anchored 39 Orlando FL 32837 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 41 Fishers IN 46038 Wachovia Mixed Use Retail/Office 42 Winston-Salem NC 27106 Wachovia Multifamily Conventional 44 Orlando FL 32811 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 45 Coral Springs FL 33071 Wachovia Hospitality Limited Service 47 Reading PA 19601 Wachovia Office Suburban 49 Jonesboro AR 72401 Wachovia Retail Anchored 50 Las Cruces NM 88011 Wachovia Multifamily Conventional 51 Sarasota FL 34232 Wachovia Office Medical 52 Staten Island NY 10314 Wachovia Retail Anchored 53 Irmo SC 29063 Wachovia Retail Anchored 54 Charlotte NC 28205 Wachovia Retail Anchored 55 Wayne PA 19087 Wachovia Mixed Use Retail/Land 56 Orlando FL 32825 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 58 Glen Allen VA 23059 Wachovia Retail Anchored 60 Dallas TX 75207 Wachovia Hospitality Limited Service 61 Ocoee FL 34761 Extra Space Self Storage Portfolio #3 Wachovia Self Storage Self Storage 62 Shawnee Mission KS 66203 Wachovia Retail Anchored 63 Fort Myers FL 33908 Wachovia Self Storage Self Storage 64 Tamarac FL 33321 Wachovia Retail Unanchored 66 Georgetown TX 78628 Wachovia Retail Anchored 67 Pineville LA 71360 Wachovia Retail Anchored 68 Sidney OH 45365 Wachovia Retail Anchored 69 Appleton WI 54911 Wachovia Retail Anchored 70 Massillon OH 44647 Wachovia Retail Shadow Anchored 71 Taylor MI 48180 Wachovia Self Storage Self Storage 72 Tullytown Borough PA 19055 Wachovia Land Retail MORTGAGE % OF AGGREGATE % OF AGGREGATE LOAN ORIGINAL LOAN CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE ORIGINATION FIRST PAY MATURITY DATE MORTGAGE NUMBER BALANCE ($) LOAN BALANCE ($) BALANCE GROUP 1 BALANCE DATE DATE OR ARD RATE - ----------------------------------------------------------------------------------------------------------------------------------- 1 216,000,000.00 216,000,000.00 15.37% 16.41% 01/10/05 02/11/05 01/11/15 5.2050% 2 132,500,000.00 132,500,000.00 9.43% 10.07% 03/03/05 04/11/05 03/11/15 5.1000% 3 127,500,000.00 127,500,000.00 9.07% 9.69% 03/15/05 05/11/05 04/11/15 5.2724% 3.1 25,044,642.86 3.2 23,902,963.76 3.3 23,223,214.29 3.4 9,256,467.70 3.5 8,988,970.24 3.6 7,249,942.85 3.7 4,705,577.94 3.8 3,733,928.57 3.9 3,460,714.29 3.10 3,324,107.14 3.11 3,096,428.57 3.12 2,367,857.14 3.13 2,138,390.07 3.14 1,956,243.76 3.15 1,934,172.78 3.16 1,639,285.71 3.17 1,477,092.33 4 100,000,000.00 100,000,000.00 7.12% 7.60% 03/15/05 05/11/05 04/11/12 5.3900% 5 56,000,000.00 56,000,000.00 3.98% 4.25% 04/13/05 06/11/05 05/11/15 5.7900% 6 41,000,000.00 41,000,000.00 2.92% 3.11% 12/13/04 02/11/05 01/11/12 5.2600% 7 40,000,000.00 40,000,000.00 2.85% 3.04% 03/01/05 04/11/05 03/11/15 5.3900% 8 29,770,000.00 29,770,000.00 2.12% 2.26% 04/20/05 06/11/05 05/11/10 5.4200% 9 29,050,000.00 29,050,000.00 2.07% 2.21% 03/10/05 04/11/05 03/11/15 5.6300% 10 29,000,000.00 29,000,000.00 2.06% 2.20% 03/11/05 04/11/05 03/11/15 5.4000% 11 27,500,000.00 27,500,000.00 1.96% 2.09% 04/15/05 06/11/05 05/11/15 5.4100% 12 26,800,000.00 26,800,000.00 1.91% 2.04% 03/02/05 04/11/05 03/11/15 5.1300% 13 26,000,000.00 26,000,000.00 1.85% 1.98% 03/18/05 05/11/05 04/11/15 5.5000% 14 24,975,000.00 24,975,000.00 1.78% 1.90% 04/20/05 06/11/05 05/11/15 5.6600% 15 19,760,000.00 19,760,000.00 1.41% 1.50% 04/05/05 05/11/05 04/11/15 5.5900% 16 19,300,000.00 19,300,000.00 1.37% 1.47% 04/06/05 05/11/05 04/11/15 5.4900% 17 18,800,000.00 18,800,000.00 1.34% 1.43% 04/01/05 05/11/05 04/11/15 5.2200% 19 18,000,000.00 18,000,000.00 1.28% 1.37% 04/14/05 06/11/05 05/11/15 5.0900% 20 16,500,000.00 16,500,000.00 1.17% 1.25% 02/16/05 04/11/05 03/11/15 5.3900% 21 16,125,000.00 16,102,087.23 1.15% 1.22% 03/29/05 05/11/05 04/11/15 6.1000% 22 16,100,000.00 16,100,000.00 1.15% 1.22% 03/31/05 05/11/05 04/11/15 4.9500% 23 16,000,000.00 16,000,000.00 1.14% 1.22% 03/02/05 04/11/05 03/11/15 5.1300% 24 16,000,000.00 15,976,876.23 1.14% 1.21% 04/04/05 05/11/05 04/11/15 5.9900% 25 15,400,000.00 15,400,000.00 1.10% 1.17% 03/23/05 05/11/05 04/11/10 5.3500% 26 15,242,500.00 15,242,500.00 1.08% 1.16% 03/18/05 05/11/05 04/11/12 4.8500% 27 15,065,000.00 15,065,000.00 1.07% 1.14% 03/01/05 04/11/05 03/11/12 4.8500% 29 12,500,000.00 12,500,000.00 0.89% 0.95% 04/04/05 05/11/05 04/11/15 5.3800% 30 12,000,000.00 12,000,000.00 0.85% 0.91% 04/20/05 06/11/05 05/11/15 5.7200% 31 11,700,000.00 11,700,000.00 0.83% 0.89% 03/30/05 05/11/05 04/11/12 5.3300% 33 10,750,000.00 10,750,000.00 0.76% 0.82% 03/01/05 04/11/05 03/11/10 5.0300% 34 10,000,000.00 9,978,428.16 0.71% 0.76% 02/23/05 04/11/05 03/11/10 5.2400% 35 9,600,000.00 9,600,000.00 0.68% 0.73% 03/21/05 05/11/05 04/11/10 4.9500% 36 8,750,000.00 8,738,150.09 0.62% 0.66% 03/18/05 05/11/05 04/11/15 6.4100% 37 8,470,000.00 8,470,000.00 0.60% 0.64% 04/14/05 06/11/05 05/11/15 5.4100% 39 8,200,000.00 8,200,000.00 0.58% 0.62% 03/21/05 05/11/05 04/11/10 4.9500% 41 7,500,000.00 7,500,000.00 0.53% 0.57% 02/17/05 04/11/05 03/11/15 5.5500% 42 7,500,000.00 7,500,000.00 0.53% 0.57% 03/17/05 05/11/05 04/11/15 5.3600% 44 6,400,000.00 6,400,000.00 0.46% 0.49% 03/21/05 05/11/05 04/11/10 4.9500% 45 6,250,000.00 6,241,322.74 0.44% 0.47% 03/31/05 05/11/05 04/11/15 6.2500% 47 6,000,000.00 6,000,000.00 0.43% 0.46% 04/20/05 06/11/05 05/11/15 5.9400% 49 5,857,500.00 5,857,500.00 0.42% 0.44% 01/14/05 05/11/05 04/11/10 4.8700% 50 5,680,000.00 5,680,000.00 0.40% 0.43% 03/31/05 05/11/05 04/11/15 5.3100% 51 5,600,000.00 5,600,000.00 0.40% 0.43% 04/20/05 06/11/05 05/11/15 5.9200% 52 5,400,000.00 5,400,000.00 0.38% 0.41% 04/20/05 06/11/05 05/11/10 5.4500% 53 5,388,000.00 5,388,000.00 0.38% 0.41% 04/04/05 05/11/05 04/11/15 5.4600% 54 5,000,000.00 5,000,000.00 0.36% 0.38% 04/04/05 05/11/05 04/11/15 5.4600% 55 5,000,000.00 4,981,825.33 0.35% 0.38% 02/11/05 03/11/05 02/11/15 5.2000% 56 4,600,000.00 4,600,000.00 0.33% 0.35% 03/21/05 05/11/05 04/11/10 4.9500% 58 4,200,000.00 4,191,243.18 0.30% 0.32% 02/18/05 04/11/05 03/11/15 5.4000% 60 4,000,000.00 4,000,000.00 0.28% 0.30% 03/18/05 05/11/05 04/11/10 5.8400% 61 3,750,000.00 3,750,000.00 0.27% 0.28% 03/21/05 05/11/05 04/11/10 4.9500% 62 3,600,000.00 3,600,000.00 0.26% 0.27% 04/20/05 06/11/05 05/11/10 5.4500% 63 3,550,000.00 3,539,915.76 0.25% 0.27% 02/24/05 04/11/05 03/11/15 5.7600% 64 3,200,000.00 3,193,455.82 0.23% 0.24% 02/16/05 04/11/05 03/11/15 5.4900% 66 3,000,000.00 3,000,000.00 0.21% 0.23% 04/20/05 06/11/05 05/11/10 5.4500% 67 2,923,000.00 2,923,000.00 0.21% 0.22% 01/13/05 03/11/05 02/11/15 4.8500% 68 2,899,000.00 2,899,000.00 0.21% 0.22% 01/31/05 03/11/05 02/11/15 4.8900% 69 2,500,000.00 2,497,334.90 0.18% 0.19% 04/08/05 05/11/05 04/11/15 5.6400% 70 2,500,000.00 2,497,263.60 0.18% 0.19% 03/29/05 05/11/05 04/11/15 5.5000% 71 2,400,000.00 2,397,564.72 0.17% 0.18% 04/08/05 05/11/05 04/11/15 5.9000% 72 1,500,000.00 1,498,301.79 0.11% 0.11% 03/24/05 05/11/05 04/11/15 5.3200% INTEREST ORIGINAL REMAINING MORTGAGE LOAN INTEREST ACCRUAL TERM TO TERM TO ORIGINAL REMAINING LOAN ADMINISTRATIVE ACCRUAL METHOD MATURITY OR MATURITY OR REMAINING IO AMORT TERM AMORT TERM MONTHLY P&I NUMBER COST RATE METHOD DURING IO ARD (MOS.) ARD (MOS.) PERIOD (MOS.) (MOS.) (MOS.) PAYMENTS ($) - ----------------------------------------------------------------------------------------------------------------------------------- 1 0.04155% Actual/360 Actual/360 120 116 20 360 360 1,186,746.76 2 0.04155% Actual/360 Actual/360 120 118 34 324 324 753,921.17 3 0.04155% Actual/360 Actual/360 120 119 35 324 324 738,656.71 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 4 0.04155% Actual/360 Actual/360 84 83 35 360 360 560,906.73 5 0.04155% Actual/360 Actual/360 120 120 36 360 360 328,225.17 6 0.04155% Actual/360 Actual/360 84 80 20 360 360 226,657.53 7 0.04155% Actual/360 Actual/360 120 118 46 360 360 224,362.69 8 0.04155% Actual/360 Actual/360 60 60 60 IO IO IO 9 0.04155% Actual/360 Actual/360 120 118 118 IO IO IO 10 0.04155% Actual/360 Actual/360 120 118 46 360 360 162,843.93 11 0.04155% Actual/360 Actual/360 120 120 120 IO IO IO 12 0.04155% Actual/360 Actual/360 120 118 46 360 360 146,004.97 13 0.04155% Actual/360 Actual/360 120 119 35 360 360 147,625.14 14 0.04155% Actual/360 120 120 360 360 144,322.56 15 0.04155% Actual/360 Actual/360 120 119 23 360 360 113,313.44 16 0.04155% Actual/360 Actual/360 120 119 59 360 360 109,462.22 17 0.04155% Actual/360 Actual/360 120 119 35 360 360 103,465.24 19 0.04155% Actual/360 Actual/360 120 120 36 360 360 97,620.38 20 0.04155% Actual/360 Actual/360 120 118 10 360 360 92,549.61 21 0.04155% Actual/360 120 119 300 299 104,881.52 22 0.04155% Actual/360 Actual/360 120 119 35 360 360 85,936.97 23 0.07155% Actual/360 Actual/360 120 118 118 IO IO IO 24 0.04155% Actual/360 120 119 300 299 102,990.44 25 0.04155% Actual/360 Actual/360 60 59 35 360 360 85,995.71 26 0.04155% Actual/360 Actual/360 84 83 83 IO IO IO 27 0.04155% Actual/360 Actual/360 84 82 82 IO IO IO 29 0.04155% Actual/360 Actual/360 120 119 59 360 360 70,035.37 30 0.04155% Actual/360 Actual/360 120 120 24 360 360 69,800.22 31 0.04155% Actual/360 Actual/360 84 83 23 360 360 65,188.79 33 0.04155% Actual/360 Actual/360 60 58 10 360 360 57,905.58 34 0.04155% Actual/360 60 58 360 358 55,158.45 35 0.04155% Actual/360 Actual/360 60 59 59 IO IO IO 36 0.04155% Actual/360 120 119 300 299 58,589.49 37 0.04155% Actual/360 Actual/360 120 120 120 IO IO IO 39 0.04155% Actual/360 Actual/360 60 59 59 IO IO IO 41 0.04155% Actual/360 Actual/360 120 118 10 360 360 42,819.75 42 0.04155% Actual/360 Actual/360 120 119 23 360 360 41,927.74 44 0.04155% Actual/360 Actual/360 60 59 59 IO IO IO 45 0.04155% Actual/360 120 119 300 299 41,229.34 47 0.04155% Actual/360 120 120 360 360 35,741.91 49 0.04155% Actual/360 Actual/360 60 59 59 IO IO IO 50 0.04155% Actual/360 Actual/360 120 119 47 360 360 31,576.59 51 0.04155% Actual/360 120 120 240 240 39,862.11 52 0.04155% Actual/360 60 60 360 360 30,491.42 53 0.04155% Actual/360 Actual/360 120 119 35 360 360 30,457.39 54 0.04155% Actual/360 Actual/360 120 119 35 360 360 28,264.09 55 0.04155% Actual/360 120 117 360 357 27,455.54 56 0.04155% Actual/360 Actual/360 60 59 59 IO IO IO 58 0.04155% Actual/360 120 118 360 358 23,584.29 60 0.04155% Actual/360 Actual/360 60 59 11 360 360 23,572.11 61 0.04155% Actual/360 Actual/360 60 59 59 IO IO IO 62 0.04155% Actual/360 60 60 360 360 20,327.61 63 0.04155% Actual/360 120 118 300 298 22,354.73 64 0.04155% Actual/360 120 118 360 358 18,149.18 66 0.04155% Actual/360 60 60 360 360 16,939.68 67 0.04155% Actual/360 Actual/360 120 117 117 IO IO IO 68 0.04155% Actual/360 Actual/360 120 117 117 IO IO IO 69 0.04155% Actual/360 120 119 360 359 14,415.10 70 0.04155% Actual/360 120 119 360 359 14,194.73 71 0.04155% Actual/360 120 119 360 359 14,235.28 72 0.04155% Actual/360 120 119 360 359 8,348.21 MORTGAGE MATURITY DATE OR LTV RATIO AT LOAN ARD BALLOON ARD APPRAISAL CUT-OFF DATE MATURITY OR NUMBER BALANCE ($) LOAN PREPAYMENT PROVISIONS APPRAISED VALUE ($) DATE DSCR (X) LTV RATIO ARD - ---------------------------------------------------------------------------------------------------------------------------------- 1 187,848,579.58 N L(28),D(88),O(4) 700,000,000 01/04/05 1.77 61.71% 53.67% 2 114,058,938.94 N L(26),D(90),O(4) 385,000,000 02/01/05 1.22 68.83% 59.25% 3 110,182,873.84 N L(25),D(91),O(4) 170,000,000 03/15/05 1.40 75.00% 64.81% 3.1 32,580,012 03/15/05 3.2 27,644,703 03/15/05 3.3 27,536,310 03/15/05 3.4 12,251,669 03/15/05 3.5 13,038,635 03/15/05 3.6 9,951,774 03/15/05 3.7 8,419,003 03/15/05 3.8 5,593,274 03/15/05 3.9 5,483,363 03/15/05 3.10 6,049,419 03/15/05 3.11 4,268,431 03/15/05 3.12 4,255,946 03/15/05 3.13 2,934,083 03/15/05 3.14 2,871,428 03/15/05 3.15 2,671,246 03/15/05 3.16 2,281,368 03/15/05 3.17 2,169,336 03/15/05 4 94,370,328.38 N L(25),D(54),O(5) 125,700,000 02/23/05 1.20 79.55% 75.08% 5 50,393,569.58 N L(24),D(92),O(4) 77,100,000 12/01/05 1.32 72.63% 65.36% 6 37,957,079.22 N L(36),D(45),O(3) 53,000,000 11/08/04 1.55 77.36% 71.62% 7 36,423,457.48 N L(26),D(91),O(3) 53,900,000 01/27/05 1.20 74.21% 67.58% 8 29,770,000.00 N L(24),D(33),O(3) 38,200,000 03/11/05 1.45 77.93% 77.93% 9 29,050,000.00 Y L(26),YM1%(91),O(3) 41,600,000 12/04/04 1.47 69.83% 69.83% 10 26,411,649.41 Y L(26),D(57),O(37) 42,000,000 01/20/05 1.32 69.05% 62.88% 11 27,500,000.00 Y L(24),D(93),O(3) 30,600,000 03/01/05 1.09 89.87% 89.87% 12 24,290,601.04 N L(26),D(91),O(3) 35,350,000 01/28/05 1.21 75.81% 68.71% 13 23,259,059.19 N L(25),D(92),O(3) 32,500,000 11/02/04 1.26 80.00% 71.57% 14 20,966,879.18 N L(24),D(93),O(3) 33,150,000 02/07/05 1.57 75.34% 63.25% 15 17,348,405.10 N L(25),D(91),O(4) 24,800,000 02/17/05 1.20 79.68% 69.95% 16 17,928,218.08 N L(25),D(92),O(3) 27,850,000 04/01/05 1.20 69.30% 64.37% 17 16,719,871.47 N L(25),D(91),O(4) 23,900,000 02/01/05 1.25 78.66% 69.96% 19 15,964,467.78 N L(24),D(93),O(3) 22,600,000 02/08/05 1.21 79.65% 70.64% 20 14,086,636.56 N L(48),D(68),O(4) 21,350,000 08/01/05 1.39 77.28% 65.98% 21 12,528,817.96 N L(48),D(69),O(3) 21,500,000 12/15/04 1.30 74.89% 58.27% 22 14,235,362.94 N L(48),D(69),O(3) 22,900,000 02/24/05 1.29 70.31% 62.16% 23 16,000,000.00 N L(26),D(87),O(7) 32,400,000 01/24/05 2.67 49.38% 49.38% 24 12,385,806.46 N L(25),D(92),O(3) 24,000,000 01/21/05 1.53 66.57% 51.61% 25 14,985,798.21 N L(25),D(32),O(3) 21,900,000 03/01/05 1.21 70.32% 68.43% 26 15,242,500.00 N L(35),YM1%(45),O(4) 21,700,000 02/09/05 1.87 70.24% 70.24% 27 15,065,000.00 N L(35),YM1%(45),O(4) 23,500,000 02/10/05 2.11 64.11% 64.11% 29 11,593,246.36 N L(49),YM1%(61),O(10) 21,100,000 02/24/05 1.61 59.24% 54.94% 30 10,568,391.26 N L(24),D(93),O(3) 15,700,000 03/16/05 1.23 76.43% 67.31% 31 10,845,183.90 N L(25),D(56),O(3) 15,255,000 02/17/05 1.23 76.70% 71.09% 33 10,102,945.49 N L(36),D(17),O(7) 17,000,000 02/17/05 1.22 63.24% 59.43% 34 9,255,910.35 N L(26),D(31),O(3) 13,350,000 01/25/05 1.33 74.74% 69.33% 35 9,600,000.00 N L(25),D(32),O(3) 11,750,000 02/10/05 1.51 81.70% 81.70% 36 6,868,640.42 N L(48), D(68), O(4) 14,600,000 02/10/05 1.77 59.85% 47.05% 37 8,470,000.00 Y L(24),YM1%(93),O(3) 12,200,000 12/02/04 1.74 69.43% 69.43% 39 8,200,000.00 N L(25),D(32),O(3) 10,000,000 02/17/05 1.51 82.00% 82.00% 41 6,431,312.23 N L(26),D(91),O(3) 9,600,000 11/30/04 1.24 78.13% 66.99% 42 6,548,345.02 N L(25),D(92),O(3) 9,470,000 02/11/05 1.26 79.20% 69.15% 44 6,400,000.00 N L(25),D(32),O(3) 7,800,000 02/17/05 1.75 82.05% 82.05% 45 4,880,431.84 N L(47),YM1%(69),O(4) 10,900,000 01/12/05 1.50 57.26% 44.77% 47 5,079,721.04 N L(36),D(81),O(3) 8,175,000 01/24/05 1.39 73.39% 62.14% 49 5,857,500.00 Y L(48),D(8),O(4) 10,500,000 10/26/04 2.51 55.79% 55.79% 50 5,164,598.91 N L(48),D(69),O(3) 7,200,000 03/10/05 1.21 78.89% 71.73% 51 3,660,625.84 N L(24),D(93),O(3) 10,250,000 03/09/05 1.59 54.63% 35.71% 52 5,013,397.29 N L(24),D(33),O(3) 7,300,000 02/18/05 1.44 73.97% 68.68% 53 4,816,017.43 N L(35),YM1%(81),O(4) 6,735,000 03/08/05 1.29 80.00% 71.51% 54 4,469,207.59 N L(35),YM1%(81),O(4) 6,300,000 03/03/05 1.24 79.37% 70.94% 55 4,136,168.64 N L(27),D(89),O(4) 6,350,000 01/14/05 1.28 78.45% 65.14% 56 4,600,000.00 N L(25),D(32),O(3) 5,600,000 02/16/05 1.59 82.14% 82.14% 58 3,497,767.50 N L(48),D(68),O(4) 5,300,000 12/28/04 1.21 79.08% 66.00% 60 3,793,671.72 N YM2%(50),O(10) 6,350,000 12/30/04 1.71 62.99% 59.74% 61 3,750,000.00 N L(25),D(32),O(3) 4,560,000 02/16/05 1.63 82.24% 82.24% 62 3,342,265.09 N L(24),D(33),O(3) 5,280,000 02/21/05 1.52 68.18% 63.30% 63 2,726,977.23 N L(26),D(91),O(3) 5,700,000 01/07/05 1.75 62.10% 47.84% 64 2,672,467.23 N L(26),D(90),O(4) 4,770,000 01/06/05 1.34 66.95% 56.03% 66 2,785,220.57 N L(24),D(33),O(3) 4,325,000 02/16/05 1.41 69.36% 64.40% 67 2,923,000.00 Y L(48),D(68),O(4) 4,500,000 12/01/04 2.07 64.96% 64.96% 68 2,899,000.00 Y L(48),D(68),O(4) 4,460,000 11/30/04 2.01 65.00% 65.00% 69 2,097,344.28 N L(25),D(92),O(3) 3,600,000 02/01/05 1.49 69.37% 58.26% 70 2,088,318.46 N L(25),D(91),O(4) 3,700,000 01/14/05 1.44 67.49% 56.44% 71 2,029,307.02 N L(25),D(92),O(3) 3,750,000 08/15/04 1.78 63.94% 54.11% 72 1,245,947.18 N L(25),D(91),O(4) 2,000,000 03/01/05 1.22 74.92% 62.30% MORTGAGE CUT-OFF DATE LOAN YEAR YEAR NUMBER OF UNIT OF LOAN AMOUNT OCCUPANCY OCCUPANCY NUMBER BUILT RENOVATED UNITS MEASURE PER (UNIT) ($) RATE "AS OF" DATE MOST RECENT PERIOD - ------------------------------------------------------------------------------------------------------------------------------------ 1 1987 1,852,501 Sq. Ft. 233 89.55% 01/31/05 Aug. 1, 2003 - July 31, 2004 2 1969 1990 1,672,237 Sq. Ft. 158 84.45% 03/01/05 YTD 11/04 Annualized 3 Various 796,653 Sq. Ft. 160 96.89% 02/01/05 3/1/04-12/31/04 Annualized 3.1 1980 154,089 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.2 1988 83,408 Sq. Ft. 91.95% 02/01/05 3/1/04-12/31/04 Annualized 3.3 1990 100,219 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.4 1997 50,651 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.5 1995 114,000 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.6 1970 61,468 Sq. Ft. 95.42% 02/01/05 3/1/04-12/31/04 Annualized 3.7 1989 56,126 Sq. Ft. 74.97% 02/01/05 3/1/04-12/31/04 Annualized 3.8 1986 21,251 Sq. Ft. 94.39% 02/01/05 3/1/04-12/31/04 Annualized 3.9 1992 22,000 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.10 1993 25,000 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.11 1995 19,477 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.12 1993 16,500 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.13 1994 16,200 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.14 1992 15,713 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.15 1995 16,200 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.16 1996 12,480 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 3.17 1990 11,871 Sq. Ft. 100.00% 02/01/05 3/1/04-12/31/04 Annualized 4 1995 274,647 Sq. Ft. 364 89.11% 03/01/05 2004 Annualized 5 2005 679,588 Sq. Ft. 82 95.77% 04/13/05 6 1970 1999 404,089 Sq. Ft. 101 100.00% 01/25/05 2004 7 1987 97,717 Sq. Ft. 409 99.58% 03/07/05 2004 8 2002 472 Units 63,072 93.22% 03/17/05 T3 9 1999 130,096 Sq. Ft. 223 90.96% 03/01/05 2004 10 1965 2003 416,942 Sq. Ft. 70 100.00% 03/07/05 Calendar Year 2004 11 2005 25,000 Sq. Ft. 1,100 100.00% 03/01/05 Year 11 Rent 12 1968 226,019 Sq. Ft. 119 97.36% 01/25/05 2004 Annualized 13 1986 113,908 Sq. Ft. 228 96.56% 03/31/05 2004 14 1988 178 Units 140,309 94.94% 01/24/05 2004 15 1990 275,460 Sq. Ft. 72 99.56% 03/01/05 2004 16 2003 250 Units 77,200 82.40% 03/15/05 T-12 3/05 17 1966 1994 141,049 Sq. Ft. 133 100.00% 03/31/05 19 1986 210 Units 85,714 90.00% 03/18/05 2004 20 2005 57,205 Sq. Ft. 288 100.00% 02/15/05 21 1989 2004 184,624 Sq. Ft. 87 100.00% 03/29/05 22 1997 240 Units 67,083 92.92% 03/03/05 2004 23 1966 159,286 Sq. Ft. 100 92.55% 01/21/05 2004 24 2000 167 Rooms 95,670 80.39% 02/01/05 T12 25 1986 98,928 Sq. Ft. 156 92.83% 03/23/05 2004 26 1987 128,870 Sq. Ft. 118 100.00% 03/10/05 2003 27 2004 81,218 Sq. Ft. 185 98.40% 02/14/05 29 1989 1995 120,820 Sq. Ft. 103 99.30% 03/07/05 2004 30 1928 2003 23,650 Sq. Ft. 507 96.62% 04/01/05 2004 31 1989 256 Units 45,703 92.97% 03/28/05 2004 Actual 33 1974 2005 548 Units 19,617 78.83% 02/24/05 Trailing 12 34 1988 1998 103,713 Sq. Ft. 96 97.74% 02/18/05 2004 35 1996 75,937 Sq. Ft. 126 81.60% 03/15/05 2004 36 2004 156 Rooms 56,014 70.86% 03/01/05 T12 37 2004 65,753 Sq. Ft. 129 100.00% 12/16/04 39 1999 86,583 Sq. Ft. 95 97.00% 03/15/05 T12 12/04 41 1999 2004 52,071 Sq. Ft. 144 89.09% 02/08/05 2004 42 1976 1998 213 Units 35,211 89.67% 01/05/05 T-3 44 2000 87,765 Sq. Ft. 73 83.10% 03/15/05 T12 12/04 45 2000 110 Rooms 56,739 75.78% 12/31/04 2004 47 1924 1985 103,972 Sq. Ft. 58 90.61% 04/01/05 2004 49 1994 126,405 Sq. Ft. 46 100.00% 12/07/04 50 1998 104 Units 54,615 99.04% 03/01/05 51 2002 45,000 Sq. Ft. 124 100.00% 04/07/05 2004 52 2000 14,490 Sq. Ft. 373 100.00% 03/22/05 2003 53 1981 1996 67,810 Sq. Ft. 79 95.43% 02/21/05 2004 54 1992 54,019 Sq. Ft. 93 100.00% 02/21/05 2004 55 1987 6,000 Sq. Ft. 830 100.00% 02/04/05 56 2002 69,385 Sq. Ft. 66 84.20% 03/15/05 2004 58 2004 14,820 Sq. Ft. 283 100.00% 02/16/05 60 1995 117 Rooms 34,188 67.38% 02/25/05 T12 2/05 61 1987 72,850 Sq. Ft. 51 96.60% 03/15/05 2004 62 2001 15,120 Sq. Ft. 238 100.00% 03/22/05 2003 63 2001 58,280 Sq. Ft. 61 90.49% 12/31/04 T3 64 1998 2004 30,390 Sq. Ft. 105 84.17% 04/03/05 7 mo annualized 66 2002 14,490 Sq. Ft. 207 100.00% 03/22/05 2003 67 2004 14,280 Sq. Ft. 205 100.00% 01/10/05 68 2004 13,882 Sq. Ft. 209 100.00% 01/25/05 69 1981 1998 30,862 Sq. Ft. 81 100.00% 04/06/05 2004 70 2004 22,716 Sq. Ft. 110 100.00% 03/10/05 71 1997 38,826 Sq. Ft. 62 84.00% 08/15/04 TTM 72 NA-Land 4,510 Sq. Ft. 332 100.00% 03/01/05 MORTGAGE UW NET LOAN MOST RECENT MOST RECENT MOST RECENT MOST RECENT UW UW OPERATING UW NET CASH NUMBER REVENUES ($) EXPENSES ($) NOI ($) NCF ($) REVENUES ($) EXPENSES ($) INCOME ($) FLOW ($) - ----------------------------------------------------------------------------------------------------------------------------------- 1 70,644,369 39,362,284 31,282,085 30,911,585 90,592,807 37,103,624 53,489,183 50,540,583 2 29,855,041 17,619,290 12,235,751 11,984,916 41,194,147 18,918,036 22,276,111 22,025,275 3 19,473,660 5,656,198 13,817,459 13,817,459 19,476,370 6,099,135 13,377,235 12,372,491 3.1 4,377,413 1,848,132 2,529,281 2,529,281 4,234,865 1,916,523 2,318,342 2,124,004 3.2 3,178,410 660,612 2,517,798 2,517,798 3,168,413 525,353 2,643,060 2,537,865 3.3 3,200,160 982,434 2,217,726 2,217,726 3,283,857 1,081,686 2,202,171 2,075,774 3.4 1,235,896 300,851 935,045 935,045 1,249,995 318,629 931,367 867,486 3.5 1,569,654 433,980 1,135,674 1,135,674 1,673,852 706,438 967,414 823,636 3.6 1,287,474 484,927 802,547 802,547 1,378,141 611,273 766,867 689,344 3.7 985,648 321,170 664,477 664,477 1,024,695 302,087 722,609 651,822 3.8 492,847 72,842 420,005 420,005 496,975 72,858 424,117 397,315 3.9 478,760 68,911 409,849 409,849 457,778 68,293 389,485 361,738 3.10 549,809 75,962 473,846 473,846 525,956 75,458 450,498 418,968 3.11 512,628 119,582 393,046 393,046 443,068 112,484 330,584 306,019 3.12 364,523 47,186 317,336 317,336 351,340 49,020 302,320 281,511 3.13 304,927 57,275 247,652 247,652 270,221 54,199 216,021 195,590 3.14 255,140 45,688 209,453 209,453 242,330 44,477 197,853 178,036 3.15 256,962 60,467 196,495 196,495 252,078 57,050 195,028 174,597 3.16 214,235 38,516 175,718 175,718 237,384 67,160 170,224 154,484 3.17 209,174 37,663 171,511 171,511 185,422 36,146 149,276 134,304 4 10,152,665 2,040,977 8,111,688 8,084,223 11,946,959 3,558,479 8,388,480 8,089,346 5 9,283,551 3,900,403 5,383,148 5,193,144 6 8,888,807 4,417,605 4,471,202 4,390,384 8,566,185 4,030,116 4,536,069 4,212,817 7 4,767,279 2,250,218 2,517,061 2,497,518 5,586,654 2,225,529 3,361,125 3,219,165 8 4,893,478 2,465,977 2,427,501 2,333,301 4,893,023 2,465,964 2,427,059 2,332,859 9 3,375,854 1,066,435 2,309,419 2,296,409 3,630,382 1,129,236 2,501,146 2,400,247 10 3,211,702 1,088,539 2,123,163 2,060,622 3,628,461 896,701 2,731,760 2,570,336 11 1,888,810 88,740 1,800,070 1,796,320 1,717,000 85,180 1,631,820 1,628,070 12 4,170,309 1,571,512 2,598,797 2,549,039 4,318,206 1,874,018 2,444,188 2,127,162 13 2,900,932 993,042 1,907,890 1,890,804 3,392,164 1,057,813 2,334,351 2,227,223 14 6,545,993 3,761,172 2,784,821 2,707,035 6,649,821 3,850,631 2,799,190 2,721,404 15 2,391,502 542,649 1,848,853 1,804,779 2,374,634 632,487 1,742,147 1,627,194 16 2,489,711 1,034,283 1,455,428 1,399,178 2,499,968 868,107 1,631,861 1,575,611 17 2,504,941 814,186 1,690,755 1,555,460 19 2,428,936 979,531 1,449,405 1,396,905 2,435,656 961,807 1,473,849 1,421,349 20 2,158,341 583,698 1,574,643 1,538,562 21 2,143,327 456,827 1,686,500 1,630,465 22 2,298,796 925,509 1,373,287 1,313,287 2,246,045 858,066 1,387,979 1,327,979 23 3,602,188 1,408,513 2,193,675 2,157,040 4,077,919 1,564,415 2,513,505 2,191,828 24 6,770,837 4,661,302 2,109,535 1,838,702 6,698,329 4,604,286 2,094,043 1,893,093 25 1,593,655 575,298 1,018,357 990,657 2,060,448 681,506 1,378,941 1,245,102 26 2,067,304 501,792 1,565,512 1,528,140 1,947,068 452,332 1,494,736 1,380,779 27 2,110,328 527,868 1,582,460 1,539,057 29 2,412,087 782,896 1,629,191 1,600,182 2,351,231 784,405 1,566,825 1,354,223 30 1,359,233 432,236 926,997 924,632 1,476,159 417,062 1,059,098 1,032,645 31 1,742,653 845,153 897,500 846,300 1,847,610 834,892 1,012,717 961,517 33 2,472,092 1,488,318 983,774 846,774 2,473,920 1,490,451 983,469 846,469 34 2,279,546 1,044,778 1,234,768 1,212,988 2,117,722 1,052,753 1,064,969 882,327 35 1,149,731 457,810 691,921 680,528 1,230,964 501,925 729,039 717,646 36 4,799,731 3,477,151 1,322,580 1,178,588 4,799,970 3,408,590 1,391,380 1,247,381 37 1,174,603 329,575 845,028 795,110 39 923,174 270,228 652,946 639,836 1,036,249 409,380 626,869 613,759 41 827,858 236,090 591,768 586,561 950,346 259,994 690,352 637,574 42 1,299,428 604,733 694,695 641,445 1,297,629 608,667 688,962 635,712 44 744,178 289,240 454,938 441,773 964,449 396,767 567,682 554,517 45 2,688,085 1,700,545 987,540 906,897 2,423,810 1,582,871 840,939 743,987 47 1,128,749 676,508 452,241 428,282 1,383,437 674,869 708,567 595,314 49 754,637 22,639 731,998 715,565 50 783,425 303,737 479,688 458,888 51 1,106,725 235,043 871,682 867,182 1,081,575 245,355 836,220 761,998 52 535,000 5,350 529,650 528,201 535,000 5,350 529,650 528,201 53 629,750 128,181 501,569 494,788 627,450 127,691 499,759 472,586 54 631,515 149,952 481,563 468,059 614,494 150,396 464,098 421,691 55 434,836 5,001 429,835 421,435 56 615,959 231,444 384,515 376,936 661,493 291,822 369,671 362,092 58 347,974 3,480 344,494 343,012 60 2,079,343 1,473,033 606,310 523,177 2,028,514 1,464,400 564,114 482,973 61 560,472 203,247 357,225 346,303 587,625 273,887 313,738 302,816 62 376,000 3,760 372,240 370,728 376,034 3,760 372,274 370,762 63 702,864 83,835 619,029 610,989 663,656 186,803 476,853 468,813 64 539,442 236,831 302,611 299,572 525,134 204,183 320,951 291,560 66 292,000 14,838 277,162 275,713 291,974 2,920 289,054 287,605 67 303,500 9,105 294,395 292,967 68 295,000 8,850 286,150 284,762 69 291,872 17,474 274,398 271,311 277,432 16,532 260,900 257,814 70 312,950 51,510 261,440 245,500 71 448,253 138,664 309,589 305,380 448,253 139,178 309,075 304,866 72 124,740 2,495 122,245 122,245 MORTGAGE LARGEST LARGEST LOAN TENANT TENANT LARGEST TENANT NUMBER LARGEST TENANT NAME SQ. FT. % OF NRA EXP. DATE 2ND LARGEST TENANT NAME - ------------------------------------------------------------------------------------------------------------------------------------ 1 Deutsche / Scudder, Stevens 378,490 20.43% 05/31/09 Ropes & Gray 2 Associated Press 290,752 17.39% 11/30/19 Thirteen/WNET 3 Various Various Various Various Various 3.1 Morristown Memorial Hospital 83,151 53.96% 02/28/12 Mid Atlantic Surgical 3.2 Montefiore Medical Center 52,907 63.43% 03/10/08 NYS Assc. for Retarded Children 3.3 Harvard Vanguard Medical Associates 64,670 64.53% 11/30/09 Kindercare Learning Ctr 3.4 Univ. of FL Jacksonville Healthcare 29,086 57.42% Multiple Spaces Medical Partners Surgery Center, Ltd 3.5 Trinity Hospitals 114,000 100.00% 06/30/09 3.6 Mountainside Hospital 20,276 32.99% 06/30/12 Surburban Endoscopy Center , LLC 3.7 Physician Associates, LLC 17,090 30.45% 12/31/05 Commonwealth Orthopaedic Centers PSC 3.8 Physician Associates of FL 20,058 94.39% 04/30/08 3.9 Physician Associates of FL 21,011 95.50% 04/30/08 Family Meds, Inc. 3.10 Physician Associates of FL 24,250 97.00% 04/30/08 Family Meds, Inc. 3.11 Exempla Health Care 19,477 100.00% 07/31/07 3.12 Physician Associates of FL 16,044 97.24% 04/30/08 Family Meds, Inc. 3.13 Team Radiology Inc. 16,200 100.00% 03/31/08 3.14 Baptist Health Properties, Inc. 15,713 100.00% 02/29/08 3.15 MedPartners Acquisition Corp 16,200 100.00% 03/31/08 3.16 Physiotherapy Associates Inc. 12,480 100.00% 05/31/08 3.17 Baptist Health Properties, Inc. 11,871 100.00% 02/29/08 4 New Century 79,636 29.00% 04/30/10 Sport Chalet 5 Wal-Mart (Ground Lease) 207,928 30.60% 01/25/25 Lowe's Home Improvement (Ground Lease) 6 Mercantile Bank & Trust 202,822 50.19% 12/12/14 Venable, LLP 7 Strategic Insight 13,788 14.11% 12/31/07 Career Blazer 8 9 AJ's Fine Foods 26,500 20.37% 04/14/25 Creative Leather Furniture 10 Lowe's Home Improvement (Ground Lease) 160,000 38.37% 05/31/24 Burlington Coat Factory 11 Columbia University 25,000 100.00% 10/31/53 12 Moreno Insurance 35,211 15.58% 05/31/07 Executive Suite (Master Lease) 13 Govolution, Inc 15,246 13.38% 01/31/12 Bean Kinney & Korman, PC 14 15 Lowe's Home Improvement 161,000 58.45% 02/29/24 Giant 16 17 Shaw's Supermarket 70,000 49.63% 07/31/08 Joey'z Shopping Spree 19 20 Office Depot 15,986 27.95% 12/31/14 Prudential/WCI 21 Home Market Foods 112,677 61.03% 03/31/30 The Home Depot 22 23 Roy's Woodland Hills 7,327 4.60% 09/30/14 Fleming's/Woodland Hills 24 25 Brent Rosencranz 15,948 16.12% Multiple Spaces Sunrise Medical 26 Jewel/Osco 64,922 50.38% 02/28/19 Ace Hardware 27 Stater Brothers 44,093 54.29% 01/31/25 Washington Mutual Bank 29 Wyrick Robbins Yates & Ponton LLP 50,555 41.84% 07/31/09 American Board of Anesthesiology, Inc. 30 Ecko Unlimited 12,000 50.74% 12/31/10 T.R.I. Center 31 33 34 Department of Revenue 47,694 45.99% 11/30/08 Executive Suites 35 36 37 CompUSA 22,092 33.60% 01/31/20 Cost Plus, Inc. 39 41 MODA 5,570 10.70% 04/30/09 J Bourn Gallery 42 44 45 47 G.S.A. 42,934 41.29% Multiple Spaces Reading Area Community College 49 Lowe's Home Improvement 126,405 100.00% 01/31/14 50 51 Aesculapian Management Company, LLC 45,000 100.00% 03/30/20 52 Walgreens 14,490 100.00% 10/31/61 53 Bi-Lo 44,570 65.73% 07/31/17 Dollar General 54 Food Lion 40,202 74.42% 05/26/12 Expert Nails 55 PNC Bank 6,000 100.00% 06/30/07 Marriott (Ground Lease) 56 58 Walgreens 14,820 100.00% 01/31/80 60 61 62 Walgreens 15,120 100.00% 09/30/61 63 64 Humana 4,638 15.26% 03/31/10 Back in Action 66 Walgreens 14,490 100.00% 07/31/77 67 Walgreens 14,280 100.00% 12/31/79 68 Walgreens 13,882 100.00% 10/31/79 69 Piggly Wiggly 30,862 100.00% 09/30/18 70 CiCi's Pizza 4,952 21.80% 04/30/14 Video Warehouse 71 72 Wachovia Bank, N.A. (Ground Lease) 4,510 100.00% 11/30/24 MORTGAGE 2ND LARGEST 2ND LARGEST 2ND LARGEST 3RD LARGEST 3RD LARGEST 3RD LARGEST LOAN TENANT TENANT % TENANT TENANT TENANT % TENANT NUMBER SQ. FT. OF NRA (%) EXP. DATE 3RD LARGEST TENANT NAME SQ. FT OF NRA EXP. DATE - --------------------------------------------------------------------------------------------------------------------------------- 1 322,754 17.42% 12/31/10 Choate, Hall & Stewart 155,324 8.38% 09/30/15 2 204,791 12.25% 11/19/18 Lerner NY 163,093 9.75% 06/30/15 3 Various Various Various Various Various Various Various 3.1 8,097 5.25% 12/31/07 Surgical Specialists 6,470 4.20% 05/31/07 3.2 14,916 17.88% 06/28/13 Cardinal Health 414, Inc. 7,345 8.81% 06/16/05 3.3 6,184 6.17% 08/31/05 World Media Foundation 5,278 5.27% 11/30/10 3.4 14,522 28.67% 04/30/13 Shands Jacksonville Medical 5,065 10.00% 10/31/09 3.5 3.6 9,099 14.80% 12/31/12 Essex Testing Clinic, Inc 7,314 11.90% 03/31/07 3.7 10,447 18.61% Multiple Spaces Gambro Healthcare 6,475 11.54% 10/31/07 3.8 3.9 989 4.50% 06/30/08 3.10 750 3.00% 06/30/08 3.11 3.12 456 2.76% 06/30/08 3.13 3.14 3.15 3.16 3.17 4 35,049 12.76% 12/31/15 Quick Loan Funding 25,918 9.44% 11/30/08 5 166,992 24.57% 10/31/30 Sport Chalet 42,000 6.18% 10/31/15 6 140,649 34.81% 04/30/11 Grant Thornton 16,744 4.14% 12/31/13 7 12,178 12.46% Multiple Spaces Citra Trading 8,167 8.36% 05/01/14 8 9 13,249 10.18% 03/10/10 Showcase Home Entertainment 12,000 9.22% 02/02/10 10 81,500 19.55% 09/30/09 Super Stop & Shop 65,000 15.59% 04/30/20 11 12 22,172 9.81% 02/18/10 Arcadis 12,552 5.55% Multiple Spaces 13 14,536 12.76% 11/30/06 Laughlin, Marinaccio & Owens 11,288 9.91% 11/30/13 14 15 53,800 19.53% 02/28/41 CVS 11,840 4.30% 02/28/06 16 17 12,000 8.51% 11/30/15 Hometown Buffet 9,745 6.91% 12/31/10 19 20 6,792 11.87% 02/28/10 Fidelity Investments 6,144 10.74% 02/28/15 21 71,947 38.97% 03/31/08 22 23 7,040 4.42% 08/31/14 Insurance Technical 4,271 2.68% 10/31/09 24 25 12,216 12.35% 12/11/07 Dot Hill Systems 11,219 11.34% 04/30/06 26 17,600 13.66% 03/14/09 Blockbuster Video 6,000 4.66% 01/31/07 27 5,000 6.16% 12/31/14 Jack in the Box (Ground Lease) 3,600 4.43% 03/31/25 29 11,008 9.11% Multiple Spaces BWAY Corporation 10,201 8.44% 09/30/08 30 8,000 33.83% 12/31/10 Subway 800 3.38% 12/31/10 31 33 34 22,448 21.64% 07/31/09 Keiser College 19,591 18.89% 09/30/14 35 36 37 18,365 27.93% 01/31/17 PETCO 15,217 23.14% 10/31/19 39 41 3,630 6.97% 07/31/09 Geist Market 2,500 4.80% 07/31/09 42 44 45 47 13,227 12.72% Multiple Spaces Stevens & Lee 7,092 6.82% 12/31/07 49 50 51 52 53 7,200 10.62% 04/30/07 Check into Cash 2,900 4.28% 10/31/07 54 3,000 5.55% 06/30/07 Sunrise Cleaners 2,540 4.70% 08/31/08 55 01/31/17 56 58 60 61 62 63 64 3,751 12.34% 05/14/09 Mishugas2, Inc. 2,354 7.75% 08/31/09 66 67 68 69 70 3,732 16.43% 09/30/09 GameStop 1,600 7.04% 05/31/09 71 72 MORTGAGE LOAN LARGEST AFFILIATED SPONSOR FLAG NUMBER LOCKBOX (> THAN 4% OF POOL) - --------------------------------------------------------------------------------------------------- 1 Day 1 Prudential Property Investment Separate Account ("PRISA") 2 Day 1 Jacob Chetrit & Arbor Realty SR, Inc. 3 Day 1 Cindy Dolgin and Meyer Chetrit 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 4 Day 1 Maguire Properties, L.P. 5 Springing 6 Day 1 7 Day 1 8 9 Day 1 10 Day 1 11 Day 1 12 13 Day 1 14 15 Springing 16 Springing 17 Springing 19 20 21 22 Day 1 23 24 25 26 27 29 30 31 33 34 Springing 35 Springing 36 37 Day 1 39 Springing 41 42 44 Springing 45 47 49 Springing 50 51 52 53 54 55 Springing 56 Springing 58 60 61 Springing 62 63 64 66 67 Springing 68 Springing 69 70 71 72
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C18 ANNEX A-1B ---------- CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES IN LOAN GROUP 2 MORTGAGE LOAN CROSS COLLATERALIZED LOAN GROUP AND CROSS NUMBER NUMBER PROPERTY NAME ADDRESS CITY STATE ZIP CODE DEFAULTED LOAN FLAG - ------------------------------------------------------------------------------------------------------------------------------------ 18 2 La Serena Apartments 727 South Lyon Street Santa Ana CA 92705 28 2 Flaherty Farm Apartments Flaherty Farms Avenue Wake Forest NC 28587 32 2 The Pointes of Marietta 1275 Cunningham Road Marietta GA 30008 38 2 Amberview Apartments 32115 - 105th Place SE Auburn WA 98092 40 2 Autumn Wood Apartments 1000 Autumn Wood Drive Hoover AL 35216 43 2 Celebration Park Apartments 32205 11th Place South Federal Way WA 98003 46 2 Westbrook Manor Apartments 14735 W Plaza Omaha NE 68137 48 2 The Quad Apartments 742 North McMillan Avenue Wilmington NC 28403 57 2 Sage Canyon 6134 4th Street NW Albuquerque NM 87107 59 2 Pines on Pelham 260 Pelham Road Greenville SC 29615 65 2 Broadway Towers Apartments 230 East Broadway Salt Lake City UT 84111 MORTGAGE GENERAL SPECIFIC % OF AGGREGATE % OF AGGREGATE LOAN LOAN PROPERTY PROPERTY ORIGINAL LOAN CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE NUMBER ORIGINATOR TYPE TYPE BALANCE ($) LOAN BALANCE ($) BALANCE GROUP 2 BALANCE - ------------------------------------------------------------------------------------------------------------------------------------ 18 Wachovia Multifamily Conventional 18,000,000.00 18,000,000.00 1.28% 20.23% 28 Wachovia Multifamily Conventional 13,500,000.00 13,500,000.00 0.96% 15.18% 32 Wachovia Multifamily Conventional 10,800,000.00 10,787,772.89 0.77% 12.13% 38 Wachovia Multifamily Conventional 8,300,000.00 8,300,000.00 0.59% 9.33% 40 Wachovia Multifamily Conventional 7,700,000.00 7,700,000.00 0.55% 8.66% 43 Wachovia Multifamily Conventional 7,000,000.00 7,000,000.00 0.50% 7.87% 46 Wachovia Multifamily Conventional 6,200,000.00 6,200,000.00 0.44% 6.97% 48 Wachovia Multifamily Conventional 6,000,000.00 6,000,000.00 0.43% 6.74% 57 Wachovia Multifamily Conventional 4,320,000.00 4,320,000.00 0.31% 4.86% 59 Wachovia Multifamily Conventional 4,150,000.00 4,150,000.00 0.30% 4.67% 65 Wachovia Multifamily Conventional 3,000,000.00 3,000,000.00 0.21% 3.37% INTEREST ORIGINAL REMAINING MORTGAGE MATURITY LOAN INTEREST ACCURAL TERM TO TERM TO LOAN ORIGINATION FIRST PAY DATE MORTGAGE ADMINISTRATIVE ACCRUAL METHOD MATURITY OR MATURITY OR NUMBER DATE DATE OR ARD DATE COST RATE METHOD DURING IO ARD (MOS.) ARD (MOS.) - ------------------------------------------------------------------------------------------------------------------------------------ 18 02/24/05 04/11/05 03/11/10 5.0000% 0.04155% Actual/360 Actual/360 60 58 28 04/15/05 06/11/05 05/11/15 5.3300% 0.04155% Actual/360 120 120 32 04/01/05 05/11/05 04/11/15 5.3200% 0.04155% Actual/360 120 119 38 03/31/05 05/11/05 04/11/10 5.4100% 0.04155% Actual/360 Actual/360 60 59 40 03/03/05 04/11/05 03/11/12 5.5300% 0.04155% Actual/360 Actual/360 84 82 43 04/07/05 05/11/05 04/11/15 5.3200% 0.04155% Actual/360 Actual/360 120 119 46 03/23/05 05/11/05 04/11/15 5.4000% 0.08155% Actual/360 Actual/360 120 119 48 04/12/05 06/11/05 05/11/15 5.1900% 0.04155% Actual/360 Actual/360 120 120 57 03/31/05 05/11/05 04/11/15 5.1600% 0.04155% Actual/360 Actual/360 120 119 59 03/31/05 05/11/05 04/11/15 5.0500% 0.04155% Actual/360 Actual/360 120 119 65 04/20/05 06/11/05 05/11/10 5.7900% 0.04155% Actual/360 60 60 MORTGAGE REMAINING ORIGINAL REMAINING MATURITY DATE OR LOAN IO PERIOD AMORT TERM AMORT TERM MONTHLY P&I ARD BALLOON ARD APPRAISED NUMBER (MOS.) (MOS.) (MOS.) PAYMENTS ($) BALANCE ($) LOAN PREPAYMENT PROVISIONS VALUE ($) - ----------------------------------------------------------------------------------------------------------------------------- 18 10 360 360 96,627.89 16,910,514.00 N L(12),YM2%(45),O(3) 25,000,000 28 300 300 81,536.86 10,215,073.69 N L(24),D(92),O(4) 17,600,000 32 360 359 60,107.11 8,970,819.99 N L(48),D(65),O(7) 13,500,000 38 23 360 360 46,658.88 7,961,122.37 N L(25),YM2%(31),O(4) 10,900,000 40 16 360 360 43,864.80 7,092,548.92 N L(48),D(29),O(7) 11,800,000 43 35 360 360 38,958.31 6,238,657.50 N L(25),D(92),O(3) 13,500,000 46 23 360 360 34,814.91 5,418,564.75 N L(25),YM1%(91),O(4) 8,100,000 48 24 360 360 32,909.60 5,217,067.53 N L(24),D(92),O(4) 8,575,000 57 47 360 360 23,614.96 3,917,466.84 N L(48),D(69),O(3) 5,450,000 59 35 360 360 22,405.08 3,677,375.40 N L(25),D(92),O(3) 5,200,000 65 360 360 17,583.49 2,798,519.84 N L(24),D(33),O(3) 5,900,000 MORTGAGE LTV RATIO CUT-OFF DATE LOAN APPRAISAL DSCR CUT-OFF DATE AT MATURITY YEAR YEAR NUMBER OF UNIT OF LOAN AMOUNT OCCUPANCY NUMBER DATE (X) LTV RATIO OR ARD BUILT RENOVATED UNITS MEASURE PER (UNIT) ($) RATE - ------------------------------------------------------------------------------------------------------------------------------------ 18 12/17/04 1.32 72.00% 67.64% 1971 2005 188 Units 95,745 96.28% 28 03/08/05 1.34 76.70% 58.04% 1999 228 Units 59,211 100.00% 32 01/07/05 1.24 79.91% 66.45% 1986 210 Units 51,370 89.05% 38 03/04/05 1.20 76.15% 73.04% 1987 157 Units 52,866 88.54% 40 04/01/05 1.23 65.25% 60.11% 1986 206 Units 37,379 88.83% 43 02/17/05 1.56 51.85% 46.21% 1968 248 Units 28,226 93.95% 46 01/12/05 1.20 76.54% 66.90% 1973 148 Units 41,892 80.41% 48 02/25/05 1.24 69.97% 60.84% 1998 136 Units 44,118 94.85% 57 03/16/05 1.23 79.27% 71.88% 1986 2004 105 Units 41,143 93.33% 59 02/17/05 1.23 79.81% 70.72% 1972 184 Units 22,554 97.83% 65 02/11/05 1.44 50.85% 47.43% 1985 94 Units 31,915 89.36% MORTGAGE OCCUPANCY MOST UW NET LOAN "AS OF" RECENT MOST RECENT MOST RECENT MOST RECENT MOST RECENT UW UW OPERATING NUMBER DATE PERIOD REVENUES ($) EXPENSES ($) NOI ($) NCF ($) REVENUES ($) EXPENSES ($) INCOME ($) - ------------------------------------------------------------------------------------------------------------------------------------ 18 02/22/05 2004 2,222,983 772,876 1,450,107 1,403,107 2,529,600 946,854 1,582,746 28 03/08/05 2004 1,420,334 28,407 1,391,927 1,334,927 1,399,495 27,990 1,371,505 32 03/28/05 2004 1,733,771 776,391 957,380 904,880 1,729,309 782,201 947,108 38 03/15/05 T-6 2/05 1,372,830 646,223 726,607 687,357 1,384,322 674,067 710,255 40 03/31/05 2004 Actual 1,371,975 784,497 587,478 535,978 1,374,357 673,411 700,946 43 04/04/05 T-12 02/05 1,726,273 925,306 800,967 738,967 1,716,518 924,953 791,564 46 01/31/05 T-12 02/05 1,169,020 714,446 454,574 417,574 1,169,465 629,094 540,371 48 02/03/05 2004 1,022,363 480,982 541,381 507,381 1,000,479 477,916 522,563 57 03/03/05 671,679 302,679 369,000 59 03/30/05 T3 1,098,484 644,035 454,449 399,249 1,069,184 684,436 384,748 65 03/10/05 2004 903,458 538,596 364,862 341,362 846,046 518,283 327,763 MORTGAGE UW NET LARGEST LARGEST LARGEST LARGEST 2ND LARGEST 2ND LARGEST 2ND LARGEST LOAN CASH TENANT TENANT TENANT TENANT 2ND LARGEST TENANT TENANT % TENANT NUMBER FLOW ($) NAME SQ. FT. % OF NRA EXP. DATE TENANT NAME SQ. FT. OF NRA (%) EXP. DATE - ------------------------------------------------------------------------------------------------------------------------------------ 18 1,535,746 28 1,314,505 32 894,608 38 671,005 40 649,446 43 729,564 46 503,371 48 488,563 57 348,000 59 329,548 65 304,263 MORTGAGE 3RD LARGEST 3RD LARGEST 3RD LARGEST LOAN 3RD LARGEST TENANT TENANT % TENANT LARGEST AFFILIATED SPONSOR FLAG NUMBER TENANT NAME SQ. FT OF NRA EXP. DATE LOCKBOX (> THAN 4% OF POOL) - -------------------------------------------------------------------------------------------------------------------------- 18 28 32 38 40 43 46 48 57 59 65 See "DESCRIPTION OF THE MORTGAGE POOL - Additional Mortgage Loan Information" in the prospectus supplement.
