Filed Pursuant to Rule 424B5
Registration File No.: 333-112636
The information in this prospectus supplement is not complete and may be
changed. This preliminary prospectus supplement is not an offer to sell these
securities and it is not a solicitation of 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 JUNE 7, 2004
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 7, 2004)
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
GERMAN AMERICAN CAPITAL CORPORATION
LASALLE BANK NATIONAL ASSOCIATION
PNC BANK, NATIONAL ASSOCIATION
MORTGAGE LOAN SELLERS
-------------------------
The COMM 2004-LNB3 Commercial Mortgage Pass-Through Certificates will
represent beneficial ownership interests in the COMM 2004-LNB3 Mortgage Trust.
The trust's assets will primarily be 95 fixed-rate mortgage loans secured by
first liens on 267 commercial, multifamily and manufactured housing properties.
The COMM 2004-LNB3 Commercial Mortgage Pass-Through Certificates are not
obligations of Deutsche Bank AG, Deutsche Mortgage & Asset Receiving
Corporation, the mortgage loan sellers or any of their respective affiliates,
and neither the certificates nor the underlying mortgage loans are insured or
guaranteed by any governmental agency.
Certain characteristics of the certificates offered herein include:
S&P/
MOODY'S/
INITIAL INITIAL PASS- DBRS
CERTIFICATE THROUGH ASSUMED FINAL ANTICIPATED
BALANCE (1) RATE(2) DISTRIBUTION DATE (3) RATINGS
------------ --------------- ------------------------ ---------------------
Class A-1 ......... $367,945,000 % November 10, 2013 AAA/Aaa/AAA
Class A-2 ......... $502,796,000 % June 10, 2014 AAA/Aaa/AAA
Class B ........... $ 40,185,000 % June 10, 2014 AA/Aa2/AA
Class C ........... $ 16,744,000 % June 10, 2014 AA-/Aa3/AA (low)
Class D ........... $ 28,464,000 % June 10, 2014 A/A2/A
Class E ........... $ 25,116,000 % July 10, 2014 A-/A3/A (low)
- ----------
(Footnotes on page S-3)
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED THAT THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS ARE TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
INVESTING IN THE CERTIFICATES OFFERED HEREIN INVOLVES RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE S-38 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 9 OF THE
PROSPECTUS.
-------------------------
Deutsche Bank Securities Inc. and ABN AMRO Incorporated are acting as
co-lead managers and underwriters of the offering, and PNC Capital Markets,
Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Nomura Securities International, Inc. are acting as
co-managers of the offering. Deutsche Bank Securities Inc. is sole bookrunner
of all the certificates offered herein. The underwriters will offer the
certificates offered herein to the public in negotiated transactions at varying
prices to be determined at the time of sale.
Deutsche Bank Securities Inc., ABN AMRO Incorporated, PNC Capital Markets,
Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Nomura Securities International, Inc. are required to purchase
the certificates offered herein (in the amounts set forth in this prospectus
supplement) from Deutsche Mortgage & Asset Receiving Corporation, subject to
certain conditions. Deutsche Mortgage & Asset Receiving Corporation expects to
receive from the sale of the certificates offered herein approximately % of
the initial aggregate certificate balance of the certificates offered herein,
plus accrued interest, before deducting expenses payable by it. The
underwriters expect to deliver the certificates offered herein to purchasers on
or about June , 2004.
DEUTSCHE BANK SECURITIES ABN AMRO INCORPORATED
Sole Book Running Manager and Co-Lead Manager Co-Lead Manager
PNC CAPITAL MARKETS, INC. JPMORGAN MERRILL LYNCH & CO. NOMURA
Co-Manager Co-Manager Co-Manager Co-Manager
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JUNE , 2004
COMM 2004-LNB3
Commercial Mortgage Pass-Through Certificates
Geographic Overview of Mortgage Pool
WASHINGTON
17 properties
$5,807,159
0.43% of total
NEVADA
2 properties
$94,840
0.01% of total
NORTHERN CALIFORNIA
16 properties
$2,774,117
0.21% of total
CALIFORNIA
61 properties
$191,780,922
14.32% of total
SOUTHERN CALIFORNIA
45 properties
$189,006,806
14.11% of total
ARIZONA
11 properties
$18,590,040
1.39% of total
COLORADO
2 properties
$3,398,111
0.25% of total
NEW MEXICO
2 properties
$134,234
0.01% of total
TEXAS
24 properties
$100,258,845
7.48% of total
OKLAHOMA
3 properties
$21,765,668
1.62% of total
ARKANSAS
3 properties
$47,770,050
3.57% of total
MISSISSIPPI
3 properties
$6,882,264
0.51% of total
KENTUCKY
1 propertY
$2,592,201
0.19% of total
ALABAMA
2 properties
$20,457,476
1.53% of total
TENNESSEE
6 properties
$13,773,660
1.03% of total
IDAHO
1 property
$40,270
0.00% of total
KANSAS
2 properties
$69,306
0.01% of total
NEBRASKA
1 property
$3,520,000
0.26% of total
MISSOURI
13 properties
$390,447
0.03% of total
MINNESOTA
2 properties
$11,388,135
0.85% of total
WISCONSIN
2 properties
$4,295,798
0.32% of total
ILLINOIS
4 properties
$24,278,547
1.81% of total
MICHIGAN
1 property
$2,400,000
0.18% of total
OHIO
1 property
$3,546,772
0.26% of total
PENNSYLVANIA
5 properties
$53,412,326
3.99% of total
NEW YORK
16 properties
$259,794,984
19.39% of total
NEW HAMPSHIRE
3 properties
$12,400,000
0.93% of total
MASSACHUSETTS
5 properties
$45,474,290
3.39% of total
CONNECTICUT
1 property
$14,925,710
1.11% of total
RHODE ISLAND
1 property
$5,993,847
0.45% of total
NEW JERSEY
3 properties
$158,182,311
11.81% of total
DELAWARE
2 properties
$61,750,000
4.61% of total
MARYLAND
4 properties
$8,322,917
0.62% of total
VIRGINIA
11 properties
$149,155,020
11.14% of total
NORTH CAROLINA
5 properties
$16,553,179
1.24% of total
SOUTH CAROLINA
2 properties
$4,631,465
0.35% of total
GEORGIA
7 properties
$10,644,152
0.79% of total
FLORIDA
38 properties
$55,037,118
4.11% of total
MORTGAGED PROPERTIES BY PROPERTY TYPE
Industrial
5.56%
Multifamily(1)
22.07%
Retail
31.66%
Mixed Use
1.27%
Self Storage
0.39%
Office
39.06%
(1) Includes Manufactured Housing (2.11%)
[ ] (less than) 1.0% of Cut-Off Date Balance
[ ] 1.0% - 5.0% of Cut-Off Date Balance
[ ] 5.1% - 10.0% of Cut-Off Date Balance
[ ] (greater than) 10.0% of Cut-Off Date Balance
Garden State Plaza Garden State Plaza
[property photo omitted] [property photo omitted]
731 Lexington Avenue - Bloomberg Headquarters DDR - Macquarie Portfolio
[property photo omitted] [property photo omitted]
DDR - Macquarie Portfolio
[property photo omitted]
Tysons Corner Center Tysons Corner Center
[property photo omitted] [property photo omitted]
G REIT Portfolio Centreville Square I&II
[property photo omitted] [property photo omitted]
International Jewelry Center Equity Industrial Partners Portfolio
[property photo omitted] [property photo omitted]
660 Figueroa Tower 660 Figueroa Tower
[property photo omitted] [property photo omitted]
3 Beaver Valley
[property photo omitted]
The footnotes to the table on the cover page are as follows:
- ----------
(1) Approximate, subject to adjustment as described in this prospectus
supplement.
(2) The pass-through rates on the Class A-1, Class A-2, Class B, Class C,
Class D and Class E certificates will equal one of the following rates:
(i) a fixed rate, (ii) a rate equal to the lesser of the initial
pass-through rate for such class and the weighted average net mortgage
pass-through rate, (iii) a rate equal to the weighted average net mortgage
pass-through rate less a specified percentage or (iv) a rate equal to the
weighted average net mortgage pass-through rate.
(3) The assumed final distribution date with respect to any class of
certificates offered herein is the distribution date on which the final
distribution would occur for such class of certificates based upon the
assumption that no mortgage loan is prepaid prior to its stated maturity
date or anticipated repayment date, as applicable, and otherwise based on
modeling assumptions described in this prospectus supplement. The actual
performance and experience of the mortgage loans will likely differ from
such assumptions. The rated final distribution date for each class of
certificates offered herein is the distribution date in July 2037. See
"Yield and Maturity Considerations" and "Ratings" in this prospectus
supplement.
---------------------
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
Information about the certificates offered herein is contained 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 certificates offered herein; and (b) this prospectus supplement, which
describes the specific terms of the certificates offered herein. If the terms of
the certificates offered herein vary between this prospectus supplement and the
accompanying prospectus, you should rely on the information in this prospectus
supplement.
In addition, we have filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, with
respect to the certificates offered herein. This prospectus supplement and the
accompanying prospectus form a part of that registration statement. However,
this prospectus supplement and the accompanying prospectus do not contain all of
the information contained in our registration statement. For further information
regarding the documents referred to in this prospectus supplement and the
accompanying prospectus, you should refer to our registration statement and the
exhibits to it. Our registration statement and the exhibits to it can be
inspected and copied at prescribed rates at the public reference facilities
maintained by the SEC at its public reference section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of these materials can also be obtained
electronically through the SEC's internet website (http://www.sec.gov).
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 from that contained in this
prospectus supplement and the prospectus. The information in this prospectus
supplement is accurate only as of the date of this prospectus supplement.
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
prospectus identify the pages where these sections are located.
Certain capitalized terms are defined and used in this prospectus
supplement and the prospectus to assist you in understanding the terms of the
certificates offered herein and this offering. The capitalized terms used in
this prospectus supplement are defined on the pages indicated under the caption
"Index of Principal Terms" beginning on page S-224 in this prospectus
supplement. The capitalized terms used in the prospectus are defined on the
pages indicated under the caption "Index of Defined Terms" beginning on page 117
in the prospectus.
S-3
---------------------
In this prospectus supplement, the terms "Depositor," "we," "us" and "our"
refer to Deutsche Mortgage & Asset Receiving Corporation.
---------------------
NOTICE TO RESIDENTS OF THE UNITED KINGDOM
The trust fund described in this prospectus supplement is a collective
investment scheme as defined in the Financial Services and Markets Act 2000
("FSMA") of the United Kingdom. It has not been authorized, or otherwise
recognized or approved by the United Kingdom's Financial Services Authority and,
as an unregulated collective investment scheme, accordingly cannot be marketed
in the United Kingdom to the general public.
The distribution of this prospectus supplement (A) if made by a person who
is not an authorized person under the FSMA, is being made only to, or directed
only at persons who (1) are outside the United Kingdom, or (2) have professional
experience in matters relating to investments, or (3) are persons falling within
Article 49(2)(a) through (d) ("high net worth companies, unincorporated
associations, etc.") of the Financial Services and Market Act 2000 (Financial
Promotion) Order 2001 (all such persons together being referred to as "FPO
Persons"), and (B) if made by a person who is an authorized person under the
FSMA, is being made only to, or directed only at, persons who (1) are outside
the United Kingdom, or (2) have professional experience in participating in
unregulated collective investment schemes, or (3) are persons falling within
Article 22(2)(a) through (d) ("high net worth companies, unincorporated
associations, etc.") of the Financial Services and Market Act 2000 (Promotion of
Collective Investment Schemes) (Exemptions) Order 2001 (all such persons
together being referred to as "PCIS Persons" and together with the FPO Persons,
the "Relevant Persons"). This prospectus supplement must not be acted on or
relied on by persons who are not Relevant Persons. Any investment or investment
activity to which this prospectus supplement relates, including the certificates
offered herein, is available only to Relevant Persons and will be engaged in
only with Relevant Persons.
Potential investors in the United Kingdom are advised that all, or most, of
the protections afforded by the United Kingdom regulatory system will not apply
to an investment in the trust fund and that compensation will not be available
under the United Kingdom Financial Services Compensation Scheme.
S-4
EXECUTIVE SUMMARY
This Executive Summary does not include all of the information you need to
consider in making your investment decision. You are advised to carefully read,
and should rely solely on, the detailed information appearing elsewhere in this
prospectus supplement and the prospectus relating to the certificates offered
herein and the underlying mortgage loans.
THE CERTIFICATES
ANTICIPATED INITIAL
RATINGS CERTIFICATE APPROXIMATE DESCRIPTION ASSUMED
(S&P/ BALANCE OR PERCENT OF APPROXIMATE OF PASS- FINAL
MOODY'S/ NOTIONAL TOTAL CREDIT THROUGH DISTRIBUTION
CLASS DBRS) BALANCE(2) CERTIFICATES SUPPORT RATE DATE
- -------------------------------------------------------------------------------- --------------------------------------------------
CERTIFICATES OFFERED
- ------------------------------------------------------------------------------------------------------------------------------------
Class A-1(5)(8) AAA/Aaa/AAA $ 367,945,000 27.469% 15.250%(4) Fixed(5) November 10, 2013
- ------------------------------------------------------------------------------------------------------------------------------------
Class A-2(5)(8) AAA/Aaa/AAA $ 502,796,000 37.536% 15.250%(4) Fixed(5) June 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class B AA/Aa2/AA $ 40,185,000 3.000% 12.250% Fixed(5) June 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class C AA-/Aa3/AA (low) $ 16,744,000 1.250% 11.000% Fixed(5) June 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class D A/A2/A $ 28,464,000 2.125% 8.875% Fixed(5) June 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class E A-/A3/A (low) $ 25,116,000 1.875% 7.000% Fixed(5) July 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
PRIVATE CERTIFICATES(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Variable
interest
Class X AAA/Aaa/AAA $ 1,339,496,991(3) N/A N/A only(3) May 10, 2026
- ------------------------------------------------------------------------------------------------------------------------------------
Class A-1A(8) AAA/Aaa/AAA $ 264,482,000 19.745% 15.250%(4) Fixed(5) June 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class F BBB+/Baa1/BBB (High) $ 15,069,000 1.125% 5.875% Fixed(5) July 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class G BBB/Baa2/BBB $ 13,395,000 1.000% 4.875% Fixed(5) July 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class H BBB-/Baa3/BBB (Low) $ 11,721,000 0.875% 4.000% Fixed(5) July 10, 2014
- ------------------------------------------------------------------------------------------------------------------------------------
Class J BB+/Ba1/BB (High) $ 11,720,000 0.875% 3.125% Fixed(6) January 10, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
Class K BB/Ba2/BB $ 6,698,000 0.500% 2.625% Fixed(6) January 10, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
Class L BB-/Ba3/BB (Low) $ 3,348,000 0.250% 2.375% Fixed(6) January 10, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
Class M B+/B1/B (High) $ 5,024,000 0.375% 2.000% Fixed(6) January 10, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
Class N B/B2/B $ 5,023,000 0.375% 1.625% Fixed(6) January 10, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
Class O B-/B3/B (Low) $ 5,023,000 0.375% 1.250% Fixed(6) January 10, 2015
- ------------------------------------------------------------------------------------------------------------------------------------
Class P NR/NR/NR $ 16,743,991 1.250% 0.000% Fixed(6) May 10, 2026
- ------------------------------------------------------------------------------------------------------------------------------------
APPROXIMATE WEIGHTED
INITIAL PASS- AVERAGE
THROUGH LIFE PRINCIPAL
CLASS RATE (YRS.)(7) WINDOW(7)
- -----------------------------------------------------------
CERTIFICATES OFFERED
- -----------------------------------------------------------
Class A-1(5)(8) --% 5.90 7/04-11/13
- -----------------------------------------------------------
Class A-2(5)(8) --% 9.81 11/13-6/14
- -----------------------------------------------------------
Class B --% 9.95 6/14-6/14
- -----------------------------------------------------------
Class C --% 9.95 6/14-6/14
- -----------------------------------------------------------
Class D --% 9.95 6/14-6/14
- -----------------------------------------------------------
Class E --% 10.02 6/14-7/14
- -----------------------------------------------------------
PRIVATE CERTIFICATES(1)
- -----------------------------------------------------------
Class X N/A N/A N/A
- -----------------------------------------------------------
Class A-1A(8) --% 8.17 7/04-6/14
- -----------------------------------------------------------
Class F --% 10.03 7/14-7/14
- -----------------------------------------------------------
Class G --% 10.03 7/14-7/14
- -----------------------------------------------------------
Class H --% 10.03 7/14-7/14
- -----------------------------------------------------------
Class J --% 10.34 7/14-1/15
- -----------------------------------------------------------
Class K --% 10.53 1/15-1/15
- -----------------------------------------------------------
Class L --% 10.53 1/15-1/15
- -----------------------------------------------------------
Class M --% 10.53 1/15-1/15
- -----------------------------------------------------------
Class N --% 10.53 1/15-1/15
- -----------------------------------------------------------
Class O --% 10.53 1/15-1/15
- -----------------------------------------------------------
Class P --% 14.02 1/15-5/26
- -----------------------------------------------------------
(1) Not offered hereby.
(2) Approximate; subject to a variance of plus or minus 5%.
(3) The Class X Certificates will not have a certificate balance. Interest will
accrue on such classes of certificates at the applicable pass-through rate,
determined as described in this prospectus supplement, on their notional
balances. With respect to the 731 Lexington Avenue-Bloomberg Headquarters
loan, the AFR/Bank of America Portfolio loan and the Saks, Inc.-North
Riverside loan, representing approximately 9.33%, 1.48% and 0.63% of the
aggregate principal balance of the pool of mortgage loans as of the cut-off
date, respectively, the related mortgaged properties also secure
subordinate loans. The Class X certificates were structured assuming that
such subordinate loans absorb any loss prior to the related mortgage loans.
For more information regarding these loans, see "Description of the
Mortgage Pool--Split Loan Structures--The 731 Lexington Avenue--Bloomberg
Headquarters Loan," "--The AFR/Bank of America Portfolio Loan" and "--The
Saks, Inc.-North Riverside Loan" in this prospectus supplement.
(4) Represents the approximate credit support for the Class A-1, Class A-2 and
Class A-1A certificates in the aggregate.
(5) The pass-through rates on the Class A-1, Class A-2, Class A-1A, Class B,
Class C, Class D, Class E, Class F, Class G and Class H certificates will
equal one of the following rates: (i) a fixed rate, (ii) a rate equal to
the lesser of the initial pass-through rate for such class and the weighted
average net mortgage pass-through rate, (iii) a rate equal to the weighted
average net mortgage pass-through rate less a specified percentage or (iv)
a rate equal to the weighted average net mortgage pass-through rate.
(6) The pass-through rates on the Class J, Class K, Class L, Class M, Class N,
Class O and Class P certificates will equal a fixed rate subject to a cap
of the weighted average net mortgage pass-through rate.
(7) The weighted average life and principal window during which distributions
of principal would be received as set forth in the table with respect to
each class of certificates is based on (i) modeling assumptions and
prepayment assumptions described in this prospectus supplement, (ii)
assumptions that there are no prepayments or losses on the mortgage loans,
and (iii) assumptions that there are no extensions of maturity dates and
that the mortgage loans with anticipated repayment dates are paid off on
their respective anticipated repayment dates.
S-5
(8) For purposes of making distributions to the Class A-1, Class A-2 and Class
A-1A certificates, the pool of mortgage loans will be deemed to consist of
two distinct Loan Groups, Loan Group 1 and Loan Group 2. Loan Group 1 will
consist of 60 mortgage loans, representing approximately 80.26% of the
outstanding pool balance. Loan Group 2 will consist of 35 mortgage loans,
representing approximately 19.74% of the outstanding pool balance. Loan
Group 2 will include approximately 94.18% of all the mortgage loans secured
by multifamily properties and approximately 45.06% of all the mortgage
loans secured by manufactured housing properties.
So long as funds are sufficient on any distribution date to make
distributions of all interest on such distribution date to the Class A-1,
Class A-2, Class A-1A and Class X certificates, interest distributions on
the Class A-1 and Class A-2 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. In addition,
generally, the Class A-1 and Class A-2 certificates will be entitled to
receive distributions of principal collected or advanced in respect of
mortgage loans in Loan Group 2 after the certificate principal balance of
the Class A-1A certificates has been reduced to zero, and the Class A-1A
certificates will be entitled to receive distributions of principal
collected or advanced in respect of mortgage loans in Loan Group 1 after
the certificate principal balance of the Class A-2 certificates has been
reduced to zero. However, on and after any distribution date on which the
certificate principal balances of the Class B through Class P certificates
have been reduced to zero, distributions of principal collected or advanced
in respect of the pool of mortgage loans will be distributed to the Class
A-1, Class A-2 and Class A-1A certificates, pro rata.
The Class Q, Class R and Class LR certificates are not represented in this
table.
The following table shows information regarding the mortgage loans and the
mortgaged properties as of the cut-off date. All weighted averages set forth
below are based on the principal balances of the mortgage loans as of such date.
THE MORTGAGE POOL
Outstanding Pool Balance as of the Cut-off Date(1) ................ $ 1,339,496,992
Number of Mortgage Loans .......................................... 95
Number of Mortgaged Properties .................................... 267
Average Mortgage Loan Balance ..................................... $ 14,099,968
Weighted Average Mortgage Rate .................................... 5.321%
Weighted Average Remaining Term to Maturity (in months)(2) ........ 110
Weighted Average Debt Service Coverage Ratio(3) ................... 1.63x
Weighted Average Loan-to-Value Ratio(3) ........................... 67.96%
- ---------
(1) Subject to a permitted variance of plus or minus 5%.
(2) Calculated with respect to the anticipated repayment date for two mortgage
loans, representing 9.54%% of the outstanding pool balance as of the
cut-off date.
(3) In the case of five mortgage loans with one or more companion loans that
are not included in the trust, DSCR and LTV have been calculated based on
the mortgage loans included in the trust and the mortgage loans that are
not included in the trust but are pari passu in right of payment with the
mortgage loans included in the trust.
S-6
TABLE OF CONTENTS
EXECUTIVE SUMMARY ....................... S-5
SUMMARY OF THE PROSPECTUS
SUPPLEMENT ........................... S-9
RISK FACTORS ............................ S-38
Risks Related to the Mortgage
Loans ............................. S-38
Conflicts of Interest ................ S-62
Risks Related to the Offered
Certificates ...................... S-68
DESCRIPTION OF THE MORTGAGE
POOL ................................. S-73
General .............................. S-73
Security for the Mortgage Loans ...... S-74
The Mortgage Loan Sellers ............ S-74
Certain Underwriting Matters ......... S-75
Underwriting Standards ............... S-78
GACC's Underwriting Standards ........ S-78
LaSalle's Underwriting Standards ..... S-80
PNC Bank's Underwriting
Standards ......................... S-82
Split Loan Structures ................ S-83
The Garden State Plaza Loan .......... S-83
The 731 Lexington Avenue-
Bloomberg Headquarters Loan ....... S-86
Rights of the Holder of the 731
Lexington Avenue-Bloomberg
Headquarters B Loan ............... S-89
The DDR-Macquarie Portfolio Loan...... S-93
The Tysons Corner Center Loan ........ S-96
The AFR/Bank of America Portfolio
Loan .............................. S-99
Rights of the Holder of the
AFR/Bank of America Portfolio B
Loan .............................. S-101
The Saks, Inc.-North Riverside
Loan .............................. S-105
Rights of the Holder of the Saks,
Inc.-North Riverside B Loan ....... S-106
ARD Loans ............................ S-109
Additional Loan Information .......... S-109
Certain Terms and Conditions of
the Mortgage Loans ................ S-126
Changes in Mortgage Pool
Characteristics ................... S-135
DESCRIPTION OF THE OFFERED
CERTIFICATES ......................... S-136
General .............................. S-136
Distributions ........................ S-137
Realized Losses ...................... S-148
Prepayment Interest Shortfalls ....... S-149
Subordination ........................ S-150
Appraisal Reductions ................. S-151
Delivery, Form and Denomination ...... S-154
Book-Entry Registration .............. S-155
Definitive Certificates .............. S-157
YIELD AND MATURITY
CONSIDERATIONS ....................... S-158
Yield Considerations ................. S-158
Weighted Average Life ................ S-160
Certain Price/Yield Tables ........... S-164
THE POOLING AND SERVICING
AGREEMENT ............................ S-167
General .............................. S-167
Servicing of the Mortgage Loans;
Collection of Payments ............ S-167
Advances ............................. S-168
Accounts ............................. S-173
Enforcement of "Due-on-Sale" and
"Due-on-Encumbrance" Clauses....... S-176
Inspections .......................... S-178
Insurance Policies ................... S-178
Assignment of the Mortgage
Loans ............................. S-181
Representations and Warranties;
Repurchase; Substitution .......... S-182
Certain Matters Regarding the
Depositor, the Servicer and the
Special Servicer .................. S-185
Events of Default .................... S-187
Rights Upon Event of Default ......... S-189
Amendment ............................ S-190
Voting Rights ........................ S-191
Sale of Defaulted Mortgage Loans...... S-191
Realization Upon Defaulted
Mortgage Loans .................... S-193
Modifications ........................ S-195
Optional Termination ................. S-197
The Trustee and the Bond
Administrator ..................... S-197
Duties of the Trustee ................ S-199
The Servicer ......................... S-199
Servicing Compensation and
Payment of Expenses ............... S-200
Special Servicing .................... S-201
Servicing of the Non-Serviced
Mortgage Loans .................... S-210
S-7
Servicer and Special Servicer
Permitted to Buy Certificates ......... S-212
Reports to Certificateholders;
Available Information ................. S-212
Other Information ........................ S-214
USE OF PROCEEDS ............................. S-216
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES ............................. S-216
ERISA CONSIDERATIONS ........................ S-218
LEGAL INVESTMENT ............................ S-220
METHOD OF DISTRIBUTION ...................... S-220
LEGAL MATTERS ............................... S-222
RATINGS ..................................... S-222
INDEX OF PRINCIPAL TERMS .................... S-224
ANNEX A-1 Certain Characteristics of
the Mortgage Loans ....................... A-1
ANNEX A-2 Certain Characteristics of
the Multifamily and Manufactured
Housing Loans ............................ A-2
ANNEX A-3 731 Lexington
Avenue-Bloomberg Headquarters
Loan Interest Rate Schedule .............. A-3
ANNEX B Structural and Collateral
Term Sheet ............................... B-1
ANNEX C Global Clearance,
Settlement and Tax Documentation
Procedures ............................... C-1
S-8
SUMMARY OF THE PROSPECTUS SUPPLEMENT
This summary highlights selected information from this prospectus
supplement and does not include all of the relevant information you need to
consider in making your investment decision. You are advised to carefully read,
and should rely solely on, the detailed information appearing elsewhere in this
prospectus supplement and in the accompanying prospectus.
Title of Certificates......... COMM 2004-LNB3 Commercial Mortgage
Pass-Through Certificates.
RELEVANT PARTIES AND DATES
Depositor..................... Deutsche Mortgage & Asset Receiving
Corporation.
Servicer...................... Midland Loan Services, Inc., a Delaware
corporation, with respect to all of the
mortgage loans other than the three mortgage
loans known as the Garden State Plaza loan, the
Tysons Corner Center loan and the AFR/Bank of
America Portfolio loan. Midland Loan Services,
Inc. is an affiliate of PNC Bank, National
Association, one of the mortgage loan sellers
and PNC Capital Markets, Inc., one of the
underwriters. The Garden State Plaza loan will
be initially serviced by Wachovia Bank,
National Association, pursuant to a separate
pooling and servicing agreement. The Tysons
Corner Center loan and the AFR/Bank of America
loan will be initially serviced by GMAC
Commercial Mortgage Corporation, each pursuant
to a separate pooling and servicing agreement.
Midland Loan Services, Inc.'s principal address
is 10851 Mastin Street, Building 82, Suite 700,
Overland Park, Kansas 66210. Wachovia Bank,
National Association's address is NC 1075, 8739
Research Drive URP 4, Charlotte, North Carolina
28262-1075. GMAC Commercial Mortgage
Corporation's address is 200 Witmer Road,
Horsham, Pennsylvania 19044. See "The Pooling
and Servicing Agreement--The Servicer" in this
prospectus supplement.
Special Servicer.............. Lennar Partners, Inc., a Florida corporation,
with respect to all of the mortgage loans other
than the Garden State Plaza loan, Tysons Corner
Center loan and the AFR/Bank of America
Portfolio loan. The Garden State Plaza loan and
the Tysons Corner Center loan will be initially
specially serviced by Lennar Partners, Inc.
each pursuant to a separate pooling and
servicing agreement. The AFR/Bank of America
Portfolio loan will be initially specially
serviced by Midland Loan Services, Inc.,
pursuant to a separate pooling and servicing
agreement. Lennar Partners, Inc.'s address is
1601 Washington Avenue, Suite 800, Miami Beach,
Florida 33139. Midland Loan Services, Inc.'s
principal address is 10851 Mastin Street,
Building
S-9
82, Suite 700, Overland Park, Kansas 66210.
See "The Pooling and Servicing
Agreement--Special Servicing--The Special
Servicer" in this prospectus supplement.
Trustee....................... Wells Fargo Bank, N.A., a national banking
association. The Trustee's address is 9062 Old
Annapolis Road, Columbia, Maryland 21045-1951,
Attention: Corporate Trust Services (COMM
2004-LNB3). See "The Pooling and Servicing
Agreement--The Trustee and the Bond
Administrator" in this prospectus supplement.
Bond Administrator............ LaSalle Bank National Association, a national
banking association. The Bond Administrator's
address is 135 South LaSalle Street, Suite
1625, Chicago, Illinois 60603, Attention:
Asset-Backed Securities Trust Services Group,
COMM 2004-LNB3. See "The Pooling and Servicing
Agreement--The Trustee and the Bond
Administrator" in this prospectus supplement.
The Directing
Certificateholder............. With respect to each mortgage loan other than a
mortgage loan that is part of a split loan
structure, the directing certificateholder will
be the controlling class representative. With
respect each mortgage loan that is part of a
split loan structure, the directing
certificateholder will be as specified in the
definition of "Directing Certificateholder" as
set forth in "The Pooling and Servicing
Agreement--Special Servicing--The Directing
Certificateholder" in this prospectus
supplement.
The Controlling Class
Representative............... Generally, the controlling class
certificateholder selected by more than 50% of
the controlling class certificateholders, by
certificate balance.
Mortgage Loan Sellers......... German American Capital Corporation, an
affiliate of Deutsche Bank Securities Inc., an
underwriter, LaSalle Bank National Association,
an affiliate of ABN AMRO Incorporated, an
underwriter, and PNC Bank, National
Association, an affiliate of Midland Loan
Services, Inc., the servicer, and PNC Capital
Markets, Inc., an underwriter. See "Description
of the Mortgage Pool--The Mortgage Loan
Sellers" in this prospectus supplement.
The mortgage loans were originated or purchased
by the mortgage loan sellers (or an affiliate
of such mortgage loan seller) as follows:
S-10
% OF INITIAL % OF INITIAL % OF INITIAL CUT-OFF
NUMBER OF OUTSTANDING LOAN LOAN DATE
MORTGAGE POOL GROUP 1 GROUP 2 PRINCIPAL
MORTGAGE LOAN SELLER LOANS BALANCE BALANCE BALANCE BALANCE
- ---------------------------------- ----------- ------------- -------------- -------------- ---------------
German American Capital
Corporation ..................... 26 60.20% 64.94% 40.95% $806,369,207
LaSalle Bank National Association 55 32.89% 30.91% 40.97% $440,615,518
PNC Bank, National Association ... 14 6.91% 4.16% 18.08% $ 92,512,267
Underwriters.................. Deutsche Bank Securities Inc., ABN AMRO
Incorporated, PNC Capital Markets, Inc., J.P.
Morgan Securities Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Nomura
Securities International, Inc. The underwriters
are required to purchase the certificates
offered herein from the Depositor (in the
amounts set forth in this prospectus supplement
under "Method of Distribution"), subject to
certain conditions. See "Method of
Distribution" in this prospectus supplement.
Cut-off Date.................. Later of June 1, 2004 or date of origination.
Closing Date.................. On or about June , 2004.
Distribution Date............. The 10th day of each month, or if such 10th
day is not a business day, the business day
immediately following such 10th day, commencing
in July 2004.
Record Date................... With respect to any distribution date, the
close of business on the last business day of
the preceding month.
Determination Date............ The earlier of (i) the sixth day of the month
in which the related distribution date occurs,
or if such sixth day is not a business day,
then the immediately preceding business day,
and (ii) the fourth business day prior to the
related distribution date.
Collection Period............. With respect to any distribution date, the
period that begins immediately following the
determination date in the calendar month
preceding the month in which such distribution
date occurs (or, in the case of the initial
distribution date, immediately following the
cut-off date) and ends on the determination
date in the calendar month in which such
distribution date occurs, provided, that with
respect to the payment by a borrower of a
balloon payment on its related due date or
during its related grace period, the collection
period will extend up to and including the
business day prior to the business day
preceding the related distribution date.
S-11
Interest Accrual Period....... With respect to any distribution date, the
calendar month immediately preceding the month
in which such distribution date occurs.
Calculations of interest due in respect of the
certificates will be made on the basis of a
360-day year consisting of twelve 30-day
months.
CERTIFICATES OFFERED
General....................... The Depositor is offering hereby the
following 6 classes of commercial mortgage
pass-through certificates:
o Class A-1
o Class A-2
o Class B
o Class C
o Class D
o Class E
The trust created by the Depositor will consist
of a total of 21 classes, the following 15 of
which are not being offered through this
prospectus supplement and the accompanying
prospectus: Class A-1A, Class X, Class F, Class
G, Class H, Class J, Class K, Class L, Class M,
Class N, Class O, Class P, Class Q, Class R and
Class LR.
The certificates will represent beneficial
ownership interests in the trust. The trust's
assets will primarily consist of 95 mortgage
loans secured by first liens on 267 commercial,
multifamily and manufactured housing
properties.
Certificate Balances.......... Your certificates have the approximate
aggregate initial certificate balance set forth
below, subject to a permitted variance of plus
or minus 5%.
Class A-1 ......... $367,945,000
Class A-2 ......... $502,796,000
Class B ........... $ 40,185,000
Class C ........... $ 16,744,000
Class D ........... $ 28,464,000
Class E ........... $ 25,116,000
The certificates that are not offered herein
(other than the Class Q, Class R and Class LR
certificates) will have the initial aggregate
certificate balances or notional balances, as
applicable, as set forth under "Executive
Summary--The Certificates" in this prospectus
supplement.
S-12
See "Description of the Offered Certificates
--General" and "--Distributions" in this
prospectus supplement.
Pass-Through Rates............ The certificates will accrue interest at an
annual rate called a pass-through rate which is
set forth below:
o The pass-through rates applicable to the
Class A-1, Class A-2, Class A-1A, Class B,
Class C, Class D, Class E, Class F, Class G
and Class H certificates will equal one of
the following rates: (i) a fixed rate, (ii)
a rate equal to the lesser of the initial
pass-through rate for such class (as
described in "Executive Summary--The
Certificates" in this prospectus supplement)
and the weighted average net mortgage
pass-through rate, (iii) a rate equal to the
weighted average net mortgage pass-through
rate less a specified percentage or (iv) a
rate equal to the weighted average net
mortgage pass-through rate.
o The pass-through rates applicable to the
Class J, Class K, Class L, Class M, Class N,
Class O and Class P certificates will, at
all times, be equal to a fixed rate per
annum subject to a cap of the weighted
average net mortgage pass-through rate.
o The Class Q, Class R and Class LR
certificates will not have pass-through
rates. See "Description of the Offered
Certificates --Distributions--Method, Timing
and Amount" and "--Payment Priorities" in
this prospectus supplement.
o The pass-through rate applicable to the
Class X certificates for the initial
distribution date will equal approximately
% per annum. The pass-through rate
applicable to the Class X certificates for
each distribution date subsequent to the
initial distribution date generally will be
equal in the aggregate to the difference
between the weighted average net mortgage
pass-through rate and the weighted average
pass-through rate of the certificates (based
on their certificate balances) other than
the Class X, Class Q, Class R and Class LR
certificates.
Distributions................. On each distribution date, you will be
entitled to receive interest and principal
distributions from available funds in an amount
equal to your certificate's interest and
principal entitlement, subject to:
(i) payment of the respective interest
entitlement for any class of
certificates bearing an earlier
alphabetical designation (except in
respect of the distribution of interest
among the Class A-1, Class
S-13
A-2, Class A-1A, and Class X certificates,
which will have the same senior priority),
and
(ii) if applicable, payment of the
respective principal entitlement for such
distribution date to outstanding classes
of certificates having an earlier
alphanumeric designation.
For purposes of making distributions to the
Class A-1, Class A-2 and Class A-1A
certificates, the pool of mortgage loans will
be deemed to consist of two distinct groups,
Loan Group 1 and Loan Group 2. Loan Group 1
will consist of 60 mortgage loans, representing
approximately 80.26% of the outstanding pool
balance, and Loan Group 2 will consist of 35
mortgage loans, representing approximately
19.74% of the outstanding pool balance. Loan
Group 2 will include approximately 94.18% of
all the mortgage loans secured by multifamily
properties and approximately 45.06% of all the
mortgage loans secured by manufactured housing
properties. Annex A-1 to this prospectus
supplement will set forth the Loan Group
designation with respect to each mortgage loan.
The Class A-1 and Class A-2 Certificates will
have priority to payments received in respect
of mortgage loans included in Loan Group 1. The
Class A-1A Certificates will have priority to
payments received in respect of mortgage loans
included in Loan Group 2. A description of the
principal and interest entitlement of each
class of certificates offered herein for each
distribution date can be found in "Description
of the Offered Certificates
--Distributions--Method, Timing and Amount,"
"--Payment Priorities" and "--Distribution of
Available Funds" in this prospectus supplement.
The Class X certificates will not be entitled
to any distributions of principal.
Prepayment Premiums;
Yield Maintenance Charges.... Prepayment premiums and yield maintenance
charges will be allocated as described in
"Description of the Offered Certificates
--Distributions--Prepayment Premiums; Yield
Maintenance Charges" in this prospectus
supplement.
Prepayment and Yield
Considerations............... The yield to investors will be sensitive to
the timing of prepayments, repurchases or
purchases of mortgage loans, and the magnitude
of losses on the mortgage loans due to
liquidations. The yield to maturity on each
class of certificates offered herein will be
sensitive to the rate and timing of principal
payments
S-14
(including both voluntary and involuntary
prepayments, defaults and liquidations) on the
mortgage loans and payments with respect to
repurchases thereof that are applied in
reduction of the certificate balance of such
class. See "Risk Factors--Risks Related to the
Offered Certificates--Risks Related to
Prepayments and Repurchases" and "--Yield
Considerations" and "Yield and Maturity
Considerations" in this prospectus supplement
and "Yield and Maturity Considerations" in the
prospectus.
S-15
Subordination; Allocation of
Losses and Certain Expenses... The chart below describes the manner in
which the rights of various classes will be
senior to the rights of other classes. This
subordination will be effected in two ways:
entitlement to receive principal and
interest on any distribution date is in
descending order and loan losses are
allocated in ascending order. (However, no
principal payments or principal losses will
be allocated to the Class X certificates,
although mortgage loan losses will reduce
the notional balances of the Class X
certificates and, therefore, the amount of
interest those classes accrue.)
[GRAPHIC OMITTED]
-----------------------------------------
Class A-1, Class A-2, Class A-1A*,
and Class X**
-----------------------------------------
------------------
Class B
------------------
------------------
Class C
------------------
------------------
Class D
------------------
------------------
Class E
------------------
------------------
Class F
------------------
------------------
Class G
------------------
------------------
Class H
------------------
------------------
Class J
------------------
------------------
Class K
------------------
------------------
Class L
------------------
------------------
Class M
------------------
------------------
Class N
------------------
------------------
Class O
------------------
------------------
Class P
------------------
------------
* The Class A-1A certificates are not
offered hereby. The Class A-1A
certificates have a priority entitlement
to principal payments received in respect
of mortgage loans included in Loan Group
2. The Class A-1 and Class A-2
certificates have a priority entitlement
to principal payments received in respect
of mortgage loans included in Loan Group
1. See "Description of the Offered
Certificates--Distributions--Method,
Timing and Amount" in this prospectus
supplement.
** The Class X certificates are not offered
hereby and are not entitled to
distributions of principal.
S-16
NO OTHER FORM OF CREDIT ENHANCEMENT WILL BE
AVAILABLE FOR THE BENEFIT OF THE HOLDERS OF THE
CERTIFICATES OFFERED HEREIN.
In certain circumstances, shortfalls in
mortgage loan interest that are the result of
the timing of prepayments and that are in
excess of the sum of (x) all or a portion of
the servicing fee payable to the servicer and
(y) the amount of mortgage loan interest that
accrues and is collected with respect to any
principal prepayment that is made after the
date on which interest is due will be allocated
to, and be deemed distributed to, each class of
certificates, pro rata, based upon amounts
distributable in respect of interest to each
such class. See "Description of the Offered
Certificates--Prepayment Interest Shortfalls"
in this prospectus supplement.
Shortfalls in
Available Funds............... The following types of shortfalls in available
funds will be allocated in the same manner as
mortgage loan losses: (i) shortfalls resulting
from additional servicing compensation which
the servicer or special servicer is entitled to
receive; (ii) shortfalls resulting from
interest on advances made by the servicer, the
special servicer or the trustee (to the extent
not covered by default interest and late
payment fees paid by the related borrower);
(iii) shortfalls resulting from unanticipated
expenses of the trust (including, but not
limited to, expenses relating to environmental
assessments, appraisals, any administrative or
judicial proceeding, management of REO
properties, maintenance of insurance policies,
and permissible indemnification); and (iv)
shortfalls resulting from a reduction of a
mortgage loan's interest rate by a bankruptcy
court or from other unanticipated or
default-related expenses of the trust.
S-17
THE MORTGAGE POOL
CHARACTERISTICS OF THE MORTGAGE POOL
A. General.................... For a more complete description of the
mortgage loans, see the following sections in
this prospectus supplement:
o Description of the Mortgage Pool;
o Annex A-1 (Certain Characteristics of the
Mortgage Loans); and
o Annex A-2 (Certain Characteristics of the
Multifamily and Manufactured Housing
Loans).
All numerical information provided in this
prospectus supplement with respect to the
mortgage loans is approximate. All weighted
average information regarding the mortgage
loans reflects weighting of the mortgage loans
by their respective principal balances as of
the cut-off date.
When information with respect to mortgaged
properties is expressed as a percentage of the
outstanding pool balance, the Loan Group 1
balance or the Loan Group 2 balance, the
percentages are based upon the outstanding
principal balance as of the cut-off date of the
related mortgage loan or allocated loan amount
attributed to such mortgaged property.
Seven mortgage loans that we intend to include
in the trust, representing 13.01% of the
outstanding pool balance, 15.24% of the Loan
Group 1 balance and 3.93% of the Loan Group 2
balance had not closed as of June 7, 2004.
Statistical information regarding the mortgage
loans may change prior to the date of initial
issuance of the certificates offered hereby due
to changes in the composition of the mortgage
pool prior to that date.
ALL MORTGAGE LOANS LOAN GROUP 1 LOAN GROUP 2
-------------------- ----------------- ---------------
Number of Mortgage Loans .................. 95 60 35
Number of Mortgaged Properties ............ 267 224 43
Number of Balloon Mortgage Loans .......... 63 38 25
Number of Hyper-Amortizing Loans .......... 2 2 0
Number of Fully Amortizing Mortgage Loans . 5 4 1
Number of Interest-Only Mortgage Loans .... 2 2 0
Number of Partial Interest-Only
Mortgage Loans(1) ........................ 23 14 9
Aggregate Initial Principal Balance (plus
or minus 5%) ............................. $1,339,496,992 $1,075,014,808 $264,482,184
S-18
ALL MORTGAGE LOANS LOAN GROUP 1 LOAN GROUP 2
-------------------- --------------------- ---------------------
Range of Mortgage Loan Principal $998,111 to $998,111 to $1,322,911 to
Balances ............................... $130,000,000 $130,000,000 $34,500,000
Average Mortgage Loan Principal
Balance ................................ $14,099,968 $17,916,913 $7,556,634
Range of Mortgage Rates ................. 4.180% to 7,160% 4,180% to 7,160% 4,430% to 6.650%
Weighted Average Mortgage Rate .......... 5.321% 5.343% 5.235%
Range of Remaining Terms to Maturity..... 58 months to 263 60 months to 263 58 months to 178
months months months
Weighted Average Remaining Term to
Maturity ............................... 110 months 111 months 107 months
Range of Remaining Amortization Term..... 177 months to 179 months to 177 months to
360 months 360 months 360 months
Weighted Average Remaining
Amortization Term ...................... 283 months 266 months 351 months
Weighted Average Loan-to-Value
Ratio(2) ............................... 67.96% 65.91% 76.28%
Weighted Average Debt Service
Coverage Ratio(2)(3) ................... 1.63x 1.71x 1.33x
----------
(1) The interest-only period for these
mortgage loans ranges from 9 to 48 months
following the cut-off date.
(2) In the case of five mortgage loans with
one or more companion loans that are not
included in the trust, DSCR and LTV have
been calculated based on the mortgage
loans included in the trust and the
mortgage loans that are not included in
the trust but are pari passu in right of
payment with the mortgage loans included
in the trust.
(3) Calculated based on mortgage loan
principal balance, as of the cut-off
date, after netting out holdback amounts
for 2 mortgage loans aggregating
$48,390,000, as described in the
definition of "UW NCF DSCR" in the
"Description of the Mortgage
Pool--Additional Loan Information--
Definitions" in this prospectus
supplement.
B. Split Loan Structures...... The mortgaged properties securing the
mortgage loans known as the Garden State Plaza
loan, 731 Lexington Avenue-Bloomberg
Headquarters loan, DDR-Macquarie Portfolio
loan, Tysons Corner Center loan, AFR/Bank of
America Portfolio loan and Saks, Inc.-North
Riverside loan also secure companion loans that
are not included in the mortgage pool.
The mortgage loan known as the "Garden State
Plaza" loan, representing 9.71% of the
outstanding pool balance and 12.09% of the Loan
Group 1 balance as of the cut-off date and with
an outstanding principal balance as of the
cut-off date of $130,000,000, is secured by a
mortgaged property that also secures three
other companion loans. The Garden State Plaza
companion loans are pari passu in right of
payment with the Garden State Plaza loan and
have outstanding principal balances as of the
cut-off date of
S-19
$130,000,000, $130,000,000 and $130,000,000,
respectively. Two of the Garden State Plaza
companion loans were deposited into the LB-UBS
Commercial Mortgage Trust 2004-C4 Commercial
Mortgage Pass-Through Certificates, Series
2004-C4 commercial mortgage securitization. The
other Garden State Plaza companion loan is
currently held by Goldman Sachs Mortgage
Company and may be sold or further divided at
any time (subject to compliance with the terms
of the related intercreditor agreement). The
Garden State Plaza loan and the Garden State
Plaza companion loans are being serviced and
administered by Wachovia Bank, National
Association, as master servicer, and by Lennar
Partners, Inc., as special servicer, pursuant
to a separate pooling and servicing agreement
entered into in connection with the issuance of
the LB-UBS Commercial Mortgage Trust 2004-C4
Commercial Mortgage Pass-Through Certificates,
Series 2004-C4. For additional information
regarding the Garden State Plaza loan, see
"Description of the Mortgage Pool--Split Loan
Structures--The Garden State Plaza Loan" and
"The Pooling and Servicing Agreement--Servicing
of the Non-Serviced Mortgage Loans" in this
prospectus supplement and "The Garden State
Plaza Loan" in Annex B to this prospectus
supplement.
The mortgage loan known as the "731 Lexington
Avenue-Bloomberg Headquarters" loan,
representing 9.33% of the outstanding pool
balance as of the cut-off date and with an
outstanding principal balance and 11.63% of the
Loan Group 1 balance as of the cut-off date of
$125,000,000, is secured by a mortgaged
property that also secures five companion loans
that are not included in the trust. Four of the
companion loans are pari passu in right of
payment with the 731 Lexington Avenue-Bloomberg
Headquarters loan and have outstanding
principal balances as of the cut-off date of
$65,000,000, $50,000,000, $74,000,000 and, in
the case of one interest-only loan (which
commences accrual only after the anticipated
repayment date of the 731 Lexington
Avenue-Bloomberg Headquarters loan), a notional
balance of $86,000,000, respectively. The other
companion loan is subordinate in right of
payment to the 731 Lexington Avenue-Bloomberg
Headquarters loan and the other 731 Lexington
Avenue-Bloomberg Headquarters companion loans
and has an outstanding principal balance as of
the cut-off date of $86,000,000. The 731
Lexington Avenue-Bloomberg Headquarters pari
passu companion loans are currently held by
German American Capital Corporation, one of the
mortgage
S-20
loan sellers, and may be sold or further
divided at any time (subject to compliance with
the terms of the related intercreditor
agreement). The 731 Lexington Avenue-Bloomberg
Headquarters subordinate loan is currently held
by 731 Funding LLC, an affiliate of the tenant
at the related mortgaged property. The pooling
and servicing agreement will govern the
servicing of the 731 Lexington Avenue-Bloomberg
Headquarters loan and the 731 Lexington
Avenue-Bloomberg Headquarters pari passu and
subordinate companion loans. For additional
information regarding the 731 Lexington
Avenue-Bloomberg Headquarters loan, see
"Description of the Mortgage Pool--Split Loan
Structures--The 731 Lexington Avenue-Bloomberg
Headquarters Loan" in this prospectus
supplement and "The 731 Lexington
Avenue-Bloomberg Headquarters Loan" in Annex B
to this prospectus supplement.
The holder of the 731 Lexington
Avenue-Bloomberg Headquarters subordinate
companion loan has certain rights with respect
to the 731 Lexington Avenue-Bloomberg
Headquarters loan and the 731 Lexington
Avenue-Bloomberg Headquarters pari passu
companion loans as described under "Description
of the Mortgage Pool--Split Loan
Structures--The 731 Lexington Avenue-Bloomberg
Headquarters Loan--Rights of the Holder of the
731 Lexington Avenue-Bloomberg Headquarters
Loan." See also "The 731 Lexington
Avenue-Bloomberg Headquarters Loan" in Annex B
to this prospectus supplement. For so long as
the holder of the 731 Lexington Avenue
subordinate companion loan is an affiliate of
the tenant at the related mortgaged property
such holder will not be permitted, under
certain circumstances, to exercise certain of
those rights.
The mortgage loan known as the "DDR-Macquarie
Portfolio" loan, representing 5.60% of the
outstanding pool balance and 6.98% of the Loan
Group 1 balance as of the cut-off date and with
an outstanding principal balance as of the
cut-off date of $75,000,000, is secured by
mortgaged properties that also secure three
other companion loans that are not included in
the trust. The DDR-Macquarie Portfolio
companion loans are pari passu in right of
payment with the DDR-Macquarie Portfolio loan
and have outstanding principal balances as of
the cut-off date of $66,000,000, $24,250,000
and $49,750,000, respectively. The
DDR-Macquarie Portfolio companion loans are
currently held by German American Capital
Corporation, one of the mortgage loan sellers,
and may be sold or further divided at any time
(subject to
S-21
compliance with the terms of the related
intercreditor agreement). The pooling and
servicing agreement will govern the servicing
of the DDR-Macquarie Portfolio loan and the
DDR-Macquarie Portfolio companion loans. For
additional information regarding the
DDR-Macquarie Portfolio loan, see "Description
of the Mortgage Pool--Split Loan
Structures--The DDR-Macquarie Portfolio Loan"
in this prospectus supplement and "The
DDR-Macquarie Portfolio Loan" in Annex B to
this prospectus supplement.
The mortgage loan known as the "Tysons Corner
Center" loan, representing 4.67% of the
outstanding pool balance and 5.81% of the Loan
Group 1 balance as of the cut-off date and with
an outstanding principal balance as of the
cut-off date of $62,500,000, is secured by a
mortgaged property that also secures three
other companion loans that are not included in
the trust. The Tysons Corner Center companion
loans are pari passu in right of payment with
the Tysons Corner Center loan and have
outstanding principal balances as of the
cut-off date of $147,500,000, $95,000,000 and
$35,000,000, respectively.
The Tysons Corner Center companion loans (all
of which are pari passu with the Tysons Corner
Center loan) were deposited into the commercial
securitizations indicated in the table below:
OUTSTANDING PRINCIPAL
BALANCE AS OF THE
CUT-OFF DATE SECURITIZATION
---------------------- ------------------------------
$ 147,500,000 COMM 2004-LNB2 Commercial
Mortgage Pass-Through
Certificates
$ 95,000,000 GE Commercial Mortgage
Corporation Commercial
Mortgage Pass-Through
Certificates, Series 2004-C2
$ 35,000,000 GMAC Commercial Mortgage
Securities, Inc., Series
2004-C1 Mortgage
Pass-Through Certificates
The Tysons Corner Center loan and the Tysons
Corner Center companion loans are being
serviced and administered by GMAC Commercial
Mortgage Corporation, as master servicer, and
by Lennar Partners, Inc., as special servicer,
pursuant to a separate pooling and servicing
agreement entered into in connection with the
issuance of the COMM 2004-LNB2 Commercial
Mortgage Pass-Through Certificates. For
additional information regarding the Tysons
Corner Center loan, see "Description of the
Mortgage Pool--Split Loan Structures--The
Tysons Corner Center Loan" and "The Pooling and
Servicing
S-22
Agreement--Servicing of the Non-Serviced
Mortgage Loans" in this prospectus supplement
and "The Tysons Corner Center Loan" in Annex B
to this prospectus supplement.
The mortgage loan known as the "AFR/Bank of
America Portfolio" loan, representing 1.48% of
the outstanding pool balance and 1.85% of the
Loan Group 1 balance as of the cut-off date and
with an outstanding principal balance as of the
cut-off date of $19,834,205, is secured by
mortgaged properties that also secure six
companion loans that are not included in the
trust. Five of the companion loans are pari
passu in right of payment with the AFR/Bank of
America Portfolio loan and have outstanding
principal balances as of the cut-off date of
$99,171,023, $74,378,267, $84,295,370,
$39,668,409 and $19,834,205, respectively. The
other companion loan is subordinate in right of
payment to the AFR/Bank of America Portfolio
loan and AFR/Bank of America Portfolio pari
passu companion loans and has an outstanding
principal balance as of the cut-off date of
$99,171,023. The AFR/Bank of America Portfolio
companion loans were deposited into the
commercial securitizations indicated in the
table below:
S-23
OUTSTANDING
PRINCIPAL BALANCE
AS OF THE PARI PASSU/
CUT-OFF DATE SUBORDINATE SECURITIZATION
------------------ ------------- ----------------------
$ 99,171,023 Pari Passu GMAC Commercial
Mortgage Securities,
Inc., Series 2003-C3
Mortgage Pass-Through
Certificates
$ 74,378,267 Pari Passu GE Commercial
Mortgage Corporation
Commercial Mortgage
Pass-Through
Certificates, Series
2004-C1
$ 84,295,370 Pari Passu COMM 2004-LNB2
Commercial Mortgage
Pass-Through
Certificates
$ 39,668,409 Pari Passu GE Commercial
Mortgage Corporation
Commercial Mortgage
Pass-Through
Certificates, Series
2004-C2
$ 19,834,205 Pari Passu GMAC Commercial
Mortgage Securities,
Inc., Series 2004-C1
Mortgage Pass-Through
Certificates
$ 99,171,023 Subordinate GMAC Commercial
Mortgage Securities,
Inc., Series 2003-C3
Mortgage Pass-Through
Certificates
The AFR/Bank of America Portfolio loan and the
AFR/Bank of America Portfolio pari passu and
subordinate companion loans are being serviced
and administered by GMAC Commercial Mortgage
Corporation, as master servicer, and by Midland
Loan Services, Inc., as special servicer,
pursuant to a separate pooling and servicing
agreement entered into in connection with the
issuance of the GMAC Commercial Mortgage
Securities, Inc., Series 2003-C3 Mortgage
Pass-Through Certificates. For additional
information regarding the AFR/Bank of America
Portfolio loan, see "Description of the
Mortgage Pool--Split Loan Structures--The
AFR/Bank of America Portfolio Loan" and "The
Pooling and Servicing Agreement--Servicing of
the Non-Serviced Mortgage Loans" in this
prospectus supplement and "The AFR/Bank of
America Portfolio Loan" in Annex B to this
prospectus supplement.
The holder of the AFR/Bank of America Portfolio
subordinate companion loan has certain rights
with respect to the AFR/Bank of America
Portfolio loan and the AFR/Bank of America
Portfolio companion loans as described under
"Description of the Mortgage Pool--Split
S-24
Loan Structures--The AFR/Bank of America
Portfolio Loan--Rights of the Holder of the
AFR/Bank of America Portfolio B Loan" in this
prospectus supplement.
The mortgage loan known as the "Saks,
Inc.-North Riverside" loan, representing 0.63%
of the outstanding pool balance and 0.78% of
the Loan Group 1 balance as of the cut-off date
and with an outstanding principal balance as of
the cut-off date of $8,372,716, is secured by a
mortgaged property that also secures one
subordinate companion loan with an outstanding
principal balance of $4,924,759 that is not
included in the trust. The Saks, Inc.-North
Riverside subordinate companion loan is
currently held by German American Capital
Corporation, one of the mortgage loan sellers,
and may be sold at any time (subject to
compliance with the terms of the related
intercreditor agreement). The pooling and
servicing agreement will govern the servicing
of the Saks, Inc.-North Riverside loan and the
Saks, Inc.-North Riverside subordinate
companion loan. For additional information
regarding the Saks, Inc.-North Riverside loan,
see "Description of the Mortgage Pool--Split
Loan Structures--The Saks, Inc.-North Riverside
Loan" in this prospectus supplement.
The holder of the Saks, Inc.-North Riverside
subordinate companion loan has certain rights
with respect to the Saks, Inc.-North Riverside
loan as described under "Description of the
Mortgage Pool--Split Loan Structures--The Saks,
Inc.-North Riverside Loan--Rights of the Holder
of the Saks, Inc.-North Riverside B Loan" in
this prospectus supplement.
Each of the mortgage loans described in this
section "--Split Loan Structure" has one or
more companion loans. None of the companion
loans will be included in the mortgage pool.
C. Nonrecourse................ Substantially all of the mortgage loans are
or should be considered nonrecourse
obligations. No mortgage loan will be insured
or guaranteed by any governmental entity or
private insurer, or by any other person.
S-25
D. Fee Simple/Leasehold
Estate...................... Each mortgage loan is secured by, among other
things, a first mortgage lien on the borrower's
fee simple estate (or in the case of 15
mortgaged properties, securing mortgage loans
which represent 1.03% of the outstanding pool
balance and 1.28% of the Loan Group 1 balance
as of the cut-off date, either (a) a leasehold
estate in a portion of the mortgaged property
and a fee estate in the remainder of the
mortgaged property or (b) a leasehold estate of
the mortgaged property and no mortgage on the
related fee estate) in an income-producing real
property.
E. Property Purposes........... The number of mortgaged properties, and the
approximate percentage of the outstanding pool
balance (as well as the approximate percentage
of the applicable Loan Group balance) as of
the cut-off date of the mortgage loans secured
thereby, for each indicated purpose are:
AGGREGATE
PRINCIPAL PERCENTAGE PERCENTAGE PERCENTAGE
BALANCE OF OF OF INITIAL OF INITIAL
NUMBER OF THE OUTSTANDING LOAN LOAN
MORTGAGED MORTGAGE POOL GROUP 1 GROUP 2
PROPERTY TYPE PROPERTIES LOANS(1) BALANCE(2) BALANCE BALANCE
- ------------------ ------------ ----------------- ------------- ------------ -----------
Office ......... 133 $ 523,162,804 39.06% 48.66% --
Retail ......... 34 424,076,365 31.66 39.45 --
Anchored ...... 27 397,599,361 29.68 36.98 --
Unanchored .... 5 14,260,847 1.06 1.33 --
CTL ........... 2 12,216,157 0.91 1.14 --
Multifamily .... 51 295,586,787 22.07 2.89 100.00%
Multifamily ... 41 267,291,789 19.95 1.45 95.18
Manufactured
Housing ....... 10 28,294,999 2.11 1.45 4.82
Industrial ..... 10 74,525,000 5.56 6.93 --
Mixed Use ...... 38 16,978,797 1.27 1.58 --
Self-Storage ... 1 5,182,311 0.39 0.48 --
--- -------------- ------ ------ ------
Total .......... 267 $1,339,512,064 100.00% 100.00% 100.00%
=== ============== ====== ====== ======
----------
(1) The total balance reflected is higher
than the actual aggregate cut-off date
balance due to the prepayment by the
AFR/Bank of America Portfolio borrower
of 0.76% of the aggregate initial
principal balance of the AFR/Bank of
America Whole Loan, which amount
reflects 110% of the allocated loan
amount of each of the two properties
released.
(2) 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 (which amounts, if
not specified in the related mortgage
loan documents, are based on the
appraised value or square footage of each
mortgaged property and/or each mortgaged
property's underwritten net cash flow).
S-26
F. Property Locations......... The table below shows, as of the cut-off date,
the number of, aggregate principal balance of,
and percentage of mutual pool balance secured
by, mortgaged properties, that are located in
the five jurisdictions that have concentrations
of mortgaged properties that are greater than
or equal to 7.48% of the outstanding pool
balance:
ALL MORTGAGED PROPERTIES(1)
AGGREGATE PERCENTAGE
NUMBER OF PRINCIPAL OF OUTSTANDING
MORTGAGED BALANCE OF THE POOL
STATE PROPERTIES MORTGAGE LOANS(2) BALANCE(1)
- ---------------------- ------------ ------------------- ---------------
New York ........... 16 $ 259,794,984 19.39%
California ......... 61 191,780,922 14.32
New Jersey ......... 3 158,182,311 11.81
Virginia ........... 11 149,155,020 11.14
Texas .............. 24 100,258,845 7.48
Other(3) ........... 152 480,339,982 35.86
--- -------------- ------
Total .............. 267 $1,339,512,064 100.00%
=== ============== ======
----------
(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 (which amounts,
if not specified in the related mortgage
loan documents, are based on the
appraised value or square footage of
each mortgaged property and/or each
mortgaged property's underwritten net
cash flow).
(2) The total balance reflected is higher
than the actual aggregate cut-off date
balance due to the prepayment by the
AFR/Bank of America Portfolio borrower of
0.76% of the aggregate initial principal
balance of the AFR/Bank of America Whole
Loan, which amount reflects 110% of the
allocated loan amount of each of the two
properties released.
(3) This reference consists of 31 states.
S-27
LOAN GROUP 1(1)
AGGREGATE
NUMBER OF PRINCIPAL PERCENTAGE OF
MORTGAGED BALANCE OF THE LOAN
STATE PROPERTIES MORTGAGE LOANS(3) GROUP BALANCE
- ---------------------- ------------ ------------------- --------------
New York ........... 6 $ 186,674,557 17.36%
California ......... 60 182,555,922 16.98
New Jersey ......... 3 158,182,311 14.71
Virginia ........... 11 149,155,020 13.87
Delaware ........... 2 61,750,000 5.74
Other(2) ........... 142 336,712,070 31.32
--- -------------- ------
Total .............. 224 $1,075,029,880 100.00%
=== ============== ======
----------
(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 (which amounts,
if not specified in the related mortgage
loan documents, are based on the
appraised value or square footage of
each mortgaged property and/or each
mortgaged property's underwritten net
cash flow).
(2) This reference consists of 30 states.
(3) The total balance reflected is higher
than the actual aggregate cut-off date
balance due to the prepayment by the
AFR/Bank of America Portfolio borrower of
0.76% of the aggregate initial principal
balance of the AFR/Bank of America Whole
Loan, which amount reflects 110% of the
allocated loan amount of each of the two
properties released.
LOAN GROUP 2(1)
AGGREGATE PERCENTAGE OF
NUMBER OF PRINCIPAL APPLICABLE LOAN
MORTGAGED BALANCE OF THE GROUP 2
STATE PROPERTIES MORTGAGE LOANS(3) BALANCE
- ---------------------- ------------ ------------------- ----------------
Texas .............. 8 $ 84,876,797 32.09%
New York ........... 10 73,120,427 27.65
Florida ............ 7 41,751,372 15.79
Georgia ............ 1 10,400,000 3.93
California ......... 1 9,225,000 3.49
Other(2) ........... 16 45,108,589 17.06
-- ------------ ------
Total .............. 43 $264,482,184 100.00%
== ============ ======
----------
(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 (which amounts,
if not specified in the related mortgage
loan documents, are based on the
appraised value or square footage of
each mortgaged property and/or each
mortgaged property's underwritten net
cash flow).
(2) This reference consists of 11 states
(3) The total balance reflected is higher
than the actual aggregate cut-off date
balance due to the prepayment by the
AFR/Bank of America Portfolio borrower of
0.76% of the aggregate initial principal
balance of the AFR/Bank of America Whole
Loan, which amount reflects 110% of the
allocated loan amount of each of the two
properties released.
S-28
See "Description of the Mortgage
Pool--Additional Loan Information" in this
prospectus supplement.
G. Amortization Types......... The mortgage loans have the amortization
characteristics set forth in the following
table:
AGGREGATE
PRINCIPAL PERCENTAGE
NUMBER OF BALANCE OF OF INITIAL
MORTGAGE THE MORTGAGE POOL
TYPE OF AMORTIZATION LOANS LOANS BALANCE(1)
- ---------------------------------- ----------- --------------- -----------
Balloon Loans .................. 63 480,731,295 35.89
Partial Interest Only
Loans(1) ..................... 23 502,604,205 37.52
Interest Only Loans ............ 2 205,000,000 15.30
Fully Amortizing Loans ......... 5 23,329,812 1.74
Anticipated Prepayment
Date Loans ................... 2 127,831,681 9.54
-- ------------- ------
Total .......................... 95 1,339,496,992 100.00
== ============= ======
----------
(1) Includes 23 mortgage loans representing
approximately 37.52% of the aggregate
principal balance of the pool of
mortgage loans and 34.64% of the Loan
Group 1 balance and 49.25% of the Loan
Group 2 balance as of the cut-off date
that pay interest-only for the first 9
to 48 scheduled payments of their
respective loan terms and thereafter
provide for regularly scheduled payments
of interest and principal based on an
amortization period longer than the
remaining term of the mortgage loan.
Such mortgage loans therefore have an
expected balloon balance at the maturity
date.
H. Prepayment Provisions;
Defeasance Loans........... As of the cut-off date, all of the mortgage
loans (other than the Saks, Inc.-North
Riverside loan, the 962 Potomac Circle Loan and
the AFR/Bank of America Portfolio loan)
prohibit voluntary prepayment or defeasance
until at least two years after the closing
date. See "Description of the Mortgage
Pool--Certain Terms and Conditions of the
Mortgage Loans--Prepayment Provisions" and
"--Property Releases" in this prospectus
supplement.
Two of the mortgage loans, representing 1.30%
of the outstanding pool balance and 0.22% of
the Loan Group 1 balance as of the cut-off date
and 5.69% of the Loan Group 2 balance as of the
cut-off date, provide for a period, following
the initial prepayment lock-out period, when
the loans are prepayable together with a yield
maintenance charge (which may in no event be
less than 1% of the prepaid amount), but do not
permit defeasance.
S-29
The mortgage loans generally provide for a
period prior to maturity (generally one to
seven months) during which prepayments may be
made without penalty or yield maintenance
charge.
With respect to the AFR/Bank of America
Portfolio loan, representing 1.48% of the
outstanding pool balance and 1.85% of the Loan
Group 1 balance as of the cut-off date,
defeasance is permitted on and after December
18, 2005. The AFR/Bank of America Portfolio
loan, together with two AFR/Bank of America
Portfolio pari passu companion loans (which are
not included in the trust) are the primary
assets of a separate REMIC with a start-up date
of December 18, 2003. In addition, prior to
December 18, 2005, up to 11.6% of the AFR/Bank
of America Portfolio Whole Loan may be prepaid
(subject to a yield maintenance charge) in
connection with the release of certain
designated properties. Yield maintenance
charges will be allocated ratably in proportion
to the outstanding principal balance of the
AFR/Bank of America Portfolio loan, the
AFR/Bank of America Portfolio pari passu
companion loans and the AFR/Bank of America
Portfolio subordinate companion loan. On April
1, 2004 and on April 30, 2004, the borrower
prepaid 0.20% and 0.56%, respectively, of the
aggregate initial principal balance of the
AFR/Bank of America Portfolio loan and the
AFR/Bank of America Portfolio companion loans.
The AFR/Bank of America Portfolio loan may be
prepaid (without a yield maintenance charge) on
and after August 1, 2013.
With respect to the Saks, Inc.-North Riverside
loan, representing 0.63% of the outstanding
pool balance and 0.78% of the Loan Group 1
balance as of the cut-off date, the related
mortgage loan documents prohibit voluntary
prepayment (at any time prior to the payment
date 5 months prior to the related maturity
date) but permit defeasance on any payment
date. However, in the event the borrower
provides notice that would result in a
defeasance of the mortgage loan on a date that
is prior to the second anniversary of the
closing date, the related mortgage loan seller
will be required to purchase the mortgage loan
from the trust at a price at least equal to the
outstanding principal balance of the mortgage
loan, plus expenses, together with a yield
maintenance charge. The Saks, Inc.-North
Riverside loan is the primary asset of a
separate REMIC.
Except as described in this paragraph, all of
the mortgage loans that permit prepayments
require that the prepayment be made on the due
date or, if on a
S-30
different date, that any prepayment be
accompanied by the interest that would be due
on the next due date. With respect to the Briar
Meadows Apartment Homes loan, representing
1.12% of the outstanding pool balance as of the
cut-off date, only prepayments received after
the 5th of any month are required to be
accompanied by the interest that would be due
on the next due date.
I. Mortgage Loans with Related
Borrowers.................. Several groups of mortgage loans have related
borrowers that are affiliated with one another
through partial or complete direct or indirect
common ownership, with the three largest of
these groups representing 5.48%, 4.69% and
2.85%, respectively, of the outstanding pool
balance and 6.83% and 5.84%, respectively, of
the Initial Loan Group 1 balance and 14.44% of
the initial Loan Group 2 balance.
ADVANCES
A. General.................... The servicer is required to advance
delinquent monthly mortgage loan payments if it
determines that the advance will be recoverable
from proceeds of the related mortgage loan. A
principal and interest advance will generally
equal the delinquent portion of the monthly
mortgage loan payment. The servicer will not be
required to advance interest in excess of a
mortgage loan's regular interest rate (i.e.,
not including any default rate). The servicer
also is not required to advance, among other
things, prepayment premiums or yield
maintenance charges, or balloon payments. If an
advance is made, the servicer will defer
(rather than advance) servicing fees, but will
advance the trustee's and the bond
administrator's fees. Neither the servicer nor
the trustee will be required to make a
principal and interest advance on any companion
loan. In addition, neither the servicer nor the
trustee will make an advance if the special
servicer determines that such advance is not
recoverable from proceeds of the related
mortgage loan.
If a borrower fails to pay amounts due on the
maturity date of the related mortgage loan, the
servicer will be required on and after such
date and until final liquidation thereof, to
advance only an amount equal to the interest
(at the mortgage loan's regular interest rate,
as described above) and principal portion of
the constant mortgage loan payment due
immediately prior to the maturity date, subject
to a recoverability determination.
S-31
In addition to principal and interest advances,
the servicer will also be obligated (subject to
the limitations described herein and except
with respect to the Garden State Plaza loan,
Tysons Corner Center loan and the AFR/Bank of
America Portfolio loan) to pay delinquent real
estate taxes, assessments and hazard insurance
premiums and to cover other similar costs and
expenses necessary to preserve the priority of
the related mortgage, enforce the terms of any
mortgage loan or to protect, manage and
maintain each related mortgaged property. In
addition, the special servicer may under
certain circumstances make property advances on
an emergency basis with respect to the mortgage
loans that have been transferred to special
servicing. The servicer will also be required
to make property advances with respect to the
mortgaged properties securing the 731 Lexington
Avenue-Bloomberg Headquarters whole loan (which
includes the 731 Lexington Avenue-Bloomberg
Headquarters loan and the 731 Lexington
Avenue-Bloomberg Headquarters pari passu and
subordinate companion loans), the DDR-Macquarie
Portfolio whole loan (which includes the
DDR-Macquarie Portfolio loan and the
DDR-Macquarie Portfolio companion loans) and
the Saks, Inc.-North Riverside whole loan
(which includes the Saks, Inc.-North Riverside
loan and the Saks, Inc.-North Riverside
subordinate companion loan), but will not be
required to make property advances with respect
to the mortgaged properties securing the Garden
State Plaza whole loan (which includes the
Garden State Plaza loan and the Garden State
Plaza companion loans), the Tysons Corner
Center whole loan (which includes the Tysons
Corner Center loan and the Tysons Corner Center
companion loans) and the AFR/Bank of America
Portfolio whole loan (which includes the
AFR/Bank of America Portfolio loan and the
AFR/Bank of America Portfolio pari passu and
subordinate companion loans).
The servicer under the LB-UBS Commercial
Mortgage Trust 2004-C4 Commercial Mortgage
Pass-Through Certificates, Series 2004-C4
commercial mortgage securitization will be
obligated to make property advances with
respect to the Garden State Plaza whole loan in
accordance with the terms of the related
pooling and servicing agreement. The servicer
under the COMM 2004-LNB2 Commercial Mortgage
Pass-Through Certificates commercial mortgage
securitization will be obligated to make
property advances with respect to the Tysons
Corner Center whole loan in accordance with the
terms of the related
S-32
pooling and servicing agreement. The servicer
under the GMAC Commercial Mortgage Securities,
Inc., Series 2003-C3 Mortgage Pass-Through
Certificates commercial mortgage securitization
will be obligated to make property advances
with respect to the AFR/Bank of America
Portfolio whole loan in accordance with the
terms of the related pooling and servicing
agreement.
If the servicer fails to make any required
advance, the trustee will be required to make
the advance. The obligation of the servicer and
the trustee to make an advance will also be
subject to a determination of recoverability.
The trustee will be entitled to conclusively
rely on the determination of recoverability
made by the servicer.
Principal and interest advances are intended to
maintain a regular flow of scheduled interest
and principal payments to the
certificateholders and are not intended to
guarantee or insure against losses. Advances
which cannot be reimbursed out of collections
on, or in respect of, the related mortgage
loans will be generally reimbursed directly
from any other collections on the mortgage
loans as provided in this prospectus supplement
and thus will cause losses to be borne by
certificateholders in the priority specified in
this prospectus supplement. The servicer and
the trustee will be entitled to interest on any
advances made, such interest accruing at the
rate and payable under the circumstances
described in this prospectus supplement.
Interest accrued on outstanding advances may
result in reductions in amounts otherwise
available for payment on the certificates.
See "The Pooling and Servicing Agreement--
Advances" in this prospectus supplement.
B. Appraisal Reduction Event
Advances................... Certain adverse events affecting a mortgage
loan, called appraisal reduction events, will
require the special servicer to obtain a new
appraisal (or, with respect to mortgage loans
having a principal balance under $2,000,000, at
the special servicer's option, an estimate of
value prepared by the special servicer or with
the consent of the directing certificateholder
(which is generally (except with respect to any
loan that is part of a split loan structure)
the holder of the majority interest of the most
subordinate class then outstanding), an
appraisal) on the related mortgaged property
(except with respect to mortgaged properties
securing the Garden State Plaza loan, the
Tysons Corner Center loan and the AFR/Bank of
America
S-33
Portfolio loan). Based on the estimate of value
or appraised value in such appraisal, as
applicable, it may be necessary to calculate an
appraisal reduction amount. The amount required
to be advanced in respect of a mortgage loan
that has been subject to an appraisal reduction
event will be reduced so that the servicer will
not be required to advance interest to the
extent of the appraisal reduction amount. Due
to the payment priorities described above, this
will reduce the funds available to pay interest
on the most subordinate class or classes of
certificates then outstanding.
The Garden State Plaza loan, the Tysons Corner
Center loan and the AFR/Bank of America
Portfolio loan are subject to provisions in the
pooling and servicing agreement under which
they are serviced relating to appraisal
reductions that are substantially similar but
not identical to the provisions set forth
above. The existence of an appraisal reduction
in respect of the Garden State Plaza loan, the
Tysons Corner Center loan or the AFR/Bank of
America Portfolio loan will proportionately
reduce the servicer's or the trustee's, as the
case may be, obligation to make principal and
interest advances on such mortgage loan.
See "Description of the Offered Certificates--
Appraisal Reductions" in this prospectus
supplement.
ADDITIONAL CONSIDERATIONS
Optional Termination.......... On any distribution date on which the
remaining aggregate principal balance of the
mortgage loans is less than 1% of the
outstanding pool balance as of the cut-off
date, each of (i) the holder of the majority
interest of the most subordinate class then
outstanding, (ii) the servicer or (iii) the
special servicer, in that order, may exercise
an option to purchase all of the mortgage loans
(and all property acquired through the exercise
of remedies in respect of any mortgage loan).
Exercise of this option will effect the
termination of the trust and retirement of the
then outstanding certificates. The trust could
also be terminated in connection with an
exchange by a sole remaining certificateholder
of all the then outstanding certificates,
excluding the Class Q, Class R and Class LR
certificates (provided, however, that the Class
A through Class E certificates are no longer
outstanding), for the mortgage loans remaining
in the trust.
See "The Pooling and Servicing
Agreement--Optional Termination" in this
prospectus supplement and "Description of the
Certificates--Termination" in the prospectus.
S-34
Certain Federal Income
Tax Consequences............. Elections will be made to treat portions of
the trust (exclusive of interest that is
deferred after the anticipated repayment date
on the mortgage loans that have an anticipated
repayment date and the related distribution
account for this deferred interest) as two
separate REMICs, known as the Lower-Tier REMIC
and the Upper-Tier REMIC, for federal income
tax purposes. In addition, the AFR/Bank of
America Portfolio loan, together with two
AFR/Bank of America Portfolio pari passu
companion loans, are the primary assets of a
separate loan REMIC, and the Saks, Inc.-North
Riverside loan is the primary asset of another
separate loan REMIC. In the opinion of counsel,
the trust and the loan REMICs will qualify for
this treatment pursuant to their elections.
Federal income tax consequences of an
investment in the certificates offered herein
include:
o Each class of certificates offered herein
will constitute a class of "regular
interests" in the Upper-Tier REMIC.
o The regular interests will be treated as
newly originated debt instruments for
federal income tax purposes.
o Beneficial owners of the certificates
offered herein will be required to report
income on the certificates offered herein in
accordance with the accrual method of
accounting.
o It is anticipated that the certificates
offered herein will be issued [at a premium]
[with [de minimis] original issue discount].
See "Certain Federal Income Tax Consequences"
in this prospectus supplement and "Certain
Federal Income Tax Consequences--Federal Income
Tax Consequences for REMIC Certificates" in the
prospectus.
ERISA Considerations.......... A fiduciary of an employee benefit plan
should review with its legal advisors whether
the purchase or holding of the certificates
offered herein could give rise to a transaction
that is prohibited or is not otherwise
permitted under either ERISA or Section 4975 of
the Internal Revenue Code of 1986, as amended,
or whether there exists any statutory,
regulatory or administrative exemption
applicable thereto. The United States
Department of Labor has granted to each of
Deutsche Bank Securities Inc., ABN AMRO
Incorporated and PNC Capital Markets, Inc. an
administrative exemption (Deutsche Bank
Securities Inc., as Department Final
Authorization Number
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97-03E, as amended by Prohibited Transaction
Exemption ("PTE") 2002-41, ABN AMRO
Incorporated, as Department Final Authorization
Number 98-08E, as amended by PTE 2002-41 and
PNC Capital Markets, Inc., as PTE 98-08, as
amended by PTE 2002-41), which generally
exempts from the application of certain of the
prohibited transaction provisions of Section
406 of ERISA and the excise taxes imposed on
such prohibited transactions by Sections
4975(a) and (b) of the Internal Revenue Code of
1986, as amended, transactions relating to the
purchase, sale and holding of pass-through
certificates underwritten by the underwriters
and the servicing and operation of the related
asset pool, provided that certain conditions
are satisfied.
The Depositor expects that the exemption
granted to Deutsche Bank Securities Inc., ABN
AMRO Incorporated and PNC Capital Markets, Inc.
will generally apply to the certificates
offered herein, provided that certain
conditions are satisfied. See "ERISA
Considerations" in this prospectus supplement
and "Certain ERISA Considerations" in the
prospectus.
Ratings....................... It is a condition to their issuance that the
certificates offered herein receive from
Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., Moody's
Investors Service, Inc. and Dominion Bond
Rating Service Limited, the credit ratings
indicated below.
S&P MOODY'S DBRS
----- --------- ---------
Class A-1 AAA Aaa AAA
Class A-2 AAA Aaa AAA
Class B AA Aa2 AA
Class C AA- Aa3 AA (Low)
Class D A A2 A
Class E A- A3 A (Low)
See "Ratings" in this prospectus supplement and
"Rating" in the prospectus for a discussion of
the basis upon which ratings are given, the
limitations of and restrictions on the ratings,
and the conclusions that should not be drawn
from a rating.
Legal Investment.............. None of the certificates will constitute
"mortgage related securities" within the
meaning of the Secondary Mortgage Market
Enhancement Act of 1984, as amended. The
appropriate characterization of the
certificates offered herein under various legal
investment restrictions, and thus the ability
of investors subject to these restrictions to
purchase the certificates offered herein, may
be subject to
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significant interpretative uncertainties.
Investors should consult their own legal
advisors to determine whether and to what
extent the certificates offered herein
constitute legal investments for them. See
"Legal Investment" in this prospectus
supplement and in the prospectus.
Denominations; Clearance
and Settlement............... The certificates offered herein will be
issuable in registered form, in minimum
denominations of certificate balance of (i)
$10,000 with respect to the Class A-1 and Class
A-2 certificates and (ii) $25,000 with respect
to the Class B, Class C, Class D and Class E
certificates. Investments in excess of the
minimum denominations may be made in multiples
of $1.
You may hold your certificates through (i) The
Depository Trust Company ("DTC") (in the United
States) or (ii) Clearstream Banking Luxembourg,
a division of Clearstream International,
societe anonyme ("Clearstream") or The
Euroclear System ("Euroclear") (in Europe).
Transfers within DTC, Clearstream or Euroclear
will be in accordance with the usual rules and
operating procedures of the relevant system.
See "Description of the Offered
Certificates--Delivery, Form and Denomination,"
"--Book-Entry Registration" and "--Definitive
Certificates" in this prospectus supplement and
"Description of the Certificates-- Book-Entry
Registration and Definitive Certificates" in
the prospectus.
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RISK FACTORS
You should carefully consider the risks before making an investment
decision. In particular, the timing and amount of distributions on your
certificates will depend on payments received on and other recoveries with
respect to the mortgage loans. Therefore, you should carefully consider the risk
factors relating to the mortgage loans and the mortgaged properties.
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.
If any of the following risks actually occur, your investment could be
materially and adversely affected.
This prospectus supplement also contains forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including the risks described below and elsewhere in this prospectus
supplement.
RISKS RELATED TO THE MORTGAGE LOANS
MORTGAGE LOANS ARE NONRECOURSE AND ARE NOT INSURED OR GUARANTEED
Payments under the mortgage loans are not insured or guaranteed by any
person or entity.
Substantially all of the mortgage loans are or should be considered to be
nonrecourse loans. If a default occurs, the lender's remedies generally are
limited to foreclosing against the borrower and/or the specific mortgaged
properties and other assets that have been pledged to secure the mortgage loan,
subject to customary nonrecourse carveouts either to the borrower or its
sponsor. Even if a mortgage loan is recourse to the borrower (or if a
nonrecourse carveout to the borrower applies), in most cases, the borrower's
assets are limited primarily to its interest in the related mortgaged property.
Payment of amounts due under the mortgage loan prior to the maturity date or the
anticipated repayment dates, as applicable, is consequently dependent primarily
on the sufficiency of the net operating income of the mortgaged property.
Payment of the mortgage loan at the maturity date or the anticipated repayment
dates, as applicable, is primarily dependent upon the borrower's ability to sell
or refinance the mortgaged property for an amount sufficient to repay the
mortgage loan.
All of the mortgage loans (other than the Saks, Inc.-North Riverside loan)
were originated within eight months prior to the cut-off date, provided that
with respect to the AFR/Bank of America loan, the related bridge loan was
originated within twelve months prior to the cut-off date. Consequently, the
mortgage loans generally do not have a long-standing payment history.
COMMERCIAL LENDING IS DEPENDENT UPON NET OPERATING INCOME
The mortgage loans are secured by various types of income-producing
commercial properties. Commercial mortgage loans are generally thought to expose
a lender to greater risk than one-to-four family residential loans.
The repayment of a commercial loan is typically dependent upon the ability
of the applicable property to produce cash flow. Even the liquidation value of a
commercial property is determined, in substantial part, by the amount of the
mortgaged property's cash flow (or its potential to generate cash flow).
However, net operating income and cash flow can be volatile and may be
insufficient to cover debt service on the loan at any given time. Lenders
typically look to the debt service coverage ratio (that is, the ratio of net
cash flow to debt service) of a mortgage loan secured by income-producing
property as an important measure of the risk of default of such mortgage loan.
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The net operating income, cash flow and property value of the mortgaged
properties may be adversely affected by a large number of factors. Some of these
factors relate to the property itself, such as:
o the age, design and construction quality of the mortgaged property;
o perceptions regarding the safety, convenience and attractiveness of
the mortgaged property;
o the proximity and attractiveness of competing properties;
o the adequacy of the mortgaged property's management and maintenance;
o increases in operating expenses at the mortgaged property and in
relation to competing properties;
o an increase in the capital expenditures needed to maintain the
mortgaged property or make improvements;
o the dependence upon a single tenant, or a concentration of tenants in
a particular business or industry;
o a decline in the financial condition of a major tenant;
o an increase in vacancy rates; and
o a decline in rental rates as leases are renewed or entered into with
new tenants.
Others factors are more general in nature, such as:
o national, regional or local economic conditions (including plant
closings, military base closings, industry slowdowns and unemployment
rates);
o local real estate conditions (such as an oversupply of competing
properties, space or multifamily housing);
o demographic factors;
o decreases in consumer confidence;
o changes in consumer tastes and preferences;
o retroactive changes in building codes;
o changes or continued weakness in specific industry segments; and
o the public's perception of safety for customers and clients.
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 and other lease terms, including
co-tenancy provisions and early termination rights;
o the creditworthiness of tenants;
o tenant defaults;
o in the case of rental properties, the rate at which new rentals occur;
and
o the mortgaged 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).
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 mortgaged properties with short-term revenue sources and may lead to
higher rates of delinquency or defaults under the related mortgage loans.
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SOME MORTGAGED PROPERTIES MAY NOT BE READILY CONVERTIBLE TO ALTERNATIVE USES
Some of the mortgaged properties may not be readily convertible to
alternative uses if those properties were to become unprofitable for any reason.
Converting commercial properties to alternate uses generally requires
substantial capital expenditures. In addition, zoning or other restrictions also
may prevent alternative uses. The liquidation value of any such mortgaged
property consequently may be substantially less than would be the case if the
property were readily adaptable to other uses.
PROPERTY VALUE MAY BE ADVERSELY AFFECTED EVEN WHEN CURRENT OPERATING INCOME IS
NOT
Various factors may adversely affect the value of the mortgaged properties
without affecting the properties' current net operating income. These factors
include, among others:
o changes in governmental regulations, fiscal policy, zoning or tax
laws;
potential environmental legislation or liabilities or other legal
liabilities;
o the availability of refinancing; and
o changes in interest rate levels.
TENANT CONCENTRATION ENTAILS RISK
A deterioration in the financial condition of a tenant can be particularly
significant if a mortgaged property is leased to a single tenant, or a small
number of tenants. Mortgaged properties leased to a single tenant, or a small
number of tenants, also are more susceptible to interruptions of cash flow if a
tenant fails to renew its lease. This is so because: (i) the financial effect of
the absence of rental income may be severe; (ii) more time may be required to
re-lease the space; and (iii) substantial capital costs may be incurred to make
the space appropriate for replacement tenants.
In the case of the seventeen mortgage loans known as "731 Lexington
Avenue-Bloomberg Headquarters," "The Arboretum," "Saks, Inc.-North Riverside,"
"Walgreens Jacksonville," "Arizona Heart Institute," "Walgreens-Compass Road,"
"Walgreens-Baltimore," "Walgreens- Jacksonville," "Walgreens-Hesperia, CA,"
"Walgreens-Whitehall, OH," "Eckerds-Peoria," "Savon-Lomita, CA," "OfficeMax,"
"1150 Gemini Plaza," "85 Moosup Road," "151 Suffolk Lane," "1200 Urban Center"
and "962 Potomac Circle," collectively representing 17.19% of the outstanding
pool balance (and 21.41% of the initial Loan Group 1 balance) as of the cut-off
date, such mortgage loans are secured by liens on mortgaged properties that are
100% leased to a single tenant.
In the case of the AFR/Bank of America Portfolio Loan, representing
approximately 1.48% of the outstanding pool balance (and 1.85% of the initial
Loan Group 1 balance) as of the cut-off date, the mortgage loan is secured by
150 mortgaged properties, 66 of which are leased to such single tenant and 67 of
which are greater than 50% leased to such single tenant pursuant to a lease that
provides that single tenant with certain rights to relocate between buildings
and to exercise certain limited termination rights. Although not all of the
mortgaged properties securing such mortgage loan are leased to a single tenant,
this mortgage loan has significant tenant concentration risk.
The underwriting of single-tenant mortgage loans is based primarily upon
the monthly rental payments due from the tenant under the lease at the related
mortgaged property. In addition, the loan underwriting for certain single-tenant
mortgage loans took into account the creditworthiness of the tenants under the
applicable leases. Accordingly, such single-tenant mortgage loans may have
higher loan-to-value ratios and lower debt service coverage ratios than other
types of mortgage loans. However, there can be no assurance that the assumptions
made when underwriting such loans will be correct, that the tenant will re-let
the premises or that such tenant will maintain its creditworthiness.
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Retail and office properties also may be adversely affected if there is a
concentration of a particular tenant or type of tenant among the mortgaged
properties or of tenants in a particular business or industry. In such cases,
industry wide concerns or a problem with such particular tenant could have a
disproportionately large impact on the pool of mortgage loans and adversely
affect distributions to certificateholders.
MORTGAGED PROPERTIES LEASED TO MULTIPLE TENANTS ALSO HAVE RISKS
If a mortgaged property has multiple tenants, re-leasing expenditures may
be more frequent than in the case of mortgaged properties with fewer tenants,
thereby reducing the cash flow available for debt service payments.
Multi-tenanted mortgaged properties also may experience higher continuing
vacancy rates and greater volatility in rental income and expenses.
RISKS RELATED TO LOAN CONCENTRATION
Several of the mortgage loans have cut-off date balances that are
substantially higher than the average cut-off date balance. In general,
concentrations in mortgage 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. The ten
largest mortgage loans represent approximately 53.73% of the outstanding pool
balance, approximately 66.95% of the Loan Group 1 balance and none of the Loan
Group 2 balance as of the cut-off date. Losses on any of these loans may have a
particularly adverse effect on the certificates offered herein.
The ten largest loans are described in Annex B to this prospectus
supplement.
Each of the other mortgage loans represents no more than 2.88% of the
outstanding pool balance as of the cut-off date.
RISKS RELATED TO BORROWER CONCENTRATION
Several groups of mortgage loans are made to the same borrower or have
related borrowers that are affiliated with one another through partial or
complete direct or indirect common ownership, with the three largest of these
groups representing 5.48%, 4.69% and 2.85%, respectively, of the outstanding
pool balance, approximately 6.83% and 5.84%, respectively, of the Loan Group 1
balance and approximately 14.44% of the Loan Group 2 balance as of the cut-off
date. A concentration of mortgage loans with the same borrower or related
borrowers also can pose increased risks. For instance, if a borrower that owns
several mortgaged properties experiences financial difficulty at one mortgaged
property, or another income-producing property that it owns, it could attempt to
avert foreclosure by filing a bankruptcy petition that might have the effect of
interrupting monthly payments for an indefinite period on all of the related
mortgage loans.
RISKS RELATING TO PROPERTY TYPE CONCENTRATION
A concentration of mortgage loans secured by the same mortgaged property
types can increase the risk that a decline in a particular industry or business
would have a disproportionately large impact on the pool of mortgage loans. In
particular, the mortgage loans in Loan Group 1 are secured primarily by
properties other than multifamily properties and the mortgage loans in Loan
Group 2 are secured primarily by multifamily properties. Because principal
distributions on the Class A-1A certificates are generally received from
collections on the mortgage loans in Loan Group 2, an adverse event with respect
to multifamily properties would have a substantially greater impact on the Class
A-1A certificates than if such class received principal distributions from loans
secured by other property types as well. However, on and after any distribution
date on which the certificate principal balances of the Class B through Class P
certificates have been reduced to zero, the Class A-1A certificates will receive
principal distributions from the collections on the pool of mortgage loans, pro
rata, with the Class A-1 and Class A-2 certificates.
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The following are certain property type concentrations of the pool of
mortgage loans as of the cut-off date:
o office properties securing mortgage loans representing 39.06% of the
outstanding pool balance and 48.66% of the Loan Group 1 balance as of
the cut-off date;
o retail properties securing mortgage loans representing 31.66% of the
outstanding pool balance and 39.45% of the Loan Group 1 balance as of
the cut-off date;
o multifamily and manufactured housing properties securing mortgage
loans representing 22.07% of the outstanding pool balance, 2.89% of
the Loan Group 1 balance and 100% of the Loan Group 2 balance as of
the cut-off date;
o industrial properties securing mortgage loans representing 5.56% of
the outstanding pool balance and 6.93% of the Loan Group 1 balance as
of the cut-off date.
o mixed use properties securing mortgage loans representing 1.27% of the
outstanding pool balance and 1.58% of the Loan Group 1 balance as of
the cut-off date; and
o one self-storage property securing one mortgage loan representing
0.39% of the outstanding pool balance and 0.48% of the Loan Group 1
balance as of the cut-off date.
GEOGRAPHIC CONCENTRATION ENTAILS RISKS
As of the cut-off date, the mortgaged properties are located in 36 states.
16 mortgaged properties, securing mortgage loans representing 19.39% of the
outstanding pool balance, are located in New York. 61 mortgaged properties,
securing mortgage loans representing 14.32% of the outstanding pool balance, are
located in California. Three mortgaged properties, securing mortgage loans
representing 11.81% of the outstanding pool balance as of the cut-off date, are
located in New Jersey. See the table entitled "Geographic Concentration of
Mortgage Loans" under "Description of the Mortgage Pool" in this prospectus
supplement. Except as set forth in this paragraph, no state contains more than
19.39% of the mortgaged properties (based on the principal balance as of the
cut-off date of the related mortgage loans or, in the case of mortgage loans
secured by multiple mortgaged properties, on the portion of principal amount of
the related mortgage loan allocated to such mortgaged property).
The economy of any state or region in which a mortgaged property is located
may be adversely affected more than that of other areas of the country by:
o certain developments particularly affecting industries concentrated in
such state or region;
o conditions in the real estate markets where the mortgaged properties
are located;
o changes in governmental rules and fiscal policies;
o acts of nature (which may result in uninsured losses); and
o other factors which are beyond the control of the borrowers.
For example, improvements on mortgaged properties located in California may
be more susceptible to certain types of special hazards not fully covered by
insurance (such as earthquakes) than properties located in other parts of the
country. To the extent that general economic or other relevant conditions in
states or regions in which concentrations of mortgaged properties securing
significant portions of the aggregate principal balance of the mortgage loans
are located decline and result in a decrease in commercial property, housing or
consumer demand in the region, the income from and market value of the mortgaged
properties and repayment by borrowers may be adversely affected.
OFFICE PROPERTIES HAVE SPECIAL RISKS
133 of the mortgaged properties, which represent security for 39.06% of the
outstanding pool balance and 48.66% of the Loan Group 1 balance as of the
cut-off date, are office properties.
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Various factors may adversely affect the value of office properties,
including:
o the quality of an office building's tenants;
o an economic decline in the business operated by the tenants;
o the diversity of an office building's tenants (or reliance on a single
or dominant tenant);
o the physical attributes of the building in relation to competing
buildings (e.g., age, condition, design, location, access to
transportation and ability to offer certain amenities, including,
without limitation, current business wiring requirements);
o the desirability of the area as a business location;
o the strength and nature of the local economy (including labor costs
and quality, tax environment and quality of life for employees); and
o an adverse change in population, patterns of telecommuting or sharing
of office space, and employment growth (which creates demand for
office space).
Moreover, the cost of refitting office space for a new tenant is often
higher than the cost of refitting other types of property.
RETAIL PROPERTIES HAVE SPECIAL RISKS
34 of the mortgaged properties, which represent security for 31.66% of the
outstanding pool balance and 39.45% of the Loan Group 1 balance as of the
cut-off date, are retail properties. Of these, 27 mortgaged properties,
representing security for 29.68% of the outstanding pool balance and 36.99% of
the Loan Group 1 balance as of the cut-off date, are considered by the
applicable mortgage loan seller to be anchored or shadow anchored properties. 5
mortgaged properties, representing security for 1.06% of the outstanding pool
balance and 1.33% of the Loan Group 1 balance as of the cut-off date, are
considered by the applicable mortgage loan seller to be unanchored mortgaged
properties. 2 mortgaged properties, representing security for 0.91% of the
outstanding pool balance and 1.14% of the Loan Group 1 balance as of the cut-off
date The quality and success of a retail property's tenants significantly affect
the property's value. For example, if the sales of retail tenants were to
decline, rents tied to a percentage of gross sales may decline and those tenants
may be unable to pay their rent or other occupancy costs. Certain tenants at
various mortgaged properties have rents tied to a percentage of gross sales.
The presence or absence of an "anchor tenant" or a "shadow anchor" in or
near a shopping center also can be important, because anchors play a key role in
generating customer traffic and making a center desirable for other tenants. An
"anchor tenant" is usually proportionately larger in size than most other
tenants in the mortgaged property, is vital in attracting customers to a retail
property and is located on the related mortgaged property. A "shadow anchor" is
usually proportionally larger in size than most tenants in the mortgaged
property, is important in attracting customers to a retail property and is
located sufficiently close and convenient to the mortgaged property, but not on
the mortgaged property, so as to influence and attract potential customers. The
economic performance of an anchored or shadow anchored retail property will
consequently be adversely affected by:
o an anchor tenant's or shadow anchor tenant's failure to renew its
lease;
o termination of an anchor tenant's or shadow anchor tenant's lease, or
if the anchor tenant or shadow anchor owns its own site, a decision to
vacate;
o the bankruptcy or economic decline of an anchor tenant, shadow anchor
or self-owned anchor; or
o the cessation of the business of an anchor tenant, a shadow anchor
tenant or of a self-owned anchor (notwithstanding its continued
payment of rent).
If an anchor store in a mortgaged property were to close, the related
borrower may be unable to replace that anchor in a timely manner or may suffer
adverse economic
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consequences. Furthermore, certain of the anchor stores at the retail properties
have co-tenancy clauses in their leases or operating agreements which permit
those anchors to cease operating if certain other stores are not operated at
those locations. The breach of various other covenants in anchor store leases or
operating agreements also may permit those stores to cease operating. Certain
non-anchor tenants at retail properties also may be permitted to terminate their
leases if certain other stores are not operated or if those tenants fail to meet
certain business objectives. Certain tenants at various mortgaged properties are
closed for business or otherwise not in occupancy and/or have co-tenancy clauses
or other termination provisions in their leases. These and other similar
situations could adversely affect the performance of the related mortgage loan
and adversely affect distributions to certificateholders.
Retail properties also face competition from sources outside a given real
estate market. For example, all of the following compete with more traditional
retail properties for consumer business:
o factory outlet centers;
o discount shopping centers and clubs;
o catalogue retailers;
o home shopping networks;
o internet web sites; and
o telemarketers.
Continued growth of these alternative retail outlets (which often have
lower operating costs) could adversely affect the rents collectible at the
retail properties included in the mortgage pool, as well as the income from, and
market value of, the mortgaged properties. Moreover, additional competing retail
properties have been and may in the future be built in the areas where the
retail properties are located. Such competition could adversely affect the
performance of the related mortgage loan and adversely affect distributions to
certificateholders.
In addition, although renovations and expansion at a mortgaged property
will generally enhance the value of the mortgaged property over time, in the
short term, construction and renovation work at a mortgaged property may
negatively impact net operating income as customers may be deterred from
shopping at or near a construction site. With respect to the mortgage loan known
as the "Garden State Plaza" loan, representing 9.71% of the outstanding pool
balance and 12.09% of the Loan Group 1 balance as of the cut-off date, subject
to the satisfaction of certain conditions set forth in the related mortgage loan
documents, the related borrowers may acquire an approximately five-acre existing
site adjacent to the mortgaged property and construct thereon a movie theater
complex, new in-line mall space, new restaurant space and parking areas as well
as expand the existing food court at the mortgaged property. Upon acquisition by
the borrowers, the new parcel will become additional collateral for the Garden
State Plaza loan, but no income from such space was included in the underwriting
of the mortgage loan.
In the case of the Tysons Corner Center loan, representing 4.67% of the
outstanding pool balance and 5.81% of the Loan Group 1 balance as of the cut-off
date, the related mortgage loan documents permit the borrower to renovate and
expand a portion of the mall at its own expense. Construction of the project is
underway and is expected to be completed on or before the fourth quarter of
2005. The scope of work approved under the mortgage loan documents includes (a)
the redevelopment of the currently vacant JC Penney building containing
approximately 230,000 square feet of gross building area and the construction of
a new attached building containing approximately 288,000 square feet of gross
building area and the leasing of such space to a theater (approximately 105,000
square feet of net rentable area on level three), food court, restaurants and
additional tenants and (b) the construction of
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an adjacent multi-level parking garage, having approximately 1,612 parking
spaces. The expansion and renovation, if completed, will provide additional
collateral for the Tysons Corner Center loan, but no income from such space was
included in the underwriting of the mortgage loan. The mortgage loan documents
do not require a reserve or completion guaranty in connection with the project.
Although construction has commenced, no assurance can be given as to the timing
of completion or leasing of the project or the impact on cash flow at the
related mortgaged properties.
MULTIFAMILY PROPERTIES HAVE SPECIAL RISKS
51 of the mortgaged properties (including 10 manufactured housing
properties), which represent security for 22.07% of the outstanding pool
balance, 2.89% of the Loan Group 1 balance and 100% of the Loan Group 2 balance
as of the cut-off date, are multifamily properties. 1 of these mortgaged
properties, representing security for 0.78% of the outstanding pool balance, or
3.93% of the Loan Group 2 balance as of the cut-off date, provide housing for
students in all or a majority of its units.
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 (e.g., its age,
appearance and construction quality);
o the location of the property (e.g., a change in the neighborhood over
time);
o the ability of management to provide adequate maintenance and
insurance;
o the types of services the property provides;
o the property's reputation;
o the level of mortgage interest rates (which may encourage tenants to
purchase rather than rent housing);
o in the case of student housing facilities, which may be more
susceptible to damage or wear and tear than other types of multifamily
housing, the reliance on the financial well-being of the college or
university to which it relates, competition from on-campus housing
units, which may adversely affect occupancy, the physical layout of
the housing, which may not be readily convertible to traditional
multifamily use, and that student tenants have a higher turnover rate
than other types of multifamily tenants, which in certain cases is
compounded by the fact that student leases are available for periods
of less than 12 months;
o the presence of competing properties in the local market;
o the tenant mix, particularly if the tenants are predominantly
students, personnel from or workers related to a military base or
workers from a particular business or industry;
o adverse local or national economic conditions, which may limit the
amount of rent that can be charged and may result in a reduction in
timely rent payments or a reduction in occupancy;
o state and local regulations;
o government assistance/rent subsidy programs; and
o national, state, or local politics.
Certain states regulate the relationship of an owner and its tenants.
Commonly, these laws require a written lease, good cause for eviction,
disclosure of fees, and notification to residents of changed land use, while
prohibiting unreasonable rules, retaliatory evictions, and restrictions on a
resident's choice of unit vendors. Apartment building owners have been the
subject of suits under state "Unfair and Deceptive Practices Acts" and other
general consumer
S-45
protection statutes for coercive, abusive or unconscionable leasing and sales
practices. A few states offer more significant protection. For example, there
are provisions that limit the basis on which a landlord may terminate a tenancy
or increase its rent or prohibit a landlord from terminating a tenancy solely by
reason of the sale of the owner's building.
In addition to state regulation of the landlord-tenant relationship,
numerous counties and municipalities, including those in which certain of the
mortgaged properties are located, impose rent control on apartment buildings.
These ordinances may limit rent increases to fixed percentages, to percentages
of increases in the consumer price index, to increases set or approved by a
governmental agency, or to increases determined through mediation or binding
arbitration. In many cases, the rent control laws do not permit vacancy
decontrol. Local authorities may not be able to impose rent control because it
is pre-empted by state law in certain states, and rent control is not imposed at
the state level in those states. In some states, however, local rent control
ordinances are not pre-empted for tenants having short-term or month-to-month
leases, and properties there may be subject to various forms of rent control
with respect to those tenants. Any limitations on a borrower's ability to raise
property rents may impair such borrower's ability to repay its multifamily loan
from its net operating income or the proceeds of a sale or refinancing of the
related multifamily property.
Certain of the mortgage loans may be secured by mortgaged properties that
are currently eligible (or may become eligible in the future) for and have
received low income housing tax credits pursuant to Section 42 of the Internal
Revenue Code in respect of various units within the mortgaged property or have
tenants that rely on rent subsidies under various government-funded programs,
including the Section 8 Tenant-Based Assistance Rental Certificate Program of
the United States Department of Housing and Urban Development. There is no
assurance that such programs will be continued in their present form or that the
level of assistance provided will be sufficient to generate enough revenues for
the related borrower to meet its obligations under the related mortgage loan.
MANUFACTURED HOUSING PROPERTIES HAVE SPECIAL RISKS
10 of the mortgaged properties, which represent security for 2.11% of the
outstanding pool balance, 1.45% of the Loan Group 1 balance and 4.82% of the
Loan Group 2 balance as of the cut-off date, are manufactured housing
properties. Loans secured by liens on manufactured housing properties pose risks
not associated with loans secured by liens on other types of income-producing
real estate.
The successful operation of a manufactured housing property may depend upon
the number of other competing residential developments in the local market, such
as:
o other manufactured housing properties;
o apartment buildings; and
o site-built single family homes.
Other factors may also include:
o the physical attributes of the community, including its age and
appearance;
o the location of the manufactured housing property;
o the ability of management to provide adequate maintenance and
insurance;
o the type of services or amenities it provides;
o the property's reputation; and
o state and local regulations, including rent control and rent
stabilization.
The manufactured housing properties are "special purpose" properties that
could not be readily converted to general residential, retail or office use.
Thus, if the operation of any of the
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manufactured housing properties becomes unprofitable due to competition, age of
the improvements or other factors such that the borrower becomes unable to meet
its obligations on the related mortgage loan, the liquidation value of that
manufactured housing property may be substantially less, relative to the amount
owing on the related mortgage loan, than would be the case if the manufactured
housing property were readily adaptable to other uses.
INDUSTRIAL PROPERTIES HAVE SPECIAL RISKS
There are 10 industrial properties, securing approximately 5.56% of the
outstanding pool balance and 6.93% of the Loan Group 1 balance as of the cut-off
date. Significant factors determining the value of industrial properties are:
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.
Industrial properties may be adversely affected by reduced demand for
industrial space occasioned by a decline in a particular industry segment (for
example, a decline in defense spending), and a particular industrial property
that suited the needs of its original tenant may be difficult to re-let to
another tenant or may become functionally obsolete relative to newer properties.
In addition, lease terms with respect to industrial properties are generally for
shorter periods of time and may result in a substantial percentage of leases
expiring in the same year at any particular industrial property.
Aspects of building site design and adaptability affect the value of an
industrial property. Site characteristics which are generally desirable to an
industrial property include high, clear ceiling heights, wide column spacing, a
large number of bays (loading docks) and large bay depths, divisibility, minimum
large truck turning radii 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.
CREDIT TENANT LEASE PROPERTIES HAVE SPECIAL RISKS
A credit tenant lease property secures two of the mortgage loans,
representing security for approximately 0.91% of the outstanding pool balance,
or 1.14% of the Loan Group 1 balance as of the cut-off date. Each credit tenant
lease loan is secured by a mortgaged property subject to credit lease
obligations of a certain tenant, which are subject to certain offset and other
rights for landlord defaults. Such mortgaged properties are leased to Walgreens
and Saks, Inc., respectively (whose published long-term unsecured debt is rated,
as of June 2, 2004, "A+" and "BB," respectively, by S&P and "Aa3" and "Ba3,"
respectively, by Moody's). Such rating reflects the rating agency's assessment
of the long-term unsecured obligations of such entity only, and do not imply an
assessment of the likelihood that the credit tenant leases will not be
terminated or such loans repaid. In addition, the underwriting for the mortgage
loans secured by a credit tenant lease property may have taken into account the
creditworthiness of the tenant under the lease. Accordingly, such mortgage loans
may have higher loan-to-value ratios and lower debt service coverage ratios than
other types of mortgage loans.
PROPERTIES WITH CONDOMINIUM OWNERSHIP HAVE SPECIAL RISKS
One mortgage loan, representing 9.33% of the outstanding pool balance and
11.63% of the Loan Group 1 balance as of the cut-off date, is secured, in whole
or in part, by the related borrower's fee simple ownership interest in two or
more condominium units. The management and operation of a condominium is
generally controlled by a condominium
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board representing the owners of the individual condominium units, subject to
the terms of the related condominium rules or by-laws. Generally, the consent of
a majority of the board members is required for any actions of the condominium
board. The condominium board is generally responsible for administration of the
affairs of the condominium, including providing for maintenance and repair of
common areas, adopting rules and regulations regarding common areas, and
obtaining insurance and repairing and restoring the common areas of the property
after a casualty. Notwithstanding the insurance and casualty provisions of the
related mortgage loan documents, the condominium board may have the right to
control the use of casualty proceeds. In addition, the condominium board
generally has the right to assess individual unit owners for their share of
expenses related to the operation and maintenance of the common elements. In the
event that an owner of another unit fails to pay its allocated assessments, the
related borrower may be required to pay such assessments in order to properly
maintain and operate the common elements of the property. Although the
condominium board generally may obtain a lien against any unit owner for common
expenses that are not paid, such lien generally is extinguished if a lender
takes possession pursuant to a foreclosure. Each unit owner is responsible for
maintenance of its respective unit and retains essential operational control
over its unit.
The mortgage loan known as the "731 Lexington Avenue-Bloomberg
Headquarters" loan, representing 9.33% of the outstanding pool balance or 11.63%
of the Loan Group 1 balance as of the cut-off date, is primarily secured by an
office condominium unit in a complex consisting of another office unit, a retail
condominium unit and residential condominium units. With respect to the office
condominium units that secure the 731 Lexington Avenue--Bloomberg Headquarters
Loan and the 731 Lexington Avenue--Bloomberg Headquarters companion loans, the
borrower holds two of the four positions on the office condominium board and two
of the five positions on the overall condominium board and is responsible for
approximately 49.06% of the common charges. However, the borrower does not have
controlling voting rights in either case. As of the cut-off date, the borrower
also owns the other office condominium unit and such other unit is additional
collateral for the 731 Lexington Avenue-Bloomberg Headquarters loan and the 731
Lexington Avenue--Bloomberg Headquarters companion loans. The additional
collateral was granted to the lender solely as a result of rights of the tenant,
under its lease for the primary mortgaged property, to expand into the second
office condominium unit; references in this prospectus supplement to the related
mortgaged property are references to the first office condominium unit only
unless specific reference is made to the additional second office condominium
unit. No value was ascribed to such additional collateral [in rating the
certificates offered hereby] and no value or cash flow from such unit was
included in the appraisal for valuation purposes or in the underwriting of the
mortgage loan. The additional second office condominium unit collateral is
subject to release, without payment of a release price, under certain
circumstances, including if space in such unit is no longer required to be
available to Bloomberg, L.P. pursuant to its lease with the borrower, further
rents and other cash flows from such unit are not required to be deposited in
the lockbox and may be separately financed. As of the cut-off date, affiliates
of the borrower own the other units in the condominium, but such units may be
sold at any time. The condominium association is required to give the lender
notice of default and an opportunity to cure.
In addition, the construction of the condominium units at the complex,
other than the first office condominium unit, is continuing and is expected to
be completed on or before the fourth quarter of 2005. The mortgage loan
documents do not require a reserve or completion guaranty in connection with the
project. Absent adverse circumstances, such as construction accidents that
result in damage to the first office condominium unit, the construction of the
other condominium units should not adversely impact the first office condominium
unit or affect the cash flow from the first office condominium unit.
Due to the nature of condominiums and a borrower's ownership interest
therein, a default on a mortgage loan secured by the borrower's interest in one
or more condominium units
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may not allow the related lender the same flexibility in realizing upon the
underlying real property as is generally available with respect to
non-condominium properties. The rights of any other unit owners, the governing
documents of the owners' association and state and local laws applicable to
condominiums must be considered and respected. Consequently, servicing and
realizing upon such collateral could subject the trust to greater expense and
risk than servicing and realizing upon collateral for other loans that are not
condominiums.
CERTAIN ADDITIONAL RISKS RELATED TO TENANTS
The income from, and market value of, the mortgaged properties leased to
various tenants would be adversely affected if:
o space in the mortgaged properties could not be leased or re-leased;
o tenants were unable to meet their lease obligations;
o a significant tenant were to become a debtor in a bankruptcy case; or
o rental payments could not be collected for any other reason.
Repayment of the mortgage loans secured by retail, office and industrial
properties will be affected by the expiration of leases and the ability of the
respective borrowers to renew the leases or relet the space on comparable terms.
In this regard, the three largest tenants and their respective lease expiration
dates for retail, office, and industrial properties are set forth on Annex A-1
to this prospectus supplement. Certain of the significant tenants have lease
expiration dates that occur prior to the maturity date of the related mortgage
loan. Certain of the mortgaged properties may be leased in whole or in part by
government-sponsored tenants who may have the right to cancel their leases at
any time or for lack of appropriations. Additionally, mortgage loans may have
concentrations of leases expiring at varying rates in varying percentages prior
to the related maturity date and in some situations, all of the leases at a
mortgaged property may expire prior to the related maturity date.
Even if vacated space is successfully relet, the costs associated with
reletting, including tenant improvements and leasing commissions, could be
substantial and could reduce cash flow from the mortgaged properties. Moreover,
if a tenant defaults in its obligations to a borrower, the borrower may incur
substantial costs and experience significant delays associated with enforcing
its rights and protecting its investment, including costs incurred in renovating
and reletting the mortgaged property.
Additionally, in certain jurisdictions, if tenant leases are subordinated
to the liens created by the mortgage but do not contain attornment provisions
(provisions requiring the tenant to recognize a successor owner following
foreclosure as landlord under the lease), the leases may terminate at the
tenant's option upon the transfer of the property to a foreclosing lender or
purchaser at foreclosure. Accordingly, if a mortgaged property is located in
such a jurisdiction and is leased to one or more desirable tenants under leases
that are subordinate to the mortgage and do not contain attornment provisions,
such mortgaged property could experience a further decline in value if such
tenants' leases were terminated.
Certain of the mortgaged properties are leased to tenants under leases that
provide such tenant with a right of first refusal to purchase the related
mortgaged property upon a sale of the mortgaged property. Such provisions, if
not waived, may impede the lender's ability to sell the related mortgaged
property at foreclosure or adversely affect the foreclosure bid price.
Certain of the mortgaged properties may have tenants that are related to or
affiliated with a borrower. In such cases, a default by the borrower may
coincide with a default by the affiliated tenants. Additionally, even if the
property becomes an REO property, it is possible that an affiliate of the
borrower may remain as a tenant.
TENANT BANKRUPTCY ENTAILS RISKS
The bankruptcy or insolvency of a major tenant, or a number of smaller
tenants, in retail, office and industrial properties may adversely affect the
income produced by a mortgaged
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property. Under the federal 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). The claim would be
limited to the unpaid rent under the lease for the periods prior to the
bankruptcy petition (or earlier surrender of the leased premises), plus the rent
under the lease for the greater of one year, or 15% (not to exceed three years),
of the remaining term of such lease.
ENVIRONMENTAL LAWS ENTAIL RISKS
Various environmental laws may make a current or previous owner or operator
of real property liable for the costs of removal, remediation or containment of
hazardous or toxic substances on, under, in, or emanating from such property.
Those laws often impose liability whether or not the owner or operator knew of,
or was responsible for, the presence of the hazardous or toxic substances. For
example, certain laws impose liability for release of asbestos-containing
materials into the air or require the removal or containment of the
asbestos-containing materials; polychlorinated biphenyls in hydraulic or
electrical equipment are regulated as hazardous or toxic substances; and the
United States Environmental Protection Agency has identified health risks
associated with elevated radon gas levels in buildings. In some states,
contamination of a property may give rise to a lien on the property for payment
of the costs of addressing the condition. This lien may have priority over the
lien of a pre-existing mortgage. Additionally, third parties may seek recovery
from owners or operators of real properties for personal injury or property
damages associated with exposure to hazardous or toxic substances related to the
properties.
Federal law requires owners of certain residential housing constructed
prior to 1978 to disclose to potential residents or purchasers any condition on
the property that causes exposure to lead-based paint. Contracts for the
purchase and sale of an interest in residential housing constructed prior to
1978 must contain a "Lead Warning Statement" that informs the purchaser of the
potential hazards to pregnant women and young children associated with exposure
to lead-based paint. The ingestion of lead-based paint chips and/or the
inhalation of dust particles from lead-based paint by children can cause
permanent injury, even at low levels of exposure. Property owners may be held
liable for injuries to their tenants resulting from exposure to lead-based paint
under common law and various state and local laws and regulations that impose
affirmative obligations on property owners of residential housing containing
lead-based paint.
The owner's liability for any required remediation generally is not limited
by law and could accordingly exceed the value of the property and/or the
aggregate assets of the owner. The presence of hazardous or toxic substances
also may adversely affect the owner's ability to refinance the property or to
sell the property to a third party. The presence of, or strong potential for
contamination by, hazardous substances consequently can have a materially
adverse effect on the value of the mortgaged property and a borrower's ability
to repay its mortgage loan.
In addition, under certain circumstances, a lender (such as the trust)
could be liable for the costs of responding to an environmental hazard. See
"Certain Legal Aspects of Mortgage Loans--Environmental Considerations" in the
prospectus.
In certain cases where the environmental consultant recommended that action
be taken in respect of a materially adverse or potentially material adverse
environmental condition at the related mortgaged property:
o an environmental consultant investigated those conditions and
recommended no further investigations or remedial action;
o a responsible third party was identified as being responsible for the
remedial action; or
o the related originator of the subject mortgage loan generally required
the related borrower to:
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(a) take investigative and/or remedial action;
(b) carry out an operation and maintenance plan or other specific
remedial action measures post-closing and/or to establish an
escrow reserve in an amount sufficient for effecting that plan
and/or the remedial action;
(c) monitor the environmental condition and/or to carry out
additional testing, in the manner and within the time frame
specified by the environmental consultant;
(d) obtain or seek a letter from the applicable regulatory authority
stating that no further action was required; or
(e) obtain environmental insurance (in the form of a secured creditor
impaired property policy or other form of environmental
insurance) or provide an indemnity or guaranty from an individual
or an entity.
POTENTIAL TRUST LIABILITY RELATED TO A MATERIALLY ADVERSE ENVIRONMENTAL
CONDITION
The mortgage loan sellers have represented to the Depositor that all of the
mortgaged properties within the 12 months preceding the cut-off date have had
(i) an environmental site assessment or (ii) an update of a previously conducted
assessment based upon information in an established database or study. In the
case of one mortgaged property, securing 0.19% of the outstanding pool balance
or 0.24% of the Loan Group 1 balance as of the cut-off date, an environmental
impairment liability insurance policy was obtained with respect to the related
mortgaged property in lieu of obtaining an environmental site assessment or
update. In the case of four mortgaged properties, securing 7.61% of the
outstanding pool balance, 5.99% of the Loan Group 1 balance and 14.17% of the
Loan Group 2 balance as of the cut-off date, environmental insurance was
obtained in addition to subjecting such mortgaged properties to an environmental
site assessment. Subject to certain conditions and exclusions, the environmental
insurance policies generally insure the trust against losses resulting from
certain known and unknown environmental conditions at the related mortgaged
property or properties during the applicable policy period. See "Description of
the Mortgage Pool--Certain Underwriting Matters--Environmental Site Assessments"
in this prospectus supplement. There can be no assurance that any such
assessment, study or review revealed all possible environmental hazards. Each
mortgage loan seller has informed the Depositor that to its actual knowledge,
without inquiry beyond the environmental assessment (or update of a previously
conducted assessment) or questionnaire completed by the borrower and submitted
to the mortgage loan seller in connection with obtaining an environmental
insurance policy in lieu of an environmental assessment, there are no
significant or material circumstances or conditions with respect to the
mortgaged property not revealed in the environmental assessment (or update of a
previously conducted assessment) or the borrower's environmental questionnaire.
The environmental assessments relating to certain of the mortgage loans revealed
the existence of friable or non-friable asbestos-containing materials,
lead-based paint, radon gas, leaking underground storage tanks, polychlorinated
biphenyl contamination, ground water contamination or other material
environmental conditions. Each mortgage loan seller has informed the Depositor
that where such conditions were identified,
o the condition has been remediated in all material respects,
o the borrower has escrowed funds to effect the remediation,
o a responsible party is currently taking or required to take actions as
have been recommended by the environmental assessment or by the
applicable governmental authority,
o an operations and maintenance plan has been or will be implemented,
o a secured creditor impaired property policy or other environmental
insurance with respect to such condition has been obtained,
o an indemnity or guaranty with respect to such condition was obtained
from a responsible third party,
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o a "no further action" letter or other evidence has been obtained
stating that the applicable governmental authority has no current
intention of requiring any action be taken by the borrower or any
other person with respect to such condition, or
o upon further investigation, an environmental consultant recommended no
further investigation or remediation.
For more information regarding environmental considerations, see "Certain Legal
Aspects of Mortgage Loans--Environmental Considerations" in the prospectus.
The pooling and servicing agreement requires that the special servicer
obtain an environmental site assessment of a mortgaged property prior to
acquiring title thereto on behalf of the trust or assuming its operation. Such
requirement may effectively preclude realization of the security for the related
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 will become liable under any environmental law.
However, there can be no assurance that the requirements of the pooling and
servicing agreement will effectively insulate the trust from potential liability
under environmental laws. See "The Pooling and Servicing Agreement--Realization
Upon Defaulted Mortgage Loans" in this prospectus supplement and "Certain Legal
Aspects of Mortgage Loans--Environmental Considerations" in the prospectus.
BORROWER MAY BE UNABLE TO REPAY THE REMAINING PRINCIPAL BALANCE ON THE MATURITY
DATE OR ANTICIPATED REPAYMENT DATE
88 mortgage loans, representing 88.72% of the outstanding pool balance,
86.51% of the Loan Group 1 balance and 97.68% of the Loan Group 2 balance as of
the cut-off date, are balloon loans which provide for substantial payments of
principal due at their stated maturities. Two mortgage loans, representing 9.54%
of the outstanding pool balance, 11.89% of the Loan Group 1 balance as of the
cut-off date, are expected to have substantial principal balances outstanding at
their anticipated repayment dates. One of these mortgage loans, representing
9.33% of the outstanding pool balance, or 11.63% of the Loan Group 1 balance as
of the cut-off date, has an anticipated repayment date in the year 2014 and the
other mortgage loan, representing 0.21% of the outstanding pool balance, or
0.26% of the Loan Group 1 balance, as of the cut-off date, has an anticipated
repayment date in the year 2013.
Balloon loans and anticipated repayment date loans involve a greater risk
to the lender than fully amortizing loans because a borrower's ability to repay
a balloon loan on its maturity date or repay a mortgage loan on its anticipated
repayment date, as applicable, typically will depend upon its ability either to
refinance such mortgage loan or to sell the mortgaged property at a price
sufficient to permit repayment. A borrower's ability to achieve either of these
goals will be affected by a number of factors, including:
o the availability of, and competition for, credit for commercial real
estate projects;
o prevailing interest rates;
o the fair market value of the related properties;
o the borrower's equity in the related properties;
o the borrower's financial condition;
o the operating history and occupancy level of the property;
o tax laws; and
o prevailing general and regional economic conditions.
The availability of funds in the credit markets fluctuates over time.
There can be no assurance that a borrower will have the ability to repay
the remaining principal balance of the related mortgage loan on the pertinent
date.
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RISKS RELATED TO MODIFICATION OF MORTGAGE LOANS WITH BALLOON PAYMENTS
In order to maximize recoveries on defaulted mortgage loans, the pooling
and servicing agreement enables the special servicer to extend and modify the
terms of mortgage loans (other than the Garden State Plaza loan, the Tysons
Corner Center loan and the AFR/Bank of America Portfolio loan, which are being
serviced pursuant to separate pooling and servicing agreements) that are in
material default or as to which a payment default (including the failure to make
a balloon payment) is reasonably foreseeable, subject, however, to the
limitations described under "The Pooling and Servicing Agreement--Servicing of
the Mortgage Loans; Collection of Payments" in this prospectus supplement. The
servicer and the special servicer may extend the maturity date of a mortgage
loan under limited circumstances. See "The Pooling and Servicing
Agreement--Modifications" in this prospectus supplement. There can be no
assurance, however, that any such extension or modification will increase the
present value of recoveries in a given case. Neither the servicer nor the
special servicer will have the ability to extend or modify the Garden State
Plaza loan, the Tysons Corner Center loan or the AFR/Bank of America Portfolio
loan, because each such mortgage loan is being serviced by another servicer and
special servicer pursuant to a separate pooling and servicing agreement. Any
delay in collection of a balloon payment that would otherwise be distributable
in respect of a class of certificates offered herein, whether such delay is due
to borrower default or to modification of the related mortgage loan by the
special servicer or the applicable special servicer servicing the Garden State
Plaza loan, the Tysons Corner Center loan or the AFR/Bank of America Portfolio
loan, will likely extend the weighted average life of such class of
certificates. See "Yield and Maturity Considerations" in this prospectus
supplement and in the prospectus.
RISKS RELATING TO BORROWERS' ORGANIZATION OR STRUCTURE
Although the mortgage loan documents generally contain covenants
customarily employed to ensure that a borrower is a single-purpose entity, in
many cases the borrowers are not required to observe all covenants which
typically are required in order for them to be viewed under standard rating
agency criteria as "special-purpose entities." In general, the borrowers'
organizational documents or the terms of the mortgage loans limit their
activities to the ownership of only the related mortgaged property or properties
and limit the borrowers' ability to incur additional indebtedness. These
provisions are designed to mitigate the possibility that the borrowers'
financial condition would be adversely impacted by factors unrelated to the
mortgaged property and the mortgage loan. However, we cannot assure you that the
related borrowers will comply with these requirements. Also, although a borrower
may currently be a single-purpose entity, such a borrower may have previously
owned property other than the related mortgaged property and/or may not have
observed all covenants and conditions which typically are required to view a
borrower as a "single purpose entity." There can be no assurance that
circumstances that arose when the borrower did not observe the required
covenants will not impact the borrower or the related mortgaged property. In
addition, many of the borrowers and their owners do not have an independent
director whose consent would be required to file a voluntary bankruptcy petition
on behalf of such borrower. One of the purposes of an independent director of
the borrower (or of a special-purpose entity having an interest in the borrower)
is to avoid a bankruptcy petition filing which is intended solely to benefit an
affiliate and is not justified by the borrower's own economic circumstances.
Borrowers (and any special purpose entity having an interest in any such
borrowers) that do not have an independent director may be more likely to file a
voluntary bankruptcy petition and therefore less likely to repay the related
mortgage loan. The bankruptcy of a borrower, or the general partner or the
managing member of a borrower, may impair the ability of the lender to enforce
its rights and remedies under the related mortgage.
With respect to certain of the mortgage loans, two or more borrowers own
the related mortgaged property as tenants-in-common. Under certain
circumstances, a tenant-in-common can be forced to sell its property, including
by a bankruptcy trustee, one or more other
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tenants-in-common seeking to partition the property and/or by a governmental
lienholder in the event of unpaid taxes. Such forced sale or action for
partition of a mortgaged property may occur during a market downturn and could
result in an early repayment of the related mortgage loan, a significant delay
in recovery against the tenant-in-common borrowers and/or a substantial decrease
in the amount recoverable upon the related mortgage loan. In most cases, the
related tenant-in-common borrower waived its right to partition, reducing the
risk of partition. However, there can be no assurance that, if challenged, this
waiver would be enforceable. In addition, because the tenant-in-common structure
may cause delays in the enforcement of remedies (because each time a
tenant-in-common borrower files for bankruptcy, the bankruptcy court stay will
be reinstated), in most cases, the related tenant-in-common borrower is a
special purpose entity (in some cases bankruptcy-remote), reducing the risk of
bankruptcy. In addition, in some cases, the related mortgage loan documents
provide for full recourse to the related tenant-in-common borrower and the
guarantor if a tenant-in-common files for bankruptcy. However, there can be no
assurance that a bankruptcy proceeding by a single tenant-in-common borrower
will not delay enforcement of this mortgage loan. Additionally, in some cases,
subject to the terms of the related mortgage loan documents, the
tenant-in-common borrowers may assign their interests to one or more
tenant-in-common borrowers. Such increase in the number of tenant-in-common
borrowers increases the risks related to this ownership structure.
RISKS RELATED TO ADDITIONAL DEBT
The mortgage loans generally prohibit the borrower from incurring any
additional debt secured by the mortgaged property without the consent of the
lender. Generally, none of the Depositor, the mortgage loan sellers, the
underwriters, the servicer, the special servicer, the bond administrator or the
trustee have made any investigations, searches or inquiries to determine the
existence or status of any subordinate secured financing with respect to any of
the mortgaged properties at any time following origination of the related
mortgage loan. However, the mortgage loan sellers have informed us that they are
aware of the actual or potential additional debt secured by a mortgaged property
with respect to the mortgage loans described under "Description of the Mortgage
Pool--Other Financing."
Except to the extent set forth in the last sentence of this paragraph, all
of the mortgage loans either prohibit future unsecured subordinated debt that is
not incurred in the ordinary course of business, or require lender's consent to
incur such debt. Moreover, in general, any borrower that does not meet the
single-purpose entity criteria may not be prohibited from incurring additional
debt. Such additional debt may be secured by other property owned by such
borrower. Certain of these borrowers may have already incurred additional debt.
The mortgage loan sellers have informed us that they are aware of actual or
potential unsecured debt with respect to the mortgage loans described under
"Description of the Mortgage Pool--Other Financing."
Additionally, although the mortgage loans generally restrict the transfer
or pledging of general partnership and managing member equity interests in a
borrower subject to certain exceptions, the terms of the mortgage loans
generally permit, subject to certain limitations, the transfer or pledge of less
than a certain specified portion of the limited partnership or non-managing
membership equity interests in a borrower. Moreover, in general, the parent
entity of any borrower that does not meet single purpose entity criteria may not
be restricted in any way from incurring mezzanine debt secured by pledges of
their equity interests in such borrower. The mortgage loan sellers have informed
us that they are aware of potential mezzanine debt with respect to the mortgage
loans described under "Description of the Mortgage Pool--Other Financing."
Although, the terms of the mortgage loans generally prohibit additional
debt of the borrowers, and debt secured by ownership interests in the borrowers,
except as provided above, it has not been confirmed whether or not any of the
borrowers have incurred additional secured or unsecured debt, or have permitted
encumbrances on the ownership
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interests in such borrowers. There can be no assurance that the borrowers have
complied with the restrictions on indebtedness contained in the related mortgage
loan documents.
When a borrower (or its constituent members) also has one or more other
outstanding loans (even if subordinated or mezzanine loans), the trust is
subjected to additional risk. The borrower may have difficulty servicing and
repaying multiple loans. The existence of another loan generally also will make
it more difficult for the borrower to obtain refinancing of the mortgage loan
and may thereby jeopardize repayment of the mortgage loan. Moreover, the need to
service additional debt may reduce the cash flow available to the borrower to
operate and maintain the mortgaged property.
Additionally, if the borrower (or its constituent members) defaults on the
mortgage loan and/or any other loan, actions taken by other lenders could impair
the security available to the trust. If a junior lender files an involuntary
petition for bankruptcy against the borrower (or the borrower files a voluntary
petition to stay enforcement by a junior lender), the trust's ability to
foreclose on the property would be automatically stayed, and principal and
interest payments might not be made during the course of the bankruptcy case.
The bankruptcy of another lender also may operate to stay foreclosure by the
trust.
Further, if another loan secured by the mortgaged property is in default,
the other lender may foreclose on the mortgaged property, absent an agreement to
the contrary, thereby causing a delay in payments and/or an involuntary
repayment of the mortgage loan prior to its maturity date or its anticipated
repayment date, as applicable. The trust may also be subject to the costs and
administrative burdens of involvement in foreclosure proceedings or related
litigation.
BANKRUPTCY PROCEEDINGS ENTAIL CERTAIN RISKS
Under the federal bankruptcy code, the filing of a petition in bankruptcy
by or against a borrower will stay the sale of the real 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 lender from foreclosing on the mortgaged property (subject to
certain protections available to the lender). As part of a restructuring plan, a
court also may reduce the amount of secured indebtedness to the then-current
value of the mortgaged property. This action would make the lender a general
unsecured creditor for the difference between the then-current value and the
amount of its outstanding mortgage indebtedness. A bankruptcy court also may:
o grant a debtor a reasonable time to cure a payment default on a
mortgage loan;
o reduce monthly payments due under a mortgage loan;
o change the rate of interest due on a mortgage loan; or
o 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 the federal bankruptcy code, the lender will be stayed from enforcing
a borrower's assignment of rents and leases. The federal bankruptcy code also
may interfere with the trustee's ability to enforce any lockbox requirements.
The legal proceedings necessary to resolve these issues can be time consuming
and may significantly delay the lender's 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.
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.