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C18 ANNEX A-2 CERTAIN INFORMATION REGARDING MULTIFAMILY MORTGAGED PROPERTIES - --------- MORTGAGE LOAN LOAN GROUP NUMBER NUMBER PROPERTY NAME PROPERTY ADDRESS PROPERTY CITY - ------------------------------------------------------------------------------------------------------------------------------------ 8 1 Cypress Lake at Stonebriar 8404 Warren Parkway Frisco 14 1 Kensington Place 1580 Geary Road Walnut Creek 16 1 Resort at University Park Apartments 4675 Alta Point Colorado Springs 18 2 La Serena Apartments 727 South Lyon Street Santa Ana 19 1 Sandpiper Village Apartments 999 Marshall Road Vacaville 22 1 Serena Shores Apartments 4101 East Baseline Road Gilbert 28 2 Flaherty Farm Apartments Flaherty Farms Avenue Wake Forest 31 1 Sterling Square Apartments 1900 Windsor Hill Drive Matthews 32 2 The Pointes of Marietta 1275 Cunningham Road Marietta 33 1 Taylors Crossing 1 Pinecroft Drive Taylors 38 2 Amberview Apartments 32115 - 105th Place SE Auburn 40 2 Autumn Wood Apartments 1000 Autumn Wood Drive Hoover 42 1 Sherwood Ridges Apartments 3736 Kings Court Winston-Salem 43 2 Celebration Park Apartments 32205 11th Place South Federal Way 46 2 Westbrook Manor Apartments 14735 W Plaza Omaha 48 2 The Quad Apartments 742 North McMillan Avenue Wilmington 50 1 Cuestas Apartments 2800 North Roadrunner Parkway Las Cruces 57 2 Sage Canyon 6134 4th Street NW Albuquerque 59 2 Pines on Pelham 260 Pelham Road Greenville 65 2 Broadway Towers Apartments 230 East Broadway Salt Lake City MORTGAGE GENERAL UTILITIES NUMBER NUMBER LOAN PROPERTY PROPERTY PROPERTY SPECIFIC PROPERTY ELEVATOR TENANT NUMBER OF OF 1 BR OF 2 BR NUMBER STATE ZIP CODE COUNTY TYPE TYPE BUILDINGS PAYS STUDIO UNITS UNITS UNITS - ------------------------------------------------------------------------------------------------------------------------------------ 8 TX 75034 Collin Multifamily Conventional N E 184 264 14 CA 94596 Contra Costa Multifamily Independent Living Y 174 4 16 CO 80918 El Paso Multifamily Conventional N E,G,W,S,T 100 150 18 CA 92705 Orange Multifamily Conventional N E,W,S,T 156 32 19 CA 95687 Solano Multifamily Conventional N E,G,W,S,T 94 116 22 AZ 85234 Maricopa Multifamily Conventional N E,G 48 156 28 NC 28587 Wake Multifamily Conventional N E,G,W 152 31 NC 28105 Mecklenburg Multifamily Conventional N E 132 96 32 GA 30008 Cobb Multifamily Conventional N E 166 33 SC 29687 Greenville Multifamily Conventional N E 118 380 38 WA 98092 King Multifamily Conventional N E,W,S 53 76 40 AL 35216 Jefferson Multifamily Conventional N E,G,W,S,T 80 126 42 NC 27106 Forsyth Multifamily Conventional N E 32 159 43 WA 98003 King Multifamily Conventional N E,W 161 87 46 NE 68137 Douglas Multifamily Conventional N E 16 84 48 NC 28403 New Hanover Multifamily Conventional N E,G,W,S,T 32 72 50 NM 88011 Dona Ana Multifamily Conventional N E 32 64 57 NM 87107 Bernalillo Multifamily Conventional N E 8 56 41 59 SC 29615 Greenville Multifamily Conventional N E 56 104 65 UT 84111 Salt Lake Multifamily Conventional Y E 44 48 AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE MORTGAGE NUMBER NUMBER RENT; RENT RENT; RENT RENT; RENT RENT; RENT RENT; RENT MORTGAGE LOAN OF 3 BR OF 4+ BR RANGES - RANGES - RANGES - RANGES - RANGES - LOAN NUMBER UNITS UNITS STUDIO UNITS 1 BR UNITS 2 BR UNITS 3 BR UNITS 4+ BR UNITS NUMBER - ------------------------------------------------------------------------------------------------------------------------------------ 8 24 845;768-978 1086;963-1124 1670;1625-1705 8 14 3433;3300-3700 4710;4640-4780 14 16 963;950-975 1235;1185-1295 16 18 999;999-999 1400;1400-1400 18 19 925;910-940 1169;1065-1230 19 22 36 703;695-710 915;900-930 1055;1045-1065 22 28 76 648;620-675 700;700-700 28 31 28 670;615-760 795;795-795 995;995-995 31 32 44 750;750-750 870;870-870 32 33 50 496;475-535 547;520-595 711;695-715 33 38 28 656;625-705 769;715-805 955;915-999 38 40 522;522-522 624;624-624 40 42 22 558;545-595 617;550-700 817;775-870 42 43 544;544-544 679;666-694 43 46 44 4 555;555-555 782;645-945 894;825-905 1005;1005-1005 46 48 32 545;545-545 725;725-725 875;875-875 48 50 8 565;565-565 688;675-700 830;830-830 50 57 460;460-460 525;525-525 665;625-920 57 59 24 399;399-399 480;475-495 598;580-635 59 65 2 724;639-950 865;811-1125 780;780-780 65 [THIS PAGE INTENTIONALLY LEFT BLANK.]
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C18 ANNEX A-3 --------- RESERVE ACCOUNT INFORMATION MORTGAGE LOAN LOAN GROUP GENERAL PROPERTY NUMBER NUMBER PROPERTY NAME TYPE - ---------------------------------------------------------------------------------------------------------------------------- 1 1 One & Two International Place Office 2 1 450 West 33rd Street Office 3 1 Kadima Medical Office Pool Office 3.1 Morristown Professional Building Office 3.2 2300 Westchester Avenue Building Office 3.3 Davis Square Center Office 3.4 Emerson Medical Complex Office 3.5 Kadima Medical Building - Minot, ND Office 3.6 Verona Professional Building Office 3.7 South Hill Medical Center Office 3.8 Orlando IV Clinic Office 3.9 Orlando III Clinic Office 3.10 Orlando II Clinic Office 3.11 Park Meadows Clinic Office 3.12 Orlando I Clinic Office 3.13 Tampa II Clinic Office 3.14 Regency Square Clinic Office 3.15 Tampa I Clinic Office 3.16 Germantown Clinic Office 3.17 San Jose Clinic Office 4 1 Park Place II Mixed Use 5 1 Happy Valley Towne Center Retail 6 1 Mercantile Bank & Trust Building Office 7 1 590 Fifth Avenue Office 8 1 Cypress Lake at Stonebriar Multifamily 9 1 Casa Paloma Shopping Center Retail 10 1 Copaco Center Retail 11 1 2700 Broadway Retail 12 1 Fullerton Towers Office 13 1 Courthouse Place Office 14 1 Kensington Place Multifamily 15 1 Springtown Shopping Center Retail 16 1 Resort at University Park Apartments Multifamily 17 1 Prospect Plaza Retail 18 2 La Serena Apartments Multifamily 19 1 Sandpiper Village Apartments Multifamily 20 1 Plaza at Wellington Green Retail 21 1 Home Market Foods Industrial 22 1 Serena Shores Apartments Multifamily 23 1 Topanga and Victory Office 24 1 Embassy Suites - Orlando, FL Hospitality 25 1 One Carlsbad Research Center Office 26 1 Heritage Plaza Shopping Center Retail 27 1 Bear Creek Village Shopping Center Retail 28 2 Flaherty Farm Apartments Multifamily 29 1 The Summit Office 30 1 1369 Broadway Office 31 1 Sterling Square Apartments Multifamily 32 2 The Pointes of Marietta Multifamily 33 1 Taylors Crossing Multifamily 34 1 1900 Building Office 35 1 Extra Space Self Storage #3 - Atlanta, GA Self Storage 36 1 Hilton Garden Inn - Dania Beach, FL Hospitality 37 1 Market Square - Phase II Retail 38 2 Amberview Apartments Multifamily 39 1 Extra Space Self Storage #3 - Orlando (South John Young Parkway), FL Self Storage 40 2 Autumn Wood Apartments Multifamily 41 1 Fall Creek Harbour Shopping Center Mixed Use 42 1 Sherwood Ridges Apartments Multifamily 43 2 Celebration Park Apartments Multifamily 44 1 Extra Space Self Storage #3 - Orlando (Metrowest Boulevard), FL Self Storage 45 1 Courtyard by Marriott - Coral Springs, FL Hospitality 46 2 Westbrook Manor Apartments Multifamily 47 1 The Madison Office 48 2 The Quad Apartments Multifamily 49 1 Lowe's Home Improvement - Jonesboro, AR Retail 50 1 Cuestas Apartments Multifamily 51 1 Cattle Ridge Medical Center Office 52 1 Walgreens - Staten Island, NY Retail 53 1 Friarsgate Plaza Shopping Center Retail 54 1 Albemarle Square Shopping Center Retail 55 1 PNC Bank & Mariott Ground Lease Mixed Use 56 1 Extra Space Self Storage #3 - Orlando (Lake Underhill Road), FL Self Storage 57 2 Sage Canyon Multifamily 58 1 Walgreens - Glen Allen, VA Retail 59 2 Pines on Pelham Multifamily 60 1 Fairfield Inn Market Center Hospitality 61 1 Extra Space Self Storage #3 - Ocoee, FL Self Storage 62 1 Walgreens - Shawnee Mission, KS Retail 63 1 Kelly Road Self Storage Self Storage 64 1 King's Plaza Retail 65 2 Broadway Towers Apartments Multifamily 66 1 Walgreens - Georgetown, TX Retail 67 1 Walgreens - Pineville, LA Retail 68 1 Walgreens - Sidney, OH Retail 69 1 Piggly Wiggly - Appleton, WI Retail 70 1 Massillon Marketplace Retail 71 1 Metro Storage - Phase II Self Storage 72 1 Wachovia Bank Ground Lease Land ANNUAL INITIAL DEPOSIT MORTGAGE MONTHLY DEPOSIT TO TO CAPITAL INITIAL ONGOING LOAN SPECIFIC PROPERTY MONTHLY TAX INSURANCE REPLACEMENT IMPROVEMENTS TI/LC TI/LC NUMBER TYPE ESCROW ESCROW RESERVES RESERVE ESCROW FOOTNOTE - ---------------------------------------------------------------------------------------------------------------------------------- 1 CBD 1,467,536 70,850 183,120 2,158,900 22,334,679 2 CBD 583,567 54,072 334,447 22,125 14,000,000 (1) 3 Medical 179,204 25,722 160,171 197,905 (1) 3.1 Medical 3.2 Medical 3.3 Medical 3.4 Medical 3.5 Medical 3.6 Medical 3.7 Medical 3.8 Medical 3.9 Medical 3.10 Medical 3.11 Medical 3.12 Medical 3.13 Medical 3.14 Medical 3.15 Medical 3.16 Medical 3.17 Medical 4 Office/Retail 113,861 23,000 27,465 83,500 (1) 5 Anchored 98,578 7,733 6 CBD 73,651 6,744 83,175 (1) 7 CBD 101,749 19,604 (1) 8 Conventional 3,750 9 Anchored 41,778 4,448 10 Anchored 4,175 156,250 11 Anchored 3,131 5,000 12 Suburban 9,044 4,590 120,808 300,000 (1) 13 Suburban 18,322 3,784 16,116 1,095,000 14 Independent Living 115,788 15 Anchored 32,077 1,890 18,314 16 Conventional 8,057 4,509 56,250 17 Anchored 30,562 19,745 10,625 18 Conventional 11,602 6,035 47,004 78,250 19 Conventional 17,076 3,420 52,500 1,005,734 20 Anchored 9,566 6,852 8,581 21 Flex 12,747 5,133 42,464 22 Conventional 14,268 59,964 23 Suburban 23,322 24 Full Service 12,493 7,785 200723.04(2) 25 Suburban 17,083 4,113 27,492 5,800 874,000 26 Anchored 27 Anchored 100,000 28 Conventional 29 Suburban 17,245 30 CBD 3,075 112,438 31 Conventional 11,413 2,587 555,000 32 Conventional 10,715 5,888 52,500 33 Conventional 11,742 12,221 137,000 34 Suburban 25,589 28,500 35 Self Storage 4,955 742 11,364 2,625 36 Limited Service 18,034 7,370 144000(2) 37 Shadow Anchored 2,520 2,830 38 Conventional 9,759 2,757 39,250 56,844 39 Self Storage 4,542 2,396 13,104 1,875 40 Conventional 10,118 3,878 51,500 400,000 41 Retail/Office 6,815 1,608 5,207 (1) 42 Conventional 8,573 53,250 43 Conventional 11,571 5,377 62,000 20,125 44 Self Storage 4,653 2,568 13,164 18,000 45 Limited Service 13,648 5,659 96,952 63,275 46 Conventional 10,465 2,738 14,800 400,000 47 Suburban 20,887 24,375 200,000 (1) 48 Conventional 5,754 49 Anchored 50 Conventional 3,087 2,200 31,679 51 Medical 8,590 383 52 Anchored 53 Anchored 4,272 687 6,781 54 Anchored 4,404 406 13,505 30,000 (1) 55 Retail/Land 56 Self Storage 2,777 1,316 7,560 1,250 57 Conventional 1,734 1,833 33,718 58 Anchored 59 Conventional 8,090 55,200 230,000 60 Limited Service 11,824 1,738 61,332 61 Self Storage 3,108 1,697 10,920 8,438 62 Anchored 63 Self Storage 1,821 2,084 8,040 64 Unanchored 7,449 1,484 125,000 65 Conventional 23,500 1,250 66 Anchored 67 Anchored 68 Anchored 69 Anchored 70 Shadow Anchored 71 Self Storage 4,814 256 4,209 72 Retail 354 (1) In addition to any such escrows funded at loan closing for potential TI/LC, these Mortgage Loans require funds to be escrowed during some or all of the loan term for TI/LC expenses, which may be incurred during the loan term. In certain instances, escrowed funds may be released to the borrower upon satisfaction of certain leasing conditions. (2) Through 3/11/06, thereafter, 1/12 of 3% of prior year's of Gross Revenue.
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C18 ANNEX A-4 COMMERCIAL TENANT SCHEDULE --------- MORTGAGE LOAN GENERAL SPECIFIC CUT-OFF DATE NUMBER LOAN GROUP PROPERTY PROPERTY LOAN OF UNITS UNIT OF NUMBER NUMBER PROPERTY NAME TYPE TYPE BALANCE ($) (UNITS) MEASURE - ------------------------------------------------------------------------------------------------------------------------------------ 1 1 One & Two International Place Office CBD 216,000,000.00 1,852,501 Sq. Ft. 2 1 450 West 33rd Street Office CBD 132,500,000.00 1,672,237 Sq. Ft. 3 1 Kadima Medical Office Pool Office Medical 127,500,000.00 796,653 Sq. Ft. 3.1 Morristown Professional Building Office Medical 154,089 Sq. Ft. 3.2 2300 Westchester Avenue Building Office Medical 83,408 Sq. Ft. 3.3 Davis Square Center Office Medical 100,219 Sq. Ft. 3.4 Emerson Medical Complex Office Medical 50,651 Sq. Ft. 3.5 Kadima Medical Building - Minot, ND Office Medical 114,000 Sq. Ft. 3.6 Verona Professional Building Office Medical 61,468 Sq. Ft. 3.7 South Hill Medical Center Office Medical 56,126 Sq. Ft. 3.8 Orlando IV Clinic Office Medical 21,251 Sq. Ft. 3.9 Orlando III Clinic Office Medical 22,000 Sq. Ft. 3.1 Orlando II Clinic Office Medical 25,000 Sq. Ft. 3.11 Park Meadows Clinic Office Medical 19,477 Sq. Ft. 3.12 Orlando I Clinic Office Medical 16,500 Sq. Ft. 3.13 Tampa II Clinic Office Medical 16,200 Sq. Ft. 3.14 Regency Square Clinic Office Medical 15,713 Sq. Ft. 3.15 Tampa I Clinic Office Medical 16,200 Sq. Ft. 3.16 Germantown Clinic Office Medical 12,480 Sq. Ft. 3.17 San Jose Clinic Office Medical 11,871 Sq. Ft. 4 1 Park Place II Mixed Use Office/Retail 100,000,000.00 274,647 Sq. Ft. 5 1 Happy Valley Towne Center Retail Anchored 56,000,000.00 679,588 Sq. Ft. 6 1 Mercantile Bank & Trust Building Office CBD 41,000,000.00 404,089 Sq. Ft. 7 1 590 Fifth Avenue Office CBD 40,000,000.00 97,717 Sq. Ft. 9 1 Casa Paloma Shopping Center Retail Anchored 29,050,000.00 130,096 Sq. Ft. 10 1 Copaco Center Retail Anchored 29,000,000.00 416,942 Sq. Ft. 11 1 2700 Broadway Retail Anchored 27,500,000.00 25,000 Sq. Ft. 12 1 Fullerton Towers Office Suburban 26,800,000.00 226,019 Sq. Ft. 13 1 Courthouse Place Office Suburban 26,000,000.00 113,908 Sq. Ft. 15 1 Springtown Shopping Center Retail Anchored 19,760,000.00 275,460 Sq. Ft. 17 1 Prospect Plaza Retail Anchored 18,800,000.00 141,049 Sq. Ft. 20 1 Plaza at Wellington Green Retail Anchored 16,500,000.00 57,205 Sq. Ft. 21 1 Home Market Foods Industrial Flex 16,102,087.23 184,624 Sq. Ft. 23 1 Topanga and Victory Office Suburban 16,000,000.00 159,286 Sq. Ft. 25 1 One Carlsbad Research Center Office Suburban 15,400,000.00 98,928 Sq. Ft. 26 1 Heritage Plaza Shopping Center Retail Anchored 15,242,500.00 128,870 Sq. Ft. 27 1 Bear Creek Village Shopping Center Retail Anchored 15,065,000.00 81,218 Sq. Ft. 29 1 The Summit Office Suburban 12,500,000.00 120,820 Sq. Ft. 30 1 1369 Broadway Office CBD 12,000,000.00 23,650 Sq. Ft. 34 1 1900 Building Office Suburban 9,978,428.16 103,713 Sq. Ft. 37 1 Market Square - Phase II Retail Shadow Anchored 8,470,000.00 65,753 Sq. Ft. 41 1 Fall Creek Harbour Shopping Center Mixed Use Retail/Office 7,500,000.00 52,071 Sq. Ft. 47 1 The Madison Office Suburban 6,000,000.00 103,972 Sq. Ft. 49 1 Lowe's Home Improvement - Jonesboro, AR Retail Anchored 5,857,500.00 126,405 Sq. Ft. 51 1 Cattle Ridge Medical Center Office Medical 5,600,000.00 45,000 Sq. Ft. 52 1 Walgreens - Staten Island, NY Retail Anchored 5,400,000.00 14,490 Sq. Ft. 53 1 Friarsgate Plaza Shopping Center Retail Anchored 5,388,000.00 67,810 Sq. Ft. 54 1 Albemarle Square Shopping Center Retail Anchored 5,000,000.00 54,019 Sq. Ft. 55 1 PNC Bank & Mariott Ground Lease Mixed Use Retail/Land 4,981,825.33 6,000 Sq. Ft. 58 1 Walgreens - Glen Allen, VA Retail Anchored 4,191,243.18 14,820 Sq. Ft. 62 1 Walgreens - Shawnee Mission, KS Retail Anchored 3,600,000.00 15,120 Sq. Ft. 64 1 King's Plaza Retail Unanchored 3,193,455.82 30,390 Sq. Ft. 66 1 Walgreens - Georgetown, TX Retail Anchored 3,000,000.00 14,490 Sq. Ft. 67 1 Walgreens - Pineville, LA Retail Anchored 2,923,000.00 14,280 Sq. Ft. 68 1 Walgreens - Sidney, OH Retail Anchored 2,899,000.00 13,882 Sq. Ft. 69 1 Piggly Wiggly - Appleton, WI Retail Anchored 2,497,334.90 30,862 Sq. Ft. 70 1 Massillon Marketplace Retail Shadow Anchored 2,497,263.60 22,716 Sq. Ft. MORTGAGE LARGEST LARGEST LOAN TENANT TENANT NUMBER LARGEST TENANT % OF NRA EXP. DATE 2ND LARGEST TENANT NAME - -------------------------------------------------------------------------------------------------------------------------------- 1 Deutsche / Scudder, Stevens 20.43% 05/31/09 Ropes & Gray 2 Associated Press 17.39% 11/30/19 Thirteen/WNET 3 Various Various Various Various 3.1 Morristown Memorial Hospital 53.96% 02/28/12 Mid Atlantic Surgical 3.2 Montefiore Medical Center 63.43% 03/10/08 NYS Assc. for Retarded Children 3.3 Harvard Vanguard Medical Associates 64.53% 11/30/09 Kindercare Learning Ctr 3.4 Univ. of FL Jacksonville Healthcare 57.42% Multiple Spaces Medical Partners Surgery Center, Ltd 3.5 Trinity Hospitals 100.00% 06/30/09 3.6 Mountainside Hospital 32.99% 06/30/12 Surburban Endoscopy Center , LLC 3.7 Physician Associates, LLC 30.45% 12/31/05 Commonwealth Orthopaedic Centers PSC 3.8 Physician Associates of FL 94.39% 04/30/08 3.9 Physician Associates of FL 95.50% 04/30/08 Family Meds, Inc. 3.1 Physician Associates of FL 97.00% 04/30/08 Family Meds, Inc. 3.11 Exempla Health Care 100.00% 07/31/07 3.12 Physician Associates of FL 97.24% 04/30/08 Family Meds, Inc. 3.13 Team Radiology Inc. 100.00% 03/31/08 3.14 Baptist Health Properties, Inc. 100.00% 02/29/08 3.15 MedPartners Acquisition Corp 100.00% 03/31/08 3.16 Physiotherapy Associates Inc. 100.00% 05/31/08 3.17 Baptist Health Properties, Inc. 100.00% 02/29/08 4 New Century 29.00% 04/30/10 Sport Chalet 5 Wal-Mart (Ground Lease) 30.60% 01/25/25 Lowe's Home Improvement (Ground Lease) 6 Mercantile Bank & Trust 50.19% 12/12/14 Venable, LLP 7 Strategic Insight 14.11% 12/31/07 Career Blazer 9 AJ's Fine Foods 20.37% 04/14/25 Creative Leather Furniture 10 Lowe's Home Improvement (Ground Lease) 38.37% 05/31/24 Burlington Coat Factory 11 Columbia University 100.00% 10/31/53 12 Moreno Insurance 15.58% 05/31/07 Executive Suite (MASTER LEASE) 13 Govolution, Inc 13.38% 01/31/12 Bean Kinney & Korman, PC 15 Lowe's Home Improvement 58.45% 02/29/24 Giant 17 Shaw's Supermarket 49.63% 07/31/08 Joey'z Shopping Spree 20 Office Depot 27.95% 12/31/14 Prudential/WCI 21 Home Market Foods 61.03% 03/31/30 The Home Depot 23 Roy's Woodland Hills 4.60% 09/30/14 Fleming's/Woodland Hills 25 Brent Rosencranz 16.12% Multiple Spaces Sunrise Medical 26 Jewel/Osco 50.38% 02/28/19 Ace Hardware 27 Stater Brothers 54.29% 01/31/25 Washington Mutual Bank 29 Wyrick Robbins Yates & Ponton LLP 41.84% 07/31/09 American Board of Anesthesiology, Inc. 30 Ecko Unlimited 50.74% 12/31/10 T.R.I. Center 34 Department of Revenue 45.99% 11/30/08 Executive Suites 37 CompUSA 33.60% 01/31/20 Cost Plus, Inc. 41 MODA 10.70% 04/30/09 J Bourn Gallery 47 G.S.A. 41.29% Multiple Spaces Reading Area Community College 49 Lowe's Home Improvement 100.00% 01/31/14 51 Aesculapian Management Company, LLC 100.00% 03/30/20 52 Walgreens 100.00% 10/31/61 53 Bi-Lo 65.73% 07/31/17 Dollar General 54 Food Lion 74.42% 05/26/12 Expert Nails 55 PNC Bank 100.00% 06/30/07 Marriott (Ground Lease) 58 Walgreens 100.00% 01/31/80 62 Walgreens 100.00% 09/30/61 64 Humana 15.26% 03/31/10 Back in Action 66 Walgreens 100.00% 07/31/77 67 Walgreens 100.00% 12/31/79 68 Walgreens 100.00% 10/31/79 69 Piggly Wiggly 100.00% 09/30/18 70 CiCi's Pizza 21.80% 04/30/14 Video Warehouse MORTGAGE 2ND LARGEST 2ND LARGEST 3RD LARGEST 3RD LARGEST MORTGAGE LOAN TENANT TENANT TENANT TENANT LOAN NUMBER % OF NRA (%) EXP. DATE 3RD LARGEST TENANT NAME % OF NRA EXP. DATE NUMBER - ------------------------------------------------------------------------------------------------------------------------------------ 1 17.42% 12/31/10 Choate, Hall & Stewart 8.38% 09/30/15 1 2 12.25% 11/19/18 Lerner NY 9.75% 06/30/15 2 3 Various Various Various Various Various 3 3.1 5.25% 12/31/07 Surgical Specialists 4.20% 05/31/07 3.1 3.2 17.88% 06/28/13 Cardinal Health 414, Inc. 8.81% 06/16/05 3.2 3.3 6.17% 08/31/05 World Media Foundation 5.27% 11/30/10 3.3 3.4 28.67% 04/30/13 Shands Jacksonville Medical 10.00% 10/31/09 3.4 3.5 3.5 3.6 14.80% 12/31/12 Essex Testing Clinic, Inc 11.90% 03/31/07 3.6 3.7 18.61% Multiple Spaces Gambro Healthcare 11.54% 10/31/07 3.7 3.8 3.8 3.9 4.50% 06/30/08 3.9 3.1 3.00% 06/30/08 3.10 3.11 3.11 3.12 2.76% 06/30/08 3.12 3.13 3.13 3.14 3.14 3.15 3.15 3.16 3.16 3.17 3.17 4 12.76% 12/31/15 Quick Loan Funding 9.44% 11/30/08 4 5 24.57% 10/31/30 Sport Chalet 6.18% 10/31/15 5 6 34.81% 04/30/11 Grant Thornton 4.14% 12/31/13 6 7 12.46% Multiple Spaces Citra Trading 8.36% 05/01/14 7 9 10.18% 03/10/10 Showcase Home Entertainment 9.22% 02/02/10 9 10 19.55% 09/30/09 Super Stop & Shop 15.59% 04/30/20 10 11 11 12 9.81% 02/18/10 Arcadis 5.55% Multiple Spaces 12 13 12.76% 11/30/06 Laughlin, Marinaccio & Owens 9.91% 11/30/13 13 15 19.53% 02/28/41 CVS 4.30% 02/28/06 15 17 8.51% 11/30/15 Hometown Buffet 6.91% 12/31/10 17 20 11.87% 02/28/10 Fidelity Investments 10.74% 02/28/15 20 21 38.97% 03/31/08 21 23 4.42% 08/31/14 Insurance Technical 2.68% 10/31/09 23 25 12.35% 12/11/07 Dot Hill Systems 11.34% 04/30/06 25 26 13.66% 03/14/09 Blockbuster Video 4.66% 01/31/07 26 27 6.16% 12/31/14 Jack in the Box (Ground Lease) 4.43% 03/31/25 27 29 9.11% Multiple Spaces BWAY Corporation 8.44% 09/30/08 29 30 33.83% 12/31/10 Subway 3.38% 12/31/10 30 34 21.64% 07/31/09 Keiser College 18.89% 09/30/14 34 37 27.93% 01/31/17 PETCO 23.14% 10/31/19 37 41 6.97% 07/31/09 Geist Market 4.80% 07/31/09 41 47 12.72% Multiple Spaces Stevens & Lee 6.82% 12/31/07 47 49 49 51 51 52 52 53 10.62% 04/30/07 Check into Cash 4.28% 10/31/07 53 54 5.55% 06/30/07 Sunrise Cleaners 4.70% 08/31/08 54 55 01/31/17 55 58 58 62 62 64 12.34% 05/14/09 Mishugas2, Inc. 7.75% 08/31/09 64 66 66 67 67 68 68 69 69 70 16.43% 09/30/09 GameStop 7.04% 05/31/09 70 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.]
WACHOVIA BANK COMMERCIAL MORTGAGE TRUST SERIES 2005-C16 ANNEX A-5 CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES (CROSSED & PORTFOLIOS) - --------- MORTGAGE LOAN LOAN GROUP NUMBER NUMBER PROPERTY NAME CITY STATE - --------------------------------------------------------------------------------------------------------------------------------- 3 1 Kadima Medical Office Pool Various Various - --------------------------------------------------------------------------------------------------------------------------------- 3.1 Morristown Professional Building Morristown NJ 3.2 2300 Westchester Avenue Building Bronx NY 3.3 Davis Square Center Somerville MA 3.5 Kadima Medical Building - Minot, ND Minot ND 3.4 Emerson Medical Complex Jacksonville FL 3.6 Verona Professional Building Verona NJ 3.7 South Hill Medical Center Southgate KY 3.8 Orlando IV Clinic Orlando FL 3.9 Orlando III Clinic Orlando FL 3.10 Orlando II Clinic Maitland FL 3.11 Park Meadows Clinic Lone Tree CO 3.12 Orlando I Clinic Kissimmee FL 3.13 Tampa II Clinic Tampa FL 3.15 Tampa I Clinic Brandon FL 3.14 Regency Square Clinic Jacksonville FL 3.16 Germantown Clinic Memphis TN 3.17 San Jose Clinic Jacksonville FL Various 1 Extra Space Self Storage Portfolio #3 Various Various - --------------------------------------------------------------------------------------------------------------------------------- 35 1 Extra Space Self Storage #3 - Atlanta, GA Atlanta GA 39 1 Extra Space Self Storage #3 - Orlando (South John Young Parkway), FL Orlando FL 44 1 Extra Space Self Storage #3 - Orlando (Metrowest Boulevard), FL Orlando FL 56 1 Extra Space Self Storage #3 - Orlando (Lake Underhill Road), FL Orlando FL 61 1 Extra Space Self Storage #3 - Ocoee, FL Ocoee FL % OF ORIGINAL MORTGAGE CUT-OFF DATE AGGREGATE TERM TO LOAN CROSS COLLATERALIZED AND ORIGINAL LOAN LOAN CUT-OFF DATE MATURITY OR NUMBER CROSS DEFAULTED LOAN FLAG BALANCE ($) BALANCE ($) BALANCE ARD (MOS.) - ----------------------------------------------------------------------------------------------------------------------- 3 127,500,000.00 127,500,000.00 9.07% 120 - ----------------------------------------------------------------------------------------------------------------------- 3.1 25,044,642.86 3.2 23,902,963.76 3.3 23,223,214.29 3.5 8,988,970.24 3.4 9,256,467.70 3.6 7,249,942.85 3.7 4,705,577.94 3.8 3,733,928.57 3.9 3,460,714.29 3.10 3,324,107.14 3.11 3,096,428.57 3.12 2,367,857.14 3.13 2,138,390.07 3.15 1,934,172.78 3.14 1,956,243.76 3.16 1,639,285.71 3.17 1,477,092.33 Various Extra Space Self Storage Portfolio #3 32,550,000.00 32,550,000.00 2.32% 60 - ----------------------------------------------------------------------------------------------------------------------- 35 Extra Space Self Storage Portfolio #3 9,600,000.00 9,600,000.00 0.68% 60 39 Extra Space Self Storage Portfolio #3 8,200,000.00 8,200,000.00 0.58% 60 44 Extra Space Self Storage Portfolio #3 6,400,000.00 6,400,000.00 0.46% 60 56 Extra Space Self Storage Portfolio #3 4,600,000.00 4,600,000.00 0.33% 60 61 Extra Space Self Storage Portfolio #3 3,750,000.00 3,750,000.00 0.27% 60 REMAINING ORIGINAL REMAINING MONTHLY MATURITY DATE MORTGAGE TERM TO REMAINING AMORT AMORT P&I OR ARD LOAN MATURITY OR IO PERIOD TERM TERM PAYMENTS BALLOON APPRAISED NUMBER ARD (MOS.) (MOS.) (MOS.) (MOS.) ($) BALANCE ($) VALUE ($) DSCR (X) - ------------------------------------------------------------------------------------------------------------------------------------ 3 119 35 324 324 738,656.71 110,182,873.84 170,000,000.00 1.40 - ------------------------------------------------------------------------------------------------------------------------------------ 3.1 32,580,012.00 3.2 27,644,703.00 3.3 27,536,310.00 3.5 13,038,635.00 3.4 12,251,669.00 3.6 9,951,774.00 3.7 8,419,003.00 3.8 5,593,274.00 3.9 5,483,363.00 3.10 6,049,419.00 3.11 4,268,431.00 3.12 4,255,946.00 3.13 2,934,083.00 3.15 2,671,246.00 3.14 2,871,428.00 3.16 2,281,368.00 3.17 2,169,336.00 Various 59 59 IO IO IO 32,550,000.00 39,710,000.00 1.58 - ------------------------------------------------------------------------------------------------------------------------------------ 35 59 59 IO IO IO 9,600,000.00 11,750,000.00 1.51 39 59 59 IO IO IO 8,200,000.00 10,000,000.00 1.51 44 59 59 IO IO IO 6,400,000.00 7,800,000.00 1.75 56 59 59 IO IO IO 4,600,000.00 5,600,000.00 1.59 61 59 59 IO IO IO 3,750,000.00 4,560,000.00 1.63 CUT-OFF DATE MORTGAGE CUT-OFF LTV RATIO NUMBER LOAN UW NET MORTGAGE LOAN DATE LTV AT MATURITY OF UNITS UNIT OF AMOUNT PER CASH FLOW LOAN NUMBER RATIO OR ARD (UNITS) MEASURE (UNIT) ($) ($) NUMBER - ----------------------------------------------------------------------------------------------------------------- 3 75.00% 64.81% 796,653 Sq. Ft. 160.04 123,72,491.00 3 - ----------------------------------------------------------------------------------------------------------------- 3.1 154,089 Sq. Ft. 2,124,004.00 3.1 3.2 83,408 Sq. Ft. 2,537,865.00 3.2 3.3 100,219 Sq. Ft. 2,075,774.00 3.3 3.5 114,000 Sq. Ft. 823,636.00 3.5 3.4 50,651 Sq. Ft. 867,486.00 3.4 3.6 61,468 Sq. Ft. 689,344.00 3.6 3.7 56,126 Sq. Ft. 651,822.00 3.7 3.8 21,251 Sq. Ft. 397,315.00 3.8 3.9 22,000 Sq. Ft. 361,738.00 3.9 3.10 25,000 Sq. Ft. 418,968.00 3.10 3.11 19,477 Sq. Ft. 306,019.00 3.11 3.12 16,500 Sq. Ft. 281,511.00 3.12 3.13 16,200 Sq. Ft. 195,590.00 3.13 3.15 16,200 Sq. Ft. 174,597.00 3.15 3.14 15,713 Sq. Ft. 178,036.00 3.14 3.16 12,480 Sq. Ft. 154,484.00 3.16 3.17 11,871 Sq. Ft. 134,304.00 3.17 Various 81.97% 81.97% 392,520 Sq. Ft. 82.93 2,550,829.77 Various - ----------------------------------------------------------------------------------------------------------------- 35 81.70% 81.70% 75,937 Sq. Ft. 126.42 717,646.15 35 39 82.00% 82.00% 86,583 Sq. Ft. 94.71 613,758.55 39 44 82.05% 82.05% 87,765 Sq. Ft. 72.92 554,517.03 44 56 82.14% 82.14% 69,385 Sq. Ft. 66.30 362,092.09 56 61 82.24% 82.24% 72,850 Sq. Ft. 51.48 302,815.95 61 [THIS PAGE INTENTIONALLY LEFT BLANK.]
ANNEX B ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 135 S. LaSalle Street Suite 1625 SERIES 2005-C18. Prior Payment: N/A Chicago, IL 60603 Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X Administrator: Analyst: REPORTING PACKAGE TABLE OF CONTENTS ==================================================================================================================================== =============================== ======================================================= ========================================= | Page(s) | Closing Date: 5/19/2005 Issue Id: WBCM5C18 | REMIC Certificate Report | First Payment Date: 6/17/2005 Monthly Data File Name: | Bond Interest Reconciliation | Assumed Final Payment Date: 5/15/2015 WBCM5C18_YYYYMM_3.zip | Cash Reconciliation Summary | ======================================== =============================== | 15 Month Historical Loan Status Summary | | 15 Month Historical Payoff/Loss Summary | | Historical Collateral Level Prepayment Report | | Delinquent Loan Detail | | Mortgage Loan Characteristics | | Loan Level Detail | | Specially Serviced Report | | Modified Loan Detail | | Realized Loss Detail | | Appraisal Reduction Detail | =============================== ======================================================= ========================================= ==================================================================================================================================== PARTIES TO THE TRANSACTION - ------------------------------------------------------------------------------------------------------------------------------------ DEPOSITOR: Wachovia Commercial Mortgage Securities, Inc. UNDERWRITER: Wachovia Capital Markets, LLC, Countrywide Securities Corporation, Credit Suisse First Boston LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Greenwich Capital Markets, Inc. MASTER SERVICER: Wachovia Bank, National Association SPECIAL SERVICER: GMAC Commercial Mortgage Corporation RATING AGENCY: Standard & Poor's Ratings Services/Moody's Investor Services ==================================================================================================================================== ==================================================================================================================================== INFORMATION IS AVAILABLE FOR THIS ISSUE FROM THE FOLLOWING SOURCES - ------------------------------------------------------------------------------------------------------------------------------------ LaSalle Web Site www.etrustee.net Servicer Website LaSalle Factor Line (800) 246-5761 ==================================================================================================================================== 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-1 ABN AMRO LaSalle Bank N.A. WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 WAC: COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 WA Life Term: SERIES 2005-C18. Prior Payment: N/A WA Amort Term: Next Payment: 7/15/2005 Current Index: Record Date: 5/31/2005 Next Index: ABN AMRO ACCT: XX-XXXX-XX-X REMIC CERTIFICATE REPORT =================================================================================================================================== ORIGINAL | OPENING PRINCIPAL PRINCIPAL NEGATIVE | CLOSING INTEREST INTEREST PASS-THROUGH CLASS FACE VALUE (1)| BALANCE PAYMENT ADJ. OR LOSS AMORTIZATION | BALANCE PAYMENT (2) ADJUSTMENT RATE CUSIP Per 1,000 | Per 1,000 Per 1,000 Per 1,000 Per 1,000 | Per 1,000 Per 1,000 Per 1,000 Next Rate (3) - ----------------------|------------------------------------------------------|------------------------------------------------------ | | | | | | | | | | | | | | - ------------------------------------------------------------------------------------------------------------------------------------ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ==================================================================================================================================== Total P&I Payment 0.00 ======================== Notes: (1) N denotes notional balance not included in total (2) Accrued Interest plus/minus Interest Adjustment minus Deferred Interest equals Interest Payment (3) Estimated 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-2 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X BOND INTEREST RECONCILIATION ================================================================ | | | | | | | Accrual | | Accrued | ------------- | Pass Thru | Certificate Class | Method Days | Rate | Interest - ---------|-------------------|-----------------|---------------- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ---------- | | | 0.00 =============================================================== ======================================================================================================== Deductions | Additions - -----------------------------------------|-------------------------------------------------------------- Deferred & | Prior Int Accrual Prepay- Other Allocable Accretion Interest | Int. Short- on prior ment Interest PPIS Interest Loss/Exp | falls Due Shortfall (3) Penalties Proceeds (1) - -----------------------------------------|-------------------------------------------------------------- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - -------------------------------------------------------------------------------------------------------- 0.00 0.00 0.00 0.00 0.00 0.00 ======================================================================================================== ================================================================================= | | | Remaining | Distributable |Interest | Current Period| Outstanding | Credit Support Certificate | Payment | (Shortfall)/ | Interest |----------------------- Interest (2) | Amount | Recovery | Shortfalls | Original Current (4) - --------------------------------------------------------------------------------- | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - --------------------------------------------------------- 0.00 0.00 0.00 ================================================================================= (1) Other Interest Proceeds are additional interest amounts specifically allocated to the bond(s) and used in determining the Distributable Interest of the bonds. (2) Accrued - Deductions + Additional Interest. (3) Where applicable. (4) Determined as follows: (A) the ending balance of all the classes less (B) the sum of (i) the ending balance of the class and (ii) the ending balance of all classes which are not subordinate to the class divided by (A). 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-3 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X CASH RECONCILIATION SUMMARY ======================================================== ======================================================== - ----------------------------------------------------- -------------------------------------------------------- INTEREST SUMMARY PRINCIPAL SUMMARY - ----------------------------------------------------- -------------------------------------------------------- Current Scheduled Interest SCHEDULED PRINCIPAL: Less Deferred Interest -------------------- Less PPIS Reducing Scheduled Int Current Scheduled Principal Plus Gross Advance Interest Advanced Scheduled Principal Less ASER Interest Adv Reduction -------------------------------------------------------- Less Other Interest Not Advanced Scheduled Principal Less Other Adjustment -------------------------------------------------------- - ----------------------------------------------------- UNSCHEDULED PRINCIPAL: Total ---------------------- - ----------------------------------------------------- Curtailments UNSCHEDULED INTEREST: Advanced Scheduled Principal - ----------------------------------------------------- Liquidation Proceeds Prepayment Penalties Repurchase Proceeds Yield Maintenance Penalties Other Principal Proceeds Other Interest Proceeds -------------------------------------------------------- - ----------------------------------------------------- Total Unscheduled Principal Total -------------------------------------------------------- - ----------------------------------------------------- Remittance Principal Less Fees Paid to Servicer -------------------------------------------------------- Less Fee Strips Paid by Servicer Remittance P&I Due Trust - ----------------------------------------------------- -------------------------------------------------------- LESS FEES & EXPENSES PAID BY/TO SERVICER Remittance P&I Due Certs - ----------------------------------------------------- -------------------------------------------------------- Special Servicing Fees Workout Fees Liquidation Fees Interest Due Serv on Advances Non Recoverable Advances -------------------------------------------------------- Misc. Fees & Expenses POOL BALANCE SUMMARY - ----------------------------------------------------- -------------------------------------------------------- Plus Trustee Fees Paid by Servicer Balance Count - ----------------------------------------------------- -------------------------------------------------------- Total Unscheduled Fees & Expenses Beginning Pool - ----------------------------------------------------- Scheduled Principal Total Interest Due Trust Unscheduled Principal - ----------------------------------------------------- Deferred Interest LESS FEES & EXPENSES PAID BY/TO TRUST Liquidations - ----------------------------------------------------- Repurchases Trustee Fee -------------------------------------------------------- Fee Strips Ending Pool Misc. Fees -------------------------------------------------------- Interest Reserve Withholding Plus Interest Reserve Deposit - ----------------------------------------------------- Total - ----------------------------------------------------- Total Interest Due Certs - ----------------------------------------------------- ======================================================== - ------------------------------------------------------- SERVICING FEE SUMMARY - ------------------------------------------------------- Current Servicing Fees Plus Fees Advanced for PPIS Less Reduction for PPIS Plus Delinquent Servicing Fees - ------------------------------------------------------- Total Servicing Fees - ------------------------------------------------------- - ------------------------------------------------------- PPIS SUMMARY - ------------------------------------------------------- Gross PPIS Reduced by PPIE Reduced by Shortfalls in Fees Reduced by Other Amounts - ------------------------------------------------------- PPIS Reducing Scheduled Interest - ------------------------------------------------------- PPIS Reducing Servicing Fee - ------------------------------------------------------- PPIS Due Certificate - ------------------------------------------------------- - ------------------------------------------------------- ADVANCE SUMMARY (ADVANCE MADE BY SERVICER) - ------------------------------------------------------- Principal Interest - ------------------------------------------------------- Prior Outstanding Plus Current Period Less Recovered Less Non Recovered - ------------------------------------------------------- Ending Outstanding - ------------------------------------------------------- 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-4 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X ASSET BACKED FACTS ~15 MONTH HISTORICAL LOAN STATUS SUMMARY ================= ======================================================================================================= Delinquency Aging Categories ------------------------------------------------------------------------------------------------------- Delinq 1 Month Delinq 2 Months Delinq 3+ Months Foreclosure REO Distribution ------------------------------------------------------------------------------------------------------- Date # Balance # Balance # Balance # Balance # Balance ================ ======================================================================================================= 06/17/05 - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- - ---------------- ------------------------------------------------------------------------------------------------------- ================ ======================================================================================================= =============================================================== Special Event Categories (1) - --------------------------------------------------------------- Modifications Specially Serviced Bankruptcy - --------------------------------------------------------------- # Balance # Balance # Balance =============================================================== - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- - --------------------------------------------------------------- =============================================================== (1) Modification, Specially Serviced & Bankruptcy Totals are Included in the Appropriate Delinquency Aging Category. 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-5 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X ASSET BACKED FACTS ~15 MONTH HISTORICAL PAYOFF/LOSS SUMMARY ==================================================================================================================================== Ending Pool (1) Payoffs (2) Penalties Appraisal Reduct. (2) Liquidations (2) Realized Losses (2) Distribution ---------------------------------------------------------------------------------------------------------------------- Date # Balance # Balance # Amount # Balance # Balance # Amount ==================================================================================================================================== 06/17/05 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ ==================================================================================================================================== =========================================== Remaining Term Curr Weighted Avg. - ------------------------------------------- Life Amort. Coupon Remit =========================================== - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- - ------------------------------------------- =========================================== (1) Percentage based on pool as of cutoff. (2) Percentage based on pool as of beginning of period. 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-6 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X HISTORICAL COLLATERAL LEVEL PREPAYMENT REPORT =========================== ===================================================================== Disclosure Payoff Initial Payoff Penalty Control # Period Balance Type Amount Amount =========================== ===================================================================== ================================================================================================ CURRENT 0 0 CUMULATIVE ============================ =========================== ============================================ Prepayment Maturity Property Geographic Date Date Type Location =========================== ============================================ ============================================================================ 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-7 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X DELINQUENT LOAN DETAIL ============================================================================================================ Paid Outstanding Out. Property Disclosure Thru Current P&I P&I Protection Control # Date Advance Advances** Advances ============================================================================================================ ============================================================================================================= ==================================================================================================================== Special Advance Servicer Foreclosure Bankruptcy REO Description (1) Transfer Date Date Date Date ==================================================================================================================== ==================================================================================================================== A. P&I Advance - Loan in Grace Period 3. P&I Advance - Loan delinquent 3 months or More B. P&I Advance - Late Payment but (less than) 1 month delinq 4. Matured Balloon/Assumed Scheduled Payment 1. P&I Advance - Loan delinquent 1 month 7. P&I Advance (Foreclosure) 2. P&I Advance - Loan delinquent 2 months 9. P&I Advance (REO) ==================================================================================================================== ** Outstanding P&I Advances include the current period P&I Advance 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-8 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X MORTGAGE LOAN CHARACTERISTICS DISTRIBUTION OF PRINCIPAL BALANCES ================================================================================ Weighted Average Current Scheduled # of Scheduled % of --------------------------- Balances Loans Balance Balance Term Coupon DSCR ================================================================================ ================================================================================ 0 0 0.00% ================================================================================ Average Scheduled Balance Maximum Scheduled Balance Minimum Scheduled Balance DISTRIBUTION OF REMAINING TERM (FULLY AMORTIZING) =============================================================================== Weighted Average Fully Amortizing # of Scheduled % of --------------------------- Mortgage Loans Loans Balance Balance Term Coupon DSCR =============================================================================== =============================================================================== 0 0 0.00% =============================================================================== Minimum Remaining Term Maximum Remaining Term DISTRIBUTION OF MORTGAGE INTEREST RATES ================================================================================ Weighted Average Current Mortgage # of Scheduled % of --------------------------- Interest Rate Loans Balance Balance Term Coupon DSCR ================================================================================ ================================================================================ 0 0 0.00% ================================================================================ Minimum Mortgage Interest Rate 10.0000% Maximum Mortgage Interest Rate 10.0000% DISTRIBUTION OF REMAINING TERM (BALLOON) ================================================================================ Weighted Average Balloon # of Scheduled % of ------------------------- Mortgage Loans Loans Balance Balance Term Coupon DSCR ================================================================================ 0 to 60 61 to 120 121 to 180 181 to 240 241 to 360 ================================================================================ 0 0 0.00% ================================================================================ Minimum Remaining Term 0 Maximum Remaining Term 0 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-9 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: SERIES 2005-C18. Prior Payment: Next Payment: Record Date: ABN AMRO ACCT: XX-XXXX-XX-X MORTGAGE LOAN CHARACTERISTICS DISTRIBUTION OF DSCR (CURRENT) ================================================================================ Debt Service # of Scheduled % of Coverage Ratio Loans Balance Balance WAMM WAC DSCR ================================================================================ ================================================================================ 0 0 0.00% ================================================================================ Maximum DSCR 0.000 Minimum DSCR 0.000 DISTRIBUTION OF DSCR (CUTOFF) ================================================================================ Debt Service # of Scheduled % of Coverage Ratio Loans Balance Balance WAMM WAC DSCR ================================================================================ ================================================================================ 0 0 0.00% ================================================================================ Maximum DSCR 0.00 Minimum DSCR 0.00 GEOGRAPHIC DISTRIBUTION ================================================================================ # of Scheduled % of Geographic Location Loans Balance Balance WAMM WAC DSCR ================================================================================ ================================================================================ 0 0.00% ================================================================================ 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-10 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: SERIES 2005-C18. Prior Payment: Next Payment: Record Date: ABN AMRO ACCT: XX-XXXX-XX-X MORTGAGE LOAN CHARACTERISTICS DISTRIBUTION OF PROPERTY TYPES ================================================================================ # of Scheduled % of Property Types Loans Balance Balance WAMM WAC DSCR ================================================================================ ================================================================================ 0 0 0.00% ================================================================================ DISTRIBUTION OF AMORTIZATION TYPE ================================================================================ # of Scheduled % of Amortization Type Loans Balance Balance WAMM WAC DSCR ================================================================================ ================================================================================ ================================================================================ DISTRIBUTION OF LOAN SEASONING ================================================================================ # of Scheduled % of Number of Years Loans Balance Balance WAMM WAC DSCR ================================================================================ ================================================================================ 0 0 0.00% ================================================================================ DISTRIBUTION OF YEAR LOANS MATURING ================================================================================ # of Scheduled % of Year Loans Balance Balance WAMM WAC DSCR ================================================================================ 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 & Longer ================================================================================ 0 0 0.00% ================================================================================ 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-11 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X LOAN LEVEL DETAIL ====================================================================================================== Operating Ending Disclosure Property Statement Maturity Principal Control # Grp Type State DSCR NOI Date Date Balance ====================================================================================================== ====================================================================================================== ====================================================================================================== W/Avg 0.00 0 0 ====================================================================================================== ================================================================================ Spec. Loan Prepayment Note Scheduled Mod. Serv ASER Status ------------------------------ Rate P&I Flag Flag Flag Code(1) Amount Penalty Date ================================================================================ ================================================================================ 0 0 0 ================================================================================ ================================================================================ * NOI and DSCR, if available and reportable under the terms of the Pooling and Servicing Agreement, are based on information obtained from the related borrower, and no other party to the agreement shall be held liable for the accuracy or methodology used to determine such figures. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) Legend: A. P&I Adv - in Grace Period B. P&I Adv - (less than) one month delinq 1. P&I Adv - delinquent 1 month 2. P&I Adv - delinquent 2 months 3. P&I Adv - delinquent 3+ months 4. Mat. Balloon/Assumed P&I 5. Prepaid in Full 6. Specially Serviced 7. Foreclosure 8. Bankruptcy 9. REO 10. DPO 11. Modification =============================================================================== 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-12 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X SPECIALLY SERVICED (PART I) ~ LOAN DETAIL =========================== =========== ================================== Balance Disclosure Transfer Loan Status ---------------------------------- Control # Date Code (1) Scheduled Actual =========================== =========== ================================== =========================== =========== ================================== ========================================= ================================== ==================================== Remaining Term Note Maturity ---------------- Property NOI Rate Date Life Amort. Type State NOI DSCR Date ========================================= ================================== ==================================== ========================================= ================================== ==================================== (1) Legend: A. P&I Adv - in Grace Period B. P&I Adv - (less than) one month delinq. 1. P&I Adv - delinquent 1 month 2. P&I Adv - delinquent 2 months 3. P&I Adv - delinquent 3+ months 4. Mat. Balloon/Assumed P&I 7. Foreclosure 9. REO 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-13 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X SPECIALLY SERVICED LOAN DETAIL (PART II) ~ SERVICER COMMENTS ========================================================================================================= Disclosure Resolution Control # Strategy Comments ========================================================================================================= ========================================================================================================= 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-14 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X MODIFIED LOAN DETAIL ======================================================================================================================== Cutoff Modified Disclosure Modification Maturity Maturity Modification Control # Date Date Date Description - ------------------------------------------------------------------------------------------------------------------------ ======================================================================================================================== 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-15 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X REALIZED LOSS DETAIL ===================================================================================================== Beginning Disclosure Appraisal Appraisal Scheduled Gross Period Control # Date Value Balance Proceeds - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- CURRENT TOTAL 0.00 0.00 CUMULATIVE 0.00 0.00 ===================================================================================================== ================================================================================ Gross Proceeds Aggregate Net Net Proceeds as a % of Liquidation Liquidation as a % of Realized Sched Principal Expenses * Proceeds Sched. Balance Loss - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CURRENT TOTAL 0.00 0.00 0.00 CUMULATIVE 0.00 0.00 0.00 ================================================================================ * Aggregate liquidation expenses also include outstanding P&I advances and unpaid servicing fees, unpaid trustee fees, etc. 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-16 ABN AMRO WACHOVIA BANK COMMERCIAL MORTGAGE TRUST Statement Date: 6/17/2005 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 6/17/2005 SERIES 2005-C18. Prior Payment: N/A Next Payment: 7/15/2005 Record Date: 5/31/2005 ABN AMRO ACCT: XX-XXXX-XX-X APPRAISAL REDUCTION DETAIL =========================== ================================================== Disclosure Appraisal Scheduled ARA Current P&I Control # Red. Date Balance Amount Advance ASER =========================== ================================================== =========================== ================================================== ========================================== ============================= ======== ============================ Remaining Term Appraisal Note Maturity ----------------- Property ---------------------------- Rate Date Life Amort. Type State DSCR Value Date ========================================== ============================= ======== ============================ ========================================== ============================= ======== ============================ 04/19/2005 - 11:35 (MXXX-MXXX) (C) 2000 LaSalle Bank N.A. B-17 [THIS PAGE INTENTIONALLY LEFT BLANK.]