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LACK OF SKILLFUL PROPERTY MANAGEMENT ENTAIL RISKS
The successful operation of a real estate project depends upon the property
manager's performance and viability. The property manager is generally
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
self-storage facilities, are generally more management intensive than properties
leased to creditworthy tenants under long-term leases.
A good property manager, by controlling costs, providing appropriate
service to tenants and seeing to the maintenance of improvements, can improve
cash flow, reduce vacancy, leasing and repair costs and preserve the building's
value. On the other hand, management errors can, in some cases, impair
short-term cash flow and the long-term viability of an income-producing
property.
No representation or warranty can be made as to the skills or experience of
any present or future managers. Many of the property managers are affiliated
with the borrower and, in some cases, such property managers may not manage any
other properties. Additionally, there can be no assurance that the related
property manager will be in a financial condition to fulfill its management
responsibilities throughout the terms of its respective management agreement.
RISKS OF INSPECTIONS RELATING TO PROPERTY
Licensed engineers or consultants inspected the mortgaged properties in
connection with the origination of the mortgage loans to assess items such as
structure, exterior walls, roofing, interior construction, mechanical and
electrical systems and general condition of the site, buildings and other
improvements. However, there is no assurance that all conditions requiring
repair or replacement were identified, or that any required repairs or
replacements were effected.
RISKS TO THE MORTGAGED PROPERTIES RELATING TO TERRORIST ATTACKS
On September 11, 2001, the United States was subjected to multiple
terrorist attacks, resulting in the loss of many lives and massive property
damage and destruction in New York City, the Washington, D.C. area and
Pennsylvania. The terrorist attacks may adversely affect the revenues or costs
of operation of the mortgaged properties. It is possible that any further
terrorist attacks could (i) lead to damage to one or more of the mortgaged
properties, (ii) result in higher costs for insurance premiums or diminished
availability of insurance coverage for losses related to terrorist attacks,
particularly for large mortgaged properties, which could adversely affect the
cash flow at such mortgaged property, or (iii) impact leasing patterns or
shopping patterns which could adversely impact leasing revenue, retail traffic
and percentage rent. In particular, the decrease in air travel may have a
negative effect on certain of the mortgaged properties, including those
mortgaged properties in tourist areas, which could reduce the ability of such
mortgaged properties to generate cash flow. These disruptions and uncertainties
could materially and adversely affect the value of, and an investor's ability to
resell, the certificates. See "--Property Insurance" below.
RECENT DEVELOPMENTS MAY INCREASE THE RISK OF LOSS ON THE MORTGAGE LOANS
The government of the United States has implemented full scale military
operations against Iraq. In addition, the government of the United States has
stated that it is likely that
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future acts of terrorism may take place. It is impossible to predict the extent
to which any such military operations or any future terrorist activities, either
domestically or internationally, may affect the economy and investment trends
within the United States and abroad. These disruptions and uncertainties could
materially and adversely affect the borrowers' abilities to make payments under
the mortgage loans, the ability of each transaction party to perform their
respective obligations under the transaction documents to which they are a
party, the value of the certificates and the ability of an investor to resell
the certificates.
PROPERTY INSURANCE
Subject to certain exceptions including where the mortgage loan documents
permit the borrower to rely on self-insurance provided by a tenant, the related
mortgage loan documents require the related borrower to maintain, or cause to be
maintained, property and casualty insurance. However, the mortgaged properties
may suffer losses due to risks which were not covered by insurance or for which
the insurance coverage is inadequate. Specifically, certain of the insurance
policies may expressly exclude coverage for losses due to mold, certain acts of
nature, terrorist activities or other insurable conditions or events. In
addition, the following mortgaged properties are located in areas that have
historically been at greater risk regarding acts of nature (such as earthquakes,
hurricanes and floods) than other states:
o 11 of the mortgaged properties, representing security for 11.14% of
the outstanding pool balance, 13.87% of the Loan Group 1 balance and
none of the Loan Group 2 balance as of the cut-off date, are located
in Virginia;
o 38 of the mortgaged properties, representing security for 4.11% of the
outstanding pool balance, 1.24% of the Loan Group 1 balance and 15.79%
of the Loan Group 2 balance as of the cut-off date, are located in
Florida;
o 5 of the mortgaged properties, representing security for 1.24% of the
outstanding pool balance, 1.15% of the Loan Group 1 balance and 1.60%
of the Loan Group 2 balance as of the cut-off date, are located in
North Carolina;
o 24 of the mortgaged properties, representing security for 7.48% of the
outstanding pool balance, 1.43% of the Loan Group 1 balance and 32.09%
of the Loan Group 2 balance as of the cut-off date, are located in
Texas;
o 61 of the mortgaged properties, representing security for 14.32% of
the outstanding pool balance, 16.98% of the Loan Group 1 balance and
3.49% of the Loan Group 2 balance as of the cut-off date, are located
in California; and
o 17 of the mortgaged properties, representing security for 0.43% of the
outstanding pool balance, 0.19% of the Loan Group 1 balance and 1.41%
of the Loan Group 2 balance as of the cut-off date, are located in
Washington.
These properties may not have adequate coverage should such an act of
nature occur.
There is no assurance that borrowers will maintain the insurance required
under the mortgage loan documents or that such insurance will be adequate.
Moreover, if reconstruction or any major repairs are required, changes in laws
may materially affect the borrower's ability to effect any reconstruction or
major repairs or may materially increase the costs of the reconstruction or
repairs.
Following the September 11, 2001 terrorist attacks, many reinsurance
companies (which assume some of the risk of policies sold by primary insurers)
indicated an intention to eliminate acts of terrorism from their reinsurance
coverage. Absent such coverage, primary insurers would have had to assume this
risk themselves causing insurers to either eliminate such coverage, increase the
amount of deductible for acts of terrorism or charge higher premiums. In order
to redress the potential lack of terrorism insurance coverage, Congress passed
the Terrorism Risk Insurance Act of 2002, thereby establishing the Terrorism
Insurance Program.
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The Terrorism Insurance Program is administered by the Secretary of the
Treasury and provides insurers with financial assistance from the United States
government in the event a qualifying terrorist attack results in insurance
claims. Pursuant to the provisions of the Terrorism Risk Insurance Act of 2002,
the federal share of compensation equals 90% of the portion of insured loss that
exceeds an applicable deductible paid by the insurer 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 will not be liable for the
payment of any aggregate losses that exceed $100 billion, regardless of the
terms of the individual insurance contracts.
The Terrorism Insurance Program provides that 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. It also provides that any state approval of terrorism
insurance exclusions that were in force on November 26, 2002 is also voided. The
statute does not require policy holders to purchase terrorism coverage nor does
it stipulate the pricing of such coverage. There can be no assurance that each
borrower under the mortgage loans has purchased terrorism coverage.
The Terrorism Risk Insurance Act of 2002 only applies to acts that are
committed by an individual or individuals acting on behalf of a foreign person
or foreign interest in an effort to influence or coerce United States civilians
or the United States government, and does not cover acts of purely domestic
terrorism. Further, any such act must be certified as an "act of terrorism" by
the federal government, which decision is not subject to judicial review.
Under its own terms, the Terrorism Insurance Program will terminate on
December 31, 2004 (with a potential to extend to December 31, 2005). There can
be no assurance that this temporary program will create any long-term changes in
the availability and cost of terrorism insurance. Moreover, there can be no
assurance that such program will be renewed or subsequent terrorism insurance
legislation will be passed upon its expiration.
The various forms of insurance maintained with respect to any of the
mortgaged properties, including property and casualty insurance, environmental
insurance and earthquake insurance, may be provided under a blanket insurance
policy, covering other real properties, some of which may not secure mortgage
loans in the trust. As a result of total limits under blanket policies, losses
at other properties covered by the blanket insurance policy may reduce the
amount of insurance coverage available with respect to a mortgaged property
securing one of the mortgage loans in the trust.
With respect to certain of the mortgage loans, the "all-risk" policy
specifically excludes terrorism insurance from its coverage. In those cases,
some borrowers obtained supplemental terrorism insurance. In other cases, the
lender waived the requirement that such insurance be maintained or the mortgage
loan documents do not contain such a requirement.
With respect to certain of the mortgage loans that we intend to include in
the trust, the related mortgage loan documents generally provide that the
borrowers are required to maintain comprehensive all-risk casualty insurance but
may not specify the nature of the specific risks required to be covered by such
insurance policies.
Even if the mortgage loan documents specify that the related borrower must
maintain all-risk casualty insurance or other insurance that covers acts of
terrorism, the borrower may fail to maintain such insurance and the servicer or
special servicer may not enforce such default or cause the borrower to obtain
such insurance if the special servicer has determined, in accordance with the
servicing standards, that either (a) such insurance is not available at any rate
or (b) such insurance is not available at commercially reasonable rates (which
determination, with respect to terrorism insurance, will be subject to consent
of the directing certificateholder (which is generally (except with respect to
the mortgage loans that are part of a split loan structure) holder of the
majority interest of the most subordinate class then outstanding and with
respect to the mortgage loans that are part of a split loan structure, as
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described under "The Pooling and Servicing Agreement--Special Servicing--The
Directing Certificateholder" in this prospectus supplement)) 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 geographic region in which
such mortgaged property is located. Additionally, if the related borrower fails
to maintain such insurance, neither the servicer nor the special servicer will
be required to maintain such terrorism insurance coverage if the special
servicer determines, in accordance with the servicing standards, that such
insurance is not available for the reasons set forth in (a) or (b) of the
preceding sentence. Furthermore, at the time existing insurance policies are
subject to renewal, there is no assurance that terrorism insurance coverage will
be available and covered under the new policies or, if covered, whether such
coverage will be adequate. Most insurance policies covering commercial real
properties such as the mortgaged properties are subject to renewal on an annual
basis. If such coverage is not currently in effect, is not adequate or is
ultimately not continued with respect to some of the mortgaged properties and
one of those properties suffers a casualty loss as a result of a terrorist act,
then the resulting casualty loss could reduce the amount available to make
distributions on your certificates.
As a result of any of the foregoing, the amount available to make
distributions on your certificates could be reduced.
APPRAISALS AND MARKET STUDIES HAVE CERTAIN LIMITATIONS
An appraisal or other market analysis was conducted with respect to the
mortgaged properties in connection with the origination or acquisition of the
related mortgage loans. The resulting estimates of value are the bases of the
cut-off date loan-to-value ratios referred to in this prospectus supplement.
Those estimates represent the analysis and opinion of the person performing the
appraisal or market analysis and are not guarantees of present or future values.
There can be no assurance that another appraiser would not have arrived at a
different evaluation, even if such appraiser used the same general approach to,
and the same method of, appraising the mortgaged property. Moreover, the values
of the mortgaged properties may have fluctuated significantly since the
appraisal or market study was performed. In addition, appraisals seek to
establish the amount a typically motivated buyer would pay a typically motivated
seller. Such amount could be significantly higher than the amount obtained from
the sale of a mortgaged property under a distress or liquidation sale.
Information regarding the appraised values of mortgaged properties available to
the Depositor as of the cut-off date is presented in Appendix A to this
prospectus supplement for illustrative purposes only. See "Description of the
Mortgage Pool--Additional Loan Information" in this prospectus supplement.
TAX CONSIDERATIONS RELATED TO FORECLOSURE
If the trust acquires a mortgaged property pursuant to a foreclosure or
deed in lieu of foreclosure, the special servicer will generally retain an
independent contractor to operate the mortgaged property.
Among other things, the independent contractor generally will not be able
to perform construction work, other than repair, maintenance or certain types of
tenant build-outs, unless the construction was at least 10% completed when
default on the mortgage loan becomes imminent. Furthermore, any net income from
such operation (other than qualifying "rents from real property"), or any rental
income based on the net profits of a tenant or sub-tenant or allocable to a
non-customary service, will subject the Lower-Tier REMIC (or the AFR/Bank of
America Portfolio loan REMIC or the Saks, Inc.-North Riverside loan REMIC, if
applicable) to federal tax on such income at the highest marginal corporate tax
rate (currently 35%) and possibly state or local tax. "Rents from real property"
does not include any rental income based on the net profits of a tenant or
sub-tenant or allocable to a service that is non-customary in the area and for
the type of building involved. In such event, the net
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proceeds available for distribution to certificateholders will be reduced. The
special servicer may permit the Lower-Tier REMIC (or the AFR/Bank of America
Portfolio loan REMIC or the Saks, Inc.-North Riverside loan REMIC, if
applicable) to earn "net income from foreclosure property" that is subject to
tax if it determines that the net after-tax benefit to certificateholders is
greater than under another method of operating or leasing the mortgaged
property. See "The Pooling and Servicing Agreement--Realization Upon Defaulted
Mortgage Loans" in this prospectus supplement.
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 with respect to the certificates.
RISKS RELATED TO ENFORCEABILITY
All of the mortgages permit the lender to accelerate the debt upon default
by the borrower. The courts of all states will enforce acceleration clauses in
the event of a material payment default. Courts, however, may refuse to permit
foreclosure or acceleration if a default is deemed immaterial or the exercise of
those remedies would be unjust or unconscionable.
If a mortgaged property has tenants, the borrower typically assigns its
income as landlord to the lender as further security, while retaining a license
to collect rents as long as there is no default. If the borrower defaults, the
license terminates and the lender is entitled to collect rents. In certain
jurisdictions, such assignments may not be perfected as security interests until
the lender takes actual possession of the property's cash flow. In some
jurisdictions, the lender may not be entitled to collect rents until the lender
takes possession of the property and secures the appointment of a receiver. In
addition, as previously discussed, if bankruptcy or similar proceedings are
commenced by or for the borrower, the lender's ability to collect the rents may
be adversely affected.
STATE LAW LIMITATIONS ENTAIL CERTAIN RISKS
10 mortgage loans, representing 18.04% of the outstanding pool balance,
18.41% of the Loan Group 1 balance and 16.53% of the Loan Group 2 balance as of
the cut-off date, are secured by more than one mortgaged property.
Some states (including California) have laws prohibiting more than one
"judicial action" to enforce a mortgage obligation. Some courts have construed
the term "judicial action" broadly. 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 mortgaged properties located in states where such
"one action" rules apply (and where non-judicial foreclosure is permitted)
before foreclosing on properties located in states where judicial foreclosure is
the only permitted method of foreclosure. As a result, the ability to realize
upon the mortgage loans may be limited by the application of state laws.
Foreclosure actions may also, in certain circumstances, subject the trust to
liability as a "lender-in-possession" or result in the equitable subordination
of the claims of the trustee to the claims of other creditors of the borrower.
The special servicer may take these state laws into consideration in deciding
which remedy to choose following a default by a borrower.
LEASEHOLD INTERESTS ENTAIL CERTAIN RISKS
15 mortgaged properties, which represent security for 1.03% of the
outstanding pool balance, or 1.28% of the Loan Group 1 balance as of the cut-off
date, are secured by a mortgage on (i) the borrower's leasehold interest in the
related mortgaged property and not the related fee simple interest or (ii) the
borrower's leasehold interest in a portion of the related mortgaged property and
the borrower's fee simple interest in the remainder of the related mortgaged
property.
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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 interest were to
be terminated upon a lease default, the leasehold mortgagee would lose its
security in such leasehold interest. Generally, the related ground lease
requires the lessor to give the leasehold mortgagee notice of lessee defaults
and an opportunity to cure them, permits the leasehold estate to be assigned to
the leasehold mortgagee or the purchaser at a foreclosure sale, and contains
certain other protective provisions typically included in a "mortgageable"
ground lease. The AFR/Bank of America Portfolio Loan is partially secured by
several ground leases which were mortgaged as additional collateral, but for
which no loan allocations were assigned, and by certain short-term leases for
parking lots or motor bank facilities serving the mortgaged properties. These
additional leases do not include such lender protections.
Upon the bankruptcy of a lessor or a lessee under a ground lease, the
debtor entity has the right to assume or reject the lease. If a debtor lessor
rejects the lease, the lessee has the right to remain in possession of its
leased premises paying the rent required under the lease for the term of the
lease (including renewals). If a debtor lessee/borrower rejects any or all of
its leases, the leasehold lender could succeed to the lessee/borrower's position
under the lease only if the lessor specifically grants the lender such right. If
both the lessor and the lessee/borrowers are involved in bankruptcy proceedings,
the trustee may be unable to enforce the bankrupt lessee/borrower's obligation
to refuse to treat a ground lease rejected by a bankrupt lessor as terminated.
In such circumstances, a lease could be terminated notwithstanding lender
protection provisions contained therein or in the mortgage.
Most of the ground leases securing the mortgaged properties provide that
the ground rent payable thereunder increases during the term of the lease. These
increases may adversely affect the cash flow and net income of the borrower from
the mortgaged property.
POTENTIAL ABSENCE OF ATTORNMENT PROVISIONS ENTAILS RISKS
In some jurisdictions, if tenant leases are subordinate to the liens
created by the mortgage and do not contain attornment provisions (i.e.,
provisions requiring the tenant to recognize a successor owner following
foreclosure as landlord under the lease), the leases may terminate upon the
transfer of the property to a foreclosing lender or purchaser at foreclosure.
Not all leases were reviewed to ascertain the existence of attornment or
subordination provisions. Accordingly, if a mortgaged property is located in
such a jurisdiction and is leased to one or more desirable tenants under leases
that are subordinate to the mortgage and do not contain attornment provisions,
such mortgaged property could experience a further decline in value if such
tenants' leases were terminated. This is particularly likely if such tenants
were paying above-market rents or could not be replaced.
If a lease is not subordinate to a mortgage, the trust will not have the
right to dispossess the tenant upon foreclosure of the mortgaged property
(unless it has otherwise agreed with the tenant). If the lease contains
provisions inconsistent with the mortgage (e.g., provisions relating to
application of insurance proceeds or condemnation awards) or which could affect
the enforcement of the lender's rights (e.g., a right of first refusal to
purchase the property), the provisions of the lease will take precedence over
the provisions of the mortgage.
RISKS RELATED TO ZONING LAWS
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 qualify as
permitted non-conforming uses. Such changes may limit the ability of the related
borrower to rebuild the premises "as is" in the event of a substantial casualty
loss. Such limitations may adversely affect the ability of a borrower to meet
its mortgage loan obligations from cash flow. Insurance proceeds may not
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be sufficient to pay off such mortgage loan in full. In addition, if the
mortgaged property was to be repaired or restored in conformity with
then-current law, its value could be less than the remaining principal balance
on the mortgage loan and it may produce less revenue than before such repair or
restoration.
In addition, certain of the mortgaged properties that do not conform to
current zoning laws may not be "legal non-conforming uses" or "legal
non-conforming structures." The failure of a mortgaged property to comply with
zoning laws or to be a "legal non-conforming use" or "legal non-conforming
structure" 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 or may necessitate material additional expenditures to remedy
non-conformities. Violations may be known to exist at a particular mortgaged
property, but the related mortgage loan sellers have informed us that, to their
knowledge, there are no violations that they consider material.
RISKS RELATED TO LITIGATION
There may be pending or threatened legal proceedings against the borrowers
and managers of the mortgaged properties and their respective affiliates arising
out of the ordinary business of the borrowers, managers and affiliates, which
litigation could have a material adverse effect on your investment.
RISKS RELATED TO COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT
Under the Americans with Disabilities Act of 1990, all public
accommodations are required to meet certain federal requirements related to
access and use by disabled persons. Borrowers may incur costs complying with the
Americans with Disabilities Act of 1990. In addition, noncompliance could result
in the imposition of fines by the federal government or an award of damages to
private litigants. The expenditure of these 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.
CONFLICTS OF INTEREST
DIRECTING CERTIFICATEHOLDER MAY DIRECT SPECIAL SERVICER ACTIONS
The special servicer is generally given considerable latitude in
determining whether and in what manner to liquidate or modify defaulted mortgage
loans. The directing certificateholder has certain rights to advise and direct
the special servicer to take or refrain from taking certain actions with respect
to the mortgage loans. The directing certificateholder, with respect to the
mortgage loans that are not part of a split loan structure is generally the
holder of the majority in interest of the controlling class. The directing
certificateholder with respect to the 731 Lexington Avenue-Bloomberg
Headquarters loan, the DDR-Macquarie Portfolio loan and the Saks, Inc.-North
Riverside loan, is as described in "The Pooling and Servicing Agreement--Special
Servicing--The Directing Certificateholder" in this prospectus supplement. The
directing certificateholder is also generally entitled to remove the special
servicer with or without cause (but see the discussion with respect to the
removal of the special servicer with respect to certain mortgage loans that are
part of a split loan structure under "Description of the Mortgage Pool--Split
Loan Structures" in this prospectus supplement). See "The Pooling and Servicing
Agreement--Special Servicing--The Directing Certificateholder" in this
prospectus supplement. The controlling class is the most subordinated (or, under
certain circumstances, the next most subordinated) class of certificates
outstanding from time to time, and such holders may have interests in conflict
with those of the holders of the other certificates. For instance, the holders
of certificates of the controlling class might desire to mitigate the potential
for loss to that class from a troubled mortgage loan by deferring enforcement in
the hope of maximizing future proceeds. However, the
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interests of the trust may be better served by prompt action, since delay
followed by a market downturn could result in fewer proceeds to the trust than
would have been realized if earlier action had been taken. The controlling class
representative has no duty to act in the interests of any class other than the
controlling class.
RELATED PARTIES MAY ACQUIRE CERTIFICATES
Affiliates of the Depositor, the mortgage loan sellers, the servicer or the
special servicer may purchase a portion of the certificates. The purchase of
certificates could cause a conflict between the servicer's or the special
servicer's duties to the trust under the pooling and servicing agreement and its
interests as a holder of a certificate. In addition, the directing
certificateholder generally has the right to remove the special servicer
(except, generally with respect to the mortgage loans that are part of a split
loan structure) and appoint a successor, which may be an affiliate of such
holder. However, the pooling and servicing agreement provides that the mortgage
loans are required to be administered in accordance with the servicing standard
without regard to ownership of any certificate by the servicer, the special
servicer or any of their affiliates. See "Servicing of the Mortgage
Loans--Servicing of the Mortgage Loans; Collection of Payments" in this
prospectus supplement.
Additionally, any of those parties may, especially if it or an affiliate
holds a subordinate certificate, or has financial interests in or other
financial dealings with a borrower or sponsor under any of the mortgage loans,
have interests when dealing with the mortgage loans that are in conflict with
those of holders of the certificates offered herein. For instance, if the
special servicer or an affiliate holds a subordinate certificate, the special
servicer could seek to reduce the potential for losses allocable to those
certificates from a troubled mortgage loan by deferring acceleration in hope of
maximizing future proceeds. The special servicer might also seek to reduce the
potential for such losses by accelerating a mortgage loan earlier than necessary
in order to avoid advance interest or additional trust fund expenses. Either
action could result in fewer proceeds to the trust than would be realized if
alternate action had been taken. In general, a servicer is not required to act
in a manner more favorable to the certificates offered herein or any particular
class of certificates that are subordinate to the certificates offered herein.
Additionally, the servicer and special servicer service and will, in the
future, service, in the ordinary course of their respective businesses, existing
and new loans for third parties, including portfolios of loans similar to the
mortgage loans that will be included in the trust. The real properties securing
these other loans may be in the same markets as, and compete with, certain of
the real properties securing the mortgage loans that will be included in the
trust. Consequently, personnel of the servicer and the special servicer may
perform services, on behalf of the trust, with respect to the mortgage loans at
the same time as they are performing services, on behalf of other persons, with
respect to other mortgage loans secured by properties that compete with the
mortgaged properties securing the mortgage loans. This may pose inherent
conflicts for the servicer or the special servicer.
The activities of the mortgage loan sellers or their affiliates may involve
properties that are in the same markets as the mortgaged properties underlying
the certificates. In such cases, the interests of such mortgage loan sellers or
such affiliates may differ from, and compete with, the interests of the trust,
and decisions made with respect to those assets may adversely affect the amount
and timing of distributions with respect to the certificates. Conflicts of
interest may arise between the trust and each of the mortgage loan sellers or
its affiliates that engage in the acquisition, development, operation, financing
and disposition of real estate if such mortgage loan sellers acquire any
certificates. In particular, if certificates held by a mortgage loan seller or
an affiliate are part of a class that is or becomes the controlling class, the
mortgage loan seller or its affiliate as a controlling class certificateholder
would have the ability to influence certain actions of the special servicer
under circumstances where the interests of the trust conflict with the interests
of the mortgage loan seller or its affiliates as acquirors, developers,
operators, financers or sellers of real estate related assets.
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CONFLICTS BETWEEN MANAGERS AND THE MORTGAGE LOAN BORROWERS
A substantial number of the mortgaged properties are managed by property
managers affiliated with the respective borrowers. In addition, substantially
all of the property managers for the mortgaged properties (or their affiliates)
manage additional properties, including properties that may compete with the
mortgaged properties. Affiliates of the managers, and certain of the managers
themselves, also may own other properties, including competing properties. The
managers of the mortgaged properties may accordingly experience conflicts of
interest in the management of such mortgaged properties.
CONFLICTS BETWEEN CERTIFICATEHOLDERS AND HOLDERS OF COMPANION LOANS
THE GARDEN STATE PLAZA LOAN
With respect to the Garden State Plaza loan, representing 9.71% of the
outstanding pool balance and 12.09% of the Loan Group 1 balance, in each case,
as of the cut-off date, the related mortgaged property also secures three other
pari passu companion loans. The Garden State Plaza loan and the three pari passu
companion loans will be serviced under the LB-UBS Series 2004-C4 pooling and
servicing agreement. Any decision to be made with respect to the Garden State
Plaza loan that requires the approval of the controlling class representative
under the LB-UBS Series 2004-C4 pooling and servicing agreement or otherwise
requires approval under the related intercreditor agreement will require the
approval of the holders of the Garden State Plaza loan and the three other pari
passu companion loans then holding a majority of the aggregate outstanding
principal balance of the Garden State Plaza loan and such pari passu companion
loans. If such holders (or their designees) cannot agree on a course of action
within a certain period of time, the master servicer or the special servicer, as
applicable, under the LB-UBS Series 2004-C4 pooling and servicing agreement will
implement a course of action or inaction in accordance with the servicing
standard set forth in the LB-UBS Series 2004-C4 pooling and servicing agreement.
The interests of the holders of the three other pari passu companion loans
may conflict with the interests of, and their decisions may adversely affect,
the holders of one or more classes of certificates offered herein. In addition,
as of the cut-off date, the Garden State Plaza loan represents approximately 25%
of the aggregate principal balance of the four loans secured by the related
mortgaged property. As a result, any determinations made by the controlling
class representative will not necessarily be implemented and approvals to
proposed actions of the master servicer or the special servicer under the LB-UBS
Series 2004-C4 pooling and servicing agreement may not be granted in all
instances, thereby potentially adversely affecting some or all of the classes of
certificates offered herein.
THE 731 LEXINGTON AVENUE-BLOOMBERG HEADQUARTERS LOAN
With respect to the 731 Lexington Avenue-Bloomberg Headquarters loan,
representing 9.33% of the outstanding pool balance and 11.63% of the Loan Group
1 balance as of the cut-off date, the related mortgaged property also secures a
subordinate companion loan and four other pari passu companion loans. The 731
Lexington Avenue-Bloomberg Headquarters loan and the 731 Lexington
Avenue-Bloomberg Headquarters pari passu and subordinate companion loans will be
serviced under the pooling and servicing agreement. The 731 Lexington
Avenue-Bloomberg Headquarters subordinate companion loan is currently held by
731 Funding LLC, an affiliate of the tenant at the mortgaged property.
Prior to the occurrence of a change of control event described under
"Description of the Mortgage Pool--Split Loan Structure--The 731 Lexington
Avenue-Bloomberg Headquarters Loan--Rights of the Holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan" in this prospectus supplement, the holder
of the 731 Lexington Avenue-Bloomberg Headquarters subordinate companion loan
will have the right under certain circumstances to advise and direct the master
servicer or special servicer, as applicable, with respect to various servicing
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matters affecting the 731 Lexington Avenue-Bloomberg Headquarters loan and the
731 Lexington Avenue-Bloomberg Headquarters companion loans and to approve
various decisions affecting the 731 Lexington Avenue-Bloomberg Headquarters loan
and the 731 Lexington Avenue-Bloomberg Headquarters companion loans. Such holder
also generally has the right to terminate the special servicer and to appoint a
successor special servicer, except while such holder is an affiliate of the
tenant at the related mortgaged property or an affiliate of the related
borrower. The holder of such subordinate companion loan may have interests in
conflict with those of the holders of the certificates offered herein. For so
long as the holder of the 731 Lexington Avenue-Bloomberg Headquarters
subordinate companion loan is an affiliate of the tenant at the related
mortgaged property, such holder will not be permitted to exercise certain of
these rights under specified circumstances.
Following the occurrence of such change of control event, any decision with
respect to the 731 Lexington Avenue-Bloomberg Headquarters loan which requires
the approval of the directing certificateholder or otherwise requires approval
under the related intercreditor agreement (including terminating the special
servicer and appointing a successor special servicer) will require the approval
of (i) the holders of a majority by principal balance of the 731 Lexington
Avenue-Bloomberg Headquarters loan and the 731 Lexington Avenue-Bloomberg
Headquarters pari passu companion loans, or (ii) if such holders (or their
designees) cannot agree on a course of action within a certain period of time,
the controlling class representative.
No certificateholder may take any action against any holder of a companion
loan (or its designee) for having acted solely in its respective interest. The
holders of the subordinate loan and the four other pari passu companion loans
(or their respective designees) may have interests in conflict with, and their
decisions may adversely affect, holders of the classes of certificates offered
herein. In addition, as of the cut-off date, the 731 Lexington Avenue-Bloomberg
Headquarters loan represents approximately 31.25% of the aggregate principal
balance of the five pari passu companion loans secured by the related mortgaged
property. As a result, any determinations made by the controlling class
representative will not necessarily be implemented and approvals to proposed
actions of the master servicer or the special servicer, as applicable, under the
pooling and servicing agreement may not be granted in all instances, thereby
potentially adversely affecting some or all of the classes of certificates
offered herein.
THE DDR-MACQUARIE PORTFOLIO LOAN
With respect to the DDR-Macquarie Portfolio loan, representing 5.60% of the
outstanding pool balance and 6.98% of the Loan Group 1 balance, in each case, as
of the cut-off date, the related mortgaged property also secures three other
pari passu companion loans. The DDR-Macquarie Portfolio loan and the three pari
passu companion loans will be serviced under the pooling and servicing
agreement. Any decision to be made with respect to the DDR-Macquarie Portfolio
loan that requires the approval of the directing certificateholder or otherwise
requires approval under the related intercreditor agreement will require the
approval of the holders of the DDR-Macquarie Portfolio loan and the three other
pari passu companion loans then holding a majority of the aggregate outstanding
principal balance of the DDR-Macquarie Portfolio loan and such pari passu
companion loans. If such holders (or their designees) cannot agree on a course
of action within a certain period of time, the controlling class representative
will be entitled to direct the master servicer or the special servicer with
respect to which course of action it should follow.
No certificateholder may take any action against any holder of a companion
loan (or its designee) for having acted solely in its respective interest. The
interests of the holders of the three other pari passu companion loans may
conflict with the interests of, and their decisions may adversely affect, the
holders of one or more classes of certificates offered herein. In addition, as
of the cut-off date, the DDR-Macquarie Portfolio loan represents approximately
34.88% of the aggregate principal balance of the four loans secured by the
related mortgaged
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property. As a result, any determinations made by the controlling class
representative will not necessarily be implemented and approvals to proposed
actions of the master servicer or the special servicer under the pooling and
servicing agreement may not be granted in all instances, thereby potentially
adversely affecting some or all of the classes of certificates offered herein.
THE TYSONS CORNER CENTER LOAN
With respect to the Tysons Corner Center loan, representing 4.67% of the
outstanding pool balance and 5.81% of the Loan Group 1 balance, in each case, as
of the cut-off date, the related mortgaged property also secures three other
pari passu companion loans. The Tysons Corner Center loan and the three pari
passu companion loans will be serviced under the COMM 2004-LNB2 pooling and
servicing agreement. Any decision to be made with respect to the Tysons Corner
Center loan that requires the approval of the majority certificateholder of the
controlling class under the COMM 2004-LNB2 pooling and servicing agreement or
otherwise requires approval under the related intercreditor agreement (other
than the termination of the special servicer under the COMM 2004-LNB2 pooling
and servicing agreement and appointment of successor special servicer with
respect to such mortgage loan) will require the approval of the holders of the
Tysons Corner Center loan and the three other pari passu companion loans then
holding a majority of the aggregate outstanding principal balance of the Tysons
Corner Center loan and such pari passu companion loans. If such holders (or
their designees) cannot agree on a course of action within a certain period of
time, the majority certificateholder of the controlling class under the COMM
2004-LNB2 pooling and servicing agreement will be entitled to direct the master
servicer or the special servicer under the COMM 2004-LNB2 pooling and servicing
agreement with respect to which course of action it should follow.
No certificateholder may take any action against any holder of a companion
loan (or its designee) for having acted solely in its respective interest. The
interests of the holders of the three other pari passu companion loans may
conflict with the interests of, and their decisions may adversely affect, the
holders of one or more classes of certificates offered herein. In addition, as
of the cut-off date, the Tysons Corner Center loan represents approximately
18.38% of the aggregate principal balance of the four loans secured by the
related mortgaged property. As a result, any determinations made by the
controlling class representative will not necessarily be implemented and
approvals to proposed actions of the master servicer or the special servicer
under the COMM 2004-LNB2 pooling and servicing agreement may not be granted in
all instances, thereby potentially adversely affecting some or all of the
classes of certificates offered herein.
THE AFR/BANK OF AMERICA PORTFOLIO LOAN
With respect to the AFR/Bank of America Portfolio loan, representing 1.48%
of the outstanding pool balance and 1.85% of the Loan Group 1 balance as of the
cut-off date, the related mortgaged properties also secure a subordinate loan
and five other pari passu companion loans. The largest of the pari passu
companion loans and the subordinate loan have been deposited into the commercial
mortgage securitization trust created pursuant to the pooling and servicing
agreement related to the GMAC Commercial Mortgage Securities Inc, Series 2003-C3
Mortgage Pass-Through Certificates. The rights of the holder of the subordinate
loan are exercised by the holders of the controlling class of the separate
series of certificates that are backed by the subordinate loan.
Prior to the occurrence of a control appraisal event described under
"Description of the Mortgage Pool--Split Loan Structure--The AFR/Bank of America
Portfolio Loan--Rights of the Holder of the AFR/Bank of America Portfolio B
Loan" in this prospectus supplement, the majority certificateholder of the
controlling class of the separate series of certificates backed by the
subordinate companion loan will have the right under certain circumstances to
advise and direct the master servicer or special servicer, as applicable, under
the GMACCM 2003-C3 pooling and servicing agreement with respect to various
servicing matters affecting the
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AFR/Bank of America Portfolio loan and the AFR/Bank of America Portfolio
companion loans and to approve various decisions affecting the AFR/Bank of
America Portfolio loan and the AFR/Bank of America Portfolio companion loans.
Such holder also has the right to terminate the special servicer under the
GMACCM 2003-C3 pooling and servicing agreement and to appoint a successor
special servicer. The holders of such certificates may have interests in
conflict with those of the holders of the certificates offered herein.
Following the occurrence of such control appraisal event, any decision with
respect to the AFR/Bank of America Portfolio loan which requires the approval of
the majority certificateholder of the controlling class under the GMACCM 2003-C3
pooling and servicing agreement or otherwise requires approval under the related
intercreditor agreement (including terminating the special servicer under the
GMACCM 2003-C3 pooling and servicing agreement and appointing a successor
special servicer) will require the approval of (i) the holders of a majority by
outstanding principal balance of the AFR/Bank of America Portfolio loan and the
AFR/Bank of America Portfolio pari passu companion loans, or (ii) if such
holders (or their designees) cannot agree on a course of action within a certain
period of time, the majority certificateholder of the controlling class under
the GMACCM 2003-C3 pooling and servicing agreement.
No certificateholder may take any action against any holder of a companion
loan (or its designee) for having acted solely in its respective interest. The
holders of the subordinate loan and the five other pari passu companion loans
(or their respective designees) may have interests in conflict with, and their
decisions may adversely affect, holders of the classes of certificates offered
herein. In addition, as of the cut-off date, the AFR/Bank of America Portfolio
loan represents approximately 5.88% of the aggregate principal balance of the
six pari passu companion loans secured by the related mortgaged properties. As a
result, any determinations made by the controlling class representative will not
necessarily be implemented and approvals to proposed actions of the master
servicer or the special servicer, as applicable, under the GMACCM 2003-C3
pooling and servicing agreement may not be granted in all instances, thereby
potentially adversely affecting some or all of the classes of the certificates
offered herein.
THE SAKS, INC.-NORTH RIVERSIDE LOAN
With respect to the Saks, Inc.-North Riverside loan, representing 0.63% of
the outstanding pool balance and 0.78% of the Loan Group 1 balance, in each case
the related mortgaged property also secures a subordinate companion loan. The
Saks, Inc.-North Riverside loan and the subordinate companion loan will be
serviced under the pooling and servicing agreement.
Prior to the occurrence of a control appraisal event described under
"Description of the Mortgage Pool--Split Loan Structure--The Saks, Inc.-North
Riverside Loan--Rights of the Holder of the Saks, Inc.-North Riverside B Loan"
in this prospectus supplement, the holder of the Saks, Inc.-North Riverside
subordinate companion loan will have the right under certain circumstances to
advise and direct the master servicer or special servicer with respect to
various servicing matters affecting the Saks, Inc.-North Riverside loan and the
Saks, Inc.-North Riverside subordinate companion loan and to approve various
decisions affecting the Saks, Inc.-North Riverside loan and the Saks, Inc.-North
Riverside subordinate companion loan. As a result, approvals to proposed actions
of the master servicer or the special servicer, as applicable, under the pooling
and servicing agreement may not be granted in all instances, thereby potentially
adversely affecting some or all of the classes of certificates offered herein.
No certificateholder may take any action against any holder of a companion loan
(or its designee) for having acted solely in its respective interest. The holder
of the Saks, Inc.-North Riverside subordinate companion loan (or its designee)
may have interests in conflict with, and its decisions may adversely affect,
holders of the classes of certificates offered herein.
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YOU WILL HAVE LESS CONTROL OVER THE SERVICING OF THE GARDEN STATE PLAZA LOAN,
THE TYSONS CORNER CENTER LOAN AND THE AFR/BANK OF AMERICA PORTFOLIO LOAN
The Garden State Plaza loan, the Tysons Corner Center loan and the AFR/Bank
of America Portfolio loan are secured by mortgaged properties that also secure
mortgage loans that are not assets of the trust. The Garden State Plaza loan is
serviced and administered by Wachovia Bank, National Association, the master
servicer under a separate pooling and servicing agreement, and, if applicable,
will be specially serviced by Lennar Partners, Inc., the special servicer under
such pooling and servicing agreement. The Tysons Corner Center loan is serviced
and administered by GMAC Commercial Mortgage Corporation, the master servicer
under a separate pooling and servicing agreement, and, if applicable, will be
specially serviced by Lennar Partners, Inc., the special servicer under such
pooling and servicing agreement. The AFR/Bank of America Portfolio loan is being
serviced and administered by GMAC Commercial Mortgage Corporation, the master
servicer under a separate pooling and servicing agreement, and, if applicable,
will be specially serviced by Midland Loan Services, Inc., the special servicer
under such pooling and servicing agreement. Each of those other pooling and
servicing agreements provides for servicing arrangements that are similar but
not identical to those under the pooling and servicing agreement. As a result,
you will have less control over the servicing of the Garden State Plaza loan,
the Tysons Corner Center loan and the AFR/Bank of America Portfolio loan than
you would have if such mortgage loans were being serviced by the servicer and
the special servicer pursuant to the terms of the pooling and servicing
agreement. See "The Pooling and Servicing Agreement--Servicing of the
Non-Serviced Mortgage Loans" in this prospectus supplement.
RISKS RELATED TO THE OFFERED CERTIFICATES
RISKS RELATED TO PREPAYMENTS AND REPURCHASES
The yield to maturity on your certificates will depend, in significant
part, upon the rate and timing of principal payments on the mortgage loans. For
this purpose, principal payments include both voluntary prepayments, if
permitted, and involuntary prepayments, such as prepayments resulting from
casualty or condemnation of mortgaged properties, defaults and liquidations by
borrowers, or repurchases upon a mortgage loan seller's breach of
representations or warranties.
In addition, because the amount of principal that will be distributed to
the Class A-1, Class A-2 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 and Class A-2 certificates will be
particularly sensitive to prepayments on mortgage loans in Loan Group 1 and the
yield on the Class A-1A certificates will be particularly sensitive to
prepayments on mortgage loans in Loan Group 2.
In addition, although the borrowers of the anticipated repayment date loans
may have certain incentives to prepay such mortgage loans on their anticipated
repayment dates, we cannot assure you that the borrowers will be able to prepay
the anticipated repayment date loans on their anticipated repayment dates. The
failure of a borrower to prepay an anticipated repayment date loan on its
anticipated repayment date will not be an event of default under the terms of
such mortgage loans, and, pursuant to the terms of the pooling and servicing
agreement, neither the servicer nor the special servicer will be permitted to
take any enforcement action with respect to a borrower's failure to pay interest
at an increased rate, other than requests for collection, until the scheduled
maturity of the respective anticipated repayment date loan; provided that the
servicer or the special servicer, as the case may be, may take action to enforce
the trust's right to apply excess cash flow to principal in accordance with the
terms of the documents of the anticipated repayment date loans. See "--Borrower
May Be Unable to Repay the Remaining Principal Balance on Maturity Date or
Anticipated Repayment Date" above.
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The investment performance of your certificates may vary materially and
adversely from your expectations if the actual rate of prepayment is higher or
lower than you anticipate.
Voluntary prepayments under certain mortgage loans may require payment of a
yield maintenance charge unless the prepayment is made within a specified number
of days of the stated maturity date or the anticipated repayment date, as
applicable. In addition, the AFR/Bank of America Portfolio loan permits partial
prepayment in connection with the release of certain identified parcels during
the related lock-out period. On April 1, 2004, the related borrower prepaid
0.20% of the aggregate initial principal balance of the AFR/Bank of America
Portfolio loan and the AFR/Bank of America Portfolio companion loans. In
addition, on April 30, 2004, the borrower prepaid 0.56% of the aggregate initial
principal balance of the AFR/Bank of America Portfolio loan and the AFR/Bank of
America Portfolio companion loans. See "Description of the Mortgage
Pool--Certain Terms and Conditions of the Mortgage Loans--Prepayment Provisions"
and "--Property Releases" in this prospectus supplement. Nevertheless, there is
no assurance that the related borrowers will refrain from prepaying their
mortgage loans due to the existence of a yield maintenance charge or a
prepayment premium. There is no assurance that involuntary prepayments will not
occur. The rate at which voluntary prepayments occur on the mortgage loans will
be affected by a variety of factors, including:
o the terms of the mortgage loans;
o the length of any prepayment lock-out period;
o the level of prevailing interest rates;
o the availability of mortgage credit;
o the applicable yield maintenance charges or prepayment premiums;
o the servicer's or special servicer's ability to enforce those charges
or premiums;
o the occurrence of casualties or natural disasters; and
o economic, demographic, tax, legal or other factors.
Generally, no yield maintenance charge or prepayment premium will be
required for prepayments in connection with a casualty or condemnation unless,
in the case of most of the mortgage loans, an event of default has occurred and
is continuing. In addition, if a mortgage loan seller repurchases any mortgage
loan from the trust due to a breach of a representation or warranty or as a
result of a document defect in the related mortgage file, the repurchase price
paid will be passed through to the holders of the certificates with the same
effect as if the mortgage loan had been prepaid in part or in full, except that
no prepayment premium or yield maintenance charge would be payable. Such a
repurchase may therefore adversely affect the yield to maturity on your
certificates. Furthermore, with regard to the 731 Lexington Avenue-Bloomberg
Headquarters loan, the AFR/Bank of America Portfolio loan and the Saks,
Inc.-North Riverside loan, which are secured by one or more mortgaged properties
that also secure a companion loan that is not included in the trust, yield
maintenance charges may not be payable if the holder of a related subordinate
companion loan purchases the related mortgage loan due to certain default
circumstances under such mortgage loan. This circumstance generally would have
the same effect on the certificates offered herein as a prepayment in full of
such mortgage loan.
With respect to the Saks, Inc.-North Riverside loan, representing 0.63% of
the outstanding pool balance and 0.78% of the Loan Group 1 balance as of the
cut-off date, the related mortgage loan documents permit defeasance on any
payment date. However, in the event the borrower provides notice that would
result in a defeasance of the mortgage loan on a date that is prior to the
second anniversary of the closing date, the related mortgage loan seller will be
required to purchase the mortgage loan from the trust at a price at least equal
to the outstanding principal balance of the mortgage loan, plus expenses,
together with a yield maintenance charge.
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RISKS RELATED TO ENFORCEABILITY OF PREPAYMENT PREMIUMS, YIELD MAINTENANCE
CHARGES AND DEFEASANCE PROVISIONS
Provisions requiring yield maintenance charges, prepayment premiums and
lock-out periods may not be enforceable in some states and under federal
bankruptcy law. Those provisions for charges and premiums also may constitute
interest for usury purposes. Accordingly, we cannot assure you that the
obligation to pay a yield maintenance charge or prepayment premium or to
prohibit prepayments will be enforceable. There is no assurance that the
foreclosure proceeds will be sufficient to pay an enforceable yield maintenance
charge or prepayment premium. Additionally, although the collateral substitution
provisions related to defeasance do not have the same effect on the
certificateholders as prepayment, there is no assurance that a court would not
interpret those provisions as requiring a yield maintenance charge or prepayment
premium. In certain jurisdictions those collateral substitution provisions might
therefore be deemed unenforceable under applicable law, or usurious.
YIELD CONSIDERATIONS
The yield on any certificate offered herein will depend on (i) the price at
which such certificate is purchased by an investor and (ii) the rate, timing and
amount of distributions on such certificate. The rate, timing and amount of
distributions on any certificate will, in turn, depend on, among other things:
o the interest rate for such certificate;
o the rate and timing of principal payments (including principal
prepayments) and other principal collections on or in respect of the
mortgage loans and the extent to which such amounts are to be applied
or otherwise result in a reduction of the certificate balance of such
certificate;
o the rate, timing and severity of losses on or in respect of the
mortgage loans or unanticipated expenses of the trust;
o the timing and severity of any interest shortfalls resulting from
prepayments;
o the timing and severity of any appraisal reductions; and
o the extent to which prepayment premiums are collected and, in turn,
distributed on such certificate.
The investment performance of the certificates offered herein may be
materially different from what you expected if the assumptions you made with
respect to the factors listed above are incorrect.
RISKS RELATED TO BORROWER DEFAULT
The rate and timing of delinquencies or defaults on the mortgage loans will
affect:
o the aggregate amount of distributions on the certificates offered
herein;
o their yield to maturity;
o the rate of principal payments; and
o their weighted average life.
Unless your certificates are Class A-1 or Class A-2 certificates, your
right to receive certain payments of principal and interest otherwise payable on
your certificates will be subordinated to such rights of the holders of the more
senior certificates having an earlier alphabetical class designation and to such
rights of the holders of the Class X certificates. See "Description of the
Offered Certificates--Distributions" in this prospectus supplement. Losses on
the mortgage loans will be allocated to the Class P, Class O, Class N, Class M,
Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C
and Class B certificates, in that order, reducing
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amounts otherwise payable to each class. Any remaining losses will then be
allocated to the Class A-1, Class A-2 and Class A-1A certificates, pro rata, and
with respect to interest losses only, the Class X certificates based on their
respective entitlements.
Each class of certificates (other than the Class P, Class Q, Class R and
Class LR certificates) is senior to certain other classes of certificates in
respect of the right to receive distributions and the allocation of losses. If
losses on the mortgage loans exceed the aggregate principal amount of the
classes of certificates subordinated to such class, that class will suffer a
loss equal to the full amount of such excess (up to the outstanding certificate
balance of such class).
If you calculate your anticipated yield based on assumed rates of default
and losses that are lower than the default rate and losses actually experienced
and such losses are allocable to your certificates, your actual yield to
maturity will be lower than the assumed yield. Under certain extreme scenarios,
such yield could be negative. In general, the earlier a loss borne by your
certificates occurs, the greater the effect on your yield to maturity.
Even if losses on the mortgage loans are not borne by your certificates,
those losses may affect the weighted average life and yield to maturity of your
certificates. This may be so because those losses cause your certificates to
have a higher percentage ownership interest in the trust (and therefore related
distributions of principal payments on the mortgage loans) than would otherwise
have been the case. The effect on the weighted average life and yield to
maturity of your certificates will depend upon the characteristics of the
remaining mortgage loans.
Additionally, delinquencies and defaults on the mortgage loans may
significantly delay the receipt of distributions by you on your certificates,
unless principal and interest advances are made to cover delinquent payments or
the subordination of another class of certificates fully offsets the effects of
any such delinquency or default.
RISKS RELATED TO CERTAIN PAYMENTS
To the extent described in this prospectus supplement, the servicer, the
special servicer or the trustee, as applicable, will be entitled to receive
interest on unreimbursed advances. This interest will generally accrue from the
date on which the related advance is made or the related expense is incurred to
the date of reimbursement. In addition, under certain circumstances, including
delinquencies in the payment of principal and interest, a mortgage loan will be
specially serviced, and the special servicer will be entitled to compensation
for special servicing activities. The right to receive interest on advances or
special servicing compensation is senior to the rights of certificateholders to
receive distributions and may lead to shortfalls in amounts otherwise
distributable on your certificates.
RISKS OF LIMITED LIQUIDITY AND MARKET VALUE
There is currently no secondary market for the certificates offered herein.
While the underwriters have advised that they currently intend to make a
secondary market in the certificates offered herein, they are under no
obligation to do so. There is no assurance that a secondary market for the
certificates offered herein will develop. Moreover, if a secondary market does
develop, we cannot assure you that it will provide you with liquidity of
investment or that it will continue for the life of the certificates offered
herein. The certificates offered herein will not be listed on any securities
exchange. Lack of liquidity could result in a precipitous drop in the market
value of the certificates offered herein. In addition, the market value of the
certificates offered herein at any time may be affected by many factors,
including then prevailing interest rates, and no representation is made by any
person or entity as to the market value of any certificates offered herein at
any time.
SUBORDINATION OF SUBORDINATE OFFERED CERTIFICATES
As described in this prospectus supplement, unless your certificates are
the Class A-1 or Class A-2 certificates, your rights to receive distributions of
amounts collected or advanced on
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or in respect of the mortgage loans will be subordinated to those of the holders
of the certificates with an earlier alphabetical designation and the Class X
certificates. See "Description of the Offered Certificates--Distributions" and
"--Subordination" in this prospectus supplement.
RISK OF LIMITED ASSETS
The certificates will represent interests solely in the assets of the trust
and will not represent an interest in or an obligation of any other entity or
person. Distributions on any of the certificates will depend solely on the
amount and timing of payments on the mortgage loans.
RISKS RELATING TO LACK OF CERTIFICATEHOLDER CONTROL OVER TRUST
You generally do not have a right to vote, except with respect to certain
amendments to the pooling and servicing agreement. Furthermore, you will
generally not have the right to make decisions concerning trust administration.
The pooling and servicing agreement gives the servicer, the special servicer,
the bond administrator or the REMIC administrator, as applicable, certain
decision-making authority concerning trust administration. These parties may
make decisions different from those that holders of any particular class of the
certificates offered herein would have made, and these decisions may negatively
affect those holders' interests.
DIFFERENT TIMING OF MORTGAGE LOAN AMORTIZATION POSES CERTAIN RISKS
As principal payments or prepayments are made on a mortgage loan that is
part of a pool of loans, the pool may be subject to more risk with respect to
the decreased diversity of mortgaged properties, types of mortgaged properties,
geographic location and number of borrowers and affiliated borrowers, as
described above under the heading "--Risks Related to the Mortgage Loans."
Classes that have a later sequential designation or a lower payment priority are
more likely to be exposed to this concentration risk than are classes with an
earlier sequential designation or higher priority. This is so because principal
on the certificates is generally payable in sequential order, and no class
entitled to distribution of principal generally receives principal until the
principal amount of the preceding class or classes entitled to receive principal
have been reduced to zero.
OTHER RISKS
The "Risk Factors" section in the prospectus describes other risks and
special considerations that may apply to your investment in certificates.
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DESCRIPTION OF THE MORTGAGE POOL
GENERAL
A trust (the "Trust" or "Trust Fund") to be created by Deutsche Mortgage &
Asset Receiving Corporation (the "Depositor") will consist primarily of a pool
(the "Mortgage Pool") of 95 fixed-rate mortgage loans (each a "Mortgage Loan,"
and collectively, the "Mortgage Loans") secured by first liens on 267
commercial, multifamily and manufactured housing properties (each a "Mortgaged
Property," and collectively, the "Mortgaged Properties"). The Mortgage Pool has
an aggregate principal balance as of June 1, 2004 (the "Cut-off Date") of
approximately $1,339,496,992 (the "Initial Outstanding Pool Balance"). The
principal balances of the Mortgage Loans as of the Cut-off Date (each, a
"Cut-off Date Balance") will range from $998,111 to $130,000,000 and the average
Cut-off Date Balance will be $14,099,968 subject to a variance of plus or minus
5%. The pool of mortgage loans will be deemed to consist of two Loan Groups
("Loan Group 1" and "Loan Group 2" and, collectively, the "Loan Groups"). Loan
Group 1 will consist of 60 Mortgage Loans, representing 80.26% of the Initial
Outstanding Pool Balance (the "Initial Loan Group 1 Balance"). Loan Group 2 will
consist of 35 Mortgage Loans (or 94.18% of the aggregate principal balance of
the mortgage loans secured by multifamily properties and 45.06% of the aggregate
principal balance of the Mortgage Loans secured by manufactured housing
properties), representing 19.74% of the Initial Pool Balance (the "Initial Loan
Group 2 Balance"). Annex A-1 to this prospectus supplement sets forth the Loan
Group designation with respect to each Mortgage Loan. All numerical information
provided herein with respect to the Mortgage Loans is provided on an approximate
basis. All percentages of the Mortgage Pool, or of any specified sub-group
thereof, referred to herein without further description are approximate
percentages of the Initial Outstanding Pool Balance. Descriptions of the terms
and provisions of the Mortgage Loans are generalized descriptions of the terms
and provisions of the Mortgage Loans in the aggregate. Many of the individual
Mortgage Loans have specific terms and provisions that deviate from the general
description.
Each of the Garden State Plaza loan, the 731 Lexington Avenue-Bloomberg
Headquarters loan, the DDR-Macquarie Portfolio loan, the Tyson Corner Center
loan, the AFR/Bank of America Portfolio loan and the Saks, Inc.-North Riverside
loan has one or more companion loans. Each companion loan is referred to in this
prospectus supplement as a "Companion Loan." The Mortgage Loan together with its
related Companion Loans is referred to in this prospectus supplement as a "Whole
Loan." None of the Companion Loans are included in the Mortgage Pool. Certain of
the Companion Loans are pari passu in right of payment with the related Mortgage
Loan. Each such Companion Loan is referred to in this prospectus supplement as a
"Pari Passu Companion Loan." Certain of the Companion Loans are subordinate in
right of payment to the related Mortgage Loan. Each such Companion Loan is
referred to in this prospectus supplement as a "B Loan." Each Companion Loan
that is being serviced under the Pooling and Servicing Agreement is referred to
in this prospectus supplement as a "Serviced Companion Loan" and together with
the related Mortgage Loan, a "Serviced Whole Loan." Each of the Garden State
Plaza Loan, the Tysons Corner Center Loan and the AFR/Bank of America Portfolio
Loan is sometimes referred to as a "Non-Serviced Mortgage Loan" and
collectively, the "Non-Serviced Mortgage Loans."
Each Mortgage Loan is evidenced by one or more promissory notes (each, a
"Note") and secured by one or more mortgages, deeds of trust or other similar
security instruments (each, a "Mortgage"). Each of the Mortgages creates a first
lien on the interests of the related borrower in the related Mortgaged Property,
as set forth on the following table:
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% OF INITIAL OUTSTANDING % OF INITIAL LOAN % OF INITIAL LOAN
INTEREST OF BORROWER ENCUMBERED POOL BALANCE(1) GROUP 1 BALANCE(1) GROUP 2 BALANCE(1)
- ------------------------------------- ------------------------- -------------------- -------------------
Fee Simple Estate(2) ................ 98.97% 98.72% 100.00%
Partial Fee/Partial Leasehold Estate 0.01 0.01 --
Leasehold Estate .................... 1.01 1.26 --
------ ------ ------
TOTAL ............................... 100.00% 100.00% 100.00%
====== ====== ======
- ----------
(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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised values or square footage of each
Mortgaged Property and/or each Mortgaged Property's underwritten net cash
flow).
(2) Includes Mortgage Loans secured by the borrower's leasehold interest in
the Mortgaged Property along with the corresponding fee interest of the
ground lessor in such Mortgaged Property.
SECURITY FOR THE MORTGAGE LOANS
None of the Mortgage Loans is insured or guaranteed by the United States,
any governmental agency or instrumentality, any private mortgage insurer or by
the Depositor, any of German American Capital Corporation ("GACC"), LaSalle Bank
National Association ("LaSalle") or PNC Bank, National Association ("PNC Bank"
and together with LaSalle and GACC, the "Mortgage Loan Sellers"), Midland Loan
Services, Inc. (the "Servicer"), Lennar Partners, Inc. (the "Special Servicer"),
Wells Fargo Bank, N.A.(the "Trustee") or LaSalle Bank National Association (the
"Bond Administrator") or any of their respective affiliates. Each Mortgage Loan
is or should be considered to be nonrecourse. In the event of a default under
any Mortgage Loan, the lender's remedies generally are limited to foreclosing
against the specific Mortgaged Property or Mortgaged Properties securing such
Mortgage Loan and such limited other assets as may have been pledged to secure
such Mortgage Loan subject to customary nonrecourse carveouts either to the
borrower or its sponsor. Even if a Mortgage Loan is recourse to the borrower (or
if a nonrecourse carveout to the borrower applies), in most cases, the
borrower's assets are limited primarily to its interest in the related Mortgaged
Property. Each Mortgage Loan is secured by one or more Mortgages and an
assignment of the related borrower's interest in the leases, rents, issues and
profits of the related Mortgaged Properties. In certain instances, additional
collateral exists in the nature of partial indemnities or guaranties, or in the
establishment and pledge of one or more reserve or escrow accounts (such
accounts, "Reserve Accounts"). Each Mortgage constitutes a first lien on a fee
or leasehold interest in a Mortgaged Property, subject generally only to (i)
liens for real estate and other taxes and special assessments not yet delinquent
or accruing interest or penalties, (ii) covenants, conditions, restrictions,
rights of way, easements and other encumbrances whether or not of public record
as of the date of recording of the related Mortgage, such exceptions having been
acceptable to the related Mortgage Loan Seller in connection with the purchase
or origination of the related Mortgage Loan, and (iii) such other exceptions and
encumbrances on Mortgaged Properties as are reflected in the related title
insurance policies.
THE MORTGAGE LOAN SELLERS
The Depositor will purchase the Mortgage Loans to be included in the
Mortgage Pool on or before the Closing Date from GACC, LaSalle and PNC Bank
pursuant to three separate mortgage loan purchase agreements (each, a "Mortgage
Loan Purchase Agreement"), to be dated the Closing Date between the related
Mortgage Loan Seller and the Depositor.
GACC. 26 Mortgage Loans, which represent security for 60.20% of the Initial
Outstanding Pool Balance, 64.94% of the Initial Loan Group 1 Balance and 40.95%
of the Initial Loan Group 2 Balance, will be sold to the Depositor by GACC. All
such Mortgage Loans, except 1 Mortgage Loan was originated by GACC or an
affiliate of GACC. GACC is a wholly-owned subsidiary of Deutsche Bank Americas
Holding Corp., which in turn is a wholly-owned subsidiary of
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Deutsche Bank AG, a German corporation. GACC is an affiliate of Deutsche Bank
Securities Inc., one of the Underwriters and an affiliate of the Depositor. GACC
engages primarily in the business of purchasing and holding mortgage loans
pending securitization, repackaging or other disposition. GACC also acts from
time to time as the originator of mortgage loans. Although GACC purchases and
sells mortgage loans for its own account, it does not act as a broker or dealer
in connection with any such loans. The principal offices of GACC are located at
60 Wall Street, New York, New York 10005.
LaSalle. 55 Mortgage Loans, which represent security for 32.89% of the
Initial Outstanding Pool Balance, 30.91% of the Initial Loan Group 1 Balance and
40.97% of the Initial Loan Group 2 Balance, will be sold to the Depositor by
LaSalle. LaSalle is a national banking association whose principal offices are
in Chicago, Illinois. LaSalle is a subsidiary of LaSalle Bank Corporation, which
is a subsidiary of ABN AMRO North America Holding Company, which is a subsidiary
of ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands.
LaSalle is a commercial bank offering a wide range of banking services to
customers in the United States. Its business is subject to examination and
regulation by Federal banking authorities. LaSalle is an affiliate of ABN AMRO
Incorporated, one of the Underwriters. LaSalle is also acting as Bond
Administrator and as paying agent and certificate registrar with respect to the
Certificates. The principal offices of LaSalle are located at 135 South LaSalle
Street, Chicago, Illinois 60603.
PNC Bank, National Association. 14 Mortgage Loans, which represent security
for 6.91% of the Initial Outstanding Pool Balance, 4.16% of the Initial Loan
Group 1 Balance and 18.08% of the Initial Loan Group 2 Balance, will be sold to
the Depositor by PNC Bank. PNC Bank is a national banking association with its
principal office in Pittsburgh, Pennsylvania. PNC Bank's business is subject to
examination and regulation by United States federal banking authorities. Its
primary federal bank regulatory authority is the Office of the Comptroller of
the Currency. PNC Bank is a wholly-owned indirect subsidiary of The PNC
Financial Services Group, Inc. ("PNC Financial"), a Pennsylvania corporation,
and is PNC Financial's principal bank subsidiary. PNC Financial and its
subsidiaries offer a wide range of commercial banking, retail banking and trust
and asset management services to its customers. As of December 31, 2003, PNC
Bank had total consolidated assets representing approximately 90.97% of PNC
Financial's consolidated assets. PNC Bank is an affiliate of PNC Capital
Markets, Inc., one of the underwriters. Midland Loan Services, Inc., the
servicer, is a wholly-owned subsidiary of PNC Bank. The principal offices of PNC
Bank are located at One PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania
15222.
Each of the Mortgage Loan Sellers will make certain representations and
warranties with respect to the Mortgage Loans sold by it and, with respect to
any breach of any representation or warranty that materially and adversely
affects the value of a Mortgage Loan sold by it, the related Mortgaged Property
or the interests of the Trustee or any holders of the Certificates therein, will
be required to cure such breach or repurchase or substitute for such Mortgage
Loan. See "The Pooling and Servicing Agreement--Representations and Warranties;
Repurchase; Substitution" in this prospectus supplement.
The information set forth herein concerning the Mortgage Loan Sellers and
the underwriting conducted by each of the Mortgage Loan Sellers with respect to
the related Mortgage Loans has been provided by the respective Mortgage Loan
Sellers, and none of the Depositor, the Underwriters or the other Mortgage Loan
Sellers make any representation or warranty as to the accuracy or completeness
of such information.
CERTAIN UNDERWRITING MATTERS
Environmental Site Assessments. Except as described below, environmental
site assessments or updates of a previously conducted assessment based on
information in an established database or study were conducted on all of the
Mortgaged Properties within the 12-month period prior to the Cut-off Date. In
some cases these assessments or updates
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revealed the existence of material environmental conditions. The Mortgage Loan
Sellers have informed the Depositor that where such conditions were identified:
o the condition has been remediated in all material respects,
o the borrower has escrowed funds to effect the remediation,
o a responsible party is currently taking or required to take actions as
have been recommended by the environmental assessment or by the
applicable governmental authority,
o an operations and maintenance plan has been or will be implemented,
o a secured creditor impaired property policy or other environmental
insurance with respect to such condition has been obtained,
o an indemnity or guaranty with respect to such condition was obtained
from a responsible third party,
o a "no further action" letter or other evidence has been obtained
stating that the applicable governmental authority has no current
intention of requiring any action be taken by the borrower or any
other person with respect to such condition, or
o upon further investigation, an environmental consultant recommended no
further investigation or remediation.
For more information regarding environmental conditions, see "Risk
Factors--Risks Related to the Mortgage Loans--Potential Trust Liability Related
to a Materially Adverse Environmental Condition" in this prospectus supplement.
In the case of one Mortgaged Property, securing 0.19% of the Initial
Outstanding Pool Balance, and 0.24% of the Initial Loan Group 1 Balance, an
environmental impairment liability insurance policy was obtained with respect to
the related Mortgaged Property in lieu of obtaining an environmental site
assessment or update. In the case of four Mortgaged Properties securing 7.61% of
the Initial Outstanding Pool Balance, 5.99% of the Initial Loan Group 1 Balance
and 14.17% of the Initial Loan Group 2 Balance, environmental insurance policies
for the related Mortgage Loans were obtained in addition to environmental site
assessments or updates thereof with respect to the related Mortgaged Properties.
Subject to certain conditions and exclusions, each environmental insurance
policy generally insures the Trust against losses resulting from certain known
and/or unknown environmental conditions at the related Mortgaged Property during
the applicable policy period. Subject to certain conditions and exclusions, the
environmental insurance policies generally provide coverage against (i) losses
resulting from default under the applicable Mortgage Loan, up to the then
outstanding principal balance and certain unpaid interest of the Mortgage Loan,
if on-site environmental conditions in violation of applicable environmental
standards are discovered at the Mortgaged Property during the policy period and
no foreclosure of the Mortgaged Property has taken place, provided, however,
that with respect to certain Mortgage Loans for which a secured creditor
impaired property policy was obtained, the coverage may be limited to the lesser
of the outstanding loan balance and the costs of clean up of environmental
conditions, up to the applicable aggregate policy limit; (ii) losses from
third-party claims against the lender during the policy period for bodily
injury, property damage or clean-up costs resulting from environmental
conditions at or emanating from the Mortgaged Property; and (iii) after
foreclosure, costs of clean-up of environmental conditions discovered during the
policy period to the extent required by applicable law, including any court
order or other governmental directive. With respect to the property known as "39
Olympia Avenue," constituting approximately 0.33% of the Initial Outstanding
Pool Balance and 0.41% of the Initial Loan Group 1 Balance, the mortgage loan
seller was added as an additional insured to an existing borrower policy of
environmental insurance previously obtained by the borrower, which policy,
subject to certain conditions and exclusions, provides coverage for third-party
claims for clean-up costs, bodily injury and property damage from pre-existing
conditions.
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The information contained herein regarding environmental conditions at the
Mortgaged Properties is based on the environmental site assessments or the
updates described in the first paragraph under this heading and has not been
independently verified by the Depositor, the Mortgage Loan Sellers, the
Underwriters, the Servicer, the Special Servicer, the Trustee, the Bond
Administrator or any of their respective affiliates. There can be no assurance
that the environmental site assessments or such updates, as applicable,
identified all environmental conditions and risks, or that any such
environmental conditions will not have a material adverse effect on the value or
cash flow of the related Mortgaged Property.
Property Condition Assessments. The Mortgage Loan Sellers have informed the
Depositor that inspections of substantially all of the Mortgaged Properties (or
updates of previously conducted inspections) were conducted by independent
licensed engineers or other representatives or designees of the related Mortgage
Loan Seller within the 12-month period prior to the Cut-off Date. Such
inspections were commissioned to inspect the exterior walls, roofing, interior
construction, mechanical and electrical systems (in most cases) and the general
condition of the site, buildings and other improvements located at a Mortgaged
Property. With respect to certain of the Mortgage Loans, the resulting reports
indicated a variety of deferred maintenance items and recommended capital
expenditures. The estimated cost of the necessary repairs or replacements at a
Mortgaged Property was included in the related property condition assessment. In
some (but not all) instances, cash reserves were established with the lender to
fund such deferred maintenance and/or replacement items.
Appraisals and Market Analysis. The Mortgage Loan Sellers have informed the
Depositor that an appraisal or market analysis for all of the Mortgaged
Properties was performed (or an existing appraisal was updated) on behalf of the
related Mortgage Loan Seller within the 14-month period prior to the Cut-off
Date. Each such appraisal was conducted by an independent appraiser that is
state certified and/or designated as a Member of the Appraisal Institute
("MAI"), in order to provide an opinion as to the market value of the related
Mortgaged Property. In general, such appraisals represent the analysis and
opinion of the respective appraisers at or before the time made, and are not
guarantees of, and may not be indicative of, present or future value. There can
be no assurance that another appraiser would not have arrived at a different
valuation, even if such appraiser used the same general approach to and the same
method of appraising the Mortgaged Property. In addition, appraisals seek to
establish the amount a typically motivated buyer would pay a typically motivated
seller. Such amount could be significantly higher than the amount obtained from
the sale of a Mortgaged Property under a distress or liquidation sale. See "Risk
Factors--Risks Related to the Mortgage Loans--Appraisals and Market Studies Have
Certain Limitations" in this prospectus supplement.
Property, Liability and Other Insurance. The Mortgage Loan Documents
generally require that: (i) the Mortgaged Property be insured by a property and
casualty insurance policy in an amount (subject to a customary deductible) at
least equal to the lesser of the outstanding principal balance of the related
Mortgage Loan (or Whole Loan), 100% of the full insurable replacement cost of
the improvements located on the related Mortgaged Property or, with respect to
certain Mortgage Loans, the full insurable actual cash value of the Mortgaged
Property; or (ii) the Mortgaged Property be insured by property insurance in
such other amounts as was required by the related originators with, if
applicable, appropriate endorsements to avoid the application of a co-insurance
clause and without reduction in insurance proceeds for depreciation. In
addition, if any portion of the improvements to a Mortgaged Property securing
any Mortgage Loan was, at the time of the origination of such Mortgage Loan, in
an area identified in the "Federal Register" by the Federal Emergency Management
Agency as having special flood hazards, and flood insurance was available, a
flood insurance policy meeting the requirements of the then-current guidelines
of the Federal Insurance Administration is in effect (except where
self-insurance is permitted) with a generally acceptable insurance carrier, in
an amount representing coverage not less than the least of (1) the outstanding
principal balance of such Mortgage Loan and with respect to any
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Mortgage Loan related to a Serviced Companion Loan, the outstanding principal
balance of the Whole Loan, (2) the maximum amount of insurance required by the
terms of the related Mortgage and available for the related Mortgaged Property
under the National Flood Insurance Act of 1968, as amended and (3) 100% of the
replacement cost of the improvements located in the special flood hazard area on
the related Mortgaged Property. In general, the standard form of property and
casualty insurance policy covers physical damage to, or destruction of, the
improvements on the Mortgaged Property by fire, lightning, explosion, smoke,
windstorm and hail, riot or strike and civil commotion, subject to the
conditions and exclusions set forth in each policy.
Each Mortgage generally also requires the related borrower to maintain
comprehensive general liability insurance against claims for personal and bodily
injury, death or property damage occurring on, in or about the related Mortgaged
Property. Each Mortgage generally further requires the related borrower to
maintain business interruption or rent loss insurance in an amount not less than
100% of the projected rental income from the related Mortgaged Property for not
less than six months. In general, the Mortgaged Properties are not insured for
earthquake risk, floods and other water-related causes, landslides and mudflow,
vermin, nuclear reaction or war. In addition, certain of the insurance policies
may specifically exclude coverage for losses due to mold, certain acts of
nature, terrorist activities or other insurable conditions or events. In some
cases, the Mortgage Loan Documents permit the related borrower to rely on
self-insurance provided by a tenant in lieu of an insurance policy. See "Risk
Factors--Property Insurance" in this prospectus supplement.
UNDERWRITING STANDARDS
GACC'S UNDERWRITING STANDARDS
General. All of the Mortgage Loans sold to the Depositor by GACC were
originated or purchased by GACC, or an affiliate of GACC, in each case,
generally in accordance with the underwriting criteria described herein. One
Mortgage Loan, representing 0.63% of the Initial Outstanding Pool Balance and
0.78% of the Initial Loan Group 1 Balance, was originated by another entity, and
GACC re-underwrote such Mortgage Loan. GACC originates loans secured by retail,
multifamily, office, self storage and industrial properties as well as
manufactured housing properties located in the United States.
Loan Analysis. In connection with the origination of mortgage loans, GACC
conducts an extensive review of the related mortgaged property, including an
analysis of the appraisal, environmental report, property operating statements,
financial data, rent rolls and related information or statements of occupancy
rates provided by the borrower and, with respect to the mortgage loans secured
by retail and office properties, certain major tenant leases and the tenant's
credit. The credit of the borrower and certain of its key principals is examined
for financial strength and character prior to approval of the mortgage loan
through a review of historical tax returns, third party credit reports,
judgment, lien, bankruptcy and pending litigation searches and, if applicable,
the loan payment history of the borrower and its principals. Generally,
borrowers are required to be single-purpose entities. A member of the GACC
underwriting or due diligence team visits the mortgaged property for a site
inspection to confirm the occupancy rates of the mortgaged property, and
analyzes the mortgaged property's market and the utility of the mortgaged
property within the market. Unless otherwise specified herein, all financial
occupancy and other information contained herein is based on such information
and there can be no assurance that such financial, occupancy and other
information remains accurate.
Loan Approval. Prior to commitment, all mortgage loans must be approved by
GACC's credit committee (the make-up of which varies by loan size) in accordance
with its credit policies. The credit committee may approve a mortgage loan as
recommended, request additional due diligence, modify the loan terms or decline
a loan transaction.
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Debt Service Coverage Ratio and LTV Ratio. GACC's underwriting standards
generally require the following minimum debt service coverage ratios for each of
the indicated property types:
PROPERTY TYPE DSCR GUIDELINE LTV RATIO GUIDELINES
- ---------------------------------- ---------------- ---------------------
Office ........................ 1.25x 75%
Anchored Retail ............... 1.25x 75%
Unanchored Retail ............. 1.30x 70%
Multifamily ................... 1.20x 80%
Manufactured housing .......... 1.20x 80%
Industrial/Warehouse .......... 1.25x 75%
Self storage .................. 1.30x 70%
The debt service coverage ratio guidelines listed above are calculated
based on Underwritten Net Cash Flow at origination and, with respect to the
Whole Loans, are calculated (unless otherwise specified) without regard to any B
Loan, if any, but including each Mortgage Loan and any related Pari Passu
Companion Loan. Therefore, the debt service coverage ratio for each Mortgage
Loan as reported elsewhere in this prospectus supplement and Annex A-1 may
differ from the amount calculated at the time of origination. In addition,
GACC's underwriting guidelines generally permit a maximum amortization period of
30 years. However, notwithstanding the foregoing, in certain circumstances the
actual debt service coverage ratios and loan-to-value ratios for the Mortgage
Loans originated or purchased by GACC may vary from these guidelines. See
"Description of the Mortgage Pool" in this prospectus supplement and Annex A-1
to this prospectus supplement.
Escrow Requirements. GACC generally requires a borrower to fund various
escrows for taxes and insurance, replacement reserves, re-tenanting expenses and
capital expenses, and in some cases only during periods when certain debt
service coverage ratio tests are not satisfied. In some cases, the borrower is
permitted to post a letter of credit or guaranty in lieu of funding a given
reserve or escrow. Generally, the required escrows for mortgage loans originated
by GACC are as follows:
o Taxes and Insurance--Typically, an initial deposit and monthly escrow
deposits equal to 1/12 of the annual property taxes (based on the most
recent property assessment and the current millage rate) and annual
insurance premiums are required in order to provide GACC with
sufficient funds to satisfy all taxes and insurance bills prior to
their respective due dates.
o Replacement Reserves--Monthly deposits generally based on the greater
of the amount recommended pursuant to a building condition report
prepared for GACC or the following minimum amounts:
Office .............................. $0.20 per square foot
Retail .............................. $0.20 per square foot of in-line space
Multifamily ......................... $2.50 per unit
Manufactured housing ................ $50 per pad
Industrial/Warehouse ................ $0.20 per square foot
Self storage ........................ $0.15 per square foot
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o Re-tenanting--Certain major tenants and a significant number of
smaller tenants may have lease expirations within the loan term. To
mitigate this risk, reserves may be established to be funded either at
closing and/or during the loan term to cover certain anticipated
leasing commissions and/or tenant improvement costs which may be
associated with re-leasing the space occupied by these tenants.
o Deferred Maintenance/Environmental Remediation--Generally, an initial
deposit is required upon funding of the mortgage loan, in an amount
equal to at least 125% of the estimated costs of the recommended
substantial repairs or replacements pursuant to the building condition
report completed by a licensed third-party engineer and the estimated
costs of environmental remediation expenses as recommended by an
independent environmental assessment. In some cases, borrowers are
permitted to substitute environmental insurance policies in lieu of
reserves for environmental remediation.
Mortgage Loans originated by GACC generally conform to the above described
underwriting guidelines. However, there can be no assurance that each Mortgage
Loan originated by GACC conforms in its entirety to the guidelines described
above.
LASALLE'S UNDERWRITING STANDARDS
General. LaSalle has developed guidelines establishing certain procedures
with respect to underwriting the Mortgage Loans originated or purchased by it
that are generally consistent with those described below. All of the Mortgage
Loans were generally originated in accordance with such guidelines.
Property Analysis. LaSalle generally performs or causes to be performed a
site inspection to evaluate the location and quality of the related Mortgaged
Properties. Such inspection generally includes an evaluation of functionality,
design, attractiveness, visibility and accessibility, as well as convenience to
major thoroughfares, transportation centers, employment sources, retail areas
and educational or recreational facilities. LaSalle assesses the submarket in
which the Mortgaged Property is located to evaluate competitive or comparable
properties as well as market trends. In addition, LaSalle evaluates the
property's age, physical condition, operating history, lease and tenant mix, and
management.
Cash Flow Analysis. LaSalle reviews, among other things, historical
operating statements, rent rolls, tenant leases and/or budgeted income and
expense statements provided by the borrower and makes adjustments in order to
determine a DSCR. See "Description of the Mortgage Pool--Additional Mortgage
Loan Information" in this prospectus supplement.
Appraisal and Loan-to-Value Ratio. For each Mortgaged Property, LaSalle
obtains a current full narrative appraisal conforming at least to the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 ("FIRREA"). The appraisal must be based on the highest and best use of
the Mortgaged Property and must include an estimate of the current market value
of the Mortgaged Property in its current condition. LaSalle then determines the
Loan-to-Value Ratio of the Mortgage Loan at the date of origination based on the
value set forth in the appraisal.
Evaluation of Borrower. LaSalle evaluates the borrower and its principals
with respect to credit history and prior experience as an owner and operator of
commercial real estate properties. The evaluation will generally include
obtaining and reviewing a credit report or other reliable indication of the
borrower's financial capacity; obtaining and verifying credit references and/or
business and trade references; and obtaining and reviewing certifications
provided by the borrower as to prior real estate experience and current
contingent liabilities. Finally, although the Mortgage Loans are nonrecourse in
nature, in the case of certain Mortgage Loans, the borrower and/or certain
principals, which may be entities thereof, may be required to assume legal
responsibility for liabilities relating to fraud, misrepresentation,
misappropriation of funds and breach of environmental or hazardous waste
requirements.
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LaSalle evaluates the financial capacity of the borrower and such principals to
meet any obligations that may arise with respect to such liabilities.
Environmental Site Assessment. Prior to origination, LaSalle either (i)
obtains or updates an environmental site assessment ("ESA") for a Mortgaged
Property prepared by a qualified environmental firm or (ii) obtains an
environmental insurance policy for a Mortgaged Property. If an ESA is obtained
or updated, LaSalle reviews the ESA to verify the absence of reported violations
of applicable laws and regulations relating to environmental protection and
hazardous waste. In cases in which the ESA identifies such violations, LaSalle
requires the borrower to carry out satisfactory remediation activities prior to
the origination of the Mortgage Loan, to establish an operations and maintenance
plan or to place sufficient funds in escrow at the time of origination of the
Mortgage Loan to complete such remediation within a specified period of time, or
to obtain an environmental insurance policy for the Mortgaged Property or to
execute an indemnity agreement with respect to such condition.
Physical Assessment Report. Prior to origination (or in certain limited
cases, after origination), LaSalle obtains a physical assessment report ("PAR")
for each Mortgaged Property prepared by a qualified structural engineering firm.
However, in certain cases a PAR is not obtained if the Mortgaged Property is
determined to be a new construction. LaSalle reviews the PAR to verify that the
property is reported to be in satisfactory physical condition, and to determine
the anticipated costs of necessary repair, replacement and major maintenance or
capital expenditure needs over the term of the Mortgage Loan. In cases in which
the PAR identifies material repairs or replacements needed immediately, LaSalle
generally requires the borrower to carry out such repairs or replacements prior
to the origination of the Mortgage Loan, or to place sufficient funds in escrow
at the time of origination of the Mortgage Loan to complete such repairs or
replacements within not more than 12 months.
Title Insurance Policy. The borrower is required to provide, and LaSalle
reviews, a title insurance policy for each Mortgaged Property. The title
insurance policy must meet the following requirements:
o the policy must be written by a title insurer licensed to do business
in the jurisdiction where the Mortgaged Property is located;
o the policy must be in an amount equal to the original principal
balance of the Mortgage Loan;
o the protection and benefits must run to the lender and its successors
and assigns;
o the policy should be written on a standard policy form of the American
Land Title Association or equivalent policy promulgated in the
jurisdiction where the Mortgaged Property is located; and
o the legal description of the Mortgaged Property in the title policy
must conform to that shown on the survey of the Mortgaged Property,
where a survey has been required.
Property Insurance. The borrower is required to provide, and LaSalle
reviews, certificates of required insurance with respect to the Mortgaged
Properties where self-insurance is not permitted. Such insurance generally may
include:
o commercial general liability insurance for bodily injury or death and
property damage;
o an "All Risk of Physical Loss" policy;
o if applicable, boiler and machinery coverage;
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o if the Mortgaged Property is located in a flood hazard area, flood
insurance; and
o such other coverage as LaSalle may require based on the specific
characteristics of the Mortgaged Property.
PNC BANK'S UNDERWRITING STANDARDS
General. PNC Bank has developed guidelines establishing certain procedures
with respect to underwriting the Mortgage Loans originated or purchased by it
that are generally consistent with those described below. All of the Mortgage
Loans sold to the Depositor by PNC Bank were generally originated in accordance
with such guidelines. In some instances, certain of such guidelines were waived
or modified by PNC Bank where it was determined not to adversely affect the
Mortgage Loans originated by it in any material respect.
Property Analysis. PNC Bank generally performs or causes to be performed a
site inspection to evaluate the location and quality of the related Mortgaged
Properties. Such inspection generally includes an evaluation of functionality,
design, attractiveness, visibility and accessibility, as well as convenience to
major thoroughfares, transportation centers, employment sources, retail areas
and educational or recreational facilities. PNC Bank assesses the submarket in
which the Mortgaged Property is located to evaluate competitive or comparable
properties as well as market trends. In addition, PNC Bank evaluates the
property's age, physical condition, operating history, lease and tenant mix, and
management.
Cash Flow Analysis. PNC Bank reviews, among other things, historical
operating statements, rent rolls, tenant leases and/or budgeted income and
expense statements provided by the borrower and makes adjustments in order to
determine a DSCR. See "Description of the Mortgage Pool--Additional Loan
Information" in this prospectus supplement.
Appraisal and Loan-to-Value Ratio. For each Mortgaged Property, PNC Bank
obtains a current full narrative appraisal conforming at least to the
requirements of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 ("FIRREA"). The appraisal is generally based on the then current use of
the Mortgaged Property and must include an estimate of the then current market
value of the Mortgaged Property in its then current condition although in
certain cases, PNC Bank may also obtain a value on a stabilized basis. PNC Bank
then determines the Loan-to-Value Ratio of the Mortgage Loan at the date of
origination or, if applicable, in connection with its acquisition, in each case
based on the value set forth in the appraisal.
Evaluation of Borrower. PNC Bank evaluates the borrower and its principals
with respect to credit history and prior experience as an owner and operator of
commercial real estate properties. The evaluation will generally include
obtaining and reviewing a credit report or other reliable indication of the
borrower's financial capacity, obtaining and verifying credit references and/or
business and trade references, and obtaining and reviewing certifications
provided by the borrower as to prior real estate experience and current
contingent liabilities. Finally, although the Mortgage Loans generally are
non-recourse in nature, in the case of certain Mortgage Loans, the borrower
and/or certain principals or affiliated entities, may be required to assume
legal responsibility for liabilities relating to fraud, intentional
misrepresentation, misappropriation of funds and breach of environmental or
hazardous waste requirements. PNC Bank evaluates the financial capacity of the
borrower and such principals to meet any obligations that may arise with respect
to such liabilities.
Environmental Site Assessment. Prior to origination, PNC Bank either (i)
obtains or updates an ESA for a Mortgaged Property prepared by a qualified
environmental firm or (ii) obtains an environmental insurance policy for a
Mortgaged Property. If an ESA is obtained or updated, PNC Bank reviews the ESA
to verify the absence of reported violations of applicable laws and regulations
relating to environmental protection and hazardous waste. Where the ESA
identifies such violations, PNC Bank generally requires the borrower to carry
out satisfactory remediation activities prior to the origination of the Mortgage
Loan, to establish an
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operations and maintenance plan or to place sufficient funds in escrow at the
time of origination of the Mortgage Loan to complete such remediation within a
specified period of time, to obtain an environmental insurance policy for the
Mortgaged Property or to execute an indemnity agreement with respect to such
condition.
Physical Assessment Report. Prior to origination or, if applicable, in
connection with the acquisition of a mortgage loan, PNC Bank obtains a PAR for
each Mortgaged Property prepared by a qualified structural engineering firm. PNC
Bank reviews the PAR to verify that the Mortgaged Property is reported to be in
satisfactory physical condition, and to determine the anticipated costs of
necessary repair, replacement and major maintenance or capital expenditure needs
over the term of the Mortgage Loan. Where the PAR identifies material repairs or
replacements needed immediately, PNC Bank generally requires the borrower to
carry out such repairs or replacements prior to the origination of the Mortgage
Loan, or to place sufficient funds in escrow at the time of origination of the
Mortgage Loan to complete such repairs or replacements within a specified time
period, generally not more than 12 months.
Title Insurance Policy. The borrower is required to provide, and PNC Bank
reviews, a title insurance policy for each Mortgaged Property. The title
insurance policy must meet the following requirements: (a) the policy must be
written by a title insurer licensed to do business in the jurisdiction where the
Mortgaged Property is located; (b) the policy must be in an amount equal to the
original principal balance of the Mortgage Loan; (c) the protection and benefits
must run to the lender and its successors and assigns; (d) the policy should be
written on a standard policy form of the American Land Title Association or
equivalent policy promulgated in the jurisdiction where the Mortgaged Property
is located; and (e) the legal description of the Mortgaged Property in the title
policy must conform to that shown on the survey of the Mortgaged Property, where
a survey has been required.
Property Insurance. The borrower is required to provide, and PNC Bank
reviews, certificates of required insurance with respect to the Mortgaged
Properties where self-insurance is not permitted. Such insurance generally may
include: (a) commercial general liability insurance for bodily injury or death
and property damage; (b) a standard "extended coverage insurance policy"
providing "special" form coverage; (c) if applicable, boiler and machinery
coverage; (d) if any improvements on the Mortgaged Property are located in a
flood hazard area, flood insurance; and (e) such other coverage as PNC Bank may
require based on the specific characteristics of the Mortgaged Property.
SPLIT LOAN STRUCTURES
THE GARDEN STATE PLAZA LOAN
With respect to the Mortgage Loan known as the "Garden State Plaza" loan
(the "Garden State Plaza Loan"), representing approximately 9.71% of the Initial
Outstanding Pool Balance and 12.09% of the Initial Loan Group 1 Balance and with
a Cut-off Date Balance of $130,000,000, the related Mortgaged Property also
secures three other mortgage loans (the "Garden State Plaza Pari Passu Loans"
and, together with the Garden State Plaza Loan, the "Garden State Plaza Whole
Loan"). The Garden State Plaza Pari Passu Loans are pari passu in right of
payment with the Garden State Plaza Loan and have Cut-off Date Balances of
$130,000,000, $130,000,000 and $130,000,000, respectively. The Garden State
Plaza Loan and the Garden State Plaza Pari Passu Loans have the same interest
rate, maturity date and amortization term. Only the Garden State Plaza Loan is
included in the Trust. The Garden State Plaza Pari Passu Loans are not assets of
the Trust.
Two of the Garden State Plaza Pari Passu Loans were deposited into the
LB-UBS Commercial Mortgage Trust 2004-C4 Commercial Mortgage Pass-Through
Certificates, Series 2004-C4 commercial mortgage securitization. The other
Garden State Plaza Pari Passu Loan is owned by Goldman Sachs Mortgage Company,
but may be sold or further divided at any time (subject to compliance with the
terms of the related intercreditor agreement).
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For the purpose of the information presented in this prospectus supplement
with respect to the Garden State Plaza Loan, the debt service coverage ratio and
loan-to-value ratio reflect the aggregate indebtedness evidenced by the Garden
State Plaza Whole Loan.
General. The Garden State Plaza Whole Loan is serviced pursuant to the
terms of the pooling and servicing agreement related to the LB-UBS Commercial
Mortgage Trust 2004-C4 Commercial Mortgage Pass-Through Certificates, Series
2004-C4 securitization (the "LB-UBS Series 2004-C4 Pooling and Servicing
Agreement") for which Wachovia Bank, National Association is the initial master
servicer (in such capacity and any successor thereto, the "LB-UBS Series 2004-C4
Servicer") and Lennar Partners, Inc. is the initial special servicer (in such
capacity and any successor thereto, the "LB-UBS Series 2004-C4 Special
Servicer"). However, the Servicer or the Trustee, as applicable, will be
obligated to make any required P&I Advances on the Garden State Plaza Loan,
unless the Servicer, the Special Servicer or the Trustee, as applicable,
determines that such an advance would not be recoverable from collections on the
Garden State Plaza Loan.
Distributions. The holders of the Garden State Plaza Loan and the Garden
State Plaza Pari Passu Loans have entered into an intercreditor agreement that
sets forth the respective rights of each such holder and provides, in general,
that:
o the Garden State Plaza Loan and the Garden State Plaza Pari Passu
Loans are of equal priority with each other and no portion of any of
them will have priority or preference over the other; and
o all payments, proceeds and other recoveries on or in respect of the
Garden State Plaza Loan and the Garden State Plaza Pari Passu Loans
will be applied to the Garden State Plaza Loan and the Garden State
Plaza Pari Passu Loans on a pari passu basis according to their
respective outstanding principal balances (subject, in each case, to
the payment and reimbursement rights of the LB-UBS Series 2004-C4
Servicer, the LB-UBS Series 2004-C4 Special Servicer and the related
trustee under the LB-UBS Series 2004-C4 Pooling and Servicing
Agreement, the Servicer and the Trustee under the Pooling and
Servicing Agreement and any other service providers with respect to a
Garden State Plaza Pari Passu Loan, in accordance with the terms of
the LB-UBS Series 2004-C4 Pooling and Servicing Agreement).
Consultation and Consent. Any decision to be made with respect to the
Garden State Plaza Whole Loan that requires the approval of the majority
certificateholder of the controlling class under the LB-UBS Series 2004-C4
Pooling and Servicing Agreement or otherwise requires approval under the related
intercreditor agreement will require the approval of noteholders (or their
designees) then holding a majority of the outstanding principal balance of the
Garden State Plaza Whole Loan. If noteholders then holding a majority of the
outstanding principal balance of the Garden State Plaza Whole Loan are not able
to agree on a course of action that satisfies the servicing standard under the
LB-UBS Series 2004-C4 Pooling and Servicing Agreement within 30 days (or such
shorter period as may be required by the Mortgage Loan Documents to the extent
the lender's approval is required) after receipt of a request for consent to any
action by the LB-UBS Series 2004-C4 Servicer or the LB-UBS Series 2004-C4
Special Servicer, as applicable, the LB-UBS Series 2004-C4 Servicer or the
LB-UBS Series 2004-C4 Special Servicer, as applicable, will implement the action
or inaction that it deems accordance with the servicing standard set forth in
the LB-UBS Series 2004-C4 Pooling and Servicing Agreement. Pursuant to the
LB-UBS Series 2004-C4 Pooling and Servicing Agreement and related intercreditor
agreement, each holder of the Garden State Plaza Loan and any Garden State Plaza
Pari Passu Loan may consult separately with the LB-UBS Series 2004-C4 Servicer
or the LB-UBS Series 2004-C4 Special Servicer, as applicable, about a particular
course of action. The noteholders then holding a majority of the outstanding
principal balance of the Garden State Plaza Whole Loan will be entitled to
approve the following:
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o any proposed foreclosure upon or comparable conversion (which may
include acquisition as REO Property) of the ownership of the related
Mortgaged Property and the other collateral securing the Garden State
Plaza Whole Loan;
o any modification, extension, amendment or waiver of a monetary term
(including, without limitation, the timing of payments) or any
material non-monetary term (including any material term relating to
insurance) of the Garden State Plaza Loan or the Garden State Plaza
Pari Passu Loans;
o any proposed sale of the related Mortgaged Property after it becomes
REO Property;
o any acceptance of a discounted payoff of the Garden State Plaza Loan
or the Garden State Plaza Pari Passu Loans;
o any determination to bring the related Mortgaged Property (including
if it is an REO Property) into compliance with applicable
environmental laws or to otherwise address hazardous materials located
at the related Mortgaged Property;
o any release of collateral for the Garden State Plaza Whole Loan
(including, but not limited to, the termination or release of any
reserves, escrows or letters of credit), other than in accordance with
the terms of, or upon satisfaction of, the Garden State Plaza Loan or
the Garden State Plaza Pari Passu Loans;
o any acceptance of substitute or additional collateral for the Garden
State Plaza Whole Loan (other than in accordance with the terms of the
Garden State Plaza Whole Loan);
o any waiver of a "due-on-sale" or "due-on-encumbrance" clause with
respect to the Garden State Plaza Whole Loan;
o any acceptance of an assumption agreement releasing the borrower from
liability under the Garden State Plaza Whole Loan;
o any renewal or replacement of the then existing insurance policies
with respect to the Garden State Plaza Whole Loan to the extent that
such renewal or replacement policies do not comply with the terms of
the Mortgage Loan Documents or any waiver, modification or amendment
of any insurance requirements under the Mortgage Loan Documents, in
each case if lenders' approval is required under the Mortgage Loan
Documents;
o any approval of a material capital expenditure, if lenders' approval
is required under the Mortgage Loan Documents;
o any replacement of the property manager, if lenders' approval is
required under the Mortgage Loan Documents;
o any approval of the incurrence of additional indebtedness secured by
the related Mortgaged Property, if lenders' approval is required under
the Mortgage Loan Documents; and
o any adoption or approval of a plan in bankruptcy of the borrower.
Notwithstanding any direction to, or approval or disapproval of, or right
to give direction to or to approve or disapprove an action of, the LB-UBS Series
2004-C4 Special Servicer or the LB-UBS Series 2004-C4 Servicer by the
noteholders then holding a majority of the outstanding principal balance of the
Garden State Plaza Whole Loan, in no event will the LB-UBS Series 2004-C4
Special Servicer or the LB-UBS Series 2004-C4 Servicer be required to take any
action or refrain from taking any action which would violate any law of any
applicable jurisdiction, be inconsistent with the servicing standard under the
LB-UBS Series 2004-C4 Pooling and Servicing Agreement, violate the REMIC
provisions of the Internal Revenue Code of 1986, as amended (the "Code") or
violate any other provisions of the LB-UBS Series 2004-C4 Pooling and Servicing
Agreement or the related Mortgage Loan Documents.
Sale of Defaulted Mortgage Loan. Under the LB-UBS Series 2004-C4 Pooling
and Servicing Agreement, if the Garden State Plaza Pari Passu Loan that was
deposited into the
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securitization created under that pooling and servicing agreement is subject to
a fair value purchase option, then the Controlling Class Representative will be
entitled to purchase the Garden State Plaza Loan from the Trust at the purchase
price determined in accordance with the terms of the LB-UBS Series 2004-C4
Pooling and Servicing Agreement by the LB-UBS Series 2004-C4 Special Servicer.
Termination of the LB-UBS Series 2004-C4 Servicer. If an event of default
has occurred with respect to the LB-UBS Series 2004-C4 Servicer under the LB-UBS
Series 2004-C4 Pooling and Servicing Agreement that materially and adversely
affects the Garden State Plaza Loan or the Garden State Plaza Pari Passu Loan
that is not owned by the trust formed under the LB-UBS Series 2004-C4 Pooling
and Servicing Agreement, and the LB-UBS Series 2004-C4 Servicer is not otherwise
terminated in accordance with the terms of the LB-UBS Series 2004-C4 Pooling and
Servicing Agreement, then, at the request of (i) the Controlling Class
Representative, if the Garden State Plaza Loan is affected or (ii) the holder of
such other Garden State Plaza Pari Passu Loan, if affected, as applicable, the
trustee under the LB-UBS Series 2004-C4 Pooling and Servicing Agreement shall
require the LB-UBS Series 2004-C4 Servicer to appoint, within 30 days of such
trustee's request, a sub-servicer (or, if the related loan is currently being
sub-serviced, to replace, within 30 days of such trustee's request, the
then-current sub-servicer with a new sub-servicer) solely with respect to the
Garden State Mortgage Whole Loan, such appointment or replacement to be effected
in accordance with the terms and provisions of the LB-UBS Series 2004-C4
Servicing Agreement.
Termination of LB-UBS Series 2004-C4 Special Servicer. The LB-UBS Series
2004-C4 Special Servicer with respect to the Garden State Plaza Whole Loan may
only be terminated for cause.
THE 731 LEXINGTON AVENUE-BLOOMBERG HEADQUARTERS LOAN
With respect to the Mortgage Loan known as the "731 Lexington
Avenue-Bloomberg Headquarters" loan (the "731 Lexington Avenue-Bloomberg
Headquarters Loan"), representing approximately 9.33% of the Initial Outstanding
Pool Balance and 11.63% of the Initial Loan Group 1 Balance and with a Cut-off
Date Balance of $125,000,000, the related Mortgaged Property also secures five
other mortgage loans (the "731 Lexington Avenue-Bloomberg Headquarters Companion
Loans"). Four of the 731 Lexington Avenue-Bloomberg Headquarters Companion Loans
(the "731 Lexington Avenue-Bloomberg Headquarters Pari Passu Loans" and,
together with the 731 Lexington Avenue-Bloomberg Headquarters Loan, the "731
Lexington Avenue-Bloomberg Headquarters Senior Loans") are pari passu in right
of payment with the 731 Lexington Avenue-Bloomberg Headquarters Loan and have
Cut-off Date Balances of $65,000,000, $50,000,000 and $74,000,000, and, in the
case of one interest-only loan (which commences accruals only after the
anticipated repayment date of the 731 Lexington Avenue-Bloomberg Headquarters
loan), a notional balance of $86,000,000, respectively. The other 731 Lexington
Avenue-Bloomberg Headquarters Companion Loan is subordinate in right of payment
to the 731 Lexington Avenue-Bloomberg Headquarters Senior Loans (the "731
Lexington Avenue-Bloomberg Headquarters B Loan" and, together with the 731
Lexington Avenue-Bloomberg Headquarters Senior Loans, the "731 Lexington
Avenue-Bloomberg Headquarters Whole Loan") and has a Cut-off Date Balance of
$86,000,000. The 731 Lexington Avenue-Bloomberg Headquarters Loan and the 731
Lexington Avenue-Bloomberg Headquarters Pari Passu Loans have the same interest
rate, maturity date and amortization term. Only the 731 Lexington
Avenue-Bloomberg Headquarters Loan is included in the Trust. The 731 Lexington
Avenue-Bloomberg Headquarters Companion Loans are not assets of the Trust.
The 731 Lexington Avenue-Bloomberg Headquarters Pari Passu Loans are owned
by GACC, one of the Mortgage Loan Sellers, but may be sold or further divided at
any time. The 731 Lexington Avenue-Bloomberg Headquarters B Loan is currently
held by 731 Funding LLC, an affiliate of the tenant at the related Mortgaged
Property. For the purpose of the information presented in this prospectus
supplement with respect to the 731 Lexington Avenue-Bloomberg
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Headquarters Loan, the debt service coverage ratio and loan-to-value ratio
reflect the aggregate indebtedness evidenced by the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans, but exclude the 731 Lexington
Avenue-Bloomberg Headquarters B Loan.
General. The 731 Lexington Avenue-Bloomberg Headquarters Whole Loan will be
serviced pursuant to the terms of the Pooling and Servicing Agreement (and all
decisions, consents, waivers, approvals and other actions on the part of any
holder of the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan will be
effected in accordance with the Pooling and Servicing Agreement). The Servicer
or the Trustee, as applicable, will be required to make (i) P&I Advances on the
731 Lexington Avenue-Bloomberg Headquarters Loan unless the Servicer, the
Special Servicer or the Trustee, as applicable, determines that such an advance
would not be recoverable from collections on the 731 Lexington Avenue-Bloomberg
Headquarters Loan and (ii) Property Advances with respect to the 731 Lexington
Avenue-Bloomberg Headquarters Whole Loan unless the Servicer, the Special
Servicer or the Trustee, as applicable, determines that such an advance would
not be recoverable from collections on the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan.
Distributions. The holders of the 731 Lexington Avenue-Bloomberg
Headquarters Loan, the 731 Lexington Avenue-Bloomberg Headquarters Pari Passu
Loans and the 731 Lexington Avenue-Bloomberg Headquarters B Loan have entered
into an intercreditor agreement, which sets forth the respective rights of each
of the holders of the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan and
provides, in general, that:
o if no monetary event of default, or a non-monetary event of default
that results in a transfer of the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan to special servicing (a "731 Lexington
Servicing Transfer Event"), shall have occurred and be continuing (or
if a monetary event of default or such a non-monetary event of default
has occurred and is continuing, the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan has cured such monetary event of
default or has cured or is diligently pursuing to cure such
non-monetary event of default, in each case in accordance with the
terms of the related intercreditor agreement and the Pooling and
Servicing Agreement), (i) the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan will generally be entitled to
receive its scheduled principal and interest payments after the
holders of the 731 Lexington Avenue-Bloomberg Headquarters Senior
Loans receive their scheduled principal (other than 731 Lexington
Avenue-Bloomberg Headquarters Additional Principal) and interest
payments (other than default interest, prepayment premiums, and 731
Lexington Avenue-Bloomberg Headquarters Additional Interest) and after
any Advances in respect of the 731 Lexington Avenue-Bloomberg
Headquarters Senior Loans and the 731 Lexington Avenue-Bloomberg
Headquarters B Loan are repaid in full, (ii) the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan will generally be
entitled to receive its 731 Lexington Avenue-Bloomberg Headquarters
Additional Principal after the holders of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans receive their 731 Lexington
Avenue-Bloomberg Headquarters Additional Principal, (iii) the holders
of the 731 Lexington Avenue-Bloomberg Headquarters Senior Loans and
the 731 Lexington Avenue-Bloomberg Headquarters B Loan will generally
be entitled to receive their respective unscheduled payments of
principal on a pro rata basis, and (iv) the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan will generally be
entitled to receive its 731 Lexington Avenue-Bloomberg Headquarters
Additional Interest after the holders of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans receive their 731 Lexington
Avenue-Bloomberg Headquarters Additional Interest; and
o if a monetary event of default, or a non-monetary event of default
that results in a 731 Lexington Servicing Transfer Event, shall have
occurred and be continuing (and has not been cured by the holder of
the 731 Lexington Avenue-Bloomberg Headquarters B Loan exercising its
cure rights, or, in the case of a non-monetary event of default, if
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such event of default has not been cured and the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan is not diligently pursuing
a cure thereof, in each case in accordance with the terms of the related
intercreditor agreement and the Pooling and Servicing Agreement), the
holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan will not
be entitled to receive payments of principal or interest until the holders
of the 731 Lexington Avenue-Bloomberg Headquarters Senior Loans receive
all their respective accrued interest (other than default interest and 731
Lexington Avenue-Bloomberg Headquarters Additional Interest) and
outstanding principal in full.
"731 Lexington Avenue-Bloomberg Headquarters Anticipated Repayment Date"
means March 1, 2014;
"731 Lexington Avenue-Bloomberg Headquarters Additional Interest" means
the excess of interest accrued on the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan at the interest rate applicable after the 731
Lexington Avenue-Bloomberg Headquarters Anticipated Repayment Date (other
than default interest) over interest that would have accrued on the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan for such period at the
interest rate applicable prior to the 731 Lexington Avenue-Bloomberg
Headquarters Anticipated Repayment Date;
"731 Lexington Avenue-Bloomberg Headquarters Additional Principal" means
principal payments from excess cash flow required with respect to the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan after the 731 Lexington
Avenue-Bloomberg Headquarters Anticipated Repayment Date.
In addition, the holders of the 731 Lexington Avenue-Bloomberg Headquarters
Senior Loans have entered into a separate intercreditor agreement that sets
forth the respective rights of each of the holders of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans and provides, in general, that:
o the 731 Lexington Avenue-Bloomberg Headquarters Loan and the 731
Lexington Avenue-Bloomberg Headquarters Pari Passu Loans are of equal
priority with each other and no portion of any of them will have
priority or preference over the other (except that one 731 Lexington
Avenue-Bloomberg Headquarters Pari Passu Loan is entitled to payments
of interest only, based on an outstanding notional balance as of the
Cut-off Date of $86,000,000, after the 731 Lexington Avenue-Bloomberg
Headquarters Anticipated Repayment Date); and
o all payments, proceeds and other recoveries on or in respect of the
731 Lexington Avenue-Bloomberg Headquarters Loan and/or the 731
Lexington Avenue-Bloomberg Headquarters Pari Passu Loans (in each
case, subject to the rights of the Servicer, the Special Servicer and
the Trustee under the Pooling and Servicing Agreement (and the master
servicer and the trustee under any other pooling and servicing
agreement relating to the 731 Lexington Avenue-Bloomberg Headquarters
Pari Passu Loans and any other service providers with respect to a 731
Lexington Avenue-Bloomberg Headquarters Pari Passu Loan) to payments
and reimbursements pursuant to and in accordance with the terms of the
Pooling and Servicing Agreement) will be applied to the 731 Lexington
Avenue-Bloomberg Headquarters Loan and the 731 Lexington
Avenue-Bloomberg Headquarters Pari Passu Loans on a pari passu basis
according to their respective outstanding principal balances or in the
case of one 731 Lexington Avenue-Bloomberg Headquarters Pari Passu
Loan, its outstanding notional balance.
The related intercreditor agreements also permit GACC, so long as it is the
holder of a 731 Lexington Avenue-Bloomberg Headquarters Pari Passu Loan, to
reallocate the principal of such loans among each other or to such new pari
passu notes; or to divide such retained loans into one or more "component" notes
in the aggregate principal amount equal to the then outstanding loan being
reallocated, provided that the aggregate principal balance of all
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outstanding 731 Lexington Avenue-Bloomberg Headquarters Pari Passu Loans held by
GACC and the new pari passu mortgage notes following such amendments is no
greater than the aggregate principal balance of the related promissory notes
prior to such amendments.
RIGHTS OF THE HOLDER OF THE 731 LEXINGTON AVENUE-BLOOMBERG HEADQUARTERS B LOAN
Consultation and Consent. Unless a 731 Lexington Avenue-Bloomberg
Headquarters Change of Control Event has occurred and is continuing, and
provided the holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan is
not an affiliate of the related borrower or, except as set forth below, an
affiliate of the tenant at the related mortgaged property (a "Tenant
Affiliate"): (i) the Servicer or the Special Servicer, as the case may be, will
be required to consult with the holder of the 731 Lexington Avenue-Bloomberg
Headquarters B Loan upon the occurrence of any event of default for the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan under the related Mortgage
Loan Documents, to consider alternative actions recommended by the holder of the
731 Lexington Avenue-Bloomberg Headquarters B Loan and to consult with the
holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan with respect to
certain determinations made by the Special Servicer pursuant to the Pooling and
Servicing Agreement, (ii) at any time (whether or not an event of default for
such mortgage loan under the related mortgage loan documents has occurred) the
Servicer and the Special Servicer will be required to consult with the holder of
the 731 Lexington Avenue-Bloomberg Headquarters B Loan (1) with respect to
proposals to take any significant action with respect to the 731 Lexington
Avenue-Bloomberg Headquarters Whole Loan and the related Mortgaged Property and
to consider alternative actions recommended by the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan and (2) to the extent that the related
Mortgage Loan Documents grant the lender the right to approve budgets for the
related mortgaged property, prior to approving any such budget and (iii) prior
to taking any of the following actions with respect to the 731 Lexington
Avenue-Bloomberg Headquarters Whole Loan, Servicer and the Special Servicer will
be required to notify in writing to the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan of any proposal to take any of such actions
(and to provide the holder of the 731 Lexington Avenue-Bloomberg Headquarters B
Loan with such information reasonably requested as may be necessary in the
reasonable judgment of the holder of the 731 Lexington Avenue-Bloomberg
Headquarters B Loan in order to make a judgment, the expense of providing such
information to be an expense of the requesting party) and to receive the written
approval of the holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan
(which approval may be withheld in its sole discretion) with respect to:
o any modification, amendment or waiver of any term of the related
Mortgage Loan Documents that would result in the extension of the
applicable maturity date, a reduction of the applicable mortgage rate
or monthly payment, or a deferral or forgiveness of interest on or
principal of the 731 Lexington Avenue-Bloomberg Headquarters Whole
Loan, a modification or waiver of any other monetary term of the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan relating to the
timing or amount of any payment of principal and interest (other than
default interest) or a modification or waiver of any provision which
restricts the related borrower from incurring additional indebtedness
or from transferring all or any material portion of the related
Mortgaged Property or the equity interests in the related borrower;
o any modification or amendment of, or waiver with respect to, the
related Mortgage Loan Documents that would result in a discounted
pay-off of the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan;
o any foreclosure upon or comparable conversion (which may include
acquisitions of an REO Property) of the related Mortgaged Property or
any acquisition of the related Mortgaged Property by deed in lieu of
foreclosure;
o any proposed or actual sale of the related Mortgaged Property or any
related REO Property;
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o any proposed or actual sale of the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan (other than in connection with exercise of the
fair value purchase option and the termination of the trust fund
pursuant to the Pooling and Servicing Agreement) or the provisions of
the related intercreditor agreement;
o any release of the related borrower, any guarantor or other obligor
from liability;
o any determination not to enforce a "due-on-sale" clause and/or
"due-on-encumbrance" clause (unless such clause is not exercisable
under the applicable law or such exercise is reasonably likely to
result in successful legal action by the related borrower)
o any action to bring the related Mortgaged Property, or related REO
Property, into compliance with applicable environmental laws or to
otherwise address hazardous materials located at such property;
o any substitution or release of collateral or acceptance of additional
collateral for the 731 Lexington Avenue-Bloomberg Headquarters Whole
Loan, including the release of additional collateral (other than any
release made in connection with the grant of a non-material easement
or right-of-way or other non-material release such as a "curb-cut")
unless required by the related mortgage loan documents;
o any termination or consent to termination of the property manager of
the related Mortgaged Property;
o any adoption or approval of a plan in a bankruptcy of the borrower;
o any consent to a new lease or material lease modification or material
amendment to the condominium declaration for the related Mortgaged
Property; or
o any renewal or replacement of the then-existing insurance policies (to
the extent the lender's approval is required under the related
Mortgage Loan Documents) or any waiver, modification or amendment of
any insurance requirements under the related Mortgage Loan Documents.
A "731 Lexington Avenue-Bloomberg Headquarters Change of Control Event"
shall be deemed to have occurred and be continuing if the initial principal
balance of the 731 Lexington Avenue-Bloomberg Headquarters B Loan, as reduced by
any payments of principal (whether as principal prepayments or otherwise)
allocated to the 731 Lexington Avenue-Bloomberg Headquarters B Loan, appraisal
reduction amounts and any realized losses allocated to the 731 Lexington
Avenue-Bloomberg Headquarters B Loan, is less than 25% of the initial principal
balance of the 731 Lexington Avenue-Bloomberg Headquarters B Loan, as reduced by
any payments of principal (whether as principal prepayments or otherwise)
allocated to the 731 Lexington Avenue-Bloomberg Headquarters B Loan.
Notwithstanding the foregoing, pursuant to the provisions of the related
intercreditor agreement, while the holder of the 731 Lexington Avenue-Bloomberg
Headquarters B Loan is a Tenant Affiliate, it will not have certain of the
consent rights described above during a "Tenant Default Period." A "Tenant
Default Period" means any period of time during:
o the continuation of a material default or event of default under the
731 Lexington Avenue-Bloomberg Headquarters Whole Loan where such
material default or event of default was in any way related to an
event of default under the tenant's lease, or otherwise resulted from
collusive activity between the related borrower and the tenant, or the
inaction or action of the tenant (including, without limitation, any
rightful exercise of set-off, abatement or termination rights under
the tenant's lease), or
o the continuation of an event of default under the tenant's lease.
Notwithstanding any direction to, or approval or disapproval of, or right
to give direction to or to approve or disapprove, an action of, the Special
Servicer or the Servicer by the holder of the 731 Lexington Avenue-Bloomberg
Headquarters B Loan or the noteholders then holding
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a majority of the outstanding principal balance of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans, as applicable, in no event will the
Special Servicer or the Servicer be required to take any action or refrain from
taking any action which would violate any law of any applicable jurisdiction, be
inconsistent with the Servicing Standard violate the REMIC provisions of the
Code or violate any other provisions of the Pooling and Servicing Agreement or
the related Mortgage Loan Documents.
Notwithstanding anything herein to the contrary, the Controlling Class
Representative and the holders of the 731 Lexington Avenue-Bloomberg
Headquarters Pari Passu Loans (or their designees) will always have the right to
consult with the Master Servicer and the Special Servicer regarding the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan.
During the occurrence and continuation of a 731 Lexington Avenue-Bloomberg
Headquarters Change of Control Event, any decision to be made with respect to
the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan which requires the
approval of the majority of holders of the Controlling Class Representative of a
securitization or otherwise requires approval under the related intercreditor
agreement will require the approval of the holders of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans (or their designees) then holding a
majority of the outstanding principal balance of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans. If the holders of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans then holding a majority of the
outstanding principal balance of the 731 Lexington Avenue-Bloomberg Headquarters
Senior Loans are not able to agree on a course of action that satisfies the
servicing standard under the Pooling and Servicing Agreement within 30 days (or
such shorter period as may be required by the Mortgage Loan Documents to the
extent the lender's approval is required) after receipt of a request for consent
to any action by the Servicer or the Special Servicer, as applicable, the
Controlling Class Representative will be entitled to direct the Servicer or the
Special Servicer, as applicable, on a course of action to follow that satisfies
the requirements set forth in the Pooling and Servicing Agreement (including
that such action does not violate the Servicing Standard or another provision of
the Pooling and Servicing Agreement, the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan or any applicable REMIC provisions of the Code), and the
Servicer or the Special Servicer, as applicable, will be required to implement
the course of action in accordance with the servicing standard set forth in the
Pooling and Servicing Agreement. For purposes of the foregoing, the Controlling
Class Representative will be entitled to exercise the rights described in this
paragraph with respect to the 731 Lexington Avenue-Bloomberg Headquarters Loan.
Cure Rights. In the event that the borrower fails to make any payment of
principal or interest on the 731 Lexington Avenue-Bloomberg Headquarters Whole
Loan, resulting in a monetary event of default, or a non-monetary event of
default exists that results in a 731 Lexington Servicing Transfer Event and is
capable of being cured within thirty days, the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan will have the right to cure such event of
default (each such cure, a "731 Lexington Avenue Cure Event") subject to certain
limitations set forth in the related intercreditor agreement; provided that the
right of the holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan to
effect a 731 Lexington Avenue Cure Event or cause a delay in the transfer of the
731 Lexington Avenue-Bloomberg Headquarters Whole Loan to special servicing is
subject to the limitation that there be no more than three consecutive 731
Lexington Avenue Cure Events or special servicing delays, in any combination and
no more than an aggregate of six 731 Lexington Avenue Cure Events or special
servicing delays in any twelve calendar month period. So long as the holder of
the 731 Lexington Avenue-Bloomberg Headquarters B Loan is exercising its cure
right, neither the Servicer nor the Special Servicer will be permitted to:
o accelerate the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan,
o treat such event of default as such for purposes of transferring the
731 Lexington Avenue-Bloomberg Headquarters Whole Loan to special
servicing, or
o commence foreclosure proceedings.
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The holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan will
not be permitted to exercise any cure rights if it is an affiliate of the
related borrower or, during any Tenant Default Period, a Tenant Affiliate.
Purchase Option. So long as no 731 Lexington Avenue-Bloomberg Headquarters
Change of Control Event exists, the holder of the 731 Lexington Avenue-Bloomberg
Headquarters B Loan has the option of purchasing the 731 Lexington
Avenue-Bloomberg Headquarters Loan from the Trust, together with the 731
Lexington Avenue-Bloomberg Headquarters Pari Passu Loans from their respective
holders, at any time that a 731 Lexington Servicing Transfer Event that
constitutes an event of default under the related Mortgage Loan Documents
occurs, provided that no foreclosure or comparable conversion of the related
Mortgaged Property has occurred; and provided further that the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan is not an affiliate of the
related borrower or, during a Tenant Default Period, a Tenant Affiliate. The
purchase price required to be paid by the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan will generally equal the aggregate
outstanding principal balance of the 731 Lexington Avenue-Bloomberg Headquarters
Loan and the 731 Lexington Avenue-Bloomberg Headquarters Pari Passu Loans,
together with accrued and unpaid interest thereon (excluding default interest),
any applicable yield maintenance premium, any unreimbursed advances, together
with unreimbursed interest thereon, relating to the 731 Lexington
Avenue-Bloomberg Headquarters Whole Loan, and, if such purchase price is being
paid more than 90 days after the event giving rise to the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan's purchase, a 1% liquidation fee
(which will be paid to the Special Servicer).
Sale of Defaulted Mortgage Loan. Under the Pooling and Servicing Agreement,
if the 731 Lexington Avenue-Bloomberg Headquarters Loan is subject to a fair
value purchase option, the Special Servicer will be required to determine the
purchase price for the other 731 Lexington Avenue-Bloomberg Headquarters Senior
Loans. Each option holder specified in "--Sale of Defaulted Mortgage Loans" of
this prospectus supplement will have an option to purchase the 731 Lexington
Avenue-Bloomberg Headquarters Loan and each holder of a 731 Lexington
Avenue-Bloomberg Headquarters Pari Passu Loan (or its designees) will have an
option to purchase its respective 731 Lexington Avenue-Bloomberg Headquarters
Pari Passu Loan, at the purchase price determined by the Special Servicer, under
the Pooling and Servicing Agreement.
Termination of Special Servicer. So long as no 731 Lexington
Avenue-Bloomberg Headquarters Change of Control Event exists, the holder of the
731 Lexington Avenue-Bloomberg Headquarters B Loan, unless such holder is an
affiliate of the related borrower or a Tenant Affiliate, is permitted to
terminate, at its expense, the Special Servicer for the 731 Lexington
Avenue-Bloomberg Headquarters Whole Loan at any time, with or without cause, and
to appoint a replacement special servicer, subject to satisfaction of the
conditions contained in the Pooling and Servicing Agreement. If an 731 Lexington
Avenue-Bloomberg Headquarters Change of Control Event exists, or if the holder
of the 731 Lexington Avenue-Bloomberg Headquarters B Loan is an affiliate of the
related borrower or a Tenant Affiliate, the holders of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans (or their designees) then holding a
majority of the outstanding principal balance of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans will be entitled to exercise this
right and if such holders are not able to agree on such appointment and removal
within 30 days after receipt of notice, then the Controlling Class
Representative will be entitled to appoint a replacement special servicer.
Covered Fees. The Servicing Fee (which includes the fees for the Servicer,
the Trustee, the Bond Administrator and fees for primary servicing functions,
but not the Special Servicing Fee) will not accrue on the Stated Principal
Balance of the 731 Lexington Avenue-Bloomberg Headquarters B Loan.
S-92
THE DDR-MACQUARIE PORTFOLIO LOAN
With respect to the Mortgage Loan known as the "DDR-Macquarie Portfolio"
loan (the "DDR-Macquarie Portfolio Loan"), representing approximately 5.60% of
the Initial Outstanding Pool Balance, 6.98% of the Initial Loan Group 1 Balance,
and with a Cut-off Date Balance of $75,000,000, the related Mortgaged Properties
also secures three other mortgage loans (the "DDR-Macquarie Portfolio Pari Passu
Loans" and, together with the DDR-Macquarie Portfolio Loan, the "DDR-Macquarie
Portfolio Whole Loan"). The DDR-Macquarie Portfolio Pari Passu Loans are pari
passu in right of payment with the DDR-Macquarie Portfolio Loan and have Cut-off
Date Balances of $66,000,000, $24,250,000, $49,750,000, respectively. The
DDR-Macquarie Portfolio Loan and the DDR-Macquarie Portfolio Pari Passu Loans
with the Cut-off Date Balances of $66,000,000 and $24,250,000 have the same
interest rate, maturity date and amortization term. The DDR-Macquarie Portfolio
Pari Passu Loan with the Cut-off Date Balance of $49,750,000 (such note the
"DDR-Macquarie Portfolio Pari Passu A4 Note"), has an interest rate of (i) from
the Closing Date through and including August 31, 2004, LIBOR (as defined in the
related intercreditor agreement) plus 0.25%, and (ii) from and including
September 1, 2004, LIBOR (as defined in the related intercreditor agreement)
plus 0.84%, but the same maturity date and amortization terms as the other
loans. Only the DDR-Macquarie Portfolio Loan is included in the Trust. The
DDR-Macquarie Portfolio Pari Passu Loans are not assets of the Trust.
The DDR-Macquarie Portfolio Pari Passu Loans are owned by GACC, one of the
Mortgage Loan Sellers, but may be sold or further divided at any time (subject
to compliance with the terms of the related intercreditor agreement).
For the purpose of the information presented in this prospectus supplement
with respect to the DDR-Macquarie Portfolio Loan, the debt service coverage
ratio and loan-to-value ratio reflect the aggregate indebtedness evidenced by
the DDR-Macquarie Portfolio Whole Loan.
General. The DDR-Macquarie Portfolio Whole Loan will be serviced pursuant
to the terms of the Pooling and Servicing Agreement (and all decisions,
consents, waivers, approvals and other actions on the part of any holder of the
DDR-Macquarie Portfolio Whole Loan will be effected in accordance with the
Pooling and Servicing Agreement). The Servicer or the Trustee, as applicable,
will be obligated to make (i) any required P&I Advances on the DDR-Macquarie
Portfolio Loan unless the Servicer, the Special Servicer or the Trustee, as
applicable, determines that such an advance would not be recoverable from
collections on the DDR-Macquarie Portfolio Loan and (ii) Property Advances with
respect to DDR-Macquarie Portfolio Whole Loan unless the Servicer, the Special
Servicer or the Trustee, as applicable, determines that such an advance would
not be recoverable from collections on the DDR-Macquarie Portfolio Whole Loan.
Distributions. The holders of the DDR-Macquarie Portfolio Loan and the
DDR-Macquarie Portfolio Pari Passu Loans have entered into an intercreditor
agreement that sets forth the respective rights of each of the holders of the
DDR-Macquarie Portfolio Whole Loan and provides, in general, that:
o the DDR-Macquarie Portfolio Loan and the DDR-Macquarie Portfolio Pari
Passu Loans are of equal priority with each other and no portion of
any of them will have priority or preference over the other; and
o all payments, proceeds and other recoveries on or in respect of the
DDR-Macquarie Portfolio Loan and the DDR-Macquarie Portfolio Pari
Passu Loans will be applied to the DDR-Macquarie Portfolio Loan and
the DDR-Macquarie Portfolio Pari Passu Loans on a pari passu basis
according to their respective outstanding principal balances (subject,
in each case, to the payment and reimbursement rights of the Servicer,
the Special Servicer and the Trustee, and any other service providers
with respect to a DDR-Macquarie Portfolio Pari Passu Loan, in
accordance with the terms of the Pooling and Servicing Agreement)
provided, however, that (i) any prepayment resulting from a
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Property Release (as defined in the DDR-Macquarie Portfolio Pari Passu
A4 Note) will be distributed to the holder of the DDR-Macquarie
Portfolio Pari Passu A4 Note only and applied in payment of the
DDR-Macquarie Portfolio Pari Passu A4 Note and (ii) any yield
maintenance premium payable by the related borrower in excess of the
yield maintenance premium payable under the DDR-Macquarie Portfolio
Pari Passu A4 Note will be paid to the DDR-Macquarie Portfolio Loan
and the other two DDR-Macquarie Portfolio Pari Passu Loans on a pari
passu basis according to their respective interests in the Mortgage
Loan.
o The related intercreditor agreement also permits GACC, so long as it
is the holder of one or more DDR-Macquarie Portfolio Pari Passu Loans,
to reallocate the principal of such loans (to the extent so retained)
among each other or to such new pari passu notes or to divide such
retained loans into one or more "component" pari passu notes in the
aggregate principal amount equal to the then outstanding mortgage loan
being reallocated, provided that the aggregate principal balance of
all outstanding DDR-Macquarie Portfolio Pari Passu Loans held by GACC
and the new pari passu mortgage notes following such amendments is no
greater than the aggregate principal balance of the related promissory
notes prior to such amendments.
Consultation and Consent. Any decision to be made with respect to the
DDR-Macquarie Portfolio Whole Loan that requires the approval of the Directing
Certificateholder under the Pooling and Servicing Agreement or otherwise
requires approval under the related intercreditor agreement (including the
termination of the Special Servicer and the appointment of a successor special
servicer) will require the approval of noteholders (or their designees) then
holding a majority of the outstanding principal balance of the DDR-Macquarie
Portfolio Whole Loan. If noteholders then holding a majority of the outstanding
principal balance of the DDR-Macquarie Portfolio Whole Loan (or their designees)
are not able to agree on a course of action that satisfies the servicing
standard under the Pooling and Servicing Agreement within 30 days (or such
shorter period as may be required by the Mortgage Loan Documents to the extent
the lender's approval is required) after receipt of a request for consent to any
action by the Servicer or the Special Servicer, as applicable, the Controlling
Class Representative will be entitled to direct the Servicer or the Special
Servicer, as applicable, on a course of action to follow that satisfies the
requirements set forth in the Pooling and Servicing Agreement (provided, that
such action does not violate applicable law, the servicing standard or any other
provision of the Pooling and Servicing Agreement, the related Mortgage Loan
Documents or the REMIC provisions of the Code), and the Servicer or the Special
Servicer, as applicable, will be required to implement the course of action in
accordance with the servicing standard set forth in the Pooling and Servicing
Agreement. Pursuant to the Pooling and Servicing Agreement and related
intercreditor agreement, each holder of the DDR-Macquarie Portfolio Loan and any
DDR-Macquarie Portfolio Pari Passu Loan may consult separately with the Servicer
or the Special Servicer, as applicable, about a particular course of action.
Except as described in the second sentence of this paragraph, the noteholders
then holding a majority of the outstanding principal balance of the
DDR-Macquarie Portfolio Whole Loan will be entitled to approve the following:
o any modification or amendment of, or waiver with respect to, the
DDR-Macquarie Portfolio Whole Loan or the Mortgage Loan Documents that
would result in the extension of the applicable maturity date, a
reduction in the applicable mortgage rate borne thereby or the monthly
payment, or any prepayment premium, exit fee or yield maintenance
charge payable thereon or a deferral or forgiveness of interest on or
principal of the DDR-Macquarie Portfolio Whole Loan, modification or
waiver of any other monetary term of the DDR-Macquarie Portfolio Whole
Loan relating to the timing or amount of any payment of principal and
interest (other than default interest) or a modification or waiver of
any provision of the DDR-Macquarie Portfolio Whole Loan
S-94
which restricts the borrower from incurring additional indebtedness or
from transferring the related Mortgaged Property or any transfer of
direct or indirect equity interests in the borrower;
o any modification or amendment of, or waiver with respect to the
related Mortgage Loan Documents that would result in a discounted
pay-off;
o any foreclosure upon or comparable conversion (which may include
acquisitions of an REO property) of the ownership of the related
Mortgaged Property securing such specially serviced mortgage loan or
any acquisition of the related mortgage loan by deed in lieu of
foreclosure;
o any proposed or actual sale of the related REO property or mortgage
loan (other than in connection with the exercise of the fair value
purchase option, the termination of the Trust or the purchase by a
Mortgage Loan Seller of a Mortgage Loan in connection with a breach of
a representation or a warranty or a document defect);
o any release of the related borrower, any guarantor or other obligor
from liability;
o any determination not to enforce a "due-on-sale" or
"due-on-encumbrance" clause (unless such clause is not exercisable
under applicable law or such exercise is reasonably likely to result
in successful legal action by the related borrower);
o any action to bring the related Mortgaged Property or related REO
property into compliance with applicable environmental laws or to
otherwise address hazardous materials located at the Mortgaged
Property or REO property;
o any substitution or release of collateral or acceptance of additional
collateral for such mortgage loan including the release of additional
collateral for such Whole Loan unless required by the underlying
Mortgage Loan Documents (other than any release made in connection
with the grant of a non-material easement or right-of-way or other
non-material release such as a "curb-cut");
o any adoption or approval of a plan in a bankruptcy of the related
borrower;
o consenting to any "new lease" or "lease modification" at any Mortgaged
Property securing the DDR-Macquarie Portfolio Whole Loan, to the
extent the lender's approval is required under the related Mortgage
Loan Documents;
o any renewal or replacement of the then-existing insurance policies (to
the extent the lender's approval is required under the related
Mortgage Loan Documents) or any waiver, modification or amendment of
any insurance requirements under the related Mortgage Loan Documents;
and
o any consent, waiver or approval with respect to any change in the
property manager at the Mortgaged Properties securing the
DDR-Macquarie Portfolio Whole Loan.
Notwithstanding any direction to, or approval or disapproval of, or right
to give direction to or to approve or disapprove an action of, the Special
Servicer or the Servicer by the noteholders then holding a majority of the
outstanding principal balance of the DDR-Macquarie Portfolio Whole Loan, in no
event will the Special Servicer or the Servicer be required to take any action
or refrain from taking any action which would violate any law of any applicable
jurisdiction, be inconsistent with the Servicing Standard, violate the REMIC
provisions of the Code or violate any other provisions of the Pooling and
Servicing Agreement or the related Mortgage Loan Documents.
Sale of Defaulted Mortgage Loan. Under the Pooling and Servicing Agreement,
if the DDR-Macquarie Portfolio Loan is subject to a fair value purchase option,
the Special Servicer will be required to determine the purchase price for the
other DDR-Macquarie Portfolio Pari Passu Loans. Each option holder specified in
"--Sale of Defaulted Mortgage Loans" of this prospectus supplement will have an
option to purchase the DDR-Macquarie
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Portfolio Loan and each holder of a DDR-Macquarie Portfolio Pari Passu Loan (or
its designees) will have an option to purchase its respective DDR-Macquarie
Portfolio Pari Passu Loan, at the purchase price determined by the Special
Servicer, under the Pooling and Servicing Agreement.
Termination of Special Servicer. Noteholders (or their designees) holding a
majority of the outstanding principal balance of the DDR-Macquarie Portfolio
Whole Loan will be entitled to terminate the Special Servicer with respect to
the special servicing of the DDR-Macquarie Portfolio Whole Loan at any time,
with or without cause, and to appoint a replacement Special Servicer, subject to
satisfaction of the conditions contained in the Pooling and Servicing Agreement.
THE TYSONS CORNER CENTER LOAN
With respect to the Mortgage Loan known as the "Tysons Corner Center" loan
(the "Tysons Corner Center Loan"), representing approximately 4.67% of the
Initial Outstanding Pool Balance and 5.81% of the Initial Loan Group 1 Balance
and with a Cut-off Date Balance of $62,500,000, the related Mortgaged Property
also secures three other mortgage loans (the "Tysons Corner Center Pari Passu
Loans" and, together with the Tysons Corner Center Loan, the "Tysons Corner
Center Whole Loan"). The Tysons Corner Center Pari Passu Loans are pari passu in
right of payment with the Tysons Corner Center Loan and have Cut-off Date
Balances of $147,500,000, $95,000,000 and $35,000,000, respectively. The Tysons
Corner Center Loan and the Tysons Corner Center Pari Passu Loans have the same
interest rate, maturity date and amortization term. Only the Tysons Corner
Center Loan is included in the Trust. The Tysons Corner Center Pari Passu Loans
are not assets of the Trust.
The Tysons Corner Center Pari Passu Loans were deposited into the
commercial securitizations indicated in the table below:
OUTSTANDING PRINCIPAL BALANCE AS OF THE CUT-OFF DATE SECURITIZATION
- ------------------------------------------------------ -----------------------------------------------
$147,500,000.......................................... COMM 2004-LNB2 Commercial Mortgage
Pass-Through Certificates
$95,000,000........................................... GE Commercial Mortgage Corporation
Commercial Mortgage Pass-Through Certificates,
Series 2004-C2
$35,000,000........................................... GMAC Commercial Mortgage Securities, Inc.,
Series 2004-C1 Mortgage Pass-Through
Certificates
For the purpose of the information presented in this prospectus supplement
with respect to the Tysons Corner Center Loan, the debt service coverage ratio
and loan-to-value ratio reflect the aggregate indebtedness evidenced by the
Tysons Corner Center Whole Loan.
General. The Tysons Corner Center Whole Loan is serviced pursuant to the
terms of the pooling and servicing agreement related to the COMM 2004-LNB2
Commercial Mortgage Pass-Through Certificates securitization (the "COMM
2004-LNB2 Pooling and Servicing Agreement") for which GMAC Commercial Mortgage
Corporation is the initial master servicer (in such capacity and any successor
thereto, the "COMM 2004-LNB2 Servicer") and Lennar Partners, Inc. is the initial
special servicer (in such capacity and any successor thereto, the "COMM
2004-LNB2 Special Servicer"). However, the Servicer or the Trustee, as
applicable, will be obligated to make any required P&I Advances on the Tysons
Corner Center Loan unless the Servicer, the Special Servicer or the Trustee, as
applicable, determines that such an advance would not be recoverable from
collections on the Tysons Corner Center Loan.