ANNEX C CLASS X-P REFERENCE RATE SCHEDULE INTEREST CLASS X-P INTEREST CLASS X-P ACCRUAL DISTRIBUTION REFERENCE ACCRUAL DISTRIBUTION REFERENCE PERIOD DATE RATE PERIOD DATE RATE - ---------- -------------- ----------- ---------- -------------- ----------- 1 6/15/2005 5.47010% 43 12/15/2008 5.29053% 2 7/15/2005 5.29229% 44 1/15/2009 5.29051% 3 8/15/2005 5.46999% 45 2/15/2009 5.29048% 4 9/15/2005 5.46993% 46 3/15/2009 5.29096% 5 10/15/2005 5.29213% 47 4/15/2009 5.46812% 6 11/15/2005 5.46982% 48 5/15/2009 5.29041% 7 12/15/2005 5.29202% 49 6/15/2009 5.46808% 8 1/15/2006 5.29196% 50 7/15/2009 5.29036% 9 2/15/2006 5.29191% 51 8/15/2009 5.46655% 10 3/15/2006 5.29193% 52 9/15/2009 5.46653% 11 4/15/2006 5.46952% 53 10/15/2009 5.29029% 12 5/15/2006 5.29174% 54 11/15/2009 5.46796% 13 6/15/2006 5.46942% 55 12/15/2009 5.29024% 14 7/15/2006 5.29163% 56 1/15/2010 5.29022% 15 8/15/2006 5.46931% 57 2/15/2010 5.29019% 16 9/15/2006 5.46926% 58 3/15/2010 5.29075% 17 10/15/2006 5.29148% 59 4/15/2010 5.47522% 18 11/15/2006 5.46914% 60 5/15/2010 5.30365% 19 12/15/2006 5.29136% 61 6/15/2010 5.48176% 20 1/15/2007 5.29131% 62 7/15/2010 5.30361% 21 2/15/2007 5.29125% 63 8/15/2010 5.48172% 22 3/15/2007 5.29139% 64 9/15/2010 5.48170% 23 4/15/2007 5.46890% 65 10/15/2010 5.30354% 24 5/15/2007 5.29115% 66 11/15/2010 5.48165% 25 6/15/2007 5.46882% 67 12/15/2010 5.30350% 26 7/15/2007 5.29107% 68 1/15/2011 5.30348% 27 8/15/2007 5.46874% 69 2/15/2011 5.30346% 28 9/15/2007 5.46870% 70 3/15/2011 5.30410% 29 10/15/2007 5.29095% 71 4/15/2011 5.48153% 30 11/15/2007 5.46861% 72 5/15/2011 5.30338% 31 12/15/2007 5.29086% 73 6/15/2011 5.48148% 32 1/15/2008 5.46852% 74 7/15/2011 5.30333% 33 2/15/2008 5.29078% 75 8/15/2011 5.48143% 34 3/15/2008 5.29082% 76 9/15/2011 5.48141% 35 4/15/2008 5.46839% 77 10/15/2011 5.30213% 36 5/15/2008 5.29067% 78 11/15/2011 5.48019% 37 6/15/2008 5.46837% 79 12/15/2011 5.30321% 38 7/15/2008 5.29064% 80 1/15/2012 5.48131% 39 8/15/2008 5.46832% 81 2/15/2012 5.30594% 40 9/15/2008 5.46830% 82 3/15/2012 5.30616% 41 10/15/2008 5.29058% 83 4/15/2012 5.48982% 42 11/15/2008 5.46825% 84 5/15/2012 5.31446% C-1 [THIS PAGE INTENTIONALLY LEFT BLANK.]
ANNEX D CLASS A-PB PLANNED PRINCIPAL BALANCE SCHEDULE PERIOD PERIOD TOTAL DATE BALANCE TOTAL DATE BALANCE - -------- ---------- ----------------- -------- ---------- ----------------- 0 05/19/05 81,472,000.00 58 03/15/10 81,472,000.00 1 06/15/05 81,472,000.00 59 04/15/10 81,472,000.00 2 07/15/05 81,472,000.00 60 05/15/10 81,471,198.00 3 08/15/05 81,472,000.00 61 06/15/10 80,120,791.62 4 09/15/05 81,472,000.00 62 07/15/10 78,610,210.65 5 10/15/05 81,472,000.00 63 08/15/10 77,246,590.76 6 11/15/05 81,472,000.00 64 09/15/10 75,876,673.16 7 12/15/05 81,472,000.00 65 10/15/10 74,347,122.92 8 01/15/06 81,472,000.00 66 11/15/10 72,963,813.60 9 02/15/06 81,472,000.00 67 12/15/10 71,421,243.61 10 03/15/06 81,472,000.00 68 01/15/11 70,024,420.25 11 04/15/06 81,472,000.00 69 02/15/11 68,621,145.40 12 05/15/06 81,472,000.00 70 03/15/11 66,754,714.98 13 06/15/06 81,472,000.00 71 04/15/11 65,336,336.41 14 07/15/06 81,472,000.00 72 05/15/11 63,759,671.26 15 08/15/06 81,472,000.00 73 06/15/11 62,327,458.31 16 09/15/06 81,472,000.00 74 07/15/11 60,737,343.03 17 10/15/06 81,472,000.00 75 08/15/11 59,291,169.31 18 11/15/06 81,472,000.00 76 09/15/11 57,838,315.53 19 12/15/06 81,472,000.00 77 10/15/11 56,228,132.73 20 01/15/07 81,472,000.00 78 11/15/11 54,761,129.63 21 02/15/07 81,472,000.00 79 12/15/11 53,137,190.51 22 03/15/07 81,472,000.00 80 01/15/12 51,637,429.39 23 04/15/07 81,472,000.00 81 02/15/12 50,920,736.69 24 05/15/07 81,472,000.00 82 03/15/12 49,192,850.41 25 06/15/07 81,472,000.00 83 04/15/12 47,692,527.47 26 07/15/07 81,472,000.00 84 05/15/12 46,248,407.95 27 08/15/07 81,472,000.00 85 06/15/12 44,925,341.97 28 09/15/07 81,472,000.00 86 07/15/12 43,468,845.14 29 10/15/07 81,472,000.00 87 08/15/12 42,132,931.88 30 11/15/07 81,472,000.00 88 09/15/12 40,790,843.98 31 12/15/07 81,472,000.00 89 10/15/12 39,315,853.50 32 01/15/08 81,472,000.00 90 11/15/12 37,960,744.38 33 02/15/08 81,472,000.00 91 12/15/12 36,473,094.28 34 03/15/08 81,472,000.00 92 01/15/13 35,104,844.87 35 04/15/08 81,472,000.00 93 02/15/13 33,730,270.87 36 05/15/08 81,472,000.00 94 03/15/13 31,972,403.41 37 06/15/08 81,472,000.00 95 04/15/13 30,583,349.04 38 07/15/08 81,472,000.00 96 05/15/13 29,062,696.37 39 08/15/08 81,472,000.00 97 06/15/13 27,660,191.26 40 09/15/08 81,472,000.00 98 07/15/13 26,126,461.38 41 10/15/08 81,472,000.00 99 08/15/13 24,710,382.50 42 11/15/08 81,472,000.00 100 09/15/13 23,287,757.25 43 12/15/08 81,472,000.00 101 10/15/13 21,734,465.97 44 01/15/09 81,472,000.00 102 11/15/13 20,298,082.94 45 02/15/09 81,472,000.00 103 12/15/13 18,731,415.93 46 03/15/09 81,472,000.00 104 01/15/14 17,281,149.27 47 04/15/09 81,472,000.00 105 02/15/14 15,824,177.68 48 05/15/09 81,472,000.00 106 03/15/14 13,991,541.45 49 06/15/09 81,472,000.00 107 04/15/14 12,519,360.62 50 07/15/09 81,472,000.00 108 05/15/14 10,917,889.91 51 08/15/09 81,472,000.00 109 06/15/14 9,431,498.01 52 09/15/09 81,472,000.00 110 07/15/14 7,816,210.87 53 10/15/09 81,472,000.00 111 08/15/14 6,315,477.90 54 11/15/09 81,472,000.00 112 09/15/14 4,807,805.94 55 12/15/09 81,472,000.00 113 10/15/14 3,171,829.67 56 01/15/10 81,472,000.00 114 11/15/14 1,649,621.97 57 02/15/10 81,472,000.00 115 12/15/14 0 D-1 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.]
PROSPECTUS COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (ISSUABLE IN SERIES) WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC. DEPOSITOR Wachovia Commercial Mortgage Securities, Inc. will periodically offer certificates in one or more series. Each series of certificates will represent the entire beneficial ownership interest in a trust fund. Distributions on the certificates of any series will be made only from the assets of the related trust fund. Neither the certificates nor any assets in the related trust fund will be obligations of, or be guaranteed by, the depositor, any servicer or any of their respective affiliates. Neither the certificates nor any assets in the related trust fund will be guaranteed or insured by any governmental agency or instrumentality or by any person, unless otherwise provided in the prospectus supplement. The primary assets of the trust fund may include: o multifamily and commercial mortgage loans, including participations therein; o mortgage-backed securities evidencing interests in or secured by multifamily and commercial mortgage loans, including participations therein, and other mortgage-backed securities; o direct obligations of the United States or other government agencies; or o a combination of the assets described above. INVESTING IN THE OFFERED CERTIFICATES INVOLVES RISKS. YOU SHOULD REVIEW THE INFORMATION APPEARING UNDER THE CAPTION "RISK FACTORS" ON PAGE 14 AND IN THE PROSPECTUS SUPPLEMENT BEFORE PURCHASING ANY OFFERED CERTIFICATE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. April 21, 2005 TABLE OF CONTENTS IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT .................................. 5 ADDITIONAL INFORMATION .................................................... 6 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ......................... 6 SUMMARY OF PROSPECTUS ..................................................... 7 RISK FACTORS .............................................................. 14 DESCRIPTION OF THE TRUST FUNDS ............................................ 34 General ................................................................. 34 Mortgage Loans--Leases .................................................. 34 CMBS .................................................................... 38 Certificate Accounts .................................................... 38 Credit Support .......................................................... 39 Cash Flow Agreements .................................................... 39 Pre-Funding ............................................................. 39 YIELD CONSIDERATIONS ...................................................... 40 General ................................................................. 40 Pass-Through Rate ....................................................... 40 Payment Delays .......................................................... 40 Shortfalls in Collections of Interest Resulting from Prepayments ........ 40 Prepayment Considerations ............................................... 40 Weighted Average Life and Maturity ...................................... 42 Controlled Amortization Classes and Companion Classes ................... 43 Other Factors Affecting Yield, Weighted Average Life and Maturity ....... 43 THE DEPOSITOR ............................................................. 45 USE OF PROCEEDS ........................................................... 45 DESCRIPTION OF THE CERTIFICATES ........................................... 46 General ................................................................. 46 Distributions ........................................................... 46 Distributions of Interest on the Certificates ........................... 47 Distributions of Principal of the Certificates .......................... 48 Components .............................................................. 48 Distributions on the Certificates in Respect of Prepayment Premiums or in Respect of Equity Participations ................................ 48 Allocation of Losses and Shortfalls ..................................... 48 Advances in Respect of Delinquencies .................................... 49 Reports to Certificateholders ........................................... 49 Voting Rights ........................................................... 51 Termination ............................................................. 51 Book-Entry Registration and Definitive Certificates ..................... 52 DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS ....................... 53 General ................................................................. 53 Assignment of Mortgage Assets; Repurchases .............................. 53 Representations and Warranties; Repurchases ............................. 54 Certificate Account ..................................................... 55 Collection and Other Servicing Procedures ............................... 58 Realization upon Defaulted Mortgage Loans ............................... 59 Hazard Insurance Policies ............................................... 60 Due-on-Sale and Due-on-Encumbrance Provisions ........................... 61 Servicing Compensation and Payment of Expenses .......................... 61 2 Evidence as to Compliance ............................................... 62 Certain Matters Regarding the Master Servicer and the Depositor ......... 62 Events of Default ....................................................... 63 Rights upon Event of Default ............................................ 63 Amendment ............................................................... 64 List of Certificateholders .............................................. 65 The Trustee ............................................................. 65 Duties of the Trustee ................................................... 65 Certain Matters Regarding the Trustee ................................... 65 Resignation and Removal of the Trustee .................................. 65 DESCRIPTION OF CREDIT SUPPORT ............................................. 67 General ................................................................. 67 Subordinate Certificates ................................................ 67 Cross-Support Provisions ................................................ 67 Insurance or Guarantees with Respect to Mortgage Loans .................. 67 Letter of Credit ........................................................ 68 Certificate Insurance and Surety Bonds .................................. 68 Reserve Funds ........................................................... 68 Credit Support with Respect to CMBS ..................................... 68 CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES ........................ 69 General ................................................................. 69 Types of Mortgage Instruments ........................................... 69 Leases and Rents ........................................................ 70 Personalty .............................................................. 70 Cooperative Loans ....................................................... 70 Junior Mortgages; Rights of Senior Lenders .............................. 71 Foreclosure ............................................................. 72 Bankruptcy Laws ......................................................... 76 Environmental Considerations ............................................ 78 Due-on-Sale and Due-on-Encumbrance ...................................... 80 Subordinate Financing ................................................... 80 Default Interest and Limitations on Prepayments ......................... 80 Certain Laws and Regulations; Types of Mortgaged Properties ............. 80 Applicability of Usury Laws ............................................. 81 Servicemembers Civil Relief Act ......................................... 81 Americans with Disabilities Act ......................................... 81 Forfeiture in Drug, RICO and Money Laundering Violations ................ 82 Federal Deposit Insurance Act; Commercial Mortgage Loan Servicing ....... 82 MATERIAL FEDERAL INCOME TAX CONSEQUENCES .................................. 84 General ................................................................. 84 REMICs .................................................................. 84 Taxation of Owners of REMIC Regular Certificates ........................ 86 Taxation of Owners of REMIC Residual Certificates ....................... 91 Grantor Trust Funds ..................................................... 101 Characterization of Investments in Grantor Trust Certificates ........... 101 Taxation of Owners of Grantor Trust Fractional Interest Certificates .... 102 Reportable Transactions ................................................. 109 STATE AND OTHER TAX CONSEQUENCES .......................................... 109 ERISA CONSIDERATIONS ...................................................... 110 General ................................................................. 110 Prohibited Transaction Exemptions ....................................... 110 3 LEGAL INVESTMENT .......................................................... 113 METHOD OF DISTRIBUTION .................................................... 115 LEGAL MATTERS ............................................................. 116 FINANCIAL INFORMATION ..................................................... 116 RATINGS ................................................................... 116 INDEX OF PRINCIPAL DEFINITIONS ............................................ 117 4 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT We provide information to you about the offered certificates in two separate documents that provide progressively more detail: o this prospectus, which provides general information, some of which may not apply to your series of certificates; and o the accompanying prospectus supplement, which describes the specific terms of your series of certificates. If the description of your certificates in the accompanying prospectus supplement differs from the related description in this prospectus, you should rely on the information in that prospectus supplement. This prospectus may not be used to consummate sales of the offered certificates of any series unless accompanied by the prospectus supplement for that series. This prospectus and the prospectus supplements also 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 the offered certificates. Wachovia Capital Markets, LLC or any such other affiliate may act as principal or agent in such transactions. Such sales will be made at prices related to prevailing market prices at the time of sale or otherwise. Some capitalized terms used in this prospectus are defined under the caption "Index of Principal Definitions" beginning on page 117 in this prospectus. In this prospectus, the terms "depositor", "we", "us" and "our" refer to Wachovia Commercial Mortgage Securities, Inc. --------------------- Until 90 days after the date of each prospectus supplement, all dealers effecting transactions in the offered certificates covered by that prospectus supplement, whether or not participating in the distribution thereof, may be required to deliver such prospectus supplement and this prospectus. This is in addition to the obligation of dealers to deliver a prospectus and prospectus supplement when acting as underwriters and with respect to their unsold allotments or subscriptions. You should rely only on any information or representations contained or incorporated by reference in this prospectus and the related prospectus supplement. This prospectus and any prospectus supplement do not constitute an offer to sell or a solicitation of an offer to buy any securities in any state or other jurisdiction in which such offer would be unlawful. 5 ADDITIONAL INFORMATION We have filed with the Securities and Exchange Commission a registration statement (of which this prospectus forms a part) under the Securities Act of 1933, as amended, with respect to the offered certificates. This prospectus and the prospectus supplement do not contain all of the information set forth in the registration statement. For further information, you should refer to the registration statement and the exhibits attached thereto. Copies of the Registration Statement may be obtained from the Public Reference Room of the Securities and Exchange Commission, Washington, D.C. 20549, upon payment of the prescribed charges, or may be examined free of charge at the Securities and Exchange Commission's offices, 450 Fifth Street, N.W., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission also maintains a site on the World Wide Web at "http://www.sec.gov" at which you can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval system. We will file or cause to be filed with the Securities and Exchange Commission such periodic reports with respect to each trust fund as are required under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE We are incorporating in this prospectus by reference all documents and reports filed by us with respect to a trust fund pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended. You may obtain, without charge, a copy of any or all documents or reports incorporated in this prospectus by reference, to the extent such documents or reports relate to an offered certificate. Exhibits to those documents will be provided to you only if such exhibits were specifically incorporated by reference in those documents. Requests to the depositor should be directed in writing to Wachovia Commercial Mortgage Securities, Inc., 301 South College Street, Charlotte, North Carolina 28288-0166, Attention: Secretary, or by telephone at 704-374-6161. 6 SUMMARY OF PROSPECTUS The following summary is a brief description of the main terms of the offered certificates. For this reason, the summary does not contain all the information that may be important to you. You will find a detailed description of the terms of the offered certificates following this summary and in the accompanying prospectus supplement. The Trust Assets.............. Each series of certificates will represent the entire beneficial ownership interest in a trust fund consisting primarily of any of the following: o mortgage assets; o certificate accounts; o forms of credit support; o cash flow agreements; and o amounts on deposit in a pre-funding account. The Mortgage Assets........... The mortgage assets with respect to each series of certificates may consist of any of the following: o multifamily and commercial mortgage loans, including participations therein; o commercial mortgage-backed securities, including participations therein; o direct obligations of the United States or other government agencies; and o a combination of the assets described above. The mortgage loans will not be guaranteed or insured by us or any of our affiliates or, unless otherwise provided in the prospectus supplement, by any governmental agency or instrumentality or other person. The mortgage loans will be primarily secured by first or junior liens on, or security interests in fee simple, leasehold or a similar interest in, any of the following types of properties: o residential properties consisting of five or more rental or cooperatively owned dwelling units; o shopping centers; o retail buildings or centers; o hotels and motels; o office buildings; o nursing homes; o hospitals or other health-care related facilities; o industrial properties; o warehouse, mini-warehouse or self-storage facilities; o mobile home parks; 7 o mixed use properties; and o other types of commercial properties. Some or all of the mortgage loans may also be secured by an assignment of one or more leases of all or a portion of the related mortgaged properties. A significant or the sole source of payments on certain mortgage loans will be the rental payments due under the related leases. A mortgage loan may have an interest rate that has any of the following features: o is fixed over its term; o adjusts from time to time; o is partially fixed and partially floating; o is floating based on one or more formulae or indices; o may be converted from a floating to a fixed interest rate; o may be converted from a fixed to a floating interest rate; or o interest is not paid currently but is accrued and added to the principal balance. A mortgage loan may provide for any of the following: o scheduled payments to maturity; o payments that adjust from time to time; o negative amortization or accelerated amortization; o full amortization or require a balloon payment due on its stated maturity date; o prohibitions on prepayment; o releases or substitutions of collateral, including defeasance thereof with direct obligations of the United States; and o payment of a premium or a yield maintenance penalty in connection with a principal prepayment. Unless otherwise described in the prospectus supplement for a series of certificates: o the mortgaged properties may be located in any one of the 50 states, the District of Columbia or the Commonwealth of Puerto Rico; o all mortgage loans will have original terms to maturity of not more than 40 years; o all mortgage loans will have individual principal balances at origination of not less than $100,000; 8 o all mortgage loans will have been originated by persons other than the depositor; and o all mortgage assets will have been purchased, either directly or indirectly, by the depositor on or before the date of initial issuance of the related series of certificates. Any commercial mortgage-backed securities included in a trust fund will evidence ownership interests in or be secured by mortgage loans similar to those described above and other mortgage-backed securities. Some commercial mortgage-backed securities included in a trust fund may be guaranteed or insured by an affiliate of the depositor, Freddie Mac, Fannie Mae, Ginnie Mae, Farmer Mac or any other person specified in the prospectus supplement. Certificate Accounts.......... Each trust fund will include one or more accounts established and maintained on behalf of the certificateholders. All payments and collections received or advanced with respect to the mortgage assets and other assets in the trust fund will be deposited into those accounts. A certificate account may be maintained as an interest bearing or a non-interest bearing account, and funds may be held as cash or reinvested. Credit Support................ The following types of credit support may be used to enhance the likelihood of distributions on certain classes of certificates: o subordination of junior certificates; o over collateralization; o letters of credit; o issurance policies; o guarantees; o reserve funds; and/or o other types of credit support described in the prospectus supplement and a combination of any of the above. Cash Flow Agreements.......... Cash flow agreements are used to reduce the effects of interest rate or currency exchange rate fluctuations on the underlying mortgage assets or on one or more classes of certificates and increase the likelihood of timely distributions on the certificates or such classes of certificates, as the case may be. The trust fund may include any of the following types of cash flow agreements: o guaranteed investment contracts; o interest rate swap or exchange contracts; o interest rate cap or floor agreements; o currency exchange agreements; o yield supplement agreements; or 9 o other types of similar agreements described in the prospectus supplement. Pre-Funding Account; Capitalized Interest Account..................... A trust fund may use monies deposited into a pre-funding account to acquire additional mortgage assets following a closing date for the related series of certificates. The amount on deposit in a pre-funding account will not exceed 25% of the pool balance of the trust fund as of the cut-off date on which the ownership of the mortgage loans and rights to payment thereon are deemed transferred to the trust fund, as specified in the related prospectus supplement. The depositor will select any additional mortgage assets using criteria that is substantially similar to the criteria used to select the mortgage assets included in the trust fund on the closing date. If provided in the prospectus supplement, a trust fund also may include amounts on deposit in a separate capitalized interest account. The depositor may use amounts on deposit in a capitalized interest account to supplement investment earnings, if any, of amounts on deposit in the pre-funding account, supplement interest collections of the trust fund, or such other purpose as specified in the prospectus supplement. Amounts on deposit in any pre-funding account or any capitalized interest account will be held in cash or invested in short-term investment grade obligations. Amounts remaining on deposit in any pre-funding account and any capitalized interest account after the end of the related pre-funding period will be distributed to certificateholders as described in the prospectus supplement. Description of Certificates... Each series of certificates will include one or more classes. Each series of certificates will represent in the aggregate the entire beneficial ownership interest in the related trust fund. The offered certificates are the classes of certificates being offered to you pursuant to the prospectus supplement. The non-offered certificates are the classes of certificates not being offered to you pursuant to the prospectus supplement. Information on the non-offered certificates is being provided solely to assist you in your understanding of the offered certificates. Distributions on Certificates................ The certificates may provide for different methods of distributions to specific classes. Any class of certificates may: o provide for the accrual of interest thereon based on fixed, variable or floating rates; o be senior or subordinate to one or more other classes of certificates with respect to interest or principal distribution and the allocation of losses on the assets of the trust fund; 10 o be entitled to principal distributions, with disproportionately low, nominal or no interest distributions; o be entitled to interest distributions, with disproportionately low, nominal or no principal distributions; o provide for distributions of principal or accrued interest only after the occurrence of certain events, such as the retirement of one or more other classes of certificates; o provide for distributions of principal to be made at a rate that is faster or slower than the rate at which payments are received on the mortgage assets in the related trust fund; o provide for distributions of principal sequentially, based on specified payment schedules or other methodologies; and o provide for distributions based on a combination of any of the above features. Interest on each class of offered certificates of each series will accrue at the applicable pass-through rate on the outstanding certificate balance or notional amount. Distributions of interest with respect to one or more classes of certificates may be reduced to the extent of certain delinquencies, losses and other contingencies described in this prospectus and the prospectus supplement. The certificate balance of a certificate outstanding from time to time represents the maximum amount that the holder thereof is then entitled to receive in respect of principal from future cash flow on the assets in the related trust fund. Unless otherwise specified in the prospectus supplement, distributions of principal will be made on each distribution date to the class or classes of certificates entitled thereto until the certificate balance of such certificates is reduced to zero. Distributions of principal to any class of certificates will be made on a pro rata basis among all of the certificates of such class. Advances...................... A servicer may be obligated as part of its servicing responsibilities to make certain advances with respect to delinquent scheduled payments and property related expenses which it deems recoverable. The trust fund may be charged interest for any advance. We will not have any responsibility to make such advances. One of our affiliates may have the responsibility to make such advances, but only if that affiliate is acting as a servicer or master servicer for the related series of certificates. Termination................... A series of certificates may be subject to optional early termination through the repurchase of the mortgage assets in the related trust fund. 11 Registration of Certificates.. One or more classes of the offered certificates may be initially represented by one or more certificates registered in the name of Cede & Co. as the nominee of The Depository Trust Company. If your offered certificates are so registered, you will not be entitled to receive a definitive certificate representing your interest except in the event that physical certificates are issued under the limited circumstances described in this prospectus and the prospectus supplement. Tax Status of the Certificates................ The certificates of each series will constitute either: o "regular interests" or "residual interests" in a trust fund treated as a "real estate mortgage investment conduit" under the Internal Revenue Code of 1986, as amended; o interests in a trust fund treated as a grantor trust under applicable provisions of the Internal Revenue Code of 1986, as amended; or o any combination of any of the above features. ERISA Considerations.......... If you are a fiduciary of an employee benefit plan or other retirement plan or arrangement that is subject to the Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as amended, or any materially similar federal, state or local law, or any person who proposes to use "plan assets" of any of these plans to acquire any offered certificates, you should carefully review with your legal counsel whether the purchase or holding of any offered certificates could give rise to transactions not permitted under these laws. The prospectus supplement will specify if investment in some certificates may require a representation that the investor is not (or is not investing on behalf of) a plan or similar arrangement or if other restrictions apply. Legal Investment.............. The prospectus supplement will specify whether the offered certificates will 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 advisors for assistance in determining the suitability of and consequences to you of the purchase, ownership and sale of the offered certificates. See "Legal Investment" herein. 12 Rating........................ At the date of issuance, as to each series, each class of offered certificates will not be rated lower than investment grade by one or more nationally recognized statistical rating agencies. A security rating is not a recommendation to buy, sell or hold securities and may be subject to qualification, revision or withdrawal at any time by the assigning rating organization. 13 RISK FACTORS You should consider the following risk factors, in addition to the risk factors in the prospectus supplement, in deciding whether to purchase any of the offered certificates. The risks and uncertainties described below, together with those described in the prospectus supplement under "Risk Factors", summarize the material risks relating to your certificates. Your Ability to Resell Certificates May Be Limited Because of Their Characteristics............. You may not be able to resell your certificates and the value of your certificates may be less than you anticipated for a variety of reasons including: o a secondary market for your certificates may not develop; o interest rate fluctuations; o the absence of redemption rights; and o the limited sources of information about the certificates other than that provided in this prospectus, the prospectus supplement and the monthly report to certificateholders. The Assets of the Trust Fund May Not Be Sufficient to Pay Your Certificates....... Unless otherwise specified in the prospectus supplement, neither the offered certificates of any series nor the mortgage assets in the related trust fund will be guaranteed or insured by us or any of our affiliates, by any governmental agency or instrumentality or by any other person. No offered certificate of any series will represent a claim against or security interest in the trust fund for any other series. Accordingly, if the related trust fund has insufficient assets to make payments on the certificates, there will be no other assets available for payment of the deficiency. Additionally, the trustee, master servicer, special servicer or other specified person may under certain circumstances withdraw some amounts on deposit in certain funds or accounts constituting part of a trust fund, including the certificate account and any accounts maintained as credit support, as described in the prospectus supplement. The trustee, master servicer, special servicer or other specified person may have the authority to make these withdrawals for purposes other than the payment of principal of or interest on the related series of certificates. The prospectus supplement for a series of certificates may provide for one or more classes of certificates that are subordinate to one or more other classes of certificates in entitlement to certain distributions on the certificates. On any distribution date in which the related trust fund has incurred losses or shortfalls in collections on the mortgage assets, the subordinate certificates initially will bear the amount of such losses or shortfalls and, thereafter, the remaining classes of certificates will bear the remaining amount of such losses or shortfalls. The priority, manner and limitations on the allocation of losses and shortfalls will be specified in the prospectus supplement. 14 Prepayments and Repurchases of the Mortgage Assets Will Affect the Timing of Your Cash Flow and May Affect Your Yield.................. Prepayments (including those caused by defaults on the mortgage loans and repurchases for breach of representation or warranty) on the mortgage loans in a trust fund generally will result in a faster rate of principal payments on one or more classes of the related certificates than if payments on such mortgage assets were made as scheduled. Thus, the prepayment experience on the mortgage assets may affect the average life of each class of related certificates. The rate of principal payments on mortgage loans varies between pools and from time to time is influenced by a variety of economic, demographic, geographic, social, tax, legal and other factors. We cannot provide any assurance as to the rate of prepayments on the mortgage loans in any trust fund or that such rate will conform to any model described in this prospectus or in any prospectus supplement. As a result, depending on the anticipated rate of prepayment for the mortgage loans in any trust fund, the retirement of any class of certificates could occur significantly earlier or later than you expected. The rate of voluntary prepayments will also be affected by: o the voluntary prepayment terms of the mortgage loan, including prepayment lock-out periods and prepayment premiums; o then-current interest rates being charged on similar mortgage loans; and o the availability of mortgage credit. A series of certificates may include one or more classes of certificates with entitlements to payments prior to other classes of certificates. As a result, yields on classes of certificates with a lower priority of payment, including classes of offered certificates, of such series may be more sensitive to prepayments on mortgage assets. A series of certificates may include one or more classes offered at a significant premium or discount. Yields on such classes of certificates will be sensitive, and in some cases extremely sensitive, to prepayments on mortgage assets and, where the amount of interest payable with respect to a class is disproportionately high, as compared to the amount of principal, a holder might, in some prepayment scenarios, fail to recoup its original investment. If a mortgage loan is in default, it may not be possible to collect a prepayment premium. No person will be required to pay any premium if a mortgage loan is repurchased for a breach of representation or warranty. 15 The yield on your certificates may be less than anticipated because: o the prepayment premium or yield maintenance required under certain prepayment scenarios may not be enforceable in some states or under federal bankruptcy laws; and o some courts may consider the prepayment premium to be usurious. Optional Early Termination of the Trust Fund May Result in an Adverse Impact on Your Yield or May Result in a Loss................... A series of certificates may be subject to optional early termination by means of the repurchase of the mortgage assets in the related trust fund. We cannot assure you that the proceeds from a sale of the mortgage assets will be sufficient to distribute the outstanding certificate balance plus accrued interest and any undistributed shortfalls in interest accrued on the certificates that are subject to the termination. Accordingly, the holders of such certificates 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. Ratings Do Not Guarantee Payment and Do Not Address Prepayment Risks............ Any rating assigned by a rating agency to a class of offered certificates will reflect only its assessment of the likelihood that holders of certificates of such class will receive payments to which such certificateholders are entitled under the related pooling and servicing agreement. Ratings do not address: o the likelihood that principal prepayments (including those caused by defaults) on the related mortgage loans will be made; o the degree to which the rate of prepayments on the related mortgage loans might differ from that originally anticipated; o the likelihood of early optional termination of the related trust fund; o the possibility that prepayments on the related mortgage loans at a higher or lower rate than anticipated by an investor may cause such investor to experience a lower than anticipated yield; or o the possibility that an investor that purchases an offered certificate at a significant premium might fail to recoup its initial investment under certain prepayment scenarios. The amount, type and nature of credit support, if any, provided with respect to a series of certificates will be determined on the basis of criteria established by each rating 16 agency rating classes of certificates of such series. Those criteria are sometimes based upon an actuarial analysis of the behavior of mortgage loans in a larger group. However, we cannot provide assurance that the historical data supporting any such actuarial analysis will accurately reflect future experience, or that the data derived from a large pool of mortgage loans will accurately predict the delinquency, foreclosure or loss experience of any particular pool of mortgage loans. In other cases, a rating agency may base their criteria upon determinations of the values of the mortgaged properties that provide security for the mortgage loans. However, we cannot provide assurance that those values will not decline in the future. Unused Amounts in Pre-Funding Accounts May Be Returned to You as a Prepayment......... The prospectus supplement will disclose when we are using a pre-funding account to purchase additional mortgage assets in connection with the issuance of certificates. Amounts on deposit in a pre-funding account that are not used to acquire additional mortgage assets by the end of the pre-funding period for a series of certificates may be distributed to holders of those certificates as a prepayment of principal, which may materially and adversely affect the yield on those certificates. Additional Mortgage Assets Acquired in Connection with the Use of a Pre-Funding Account May Change the Aggregate Characteristics of a Trust Fund............. Any additional mortgage assets acquired by a trust fund with funds in a pre-funding account may possess substantially different characteristics than the mortgage assets in the trust fund on the closing date for a series of certificates. Therefore, the aggregate characteristics of a trust fund following the pre-funding period may be substantially different than the characteristics of a trust fund on the closing date for that series of certificates. Net Operating Income Produced by a Mortgaged Property May Be Inadequate to Repay the Mortgage Loans.............. The value of a mortgage loan secured by a multifamily or commercial property is directly related to the net operating income derived from that property because the ability of a borrower to repay a loan secured by an income-producing property typically depends primarily upon the successful operation of that property rather than upon the existence of independent income or assets of the borrower. The reduction in the net operating income of the property may impair the borrower's ability to repay the loan. Many of the mortgage loans included in a trust fund may be secured by liens on owner-occupied mortgaged properties or 17 on mortgaged properties leased to a single tenant. Accordingly, a decline in the financial condition of the borrower or single tenant may have a disproportionately greater affect on the net operating income from such mortgaged properties than would be the case with respect to mortgaged properties with multiple tenants. Future Value of a Mortgaged Property and its Net Operating Income and Cash Flow Is Not Predictable..... Commercial and multifamily property values and cash flows and net operating income from such mortgaged properties are volatile and may be insufficient to cover debt service on the related mortgage loan at any given time. Property value, cash flow and net operating income depend upon a number of factors, including: o changes in general or local economic conditions and/or specific industry segments; o declines in real estate values; o an oversupply of commercial or multifamily properties in the relevant market; o declines in rental or occupancy rates; o increases in interest rates, real estate tax rates and other operating expenses; o changes in governmental rules, regulations and fiscal policies, including environmental legislation; o perceptions by prospective tenants and, if applicable, their customers, of the safety, convenience, services and attractiveness of the property; o the age, construction quality and design of a particular property; o whether the mortgaged properties are readily convertible to alternative uses; o acts of God; and o other factors beyond our control or the control of a servicer. Nonrecourse Loans Limit the Remedies Available Following a Mortgagor Default..................... The mortgage loans will not be an obligation of, or be insured or guaranteed by, any governmental entity, by any private mortgage insurer, or by the depositor, the originators, the master servicer, the special servicer, the trustee or any of their respective affiliates. Each mortgage loan included in a trust fund generally will be a nonrecourse loan. If there is a default (other than a default resulting from voluntary bankruptcy, fraud or willful misconduct) there will generally only be recourse against the specific mortgaged properties and other assets that have been pledged 18 to secure such mortgage loan. Even if a mortgage loan provides for recourse to a mortgagor or its affiliates, it is unlikely the trust fund ultimately could recover any amounts not covered by the mortgaged property. Special Risks of Mortgage Loans Secured by Multifamily Properties...... Mortgage loans secured by multifamily properties may constitute a material concentration of the mortgage loans in a trust fund. Adverse economic conditions, either local, regional or national, may limit the amount of rent that a borrower may charge for rental units, and may result in a reduction in timely rent payments or a reduction in occupancy levels. Occupancy and rent levels may also be affected by: o construction of additional housing units; o local military base closings; o developments at local colleges and universities; o national, regional and local politics, including, in the case of multifamily rental properties, current or future rent stabilization and rent control laws and agreements; o the level of mortgage interest rates, which may encourage tenants in multifamily rental properties to purchase housing; o tax credit and city, state and federal housing subsidy or similar programs which may impose rent limitations and may adversely affect the ability of the applicable borrowers to increase rents to maintain the mortgaged properties in proper condition during periods of rapid inflation or declining market value of the mortgaged properties; o tax credit and city, state and federal housing subsidy or similar programs which may impose income restrictions on tenants and which may reduce the number of eligible tenants in such mortgaged properties and result in a reduction in occupancy rates applicable thereto; and o the possibility that some eligible tenants may not find any differences in rents between subsidized or supported properties and other multifamily rental properties in the same area to be a sufficient economic incentive to reside at a subsidized or supported property, which may have fewer amenities or otherwise be less attractive as a residence. All of these conditions and events may increase the possibility that a borrower may be unable to meet its obligations under its mortgage loan. The multifamily projects market is characterized generally 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 19 relatively short period of time. Because 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. Special Risks of Mortgage Loans Secured by Retail Properties.................. Mortgage loans secured by retail properties may constitute a material concentration of the mortgage loans in a trust fund. Significant factors determining the value of retail properties are: o the quality of the tenants; and o the fundamental aspects of real estate such as location and market demographics. The correlation between the success of tenant businesses and property value is more direct with respect to retail properties than other types of commercial property because a significant component of the total rent paid by retail tenants is often tied to a percentage of gross sales. Significant tenants at a retail property play an important part in generating customer traffic and making a retail property a desirable location for other tenants at that property. Accordingly, retail properties may be adversely affected if a significant tenant ceases operations at those locations, which may occur on account of a voluntary decision not to renew a lease, bankruptcy or insolvency of the tenant, the tenant's general cessation of business activities or for other reasons. In addition, some tenants at retail properties may be entitled to terminate their leases or pay reduced rent if an anchor tenant ceases operations at the property. In those cases, we cannot provide assurance that any anchor tenants will continue to occupy space in the related shopping centers. Shopping centers, in general, are affected by the health of the retail industry. In addition, a shopping center may be adversely affected by the bankruptcy or decline in drawing power of an anchor tenant, the risk that an anchor tenant may vacate notwithstanding that tenant's continuing obligation to pay rent, 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). Unlike other income producing properties, retail properties also face competition from sources outside a given real estate market, such as: o catalogue retailers; o home shopping networks; o the internet; o telemarketing; and o outlet centers. 20 Continued growth of these alternative retail outlets (which are often characterized by lower operating costs) could adversely affect the rents collectible at the retail properties which secure mortgage loans in a trust fund. Special Risks of Mortgage Loans Secured by Hospitality Properties...... Mortgage loans secured by hospitality properties (e.g., a hotel or motel) may constitute a material concentration of the mortgage loans in a trust fund. Various factors affect the economic viability of a hospitality property, including: o location, quality and franchise affiliation (or lack thereof); o adverse economic conditions, either local, regional or national, which may limit the amount that a consumer is willing to pay for a room and may result in a reduction in occupancy levels; o the construction of competing hospitality properties, which may result in a reduction in occupancy levels; o the increased sensitivity of hospitality properties (relative to other commercial properties) to adverse economic conditions and competition, as hotel rooms generally are rented for short periods of time; o the financial strength and capabilities of the owner and operator of a hospitality property, which may have a substantial impact on the property's quality of service and economic performance; and o the generally seasonal nature of the hospitality industry, which can be expected to cause periodic fluctuations in room and other revenues, occupancy levels, room rates and operating expenses. In addition, the successful operation of a hospitality property with a franchise affiliation may depend in part upon the strength of the franchisor, the public perception of the franchise service mark and the continued existence of any franchise license agreement. The transferability of a franchise license agreement may be restricted, and a lender or other person that acquires title to a hospitality property as a result of foreclosure may be unable to succeed to the borrower's rights under the franchise license agreement. Moreover, the transferability of a hospitality property's operating, liquor and other licenses upon a transfer of the hospitality property, whether through purchase or foreclosure, is subject to local law requirements and may not be transferable. Special Risks of Mortgage Loans Secured by Office Buildings................... Mortgage loans secured by office buildings may constitute a material concentration of the mortgage loans in a trust fund. Significant factors determining the value of office buildings include: o the quality of the tenants in the building; 21 o the physical attributes of the building in relation to competing buildings; and o the strength and stability of the market area as a desirable business location. An economic decline in the business operated by the tenants may adversely affect an office building. That risk is increased if revenue is dependent on a single tenant or if there is a significant concentration of tenants in a particular business or industry. Office buildings are also subject to competition with other office properties in the same market. Competition is affected by a property's: o age; o condition; o design (e.g., floor sizes and layout); o access to transportation; and o ability or inability to offer certain amenities to its tenants, including sophisticated building systems (such as fiber optic cables, satellite communications or other base building technological features). The success of an office building also depends on the local economy. A company's decision to locate office headquarters in a given area, for example, may be affected by such factors as labor cost and quality, tax environment and quality of life issues such as schools and cultural amenities. A central business district may have an economy which is markedly different from that of a suburb. The local economy and the financial condition of the owner will impact on an office building's ability to attract stable tenants on a consistent basis. In addition, the cost of refitting office space for a new tenant is often more costly than for other property types. Special Risks of Mortgage Loans Secured by Warehouse and Self Storage Facilities.................. Mortgage loans secured by warehouse and storage facilities may constitute a material concentration of the mortgage loans in a trust fund. The storage facilities market contains low barriers to entry. Increased competition among self storage facilities may reduce income available to repay mortgage loans secured by a self storage facility. Furthermore, the inability of a borrower to police what is stored in a self storage facility due to privacy considerations may increase environmental risks. 22 Special Risks of Mortgage Loans Secured by Healthcare-Related Properties.................. The mortgaged properties may include health care-related facilities, including senior housing, assisted living facilities, skilled nursing facilities and acute care facilities. o Senior housing generally consists of facilities with respect to which the residents are ambulatory, handle their own affairs and typically are couples whose children have left the home and at which the accommodations are usually apartment style; o Assisted living facilities are typically single or double room occupancy, dormitory-style housing facilities which provide food service, cleaning and some personal care and with respect to which the tenants are able to medicate themselves but may require assistance with certain daily routines; o Skilled nursing facilities provide services to post trauma and frail residents with limited mobility who require extensive medical treatment; and o Acute care facilities generally consist of hospital and other facilities providing short-term, acute medical care services. Certain types of health care-related properties, particularly acute care facilities, skilled nursing facilities and some assisted living facilities, typically receive a substantial portion of their revenues from government reimbursement programs, primarily Medicaid and Medicare. Medicaid and Medicare are subject to statutory and regulatory changes, retroactive rate adjustments, administrative rulings, policy interpretations, delays by fiscal intermediaries and government funding restrictions. Moreover, governmental payors have employed cost-containment measures that limit payments to health care providers, and there exist various proposals for national health care reform that could further limit those payments. Accordingly, we cannot provide assurance that payments under government reimbursement programs will, in the future, be sufficient to fully reimburse the cost of caring for program beneficiaries. If those payments are insufficient, net operating income of health care-related facilities that receive revenues from those sources may decline, which consequently could have an adverse affect on the ability of the related borrowers to meet their obligations under any mortgage loans secured by health care-related facilities. Moreover, health care-related facilities are generally subject to federal and state laws that relate to the adequacy of medical care, distribution of pharmaceuticals, rate setting, equipment, personnel, operating policies and additions to facilities and services. In addition, facilities where such care or other medical services are provided are subject to periodic 23 inspection by governmental authorities to determine compliance with various standards necessary to continued licensing under state law and continued participation in the Medicaid and Medicare reimbursement programs. Furthermore, under applicable federal and state laws and regulations, Medicare and Medicaid reimbursements are generally not permitted to be made to any person other than the provider who actually furnished the related medical goods and services. Accordingly, in the event of foreclosure, the trustee, the master servicer, the special servicer or a subsequent lessee or operator of any health care-related facility securing a defaulted mortgage loan generally would not be entitled to obtain from federal or state governments any outstanding reimbursement payments relating to services furnished at such property prior to foreclosure. Any of the aforementioned events may adversely affect the ability of the related borrowers to meet their mortgage loan obligations. Providers of assisted living services are also subject to state licensing requirements in certain states. The failure of an operator to maintain or renew any required license or regulatory approval could prevent it from continuing operations at a health care-related facility or, if applicable, bar it from participation in government reimbursement programs. In the event of foreclosure, we cannot provide assurance that the trustee or any other purchaser at a foreclosure sale would be entitled to the rights under the licenses, and the trustee or other purchaser may have to apply in its own right for the applicable license. We cannot provide assurance that the trustee or other purchaser could obtain the applicable license or that the related mortgaged property would be adaptable to other uses. Government regulation applying specifically to acute care facilities, skilled nursing facilities and certain types of assisted living facilities includes health planning legislation, enacted by most states, intended, at least in part, to regulate the supply of nursing beds. The most common method of control is the requirement that a state authority first make a determination of need, evidenced by its issuance of a certificate of need, before a long-term care provider can establish a new facility, add beds to an existing facility or, in some states, take certain other actions (for example, acquire major medical equipment, make major capital expenditures, add services, refinance long-term debt, or transfer ownership of a facility). States also regulate nursing bed supply in other ways. For example, some states have imposed moratoria on the licensing of new beds, or on the certification of new Medicaid beds, or have discouraged the construction of new nursing facilities by limiting Medicaid reimbursements allocable to the cost of new construction and equipment. In general, a certificate of need is site specific and operator specific; it cannot be transferred from one site to another, or to another operator, without the approval of the appropriate state agency. Accordingly, in the case of foreclosure upon a mortgage loan 24 secured by a lien on a health care-related mortgaged property, the purchaser at foreclosure might be required to obtain a new certificate of need or an appropriate exemption. In addition, compliance by a purchaser with applicable regulations may in any case require the engagement of a new operator and the issuance of a new operating license. Upon a foreclosure, a state regulatory agency may be willing to expedite any necessary review and approval process to avoid interruption of care to a facility's residents, but we cannot provide assurance that any state regulatory agency will do so or that the state regulatory agency will issue any necessary licenses or approvals. Federal and state government "fraud and abuse" laws also apply to health care-related facilities. "Fraud and abuse" laws generally prohibit payment or fee-splitting arrangements between health care providers that are designed to induce or encourage the referral of patients to, or the recommendation of, a particular provider for medical products or services. Violation of these restrictions can result in license revocation, civil and criminal penalties, and exclusion from participation in Medicare or Medicaid programs. The state law restrictions in this area vary considerably from state to state. Moreover, the federal anti-kickback law includes broad language that potentially could be applied to a wide range of referral arrangements, and regulations designed to create "safe harbors" under the law provide only limited guidance. Accordingly, we cannot provide assurance that such laws will be interpreted in a manner consistent with the practices of the owners or operators of the health care-related mortgaged properties that are subject to those laws. The operators of health care-related facilities are likely to compete on a local and regional basis with others that operate similar facilities, some of which competitors may be better capitalized, may offer services not offered by such operators, or may be owned by non-profit organizations or government agencies supported by endowments, charitable contributions, tax revenues and other sources not available to such operators. The successful operation of a health care-related facility will generally depend upon: o the number of competing facilities in the local market; o the facility's age and appearance; o the reputation and management of the facility; o the types of services the facility provides; and o where applicable, the quality of care and the cost of that care. The inability of a health care-related mortgaged property to flourish in a competitive market may increase the likelihood of foreclosure on the related mortgage loan, possibly affecting the yield on one or more classes of the related series of offered certificates. 25 Special Risks of Mortgage Loans Secured by Industrial and Mixed-Use Facilities.... Mortgage loans secured by industrial and mixed-use facilities may constitute a material concentration of the mortgage loans in a trust fund. 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. Site characteristics which are valuable to an industrial property include clear heights, column spacing, zoning restrictions, number of bays and bay depths, divisibility, truck turning radius and overall functionality and accessibility. Location is also important because an industrial property requires the availability of labor sources, proximity to supply sources and customers and accessibility to rail lines, major roadways and other distribution channels. Industrial properties may be adversely affected by reduced demand for industrial space occasioned by a decline in a particular industry segment (e.g. 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. Poor Property Management Will Adversely Affect the Performance of the Related Mortgaged Property.......... Each mortgaged property securing a mortgage loan which has been sold into a trust fund is managed by a property manager (which generally is an affiliate of the borrower) or by the borrower itself. The successful operation of a real estate project is largely dependent on the performance and viability of the management of such project. The property manager is responsible for: o operating the property; o providing building services; o responding to changes in the local market; and o planning and implementing the rental structure, including establishing levels of rent payments and advising the borrowers so that maintenance and capital improvements can be carried out in a timely fashion. 26 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 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. There can be no assurance that the property managers will at all times be in a financial condition to continue to fulfill their management responsibilities under the related management agreements throughout the terms of those agreements. Balloon Payments on Mortgage Loans Result in Heightened Risk of Borrower Default.... Some of the mortgage loans included in a trust fund may not be fully amortizing (or may not amortize at all) over their terms to maturity and, thus, will require substantial principal payments (that is, balloon payments) at their stated maturity. Mortgage loans of this type involve a greater degree of risk than self-amortizing loans because the ability of a borrower to make a balloon payment typically will depend upon either: o its ability to fully refinance the loan; or o its ability to sell the related mortgaged property at a price sufficient to permit the borrower to make the balloon payment. The ability of a borrower to accomplish either of these goals will be affected by a number of factors, including: o the value of the related mortgaged property; o the level of available mortgage interest rates at the time of sale or refinancing; o the borrower's equity in the related mortgaged property; o the financial condition and operating history of the borrower and the related mortgaged property; o tax laws; o rent control laws (with respect to certain residential properties); o Medicaid and Medicare reimbursement rates (with respect to hospitals and nursing homes); o prevailing general economic conditions; and o the availability of credit for loans secured by commercial or multifamily, as the case may be, real properties generally. 27 The Servicer Will Have Discretion to Handle or Avoid Obligor Defaults in a Manner Which May Be Adverse to Your Interests........... If and to the extent specified in the prospectus supplement defaulted mortgage loans exist or are imminent, in order to maximize recoveries on defaulted mortgage loans, the related pooling and servicing agreement will permit (within prescribed limits) the master servicer or a special servicer to extend and modify mortgage loans that are in default or as to which a payment default is imminent. While the related pooling and servicing agreement generally will require a master servicer to determine that any such extension or modification is reasonably likely to produce a greater recovery on a present value basis than liquidation, we cannot provide assurance that any such extension or modification will in fact increase the present value of receipts from or proceeds of the affected mortgage loans. In addition, a master servicer or a special servicer may receive a workout fee based on receipts from or proceeds of such mortgage loans that would otherwise be payable to the certificateholders. Proceeds Received upon Foreclosure of Mortgage Loans Secured Primarily by Junior Mortgages May Result in Losses................... To the extent specified in the prospectus supplement, some of the mortgage loans included in a trust fund may be secured primarily by junior mortgages. When liquidated, mortgage loans secured by junior mortgages are entitled to satisfaction from proceeds that remain from the sale of the related mortgaged property after the mortgage loans senior to such mortgage loans have been satisfied. If there are insufficient funds to satisfy both the junior mortgage loans and senior mortgage loans, the junior mortgage loans would suffer a loss and, accordingly, one or more classes of certificates would bear such loss. Therefore, any risks of deficiencies associated with first mortgage loans will be greater with respect to junior mortgage loans. Credit Support May Not Cover Losses or Risks Which Could Adversely Affect Payment on Your Certificates........... The prospectus supplement for the offered certificates of each series will describe any credit support provided with respect to those certificates. Use of credit support will be subject to the conditions and limitations described in this prospectus and in the related prospectus supplement. Moreover, credit support may not cover all potential losses or risks; for example, credit support may or may not cover fraud or negligence by a mortgage loan originator or other parties. A series of certificates may include one or more classes of subordinate certificates (which may include offered certificates), if so provided in the prospectus supplement. Although subordination is intended to reduce the risk to holders of 28 senior certificates of delinquent distributions or ultimate losses, the amount of subordination will be limited and may decline under certain circumstances. In addition, if principal payments on one or more classes of certificates of a series are made in a specified order of priority, any limits with respect to the aggregate amount of claims under any related credit support may be exhausted before the principal of the lower priority classes of certificates of such series has been fully repaid. As a result, the impact of losses and shortfalls experienced with respect to the mortgage assets may fall primarily upon those classes of certificates having a lower priority of payment. Moreover, if a form of credit support covers more than one series of certificates, holders of certificates of one series will be subject to the risk that such credit support will be exhausted by the claims of the holders of certificates of one or more other series. Regardless of the form of credit enhancement provided, the amount of coverage will be limited in amount and in most cases will be subject to periodic reduction in accordance with a schedule or formula. The master servicer will generally be permitted to reduce, terminate or substitute all or a portion of the credit enhancement for any series of certificates if the applicable rating agency indicates that the then-current rating of those certificates will not be adversely affected. The rating of any series of certificates by any applicable rating agency may be lowered following the initial issuance of those certificates as a result of the downgrading of the obligations of any applicable credit support provider, or as a result of losses on the related mortgage assets substantially in excess of the levels contemplated by that rating agency at the time of its initial rating analysis. None of the depositor, the master servicer or any of our or the master servicer's affiliates will have any obligation to replace or supplement any credit enhancement, or to take any other action to maintain any rating of any series of certificates. Mortgagors of Commercial Mortgage Loans Are Sophisticated and May Take Actions Adverse to Your Interests................... Mortgage loans made to partnerships, corporations or other entities may entail risks of loss from delinquency and foreclosure that are greater than those of mortgage loans made to individuals. The mortgagor's sophistication and form of organization may increase the likelihood of protracted litigation or bankruptcy in default situations. Some Actions Allowed by the Mortgage May Be Limited by Law...................... Mortgages securing mortgage loans included in a trust fund may contain a due-on-sale clause, which permits the lender to accelerate the maturity of the mortgage loan if the borrower sells, transfers or conveys the related mortgaged property or its interest in the mortgaged property. Mortgages securing mortgage loans included in a trust fund may also include a 29 debt-acceleration clause, which permits the lender to accelerate the debt upon a monetary or non-monetary default of the borrower. Such clauses are not always enforceable. The courts of all states will enforce clauses providing for acceleration in the event of a material payment default. The equity courts of any state, however, may refuse the foreclosure of a mortgage or deed of trust when an acceleration of the indebtedness would be inequitable or unjust or the circumstances would render the acceleration unconscionable. Assignment of Leases and Rents to Provide Further Security for Mortgage Loans Poses Special Risks......... The mortgage loans included in any trust fund typically will be secured by an assignment of leases and rents pursuant to which the borrower assigns to the lender its right, title and interest as landlord under the leases of the related mortgaged property, and the income derived therefrom, as further security for the related mortgage loan, while retaining a license to collect rents for so long as there is no default. If the borrower defaults, the license terminates and the lender is entitled to collect rents. Some state laws may require that the lender take possession of the mortgaged property and obtain a judicial appointment of a receiver before becoming entitled to collect the rents. In addition, bankruptcy or the commencement of similar proceedings by or in respect of the borrower may adversely affect the lender's ability to collect the rents. Inclusion in a Trust Fund of Delinquent Mortgage Loans May Adversely Affect the Rate of Defaults and Prepayments on the Mortgage Loans....................... If so provided in the prospectus supplement, the trust fund for a series of certificates may include mortgage loans that are delinquent as of the date they are deposited in the trust fund. A mortgage loan will be considered "delinquent" if it is 30 days or more past its most recently contractual scheduled payment date in payment of all amounts due according to its terms. In any event, at the time of its creation, the trust fund will not include delinquent loans which by principal amount are more than 20% of the aggregate principal amount of all mortgage loans in the trust fund. If so specified in the prospectus supplement, the servicing of such mortgage loans will be performed by a special servicer. Credit support provided with respect to a series of certificates may not cover all losses related to delinquent mortgage loans, and investors should consider the risk that the inclusion of such mortgage loans in the trust fund may adversely affect the rate of defaults and prepayments on the mortgage loans in the trust fund and the yield on the offered certificates of such series. 30 Environmental Liability May Affect the Lien on a Mortgaged Property and Expose the Lender to Costs.. Under certain laws, contamination of real property may give rise to a lien on the property to assure the costs of cleanup. In several states, that lien has priority over an existing mortgage lien on a property. In addition, under the laws of some states and under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, a lender may be liable, as an "owner" or "operator," for costs of addressing releases or threatened releases of hazardous substances at a property, if agents or employees of the lender have become sufficiently involved in the operations of the borrower, regardless of whether or not the environmental damage or threat was caused by the borrower. A lender also risks such liability on foreclosure of the mortgage. In addition, liabilities imposed upon a borrower by CERCLA or other environmental laws may adversely affect a borrower's ability to repay a loan. If a trust fund includes mortgage loans and the prospectus supplement does not otherwise specify, the related pooling and servicing agreement will contain provisions generally to the effect that the master servicer, acting on behalf of the trust fund, may not acquire title to a mortgaged property or assume control of its operation unless the master servicer, based upon a report prepared by a person who regularly conducts environmental site assessments, has made the determination that it is appropriate to do so. These provisions are designed to reduce substantially the risk of liability for costs associated with remediation of hazardous substances, but we cannot provide assurance in a given case that those risks can be eliminated entirely. In addition, it is likely that any recourse against the person preparing the environmental report, and such person's ability to satisfy a judgment, will be limited. One Action Jurisdiction May Limit the Ability of the Special Servicer to Foreclose on a Mortgaged Property.................... Several states (including California) have laws that prohibit more than one "judicial action" to enforce a mortgage obligation, and some courts have construed the term "judicial action" broadly. The special servicer may need to obtain advice of counsel prior to enforcing any of the trust fund's rights under any of the mortgage loans that include mortgaged properties where the rule could be applicable. In the case of a mortgage loan secured by mortgaged properties located in multiple states, the special servicer may be required to foreclose first on properties located in states where "one action" rules apply (and where non-judicial foreclosure is permitted) before foreclosing on properties located in states where judicial foreclosure is the only permitted method of foreclosure. 31 Rights Against Tenants May Be Limited if Leases Are Not Subordinate to the Mortgage or Do Not Contain Attornment Provisions....... Some of the tenant leases contain provisions that require the tenant to attorn to (that is, recognize as landlord under the lease) a successor owner of the property following foreclosure. Some of the leases may be either subordinate to the liens created by the mortgage loans or else contain a provision that requires the tenant to subordinate the lease if the mortgagee agrees to enter into a non-disturbance agreement. In some states, if tenant leases are subordinate to the liens created by the mortgage loans and such leases do not contain attornment provisions, such leases may terminate upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Accordingly, in the case of the foreclosure of a mortgaged property located in such a state and leased to one or more desirable tenants under leases that do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants' leases were terminated (e.g., if such tenants were paying above-market rents). If a lease is senior to a mortgage, the lender will not (unless it has otherwise agreed with the tenant) possess the right to dispossess the tenant upon foreclosure of the property, and if the lease contains provisions inconsistent with the mortgage (e.g., provisions relating to application of insurance proceeds or condemnation awards), the provisions of the lease will take precedence over the provisions of the mortgage. If Mortgaged Properties Are Not in Compliance With Current Zoning Laws, You May Not Be Able to Restore Compliance Following a Casualty Loss............... Due to changes in applicable building and zoning ordinances and codes which have come into effect after the construction of improvements on certain of the mortgaged properties, some improvements may not comply fully with current zoning laws (including density, use, parking and set-back requirements) but may qualify as permitted non-confirming uses. Such changes may limit the ability of the related mortgagor to rebuild the premises "as is" in the event of a substantial casualty loss. Such limitations may adversely affect the ability of the mortgagor to meet its mortgage loan obligations from cash flow. 