S-96
Distributions. The holders of the Tysons Corner Center Loan and the Tysons
Corner Center Pari Passu Loans have entered into an intercreditor agreement that
sets forth the respective rights of each of the holders of the Tysons Corner
Center Whole Loan and provides, in general, that:
o the Tysons Corner Center Loan and the Tysons Corner Center Pari Passu
Loans are of equal priority with each other and no portion of any of
them will have priority or preference over the other; and
o all payments, proceeds and other recoveries on or in respect of the
Tysons Corner Center Loan and the Tysons Corner Center Pari Passu
Loans will be applied to the Tysons Corner Center Loan and the Tysons
Corner Center Pari Passu Loans on a pari passu basis according to
their respective outstanding principal balances (subject, in each
case, to the payment and reimbursement rights of the COMM 2004-LNB2
Servicer, the COMM 2004-LNB2 Special Servicer and the related trustee
under the COMM 2004-LNB2 Pooling and Servicing Agreement, the Servicer
and the Trustee under the Pooling and Servicing Agreement and any
other service providers with respect to a Tysons Corner Center Pari
Passu Loan, in accordance with the terms of the COMM 2004-LNB2 Pooling
and Servicing Agreement).
Consultation and Consent. Any decision to be made with respect to the
Tysons Corner Center Whole Loan that requires the approval of the majority
certificateholder of the controlling class under the COMM 2004-LNB2 Pooling and
Servicing Agreement or otherwise requires approval under the related
intercreditor agreement (excluding the termination of the COMM 2004-LNB2 Special
Servicer and the appointment of a successor special servicer) will require the
approval of noteholders (or their designees) then holding a majority of the
outstanding principal balance of the Tysons Corner Center Whole Loan. If
noteholders then holding a majority of the outstanding principal balance of the
Tysons Corner Center Whole Loan are not able to agree on a course of action that
satisfies the servicing standard under the COMM 2004-LNB2 Pooling and Servicing
Agreement within 30 days (or such shorter period as may be required by the
Mortgage Loan Documents to the extent the lender's approval is required) after
receipt of a request for consent to any action by the COMM 2004-LNB2 Servicer or
the COMM 2004-LNB2 Special Servicer, as applicable, the majority
certificateholder of the controlling class under the COMM 2004-LNB2 Pooling and
Servicing Agreement will be entitled to direct the COMM 2004-LNB2 Servicer or
the COMM 2004-LNB2 Special Servicer, as applicable, on a course of action to
follow that satisfies the requirements set forth in the COMM 2004-LNB2 Pooling
and Servicing Agreement (provided, that such action does not violate the
servicing standard or any other provision of the COMM 2004-LNB2 Pooling and
Servicing Agreement, the related Mortgage Loan Documents or the REMIC provisions
of the Code), and the COMM 2004-LNB2 Servicer or the COMM 2004-LNB2 Special
Servicer, as applicable, will be required to implement the course of action in
accordance with the servicing standard set forth in the COMM 2004-LNB2 Pooling
and Servicing Agreement. Pursuant to the COMM 2004-LNB2 Pooling and Servicing
Agreement and related intercreditor agreement, each holder of the Tysons Corner
Center Loan and any Tysons Corner Center Pari Passu Loan may consult separately
with the COMM 2004-LNB2 Servicer or the COMM 2004-LNB2 Special Servicer, as
applicable, about a particular course of action. Except as described in the
second sentence of this paragraph, the noteholders then holding a majority of
the outstanding principal balance of the Tysons Corner Center Whole Loan will be
entitled to approve the following:
o any modification or amendment of, or waiver with respect to, the
Tysons Corner Center Whole Loan or the Mortgage Loan Documents that
would result in the extension of the applicable maturity date, a
reduction in the applicable mortgage rate borne thereby or the monthly
payment, or any prepayment premium, exit fee or yield maintenance
charge payable thereon or a deferral or forgiveness of interest on or
principal of the Tysons Corner Center Whole Loan, modification or
waiver of any other monetary term of the Tysons Corner Center Whole
Loan relating to the timing or amount of any
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payment of principal and interest (other than default interest) or a
modification or waiver of any provision of the Tysons Corner Center
Whole Loan which restricts the borrower from incurring additional
indebtedness or from transferring the Mortgaged Property or any
transfer of direct or indirect equity interests in the borrower;
o any modification or amendment of, or waiver with respect to the
related Mortgage Loan Documents that would result in a discounted
pay-off;
o any foreclosure upon or comparable conversion (which may include
acquisitions of an REO property) of the ownership of the related
Mortgaged Property securing such specially serviced mortgage loan or
any acquisition of the related mortgage loan by deed in lieu of
foreclosure;
o any proposed or actual sale of the related REO property or mortgage
loan (other than in connection with the exercise of the fair value
purchase option or the termination of the related trust fund pursuant
to the COMM 2004-LNB2 Pooling and Servicing Agreement);
o any release of the related borrower, any guarantor or other obligor
from liability;
o any determination not to enforce a "due-on-sale" or
"due-on-encumbrance" clause (unless such clause is not exercisable
under applicable law or such exercise is reasonably likely to result
in successful legal action by the related borrower);
o any action to bring the related Mortgaged Property or related REO
property into compliance with applicable environmental laws or to
otherwise address hazardous materials located at the Mortgaged
Property or REO property;
o any substitution or release of collateral or acceptance of additional
collateral for such mortgage loan including the release of additional
collateral for such Whole Loan unless required by the underlying
Mortgage Loan Documents (other than any release made in connection
with the grant of a non-material easement or right-of-way or other
non-material release such as a "curb-cut");
o any adoption or approval of a plan in a bankruptcy of the related
borrower;
o consenting to any "new lease" or "lease modification" at the Mortgaged
Property securing the Tysons Corner Center Whole Loan, to the extent
the lender's approval is required under the related Mortgage Loan
Documents;
o any renewal or replacement of the then-existing insurance policies (to
the extent the lender's approval is required under the related
Mortgage Loan Documents) or any waiver, modification or amendment of
any insurance requirements under the related Mortgage Loan Documents;
and
o any consent, waiver or approval with respect to any change in the
property manager at the Mortgaged Property securing the Tysons Corner
Center Whole Loan.
Notwithstanding any direction to, or approval or disapproval of, or right
to give direction to or to approve or disapprove an action of, the COMM
2004-LNB2 Special Servicer or the COMM 2004-LNB2 Servicer by the noteholders
then holding a majority of the outstanding principal balance of the Tysons
Center Corner Whole Loan, in no event will the COMM 2004-LNB2 Special Servicer
or the COMM 2004-LNB2 Servicer be required to take any action or refrain from
taking any action which would violate any law of any applicable jurisdiction, be
inconsistent with the servicing standard under the COMM 2004-LNB2 Pooling and
Servicing Agreement, violate the REMIC provisions of the Code or violate any
other provisions of the COMM 2004-LNB2 Pooling and Servicing Agreement or the
related Mortgage Loan Documents.
Sale of Defaulted Mortgage Loan. Under the COMM 2004-LNB2 Pooling and
Servicing Agreement, if the Tysons Corner Center Pari Passu Loan that was
deposited into the
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securitization created under that pooling and servicing agreement is subject to
a fair value purchase option, then the Controlling Class Representative will be
entitled to purchase the Tysons Corner Center Loan from the Trust at the
purchase price determined by the COMM 2004-LNB2 Special Servicer.
Termination of the COMM 2004-LNB2 Servicer. If an event of default has
occurred with respect to the COMM 2004-LNB2 Servicer under the COMM 2004-LNB2
Pooling and Servicing Agreement, which event of default relates to the Tysons
Corner Center Whole Loan or, if the certificates issued under the Pooling and
Servicing Agreement or any securities issued under any other pooling and
servicing agreement as to which a Tysons Corner Center Pari Passu Loan is
subject, have been qualified, withdrawn or downgraded because of the actions of
the COMM 2004-LNB2 Servicer with respect to the Tysons Corner Center Whole Loan,
then the holders of a majority of the outstanding principal balance of the
Tysons Corner Center Whole Loan (or their designees (which designee for the
Trust will be the Controlling Class Representative)) will be entitled to direct
the related trustee to terminate the COMM 2004-LNB2 Servicer solely with respect
to the Tysons Corner Center Whole Loan and, at the direction of such majority
holders (or their designees), a successor master servicer will be appointed to
service the Tysons Corner Center Whole Loan that assumes the obligations of the
COMM 2004-LNB2 Servicer and that meets the eligibility requirements of the COMM
2004-LNB2 Pooling and Servicing Agreement and the related pooling and servicing
agreement. If such holders are not able to agree on such appointment and removal
within 30 days after receipt of notice, then the majority certificateholder of
the controlling class under the COMM 2004-LNB2 Pooling and Servicing Agreement
will be entitled to appoint a successor servicer of the Tysons Corner Center
Whole Loan.
Termination of COMM 2004-LNB2 Special Servicer. The majority
certificateholder of the controlling class under the COMM 2004-LNB2 Pooling and
Servicing Agreement will be entitled to terminate, at its expense, the COMM
2004-LNB2 Special Servicer with respect to the special servicing of the Tysons
Corner Center Whole Loan at any time, with or without cause, and to appoint a
replacement special servicer, subject to satisfaction of the conditions
contained in the COMM 2004-LNB2 Pooling and Servicing Agreement.
THE AFR/BANK OF AMERICA PORTFOLIO LOAN
With respect to the Mortgage Loan known as the "AFR/Bank of America
Portfolio" loan (the "AFR/Bank of America Portfolio Loan"), representing
approximately 1.48% of the Initial Outstanding Pool Balance and 1.85% of the
Initial Loan Group 1 Balance with a Cut-off Date Balance of $19,834,205, the
related Mortgaged Properties also secure six other mortgage loans (the "AFR/Bank
of America Portfolio Companion Loans"). Five of the AFR/Bank of America
Portfolio Companion Loans (the "AFR/Bank of America Portfolio Pari Passu Loans"
and together with the AFR/Bank of America Portfolio Loan, the "AFR/Bank of
America Portfolio Senior Loans") are pari passu in right of payment with the
AFR/Bank of America Portfolio Loan and have Cut-off Date Balances of
$99,171,023, $74,378,267, $84,295,370, $39,668,409 and $19,834,205,
respectively. The other AFR/Bank of America Portfolio Companion Loan is
subordinate in right of payment to the AFR/Bank of America Portfolio Senior
Loans (the "AFR/Bank of America Portfolio B Loan" and, together with the
AFR/Bank of America Portfolio Senior Loans, the "AFR/Bank of America Portfolio
Whole Loan") and has a Cut-off Date Balance of $99,171,023. The AFR/Bank of
America Portfolio Loan and the AFR/Bank of America Portfolio Pari Passu Loans
have the same interest rate, maturity date and amortization term. The AFR/Bank
of America Portfolio B Loan has the same maturity date and amortization term as
the AFR/Bank of America Portfolio Senior Loans, but an interest rate of 5.3918%
per annum. Only the AFR/Bank of America Portfolio Loan is included in the Trust.
The AFR/Bank of America Portfolio Companion Loans are not assets of the Trust.
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The AFR/Bank of America Portfolio Companion Loans were deposited into the
commercial securitizations indicated in the table below:
OUTSTANDING
PRINCIPAL BALANCE AS PARI PASSU/
OF THE CUT-OFF DATE SUBORDINATE SECURITIZATION
- ---------------------- ------------- ---------------------------------------------------
$99,171,023........... Pari Passu GMAC Commercial Mortgage Securities, Inc., Series
2003-C3 Mortgage Pass-Through Certificates
$74,378,267........... Pari Passu GE Commercial Mortgage Corporation Commercial
Mortgage Pass-Through Certificates, Series 2004-C1
$84,295,370........... Pari Passu COMM 2004-LNB2 Commercial Mortgage Pass-Through
Certificates
$39,668,409........... Pari Passu GE Commercial Mortgage Corporation Commercial
Mortgage Pass-Through Certificates, Series 2004-C2
$19,834,205........... Pari Passu GMAC Commercial Mortgage Securities, Inc., Series
2004-C1 Mortgage Pass-Through Certificates
$99,171,023........... Subordinate GMAC Commercial Mortgage Securities, Inc., Series
2003-C3 Mortgage Pass-Through Certificates
For the purpose of the information presented in this prospectus supplement
with respect to the AFR/Bank of America Portfolio Loan, the debt service
coverage ratio and loan-to-value ratio reflect the aggregate indebtedness
evidenced by the AFR/Bank of America Portfolio Senior Loans, but not the
AFR/Bank of America Portfolio B Loan.
General. The AFR/Bank of America Portfolio Loan will be serviced pursuant
to the terms of the pooling and servicing agreement related to the GMAC
Commercial Mortgage Securities Inc., Series 2003-C3 Mortgage Pass-Through
Certificates securitization (the "GMACCM 2003-C3 Pooling and Servicing
Agreement") for which GMAC Commercial Mortgage Corporation is the initial master
servicer (in such capacity and any successor thereto, the "GMACCM 2003-C3
Servicer") and Midland Loan Services, Inc. is the initial special servicer (in
such capacity and any successor thereto, the "GMACCM 2003-C3 Special Servicer").
However, the Servicer or the Trustee, as applicable, will be obligated to make
any required P&I Advances on the AFR/Bank of America Portfolio Loan unless the
Servicer, the Special Servicer or the Trustee, as applicable, determines that
such an advance would not be recoverable from collections on the AFR/Bank of
America Portfolio Loan.
Distributions. The holders of the AFR/Bank of America Portfolio Senior
Loans and the AFR/Bank of America Portfolio B Loan have entered into an
intercreditor agreement that sets forth the respective rights of each of the
holders of the AFR/Bank of America Portfolio Whole Loan and provides, in
general, that:
o prior to the occurrence and continuance of a monetary event of default
or material non-monetary event of default (or if such event of default
has occurred and is continuing, subject in each case to the cure
rights of the holder of the AFR/Bank of America Portfolio B Loan, as
described below):
o the holder of the AFR/Bank of America Portfolio B Loan will
generally be entitled to receive its scheduled interest payments
after the holders of the AFR/Bank of America Portfolio Senior
Loans receive their scheduled interest payments (other than
default interest) and after any advances in respect of the
AFR/Bank of America Portfolio Senior Loans and the AFR/Bank of
America Portfolio B Loan are repaid in full; and
o the holders of the AFR/Bank of America Portfolio Senior Loans and
the AFR/Bank of America Portfolio B Loan will be entitled to
receive their respective scheduled, voluntary and involuntary
payments of principal on a pro rata basis; and
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o upon the occurrence and continuance of a monetary event of default or
material non-monetary event of default under the related Mortgage Loan
Documents, and so long as the holder of the AFR/Bank of America
Portfolio B Loan is not exercising its cure rights, the holder of the
AFR/Bank of America Portfolio B Loan will not be entitled to receive
payments of principal and interest until the holders of the AFR/Bank
of America Portfolio Senior Loans receive all their respective accrued
scheduled interest (other than default interest) and outstanding
principal in full.
In addition, the holders of the AFR/Bank of America Portfolio Loan and the
AFR/Bank of America Portfolio Pari Passu Loans entered into a separate
intercreditor agreement that sets forth the respective rights of each of the
holders of the AFR/Bank of America Portfolio Loan and the AFR/Bank of America
Portfolio Pari Passu Loans and provides, in general, that:
o the AFR/Bank of America Portfolio Loan and the AFR/Bank of America
Portfolio Pari Passu Loans are of equal priority with each other and
no portion of any of them will have priority or preference over the
other; and
o all payments, proceeds and other recoveries on or in respect of the
AFR/Bank of America Portfolio Loan and the AFR/Bank of America
Portfolio Pari Passu Loans will be applied to the AFR/Bank of America
Portfolio Loan and the AFR/Bank of America Portfolio Pari Passu Loans
on a pari passu basis according to their respective outstanding
principal balances (subject, in each case, to the payment and
reimbursement rights of the GMACCM 2003-C3 Servicer, the GMACCM
2003-C3 Special Servicer, the related trustee and fiscal agent under
the GMACCM 2003-C3 Pooling and Servicing Agreement, the Servicer and
the Trustee under the Pooling and Servicing Agreement and any other
service providers with respect to an AFR/Bank of America Portfolio
Pari Passu Loan, in accordance with the terms of the GMACCM 2003-C3
Pooling and Servicing Agreement).
RIGHTS OF THE HOLDER OF THE AFR/BANK OF AMERICA PORTFOLIO B LOAN
Consultation and Consent. Unless an AFR/Bank of America Portfolio Change of
Control Event has occurred and is continuing, then (i) the GMACCM 2003-C3
Special Servicer will be required to consult with the holder of the AFR/Bank of
America Portfolio B Loan upon the occurrence of any event of default for the
AFR/Bank of America Portfolio Loan under the related Mortgage Loan Documents, to
consider alternative actions recommended by the holder of the AFR/Bank of
America Portfolio B Loan and to consult with the holder of the AFR/Bank of
America Portfolio B Loan with respect to certain determinations made by the
GMACCM 2003-C3 Special Servicer pursuant to the GMACCM 2003-C3 Pooling and
Servicing Agreement, (ii) at any time (whether or not an event of default for
such mortgage loan under the related Mortgage Loan Documents has occurred) the
GMACCM 2003-C3 Servicer and the GMACCM 2003-C3 Special Servicer will be required
to consult with the holder of the AFR/Bank of America Portfolio B Loan (1) with
respect to proposals to take any significant action with respect to the AFR/Bank
of America Portfolio Whole Loan and the related Mortgaged Property and to
consider alternative actions recommended by the holder of the AFR/Bank of
America Portfolio B Loan and (2) to the extent that the related Mortgage Loan
Documents grant the lender the right to approve budgets for the related
Mortgaged Properties, prior to approving any such budget and (iii) prior to
taking any of the following actions with respect to the AFR/Bank of America
Portfolio Whole Loan, the GMACCM 2003-C3 Servicer and the GMACCM 2003-C3 Special
Servicer will be required to notify in writing to the holder of the AFR/Bank of
America Portfolio B Loan of any proposal to take any of such actions (and to
provide the holder of the AFR/Bank of America Portfolio B Loan with such
information reasonably requested as may be necessary in the reasonable judgment
of the holder of the AFR/Bank of America Portfolio B Loan in order to make a
judgment, the expense of providing such information not to be an expense of the
requesting party) and to receive the written approval of the holder of the
AFR/Bank of America Portfolio B Loan (which approval may be withheld in its sole
discretion) with respect to:
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o any modification or waiver of any term of the related Mortgage Loan
Documents that would result in the extension of the applicable
maturity date, a reduction of the applicable mortgage rate or Monthly
Payment, that relates to any exit fee, Prepayment Premium or Yield
Maintenance Charge, or a deferral or forgiveness of interest on or
principal of the AFR/Bank of America Portfolio Whole Loan, a
modification or waiver of any other monetary term of the AFR/Bank of
America Portfolio Whole Loan relating to the timing or amount of any
payment of principal and interest (other than default interest) or a
modification or waiver of any provision which restricts the related
borrower from incurring additional indebtedness or from transferring
any related Mortgaged Property;
o the waiver of any "due-on-sale" clause and/or "due-on-encumbrance"
clause (unless such clause is not exercisable under the applicable law
or such exercise is reasonably likely to result in successful legal
action by the related borrower);
o any proposed or actual foreclosure upon or comparable conversion
(which may include acquisitions of an REO Property) of any related
Mortgaged Property if the AFR/Bank of America Portfolio Whole Loan
should become a specially serviced loan and continue in default or any
acquisition of such related Mortgaged Property by deed in lieu of
foreclosure;
o any proposed or actual sale of the related REO Property or the
AFR/Bank of America Portfolio Whole Loan (other than in connection
with exercise of the fair value purchase option or the termination of
the trust fund pursuant to the GMACCM 2003-C3 Pooling and Servicing
Agreement);
o any release of the related borrower, any guarantor or other obligor
from liability;
o any modification or amendment of, or waiver of any term of the
AFR/Bank of America Portfolio Whole Loan that would result in a
discounted pay-off;
o any determination to bring any related Mortgaged Property, which has
become an REO Property, into compliance with applicable environmental
laws or to otherwise address hazardous materials located at such
property;
o any substitution or release of collateral or acceptance of additional
collateral for the AFR/Bank of America Portfolio Whole Loan (other
than any release made in connection with the grant of a non-material
easement or right-of-way or other non-material release such as a
"curb-cut") unless required by the Mortgage Loan Documents;
o any adoption or approval of a plan in a bankruptcy of the borrower;
o any termination or consent to termination of the related property
manager of the AFR/Bank of America Portfolio Whole Loan or a change in
any franchise arrangement related to the AFR/Bank of America Portfolio
Whole Loan;
o any consent to the execution, termination or renewal of any major
lease at any related Mortgaged Property; or
o any renewal or replacement of the then-existing insurance policies (to
the extent the lender's approval is required under the related
Mortgage Loan Documents) or any waiver, modification or amendment of
any insurance requirements under the related Mortgage Loan Documents.
Notwithstanding any direction to, or approval or disapproval of, or right
to give direction to or to approve or disapprove an action of, the GMACCM
2003-C3 Special Servicer or the GMACCM 2003-C3 Servicer by the holder of the
AFR/Bank of America Portfolio B Loan, in no event will the GMACCM 2003-C3
Special Servicer or the GMACCM 2003-C3 Servicer be required to take any action
or refrain from taking any action which would violate any law of any applicable
jurisdiction, be inconsistent with the servicing standard under the GMACCM
2003-C3 Pooling and Servicing Agreement, violate the REMIC provisions of the
Code or violate any other provisions of the GMACCM 2003-C3 Pooling and Servicing
Agreement or the related Mortgage Loan Documents.
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Notwithstanding anything herein to the contrary, the majority
certificateholder of the controlling class under the GMACCM 2003-C3 Pooling and
Servicing Agreement, the majority certificateholder of the controlling class
under each pooling and servicing agreement governing the other AFR/Bank of
America Portfolio Pari Passu Loans and the Controlling Class Representative will
always retain the right to consult with the GMACCM 2003-C3 Servicer and the
GMACCM 2003-C3 Special Servicer regarding the AFR/Bank of America Portfolio
Whole Loan.
Upon the occurrence and continuance of an AFR/Bank of America Portfolio
Change of Control Event, any decision to be made with respect to the AFR/Bank of
America Portfolio Whole Loan which requires the approval of the majority of
holders of the then controlling class of a securitization or otherwise requires
approval under the related intercreditor agreement will require the approval of
the holders of the AFR/Bank of America Portfolio Senior Loans (or their
designees) then holding a majority of the outstanding principal balance of the
AFR/Bank of America Portfolio Senior Loans. If the holders of the AFR/Bank of
America Portfolio Senior Loans then holding a majority of the outstanding
principal balance of the AFR/Bank of America Portfolio Senior Loans are not able
to agree on a course of action that satisfies the servicing standard under the
GMACCM 2003-C3 Pooling and Servicing Agreement within 60 days after receipt of a
request for consent to any action by the GMACCM 2003-C3 Servicer or the GMACCM
2003-C3 Special Servicer, as applicable, the majority certificateholder of the
controlling class under the GMACCM 2003-C3 Pooling and Servicing Agreement will
be entitled to direct the GMACCM 2003-C3 Servicer or the GMACCM 2003-C3 Special
Servicer, as applicable, on a course of action to follow that satisfies the
requirements set forth in the GMACCM 2003-C3 Pooling and Servicing Agreement
(provided that such action does not violate the servicing standard or another
provision of the GMACCM 2003-C3 Pooling and Servicing Agreement, the AFR/Bank of
America Portfolio Whole Loan or any applicable REMIC provisions of the Code),
and the GMACCM 2003-C3 Servicer or the GMACCM 2003-C3 Special Servicer, as
applicable, will be required to implement the course of action in accordance
with the servicing standard set forth in the GMACCM 2003-C3 Pooling and
Servicing Agreement. For purposes of the foregoing, the Controlling Class
Representative will be entitled to exercise the rights described in this
paragraph with respect to the AFR/Bank of America Portfolio Loan.
Cure Rights. In the event that the borrower fails to make any payment of
principal or interest on the AFR/Bank of America Portfolio Whole Loan, resulting
in a monetary event of default, or a material non-monetary event of default
exists that is capable of being cured within thirty days, the holder of the
AFR/Bank of America Portfolio B Loan will have the right to cure such event of
default (each such cure, an "AFR/Bank of America Portfolio Cure Event") subject
to certain limitations set forth in the related intercreditor agreement;
provided that the right of the holder of the AFR/Bank of America Portfolio B
Loan to effect an AFR/Bank of America Portfolio Cure Event or cause a delay in
the transfer of the AFR/Bank of America Whole Loan to special servicing is
subject to the limitation that there be no more than three consecutive AFR/Bank
of America Portfolio Cure Events or special servicing delays, in any combination
and no more than an aggregate of six AFR/Bank of America Portfolio Cure Events
or special servicing delays in any twelve calendar month period. So long as the
holder of the AFR/Bank of America Portfolio B Loan is exercising its cure right,
neither the GMACCM 2003-C3 Servicer nor the GMACCM 2003-C3 Special Servicer will
be permitted to (i) accelerate the AFR/Bank of America Portfolio Whole Loan,
(ii) treat such event of default as such for purposes of transferring the
AFR/Bank of America Portfolio Whole Loan to special servicing, or (iii) commence
foreclosure proceedings. The holder of the AFR/Bank of America Portfolio B Loan
will not be permitted to exercise any cure rights if it is an affiliate of the
related borrower.
Purchase Option. So long as no AFR/Bank of America Portfolio Change of
Control Event exists, the holder of the AFR/Bank of America Portfolio B Loan has
the option of purchasing the AFR/Bank of America Portfolio Loan from the Trust,
together with the AFR/Bank of America Portfolio Pari Passu Loans, at any time
after the AFR/Bank of America Portfolio Whole Loan
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becomes a specially serviced mortgage loan under the GMACCM 2003-C3 Pooling and
Servicing Agreement as a result of an event that constitutes an event of default
under the AFR/Bank of America Portfolio Whole Loan, provided that no foreclosure
sale, sale by power of sale or delivery of a deed in lieu of foreclosure with
respect to any related Mortgaged Property has occurred.
The purchase price required to be paid by the holder of the AFR/Bank of
America Portfolio B Loan will generally equal the aggregate outstanding
principal balance of the AFR/Bank of America Portfolio Senior Loans, together
with accrued and unpaid interest thereon (excluding default interest), any
unreimbursed advances, together with unreimbursed interest thereon, relating to
the AFR/Bank of America Portfolio Whole Loan, and, if such purchase price is
being paid more than 90 days after the event giving rise to the holder of the
AFR/Bank of America Portfolio B Loan's purchase, a 1% liquidation fee (which
will be paid to the GMACCM 2003-C3 Special Servicer).
Sale of Defaulted Mortgage Loan. Under the GMACCM 2003-C3 Pooling and
Servicing Agreement, if the AFR/Bank of America Portfolio Pari Passu Loan that
was deposited into the GMAC Commercial Mortgage Securities, Inc., Series 2003-C3
Mortgage Pass-Through Certificates securitization is subject to a fair value
purchase option, the option holder will also be required to purchase the other
AFR/Bank of America Portfolio Pari Passu Loans and the AFR/Bank of America
Portfolio Loan. Such option may be exercised by the majority certificateholder
of the related securitization's controlling class and German American Capital
Corporation, as mortgage loan seller under that securitization, in that order.
If such option is exercised by the majority certificateholder of the related
securitization's controlling class, then that holder will be required to
purchase the AFR/Bank of America Portfolio Loan from the Trust in connection
with the exercise of that option, unless the Controlling Class Representative
elects to purchase the AFR/Bank of America Portfolio Loan from the Trust at the
purchase price determined by the GMACCM 2003-C3 Special Servicer. If such option
is exercised by German American Capital Corporation, then such option holder
will be required to purchase the AFR/Bank of America Portfolio Loan from the
Trust in connection with the exercise of that option.
Termination of the GMACCM 2003-C3 Servicer. If an event of default has
occurred with respect to the GMACCM 2003-C3 Servicer under the GMACCM 2003-C3
Pooling and Servicing Agreement, which event of default relates to the AFR/Bank
of America Portfolio Whole Loan or, if the Certificates or any commercial
mortgage pass-through certificates issued under any other pooling and servicing
agreement as to which an AFR/Bank of America Portfolio Pari Passu Loan is
subject, have been qualified, withdrawn or downgraded because of the actions of
the GMACCM 2003-C3 Servicer with respect to the AFR/Bank of America Portfolio
Whole Loan, then the Controlling Class Representative or such holder of an
AFR/Bank of America Portfolio Pari Passu Loan (or its designee), as applicable,
will be entitled to direct the GMACCM 2003-C3 Trustee to terminate the GMACCM
2003-C3 Servicer solely with respect to the AFR/Bank of America Portfolio Whole
Loan and, at the direction of the Controlling Class Representative or holder of
such AFR/Bank of America Portfolio Pari Passu Loan (or its designee), as
applicable, a successor master servicer will be appointed to service the
AFR/Bank of America Portfolio Whole Loan that assumes the obligations of the
GMACCM 2003-C3 Servicer and that meets the eligibility requirements of the
GMACCM 2003-C3 Pooling and Servicing Agreement and the related pooling and
servicing agreement.
Termination of GMACCM 2003-C3 Special Servicer. So long as no AFR/Bank of
America Portfolio Change of Control Event has occurred and is continuing, the
holder of the AFR/Bank of America Portfolio B Loan is permitted to terminate, at
its expense, the GMACCM 2003-C3 Special Servicer for the AFR/Bank of America
Portfolio Whole Loan at any time with or without cause, and to appoint a
replacement special servicer, subject to satisfaction of the conditions
contained in the GMACCM 2003-C3 Pooling and Servicing Agreement. If an AFR/Bank
of America Portfolio Change of Control Event exists, the holders of the AFR/Bank
of America Portfolio Senior Loans (or their designees) then holding a majority
of the outstanding principal
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balance of the AFR/Bank of America Portfolio Senior Loans will be entitled to
exercise this right and if such holders are not able to agree on such
appointment and removal within 60 days after receipt of notice, then the
majority certificateholder of the controlling class under the GMACCM 2003-C3
Pooling and Servicing Agreement will be entitled to appoint a replacement
special servicer.
Exercise of Rights of Holders of AFR/Bank of America Portfolio B Loan. The
AFR/Bank of America Portfolio B Loan has been deposited into the commercial
mortgage securitization trust created under the GMACCM 2003-C3 Pooling and
Servicing Agreement. All rights of the holder of the AFR/Bank of America
Portfolio B Loan will initially be exercised by the controlling class of the
separate series of commercial mortgage pass-through certificates backed by the
AFR/Bank of America Portfolio B Loan.
Such rights will terminate and will be exercised by the holders of the
AFR/Bank of America Portfolio Senior Loans (as described above) at any time that
an "AFR/Bank of America Portfolio Change of Control Event" has occurred and is
continuing. An AFR/Bank of America Portfolio Change of Control Event will be
deemed to have occurred and be continuing if the initial principal balance of
the AFR/Bank of America Portfolio B Loan, as reduced by any payments of
principal (whether as scheduled amortization, principal prepayments or
otherwise) allocated to the AFR/Bank of America Portfolio B Loan, appraisal
reduction amounts and any realized losses allocated to the AFR/Bank of America
Portfolio B Loan, is less than 25% of the initial principal balance of the
AFR/Bank of America Portfolio B Loan, as reduced by any payments of principal
(whether as scheduled amortization, principal prepayments or otherwise allocated
to the AFR/Bank of America Portfolio B Loan).
The AFR/Bank of America Portfolio Loan is referred to as such in this
prospectus supplement because it is secured by Mortgaged Properties at which
Bank of America is a tenant.
THE SAKS, INC.-NORTH RIVERSIDE LOAN
With respect to the Mortgage Loan known as the "Saks, Inc.-North Riverside"
loan (the "Saks, Inc.-North Riverside Loan"), representing approximately 0.63%
of the Initial Outstanding Pool Balance and 0.78% of the Initial Loan Group 1
Balance and with a Cut-off Date Balance of $8,372,716, the related Mortgaged
Property also secures one other mortgage loan (the "Saks, Inc.-North Riverside B
Loan" and, together with the Saks, Inc.-North Riverside Loan, the "Saks,
Inc.-North Riverside Whole Loan"). The Saks, Inc.-North Riverside B Loan is
subordinate in right of payment to the Saks, Inc.-North Riverside Loan and has a
Cut-off Date Balance of $4,924,759. The Saks, Inc.-North Riverside Loan is a
fully amortizing loan with a maturity date on January 1, 2024. The Saks,
Inc.-North Riverside B Loan is an interest-only balloon loan with a maturity
date on January 1, 2024. The Saks, Inc.-North Riverside Loan and the Saks,
Inc.-North Riverside B Loan have the same interest rate. Only the Saks,
Inc.-North Riverside Loan is included in the Trust. The Saks, Inc.-North
Riverside B Loan is not an asset of the Trust. The Saks, Inc.-North Riverside B
Loan is currently owned by an affiliate of GACC, one of the mortgage loan
sellers, and may be sold or transferred at any time (subject to compliance with
the terms of the related intercreditor agreement).
For the purpose of the information presented elsewhere in this prospectus
supplement with respect to the Saks, Inc.-North Riverside Loan, the debt service
coverage ratio and loan-to-value ratio reflect the indebtedness evidenced by the
Saks, Inc.-North Riverside Loan, but not the Saks, Inc.-North Riverside B Loan.
The debt service coverage ratio and the loan-to-value ratio for the Saks,
Inc.-North Riverside Whole Loan as of the Cut-off Date are 1.00x and 98.39%,
respectively.
General. The Saks, Inc.-North Riverside Loan and the Saks, Inc.-North
Riverside B Loan will be serviced pursuant to the Pooling and Servicing
Agreement. The Servicer or the Trustee, as applicable, will be obligated to make
any required P&I Advances on the Saks, Inc.-North Riverside Loan unless the
Servicer, the Special Servicer or the Trustee, as applicable,
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determines that such an advance would not be recoverable from collections on the
Saks, Inc.-North Riverside Whole Loan. Neither the Servicer nor the Trustee will
be required to make P&I Advances with respect to the Saks, Inc.-North Riverside
B Loan.
Distributions. The holders of the Saks, Inc.-North Riverside Loan and the
Saks, Inc.-North Riverside B Loan have entered into an intercreditor agreement
that sets forth the respective rights of each of the holders of the Saks,
Inc.-North Riverside Whole Loan and provides, in general, that:
o prior to the occurrence and continuance of a monetary event of default
or material non-monetary event of default (or if such event of default
has occurred and is continuing, subject in each case to the cure
rights of the holder of the Saks, Inc.-North Riverside B Loan, as
described below):
o the holder of the Saks, Inc.-North Riverside B Loan will
generally be entitled to receive its scheduled interest payments
after the holder of the Saks, Inc.-North Riverside Loan receives
its scheduled interest payments (other than default interest) and
after any advances in respect of the Saks, Inc.-North Riverside
Loan and the Saks, Inc.-North Riverside B Loan are repaid in
full;
o the holder of the Saks, Inc.-North Riverside Loan will be
entitled to receive all scheduled payments of principal on the
Saks, Inc.-North Riverside Whole Loan and all voluntary and
involuntary prepayments on the Saks, Inc.-North Riverside Whole
Loan until the principal balance of the Saks, Inc.-North
Riverside Loan is paid in full; and
o the holder of the Saks, Inc.-North Riverside B Loan will be
entitled to receive the scheduled balloon payment at maturity;
and
o upon the occurrence and continuance of a monetary event of default or
material non-monetary event of default, so long as the holder of the
Saks, Inc.-North Riverside B Loan is not exercising its cure rights,
the holder of the Saks, Inc.-North Riverside B Loan will not be
entitled to receive payments of principal and interest until the
holder of the Saks, Inc.-North Riverside Loan receives all of its
accrued scheduled interest and outstanding principal in full.
RVI Policy. The borrower under the Saks, Inc.-North Riverside Whole Loan
has obtained a residual value insurance, or RVI, policy. The RVI policy provides
that, upon the maturity of the Saks, Inc.-North Riverside Whole Loan, if such
borrower does not pay the scheduled balloon payment and all other amounts
payable under the Saks, Inc.-North Riverside Whole Loan, the provider of the RVI
policy will be required, subject to certain exclusions from coverage, to pay an
amount equal to any such remaining indebtedness up to $4,932,024, which equals
the insured value of the related Mortgaged Property. This amount is at least
equal to the amount of the scheduled balloon payment due on the Saks, Inc.-North
Riverside B Loan. The RVI policy only supports payments on the Saks, Inc.-North
Riverside B Loan and is not available for payments on the Saks, Inc.-North
Riverside Loan.
RIGHTS OF THE HOLDER OF THE SAKS, INC.-NORTH RIVERSIDE B LOAN
Consultation and Consent. Unless a Saks, Inc.-North Riverside Change of
Control Event has occurred and is continuing or the holder of the Saks,
Inc.-North Riverside B Loan is an affiliate of the borrower, then (i) the
Special Servicer will be required to consult with the holder of the Saks,
Inc.-North Riverside B Loan upon the occurrence of any event of default for the
Saks, Inc.-North Riverside Loan under the related Mortgage Loan Documents, to
consider alternative actions recommended by the holder of the Saks, Inc.-North
Riverside B Loan and to consult with the holder of the Saks, Inc.-North
Riverside B Loan with respect to certain determinations made by the Special
Servicer pursuant to the Pooling and Servicing Agreement, (ii) at any time
(whether or not an event of default for such mortgage loan under the related
Mortgage Loan Documents has occurred) the Servicer and the Special Servicer will
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be required to consult with the holder of the Saks, Inc.-North Riverside B Loan
(1) with respect to proposals to take any significant action with respect to the
Saks, Inc.-North Riverside Whole Loan and the related Mortgaged Property and to
consider alternative actions recommended by the holder of the Saks, Inc.-North
Riverside B Loan and (2) to the extent that the related Mortgage Loan Documents
grant the lender the right to approve budgets for the related Mortgaged
Property, prior to approving any such budget and (iii) prior to taking any of
the following actions with respect to the Saks, Inc.-North Riverside Whole Loan,
the Servicer and the Special Servicer will be required to notify in writing to
the holder of the Saks, Inc.-North Riverside B Loan of any proposal to take any
of such actions (and to provide the holder of the Saks, Inc.-North Riverside B
Loan with such information reasonably requested as may be necessary in the
reasonable judgment of the holder of the Saks, Inc.-North Riverside B Loan in
order to make a judgment, the expense of providing such information to be an
expense of the requesting party) and to receive the written approval of the
holder of the Saks, Inc.-North Riverside B Loan (which approval may be withheld
in its sole discretion) with respect to:
o any modification or amendment of, or waiver with respect to any term
of the related Mortgage Loan Documents that would result in the
extension of the applicable maturity date, a reduction of the
applicable mortgage rate or Monthly Payment, any exit fee or
Prepayment Premium, or a deferral or forgiveness of interest on or
principal of the Saks, Inc.-North Riverside Whole Loan, a modification
or waiver of any other monetary term of the Saks, Inc.-North Riverside
Whole Loan relating to the timing or amount of any payment of
principal and interest (other than default interest) or a modification
or waiver of any provision which restricts the related borrower from
incurring additional indebtedness or from transferring the related
Mortgaged Property or any transfer of direct or indirect equity
interest in the borrower;
o any modification or amendment of, or waiver of any term of the Saks,
Inc.-North Riverside Whole Loan that would result in a discounted
pay-off;
o any foreclosure upon or comparable conversion (which may include
acquisitions of an REO Property) of any related Mortgaged Property or
any acquisition of such related Mortgaged Property by deed in lieu of
foreclosure;
o any proposed or actual sale of the related REO Property or the Saks,
Inc.-North Riverside Whole Loan (other than in connection with
exercise of the fair value purchase option or the termination of the
trust fund);
o any release of the related borrower, any guarantor or other obligor
from liability with respect to the Saks, Inc.-North Riverside Whole
Loan;
o any determination not to enforce a "due-on-sale" clause and/or
"due-on-encumbrance" clause (unless such clause is not exercisable
under the applicable law or such exercise is reasonably likely to
result in successful legal action by the related borrower);
o any action to bring a related Mortgaged Property, which has become an
REO Property, into compliance with applicable environmental laws or to
otherwise address hazardous materials located at such property;
o any substitution or release of collateral or acceptance of additional
collateral for the Saks, Inc.-North Riverside Whole Loan including the
release of additional collateral for the Saks, Inc.-North Riverside
Whole Loan unless required by the Mortgage Loan Documents (other than
any release made in connection with the grant of a non-material
easement or right-of-way or other non-material release such as a
"curb-cut");
o any change in the related property manager;
o any adoption or approval of a plan in a bankruptcy of the borrower;
o consenting to the execution, termination or renewal of any major lease
(to the extent the lender's approval is required under the related
Mortgage Loan Documents);
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o the approval of additional indebtedness secured by any related
Mortgaged Property, to the extent the lender's approval is required
under the related Mortgage Loan Documents; or
o any renewal or replacement of the then-existing insurance policies (to
the extent the lender's approval is required under the related
Mortgage Loan Documents) other than the RVI policy or any waiver,
modification or amendment of any insurance requirements under the
related Mortgage Loan Documents other than requirements relating to
the RVI policy;
provided, that the consent of the Saks, Inc.-North Riverside B Loan holder to
any such proposed action requiring its consent under the paragraph above will be
deemed given if the Saks, Inc.-North Riverside B Loan holder fails to notify the
Servicer of its approval or disapproval of any such proposed action within ten
business days of delivery to such holder by the Servicer of written notice of
such a proposed action, together with the information requested by the Saks,
Inc.-North Riverside B Loan holder pursuant to the Pooling and Servicing
Agreement.
Such rights will terminate and will be exercised by the Trust as holder of
the Saks, Inc.-North Riverside Loan at any time that the holder of the Saks,
Inc.-North Riverside B Loan is an affiliate of the related borrower or if a
"Saks, Inc.-North Riverside Change of Control Event" has occurred and is
continuing. A Saks, Inc.-North Riverside Change of Control Event will be deemed
to have occurred and be continuing if the initial principal balance of the Saks,
Inc.-North Riverside B Loan, as reduced by any payments of principal (whether as
scheduled amortization, principal prepayments or otherwise) allocated to the
Saks, Inc.-North Riverside B Loan, appraisal reduction amounts and any realized
losses allocated to the Saks, Inc.-North Riverside B Loan, is less than 25% of
the initial principal balance of the Saks, Inc.-North Riverside B Loan, as
reduced by any payments of principal (whether as scheduled amortization,
principal prepayments or otherwise allocated to the Saks, Inc.-North Riverside B
Loan). Upon the occurrence and continuance of a Saks, Inc.-North Riverside
Change of Control Event or if the holder of Saks, Inc.-North Riverside B Loan is
an affiliate of the related borrower, any decision to be made with respect to
the Saks, Inc.-North Riverside Whole Loan which requires the approval of the
holder of the Saks, Inc.-North Riverside B Loan will require the approval of the
Controlling Class Representative.
Notwithstanding any direction to, or approval or disapproval of, or right
to give direction to or to approve or disapprove, an action of, the Special
Servicer or the Servicer by the holder of the Saks, Inc.-North Riverside B Loan,
in no event will the Special Servicer or the Servicer be required to take any
action or refrain from taking any action which would violate any law of any
applicable jurisdiction, be inconsistent with the servicing standard under the
Pooling and Servicing Agreement, violate the REMIC provisions of the Code or
violate any other provisions of the Pooling and Servicing Agreement or the
related Mortgage Loan Documents.
Notwithstanding anything herein to the contrary, the Controlling Class
Representative will always retain the right to consult with the Servicer and the
Special Servicer regarding the Saks, Inc.-North Riverside Whole Loan.
Cure Rights. The holder of the Saks, Inc.-North Riverside B Loan generally
will have the right under the Saks, Inc.-North Riverside Whole Loan to cure any
monetary event of default and any non-monetary event of default that is capable
of being cured within 30 days. These cure rights, including the right of the
holder of the Saks, Inc.-North Riverside B Loan to cause a delay in the transfer
of the Saks, Inc.-North Riverside Whole Loan to special servicing under the
Pooling and Servicing Agreement, are subject to the limitation that there be no
more than three consecutive cures or special servicing delays, in any
combination, and no more than an aggregate of six cures or special servicing
delays in any twelve calendar month period. So long as the holder of the Saks,
Inc.-North Riverside B Loan is exercising its cure rights, neither the Servicer
nor the Special Servicer will be permitted to (i) accelerate the Saks,
Inc.-North Riverside Whole Loan, (ii) treat such event of default as such for
purposes of transferring the
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Saks, Inc.-North Riverside Whole Loan to special servicing, or (iii) commence
foreclosure proceedings. The holder of the Saks, Inc.-North Riverside B Loan
will not be permitted to exercise any cure rights if it is an affiliate of the
related borrower.
Purchase Option. The holder of the Saks, Inc.-North Riverside B Loan has
the option of purchasing the Saks, Inc.-North Riverside Loan from the trust at
any time after the Saks, Inc.-North Riverside Whole Loan becomes a specially
serviced mortgage loan under the Pooling and Servicing Agreement as a result of
an event that constitutes an event of default under the Saks, Inc.-North
Riverside Whole Loan. Notwithstanding the foregoing, no such purchase option may
be exercised if a foreclosure or comparable conversion of the related Mortgaged
Property has occurred.
The purchase price required to be paid by the holder of the Saks,
Inc.-North Riverside B Loan will generally equal the outstanding principal
balance of the Saks, Inc.-North Riverside Loan, together with accrued and unpaid
interest thereon (excluding default interest), all accrued and unpaid servicing
compensation, special servicing compensation and any accrued and unpaid
advances, together with interest thereon relating to the Saks, Inc.-North
Riverside Whole Loan (other than interest on advances payable to the holder of
the Saks, Inc.-North Riverside B Loan), and, if such purchase price is being
paid more than 90 days after the event giving rise to the holder of the Saks,
Inc.-North Riverside B Loan's purchase, a 1% liquidation fee.
ARD LOANS
Two mortgage loans (the "ARD Loans"), representing 9.54% of the outstanding
pool balance and 11.89% of the Loan Group 1 balance, as of the Cut-off Date,
provide that if, after a certain date (each, an "Anticipated Repayment Date"),
the borrower has not prepaid such Mortgage Loan in full, any principal
outstanding on that date will accrue interest at an increased interest rate (the
"Revised Rate") rather than the stated Mortgage Rate (the "Initial Rate"). With
respect to the Mortgage Loan known as "Eckerd-Peoria" loan and the 731 Lexington
Avenue-Bloomberg Headquarters Loan, the Anticipated Repayment Date for each such
Mortgage Loan is approximately 120 months, after the origination date for such
Mortgage Loan. The Revised Rate for each of the ARD Loans is equal to the
Initial Rate plus 2% per annum. After its Anticipated Repayment Date, each ARD
Loan further requires that all cash flow available from the related Mortgaged
Property, after payment of the constant periodic payment required under the
terms of the related Mortgage Loan Documents and all escrows and property
expenses required under the related Mortgage Loan Documents, be used to
accelerate amortization of principal on that ARD Loan. While interest at the
Initial Rate continues to accrue and be payable on a current basis on each ARD
Loan after its Anticipated Repayment Date, the payment of interest at the excess
of the Revised Rate over the Initial Rate for the ARD Loans will be deferred and
will be required to be paid, with interest, only after the outstanding principal
balance of that ARD Loan (or, with respect to the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan, the principal balance of such Whole Loan) has been paid
in full. The foregoing features, to the extent applicable, are designed to
increase the likelihood that each ARD Loan will be prepaid by the respective
borrower on or about its Anticipated Repayment Date. There can be no assurance
that any borrower will prepay the related ARD Loan on its Anticipated Repayment
Date.
ADDITIONAL LOAN INFORMATION
General. The following tables set forth certain information with respect to
the Mortgage Loans and Mortgaged Properties. Such information is presented,
where applicable, as of the Cut-off Date for each Mortgage Loan, as adjusted for
the scheduled principal payments due on the Mortgage Loans on or before the
Cut-off Date. The statistics in such schedule and tables were derived, in many
cases, from information and operating statements furnished by or on behalf of
the respective borrowers. Such information and operating statements were
generally
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unaudited and have not been independently verified by the Depositor, the
applicable Mortgage Loan Seller or the Underwriters or any of their respective
affiliates or any other person. The sum of the amounts in any column of any of
the following tables or of Annex A-1 and Annex A-2 to this prospectus supplement
may not equal the indicated total under such column due to rounding.
Net income for a Mortgaged Property as determined in accordance with
generally accepted accounting principles ("GAAP") is not the same as the stated
Underwritten Net Cash Flow for such Mortgaged Property as set forth in the
following schedule or tables. In addition, Underwritten Net Cash Flow is not a
substitute for, or comparable to, operating income (as determined in accordance
with GAAP) as a measure of the results of a property's operations or a
substitute for cash flows from operating activities (determined in accordance
with GAAP) as a measure of liquidity. No representation is made as to the future
net cash flow of the Mortgaged Properties, nor is the Underwritten Net Cash Flow
set forth herein with respect to any Mortgaged Property intended to represent
such future net cash flow.
Definitions. For purposes of this prospectus supplement, including the
following tables and Annex A-1 and Annex A-2 to this prospectus supplement, the
indicated terms have the following meanings:
1. "Underwritten Net Cash Flow," "Underwritten NCF" or "UW NCF," with
respect to any Mortgaged Property, means an estimate of cash flow available
for debt service in a typical year of stable, normal operations as
determined by the related Mortgage Loan Seller. In general, it is the
estimated revenue derived from the use and operation of such Mortgaged
Property less the sum of (a) estimated operating expenses (such as
utilities, administrative expenses, repairs and maintenance, management and
franchise fees and advertising), (b) estimated fixed expenses (such as
insurance, real estate taxes and, if applicable, ground lease payments),
(c) estimated capital expenditures and reserves for capital expenditures,
including tenant improvement costs and leasing commissions, as applicable,
and (d) an allowance for vacancies and losses. Underwritten Net Cash Flow
generally does not reflect interest expense and non-cash items such as
depreciation and amortization. The Underwritten Net Cash Flow for each
Mortgaged Property is calculated on the basis of numerous assumptions and
subjective judgments, which, if ultimately proven erroneous, could cause
the actual net cash flow for such Mortgaged Property to differ materially
from the Underwritten Net Cash Flow set forth herein. Certain of such
assumptions and subjective judgments of each Mortgage Loan Seller relate to
future events, conditions and circumstances, including future expense
levels, the re-leasing of vacant space and the continued leasing of
occupied space, which will be affected by a variety of complex factors over
which none of the Depositor, the applicable Mortgage Loan Seller or the
Servicer have control. In some cases, the Underwritten Net Cash Flow set
forth herein for any Mortgaged Property is higher, and may be materially
higher, than the annual net cash flow for such Mortgaged Property based on
historical operating statements.
In determining Underwritten Net Cash Flow for a Mortgaged Property,
the applicable Mortgage Loan Seller generally relied on rent rolls and/or
other generally unaudited financial information provided by the respective
borrowers; in some cases, the appraisal and/or local market information was
the primary basis for the determination. From that information, the
applicable Mortgage Loan Seller calculated stabilized estimates of cash
flow that took into consideration historical financial statements (where
available), material changes in the operating position of a Mortgaged
Property of which the applicable Mortgage Loan Seller was aware (e.g.,
current rent roll information including newly signed leases, near term
market rent steps, expirations of "free rent" periods, market rents, and
market vacancy data), and estimated capital expenditures, leasing
commission and tenant improvement reserves. In certain cases, the
applicable Mortgage Loan Seller's estimate of Underwritten Net Cash Flow
reflected differences from the information contained in the operating
statements obtained from the respective borrowers (resulting in either an
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increase or decrease in the estimate of Underwritten Net Cash Flow derived
therefrom) based upon the applicable Mortgage Loan Seller's own analysis of
such operating statements and the assumptions applied by the respective
borrowers in preparing such statements and information. In certain
instances, for example, property management fees and other expenses may
have been taken into account in the calculation of Underwritten Net Cash
Flow even though such expenses may not have been reflected in actual
historic operating statements. In most of those cases, the information was
annualized, with some exceptions, before using it as a basis for the
determination of Underwritten Net Cash Flow. No assurance can be given with
respect to the accuracy of the information provided by any borrowers, or
the adequacy of the procedures used by any Mortgage Loan Seller in
determining the presented operating information.
2. "Annual Debt Service" generally means, for any Mortgage Loan, 12
times the monthly payment in effect as of the Cut-off Date for such
Mortgage Loan or, for certain Mortgage Loans that pay interest only for a
period of time, 12 times the monthly payment of principal and interest as
of the date immediately following the expiration of such interest only
period.
3. "UW NCF DSCR," "Underwritten NCF DSCR," "Debt Service Coverage
Ratio" or "DSCR" means, with respect to any Mortgage Loan, (a) the
Underwritten Net Cash Flow for the related Mortgaged Property, divided by
(b) the Annual Debt Service for such Mortgage Loan.
For purposes of calculating such amounts in the following tables and
in Annex A-1 and Annex A-2 and in the tables in Annex B to this prospectus
supplement, the Cut-off Date Balance of the following Mortgage Loans,
collectively representing approximately 3.61% of the Initial Outstanding
Pool Balance, 1.59% of the Initial Loan Group 1 Balance and 11.82% of the
Initial Loan Group 2 Balance, has been reduced by the following holdback
amounts: (i) with respect to the Mortgage Loan known as "The Arboretum" by
$205,000 and; (ii) with respect to the Mortgage Loan known as "Wiener
Portfolio VII" by $700,000.
In the case of the Garden State Plaza Loan, the 731 Lexington
Avenue-Bloomberg Headquarters Loan, the DDR-Macquarie Portfolio Loan, the
Tysons Corner Center Loan, the AFR/Bank of America Portfolio Loan and the
Saks, Inc.-North Riverside Loan, please refer to the Footnotes to Annex A-1
for more detailed information regarding the calculation of DSCRs for such
Mortgage Loans.
In general, 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 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. If a property does not
possess a stable operating expectancy (for instance, if it is subject to
material leases that are scheduled to expire during the loan term and that
provide for above-market rents and/or that may be difficult to replace), a
debt service coverage ratio may not be a reliable indicator of a property's
ability to service the mortgage debt over the entire remaining loan term.
The Underwritten NCF DSCRs are presented herein for illustrative purposes
only and, as discussed above, are limited in their usefulness in assessing
the current, or predicting the future, ability of a Mortgaged Property to
generate sufficient cash flow to repay the related Mortgage Loan.
Accordingly, no assurance can be given, and no representation is made, that
the Underwritten NCF DSCRs accurately reflects that ability.
4. "Appraised Value" means, for any Mortgaged Property, the
appraiser's adjusted value as stated in the most recent third party
appraisal available to the Depositor. In certain cases, the appraiser's
adjusted value takes into account certain repairs or stabilization of
operations. In certain cases in which the appraiser assumed the completion
of repairs, such repairs were, in general, either completed prior to the
appraisal date or
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the applicable Mortgage Loan Seller has taken reserves sufficient to
complete such repairs. No representation is made that any such value would
approximate either the value that would be determined in a current
appraisal of the related Mortgaged Property or the amount that would be
realized upon a sale.
5. "Cut-off Date Loan-to-Value Ratio," "Loan-to-Value Ratio," "Cut-off
Date LTV," "Cut-off Date LTV Ratio," "Current LTV," or "LTV" means, with
respect to any Mortgage Loan, (a) the Cut-off Date Balance of such Mortgage
Loan divided (b) by the Appraised Value of the related Mortgaged Property
or Mortgaged Properties.
For purposes of calculating such amounts in the following tables and
in Annex A-1 and Annex A-2 and in the tables in Annex B to this prospectus
supplement, the Cut-off Date Balance of the following Mortgage Loans,
collectively representing approximately 3.61% of the Initial Outstanding
Pool Balance, 1.59% of the Initial Loan Group 1 Balance and 11.82% of the
Initial Loan Group 2 Balance, has been reduced by the following holdback
amounts: (i) with respect to the Mortgage Loan known as "The Arboretum," by
$205,000; and (ii) with respect to the Mortgage Loan known as "Wiener
Portfolio VII," by $700,000.
In the case of the Garden State Plaza Loan, the Lexington
Avenue-Bloomberg Headquarters Loan, the DDR-Macquarie Portfolio Loan, the
Tysons Corner Center Loan, the AFR/Bank of America Portfolio Loan and the
Saks, Inc.-North Riverside Loan, please refer to the Footnotes to Annex A-1
for more detailed information regarding the calculation of the
Loan-to-Value ratios for such Mortgage Loans.
6. "Square Feet" or "Sq. Ft." means, in the case of a Mortgaged
Property operated as a retail center, office, industrial/warehouse
facility, combination retail office facility or other special purpose
property, the square footage of the net rentable or leasable area.
7. "Units," "Rooms" or "Pads" means: (a) in the case of a Mortgaged
Property operated as multifamily housing, the number of apartments,
regardless of the size of or number of rooms in such apartment, and (b) in
the case of a Mortgaged Property operated as a manufactured housing
property, the number of manufactured home properties.
8. "Occupancy Rate" means the percentage of Square Feet or Units, as
the case may be, of a Mortgaged Property that was occupied or leased or, in
the case of certain properties, average units so occupied over a specified
period, as of a specified date (identified on Annex A-1 to this prospectus
supplement as the "Occupancy As-of Date") or as specified by the borrower
or as derived from the Mortgaged Property's rent rolls, operating
statements or appraisals or as determined by a site inspection of such
Mortgaged Property. Information on Annex A-1 to this prospectus supplement
concerning the "Largest Tenant" is presented as of the same date as of
which the Occupancy Rate is specified.
9. "Balloon Balance" means, with respect to any Balloon Loan, the
principal amount that will be due at maturity for such Balloon Loan.
10. "LTV Ratio at Maturity" means, with respect to any Balloon Loan,
(a) the Balloon Balance for such Mortgage Loan or with respect to any ARD
Loan, its outstanding principal balance as of the related Anticipated
Repayment Date divided by (b) the Appraised Value of the related Mortgaged
Property.
In the case of the Garden State Plaza Loan, the 731 Lexington
Avenue-Bloomberg Headquarters Loan, the DDR-Macquarie Portfolio Loan, the
Tysons Corner Center Loan, the AFR/Bank of America Portfolio Loan and the
Saks, Inc.-North Riverside Loan, please refer to the Footnotes to Annex A-1
for more detailed information regarding the calculation of Loan-to-Value
Ratios for such Mortgage Loans.
11. "Mortgage Rate" or "Interest Rate" means, with respect to any
Mortgage Loan, the Mortgage Rate in effect as of the Cut-off Date for such
Mortgage Loan.
S-112
12. "Servicing Fee Rate" for each Mortgage Loan is the percentage rate
per annum set forth in Annex A-1 for such Mortgage Loan that is payable in
respect of the administration of such Mortgage Loan (which includes the
Master Servicing Fee Rate, Trustee Fee Rate, Bond Administrator Fee Rate
and the primary fee rate (the servicing fee rate paid to the primary
servicer), if any).
13. "Term to Maturity" means, with respect to any Mortgage Loan, the
remaining term, in months, from the Cut-off Date for such Mortgage Loan to
the related maturity date or the Anticipated Repayment Date, as applicable.
14. "GLA" means gross leasable area.
15. "U/W Revenue" means, with respect to any Mortgage Loan, the gross
potential rent, less vacancies and collection loss.
16. "NRA" means net rentable area.
S-113
RANGE OF CUT-OFF DATE BALANCES--ALL MORTGAGE LOANS
WEIGHTED AVERAGE
-----------------------------------------------------
% OF STATED
NUMBER OF AGGREGATE OUTSTANDING REMAINING
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE INITIAL POOL MORTGAGE TERM CUT-OFF DATE
BALANCES LOANS BALANCE BALANCE RATE (MOS.) DSCR(1)(2) LTV RATIO (1)(2)
- ------------------------------- ----------- ----------------- -------------- ---------- ---------- ------------ ------------------
$998,111 - $1,999,999.......... 13 $ 20,422,039 1.52% 5.854% 111 1.50x 69.48%
$2,000,000 - $2,999,999........ 12 29,383,023 2.19 5.823% 129 1.47x 67.41%
$3,000,000 - $3,999,999........ 12 42,962,652 3.21 5.818% 129 1.35x 72.03%
$4,000,000 - $5,999,999........ 15 71,236,004 5.32 5.439% 112 1.39x 73.65%
$6,000,000 - $6,999,999........ 7 43,723,535 3.26 5.746% 118 1.45x 74.08%
$7,000,000 - $9,999,999........ 6 51,488,357 3.84 5.643% 123 1.38x 72.05%
$10,000,000 - $14,999,999...... 5 57,140,000 4.27 5.495% 102 1.29x 74.47%
$15,000,000 - $29,999,999...... 12 234,018,646 17.47 5.379% 104 1.39x 72.87%
$30,000,000 - $49,999,999...... 7 280,622,735 20.95 5.376% 109 1.36x 73.62%
$50,000,000 - $69,999,999...... 3 178,500,000 13.33 5.320% 119 1.54x 67.50%
$70,000,000 - $130,000,000..... 3 330,000,000 24.64 4.931% 105 2.31x 55.54%
-- -------------- ------
TOTAL/WEIGHTED AVERAGE ........ 95 $1,339,496,992 100.00% 5.321% 110 1.63X 67.96%
== ============== ======
WEIGHTED AVERAGE
----------------
RANGE OF CUT-OFF DATE LTV RATIO
BALANCES AT MATURITY (2)
- ------------------------------- ----------------
$998,111 - $1,999,999.......... 58.22%
$2,000,000 - $2,999,999........ 47.91%
$3,000,000 - $3,999,999........ 53.81%
$4,000,000 - $5,999,999........ 60.46%
$6,000,000 - $6,999,999........ 57.06%
$7,000,000 - $9,999,999........ 54.02%
$10,000,000 - $14,999,999...... 64.62%
$15,000,000 - $29,999,999...... 64.45%
$30,000,000 - $49,999,999...... 63.16%
$50,000,000 - $69,999,999...... 57.24%
$70,000,000 - $130,000,000..... 49.22%
TOTAL/WEIGHTED AVERAGE ........ 57.82%
(1) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF CUT-OFF DATE BALANCES--LOAN GROUP 1
WEIGHTED AVERAGE
--------------------------------------------------------
NUMBER OF AGGREGATE % OF LOAN STATED
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE
BALANCES LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR (1)(2) LTV RATIO (1)(2)
- ------------------------------- ----------- ----------------- ----------- ---------- ------------- ------------- -----------------
$998,111 - $1,999,999.......... 6 $ 9,244,395 0.86% 6.016% 115 1.59x 63.41%
$2,000,000 - $2,999,999........ 8 19,690,881 1.83 5.904% 134 1.49x 66.13%
$3,000,000 - $3,999,999........ 8 28,525,232 2.65 5.905% 135 1.32x 70.07%
$4,000,000 - $5,999,999........ 9 43,483,845 4.04 5.408% 114 1.47x 70.90%
$6,000,000 - $6,999,999........ 4 25,241,357 2.35 5.697% 103 1.35x 75.63%
$7,000,000 - $9,999,999........ 3 25,372,716 2.36 6.048% 158 1.47x 69.48%
$10,000,000 - $14,999,999...... 2 21,300,000 1.98 5.729% 103 1.31x 71.06%
$15,000,000 - $29,999,999...... 9 178,808,646 16.63 5.510% 99 1.40x 71.29%
$30,000,000 - $49,999,999...... 5 214,847,735 19.99 5.523% 114 1.40x 72.51%
$50,000,000 - $69,999,999...... 3 178,500,000 16.60 5.320% 119 1.54x 67.50%
$70,000,000 - $130,000,000..... 3 330,000,000 30.70 4.931% 105 2.31x 55.54%
- -------------- ------
TOTAL/WEIGHTED AVERAGE ........ 60 $1,075,014,808 100.00% 5.343% 111 1.71X 65.91%
== ============== ======
WEIGHTED AVERAGE
----------------
RANGE OF CUT-OFF DATE LTV RATIO
BALANCES AT MATURITY (2)
- ------------------------------- ----------------
$998,111 - $1,999,999.......... 51.97%
$2,000,000 - $2,999,999........ 42.55%
$3,000,000 - $3,999,999........ 49.43%
$4,000,000 - $5,999,999........ 56.23%
$6,000,000 - $6,999,999........ 66.05%
$7,000,000 - $9,999,999........ 40.91%
$10,000,000 - $14,999,999...... 59.63%
$15,000,000 - $29,999,999...... 63.74%
$30,000,000 - $49,999,999...... 60.94%
$50,000,000 - $69,999,999...... 57.24%
$70,000,000 - $130,000,000..... 49.22%
TOTAL/WEIGHTED AVERAGE ........ 55.90%
(1) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date.