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. 32 Inspections of the Mortgaged Properties Were Limited..... The mortgaged properties were inspected by licensed engineers in connection with the origination of the mortgage loans to assess the structure, exterior walls, roofing interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements located on the mortgaged properties. We cannot provide assurance that all conditions requiring repair or replacement have been identified in such inspections. Litigation Concerns........... There may be legal proceedings pending and, from time to time, threatened against the mortgagors or their affiliates relating to the business, or arising out of the ordinary course of business, of the mortgagors and their affiliates. We cannot provide assurance that such litigation will not have a material adverse effect on the distributions to you on your certificates. 33 DESCRIPTION OF THE TRUST FUNDS GENERAL The primary assets of each trust fund will consist of mortgage assets which include (i) one or more multifamily and/or commercial mortgage loans and participations therein, (ii) CMBS, (iii) direct obligations of the United States or other government agencies, or (iv) a combination of the assets described in clauses (i), (ii) and (iii). Each trust fund will be established by the depositor. Each mortgage asset will be selected by the depositor for inclusion in a trust fund from among those purchased, either directly or indirectly, from a prior holder thereof, which may or may not be the originator of such mortgage loan or the issuer of such CMBS and may be an affiliate of the depositor. The mortgage assets will not be guaranteed or insured by the depositor or any of its affiliates or, unless otherwise provided in the prospectus supplement, by any governmental agency or instrumentality or by any other person. The discussion below under the heading "--Mortgage Loans--Leases," unless otherwise noted, applies equally to mortgage loans underlying any CMBS included in a particular trust fund. MORTGAGE LOANS--LEASES General. The mortgage loans will be evidenced by mortgage notes secured by mortgages or deeds of trust or similar security instruments that create first or junior liens on, or installment contracts for the sale of, mortgaged properties consisting of (i) multifamily properties, which are residential properties consisting of five or more rental or cooperatively owned dwelling units in high-rise, mid-rise or garden apartment buildings or other residential structures, or (ii) commercial properties, which include office buildings, retail stores, hotels or motels, nursing homes, hospitals or other health care-related facilities, mobile home parks, warehouse facilities, mini-warehouse facilities, self-storage facilities, industrial plants, mixed use or other types of income-producing properties or unimproved land. The multifamily properties may include mixed commercial and residential structures and may include apartment buildings owned by private cooperative housing corporations. If so specified in the prospectus supplement, each mortgage will create a first priority mortgage lien on a mortgaged property. A mortgage may create a lien on a borrower's leasehold estate in a property; however, the term of any such leasehold will exceed the term of the mortgage note by at least ten years. Each mortgage loan will have been originated by a person other than the depositor. If so specified in the prospectus supplement, mortgage assets for a series of certificates may include mortgage loans made on the security of real estate projects under construction. In that case, the prospectus supplement will describe the procedures and timing for making disbursements from construction reserve funds as portions of the related real estate project are completed. In addition, mortgage assets may include mortgage loans that are delinquent as of the date of issuance of a series of certificates. In that case, the prospectus supplement will set forth, as to each such mortgage loan, available information as to the period of such delinquency, any forbearance arrangement then in effect, the condition of the related mortgaged property and the ability of the mortgaged property to generate income to service the mortgage debt. Leases. To the extent specified in the prospectus supplement, the commercial properties may be leased to lessees that occupy all or a portion of such properties. Pursuant to a lease assignment, the borrower may assign its right, title and interest as lessor under each lease and the income derived therefrom to the mortgagee, while retaining a license to collect the rents for so long as there is no default. If the borrower defaults, the license terminates and the mortgagee or its agent is entitled to collect the rents from the lessee for application to the monetary obligations of the borrower. State law may limit or restrict the enforcement of the lease assignments by a mortgagee until it takes possession of the mortgaged property and/or a receiver is appointed. See "Certain Legal Aspects of the Mortgage Loans and Leases--Leases and Rents." Alternatively, to the extent specified in the prospectus supplement, the borrower and the mortgagee may agree that payments under leases are to be made directly to a servicer. To the extent described in the prospectus supplement, the leases, which may include "bond-type" or "credit-type" leases, may require the lessees to pay rent that is sufficient in the aggregate to cover all scheduled payments of principal and interest on the mortgage loans and, in certain cases, their pro rata 34 share of the operating expenses, insurance premiums and real estate taxes associated with the mortgaged properties. A "bond-type" lease is a lease between a lessor and a lessee for a specified period of time with specified rent payments that are at least sufficient to repay the related note(s). A bond-type lease requires the lessee to perform and pay for all obligations related to the leased premises and provides that, no matter what occurs with regard to the leased premises, the lessee is obligated to continue to pay its rent. A "credit-type" lease is a lease between a lessor and a lessee for a specified period of time with specified rent payments at least sufficient to repay the related note(s). A credit-type lease requires the lessee to perform and pay for most of the obligations related to the leased premises, excluding only a few landlord duties which remain the responsibility of the borrower/lessor. Leases (other than bond-type leases) may require the borrower to bear costs associated with structural repairs and/or the maintenance of the exterior or other portions of the mortgaged property or provide for certain limits on the aggregate amount of operating expenses, insurance premiums, taxes and other expenses that the lessees are required to pay. If so specified in the prospectus supplement, under certain circumstances the lessees may be permitted to set off their rental obligations against the obligations of the borrowers under the leases. In those cases where payments under the leases (net of any operating expenses payable by the borrowers) are insufficient to pay all of the scheduled principal and interest on the mortgage loans, the borrowers must rely on other income or sources generated by the mortgaged property to make payments on the mortgage loan. To the extent specified in the prospectus supplement, some commercial properties may be leased entirely to one lessee. This is generally the case in bond-type leases and credit-type leases. In such cases, absent the availability of other funds, the borrower must rely entirely on rent paid by such lessee in order for the borrower to pay all of the scheduled principal and interest on the related commercial loan. To the extent specified in the prospectus supplement, some leases (not including bond-type leases) may expire prior to the stated maturity of the mortgage loan. In such cases, upon expiration of the leases the borrowers will have to look to alternative sources of income, including rent payment by any new lessees or proceeds from the sale or refinancing of the mortgaged property, to cover the payments of principal and interest due on the mortgage loans unless the lease is renewed. As specified in the prospectus supplement, some leases may provide that upon the occurrence of a casualty affecting a mortgaged property, the lessee will have the right to terminate its lease, unless the borrower, as lessor, is able to cause the mortgaged property to be restored within a specified period of time. Some leases may provide that it is the lessor's responsibility to restore the mortgaged property to its original condition after a casualty. Some leases may provide that it is the lessee's responsibility to restore the mortgaged property to its original condition after a casualty. Some leases may provide a right of termination to the lessee if a taking of a material or specified percentage of the leased space in the mortgage property occurs, or if the ingress or egress to the leased space has been materially impaired. Default and Loss Considerations with Respect to the Mortgage Loans. Mortgage loans secured by liens on income-producing properties are substantially different from loans which are secured by owner-occupied single-family homes. The repayment of a loan secured by a lien on an income producing property is typically dependent upon the successful operation of such property (that is, its ability to generate income). Moreover, some or all of the mortgage loans included in a trust fund may be non-recourse loans, which means that, absent special facts, recourse in the case of default will be limited to the mortgaged property and such other assets, if any, that the borrower pledged to secure repayment of the mortgage loan. Lenders typically look to the Debt Service Coverage Ratio of a loan secured by income-producing property as an important measure of the risk of default on such a loan. As more fully set forth in the prospectus supplement, the Debt Service Coverage Ratio of a mortgage loan at any given time is the ratio of (i) the Net Operating Income of the mortgaged property for a twelve-month period to (ii) the annualized scheduled payments on the mortgage loan and on any other loan that is secured by a lien on the mortgaged property prior to the lien of the mortgage. As more fully set forth in the prospectus supplement, Net Operating Income means, for any given period, the total operating revenues derived from a mortgaged property, minus the total operating expenses incurred in respect of the mortgaged property other than (i) non-cash items such as depreciation and amortization, (ii) capital expenditures and (iii) debt service on loans (including the mortgage loan) secured by liens on the mortgaged property. The Net Operating Income of a mortgaged property will fluctuate over time and may not be sufficient to cover 35 debt service on the mortgage loan at any given time. An insufficiency of Net Operating Income can be compounded or solely caused by an adjustable rate mortgage loan. As the primary source of the operating revenues of a non-owner occupied income-producing property, the condition of the applicable real estate market and/or area economy may effect rental income (and maintenance payments from tenant-stockholders of a private cooperative housing corporation). In addition, properties typically leased, occupied or used on a short-term basis, such as certain health-care-related facilities, hotels and motels, and mini warehouse and self-storage facilities, tend to be affected more rapidly by changes in market or business conditions than do properties typically leased, occupied or used for longer periods, such as warehouses, retail stores, office buildings and industrial plants. Commercial loans may be secured by owner-occupied mortgaged properties or mortgaged properties leased to a single tenant. Accordingly, a decline in the financial condition of the mortgagor or single tenant, as applicable, may have a disproportionately greater effect on the Net Operating Income from such mortgaged properties than the case of mortgaged properties with multiple tenants. The Debt Service Coverage Ratio should not be relied upon as the sole measure of the risk of default of any loan, however, since other factors may outweigh a high Debt Service Coverage Ratio. With respect to a balloon mortgage loan, for example, the risk of default as a result of the unavailability of a source of funds to finance the related balloon payment at maturity on terms comparable to or better than those of the balloon mortgage loans could be significant even though the related Debt Service Coverage Ratio is high. Increases in operating expenses due to the general economic climate or economic conditions in a locality or industry segment, such as increases in interest rates, real estate tax rates, energy costs, labor costs and other operating expenses, and/or changes in governmental rules, regulations and fiscal policies may also affect the risk of default on a mortgage loan. As may be further described in the prospectus supplement, in some cases leases of mortgaged properties may provide that the lessee, rather than the borrower/landlord, is responsible for payment of operating expenses. However, the existence of such "net of expense" provisions will result in stable Net Operating Income to the borrower/landlord only to the extent that the lessee is able to absorb operating expense increases while continuing to make rent payments. See "--Leases" above. While the duration of leases and the existence of any "net of expense" provisions are often viewed as the primary considerations in evaluating the credit risk of mortgage loans secured by certain income-producing properties, such risk may be affected equally or to a greater extent by changes in government regulation of the operator of the property. Examples of the latter include mortgage loans secured by health care-related facilities, the income from which and the operating expenses of which are subject to state and/or federal regulations, such as Medicare and Medicaid, and multifamily properties and mobile home parks, which may be subject to state or local rent control regulation and, in certain cases, restrictions on changes in use of the property. Low- and moderate-income housing in particular may be subject to legal limitations and regulations but, because of such regulations, may also be less sensitive to fluctuations in market rents generally. Lenders also look to the Loan-to-Value Ratio of a mortgage loan as a measure of risk of loss if a property must be liquidated following a default. The lower the Loan-to-Value Ratio, the greater the percentage of the borrower's equity in a mortgaged property, and thus the greater the cushion provided to the lender against loss on liquidation following a default. Loan-to-Value Ratios will not necessarily constitute an accurate measure of the risk of liquidation loss in a pool of mortgage loans. For example, the value of a mortgaged property as of the date of initial issuance of the related series of certificates may be less than the fair market value of the mortgaged property determined in an appraisal determined at loan origination, and will likely continue to fluctuate from time to time based upon changes in economic conditions and the real estate market. Moreover, even when current, an appraisal is not necessarily a reliable estimate of value. Appraised values of income-producing properties are generally based on the market comparison method (recent resale value of comparable properties at the date of the appraisal), the cost replacement method (the cost of replacing the property at such date), the income capitalization method (a projection of value based upon the property's projected net cash flow), or upon a selection from or interpolation of the values derived from 36 such methods. Each of these appraisal methods can present analytical difficulties. It is often difficult to find truly comparable properties that have recently been sold; the replacement cost of a property may have little to do with its current market value; and income capitalization is inherently based on inexact projections of income and expense and the selection of an appropriate capitalization rate. Where more than one of these appraisal methods are used and provide significantly different results, an accurate determination of value and, correspondingly, a reliable analysis of default and loss risks, is even more difficult. While the depositor believes that the foregoing considerations are important factors that generally distinguish loans secured by liens on income-producing real estate from single-family mortgage loans, there is no assurance that all of such factors will in fact have been prudently considered by the originators of the mortgage loans, or that, for a particular mortgage loan, they are complete or relevant. See "Risk Factors--Net Operating Income Produced by a Mortgaged Property May Be Inadequate to Repay the Mortgage Loans" and "--Balloon Payments on Mortgage Loans Result in Heightened Risk of Borrower Default." Payment Provisions of the Mortgage Loans. Unless otherwise specified in the prospectus supplement, all of the mortgage loans will have original terms to maturity of not more than 40 years and will provide for scheduled payments of principal, interest or both, to be made on specified dates that occur monthly or quarterly or at such other interval as is specified in the prospectus supplement. A mortgage loan (i) may provide for no accrual of interest or for accrual of interest thereon at an interest rate that is fixed over its term or that adjusts from time to time, or that may be converted at the borrower's election from an adjustable to a fixed interest rate, or from a fixed to an adjustable interest rate, (ii) may provide for the formula, index or other method by which the interest rate will be calculated, (iii) may provide for level payments to maturity or for payments that adjust from time to time to accommodate changes in the interest rate or to reflect the occurrence of certain events, and may permit negative amortization or accelerated amortization, (iv) may be fully amortizing over its term to maturity, or may provide for little or no amortization over its term and thus require a balloon payment on its stated maturity date, and (v) may contain a prohibition on prepayment for a specified lockout period or require payment of a prepayment premium or a yield maintenance penalty in connection with a prepayment, in each case as described in the prospectus supplement. A mortgage loan may also contain an equity participation provision that entitles the lender to a share of profits realized from the operation or disposition of the mortgaged property, as described in the prospectus supplement. If holders of any series or class of offered certificates will be entitled to all or a portion of a prepayment premium or an equity participation, the prospectus supplement will describe the prepayment premium and/or equity participation and the method or methods by which any such amounts will be allocated to holders. Mortgage Loan Information in Prospectus Supplements. Each prospectus supplement will contain certain information pertaining to the mortgage loans in the related trust fund which will generally include the following: (i) the aggregate outstanding principal balance and the largest, smallest and average outstanding principal balance of the mortgage loans as of the applicable Cut-Off Date, (ii) the type or types of property that provide security for repayment of the mortgage loans, (iii) the original and remaining terms to maturity of the mortgage loans and the seasoning of the mortgage loans, (iv) the earliest and latest origination date and maturity date and weighted average original and remaining terms to maturity (or for ARD loans, the anticipated repayment date) of the mortgage loans, (v) the original Loan-to-Value Ratios of the mortgage loans, (vi) the mortgage interest rates or range of mortgage interest rates and the weighted average mortgage interest rate carried by the mortgage loans, (vii) the geographic distribution of the mortgaged properties on a state-by-state basis, (viii) information with respect to the prepayment provisions, if any, of the mortgage loans, (ix) with respect to adjustable rate mortgage loans, the index or indices upon which such adjustments are based, the adjustment dates, the range of gross margins and the weighted average gross margin, and any limits on mortgage interest rate adjustments at the time of any adjustment and over the life of the adjustable rate mortgage loans, (x) Debt Service Coverage Ratios either at origination or as of a more recent date (or both) and (xi) information regarding the payment characteristics of the mortgage loans, including without limitation balloon payment and other amortization provisions. In appropriate cases, the prospectus supplement will also contain certain information available to the depositor that pertains to the provisions of leases and the nature of tenants 37 of the mortgaged properties. If specific information regarding the mortgage loans is not known to the depositor at the time the certificates are initially offered, the depositor will provide more general information of the nature described above in the prospectus supplement, and the depositor will set forth specific information of the nature described above in a report which will be available to purchasers of the related certificates at or before the initial issuance thereof and will be filed as part of a Current Report on Form 8-K with the Securities and Exchange Commission within 15 days following such issuance. CMBS CMBS may include (i) private (that is, not guaranteed or insured by the United States or any agency or instrumentality thereof) mortgage participations, mortgage pass-through certificates or other mortgage-backed securities such as mortgage-backed securities that are similar to a series of certificates or (ii) certificates insured or guaranteed by Freddie Mac, Fannie Mae, Ginnie Mae or Farmer Mac, provided that each CMBS will evidence an interest in, or will be secured by a pledge of, mortgage loans that conform to the descriptions of the mortgage loans contained in this prospectus. The CMBS may have been issued in one or more classes with characteristics similar to the classes of certificates described in this prospectus. Distributions in respect of the CMBS will be made by the CMBS servicer or the CMBS trustee on the dates specified in the prospectus supplement. The CMBS issuer or the CMBS servicer or another person specified in the prospectus supplement may have the right or obligation to repurchase or substitute assets underlying the CMBS after a certain date or under other circumstances specified in the prospectus supplement. Reserve funds, subordination or other credit support similar to that described for the certificates under "Description of Credit Support" may have been provided with respect to the CMBS. The type, characteristics and amount of such credit support, if any, will be a function of the characteristics of the underlying mortgage loans and other factors and generally will have been established on the basis of the requirements of any rating agency that may have assigned a rating to the CMBS, or by the initial purchasers of the CMBS. The prospectus supplement for certificates that evidence interests in CMBS will specify, to the extent available and deemed material, (i) the aggregate approximate initial and outstanding principal amount and type of the CMBS to be included in the trust fund, (ii) the original and remaining term to stated maturity of the CMBS, if applicable, (iii) the pass-through or bond rate of the CMBS or the formula for determining such rates, (iv) the payment characteristics of the CMBS, (v) the CMBS issuer, CMBS servicer and CMBS trustee, (vi) a description of the credit support, if any, (vii) the circumstances under which the related underlying mortgage loans, or the CMBS themselves, may be purchased prior to their maturity, (viii) the terms on which mortgage loans may be substituted for those originally underlying the CMBS, (ix) the servicing fees payable under the CMBS agreement, (x) the type of information in respect of the underlying mortgage loans described under "--Mortgage Loans--Leases--Mortgage Loan Information in Prospectus Supplements" and (xi) the characteristics of any cash flow agreements that relate to the CMBS. To the extent required under the securities laws, CMBS included among the assets of a trust fund will (i) either have been registered under the Securities Act of 1933, as amended, or be eligible for resale under Rule 144(k) under the Securities Act of 1933, as amended, and (ii) have been acquired in a bona fide secondary market transaction and not from the issuer or an affiliate. CERTIFICATE ACCOUNTS Each trust fund will include one or more certificate accounts established and maintained on behalf of the certificateholders into which the person or persons designated in the prospectus supplement will, to the extent described in this prospectus and in the prospectus supplement, deposit all payments and collections received or advanced with respect to the mortgage assets and other assets in the trust fund. A certificate account may be maintained as an interest bearing or a non-interest bearing account, and funds held therein may be held as cash or invested in certain short-term, investment grade obligations, in each case as described in the prospectus supplement. 38 CREDIT SUPPORT If so provided in the prospectus supplement, partial or full protection against certain defaults and losses on the mortgage assets in the trust fund may be provided to one or more classes of certificates in the form of subordination of one or more other classes of certificates or by one or more other types of credit support, such as over collateralization, a letter of credit, insurance policy, guarantee or reserve fund, or by a combination thereof. The amount and types of credit support, the identity of the entity providing it (if applicable) and related information with respect to each type of credit support, if any, will be set forth in the prospectus supplement for the certificates of each series. The prospectus supplement for any series of certificates evidencing an interest in a trust fund that includes CMBS will describe in the same fashion any similar forms of credit support that are provided by or with respect to, or are included as part of the trust fund evidenced by or providing security for, such CMBS to the extent information is available and deemed material. The type, characteristic and amount of credit support will be determined based on the characteristics of the mortgage assets and other factors and will be established, in part, on the basis of requirements of each rating agency rating a series of certificates. If so specified in the prospectus supplement, any credit support may apply only in the event of certain types of losses or delinquencies and the protection against losses or delinquencies provided by such credit support will be limited. See "Risk Factors--Credit Support May Not Cover Losses or Risks Which Could Adversely Affect Payment on Your Certificates" and "Description of Credit Support." CASH FLOW AGREEMENTS If so provided in the prospectus supplement, the trust fund may include guaranteed investment contracts pursuant to which moneys held in the funds and accounts established for the related series will be invested at a specified rate. The trust fund may also include interest rate exchange agreements, interest rate cap or floor agreements, currency exchange agreements or similar agreements designed to reduce the effects of interest rate or currency exchange rate fluctuations on the mortgage assets or on one or more classes of certificates. The principal terms of any guaranteed investment contract or other agreement, and the identity of the obligor under any guaranteed investment contract or other agreement, will be described in the prospectus supplement. PRE-FUNDING If so provided in the prospectus supplement, a trust fund may include amounts on deposit in a separate pre-funding account that may be used by the trust fund to acquire additional mortgage assets. Amounts in a pre-funding account will not exceed 25% of the pool balance of the trust fund as of the Cut-Off Date. Additional mortgage assets will be selected using criteria that are substantially similar to the criteria used to select the mortgage assets included in the trust fund on the closing date. The trust fund may acquire such additional mortgage assets for a period of time of not more than 120 days after the closing date for the related series of certificates. Amounts on deposit in the pre-funding account after the end of the pre-funding period will be distributed to certificateholders or such other person as set forth in the prospectus supplement. In addition, a trust fund may include a separate capitalized interest account. Amounts on deposit in the capitalized interest account may be used to supplement investment earnings, if any, of amounts on deposit in the pre-funding account, supplement interest collections of the trust fund, or such other purpose as specified in the prospectus supplement. Amounts on deposit in the capitalized interest account and pre-funding account generally will be held in cash or invested in short-term investment grade obligations. Any amounts on deposit in the capitalized interest account will be released after the end of the pre-funding period as specified in the prospectus supplement. See "Risk Factors--Unused Amounts in Pre-Funding Accounts May Be Returned to You as a Prepayment." 39 YIELD CONSIDERATIONS GENERAL The yield on any offered certificate will depend on the price paid by the certificateholder, the pass-through rate of the certificate and the amount and timing of distributions on the certificate. See "Risk Factors--Prepayments and Repurchases of the Mortgage Assets Will Affect the Timing of Your Cash Flow and May Affect Your Yield." The following discussion contemplates a trust fund that consists solely of mortgage loans. While you generally can expect the characteristics and behavior of mortgage loans underlying CMBS to have the same effect on the yield to maturity and/or weighted average life of a class of certificates as will the characteristics and behavior of comparable mortgage loans, the effect may differ due to the payment characteristics of the CMBS. If a trust fund includes CMBS, the prospectus supplement will discuss the effect that the CMBS payment characteristics may have on the yield to maturity and weighted average lives of the offered certificates. PASS-THROUGH RATE The certificates of any class within a series may have a fixed, variable or adjustable pass-through rate, which may or may not be based upon the interest rates borne by the mortgage loans in the related trust fund. The prospectus supplement will specify the pass-through rate for each class of certificates or, in the case of a class of offered certificates with a variable or adjustable pass-through rate, the method of determining the pass-through rate; the effect, if any, of the prepayment of any mortgage loan on the pass-through rate of one or more classes of offered certificates; and whether the distributions of interest on the offered certificates of any class will be dependent, in whole or in part, on the performance of any obligor under a cash flow agreement. PAYMENT DELAYS A period of time will elapse between the date upon which payments on the mortgage loans in the related trust fund are due and the distribution date on which such payments are passed through to certificateholders. That delay will effectively reduce the yield that would otherwise be produced if payments on such mortgage loans were distributed to certificateholders on or near the date they were due. SHORTFALLS IN COLLECTIONS OF INTEREST RESULTING FROM PREPAYMENTS When a borrower makes a principal prepayment on a mortgage loan in full or in part, the borrower is generally charged interest only for the period from the date on which the preceding scheduled payment was due up to the date of such prepayment, instead of for the full accrual period, that is, the period from the due date of the preceding scheduled payment up to the due date for the next scheduled payment. However, interest accrued on any series of certificates and distributable thereon on any distribution date will generally correspond to interest accrued on the principal balance of mortgage loans for their respective full accrual periods. Consequently, if a prepayment on any mortgage loan is distributable to certificateholders on a particular distribution date, but such prepayment is not accompanied by interest thereon for the full accrual period, the interest charged to the borrower (net of servicing and administrative fees) may be less than the corresponding amount of interest accrued and otherwise payable on the certificates of the related series. If and to the extent that any prepayment interest shortfall is allocated to a class of offered certificates, the yield on the offered certificates will be adversely affected. The prospectus supplement will describe the manner in which any prepayment interest shortfalls will be allocated among the classes of certificates. If so specified in the prospectus supplement, the master servicer will be required to apply some or all of its servicing compensation for the corresponding period to offset the amount of any prepayment interest shortfalls. The prospectus supplement will also describe any other amounts available to offset prepayment interest shortfalls. See "Description of the Pooling and Servicing Agreements--Servicing Compensation and Payment of Expenses." PREPAYMENT CONSIDERATIONS A certificate's yield to maturity will be affected by the rate of principal payments on the mortgage loans in the related trust fund and the allocation of those principal payments to reduce the principal 40 balance (or notional amount, if applicable) of the certificate. The rate of principal payments on the mortgage loans will in turn be affected by the amortization schedules of the mortgage loans (which, in the case of adjustable rate mortgage loans, will change periodically to accommodate adjustments to their mortgage interest rates), the dates on which any balloon payments are due, and the rate of principal prepayments thereon (including for this purpose, prepayments resulting from liquidations of mortgage loans due to defaults, casualties or condemnations affecting the mortgaged properties, or purchases of mortgage loans out of the trust fund). Because the rate of principal prepayments on the mortgage loans in any trust fund will depend on future events and a variety of factors (as discussed more fully below), it is impossible to predict with assurance a certificate's yield to maturity. The extent to which the yield to maturity of a class of offered certificates of any series may vary from the anticipated yield will depend upon the degree to which they are purchased at a discount or premium and when, and to what degree, payments of principal on the mortgage loans in the related trust fund are in turn distributed on such certificates (or, in the case of a class of Stripped Interest Certificates, result in the reduction of the notional amount of the Stripped Interest Certificate). Further, an investor should consider, in the case of any offered certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on the mortgage loans in the trust fund could result in an actual yield to such investor that is lower than the anticipated yield and, in the case of any offered certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments could result in an actual yield to such investor that is lower than the anticipated yield. In general, the earlier a prepayment of principal on the mortgage loans is distributed on an offered certificate purchased at a discount or premium (or, if applicable, is allocated in reduction of the notional amount thereof), the greater will be the effect on the investor's yield to maturity. As a result, the effect on an investor's yield of principal payments (to the extent distributable in reduction of the principal balance or notional amount of the investor's offered certificates) occurring at a rate higher (or lower) than the rate anticipated by the investor during any particular period would not be fully offset by a subsequent like reduction (or increase) in the rate of principal payments. A class of certificates, including a class of offered certificates, may provide that on any distribution date the holders of certificates are entitled to a pro rata share of the prepayments (including prepayments occasioned by defaults) on the mortgage loans in the related trust fund that are distributable on that date, to a disproportionately large share (which, in some cases, may be all) of such prepayments, or to a disproportionately small share (which, in some cases, may be none) of the prepayments. As and to the extent described in the prospectus supplement, the entitlements of the various classes of certificateholders of any series to receive payments (and, in particular, prepayments) of principal of the mortgage loans in the related trust fund may vary based on the occurrence of certain events (e.g., the retirement of one or more classes of a series of certificates) or subject to certain contingencies (e.g., prepayment and default rates with respect to the mortgage loans). In general, the notional amount of a class of Stripped Interest Certificates will either (i) be based on the principal balances of some or all of the mortgage assets in the related trust fund or (ii) equal the certificate balances of one or more of the other classes of certificates of the same series. Accordingly, the yield on such Stripped Interest Certificates will be directly related to the amortization of the mortgage assets or classes of certificates, as the case may be. Thus, if a class of certificates of any series consists of Stripped Interest Certificates or Stripped Principal Certificates, a lower than anticipated rate of principal prepayments on the mortgage loans in the related trust fund will negatively affect the yield to investors in Stripped Principal Certificates, and a higher than anticipated rate of principal prepayments on the mortgage loans will negatively affect the yield to investors in Stripped Interest Certificates. The depositor is not aware of any relevant publicly available or authoritative statistics with respect to the historical prepayment experience of a large group of multifamily or commercial mortgage loans. However, the extent of prepayments of principal of the mortgage loans in any trust fund may be affected by a number of factors, including, without limitation, the availability of mortgage credit, the relative economic vitality of the area in which the mortgaged properties are located, the quality of management of the mortgaged properties, the servicing of the mortgage loans, possible changes in tax laws and other opportunities for investment. In addition, the rate of principal payments on the mortgage loans in any 41 trust fund may be affected by the existence of lockout periods and requirements that principal prepayments be accompanied by prepayment premiums, and by the extent to which such provisions may be practicably enforced. The rate of prepayment on a pool of mortgage loans is also affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. When the prevailing market interest rate is below a mortgage coupon, a borrower may have an increased incentive to refinance its mortgage loan. In addition, as prevailing market interest rates decline, even borrowers with adjustable rate mortgage loans that have experienced a corresponding interest rate decline may have an increased incentive to refinance for purposes of either (i) converting to a fixed rate loan and thereby "locking in" such rate or (ii) taking advantage of the initial "teaser rate" (a mortgage interest rate below what it would otherwise be if the applicable index and gross margin were applied) on another adjustable rate mortgage loan. Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some borrowers may sell mortgaged properties in order to realize their equity therein, to meet cash flow needs or to make other investments. In addition, some borrowers may be motivated by federal and state tax laws (which are subject to change) to sell mortgaged properties prior to the exhaustion of tax depreciation benefits. The depositor will make no representation as to the particular factors that will affect the prepayment of the mortgage loans in any trust fund, as to the relative importance of such factors, as to the percentage of the principal balance of the mortgage loans that will be paid as of any date or as to the overall rate of prepayment on the mortgage loans. WEIGHTED AVERAGE LIFE AND MATURITY The rate at which principal payments are received on the mortgage loans in a trust fund will affect the ultimate maturity and the weighted average life of one or more classes of a series of certificates. Weighted average life refers to the average amount of time that will elapse from the date of issuance of an instrument until each dollar of the principal amount of such instrument is repaid to the investor. The weighted average life and maturity of a class of certificates of a series will be influenced by the rate at which principal on the mortgage loans, whether in the form of scheduled amortization or prepayments (for this purpose, the term "prepayment" includes voluntary prepayments, liquidations due to default and purchases of mortgage loans out of the trust fund), is paid to that class of certificateholders. Prepayment rates on loans are commonly measured relative to a prepayment standard or model, such as the CPR prepayment model or the SPA prepayment model. CPR represents an assumed constant rate of prepayment each month (expressed as an annual percentage) relative to the then outstanding principal balance of a pool of loans for the life of those loans. SPA represents an assumed variable rate of prepayment each month (expressed as an annual percentage) relative to the then outstanding principal balance of a pool of loans, with different prepayment assumptions often expressed as percentages of SPA. For example, a prepayment assumption of 100% of SPA assumes prepayment rates of 0.2% per annum of the then outstanding principal balance of loans in the first month of the life of the loans and an additional 0.2% per annum in each following month until the 30th month. Beginning in the 30th month, and in each following month during the life of the loans, 100% of SPA assumes a constant prepayment rate of 6% per annum each month. Neither CPR nor SPA nor any other prepayment model or assumption purports to be a historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any particular pool of loans. Moreover, the CPR and SPA models were developed based upon historical prepayment experience for single-family loans. Thus, it is unlikely that the prepayment experience of the mortgage loans included in any trust fund will conform to any particular level of CPR or SPA. The prospectus supplement for each series of certificates will contain tables, if applicable, setting forth the projected weighted average life of each class of offered certificates and the percentage of the initial certificate balance of each class that would be outstanding on specified distribution dates based on the assumptions stated in the prospectus supplement, including assumptions that borrowers make prepayments on the mortgage loans at rates corresponding to various percentages of CPR or SPA, or at such other rates specified in the prospectus supplement. The tables and assumptions will illustrate the 42 sensitivity of the weighted average lives of the certificates to various assumed prepayment rates and will not be intended to predict, or to provide information that will enable investors to predict, the actual weighted average lives of the certificates. CONTROLLED AMORTIZATION CLASSES AND COMPANION CLASSES A series of certificates may include one or more controlled amortization classes that are designed to provide increased protection against prepayment risk by transferring that risk to one or more companion classes. Unless otherwise specified in the prospectus supplement, each controlled amortization class will either be a planned amortization class or a targeted amortization class. In general, distributions of principal on a planned amortization class of certificates are made in accordance with a specified amortization schedule so long as prepayments on the underlying mortgage loans occur within a specified range of constant prepayment rates and, as described below, so long as one or more companion classes remain to absorb excess cash flows and make up for shortfalls. For example, if the rate of prepayments is significantly higher than expected, the excess prepayments will be applied to retire the companion classes prior to reducing the principal balance of a planned amortization class. If the rate of prepayments is significantly lower than expected, a disproportionately large portion of prepayments may be applied to a planned amortization class. Once the companion classes for a planned amortization class are retired, the planned amortization class of certificates will have no further prepayment protection. A targeted amortization class of certificates is similar to a planned amortization class of certificates, but a targeted amortization class structure generally does not draw on companion classes to make up cash flow shortfalls, and will generally not provide protection to the targeted amortization class against the risk that prepayments occur more slowly than expected. In general, the reduction of prepayment risk afforded to a controlled amortization class comes at the expense of one or more companion classes of the same series (any of which may also be a class of offered certificates) which absorb a disproportionate share of the overall prepayment risk of a given structure. As more particularly described in the prospectus supplement, the holders of a companion class will receive a disproportionately large share of prepayments when the rate of prepayment exceeds the rate assumed in structuring the controlled amortization class, and (in the case of a companion class that supports a planned amortization class of certificates) a disproportionately small share of prepayments (or no prepayments) when the rate of prepayment falls below that assumed rate. Thus, as and to the extent described in the prospectus supplement, a companion class will absorb a disproportionate share of the risk that a relatively fast rate of prepayments will result in the early retirement of the investment, that is, "call risk," and, if applicable, the risk that a relatively slow rate of prepayments will extend the average life of the investment, that is, "extension risk", that would otherwise be allocated to the related controlled amortization class. Accordingly, companion classes can exhibit significant average life variability. OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY Balloon Payments; Extensions of Maturity. Some or all of the mortgage loans included in a trust fund may require that balloon payments be made at maturity. Because the ability of a borrower to make a balloon payment typically will depend upon its ability either to refinance the loan or to sell the mortgaged property, there is a risk that mortgage loans that require balloon payments may default at maturity, or that the maturity of such a mortgage loan may be extended in connection with a workout. In the case of defaults, recovery of proceeds may be delayed by, among other things, bankruptcy of the borrower or adverse conditions in the market where the property is located. In order to minimize losses on defaulted mortgage loans, the master servicer or a special servicer, to the extent and under the circumstances set forth in this prospectus and in the prospectus supplement, may be authorized to modify mortgage loans that are in default or as to which a payment default is imminent. Any defaulted balloon payment or modification that extends the maturity of a mortgage loan may delay distributions of principal on a class of offered certificates and thereby extend the weighted average life of the certificates and, if the certificates were purchased at a discount, reduce the yield thereon. Negative Amortization. Mortgage loans that permit negative amortization can affect the weighted average life of a class of certificates. In general, mortgage loans that permit negative amortization by their 43 terms limit the amount by which scheduled payments may adjust in response to changes in mortgage interest rates and/or provide that scheduled payment amounts will adjust less frequently than the mortgage interest rates. Accordingly, during a period of rising interest rates, the scheduled payment on a mortgage loan that permits negative amortization may be less than the amount necessary to amortize the loan fully over its remaining amortization schedule and pay interest at the then applicable mortgage interest rate. In that case, the mortgage loan balance would amortize more slowly than necessary to repay it over its schedule and, if the amount of scheduled payment were less than the amount necessary to pay current interest at the applicable mortgage interest rate, the loan balance would negatively amortize to the extent of the amount of the interest shortfall. Conversely, during a period of declining interest rates, the scheduled payment on a mortgage loan that permits negative amortization may exceed the amount necessary to amortize the loan fully over its remaining amortization schedule and pay interest at the then applicable mortgage interest rate. In that case, the excess would be applied to principal, thereby resulting in amortization at a rate faster than necessary to repay the mortgage loan balance over its schedule. A slower or negative rate of mortgage loan amortization would correspondingly be reflected in a slower or negative rate of amortization for one or more classes of certificates of the related series. Accordingly, the weighted average lives of mortgage loans that permit negative amortization (and that of the classes of certificates to which any such negative amortization would be allocated or which would bear the effects of a slower rate of amortization on the mortgage loans) may increase as a result of such feature. A faster rate of mortgage loan amortization will shorten the weighted average life of the mortgage loans and, correspondingly, the weighted average lives of those classes of certificates then entitled to a portion of the principal payments on those mortgage loans. The prospectus supplement will describe, if applicable, the manner in which negative amortization in respect of the mortgage loans in any trust fund is allocated among the respective classes of certificates of the related series. Foreclosures and Payment Plans. The number of foreclosures and the principal amount of the mortgage loans that are foreclosed in relation to the number and principal amount of mortgage loans that are repaid in accordance with their terms will affect the weighted average lives of those mortgage loans and, accordingly, the weighted average lives of and yields on the certificates of the related series. Servicing decisions made with respect to the mortgage loans, including the use of payment plans prior to a demand for acceleration and the restructuring of mortgage loans in bankruptcy proceedings, may also have an effect upon the payment patterns of particular mortgage loans and thus the weighted average lives of and yields on the certificates of the related series. Losses and Shortfalls on the Mortgage Assets. The yield to holders of the offered certificates of any series will directly depend on the extent to which such holders are required to bear the effects of any losses or shortfalls in collections arising out of defaults on the mortgage assets in the related trust fund and the timing of such losses and shortfalls. In general, the earlier that any such loss or shortfall occurs, the greater will be the negative effect on yield for any class of certificates that is required to bear the effects of the loss or shortfall. The amount of any losses or shortfalls in collections on the mortgage assets in any trust fund (to the extent not covered or offset by draws on any reserve fund or under any instrument of credit support) will be allocated among the classes of certificates of the related series in the priority and manner, and subject to the limitations, specified in the prospectus supplement. As described in the prospectus supplement, such allocations may result in reductions in the entitlements to interest and/or certificate balances of one or more classes of certificates, or may be effected simply by a prioritization of payments among the classes of certificates. The yield to maturity on a class of subordinate certificates may be extremely sensitive to losses and shortfalls in collections on the mortgage assets in the related trust fund. Additional Certificate Amortization. In addition to entitling certificateholders to a specified portion (which may range from none to all) of the principal payments received on the mortgage assets in the related trust fund, one or more classes of certificates of any series, including one or more classes of offered certificates of a series, may provide for distributions of principal from (i) amounts attributable to interest accrued but not currently distributable on one or more classes of Accrual Certificates, (ii) excess funds or (iii) any other amounts described in the prospectus supplement. As specifically set forth in the prospectus supplement, "excess funds" generally will represent that portion of the amounts distributable in respect 44 of the certificates of any series on any distribution date that represent (i) interest received or advanced on the mortgage assets in the related trust fund that is in excess of the interest currently distributable on that series of certificates, as well as any interest accrued but not currently distributable on any Accrual Certificates of that series or (ii) prepayment premiums, payments from equity participations entitling the lender to a share of profits realized from the operation or disposition of the mortgaged property, or any other amounts received on the mortgage assets in the trust fund that do not constitute interest thereon or principal thereof. The amortization of any class of certificates out of the sources described in the preceding paragraph would shorten the weighted average life of certificates and, if those certificates were purchased at a premium, reduce the yield on those certificates. The prospectus supplement will discuss the relevant factors that you should consider in determining whether distributions of principal of any class of certificates out of such sources would have any material effect on the rate at which your certificates are amortized. THE DEPOSITOR Wachovia Commercial Mortgage Securities, Inc., the depositor, is a North Carolina corporation organized on August 17, 1988 as a wholly-owned subsidiary of Wachovia Bank, National Association (formerly known as First Union National Bank), a national banking association with its main office located in Charlotte, North Carolina. Wachovia Bank, National Association is a subsidiary of Wachovia Corporation, a North Carolina corporation registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. Wachovia Corporation is a financial holding company under the Gramm-Leach-Bliley Act. The depositor's principal business is to acquire, hold and/or sell or otherwise dispose of cash flow assets, usually in connection with the securitization of that asset. The depositor maintains its principal office at 301 South College Street, Charlotte, North Carolina 28288-0166. Its telephone number is 704-374-6161. There can be no assurance that the depositor will have any significant assets. USE OF PROCEEDS The net proceeds to be received from the sale of certificates will be applied by the depositor to the purchase of trust assets or will be used by the depositor for general corporate purposes. The depositor expects to sell the certificates from time to time, but the timing and amount of offerings of certificates will depend on a number of factors, including the volume of mortgage assets acquired by the depositor, prevailing interest rates, availability of funds and general market conditions. 45 DESCRIPTION OF THE CERTIFICATES GENERAL In the aggregate, the certificates of each series of certificates will represent the entire beneficial ownership interest in the trust fund created pursuant to the related pooling and servicing agreement. Each series of certificates may consist of one or more classes of certificates (including classes of offered certificates), and such class or classes may (i) provide for the accrual of interest thereon at a fixed, variable or adjustable rate; (ii) be senior or subordinate to one or more other classes of certificates in entitlement to certain distributions on the certificates; (iii) be entitled, as Stripped Principal Certificates, to distributions of principal with disproportionately small, nominal or no distributions of interest; (iv) be entitled, as Stripped Interest Certificates, to distributions of interest with disproportionately small, nominal or no distributions of principal; (v) provide for distributions of principal and/or interest thereon that commence only after the occurrence of certain events such as the retirement of one or more other classes of certificates of such series; (vi) provide for distributions of principal to be made, from time to time or for designated periods, at a rate that is faster (and, in some cases, substantially faster) or slower (and, in some cases, substantially slower) than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; (vii) provide for distributions of principal to be made, subject to available funds, based on a specified principal payment schedule or other methodology; and/or (viii) provide for distributions based on a combination of two or more components thereof with one or more of the characteristics described in this paragraph, including a Stripped Principal Certificate component and a Stripped Interest Certificate component, to the extent of available funds, in each case as described in the prospectus supplement. Any such classes may include classes of offered certificates. With respect to certificates with two or more components, references in this prospectus to certificate balance, notional amount and pass-through rate refer to the principal balance, if any, notional amount, if any, and the pass-through rate, if any, for that component. Each class of offered certificates of a series will be issued in minimum denominations corresponding to the certificate balances or, in the case of Stripped Interest Certificates or REMIC residual certificates, notional amounts or percentage interests specified in the prospectus supplement. As provided in the prospectus supplement, one or more classes of offered certificates of any series may be issued in fully registered, definitive form or may be offered in book-entry format through the facilities of DTC. The offered certificates of each series (if issued as definitive certificates) may be transferred or exchanged, subject to any restrictions on transfer described in the prospectus supplement, at the location specified in the prospectus supplement, without the payment of any service charge, other than any tax or other governmental charge payable in connection therewith. Interests in a class of book-entry certificates will be transferred on the book-entry records of DTC and its participating organizations. See "Risk Factors--Your Ability to Resell Certificates May Be Limited Because of Their Characteristics," and "--The Assets of the Trust Fund May Not Be Sufficient to Pay Your Certificates." DISTRIBUTIONS Distributions on the certificates of each series will be made by or on behalf of the trustee or master servicer on each distribution date as specified in the prospectus supplement from the Available Distribution Amount for such series and such distribution date. Except as otherwise specified in the prospectus supplement, distributions on the certificates of each series (other than the final distribution in retirement of any certificate) will be made to the persons in whose names those certificates are registered on the record date, which is the close of business on the last business day of the month preceding the month in which the applicable distribution date occurs, and the amount of each distribution will be determined as of the close of business on the determination date that is specified in the prospectus supplement. All distributions with respect to each class of certificates on each distribution date will be allocated pro rata among the outstanding certificates in that class. The trustee will make payments either by wire transfer in immediately available funds to the account of a certificateholder at a bank or other entity having appropriate facilities therefor, if such certificateholder has provided the trustee or other person required to make such payments with wiring instructions (which may be provided 46 in the form of a standing order applicable to all subsequent distributions) no later than the date specified in the prospectus supplement (and, if so provided in the prospectus supplement, such certificateholder holds certificates in the requisite amount or denomination specified in the prospectus supplement), or by check mailed to the address of the certificateholder as it appears on the certificate register; provided, however, that the trustee will make the final distribution in retirement of any class of certificates (whether definitive certificates or book-entry certificates) only upon presentation and surrender of the certificates at the location specified in the notice to certificateholders of such final distribution. DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES Each class of certificates of each series (other than certain classes of Stripped Principal Certificates and certain REMIC residual certificates that have no pass-through rate) may have a different pass-through rate which may be fixed, variable or adjustable. The prospectus supplement will specify the pass-through rate or, in the case of a variable or adjustable pass-through rate, the method for determining the pass-through rate, for each class. Unless otherwise specified in the prospectus supplement, interest on the certificates of each series will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Distributions of interest in respect of the certificates of any class (other than any class of Accrual Certificates that will be entitled to distributions of accrued interest commencing only on the distribution date, or under the circumstances, specified in the prospectus supplement, and other than any class of Stripped Principal Certificates or REMIC residual certificates that is not entitled to any distributions of interest) will be made on each distribution date based on the Accrued Certificate Interest for such class and such distribution date, subject to the sufficiency of the portion of the Available Distribution Amount allocable to such class on such distribution date. Prior to the time interest is distributable on any class of Accrual Certificates, the amount of Accrued Certificate Interest otherwise distributable on that class will be added to the certificate balance of that class on each distribution date. With respect to each class of certificates (other than some classes of Stripped Interest Certificates and REMIC residual certificates), Accrued Certificate Interest for each distribution date will be equal to interest at the applicable pass-through rate accrued for a specified period (generally the period between distribution dates) on the outstanding certificate balance thereof immediately prior to such distribution date. Unless otherwise provided in the prospectus supplement, Accrued Certificate Interest for each distribution date on Stripped Interest Certificates will be similarly calculated except that it will accrue on a notional amount that is either (i) based on the principal balances of some or all of the mortgage assets in the related trust fund or (ii) equal to the certificate balances of one or more other classes of certificates of the same series. Reference to a notional amount with respect to a class of Stripped Interest Certificates is solely for convenience in making certain calculations and does not represent the right to receive any distributions of principal. If so specified in the prospectus supplement, the amount of Accrued Certificate Interest that is otherwise distributable on (or, in the case of Accrual Certificates, that may otherwise be added to the certificate balance of) one or more classes of the certificates of a series will be reduced to the extent that any prepayment interest shortfalls, as described under "Yield Considerations--Shortfalls in Collections of Interest Resulting from Prepayments" exceed the amount of any sums (including, if and to the extent specified in the prospectus supplement, the master servicer's servicing compensation) that are applied to offset such shortfalls. The particular manner in which prepayment interest shortfalls will be allocated among some or all of the classes of certificates of that series will be specified in the prospectus supplement. The prospectus supplement will also describe the extent to which the amount of Accrued Certificate Interest that is otherwise distributable on (or, in the case of Accrual Certificates, that may otherwise be added to the certificate balance of) a class of offered certificates may be reduced as a result of any other contingencies, including delinquencies, losses and deferred interest on or in respect of the mortgage assets in the related trust fund. Unless otherwise provided in the prospectus supplement, any reduction in the amount of Accrued Certificate Interest otherwise distributable on a class of certificates by reason of the allocation to such class of a portion of any deferred interest on or in respect of the mortgage assets in the related trust fund will result in a corresponding increase in the certificate balance of that class. See "Risk Factors--Prepayment and Repurchases of the Mortgage Assets Will Affect the Timing of Your Cash Flow and May Affect Your Yield" and "Yield Considerations." 47 DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES Each class of certificates of each series (other than certain classes of Stripped Interest Certificates or REMIC residual certificates) will have a certificate balance which, at any time, will equal the then maximum amount that the holders of certificates of that class will be entitled to receive in respect of principal out of the future cash flow on the mortgage assets and other assets included in the related trust fund. The outstanding certificate balance of a class of certificates will be reduced by distributions of principal made on those certificates from time to time and, if so provided in the prospectus supplement, further by any losses incurred in respect of the related mortgage assets allocated to those certificates from time to time. In turn, the outstanding certificate balance of a class of certificates may be increased as a result of any deferred interest on or in respect of the related mortgage assets that is allocated to those certificates from time to time, and will be increased, in the case of a class of Accrual Certificates prior to the distribution date on which distributions of interest on those Accrual Certificates are required to commence, by the amount of any Accrued Certificate Interest in respect thereof (reduced as described above). Unless otherwise provided in the prospectus supplement, the initial aggregate certificate balance of all classes of a series of certificates will not be greater than the aggregate outstanding principal balance of the related mortgage assets as of the applicable Cut-Off Date, after application of scheduled payments due on or before such date, whether or not received. As and to the extent described in the prospectus supplement, distributions of principal with respect to a series of certificates will be made on each distribution date to the holders of the class or classes of certificates of such series entitled to distributions until the certificate balances of those certificates have been reduced to zero. Distributions of principal with respect to one or more classes of certificates may be made at a rate that is faster (and, in some cases, substantially faster) than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund, may not commence until the occurrence of certain events, such as the retirement of one or more other classes of certificates of the same series, or may be made at a rate that is slower (and, in some cases, substantially slower) than the rate at which payments or other collections of principal are received on such mortgage assets. In addition, distributions of principal with respect to one or more classes of controlled amortization certificates may be made, subject to available funds, based on a specified principal payment schedule and, with respect to one or more classes of companion classes of certificates, may be contingent on the specified principal payment schedule for a controlled amortization class of certificates of the same series and the rate at which payments and other collections of principal on the mortgage assets in the related trust fund are received. Unless otherwise specified in the prospectus supplement, distributions of principal of any class of certificates will be made on a pro rata basis among all of the certificates belonging to that class. COMPONENTS To the extent specified in the prospectus supplement, distribution on a class of certificates may be based on a combination of two or more different components as described under "--General" above. To that extent, the descriptions set forth under "--Distributions of Interest on the Certificates" and "--Distributions of Principal of the Certificates" above also relate to components of such a class of certificates. In such case, reference in those sections to certificate balance and pass-through rate refer to the principal balance, if any, of any of the components and the pass-through rate, if any, on any component, respectively. DISTRIBUTIONS ON THE CERTIFICATES IN RESPECT OF PREPAYMENT PREMIUMS OR IN RESPECT OF EQUITY PARTICIPATIONS If so provided in the prospectus supplement, prepayment premiums or payments in respect of equity participations entitling the lender to a share of profits realized from the operation or disposition of the mortgaged property received on or in connection with the mortgage assets in any trust fund will be distributed on each distribution date to the holders of the class of certificates of the related series entitled thereto in accordance with the provisions described in such prospectus supplement. ALLOCATION OF LOSSES AND SHORTFALLS If so provided in the prospectus supplement for a series of certificates consisting of one or more classes of subordinate certificates, on any distribution date in respect of which losses or shortfalls in 48 collections on the mortgage assets have been incurred, the amount of such losses or shortfalls will be borne first by a class of subordinate certificates in the priority and manner and subject to the limitations specified in the prospectus supplement. See "Description of Credit Support" for a description of the types of protection that may be included in shortfalls on mortgage assets comprising the trust fund. ADVANCES IN RESPECT OF DELINQUENCIES With respect to any series of certificates evidencing an interest in a trust fund, unless otherwise provided in the prospectus supplement, a servicer or another entity described therein will be required as part of its servicing responsibilities to advance on or before each distribution date its own funds or funds held in the related certificate account that are not included in the Available Distribution Amount for such distribution date, in an amount equal to the aggregate of payments of principal (other than any balloon payments) and interest (net of related servicing fees) that were due on the mortgage loans in the trust fund and were delinquent on the related determination date, subject to the servicer's (or another entity's) good faith determination that such advances will be reimbursable from the loan proceeds. In the case of a series of certificates that includes one or more classes of subordinate certificates and if so provided in the prospectus supplement, each servicer's (or another entity's) advance obligation may be limited only to the portion of such delinquencies necessary to make the required distributions on one or more classes of senior certificates and/or may be subject to the servicer's (or another entity's) good faith determination that such advances will be reimbursable not only from the loan proceeds but also from collections on other trust assets otherwise distributable on one or more classes of subordinate certificates. See "Description of Credit Support". Advances are intended to maintain a regular flow of scheduled interest and principal payments to holders of the class or classes of certificates entitled thereto, rather than to guarantee or insure against losses. Unless otherwise provided in the prospectus supplement, advances of a servicer's (or another entity's) funds will be reimbursable only out of recoveries on the mortgage loans (including amounts received under any form of credit support) respecting which advances were made and, if so provided in the prospectus supplement, out of any amounts otherwise distributable on one or more classes of subordinate certificates of such series; provided, however, that any advance will be reimbursable from any amounts in the related certificate account prior to any distributions being made on the certificates to the extent that a servicer (or such other entity) shall determine in good faith that such advance is not ultimately recoverable from related proceeds on the mortgage loans or, if applicable, from collections on other trust assets otherwise distributable on the subordinate certificates. If advances have been made from excess funds in a certificate account, the master servicer or other person that advanced such funds will be required to replace such funds in the certificate account on any future distribution date to the extent that funds then in the certificate account are insufficient to permit full distributions to certificateholders on that date. If so specified in the prospectus supplement, the obligation of a master servicer or other specified person to make advances may be secured by a cash advance reserve fund or a surety bond. If applicable, we will provide in the prospectus supplement information regarding the characteristics of, and the identity of any obligor on, any such surety bond. If and to the extent so provided in the prospectus supplement, any entity making advances will be entitled to receive interest on those advances for the period that such advances are outstanding at the rate specified therein and will be entitled to pay itself that interest periodically from general collections on the mortgage assets prior to any payment to certificateholders as described in the prospectus supplement. The prospectus supplement for any series of certificates evidencing an interest in a trust fund that includes CMBS will describe any comparable advancing obligation of a party to the related pooling and servicing agreement or of a party to the related CMBS agreement. REPORTS TO CERTIFICATEHOLDERS On each distribution date a master servicer or trustee will forward to the holder of certificates of each class of a series a distribution date statement accompanying the distribution of principal and/or interest to those holders. As further provided in the prospectus supplement, the distribution date statement for each class will set forth to the extent applicable and available: 49 (i) the amount of such distribution to holders of certificates of such class applied to reduce the certificate balance thereof; (ii) the amount of such distribution to holders of certificates of such class allocable to Accrued Certificate Interest; (iii) the amount, if any, of such distribution to holders of certificates of such class allocable to prepayment premiums; (iv) the amount of servicing compensation received by each servicer and such other customary information as the master servicer or the trustee deems necessary or desirable, or that a certificateholder reasonably requests, to enable certificateholders to prepare their tax returns; (v) the aggregate amount of advances included in such distribution and the aggregate amount of unreimbursed advances at the close of business on, or as of a specified date shortly prior to, such distribution date; (vi) the aggregate principal balance of the related mortgage loans on, or as of a specified date shortly prior to, such distribution date; (vii) the number and aggregate principal balance of any mortgage loans in respect of which (A) one scheduled payment is delinquent, (B) two scheduled payments are delinquent, (C) three or more scheduled payments are delinquent and (D) foreclosure proceedings have been commenced; (viii) with respect to any mortgage loan liquidated during the related prepayment period (as to the current distribution date, generally the period extending from the prior distribution date to and including the current distribution date) in connection with a default on that mortgage loan or because the mortgage loan was purchased out of the trust fund (other than a payment in full), (A) the loan number, (B) the aggregate amount of liquidation proceeds received and (C) the amount of any loss to certificateholders; (ix) with respect to any REO Property sold during the related collection period, (A) the loan number of the related mortgage loan, (B) the aggregate amount of sales proceeds and (C) the amount of any loss to certificateholders in respect of the related mortgage loan; (x) the certificate balance or notional amount of each class of certificates (including any class of certificates not offered hereby) immediately before and immediately after such distribution date, separately identifying any reduction in the certificate balance due to the allocation of any losses in respect of the related mortgage loans; (xi) the aggregate amount of principal prepayments made on the mortgage loans during the related prepayment period; (xii) the amount deposited in or withdrawn from any reserve fund on such distribution date, and the amount remaining on deposit in the reserve fund as of the close of business on such distribution date; (xiii) the amount of any Accrued Certificate Interest due but not paid on such class of offered certificates at the close of business on such distribution date; and (xiv) if such class of offered certificates has a variable pass-through rate or an adjustable pass-through rate, the pass-through rate applicable thereto for such distribution date. In the case of information furnished pursuant to subclauses (i)-(iv) above, the amounts will be expressed as a dollar amount per minimum denomination of the relevant class of offered certificates or per a specified portion of such minimum denomination. The prospectus supplement for each series of offered certificates will describe any additional information to be included in reports to the holders of such certificates. Within a reasonable period of time after the end of each calendar year, the related master servicer or trustee, as the case may be, will be required to furnish to each person who at any time during the 50 calendar year was a holder of an offered certificate a statement containing the information set forth in subclauses (i)-(iv) above, aggregated for such calendar year or the applicable portion thereof during which such person was a certificateholder. Such obligation will be deemed to have been satisfied to the extent that substantially comparable information is provided pursuant to any requirements of the Code as are from time to time in force. See, however, "Description of the Certificates--Book-Entry Registration and Definitive Certificates." If the trust fund for a series of certificates includes CMBS, the ability of the related master servicer or trustee, as the case may be, to include in any distribution date statement information regarding the mortgage loans underlying such CMBS will depend on the reports received with respect to such CMBS. In such cases, the prospectus supplement will describe the loan-specific information to be included in the distribution date statements that will be forwarded to the holders of the offered certificates of that series in connection with distributions made to them. VOTING RIGHTS The voting rights evidenced by each series of certificates will be allocated among the respective classes of such series in the manner described in the prospectus supplement. Certificateholders will generally have a right to vote only with respect to required consents to certain amendments to the related pooling and servicing agreement and as otherwise specified in the prospectus supplement. See "Description of the Pooling and Servicing Agreements--Amendment." The holders of specified amounts of certificates of a particular series will have the collective right to remove the related trustee and also to cause the removal of the related master servicer in the case of an event of default under the related pooling and servicing agreement on the part of the master servicer. See "Description of the Pooling and Servicing Agreements--Events of Default," "--Rights upon Event of Default" and "--Resignation and Removal of the Trustee." TERMINATION The obligations created by the pooling and servicing agreement for each series of certificates will terminate upon the payment (or provision for payment) to certificateholders of that series of all amounts held in the related certificate account, or otherwise by the related master servicer or trustee or by a special servicer, and required to be paid to such certificateholders pursuant to such pooling and servicing agreement following the earlier of (i) the final payment or other liquidation of the last mortgage asset subject to the pooling and servicing agreement or the disposition of all property acquired upon foreclosure of any mortgage loan subject to the pooling and servicing agreement and (ii) the purchase of all of the assets of the related trust fund by the party entitled to effect such termination, under the circumstances and in the manner that will be described in the prospectus supplement. Written notice of termination of a pooling and servicing agreement will be given to each certificateholder of the related series, and the final distribution will be made only upon presentation and surrender of the certificates of such series at the location to be specified in the notice of termination. If so specified in the prospectus supplement, a series of certificates will be subject to optional early termination through the repurchase of the assets in the related trust fund by a party that will be specified in the prospectus supplement, under the circumstances and in the manner set forth in the prospectus supplement. If so provided in the prospectus supplement, upon the reduction of the certificate balance of a specified class or classes of certificates by a specified percentage or amount, a party identified in the prospectus supplement will be authorized or required to solicit bids for the purchase of all the assets of the related trust fund, or of a sufficient portion of such assets to retire such class or classes, under the circumstances and in the manner set forth in the prospectus supplement. In any event, unless otherwise disclosed in the prospectus supplement, any such repurchase or purchase shall be at a price or prices that are generally based upon the unpaid principal balance of, plus accrued interest on, all mortgage loans (other than mortgage loans secured by REO Properties) then included in a trust fund and the fair market value of all REO Properties then included in the trust fund, which may or may not result in full payment of the aggregate certificate balance plus accrued interest and any undistributed shortfall in interest for the then outstanding certificates. Any sale of trust fund assets will be without recourse to the trust and/or 51 certificateholders, provided, however, that there can be no assurance that in all events a court would accept such a contractual stipulation. BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES If so provided in the prospectus supplement, one or more classes of the offered certificates of any series will be offered in book-entry format through the facilities of DTC, and each such class will be represented by one or more global certificates registered in the name of DTC or its nominee. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking corporation" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participating organizations deposit with DTC. DTC also facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book entry changes in their accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants that maintain accounts with DTC include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system also is available to indirect participants in the DTC system such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant in the DTC system, either directly or indirectly. The rules applicable to DTC and its participants are on file with the Securities and Exchange Commission. Purchases of book-entry certificates under the DTC system must be made by or through direct participants in the DTC system, which will receive a credit for the book-entry certificates on DTC's records. A certificate owner's ownership interest as an actual purchaser of a book-entry certificate will in turn be recorded on the records of direct participants and indirect participants. Certificate owners will not receive written confirmation from DTC of their purchases, but certificate owners are expected to receive written confirmations providing details of such transactions, as well as periodic statements of their holdings, from the direct participant or indirect participant through which each certificate owner entered into the transaction. Transfers of ownership interest in the book-entry certificates will be accomplished by entries made on the books of participants acting on behalf of certificate owners. Certificate owners will not receive certificates representing their ownership interests in the book-entry certificates, except in the event that use of the book-entry system for the book-entry certificates of any series is discontinued as described below. DTC will not know the identity of actual certificate owners of the book-entry certificates; DTC's records reflect only the identity of the direct participants in the DTC system to whose accounts such certificates are credited. The participants will remain responsible for keeping account of their holdings on behalf of their customers. Notices and other communications conveyed by DTC to direct participants in the DTC system, by direct participants to indirect participants, and by direct participants and indirect participants to certificate owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Distributions on the book-entry certificates will be made to DTC. DTC's practice is to credit direct participants' accounts on the related distribution date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such date. Disbursement of such distributions by participants to certificate owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of each such participant (and not of DTC, the depositor or any trustee or master servicer), subject to any statutory or regulatory requirements as may be in effect from time to time. Under a book-entry system, certificate owners may receive payments after the related distribution date. As may be provided in the prospectus supplement, the only "certificateholder" (as such term is used in the related pooling and servicing agreement) of a book-entry certificate will be the nominee of DTC, 52 and the certificate owners will not be recognized as certificateholders under the pooling and servicing agreement. Certificate owners will be permitted to exercise the rights of certificateholders under the related pooling and servicing agreement only indirectly through the participants who in turn will exercise their rights through DTC. The depositor is informed that DTC will take action permitted to be taken by a certificateholder under a pooling and servicing agreement only at the direction of one or more participants to whose account with DTC interests in the book-entry certificates are credited. Because DTC can act only on behalf of direct participants in the DTC system, who in turn act on behalf of indirect participants and certain certificate owners, the ability of a certificate owner to pledge its interest in book-entry certificates to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of its interest in book-entry certificates, may be limited due to the lack of a physical certificate evidencing such interest. As may be specified in the prospectus supplement, certificates initially issued in book-entry form will be issued as definitive certificates to certificate owners or their nominees, rather than to DTC or its nominee, only if (i) the depositor advises the trustee in writing that DTC is no longer willing or able to properly discharge its responsibilities as depository with respect to such certificates and the depositor is unable to locate a qualified successor or (ii) the depositor notifies DTC of its intent to terminate the book-entry system through DTC with respect to such certificates and, upon receipt of notice of such intent from DTC, the participants holding beneficial interests in the certificates agree to initiate such termination. Upon the occurrence of either of the events described in the preceding sentence, DTC will be required to notify all participants of the availability through DTC of definitive certificates. Upon surrender by DTC of the certificate or certificates representing a class of book-entry certificates, together with instructions for registration, the trustee or other designated party will be required to issue to the certificate owners identified in such instructions the definitive certificates to which they are entitled, and thereafter the holders of such definitive certificates will be recognized as certificateholders under the related pooling and servicing agreement. DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS GENERAL The certificates of each series will be issued pursuant to a pooling and servicing agreement or other agreement specified in the prospectus supplement. In general, the parties to a pooling and servicing agreement will include the depositor, the trustee, the master servicer and, in some cases, a special servicer appointed as of the date of the pooling and servicing agreement. However, a pooling and servicing agreement that relates to a trust fund that consists solely of CMBS may not include a master servicer or other servicer as a party. All parties to each pooling and servicing agreement under which certificates of a series are issued will be identified in the prospectus supplement. A form of a pooling and servicing agreement has been filed as an exhibit to the registration statement of which this prospectus is a part. However, the provisions of each pooling and servicing agreement will vary depending upon the nature of the certificates to be issued thereunder and the nature of the related trust fund. The following summaries describe certain provisions that may appear in a pooling and servicing agreement under which certificates that evidence interests in mortgage loans will be issued. The prospectus supplement for a series of certificates will describe any provision of the related pooling and servicing agreement that materially differs from the description thereof contained in this prospectus and, if the related trust fund includes CMBS, will summarize all of the material provisions of the related pooling and servicing agreement. The summaries in this prospectus do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the pooling and servicing agreement for each series of certificates and the description of such provisions in the prospectus supplement. As used in this prospectus with respect to any series, the term "certificate" refers to all of the certificates of that series, whether or not offered hereby and by the prospectus supplement, unless the context otherwise requires. ASSIGNMENT OF MORTGAGE ASSETS; REPURCHASES As set forth in the prospectus supplement, generally at the time of issuance of any series of certificates, the depositor will assign (or cause to be assigned) to the designated trustee the mortgage loans 53 to be included in the related trust fund, together with, unless otherwise specified in the prospectus supplement, all principal and interest to be received on or with respect to such mortgage loans after the Cut-Off Date, other than principal and interest due on or before the Cut-Off Date. The trustee will, concurrently with such assignment, deliver the certificates to or at the direction of the depositor in exchange for the mortgage loans and the other assets to be included in the trust fund for such series. Each mortgage loan will be identified in a schedule appearing as an exhibit to the related pooling and servicing agreement. Such schedule generally will include detailed information that pertains to each mortgage loan included in the related trust fund, which information will typically include the address of the related mortgaged property and type of such property; the mortgage interest rate and, if applicable, the applicable index, gross margin, adjustment date and any rate cap information; the original and remaining term to maturity; the original amortization term; the original and outstanding principal balance; and the Loan-to-Value Ratio and Debt Service Coverage Ratio as of the date indicated. With respect to each mortgage loan to be included in a trust fund, the depositor will deliver (or cause to be delivered) to the related trustee (or to a custodian appointed by the trustee) certain loan documents which will include the original mortgage note (or lost note affidavit) endorsed, without recourse, to the order of the trustee, the original mortgage (or a certified copy thereof) with evidence of recording indicated thereon and an assignment of the mortgage to the trustee in recordable form. The related pooling and servicing agreement will require that the depositor or other party thereto promptly cause each such assignment of mortgage to be recorded in the appropriate public office for real property records. The related trustee (or the custodian appointed by the trustee) will be required to review the mortgage loan documents within a specified period of days after receipt thereof, and the trustee (or the custodian) will hold such documents in trust for the benefit of the certificateholders of the related series. Unless otherwise specified in the prospectus supplement, if any document is found to be missing or defective, in either case such that interests of the certificateholders are materially and adversely affected, the trustee (or such custodian) will be required to notify the master servicer and the depositor, and the master servicer will be required to notify the relevant seller of the mortgage asset. In that case, and if the mortgage asset seller cannot deliver the document or cure the defect within a specified number of days after receipt of such notice, then unless otherwise specified in the prospectus supplement, the mortgage asset seller will be obligated to replace the related mortgage loan or repurchase it from the trustee at a price that will be specified in the prospectus supplement. If so provided in the prospectus supplement, the depositor will, as to some or all of the mortgage loans, assign or cause to be assigned to the trustee the related lease assignments. In certain cases, the trustee, or master servicer, as applicable, may collect all moneys under the related leases and distribute amounts, if any, required under the leases for the payment of maintenance, insurance and taxes, to the extent specified in the related leases. The trustee, or if so specified in the prospectus supplement, the master servicer, as agent for the trustee, may hold the leases in trust for the benefit of the certificateholders. With respect to each CMBS in certificate form, the depositor will deliver or cause to be delivered to the trustee (or the custodian) the original certificate or other definitive evidence of such CMBS together with bond power or other instruments, certifications or documents required to transfer fully such CMBS to the trustee for the benefit of the certificateholders. With respect to each CMBS in uncertificated or book-entry form or held through a "clearing corporation" within the meaning of the New York Uniform Commercial Code, the depositor and the trustee will cause such CMBS to be registered directly or on the books of such clearing corporation or of a financial intermediary in the name of the trustee for the benefit of the certificateholders. Unless otherwise provided in the prospectus supplement, the related pooling and servicing agreement will require that either the depositor or the trustee promptly cause any CMBS in certificated form not registered in the name of the trustee to be reregistered, with the applicable persons, in the name of the trustee. REPRESENTATIONS AND WARRANTIES; REPURCHASES The depositor will, with respect to each mortgage loan in the related trust fund, make or assign certain representations and warranties made by the warranting party, covering, by way of example: (i) the 54 accuracy of the information set forth for such mortgage loan on the schedule of mortgage loans appearing as an exhibit to the related pooling and servicing agreement; (ii) the enforceability of the related mortgage note and mortgage and the existence of title insurance insuring the lien priority of the related mortgage; (iii) the warranting party's title to the mortgage loan and the authority of the warranting party to sell the mortgage loan; and (iv) the payment status of the mortgage loan. Each warranting party will be identified in the prospectus supplement. Unless otherwise provided in the prospectus supplement, each pooling and servicing agreement will provide that the master servicer and/or trustee will be required to notify promptly any warranting party of any breach of any representation or warranty made by it in respect of a mortgage loan that materially and adversely affects the interests of the related certificateholders. If such warranting party cannot cure such breach within a specified period following the date on which it was notified of such breach, then, unless otherwise provided in the prospectus supplement, it will be obligated to repurchase such mortgage loan from the trustee within a specified period at a price that will be specified in the prospectus supplement. If so provided in the prospectus supplement for a series of certificates, a warranting party, in lieu of repurchasing a mortgage loan as to which a breach has occurred, will have the option, exercisable upon certain conditions and/or within a specified period after initial issuance of such series of certificates, to replace such mortgage loan with one or more other mortgage loans, in accordance with standards that will be described in the prospectus supplement. This repurchase or substitution obligation may constitute the sole remedy available to holders of certificates of any series for a breach of representation and warranty by a warranting party. Moreover, neither the depositor (unless it is the warranting party) nor any entity acting solely in its capacity as the master servicer will be obligated to purchase or replace a mortgage loan if a warranting party defaults on its obligation to do so. The dates as of which representations and warranties have been made by a warranting party will be specified in the prospectus supplement. In some cases, such representations and warranties will have been made as of a date prior to the date upon which the related series of certificates is issued, and thus may not address events that may occur following the date as of which they were made. However, the depositor will not include any mortgage loan in the trust fund for any series of certificates if anything has come to the depositor's attention that would cause it to believe that the representations and warranties made in respect of such mortgage loan will not be accurate in all material respects as of such date of issuance. CERTIFICATE ACCOUNT General. The master servicer and/or the trustee will, as to each trust fund, establish and maintain or cause to be established and maintained certificate accounts for the collection of payments on the related mortgage loans, which will be established so as to comply with the standards of each rating agency that has rated any one or more classes of certificates of the related series. As described in the prospectus supplement, a certificate account may be maintained either as an interest-bearing or a non-interest-bearing account, and the funds held therein may be held as cash or invested in permitted investments, such as United States government securities and other investment grade obligations specified in the related pooling and servicing agreement. Any interest or other income earned on funds in the certificate account will be paid to the related master servicer or trustee as additional compensation. If permitted by such rating agency or agencies and so specified in the prospectus supplement, a certificate account may contain funds relating to more than one series of mortgage pass-through certificates and may contain other funds representing payments on mortgage loans owned by the related master servicer or serviced by it on behalf of others. Deposits. Unless otherwise provided in the related pooling and servicing agreement and described in the prospectus supplement, the related master servicer, trustee or special servicer will be required to deposit or cause to be deposited in the certificate account for each trust fund within a certain period following receipt (in the case of collections and payments), the following payments and collections received, or advances made, by the master servicer, the trustee or any special servicer subsequent to the Cut-Off Date (other than payments due on or before the Cut-Off Date): 55 (i) all payments on account of principal, including principal prepayments, on the mortgage loans; (ii) all payments on account of interest on the mortgage loans, including any default interest collected, in each case net of any portion thereof retained by the master servicer, any special servicer or sub-servicer as its servicing compensation or as compensation to the trustee; (iii) all insurance proceeds received under any hazard, title or other insurance policy that provides coverage with respect to a mortgaged property or the related mortgage loan (other than proceeds applied to the restoration of the property or released to the related borrower in accordance with the customary servicing practices of the master servicer (or, if applicable, a special servicer) and/or the terms and conditions of the related mortgage and all other liquidation proceeds received and retained in connection with the liquidation of defaulted mortgage loans or property acquired in respect thereof, by foreclosure or otherwise, together with the Net Operating Income (less reasonable reserves for future expenses) derived from the operation of any mortgaged properties acquired by the trust fund through foreclosure or otherwise; (iv) any amounts paid under any instrument or drawn from any fund that constitutes credit support for the related series of certificates as described under "Description of Credit Support;" (v) any advances made as described under "Description of the Certificate--Advances in Respect of Delinquencies;" (vi) any amounts paid under any cash flow agreement, as described under "Description of the Trust Funds--Cash Flow Agreements;" (vii) all liquidation proceeds resulting from the purchase of any mortgage loan, or property acquired in respect thereof, by the depositor, any mortgage asset seller or any other specified person as described under "--Assignment of Mortgage Assets; Repurchases" and "--Representations and Warranties; Repurchases," all liquidation proceeds resulting from the purchase of any defaulted mortgage loan as described under "--Realization Upon Defaulted Mortgage Loans," and all liquidation proceeds resulting from any mortgage asset purchased as described under "Description of the Certificates--Termination;" (viii) any amounts paid by the master servicer to cover prepayment interest shortfalls arising out of the prepayment of mortgage loans as described under "--Servicing Compensation and Payment of Expenses;" (ix) to the extent that any such item does not constitute additional servicing compensation to the master servicer or a special servicer, any payments on account of modification or assumption fees, late payment charges, prepayment premiums or lenders' equity participations on the mortgage loans; (x) all payments required to be deposited in the certificate account with respect to any deductible clause in any blanket insurance policy described under "--Hazard Insurance Policies;" (xi) any amount required to be deposited by the master servicer or the trustee in connection with losses realized on investments for the benefit of the master servicer or the trustee, as the case may be, of funds held in the certificate account; and (xii) any other amounts required to be deposited in the certificate account as provided in the related pooling and servicing agreement and described in the prospectus supplement. Withdrawals. Unless otherwise provided in the related pooling and servicing agreement and described in the prospectus supplement, the master servicer, trustee or special servicer may make withdrawals from the certificate account for each trust fund for any of the following purposes: (i) to make distributions to the certificateholders on each distribution date; (ii) to reimburse the master servicer or any other specified person for unreimbursed amounts advanced by it as described under "Description of the Certificates--Advances in Respect of Delinquencies," such reimbursement to be made out of amounts received which were identified 56 and applied by the master servicer as late collections of interest (net of related servicing fees) on and principal of the particular mortgage loans with respect to which the advances were made or out of amounts drawn under any form of credit support with respect to such mortgage loans; (iii) to reimburse the master servicer or a special servicer for unpaid servicing fees earned by it and certain unreimbursed servicing expenses incurred by it with respect to mortgage loans in the trust fund and properties acquired in respect thereof, such reimbursement to be made out of amounts that represent liquidation proceeds and insurance proceeds collected on the particular mortgage loans and properties, and net income collected on the particular properties, with respect to which such fees were earned or such expenses were incurred or out of amounts drawn under any form of credit support with respect to such mortgage loans and properties; (iv) to reimburse the master servicer or any other specified person for any advances described in clause (ii) above made by it, any servicing expenses referred to in clause (iii) above incurred by it and any servicing fees earned by it, which, in the good faith judgment of the master servicer or such other person, will not be recoverable from the amounts described in clauses (ii) and (iii), respectively, such reimbursement to be made from amounts collected on other mortgage loans in the related trust fund or, if and to the extent so provided by the related pooling and servicing agreement and described in the prospectus supplement, only from that portion of amounts collected on such other mortgage loans that is otherwise distributable on one or more classes of subordinate certificates of the related series; (v) if and to the extent described in the prospectus supplement, to pay the master servicer, a special servicer or another specified entity (including a provider of credit support) interest accrued on the advances described in clause (ii) above made by it and the servicing expenses described in clause (iii) above incurred by it while such remain outstanding and unreimbursed; (vi) to pay for costs and expenses incurred by the trust fund for environmental site assessments performed with respect to mortgaged properties that constitute security for defaulted mortgage loans, and for any containment, clean-up or remediation of hazardous wastes and materials present on such mortgaged properties, as described under "--Realization Upon Defaulted Mortgage Loans;" (vii) to reimburse the master servicer, the depositor, or any of their respective directors, officers, employees and agents, as the case may be, for certain expenses, costs and liabilities incurred thereby, as and to the extent described under "--Certain Matters Regarding the Master Servicer and the Depositor;" (viii) if and to the extent described in the prospectus supplement, to pay the fees of the trustee; (ix) to reimburse the trustee or any of its directors, officers, employees and agents, as the case may be, for certain expenses, costs and liabilities incurred thereby, as and to the extent described under "--Certain Matters Regarding the Trustee;" (x) to pay the master servicer or the trustee, as additional compensation, interest and investment income earned in respect of amounts held in the certificate account and, to the extent described in the prospectus supplement, prepayment interest excesses collected from borrowers in connection with prepayments of mortgage loans and late charges and default interest collected from borrowers; (xi) to pay (generally from related income) for costs incurred in connection with the operation, management and maintenance of any mortgaged property acquired by the trust fund by foreclosure or otherwise; (xii) if one or more elections have been made to treat the trust fund or designated portions thereof as a REMIC, to pay any federal, state or local taxes imposed on the trust fund or its assets or transactions, as and to the extent described under "Material Federal Income Tax Consequences--Taxation of Owners of REMIC Residual Certificates--Prohibited Transactions Tax and Other Taxes;" 57 (xiii) to pay for the cost of an independent appraiser or other expert in real estate matters retained to determine a fair sale price for a defaulted mortgage loan or a property acquired in respect thereof in connection with the liquidation of such mortgage loan or property; (xiv) to pay for the cost of various opinions of counsel obtained pursuant to the related pooling and servicing agreement for the benefit of certificateholders; (xv) to pay for the cost of recording the pooling and servicing agreement if recorded in accordance with the pooling and servicing agreement; (xvi) to make any other withdrawals permitted by the related pooling and servicing agreement and described in the prospectus supplement; and (xvii) to clear and terminate the certificate account upon the termination of the trust fund. COLLECTION AND OTHER SERVICING PROCEDURES Master Servicer. The master servicer for any mortgage pool, directly or through sub-servicers, will be required to make reasonable efforts to collect all scheduled mortgage loan payments and will be required to follow such collection procedures as it would follow with respect to mortgage loans that are comparable to such mortgage loans and held for its own account, provided such procedures are consistent with (i) the terms of the related pooling and servicing agreement and any related instrument of credit support included in the related trust fund, (ii) applicable law and (iii) the servicing standard specified in the pooling and servicing agreement. The master servicer will also be required to perform other customary functions of a servicer of comparable loans, including maintaining escrow or impound accounts for payment of taxes, insurance premiums and similar items, or otherwise monitoring the timely payment of those items; attempting to collect delinquent payments; supervising foreclosures; conducting property inspections on a periodic or other basis; managing REO Properties; and maintaining servicing records relating to the mortgage loans. Generally, the master servicer will be responsible for filing and settling claims in respect of particular mortgage loans under any applicable instrument of credit support. See "Description of Credit Support." A master servicer may agree to modify, waive or amend any term of any mortgage loan serviced by it in a manner consistent with the servicing standard specified in the pooling and servicing agreement; provided that the modification, waiver or amendment will not (i) affect the amount or timing of any scheduled payments of principal or interest on the mortgage loan or (ii) in the judgment of the master servicer, materially impair the security for the mortgage loan or reduce the likelihood of timely payment of amounts due thereon. A master servicer also may agree to any other modification, waiver or amendment if, in its judgment (x) a material default on the mortgage loan has occurred or a payment default is imminent and (y) such modification, waiver or amendment is reasonably likely to produce a greater recovery with respect to the mortgage loan on a present value basis than would liquidation. Sub-Servicers. A master servicer may delegate its servicing obligations in respect of the mortgage loans serviced by it to one or more third-party sub-servicers, but the master servicer will remain liable for such obligations under the related pooling and servicing agreement unless otherwise provided in the prospectus supplement. Unless otherwise provided in the prospectus supplement, each sub-servicing agreement between a master servicer and a sub-servicer must provide that, if for any reason the master servicer is no longer acting in such capacity, the trustee or any successor master servicer may assume the master servicer's rights and obligations under such sub-servicing agreement. Generally, the master servicer will be solely liable for all fees owed by it to any sub-servicer, irrespective of whether the master servicer's compensation pursuant to the related pooling and servicing agreement is sufficient to pay such fees. Each sub-servicer will be reimbursed by the master servicer for certain expenditures which it makes, generally to the same extent the master servicer would be reimbursed under a pooling and servicing agreement. See "--Certificate Account" and "--Servicing Compensation and Payment of Expenses." Special Servicers. If and to the extent specified in the prospectus supplement, a special servicer may be a party to the related pooling and servicing agreement or may be appointed by the master servicer or 58 another specified party to perform certain specified duties (for example, the servicing of defaulted mortgage loans) in respect of the servicing of the related mortgage loans. The special servicer under a pooling and servicing agreement may be an affiliate of the depositor and may have other normal business relationships with the depositor or the depositor's affiliates. The master servicer will be liable for the performance of a special servicer only if, and to the extent, set forth in the prospectus supplement. Each pooling and servicing agreement may provide that neither the special servicer nor any director, officer, employee or agent of the special servicer will be under any liability to the related trust fund or certificateholders for any action taken, or not taken, in good faith pursuant to the pooling and servicing agreement or for errors in judgment; provided, however, that neither the special servicer nor any such person will be protected against any breach of a representation, warranty or covenant made in such pooling and servicing agreement, or against any expense or liability that such person is specifically required to bear pursuant to the terms of such pooling and servicing agreement, or against any liability that would otherwise be imposed by reason of misfeasance, bad faith or negligence in the performance of obligations or duties thereunder. REALIZATION UPON DEFAULTED MORTGAGE LOANS A borrower's failure to make required mortgage loan payments may mean that operating income is insufficient to service the mortgage debt, or may reflect the diversion of that income from the servicing of the mortgage debt. In addition, a borrower that is unable to make mortgage loan payments may also be unable to make timely payment of taxes and to otherwise maintain and insure the related mortgaged property. In general, the related master servicer will be required to monitor any mortgage loan that is in default, evaluate whether the causes of the default can be corrected over a reasonable period without significant impairment of the value of the related mortgaged property, initiate corrective action in cooperation with the borrower if cure is likely, inspect the related mortgaged property and take such other actions as are consistent with the servicing standard specified in the pooling and servicing agreement. A significant period of time may elapse before the master servicer is able to assess the success of any such corrective action or the need for additional initiatives. The time within which the master servicer can make the initial determination of appropriate action, evaluate the success of corrective action, develop additional initiatives, institute foreclosure proceedings and actually foreclose (or accept a deed to a mortgaged property in lieu of foreclosure) on behalf of the certificateholders may vary considerably depending on the particular mortgage loan, the mortgaged property, the borrower, the presence of an acceptable party to assume the mortgage loan and the laws of the jurisdiction in which the mortgaged property is located. If a borrower files a bankruptcy petition, the master servicer may not be permitted to accelerate the maturity of the related mortgage loan or to foreclose on the mortgaged property for a considerable period of time. See "Certain Legal Aspects of Mortgage Loans and Leases." A pooling and servicing agreement may grant to the master servicer, a special servicer, a provider of credit support and/or the holder or holders of certain classes of certificates of the related series a right of first refusal to purchase from the trust fund, at a predetermined purchase price (which, if insufficient to fully fund the entitlements of certificateholders to principal and interest thereon, will be specified in the prospectus supplement), any mortgage loan as to which a specified number of scheduled payments are delinquent. In addition, the prospectus supplement may specify other methods for the sale or disposal of defaulted mortgage loans pursuant to the terms of the related pooling and servicing agreement. If a default on a mortgage loan has occurred, the master servicer, on behalf of the trustee, may at any time institute foreclosure proceedings, exercise any power of sale contained in the related mortgage, obtain a deed in lieu of foreclosure, or otherwise acquire title to the related mortgaged property, by operation of law or otherwise, if such action is consistent with the servicing standard specified in the pooling and servicing agreement. Unless otherwise specified in the prospectus supplement, the master servicer may not, however, acquire title to any mortgaged property or take any other action that would cause the trustee, for the benefit of certificateholders of the related series, or any other specified person to be considered to hold title to, to be a "mortgagee-in-possession" of, or to be an "owner" or an "operator" of, such mortgaged property within the meaning of certain federal environmental laws, unless 59 the master servicer has previously determined, based on a report prepared by a person who regularly conducts environmental audits (which report will be an expense of the trust fund), that: (i) either the mortgaged property is in compliance with applicable environmental laws and regulations or, if not, that taking such actions as are necessary to bring the mortgaged property into compliance therewith is reasonably likely to produce a greater recovery on a present value basis than not taking such actions; and (ii) either there are no circumstances or conditions present at the mortgaged property relating to the use, management or disposal of hazardous materials for which investigation, testing, monitoring, containment, cleanup or remediation could be required under any applicable environmental laws and regulations or, if such circumstances or conditions are present for which any such action could reasonably be expected to be required, taking such actions with respect to the mortgaged property is reasonably likely to produce a greater recovery on a present value basis than not taking such actions. See "Certain Legal Aspects of Mortgage Loans and Leases--Environmental Considerations." If title to any mortgaged property is acquired by a trust fund as to which a REMIC election has been made, the master servicer, on behalf of the trust fund, will be required to sell the mortgaged property by the end of the third calendar year following the year of acquisition or unless (i) the Internal Revenue Service grants an extension of time to sell such property or (ii) the trustee receives an opinion of independent counsel to the effect that the holding of the property by the trust fund for more than three years after 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 the trust fund to fail to qualify as a REMIC under the Code at any time that any certificate is outstanding. Subject to the foregoing, the master servicer will generally be required to solicit bids for any mortgaged property so acquired in such a manner as will be reasonably likely to realize a fair price for such property. If the trust fund acquires title to any mortgaged property, the master servicer, on behalf of the trust fund, may retain an independent contractor to manage and operate such property. The retention of an independent contractor, however, will not relieve the master servicer of its obligation to manage such mortgaged property in a manner consistent with the servicing standard specified in the pooling and servicing agreement. If liquidation proceeds collected with respect to a defaulted mortgage loan are less than the outstanding principal balance of the defaulted mortgage loan plus interest accrued thereon plus the aggregate amount of reimbursable expenses incurred by the master servicer with respect to such mortgage loan, the trust fund will realize a loss in the amount of such difference. The master servicer will be entitled to reimburse itself from the liquidation proceeds recovered on any defaulted mortgage loan (prior to the distribution of such liquidation proceeds to certificateholders), amounts that represent unpaid servicing compensation in respect of the mortgage loan, unreimbursed servicing expenses incurred with respect to the mortgage loan and any unreimbursed advances of delinquent payments made with respect to the mortgage loan. HAZARD INSURANCE POLICIES Each pooling and servicing agreement may require the related master servicer to cause each mortgage loan borrower to maintain a hazard insurance policy that provides for such coverage as is required under the related mortgage or, if the mortgage permits the holder thereof to dictate to the borrower the insurance coverage to be maintained on the related mortgaged property, such coverage as is consistent with the requirements of the servicing standard specified in the pooling and servicing agreement. Such coverage generally will be in an amount equal to the lesser of the principal balance owing on such mortgage loan and the replacement cost of the mortgaged property, but in either case not less than the amount necessary to avoid the application of any co-insurance clause contained in the hazard insurance policy. The ability of the master servicer to assure that hazard insurance proceeds are appropriately applied may be dependent upon its being named as an additional insured under any hazard insurance policy and under any other insurance policy referred to below, or upon the extent to which information concerning covered losses is furnished by borrowers. All amounts collected by the master servicer under any such policy (except for amounts to be applied to the restoration or repair of the 60 mortgaged property or released to the borrower in accordance with the master servicer's normal servicing procedures and/or to the terms and conditions of the related mortgage and mortgage note) will be deposited in the related certificate account. The pooling and servicing agreement may provide that the master servicer may satisfy its obligation to cause each borrower to maintain such a hazard insurance policy by maintaining a blanket policy insuring against hazard losses on all of the mortgage loans in the related trust fund. If such blanket policy contains a deductible clause, the master servicer will be required, in the event of a casualty covered by such blanket policy, to deposit in the related certificate account all sums that would have been deposited therein but for such deductible clause. In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements of the property by fire, lightning, explosion, smoke, windstorm and hail, riot, strike and civil commotion, subject to the conditions and exclusions specified in each policy. Although the policies covering the mortgaged properties will be underwritten by different insurers under different state laws in accordance with different applicable state forms, and therefore will not contain identical terms and conditions, most such policies typically do not cover any physical damage resulting from war, revolution, governmental actions, terrorism, floods and other water-related causes, earth movement (including earthquakes, landslides and mudflows), wet or dry rot, vermin, domestic animals and certain other kinds of risks. The hazard insurance policies covering the mortgaged properties will typically contain co-insurance clauses that in effect require an insured at all times to carry insurance of a specified percentage (generally 80% to 90%) of the full replacement value of the improvements on the property in order to recover the full amount of any partial loss. If the insured's coverage falls below this specified percentage, such clauses generally provide that the insurer's liability in the event of partial loss does not exceed the lesser of (i) the replacement cost of the improvements less physical depreciation and (ii) such proportion of the loss as the amount of insurance carried bears to the specified percentage of the full replacement cost of such improvements. DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS Certain of the mortgage loans may contain a due-on-sale clause that entitles the lender to accelerate payment of the mortgage loan upon any sale or other transfer of the related mortgaged property made without the lender's consent. Certain of the mortgage loans may also contain a due-on-encumbrance clause that entitles the lender to accelerate the maturity of the mortgage loan upon the creation of any other lien or encumbrance upon the mortgaged property. The master servicer will determine whether to exercise any right the trustee may have under any such provision in a manner consistent with the servicing standard specified in the pooling and servicing agreement. Unless otherwise specified in the prospectus supplement, the master servicer will be entitled to retain as additional servicing compensation any fee collected in connection with the permitted transfer of a mortgaged property. See "Certain Legal Aspects of Mortgage Loans and Leases--Due-on-Sale and Due-on-Encumbrance." SERVICING COMPENSATION AND PAYMENT OF EXPENSES Generally, a master servicer's primary servicing compensation with respect to a series of certificates will come from the periodic payment to it of a portion of the interest payments on each mortgage loan in the related trust fund. Since that compensation is generally based on a percentage of the principal balance of each such mortgage loan outstanding from time to time, it will decrease in accordance with the amortization of the mortgage loans. The prospectus supplement with respect to a series of certificates may provide that, as additional compensation, the master servicer may retain all or a portion of late payment charges, prepayment premiums, modification fees and other fees collected from borrowers and any interest or other income that may be earned on funds held in the certificate account. Any sub-servicer will receive a portion of the master servicer's compensation as its sub-servicing compensation. In addition to amounts payable to any sub-servicer, a master servicer may be required, to the extent provided in the prospectus supplement, to pay from amounts that represent its servicing compensation certain expenses incurred in connection with the administration of the related trust fund, including, without limitation, payment of the fees and disbursements of independent accountants and payment of 61 expenses incurred in connection with distributions and reports to certificateholders. Certain other expenses, including certain expenses related to mortgage loan defaults and liquidations and, to the extent so provided in the prospectus supplement, interest on such expenses at the rate specified therein, and the fees of the trustee and any special servicer, may be required to be borne by the trust fund. If and to the extent provided in the prospectus supplement, the master servicer may be required to apply a portion of the servicing compensation otherwise payable to it in respect of any period to prepayment interest shortfalls. See "Yield Considerations--Shortfalls in Collections of Interest Resulting from Prepayments." EVIDENCE AS TO COMPLIANCE Each pooling and servicing agreement may require that, on or before a specified date in each year, the master servicer cause a firm of independent public accountants to furnish a statement to the trustee to the effect that, based on an examination by such firm conducted substantially in compliance with the Uniform Single Audit Program for Mortgage Bankers, the servicing by or on behalf of the master servicer of mortgage loans under pooling and servicing agreements substantially similar to each other (which may include the related pooling and servicing agreement) was conducted through the preceding calendar year or other specified twelve-month period in compliance with the terms of such agreements except for any significant exceptions or errors in records that, in the opinion of such firm, paragraph 4 of the Uniform Single Audit Program for Mortgage Bankers requires it to report. Each pooling and servicing agreement will also provide for delivery to the trustee, on or before a specified date in each year, of a statement signed by one or more officers of the master servicer to the effect that the master servicer has fulfilled its material obligations under the pooling and servicing agreement throughout the preceding calendar year or other specified twelve-month period. Copies of the annual accountants' statement and the statement of officers of a master servicer will be made available to certificateholders upon written request to the master servicer. CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR The master servicer under a pooling and servicing agreement may be an affiliate of the depositor and may have other normal business relationships with the depositor or the depositor's affiliates. The related pooling and servicing agreement may permit the master servicer to resign from its obligations thereunder upon a determination that such obligations are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it at the date of the pooling and servicing agreement. Unless applicable law requires the master servicer's resignation to be effective immediately, no such resignation will become effective until the trustee or a successor servicer has assumed the master servicer's obligations and duties under the pooling and servicing agreement. The related pooling and servicing agreement may also provide that the master servicer may resign at any other time provided that (i) a willing successor master servicer has been found, (ii) each of the rating agencies that has rated any one or more classes of certificates of the related series 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 such 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. Unless otherwise specified in the prospectus supplement, the master servicer will also be required to maintain a fidelity bond and errors and omissions policy that provides coverage against losses that may be sustained as a result of an officer's or employee's misappropriation of funds, errors and omissions or negligence, subject to certain limitations as to amount of coverage, deductible amounts, conditions, exclusions and exceptions. Each pooling and servicing agreement may further provide that none of the master servicer, the depositor and any director, officer, employee or agent of either of them will be under any liability to the related trust fund or certificateholders for any action taken, or not taken, in good faith pursuant to the pooling and servicing agreement or for errors in judgment; provided, however, that none of the master servicer, the depositor and any such person will be protected against any breach of a representation, 62 warranty or covenant made in such pooling and servicing agreement, or against any expense or liability that such person is specifically required to bear pursuant to the terms of such pooling and servicing agreement, or against any liability that would otherwise be imposed by reason of misfeasance, bad faith or negligence in the performance of obligations or duties thereunder. Unless otherwise specified in the prospectus supplement, each pooling and servicing agreement will further provide that the master servicer, the depositor and any director, officer, employee or agent of either of them will be entitled to indemnification by the related trust fund against any loss, liability or expense incurred in connection with the pooling and servicing agreement or the related series of certificates; provided, however, that such indemnification will not extend to any loss, liability or expense (i) that such person is specifically required to bear pursuant to the terms of such agreement, and is not reimbursable pursuant to the pooling and servicing agreement; (ii) incurred in connection with any breach of a representation, warranty or covenant made in the pooling and servicing agreement; (iii) incurred by reason of misfeasance, bad faith or negligence in the performance of obligations or duties under the pooling and servicing agreement. In addition, each pooling and servicing agreement will provide that neither the master servicer nor the depositor will be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its respective duties under the pooling and servicing agreement and, unless it has received sufficient assurance as to the reimbursement of the costs and liabilities of such legal action or, in its opinion such legal action does not involve it in any expense or liability. However, each of the master servicer and the depositor will be permitted, in the exercise of its discretion, to undertake any such action that it may deem necessary or desirable with respect to the enforcement and/or protection of the rights and duties of the parties to the pooling and servicing agreement and the interests of the certificateholders thereunder. In such event, the legal expenses and costs of such action, and any liability resulting therefrom, will be expenses, costs and liabilities of the certificateholders, and the master servicer or the depositor, as the case may be, will be entitled to charge the related certificate account therefor. Subject, in certain circumstances, to the satisfaction of certain conditions that may be required in the related pooling and servicing agreement, any person into which the master servicer or the depositor may be merged or consolidated, or any person resulting from any merger or consolidation to which the master servicer or the depositor is a party, or any person succeeding to the business of the master servicer or the depositor, will be the successor of the master servicer or the depositor, as the case may be, under the related pooling and servicing agreement. EVENTS OF DEFAULT The events of default for a series of certificates under the related pooling and servicing agreement generally will include (i) any failure by the master servicer to distribute or cause to be distributed to certificateholders, or to remit to the trustee for distribution to certificateholders in a timely manner, any amount required to be so distributed or remitted, provided that such failure is permitted so long as the failure is corrected by 10:00 a.m. on the related distribution date, (ii) any failure by the master servicer or the special servicer duly to observe or perform in any material respect any of its other covenants or obligations under the pooling and servicing agreement which continues unremedied for 30 days after written notice of such failure has been given to the master servicer or the special servicer, as applicable, by any party to the pooling and servicing agreement, or to the master servicer or the special servicer, as applicable, by certificateholders entitled to not less than 25% (or such other percentage specified in the prospectus supplement) of the voting rights for such series (subject to certain extensions provided in the related pooling and servicing agreement); and (iii) certain events of insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings in respect of or relating to the master servicer or the special servicer and certain actions by or on behalf of the master servicer or the special servicer indicating its insolvency or inability to pay its obligations. Material variations to the foregoing events of default (other than to add thereto or shorten cure periods or eliminate notice requirements) will be specified in the prospectus supplement. RIGHTS UPON EVENT OF DEFAULT So long as an event of default under a pooling and servicing agreement remains unremedied, the depositor or the trustee will be authorized, and at the direction of certificateholders entitled to not less 63 than 25% (or such other percentage specified in the prospectus supplement) of the voting rights for such series, the trustee will be required, to terminate all of the rights and obligations of the master servicer as master servicer under the pooling and servicing agreement, whereupon the trustee will succeed to all of the responsibilities, duties and liabilities of the master servicer under the pooling and servicing agreement (except that if the master servicer is required to make advances in respect of mortgage loan delinquencies, but the trustee is prohibited by law from obligating itself to do so, or if the prospectus supplement so specifies, the trustee will not be obligated to make such advances) and will be entitled to similar compensation arrangements. If the trustee is unwilling or unable so to act, it may (or, at the written request of certificateholders entitled to at least 51% (or such other percentage specified in the prospectus supplement) of the voting rights for such series, it will be required to) appoint, or petition a court of competent jurisdiction to appoint, a loan servicing institution that (unless otherwise provided in the prospectus supplement) is acceptable to each rating agency that assigned ratings to the offered certificates of such series to act as successor to the master servicer under the pooling and servicing agreement. Pending such appointment, the trustee will be obligated to act in such capacity. No certificateholder will have the right under any pooling and servicing agreement to institute any proceeding with respect thereto unless such holder previously has given to the trustee written notice of default and unless certificateholders entitled to at least 25% (or such other percentage specified in the prospectus supplement) of the voting rights for the related series shall have made written request upon the trustee to institute such proceeding in its own name as trustee thereunder and shall have offered to the trustee reasonable indemnity, and the trustee for 60 days (or such other period specified in the prospectus supplement) shall have neglected or refused to institute any such proceeding. The trustee, however, will be under no obligation to exercise any of the trusts or powers vested in it by any pooling and servicing agreement or to make any investigation of matters arising thereunder or to institute, conduct or defend any litigation thereunder or in relation thereto at the request, order or direction of any of the holders of certificates of the related series, unless such certificateholders have offered to the trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby. AMENDMENT Each pooling and servicing agreement may be amended by the parties thereto, without the consent of any of the holders of the related certificates, (i) to cure any ambiguity, (ii) to correct, modify or supplement any provision in the pooling and servicing agreement that may be inconsistent with any other provision therein, (iii) to add any other provisions with respect to matters or questions arising under the pooling and servicing agreement that are not inconsistent with the provisions thereof, (iv) to comply with any requirements imposed by the Code or (v) for any other purpose; provided that such amendment (other than an amendment for the purpose specified in clause (iv) above) may not (as evidenced by an opinion of counsel to such effect satisfactory to the trustee) adversely affect in any material respect the interests of any such holder. Each pooling and servicing agreement may also be amended for any purpose by the parties, with the consent of certificateholders entitled to at least 51% (or such other percentage specified in the prospectus supplement) of the voting rights for the related series allocated to the affected classes; provided, however, that no such amendment may (x) reduce in any manner the amount of, or delay the timing of, payments received or advanced on mortgage loans that are required to be distributed in respect of any certificate without the consent of the holder of such certificate, (y) adversely affect in any material respect the interests of the holders of any class of certificates, in a manner other than as described in clause (x), without the consent of the holders of all certificates of such class or (z) modify the provisions of the pooling and servicing agreement described in this paragraph without the consent of the holders of all certificates of the related series. However, unless otherwise specified in the related pooling and servicing agreement, the trustee will be prohibited from consenting to any amendment of a pooling and servicing agreement pursuant to which a REMIC election is to be or has been made unless the trustee shall first have received an opinion of counsel to the effect that such amendment will not result in the imposition of a tax on the related trust fund or cause the related trust fund to fail to qualify as a REMIC at any time that the related certificates are outstanding. 64 LIST OF CERTIFICATEHOLDERS Upon written request of any certificateholder of record made for purposes of communicating with other holders of certificates of the same series with respect to their rights under the related pooling and servicing agreement, the trustee or other specified person will afford such certificateholder access, during normal business hours, to the most recent list of certificateholders of that series then maintained by such person. THE TRUSTEE The trustee under each pooling and servicing agreement will be named in the related prospectus supplement. The commercial bank, national banking association, banking corporation or trust company that serves as trustee may have typical banking relationships with the depositor and its affiliates and with any master servicer and its affiliates. DUTIES OF THE TRUSTEE The trustee for a series of certificates will make no representation as to the validity or sufficiency of the related pooling and servicing agreement, the certificates or any mortgage loan or related document and will not be accountable for the use or application by or on behalf of any master servicer of any funds paid to the master servicer or any special servicer in respect of the certificates or the mortgage loans, or any funds deposited into or withdrawn from the certificate account or any other account by or on behalf of the master servicer or any special servicer. If no event of default under a related pooling and servicing agreement has occurred and is continuing, the trustee will be required to perform only those duties specifically required under the related pooling and servicing agreement. However, upon receipt of any of the various certificates, reports or other instruments required to be furnished to it pursuant to the pooling and servicing agreement, the trustee will be required to examine such documents and to determine whether they conform to the requirements of the pooling and servicing agreement. CERTAIN MATTERS REGARDING THE TRUSTEE The trustee for a series of certificates may be entitled to indemnification, from amounts held in the related certificate account, for any loss, liability or expense incurred by the trustee in connection with the trustee's acceptance or administration of its trusts under the related pooling and servicing agreement; provided, however, that such indemnification will not extend to any loss, liability or expense that constitutes a specific liability imposed on the trustee pursuant to the pooling and servicing agreement, or to any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence on the part of the trustee in the performance of its obligations and duties thereunder, or by reason of its reckless disregard of such obligations or duties, or as may arise from a breach of any representation, warranty or covenant of the trustee made in the pooling and servicing agreement. As and to the extent described in the prospectus supplement, the fees and normal disbursements of any trustee may be the expense of the related master servicer or other specified person or may be required to be borne by the related trust fund. RESIGNATION AND REMOVAL OF THE TRUSTEE The trustee for a series of certificates will be permitted at any time to resign from its obligations and duties under the related pooling and servicing agreement by giving written notice thereof to the depositor. Upon receiving such notice of resignation, the master servicer (or such other person as may be specified in the prospectus supplement) will be required to use reasonable efforts to promptly appoint a successor trustee. If no successor trustee shall have accepted an appointment within a specified period after the giving of such notice of resignation, the resigning trustee may petition any court of competent jurisdiction to appoint a successor trustee. Unless otherwise provided in the prospectus supplement, if at any time the trustee ceases to be eligible to continue as such under the related pooling and servicing agreement, or if at any time the trustee becomes incapable of acting, or if certain events of (or proceedings in respect of) bankruptcy or insolvency occur with respect to the trustee, the depositor will be authorized to remove the trustee and 65 appoint a successor trustee. In addition, unless otherwise provided in the prospectus supplement, holders of the certificates of any series entitled to at least 51% (or such other percentage specified in the prospectus supplement) of the voting rights for such series may at any time (with or without cause) remove the trustee and appoint a successor trustee. Any resignation or removal of the trustee and appointment of a successor trustee will not become effective until acceptance of appointment by the successor trustee. 66 DESCRIPTION OF CREDIT SUPPORT GENERAL Credit support may be provided with respect to one or more classes of the certificates of any series, or with respect to the related mortgage assets. Credit support may be in the form of over-collateralization, a letter of credit, the subordination of one or more classes of certificates, the use of a pool insurance policy or guarantee insurance, the establishment of one or more reserve funds or another method of credit support described in the prospectus supplement, or any combination of the foregoing. If so provided in the prospectus supplement, any form of credit support may provide credit enhancement for more than one series of certificates to the extent described in the prospectus supplement. The credit support generally will not provide protection against all risks of loss and will not guarantee payment to certificateholders of all amounts to which they are entitled under the related pooling and servicing agreement. If losses or shortfalls occur that exceed the amount covered by the credit support or that are not covered by the credit support, certificateholders will bear their allocable share of deficiencies. Moreover, if a form of credit support covers more than one series of certificates, holders of certificates of one series will be subject to the risk that such credit support will be exhausted by the claims of the holders of certificates of one or more other series before the former receive their intended share of such coverage. If credit support is provided with respect to one or more classes of certificates of a series, or with respect to the related mortgage assets, the prospectus supplement will include a description of (i) the nature and amount of coverage under such credit support, (ii) any conditions to payment thereunder not otherwise described in this prospectus, (iii) the conditions (if any) under which the amount of coverage under such credit support may be reduced and under which such credit support may be terminated or replaced and (iv) the material provisions relating to such credit support. Additionally, the prospectus supplement will set forth certain information with respect to the obligor under any instrument of credit support, generally including (w) a brief description of its principal business activities, (x) its principal place of business, place of incorporation and the jurisdiction under which it is chartered or licensed to do business, (y) if applicable, the identity of the regulatory agencies that exercise primary jurisdiction over the conduct of its business and (z) its total assets, and its stockholders equity or policyholders' surplus, if applicable, as of a date that will be specified in the prospectus supplement. See "Risk Factors--Credit Support May Not Cover Losses or Risks Which Could Adversely Affect Payment on Your Certificates." SUBORDINATE CERTIFICATES If so specified in the prospectus supplement, one or more classes of certificates of a series may be subordinate certificates which are subordinated in right of payment to one or more other classes of senior certificates. If so provided in the prospectus supplement, the subordination of a class may apply only in the event of (or may be limited to) certain types of losses or shortfalls. The prospectus supplement will set forth information concerning the amount of subordination provided by a class or classes of subordinate certificates in a series, the circumstances under which such subordination will be available and the manner in which the amount of subordination will be made available. CROSS-SUPPORT PROVISIONS If the mortgage assets in any trust fund are divided into separate groups, each supporting a separate class or classes of certificates of a series, credit support may be provided by cross-support provisions requiring that distributions be made on senior certificates evidencing interests in one group of mortgage assets prior to distributions on subordinate certificates evidencing interests in a different group of mortgage assets within the trust fund. The prospectus supplement for a series that includes a cross-support provision will describe the manner and conditions for applying such provisions. INSURANCE OR GUARANTEES WITH RESPECT TO MORTGAGE LOANS If so provided in the prospectus supplement for a series of certificates, mortgage loans included in the related trust fund will be covered for certain default risks by insurance policies or guarantees. To the extent material, a copy of each such instrument will accompany the Current Report on Form 8-K to be filed with the Securities and Exchange Commission within 15 days of issuance of the certificates of the related series. 67 LETTER OF CREDIT If so provided in the prospectus supplement for a series of certificates, deficiencies in amounts otherwise payable on such certificates or certain classes thereof will be covered by one or more letters of credit, issued by a bank or financial institution specified in such prospectus supplement. Under a letter of credit, the bank or financial institution providing the letter of credit will be obligated to honor draws thereunder in an aggregate fixed dollar amount, net of unreimbursed payments thereunder, generally equal to a percentage specified in the prospectus supplement of the aggregate principal balance of the mortgage assets on the related Cut-Off Date or of the initial aggregate certificate balance of one or more classes of certificates. If so specified in the prospectus supplement, the letter of credit may permit draws only in the event of certain types of losses and shortfalls. The amount available under the letter of credit will, in all cases, be reduced to the extent of the unreimbursed payments thereunder and may otherwise be reduced as described in the prospectus supplement. The obligations of the bank or financial institution providing the letter of credit for each series of certificates will expire at the earlier of the date specified in the prospectus supplement or the termination of the trust fund. A copy of any such letter of credit will accompany the Current Report on Form 8-K to be filed with the Securities and Exchange Commission within 15 days of issuance of the certificates of the related series. CERTIFICATE INSURANCE AND SURETY BONDS If so provided in the prospectus supplement for a series of certificates, deficiencies in amounts otherwise payable on such certificates or certain classes thereof will be covered by insurance policies and/or surety bonds provided by one or more insurance companies or sureties. Such instruments may cover, with respect to one or more classes of certificates of the related series, timely distributions of interest and/or full distributions of principal on the basis of a schedule of principal distributions set forth in or determined in the manner specified in the prospectus supplement. A copy of any such instrument will accompany the Current Report on Form 8-K to be filed with the Securities and Exchange Commission within 15 days of issuance of the certificates of the related series. RESERVE FUNDS If so provided in the prospectus supplement for a series of certificates, deficiencies in amounts otherwise payable on such certificates or certain classes thereof will be covered (to the extent of available funds) by one or more reserve funds in which cash, a letter of credit, permitted investments, a demand note or a combination thereof will be deposited, in the amounts specified in such prospectus supplement. If so specified in the prospectus supplement, the reserve fund for a series may also be funded over time by a specified amount of the collections received on the related mortgage assets. Amounts on deposit in any reserve fund for a series, together with the reinvestment income thereon, if any, will be applied for the purposes, in the manner, and to the extent specified in the prospectus supplement. If so specified in the prospectus supplement, reserve funds may be established to provide protection only against certain types of losses and shortfalls. Following each distribution date, amounts in a reserve fund in excess of any amount required to be maintained in the reserve fund may be released from the reserve fund under the conditions and to the extent specified in the prospectus supplement. If so specified in the prospectus supplement, amounts deposited in any reserve fund will be invested in permitted investments, such as United States government securities and other investment grade obligations specified in the related pooling and servicing agreement. Unless otherwise specified in the prospectus supplement, any reinvestment income or other gain from such investments will be credited to the related reserve fund for such series, and any loss resulting from such investments will be charged to such reserve fund. However, such income may be payable to any related master servicer or another service provider as additional compensation for its services. The reserve fund, if any, for a series will not be a part of the trust fund unless otherwise specified in the prospectus supplement. CREDIT SUPPORT WITH RESPECT TO CMBS If so provided in the prospectus supplement for a series of certificates, any CMBS included in the related trust fund and/or the related underlying mortgage loans may be covered by one or more of the 68 types of credit support described in this prospectus. The prospectus supplement for any series of certificates evidencing an interest in a trust fund that includes CMBS will describe to the extent information is available and deemed material, any similar forms of credit support that are provided by or with respect to, or are included as part of the trust fund evidenced by or providing security for, such CMBS. The type, characteristic and amount of credit support will be determined based on the characteristics of the mortgage assets and other factors and will be established, in part, on the basis of requirements of each rating agency rating the certificates of such series. If so specified in the prospectus supplement, any such credit support may apply only in the event of certain types of losses or delinquencies and the protection against losses or delinquencies provided by such credit support will be limited. CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES The following discussion contains general summaries of certain legal aspects of loans secured by commercial and multifamily residential properties. Because such legal aspects are governed by applicable state law (which laws may differ substantially), the summaries do not purport to be complete, to reflect the laws of any particular state, or to encompass the laws of all states in which the security for the mortgage loans (or mortgage loans underlying any CMBS) is situated. Accordingly, the summaries are qualified in their entirety by reference to the applicable laws of those states. See "Description of the Trust Funds--Mortgage Loans--Leases." For purposes of the following discussion, "mortgage loan" includes a mortgage loan underlying a CMBS. GENERAL Each mortgage loan will be evidenced by a note or bond and secured by an instrument granting a security interest in real property, which may be a mortgage, deed of trust or a deed to secure debt, depending upon the prevailing practice and law in the state in which the related mortgaged property is located. Mortgages, deeds of trust and deeds to secure debt are collectively referred to as "mortgages" in this prospectus and, unless otherwise specified, in any prospectus supplement. A mortgage creates a lien upon, or grants a title interest in, the real property covered thereby, and represents the security for the repayment of the indebtedness customarily evidenced by a promissory note. The priority of the lien created or interest granted will depend on the terms of the mortgage and, in some cases, on the terms of separate subordination agreements or intercreditor agreements with others that hold interests in the real property, the knowledge of the parties to the mortgage and, generally, the order of recordation of the mortgage in the appropriate public recording office. However, the lien of a recorded mortgage will generally be subordinate to later-arising liens for real estate taxes and assessments and other charges imposed under governmental police powers. Additionally, in some states, mechanic's and materialman's liens have priority over mortgage liens. The mortgagee's authority under a mortgage, the beneficiary's authority under a deed of trust and the grantee's authority under a deed to secure debt are governed by the express provisions of the related instrument, the law of the state in which the real property is located, certain federal laws (including, without limitation, the Servicemembers Civil Relief Act) and, in some deed of trust transactions, the trustee's authority is further limited by the directions of the beneficiary. TYPES OF MORTGAGE INSTRUMENTS There are two parties to a mortgage: a mortgagor (the borrower and usually the owner of the subject property) and a mortgagee (the lender). In a mortgage, the mortgagor grants a lien on the subject property in favor of the mortgagee. A deed of trust is a three-party instrument, among a trustor (the equivalent of a borrower), a trustee to whom the real property is conveyed, and a beneficiary (the lender) for whose benefit the conveyance is made. Under a deed of trust, the trustor grants the property to the trustee, in trust, irrevocably until the debt is paid, and generally with a power of sale. A deed to secure debt typically has two parties. The borrower, or grantor, conveys title to the real property to the grantee, or lender, generally with a power of sale, until such time as the debt is repaid. In a case where the borrower is a land trust, there would be an additional party to a mortgage instrument because legal title to the property is held by a land trustee under a land trust agreement for the benefit of the borrower. At 69 origination of a mortgage loan involving a land trust, the borrower generally executes a separate undertaking to make payments on the mortgage note. The mortgagee's authority under a mortgage, the trustee's authority under a deed of trust and the grantee's authority under a deed to secure debt are governed by the express provisions of the related instrument, the law of the state in which the real property is located, certain federal laws and, in some deed of trust transactions, the directions of the beneficiary. LEASES AND RENTS Mortgages that encumber income-producing property often contain an assignment of rents and leases, pursuant to which the borrower assigns to the lender the borrower's right, title and interest as landlord under each lease and the income derived therefrom, while (unless rents are to be paid directly to the lender) retaining a revocable license to collect the rents for so long as there is no default. If the borrower defaults, the license terminates and the lender is entitled to collect the rents. Local law may require that the lender take possession of the property and/or obtain a court-appointed receiver before becoming entitled to collect the rents. Lenders that actually take possession of the property, however, may incur potentially substantial risks attendant to being a mortgagee in possession. Such risks include liability for environmental clean-up costs and other risks inherent in property ownership. See "--Environmental Considerations." In most states, hotel and motel room receipts/revenues are considered accounts receivable under the Uniform Commercial Code; in cases where hotels or motels constitute loan security, the receipts/revenues are generally pledged by the borrower as additional security for the loan. In general, the lender must file financing statements in order to perfect its security interest in the receipts/revenues and must file continuation statements, generally every five years, to maintain perfection of such security interest. Even if the lender's security interest in room receipts/revenues is perfected under the Uniform Commercial Code, it will generally be required to commence a foreclosure action or otherwise take possession of the property in order to collect the room receipts/revenues following a default. See "--Bankruptcy Laws." PERSONALTY In the case of certain types of mortgaged properties, such as hotels, motels and nursing homes, personal property (to the extent owned by the borrower and not previously pledged) may constitute a significant portion of the property's value as security. The creation and enforcement of liens on personal property are governed by the Uniform Commercial Code. Accordingly, if a borrower pledges personal property as security for a mortgage loan, the lender generally must file Uniform Commercial Code financing statements in order to perfect its security interest therein, and must file continuation statements, generally every five years, to maintain that perfection. COOPERATIVE LOANS If specified in the prospectus supplement, the mortgage loans may consist of loans secured by "blanket mortgages" on the property owned by cooperative housing corporations. If specified in the prospectus supplement, the mortgage loans may consist of cooperative loans secured by security interests in shares issued by private cooperative housing corporations and in the related proprietary leases or occupancy agreements granting exclusive rights to occupy specific dwelling units in the cooperatives' buildings. The security agreement will create a lien upon, or grant a title interest in, the property which it covers, the priority of which will depend on the terms of the particular security agreement as well as the order of recordation of the agreement in the appropriate recording office. Such a lien or title interest is not prior to the lien for real estate taxes and assessments and other charges imposed under governmental police powers. A cooperative generally owns in fee or has a leasehold interest in land and owns in fee or leases the building or buildings thereon and all separate dwelling units in the buildings. The cooperative is owned by tenant-stockholders who, through ownership of stock or shares in the corporation, receive proprietary leases or occupancy agreements which confer exclusive rights to occupy specific units. Generally, a tenant-stockholder of a cooperative must make a monthly payment to the cooperative representing such 70 tenant-stockholder's pro rata share of the cooperative's payments for its blanket mortgage, real property taxes, maintenance expenses and other capital or ordinary expenses. The cooperative is directly responsible for property management and, in most cases, payment of real estate taxes, other governmental impositions and hazard and liability insurance. If there is a blanket mortgage or mortgages on the cooperative apartment building or underlying land, as is generally the case, or an underlying lease of the land, as is the case in some instances, the cooperative, as property mortgagor, or lessee, as the case may be, is also responsible for meeting these mortgage or rental obligations. A blanket mortgage is ordinarily incurred by the cooperative in connection with either the construction or purchase of the cooperative's apartment building or obtaining of capital by the cooperative. The interest of the occupant under proprietary leases or occupancy agreements as to which that cooperative is the landlord are generally subordinate to the interest of the holder of a blanket mortgage and to the interest of the holder of a land lease. If the cooperative is unable to meet the payment obligations (i) arising under a blanket mortgage, the mortgagee holding a blanket mortgage could foreclose on that mortgage and terminate all subordinate proprietary leases and occupancy agreements, or (ii) arising under its land lease, the holder of the landlord's interest under the land lease could terminate it and all subordinate proprietary leases and occupancy agreements. Also, a blanket mortgage on a cooperative may provide financing in the form of a mortgage that does not fully amortize, with a significant portion of principal being due in one final payment at maturity. The inability of the cooperative to refinance a mortgage and its consequent inability to make such final payment could lead to foreclosure by the mortgagee and termination of all proprietary leases and occupancy agreements. Similarly, a land lease has an expiration date and the inability of the cooperative to extend its term, or, in the alternative, to purchase the land, could lead to termination of the cooperatives' interest in the property and termination of all proprietary leases and occupancy agreements. Upon foreclosure of a blanket mortgage on a cooperative, the lender would normally be required to take the mortgaged property subject to state and local regulations that afford tenants who are not shareholders various rent control and other protections. A foreclosure by the holder of a blanket mortgage or the termination of the underlying lease could eliminate or significantly diminish the value of any collateral held by a party who financed the purchase of cooperative shares by an individual tenant stockholder. An ownership interest in a cooperative and accompanying occupancy rights are financed through a cooperative share loan evidenced by a promissory note and secured by an assignment of and a security interest in the occupancy agreement or proprietary lease and a security interest in the related cooperative shares. The lender generally takes possession of the share certificate and a counterpart of the proprietary lease or occupancy agreement and financing statements covering the proprietary lease or occupancy agreement and the cooperative shares are filed in the appropriate state and local offices to perfect the lender's interest in its collateral. Subject to the limitations discussed below, upon default of the tenant-stockholder, the lender may sue for judgment on the promissory note, dispose of the collateral at a public or private sale or otherwise proceed against the collateral or tenant-stockholder as an individual as provided in the security agreement covering the assignment of the proprietary lease or occupancy agreement and the pledge of cooperative shares. See "--Foreclosure--Cooperative Loans" below. JUNIOR MORTGAGES; RIGHTS OF SENIOR LENDERS Some of the mortgage loans included in a trust fund may be secured by mortgage instruments that are subordinate to mortgage instruments held by other lenders. The rights of the trust fund (and therefore the certificateholders), as holder of a junior mortgage instrument, are subordinate to those of the senior lender, including the prior rights of the senior lender to receive rents, hazard insurance and condemnation proceeds and to cause the mortgaged property to be sold upon borrower's default and thereby extinguish the trust fund's junior lien unless the master servicer or special servicer satisfies the defaulted senior loan, or, if permitted, asserts its subordinate interest in a property in foreclosure litigation. As discussed more fully below, in many states a junior lender may satisfy a defaulted senior loan in full, adding the amounts expended to the balance due on the junior loan. Absent a provision in the senior mortgage instrument, no notice of default is required to be given to the junior lender. The form of the mortgage instrument used by many institutional lenders confers on the lender the right both to receive all proceeds collected under any hazard insurance policy and all awards made in connection with any condemnation proceedings, and (subject to any limits imposed by applicable state 71 law) to apply such proceeds and awards to any indebtedness secured by the mortgage instrument in such order as the lender may determine. Thus, if improvements on a property are damaged or destroyed by fire or other casualty, or if the property is taken by condemnation, the holder of the senior mortgage instrument will have the prior right to collect any insurance proceeds payable under a hazard insurance policy and any award of damages in connection with the condemnation and to apply the same to the senior indebtedness. Accordingly, only the proceeds in excess of the amount of senior indebtedness will be available to be applied to the indebtedness secured by a junior mortgage instrument. The form of mortgage instrument used by many institutional lenders typically contains a "future advance" clause, which provides, in general, that additional amounts advanced to or on behalf of the mortgagor or trustor by the mortgagee or beneficiary are to be secured by the mortgage instrument. While such a clause is valid under the laws of most states, the priority of any advance made under the clause depends, in some states, on whether the advance was an "obligatory" or an "optional" advance. If the lender is obligated to advance the additional amounts, the advance may be entitled to receive the same priority as the amounts advanced at origination, notwithstanding that intervening junior liens may have been recorded between the date of recording of the senior mortgage instrument and the date of the future advance, and notwithstanding that the senior lender had actual knowledge of such intervening junior liens at the time of the advance. Where the senior lender is not obligated to advance the additional amounts and has actual knowledge of the intervening junior liens, the advance may be subordinate to such intervening junior liens. Priority of advances under a "future advance" clause rests, in many other states, on state law giving priority to all advances made under the loan agreement up to a "credit limit" amount stated in the recorded mortgage. Another provision typically found in the form of mortgage instrument used by many institutional lenders permits the lender to itself perform certain obligations of the borrower (for example, the obligations to pay when due all taxes and assessments on the property and, when due, all encumbrances, charges and liens on the property that are senior to the lien of the mortgage instrument, to maintain hazard insurance on the property, and to maintain and repair the property) upon a failure of the borrower to do so, with all sums so expended by the lender becoming part of the indebtedness secured by the mortgage instrument. The form of mortgage instrument used by many institutional lenders typically requires the borrower to obtain the consent of the lender in respect of actions affecting the mortgaged property, including the execution of new leases and the termination or modification of existing leases, the performance of alterations to buildings forming a part of the mortgaged property and the execution of management and leasing agreements for the mortgaged property. Tenants will often refuse to execute leases unless the lender executes a written agreement with the tenant not to disturb the tenant's possession of its premises in the event of a foreclosure. A senior lender may refuse to consent to matters approved by a junior lender, with the result that the value of the security for the junior mortgage instrument is diminished. FORECLOSURE General. Foreclosure is a legal procedure that allows the lender to seek to recover its mortgage debt by enforcing its rights and available legal remedies under the mortgage in respect of the mortgaged property. If the borrower defaults in payment or performance of its obligations under the note or mortgage, the lender has the right to institute foreclosure proceedings to sell the real property at public auction to satisfy the indebtedness. Foreclosure Procedures Vary From State to State. Two primary methods of foreclosing a mortgage are judicial foreclosure, involving court proceedings, and non-judicial foreclosure pursuant to a power of sale usually granted in the mortgage instrument. Other foreclosure procedures are available in some states, but they are either infrequently used or available only in limited circumstances. A foreclosure action is subject to most of the delays and expenses of other lawsuits if defenses are raised or counterclaims are interposed, and sometimes requires years to complete. Moreover, the filing by or against the borrower-mortgagor of a bankruptcy petition would impose an automatic stay on such proceedings and could further delay a foreclosure sale. Judicial Foreclosure. A judicial foreclosure proceeding is conducted in a court having jurisdiction over the mortgaged property. Generally, the action is initiated by the service of legal pleadings upon all 72 parties having a subordinate interest of record in the real property and all parties in possession of the property, under leases or otherwise, whose interests are subordinate to the mortgage. Delays in completion of the foreclosure may occasionally result from difficulties in locating proper defendants. As stated above, if the lender's right to foreclose is contested by any defendant, the legal proceedings may be time-consuming. In addition, judicial foreclosure is a proceeding in equity and, therefore, equitable defenses may be raised against the foreclosure. Upon successful completion of a judicial foreclosure proceeding, the court generally issues a judgment of foreclosure and appoints a referee or other officer to conduct a public sale of the mortgaged property, the proceeds of which are used to satisfy the judgment. Such sales are made in accordance with procedures that vary from state to state. Non-Judicial Foreclosure/Power of Sale. Foreclosure of a deed of trust is generally accomplished by a non-judicial trustee's sale pursuant to a power of sale typically granted in the deed of trust. A power of sale may also be contained in any other type of mortgage instrument if applicable law so permits. A power of sale under a deed of trust or mortgage allows a non-judicial public sale to be conducted generally following a request from the beneficiary/lender to the trustee to sell the property upon default by the borrower and after notice of sale is given in accordance with the terms of the mortgage and applicable state law. In some states, prior to such sale, the trustee under the deed of trust must record a notice of default and notice of sale and send a copy to the borrower and to any other party which has recorded a request for a copy of a notice of default and notice of sale. In addition, in some states the trustee must provide notice to any other party having an interest of record in the real property, including junior lienholders. A notice of sale must be posted in a public place and, in most states, published for a specified period of time in one or more newspapers. The borrower or a junior lienholder may then have the right, during a reinstatement period required in some states, to cure the default by paying the entire actual amount in arrears (without regard to the acceleration of the indebtedness), plus the lender's expenses incurred in enforcing the obligation. In other states, the borrower or the junior lienholder is not provided a period to reinstate the loan, but has only the right to pay off the entire debt to prevent the foreclosure sale. In addition to such cure rights, in most jurisdictions, the borrower-mortgagor or a subordinate lienholder can seek to enjoin the non-judicial foreclosure by commencing a court proceeding. Generally, state law governs the procedure for public sale, the parties entitled to notice, the method of giving notice and the applicable time periods. Both judicial and non-judicial foreclosures may result in the termination of leases at the mortgaged property, which in turn could result in the reduction in the income for such property. Some of the factors that will determine whether or not a lease will be terminated by a foreclosure are: the provisions of applicable state law, the priority of the mortgage vis-a-vis the lease in question, the terms of the lease and the terms of any subordination, non-disturbance and attornment agreement between the tenant under the lease and the mortgagee. Equitable Limitations on Enforceability of Certain Provisions. United States courts have traditionally imposed general equitable principles to limit the remedies available to lenders in foreclosure actions. These principles are generally designed to relieve borrowers from the effects of mortgage defaults perceived as harsh or unfair. Relying on such principles, a court may alter the specific terms of a loan to the extent it considers necessary to prevent or remedy an injustice, undue oppression or overreaching, or may require the lender to undertake affirmative actions to determine the cause of the borrower's default and the likelihood that the borrower will be able to reinstate the loan. In some cases, courts have substituted their judgment for the lender's and have required that lenders reinstate loans or recast payment schedules in order to accommodate borrowers who are suffering from a temporary financial disability. In other cases, courts have limited the right of the lender to foreclose in the case of a non-monetary default, such as a failure to adequately maintain the mortgaged property or placing a subordinate mortgage or other encumbrance upon the mortgaged property. Finally, some courts have addressed the issue of whether federal or state constitutional provisions reflecting due process concerns for adequate notice require that a borrower receive notice in addition to statutorily prescribed minimum notice. For the most part, these cases have upheld the reasonableness of the notice provisions or have found that a public sale under a mortgage providing for a power of sale does not involve sufficient state action to trigger constitutional protections. 73 Public Sale. A third party may be unwilling to purchase a mortgaged property at a public sale for a number of reasons, including the difficulty in determining the exact status of title to the property (due to, among other things, redemption rights that may exist) and because of the possibility that physical deterioration of the property may have occurred during the foreclosure proceedings. For these reasons, it is common for the lender to purchase the mortgaged property for an amount equal to the secured indebtedness and accrued and unpaid interest plus the expenses of foreclosure, in which event the borrower's debt will be extinguished. Thereafter, subject to the borrower's right in some states to remain in possession during a redemption period, the lender will become the owner of the property and have both the benefits and burdens of ownership, including the obligation to pay debt service on any senior mortgages, to pay taxes, to obtain casualty insurance and to make such repairs as are necessary to render the property suitable for sale. The costs involved in a foreclosure process can often be quite expensive; such costs may include, depending on the jurisdiction involved, legal fees, court administration fees, referee fees and transfer taxes or fees. The costs of operating and maintaining a commercial or multifamily residential property may be significant and may be greater than the income derived from that property. The lender also will commonly obtain the services of a real estate broker and pay the broker's commission in connection with the sale or lease of the property. Depending upon market conditions, the ultimate proceeds of the sale of the property may not equal the lender's investment in the property. Moreover, because of the expenses associated with acquiring, owning and selling a mortgaged property, a lender could realize an overall loss on a mortgage loan even if the mortgaged property is sold at foreclosure, or resold after it is acquired through foreclosure, for an amount equal to the full outstanding principal amount of the loan plus accrued interest. The holder of a junior mortgage that forecloses on a mortgaged property does so subject to senior mortgages and any other prior liens, and may be obliged to keep senior mortgage loans current in order to avoid foreclosure of its interest in the property. In addition, if the foreclosure of a junior mortgage triggers the enforcement of a "due-on-sale" clause contained in a senior mortgage, the junior mortgagee could be required to pay the full amount of the senior mortgage indebtedness, including penalty fees and court costs, or face foreclosure. Rights of Redemption. The purposes of a foreclosure action are to enable the lender to realize upon its security and to bar the borrower, and all persons who have interests in the property that are subordinate to that of the foreclosing lender, from exercise of their "equity of redemption." The doctrine of equity of redemption provides that, until the property encumbered by a mortgage has been sold in accordance with a properly conducted foreclosure and foreclosure sale, those having interests that are subordinate to that of the foreclosing lender have an equity of redemption and may redeem the property by paying the entire debt with interest. Those having an equity of redemption must generally be made parties and joined in the foreclosure proceeding in order for their equity of redemption to be terminated. The equity of redemption is a common-law (non-statutory) right which should be distinguished from post-sale statutory rights of redemption. In some states, after sale pursuant to a deed of trust or foreclosure of a mortgage, the borrower and foreclosed junior lienors are given a statutory period in which to redeem the property. In some states, statutory redemption may occur only upon payment of the foreclosure sale price. In other states, redemption may be permitted if the former borrower pays only a portion of the sums due. The effect of a statutory right of redemption is to diminish the ability of the lender to sell the foreclosed property because the exercise of a right of redemption would defeat the title of any purchaser through a foreclosure. Consequently, the practical effect of the redemption right is to force the lender to maintain the property and pay the expenses of ownership until the redemption period has expired. In some states, a post-sale statutory right of redemption may exist following a judicial foreclosure, but not following a trustee's sale under a deed of trust. Anti-Deficiency Legislation. Some or all of the mortgage loans may be nonrecourse loans, as to which recourse in the case of default will be limited to the mortgaged property and such other assets, if any, that were pledged to secure the mortgage loan. However, even if a mortgage loan by its terms provides for recourse to the borrower's other assets, a lender's ability to realize upon those assets may be limited by state law. For example, in some states a lender cannot obtain a deficiency judgment against the borrower following a non-judicial foreclosure. A deficiency judgment is a personal judgment against the former borrower equal to the difference between the net amount realized upon the public sale of the real 74 property and the amount due to the lender. Other statutes may require the lender to exhaust the security afforded under a mortgage before bringing a personal action against the borrower. In certain other states, the lender has the option of bringing a personal action against the borrower on the debt without first exhausting such security; however, in some of those states, the lender, following judgment on such personal action, may be deemed to have elected a remedy and thus may be precluded from foreclosing upon the security. Consequently, lenders in those states where such an election of remedy provision exists will usually proceed first against the security. Finally, other statutory provisions, designed to protect borrowers from exposure to large deficiency judgments that might result from bidding at below-market values at the foreclosure sale, limit any deficiency judgment to the excess of the outstanding debt over the judicially determined fair market value of the property at the time of the sale. Leasehold Risks. Mortgage loans may be secured by a mortgage on the borrower's leasehold interest in a ground lease. Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the borrower's leasehold were to be terminated upon a lease default or the bankruptcy of the lessee or the lessor, the leasehold mortgagee would lose its security. This risk may be substantially lessened if the ground lease contains provisions protective of the leasehold mortgagee, such as a provision that requires the ground lessor to give the leasehold mortgagee notices of lessee defaults and an opportunity to cure them, a provision that permits the leasehold estate to be assigned to and by the leasehold mortgagee or the purchaser at a foreclosure sale, a provision that gives the leasehold mortgagee the right to enter into a new ground lease with the ground lessor on the same terms and conditions as the old ground lease or a provision that prohibits the ground lessee/borrower from treating the ground lease as terminated in the event of the ground lessor's bankruptcy and rejection of the ground lease by the trustee for the debtor/ground lessor. Certain mortgage loans, however, may be secured by liens on ground leases that do not contain all or some of these provisions. Regulated Healthcare Facilities. A mortgage loan may be secured by a mortgage on a nursing home or other regulated healthcare facility. In most jurisdictions, a license (which is nontransferable and may not be assigned or pledged) granted by the appropriate state regulatory authority is required to operate a regulated healthcare facility. Accordingly, the ability of a person acquiring this type of property upon a foreclosure sale to take possession of and operate the same as a regulated healthcare facility may be prohibited by applicable law. Notwithstanding the foregoing, however, in certain jurisdictions the person acquiring this type of property at a foreclosure sale may have the right to terminate the use of the same as a regulated health care facility and convert it to another lawful purpose. Cross-Collateralization. Certain of the mortgage loans may be secured by more than one mortgage covering mortgaged properties located in more than one state. Because of various state laws governing foreclosure or the exercise of a power of sale and because, in general, foreclosure actions are brought in state court and the courts of one state cannot exercise jurisdiction over property in another state, it may be necessary upon a default under a cross-collateralized mortgage loan to foreclose on the related mortgaged properties in a particular order rather than simultaneously in order to ensure that the lien of the mortgages is not impaired or released. Cooperative Loans. The cooperative shares owned by the tenant-stockholder and pledged to the lender are, in almost all cases, subject to restrictions on transfer as set forth in the cooperative's certificate of incorporation and by-laws, as well as the proprietary lease or occupancy agreement, and may be cancelled by the cooperative for failure by the tenant-stockholder to pay rent or other obligations or charges owed by such tenant-stockholder, including mechanics' liens against the cooperative apartment building incurred by such tenant-stockholder. The proprietary lease or occupancy agreement generally permit the cooperative to terminate such lease or agreement in the event an obligor fails to make payments or defaults in the performance of covenants required thereunder. Typically, the lender and the cooperative enter into a recognition agreement which establishes the rights and obligations of both parties in the event of a default by the tenant-stockholder. A default under the proprietary lease or occupancy agreement will usually constitute a default under the security agreement between the lender and the tenant-stockholder. The recognition agreement generally provides that, in the event that the tenant-stockholder has defaulted under the proprietary lease or the occupancy agreement is terminated, the cooperative will 75 recognize the lender's lien against proceeds from the sale of the cooperative apartment, subject, however, to the cooperative's right to sums due under such proprietary lease or occupancy agreement. The total amount owed to the cooperative by the tenant-stockholder, which the lender generally cannot restrict and does not monitor, could reduce the value of the collateral below the outstanding principal balance of the cooperative loan and accrued and unpaid interest thereon. Recognition agreements also provide that in the event of a foreclosure on a cooperative loan, the lender must obtain the approval or consent of the cooperative as required by the proprietary lease before transferring the cooperative shares or assigning the proprietary lease. Generally, the lender is not limited in any rights it may have to dispossess the tenant-stockholders. In some states, foreclosure on the cooperative shares is accomplished by a sale in accordance with the provisions of Article 9 of the Uniform Commercial Code and the security agreement relating to those shares. Article 9 of the Uniform Commercial Code requires that a sale be conducted in a "commercially reasonable" manner. Whether a foreclosure sale has been conducted in a "commercially reasonable" manner will depend on the facts in each case. In determining commercial reasonableness, a court will look to the notice given the debtor and the method, manner, time, place and terms of the foreclosure. Generally, a sale conducted according to the usual practice of banks selling similar collateral will be considered reasonably conducted. Article 9 of the Uniform Commercial Code provides that the proceeds of the sale will be applied first to pay the costs and expenses of the sale and then to satisfy the indebtedness secured by the lender's security interest. The recognition agreement, however, generally provides that the lender's right to reimbursement is subject to the right of the cooperatives to receive sums due under the proprietary lease or occupancy agreement. If there are proceeds remaining, the lender must account to the tenant-stockholder for the surplus. Conversely, if a portion of the indebtedness remains unpaid, the tenant-stockholder is generally responsible for the deficiency. BANKRUPTCY LAWS Operation of the Bankruptcy Code and related state laws may interfere with or affect the ability of a lender to realize upon collateral and/or to enforce a deficiency judgment. For example, under the Bankruptcy Code, virtually all actions (including foreclosure actions and deficiency judgment proceedings) to collect a debt are automatically stayed upon the filing of the bankruptcy petition and, often, no interest or principal payments are made during the course of the bankruptcy case. The delay and the consequences thereof caused by the automatic stay can be significant. Also, under the Bankruptcy Code, the filing of a petition in bankruptcy by or on behalf of a junior lienholder would stay the senior lender from proceeding with any foreclosure action. Under the Bankruptcy Code, provided certain substantive and procedural safeguards protective of the lender's secured claim are met, the amount and terms of a mortgage loan secured by a lien on property of the debtor may be modified under certain circumstances. For example, if the loan is undersecured, the outstanding amount of the loan which would remain secured may be reduced to the then-current value of the property (with a corresponding partial reduction of the amount of lender's security interest) pursuant to a confirmed plan, thus leaving the lender a general unsecured creditor for the difference between such value and the outstanding balance of the loan. Other modifications may include the reduction in the amount of each scheduled payment by means of a reduction in the rate of interest and/or an alteration of the repayment schedule (with or without affecting the unpaid principal balance of the loan), and/or by an extension (or shortening) of the term to maturity. Some bankruptcy courts have approved plans, based on the particular facts of the reorganization case, that effected the cure of a mortgage loan default by paying arrearages over a number of years. Also under federal bankruptcy law, a bankruptcy court may permit a debtor through its rehabilitative plan to de-accelerate a secured loan and to reinstate the loan even though the lender accelerated the mortgage loan and final judgment of foreclosure had been entered in state court (provided no sale of the property had yet occurred) prior to the filing of the debtor's petition. This may be done even if the full amount due under the original loan is never repaid. Federal bankruptcy law provides generally that rights and obligations under an unexpired lease of the debtor/lessee may not be terminated or modified at any time after the commencement of a case under the 76 Bankruptcy Code solely on the basis of a provision in the lease to such effect or because of certain other similar events. This prohibition could limit the ability of the trustee for a series of certificates to exercise certain contractual remedies with respect to the leases. In addition, Section 362 of the Bankruptcy Code operates as an automatic stay of, among other things, any act to obtain possession of property from a debtor's estate. This may delay a trustee's exercise of such remedies for a related series of certificates in the event that a related lessee or a related mortgagor becomes the subject of a proceeding under the Bankruptcy Code. For example, a mortgagee would be stayed from enforcing a lease assignment by a mortgagor related to a mortgaged property if the related mortgagor was in a bankruptcy proceeding. The legal proceedings necessary to resolve the issues could be time-consuming and might result in significant delays in the receipt of the assigned rents. Similarly, the filing of a petition in a bankruptcy by or on behalf of a lessee of a mortgaged property would result in a stay against the commencement or continuation of any state court proceeding for past due rent, for accelerated rent, for damages or for a summary eviction order with respect to a default under the lease that occurred prior to the filing of the lessee's petition. Rents and other proceeds of a mortgage loan may also escape an assignment thereof if the assignment is not fully perfected under state law prior to commencement of the bankruptcy proceeding. See "--Leases and Rents." In addition, the Bankruptcy Code generally provides that a trustee or debtor-in-possession may, subject to approval of the court, (a) assume the lease and retain it or assign it to a third party or (b) reject the lease. If the lease is assumed, the trustee in bankruptcy on behalf of the lessee, or the lessee as debtor-in-possession, or the assignee, if applicable, must cure any defaults under the lease, compensate the lessor for its losses and provide the lessor with "adequate assurance" of future performance. Such remedies may be insufficient, however, as the lessor may be forced to continue under the lease with a lessee that is a poor credit risk or an unfamiliar tenant if the lease was assigned, and any assurances provided to the lessor may, in fact, be inadequate. If the lease is rejected, such rejection generally constitutes a breach of the executory contract or unexpired lease immediately before the date of filing the petition. As a consequence, the other party or parties to such lease, such as the mortgagor, as lessor under a lease, would have only an unsecured claim against the debtor for damages resulting from such breach which could adversely affect the security for the related mortgage loan. In addition, pursuant to Section 502(b)(6) of the Bankruptcy Code, a lessor's damages for lease rejection in respect of future rent installments are limited to the rent reserved by the lease, without acceleration, for the greater of one year or 15% of the remaining term of the lease, but not more than three years. If a trustee in bankruptcy on behalf of a lessor, or a lessor as debtor-in-possession, rejects an unexpired lease of real property, the lessee may treat such lease as terminated by such rejection or, in the alternative, the lessee may remain in possession of the leasehold for the balance of such term, and for any renewal or extension of such term that is enforceable by the lessee under applicable nonbankruptcy law. The Bankruptcy Code provides that if a lessee elects to remain in possession after such a rejection of a lease, the lessee may offset any damages occurring after such date caused by the nonperformance of any obligation of the lessor under the lease after such date against rents reserved under the lease. To the extent provided in the related prospectus supplement, the lessee will agree under certain leases to pay all amounts owing thereunder to the master servicer without offset. To the extent that such a contractual obligation remains enforceable against the lessee, the lessee would not be able to avail itself of the rights of offset generally afforded to lessees of real property under the Bankruptcy Code. In a bankruptcy or similar proceeding of a mortgagor, action may be taken seeking the recovery, as a preferential transfer or on other grounds, of any payments made by the mortgagor, or made directly by the related lessee, under the related mortgage loan to the trust fund. Payments on long-term debt may be protected from recovery as preferences if they are payments in the ordinary course of business made on debts incurred in the ordinary course of business. Whether any particular payment would be protected depends upon the facts specific to a particular transaction. A trustee in bankruptcy, in some cases, may be entitled to collect its costs and expenses in preserving or selling the mortgaged property ahead of payment to the lender. In certain circumstances, a debtor in bankruptcy may have the power to grant liens senior to the lien of a mortgage, and analogous state statutes and general principles of equity may also provide a mortgagor with means to halt a foreclosure proceeding or sale and to force a restructuring of a mortgage loan on terms a lender would not otherwise 77 accept. Moreover, the laws of certain states also give priority to certain tax liens over the lien of a mortgage or deed of trust. Under the Bankruptcy Code, if the court finds that actions of the mortgagee have been unreasonable, the lien of the related mortgage may be subordinated to the claims of unsecured creditors. Certain of the mortgagors may be partnerships. The laws governing limited partnerships in certain states provide that the commencement of a case under the Bankruptcy Code with respect to a general partner will cause a person to cease to be a general partner of the limited partnership, unless otherwise provided in writing in the limited partnership agreement. This provision may be construed as an "ipso facto" clause and, in the event of the general partner's bankruptcy, may not be enforceable. Certain limited partnership agreements of the mortgagors may provide that the commencement of a case under the Bankruptcy Code with respect to the related general partner constitutes an event of withdrawal (assuming the enforceability of the clause is not challenged in bankruptcy proceedings or, if challenged, is upheld) that might trigger the dissolution of the limited partnership, the winding up of its affairs and the distribution of its assets, unless (i) at the time there was at least one other general partner and the written provisions of the limited partnership agreement permit the business of the limited partnership to be carried on by the remaining general partner and that general partner does so or (ii) the written provisions of the limited partnership agreement permit the limited partner to agree within a specified time frame (often 60 days) after such withdrawal to continue the business of the limited partnership and to the appointment of one or more general partners and the limited partners do so. In addition, the laws governing general partnerships in certain states provide that the commencement of a case under the Bankruptcy Code or state bankruptcy laws with respect to a general partner of such partnerships triggers the dissolution of such partnership, the winding up of its affairs and the distribution of its assets. Such state laws, however, may not be enforceable or effective in a bankruptcy case. The dissolution of a mortgagor, the winding up of its affairs and the distribution of its assets could result in an acceleration of its payment obligation under a related mortgage loan, which may reduce the yield on the related series of certificates in the same manner as a principal prepayment. In addition, the bankruptcy of the general partner of a mortgagor that is a partnership may provide the opportunity for a trustee in bankruptcy for such general partner, such general partner as a debtor-in-possession, or a creditor of such general partner to obtain an order from a court consolidating the assets and liabilities of the general partner with those of the mortgagor pursuant to the doctrines of substantive consolidation or piercing the corporate veil. In such a case, the mortgaged property could become property of the estate of such bankrupt general partner. Not only would the mortgaged property be available to satisfy the claims of creditors of such general partner, but an automatic stay would apply to any attempt by the trustee to exercise remedies with respect to such mortgaged property. However, such an occurrence should not affect the trustee's status as a secured creditor with respect to the mortgagor or its security in the mortgaged property. ENVIRONMENTAL CONSIDERATIONS General. A lender may be subject to environmental risks when taking a security interest in real property. Of particular concern may be properties that are or have been used for industrial, manufacturing, military, disposal or certain commercial activities. Such environmental risks include the possible diminution of the value of a contaminated property or, as discussed below, potential liability for clean-up costs or other remedial actions and natural resource damages that could exceed the value of the property or the amount of the lender's loan. In certain circumstances, a lender may decide to abandon a contaminated mortgaged property as collateral for its loan rather than foreclose and risk liability for such costs. Superlien Laws. Under certain federal and state laws, contamination on a property may give rise to a lien on the property for clean-up costs. In several states, such a lien has priority over all existing liens, including those of existing mortgages. In these states, the lien of a mortgage may lose its priority to such a "superlien." CERCLA. The federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), imposes strict liability on present and past "owners" and "operators" 78 of contaminated real property for the costs of clean-up. Excluded from CERCLA's definition of "owner" or "operator," however, is a lender that, "without participating in the management" of a facility holds indicia of ownership primarily to protect his security interest in the facility. This secured creditor exemption is intended to provide a lender certain protections from liability under CERCLA as an owner or operator of contaminated property. However, a secured lender may be liable as an "owner" or "operator" of a contaminated mortgaged property if agents or employees of the lender are deemed to have actually participated in the management of such mortgaged property or the operations of the borrower. Such liability may exist even if the lender did not cause or contribute to the contamination and regardless of whether the lender has actually taken possession of a mortgaged property through foreclosure, deed in lieu of foreclosure or otherwise. Moreover, such liability, if incurred, would not be limited to, and could substantially exceed, the original or unamortized principal balance of a loan or to the value of the property securing a loan. In addition, lenders may face potential liability for remediation of releases of petroleum or hazardous wastes from underground storage tanks under the federal Resource Conservation and Recovery Act ("RCRA"), if they are deemed to be the "owners" or "operators" of facilities in which they have a security interest or upon which they have foreclosed. The federal Asset Conservation, Lender Liability and Deposit Insurance Protection Act of 1996 (the "Lender Liability Act") seeks to clarify the actions a lender may take without incurring liability as an "owner" or "operator" of contaminated property or underground petroleum storage tanks. The Lender Liability Act amends CERCLA and RCRA to provide guidance on actions that do or do not constitute "participation in management." However, the protections afforded by these amendments are subject to terms and conditions that have not been clarified by the courts. Moreover, the Lender Liability Act does not, among other things: (1) eliminate potential liability to lenders under CERCLA or RCRA, (2) necessarily reduce credit risks associated with lending to borrowers having significant environmental liabilities or potential liabilities, (3) eliminate environmental risks associated with taking possession of contaminated property or underground storage tanks or assuming control of the operations thereof, or (4) necessarily affect liabilities or potential liabilities under state environmental laws which may impose liability on "owners or operators" but do not incorporate the secured creditor exemption. Certain Other State Laws. Many states have statutes similar to CERCLA and RCRA, and not all of those statutes provide for a secured creditor exemption. In a few states, transfers of some types of properties are conditioned upon cleanup of contamination. In these cases, a lender that becomes the owner of a property through foreclosure, deed in lieu of foreclosure or otherwise, may be required to enter into an agreement with the state providing for the cleanup of the contamination before selling or otherwise transferring the property. Beyond statute-based environmental liability, there exist common law causes of action (for example, actions based on nuisance or on toxic tort resulting in death, personal injury, or damage to property) related to hazardous environmental conditions on a property. While a party seeking to hold a lender liable in such cases may face litigation difficulties, unanticipated or uninsured liabilities of the borrower may jeopardize the borrower's ability to meet its loan obligations. Additional Considerations. The cost of remediating hazardous substance contamination at a property can be substantial. If a lender becomes liable, it can bring an action for contribution against other potentially liable parties, but such parties may be bankrupt or otherwise judgment proof. Accordingly, it is possible that such costs could become a liability of the trust fund and occasion a loss to the certificateholders. To reduce the likelihood of such a loss, unless otherwise specified in the prospectus supplement, the pooling and servicing agreement will provide that the master servicer, acting on behalf of the trustee, may not take possession of a mortgaged property or take over its operation unless the master servicer, based solely on a report (as to environmental matters) prepared by a person who regularly conducts environmental site assessments, has made the determination that it is appropriate to do so, as described under "Description of the Pooling and Servicing Agreements--Realization upon Defaulted Mortgage Loans." 79 If a lender forecloses on a mortgage secured by a property, the operations of which are subject to environmental laws and regulations, the lender may be required to operate the property in accordance with those laws and regulations. Such compliance may entail substantial expense, especially in the case of industrial or manufacturing properties. In addition, a lender may be obligated to disclose environmental conditions on a property to government entities and/or to prospective buyers (including prospective buyers at a foreclosure sale or following foreclosure). Such disclosure may result in the imposition of certain investigation or remediation requirements and/or decrease the amount that prospective buyers are willing to pay for the affected property, sometimes substantially, and thereby decrease the ability of the lender to recoup its investment in a loan upon foreclosure. DUE-ON-SALE AND DUE-ON-ENCUMBRANCE Certain of the mortgage loans may contain "due-on-sale" and "due-on-encumbrance" clauses that purport to permit the lender to accelerate the maturity of the loan if the borrower transfers or encumbers the related mortgaged property. In recent years, court decisions and legislative actions placed substantial restrictions on the right of lenders to enforce such clauses in many states. By virtue, however, of the Garn-St. Germain Depository Institutions Act of 1982 (the "Garn Act"), effective October 15, 1982 (which purports to preempt state laws that prohibit the enforcement of due-on-sale clauses by providing, among other matters, that "due-on-sale" clauses in certain loans made after the effective date of the Garn Act are enforceable, within certain limitations as set forth in the Garn Act and the regulations promulgated thereunder), a master servicer may nevertheless have the right to accelerate the maturity of a mortgage loan that contains a "due-on-sale" provision upon transfer of an interest in the property, regardless of the master servicer's ability to demonstrate that a sale threatens its legitimate security interest. SUBORDINATE FINANCING Certain of the mortgage loans may not restrict the ability of the borrower to use the mortgaged property as security for one or more additional loans. Where a borrower encumbers a mortgaged property with one or more junior liens, the senior lender is subjected to additional risk. First, the borrower may have difficulty servicing and repaying multiple loans. Moreover, if the subordinate financing permits recourse to the borrower (as is frequently the case) and the senior loan does not, a borrower may have more incentive to repay sums due on the subordinate loan. Second, acts of the senior lender that prejudice the junior lender or impair the junior lender's security may create a superior equity in favor of the junior lender. For example, if the borrower and the senior lender agree to an increase in the principal amount of or the interest rate payable on the senior loan, the senior lender may lose its priority to the extent any existing junior lender is harmed or the borrower is additionally burdened. Third, if the borrower defaults on the senior loan and/or any junior loan or loans, the existence of junior loans and actions taken by junior lenders can impair the security available to the senior lender and can interfere with or delay the taking of action by the senior lender. Moreover, the bankruptcy of a junior lender may operate to stay foreclosure or similar proceedings by the senior lender. DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS Notes and mortgages may contain provisions that obligate the borrower to pay a late charge or additional interest if payments are not timely made, and in some circumstances, may prohibit prepayments for a specified period and/or condition prepayments upon the borrower's payment of prepayment fees or yield maintenance penalties. In certain states, there are or may be specific limitations upon the late charges which a lender may collect from a borrower for delinquent payments. Certain states also limit the amounts that a lender may collect from a borrower as an additional charge if the loan is prepaid. In addition, the enforceability of provisions that provide for prepayment fees or penalties upon an involuntary prepayment is unclear under the laws of many states. CERTAIN LAWS AND REGULATIONS; TYPES OF MORTGAGED PROPERTIES The mortgaged properties will be subject to compliance with various federal, state and local statutes and regulations. Failure to comply (together with an inability to remedy any such failure) could result in 80 material diminution in the value of a mortgaged property which could, together with the possibility of limited alternative uses for a particular mortgaged property (e.g., a nursing or convalescent home or hospital), result in a failure to realize the full principal amount of the related mortgage loan. Mortgages on properties which are owned by the mortgagor under a condominium form of ownership are subject to the declaration, by-laws and other rules and regulations of the condominium association. Mortgaged properties which are hotels or motels may present additional risk in that hotels and motels are typically operated pursuant to franchise, management and operating agreements which may be limited by the operator. In addition, the transferability of the hotel's liquor and other licenses to an entity acquiring the hotel either through purchases or foreclosure is subject to the vagaries of local law requirements. In addition, mortgaged properties which are multifamily residential properties may be subject to rent control laws, which could impact the future cash flows of such properties. APPLICABILITY OF USURY LAWS Title V of the Depository Institutions Deregulation and Monetary Control Act of 1980 ("Title V") provides that state usury limitations shall not apply to certain types of residential (including multifamily) first mortgage loans originated by certain lenders after March 31, 1980. Title V authorized any state to reimpose interest rate limits by adopting, before April 1, 1983, a law or constitutional provision that expressly rejects application of the federal law. In addition, even where Title V is not so rejected, any state is authorized by the law to adopt a provision limiting discount points or other charges on mortgage loans covered by Title V. Certain states have taken action to reimpose interest rate limits and/or to limit discount points or other charges. No mortgage loan originated in any state in which application of Title V has been expressly rejected or a provision limiting discount points or other charges has been adopted will (if originated after that rejection or adoption) be eligible for inclusion in a trust fund unless (i) such mortgage loan provides for such interest rate, discount points and charges as are permitted in such state or (ii) such mortgage loan provides that the terms thereof are to be construed in accordance with the laws of another state under which such interest rate, discount points and charges would not be usurious and the borrower's counsel has rendered an opinion that such choice of law provision would be given effect. SERVICEMEMBERS CIVIL RELIEF ACT Under the terms of the Servicemembers Civil Relief Act (the "Relief Act"), a borrower who enters military service after the origination of such borrower's mortgage loan (including a borrower who was in reserve status and is called to active duty after origination of the mortgage loan), upon notification by such borrower, may not be charged interest (including fees and charges) above an annual rate of 6% during the period of such borrower's active duty status. In addition to adjusting the interest, the lender must forgive any such interest in excess of 6%, unless a court or administrative agency orders otherwise upon application of the lender. The Relief Act applies to individuals who are members of the Army, Navy, Air Force, Marines, National Guard, Reserves, Coast Guard and officers of the U.S. Public Health Service or the National Oceanic and Atmospheric Administration assigned to duty with the military. Because the Relief Act applies to individuals who enter military service (including reservists who are called to active duty) after origination of the related mortgage loan, no information can be provided as to the number of loans with individuals as borrowers that may be affected by the Relief Act. Application of the Relief Act would adversely affect, for an indeterminate period of time, the ability of any servicer to collect full amounts of interest on certain of the mortgage loans. Any shortfalls in interest collections resulting from the application of the Relief Act would result in a reduction of the amounts distributable to the holders of the related series of certificates, and would not be covered by advances or, unless otherwise specified in the prospectus supplement, any form of credit support provided in connection with such certificates. In addition, the Relief Act imposes limitations that would impair the ability of the servicer to foreclose on an affected mortgage loan during the borrower's period of active duty status and, under certain circumstances, during an additional three-month period thereafter. AMERICANS WITH DISABILITIES ACT Under Title III of the Americans with Disabilities Act of 1990 and rules promulgated thereunder (collectively, the "ADA"), in order to protect individuals with disabilities, public accommodations (such 81 as hotels, restaurants, shopping centers, hospitals, schools and social service center establishments) must remove architectural and communication barriers that are structural in nature from existing places of public accommodation to the extent "readily achievable." In addition, under the ADA, alterations to a place of public accommodation or a commercial facility are to be made so that, to the maximum extent feasible, such altered portions are readily accessible to and usable by disabled individuals. The "readily achievable" standard takes into account, among other factors, the financial resources of the affected site, owner, landlord or other applicable person. The requirements of the ADA may also be imposed on a foreclosing lender who succeeds to the interest of the borrower as owner or landlord. Since the "readily achievable" standard may vary depending on the financial condition of the owner or landlord, a foreclosing lender who is financially more capable than the borrower of complying with the requirements of the ADA may be subject to more stringent requirements than those to which the borrower is subject. FORFEITURE IN DRUG, RICO AND MONEY LAUNDERING VIOLATIONS Federal law provides that property purchased or improved with assets derived from criminal activity or otherwise tainted, or used in the commission of certain offenses, can be seized and ordered forfeited to the United States of America. The offenses which can trigger such a seizure and forfeiture include, among others, violations of the Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy Act, the anti-money laundering laws and regulations, including the USA Patriot Act of 2001 and the regulations issued pursuant to that Act, as well as the narcotic drug laws. In many instances, the United States may seize the property even before a conviction occurs. In the event of a forfeiture proceeding, a lender may be able to establish its interest in the property by proving that (1) its mortgage was executed and recorded before the commission of the illegal conduct from which the assets used to purchase or improve the property were derived or before the commission of any other crime upon which the forfeiture is based, or (2) the lender, at the time of the execution of the mortgage, "did not know or was reasonably without cause to believe that the property was subject to forfeiture." However, there is no assurance that such a defense will be successful. FEDERAL DEPOSIT INSURANCE ACT; COMMERCIAL MORTGAGE LOAN SERVICING Under the Federal Deposit Insurance Act, federal bank regulatory authorities, including the Office of the Comptroller of the Currency (OCC), have the power to determine if any activity or contractual obligation of a bank constitutes an unsafe or unsound practice or violates a law, rule or regulation applicable to such bank. If Wachovia Bank, National Association (Wachovia) or another bank is a servicer and/or a mortgage loan seller for a series and the OCC, which has primary regulatory authority over Wachovia and other banks, were to find that any obligation of Wachovia or such other bank under the related pooling and servicing agreement or other agreement or any activity of Wachovia or such other bank constituted an unsafe or unsound practice or violated any law, rule or regulation applicable to it, the OCC could order Wachovia or such other bank, among other things, to rescind such contractual obligation or terminate such activity. In March 2003, the OCC issued a temporary cease and desist order against a national bank (which was converted to a consent order in April 2003) asserting that, contrary to safe and sound banking practices, the bank was receiving inadequate servicing compensation in connection with several credit card securitizations sponsored by its affiliates because of the size and subordination of the contractual servicing fee, and ordered the bank, among other things, to immediately resign as servicer, to cease all servicing activity within 120 days and to immediately withhold funds from collections in an amount sufficient to compensate it for its actual costs and expenses of servicing (notwithstanding the priority of payments in the related securitization agreements). Although, at the time the 2003 temporary cease and desist order was issued, no conservator or receiver had been appointed with respect to the national bank, the national bank was already under a consent cease and desist order issued in May 2002 covering numerous matters, including a directive that the bank develop and submit a plan of disposition providing for the sale or liquidation of the bank, imposing general prohibitions on the acceptance of new credit card accounts and deposits in general, and placing significant restrictions on the bank's transactions with its affiliates. 82 While the depositor does not believe that the OCC would consider, with respect to any series, (i) provisions relating to Wachovia or another bank acting as a servicer under the related pooling and servicing agreement, (ii) the payment or amount of the servicing compensation payable to Wachovia or another bank or (iii) any other obligation of Wachovia or another bank under the related pooling and servicing agreement or other contractual agreement under which the depositor may purchase mortgage loans from Wachovia or another bank, to be unsafe or unsound or violative of any law, rule or regulation applicable to it, there can be no assurance that the OCC in the future would not conclude otherwise. If the OCC did reach such a conclusion, and ordered Wachovia or another bank to rescind or amend any such agreement, payments on certificates could be delayed or reduced. 83 MATERIAL FEDERAL INCOME TAX CONSEQUENCES GENERAL The following is a general discussion of the anticipated material federal income tax consequences of the purchase, ownership and disposition of offered certificates. This discussion is directed solely to certificateholders that hold the certificates as capital assets within the meaning of section 1221 of the Code and it does not purport to discuss all federal income tax consequences that may be applicable to particular categories of investors, some of which (such as banks, insurance companies, foreign investors, tax exempt organizations, dealers in securities or currencies, mutual funds, real estate investment trusts, natural persons, cash method taxpayers, S corporations, estates and trusts, investors that hold the offered certificates as part of a hedge, straddle or an integrated or conversion transaction, or investors whose functional currency is not the United States dollar) may be subject to special rules. Further, the authorities on which this discussion, and the opinion referred to below, are based are subject to change or differing interpretations, which could apply retroactively. Taxpayers and preparers of tax returns (including those filed by any REMIC or other issuer) should be aware that under applicable Treasury regulations a provider of advice on specific issues of law is not considered an income tax return preparer unless the advice is given with respect to the consequences of contemplated actions and is directly relevant to the determination of an entry on a tax return. Accordingly, taxpayers should consult their own tax advisors and tax return preparers regarding the preparation of any item on a tax return, even where the anticipated tax treatment has been discussed herein. In addition to the federal income tax consequences described herein, potential investors should consider the state and local tax consequences, if any, of the purchase, ownership and disposition of offered certificates. See "State and Other Tax Consequences." Certificateholders are advised to consult their own tax advisors concerning the federal, state, local or other tax consequences to them of the purchase, ownership and disposition of offered certificates. The following discussion addresses securities of two general types: (i) REMIC Certificates representing interests in a trust, or a portion thereof, that the master servicer or the trustee will elect to have treated as a real estate mortgage investment conduit ("REMIC") under sections 860A through 860G (the "REMIC Provisions") of the Code and (ii) grantor trust certificates representing interests in a grantor trust fund as to which no such election will be made. The prospectus supplement for each series of certificates will indicate whether a REMIC election (or elections) will be made for the related trust or applicable portion thereof and, if such an election is to be made, will identify all "regular interests" and "residual interests" in each REMIC. For purposes of this tax discussion, references to a "certificateholder" or a "holder" are to the beneficial owner of a certificate. The following discussion is limited in applicability to offered certificates. Moreover, this discussion applies only to the extent that mortgage assets held by a trust fund consist solely of mortgage loans. To the extent that other mortgage assets, including REMIC Certificates and mortgage pass-through certificates, are to be held by a trust, the tax consequences associated with the inclusion of such assets will be disclosed in the related prospectus supplement. In addition, if cash flow agreements, other than guaranteed investment contracts, are included in a trust, the tax consequences associated with any cash flow agreements also will be disclosed in the related prospectus supplement. See "Description of the Trust Funds--Cash Flow Agreements." Furthermore, the following discussion is based in part upon the rules governing original issue discount that are set forth in sections 1271-1273 and 1275 of the Code and in the Treasury regulations issued thereunder (the "OID Regulations"), and in part upon the REMIC Provisions and the Treasury regulations issued thereunder (the "REMIC Regulations"). The OID Regulations do not adequately address certain issues relevant to, and in some instances provide that they are not applicable to, securities such as the certificates. REMICS Classification of REMICs. It is the opinion of Cadwalader, Wickersham & Taft LLP, counsel to the depositor, that upon the issuance of each series of REMIC Certificates, assuming compliance with all provisions of the related pooling and servicing agreement and based upon the law on the date thereof, for 84 federal income tax purposes the related trust will qualify as one or more REMICs and the REMIC Certificates offered will be considered to evidence ownership of "regular interests" ("REMIC Regular Certificates") or "residual interests" ("REMIC Residual Certificates") under the REMIC Provisions. If an entity electing to be treated as a REMIC fails to comply with one or more of the ongoing requirements of the Code for such status during any taxable year, the Code provides that the entity will not be treated as a REMIC for such year and thereafter. In that event, such entity may be taxable as a corporation under Treasury regulations, and the related REMIC Certificates may not be accorded the status or given the tax treatment described below. Although the Code authorizes the Treasury Department to issue regulations providing relief in the event of an inadvertent termination of REMIC status, no such regulations have been issued. Any such relief, moreover, may be accompanied by sanctions, such as the imposition of a corporate tax on all or a portion of the trust fund's income for the period during which the requirements for such status are not satisfied. The pooling and servicing agreement with respect to each REMIC will include provisions designed to maintain the trust status as a REMIC under the REMIC Provisions. It is not anticipated that the status of any trust as a REMIC will be terminated. Characterization of Investments in REMIC Certificates. In general, with respect to each series of certificates for which a REMIC election is made, certificates held by a real estate investment trust will constitute "real estate assets" within the meaning of section 856(c)(5)(B) of the Code, and each such series of certificates will constitute assets described in section 7701(a)(19)(C) of the Code in the same proportion that the assets of the REMIC underlying such certificates would be so treated. However, to the extent that the REMIC assets constitute mortgages on property not used for residential or certain other prescribed purposes, the REMIC Certificates will not be treated as assets qualifying under section 7701(a)(19)(C)(v) of the Code. Moreover, if 95% or more of the assets of the REMIC qualify for any of the foregoing treatments at all times during a calendar year, the REMIC Certificates will qualify for the corresponding status in their entirety for that calendar year. Interest on the REMIC Regular Certificates and income allocated to the class of REMIC Residual Certificates will be interest described in section 856(c)(3)(B) of the Code to the extent that such certificates are treated as "real estate assets" within the meaning of section 856(c)(5)(B) of the Code. In addition, generally the REMIC Regular Certificates will be "qualified mortgages" within the meaning of section 860G(a)(3) of the Code. The determination as to the percentage of the REMIC's assets that constitute assets described in the foregoing sections of the Code will be made with respect to each calendar quarter based on the average adjusted basis of each category of the assets held by the REMIC during such calendar quarter. The servicer or the trustee will report those determinations to certificateholders in the manner and at the times required by the applicable Treasury regulations. The assets of the REMIC will include, in addition to mortgage loans, payments on mortgage loans held pending distribution on the REMIC Certificates and property acquired by foreclosure held pending sale, and may include amounts in reserve accounts. It is unclear whether property acquired by foreclosure held pending sale and amounts in reserve accounts would be considered to be part of the mortgage loans, or whether such assets otherwise would receive the same treatment as the mortgage loans for purposes of all of the foregoing sections. The related prospectus supplement will describe whether any mortgage loans included in the trust fund will not be treated as assets described in the foregoing sections. The REMIC regulations do provide that payments on mortgage loans held pending distribution are considered part of the mortgage loans. Tiered REMIC Structures. For certain series of REMIC Certificates, two or more separate elections may be made to treat designated portions of the related trust fund as separate or tiered REMICs for federal income tax purposes. Upon the issuance of any such series of REMIC Certificates, counsel to the depositor will deliver its opinion generally to the effect that, assuming compliance with all provisions of the related pooling and servicing agreement, the tiered REMICs will each qualify as a REMIC and the REMIC Certificates issued by the tiered REMICs, respectively, will be considered to evidence ownership of REMIC Regular Certificates or REMIC Residual Certificates in the related REMIC within the meaning of the REMIC Provisions. For purposes of determining whether the REMIC Certificates are "real estate assets" within the meaning of section 856(c)(5)(B) of the Code, "loans secured by an interest in real property" under 85 section 7701(a)(19)(C) of the Code, and whether the income generated by these certificates is interest described in section 856(c)(3)(B) of the Code, the tiered REMICs will be treated as one REMIC. TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES General. Except as otherwise stated in this discussion, REMIC Regular Certificates will be treated for federal income tax purposes as debt instruments issued by the REMIC and not as ownership interests in the REMIC or its assets. Moreover, holders of REMIC Regular Certificates that otherwise report income under a cash method of accounting will be required to report income with respect to REMIC Regular Certificates under an accrual method. Original Issue Discount. Certain REMIC Regular Certificates may be issued with "original issue discount" within the meaning of section 1273(a) of the Code. Any holders of REMIC Regular Certificates issued with original issue discount generally will be required to include original issue discount in income as it accrues, in accordance with the method described below, in advance of the receipt of the cash attributable to such income. In addition, section 1272(a)(6) of the Code provides special rules applicable to REMIC Regular Certificates and certain other debt instruments issued with original issue discount. Final regulations have not been issued under that section. The Code requires that a prepayment assumption be used with respect to mortgage loans held by a REMIC in computing the accrual of original issue discount on REMIC Regular Certificates issued by that REMIC, and that adjustments be made in the amount and rate of accrual of such discount to reflect differences between the actual prepayment rate and the prepayment assumption. The prepayment assumption is to be determined in a manner prescribed in Treasury regulations; as noted above, those regulations have not been issued. The conference committee report accompanying the Tax Reform Act of 1986 indicates that the regulations will provide that the prepayment assumption used with respect to a REMIC Regular Certificate must be the same as that used in pricing the initial offering. The prepayment assumption used in reporting original issue discount for each series of REMIC Regular Certificates will be consistent with this standard and will be disclosed in the related prospectus supplement. However, neither the depositor nor any other person will make any representation that the mortgage loans will in fact prepay at a rate conforming to the prepayment assumption or at any other rate. The original issue discount, if any, on a REMIC Regular Certificate will be the excess of its stated redemption price at maturity over its issue price. The issue price of a particular class of REMIC Regular Certificates will be the first cash price at which a substantial amount of REMIC Regular Certificates of that class is sold (excluding sales to bond houses, brokers and underwriters). If less than a substantial amount of a particular class of REMIC Regular Certificates is sold for cash on or prior to the date of their initial issuance, the issue price will be the fair market value on the issuance date. Under the OID Regulations, the stated redemption price of a REMIC Regular Certificate is equal to the total of all payments to be made on such certificate other than "qualified stated interest." "Qualified stated interest" includes interest payable unconditionally at least annually at a single fixed rate, at a "qualified floating rate," or at an "objective rate," or a combination of a single fixed rate and one or more "qualified floating rates," or one "qualified inverse floating rates," or a combination of "qualified floating rates" that does not operate in a manner that accelerates or defers interest payments on such REMIC Regular Certificates. It is not entirely clear under the Code that interest paid to the REMIC Regular Certificates that are subject to early termination through prepayments and that have limited enforcement rights should be considered "qualified stated interest". However, unless disclosed otherwise in the prospectus supplement, the trust fund intends to treat stated interest as "qualified stated interest" for determining if, and to what extent, the REMIC Regular Certificates have been issued with original issue discount. Nevertheless, holders of the REMIC Regular Certificates should consult their own tax advisors with respect to whether interest in the REMIC Regular Certificates qualifies as "qualified stated interest" under the Code. In the case of REMIC Regular Certificates bearing adjustable interest rates, the determination of the total amount of original issue discount and the timing of the inclusion thereof will vary according to the characteristics of such REMIC Regular Certificates. If the original issue discount rules apply to such certificates, the related prospectus supplement will describe the manner in which these rules will be applied in preparing information returns to the certificateholders and the Internal Revenue Service (the "IRS"). 