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF CUT-OFF DATE BALANCES--LOAN GROUP 2
WEIGHTED AVERAGE
----------------------------------------------------------------
NUMBER OF AGGREGATE % OF LOAN STATED
RANGE OF CUT-OFF DATE BAL- MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
ANCES LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR (1) LTV RATIO (1) AT MATURITY
- ---------------------------- ----------- -------------- ----------- ---------- ------------- ---------- --------------- ------------
$1,322,911 - $1,999,999..... 7 $ 11,177,644 4.23% 5.721% 108 1.43x 74.50% 63.40%
$2,000,000 - $2,999,999..... 4 9,692,142 3.66 5.659% 119 1.44x 70.03% 58.79%
$3,000,000 - $3,999,999..... 4 14,437,420 5.46 5.644% 119 1.42x 75.90% 62.46%
$4,000,000 - $5,999,999..... 6 27,752,160 10.49 5.486% 108 1.28x 77.97% 67.09%
$6,000,000 - $6,999,999..... 3 18,482,178 6.99 5.813% 138 1.58x 71.97% 44.77%
$7,000,000 - $9,999,999..... 3 26,115,641 9.87 5.251% 89 1.30x 74.54% 66.75%
$10,000,000 - $14,999,999... 3 35,840,000 13.55 5.355% 101 1.27x 76.49% 67.59%
$15,000,000 - $29,999,999... 3 55,210,000 20.87 4.954% 120 1.37x 77.98% 66.75%
$30,000,000 - $34,500,000... 2 65,775,000 24.87 4.897% 91 1.22x 77.24% 70.44%
-- ------------ ------
TOTAL/WEIGHTED AVERAGE ..... 35 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
(1) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
S-114
TYPE OF MORTGAGED PROPERTIES--ALL MORTGAGE LOANS(1)
% OF CUT-OFF DATE
NUMBER OF AGGREGATE OUTSTANDING NUMBER BALANCE PER
MORTGAGED CUT-OFF DATE INITIAL POOL OF UNITS # OF UNITS
PROPERTY TYPE PROPERTIES BALANCE BALANCE OR NRA OR NRA
- ------------------------------- ------------ ----------------------- -------------- ------------ --------------
Office ........................ 133 $ 523,162,803 39.06% 11,416,052 $ 45.83
Retail ........................ 34 424,076,365 31.66 7,477,799 $ 56.71
Anchored ..................... 27 397,599,361 29.68 7,165,101 $ 55.49
Unanchored ................... 5 14,260,847 1.06 117,588 $ 121.28
CTL .......................... 2 12,216,157 0.91 195,110 $ 62.61
Multifamily ................... 51 295,586,787 22.07 7,424 $ 39,815.03
Multifamily .................. 41 267,291,789 19.95 5,207 $ 51,333.16
Manufactured Housing ......... 10 28,294,999 2.11 2,217 $ 12,762.74
Industrial .................... 10 74,525,000 5.56 2,426,397 $ 30.71
Mixed Use ..................... 38 16,978,797 1.27 508,407 $ 33.40
Self Storage .................. 1 5,182,311 0.39 933 $ 5,554.46
--- ---------------- ------
TOTAL/AVERAGE/WEIGHTED
AVERAGE ...................... 267 $ 1,339,512,064(2) 100.00% 21,837,012 $ 61.34
=== ================== ======
WEIGHTED AVERAGE
--------------------------------------------------------------------------------
STATED
REMAINING
MORTGAGE TERM CUT-OFF DATE LTV RATIO
PROPERTY TYPE RATE (MOS.) OCCUPANCY DSCR(3)(4) LTV RATIO(3)(4) AT MATURITY(4)
- ------------------------------- ---------- ---------- ----------- ------------ ----------------- ---------------
Office ........................ 5.491% 109 96.21% 1.42x 68.33% 56.76%
Retail ........................ 5.102% 113 97.28% 2.17x 60.08% 53.40%
Anchored ..................... 5.033% 109 97.10% 2.21x 59.64% 54.94%
Unanchored ................... 5.548% 120 100.00% 1.52x 67.70% 56.20%
CTL .......................... 6.811% 244 100.00% 1.39x 65.32% --%
Multifamily ................... 5.285% 106 93.16% 1.32x 76.32% 65.70%
Multifamily .................. 5.236% 105 93.73% 1.32x 76.21% 65.70%
Manufactured Housing ......... 5.749% 110 87.69% 1.36x 77.36% 65.69%
Industrial .................... 5.489% 120 87.10% 1.34x 75.13% 59.74%
Mixed Use ..................... 5.377% 119 99.23 1.44x 77.27% 64.37%
Self Storage .................. 5.600% 119 77.10% 1.51x 64.78% 28.47%
TOTAL/AVERAGE/WEIGHTED
AVERAGE ...................... 5.321% 110 95.33% 1.63X 67.96% 57.82%
- -------
(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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised value or square footage of each
Mortgaged Property and/or each Mortgaged Property's Underwritten Net Cash
Flow).
(2) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower of .76% of the aggregate initial principal balance of the
AFR/Bank of America Portfolio Whole Loan, which amount reflects 110% of
the allocated loan amount of each of the two properties released.
(3) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(4) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
TYPE OF MORTGAGED PROPERTIES--LOAN GROUP 1(1)
% OF CUT-OFF DATE
NUMBER OF AGGREGATE OUTSTANDING NUMBER BALANCE PER
MORTGAGED CUT-OFF DATE INITIAL GROUP 1 OF UNITS # OF UNITS
PROPERTY TYPE PROPERTIES BALANCE BALANCE(2) OR NRA OR NRA
- ------------------------------- ------------ ----------------------- ----------------- ------------ --------------
Office ........................ 133 $ 523,162,803 48.66% 11,416,052 $ 45.83
Retail ........................ 34 424,076,365 39.45 7,477,799 $ 56.71
Anchored ..................... 27 397,599,361 36.98 7,165,101 $ 55.49
Unanchored ................... 5 14,260,847 1.33 117,588 $ 121.28
CTL .......................... 2 12,216,157 1.14 195,110 $ 62.61
Multifamily ................... 8 31,104,603 2.89 1,500 $ 20,736.40
Multifamily .................. 3 15,558,409 1.45 108 $ 144,059.34
Manufactured Housing ......... 5 15,546,194 1.45 1,392 $ 11,168.24
Industrial .................... 10 74,525,000 6.93 2,426,397 $ 30.71
Mixed Use ..................... 38 16,978,797 1.58 508,407 $ 33.40
Self Storage .................. 1 5,182,311 0.48 933 $ 5,554.46
--- ---------------- ------
TOTAL/AVERAGE/WEIGHTED
AVERAGE ...................... 224 $ 1,075,029,880(2) 100.00% 21,831,088 $ 49.24
=== ================== ======
WEIGHTED AVERAGE
--------------------------------------------------------------------------------
STATED
REMAINING
MORTGAGE TERM CUT-OFF DATE LTV RATIO
PROPERTY TYPE RATE (MOS.) OCCUPANCY DSCR(3)(4) LTV RATIO(3)(4) AT MATURITY(4)
- ----------------------------------------- ---------- ----------- ------------ ----------------- ---------------
Office ........................ 5.491% 109 96.21% 1.42x 68.33% 56.76%
Retail ........................ 5.102% 113 97.28% 2.17x 60.08% 53.40%
Anchored ..................... 5.033% 109 97.10% 2.21x 59.64% 54.94%
Unanchored ................... 5.548% 120 100.00% 1.52x 67.70% 56.20%
CTL .......................... 6.811% 244 100.00% 1.39x 65.32% --
Multifamily ................... 5.706% 98 88.66% 1.32x 76.67% 66.44%
Multifamily .................. 5.512% 80 97.08% 1.28x 76.92% 68.85%
Manufactured Housing ......... 5.900% 115 80.23% 1.37x 76.42% 64.02%
Industrial .................... 5.489% 120 87.10% 1.34x 75.13% 59.74%
Mixed Use ..................... 5.377% 119 99.23% 1.44x 77.27% 64.37%
Self Storage .................. 5.600% 119 77.10% 1.51x 64.78% 28.47%
TOTAL/AVERAGE/WEIGHTED
AVERAGE ...................... 5.343% 111 95.74% 1.71X 65.91% 55.90%
- -------
(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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised value or square footage of each
Mortgaged Property and/or each Mortgaged Property's Underwritten Net Cash
Flow).
(2) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower of 0.76% of the aggregate initial principal balance of the
AFR/Bank of America Portfolio Whole Loan, which amount reflects 110% of
the allocated loan amount of each of the two properties released.
(3) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date).
(4) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are
notincluded in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
S-115
TYPE OF MORTGAGED PROPERTIES--LOAN GROUP 2(1)
% OF CUT-OFF DATE
NUMBER OF AGGREGATE OUTSTANDING NUMBER BALANCE PER
MORTGAGED CUT-OFF DATE INITIAL GROUP 2 OF UNITS # OF UNITS
PROPERTY TYPE PROPERTIES BALANCE BALANCE OR NRA OR NRA
- ------------------------------- ------------ -------------- ----------------- ---------- ---------------
Multifamily ................... 43 $264,482,184 100.00% 5,924 $ 44,645.88
Multifamily .................. 38 251,733,380 95.18 5,099 $ 49,369.17
Manufactured Housing ......... 5 12,748,805 4.82 825 $ 15,453.10
Total/Average/Weighted
Average ...................... 43 $264,482,184 100.00% 5,924 $ 44,645.88
WEIGHTED AVERAGE
--------------------------------------------------------------------------
STATED
MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
PROPERTY TYPE RATE TERM (MOS.) OCCUPANCY DSCR(2) LTV RATIO(2) AT MATURITY
- ------------------------------- ---------- ------------- ----------- --------- -------------- ------------
Multifamily ................... 5.235% 107 93.68% 1.33x 76.28% 65.61%
Multifamily .................. 5.219% 107 93.53% 1.32x 76.17% 65.51%
Manufactured Housing ......... 5.564% 103 96.79% 1.35x 78.51% 67.72%
Total/Average/Weighted
Average ...................... 5.235% 107 93.68% 1.33x 76.28% 65.61%
- -------
(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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised value or square footage of each
Mortgaged Property and/or each Mortgaged Property's Underwritten Net Cash
Flow).
(2) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
S-116
MORTGAGED PROPERTIES BY STATE AND/OR LOCATION--ALL MORTGAGE LOANS
% OF WEIGHTED AVERAGES
OUTSTANDING --------------------------------------------------------------------
NUMBER OF AGGREGATE INITIAL STATED
MORTGAGE CUT-OFF DATE POOL MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
STATE/LOCATION PROPERTIES BALANCE BALANCE RATE TERM (MOS.) DSCR(4)(5) LTV RATIO(4)(5) AT MATURITY(5)
- -------------- ------------ ----------------- ------------ ---------- ------------- ------------ ----------------- ------------
New York 16 $ 259,794,984 19.39% 5.007% 101 1.74x 65.09% 53.60%
California(1) 61 191,780,922 14.32 5.516% 115 1.48x 68.11% 55.99%
N. California 16 2,774,117 0.21 5.489% 114 1.95x 47.29% 39.85%
S. California 45 189,006,806 14.11 5.516% 115 1.47x 68.42% 56.23%
New Jersey 3 158,182,311 11.81 5.138% 115 2.17x 57.38% 55.44%
Virginia 11 149,155,020 11.14 5.392% 115 1.59x 65.70% 57.79%
Texas 24 100,258,845 7.48 5.323% 118 1.36x 74.55% 62.36%
Delaware 2 61,750,000 4.61 5.099% 114 1.33x 76.13% 63.81%
Florida 38 55,037,118 4.11 5.423% 102 1.37x 71.76% 58.38%
Pennsylvania 5 53,412,326 3.99 5.238% 96 1.63x 70.69% 64.67%
Arkansas 3 47,770,050 3.57 5.748% 109 1.71x 73.65% 64.27%
Massachusetts 5 45,474,290 3.39 5.346% 120 1.34x 76.82% 61.02%
Illinois 4 24,278,547 1.81 5.859% 145 1.50x 69.04% 41.24%
Oklahoma 3 21,765,668 1.62 5.690% 85 1.26x 71.72% 66.81%
Alabama 2 20,457,476 1.53 5.715% 91 1.33x 72.59% 66.45%
Arizona 11 18,590,040 1.39 5.910% 119 1.42x 71.91% 60.87%
North Carolina 5 16,553,179 1.24 5.192% 100 2.04x 69.80% 61.23%
Connecticut 1 14,925,710 1.11 5.287% 120 1.31x 76.92% 60.69%
Tennessee 6 13,773,660 1.03 5.158% 95 2.52x 61.70% 55.84%
New Hampshire 3 12,400,000 0.93 6.115% 120 1.39x 67.62% 53.94%
Minnesota 2 11,388,135 0.85 4.479% 77 2.95x 60.77% 55.33%
Georgia 7 10,644,152 0.79 6.047% 121 1.26x 76.36% 64.86%
Maryland 4 8,322,917 0.62 4.968% 120 1.59x 66.60% 54.69%
Mississippi 3 6,882,264 0.51 6.008% 117 1.37x 78.67% 66.89%
Rhode Island 1 5,993,847 0.45 5.150% 119 1.29x 74.83% 61.89%
Washington 17 5,807,159 0.43 5.481% 118 1.72x 55.36% 46.34%
South Carolina 2 4,631,465 0.35 5.688% 117 1.22x 79.12% 66.67%
Wisconsin 2 4,295,798 0.32 5.350% 119 1.37x 78.11% 65.00%
Ohio 1 3,546,772 0.26 5.640% 119 1.37x 70.23% 58.98%
Nebraska 1 3,520,000 0.26 5.200% 84 1.38x 68.10% 61.80%
Colorado 2 3,398,111 0.25 6.418% 120 1.22x 74.82% 49.86%
Kentucky 1 2,592,201 0.19 5.440% 118 1.49x 68.49% 52.17%
Michigan 1 2,400,000 0.18 6.220% 120 1.28x 80.00% 68.28%
Missouri 13 390,447 0.03 5.489% 114 1.95x 47.29% 39.85%
New Mexico 2 134,234 0.01 5.489% 114 1.95x 47.29% 39.85%
Nevada 2 94,840 0.01 5.489% 114 1.95x 47.29% 39.85%
Kansas 2 69,306 0.01 5.489% 114 1.95x 47.29% 39.85%
Idaho 1 40,270 0.00 5.489% 114 1.95x 47.29% 39.85%
-- -------------- ------ ----- --- ---- ----- -----
Total/Weighted
Average 267 $1,339,512,064 100.00% 5.321% 110 1.63x 67.96% 57.82%
=== ============== ====== ===== === ==== ===== =====
- ---------
(1) Northern California properties have a zip code greater than or equal to
93600. Southern California properties have a zip code less than 93600.
(2) 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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised value or square footage of each
Mortgaged Property and/or each Mortgaged Property's Underwritten Net Cash
Flow).
(3) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower of 0.76% of the aggregate initial principal balance of the
AFR/Bank of America Portfolio Whole Loan, which amount reflects 110% of
the allocated loan amount of each of the two properties released.
(4) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(5) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
S-117
MORTGAGED PROPERTIES BY STATE AND/OR LOCATION--LOAN GROUP 1
% OF WEIGHTED AVERAGES
OUTSTANDING -------------------------------------------------------
NUMBER OF AGGREGATE INITIAL STATED
MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE
STATE/LOCATION PROPERTIES BALANCE BALANCE RATE TERM (MOS.) DSCR(4)(5) LTV RATIO(4)(5)
- ------------------------ ------------ ----------------------- ------------ ---------- ------------- ------------ -----------------
New York ............... 6 $ 186,674,557 17.36% 5.102% 103 1.91x 60.07%
California(1) .......... 60 182,555,922 16.98 5.506% 115 1.49x 67.97%
S. California .......... 44 179,781,806 16.72 5.506% 115 1.48x 68.29%
N. California .......... 16 2,774,117 0.26 5.489% 114 1.95x 47.29%
New Jersey ............. 3 158,182,311 14.71 5.138% 115 2.17x 57.38%
Virginia ............... 11 149,155,020 13.87 5.392% 115 1.59x 65.70%
Delaware ............... 2 61,750,000 5.74 5.099% 114 1.33x 76.13%
Pennsylvania ........... 4 51,652,326 4.80 5.196% 95 1.64x 70.79%
Arkansas ............... 3 47,770,050 4.44 5.748% 109 1.71x 73.65%
Massachusetts .......... 5 45,474,290 4.23 5.346% 120 1.34x 76.82%
Oklahoma ............... 3 21,765,668 2.02 5.690% 85 1.26x 71.72%
Alabama ................ 1 16,860,595 1.57 5.690% 85 1.26x 71.75%
Illinois ............... 3 15,867,905 1.48 6.426% 179 1.49x 64.12%
Texas .................. 16 15,382,048 1.43 5.405% 96 1.50x 67.50%
Connecticut ............ 1 14,925,710 1.39 5.287% 120 1.31x 76.92%
Arizona ................ 10 13,710,040 1.28 6.100% 118 1.45x 69.03%
Florida ................ 31 13,285,747 1.24 5.653% 167 1.67x 57.85%
New Hampshire .......... 3 12,400,000 1.15 6.115% 120 1.39x 67.62%
North Carolina ......... 3 12,319,307 1.15 5.133% 94 2.29x 66.33%
Tennessee .............. 4 10,250,749 0.95 4.771% 80 2.89x 60.94%
Maryland ............... 4 8,322,917 0.77 4.968% 120 1.59x 66.60%
Minnesota .............. 1 8,093,023 0.75 4.180% 60 3.62x 54.31%
Rhode Island ........... 1 5,993,847 0.56 5.150% 119 1.29x 74.83%
Mississippi ............ 1 4,084,708 0.38 6.150% 116 1.34x 77.80%
Ohio ................... 1 3,546,772 0.33 5.640% 119 1.37x 70.23%
Nebraska ............... 1 3,520,000 0.33 5.200% 84 1.38x 68.10%
Colorado ............... 2 3,398,111 0.32 6.418% 120 1.22x 74.82%
Kentucky ............... 1 2,592,201 0.24 5.440% 118 1.49x 68.49%
Michigan ............... 1 2,400,000 0.22 6.220% 120 1.28x 80.00%
Washington ............. 15 2,078,159 0.19 5.489% 114 1.95x 47.29%
Missouri ............... 13 390,447 0.04 5.489% 114 1.95x 47.29%
Georgia ................ 6 244,152 0.02 5.489% 114 1.95x 47.29%
New Mexico ............. 2 134,234 0.01 5.489% 114 1.95x 47.29%
Nevada ................. 2 94,840 0.01 5.489% 114 1.95x 47.29%
Kansas ................. 2 69,306 0.01 5.489% 114 1.95x 47.29%
South Carolina ......... 1 44,648 0.00 5.489% 114 1.95x 47.29%
Idaho .................. 1 40,270 0.00 5.489% 114 1.95x 47.29%
-- ---------------- ------
TOTAL/WEIGHTED
AVERAGE ............... 224 $ 1,075,029,880(3) 100.00% 5.343% 111 1.71X 65.91%
=== ================== ======
WEIGHTED AVERAGES
-----------------
LTV RATIO
STATE/LOCATION AT MATURITY(5)
- ------------------------ ---------------
New York ............... 47.67%
California(1) .......... 55.81%
S. California .......... 56.06%
N. California .......... 39.85%
New Jersey ............. 55.44%
Virginia ............... 57.79%
Delaware ............... 63.81%
Pennsylvania ........... 65.06%
Arkansas ............... 64.27%
Massachusetts .......... 61.02%
Oklahoma ............... 66.81%
Alabama ................ 66.84%
Illinois ............... 26.44%
Texas .................. 59.90%
Connecticut ............ 60.69%
Arizona ................ 58.85%
Florida ................ 22.31%
New Hampshire .......... 53.94%
North Carolina ......... 59.40%
Tennessee .............. 57.24%
Maryland ............... 54.69%
Minnesota .............. 54.31%
Rhode Island ........... 61.89%
Mississippi ............ 66.52%
Ohio ................... 58.98%
Nebraska ............... 61.80%
Colorado ............... 49.86%
Kentucky ............... 52.17%
Michigan ............... 68.28%
Washington ............. 39.85%
Missouri ............... 39.85%
Georgia ................ 39.85%
New Mexico ............. 39.85%
Nevada ................. 39.85%
Kansas ................. 39.85%
South Carolina ......... 39.85%
Idaho .................. 39.85%
TOTAL/WEIGHTED
AVERAGE ............... 55.90%
- ---------
(1) Northern California properties have a zip code greater than or equal to
93600. Southern California properties have a zip code less than 93600.
(2) 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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised value or square footage of each
Mortgaged Property and/or each Mortgaged Property's Underwritten Net Cash
Flow).
(3) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower of 0.76% of the aggregate initial principal balance of the
AFR/Bank of America Portfolio Whole Loan, which amount reflects 110% of
the allocated loan amount of each of the two properties released.
(4) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date).
(5) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are
notincluded in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
S-118
MORTGAGED PROPERTIES BY STATE AND/OR LOCATION--LOAN GROUP 2(1)
% OF WEIGHTED AVERAGES
OUTSTANDING --------------------------------------------------------------
NUMBER OF AGGREGATE INITIAL STATED
MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
STATE/LOCATION PROPERTIES BALANCE BALANCE RATE TERM (MOS.) DSCR(3) LTV RATIO(3) AT MATURITY
- ---------------------------- ------------ -------------- ------------ ---------- ------------- --------- -------------- ------------
Texas ...................... 8 $ 84,876,797 32.09% 5.309% 122 1.34x 75.83% 62.80%
New York ................... 10 73,120,427 27.65% 4.765% 94 1.31x 77.91% 68.75%
Florida .................... 7 41,751,372 15.79% 5.350% 81 1.28x 76.18% 69.86%
Georgia .................... 1 10,400,000 3.93% 6.060% 121 1.24x 77.04% 65.45%
Southern California(2). 1 9,225,000 3.49% 5.710% 121 1.20x 70.96% 59.66%
Illinois ................... 1 8,410,641 3.18% 4.788% 82 1.52x 78.31% 69.16%
Arizona .................... 1 4,880,000 1.85% 5.375% 120 1.32x 80.00% 66.56%
South Carolina ............. 1 4,586,818 1.73% 5.690% 117 1.21x 79.43% 66.93%
Wisconsin .................. 2 4,295,798 1.62% 5.350% 119 1.37x 78.11% 65.00%
North Carolina ............. 2 4,233,872 1.60% 5.364% 119 1.32x 79.88% 66.54%
Washington ................. 2 3,729,000 1.41% 5.476% 120 1.59x 59.86% 49.96%
Alabama .................... 1 3,596,881 1.36% 5.830% 119 1.65x 76.53% 64.63%
Tennessee .................. 2 3,522,911 1.33% 6.283% 142 1.43x 63.89% 51.78%
Minnesota .................. 1 3,295,112 1.25% 5.215% 119 1.32x 76.63% 57.83%
Mississippi ................ 2 2,797,555 1.06% 5.800% 119 1.42x 79.93% 67.44%
Pennsylvania ............... 1 1,760,000 0.67% 6.449% 120 1.34x 67.69% 53.20%
-- ------------ ------
TOTAL/WEIGHTED
AVERAGE ................... 43 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
- ---------
(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 (which amounts, if not specified in the related Mortgage Loan
Documents, are based on the appraised value or square footage of each
Mortgaged Property and/or each Mortgaged Property's Underwritten Net Cash
Flow).
(2) Southern California properties have a zip code less than 93600.
(3) Calculated on loan balance after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
S-119
RANGE OF DEBT SERVICE COVERAGE RATIOS AS OF THE CUT-OFF DATE--ALL MORTGAGE LOANS
% OF WEIGHTED AVERAGES
OUTSTANDING -----------------------------------------------------------------------
RANGE OF DEBT NUMBER OF AGGREGATE INITIAL STATED
SERVICE MORTGAGE CUT-OFF DATE POOL MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
COVERAGE RATIOS LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2) AT MATURITY(2)
- ----------------------------- ----------------- ------------ ---------- ------------- ------------ ----------------- ---------------
1.20x+ - 1.29x ... 29 $ 370,901,681 27.69% 5.571% 104 1.24x 75.87% 66.30%
1.30x+ - 1.39x ... 26 286,531,603 21.39 5.308% 111 1.34x 74.68% 63.02%
1.40x+ - 1.49x ... 16 278,595,417 20.80 5.434% 121 1.45x 67.75% 52.92%
1.50x+ - 1.59x ... 8 34,736,816 2.59 5.378% 110 1.53x 71.63% 57.00%
1.60x+ - 1.74x ... 7 19,943,881 1.49 5.491% 122 1.66x 63.85% 46.66%
1.75x+ - 1.99x ... 7 143,787,594 10.73 5.352% 119 1.87x 54.73% 42.83%
2.00x+ - 2.49x ... 1 130,000,000 9.71 4.980% 120 2.36x 53.21% 53.21%
2.50x+ - 3.62x ... 1 75,000,000 5.60 4.180% 60 3.62x 54.31% 54.31%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ......... 95 $1,339,496,992 100.00% 5.321% 110 1.63X 67.96% 57.82%
== ============== ======
(1) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF DEBT SERVICE COVERAGE RATIOS AS OF THE CUT-OFF DATE--LOAN GROUP 1
% OF WEIGHTED AVERAGES
OUTSTANDING -------------------------------------------------------
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF DEBT SERVICE MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE
COVERAGE RATIOS LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2)
- ---------------------- ----------- ----------------- ------------ ---------- ------------- ------------ -----------------
1.20x+ - 1.29x ....... 16 $ 231,002,008 21.49% 5.810% 108 1.25x 75.37%
1.30x+ - 1.39x ....... 17 226,525,363 21.07 5.318% 109 1.34x 74.19%
1.40x+ - 1.49x ....... 10 239,794,322 22.31 5.472% 122 1.45x 65.87%
1.50x+ - 1.59x ....... 5 21,869,175 2.03 5.526% 119 1.53x 71.76%
1.60x+ - 1.74x ....... 4 13,175,000 1.23 5.366% 131 1.68x 58.26%
1.75x+ - 1.99x ....... 6 137,648,940 12.80 5.317% 117 1.87x 54.61%
2.00x+ - 2.49x ....... 1 130,000,000 12.09 4.980% 120 2.36x 53.21%
2.50x+ - 3.62x ....... 1 75,000,000 6.98 4.180% 60 3.62x 54.31%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ............. 60 $1,075,014,808 100.00% 5.343% 111 1.71X 65.91%
== ============== ======
WEIGHTED AVERAGES
-----------------
RANGE OF DEBT SERVICE LTV RATIO
COVERAGE RATIOS AT MATURITY(2)
- ---------------------- ---------------
1.20x+ - 1.29x ....... 64.71%
1.30x+ - 1.39x ....... 62.66%
1.40x+ - 1.49x ....... 50.63%
1.50x+ - 1.59x ....... 53.91%
1.60x+ - 1.74x ....... 37.38%
1.75x+ - 1.99x ....... 44.70%
2.00x+ - 2.49x ....... 53.21%
2.50x+ - 3.62x ....... 54.31%
TOTAL/WEIGHTED 55.90%
AVERAGE .............
(1) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date.
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
S-120
RANGE OF DEBT SERVICE COVERAGE RATIOS AS OF THE CUT-OFF DATE--LOAN GROUP 2
% OF WEIGHTED AVERAGES
OUTSTANDING --------------------------------------------------------------
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF DEBT SERVICE MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
COVERAGE RATIOS LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1) LTV RATIO(1) AT MATURITY
- -------------------------- ----------- -------------- ------------ ---------- ------------- --------- -------------- ------------
1.20x+ - 1.29x ........... 13 $139,899,673 52.90% 5.177% 96 1.22x 76.68% 68.92%
1.30x+ - 1.39x ........... 9 60,006,239 22.69 5.269% 120 1.36x 76.53% 64.38%
1.40x+ - 1.49x ........... 6 38,801,095 14.67 5.199% 117 1.43x 79.35% 67.13%
1.50x+ - 1.59x ........... 3 12,867,641 4.87 5.127% 95 1.53x 71.42% 62.25%
1.60x+ - 1.74x ........... 3 6,768,881 2.56 5.733% 104 1.64x 74.73% 64.72%
1.75x+ - 1.87x ........... 1 6,138,654 2.32 6.150% 177 1.87x 57.37% 0.85%
-- ------------ ------
TOTAL/WEIGHTED
AVERAGE ................. 35 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
(1) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
RANGE OF LTV RATIOS AS OF THE CUT-OFF DATE--ALL MORTGAGE LOANS
% OF WEIGHTED AVERAGES
OUTSTANDING --------------------------------------------------------
RANGE OF LTV RATIOS NUMBER OF AGGREGATE INITIAL STATED
AS OF THE CUT-OFF MORTGAGE CUT-OFF DATE POOL MORTGAGE REMAINING CUT-OFF DATE
DATE(1)(2) LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2)
- ------------------------- ----------- ----------------- ------------ ---------- ------------- ------------ -----------------
47.29% - 49.99% ......... 2 $ 22,334,205 1.67% 5.552% 121 1.89x 47.35%
50.00% - 59.99% ......... 11 415,745,654 31.04 5.023% 109 2.21x 55.09%
60.00% - 69.99% ......... 20 166,253,554 12.41 5.437% 109 1.55x 64.90%
70.00% - 74.99% ......... 19 237,810,060 17.75 5.571% 109 1.32x 73.59%
75.00% - 79.99% ......... 40 488,593,519 36.48 5.400% 112 1.31x 77.94%
80.00% - 80.00% ......... 3 8,760,000 0.65 5.557% 120 1.30x 80.00%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ................ 95 $1,339,496,992 100.00% 5.321% 110 1.63X 67.96%
== ============== ======
WEIGHTED AVERAGES
-----------------
RANGE OF LTV RATIOS
AS OF THE CUT-OFF LTV RATIO
DATE(1)(2) AT MATURITY(2)
- ------------------------- ---------------
47.29% - 49.99% ......... 35.46%
50.00% - 59.99% ......... 47.34%
60.00% - 69.99% ......... 51.49%
70.00% - 74.99% ......... 64.12%
75.00% - 79.99% ......... 66.68%
80.00% - 80.00% ......... 67.24%
TOTAL/WEIGHTED
AVERAGE ................ 57.82%
(1) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF LTV RATIOS AS OF THE CUT-OFF DATE--LOAN GROUP 1
% OF WEIGHTED AVERAGES
OUTSTANDING --------------------------------------------------------------------
RANGE OF LTV RATIOS NUMBER OF AGGREGATE INITIAL STATED
AS OF THE CUT-OFF MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
DATE(1)(2) LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2) AT MATURITY(2)
- -------------------- ----------- ---------------- ------------ ---------- ------------- ----------- --------------- ---------------
47.29% - 49.99% .... 2 $ 22,334,205 2.08% 5.552% 121 1.89x 47.35% 35.46%
50.00% - 59.99% .... 9 407,350,000 37.89 5.003% 108 2.22x 55.05% 48.04%
60.00% - 69.99% .... 16 159,498,643 14.84 5.406% 108 1.55x 64.89% 51.44%
70.00% - 74.99% .... 13 182,185,060 16.95 5.664% 113 1.34x 73.51% 63.28%
75.00% - 79.99% .... 19 301,246,900 28.02 5.551% 115 1.30x 77.81% 65.86%
80.00% - 80.00% .... 1 2,400,000 0.22 6.220% 120 1.28x 80.00% 68.28%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ........... 60 $1,075,014,808 100.00% 5.343% 111 1.71X 65.91% 55.90%
== ============== ======
(1) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the Loan Group 1 balance as of the cut-off date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
S-121
RANGE OF LTV RATIOS AS OF THE CUT-OFF DATE--LOAN GROUP 2
WEIGHTED AVERAGES
--------------------------------------------------------------
% OF
OUTSTANDING
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF LTV RATIOS MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
AS OF THE CUT-OFF DATE LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1) LTV RATIO(1) AT MATURITY
- -------------------------- ----------- -------------- ------------ ---------- ------------- --------- -------------- ------------
56.43% - 59.99% .......... 2 $ 8,395,654 3.17% 5.970% 162 1.79x 57.12% 13.28%
60.00% - 69.99% .......... 4 6,754,911 2.55 6.149% 131 1.45x 65.15% 52.71%
70.00% - 74.99% .......... 6 55,625,000 21.03 5.268% 94 1.26x 73.84% 66.85%
75.00% - 80.00% .......... 23 193,706,619 73.24 5.162% 107 1.32x 78.20% 67.98%
-- ------------ ------
TOTAL/WEIGHTED
AVERAGE ................. 35 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
(1) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
RANGE OF LTV RATIOS AS OF MATURITY DATES--ALL MORTGAGE LOANS
WEIGHTED AVERAGES
% OF -------------------------------------------------------
RANGE OF LTV OUTSTANDING
RATIOS AGGREGATE INITIAL STATED
AS OF MATURITY NUMBER OF CUT-OFF DATE POOL MORTGAGE REMAINING CUT-OFF DATE
DATES MORTGAGE LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2)
- -------------------- ---------------- ----------------- ------------ ---------- ------------- ------------ -----------------
0.00% - 29.99% ..... 6 $ 28,512,122 2.13% 6.248% 196 1.54x 61.40%
30.00% - 39.99%..... 2 23,734,205 1.77 5.604% 115 1.84x 49.27%
40.00% - 49.99%..... 8 250,479,735 18.70 5.328% 117 1.66x 57.30%
50.00% - 59.99%..... 19 262,515,788 19.60 4.922% 103 2.51x 57.07%
60.00% - 69.99%..... 49 642,206,305 47.94 5.438% 113 1.34x 75.61%
70.00% - 74.13%..... 11 132,048,837 9.86 5.286% 78 1.25x 77.41%
-- -------------- ------
TOTAL/WEIGHTED 5.321% 110 1.63X 67.96%
AVERAGE ........... 95 $1,339,496,992 100.00%
== ============== ======
WEIGHTED AVERAGES
-----------------
RANGE OF LTV
RATIOS
AS OF MATURITY LTV RATIO
DATES AT MATURITY(2)
- -------------------- ---------------
0.00% - 29.99% ..... 5.47%
30.00% - 39.99%..... 39.74%
40.00% - 49.99%..... 43.59%
50.00% - 59.99%..... 54.21%
60.00% - 69.99%..... 64.88%
70.00% - 74.13%..... 72.21%
TOTAL/WEIGHTED 57.82%
(1) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF LTV RATIOS AS OF MATURITY DATES--LOAN GROUP 1
% OF WEIGHTED AVERAGES
OUTSTANDING ------------------------------------------------------------------
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF LTV RATIOS MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
AS OF MATURITY DATES LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2) AT MATURITY(2)
- --------------------- ----------- ----------------- ------------ --------- ------------ ----------- ---------------- --------------
0.00% - 29.99% ...... 5 $ 22,373,468 2.08% 6.275% 201 1.45x 62.50% 6.74%
30.00% - 39.99% ..... 2 23,734,205 2.21 5.604% 115 1.84x 49.27% 39.74%
40.00% - 49.99% ..... 7 248,222,735 23.09 5.326% 117 1.66x 57.31% 43.56%
50.00% - 59.99% ..... 13 243,240,765 22.63 4.854% 101 2.60x 56.05% 53.99%
60.00% - 69.99% ..... 28 465,116,245 43.27 5.497% 112 1.34x 74.70% 64.11%
70.00% - 74.13% ..... 5 72,327,390 6.73 5.672% 92 1.27x 78.58% 72.40%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ............ 60 $1,075,014,808 100.00% 5.343% 111 1.71X 65.91% 55.90%
== ============== ======
(1) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
S-122
RANGE OF LTV RATIOS AS OF MATURITY DATES--LOAN GROUP 2
WEIGHTED AVERAGES
--------------------------------------------------------------
% OF
OUTSTANDING
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF LTV RATIOS MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
AS OF MATURITY DATES LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1) LTV RATIO(1) AT MATURITY
- ------------------------ ----------- -------------- ------------ ---------- ------------- --------- -------------- ------------
00.85% - 59.99% ........ 8 $ 27,670,678 10.46% 5.837% 136 1.45x 66.02% 43.67%
60.00% - 69.99% ........ 21 177,090,060 66.96 5.282% 118 1.34x 77.98% 66.90%
70.00% - 73.89% ........ 6 59,721,447 22.58 4.818% 60 1.22x 75.99% 71.97%
-- ------------ ------
TOTAL/WEIGHTED
AVERAGE ............... 35 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
(1) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
RANGE OF MORTGAGE RATES AS OF THE CUT-OFF DATE--ALL MORTGAGE LOANS
% OF WEIGHTED AVERAGES
OUTSTANDING ----------------------------------------------------------------------
RANGE OF MORTGAGE NUMBER OF AGGREGATE INITIAL STATED
RATES AS OF THE MORTGAGE CUT-OFF DATE POOL MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
CUT-OFF DATE LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2) AT MATURITY(2)
- ------------------ ----------- ---------------- ------------ ---------- ------------ ------------ ----------------- ---------------
4.180% - 4.999% .. 11 $ 330,555,641 24.68% 4.734% 100 2.27x 62.39% 58.65%
5.000% - 5.249% .. 14 220,406,349 16.45 5.175% 101 1.48x 67.29% 59.01%
5.250% - 5.449% .. 15 315,013,072 23.52 5.325% 118 1.48x 66.45% 51.36%
5.450% - 5.749% .. 19 256,150,257 19.12 5.556% 110 1.37x 72.51% 63.57%
5.750% - 5.999% .. 12 84,767,430 6.33 5.854% 108 1.34x 76.50% 67.14%
6.000% - 6.449% .. 19 117,483,615 8.77 6.142% 129 1.33x 73.36% 55.57%
6.450% - 7.160% .. 5 15,120,627 1.13 6.893% 189 1.47x 64.29% 24.73%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ......... 95 $1,339,496,992 100.00% 5.321% 110 1.63X 67.96% 57.82%
== ============== ======
(1) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF MORTGAGE RATES AS OF THE CUT-OFF DATE--LOAN GROUP 1
% OF WEIGHTED AVERAGES
OUTSTANDING -------------------------------------------------------
RANGE OF MORTGAGE NUMBER OF AGGREGATE INITIAL STATED
RATES AS OF THE MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE
CUT-OFF DATE LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1)(2) LTV RATIO(1)(2)
- ------------------------- ----------- ----------------- ------------ ---------- ------------- ------------ -----------------
4.180% - 4.999% ......... 5 $ 221,700,000 20.62% 4.706% 100 2.72x 54.92%
5.000% - 5.249% ......... 9 190,531,237 17.72 5.170% 106 1.53x 66.05%
5.250% - 5.449% ......... 10 267,253,241 24.86 5.325% 119 1.52x 64.36%
5.450% - 5.749% ......... 11 222,685,160 20.71 5.549% 108 1.37x 72.20%
5.750% - 5.999% ......... 6 62,062,493 5.77 5.871% 106 1.31x 76.11%
6.000% - 6.449% ......... 15 96,984,961 9.02 6.146% 127 1.30x 74.37%
6.450% - 7.160% ......... 4 13,797,716 1.28 6.916% 190 1.50x 63.77%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ................ 60 $1,075,014,808 100.00% 5.343% 111 1.71X 65.91%
== ============== ======
WEIGHTED AVERAGES
-----------------
RANGE OF MORTGAGE
RATES AS OF THE LTV RATIO
CUT-OFF DATE AT MATURITY(2)
- ------------------------- ---------------
4.180% - 4.999% ......... 53.96%
5.000% - 5.249% ......... 57.23%
5.250% - 5.449% ......... 48.28%
5.450% - 5.749% ......... 63.73%
5.750% - 5.999% ......... 67.55%
6.000% - 6.449% ......... 58.12%
6.450% - 7.160% ......... 22.07%
TOTAL/WEIGHTED
AVERAGE ................ 55.90%
(1) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date).
(2) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are
nincluded in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
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RANGE OF MORTGAGE RATES AS OF THE CUT-OFF DATE--LOAN GROUP 2
WEIGHTED AVERAGES
--------------------------------------------------------------
% OF
OUTSTANDING
RANGE OF MORTGAGE NUMBER OF AGGREGATE INITIAL STATED
RATES AS OF THE MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
CUT-OFF DATE LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1) LTV RATIO(1) AT MATURITY
- --------------------- ----------- -------------- ------------ ---------- ------------- --------- -------------- ------------
4.430% - 4.999% ..... 6 $108,855,641 41.16% 4.790% 100 1.33x 77.59% 68.21%
5.000% - 5.249% ..... 5 29,875,112 11.30 5.204% 70 1.22x 75.18% 70.30%
5.250% - 5.449% ..... 5 47,759,831 18.06 5.325% 117 1.26x 78.11% 68.58%
5.450% - 5.749% ..... 8 33,465,097 12.65 5.596% 119 1.35x 74.52% 62.53%
5.750% - 5.999% ..... 6 22,704,937 8.58 5.809% 114 1.40x 77.56% 66.02%
6.000% - 6.449% ..... 4 20,498,654 7.75 6.121% 138 1.47x 68.57% 43.54%
6.450% - 6.650% ..... 1 1,322,911 0.50 6.650% 178 1.26x 69.63% 52.49%
- ------------ ------
TOTAL/WEIGHTED
AVERAGE ............ 35 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
- ---------
(1) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
RANGE OF REMAINING TERMS TO MATURITY IN MONTHS--ALL MORTGAGE LOANS(1)
WEIGHTED AVERAGES
% OF -----------------------------------------------------------------------
OUTSTANDING
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF REMAINING MORTGAGE CUT-OFF DATE POOL MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
TERMS (MOS.) LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(2)(3) LTV RATIO(2)(3) AT MATURITY(3)
- ------------------ ----------- --------------- ------------ ---------- ------------- ------------ ----------------- ---------------
58 - 84 .......... 16 $ 230,094,478 17.18% 4.765% 69 2.07x 66.42% 62.70%
85 - 104 ......... 3 78,715,000 5.88 5.764% 85 1.25x 75.30% 69.84%
105 - 119 ........ 31 447,917,791 33.44 5.405% 117 1.53x 65.01% 52.18%
120 - 263 ........ 45 582,769,723 43.51 5.417% 124 1.59x 69.84% 58.61%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ......... 95 $1,339,496,992 100.00% 5.321% 110 1.63X 67.96% 57.82%
== ============== ======
- ---------
(1) With respect to 2 ARD Loans, representing 9.54% of the Initial Outstanding
Pool Balance, as of their respective Anticipated Repayment Dates.
(2) Calculated on loan balance after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(3) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are not
included in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
RANGE OF REMAINING TERMS TO MATURITY IN MONTHS--LOAN GROUP 1(1)
WEIGHTED AVERAGES
% OF -----------------------------------------------------------------------
OUTSTANDING
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF REMAINING MORTGAGE CUT-OFF DATE GROUP 1 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
TERMS (MOS.) LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(2)(3) LTV RATIO(2)(3) AT MATURITY(3)
- ------------------ ----------- --------------- ------------ ---------- ------------- ------------ ----------------- ---------------
60 - 84 .......... 9 $ 161,962,390 15.07% 4.745% 72 2.41x 62.27% 58.94%
85 - 104 ......... 3 78,715,000 7.32 5.764% 85 1.25x 75.30% 69.84%
105 - 119 ........ 18 365,773,260 34.02 5.388% 117 1.58x 62.07% 48.84%
120 - 263 ........ 30 468,564,157 43.59 5.443% 125 1.64x 68.59% 58.02%
-- -------------- ------
TOTAL/WEIGHTED
AVERAGE ......... 60 $1,075,014,808 100.00% 5.343% 111 1.71X 65.91% 55.90%
== ============== ======
- ---------
(1) With respect to 2 ARD Loans, representing 11.89% of the Initial
Outstanding Pool Balance, as of their respective Anticipated Repayment
Dates.
(2) Calculated on loan balances after netting out a holdback amount for one
loan (1.59% of the outstanding Loan Group 1 balance as of the cut-off
date).
(3) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the
mortgage loans included in the Trust and the mortgage loans that are
notincluded in the Trust but are pari passu in right of payment with the
mortgage loans included in the Trust.
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RANGE OF REMAINING TERMS TO MATURITY IN MONTHS--LOAN GROUP 2
WEIGHTED AVERAGES
--------------------------------------------------------------
% OF
OUTSTANDING
NUMBER OF AGGREGATE INITIAL STATED
RANGE OF REMAINING MORTGAGE CUT-OFF DATE GROUP 2 MORTGAGE REMAINING CUT-OFF DATE LTV RATIO
TERMS (MOS.) LOANS BALANCE BALANCE RATE TERM (MOS.) DSCR(1) LTV RATIO(1) AT MATURITY
- ----------------------- ----------- -------------- ------------ ---------- ------------- --------- -------------- ------------
58 - 99 ............... 7 $ 68,132,088 25.76% 4.814% 63 1.26x 76.28% 71.62%
100 - 119 ............. 13 82,144,530 31.06 5.480% 118 1.31x 78.11% 67.03%
120 - 178 ............. 15 114,205,566 43.18 5.310% 124 1.37x 74.97% 61.01%
-- ------------ ------
TOTAL/WEIGHTED
AVERAGE .............. 35 $264,482,184 100.00% 5.235% 107 1.33X 76.28% 65.61%
== ============ ======
- ---------
(1) Calculated on loan balances after netting out a holdback amount for one
loan (11.82% of the outstanding Loan Group 2 balance as of the cut-off
date).
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CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
Calculation of Interest. 10.27% of the Mortgage Loans, based on the Initial
Outstanding Pool Balance or 12.79% based on Initial Loan Group 1 Balance, accrue
interest on the basis of a 360-day year consisting of twelve 30-day months.
89.73% of the Mortgage Loans, based on the Initial Outstanding Pool Balance or
87.21% based on Initial Loan Group 1 Balance and 100% based on Initial Loan
Group 2 Balance, accrue interest on the basis of the actual number of days
elapsed and a 360-day year.
Amortization of Principal. The Mortgage Loans provide for one of the
following:
63 Mortgage Loans, representing 35.89% of the Initial Outstanding Pool
Balance, 32.80% of the Initial Loan Group 1 Balance and 48.43% of the Initial
Loan Group 2 Balance, provide for payments of interest and principal and then
have an expected Balloon Balance at the maturity date or the Anticipated
Repayment Date, as applicable.
23 Mortgage Loans, representing 37.52% of the Initial Outstanding Pool
Balance, 34.64% of the Initial Loan Group 1 Balance and 49.25% of the Initial
Loan Group 2 Balance, provide for payments of interest only for the first 9 to
48 months following the cut-off date and thereafter provide for regularly
scheduled payments of interest and principal based on an amortization period
longer than the remaining term of the related Mortgage Loan and therefore have
an expected Balloon Balance at the related maturity date.
Five Mortgage Loans, representing 1.74% of the Initial Outstanding Pool
Balance and 1.60% of the Initial Loan Group 1 Balance and 2.32% of the Initial
Loan Group 2 Balance, are fully amortizing.
Two Mortgage Loans, representing 9.54% of the Initial Outstanding Pool
Balance and 11.89% of the Initial Loan Group 1 Balance, provide for an increase
in the related interest rate after the Anticipated Repayment Date. The Excess
Interest will be deferred and will not be paid until the principal balance and
all other amounts related thereto of the related Mortgage Loan has been paid.
Any amount received in respect of that deferred interest will be distributed to
the holders of the Class Q Certificates.
Two Mortgage Loans, representing 15.30% of the Initial Outstanding Pool
Balance and 19.07% of the Initial Loan Group 1 Balance, are interest only for
the entire term of the Mortgage Loans.
Prepayment Provisions. All of the Mortgage Loans (other than the AFR/Bank
of America Portfolio Loan, the 962 Potomac Circle Loan and the Saks, Inc.--North
Riverside Loan (each as described below)) prohibit voluntary prepayment or
defeasance for a specified period (each, a "Lock-Out Period") of at least two
years from the Closing Date. The weighted average Lock-Out Period remaining from
the Cut-off Date for the Mortgage Loans is approximately 105 months. Following
the expiration of the Lock-Out Period, each such Mortgage Loan restricts
voluntary prepayments in one of the following ways:
(1) 92 of the Mortgage Loans, representing approximately 98.07% of the
Initial Outstanding Pool Balance, 99.00% of the Initial Loan Group 1
Balance and 94.31% of the Initial Loan Group 2 Balance, permit only
defeasance after the expiration of the Lock-out Period. In the case of
certain Mortgage Loans that are secured by multiple properties or separate
parcels on the same Mortgaged Property, partial defeasance is permitted,
subject to certain conditions specified in the related Mortgage Loan
Documents; or
(2) Two of the Mortgage Loans, representing approximately 1.30% of the
Initial Outstanding Pool Balance, 0.22% of the Initial Loan Group 1 Balance
and 5.69% of the Initial Loan Group 2 Balance, requires that any principal
prepayment made during a specified period of time after the Lock-Out Period
(a "Yield Maintenance Period"), be accompanied by a Yield Maintenance
Charge or a Prepayment Premium;
(3) One of the Mortgage Loans, representing approximately 0.63% of the
initial Outstanding Pool Balance and 0.78% of the Initial Loan Group 1
Balance currently permits defeasance.
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provided that the Mortgage Loans generally permit voluntary prepayment without
the payment of any penalty on the last one to seven scheduled payment dates
(including the scheduled payment on the stated maturity date).
The AFR/Bank of America Portfolio Loan, representing approximately 1.48% of
the Initial Outstanding Pool Balance and 1.85% of the Initial Loan Group 1
Balance, permits the voluntary prepayment of a specified portion of the Mortgage
Loan (subject to payment of a Yield Maintenance Charge) in connection with the
sale and release of certain identified Mortgaged Properties during its Lock-Out
Period. From and after December 18, 2005 (the date that is two years after the
start-up date of the REMIC that includes the AFR/Bank of America Portfolio Loan
(the "AFR/Bank of America Portfolio Loan REMIC"), defeasance is permitted with
respect to any of the related Mortgaged Properties, subject to certain
conditions in the related Mortgage Loan Documents. On April 1, 2004 and April
30, 2004, the borrower of the AFR/Bank of America Portfolio Whole Loan prepaid
0.20% and 0.56%, respectively of the aggregate initial principal balance of the
AFR/Bank of America Portfolio Whole Loan. From and after August 1, 2013, the
AFR/Bank of America Portfolio Loan may be prepaid without payment of a Yield
Maintenance Charge.
With respect to the Saks, Inc.-North Riverside Loan, representing
approximately 0.63% of the Initial Outstanding Pool Balance and 0.78% of the
Initial Loan Group 1 Balance, permits defeasance on any payment date. However,
in the event the borrower provides notice that would result in a defeasance of
the Mortgage Loan on a date that is prior to the second anniversary of the
Closing Date, the related Mortgage Loan Seller will be required to purchase the
Mortgage Loan from the Trust at a purchase price equal to the sum of: (1) the
unpaid principal balance of the Mortgage Loan; (2) any accrued but unpaid
interest on the Mortgage Loan; (3) any related unreimbursed Property Advances
and accrued and unpaid interest on any Advances; (4) any unpaid special
servicing fees and workout fees; (5) all expenses incurred by the Servicer, the
Special Servicer, the Depositor, the Bond Administrator or the Trustee in
respect of such repurchase; and (6) a Yield Maintenance Charge.
"Yield Maintenance Charge" means:
o with respect to the AFR/Bank of America Portfolio Loan, such Mortgage
Loan's pro rata share (based on its principal balance) of the product
of (A) the excess, if any (expressed as a percentage of the
outstanding principal amount before any prepayment), of (i) the sum of
the present values of all remaining scheduled payments of principal
and interest, including the payment of principal and interest
scheduled to be outstanding on the maturity date, discounted at a rate
that equals the Treasury Rate (converted to a monthly equivalent) over
(ii) the outstanding principal amount immediately before such
prepayment and (B) the principal amount being repaid; and
o with respect to the Briar Meadows Apartment Homes loan, representing
approximately 1.12% of the Initial Outstanding Pool Balance and 5.69%
of the Initial Loan Group 2 Balance and the Saks, Inc.--North
Riverside loan, representing 0.63% of the Initial Outstanding Pool
Balance and 0.78% of the Initial Loan Group 1 Balance, an amount equal
to the greater of (i) a specified percentage of the principal amount
being prepaid (or repurchased, as applicable) or (ii) the present
value, as of the prepayment (or repurchased, as applicable) date, of
the remaining scheduled payments of principal and interest from the
prepayment (or repurchase, as applicable) date through the maturity
date (including any balloon payment) determined by discounting such
payments at the Discount Rate, less the amount of principal being
prepaid. The term "Discount Rate" in connection with these Mortgage
Loans means the rate, which, when compounded monthly, is equivalent to
the Treasury Rate when compounded semi-annually, and the term
"Treasury Rate" in connection with these Mortgage Loans means the
yield calculated by the linear interpolation of the yields, as
reported in Federal Reserve Statistical Release H.15-Selected Interest
Rates ("Release H.15") under the heading U.S. Government Securities/
Treasury Constant Maturities for the week ending prior to the
S-127
prepayment (or repurchase, as applicable) date, of Securities/Treasury
Constant Maturities for the week ending prior to the prepayment (or
repurchase, as applicable) date, of U.S. Treasury Constant Maturities
with maturity dates (one longer and one shorter) most nearly
approximating the maturity date of the respective Mortgage Loan. In
the event Release H.15 is no longer published, the lender will select
a comparable publication to determine the Treasury Rate; and
o with respect to the 962 Potomac Circle Loan, representing
approximately 0.18% of the Initial Outstanding Pool Balance and 0.22%
of the Initial Loan Group 1 Balance, the present value, as of the date
of the related prepayment and based on a discount rate equal to the
Comparable Treasury Rate and trading closest to par, of the excess of
(a) the total amount of interest that would accrue to the lender on
account of the unpaid principal balance of the Mortgage Loan as of the
date of the related prepayment through the last day of the Yield
Maintenance Period (which for this Mortgage Loan ends on the maturity
date), assuming no reduction of such unpaid principal balance between
such dates and assuming that such interest is paid on a 30/360 basis,
over
(b) the total amount of investment income that would be earned by the
lender from the date of related prepayment through the last day of the
yield maintenance period accruing on a 30/360 basis (which for this
Mortgage Loan ends on the maturity date), if the principal balance of
the Mortgage Loan (as of the date of the related prepayment) were
invested in United States government general issue Treasury Securities
at the Comparable Treasury Rate during the Yield Maintenance Period.
"Comparable Treasury Rate" means the rate of interest which is equal to the
average yield (determined by the lender on the date that is seven days prior to
the date of the related prepayment) on then generally available United States
government general issuer Treasury securities maturing nearest to the end of the
Yield Maintenance Period.
"Treasury Rate" means, as of any payment date, the yield, calculated by
linear interpolation (rounded to the nearest one-thousandth of one percent) of
the yields of non-callable United States Treasury obligations with terms (one
longer and one shorter) most nearly approximating the period from such payment
date to the anticipated repayment date, as determined on the basis of Federal
Reserve Statistical Release H.15 Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities (or if such release is
unavailable, another recognized source).
"Prepayment Premium" means, with respect to any Mortgage Loan, any premium,
fee or other additional amount (other than a Yield Maintenance Charge) paid or
payable, as the context requires, by a borrower in connection with a Principal
Prepayment on, or other early collection of principal of, that Mortgage Loan.
Prepayment Premiums and Yield Maintenance Charges are distributable as
described in this prospectus supplement under "Description of the
Certificates--Distributions--Prepayment Premiums; Yield Maintenance Charges."
All of the Mortgage Loans that permit prepayments require that the
prepayment be made on the Due Date or, if on a different date, that any
prepayment be accompanied by the interest that would be due on the next Due
Date.
Certain state laws limit the amounts that a lender may collect from a
borrower as an additional charge in connection with the prepayment of a Mortgage
Loan. Provided no event of default exists, none of the Mortgage Loans require
the payment of Yield Maintenance Charges in connection with a prepayment of the
related Mortgage Loan as a result of a total casualty or condemnation. Certain
of the Mortgage Loans may require the payment of Prepayment Premiums or Yield
Maintenance Charges in connection with an acceleration of the related Mortgage
Loan. There can be no assurance that the related borrowers will pay the
S-128
Prepayment Premiums or Yield Maintenance Charges. See "Risk Factors--Risks
Related to Enforceability of Prepayment Premiums, Yield Maintenance Charges and
Defeasance Provisions" in this prospectus supplement and "Certain Legal Aspects
of Mortgage Loans--Default Interest and Limitations on Prepayments" in the
prospectus.
In the case of most of the Mortgage Loans, if an award or loss resulting
from an event of condemnation or casualty is less than a specified percentage of
the original principal balance of the Mortgage Loan and if in the reasonable
judgment of the lender (i) the Mortgaged Property can be restored within six
months prior to the maturity of the related Note to a property no less valuable
or useful than it was prior to the condemnation or casualty, (ii) after a
restoration the Mortgaged Property would adequately secure the outstanding
balance of the related Note and (iii) no event of default has occurred or is
continuing, the proceeds or award may be applied by the borrower to the costs of
repairing or replacing the Mortgaged Property. In all other circumstances, the
Mortgage Loans provide generally that in the event of a condemnation or
casualty, the lender may apply the condemnation award or insurance proceeds to
the repayment of debt, without payment of a Prepayment Premium or a Yield
Maintenance Charge.
Certain Mortgage Loans provide that if casualty or condemnation proceeds
are above a specified amount, the borrower will be permitted to supplement such
proceeds with an amount sufficient to prepay the entire principal balance of the
Mortgage Loan. In such event, no Prepayment Premium or Yield Maintenance Charge
would be required to be paid.
Neither the Depositor nor any of the Mortgage Loan Sellers makes any
representation as to the enforceability of the provision of any Mortgage Loan
requiring the payment of a Prepayment Premium or a Yield Maintenance Charge, or
of the collectability of any Prepayment Premium or Yield Maintenance Charge. See
"Risk Factors--Risks Related to the Offered Certificates--Risk Related to
Prepayments and Repurchases" and "--Yield Considerations" in this prospectus
supplement and "Certain Legal Aspects of Mortgage Loans--Default Interest and
Limitations on Prepayments" in the prospectus.
Property Releases. Certain of the Mortgage Loans contain provisions which
permit the related borrower to release a portion or all of the Mortgaged
Property or Mortgaged Properties securing such Mortgage Loan.
Except with respect to the Mortgage Loans known as "962 Potomac Circle" and
"Briar Meadows Apartment Homes" (each as described below), all of the Mortgage
Loans permit the applicable borrower, at any time after a specified period (the
"Defeasance Lock-Out Period"), to obtain a release of the Mortgaged Property
from the lien of the related Mortgage ("Defeasance" or, the option to cause a
Defeasance, the "Defeasance Option"), provided that, among other conditions, (a)
no event of default exists, (b) the borrower pays on any Due Date (the "Release
Date") (i) all interest accrued and unpaid on the principal balance of the Note
(or, with respect to a partial Defeasance, a portion of the Note) to and
including the Release Date and (ii) all other sums, excluding scheduled interest
or principal payments, due under the Mortgage Loan and all related Mortgage Loan
Documents, and (c) the borrower delivers "government securities" (within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended),
that are acceptable to the Rating Agencies (the "Defeasance Collateral") in an
amount sufficient to make payments on or prior to, but as close as possible to,
all successive scheduled payment dates from the Release Date to the related
maturity date (or Anticipated Repayment Date, if applicable), or in certain
cases, through the date on which the mortgage loan is freely prepayable, in
amounts equal to the scheduled payments due on such dates under the Mortgage
Loan or the defeased amount thereof in the case of a partial Defeasance. In
addition, in connection with a Defeasance, the related borrower is generally
required to (i) pay any costs and expenses incurred in connection with the
Defeasance and (ii) deliver a security agreement granting the Trust a first
priority lien on the Defeasance Collateral and an opinion of counsel to such
effect.
S-129
With respect to the Mortgage Loan known as "Saks, Inc.-North Riverside,"
representing approximately 0.63% of the Initial Outstanding Pool Balance and
0.78% of the Initial Loan Group 1 Balance, the Mortgage Loan documents permit
the borrower to defease the Mortgage Loan on a payment date at any time
including the first payment date following the Closing Date. However, in the
event the borrower provides notice that would result in a defeasance of the
Mortgage Loan on a date that is prior to the second anniversary of the Closing
Date, the related Mortgage Loan Seller will be required to purchase the Mortgage
Loan from the Trust for a purchase price, as defined above under "--Certain
Terms and Conditions of the Mortgage Loans--Prepayment Provisions". With respect
to the Mortgage Loan known as "Briar Meadows Apartment Homes," representing
approximately 1.12% of the Initial Outstanding Pool Balance and 5.69% of the
Initial Loan Group 2 Balance, the Mortgage Loan documents permit prepayment as
described above under "--Certain Terms and Conditions of the Mortgage
Loans--Prepayment Provisions" but do not permit defeasance.
Certain Mortgage Loans permit the release of individual Mortgaged
Properties upon the partial Defeasance of the related Mortgage Loan. These
Mortgage Loans generally require that (i) prior to the release of a related
Mortgaged Property, the borrower deliver Defeasance Collateral at least equal to
a specified percentage (generally 125%) of the allocated loan amount for such
Mortgaged Property to be defeased and (ii) the DSCR with respect to the
remaining Mortgaged Properties after the Defeasance be no less than the greater
of (x) the DSCR at origination and (y) the DSCR immediately prior to such
defeasance.
In many cases, a successor borrower will assume the obligations of the
borrower exercising a Defeasance Option and the original borrower will be
released from its obligations under the related Mortgage Loan documents. If a
Mortgage Loan is partially defeased and the successor borrower will be assuming
the borrower's obligations, the related Note will generally be split and only
the defeased portion of the borrower's obligations will be transferred to the
successor borrower.
The Depositor makes no representation as to the enforceability of the
defeasance provisions of any Mortgage Loan. See "Risk Factors--Risks Related to
the Offered Certificates--Risks Related to Prepayments and Repurchases" and
"--Yield Considerations" in this prospectus supplement.
In addition to the release by substitution of a Mortgaged Property securing
a Mortgage Loan for Defeasance Collateral, certain of the Mortgage Loans permit
the release of a Mortgaged Property or portion thereof as follows:
o the release of a Mortgaged Property or a portion of a Mortgaged
Property where such property was given no or little value in
connection with loan origination and underwriting criteria;
o with respect to the Tysons Corner Center Loan, the borrower is
permitted to obtain the release of certain out-parcels and surface and
garage parking parcels subject to the satisfaction of certain
conditions specified in the related Mortgage Loan Documents (including
written confirmation from the Rating Agencies that such action would
not cause the then current rating of the Certificates to be qualified,
withdrawn or downgraded) but without the payment of a release payment;
and
o with respect to the AFR/Bank of America Portfolio Loan, the release of
certain designated Mortgaged Properties during its Lock-Out Period,
subject to payment of a Yield Maintenance Charge and satisfaction of a
DSCR test and payment of 110% of the related allocated loan amount by
the borrower; and after the related Lock-Out Period, the AFR/Bank of
America Portfolio Loan requires that prior to the release of a related
Mortgaged Property, the borrower deliver Defeasance Collateral based
on a release price equal to a scaled percentage of the allocated loan
amount for such Mortgaged Property, which may vary between 110% and
125%. On April 1, 2004, the borrower prepaid 0.20% of the aggregate
initial principal balance of the AFR/Bank of America
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Portfolio Whole Loan. In addition, on April 30, 2004, the borrower
prepaid 0.56% of the aggregate initial principal balance of the
AFR/Bank of America Portfolio Whole Loan.
The release price that is required to be paid for any Mortgaged
Property securing the AFR/Bank of America Portfolio Loan is based on
the allocated loan amount for that Mortgaged Property:
RELEASE PRICE
TOTAL AMOUNT PREPAID/DEFEASED (% OF ALLOCATED LOAN AMOUNT)
- ----------------------------- -----------------------------
$60,000,000 or less................ 110.0%
$60,000,001 - $100,000,000......... 117.5%
more than $100,000,000............. 125.0%
The release price that is required to be paid for any Mortgaged Property
securing the AFR/Bank of America Portfolio Loan that has no allocated loan
amount will be the lesser of (i) the actual consideration received by the
borrower from Bank of America in the event such individual property is
transferred by the borrower to Bank of America and (ii) 50% of the
appraised value of the Mortgaged Property as of the origination date.
Designated Release Property List for the AFR/Bank of America Portfolio Whole
Loan:
ALLOCATED LOAN
PROPERTY CITY STATE AMOUNT RELEASE PRICE
- -------------------------------------- --------------- ------- --------------- --------------
One South Van Ness Boulevard ......... San Francisco CA $34,878,437 $38,366,281
500 Ellinwood Way .................... Pleasant Hill CA 2,780,450 3,058,495
5875 NW 163rd Street ................. Miami Lakes FL 7,368,684 8,105,552
801 Main Street ...................... Lynchburg VA 1,031,616 1,134,777
204 East Rush ........................ Harrison AR 466,683 513,352
606 Broad Street ..................... South Boston VA 356,153 391,768
128 South Washington Street .......... Albany GA 540,370 594,407
102 East Front Street ................ Port Angeles WA 491,246 540,370
7680 Girard Avenue ................... La Jolla CA 2,407,103 2,647,814
231 South Ridgewood Drive ............ Sebring FL 515,808 567,389
3415/17 Eastern Avenue ............... Baltimore MD 392,996 432,296
----------- -----------
TOTAL ................................ $54,545,455 $60,000,000
=========== ===========
o With respect to the Mortgage Loan known as the "The Equity Industrial
Partners Portfolio", representing 4.18% of the Initial Outstanding
Pool Balance and 5.21% of the Initial Loan Group 1 Balance, the
Mortgage Loan Documents permit the substitution of three of the
related Mortgaged Properties in accordance with the conditions set
forth in the related Mortgage Loan Documents. For more information,
see "The Equity Industrial Partners Portfolio Loan" in Annex B to this
prospectus supplement.
Escrows. Certain of the Mortgage Loans provide for monthly escrows to cover
property taxes, insurance premiums, ground lease payments and ongoing capital
replacements. For information regarding certain escrows, see Annex A-1 to this
prospectus supplement. With respect to the Garden State Plaza Loan, a guaranty
is in place to cover costs described above in lieu of an escrow. For more
information, see "The Garden State Plaza Loan" in Annex B to this prospectus
supplement.
Other Financing. The applicable Mortgage Loan Sellers have informed the
Depositor that they are aware of the following existing indebtedness secured by
a Mortgaged Property that also secures a Mortgage Loan:
o with respect to the Garden State Plaza Loan, representing
approximately 9.71% of the Initial Outstanding Pool Balance and 12.09%
of the Initial Loan Group 1 Balance, the
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related Mortgaged Property also secures the Garden State Plaza Pari
Passu Loans (with unpaid principal balances as of the Cut-off Date of
$130,000,000, $130,000,000 and $130,000,000, respectively). The Garden
State Plaza Pari Passu Loans are not assets of the Trust. See "--Split
Loan Structures--The Garden State Plaza Loan" above;
o with respect to the 731 Lexington Avenue-Bloomberg Headquarters Loan,
representing approximately 9.33% of the Initial Outstanding Pool
Balance and 11.63% of the Initial Loan Group 1 Balance, the related
Mortgaged Properties also secure the 731 Lexington Avenue-Bloomberg
Headquarters Pari Passu Loans (with unpaid principal balances as of
the Cut-off Date of $65,000,000, $50,000,000, $74,000,000 and, in the
case of one interest-only loan (which commences accruals only after
the anticipated repayment date of the 731 Lexington Avenue-Bloomberg
Headquarters loan), a notional balance of $86,000,000, respectively)
and the 731 Lexington Avenue-Bloomberg Headquarters B Loan (with an
unpaid principal balance as of the Cut-off Date of $86,000,000). The
731 Lexington Avenue-Bloomberg Headquarters Companion Loans are not
assets of the Trust. See "--Split Loan Structures--731 Lexington
Avenue-Bloomberg Headquarters Loan" above;
o with respect to the DDR-Macquarie Portfolio Loan, representing
approximately 5.60% of the Initial Outstanding Pool Balance and 6.98%
of the Initial Loan Group 1 Balance, the related Mortgaged Properties
also secure the DDR-Macquarie Portfolio Pari Passu Loans (with unpaid
principal balances as of the Cut-off Date of $66,000,000, $24,250,000
and $49,750,000, respectively). The DDR-Macquarie Portfolio Pari Passu
Loans are not assets of the Trust. See "--Split Loan Structures--The
DDR-Macquarie Portfolio Loan" above;
o with respect to the Tysons Corner Center Loan, representing
approximately 4.67% of the Initial Outstanding Pool Balance and 5.81%
of the Initial Loan Group 1 Balance, the related Mortgaged Property
also secures the Tysons Corner Center Pari Passu Loans (with unpaid
principal balances as of the Cut-off Date of $147,500,000, $95,000,000
and $35,000,000, respectively). The Tysons Corner Center Pari Passu
Loans are not assets of the Trust. See "--Split Loan Structures--The
Tysons Corner Center Loan" above;
o with respect to the AFR/Bank of America Portfolio Loan, representing
approximately 1.48% of the Initial Outstanding Pool Balance and 1.85%
of the Initial Loan Group 1 Balance, the related Mortgaged Properties
also secure the AFR/Bank of America Portfolio Pari Passu Loans (with
unpaid principal balances as of the Cut-off Date of $99,171,023,
$74,378,269, $84,295,370, $39,669,409 and $19,834,205, respectively)
and the AFR/Bank of America Portfolio B Loan (with an unpaid principal
balance as of the Cut-off Date of $99,171,023). The AFR/Bank of
America Portfolio Companion Loans are not assets of the Trust. See
"--Split Loan Structures--The AFR/Bank of America Portfolio Loan"
above; and
o with respect to the Saks, Inc.-North Riverside Loan, representing
approximately 0.63% of the Initial Outstanding Pool Balance and 0.78%
of the Initial Loan Group 1 Balance, the related Mortgaged Property
also secures the Saks, Inc.-North Riverside B Loan (with an unpaid
principal balance as of the Cut-off Date of $4,924,759). The Saks,
Inc.-North Riverside Loan is not assets of the Trust. See "--Split
Loan Structures--The Saks, Inc.-North Riverside Loan" above.