86 In addition, if the accrued interest to be paid on the first distribution date is computed with respect to a period that begins prior to the issuance of the certificates, a portion of the purchase price paid for a REMIC Regular Certificate will reflect accrued interest. The OID Regulations state that all or some portion of such accrued interest may be treated as a separate asset the cost of which is recovered entirely out of interest paid on the first distribution date. It is unclear how an election to do so would be made under the OID Regulations and whether such an election could be made unilaterally by a certificateholder. Notwithstanding the general definition of original issue discount, original issue discount on a REMIC Regular Certificate will be considered to be de minimis if it is less than 0.25% of the stated redemption price of the REMIC Regular Certificate multiplied by its weighted average life. For this purpose, the weighted average life of the REMIC Regular Certificate is computed as the sum of the amounts determined, as to each payment included in the stated redemption price of such REMIC Regular Certificate, by multiplying the number of complete years, rounding down for partial years, from the issue date until any payment is expected to be made (taking into account the prepayment assumption) by a fraction, the numerator of which is the amount of the payment, and the denominator of which is the stated redemption price at maturity. Under the OID Regulations, original issue discount of only a de minimis amount will be included in income as each payment of stated principal is made, based on the product of the total amount of such de minimis original issue discount and a fraction, the numerator of which is the amount of such principal payment and the denominator of which is the outstanding stated principal amount of the REMIC Regular Certificate. The OID Regulations also would permit a certificateholder to elect to accrue de minimis original issue discount into income currently based on a constant yield method. See "--Taxation of Owners of REMIC Regular Certificates--Market Discount" for a description of such election under the OID Regulations. If original issue discount on a REMIC Regular Certificate is in excess of a de minimis amount, the holder of such certificate must include in ordinary gross income the sum of the "daily portions" of original issue discount for each day during its taxable year on which it held such REMIC Regular Certificate, including the purchase date but excluding the disposition date. In the case of an original holder of a REMIC Regular Certificate, the daily portions of original issue discount will be determined as follows. As to each "accrual period," that is, each period that ends on a date that corresponds to a distribution date and begins on the first day following the immediately preceding accrual period, a calculation will be made of the portion of the original issue discount that accrued during such accrual period. The portion of original issue discount that accrues in any accrual period will equal the excess, if any, of (i) the sum of (a) the present value, as of the end of the accrual period, of all of the distributions remaining to be made on the REMIC Regular Certificate, if any, in future periods and (b) the distributions made on such REMIC Regular Certificate during the accrual period of amounts included in the stated redemption price, over (ii) the adjusted issue price of the REMIC Regular Certificate at the beginning of the accrual period. The present value of the remaining distributions referred to in the preceding sentence will be calculated assuming that distributions on the REMIC Regular Certificate will be received in future periods based on the mortgage loans being prepaid at a rate equal to the prepayment assumption and using a discount rate equal to the original yield to maturity of the certificate. For these purposes, the original yield to maturity of the certificate will be calculated based on its issue price and assuming that distributions on the certificate will be made in all accrual periods based on the mortgage loans being prepaid at a rate equal to the prepayment assumption. The adjusted issue price of a REMIC Regular Certificate at the beginning of any accrual period will equal the issue price of such certificate, increased by the aggregate amount of original issue discount that accrued with respect to such certificate in prior accrual periods, and reduced by the amount of any distributions made on such REMIC Regular Certificate in prior accrual periods of amounts included in the stated redemption price. The original issue discount accruing during any accrual period, computed as described above, will be allocated ratably to each day during the accrual period to determine the daily portion of original issue discount for such day. A subsequent purchaser of a REMIC Regular Certificate that purchases such certificate at a cost (excluding any portion of such cost attributable to accrued qualified stated interest) less than its remaining stated redemption price will also be required to include in gross income the daily portions of any original issue discount with respect to such certificate. However, each such daily portion will be reduced, if such 87 cost is in excess of its "adjusted issue price," in proportion to the ratio such excess bears to the aggregate original issue discount remaining to be accrued on such REMIC Regular Certificate. The adjusted issue price of a REMIC Regular Certificate on any given day equals the sum of (i) the adjusted issue price (or, in the case of the first accrual period, the issue price) of the certificate at the beginning of the accrual period, including the first day and (ii) the daily portions of original issue discount for all days during the related accrual period up to the day of determination. The Treasury Department proposed regulations on August 24, 2004 that create a special rule for accruing original issue discount on REMIC Regular Certificates providing for a delay between record and payment dates, such that the period over which original issue discount accrues coincides with the period over which the certificateholder's right to interest payment accrues under the governing contract provisions rather than over the period between distribution dates. If the proposed regulations are adopted in the same form as proposed, certificateholders would be required to accrue interest from the issue date to the first record date, but would not be required to accrue interest after the last record date. The proposed regulations are limited to REMIC Regular Certificates with delayed payment for periods of fewer than 32 days. The proposed regulations are proposed to apply to any REMIC Regular Certificate issued after the date the final regulations are published in the Federal Register. Market Discount. A certificateholder that purchases a REMIC Regular Certificate at a market discount, that is, in the case of a REMIC Regular Certificate issued without original issue discount, at a purchase price less than its remaining stated principal amount, or in the case of a REMIC Regular Certificate issued with original issue discount, at a purchase price less than its adjusted issue price, will recognize gain upon receipt of each distribution representing stated redemption price. In particular, under section 1276 of the Code such a certificateholder generally will be required to allocate the portion of each such distribution representing stated redemption price first to accrued market discount not previously included in income, and to recognize ordinary income to that extent. A certificateholder may elect to include market discount in income currently as it accrues rather than including it on a deferred basis in accordance with the foregoing. If the election is made, it will apply to all market discount bonds acquired by such certificateholder on or after the first day of the taxable year to which the election applies. In addition, the OID Regulations permit a certificateholder to elect to accrue all interest, discount and premium in income as interest, based on a constant yield method. If such an election were made with respect to a REMIC Regular Certificate with market discount, the certificateholder would be deemed to have made an election to currently include market discount in income with respect to all other debt instruments having market discount that such certificateholder acquires during the taxable year of the election or thereafter, and possibly previously acquired instruments. Similarly, a certificateholder that made this election for a certificate that is acquired at a premium would be deemed to have made an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that such certificateholder owns or acquires. See "--Taxation of Owners of REMIC Regular Certificates--Premium." Each of these elections to accrue interest, discount and premium with respect to a certificate on a constant yield method or as interest would be irrevocable. Market discount with respect to a REMIC Regular Certificate will be considered to be de minimis for purposes of section 1276 of the Code if such market discount is less than 0.25% of the remaining stated redemption price of such REMIC Regular Certificate multiplied by the number of full years to maturity remaining after the date of its purchase. In interpreting a similar rule with respect to original issue discount on obligations payable in installments, the OID Regulations refer to the weighted average maturity of obligations, and it is likely that the same rule will be applied with respect to market discount, presumably taking into account the prepayment assumption. If market discount is treated as de minimis under this rule, it appears that the actual discount would be treated in a manner similar to original issue discount of a de minimis amount. See "--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount." Such treatment would result in discount being included in income at a slower rate than discount would be required to be included in income using the method described above. Section 1276(b)(3) of the Code specifically authorizes the Treasury Department to issue regulations providing for the method for accruing market discount on debt instruments, the principal of which is payable in more than one installment. Until regulations are issued, the rules described in the committee 88 report accompanying the Tax Reform Act of 1986 apply. That committee report indicates that REMIC Regular Certificates should accrue market discount either: o on the basis of a constant yield method; o in the case of a REMIC Regular Certificate issued without original issue discount, in an amount that bears the same ratio to the total remaining market discount as the stated interest paid during the accrual period bears to the total amount of stated interest remaining to be paid as of the beginning of the accrual period; or o in the case of a REMIC Regular Certificate issued with original issue discount, in an amount that bears the same ratio to the total remaining market discount as the original issue discount accrued in the accrual period bears to the total original issue discount remaining on the REMIC Regular Certificate at the beginning of the accrual period. Furthermore, the prepayment assumption used in calculating the accrual of original issue discount is also used in calculating the accrual of market discount. Because the regulations referred to in this paragraph have not been issued, it is not possible to predict what effect such regulations might have on the tax treatment of a REMIC Regular Certificate purchased at a discount in the secondary market. To the extent that REMIC Regular Certificates provide for monthly or other periodic distributions throughout their term, the effect of these rules may be to require market discount to be includible in income at a rate that is not significantly slower than the rate at which such discount would accrue if it were original issue discount. Moreover, in any event a holder of a REMIC Regular Certificate generally will be required to treat a portion of any gain on the sale or exchange of such certificate as ordinary income to the extent of the market discount accrued to the date of disposition under one of the foregoing methods, less any accrued market discount previously reported as ordinary income. Further, under section 1277 of the Code a holder of a REMIC Regular Certificate may be required to defer a portion of its interest deductions for the taxable year attributable to any indebtedness incurred or continued to purchase or carry a REMIC Regular Certificate purchased with market discount. For these purposes, the de minimis rule referred to above applies. Any such deferred interest expense would not exceed the market discount that accrues during such taxable year and is, in general, allowed as a deduction not later than the year in which such market discount is includible in income. If such holder elects to include market discount in income currently as it accrues on all market discount instruments acquired by such holder in that taxable year or thereafter, the interest deferral rule described above will not apply. Premium. A REMIC Regular Certificate purchased at a cost (excluding accrued qualified stated interest) greater than its remaining stated redemption price will be considered to be purchased at a premium. The holder of such a REMIC Regular Certificate may elect under section 171 of the Code to amortize such premium against qualified stated interest under the constant yield method over the life of the certificate. If made, such an election will apply to all debt instruments having amortizable bond premium that the holder owns or subsequently acquires. Amortizable premium will be treated as an offset to interest income on the related debt instrument, rather than as a separate interest deduction. The OID Regulations also permit certificateholders to elect to include all interest, discount and premium in income based on a constant yield method, further treating the certificateholder as having made the election to amortize premium generally. See "--Taxation of Owners of REMIC Regular Certificates--Market Discount." The committee report accompanying the Tax Reform Act of 1986 states that the same rules that apply to accrual of market discount will also apply in amortizing bond premium under section 171 of the Code. Realized Losses. Under section 166 of the Code, both noncorporate holders of the REMIC Regular Certificates that acquire such certificates in connection with a trade or business and corporate holders of the REMIC Regular Certificates should be allowed to deduct, as ordinary losses, any losses sustained during a taxable year in which their certificates become wholly or partially worthless as the result of one or more realized losses on the residential loans. However, it appears that a noncorporate holder that does not acquire a REMIC Regular Certificate in connection with a trade or business will not be entitled to deduct a loss under section 166 of the Code until such holder's certificate becomes wholly worthless and 89 that the loss will be characterized as a short-term capital loss. Losses sustained on the mortgage loans may be "events which have occurred before the close of the accrued period" that can be taken into account under Code section 1272(a)(6) for purposes of determining the amount of OID that accrues on a certificate. The holder of a REMIC Regular Certificate eventually will recognize a loss or reduction in income attributable to previously accrued and included income that as the result of a realized loss ultimately will not be realized, but the law is unclear with respect to the timing and character of such loss or reduction in income. Sales of REMIC Regular Certificates. If a REMIC Regular Certificate is sold, the selling certificateholder will recognize gain or loss equal to the difference between the amount realized on the sale and its adjusted basis in the REMIC Regular Certificate. The adjusted basis of a REMIC Regular Certificate generally will equal the cost of such REMIC Regular Certificate to such certificateholder, increased by income reported by such certificateholder with respect to such REMIC Regular Certificate, including original issue discount and market discount income, and reduced (but not below zero) by distributions on such REMIC Regular Certificate received by such certificateholder and by any amortized premium. Except as provided in the following two paragraphs, any such gain or loss will be capital gain or loss, provided such REMIC Regular Certificate is held as a capital asset within the meaning of section 1221 of the Code. Gain from the sale of a REMIC Regular Certificate that might otherwise be capital gain will be treated as ordinary income to the extent such gain does not exceed the excess, if any, of: o the amount that would have been includible in the seller's income with respect to such REMIC Regular Certificate assuming that income had accrued thereon at a rate equal to 110% of the "applicable Federal rate" determined as of the date of purchase of such REMIC Regular Certificate, over o the amount of ordinary income actually includible in the seller's income prior to such sale. In addition, gain recognized on the sale of a REMIC Regular Certificate by a seller who purchased such REMIC Regular Certificate at a market discount will be taxable as ordinary income in an amount not exceeding the portion of such discount that accrued during the period such REMIC Regular Certificate was held by such holder, reduced by any market discount included in income under the rules described above under "--Taxation of Owners of REMIC Regular Certificates--Market Discount" and "--Premium." REMIC Regular Certificates will be "evidences of indebtedness" within the meaning of section 582(c)(1) of the Code, so that gain or loss recognized from the sale of a REMIC Regular Certificate by a bank or thrift institution to which such section applies will be ordinary income or loss. A portion of any gain from the sale of a REMIC Regular Certificate that might otherwise be capital gain may be treated as ordinary income to the extent that such certificate is held as part of a "conversion transaction" within the meaning of section 1258 of the Code. A conversion transaction generally is one in which the taxpayer has taken two or more positions in the same or similar property that reduce or eliminate market risk and substantially all of the taxpayer's return is attributable to the time value of money. The amount of gain so realized in a conversion transaction that is recharacterized as ordinary income generally will not exceed the amount of interest that would have accrued on the taxpayer's net investment at 120% of the appropriate "applicable Federal rate" at the time the taxpayer enters into the conversion transaction, subject to appropriate reduction for prior inclusion of interest and other ordinary income items from the transaction. Finally, a taxpayer may elect to have net capital gain taxed at ordinary income rates rather than capital gains rates in order to include such net capital gain in total net investment income for the taxable year, for purposes of the rule that limits the deduction of interest on indebtedness incurred to purchase or carry property held for investment to a taxpayer's net investment income. Foreign Investors in REMIC Regular Certificates. A REMIC Regular Certificateholder that is not a U.S. Person (defined below) and is not subject to federal income tax as a result of any direct or indirect 90 connection to the United States in addition to its ownership of a REMIC Regular Certificate will not, unless otherwise stated in the related prospectus supplement, be subject to United States federal income or withholding tax in respect of a distribution on a REMIC Regular Certificate, provided that the holder complies to the extent necessary with certain identification requirements (including delivery of a statement, signed under penalties of perjury, certifying that such certificateholder is not a United States Person and providing the name and address of such certificateholder). For these purposes, "U.S. Person" means: o a citizen or resident of the United States; o a corporation or partnership (or other entity treated as a corporation or a partnership for United States Federal income tax purposes) created or organized in, or under the laws of, the United States, any State thereof or the District of Columbia (unless, in the case of a partnership, Treasury regulations are enacted that provide otherwise); o an estate whose income is includible in gross income for United States federal income tax purposes regardless of its source; and o a trust if a court within the United States is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust. It is possible that the IRS may assert that the foregoing tax exemption should not apply with respect to interest distributed on a REMIC Regular Certificate that is held by: o a REMIC Residual Certificateholder that owns directly or indirectly a 10% or greater interest in the REMIC Residual Certificates; or o to the extent of the amount of interest paid by the related mortgagor on a particular mortgage loan, a REMIC Regular Certificateholder that owns a 10% or greater ownership interest in such mortgagor or a controlled foreign corporation of which such mortgagor is a "United States shareholder" within the meaning of section 951(b) of the Code. If the holder does not qualify for exemption, distributions of interest, including distributions in respect of accrued original issue discount, to such holder may be subject to a tax rate of 30%, subject to reduction under any applicable tax treaty. In addition, the foregoing rules will not apply to exempt a United States shareholder of a controlled foreign corporation from taxation on such United States shareholder's allocable portion of the interest income received by such controlled foreign corporation. Further, it appears that a REMIC Regular Certificate would not be included in the estate of a nonresident alien individual and would not be subject to United States estate taxes. However, certificateholders who are non-resident alien individuals should consult their tax advisors concerning this question. Transfers of REMIC Residual Certificates to investors that are not U.S. Persons will be prohibited under the related pooling and servicing agreement. The Treasury Department issued final regulations which make certain modifications to the withholding, backup withholding and information reporting rules described above. Prospective investors are urged to consult their own tax advisors regarding these regulations. TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES General. As residual interests, the REMIC Residual Certificates will be subject to tax rules that differ significantly from those that would apply if the REMIC Residual Certificates were treated for federal income tax purposes as direct ownership interests in the mortgage loans included in a trust fund or as debt instruments issued by the REMIC. An original holder of a REMIC Residual Certificate generally will be required to report its daily portion of the taxable income or, subject to the limitations noted in this discussion, the net loss of the REMIC for each day during a calendar quarter that such holder owned such REMIC Residual Certificate. For this purpose, the taxable income or net loss of the REMIC will be allocated to each day in the calendar quarter ratably using a "30 days per month/90 days per quarter/360 days per year" convention 91 unless the related prospectus supplement states otherwise. The daily amounts so allocated will then be allocated among the REMIC Residual Certificateholders in proportion to their respective ownership interests on such day. Any amount included in the gross income or allowed as a loss of any REMIC Residual Certificateholder by virtue of this paragraph will be treated as ordinary income or loss. The taxable income of the REMIC will be determined under the rules described below in "--Taxable Income of the REMIC" and will be taxable to the REMIC Residual Certificateholders without regard to the timing or amount of cash distributions by the REMIC. Ordinary income derived from REMIC Residual Certificates will be "portfolio income" for purposes of the taxation of taxpayers subject to limitations under section 469 of the Code on the deductibility of "passive losses." A holder of a REMIC Residual Certificate that purchased such certificate from a prior holder of such certificate also will be required to report on its federal income tax return amounts representing its daily share of the taxable income or loss of the REMIC for each day that it holds such REMIC Residual Certificate. Those daily amounts generally will equal the amounts of taxable income or net loss determined as described above. The Committee Report indicates that certain modifications of the general rules may be made, by regulations, legislation or otherwise, to reduce or increase the income of a REMIC Residual Certificateholder that purchased such REMIC Residual Certificate from a prior holder of such certificate at a price greater than (or less than) the adjusted basis, such REMIC Residual Certificate would have had in the hands of an original holder of such certificate. The REMIC Regulations, however, do not provide for any such modifications. The amount of income REMIC Residual Certificateholders will be required to report (or the tax liability associated with such income) may exceed the amount of cash distributions received from the REMIC for the corresponding period. Consequently, REMIC Residual Certificateholders should have other sources of funds sufficient to pay any federal income taxes due as a result of their ownership of REMIC Residual Certificates or unrelated deductions against which income may be offset, subject to the rules relating to "excess inclusions," residual interests without "significant value" and "noneconomic" residual interests discussed below. The fact that the tax liability associated with the income allocated to REMIC Residual Certificateholders may exceed the cash distributions received by such REMIC Residual Certificateholders for the corresponding period may significantly adversely affect such REMIC Residual Certificateholders' after-tax rate of return. On May 11, 2004 the Treasury Department published final Treasury regulations (the "Inducement Fee Regulations") under sections 446(b), 860C, and 863(a) of the Code relating to the proper method of accounting for, and source of income from, fees ("inducement fees") received by taxpayers to induce the acquisition of "noneconomic" REMIC Residual Certificates. These regulations apply to taxpayers who receive inducement fees in connection with becoming the holder of a noneconomic REMIC Residual Certificate for taxable years ending on or after May 11, 2004. Proposed Treasury regulation section 1.863-1(e) provides that an inducement fee is treated as U.S. source income. Proposed Treasury regulation section 1.446-6(c) sets forth a general rule (the "General Rule") which provides that a taxpayer must recognize in income an inducement fee received for acquiring a noneconomic REMIC Residual Certificate "over the remaining expected life of the applicable REMIC in a manner that reasonably reflects the after-tax costs and benefits of holding that noneconomic residual interest." Under the Inducement Fee Regulations, a taxpayer is generally permitted to adopt an accounting method for the recognition of inducement fees that meets the General Rule described above. The Proposed Treasury regulations state, however, that the treatment of inducement fees received on noneconomic REMIC Residual Certificates constitutes a method of accounting for purposes of Internal Revenue Code sections 446 and 481. Thus, under the Inducement Fee Regulations, once an accounting method is adopted it must be consistently applied to all inducement fees received by the taxpayer in respect of noneconomic REMIC Residual Certificates, and may not be changed without the consent of the Commissioner, pursuant to section 446(e) of the Code and the Treasury regulations and other procedures thereunder. 92 The Inducement Fee Regulations set forth two alternative safe harbor methods of accounting for meeting the General Rule described above. The Commissioner is authorized to provide additional safe harbor methods by revenue ruling or revenue procedure. Under one safe harbor method of accounting set forth in the Inducement Fee Regulations (the "Book Method"), a taxpayer includes an inducement fee in income in accordance with the same accounting method and time period used by the taxpayer for financial reporting purposes, provided that the period over which such inducement fee is included in income is not less than the period the related REMIC is expected to generate taxable income. Under the second safe harbor accounting method (the "Modified REMIC Regulatory Method"), a taxpayer recognizes inducement fee income ratably over the remaining anticipated weighted average life of the REMIC. For this purpose, the REMIC's remaining anticipated weighted average life is determined as of the date of acquisition of the noneconomic REMIC Residual Certificate using the methodology provided in current Treasury regulation section 1.860E-1(a)(3)(iv). The Inducement Fee Regulations also provide that upon a sale or other disposition of a noneconomic REMIC Residual Certificate (other than in a transaction to which section 381(c)(4) of the Code applies) the holder must include currently in income the balance of any previously unrecognized inducement fee amounts attributable to such residual interest. Holders of REMIC Residual Certificates should consult their tax advisors concerning the treatment of such inducement fee payments for income tax purposes. Taxable Income of the REMIC. The taxable income of the REMIC will equal the income from the mortgage loans and other assets of the REMIC plus any cancellation of indebtedness income due to the allocation of realized losses to REMIC Regular Certificates, less the deductions allowed to the REMIC for interest on the REMIC Regular Certificates, amortization of any premium on the mortgage loans, bad debt losses with respect to the mortgage loans and, except as described below, for servicing, administrative and other expenses. For purposes of determining its taxable income, the REMIC will have an initial aggregate basis in its assets equal to the sum of the issue prices of all REMIC Certificates (or, if a class of REMIC Certificates is not sold initially, fair market value). Such aggregate basis will be allocated among the mortgage loans and the other assets of the REMIC in proportion to their respective fair market values. The issue price of any REMIC Certificates offered by this prospectus and the related prospectus supplement will be determined in the manner described above under "--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount." If one or more classes of REMIC Certificates are retained initially rather than sold, the master servicer or the trustee may be required to estimate the fair market value of the REMIC's interests in its mortgage loans and other property in order to determine the basis to the REMIC of the mortgage loans and other property held by such REMIC. Subject to possible application of the de minimis rules, the method of accrual by the REMIC of original issue discount income and market discount income with respect to mortgage loans that it holds will be equivalent to the method for accruing original issue discount income for holders of REMIC Regular Certificates. However, a REMIC that acquires loans at a market discount must include such market discount in income currently, as it accrues, on a constant interest basis. See "--Taxation of Owners of REMIC Regular Certificates" above, which describes a method for accruing such discount income that is analogous to that required to be used by a REMIC as to mortgage loans with market discount that it holds. A mortgage loan will be deemed to have been acquired with discount (or premium) if the REMIC's basis in that mortgage loan is less than (or greater than) its stated redemption price. Any such discount will be includible in the income of the REMIC as it accrues, under a method similar to the method described above for accruing original issue discount on the REMIC Regular Certificates. It is anticipated that each REMIC will elect under section 171 of the Code to amortize any premium on the mortgage loans. Premium on any mortgage loan to which such election applies may be amortized under a constant yield method, presumably taking into account a prepayment assumption. However, this election would not apply to any mortgage loan originated on or before September 27, 1985. Instead, premium on such 93 a mortgage loan should be allocated among the principal payments thereon and be deductible by the REMIC as those payments become due or upon the prepayment of such mortgage loan. A REMIC will be allowed deductions for interest on the REMIC Regular Certificates equal to the deductions that would be allowed if the REMIC Regular Certificates were indebtedness of the REMIC. Original issue discount will be considered to accrue for this purpose as described above under "--Taxation of Owners of REMIC Regular Certificate--Original Issue Discount," except that the de minimis rule and the adjustments for subsequent holders of REMIC Regular Certificates described therein will not apply. If a class of REMIC Regular Certificates is issued at a price in excess of the stated redemption price of such class, the net amount of interest deductions that are allowed the REMIC in each taxable year with respect to the REMIC Regular Certificates of such class will be reduced by an amount equal to the portion of the premium that is considered to be amortized or repaid in that year. Although the matter is not entirely certain, it is likely that Issue Premium would be amortized under a constant yield method in a manner analogous to the method of accruing original issue discount described above under "--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount." As a general rule, the taxable income of a REMIC will be determined in the same manner as if the REMIC were an individual having the calendar year as its taxable year and using the accrual method of accounting. However, no item of income, gain, loss or deduction allocable to a prohibited transaction will be taken into account. See "--Prohibited Transactions Tax and Other Taxes" below. The limitation on miscellaneous itemized deductions imposed on individuals by section 67 of the Code will not be applied at the REMIC level so that the REMIC will be allowed deductions for servicing, administrative and other non-interest expenses in determining its taxable income. All such expenses will be allocated as a separate item to the holders of REMIC Certificates, subject to the limitation of section 67 of the Code. See "--Possible Pass-Through of Miscellaneous Itemized Deductions." If the deductions allowed to the REMIC exceed its gross income for a calendar quarter, such excess will be the net loss for the REMIC for that calendar quarter. Basis Rules, Net Losses and Distributions. The adjusted basis of a REMIC Residual Certificate will be equal to the amount paid for such REMIC Residual Certificate, increased by amounts included in the income of the REMIC Residual Certificateholder and decreased (but not below zero) by distributions made, and by net losses allocated, to such REMIC Residual Certificateholder. A REMIC Residual Certificateholder is not allowed to take into account any net loss for any calendar quarter to the extent such net loss exceeds such REMIC Residual Certificateholder's adjusted basis in its REMIC Residual Certificate as of the close of such calendar quarter. Any loss that is not currently deductible by reason of this limitation may be carried forward indefinitely to future calendar quarters and, subject to the same limitation, may be used only to offset income from the REMIC Residual Certificate. The ability of REMIC Residual Certificateholders to deduct net losses may be subject to additional limitations under the Code, as to which REMIC Residual Certificateholders should consult their tax advisors. Any distribution on a REMIC Residual Certificate will be treated as a nontaxable return of capital to the extent it does not exceed the holder's adjusted basis in such REMIC Residual Certificate. To the extent a distribution on a REMIC Residual Certificate exceeds such adjusted basis, it will be treated as gain from the sale of such REMIC Residual Certificate. Holders of certain REMIC Residual Certificates may be entitled to distributions early in the term of the related REMIC under circumstances in which their bases in such REMIC Residual Certificates will not be sufficiently large that such distributions will be treated as nontaxable returns of capital. Their bases in such REMIC Residual Certificates will initially equal the amount paid for such REMIC Residual Certificates and will be increased by their allocable shares of taxable income of the trust fund. However, such bases increases may not occur until the end of the calendar quarter, or perhaps the end of the calendar year, with respect to which such REMIC taxable income is allocated to the REMIC Residual Certificateholders. To the extent such REMIC Residual Certificateholders' initial bases are less than the distributions to such REMIC Residual Certificateholders, and increases in such initial bases either occur after such distributions or are less than the amount of such 94 distributions, gain will be recognized to such REMIC Residual Certificateholders on such distributions and will be treated as gain from the sale of their REMIC Residual Certificates. The effect of these rules is that a REMIC Residual Certificateholder may not amortize its basis in a REMIC Residual Certificate, but may only recover its basis through distributions, through the deduction of any net losses of the REMIC or upon the sale of its REMIC Residual Certificate. See "--Sales of REMIC Residual Certificates." For a discussion of possible modifications of these rules that may require adjustments to income of a holder of a REMIC Residual Certificate other than an original holder in order to reflect any difference between the cost of such REMIC Residual Certificate to such REMIC Residual Certificateholder and the adjusted basis such REMIC Residual Certificate would have in the hands of an original holder, see "--Taxation of Owners of REMIC Residual Certificates--General." Excess Inclusions. Any "excess inclusions" with respect to a REMIC Residual Certificate will be subject to federal income tax in all events. In general, the "excess inclusions" with respect to a REMIC Residual Certificate for any calendar quarter will be the excess, if any, of: o the sum of the daily portions of REMIC taxable income allocable to such REMIC Residual Certificate; over o the sum of the "daily accruals" for each day during such quarter that such REMIC Residual Certificate was held by such REMIC Residual Certificateholder. The daily accruals of a REMIC Residual Certificateholder will be determined by allocating to each day during a calendar quarter its ratable portion of the product of the "adjusted issue price" of the REMIC Residual Certificate at the beginning of the calendar quarter and 120% of the "long-term Federal rate" in effect on the date the certificates were issued. For this purpose, the adjusted issue price of a REMIC Residual Certificate as of the beginning of any calendar quarter will be equal to the issue price of the REMIC Residual Certificate, increased by the sum of the daily accruals for all prior quarters and decreased (but not below zero) by any distributions made with respect to such REMIC Residual Certificate before the beginning of such quarter. The issue price of a REMIC Residual Certificate is the initial offering price to the public (excluding bond houses and brokers) at which a substantial amount of the REMIC Residual Certificates were sold. The "long-term Federal rate" is an average of current yields on Treasury securities with a remaining term of greater than nine years, computed and published monthly by the IRS. For REMIC Residual Certificateholders, an excess inclusion: o will not be permitted to be offset by deductions, losses or loss carryovers from other activities; o will be treated as "unrelated business taxable income" to an otherwise tax-exempt organization; and o will not be eligible for any rate reduction or exemption under any tax treaty with respect to the 30% United States withholding tax imposed on distributions to foreign investors. See, however, "--Foreign Investors in REMIC Residual Certificates" below. In the case of any REMIC Residual Certificates held by a real estate investment trust, the aggregate excess inclusions with respect to such REMIC Residual Certificates, reduced (but not below zero) by the real estate investment trust taxable income, excluding any net capital gain, will be allocated among the shareholders of such trust in proportion to the dividends received by such shareholders from such trust, and any amount so allocated will be treated as an excess inclusion with respect to a REMIC Residual Certificate as if held directly by such shareholder. The Treasury could issue regulations which apply a similar rule to regulated investment companies, common trust funds and certain cooperatives. The REMIC Regulations currently do not address this subject. In addition, there are three rules for determining the effect of excess inclusions on the alternative minimum taxable income of a REMIC Residual Certificateholder. First, alternative minimum taxable income for a REMIC Residual Certificateholder is determined without regard to the special rule discussed above, that taxable income cannot be less than excess inclusions. Second, a REMIC Residual 95 Certificateholder's alternative minimum taxable income for a taxable year cannot be less than the excess inclusions for the year. Third, the amount of any alternative minimum tax net operating loss deduction must be computed without regard to any excess inclusions. Noneconomic REMIC Residual Certificates. Under the REMIC regulations, transfers of "noneconomic" REMIC Residual Certificates will be disregarded for all federal income tax purposes if "a significant purpose of the transfer was to enable the transferor to impede the assessment or collection of tax". If such transfer is disregarded, the purported transferor will continue to remain liable for any taxes due with respect to the income on such "noneconomic" REMIC Residual Certificate. The REMIC regulations provide that a REMIC Residual Certificate is noneconomic unless, based on the prepayment assumptions and on any required or permitted cleanup calls, or required liquidation provisions, the present value of the expected future distributions discounted at the "applicable Federal rate" on the REMIC Residual Certificate equals at least the present value of the expected tax on the anticipated excess inclusions and the transferor reasonably expects that the transferee will receive distributions with respect to the REMIC Residual Certificate at or after the time the taxes accrue on the anticipated excess inclusions in an amount sufficient to satisfy the accrued taxes. The REMIC regulations explain that a significant purpose to impede the assessment or collection of tax exists if the transferor, at the time of the transfer, either knew or should have known that the transferee would be unwilling or unable to pay taxes due on its share of the taxable income of the REMIC. Under the REMIC regulations, a safe harbor is provided if (1) the transferor conducted, at the time of the transfer, a reasonable investigation of the financial condition of the transferee and found that the transferee historically had paid its debts as they came due in the future, (2) the transferee represents to the transferor that it understands that, as the holder of the noneconomic residual interest, the transferee may incur tax liabilities in excess of cash flows generated by the interest and that the transferee intends to pay taxes associated with holding the residual interest as they become due and (3) the transferee represents to the transferor that it will not cause income from the REMIC Residual Certificate to be attributable to a foreign permanent establishment or fixed base (within the meaning of an applicable income tax treaty) of the transferee or any other United States person. Accordingly, all transfers of REMIC Residual Certificates that may constitute noneconomic residual interests will be subject to certain restrictions under the terms of the related pooling and servicing agreement that are intended to reduce the possibility of any such transfer being disregarded. Such restrictions will require each party to a transfer to provide an affidavit to certify to the matters in the preceding sentence. In addition to the three conditions set forth above, a fourth condition must be satisfied in one of two alternative ways for the transferor to have a "safe harbor" against ignoring the transfer. Either: (a) the present value of the anticipated tax liabilities associated with holding the noneconomic residual interest not exceed the sum of: (i) the present value of any consideration given the transferee to acquire the interest; (ii) the present value of the expected future distributions on the interest; and (iii) the present value of the anticipated tax savings associated with holding the interest as the REMIC generates losses. For purposes of the computations under this alternative, the transferee is assumed to pay tax at the highest rate of tax specified in section 11(b)(1) of the Code (currently 35%) or, in certain circumstances, the alternative minimum tax rate. Further, present values are generally computed using a discount rate equal to the short-term Federal rate set forth in section 1274(d) of the Code for the month of the transfer and the compounding period used by the transferee; or (b) the following requirements are satisfied: (i) the transferee is a domestic "C" corporation (other than a corporation exempt from taxation of a regulated investment company or real estate investment trust) that meets certain gross and net asset tests (generally, $100 million of gross assets and $10 million of net assets for the current year and the two preceding fiscal years); 96 (ii) the transferee agrees in writing that it will transfer the residual interest only to a subsequent transferee that is an eligible corporation and meets the requirements for a safe harbor transfer; and (iii) the facts and circumstances known to the transferor on or before the date of the transfer do not reasonably indicate that the taxes associated with ownership of the residual interest will not be paid by the transferee. Prior to purchasing a REMIC Residual Certificate, prospective purchasers should consider the possibility that a purported transfer of such REMIC Residual Certificate by such a purchaser to another purchaser at some future date may be disregarded in accordance with the above-described rules which would result in the retention of tax liability by such purchaser. The related prospectus supplement will disclose whether offered REMIC Residual Certificates may be considered "noneconomic" residual interests under the REMIC Regulations; provided, however, that any disclosure that a REMIC Residual Certificate will not be considered "noneconomic" will be based upon certain assumptions, and the depositor will make no representation that a REMIC Residual Certificate will not be considered "noneconomic" for purposes of the above-described rules. See "--Foreign Investors in REMIC Residual Certificates" below for additional restrictions applicable to transfers of certain REMIC Residual Certificates to foreign persons. Mark-to-Market Rules. Section 475 provides a requirement that a securities dealer mark-to-market securities held for sale to customers. Treasury regulations provide that for purposes of this mark-to-market requirement, a REMIC Residual Certificate is not treated as a security and thus cannot be marked to market. Possible Pass-Through of Miscellaneous Itemized Deductions. Fees and expenses of a REMIC generally will be allocated to the holders of the related REMIC Residual Certificates. The applicable Treasury regulations indicate, however, that in the case of a REMIC that is similar to a single class grantor trust, all or a portion of such fees and expenses should be allocated to the holders of the related REMIC Regular Certificates. Unless otherwise stated in the related prospectus supplement, such fees and expenses will be allocated to holders of the related REMIC Residual Certificates in their entirety and not to the holders of the related REMIC Regular Certificates. With respect to REMIC Residual Certificates or REMIC Regular Certificates which receive an allocation of fees and expenses in accordance with the preceding discussion, if any holder thereof is an individual, estate or trust, or a certain "pass-through entity," an amount equal to these fees and expenses will be added to the certificateholder's gross income and the certificateholder will treat such fees and expenses as a miscellaneous itemized deduction subject to the limitation of section 67 of the Code to the extent they exceed in the aggregate two percent of a taxpayer's adjusted gross income. In addition, section 68 of the Code provides that the amount of itemized deductions otherwise allowable for an individual whose adjusted gross income exceeds a specified amount will be reduced by the lesser of: o 3% of the excess of the individual's adjusted gross income over such amount; and o 80% of the amount of itemized deductions otherwise allowable for the taxable year. However the section 68 reduction of allowable itemized deductions will be phased out beginning in 2006 and eliminated after 2009. In determining the alternative minimum taxable income of such a holder of a REMIC Certificate that is an individual, estate or trust, or a "pass-through entity," beneficially owned by one or more individuals, estates or trusts, no deduction will be allowed for such holder's allocable portion of servicing fees and other miscellaneous itemized deductions of the REMIC, even though an amount equal to the amount of such fees and other deductions will be included in such holder's gross income. Accordingly, such REMIC Certificates may not be appropriate investments for individuals, estates or trusts, or pass-through entities beneficially owned by one or more individuals, estates or trusts. Such prospective investors should carefully consult with their own tax advisors prior to making an investment in such certificates. Sale of REMIC Residual Certificates. If a REMIC Residual Certificate is sold, the selling certificateholder will recognize gain or loss equal to the difference between the amount realized on the 97 sale and its adjusted basis in the REMIC Residual Certificate. The adjusted basis of a REMIC Residual Certificate will be determined as described under "--Basis Rules, Net Losses and Distributions. In addition to reporting the taxable income of the REMIC, a REMIC Residual Certificateholder will have taxable income to the extent that any cash distribution to it from the REMIC exceeds the adjusted basis on that distribution date. Income will be treated as gain from the sale or exchange of the REMIC Residual Certificate. As a result, if the REMIC Residual Certificateholder has an adjusted basis in its REMIC Residual Certificate remaining when its interest in the REMIC terminates, and if it holds the REMIC Residual Certificate as a capital asset under section 1221 of the Code, then it will recognize a capital loss at that time in the amount of the remaining adjusted basis. Any gain on the sale of a REMIC Residual Certificate will be treated as ordinary income: (1) if a REMIC Residual Certificate is held as part of a "conversion transaction" as defined in section 1258(c) of the Code, up to the amount of interest that would have accrued on the REMIC Residual Certificateholder's net investment in the conversion transaction at 120% of the appropriate applicable federal rate in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior disposition of property that was held as a part of the transaction, or (2) in the case of a non-corporate taxpayer, to the extent that taxpayer has made an election under section 163(d)(4) of the Code to have net capital gains taxed as investment income at ordinary income rates. In addition, gain or loss recognized from the sale of a REMIC Residual Certificate by certain banks or thrift institutions will be treated as ordinary income or loss pursuant to section 582(c) of the Code. Except as may be provided in Treasury regulations yet to be issued, if the seller of a REMIC Residual Certificate reacquires a REMIC Residual Certificate, or acquires any other residual interest in a REMIC or any similar interest in a "taxable mortgage pool" during the period beginning six months before, and ending six months after, the date of such sale, such sale will be subject to the "wash sale" rules of section 1091 of the Code. In that event, any loss realized by the REMIC Residual Certificateholder on the sale will not be deductible, but instead will be added to such REMIC Residual Certificateholder's adjusted basis in the newly acquired asset. Prohibited Transactions Tax and Other Taxes. The Code imposes a tax on REMICs equal to 100% of the net income derived from "prohibited transactions". In general, subject to certain specified exceptions, a prohibited transaction means: o the disposition of a mortgage loan; o the receipt of income from a source other than a mortgage loan or certain other permitted investments; o the receipt of compensation for services; or o gain from the disposition of an asset purchased with the payments on the mortgage loans for temporary investment pending distribution on the REMIC Certificates. It is not anticipated that the REMIC will engage in any prohibited transactions in which it would recognize a material amount of net income. In addition, certain contributions to a REMIC made after the day on which the REMIC issues all of its interests could result in the imposition of a tax on the REMIC equal to 100% of the value of the contributed property. The pooling and servicing agreement will include provisions designed to prevent the acceptance of any contributions that would be subject to such tax. REMICs also are subject to federal income tax at the highest corporate rate on "net income from foreclosure property," determined by reference to the rules applicable to real estate investment trusts. "Net income from foreclosure property" generally means gain from the sale of a foreclosure property that is inventory property and gross income from foreclosure property other than qualifying rents and other qualifying income for a real estate investment trust. A REMIC may recognize "net income from foreclosure property" subject to federal income tax if the Trustee or applicable servicer determines that the recovery to certificateholders is likely to be greater on an after tax basis than earning qualifying income that is not subject to tax. 98 Unless otherwise disclosed in the related prospectus supplement, it is not anticipated that any material state or local income or franchise tax will be imposed on any REMIC. Unless otherwise stated in the related prospectus supplement, and to the extent permitted by then applicable laws, any tax on prohibited transactions, contributions, "net income from foreclosure property" or state or local tax imposed on the REMIC will be borne by the related servicer or trustee in any case out of its own funds, if such tax arose out of a breach of such person's obligations under the related pooling and servicing agreement and in respect of compliance with applicable laws and regulations. Any such tax not borne by a servicer or trustee will be charged against the related trust fund resulting in a reduction in amounts payable to holders of the related REMIC Certificates. Tax and Restrictions on Transfers of REMIC Residual Certificates to Certain Organizations. If a REMIC Residual Certificate is transferred to a "disqualified organization," a tax would be imposed in an amount equal to the product of: o the present value discounted using the "applicable Federal rate" of the total anticipated excess inclusions with respect to such REMIC Residual Certificate for periods after the transfer; and o the highest marginal federal income tax rate applicable to corporations. The anticipated excess inclusions must be determined as of the date that the REMIC Residual Certificate is transferred and must be based on events that have occurred up to the time of such transfer, the prepayment assumption, required or permitted cleanup calls, or required liquidation provisions. Such a tax generally would be imposed on the transferor of the REMIC Residual Certificate, except that where such transfer is through an agent for a disqualified organization, the tax would instead be imposed on such agent. However, a transferor of a REMIC Residual Certificate would in no event be liable for such tax with respect to a transfer if the transferee furnishes to the transferor an affidavit that the transferee is not a disqualified organization and, as of the time of the transfer, the transferor does not have actual knowledge that such affidavit is false. Moreover, an entity will not qualify as a REMIC unless there are reasonable arrangements designed to ensure that residual interests are not held by disqualified organizations and information necessary for the application of the tax are made available. Restrictions on the transfer of REMIC Residual Certificates and certain other provisions that are intended to meet this requirement will be included in each pooling and servicing agreement, and will be discussed more fully in any prospectus supplement relating to the offering of any REMIC Residual Certificate. In addition, if a "pass-through entity" includes in income excess inclusions with respect to a REMIC Residual Certificate, and disqualified organization is the record holder of an interest in such entity, then a tax will be imposed on such entity equal to the product of the amount of excess inclusions allocable to the interest in the pass-through entity held by such disqualified organization and the highest marginal federal income tax rate imposed on corporations. A pass-through entity will not be subject to this tax for any period, however, if each record holder of an interest in such pass-through entity furnishes to such pass-through entity such holder's social security number and a statement under penalty of perjury that such social security number is that of the recordholder or a statement under penalty of perjury that such record holder is not a disqualified organization. For these purposes, a "disqualified organization" generally means: o the United States, any State or political subdivision thereof, any foreign government, any international organization, or any agency or instrumentality of the foregoing (but would exclude as instrumentalities entities not treated as instrumentalities under section 168(h)(2)(D) of the Code or the Freddie Mac), or any organization (other than a cooperative described in section 521 of the Code); o any organization that is exempt from federal income tax, unless it is subject to the tax imposed by section 511 of the Code; or o any organization described in section 1381(a)(2)(C) of the Code. For these purposes, a "pass-through entity" means any regulated investment company, real estate investment trust, trust, partnership or certain other entities described in section 860E(e)(6) of the Code. 99 In addition, a person holding an interest in a pass-through entity as a nominee for another person will, with respect to such interest, be treated as a pass-through entity. Termination. A REMIC will terminate immediately after the distribution date following receipt by the REMIC of the final payment in respect of the mortgage loans or upon a sale of the REMIC's assets following the adoption by the REMIC of a plan of complete liquidation. The last distribution on a REMIC Regular Certificate will be treated as a payment in retirement of a debt instrument. In the case of a REMIC Residual Certificate, if the last distribution on such REMIC Residual Certificate is less than the REMIC Residual Certificateholder's adjusted basis in such REMIC Residual Certificate, such REMIC Residual Certificateholder should be treated as realizing a loss equal to the amount of such difference. Such loss may be treated as a capital loss and may be subject to the "wash sale" rules of section 1091 of the Code. Reporting and Other Administrative Matters. Solely for purposes of the administrative provisions of the Code, the REMIC will be treated as a partnership and REMIC Residual Certificateholders will be treated as partners. Unless otherwise stated in the related prospectus supplement, either the trustee or the servicer generally will hold at least a nominal amount of REMIC Residual Certificates, will file REMIC federal income tax returns on behalf of the related REMIC, and will be designated as and will act as the "tax matters person" with respect to the REMIC in all respects. As the tax matters person, the trustee or the servicer, as the case may be, will, subject to certain notice requirements and various restrictions and limitations, generally have the authority to act on behalf of the REMIC and the REMIC Residual Certificateholders in connection with the administrative and judicial review of items of income, deduction, gain or loss of the REMIC, as well as the REMIC's classification. REMIC Residual Certificateholders will generally be required to report such REMIC items consistently with their treatment on the related REMIC's tax return and may in some circumstances be bound by a settlement agreement between the trustee or the servicer, as the case may be, as tax matters person, and the IRS concerning any such REMIC item. Adjustments made to the REMIC tax return may require a REMIC Residual Certificateholder to make corresponding adjustments on its return, and an audit of the REMIC's tax return, or the adjustments resulting from such an audit, could result in an audit of a REMIC Residual Certificateholder's return. No REMIC will be registered as a tax shelter pursuant to section 6111 of the Code because it is not anticipated that any REMIC will have a net loss for any of the first five taxable years of its existence. Any person that holds a REMIC Residual Certificate as a nominee for another person may be required to furnish to the related REMIC, in a manner to be provided in Treasury regulations, the name and address of such person and other information. Reporting of interest income, including any original issue discount, with respect to REMIC Regular Certificates is required annually, and may be required more frequently under Treasury regulations. These information reports generally are required to be sent to individual holders of REMIC Regular Certificates and the IRS; holders of REMIC Regular Certificates that are corporations, trusts, securities dealers and certain other non-individuals will be provided interest and original issue discount income information and the information set forth in the following paragraph upon request in accordance with the requirements of the applicable regulations. The information must be provided by the later of 30 days after the end of the quarter for which the information was requested, or two weeks after the receipt of the request. The REMIC must also comply with rules requiring that information relating to be reported to the IRS. Reporting with respect to the REMIC Residual Certificates, including income, excess, inclusions, investment expenses and relevant information regarding qualification of the REMIC's assets will be made as required under the Treasury regulations, generally on a quarterly basis. As applicable, the REMIC Regular Certificate information reports will include a statement of the adjusted issue price of the REMIC Regular Certificate at the beginning of each accrual period. In addition, the reports will include information required by regulations with respect to computing the accrual of any market discount. Because exact computation of the accrual of market discount on a constant yield method would require information relating to the holder's purchase price that the REMIC may not have, such regulations only require that information pertaining to the appropriate proportionate method of accruing market discount be provided. See "--Taxation of Owners of REMIC Regular Certificates--Market Discount." 100 The responsibility for complying with the foregoing reporting rules will be borne by either the trustee or the servicer, unless otherwise stated in the related prospectus supplement. Backup Withholding with Respect to REMIC Certificates. Payments of interest and principal, and proceeds from the sale of REMIC Certificates, may be subject to the "backup withholding tax" at a rate of 28% (increasing to 30% after 2010) if recipients of such payments fail to furnish to the payor certain information, including their taxpayer identification numbers, or otherwise fail to establish an exemption from such tax. Any amounts deducted and withheld from a distribution to a recipient would be allowed as a credit against such recipient's federal income tax. Furthermore, certain penalties may be imposed by the IRS on a recipient of payments that is required to supply information but that does not do so in the proper manner. Foreign Investors. The REMIC Regulations provide that the transfer of a REMIC Residual Certificate that has "tax avoidance potential" to a "foreign person" will be disregarded for all federal tax purposes. This rule appears intended to apply to a transferee who is not a U.S. Person, unless that transferee's income is effectively connected with the conduct of a trade or business within the United States. A REMIC Residual Certificate is deemed to have tax avoidance potential unless, at the time of the transfer: (1) the future value of expected distributions equals at least 30% of the anticipated excess inclusions after the transfer, and (2) the transferor reasonably expects that the transferee will receive sufficient distributions from the REMIC at or after the time at which the excess inclusions accrue and prior to the end of the next succeeding taxable year for the accumulated withholding tax liability to be paid. If the non-U.S. Person transfers the REMIC Residual Certificate back to a U.S. Person, the transfer will be disregarded and the foreign transferor will continue to be treated as the owner unless arrangements are made so that the transfer does not have the effect of allowing the transferor to avoid tax on accrued excess inclusions. The prospectus supplement relating to the offered certificates of a series may provide that a REMIC Residual Certificate may not be purchased by or transferred to any person that is not a U.S. Person or may describe the circumstances and restrictions pursuant to which a transfer may be made. GRANTOR TRUST FUNDS Classification of Grantor Trust Funds. With respect to each series of grantor trust certificates, counsel to the depositor will deliver its opinion to the effect that, assuming compliance with the pooling and servicing agreement, the grantor trust fund will be classified as a grantor trust under subpart E, part I of subchapter J of the Code and not as a partnership or an association taxable as a corporation. Accordingly, each holder of a grantor trust certificate generally will be treated as the owner of an interest in the mortgage loans included in the grantor trust fund. For purposes of the following discussion, a grantor trust certificate represents an undivided equitable ownership interest in the principal of the mortgage loans constituting the related grantor trust fund, together with interest thereon at a pass-through rate, will be referred to as a "grantor trust fractional interest certificate." A grantor trust certificate representing ownership of all or a portion of the difference between interest paid on the mortgage loans constituting the related grantor trust fund less normal administration fees and any spread and interest paid to the holders of grantor trust fractional interest certificates issued with respect to a grantor trust fund will be referred to as a "grantor trust strip certificate." A grantor trust strip certificate may also evidence a nominal ownership interest in the principal of the mortgage loans constituting the related grantor trust fund. CHARACTERIZATION OF INVESTMENTS IN GRANTOR TRUST CERTIFICATES Grantor Trust Fractional Interest Certificates. Except as discussed in the related prospectus supplement, in the case of grantor trust fractional interest certificates, counsel to the depositor will deliver an opinion that, in general, grantor trust fractional interest certificates will represent interests in: 101 o assets described in section 7701(a)(19)(C) of the Code; o "obligation[s] which...