The Mortgage Loans generally prohibit the related borrower from incurring
unsecured indebtedness other than in the ordinary course of business. Certain
exceptions include:
o with respect to the Mortgage Loan known as the "Congress Apartments"
loan, representing 0.32% of the Initial Outstanding Pool Balance and
1.62% of the Initial Loan Group 2 balance, the borrower is permitted
to incur additional unsecured indebtedness and has entered into
$500,000 of subordinated indebtedness;
o with respect to the Tysons Corner Center Loan, representing 4.67% of
the Initial
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Outstanding Pool Balance and 5.81% of the Initial Loan Group 1
Balance, the borrower is permitted to incur additional unsecured
indebtedness in connection with the expansion and renovation of
certain portions of the Mortgaged Property; and
o with respect to the DDR-Macquarie Portfolio Loan, representing 5.60%
of the Initial Outstanding Pool Balance and 6.98% of the Initial Loan
Group 1 Balance, two of the borrowers owning properties in
Pennsylvania are permitted to enter into subordinated notes in the
aggregate principal amount of $14,921,546, provided such notes (i)
provide for interest to accrue and not be paid during the period that
the Mortgage Loan is outstanding, (ii) have a term of 20 years, (iii)
are fully subordinated to the Mortgage Loan, and (iv) are defaultable
only upon failure to repay at maturity.
The Mortgage Loan Documents generally prohibit the pledge or transfer of
controlling ownership interests in the related borrower above certain percentage
thresholds without lender consent, other than certain specified transfers
pursuant to the terms of the related mortgage loan documents or transfers to
parties related to the borrower. Certain exceptions include:
o the Mortgage Loan known as "731 Lexington Avenue-Bloomberg
Headquarters," representing 9.33% of the Initial Outstanding Pool
Balance and 11.63% of the Initial Loan Group 1 Balance, permits a
transfer of the borrower to certain of its affiliates and, under
certain circumstances, a transfer of indirect interests of the
borrower to non-affiliates;
o the Mortgage Loan known as "Garden State Plaza," representing 9.71% of
the Initial Outstanding Pool Balance and 12.09% of the Initial Loan
Group 1 Balance, permits the transfer of the direct or indirect
interest in the borrower, provided the transferee satisfies the
financial criteria set forth in the related Mortgage Loan Documents;
o the Mortgage Loan known as "Tysons Corner Center," representing 4.67%
of the Initial Outstanding Pool Balance and 5.81% of the Initial Loan
Group 1 Balance, permits a transfer of the controlling interests in
the Mortgagor among joint venture partners;
o the Mortgage Loan known as "DDR-Macquarie Portfolio," representing
5.60% of the Initial Outstanding Pool Balance and 6.98% of the Initial
Loan Group 1 Balance, permits a transfer of direct and indirect
interests in the indirect parent entity of the borrower without the
consent of the lender;
o the Mortgage Loan known as "AFR/Bank of America Portfolio,"
representing 1.48% of the Initial Outstanding Pool Balance and 1.85%
of the Initial Loan Group 1 Balance, permits a transfer of the
borrower to certain of its affiliates and, under certain
circumstances, a transfer of indirect interests of the borrower to
non-affiliates; and
o the Mortgage Loan known as "Saks, Inc.-North Riverside," representing
0.63% of the Initial Outstanding Pool Balance and 0.78% of the Initial
Loan Group 1 Balance, permits unrestricted transfers of limited
partnership interests in the borrower or any general partner, manager,
member, beneficial owner or trustee of the borrower.
In addition, the Mortgage Loan Sellers have notified the Depositor that
they are aware of the following existing or potential mezzanine debt:
o with respect to the Mortgage Loan known as "Stonegate Oklahoma,"
representing 2.88% of the Initial Outstanding Pool Balance and 3.59%
of the Initial Loan Group 1 Balance, the sole member of the borrower
has incurred mezzanine debt in the amount of $3,000,000. The mezzanine
lender has entered into an intercreditor agreement;
o with respect to the Mortgage Loan known as "The Tower," representing
1.72% of the Initial Outstanding Pool Balance and 2.14% of the Initial
Loan Group 1 Balance, the sole member of the borrower has incurred
mezzanine debt in the amount of $2,500,000. The mezzanine lender has
entered into an intercreditor agreement; and
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o with respect to the Mortgage Loan known as "Melbourne Park
Apartments," representing 0.18% of the Initial Outstanding Pool
Balance and 0.92% of the Initial Loan Group 2 Balance, the
non-managing member of the borrower is permitted to obtain mezzanine
financing secured by its ownership interest in the borrower, subject
to certain conditions, including a loan-to-value ratio of not more
than 85% and a debt service coverage ratio of at least 1.07x
calculated taking into account the combined principal balances of the
Mortgage Loan and related mezzanine loan), and confirmation that the
Rating Agencies will not qualify, withdraw or downgrade any of their
then-current ratings on the Certificates.
o With respect to the Mortgage Loan known as "Southaven Shopping
Center," representing 0.30% of the Initial Outstanding Pool Balance
and 0.38% of the Initial Loan Group 1 Balance, the non-managing member
of the borrower is permitted to obtain mezzanine financing secured by
its ownership interest in the borrower, subject to certain conditions,
including a loan-to-value ratio of not more than 85% LTV and a debt
service coverage ratio of at least 1.20x calculated taking into
account the combined principal balances of the Mortgage Loan and
related Mezzanine Loan), and confirmation that the Rating Agencies
will not qualify, withdraw or downgrade any of their then-current
ratings on the Certificates.
Certain risks relating to additional debt are described in "Risk
Factors--Risks Related to Additional Debt" in this prospectus supplement.
"Due-on-Sale" and "Due-on-Encumbrance" Provisions. The Mortgage Loans
generally contain "due-on-sale" and "due-on-encumbrance" clauses that, in each
case, permit the holder of the Mortgage Loan to accelerate the maturity of the
Mortgage Loan if the borrower sells or otherwise transfers or encumbers the
related Mortgaged Property without the consent of the lender. The Pooling and
Servicing Agreement requires the Servicer or the Special Servicer (except with
respect to the Non-Serviced Mortgage Loans and subject to the rights of the
Directing Certificateholder), as applicable, to determine, in a manner
consistent with the Servicing Standard, whether to exercise any right the lender
may have under any such clause to accelerate payment of the related Mortgage
Loan upon, or to withhold its consent to, any transfer or further encumbrance of
the related Mortgaged Property. Certain of the Mortgage Loans provide that the
lender may condition an assumption of the loan on the receipt of an assumption
fee, which is in some cases up to one percent of the then unpaid principal
balance of the applicable Note, in addition to the payment of all costs and
expenses incurred in connection with such assumption. Certain of the Mortgage
Loans permit either: (i) a transfer of the related Mortgaged Property if certain
specified conditions are satisfied or if the transfer is to a borrower
reasonably acceptable to the lender; or (ii) transfers to parties related to the
borrower. See "Description of the Pooling Agreements--Due-on-Sale and
Due-on-Encumbrance Provisions" and "Certain Legal Aspects of Mortgage
Loans--Due-on-Sale and Due-on-Encumbrance Provisions" in the prospectus. The
Depositor makes no representation as to the enforceability of any due-on-sale or
due-on-encumbrance provision in any Mortgage Loan.
Section 42 Loans. Certain of the Mortgage Loans may be secured now or in
the future by Mortgaged Properties that are eligible for and have received low
income housing tax credits pursuant to Section 42 of the Internal Revenue Code
in respect of various units within the Mortgaged Property or have tenants that
rely on rent subsidies under various government-funded programs, including the
Section 8 Tenant-Based Assistance Rental Certificate Program of the United
States Department of Housing and Urban Development. The Depositor gives no
assurance that such programs will be continued in their present form or that the
level of assistance provided will be sufficient to generate enough revenues for
the related borrower to meet its obligations under the related Mortgage Loan.
Delinquency. As of the Cut-off Date, none of the Mortgage Loans were 30
days or more delinquent, or had been 30 days or more delinquent during the 12
calendar months preceding the Cut-off Date.
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Borrower Concentrations. Several groups of Mortgage Loans have related
borrowers that are affiliated with one another through partial or complete
direct or indirect common ownership. The three largest of these groups represent
5.48%, 4.69%, and 2.85%, respectively, of the Initial Outstanding Pool Balance,
6.83% and 5.84%, respectively, of the Initial Loan Group 1 Balance and 14.44%,
respectively, of the Initial Loan Group 2 Balance.
Single-Tenant Mortgage Loans. In the case of 17 Mortgage Loans,
representing 17.19% of the Initial Outstanding Pool Balance and 21.41% of the
Initial Loan Group 1 Balance, one or more of the related Mortgaged Properties
are 100% leased to a single tenant (each such Mortgage Loan, a "Single-Tenant
Mortgage Loan"). The Mortgaged Property securing each Single-Tenant Mortgage
Loan is generally subject to a single space lease, which generally has a primary
lease term that expires on or after the scheduled maturity date of the related
Mortgage Loan. The amount of the monthly rental payments payable by the tenant
under the lease is equal to or greater than the scheduled payment of all
principal, interest and other amounts (other than any Balloon Payment) due each
month on the related Mortgage Loan. The AFR/Bank of America Portfolio Loan,
representing approximately 1.48% of the Initial Outstanding Pool Balance and
1.85% of the Initial Loan Group 1 Balance, is secured by 150 Mortgaged
Properties, 66 of which are each leased to a single tenant and 67 of which are
greater than 50% leased to such single tenant pursuant to a lease that provides
that tenant with the right to relocate between buildings and to exercise certain
limited termination rights.
Geographic Location. The Mortgaged Properties are located throughout 36
states, with the largest concentrations by Initial Outstanding Pool Balance
located in New York. See "Summary of the Prospectus Supplement--Characteristics
of The Mortgage Pool--Property Locations" in this prospectus supplement for a
table setting forth information about the jurisdictions with the greatest
concentrations of Mortgaged Properties.
Cross-Collateralization and Cross-Default. Two groups of the Mortgage
Loans, collectively representing approximately 7.35% of the Initial Outstanding
Pool Balance, are cross-defaulted and cross-collateralized, although in each
case, the borrowers are different entities. The Mortgage Loans known as the
"Windover of Melbourne," "Windover Goldenpoint" and "Wedgewood Park" loans,
collectively representing 1.87% of the Initial Outstanding Pool Balance and
9.49% of the Initial Loan Group 2 Balance, are cross-defaulted and
cross-collateralized with each other; and the Mortgage Loans known as the
"Public Ledger Building," "824 Market Street," "Brunswig Square," "1150 Gemini
Plaza" and "The Atrium Building" loan, collectively representing 5.48% of the
Initial Outstanding Pool Balance are cross-defaulted and cross-collateralized
with each other. There can be no assurance that the cross-collateralization and
cross-default provisions in the related Mortgage Loan Documents will be
enforceable.
CHANGES IN MORTGAGE POOL CHARACTERISTICS
The description in this prospectus supplement, including Annex A-1 and
Annex A-2, of the Mortgage Pool and the Mortgaged Properties is based upon the
Mortgage Pool as expected to be constituted at the close of business on the
Cut-off Date, as adjusted for the scheduled principal payments due on the
Mortgage Loans on or before the Cut-off Date. Prior to the issuance of the
Offered Certificates, a Mortgage Loan may be removed from the Mortgage Pool if
the Depositor deems such removal necessary or appropriate or if it is prepaid.
This may cause the range of Mortgage Rates and maturities as well as the other
characteristics of the Mortgage Loans to vary from those described herein.
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates and will be filed by the Depositor,
together with the Pooling and Servicing Agreement, with the Securities and
Exchange Commission within 15 days after the initial issuance of the Offered
Certificates. In the event Mortgage Loans are removed from the Mortgage Pool as
set forth in the preceding paragraph, such removal will be noted in the Form
8-K. Such Form 8-K will be available to purchasers and potential purchasers of
the Offered Certificates.
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DESCRIPTION OF THE OFFERED CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement and will consist of 21 classes (each, a "Class") to be designated as
the Class X Certificates, Class A-1 Certificates, Class A-2 Certificates, Class
A-1A Certificates, Class B Certificates, Class C Certificates, Class D
Certificates, Class E Certificates, Class F Certificates, Class G Certificates,
Class H Certificates, Class J Certificates, Class K Certificates, Class L
Certificates, Class M Certificates, Class N Certificates, Class O Certificates,
Class P Certificates, Class Q Certificates, Class R Certificates and Class LR
Certificates (collectively, the "Certificates"). Only the Class A-1, Class A-2,
Class B, Class C, Class D and Class E Certificates (the "Offered Certificates")
are offered hereby. The Class A-1A, Class X, Class F, Class G, Class H, Class J,
Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class R and Class
LR Certificates (the "Private Certificates") are not offered hereby.
The Certificates represent in the aggregate the entire beneficial ownership
interest in a Trust consisting of, among other things: (i) the Mortgage Loans
and all payments under and proceeds of the Mortgage Loans due after the Cut-off
Date; (ii) any Mortgaged Property (other than the Mortgaged Property securing
the Non-Serviced Mortgage Loans) acquired on behalf of the Trust through
foreclosure, deed in lieu of foreclosure or otherwise (upon acquisition, an "REO
Property"); (iii) such funds or assets as from time to time are deposited in the
Collection Account, the Distribution Account, the Excess Liquidation Proceeds
Account, the Interest Reserve Account and any account established in connection
with REO Properties (an "REO Account"); (iv) the rights of the lender under all
insurance policies with respect to the Mortgage Loans and the Mortgaged
Properties, to the extent of the Trust's interests therein; (v) the Depositor's
rights and remedies under the Mortgage Loan Purchase Agreements relating to
document delivery requirements with respect to the Mortgage Loans and the
representations and warranties of the related Mortgage Loan Seller regarding its
Mortgage Loans; and (vi) all of the lender's right, title and interest in the
Reserve Accounts and Lock Box Accounts, in each case, to the extent of the
Trust's interests therein.
Upon initial issuance, the Class A-1, Class A-2, Class A-1A, 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 "Principal
Balance Certificates" and each a "Principal Balance Certificate") will have the
following aggregate principal balances (each, a "Certificate Balance"), in each
case, subject to a variance of plus or minus 5%:
APPROXIMATE PERCENT
INITIAL AGGREGATE OF INITIAL OUTSTANDING APPROXIMATE PERCENT
CLASS CERTIFICATE BALANCE POOL BALANCE OF CREDIT SUPPORT
- -------------------- --------------------- ------------------------ --------------------
Offered Certificates
Class A-1 .......... $367,945,000 27.469% 15.250%(1)
Class A-2 .......... $502,796,000 37.536% 15.250%(1)
Class B ............ $ 40,185,000 3.000% 12.250%
Class C ............ $ 16,744,000 1.250% 11.000%
Class D ............ $ 28,464,000 2.125% 8.875%
Class E ............ $ 25,116,000 1.875% 7.000%
Private Certificates
Class A-1A ......... $264,482,000 19.745% 15.250%(1)
Class F ............ $ 15,069,000 1.125% 5.875%
Class G ............ $ 13,395,000 1.000% 4.875%
Class H ............ $ 11,721,000 0.875% 4.000%
Class J ............ $ 11,720,000 0.875% 3.125%
Class K ............ $ 6,698,000 0.500% 2.625%
Class L ............ $ 3,348,000 0.250% 2.375%
Class M ............ $ 5,024,000 0.375% 2.000%
Class N ............ $ 5,023,000 0.375% 1.625%
Class O ............ $ 5,023,000 0.375% 1.250%
Class P ............ $ 16,743,991 1.250% 0.000%
- ----------
(1) Represents the approximate credit support for the Class A-1, Class A-2 and
Class A-1A Certificates in the aggregate.
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The Class X Certificates will have a notional balance (the "Notional
Balance"), which is used solely for the purpose of determining the amount of
interest to be distributed on such Certificates. The Class X Certificates will
have a Notional Balance equal to the aggregate Certificate Balance of the
Principal Balance Certificates from time to time. The initial Notional Balance
of the Class X Certificates will be $1,339,496,991. The Notional Balance of the
Class X Certificates is used solely for the purpose of determining the amount of
interest to be distributed on such Certificates and does not represent the right
to receive any distributions of principal.
The Class Q, Class R and Class LR Certificates will not have Certificate
Balances or Notional Balances.
The Certificate Balance of any Class of Certificates outstanding at any
time represents the maximum amount which the holders thereof are entitled to
receive as distributions allocable to principal from the cash flow on the
Mortgage Loans and the other assets in the Trust; provided, however, that in the
event that Realized Losses previously allocated to a Class of Certificates in
reduction of the Certificate Balance thereof are recovered subsequent to the
reduction of the Certificate Balance of such Class to zero, such Class may
receive distributions in respect of such recoveries in accordance with the
priorities set forth under "--Distributions--Payment Priorities" in this
prospectus supplement.
The respective Certificate Balance of each Class of Principal Balance
Certificates will in each case be reduced by amounts actually distributed
thereon that are allocable to principal and by any Realized Losses allocated to
such Class of Certificates. The Class X Certificates represent a right to
receive interest accrued as described below on a Notional Balance. The Notional
Balance of the Class X Certificates will be reduced to the extent of all
reductions in the aggregate Certificate Balance of the Principal Balance
Certificates.
DISTRIBUTIONS
Method, Timing and Amount. Distributions on the Certificates will be made
on the 10th day of each month or, if such 10th day is not a business day, then
on the next succeeding business day, commencing in July, 2004 (each, a
"Distribution Date"). All distributions (other than the final distribution on
any Certificate) will be made by the Bond Administrator to the persons in whose
names the Certificates are registered at the close of business on the last
business day of the calendar month immediately preceding the month in which such
Distribution Date occurs or, if such day is not a business day, the preceding
business day (the "Record Date"). Such distributions will be made by wire
transfer in immediately available funds to the account specified by the
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder provides the Bond Administrator with wiring
instructions no less than five business days prior to the related Record Date,
or otherwise by check mailed to such Certificateholder. The final distribution
on any Offered Certificates will be made in like manner, but only upon
presentment or surrender (for notation that the Certificate Balance thereof has
been reduced to zero) of such Certificate at the location specified in the
notice to the holder thereof of such final distribution. All distributions made
with respect to a Class of Certificates on each Distribution Date will be
allocated pro rata among the outstanding Certificates of such Class based on
their respective Percentage Interests. The "Percentage Interest" evidenced by
any Offered Certificate is equal to the initial principal balance thereof as of
the Closing Date divided by the initial Certificate Balance of the related
Class.
The aggregate distribution to be made with respect to the Certificates on
any Distribution Date will equal the Available Funds. The "Available Funds" for
any Distribution Date will be the sum of (i) all previously undistributed
Monthly Payments or other receipts on account of principal and interest on or in
respect of the Mortgage Loans (including Unscheduled Payments and Net REO
Proceeds, if any, but excluding Excess Interest and Excess Liquidation Proceeds)
received by or on behalf of the Servicer in the Collection Period relating to
such
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Distribution Date, (ii) all P&I Advances made by the Servicer or the Trustee, as
applicable, in respect of such Distribution Date, (iii) all other amounts
received by the Servicer in such Collection Period and required to be deposited
in the Collection Account by the Servicer pursuant to the Pooling and Servicing
Agreement allocable to the Mortgage Loans for the applicable Collection Period,
(iv) without duplication, any late Monthly Payments on or in respect of the
Mortgage Loans received after the end of the Collection Period relating to such
Distribution Date but prior to the close of business on the business day prior
to the related Servicer Remittance Date, (v) any amounts representing Prepayment
Interest Shortfalls remitted by the Servicer to the Collection Account (as
described under "--Prepayment Interest Shortfalls" below), and (vi) for the
Distribution Date occurring in each March of each calendar year, the Withheld
Amounts then on deposit in the Interest Reserve Account as described under "The
Pooling and Servicing Agreement--Accounts--Interest Reserve Account" below, but
excluding the following:
(a) all amounts permitted to be used to reimburse the Servicer, the
Special Servicer or the Trustee, as applicable, for previously unreimbursed
Advances and interest thereon as described in this prospectus supplement
under "The Pooling and Servicing Agreement-- Advances";
(b) the aggregate amount of the Servicing Fee (which includes the fees
for the Servicer, the Trustee, the Bond Administrator and fees for primary
servicing functions), and the other Servicing Compensation (e.g., Net
Prepayment Interest Excess, Net Default Interest, late payment fees (to the
extent not applied to the reimbursement of interest on Advances and certain
expenses, as provided in the Pooling and Servicing Agreement), assumption
fees, loan modification fees, extension fees, loan service transaction
fees, demand fees, beneficiary statement charges and similar fees) payable
to the Servicer, the Trustee and the Bond Administrator, and the Special
Servicing Fee (and other amounts payable to the Special Servicer described
in this prospectus supplement under "The Pooling and Servicing
Agreement--Special Servicing--The Special Servicer), together with interest
thereon to the extent provided in the Pooling and Servicing Agreement, and
reinvestment earnings on payments received with respect to the Mortgage
Loans which the Servicer or Special Servicer is entitled to receive as
additional servicing compensation, in each case in respect of such
Distribution Date;
(c) all amounts representing scheduled Monthly Payments due after the
related Due Date;
(d) to the extent permitted by the Pooling and Servicing Agreement,
that portion of net liquidation proceeds, net insurance proceeds and net
condemnation proceeds with respect to a Mortgage Loan which represents any
unpaid Servicing Fee and special servicing compensation together with
interest thereon at the Advance Rate as described in this prospectus
supplement, to which the Servicer, the Special Servicer, any subservicer,
the Bond Administrator and the Trustee are entitled;
(e) all amounts representing certain expenses reimbursable or payable
to the Servicer, the Special Servicer, the Trustee or the Bond
Administrator and other amounts permitted to be retained by the Servicer or
withdrawn pursuant to the Pooling and Servicing Agreement in respect of
various items, including interest thereon as provided in the Pooling and
Servicing Agreement;
(f) Prepayment Premiums and Yield Maintenance Charges;
(g) any interest or investment income on funds on deposit in the
Collection Account, the Distribution Account, any REO Account or the Excess
Liquidation Proceeds Account or, to the extent payable to the Bond
Administrator or the Servicer under the terms of the related Mortgage Loan,
any cash collateral account, any Lock-Box Account or any Reserve Account
or, in each case, any interest on Permitted Investments in which such funds
may be invested;
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(h) all amounts received with respect to each Mortgage Loan previously
purchased or repurchased from the Trust Fund pursuant to the Pooling and
Servicing Agreement or a Mortgage Loan Purchase Agreement during the
related Collection Period and subsequent to the date as of which such
Mortgage Loan was purchased or repurchased;
(i) the amount reasonably determined by the Bond Administrator to be
necessary to pay any applicable federal, state or local taxes imposed on
the Upper-Tier REMIC, the Lower-Tier REMIC or the Loan REMIC under the
circumstances and to the extent described in the Pooling and Servicing
Agreement; and
(j) with respect to any Distribution Date occurring in each February,
and in any January occurring in a year that is not a leap year, in either
case, unless such Distribution Date is the final Distribution Date, the
Withheld Amounts to be deposited in the Interest Reserve Account in
accordance with the Pooling and Servicing Agreement.
The "Monthly Payment" with respect to any Mortgage Loan (other than any REO
Loan) and any Due Date, is the scheduled monthly payment of principal, if any,
and interest at the Mortgage Rate, excluding any Balloon Payment (but not
excluding any constant Monthly Payment due on a Balloon Loan), which is payable
by the related borrower on such Due Date under the related Note. The Monthly
Payment with respect to an REO Loan for any Distribution Date is the monthly
payment that would otherwise have been payable on the related Due Date had the
related Note not been discharged, determined as set forth in the Pooling and
Servicing Agreement and on the assumption that all other amounts, if any, due
thereunder are paid when due.
"Unscheduled Payments" are all net liquidation proceeds, net insurance
proceeds and net condemnation proceeds payable under the Mortgage Loans, the
repurchase price of any Mortgage Loan repurchased by a Mortgage Loan Seller due
to a breach of a representation or warranty made by it or as a result of a
document defect in the mortgage file or the purchase price paid by the parties
described in this prospectus supplement under "The Pooling and Servicing
Agreement--Optional Termination" and "--Realization Upon Defaulted Mortgage
Loans," and any other payments under or with respect to the Mortgage Loans not
scheduled to be made, including Principal Prepayments received by the Servicer
(but excluding Prepayment Premiums and Yield Maintenance Charges, if any) during
such Collection Period. See "Yield and Maturity Considerations--Yield
Considerations--Certain Relevant Factors" in this prospectus supplement.
"Net REO Proceeds" with respect to any REO Property and any related REO
Loan are all revenues received by the Special Servicer with respect to such REO
Property or REO Loan, net of any insurance premiums, taxes, assessments and
other costs and expenses permitted to be paid therefrom pursuant to the Pooling
and Servicing Agreement.
"Principal Prepayments" are payments of principal made by a borrower on a
Mortgage Loan that are received in advance of the scheduled Due Date for such
payments and that are not accompanied by an amount of interest representing the
full amount of scheduled interest due on any date or dates in any month or
months subsequent to the month of prepayment.
The "Collection Period" with respect to any Distribution Date and each
Mortgage Loan, is the period that begins immediately following the Determination
Date in the calendar month preceding the month in which such Distribution Date
occurs (or, in the case of the initial Distribution Date, immediately following
the Cut-off Date) and ends on the Determination Date in the calendar month in
which such Distribution Date occurs, provided, that with respect to the payment
by a borrower of a Balloon Payment on its related Due Date or during its related
grace period, the Collection Period will extend up to and including the business
day prior to the business day preceding the related Distribution Date.
If, in connection with any Distribution Date, the Bond Administrator has
reported the amount of an anticipated distribution to DTC based on the expected
receipt of any monthly payment based on information set forth in a report of the
Servicer or the Special Servicer, or
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any other monthly payment, Balloon Payment or prepayment expected to be or which
is paid on the last two business days preceding such Distribution Date, and the
related borrower fails to make such payments at such time, the Bond
Administrator will use commercially reasonable efforts to cause DTC to make the
revised distribution on a timely basis on such Distribution Date, but there can
be no assurance that DTC can do so. The Trustee, the Servicer, the Special
Servicer and the Bond Administrator will not be liable or held responsible for
any resulting delay (or claims by DTC resulting therefrom) in the making of such
distribution to Certificateholders. In addition, if the Bond Administrator
incurs out-of-pocket expenses, despite reasonable efforts to avoid/mitigate such
expenses, as a consequence of a borrower failing to make such payments, the Bond
Administrator will be entitled to reimbursement from the Trust Fund. Any such
reimbursement will constitute an expense of the Trust Fund.
The "Determination Date" is the earlier of (i) the sixth day of the month
in which the related Distribution Date occurs, or if such sixth day is not a
business day, then the immediately preceding business day, and (ii) the fourth
business day prior to the related Distribution Date.
"Net Default Interest" with respect to any Mortgage Loan is any Default
Interest accrued on such Mortgage Loan less amounts required to pay the
Servicer, the Special Servicer or the Trustee, as applicable, interest on the
related Advances at the Advance Rate and to reimburse the Trust for certain
related expenses.
"Default Interest" with respect to any Mortgage Loan is interest accrued on
such Mortgage Loan at the excess of (i) the related Default Rate over (ii) the
related Mortgage Rate.
The "Default Rate" with respect to any Mortgage Loan is the per annum rate
at which interest accrues on such Mortgage Loan following any event of default
on such Mortgage Loan, including a default in the payment of a Monthly Payment
or a Balloon Payment.
Payment Priorities. As used below in describing the priorities of
distribution of Available Funds for each Distribution Date, the terms set forth
below will have the following meanings:
The "Interest Accrual Amount" with respect to any Distribution Date and any
Class of Certificates (other than the Class Q, Class R and Class LR
Certificates), is an amount equal to interest for the related Interest Accrual
Period at the Pass-Through Rate for such Class on the related Certificate
Balance or Notional Balance, as applicable, outstanding immediately prior to
such Distribution Date (provided, that for interest accrual purposes, any
distributions in reduction of Certificate Balance or reductions in Notional
Balance, as applicable, as a result of allocations of Realized Losses on the
Distribution Date occurring in an Interest Accrual Period will be deemed to have
been made on the first day of such Interest Accrual Period) minus the amount of
any Net Prepayment Interest Shortfall allocated to such Class with respect to
such Distribution Date. Calculations of interest due in respect of the
Certificates will be made on the basis of a 360-day year consisting of twelve
30-day months.
"Appraisal Reduction Amount" is the amount described under "--Appraisal
Reductions" below.
The "Interest Accrual Period" with respect to any Distribution Date is the
calendar month immediately preceding the month in which such Distribution Date
occurs.
An "Interest Shortfall" with respect to any Distribution Date for any Class
of Offered Certificates is any shortfall in the amount of interest required to
be distributed on such Class on such Distribution Date. No interest accrues on
Interest Shortfalls.
The "Pass-Through Rate" for any Class of Offered Certificates is the per
annum rate at which interest accrues on the Certificates of such Class during
any Interest Accrual Period. The Pass-Through Rates applicable to the Class A-1,
Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G and
Class H Certificates will equal one of the following rates: (i) a fixed rate,
(ii) a rate equal to the lesser of the initial Pass-Through Rate for such Class
(as described in "Executive Summary--The Certificates" in this prospectus
supplement) and the
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Weighted Average Net Mortgage Pass-Through Rate, (iii) a rate equal to the
Weighted Average Net Mortgage Pass-Through Rate less a specified percentage or
(iv) a rate equal to the Weighted Average Net Mortgage Pass-Through Rate. The
Pass-Through Rates applicable to the Class J, Class K, Class L, Class M, Class
N, Class O and Class P Certificates will, at all times, be equal to a fixed rate
per annum subject to a cap of the Weighted Average Net Mortgage Pass-Through
Rate. The Pass-Through Rate applicable to the Class X Certificates for the
initial Distribution Date is equal to approximately % per annum. The
Pass-Through Rate applicable to the Class X Certificates for each Distribution
Date subsequent to the initial Distribution Date generally is equal in the
aggregate to the difference between the Weighted Average Net Mortgage
Pass-Through Rate and the Weighted Average Pass-Through Rate of the Principal
Balance Certificates (based on their Certificate Balances). The Class Q, Class R
and Class LR Certificates do not have Pass-Through Rates. The Class Q
Certificates will not be entitled to distributions in respect of interest other
than Excess Interest.
The "Weighted Average Net Mortgage Pass-Through Rate" for any Distribution
Date is a per annum rate equal to a fraction (expressed as a percentage) the
numerator of which is the sum for all Mortgage Loans of the product of (i) the
Net Mortgage Pass-Through Rate of each such Mortgage Loan as of the immediately
preceding Distribution Date and (ii) the Stated Principal Balance of each such
Mortgage Loan, and the denominator of which is the sum of the Stated Principal
Balances of all such Mortgage Loans as of the immediately preceding Distribution
Date.
The "Due Date" with respect to any Mortgage Loan and any month, is the
first day of such month in the related collection period as specified in the
related Note for such Mortgage Loan.
The "Net Mortgage Pass-Through Rate" with respect to any Mortgage Loan and
any Distribution Date is the Mortgage Rate for such Mortgage Loan for the
related Interest Accrual Period minus the Servicing Fee Rate. For purposes of
calculating the Pass-Through Rates on the Certificates, the Net Mortgage
Pass-Through Rate of each Mortgage Loan which accrues interest on an actual/360
basis for any one-month period preceding a related Due Date will be the
annualized rate at which interest would have to accrue in respect of the
Mortgage Loan on the basis of a 360-day year consisting of twelve 30-day months
in order to produce the aggregate amount of interest actually required to be
paid in respect of the Mortgage Loan during the one-month period at the related
Net Mortgage Pass-Through Rate; provided, however, that the Net Mortgage
Pass-Through Rate for the one month period (1) prior to the Due Dates in January
and February in any year which is not a leap year or in February in any year
which is a leap year will be determined exclusive of the amounts withheld from
that month, and (2) prior to the Due Date in March, will be determined inclusive
of the amounts withheld from the immediately preceding February, and, if
applicable, January.
The "Mortgage Rate" with respect to each Mortgage Loan and any Interest
Accrual Period is the annual rate at which interest accrues on such Mortgage
Loan during such period (in the absence of a default), as set forth in the
related Note from time to time (the initial rate is set forth on Annex A-1 to
this prospectus supplement); provided, however, that for purposes of calculating
Pass-Through Rates, the Mortgage Rate for any Mortgage Loan will be determined
without regard to any modification, waiver or amendment of the terms of that
Mortgage Loan, whether agreed to by the Servicer or resulting from a bankruptcy,
insolvency or similar proceeding involving the related borrower and without
regard to any excess interest.
So long as both the Class A-2 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. On each Distribution Date
after the Certificate Balance of either the Class A-2 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 any Distribution Date will be equal
to the sum of the following items without duplication:
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(i) the principal component of all scheduled Monthly Payments (other
than Balloon Payments) due on the Mortgage Loans on or before the related
Due Date (if received or advanced);
(ii) the principal component of all Assumed Scheduled Payments due on
or before the related Due Date (if received or advanced) with respect to
any Mortgage Loan that is delinquent in respect of its Balloon Payment;
(iii) the Stated Principal Balance of each Mortgage Loan that was,
during the related Collection Period, repurchased from the Trust Fund in
connection with the breach of a representation or warranty or a document
defect in the related mortgage file or purchased from the Trust as
described in this prospectus supplement under "The Pooling and Servicing
Agreement--Sale of Defaulted Mortgage Loans and "--Optional Termination";
(iv) the portion of Unscheduled Payments allocable to principal of any
Mortgage Loan that was liquidated during the related Collection Period;
(v) the principal component of all Balloon Payments and any other
principal payment on any Mortgage Loan received on or after the maturity
date thereof, to the extent received during the related Collection Period;
(vi) all other Principal Prepayments received in the related
Collection Period; and
(vii) any other full or partial recoveries in respect of principal of
the Mortgage Loans, including net insurance proceeds, net liquidation
proceeds and Net REO Proceeds received in the related Collection Period,
net of any related outstanding P&I Advances allocable to principal;
as reduced by any (1) Nonrecoverable Advances plus interest on such
Nonrecoverable Advances that are paid or reimbursed from principal collections
on the Mortgage Loans or, with respect to Property Advances, the Serviced Whole
Loans, in a period during which such principal collections would have otherwise
been included in the Principal Distribution Amount for such Distribution Date
and (2) Workout-Delayed Reimbursement Amounts that were paid or reimbursed from
principal collections on the Mortgage Loans or, with respect to Property
Advances, the Serviced Whole Loans, in a period during which such principal
collections would have otherwise been included in the Principal Distribution
Amount for such Distribution Date (provided that, in the case of clauses (1) and
(2) above, if any of the amounts that were reimbursed from principal collections
on the Mortgage Loans or, with respect to Property Advances, the Serviced Whole
Loans, are subsequently recovered on the related Mortgage Loan or, with respect
to Property Advances, the Serviced Whole Loans, such recovery will increase the
Principal Distribution Amount for the Distribution Date related to the period in
which such recovery occurs).
The "Group 1 Principal Distribution Amount" is the sum of clauses (i)
through (vii) above allocable to Mortgage Loans in Loan Group 1.
The "Group 2 Principal Distribution Amount" is the sum of clauses (i)
through (vii) above allocable to Mortgage Loans in Loan Group 2.
The "Assumed Scheduled Payment" with respect to any Mortgage Loan that is
delinquent in respect of its Balloon Payment (including any REO Loan as to which
the Balloon Payment would have been past due) will be an amount equal to the sum
of (a) the principal portion of the Monthly Payment that would have been due on
such Mortgage Loan on the related Due Date (or the portion thereof not received)
based on the constant Monthly Payment that would have been due on such Mortgage
Loan on the related Due Date based on the constant payment required by the
related Note and the amortization or payment schedule thereof (as calculated
with interest at the related Mortgage Rate), if any, assuming such Balloon
Payment has not become due after giving effect to any prior modification, and
(b) interest at the applicable Net Mortgage Pass-Through Rate.
An "REO Loan" is any Mortgage Loan (other than the Non-Serviced Mortgage
Loans) as to which the related Mortgaged Property has become an REO Property.
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Distribution of Available Funds. On each Distribution Date, prior to the
Crossover Date, the Available Funds for such Distribution Date will be
distributed in the following amounts and order of priority:
(i) First, to pay interest, pro rata, (i) on the Class A-1 and Class
A-2 Certificates from the Available Funds for such Distribution Date
attributable to Mortgage Loans in Loan Group 1 up to an amount equal to the
aggregate Interest Accrual Amount for those Classes, in each case in
accordance with their respective interest entitlements, (ii) on the Class
A-1A Certificates from the portion of the Available Funds for such
Distribution Date attributable to Mortgage Loans in Loan Group 2 up to an
amount equal to the aggregate Interest Accrual Amount for such Class, and
(iii) on the Class X Certificates from the Available Funds for such
Distribution Date up to an amount equal to the aggregate Interest Accrual
Amount for such Class; provided, however, if on any Distribution Date, the
Avaliable Funds (or applicable portion thereof) are insufficient to pay in
full the total amount of interest to be paid to any of the Classes
described in this clause First, the Available Funds for such Distribution
Date will be allocated among all those Classes pro rata, in accordance with
their respective interest entitlements;
(ii) Second, pro rata, to the Class A-1, Class A-2, Class A-1A and
Class X Certificates, in respect of interest, up to an amount equal to the
aggregate unpaid Interest Shortfalls previously allocated to such Classes;
(iii) Third, in reduction of the Certificate Balances thereof, (A) to
the Class A-1 and Class A-2 Certificates, first, to the Class A-1
Certificates, in an amount equal to the Group 1 Principal Distribution
Amount for such Distribution Date and, after the Class A-1A Certificates
have been reduced to zero, the Group 2 Principal Distribution Amount
remaining after payments to the Class A-1A Certificates have been made on
such Distribution Date, until the Class A-1 Certificates are reduced to
zero, and second, to the Class A-2 Certificates, in an amount equal to the
Group 1 Principal Distribution Amount (or the portion of it remaining after
distributions on the Class A-1 Certificates) for such Distribution Date
and, after the Class A-1A Certificates have been reduced to zero, the Group
2 Principal Distribution Amount remaining after payments to the Class A-1A
and Class A-1 Certificates have been made on such Distribution Date, until
the Class A-2 Certificates are reduced to zero, and (B) to the Class A-1A
Certificates, in an amount equal to the Group 2 Principal Distribution
Amount for such Distribution Date and, after the Class A-2 Certificates
have been reduced to zero, the Group 1 Principal Distribution Amount
remaining after payments to the Class A-1 and Class A-2 Certificates have
been made on such Distribution Date, until the Class A-1A Certificates are
reduced to zero;
(iv) Fourth, to the Class A-1, Class A-2 and Class A-1A Certificates,
pro rata, to the extent not distributed pursuant to all prior clauses, for
the unreimbursed amounts of Realized Losses, if any, an amount equal to the
aggregate of such unreimbursed Realized Losses previously allocated to such
Class;
(v) Fifth, to the Class B Certificates, in respect of interest, up to
an amount equal to the Interest Accrual Amount of such Class;
(vi) Sixth, to the Class B Certificates, in respect of interest, up to
an amount equal to the aggregate unpaid Interest Shortfalls previously
allocated to such Class;
(vii) Seventh, to the Class B Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(viii) Eighth, to the Class B Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(ix) Ninth, to the Class C Certificates, in respect of interest, up to
an amount equal to the Interest Accrual Amount of such Class;
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(x) Tenth, to the Class C Certificates, in respect of interest, up to
an amount equal to the aggregate unpaid Interest Shortfalls previously
allocated to such Class;
(xi) Eleventh, to the Class C Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xii) Twelfth, to the Class C Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xiii) Thirteenth, to the Class D Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xiv) Fourteenth, to the Class D Certificates, in respect of interest,
up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xv) Fifteenth, to the Class D Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xvi) Sixteenth, to the Class D Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xvii) Seventeenth, to the Class E Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xviii) Eighteenth, to the Class E Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xix) Nineteenth, to the Class E Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xx) Twentieth, to the Class E Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xxi) Twenty-first, to the Class F Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xxii) Twenty-second, to the Class F Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xxiii) Twenty-third, to the Class F Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxiv) Twenty-fourth, to the Class F Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xxv) Twenty-fifth, to the Class G Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xxvi) Twenty-sixth, to the Class G Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
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(xxvii) Twenty-seventh, to the Class G Certificates, in reduction of
the Certificate Balance thereof, an amount equal to the Principal
Distribution Amount less amounts of Principal Distribution Amount
distributed pursuant to all prior clauses, until the Certificate Balance of
such Class is reduced to zero;
(xxviii) Twenty-eighth, to the Class G Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xxix) Twenty-ninth, to the Class H Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xxx) Thirtieth, to the Class H Certificates, in respect of interest,
up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xxxi) Thirty-first, to the Class H Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxxii) Thirty-second, to the Class H Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xxxiii) Thirty-third, to the Class J Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xxxiv) Thirty-fourth, to the Class J Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xxxv) Thirty-fifth, to the Class J Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxxvi) Thirty-sixth, to the Class J Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xxxvii) Thirty-seventh, to the Class K Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xxxviii) Thirty-eighth, to the Class K Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xxxix) Thirty-ninth, to the Class K Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xl) Fortieth, to the Class K Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xli) Forty-first, to the Class L Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xlii) Forty-second, to the Class L Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
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(xliii) Forty-third, to the Class L Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xliv) Forty-fourth, to the Class L Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xlv) Forty-fifth, to the Class M Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(xlvi) Forty-sixth, to the Class M Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(xlvii) Forty-seventh, to the Class M Certificates, in reduction of
the Certificate Balance thereof, an amount equal to the Principal
Distribution Amount less amounts of Principal Distribution Amount
distributed pursuant to all prior clauses, until the Certificate Balance of
such Class is reduced to zero;
(xlviii) Forty-eighth, to the Class M Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(xlix)Forty-ninth, to the Class N Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(l) Fiftieth, to the Class N Certificates, in respect of interest, up
to an amount equal to the aggregate unpaid Interest Shortfalls previously
allocated to such Class;
(li) Fifty-first, to the Class N Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses until the Certificate Balance of such Class is reduced
to zero;
(lii) Fifty-second, to the Class N Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class;
(liii) Fifty-third, to the Class O Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(liv) Fifty-fourth, to the Class O Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
(lv) Fifty-fifth, to the Class O Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(lvi) Fifty-sixth, to the Class O Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class; and
(lvii) Fifty-seventh, to the Class P Certificates, in respect of
interest, up to an amount equal to the Interest Accrual Amount of such
Class;
(lviii) Fifty-eighth, to the Class P Certificates, in respect of
interest, up to an amount equal to the aggregate unpaid Interest Shortfalls
previously allocated to such Class;
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(lix)Fifty-ninth, to the Class P Certificates, in reduction of the
Certificate Balance thereof, an amount equal to the Principal Distribution
Amount less amounts of Principal Distribution Amount distributed pursuant
to all prior clauses until the Certificate Balance of such Class is reduced
to zero;
(lx) Sixtieth, to the Class P Certificates, to the extent not
distributed pursuant to all prior clauses, for the unreimbursed amounts of
Realized Losses, if any, an amount equal to the aggregate of such
unreimbursed Realized Losses previously allocated to such Class; and
(lxi) Sixty-first, to the Class R and Class LR Certificates as
specified in the Pooling and Servicing Agreement.
All references to "pro rata" in the preceding clauses unless otherwise
specified mean pro rata based upon the amount distributable pursuant to such
clause.
Notwithstanding the foregoing, on each Distribution Date occurring on or
after the Crossover Date, the Principal Distribution Amount will be distributed
to the Class A-1, Class A-2 and Class A-1A Certificates, pro rata, based on
their respective Certificate Balances, in reduction of their respective
Certificate Balances, until the Certificate Balance of each such Class is
reduced to zero, and any unreimbursed amounts of Realized Losses previously
allocated to such Classes, if available, will be distributed pro rata based on
the amount of unreimbursed Realized Losses previously allocated to such Classes.
The "Crossover Date" is the Distribution Date on which the Certificate Balance
of each Class of Principal Balance Certificates, other than the Class A-1, Class
A-2 and Class A-1A Certificates, have been reduced to zero. The Class X
Certificates will not be entitled to any distribution of principal.
Prepayment Premiums; Yield Maintenance Charge. On any Distribution Date,
Yield Maintenance Charges collected in respect of Mortgage Loans included in
Loan Group 1 during the related Collection Period will be required to be
distributed by the Trustee to the holders of the Class A-1 through Class H
Certificates (other than the Class A-1A Certificates) in the following manner:
the holders of each class of the Class A-1 through Class H Certificates (other
than the Class A-1A Certificates) will receive the product of (a) a fraction,
not greater than one, the numerator of which is the amount of principal
distributed to such class on such Distribution Date and the denominator of which
is the total amount of principal distributed as principal representing principal
payments in respect of Mortgage Loans included in Loan Group 1 to all of the
Certificates (other than the Class A-1A Certificates) on such Distribution Date,
(b) the Base Interest Fraction for the related principal prepayment and such
Class of Certificates and (c) the Yield Maintenance Charges collected on such
principal prepayment during the related Collection Period.
On any Distribution Date, Yield Maintenance Charges collected in respect of
Mortgage Loans included in Loan Group 2 during the related Collection Period
will be required to be distributed by the Trustee to the holders of the Class
A-1A Certificates in the following manner: the holders of each Class of the
Class A-1A Certificates will receive the product of (a) a fraction, not greater
than one, the numerator of which is the amount of principal distributed to such
class on such Distribution Date and the denominator of which is the total amount
of principal distributed as principal representing principal payments in respect
of the Mortgage Loans included in Loan Group 2 to the Class A-1A Certificates on
such Distribution Date, (b) the Base Interest Fraction for the related principal
prepayment and such Class of Certificates and (c) the Yield Maintenance Charges
collected on such principal prepayment during the related Collection Period.
Any Yield Maintenance Charges collected during the related Collection
Period remaining after such distributions shall be distributed to the holders of
the Class X Certificates. No Yield Maintenance Charges in respect of the
Mortgage Loans will be distributed to holders of any other Class of
Certificates.
The "Base Interest Fraction" for any principal prepayment on any Mortgage
Loan and for any of the Class A-1 through Class H Certificates, will be a
fraction (not greater than one) (a)
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whose numerator is the greater of zero and the amount, if any, by which (i) the
Pass-Through Rate on such Class of Certificates exceeds (ii) the yield rate (as
provided by the Servicer) used in calculating the Yield Maintenance Charge with
respect to such principal prepayment and (b) whose denominator is the amount, if
any, by which the (i) Mortgage Rate on such Mortgage Loan exceeds (ii) the yield
rate (as provided by the Servicer) used in calculating the Yield Maintenance
Charge with respect to such principal prepayment; provided, however, that if
such yield rate is greater than or equal to the lesser of (x) the Mortgage Rate
on such Mortgage Loan and (y) the Pass-Through Rate described in the clause
(a)(i) above, then the Base Interest Fraction will be zero.
In the case of the Serviced Whole Loans, Prepayment Premiums or Yield
Maintenance Charges actually collected in respect of such Whole Loan will be
allocated ratably in proportion to the outstanding principal balances of the
Mortgage Loan and the related Companion Loans.
REALIZED LOSSES
The Certificate Balance of the Certificates will be reduced without
distribution on any Distribution Date to the extent of any Realized Loss
allocated to the applicable Class of Certificates on such Distribution Date. As
referred to herein, the "Realized Loss" with respect to any Distribution Date
shall mean the amount, if any, by which the aggregate Certificate Balance of the
Regular Certificates (other than the Class X Certificates) after giving effect
to distributions made on such Distribution Date exceeds the aggregate Stated
Principal Balance of the Mortgage Loans (for purposes of this calculation only,
the aggregate Stated Principal Balance will not be reduced by the amount of
principal payments received on the Mortgage Loans that were used to reimburse
the Servicer or the Trustee from general collections of principal on the
Mortgage Loans for Workout-Delayed Reimbursement Amounts, to the extent those
amounts are not otherwise determined to be Nonrecoverable Advances) immediately
following the Determination Date preceding such Distribution Date. Any such
Realized Losses will be applied to the Classes of Principal Balance Certificates
in the following order, until the Certificate Balance of each is reduced to
zero: first, to the Class P Certificates, second, to the Class O Certificates,
third, to the Class N Certificates, fourth, to the Class M Certificates, fifth,
to the Class L Certificates, sixth, to the Class K Certificates, seventh, to the
Class J Certificates, eighth, to the Class H Certificates, ninth, to the Class G
Certificates, tenth, to the Class F Certificates, eleventh, to the Class E
Certificates, twelfth, to the Class D Certificates, thirteenth, to the Class C
Certificates, fourteenth, to the Class B Certificates, and finally, pro rata, to
the Class A-1, Class A-2 and Class A-1A Certificates based on their respective
Certificate Balances. Any amounts recovered in respect of any such amounts
previously allocated as Realized Losses will be distributed to the Classes of
Principal Balance Certificates in reverse order of allocation of such Realized
Losses thereto. Shortfalls in Available Funds resulting from the following
expenses will be allocated in the same manner as Realized Losses:
o interest on Advances (to the extent not covered by Default Interest
and late payment fees);
o additional servicing compensation (including the special servicing
fee);
o extraordinary expenses of the Trust and other additional expenses of
the Trust;
o a reduction of the interest rate of a Mortgage Loan by a bankruptcy
court pursuant to a plan of reorganization or pursuant to any of its
equitable powers;
o a reduction in interest rate or a forgiveness of principal of a
Mortgage Loan as described under "The Pooling and Servicing
Agreement--Modifications," in this prospectus supplement or otherwise.
Net Prepayment Interest Shortfalls, as described under "--Prepayment Interest
Shortfalls" in this prospectus supplement, will be allocated to, and be deemed
distributed to, each Class of Certificates, pro rata, based upon amounts
distributable in respect of interest to each such
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Class (without giving effect to any such allocation of Net Prepayment Interest
Shortfall). The Notional Balances of the Class X Certificates will be reduced to
reflect reductions in the Certificate Balances of the Classes of Principal
Balance Certificates that are included in the calculation of such Notional
Balances, as set forth above, as a result of write-offs in respect of final
recovery determinations in respect of liquidation of defaulted Mortgage Loans.
The "Stated Principal Balance" of each Mortgage Loan will generally equal
the Cut-off Date Balance thereof (or in the case of a Replacement Mortgage Loan,
the outstanding principal balance as of the related date of substitution and
after application of all scheduled payments of principal and interest due on or
before the related Due Date in the month of substitution, whether or not
received), reduced (to not less than zero) on each Distribution Date by (i) all
payments or other collections (or Advances in lieu thereof) of principal of such
Mortgage Loan that have been distributed on the Certificates on such
Distribution Date or applied to any other payments required under the Pooling
and Servicing Agreement on or prior to such date of determination and (ii) any
principal forgiven by the Special Servicer and other principal losses realized
in respect of such Mortgage Loan during the related Collection Period.
With respect to each Non-Serviced Mortgage Loan, any additional trust
expenses under the LB-UBS Series 2004-C4 Pooling and Servicing Agreement, COMM
2004-LNB2 Pooling and Servicing Agreement or the GMACCM 2003-C3 Pooling and
Servicing Agreement, as applicable, that are similar to those expenses resulting
in Realized Losses and that relate to a Non-Serviced Mortgage Loan are to be
paid out of collections on, and other proceeds of, the related Non-Serviced
Mortgage Loan and the related Companion Loans, thereby potentially resulting in
a loss to the Trust.
PREPAYMENT INTEREST SHORTFALLS
For any Distribution Date, a "Prepayment Interest Shortfall" will arise
with respect to any Mortgage Loan if (i) a borrower makes a full Principal
Prepayment or a Balloon Payment during the related Collection Period or (ii) a
prepayment due to receipt of insurance proceeds, Liquidation Proceeds or
condemnation proceeds, as applicable, and the date such payment was made or
amounts received (or, in the case of a Balloon Payment, the date through which
interest thereon accrues) occurred prior to the Due Date for such Mortgage Loan
in the related Collection Period. Such a shortfall arises because the amount of
interest which accrues on the amount of such Principal Prepayment, the principal
portion of a Balloon Payment or prepayment due to the receipt of insurance
proceeds, Liquidation Proceeds or condemnation proceeds, as the case may be,
will be less than the corresponding amount of interest accruing on the
Certificates and fees payable to the Trustee, the Bond Administrator and the
Servicer. In such case, the Prepayment Interest Shortfall will generally equal
the excess of (a) the aggregate amount of interest which would have accrued on
the Stated Principal Balance of such Mortgage Loan for the one month period
ending on such Due Date if such Principal Prepayment, Balloon Payment or
prepayment due to receipt of insurance proceeds, Liquidation Proceeds or
condemnation proceeds had not been made over (b) the aggregate interest that did
so accrue through the date such payment was made.
In any case in which a Principal Prepayment in full or in part, a Balloon
Payment or prepayment due to receipt of insurance proceeds, Liquidation Proceeds
or condemnation proceeds is made during any Collection Period after the Due Date
for a Mortgage Loan in the related Collection Period, "Prepayment Interest
Excess" will arise since the amount of interest which accrues on the amount of
such Principal Prepayment, the principal portion of a Balloon Payment or
prepayment due to receipt of insurance proceeds, Liquidation Proceeds or
condemnation proceeds will exceed the corresponding amount of interest accruing
on the Certificates and fees payable to the Trustee and the Servicer.
With respect to any Mortgage Loan (other than a Specially Serviced Mortgage
Loan and a Non-Serviced Mortgage Loan) that has been subject to a Principal
Prepayment and a
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Prepayment Interest Shortfall (other than at the request of or with the consent
of the Directing Certificateholder), the Servicer will be required to deliver to
the Bond Administrator for deposit in the Distribution Account, without any
right of reimbursement therefor, a cash payment (the "Servicer Prepayment
Interest Shortfall"), in an amount equal to the lesser of (x) the aggregate
amount of Prepayment Interest Shortfalls incurred in connection with Principal
Prepayments received in respect of the Mortgage Loans (other than a Specially
Serviced Loan and a Non-Serviced Mortgage Loan) during the related Collection
Period, and (y) the aggregate of (A) the portion of its Servicing Fees that is
being paid in such Collection Period with respect to the Mortgage Loans (other
than a Specially Serviced Loan and a Non-Serviced Mortgage Loan) and (B) all
Prepayment Interest Excess received during the related Collection Period on the
Mortgage Loans (other than a Specially Serviced Loan and a Non-Serviced Mortgage
Loan) serviced by the Servicer; provided, however, that the rights of the
Certificateholders to offset of the aggregate Prepayment Interest Shortfalls
will not be cumulative. Notwithstanding the previous sentence, if any Mortgage
Loan (other than a Specially Serviced Mortgage Loan or a Non-Serviced Mortgage
Loan) has been subject to a Principal Prepayment and a Prepayment Interest
Shortfall as a result of (i) the payment of insurance proceeds or condemnation
proceeds, (ii) subsequent to a default under the related Mortgage Loan Documents
(provided, that the Servicer reasonably believes that acceptance of such
prepayment is consistent with the Servicing Standard, (iii) pursuant to
applicable law or a court order, the portion of the Servicing Fee described in
clause (A) of the preceding sentence shall be limited to that portion of its
Servicing Fees computed at a rate of 0.02% per annum and paid in such Collection
Period with respect to the Mortgage Loans (other than Specially Serviced Loans
and Non-Serviced Mortgage Loans.
"Net Prepayment Interest Shortfall" means with respect to each Mortgage
Loan, the aggregate Prepayment Interest Shortfalls in excess of the Servicer
Prepayment Interest Shortfall. The Net Prepayment Interest Shortfall will
generally be allocated to each Class of Certificates, pro rata, based on
interest amounts distributable (without giving effect to any such allocation of
Net Prepayment Interest Shortfall) to each such Class.
To the extent that such Prepayment Interest Excess for all Mortgage Loans
exceeds such Prepayment Interest Shortfalls for all Mortgage Loans as of any
Distribution Date, such excess amount (the "Net Prepayment Interest Excess")
will be payable to the Servicer as additional compensation.
SUBORDINATION
As a means of providing a certain amount of protection to the holders of
the Class A-1, Class A-2, Class A-1A and Class X Certificates (except as set
forth below) against losses associated with delinquent and defaulted Mortgage
Loans, the rights of the holders of the Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O
and Class P Certificates (collectively, the "Subordinate Certificates") to
receive distributions of interest and principal (if applicable) with respect to
the Mortgage Loans, as applicable, will be subordinated to such rights of the
holders of the Class A-1, Class A-2, Class A-1A and Class X Certificates. The
Class B Certificates will be likewise protected by the subordination of the
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. The Class C Certificates
will be likewise protected by the subordination of the 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. The Class D Certificates will be likewise protected by the
subordination of the Class E, Class F, Class G, Class H, Class J, Class K, Class
L, Class M, Class N, Class O and Class P Certificates. The Class E Certificates
will be likewise protected by the subordination of the Class F, Class G, Class
H, Class J, Class K, Class L, Class M, Class N, Class O and Class P
Certificates. This subordination will be effected in two ways: (i) by the
preferential right of the holders of a Class of Regular Certificates to receive
on any Distribution Date the amounts of interest and principal distributable in
respect of such Regular Certificates on such date prior to any distribution
being made on such Distribution
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Date in respect of any Classes of Regular Certificates subordinate thereto, and
(ii) by the allocation of Realized Losses, first, to the Class P Certificates,
second, to the Class O Certificates, third, to the Class N Certificates, fourth,
to the Class M Certificates, fifth to the Class L Certificates, sixth, to the
Class K Certificates, seventh, to the Class J Certificates, eighth, to the Class
H Certificates, ninth, to the Class G Certificates, tenth, to the Class F
Certificates, eleventh, to the Class E Certificates, twelfth, to the Class D
Certificates, thirteenth, to the Class C Certificates, fourteenth, to the Class
B Certificates, and finally, pro rata, to the Class A-1, Class A-2 and Class
A-1A Certificates based on their respective Certificate Balances for Realized
Losses. No other form of credit enhancement will be available for the benefit of
the holders of the Offered Certificates.
Allocation of principal distributions to the Class A-1, Class A-2 and Class
A-1A Certificates (collectively, the "Class A Certificates") will have the
effect of reducing the aggregate Certificate Balance of the Class A 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 the Class A Certificates, the percentage interest
in the Trust Fund evidenced by the Class A 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 the Class A
Certificates by the Subordinate Certificates.
APPRAISAL REDUCTIONS
With respect to any Mortgage Loan other than a Non-Serviced Mortgage Loan
or Serviced Whole Loan, on the first Distribution Date following the earliest of
(i) the date on which such Mortgage Loan or Serviced Whole Loan becomes a
Modified Mortgage Loan (as defined below), (ii) the 90th day following the
occurrence of any uncured delinquency in Monthly Payments with respect to such
Mortgage Loan or Serviced Whole Loan, (iii) receipt of notice that the related
borrower has filed a bankruptcy petition or the date on which a receiver is
appointed and continues in such capacity or the 60th day after the related
borrower becomes the subject of involuntary bankruptcy proceedings and such
proceedings are not dismissed in respect of the Mortgaged Property securing such
Mortgage Loan or Serviced Whole Loan, (iv) the date on which the Mortgaged
Property securing such Mortgage Loan or Serviced Whole Loan becomes an REO
Property, (v) the 60th day after the third anniversary of any extension of a
Mortgage Loan or Serviced Whole Loan and (vi) with respect to a Balloon Loan, a
payment default shall have occurred with respect to the related Balloon Payment;
provided, however, if (A) the related borrower is diligently seeking a
refinancing commitment (and delivers a statement to that effect to the Servicer,
with a copy to the Special Servicer and the Directing Certificateholder within
30 days after the default), (B) the related borrower continues to make its
Assumed Scheduled Payment, (C) no other Servicing Transfer Event has occurred
with respect to that Mortgage Loan or Serviced Whole Loan and (D) the Directing
Certificateholder consents, an Appraisal Reduction Event will not occur until 60
days beyond the related maturity date; and provided, further, if the related
borrower has delivered to the Special Servicer and the Directing
Certificateholder, on or before the 60th day after the related maturity date, a
refinancing commitment reasonably acceptable to the Special Servicer and the
Directing Certificateholder, and the borrower continues to make its Assumed
Scheduled Payments (and no other Servicing Transfer Event has occurred with
respect to that Mortgage), an Appraisal Reduction Event will not occur until the
earlier of (1) 120 days beyond the related maturity date and (2) the termination
of the refinancing commitment; (any of clauses (i), (ii), (iii), (iv), (v) and
(vi), an "Appraisal Reduction Event"), an Appraisal Reduction Amount will be
calculated. The "Appraisal Reduction Amount" for any Distribution Date and for
any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or the Serviced
Whole Loan as to which any Appraisal Reduction Event has occurred will be an
amount equal to the excess, if any, of (a) the outstanding Stated Principal
Balance of such Mortgage Loan or the applicable Serviced Whole Loan over (b) the
excess of (i) 90% of the sum of the appraised values (net of any prior mortgage
liens but including all escrows and reserves (other than escrows and reserves
for
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taxes and insurance)) of the related Mortgaged Properties securing such Mortgage
Loan or the applicable Serviced Whole Loan as determined by Updated Appraisals
obtained by the Special Servicer (the costs of which shall be paid by the
Servicer or the Special Servicer, as applicable, as Property Advance) minus any
downward adjustments the Special Servicer deems appropriate (without implying
any duty to do so) based upon its review of the Appraisal and any other
information it may deem appropriate or, in the case of Mortgage Loans or
Serviced Whole Loans having a principal balance under $2,000,000, 90% of the sum
of the estimated values of the related Mortgaged Properties, as described below
over (ii) the sum of (A) to the extent not previously advanced by the Servicer
or the Trustee, all unpaid interest on such Mortgage Loan or the applicable
Serviced Whole Loan (exclusive of Default Interest) at a per annum rate equal to
the Mortgage Rate (or with respect to a the applicable Serviced Whole Loan, the
weighted average of its Mortgage Rates), (B) all unreimbursed Property Advances
and the principal portion of all unreimbursed P&I Advances, and all unpaid
interest on Advances at the Advance Rate in respect of such Mortgage Loan or the
applicable Serviced Whole Loan, (C) any other unpaid additional Trust expenses
in respect of such Mortgage Loan or the applicable Serviced Whole Loan and (D)
all currently due and unpaid real estate taxes, ground rents and assessments and
insurance premiums and all other amounts due and unpaid with respect to such
Mortgage Loan or the applicable Serviced Whole Loan (which taxes, premiums (net
of any escrows or reserves therefor) and other amounts have not been the subject
of an Advance by the Servicer, the Special Servicer or the Trustee, as
applicable); provided, however, that in the event that the Special Servicer has
not received an Updated Appraisal or Small Loan Appraisal Estimate within the
time frame described below, the Appraisal Reduction Amount will be deemed to be
an amount equal to 25% of the current Stated Principal Balance of the related
Mortgage Loan or the applicable Serviced Whole Loan until an Updated Appraisal
or Small Loan Appraisal Estimate is received and the Appraisal Reduction Amount
is calculated. Notwithstanding the foregoing, within 60 days after the Appraisal
Reduction Event (or in the case of an Appraisal Reduction Event occurring by
reason of clause (ii) of the definition thereof, 30 days) (i) with respect to
Mortgage Loans or an applicable Serviced Whole Loan having a principal balance
of $2,000,000 or higher, the Special Servicer will be required to obtain an
Updated Appraisal, and (ii) for Mortgage Loans or an applicable Serviced Whole
Loan having a principal balance under $2,000,000, the Special Servicer will be
required, at its option, (A) to provide its good faith estimate (a "Small Loan
Appraisal Estimate") of the value of the Mortgaged Properties within the same
time period as an appraisal would otherwise be required and such Small Loan
Appraisal Estimate will be used in lieu of an Updated Appraisal to calculate an
Appraisal Reduction Amount for such Mortgage Loans or applicable Serviced Whole
Loans, or (B) to obtain, with the consent of the Directing Certificateholder, an
Updated Appraisal. On the first Distribution Date occurring on or after the
delivery of such an Updated Appraisal, the Special Servicer will be required to
adjust the Appraisal Reduction Amount to take into account such appraisal
(regardless of whether the Updated Appraisal is higher or lower than the Small
Loan Appraisal Estimate). To the extent required in the Pooling and Servicing
Agreement, Appraisal Reduction Amounts will be recalculated on each Distribution
Date and an Updated Appraisal will be obtained annually.
At any time that an Appraisal Reduction Amount exists with respect to any
Mortgage Loan (other than a Non-Serviced Mortgage Loan), the Directing
Certificateholder may, at its own expense, obtain and deliver to the Servicer,
the Special Servicer and the Trustee an appraisal that satisfies the
requirements of an "Updated Appraisal," and upon the written request of the
Directing Certificateholder, the Special Servicer must recalculate the Appraisal
Reduction Amount in respect of such Mortgage Loan or the applicable Serviced
Whole Loan based on such appraisal and will be required to notify the Trustee,
the Servicer and the Directing Certificateholder of such recalculated Appraisal
Reduction Amount.
Contemporaneously with the earliest of (i) the effective date of any
modification of the stated maturity, Mortgage Rate, principal balance or
amortization terms of any Mortgage Loan or Serviced Whole Loan, any extension of
the maturity date of a Mortgage Loan or Serviced
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Whole Loan or consent to the release of any Mortgaged Property or REO Property
from the lien of the related Mortgage other than pursuant to the terms of the
Mortgage Loan or Serviced Whole Loan, (ii) the occurrence of an Appraisal
Reduction Event, (iii) a default in the payment of a Balloon Payment for which
an extension has not been granted or (iv) the date on which the Special
Servicer, consistent with the Servicing Standard, requests an Updated Appraisal,
the Special Servicer will be required to obtain an appraisal (or a letter update
for an existing appraisal which is less than two years old) of the Mortgaged
Property or REO Property, as the case may be, from an independent appraiser who
is a member of the Appraiser Institute (an "Updated Appraisal") or a Small Loan
Appraisal Estimate, as applicable, provided, that, the Special Servicer will not
be required to obtain an Updated Appraisal or Small Loan Appraisal Estimate of
any Mortgaged Property with respect to which there exists an appraisal or Small
Loan Appraisal Estimate which is less than 12 months old. The Special Servicer
will be required to update, on an annual basis, each Small Loan Appraisal
Estimate or Updated Appraisal for so long as the related Mortgage Loan or
Serviced Whole Loan remains specially serviced.