[are] principally secured by an interest in real property" within the meaning of section 860G(a)(3)(A) of the Code; and o "real estate assets" within the meaning of section 856(c)(5)(B) of the Code. In addition, counsel to the depositor will deliver an opinion that interest on grantor trust fractional interest certificates will to the same extent be considered "interest on obligations secured by mortgages on real property or on interests in real property" within the meaning of section 856(c)(3)(B) of the Code. Grantor Trust Strip Certificates. Even if grantor trust strip certificates evidence an interest in a grantor trust fund consisting of mortgage loans that are assets described in section 7701(a)(19)(C) of the Code, "real estate assets" within the meaning of section 856(c)(5)(B) of the Code, and the interest on which is "interest on obligations secured by mortgages on real property" within the meaning of section 856(c)(3)(B) of the Code, it is unclear whether the grantor trust strip certificates, and the income they produce, will be so characterized. Although the policies underlying such sections may suggest that such characterization is appropriate, counsel to the depositor will not deliver any opinion on the characterization of these certificates. Prospective purchasers of grantor trust strip certificates should consult their tax advisors regarding whether the grantor trust strip certificates, and the income they produce, will be so characterized. The grantor trust strip certificates will be "obligation[s] (including any participation or certificate of beneficial ownership therein) which[are] principally secured by an interest in real property" within the meaning of section 860G(a)(3)(A) of the Code. TAXATION OF OWNERS OF GRANTOR TRUST FRACTIONAL INTEREST CERTIFICATES General. Holders of a particular series of grantor trust fractional interest certificates generally will be required to report on their federal income tax returns their shares of the entire income from the mortgage loans (including reasonable servicing fees and other expenses) and will be entitled to deduct their shares of any such reasonable servicing fees and other expenses. In some situations, the taxpayer's deduction may be subject to itemized deduction limitations and be limited if the taxpayer is subject to the corporate alternative minimum tax. For a more detailed discussion of these limitations, see "--Taxation of Owners of REMIC Residual Certificates--Possible Pass-Through of Miscellaneous Itemized Deductions". Although it is not entirely clear, it appears that in transactions in which multiple classes of grantor trust certificates are issued, such fees and expenses should be allocated among the classes of grantor trust certificates using a method that recognizes that each such class benefits from the related services. In the absence of further guidance, it is intended to base information returns or reports on a method that allocates such expenses among classes of grantor trust certificates with respect to each period based on the distributions made to each such class during that period. The federal income tax treatment of grantor trust fractional interest certificates of any series will depend on whether they are subject to the "stripped bond" rules of section 1286 of the Code. Grantor trust fractional interest certificates may be subject to those rules if a class of grantor trust strip certificates is issued as part of the same series of Certificates or the depositor or any of its affiliates retains a right to receive a specified portion of the interest payable on a mortgage asset. Further, the IRS has ruled that an unreasonably high servicing fee retained by a seller or servicer will be treated as a retained ownership interest in mortgages that constitutes a stripped coupon. For purposes of determining what constitutes reasonable servicing fees for various types of mortgages the IRS has established certain "safe harbors." The servicing fees paid with respect to the mortgage loans for certain series of grantor trust certificates may be higher than the "safe harbors" and, accordingly, may not constitute reasonable servicing compensation. The related prospectus supplement will include information regarding servicing fees paid to a servicer or their respective affiliates necessary to determine whether the preceding "safe harbor" rules apply. If Stripped Bond Rules Apply. If the stripped bond rules apply, each grantor trust fractional interest certificate will be treated as having been issued with "original issue discount" within the meaning of 102 section 1273(a) of the Code, subject, however, to the discussion below regarding the treatment of certain stripped bonds as market discount bonds and de minimis market discount discussion below. See "--Taxation of Owners of Grantor Trust Fractional Interest Certificates--Market Discount." Under the stripped bond rules, the holder of a grantor trust fractional interest certificate will be required to report "qualified stated interest" from its grantor trust fractional interest certificate for each month, as such amounts are received or accrued (based on the holder's method of accounting) and will be required to report an amount equal to the original issue discount income that accrues on such certificate in that month calculated under a constant yield method, in accordance with the rules of the Code relating to original issue discount. The original issue discount on a grantor trust fractional interest certificate will be the excess of such certificate's stated redemption price over its issue price. The issue price of a grantor trust fractional interest certificate as to any purchaser will be equal to the price paid by such purchaser for the grantor trust fractional interest certificate. The stated redemption price of a grantor trust fractional interest certificate will be the sum of all payments to be made on such certificate, other than "qualified stated interest," and the certificate's share of reasonable servicing and other expenses. See "--Taxation of Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond Rules Do Not Apply" for a definition of "qualified stated interest." In general, the amount of such income that accrues in any month would equal the product of such holder's adjusted basis in such grantor trust fractional interest certificate at the beginning of such month (see "--Sales of Grantor Trust Certificates") and the yield of such grantor trust fractional interest certificate to such holder. Such yield would be computed at the rate that, if used to discount the holder's share of future payments on the mortgage loans, would cause the present value of those future payments to equal the price at which the holder purchased such certificate. In computing yield under the stripped bond rules, a certificateholder's share of future payments on the mortgage loans will not include any payments made in respect of any spread or any other ownership interest in the mortgage loans retained by the depositor, a servicer, or their respective affiliates, but will include such certificateholder's share of any reasonable servicing fees and other expenses. With respect to certain categories of debt instruments, section 1272(a)(6) of the Code requires the use of a reasonable prepayment assumption and conforms to the prepayment assumption used in pricing the instrument. Regulations could be adopted applying those provisions to the grantor trust fractional interest certificates. It is unclear whether those provisions would be applicable to the grantor trust fractional interest certificates or whether use of a reasonable prepayment assumption may be required or permitted without reliance on these rules. It is also uncertain, if a prepayment assumption is used, whether the assumed prepayment rate would be determined based on conditions at the time of the first sale of the grantor trust fractional interest certificate or, with respect to any holder, at the time of purchase of the grantor trust fractional interest certificate by that holder. Certificateholders are advised to consult their own tax advisors concerning reporting original issue discount in general and, in particular, whether a prepayment assumption should be used in reporting original issue discount with respect to grantor trust fractional interest certificates. In the case of a grantor trust fractional interest certificate acquired at a price equal to the principal amount of the mortgage loans allocable to such certificate, the use of a prepayment assumption generally would not have any significant effect on the yield used in calculating accruals of interest income. In the case, however, of a grantor trust fractional interest certificate acquired at a discount or premium, the use of a reasonable prepayment assumption would increase or decrease such yield, and thus accelerate or decelerate, respectively, the reporting of income. If a prepayment assumption is not used, then when a mortgage loan prepays in full, the holder of a grantor trust fractional interest certificate acquired at a discount or a premium generally will recognize income or loss, which under amendments to the Code adopted in 1997 would be capital except to the extent of any accrued market discount equal to the difference between the portion of the prepaid principal amount of the mortgage loan that is allocable to such certificate and the portion of the adjusted basis of such certificate that is allocable to such certificateholder's interest in the mortgage loan. If a prepayment assumption is used, although there is no guidance, logically that no separate item of income or loss should be recognized upon a prepayment. Instead, a prepayment should be treated as a partial payment of the stated redemption price of the grantor trust fractional interest certificate and accounted 103 for under a method similar to that described for taking account of original issue discount on REMIC Regular Certificates. See "--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount." It is unclear whether any other adjustments would be required to reflect differences between an assumed prepayment rate and the actual rate of prepayments. In the absence of statutory or administrative clarification, it is currently intended to base information reports or returns to the IRS and certificateholders in transactions subject to the stripped bond rules on a prepayment assumption that will be disclosed in the related prospectus supplement and on a constant yield computed using a representative initial offering price for each class of certificates. However, neither the depositor nor any other person will make any representation that the mortgage loans will in fact prepay at a rate conforming to such stripped bond prepayment assumption or any other rate and certificateholders should bear in mind that the use of a representative initial offering price will mean that such information returns or reports, even if otherwise accepted as accurate by the IRS, will in any event be accurate only as to the initial certificateholders of each series who bought at that price. In light of the application of section 1286 of the Code, a beneficial owner of a stripped bond generally will be required to compute accruals of original issue discount based on its yield, possibly taking into account its own prepayment assumption. The information necessary to perform the related calculations for information reporting purposes, however, generally will not be available to the trustee. Accordingly, any information reporting provided by the trustee with respect to these stripped bonds, which information will be based on pricing information as of the closing date, will largely fail to reflect the accurate accruals of original issue discount for these certificates. Prospective investors therefore should be aware that the timing of accruals of original issue discount applicable to a stripped bond generally will be different than that reported to holders and the IRS. Prospective investors should consult their own tax advisors regarding their obligation to compute and include in income the correct amount of original issue discount accruals and any possible tax consequences to them if they should fail to do so. Under Treasury regulation section 1.1286-1(b), certain stripped bonds are to be treated as market discount bonds and, accordingly, any purchaser of such a bond is to account for any discount on the bond as market discount rather than original issue discount. This treatment only applies, however, if immediately after the most recent disposition of the bond by a person stripping one or more coupons from the bond and disposing of the bond or coupon, there is less than a de minimis amount of original issue discount or the annual stated rate of interest payable on the original bond is no more than one percentage point lower than the gross interest rate payable on the original mortgage loan before subtracting any servicing fee or any stripped coupon. Original issue discount or market discount on a grantor trust fractional interest certificate are de minimis if less than 0.25% of the stated redemption price multiplied by the weighted average maturity of the mortgage loans. Original issue discount or market discount of only a de minimis amount will be included in income in the same manner as de minimis original issue discount and market discount described in "--If Stripped Bond Rules Do Not Apply" and "--Market Discount." If Stripped Bond Rules Do Not Apply. Subject to the discussion below on original issue discount, if the stripped bond rules do not apply to a grantor trust fractional interest certificate, the certificateholder will be required to report its share of the interest income on the mortgage loans in accordance with such certificateholder's normal method of accounting. The original issue discount rules will apply to a grantor trust fractional interest certificate to the extent it evidences an interest in mortgage loans issued with original issue discount. The original issue discount, if any, on the mortgage loans will equal the difference between the stated redemption price of such mortgage loans and their issue price. Under the OID Regulations, the stated redemption price is equal to the total of all payments to be made on such mortgage loan other than "qualified stated interest." "Qualified stated interest" generally includes interest that is unconditionally payable at least annually at a single fixed rate, at a "qualified floating rate" or at an "objective rate." In general, the issue price of a mortgage loan will be the amount received by the borrower from the lender under the terms of the mortgage loan, less any "points" paid by the borrower, and the stated redemption price of a mortgage loan will equal its principal amount, unless the mortgage loan provides for an initial below-market rate of interest or the acceleration or the deferral of interest payments. 104 In the case of mortgage loans bearing adjustable or variable interest rates, the related prospectus supplement will describe the manner in which such rules will be applied with respect to those mortgage loans in preparing information returns to the certificateholders and the IRS. Notwithstanding the general definition of original issue discount, original issue discount will be considered to be de minimis if such original issue discount is less than 0.25% of the stated redemption price multiplied by the weighted average maturity of the mortgage loan. For this purpose, the weighted average maturity of the mortgage loan will be computed by multiplying the number of full years from the issue date until such payment is expected to be made by a fraction, the numerator of which is the amount of the payment and the denominator of which is the stated redemption price of the mortgage loan. Under the OID Regulations, original issue discount of only a de minimis amount will generally be included in income as each payment of stated principal price is made, based on the product of the total amount of such de minimis original issue discount and a fraction, the numerator of which is the amount of each such payment and the denominator of which is the outstanding stated principal amount of the mortgage loan. The OID Regulations also permit a certificateholder to elect to accrue de minimis original issue discount into income currently based on a constant yield method. See "--Market Discount" below. If original issue discount is in excess of a de minimis amount, all original issue discount with respect to a mortgage loan will be required to be accrued and reported in income each month, based on a constant yield. The OID Regulations suggest that no prepayment assumption is appropriate in computing the yield on prepayable obligations issued with original issue discount. In the absence of statutory or administrative clarification, it currently is not intended to base information reports or returns to the IRS and certificateholders on the use of a prepayment assumption in transactions not subject to the stripped bond rules. However, section 1272(a)(6) of the Code may require that a prepayment assumption be made in computing yield with respect to all mortgage-backed securities. Certificateholders are advised to consult their own tax advisors concerning whether a prepayment assumption should be used in reporting original issue discount with respect to grantor trust fractional interest certificates. Certificateholders should refer to the related prospectus supplement with respect to each series to determine whether and in what manner the original issue discount rules will apply to mortgage loans in such series. A purchaser of a grantor trust fractional interest certificate that purchases such grantor trust fractional interest certificate at a cost less than such certificate's allocable portion of the aggregate remaining stated redemption price of the mortgage loans held in the related trust fund will also be required to include in gross income such certificate's daily portions of any original issue discount with respect to such mortgage loans. However, each such daily portion will be reduced, if the cost of such grantor trust fractional interest certificate to such purchaser is in excess of such certificate's allocable portion of the aggregate "adjusted issue prices" of the mortgage loans held in the related trust fund, approximately in proportion to the ratio such excess bears to such certificate's allocable portion of the aggregate original issue discount remaining to be accrued on such mortgage loans. The adjusted issue price of a mortgage loan on any given day equals the sum of the adjusted issue price of such mortgage loan at the beginning of the accrual period that includes such day plus the daily portions of original issue discount for all days during such accrual period prior to such day. The adjusted issue price of a mortgage loan at the beginning of any accrual period will equal the issue price of such mortgage loan, increased by the aggregate amount of original issue discount with respect to such mortgage loan that accrued in prior accrual periods, and reduced by the amount of any payments made on such mortgage loan in prior accrual periods of amounts included in its stated redemption price. The trustee or servicer, as applicable, will provide to any holder of a grantor trust fractional interest certificate such information as such holder may reasonably request from time to time with respect to original issue discount accruing on grantor trust fractional interest certificates. See "--Grantor Trust Reporting" below. Market Discount. If the stripped bond rules do not apply to the grantor trust fractional interest certificate, a certificateholder may be subject to the market discount rules of sections 1276 through 1278 of the Code to the extent an interest in a mortgage loan is considered to have been purchased at a "market discount." If market discount is in excess of a de minimis amount, the holder generally will be required to include in income in each month the amount of such discount that has accrued through such month that 105 has not previously been included in income, but limited, in the case of the portion of such discount that is allocable to any mortgage loan, to the payment of stated redemption price on such mortgage loan that is received by or due to the trust fund in that month. A certificateholder may elect to include market discount in income currently as it accrues under a constant yield method rather than including it on a deferred basis in accordance with the foregoing. If made, such election will apply to all market discount bonds acquired by such certificateholder during or after the first taxable year to which such election applies. In addition, the OID Regulations would permit a certificateholder to elect to accrue all interest, discount and premium in income as interest, based on a constant yield method. If such an election were made with respect to a mortgage loan with market discount, the certificateholder would be deemed to have made an election to currently include market discount in income with respect to all other debt instruments having market discount that such certificateholder acquires during the taxable year of the election and thereafter and, possibly, previously acquired instruments. Similarly, a certificateholder that made this election for a certificate acquired at a premium would be deemed to have made an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that such certificateholder owns or acquires. See "--Taxation of Owners of REMIC Regular Certificates-- Premium." Each of these elections to accrue interest, discount and premium with respect to a certificate on a constant yield method or as interest is irrevocable. Section 1276(b)(3) of the Code authorized the Treasury Department to issue regulations providing for the method for accruing market discount on debt instruments where principal is payable in more than one installment. Until such time as regulations are issued by the Treasury Department, certain rules described in the Committee Report apply. For a more detailed discussion of the treatment of market discount, see "Taxation of Owners of REMIC Regular Certificates--Market Discount". Because the mortgage loans will provide for periodic payments of stated redemption price, such discount may be required to be included in income at a rate that is not significantly lower than the rate at which such discount would be included in income if it were original issue discount. Market discount with respect to mortgage loans generally will be considered to be de minimis if it is less than 0.25% of the stated redemption price of the mortgage loans multiplied by the number of full years to maturity remaining after the date of its purchase. In interpreting a similar rule with respect to original issue discount on obligations payable in installments, the OID Regulations refer to the weighted average maturity of obligations, and it is likely that the same rule will be applied with respect to market discount, presumably taking into account the prepayment assumption used, if any. The effect of using a prepayment assumption could be to accelerate the reporting of such discount income. If market discount is treated as de minimis under the foregoing rule, it appears that actual discount would be treated in a manner similar to original issue discount of a de minimis amount. See "--If Stripped Bond Rules Do Not Apply." Further, under the rules described in "--Taxation of Owners of REMIC Regular Certificates--Market Discount," any discount that is not original issue discount and exceeds a de minimis amount may require the deferral of interest expense deductions attributable to accrued market discount not yet includible in income, unless an election has been made to report market discount currently as it accrues. This rule applies without regard to the origination dates of the mortgage loans. Premium. If a certificateholder is treated as acquiring the underlying mortgage loans at a premium, that is, at a price in excess of their remaining stated redemption price, such certificateholder may elect under section 171 of the Code to amortize using a constant yield method. Amortizable premium is treated as an offset to interest income on the related debt instrument, rather than as a separate interest deduction. It is unclear whether a prepayment assumption should be used in computing amortization of premium allowable under section 171 of the Code. If premium is not subject to amortization using a prepayment assumption and a mortgage loan prepays in full, the holder of a grantor trust fractional interest certificate acquired at a premium should recognize a loss, equal to the difference between the portion of the prepaid principal amount of the mortgage loan that is allocable to the certificate and the portion of the adjusted basis of the certificate that is allocable to the mortgage loan. If a prepayment assumption is used to amortize such premium, it appears that such a loss would be unavailable. Instead, if a prepayment assumption is used, a prepayment should be treated as a partial payment of the stated redemption price of the grantor trust fractional interest certificate and accounted for under a method similar to that described for taking account of original issue discount on REMIC Regular Certificates. See 106 "--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount." It is unclear whether any other adjustments would be required to reflect differences between the prepayment assumption used, if any, and the actual rate of prepayments. Taxation of Owners of Grantor Trust Strip Certificates. The "stripped coupon" rules of section 1286 of the Code will apply to the grantor trust strip certificates. Except as described above in "--If Stripped Bond Rules Apply," no regulations or published rulings under section 1286 of the Code have been issued and some uncertainty exists as to how it will be applied to securities such as the grantor trust strip certificates. Accordingly, holders of grantor trust strip certificates should consult their own tax advisors concerning the method to be used in reporting income or loss with respect to such certificates. The OID Regulations insofar as they describe the application of the constant yield method, do not apply to instruments to which section 1272(a)(6) applies, which may include grantor trust strip certificates as well as grantor trust fractional interest certificates, although they provide general guidance as to how the original issue discount sections of the Code will be applied. In addition, the discussion below is subject to the discussion under "--Possible Application of Contingent Payment Rules" below and assumes that the holder of a grantor trust strip certificate will not own any grantor trust fractional interest certificates. Under the stripped coupon rules, it appears that original issue discount will be required to be accrued in each month on the grantor trust strip certificates based on a constant yield method. In effect, each holder of grantor trust strip certificates would include as interest income in each month an amount equal to the product of such holder's adjusted basis in such grantor trust strip certificate at the beginning of such month and the yield of such grantor trust strip certificate to such holder. Such yield would be calculated based on the price paid for that grantor trust strip certificate by its holder and the payments remaining to be made thereon at the time of the purchase, plus an allocable portion of the servicing fees and expenses to be paid with respect to the mortgage loans. See "--If Stripped Bond Rules Apply" above. As noted above, section 1272(a)(6) of the Code requires that a prepayment assumption be used in computing the accrual of original issue discount with respect to certain categories of debt instruments, and that adjustments be made in the amount and rate of accrual of such discount when prepayments do not conform to such prepayment assumption. Regulations could be adopted applying those provisions to the grantor trust strip certificates. It is unclear whether those provisions would be applicable to the grantor trust strip certificates or whether use of a prepayment assumption may be required or permitted in the absence of such regulations. It is also uncertain, if a prepayment assumption is used, whether the assumed prepayment rate would be determined based on conditions at the time of the first sale of the grantor trust strip certificate or, with respect to any subsequent holder, at the time of purchase of the grantor trust strip certificate by that holder. The accrual of income on the grantor trust strip certificates will be significantly slower if a prepayment assumption is permitted to be made than if yield is computed assuming no prepayments. In the absence of statutory or administrative guidance, it is intended to base information returns or reports to the IRS and certificateholders on the stripped bond prepayment assumption disclosed in the related prospectus supplement and on a constant yield computed using a representative initial offering price for each class of certificates. However, neither the depositor nor any other person will make any representation that the mortgage loans will in fact prepay at a rate conforming to the stripped bond prepayment assumption. Prospective purchasers of the grantor trust strip certificates should consult their own tax advisors regarding the use of the stripped bond prepayment assumption. It is unclear under what circumstances, if any, the prepayment of a mortgage loan will give rise to a loss to the holder of a grantor trust strip certificate. If a grantor trust strip certificate is treated as a single instrument and the effect of prepayments is taken into account in computing yield with respect to such grantor trust strip certificate, it appears that no loss may be available as a result of any particular prepayment unless prepayments occur at a rate faster than the stripped bond prepayment assumption. However, if a grantor trust strip certificate is treated as an interest in discrete mortgage loans, or if the stripped bond prepayment assumption is not used, then when a mortgage loan is prepaid, the holder of a grantor trust strip certificate should be able to recognize a loss equal to the portion of the adjusted issue price of the grantor trust strip certificate that is allocable to such mortgage loan. In addition, any loss may be treated as a capital loss. 107 Possible Application of Contingent Payment Rules. The coupon stripping rules' general treatment of stripped coupons is to regard them as newly issued debt instruments in the hands of each purchaser. To the extent that payments on the grantor trust strip certificates would cease if the mortgage loans were prepaid in full, the grantor trust strip certificates could be considered to be debt instruments providing for contingent payments. Under the OID Regulations, debt instruments providing for contingent payments are not subject to the same rules as debt instruments providing for non-contingent payments. Final regulations have been promulgated with respect to contingent payment debt instruments. However, these regulations do not specifically address the grantor trust strip certificates or other securities subject to the stripped bond rules of section 1286 of the Code. Certificateholders should consult their tax advisors concerning the possible application of the contingent payment rules to the grantor trust strip certificates. Sales of Grantor Trust Certificates. Any gain or loss, equal to the difference between the amount realized on the sale or exchange of a grantor trust certificate and its adjusted basis, recognized on such sale or exchange of a grantor trust certificate by an investor who holds such grantor trust certificate as a capital asset, will be capital gain or loss, except to the extent of accrued and unrecognized market discount, which will be treated as ordinary income. The adjusted basis of a grantor trust certificate generally will equal its cost, increased by any income reported by the seller and reduced (but not below zero) by any previously reported losses, any amortized premium and by any distributions with respect to such grantor. Gain or loss from the sale of a grantor trust certificate may be partially or wholly ordinary and not capital in certain circumstances. Gain attributable to accrued and unrecognized market discount will be treated as ordinary income, as will gain or loss recognized by banks and other financial institutions subject to section 582(c) of the Code. Furthermore, a portion of any gain that might otherwise be capital gain may be treated as ordinary income to the extent that the grantor trust certificate is held as part of a "conversion transaction" within the meaning of section 1258 of the Code. A conversion transaction generally is one in which the taxpayer has taken two or more positions in the same or similar property that reduce or eliminate market risk and the taxpayer's return is substantially attributable to the time value of money. The amount of gain realized in a conversion transaction that is recharacterized as ordinary income generally will not exceed the amount of interest that would have accrued on the taxpayer's net investment at 120% of the appropriate "applicable Federal rate" at the time the taxpayer enters into the conversion transaction, subject to appropriate reduction for prior inclusion of interest and other ordinary income items from the transaction. Finally, a taxpayer may elect to have net capital gain taxed at ordinary income rates rather than capital gains rates in order to include such net capital gain in total net investment income for that taxable year, for purposes of the rule that limits the deduction of interest on indebtedness incurred to purchase or carry property held for investment to a taxpayer's net investment income. Grantor Trust Reporting. As may be provided in the related prospectus supplement, the trustee or servicer, as applicable, will furnish to each holder of a grantor trust certificate, with each distribution, a statement setting forth the amount of such distribution allocable to principal on the underlying mortgage loans and to interest thereon at the related pass-through interest rate. In addition, within a reasonable time after the end of each calendar year, the trustee or servicer will furnish to each certificateholder during such year such customary factual information as the depositor or the reporting party deems necessary or desirable to enable holders of grantor trust certificates to prepare their tax returns and will furnish comparable information to the IRS as and when required by law to do so. Because the rules for accruing discount and amortizing premium with respect to the grantor trust certificates are uncertain in various respects, there is no assurance the IRS will agree with the trustee's or servicer's information reports. Moreover, such information reports, even if otherwise accepted as accurate by the IRS, will in any event be accurate only as to the initial certificateholders that bought their certificates at the representative initial offering price used in preparing such reports. Backup Withholding. In general, the rules described in "--Taxation of Owners of REMIC Residual Certificates--Backup Withholding with Respect to REMIC Certificates" will also apply to grantor trust certificates. Foreign Investor. In general, the discussion with respect to REMIC Regular Certificates in "--Taxation of Owners of REMIC Regular Certificates--Foreign Investors in REMIC Regular Certificates" applies to grantor trust certificates except that grantor trust certificates will, unless otherwise 108 disclosed in the related prospectus supplement, be eligible for exemption from United States withholding tax, subject to the conditions described in such discussion, only to the extent the related mortgage loans were originated after July 18, 1984. However, to the extent the grantor trust certificate represents an interest in real property (e.g., because of foreclosures), it would be treated as representing a United States real property interest for United States federal income tax purposes. This could result in withholding consequences to non-U.S. certificateholders and potential U.S. taxation. To the extent that interest on a grantor trust certificate would be exempt under sections 871(h)(1) and 881(c) of the Code from United States withholding tax, and the grantor trust certificate is not held in connection with a certificateholder's trade or business in the United States, such grantor trust certificate will not be subject to United States estate taxes in the estate of a non-resident alien individual. On June 20, 2002, the IRS published regulations which will, when effective, and if finalized in their proposed form, establish a reporting framework for interests in "widely held fixed investment trusts" that will place the responsibility of reporting on the person in the ownership chain who holds an interest for a beneficial owner. A widely-held fixed investment trust is defined as an entity classified as a "trust" under Treasury regulation section 301.7701-4(c), in which any interest is held by a middleman, which includes, but is not limited to (i) a custodian of a person's account, (ii) a nominee and (iii) a broker holding an interest for a customer in street name. These regulations were proposed to be effective beginning January 1, 2004, but such date has passed and the regulations have not been finalized. It is unclear when, or if, these regulations will become final. REPORTABLE TRANSACTIONS Any holder of an offered certificate that reports any item or items of income, gain, expense, or loss in respect of such certificate for tax purposes in an amount that differs from the amount reported for book purposes by more than $10 million, on a gross basis, in any taxable year may be subject to certain disclosure requirements for "reportable transactions." Prospective investors should consult their tax advisers concerning any possible tax return disclosure obligation with respect to the offered certificates. STATE AND OTHER TAX CONSEQUENCES In addition to the federal income tax consequences described in "Material Federal Income Tax Consequences," potential investors should consider the state and local tax consequences of the acquisition, ownership and disposition of the offered certificates. State and local tax law may differ substantially from the corresponding federal tax law, and the discussion above does not purport to describe any aspect of the tax laws of any state or other jurisdiction. Therefore, prospective investors should consult their own tax advisors with respect to the various tax consequences of investments in the offered certificates. 109 ERISA CONSIDERATIONS GENERAL ERISA and the Code impose certain requirements on retirement plans and other employee benefit plans or arrangements, including individual retirement accounts, individual retirement annuities, medical savings accounts, Keogh plans, collective investment funds and separate and general accounts in which such plans, accounts or arrangements are invested that are subject to the fiduciary responsibility provisions of ERISA and Section 4975 of the Code (all of which are referred to in this prospectus as "Plans"), and on persons who are fiduciaries with respect to Plans, in connection with the investment of Plan assets. Certain employee benefit plans, such as governmental plans (as defined in ERISA Section 3(32)), and, if no election has been made under Section 410(d) of the Code, church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements. However, such plans may be subject to the provisions of other applicable federal, state or local law (which may contain restrictions substantially similar to those in ERISA and the Code). ERISA generally imposes on Plan fiduciaries certain general fiduciary requirements, including those of investment prudence and diversification and the requirement that a Plan's investments be made in accordance with the documents governing the Plan. In addition, ERISA and the Code prohibit a broad range of transactions involving assets of a Plan and persons ("Parties-in-Interest") who have certain specified relationships to the Plan, unless a statutory or administrative exemption is available. Certain Parties-in-Interest that participate in a prohibited transaction may be subject to an excise tax imposed pursuant to Section 4975 of the Code, unless a statutory or administrative exemption is available. These prohibited transactions generally are set forth in Section 406 of ERISA and Section 4975 of the Code. Plan Asset Regulations. A Plan's investment in offered certificates may cause the trust assets to be deemed "plan assets" of a Plan. Section 2510.3-101 of the regulations of the United States Department of Labor (the "DOL") provides that when a Plan acquires an equity interest in an entity, the Plan's assets include both such equity interest and an undivided interest in each of the underlying assets of the entity, unless certain exceptions not applicable to this discussion apply, or unless the equity participation in the entity by "benefit plan investors" (defined to include Plans and certain employee benefit plans not subject to ERISA, including foreign and governmental plans) is not "significant." For this purpose, in general, equity participation in a trust fund will be "significant" on any date if, immediately after the most recent acquisition of any certificate, 25% or more of any class of certificates is held by benefit plan investors (excluding for this calculation any person, other than a benefit plan investor, who has discretionary authority or control, or provides investment advice (direct or indirect) for a fee with respect to the assets of the trust fund). Any person who has discretionary authority or control respecting the management or disposition of plan assets of a Plan, and any person who provides investment advice with respect to such assets for a fee, will generally be a fiduciary of the investing plan. If the trust assets constitute plan assets, then any party exercising management or discretionary control regarding those assets, such as a master servicer, a special servicer or any sub-servicer, may be deemed to be a Plan "fiduciary" with respect to the investing Plan, and thus subject to the fiduciary responsibility provisions and prohibited transaction provisions of ERISA and the Code. In addition, if the trust assets constitute plan assets, the purchase of certificates by a Plan, as well as the operation of the trust fund, may constitute or involve a prohibited transaction under ERISA and the Code. PROHIBITED TRANSACTION EXEMPTIONS Wachovia Corporation ("Wachovia") has received from the DOL an individual prohibited transaction exemption (the "Exemption"), which generally exempts from the application of the prohibited transaction provisions of sections 406(a) and (b) and 407(a) of ERISA, and the excise taxes imposed on such prohibited transactions pursuant to Section 4975(a) and (b) of the Code, certain transactions, among others, relating to the servicing and operation of mortgage pools and the purchase, sale and holding of mortgage pass-through certificates underwritten by an underwriter, provided that certain conditions set forth in the Exemption application are satisfied. For purposes of this Section, "ERISA Considerations," 110 the term "underwriter" includes (i) Wachovia, (ii) any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Wachovia, and (iii) any member of the underwriting syndicate or selling group of which Wachovia or a person described in (ii) is a manager or co-manager with respect to a class of certificates. See "Method of Distribution." The Exemption sets forth five general conditions which, among others, must be satisfied for a transaction involving the purchase, sale and holding of offered certificates by a Plan to be eligible for exemptive relief under the Exemption: First, the acquisition of offered certificates by a Plan must be on terms that are at least as favorable to the Plan as they would be in an arm's-length transaction with an unrelated party. Second, the offered certificates at the time of acquisition by the Plan must be rated in one of the four highest generic rating categories by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's"), Moody's Investors Service, Inc. ("Moody's"), or Fitch, Inc. ("Fitch"). Third, the trustee cannot be an affiliate of any other member of the Restricted Group other than an underwriter. The "Restricted Group" consists of any underwriter, the depositor, the trustee, the master servicer, the special servicer, any sub-servicer, the provider of any credit support and any obligor with respect to mortgage assets (including mortgage loans underlying a CMBS not issued by Fannie Mae, Freddie Mac, Farmer Mac or Ginnie Mae) constituting more than 5% of the aggregate unamortized principal balance of the mortgage assets in the related trust fund as of the date of initial issuance of the certificates. Fourth, the sum of all payments made to and retained by the underwriter(s) in connection with the distribution or placement of certificates must represent not more than reasonable compensation for underwriting or placing the certificates; the sum of all payments made to and retained by the depositor pursuant to the assignment of the mortgage assets to the related trust fund must represent not more than the fair market value of such obligations; and the sum of all payments made to and retained by the master servicer and any sub-servicer must represent not more than reasonable compensation for such person's services under the related pooling and servicing agreement and reimbursement of such person's reasonable expenses in connection therewith. Fifth, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933, as amended. In the event the obligations used to fund the trust fund have not all been transferred to the trust fund on the closing date, additional obligations meeting certain requirements as specified in the Exemption may be transferred to the trust fund in exchange for the amounts credited to the Pre-Funding Account during a period required by the Exemption, commencing on the closing date and ending no later than the earliest to occur of: (i) the date the amount on deposit in the Pre-Funding Account (as defined in the Exemption) is less than the minimum dollar amount specified in the pooling and servicing agreement; (ii) the date on which an event of default occurs under the pooling and servicing agreement; or (iii) the date which is the later of three months or 90 days after the closing date. In addition, the amount in the Pre-Funding Account may not exceed 25% of the aggregate principal amount of the offered certificates. Certain other conditions of the Exemption relating to pre-funding accounts must also be met, in order for the exemption to apply. The prospectus supplement will discuss whether pre-funding accounts will be used. The Exemption also requires that the trust fund meet the following requirements: (i) the trust fund must consist solely of assets of the type that have been included in other investment pools; (ii) certificates in such other investment pools must have been rated in one of the four highest categories of Standard & Poor's, Moody's, or Fitch for at least one year prior to the Plan's acquisition of certificates; and (iii) certificates in such other investment pools must have been purchased by investors other than Plans for at least one year prior to any Plan's acquisition of certificates. The Exemption generally applies to mortgage loans such as the mortgage loans to be included in any trust fund. It is not clear whether the Exemption applies to participant directed plans as described in 111 Section 404(c) of ERISA or plans that are subject to Section 4975 of the Code but that are not subject to Title I of ERISA, such as certain Keogh plans and certain individual retirement accounts. If mortgage loans are secured by leasehold interests, each lease term must be at least 10 years longer than the term of the relevant mortgage loan. If the general conditions set forth in the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(a) and 407(a) of ERISA (as well as the excise taxes imposed by Sections 4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of the Code) in connection with (i) the direct or indirect sale, exchange or transfer of offered certificates acquired by a Plan upon issuance from the depositor or underwriter when the depositor, underwriter, master servicer, special servicer, sub-servicer, trustee, provider of credit support, or obligor with respect to mortgage assets is a "Party in Interest" under ERISA with respect to the investing Plan, (ii) the direct or indirect acquisition or disposition in the secondary market of offered certificates by a Plan and (iii) the holding of offered certificates by a Plan. However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of a certificate on behalf of an "Excluded Plan" by any person who has discretionary authority or renders investment advice with respect to the assets of such Excluded Plan. For this purpose, an Excluded Plan is a Plan sponsored by any member of the Restricted Group. If certain specific conditions set forth in the Exemption are also satisfied, the Exemption may provide relief from the restrictions imposed by Sections 406(b)(1) and (b)(2) of ERISA and the taxes imposed by Sections 4975(a) and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code to an obligor acting as a fiduciary with respect to the investment of a Plan's assets in the certificates (or such obligor's affiliate) only if, among other requirements (i) such obligor (or its affiliate) is an obligor with respect to 5% percent or less of the fair market value of the assets contained in the trust fund and is otherwise not a member of the Restricted Group, (ii) a Plan's investment in certificates does not exceed 25% of all of the certificates outstanding at the time of the acquisition, (iii) immediately after the acquisition, no more than 25% of the assets of the Plan are invested in certificates representing an interest in trusts (including the trust fund) containing assets sold or serviced by the depositor or a servicer and (iv) in the case of the acquisition of the certificates in connection with their initial issuance, at least 50% of the certificates are acquired by persons independent of the Restricted Group and at least 50% of the aggregate interest in the trust fund is acquired by persons independent of the Restricted Group. The Exemption also applies to transactions in connection with the servicing, management and operation of the trust fund, provided that, in addition to the general requirements described above, (a) such transactions are carried out in accordance with the terms of a binding pooling and servicing agreement, (b) the pooling and servicing agreement is provided to, or described in all material respects in the prospectus or private placement memorandum provided to, investing Plans before their purchase of certificates issued by the trust fund and (c) the terms and conditions for the defeasance of a mortgage obligation and substitution of a new mortgage obligation, as so directed, have been approved by an NRSRO and do not result in any certificates receiving a lower credit rating from the NRSRO than the current rating. The pooling and servicing agreements will each be a "Pooling and Servicing Agreement" as defined in the Exemption. Each pooling and servicing agreement will provide that all transactions relating to the servicing, management and operations of the trust fund must be carried out in accordance with the pooling and servicing agreement. The DOL has issued a Prohibited Transaction Class Exemption 95-60 (the "Class Exemption"), which provides relief from the application of the prohibited transaction provisions of Sections 406(a), 406(b) and 407(a) of ERISA and Section 4975 of the Code for transactions in connection with the servicing, management and operation of a trust in which an insurance company general account has an interest as a result of its acquisition of certificates issued by such trust, provided that certain conditions are satisfied. Insurance company general accounts meeting the specified conditions may generally purchase, in reliance on the Class Exemption, classes of certificates that do not meet the requirements of the Exemption solely because they have not received a rating at the time of the acquisition in one of the four highest rating categories from Standard & Poor's, Moody's, or Fitch. In addition to the foregoing Class Exemption, relief may be available to certain insurance company general accounts, which support 112 policies issued by any insurer on or before December 31, 1998 to or for the benefit of employee benefit plans, under regulations published by the DOL under Section 401(c) of ERISA, that became applicable on July 5, 2001. Any Plan fiduciary considering the purchase of certificates should consult with its counsel with respect to the applicability of the Exemption and other issues and determine on its own whether all conditions have been satisfied and whether the certificates are an appropriate investment for a Plan under ERISA and the Code (or, in the case of governmental plans or church plans, under applicable federal, state or local law). The prospectus supplement will specify the representations required by purchasers of certificates, but generally, each purchaser using the assets of one or more Plans to purchase a certificate shall be deemed to represent that each such Plan qualifies as an "accredited investor" as defined in Rule 501(a)(1) of Regulation D under the Securities Act of 1933, and no Plan will be permitted to purchase or hold such certificates unless such certificates are rated in one of the top four rating categories by at least one rating agency at the time of such purchase, unless such Plan is an insurance company general account that represents and warrants that it is eligible for, and meets all of the requirements of, Sections I and III of Prohibited Transaction Class Exemption 95-60. Each purchaser of classes of certificates that are not rated at the time of purchase in one of the top four rating categories by at least one rating agency shall be deemed to represent that it is eligible for, and meets all of the requirements of, Sections I and III of Prohibited Transaction Class Exemption 95-60. The prospectus supplement with respect to a series of certificates may contain additional information regarding the application of the Exemption or any other exemption, with respect to the certificates offered thereby. LEGAL INVESTMENT If so specified in the related prospectus supplement, certain classes of the offered certificates will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"). Generally, the only classes of offered certificates which will qualify as "mortgage related securities" will be those that (1) are rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization and (2) are part of a series evidencing interests in a trust fund consisting of loans originated by certain types of originators specified in SMMEA and secured by first liens on real estate. The appropriate characterization of those offered certificates not qualifying as "mortgage related securities" for purposes of SMMEA ("Non-SMMEA Certificates") under various legal investment restrictions, and thus the ability of investors subject to these restrictions to purchase such offered certificates, may be subject to significant interpretive uncertainties. Accordingly, investors whose investment activities are subject to investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the Non-SMMEA Certificates constitute legal investments for them. Those classes of offered certificates qualifying as "mortgage related securities" will constitute legal investments for persons, trusts, corporations, partnerships, associations, business trusts and business entities (including depository institutions, insurance companies, trustees and pension funds) created pursuant to or existing under the laws of the United States or of any state, including the District of Columbia and Puerto Rico, whose authorized investments are subject to state regulation, to the same extent that, under applicable law, obligations issued by or guaranteed as to principal and interest by the United States or any of its agencies or instrumentalities constitute legal investments for such entities. Under SMMEA, a number of states enacted legislation, on or before the October 3, 1991 cutoff for such enactments, limiting to various extents the ability of certain entities (in particular, insurance companies) to invest in "mortgage related securities" secured by liens on residential, or mixed residential and commercial properties, in most cases by requiring the affected investors to rely solely upon existing state law, and not SMMEA. Pursuant to Section 347 of the Riegle Community Development and Regulatory Improvement Act of 1994, which amended the definition of "mortgage related security" to include, in relevant part, offered certificates satisfying the rating and qualified originator requirements for "mortgage related securities," but evidencing interests in a trust fund consisting, in whole or in part, of first liens on one or more parcels of real estate upon which are located one or more commercial structures, states were authorized to enact legislation, on or before September 23, 2001, specifically referring to 113 Section 347 and prohibiting or restricting the purchase, holding or investment by state-regulated entities in such types of offered certificates. Accordingly, the investors affected by any state legislation overriding the preemptive effect of SMMEA will be authorized to invest in offered certificates qualifying as "mortgage related securities" only to the extent provided in that legislation. SMMEA also amended the legal investment authority of federally-chartered depository institutions as follows: federal savings and loan associations and federal savings banks may invest in, sell or otherwise deal in "mortgage related securities" without limitation as to the percentage of their assets represented thereby, federal credit unions may invest in those securities, and national banks may purchase those securities for their own account without regard to the limitations generally applicable to investment securities set forth in 12 U.S.C. Section 24 (Seventh), subject in each case to those regulations as the applicable federal regulatory authority may prescribe. In this connection, the Office of the Comptroller of the Currency (the "OCC") has amended 12 C.F.R. Part 1 to authorize national banks to purchase and sell for their own account, without limitation as to a percentage of the bank's capital and surplus (but subject to compliance with certain general standards in 12 C.F.R. Section 1.5 concerning "safety and soundness" and retention of credit information), certain "Type IV securities," defined in 12 C.F.R. Section 1.2(m) to include certain "commercial mortgage-related securities" and "residential mortgage-related securities." As so defined, "commercial mortgage-related security" and "residential mortgage-related security" mean, in relevant part, "mortgage related security" within the meaning of SMMEA, provided that, in the case of a "commercial mortgage-related security," it "represents ownership of a promissory note or certificate of interest or participation that is directly secured by a first lien on one or more parcels of real estate upon which one or more commercial structures are located and that is fully secured by interests in a pool of loans to numerous obligors." In the absence of any rule or administrative interpretation by the OCC defining the term "numerous obligors," no representation is made as to whether any of the offered certificates will qualify as "commercial mortgage-related securities," and thus as "Type IV securities," for investment by national banks. The National Credit Union Administration (the "NCUA") has adopted rules, codified at 12 C.F.R. Part 703, which permit federal credit unions to invest in "mortgage related securities," other than stripped mortgage related securities (unless the credit union complies with the requirements of 12 C.F.R. Section 703.16 (e) for investing in those securities), residual interests in mortgage related securities, and commercial mortgage related securities, subject to compliance with general rules governing investment policies and practices; however, credit unions approved for the NCUA's "investment pilot program" under 12 C.F.R. Section 703.19 may be able to invest in those prohibited forms of securities, while "RegFlex credit unions" may invest in commercial mortgage related securities under certain conditions pursuant to 12 C.F.R. Section 742.4(b)(2). The Office of Thrift Supervision (the "OTS") has issued Thrift Bulletin 13a (December 1, 1998), "Management of Interest Rate Risk, Investment Securities, and Derivatives Activities" and Thrift Bulletin 73a (December 18, 2001) "Investing in Complex Securities," which thrift institutions subject to the jurisdiction of the OTS should consider before investing in any of the offered certificates. All depository institutions considering an investment in the offered certificates should review the "Supervisory Policy Statement on Investment Securities and End-User Derivatives Activities" (the "1998 Policy Statement") of the Federal Financial Institutions Examination Council, which has been adopted by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the OCC and the OTS, effective May 26, 1998, and by the NCUA effective October 1, 1998. The 1998 Policy Statement sets forth general guidelines which depository institutions must follow in managing risks (including market, credit, liquidity, operational (transaction), and legal risks) applicable to all securities (including mortgage pass-through securities and mortgage-derivative products) used for investment purposes. Investors whose investment activities are subject to regulation by federal and state authorities should review rules, policies and guidelines adopted from time to time by those authorities before purchasing any offered certificates, as certain classes may be deemed unsuitable investments, or may otherwise be restricted, under those rules, policies or guidelines (in certain instances irrespective of SMMEA). The foregoing does not take into consideration the applicability of statutes, rules, regulations, orders, guidelines or agreements generally governing investments made by a particular investor, including, but not limited to, "prudent investor" provisions, percentage-of-assets limits, provisions which may restrict or 114 prohibit investment in securities which are not "interest-bearing" or "income-paying," and, with regard to any offered certificates issued in book-entry form, provisions which may restrict or prohibit investments in securities which are issued in book-entry form. Except as to the status of certain classes of offered certificates as "mortgage related securities," no representations are made as to the proper characterization of the offered certificates for legal investment purposes, financial institution regulatory purposes, or other purposes, or as to the ability of particular investors to purchase offered certificates under applicable legal investment restrictions. The uncertainties described above (and any unfavorable future determinations concerning legal investment or financial institution regulatory characteristics of the offered certificates) may adversely affect the liquidity of the offered certificates. Accordingly, all investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the offered certificates constitute legal investments or are subject to investment, capital or other restrictions and, if applicable, whether SMMEA has been overridden in any jurisdiction relevant to such investor. METHOD OF DISTRIBUTION The offered certificates offered by the prospectus and the related prospectus supplements will be offered in series. The distribution of the offered certificates may be effected from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices to be determined at the time of sale or at the time of commitment therefor. The prospectus supplement for the offered certificates of each series will, as to each class of such certificates, set forth the method of the offering, either the initial public offering price or the method by which the price at which the certificates of such class will be sold to the public can be determined, any class or classes of offered certificates, or portions thereof, that will be sold to affiliates of the depositor, the amount of any underwriting discounts, concessions and commissions to underwriters, any discounts or commissions to be allowed to dealers and the proceeds of the offering to the depositor. If so specified in the prospectus supplement, the offered certificates of a series will be distributed in a firm commitment underwriting, subject to the terms and conditions of the underwriting agreement, by Wachovia Capital Markets, LLC, acting as underwriter with other underwriters, if any, named in the prospectus supplement. Alternatively, the prospectus supplement may specify that offered certificates will be distributed by Wachovia Capital Markets, LLC acting as agent. If Wachovia Capital Markets, LLC acts as agent in the sale of offered certificates, Wachovia Capital Markets, LLC will receive a selling commission with respect to such offered certificates, depending on market conditions, expressed as a percentage of the aggregate certificate balance or notional amount of such offered certificates as of the date of issuance. The exact percentage for each series of certificates will be disclosed in the prospectus supplement. To the extent that Wachovia Capital Markets, LLC elects to purchase offered certificates as principal, Wachovia Capital Markets, LLC may realize losses or profits based upon the difference between its purchase price and the sales price. The prospectus supplement with respect to any series offered other than through underwriters will contain information regarding the nature of such offering and any agreements to be entered into between the depositor or any affiliate of the depositor and purchasers of offered certificates of such series. This prospectus and prospectus supplements also may be used by the depositor, Wachovia Capital Markets, LLC, an affiliate of the depositor, and any other affiliate of the depositor 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 such transactions. Such sales will be made at prices related to prevailing market prices at the time of sale or otherwise. If so specified in a prospectus supplement, all or a portion of one or more classes of the offered certificates identified in the prospectus supplement may be retained or sold by the depositor either directly or indirectly through an underwriter, including Wachovia Capital Markets, LLC to one or more affiliates of the depositor. This prospectus and prospectus supplements may be used by any such affiliate to resell offered certificates publicly or privately to affiliated or unaffiliated parties either directly or indirectly through an underwriter, including Wachovia Capital Markets, LLC. 115 The depositor will agree to indemnify Wachovia Capital Markets, LLC and any underwriters and their respective controlling persons against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended, or will contribute to payments that any such person may be required to make in respect thereof. In the ordinary course of business, Wachovia Capital Markets, LLC and the depositor may engage in various securities and financing transactions, including repurchase agreements to provide interim financing of the depositor's mortgage loans pending the sale of such mortgage loans or interests therein, including the certificates. The depositor anticipates that the offered certificates will be sold primarily to institutional investors which may include affiliates of the depositor. Purchasers of offered certificates, including dealers, may, depending on the facts and circumstances of such purchases, be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended, in connection with reoffers and sales by them of offered certificates. Certificateholders should consult with their legal advisors in this regard prior to any such reoffer or sale. As to each series of certificates, only those classes rated in an investment grade rating category by any rating agency will be offered hereby. Any class of certificates not offered by this prospectus may be initially retained by the depositor, and may be sold by the depositor at any time to one or more institutional investors. Underwriters or agents and their associates may be customers of (including borrowers from), engage in transactions with, and/or perform services for the depositor, its affiliates, and the trustee in the ordinary course of business. LEGAL MATTERS Unless otherwise specified in the prospectus supplement, certain legal matters in connection with the certificates of each series, including certain federal income tax consequences, will be passed upon for the depositor by Cadwalader, Wickersham & Taft LLP, Charlotte, North Carolina. FINANCIAL INFORMATION A new trust fund will be formed with respect to each series of certificates, and no trust fund will engage in any business activities or have any assets or obligations prior to the issuance of the related series of certificates. Accordingly, no financial statements with respect to any trust fund will be included in this prospectus or in the prospectus supplement. RATINGS It is a condition to the issuance of any class of offered certificates that they shall have been rated not lower than investment grade, that is, in one of the four highest rating categories, by at least one rating agency. Ratings on commercial mortgage pass-through certificates address the likelihood of receipt by the holders thereof of all collections on the underlying mortgage assets to which such holders are entitled. These ratings address the structural, legal and issuer-related aspects associated with such certificates, the nature of the underlying mortgage assets and the credit quality of the guarantor, if any. Ratings on commercial mortgage pass-through certificates do not represent any assessment of the likelihood of principal prepayments by borrowers or of the degree by which such prepayments might differ from those originally anticipated. As a result, certificateholders might suffer a lower than anticipated yield, and, in addition, holders of Stripped Interest Certificates in extreme cases might fail to recoup their initial investments. There can be no assurance that any rating agency not requested to rate the offered certificates will not nonetheless issue a rating to any or all classes thereof and, if so, what such rating or ratings would be. A rating assigned to any class of offered certificates by a rating agency that has not been requested by the depositor to do so may be lower than the rating assigned to a class of offered certificates by one or more of the rating agencies that has been requested by the depositor to rate the offered certificates. 116 A security rating is not a recommendation to buy, sell or hold securities and may be subject to qualification, revision or withdrawal at any time by the assigning rating organization. Each security rating should be evaluated independently of another security rating. INDEX OF PRINCIPAL DEFINITIONS "Accrual Certificates" means certificates which provide for distributions of accrued interest thereon commencing only following the occurrence of certain events, such as the retirement of one or more other classes of certificates of such series. "Accrued Certificate Interest" means, with respect to each class of certificates and each distribution date, other than certain classes of Stripped Interest Certificates and REMIC Residual certificates, the amount equal to the interest accrued for a specified period (generally the period between distribution dates) on the outstanding certificate balance of those certificates immediately prior to such distribution date, at the applicable pass-through rate, as described under "Distributions of Interest on the Certificates" in this prospectus. "Available Distribution Amount" means, for any series of certificates and any distribution date, the total of all payments or other collections (or advances in lieu thereof) on, under or in respect of the mortgage assets and any other assets included in the related trust fund that are available for distribution to the certificateholders of that series on that date. The particular components of the Available Distribution Amount for any series on each distribution date will be more specifically described in the prospectus supplement. "Code" means the Internal Revenue Code of 1986, as amended. "Constant Prepayment Rate" or "CPR" means a rate that represents an assumed constant rate of prepayment each month (which is expressed on a per annum basis) relative to the outstanding principal balance of a pool of mortgage loans for the life of such mortgage loans. "Cut-Off Date" means the date on which the ownership of the mortgage loans of a related series of certificates and rights to payment thereon are deemed transferred to the trust fund, as specified in the related prospectus supplement. "Debt Service Coverage Ratio" means, with respect to a mortgage loan at any given time and as more fully set forth in the prospectus supplement, the ratio of (i) the Net Operating Income of the mortgaged property for a twelve-month period to (ii) the annualized scheduled payments on the mortgage loan and on any other loan that is secured by a lien on the mortgaged property prior to the lien of the mortgage. "DTC" means The Depository Trust Company. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Farmer Mac" or "FAMC" means the Federal Agricultural Mortgage Corporation. "Loan-to-Value Ratio" means, as more fully set forth in the prospectus supplement, the ratio (expressed as a percentage) of (i) the then outstanding principal balance of the mortgage loan and the outstanding principal balance of any loan secured by a lien on the mortgaged property prior to the lien of the mortgage, to (ii) the value of the mortgaged property, which is generally its fair market value determined in an appraisal obtained by the originator at the origination of such loan. "Net Operating Income" means, as more fully set forth in the prospectus supplement and for any given period, the total operating revenues derived from a mortgaged property, minus the total operating expenses incurred in respect of the mortgaged property other than (i) non-cash items such as depreciation and amortization, (ii) capital expenditures and (iii) debt service on loans (including the mortgage loan) secured by liens on the mortgaged property. "REMIC" means a "real estate mortgage investment conduit" under the Code. "REMIC Certificate" means a certificate issued by a trust fund relating to a series of certificate where an election is made to treat the trust fund as a REMIC. "REO Property" means any mortgaged property acquired on behalf of the trust fund in respect of a defaulted mortgage loan through foreclosure, deed in lieu of foreclosure or otherwise. 117 "SMMEA" means the Secondary Mortgage Market Enhancement Act of 1984, as amended. "Standard Prepayment Assumption" or "SPA" means a rate that represents an assumed variable rate of prepayment each month (which is expressed on a per annum basis) relative to the then outstanding principal balance of a pool of loans, with different prepayment assumptions often expressed as percentages of SPA. "Stripped Interest Certificates" means certificates which are entitled to interest distributions with disproportionately small, nominal or no principal distributions. "Stripped Principal Certificates" means certificates which are entitled to principal distributions with disproportionately small, nominal or no interest distributions. 118
The file "WBCMT 2005-C18 Prospectus Annexes A1-5.xls", which is a Microsoft Excel*, Version 5.0 spreadsheet, that provides in electronic format certain information shown in Annexes A-1, A-1A, A-1B, A-2, A-3, A-4 and A-5. In addition, the spreadsheet provides certain Mortgage Loan and Mortgaged Property information contained in Annex A-1 and information detailing the changes in the amount of monthly payments with regard to certain Mortgage Loans. As described under "DESCRIPTION OF THE CERTIFICATES--Reports to Certificateholders; Available Information" in this prospectus supplement, each month the Trustee will make available through its internet website an electronic file in CMSA format updating and supplementing the information contained in the "WBCMT 2005-C18 Prospectus Annexes A1-5.xls" file. To open the file, insert the diskette into your floppy drive. Copy the file "WBCMT 2005-C18 Prospectus Annexes A1-5.xls" to your hard drive or network drive. Copy the file "WBCMT 2005-C18 Prospectus Annexes A1-5.xls" as you would normally open any spreadsheet in Microsoft Excel. After the file is opened, a securities law legend will be displayed. READ THE LEGEND CAREFULLY. To view the data, see the worksheets labeled "Disclaimer" and "A-1 Loan and Property Schedule" or "A-1A Loan and Property Schedule" or "A-1B Loan and Property Schedule" or "A-2 Multifamily Data" or "A-3 Reserve Accounts" or "A-4 Commercial Tenant Schedule" or "A-5 Cross-Collateralized Pool", respectively. * Microsoft Excel is a registered trademark of Microsoft Corporation. ================================================================================ UNTIL AUGUST , 2005, ALL DEALERS THAT EFFECT TRANSACTIONS IN THE OFFERED CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. -------------------------------------------- TABLE OF CONTENTS PAGE ------ PROSPECTUS SUPPLEMENT 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-41 DESCRIPTION OF THE MORTGAGE POOL ........................................ S-90 SERVICING OF THE MORTGAGE LOANS ......................................... S-194 DESCRIPTION OF THE CERTIFICATES ......................................... S-209 YIELD AND MATURITY CONSIDERATIONS........................................ S-244 USE OF PROCEEDS ......................................................... S-252 MATERIAL FEDERAL INCOME TAX CONSEQUENCES ................................ S-253 ERISA CONSIDERATIONS .................................................... S-254 LEGAL INVESTMENT ........................................................ S-257 METHOD OF DISTRIBUTION .................................................. S-257 LEGAL MATTERS ........................................................... S-258 RATINGS ................................................................. S-258 INDEX OF DEFINED TERMS .................................................. S-260 ANNEX A-1 ............................................................... A-1 ANNEX A-1A .............................................................. A-1A ANNEX A-1B .............................................................. A-1B ANNEX A-2 ............................................................... A-2 ANNEX A-3 ............................................................... A-3 ANNEX A-4 ............................................................... A-4 ANNEX A-5 ............................................................... A-5 ANNEX B ................................................................. B-1 ANNEX C ................................................................. C-1 ANNEX D ................................................................. D-1 PROSPECTUS ADDITIONAL INFORMATION .................................................. 6 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE ....................... 6 SUMMARY OF PROSPECTUS ................................................... 7 RISK FACTORS ............................................................ 14 DESCRIPTION OF THE TRUST FUNDS .......................................... 34 YIELD CONSIDERATIONS .................................................... 40 THE DEPOSITOR ........................................................... 45 USE OF PROCEEDS ......................................................... 45 DESCRIPTION OF THE CERTIFICATES ......................................... 46 DESCRIPTION OF THE POOLING AND SERVICING AGREEMENTS ..................... 53 DESCRIPTION OF CREDIT SUPPORT ........................................... 67 CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND LEASES ...................... 69 MATERIAL FEDERAL INCOME TAX CONSEQUENCES ................................ 84 STATE AND OTHER TAX CONSEQUENCES......................................... 109 ERISA CONSIDERATIONS .................................................... 110 LEGAL INVESTMENT ........................................................ 113 METHOD OF DISTRIBUTION .................................................. 115 LEGAL MATTERS ........................................................... 116 FINANCIAL INFORMATION ................................................... 116 RATINGS ................................................................. 116 INDEX OF PRINCIPAL DEFINITIONS .......................................... 117 $1,196,957,000 (APPROXIMATE) WACHOVIA COMMERCIAL MORTGAGE SECURITIES, INC. (DEPOSITOR) WACHOVIA BANK COMMERCIAL MORTGAGE TRUST COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2005-C18 ----------------------- PROSPECTUS SUPPLEMENT ----------------------- WACHOVIA SECURITIES COUNTRYWIDE SECURITIES CORPORATION CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO. RBS GREENWICH CAPITAL MAY , 2005 ================================================================================