Each Serviced Whole Loan will be treated as a single mortgage loan for
purposes of calculating an Appraisal Reduction Amount with respect to the
mortgage loans that comprise such Whole Loan. Any Appraisal Reduction on the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan will generally be allocated,
first, to the holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan
(up to the full principal balance thereof) and, then, to the holders of the 731
Lexington Avenue-Bloomberg Headquarters Senior Loans (which include the Trust as
the holder of the 731 Lexington Avenue-Bloomberg Headquarters Loan), pro rata,
based on each such loan's outstanding principal balance. Any Appraisal Reduction
on the DDR-Macquarie Portfolio Whole Loan will generally be allocated, pro rata,
to the DDR-Macquarie Portfolio Loan and the DDR-Macquarie Portfolio Pari Passu
Loans based on each loan's outstanding principal balance. Any Appraisal
Reduction on the Saks, Inc.-North Riverside Whole Loan will generally be
allocated, first, to the holder of the Saks, Inc.-North Riverside B Loan (up to
the full principal balance thereof) and, then, to the Trust, as holder of the
Saks, Inc.-North Riverside Loan.
In the event that an Appraisal Reduction Event occurs with respect to a
Mortgage Loan, the amount advanced by the Servicer with respect to delinquent
payments of interest for such Mortgage Loan will be reduced as described under
"The Pooling and Servicing Agreement--Advances" in this prospectus supplement.
The Garden State Plaza Loan, the Tysons Corner Center Loan and the AFR/Bank
of America Portfolio Loan are subject to provisions in the LB-UBS Series 2004-C4
Pooling and Servicing Agreement, the COMM 2004-LNB2 Pooling and Servicing
Agreement and the GMACCM 2003-C3 Pooling and Servicing Agreement, respectively,
relating to appraisal reductions that are substantially similar but not
identical to the provisions set forth above. The existence of an appraisal
reduction in respect of the Garden State Plaza Loan, the Tysons Corner Center
Loan and/or the AFR/Bank of America Portfolio Loan will proportionately reduce
the Servicer's or the Trustee's, as the case may be, obligation to make P&I
Advances on each of the Garden State Plaza Loan, the Tysons Corner Center Loan
and the AFR/Bank of America Portfolio Loan, as applicable, and will generally
have the effect of reducing the amount otherwise available for current
distributions to the holders of the most subordinate Class or Classes of
Certificates. Any such appraisal reduction on the Garden State Plaza Whole Loan
will generally be allocated, pro rata, to the Garden State Plaza Loan and the
Garden State Plaza Pari Passu Loans, based on each loan's outstanding principal
balance. Any such appraisal reduction on the Tysons Corner Center Whole Loan
will generally be allocated, pro rata, to the Tysons Corner Center Loan and the
Tysons Corner Center Pari Passu Loan, based on each loan's outstanding principal
balance. Any such appraisal reduction on the AFR/Bank of America Portfolio Whole
Loan will generally be allocated, first, to the holder of the AFR/Bank of
America Portfolio B Loan (up to the full principal balance thereof) and, then,
to the holders
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of the AFR/Bank of America Portfolio Senior Loans (which include the Trust as
the holder of the AFR/Bank of America Portfolio Loan), pro rata, based on each
such loan's outstanding principal balance.
A "Modified Mortgage Loan" is any Specially Serviced Mortgage Loan which
has been modified by the Special Servicer in a manner that: (a) affects the
amount or timing of any payment of principal or interest due thereon (other
than, or in addition to, bringing current Monthly Payments with respect to such
Mortgage Loan); (b) except as expressly contemplated by the related Mortgage,
results in a release of the lien of the Mortgage on any material portion of the
related Mortgaged Property without a corresponding Principal Prepayment in an
amount not less than the fair market value (as is) of the property to be
released; or (c) in the reasonable good faith judgment of the Special Servicer,
otherwise materially impairs the security for such Mortgage Loan or Serviced
Whole Loan or reduces the likelihood of timely payment of amounts due thereon.
DELIVERY, FORM AND DENOMINATION
The Offered Certificates will be issuable in registered form, in minimum
denominations of Certificate Balance of (i) $10,000 with respect to the Class
A-1 and Class A-2 Certificates and multiples of $1 in excess thereof; and (ii)
$25,000 with respect to Classes B, C, D and E Certificates and multiples of $1
in excess thereof.
The Offered Certificates will initially be represented by one or more
global Certificates for each such Class registered in the name of the nominee of
DTC. The Depositor has been informed by DTC that DTC's nominee will be Cede &
Co. No holder of an Offered Certificate will be entitled to receive a
certificate issued in fully registered, certificated form (each, a "Definitive
Certificate") representing its interest in such Class, except under the limited
circumstances described in the prospectus under "Description of the
Certificates--Book-Entry Registration and Definitive Certificates." Unless and
until Definitive Certificates are issued, all references to actions by holders
of the Offered Certificates will refer to actions taken by DTC upon instructions
received from holders of Offered Certificates through its participating
organizations (together with Clearstream Banking, societe anonyme
("Clearstream") and Euroclear participating organizations, the "Participants"),
and all references herein to payments, notices, reports, statements and other
information to holders of Offered Certificates will refer to payments, notices,
reports and statements to DTC or Cede & Co., as the registered holder of the
Offered Certificates, for distribution to holders of Offered Certificates
through its Participants in accordance with DTC procedures; provided, however,
that to the extent that the party responsible for distributing any report,
statement or other information has been provided with the name of the beneficial
owner of a Certificate (or the prospective transferee of such beneficial owner),
such report, statement or other information will be provided to such beneficial
owner (or prospective transferee).
Until Definitive Certificates are issued in respect of the Offered
Certificates, interests in the Offered Certificates will be transferred on the
book-entry records of DTC and its Participants. The Bond Administrator will
initially serve as certificate registrar (in such capacity, the "Certificate
Registrar") for purposes of recording and otherwise providing for the
registration of the Offered Certificates.
A "Certificateholder" under the Pooling and Servicing Agreement will be the
person in whose name a Certificate is registered in the certificate register
maintained pursuant to the Pooling and Servicing Agreement, except that solely
for the purpose of giving any consent or taking any action pursuant to the
Pooling and Servicing Agreement, any Certificate registered in the name of the
Depositor, the Servicer, the Special Servicer, the Trustee (in its individual
capacity), the Bond Administrator, a manager of a Mortgaged Property, a borrower
or any person affiliated with the Depositor, the Servicer, the Special Servicer,
the Trustee, the Bond Administrator, such manager or a borrower will be deemed
not to be outstanding and the Voting Rights to which it is entitled will not be
taken into account in determining whether the
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requisite percentage of Voting Rights necessary to effect any such consent or
take any such action has been obtained; provided, however, that for purposes of
obtaining the consent of Certificateholders to an amendment to the Pooling and
Servicing Agreement, any Certificates beneficially owned by the Servicer or
Special Servicer or an affiliate will be deemed to be outstanding, provided that
such amendment does not relate to compensation of the Servicer or Special
Servicer or otherwise benefit the Servicer or the Special Servicer in any
material respect; provided, further, that for purposes of obtaining the consent
of Certificateholders to any action proposed to be taken by the Special Servicer
with respect to a Specially Serviced Mortgage Loan, any Certificates
beneficially owned by the Special Servicer or an affiliate will be deemed not to
be outstanding, provided further, however, that such restrictions will not apply
to the exercise of the Special Servicer's rights, if any, as a member of the
Controlling Class. Notwithstanding the foregoing, solely for purposes of
providing or distributing any reports, statements or other information pursuant
to the Pooling and Servicing Agreement, a Certificateholder will include any
beneficial owner (or prospective transferee of a beneficial owner) to the extent
that the party required or permitted to provide or distribute such report,
statement or other information has been provided with the name of such
beneficial owner (or prospective transferee). See "Description of the
Certificates--Book-Entry Registration and Definitive Certificates" in the
prospectus.
BOOK-ENTRY REGISTRATION
Holders of Offered Certificates may hold their Certificates through DTC (in
the United States) or Clearstream or Euroclear (in Europe) if they are
Participants of such system, or indirectly through organizations that are
participants in such systems. Clearstream and Euroclear will hold omnibus
positions on behalf of the Clearstream Participants and the Euroclear
Participants, respectively, through customers' securities accounts in
Clearstream's and Euroclear's names on the books of their 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 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. For
additional information regarding clearance and settlement procedures for the
Offered Certificates and for information with respect to tax documentation
procedures relating to the Offered Certificates, see Annex C hereto.
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, Euroclear or Clearstream,
as the case may be, will then deliver instructions to the Depository to take
action to effect final settlement on its behalf.
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Because of time-zone differences, credits of securities in Clearstream or
Euroclear 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 Euroclear 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 but will be
available in the relevant Clearstream or Euroclear 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 Bond Administrator through
the Participants who in turn will receive them from DTC. 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 Bond Administrator 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, Euroclear or holders of Offered Certificates.
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.
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.
Clearstream is incorporated under the laws of Luxembourg as a professional
depository. 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.
Euroclear was created in 1968 to hold securities for participants of the
Euroclear system ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment.
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
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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.
Although DTC, Euroclear and Clearstream have implemented the foregoing
procedures in order to facilitate transfers of interests in Global Certificates
among Participants of DTC, Euroclear and Clearstream, they are under no
obligation to perform or to continue to comply with such procedures, and such
procedures may be discontinued at any time. None of the Depositor, the Trustee,
the Bond Administrator, the Servicer, the Special Servicer or the Underwriters
will have any responsibility for the performance by DTC, Euroclear or
Clearstream or their respective direct or indirect Participants of their
respective obligations under the rules and procedures governing their
operations.
The information herein concerning DTC, Clearstream and Euroclear and their
book-entry systems has been obtained from sources believed to be reliable, but
the Depositor takes no responsibility for the accuracy or completeness thereof.
DEFINITIVE CERTIFICATES
Definitive Certificates will be delivered to beneficial owners of the
Offered Certificates ("Certificate Owners") (or their nominees) only if (i) DTC
is no longer willing or able properly to discharge its responsibilities as
depository with respect to the book-entry certificates, and the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole option,
elects to terminate the book-entry system through DTC with respect to some or
all of any Class or Classes of Certificates, or (iii) after the occurrence of an
Event of Default under the Pooling and Servicing Agreement, Certificate Owners
representing a majority in principal amount of the book-entry certificates then
outstanding advise the Bond Administrator and DTC through DTC Participants in
writing that the continuation of a book-entry system through DTC (or a successor
thereto) is no longer in the best interest of Certificate Owners.
Upon the occurrence of any of the events described in clauses (i) through
(iii) in the immediately preceding paragraph, the Bond Administrator is required
to notify all affected Certificateholders (through DTC and related DTC
Participants) of the availability through DTC of Definitive Certificates. Upon
delivery of Definitive Certificates, the Trustee, the Bond Administrator, the
Certificate Registrar and the Servicer will recognize the holders of such
Definitive Certificates as holders under the Pooling and Servicing Agreement
("Holders"). Distributions of principal and interest on the Definitive
Certificates will be made by the Bond Administrator directly to Holders of
Definitive Certificates in accordance with the procedures set forth in the
Prospectus and the Pooling and Servicing Agreement.
Upon the occurrence of any of the events described in clauses (i) through
(iii) of the second preceding paragraph, requests for transfer of Definitive
Certificates will be required to be submitted directly to the Certificate
Registrar in a form acceptable to the Certificate Registrar (such as the forms
which will appear on the back of the certificate representing a Definitive
Certificate), signed by the Holder or such Holder's legal representative and
accompanied by the Definitive Certificate or Certificates for which transfer is
being requested. The Bond Administrator will be appointed as the initial
Certificate Registrar.
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YIELD AND MATURITY CONSIDERATIONS
YIELD CONSIDERATIONS
General. The yield on any Offered Certificate will depend on: (i) the
Pass-Through Rate in effect from time to time for such Certificate; (ii) the
price paid for such Certificate and the rate and timing of payments of principal
on such Certificate; and (iii) the aggregate amount of distributions on such
Certificate.
Pass-Through Rate. The Pass-Through Rates applicable to the Class A-1,
Class A-2, Class B, Class C, Class D and Class E Certificates for any
Distribution Date will equal one of the following: (i) a fixed rate, (ii) a rate
equal to the lesser of the initial Pass-Through Rate for such Class and the
Weighted Average Net Mortgage Pass-Through Rate for such Distribution Date,
(iii) a rate equal to the Weighted Average Net Mortgage Pass-Through Rate less a
specified percentage or (iv) a rate equal to the Weighted Average Net Mortgage
Pass-Through Rate. Accordingly, the yield on the Offered Certificates will be
sensitive to changes in the relative composition of the Mortgage Loans as a
result of scheduled amortization, voluntary prepayments, liquidations of
Mortgage Loans following default and repurchases of Mortgage Loans. Losses or
payments of principal on the Mortgage Loans with higher Net Mortgage
Pass-Through Rates could result in a reduction in the Weighted Average Net
Mortgage Pass-Through Rate, thereby, to the extent that the rate with respect to
the Class A-1, Class A-2, Class B, Class C, Class D and Class E Certificates is
not a fixed rate, reducing the Pass-Through Rates on such Classes of Offered
Certificates.
See "Yield and Maturity Considerations" in the prospectus, "Description of
the Offered Certificates" and "Description of the Mortgage Pool" in this
prospectus supplement and "--Rate and Timing of Principal Payments" below.
Rate and Timing of Principal Payments. The yield to holders of the Offered
Certificates will be affected by the rate and timing of principal payments on
the Mortgage Loans (including Principal Prepayments on the Mortgage Loans
resulting from both voluntary prepayments by the borrowers and involuntary
liquidations). The rate and timing of principal payments on the Mortgage Loans
will in turn be affected by, among other things, the amortization schedules
thereof, the dates on which Balloon Payments or payments with respect to ARD
Loans are due 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). Prepayments and, assuming the respective stated maturity
dates or Anticipated Repayment Dates thereof have not occurred, liquidations and
purchases of the Mortgage Loans, will result in distributions on the Principal
Balance Certificates of amounts that otherwise would have been 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
Principal Balance Certificates) while work-outs are negotiated or foreclosures
are completed. See "The Pooling and Servicing Agreement--Amendment" and
"--Modifications" in this prospectus supplement and "Description of the Pooling
Agreements--Realization Upon Defaulted Mortgage Loans" and "Certain Legal
Aspects of the Mortgage Loans--Foreclosure" in the prospectus. Because the rate
of principal payments on the Mortgage Loans will depend on future events and a
variety of factors (as described 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.
In addition, although the borrowers under the ARD Loans may have certain
incentives to prepay the ARD Loans on their Anticipated Repayment Dates, the
Depositor makes no assurance that the borrowers will be able to prepay the ARD
Loans on their Anticipated
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Repayment Dates. The failure of a borrower to prepay an ARD Loan on its
Anticipated Repayment Date will not be an event of default under the terms of
the related ARD Loan, and, pursuant to the terms of the Pooling and Servicing
Agreement, neither the Servicer nor the Special Servicer will be permitted to
take any enforcement action with respect to a borrower's failure to pay Excess
Interest, other than requests for collection, until the scheduled maturity of
the respective ARD Loan; provided that the Servicer or the Special Servicer, as
the case may be, may take action to enforce the Trust's right to apply excess
cash flow to principal in accordance with the terms of the related Mortgage Loan
Documents. See "Risk Factors--Borrower May Be Unable to Repay the Remaining
Principal Balance on the Maturity Date or Anticipated Repayment Date" in this
prospectus supplement.
The extent to which the yield to maturity of an Offered Certificate may
vary from the anticipated yield will depend upon the degree to which such
Certificate is purchased at a discount or premium and when, and to what degree,
payments of principal on the Mortgage Loans are in turn distributed on or
otherwise result in the reduction of the Certificate Balance of such
Certificate. An investor should consider, in the case of an Offered Certificate
purchased at a discount, the risk that a slower than anticipated rate of
principal payments on such Certificate could result in an actual yield to such
investor that is lower than the anticipated yield and, in the case of an Offered
Certificate purchased at a premium, the risk that a faster than anticipated rate
of principal payments on such Certificate could result in an actual yield to
such investor that is lower than the anticipated yield. In general, the earlier
a payment of principal is made on 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 such
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.
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 generally be borne: first, by the holders
of the respective Classes of Subordinate Certificates, in reverse alphabetical
order of Class designation, to the extent of amounts otherwise distributable in
respect of their Certificates; and then, by the holders of the Offered
Certificates. Further, any Net Prepayment Interest Shortfall for each
Distribution Date will be allocated on such Distribution Date among each Class
of Certificates, pro rata, in accordance with the respective Interest Accrual
Amounts for each such Class of Certificates for such Distribution Date (without
giving effect to any such allocation of Net Prepayment Interest Shortfall).
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, Prepayment Premiums, prepayment
lock-out periods 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 comparable
residential and/or commercial space 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" and
"Description of the Mortgage Pool" in this prospectus supplement and "Risk
Factors" and "Yield and Maturity Considerations-- Yield and Prepayment
Considerations" in the prospectus.
The rate of prepayment on a Mortgage Loan 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
coupon, a borrower may have an increased incentive to refinance its mortgage
loan. If a Mortgage Loan is not in a lock-out period, the Prepayment Premium, if
any, in respect of such Mortgage Loan may not be sufficient economic
disincentive to prevent the related borrower from voluntarily prepaying
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the loan as part of a refinancing thereof. See "Description of the Mortgage
Pool--Certain Terms and Conditions of the Mortgage Loans" in this prospectus
supplement.
Delay in Payment of Distributions. Because monthly distributions will not
be made to Certificateholders until a date that is scheduled to be at least 10
days following the end of the related Interest Accrual Period, the effective
yield to the holders of the Offered Certificates will be 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 Interest. As described under "Description of the Offered
Certificates-- Distributions" in this prospectus supplement, if the portion of
the Available Funds to be distributed in respect of interest on any Class of
Offered Certificates on any Distribution Date is less than the respective
Interest Accrual Amount 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.
WEIGHTED AVERAGE LIFE
The weighted average life of a Principal Balance Certificate refers to the
average amount of time that will elapse from the date of its issuance until each
dollar allocable to principal of such Certificate is distributed to the
investor. For purposes of this prospectus supplement, the weighted average life
of a Principal Balance Certificate is determined by (i) multiplying the amount
of each principal distribution thereon by the number of years from the Closing
Date to the related Distribution Date, (ii) summing the results and (iii)
dividing the sum by the aggregate amount of the reductions in the Certificate
Balance of such Certificate. Accordingly, the weighted average life of any such
Certificate will be influenced by, among other things, the rate at which
principal of the Mortgage Loans is paid or otherwise collected or advanced and
the extent to which such payments, collections or advances of principal are in
turn applied in reduction of the Certificate Balance of the Class of
Certificates to which such Certificate belongs. If the Balloon Payment on a
Balloon Loan having a Due Date after the Determination Date in any month is
received on the stated maturity date thereof, the excess of such payment over
the related Assumed Monthly Payment will not be included in the Available Funds
until the Distribution Date in the following month. Therefore, the weighted
average life of the Principal Balance Certificates may be extended.
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 ("CPR") model. The CPR Model assumes that a group of mortgage loans
experiences prepayments each month at a specified constant annual rate. As used
in each of the following sets of tables with respect to any particular Class,
the column headed "0%" assumes that none of the Mortgage Loans is prepaid before
maturity or, with respect to the ARD Loans, the respective related Anticipated
Repayment Date. The columns headed "25%," "50%," "75%," and "100%" assume that
no prepayments are made on any Mortgage Loan during such Mortgage Loan's
Lock-Out Period, if any, or during such Mortgage Loan's Yield Maintenance
Period, if any, and are otherwise made on each of the Mortgage Loans at the
indicated CPR percentages. There is no assurance, however, that prepayments of
the Mortgage Loans (whether or not in a Lock-Out Period or a Yield Maintenance
Period) will conform to any particular CPR percentages, and no representation is
made that the Mortgage Loans will prepay in accordance with the assumptions at
any of the CPR percentages shown or at any other particular prepayment rate,
that all the Mortgage Loans will prepay in accordance with the assumptions at
the same rate or that Mortgage Loans that are in a Lock-Out Period or a Yield
Maintenance Period will not prepay as a result of involuntary liquidations upon
default or otherwise.
The following tables indicate the percentage of the initial Certificate
Balance of each Class of Offered Certificates that would be outstanding after
each of the dates shown at the
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indicated CPR percentages and the corresponding weighted average life of each
such Class of Certificates. The tables have been prepared on the basis of the
information set forth herein under "Description of the Mortgage Pool--Additional
Loan Information" and on Annex A-1 to this prospectus supplement and the
following assumptions (collectively, the "Modeling Assumptions"):
(i) the initial Certificate Balance and the Pass-Through Rate for each
Class of Certificates are as set forth herein;
(ii) the scheduled Monthly Payments for each Mortgage Loan are based
on such Mortgage Loan's Cut-off Date Balance, stated monthly principal and
interest payments, and the Mortgage Rate in effect as of the Cut-off Date
for such Mortgage Loan;
(iii) all scheduled Monthly Payments (including Balloon Payments) are
assumed to be timely received on the first day of each month commencing in
July 2004;
(iv) there are no delinquencies or losses in respect of the Mortgage
Loans, there are no extensions of maturity in respect of the Mortgage
Loans, there are no Appraisal Reduction Amounts applied to the Mortgage
Loans and there are no casualties or condemnations affecting the Mortgaged
Properties;
(v) prepayments are made on each of the Mortgage Loans at the
indicated CPR percentages set forth in the table (without regard to any
limitations in such Mortgage Loans on partial voluntary principal
prepayments) except to the extent modified below by the assumption numbered
(xii);
(vi) all Mortgage Loans accrue interest under the method specified in
Annex A-1;
(vii) no party exercises its right of optional termination described
herein;
(viii) no Mortgage Loan will be repurchased by the related Mortgage
Loan Seller for a breach of a representation or warranty, a document defect
in the mortgage file [or, with respect to the Saks, Inc.--North Riverside
Loan, in connection with an early defeasance request], no holder of the
related subordinate debt with respect to the 731 Lexington Avenue-Bloomberg
Headquarters Loan, the AFR/Bank of America Portfolio Loan or the Saks,
Inc.-North Riverside Loan will exercise its option to purchase such
Mortgage Loan; and no party that is entitled to under the Pooling and
Servicing Agreement will exercise its option to purchase all of the
Mortgage Loans and thereby cause an early termination of the Trust Fund;
(ix) no Prepayment Interest Shortfalls are incurred and no Prepayment
Premiums or Yield Maintenance Charges are collected;
(x) there are no additional Trust expenses;
(xi) distributions on the Certificates are made on the 10th day of
each month, commencing in July 2004;
(xii) no prepayments are received as to any Mortgage Loan during such
Mortgage Loan's Lock-Out Period, if any, or Yield Maintenance Period, if
any;
(xiii) the Closing Date is June 28, 2004;
(xiv) each ARD Loan in the Trust is paid in full on its Anticipated
Repayment Date;
(xv) with respect to each Mortgage Loan, the Master Servicing Fee, the
Trustee Fee and the Bond Administrator Fee accrue on the same basis as
interest accrues on such Mortgage Loan. With respect to the AFR/Bank of
America Portfolio Loan, separate servicing fees as set forth in the GECMC
2004-C1 Pooling and Servicing Agreement and the GECMC 2004-C2 Pooling and
Servicing Agreement are each calculated on a 30/360 basis; and
(xvi) the 731 Lexington Avenue-Bloomberg Headquarters Loan, the
AFR/Bank of America Portfolio Loan and the Saks, Inc.-North Riverside were
each modeled based on
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the principal balance of the related Whole Loan but only the portions of
such cash flow due with respect to the Cut-Off Date Balance of the related
Mortgage Loan were included in the tables presented herein.
To the extent that the Mortgage Loans have characteristics or experience
performance that differs from those assumed in preparing the tables set forth
below, the Class A-1, Class A-2, Class B, Class C, Class D and Class E
Certificates may mature earlier or later than indicated by the tables. It is
highly unlikely that the Mortgage Loans will prepay or perform in accordance
with the Modeling Assumptions at any constant rate until maturity or that all
the Mortgage Loans will prepay in accordance with the Modeling Assumptions or at
the same rate. In particular, certain of the Mortgage Loans may not permit
voluntary partial Principal Prepayments. In addition, variations in the actual
prepayment experience and the balance of the specific Mortgage Loans that prepay
may increase or decrease the percentages of initial Certificate Balances (and
weighted average lives) shown in the following tables. Such variations may occur
even if the average prepayment experience of the Mortgage Loans were to equal
any of the specified CPR percentages. In addition, there can be no assurance
that the actual pre-tax yields on, or any other payment characteristics of, any
Class of Offered Certificates will correspond to any of the information shown in
the yield tables herein, or that the aggregate purchase prices of the Offered
Certificates will be as assumed. Accordingly, investors must make their own
decisions as to the appropriate assumptions (including prepayment assumptions)
to be used in deciding whether to purchase the Offered Certificates.
Investors are urged to conduct their own analyses of the rates at which the
Mortgage Loans may be expected to prepay.
Based on the Modeling Assumptions, the following tables indicate the
resulting weighted average lives of the Class A-1, Class A-2, Class B, Class C,
Class D and Class E Certificates and set forth the percentage of the initial
Certificate Balance of each such Class of Certificates that would be outstanding
after the Closing Date and each of the Distribution Dates shown under the
applicable assumptions at the indicated CPR percentages.
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE
OF THE CLASS A-1 CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD MAINTENANCE--OTHERWISE AT
INDICATED CPR
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ------------------------------------------- -------- --------- --------- --------- ---------
Initial ................................... 100% 100% 100% 100% 100%
June 2005 ................................. 98 98 98 98 98
June 2006 ................................. 96 96 96 96 96
June 2007 ................................. 92 92 92 92 92
June 2008 ................................. 88 88 88 88 88
June 2009 ................................. 61 61 61 61 61
June 2010 ................................. 56 56 56 56 56
June 2011 ................................. 31 30 28 25 11
June 2012 ................................. 7 7 7 7 7
June 2013 ................................. 2 2 2 2 2
June 2014 and thereafter .................. 0 0 0 0 0
Weighted Average Life (in years) .......... 5.90 5.89 5.87 5.85 5.71
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PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE
OF THE CLASS A-2 CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD MAINTENANCE--OTHERWISE AT
INDICATED CPR
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ------------------------------------------- -------- --------- --------- --------- ---------
Initial ................................... 100% 100% 100% 100% 100%
June 2005 ................................. 100 100 100 100 100
June 2006 ................................. 100 100 100 100 100
June 2007 ................................. 100 100 100 100 100
June 2008 ................................. 100 100 100 100 100
June 2009 ................................. 100 100 100 100 100
June 2010 ................................. 100 100 100 100 100
June 2011 ................................. 100 100 100 100 100
June 2012 ................................. 100 100 100 100 100
June 2013 ................................. 100 100 100 100 100
June 2014 and thereafter .................. 0 0 0 0 0
Weighted Average Life (in years) .......... 9.81 9.78 9.75 9.71 9.48
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE
OF THE CLASS B CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD MAINTENANCE--OTHERWISE AT
INDICATED CPR
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ------------------------------------------- -------- --------- --------- --------- ---------
Initial ................................... 100% 100% 100% 100% 100%
June 2005 ................................. 100 100 100 100 100
June 2006 ................................. 100 100 100 100 100
June 2007 ................................. 100 100 100 100 100
June 2008 ................................. 100 100 100 100 100
June 2009 ................................. 100 100 100 100 100
June 2010 ................................. 100 100 100 100 100
June 2011 ................................. 100 100 100 100 100
June 2012 ................................. 100 100 100 100 100
June 2013 ................................. 100 100 100 100 100
June 2014 and thereafter .................. 0 0 0 0 0
Weighted Average Life (in years) .......... 9.95 9.95 9.95 9.95 9.78
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE
OF THE CLASS C CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD MAINTENANCE--OTHERWISE AT
INDICATED CPR
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ------------------------------------------- -------- --------- --------- --------- ---------
Initial ................................... 100% 100% 100% 100% 100%
June 2005 ................................. 100 100 100 100 100
June 2006 ................................. 100 100 100 100 100
June 2007 ................................. 100 100 100 100 100
June 2008 ................................. 100 100 100 100 100
June 2009 ................................. 100 100 100 100 100
June 2010 ................................. 100 100 100 100 100
June 2011 ................................. 100 100 100 100 100
June 2012 ................................. 100 100 100 100 100
June 2013 ................................. 100 100 100 100 100
June 2014 and thereafter .................. 0 0 0 0 0
Weighted Average Life (in years) .......... 9.95 9.95 9.95 9.95 9.78
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PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE
OF THE CLASS D CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD MAINTENANCE--OTHERWISE AT
INDICATED CPR
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ------------------------------------------- -------- --------- --------- --------- ---------
Initial ................................... 100% 100% 100% 100% 100%
June 2005 ................................. 100 100 100 100 100
June 2006 ................................. 100 100 100 100 100
June 2007 ................................. 100 100 100 100 100
June 2008 ................................. 100 100 100 100 100
June 2009 ................................. 100 100 100 100 100
June 2010 ................................. 100 100 100 100 100
June 2011 ................................. 100 100 100 100 100
June 2012 ................................. 100 100 100 100 100
June 2013 ................................. 100 100 100 100 100
June 2014 and thereafter .................. 0 0 0 0 0
Weighted Average Life (in years) .......... 9.95 9.95 9.95 9.95 9.78
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE
OF THE CLASS E CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD MAINTENANCE--OTHERWISE AT
INDICATED CPR
DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- ------------------------------------------- -------- --------- --------- --------- ---------
Initial ................................... 100% 100% 100% 100% 100%
June 2005 ................................. 100 100 100 100 100
June 2006 ................................. 100 100 100 100 100
June 2007 ................................. 100 100 100 100 100
June 2008 ................................. 100 100 100 100 100
June 2009 ................................. 100 100 100 100 100
June 2010 ................................. 100 100 100 100 100
June 2011 ................................. 100 100 100 100 100
June 2012 ................................. 100 100 100 100 100
June 2013 ................................. 100 100 100 100 100
June 2014 ................................. 83 67 45 12 0
June 2015 and thereafter .................. 0 0 0 0 0
Weighted Average Life (in years) .......... 10.02 10.01 9.99 9.96 9.78
CERTAIN PRICE/YIELD TABLES
The tables set forth below show the corporate bond equivalent ("CBE")
yield, weighted average life in years, first principal payment date and last
principal payment date with respect to each Class of Offered Certificates under
the Modeling Assumptions.
The yields set forth in the following tables were calculated by determining
the monthly discount rates which, when applied to the assumed stream of cash
flows to be paid on each Class of Offered Certificates, would cause the
discounted present value of such assumed stream of cash flows as of June 28,
2004 to equal the assumed purchase prices, plus accrued interest at the
applicable Pass-Through Rate as stated on the cover of this prospectus
supplement from and including June 1, 2004 to but excluding the Closing Date,
and converting such monthly rates to semi-annual corporate bond equivalent
rates. Such calculation does not take into account variations that may occur in
the interest rates at which investors may be able to reinvest funds received by
them as reductions of the Certificate Balances of such Classes of Offered
Certificates and consequently does not purport to reflect the return on any
investment in such Classes of Offered Certificates when such reinvestment rates
are considered. Purchase prices are interpreted as a percentage of the initial
Certificate Balance of the specified Class and are exclusive of accrued
interest.
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PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL
PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE FOR THE CLASS A-1 CERTIFICATES
AT THE SPECIFIED CPRS 0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD
MAINTENANCE--OTHERWISE AT INDICATED CPR
ASSUMED PRICE (IN %) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------------------------- -------- --------- --------- --------- ---------
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
Weighted Average Life (yrs) ...........
First Principal Payment Date ..........
Last Principal Payment Date ...........
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL
PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE FOR THE CLASS A-2 CERTIFICATES
AT THE SPECIFIED CPRS 0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD
MAINTENANCE--OTHERWISE AT INDICATED CPR
ASSUMED PRICE (IN %) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------------------------- -------- --------- --------- --------- ---------
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
Weighted Average Life (yrs) ...........
First Principal Payment Date ..........
Last Principal Payment Date ...........
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL
PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE FOR THE CLASS B CERTIFICATES
AT THE SPECIFIED CPRS 0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD
MAINTENANCE--OTHERWISE AT INDICATED CPR
ASSUMED PRICE (IN %) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------------------------- -------- --------- --------- --------- ---------
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
Weighted Average Life (yrs) ...........
First Principal Payment Date ..........
Last Principal Payment Date ...........
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PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL
PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE FOR THE CLASS C CERTIFICATES
AT THE SPECIFIED CPRS 0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD
MAINTENANCE--OTHERWISE AT INDICATED CPR
ASSUMED PRICE (IN %) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------------------------- -------- --------- --------- --------- ---------
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
Weighted Average Life (yrs) ...........
First Principal Payment Date ..........
Last Principal Payment Date ...........
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL
PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE FOR THE CLASS D CERTIFICATES
AT THE SPECIFIED CPRS 0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD
MAINTENANCE--OTHERWISE AT INDICATED CPR
ASSUMED PRICE (IN %) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------------------------- -------- --------- --------- --------- ---------
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
Weighted Average Life (yrs) ...........
First Principal Payment Date ..........
Last Principal Payment Date ...........
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL
PAYMENT DATE AND LAST PRINCIPAL PAYMENT DATE FOR THE CLASS E CERTIFICATES
AT THE SPECIFIED CPRS 0% CPR DURING LOCK-OUT, DEFEASANCE AND YIELD
MAINTENANCE--OTHERWISE AT INDICATED CPR
ASSUMED PRICE (IN %) 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR
- --------------------------------------- -------- --------- --------- --------- ---------
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
......................................
Weighted Average Life (yrs) ...........
First Principal Payment Date ..........
Last Principal Payment Date ...........
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THE POOLING AND SERVICING AGREEMENT
GENERAL
The Certificates will be issued pursuant to a Pooling and Servicing
Agreement, to be dated as of June 1, 2004 (the "Pooling and Servicing
Agreement"), entered into, among others, by the Depositor, the Servicer, the
Special Servicer, the Trustee and the Bond Administrator.
Reference is made to the prospectus for important information in addition
to that set forth in this prospectus supplement regarding the terms of the
Pooling and Servicing Agreement and the terms and conditions of the Offered
Certificates. The Bond Administrator has informed the Depositor that it will
provide to a prospective or actual holder of an Offered Certificate at the
expense of the requesting party, upon written request, a copy (without exhibits)
of the Pooling and Servicing Agreement. Requests should be addressed to LaSalle
Bank National Association, 135 South LaSalle Street, Chicago, Illinois 60603,
Attention: Asset Backed Securities Trust Services Group--COMM 2004-LNB3.
SERVICING OF THE MORTGAGE LOANS; COLLECTION OF PAYMENTS
The Pooling and Servicing Agreement requires the Servicer and Special
Servicer to diligently service and administer the Mortgage Loans (other than the
Garden State Plaza Loan, Tysons Corner Center Loan, and the AFR/Bank of America
Portfolio Loan, which will be serviced pursuant to the LB-UBS Series 2004-C4
Pooling and Servicing Agreement, the COMM 2004-LNB2 Pooling and Servicing
Agreement and the GMACCM 2003-C3 Pooling and Servicing Agreement, respectively)
for which each is responsible in the best interests of and for the benefit of
the Certificateholders and, with respect to each Serviced Whole Loan, for the
benefit of the holders of the related Serviced Companion Loans (as a collective
whole, as determined by the Servicer or the Special Servicer, as the case may
be, in the exercise of its reasonable judgment) 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 Mortgage Loans or
Serviced Whole Loans, as applicable, and, to the extent consistent with the
foregoing, in accordance with the higher of the following standards of care:
o the same manner in which, and with the same care, skill, prudence and
diligence with which the Servicer or the Special Servicer, as the case
may be, services and administers similar mortgage loans for other
third-party portfolios, giving due consideration to the customary and
usual standards of practice of prudent institutional commercial and
multifamily mortgage lenders servicing their own mortgage loans with a
view to the maximization of timely recovery of principal and interest
on a net present value basis on the Mortgage Loans or Specially
Serviced Mortgage Loans, as applicable, and the best interests of the
Trust and the Certificateholders and, with respect to any Serviced
Whole Loan, the holders of the related Serviced Companion Loans (as a
collective whole, as determined by the Servicer or the Special
Servicer, as the case may be, in its reasonable judgment); and
o the same care, skill, prudence and diligence with which the Servicer
or the Special Servicer, as the case may be, services and administers
commercial and multifamily mortgage loans owned by the Servicer or the
Special Servicer, as the case may be, with a view to the maximization
of timely recovery of principal and interest on a net present value
basis on the Mortgage Loans or Specially Serviced Mortgage Loans, as
applicable, and the best interests of the Trust and the
Certificateholders and, with respect to any Serviced Whole Loan, the
holders of the related Serviced Companion Loans (as a collective
whole, as determined by the Servicer or the Special Servicer, as the
case may be, in its reasonable judgment) but without regard to:
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(A) any relationship that the Servicer or the Special Servicer, as
the case may be, or any affiliate of either, may have with the
related borrower, any Mortgage Loan Seller, any other party to
the Pooling and Servicing Agreement or any affiliate of any of
the foregoing;
(B) the ownership of any Certificate by the Servicer or the Special
Servicer, as the case may be, or any affiliate of either;
(C) the Servicer's obligation to make Advances;
(D) the Servicer's or the Special Servicer's, as the case may be,
right to receive compensation for its services under the Pooling
and Servicing Agreement or with respect to any particular
transaction;
(E) the ownership, servicing or management for others of any other
mortgage loans or mortgaged properties by the Servicer or the
Special Servicer or any affiliate of the Servicer or Special
Servicer, as applicable; and
(F) any debt that the Servicer or the Special Servicer or any
affiliate of the Servicer or the Special Servicer, as applicable,
has extended to any borrower or affiliate of the borrower
(including, without limitation, any mezzanine financing) (the
foregoing, collectively referred to as the "Servicing Standard").
For a description of the servicing of the Garden State Plaza Loan, Tysons
Corner Center Loan and the AFR/Bank of America Portfolio Loan see "--Servicing
of the Non-Serviced Mortgage Loans" below and "Description of the Mortgage
Pool--Split Loan Structures--The Garden State Plaza Loan," "--The Tysons Corner
Center Loan" and "--The AFR/Bank of America Portfolio Loan" in this prospectus
supplement.
The Servicer and the Special Servicer are permitted, at their own expense,
to employ subservicers, agents or attorneys in performing any of their
respective obligations under the Pooling and Servicing Agreement, but will not
thereby be relieved of any such obligation, and will be responsible for the acts
and omissions of any such subservicers, agents or attorneys. The Pooling and
Servicing Agreement provides, however, that neither the Servicer, the Special
Servicer nor any of their respective directors, officers, employees members,
managers or agents will have any liability to the Trust or the
Certificateholders for taking any action or refraining from taking an action in
good faith, or for errors in judgment. The foregoing provision would not protect
the Servicer or the Special Servicer for the breach of its representations or
warranties in the Pooling and Servicing Agreement or any liability by reason of
willful misconduct, bad faith, fraud or negligence in the performance of its
duties or by reason of its reckless disregard of obligations or duties under the
Pooling and Servicing Agreement.
The Pooling and Servicing Agreement requires the Servicer or the Special
Servicer, as applicable, to make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans (other than the
Non-Serviced Mortgage Loans) and Serviced Companion Loans, to the extent such
procedures are consistent with the Servicing Standard. Consistent with the
above, the Servicer or Special Servicer may, in its discretion, waive any late
payment fee in connection with any delinquent Monthly Payment or Balloon Payment
with respect to any Mortgage Loan.
ADVANCES
The Servicer will be obligated to advance, on the business day immediately
preceding a Distribution Date (the "Servicer Remittance Date") an amount (each
such amount, a "P&I Advance") equal to the amount not received in respect of the
Monthly Payment or Assumed Monthly Payment (with interest at the Net Mortgage
Pass-Through Rate plus the Trustee Fee Rate) on a Mortgage Loan that was
delinquent as of the close of business on the immediately preceding Due Date and
which delinquent payment has not been received as of the Servicer
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Remittance Date, or, in the event of a default in the payment of amounts due on
the maturity date of a Mortgage Loan, the amount equal to the Monthly Payment or
portion thereof or the Assumed Monthly Payment not received that was due prior
to the maturity date; provided, however, the Servicer will not be required to
make an Advance to the extent it determines that such Advance would not be
ultimately recoverable from collections on the related Mortgage Loan as
described below. In addition, the Servicer will not make an Advance to the
extent that it has received written notice that the Special Servicer determines
that such Advance would not be ultimately recoverable from collections on the
related Mortgage Loan. P&I Advances made in respect of Mortgage Loans which have
a grace period that expires after the Determination Date will not begin to
accrue interest until the day succeeding the expiration date of any applicable
grace period; provided that if such P&I Advance is not reimbursed from
collections received by the related borrower by the end of the applicable grace
period, interest on such Advance will accrue from the date such Advance is made.
P&I Advances are intended to maintain a regular flow of scheduled interest
and principal payments to holders of the Certificates entitled thereto, rather
than to guarantee or insure against losses. Neither the Servicer nor the Trustee
will be required or permitted to make a P&I Advance for Default Interest or
Balloon Payments. The Special Servicer will not be required or permitted to make
any P&I Advance. The amount required to be advanced in respect of delinquent
Monthly Payments or Assumed Scheduled Payments on a Mortgage Loan that has been
subject to an Appraisal Reduction Event will equal the product of (a) the amount
that would be required to be advanced by the Servicer without giving effect to
such Appraisal Reduction Event and (b) a fraction, the numerator of which is the
Stated Principal Balance of the Mortgage Loan (as of the last day of the related
Collection Period) less any Appraisal Reduction Amounts thereof and the
denominator of which is the Stated Principal Balance (as of the last day of the
related Collection Period).
With respect to the 731 Lexington Avenue-Bloomberg Headquarters Loan, the
DDR-Macquarie Portfolio Loan, the Tysons Corner Center Loan and the AFR/Bank of
America Portfolio Loan, the Servicer will be required (subject to the second
succeeding sentence below) to make its determination that it has made a
nonrecoverable P&I Advance on such Mortgage Loan or that any proposed P&I
Advance, if made, would constitute a nonrecoverable P&I Advance with respect to
such Mortgage Loan independently of any determination made by the servicer with
respect to a commercial mortgage securitization holding one of the related Pari
Passu Companion Loans. If the Servicer determines that a proposed P&I Advance
with respect to the 731 Lexington Avenue-Bloomberg Headquarters Loan, the
DDR-Macquarie Portfolio Loan, the Tysons Corner Center Loan or the AFR/Bank of
America Portfolio Loan, if made, or any outstanding P&I Advance with respect to
such Mortgage Loan previously made, would be, or is, as applicable, a
nonrecoverable advance, the Servicer will be required to provide the servicer of
each securitization that holds a related Pari Passu Companion Loan written
notice of such determination within one business day of the date of such
determination. If the Servicer receives written notice from any such servicer
that it has determined, with respect to the related Pari Passu Companion Loan,
that any proposed advance of principal and/or interest would be, or any
outstanding advance of principal and/or interest is, a nonrecoverable advance,
then such determination will generally be binding on the Certificateholders and
neither the Servicer nor the Trustee will be permitted to make any additional
P&I Advances with respect to the related Mortgage Loan unless the Servicer has
consulted with the other servicers of the related securitizations and they agree
that circumstances with respect to such Whole Loan have changed such that a
proposed P&I Advance in respect of the related Mortgage Loan would be
recoverable. Notwithstanding the foregoing, if the servicer of a Pari Passu
Companion Loan related to a Mortgage Loan discussed in this paragraph determines
that any advance of principal and/or interest with respect to such related Pari
Passu Companion Loan would be recoverable, then the Servicer will continue to
have the discretion to determine that any proposed P&I Advance or outstanding
P&I Advance would be, or is, as applicable, a nonrecoverable P&I Advance. Once
such a nonrecoverability determination is
S-169
made by the Servicer or the Servicer receives written notice of such
nonrecoverability determination by any of the other servicers, neither the
Servicer nor the Trustee will be permitted to make any additional P&I Advances
with respect to the related Mortgage Loan except as set forth in this paragraph.
With respect to the Garden State Plaza Loan, the Servicer will make its own
independent recoverability determination in accordance with the Servicing
Standard with respect to a P&I Advance on the Garden State Plaza Loan. The
Servicer will make such determination independently of any determination made by
any servicer with respect to a commercial mortgage securitization holding one of
the related Pari Passu Companion Loans (including, the LB-UBS Series 2004-C4
Servicer). The Servicer will not be bound by any determination made by such
servicer with respect to the related Pari Passu Companion Loans.
With respect to each Mortgage Loan that is part of a Whole Loan, the
Servicer will only be entitled to reimbursement for a P&I Advance that becomes
nonrecoverable first, from the proceeds of the related Mortgage Loan, and then,
from general collections of the Trust either immediately or, if it elects, over
time in accordance with the terms of the Pooling and Servicing Agreement.
Neither the Servicer nor the Trustee will be required to make P&I Advances
with respect to any Companion Loan.
In addition to P&I Advances, the Servicer will also be obligated (subject
to the limitations described herein and except with respect to the Non-Serviced
Mortgage Loans) to make advances ("Property Advances," and together with P&I
Advances, "Advances") to pay delinquent real estate taxes, assessments and
hazard insurance premiums and to cover other similar costs and expenses
necessary to preserve the priority of the related Mortgage, enforce the terms of
any Mortgage Loan or to protect, manage and maintain each related Mortgaged
Property (other than with respect to the Mortgaged Properties securing the
Non-Serviced Mortgage Loans). In addition if the Special Servicer requests that
the Servicer make a Property Advance and the Servicer fails to make such advance
within two business days, then the Special Servicer may make such Property
Advance on an emergency basis with respect to the Specially Serviced Mortgage
Loans or REO Loans. The Servicer will also be obligated to make Property
Advances with respect to the Serviced Whole Loans.
With respect to a nonrecoverable Property Advance on each of the 731
Lexington Avenue-Bloomberg Headquarters Whole Loan, the DDR-Macquarie Portfolio
Whole Loan and the Saks, Inc.-North Riverside Whole Loan, the Servicer will be
entitled to reimbursement first from collections on, and proceeds of, the
related B Loan, if any, second, from collections on, and proceeds of, the
related Mortgage Loan and any related Pari Passu Companion Loan, on a pro rata
basis (based on each such loan's outstanding principal balance), and then from
general collections of the Trust and with respect to any related Pari Passu
Companion Loan, from general collections of each trust into which such Pari
Passu Companion Loan has been deposited, on a pro rata basis (based on each such
loan's outstanding principal balance).
The LB-UBS Series 2004-C4 Servicer, the COMM 2004-LNB2 Servicer and the
GMACCM 2003-C3 Servicer are obligated to make property advances with respect to
the Garden State Plaza Whole Loan, Tysons Corner Center Whole Loan and the
AFR/Bank of America Portfolio Whole Loan, respectively.
With respect to a nonrecoverable property advance on each of the Garden
State Plaza Whole Loan, the Tysons Corner Center Whole Loan and the AFR/Bank of
America Portfolio Whole Loan, the applicable servicer under the related pooling
and servicing agreement governing such Non-Serviced Mortgage Loan will be
entitled to reimbursement first from collections on, and proceeds of, the
related B Loan, if any, second, from collections on, and proceeds of, the
related Mortgage Loan and any related Pari Passu Companion Loan, on a pro rata
basis (based on each such loan's outstanding principal balance), and then from
general collections of the Trust and with respect to any related Pari Passu
Companion Loan, from
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general collections of each trust into which such Pari Passu Companion Loan has
been deposited, on a pro rata basis (based on each such loan's outstanding
principal balance).
To the extent the Servicer fails to make an Advance it is required to make
under the Pooling and Servicing Agreement, the Trustee, subject to a
recoverability determination, will make such required Advance pursuant to the
terms of the Pooling and Servicing Agreement. The Trustee will be entitled to
rely conclusively on any nonrecoverability determination of the Servicer or
Special Servicer. The Trustee, as back-up advancer, will be required to have a
combined capital and surplus of at least $50,000,000 and have debt ratings that
satisfy certain criteria set forth in the Pooling and Servicing Agreement.
The Servicer, the Special Servicer or the Trustee, as applicable, will be
entitled to reimbursement for any Advance made by it in an amount equal to the
amount of such Advance, together with all accrued and unpaid interest thereon,
(i) from late payments on the related Mortgage Loan by the borrower, (ii) from
insurance proceeds, condemnation proceeds, liquidation proceeds from the sale of
the related Specially Serviced Mortgage Loan or the related Mortgaged Property
or other collections relating to the Mortgage Loan or (iii) upon determining in
its reasonable judgment that such Advance is not recoverable in the manner
described in the preceding two clauses, from any other amounts from time to time
on deposit in the Collection Account (except as provided in this section with
respect to Whole Loans).
The Servicer, the Special Servicer and the Trustee will each be entitled to
receive interest on Advances at a per annum rate equal to the Prime Rate (the
"Advance Rate") (i) from the amount of Default Interest on the related Mortgage
Loan paid by the borrower, (ii) from late payment fees on the related Mortgage
Loan paid by the borrower, and (iii) upon determining in good faith that such
interest is not recoverable in the manner described in the preceding two
clauses, from any other amounts from time to time on deposit in the Collection
Account (except as provided in this section with respect to Whole Loans). The
Servicer will be authorized to pay itself, the Special Servicer or the Trustee,
as applicable, such interest monthly prior to any payment to holders of
Certificates, provided that no interest shall accrue and be payable on any P&I
Advances until the grace period for a late payment by the underlying borrower
has expired. To the extent that the payment of such interest at the Advance Rate
results in a shortfall in amounts otherwise payable on one or more Classes of
Certificates on the next Distribution Date, the Servicer or the Trustee, as
applicable, will be obligated to make an Advance to cover such shortfall, but
only to the extent the Servicer or the Trustee, as applicable, concludes that,
with respect to each such Advance, such Advance can be recovered from amounts
payable on or in respect of the Mortgage Loan to which the Advance is related.
If the interest on such Advance is not recovered from Default Interest and late
payment fees on such Mortgage Loan, a shortfall will result which will have the
same effect as a Realized Loss. The "Prime Rate" is the rate, for any day, set
forth as such in the "Money Rates" section of The Wall Street Journal, Eastern
Edition.
The obligation of the Servicer or the Trustee, as applicable, to make
Advances with respect to any Mortgage Loan pursuant to the Pooling and Servicing
Agreement continues through the foreclosure of such Mortgage Loan and until the
liquidation of the Mortgage Loan or disposition of the related REO Properties.
With respect to the payment of insurance premiums and delinquent tax
assessments, in the event that the Servicer determines that a Property Advance
of such amounts would not be recoverable, the Servicer will be required to
notify the Trustee and the Special Servicer of such determination. Upon receipt
of such notice, the Special Servicer will be required to determine (with the
reasonable assistance of the Servicer) whether or not payment of such amount (i)
is necessary to preserve the related Mortgaged Property and (ii) would be in the
best interests of the Certificateholders (and in the case of a Serviced Whole
Loan, the holders of the related Serviced Companion Loans). If the Special
Servicer determines that such payment (i) is necessary to preserve the related
Mortgaged Property and (ii) would be in the best interests of the
Certificateholders (and in the case of a Serviced Whole Loan, the holders of the
related
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Serviced Companion Loans), the Special Servicer will be required to direct the
Servicer to make such payment, who will then be required to make such payment
from the Collection Account (or, with respect to a Serviced Whole Loan, the
related custodial account) to the extent of available funds.
Subject to the conditions or limitations set forth in the Pooling and
Servicing Agreement, the Servicer, the Trustee or the Special Servicer, as
applicable, will be entitled to recover any Advance made out of its own funds
from any amounts collected in respect of a Mortgage Loan (or, with respect to
any Property Advance made with respect to a Serviced Whole Loan, from any
amounts collected in respect of such Serviced Whole Loan) as to which that
Advance was made, whether in the form of late payments, insurance proceeds, and
condemnation proceeds, liquidation proceeds, REO proceeds or otherwise from the
Mortgage Loan or REO Loan (or, with respect to any Property Advance made with
respect to a Serviced Whole Loan, from any amounts collected in respect of such
Serviced Whole Loan) ("Related Proceeds") prior to distributions on the
Certificates. Notwithstanding the foregoing, none of the Servicer, the Special
Servicer or the Trustee will be obligated to make any Advance that it or the
Special Servicer determines in its reasonable judgment would, if made, not be
ultimately recoverable (including interest on the Advance at the Advance Rate)
out of Related Proceeds (a "Nonrecoverable Advance"). Any such determination
with respect to the recoverability of Advances by either the Servicer or the
Special Servicer must be evidenced by an officer's certificate delivered to the
other and to the Depositor, the Bond Administrator and the Trustee and, in the
case of the Trustee, delivered to the Depositor, the Bond Administrator, the
Servicer and the Special Servicer, setting forth such nonrecoverability
determination and the considerations of the Servicer, the Special Servicer or
the Trustee, as the case may be, forming the basis of such determination (such
certificate accompanied by, to the extent available, income and expense
statements, rents rolls, occupancy status, property inspections and other
information used by the Servicer, the Trustee or the Special Servicer, as
applicable, to make such determination, together with any existing Appraisal or
Updated Appraisal); provided, however, that the Special Servicer may, at its
option, make a determination in accordance with the Servicing Standard, that any
Advance previously made or proposed to be made is nonrecoverable and shall
deliver to the Servicer and the Trustee notice of such determination. Any such
determination shall be conclusive and binding on the Servicer, the Special
Servicer and the Trustee.
Subject to the discussion in this section relating to Whole Loans, each of
the Servicer, the Special Servicer and the Trustee will be entitled to recover
any Advance made by it that it subsequently determines to be a Nonrecoverable
Advance out of general funds on deposit in the Collection Account (or, with
respect to any Property Advance made with respect to a Serviced Whole Loan, out
of general funds on deposit in the custodial account related to such Serviced
Whole Loan) in each case, first, from principal collections and then, from
interest collections. If the funds in the Collection Account (or, with respect
to a Serviced Whole Loan, the related custodial account) allocable to principal
and available for distribution on the next Distribution Date are insufficient to
fully reimburse the party entitled to reimbursement, then such party may elect,
on a monthly basis, in its sole discretion, to defer reimbursement of the
portion that exceeds such amount allocable to principal (in which case interest
will continue to accrue on the unreimbursed portion of the Advance at the
Advance Rate) for such time as is required to reimburse such excess portion from
principal for a period not to exceed 12 months (provided, however, that any
deferment over six months will require the consent of the Controlling Class
Representative). In addition, the Servicer, the Special Servicer or the Trustee,
as applicable, will be entitled to recover any Advance that is outstanding at
the time that a Mortgage Loan, REO Loan or a Serviced Whole Loan, as applicable,
is modified but is not repaid in full by the borrower in connection with such
modification but becomes an obligation of the borrower to pay such amounts in
the future (such Advance, a "Workout-Delayed Reimbursement Amount"), first, only
out of principal collections in the Collection Account (or with respect to a
Serviced Whole Loan, first out of the related custodial account) and second,
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only upon a determination by the Servicer, the Special Servicer or the Trustee,
as applicable, that such amounts will not ultimately be recoverable from late
collections of interest and principal or any other recovery on or in respect of
the related Mortgage Loan or REO Loan, from general collections in the
Collection Account, taking into account the factors listed below in making this
determination. In making a nonrecoverability determination, such person will be
entitled to (i) give due regard to the existence of any Nonrecoverable Advance
or Workout-Delayed Reimbursement Amount with respect to other Mortgage Loans
which, at the time of such consideration, the recovery of which are being
deferred or delayed by the Servicer, the Special Servicer or the Trustee, as
applicable, in light of the fact that proceeds on the related Mortgage Loan are
a source of recovery not only for the Property Advance or P&I Advance under
consideration, but also as a potential source of recovery of such Nonrecoverable
Advance or Workout-Delayed Reimbursement Amounts which are or may be being
deferred or delayed and (ii) consider (among other things) only the obligations
of the borrower under the terms of the related Mortgage Loan (or the Serviced
Whole Loan, as applicable) as it may have been modified, to consider (among
other things) the related Mortgaged Properties in their "as is" or then current
conditions and occupancies, as modified by such party's assumptions (consistent
with the applicable Servicing Standard in the case of the Servicer or the
Special Servicer) regarding the possibility and effects of future adverse change
with respect to such Mortgaged Properties, to estimate and consider (consistent
with the applicable Servicing Standard in the case of the Servicer or the
Special Servicer) (among other things) future expenses and to estimate and
consider (among other things) the timing of recoveries. In addition, any such
person may update or change its recoverability determinations at any time (but
not reverse any other person's determination that an Advance is non-recoverable)
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 will be conclusive and binding on the
Certificateholders and the holders of the Serviced Companion Loans. The Trustee
will be entitled to rely conclusively on any nonrecoverability determination of
the Servicer or the Special Servicer, as applicable, and the Servicer will be
entitled to rely conclusively on any nonrecoverability determination of the
Special Servicer. Nonrecoverable Advances allocated to the Mortgage Loans (with
respect to any Mortgage Loan that is part of a Whole Loan, as described above)
will represent a portion of the losses to be borne by the Certificateholders.
In addition, the Servicer, the Special Servicer and the Trustee, as
applicable, shall consider Unliquidated Advances in respect of prior Advances
for purposes of nonrecoverability determinations as if such Unliquidated
Advances were unreimbursed Advances. None of the Servicer, the Special Servicer
or Trustee will be required to make any principal or interest advances with
respect to delinquent amounts due on any Companion Loan. Any requirement of the
Servicer or Trustee 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.
"Unliquidated Advance" means any Advance previously made by a party to the
Pooling and Servicing Agreement that has been previously reimbursed, as between
the person that made the Advance under the Pooling and Servicing Agreement, on
the one hand, and the Trust Fund, on the other, as part of a Workout-Delayed
Reimbursement Amount, as applicable, but that has not been recovered from the
related borrower or otherwise from collections on or the proceeds of the
Mortgage Loan or the applicable Serviced Whole Loan or REO Property in respect
of which the Advance was made.
ACCOUNTS
Collection Account. The Servicer will establish and maintain one or more
segregated accounts (the "Collection Account") pursuant to the Pooling and
Servicing Agreement, and will be required to deposit into the Collection Account
(or with respect to each Serviced Whole
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Loan, a separate custodial account) all payments in respect of the Mortgage
Loans, other than amounts permitted to be withheld by the Servicer or amounts to
be deposited into any Reserve Account. Payments and collections received in
respect of each Serviced Whole Loan will not be deposited into the Collection
Account, but will be deposited into a separate custodial account. Payments and
collections on each related Mortgage Loan will be transferred from such
custodial account to the Collection Account no later than the business day
preceding the related Distribution Date.
Distribution Accounts. The Bond Administrator will establish and maintain
one or more segregated accounts (the "Distribution Account") in the name of the
Trustee for the benefit of the holders of the Certificates. With respect to each
Distribution Date, the Servicer will remit on or before each Servicer Remittance
Date to the Bond Administrator, and the Bond Administrator will deposit into the
Distribution Account, to the extent of funds on deposit in the Collection
Account, on the Servicer Remittance Date an aggregate amount of immediately
available funds equal to the sum of (i) the Available Funds (including all P&I
Advances) and (ii) the Trustee Fee (which includes the Bond Administrator Fee).
To the extent the Servicer fails to do so, the Trustee will deposit all P&I
Advances into the Distribution Account as described herein. See "Description of
the Offered Certificates--Distributions" in this prospectus supplement.
Interest Reserve Account. The Bond Administrator 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, unless such Distribution Date is
the final Distribution Date there shall be deposited, in respect of each
Mortgage Loan that does not accrue interest on the basis of a 360-day year of 12
months of 30 days each, an amount equal to one day's interest at the related
Mortgage Rate (net of any Servicing Fee payable therefrom) on the respective
Stated Principal Balance as of the immediately preceding Due Date, to the extent
a Monthly Payment or P&I Advance is made in respect thereof (all amounts so
deposited in any consecutive January (if applicable) and February, "Withheld
Amounts"). With respect to each Distribution Date occurring in March, an amount
is required to be withdrawn from the Interest Reserve Account in respect of each
such Mortgage Loan equal to the related Withheld Amounts from the preceding
January (if applicable) and February, if any, and deposited into the
Distribution Account.
Excess Interest Distribution Account. The Bond Administrator is required to
establish and maintain an "Excess Interest Distribution Account" in the name of
the Trustee for the benefit of the Class Q Certificateholders. Prior to the
applicable Distribution Date, the Servicer is required to remit to the Trustee
for deposit into the Excess Interest Distribution Account an amount equal to the
Excess Interest received during the related Collection Period. The Excess
Interest Distribution Account may be a subaccount of the Distribution Account.
On each Distribution Date, the Bond Administrator is required to distribute from
the Excess Interest Distribution Account any Excess Interest received with
respect to the Mortgage Loans during the related Collection Period to the Class
Q Certificates.
"Excess Interest" with respect to the ARD Loans is the interest accrued at
an increased interest rate in respect of each ARD Loan after the Anticipated
Repayment Date in excess of the interest accrued at the initial interest rate,
plus any related interest, to the extent permitted by applicable law.
The Bond Administrator will also establish and maintain one or more
segregated accounts or sub-accounts for the "Lower-Tier Distribution Account,"
the "Upper-Tier Distribution Account," and the "Excess Liquidation Proceeds
Account," each in the name of the Trustee for the benefit of the holders of the
Certificates.
The Collection Account, the separate custodial account for each Serviced
Whole Loan, the Lower-Tier Distribution Account, the Upper-Tier Distribution
Account, the Excess Interest Distribution Account and the Excess Liquidation
Proceeds Account will be held in the name of
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the Trustee (or the Servicer or Bond Administrator on behalf of the Trustee) on
behalf of the holders of Certificates, and, in the case of the Serviced Whole
Loans, the holders of the related Serviced Companion Loans. The Excess Interest
Distribution Account will be held in the name of the Trustee (or the Servicer or
Bond Administrator on behalf of the Trustee) on behalf of the holders of the
Class Q Certificates. Each of the Collection Account, the separate custodial
account for each Serviced Whole Loan, any REO Account, the Lower-Tier
Distribution Account, the Upper-Tier Distribution Account, the Excess Interest
Distribution Account and the Excess Liquidation Proceeds Account will be (or
will be a sub-account of) either (i) (A) an account or accounts maintained with
a depository institution or trust company the short-term unsecured debt
obligations or commercial paper of which are rated at least "A-1" by S&P, "P-1"
by Moody's Investors Service, Inc. ("Moody's") and "R-1 (middle)" by DBRS or, if
not rated by DBRS, an equivalent rating such as those listed above by two
nationally-recognized statistical rating organizations and "F1" by Fitch, with
respect to any custodial account related to a Serviced Whole Loan as to which
commercial mortgage pass-through certificates backed by a Serviced Companion
Loan have been issued ("Companion Loan Securities") rated by Fitch, in the case
of accounts in which deposits have a maturity of 30 days or less or, in the case
of accounts in which deposits have a maturity of more than 30 days, the
long-term unsecured debt obligations of which are rated at least "AA-" by S&P,
"Aa3" by Moody's and AA (low) by DBRS or, if not rated by DBRS, an equivalent
rating such as those listed above by two nationally-recognized statistical
rating organizations and "AA-" by Fitch, with respect to any custodial account
related to a Serviced Whole Loan that has Companion Loan Securities rated by
Fitch or (B) as to which the Bond Administrator has received written
confirmation from each rating agency then rating any Certificates or Companion
Loan Securities that holding funds in such account would not cause any rating
agency to qualify, withdraw or downgrade any of its then-current ratings on the
Certificates or Companion Loan Securities or (ii) a segregated trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity which, in the case of a state
chartered depository institution, is subject to regulations substantially
similar to 12 C.F.R. Section 9.10(b), having in either case a combined capital
surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authority, or (iii) any other account that, as evidenced by a
written confirmation from each rating agency then rating any Certificates or
Companion Loan Securities that such account would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then-current ratings assigned to
the Certificates or Companion Loan Securities, which may be an account
maintained with the Trustee, the Bond Administrator or the Servicer, or (iv)
with PNC Bank so long as PNC Bank's long-term unsecured debt rating is at least
"A" from S&P and "A" from Moody's (if the deposits are to be held in the account
for more than 30 days) or PNC Bank's short-term deposit or short-term unsecured
debt rating is at least "A-1" from S&P or "P-1" from Moody's (if the deposits to
be held in accounts for 30 days or less).
Amounts on deposit in the Collection Account, the separate custodial
account for each Serviced Whole Loan and any REO Account may be invested in
certain United States government securities and other high-quality investments
specified in the Pooling and Servicing Agreement ("Permitted Investments").
Interest or other income earned on funds in the Collection Account and the
separate custodial account for each Serviced Whole Loan will be paid to the
Servicer (except to the extent required to be paid to the related borrower) as
additional servicing compensation and interest or other income earned on funds
in any REO Account will be payable to the Special Servicer. The Servicer or the
Special Servicer, as applicable, will be required to bear any losses resulting
from the investment of such funds in accounts maintained by the Servicer, other
than losses resulting from investments directed by or on behalf of a borrower or
which result from the insolvency of any financial institution which was an
eligible institution under the terms of the Pooling and Servicing Agreement in
the month in which the loss occurred and at the time the investment was made.
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Amounts on deposit in the Distribution Account, the Interest Reserve
Account, the Excess Interest Distribution Account and the Excess Liquidation
Proceeds Account will remain uninvested.
The Servicer may make withdrawals from the Collection Account (and the
separate custodial account for each Serviced Whole Loan), to the extent
permitted and in the priorities provided in the Pooling and Servicing Agreement.
ENFORCEMENT OF "DUE-ON-SALE" AND "DUE-ON-ENCUMBRANCE" CLAUSES
In general, the Mortgage Loans or Serviced Whole Loans contain provisions
in the nature of "due-on-sale" clauses (including, without limitation, sales of
Mortgaged Properties (in full or part) or the sale, transfer, pledge or
hypothecation of direct or indirect interests in the borrower or its owners),
which by their terms (a) provide that the Mortgage Loans or Serviced Whole Loans
will (or may at the lender's option) become due and payable upon the sale or
other transfer of an interest in the related Mortgaged Property, (b) provide
that the Mortgage Loans or Serviced Whole Loans may not be assumed without the
consent of the related lender in connection with any such sale or other transfer
or (c) provide that such Mortgage Loans or Serviced Whole Loans may be assumed
or transferred without the consent of the lender provided certain conditions are
satisfied. The Servicer or the Special Servicer, as applicable, will not be
required to enforce any such due-on-sale clauses and in connection therewith
will not be required to (i) accelerate payments thereon or (ii) withhold its
consent to such an assumption if (x) such provision is not exercisable under
applicable law or the enforcement of such provision is reasonably likely to
result in meritorious legal action by the borrower or (y) the Servicer or the
Special Servicer, as applicable, determines, in accordance with the Servicing
Standard, that granting such consent would be likely to result in a greater
recovery, on a present value basis (discounting at the related Mortgage Rate),
than would enforcement of such clause. If the Servicer or the Special Servicer,
as applicable, determines that (i) granting such consent would be likely to
result in a greater recovery, (ii) such provisions are not legally enforceable,
or (iii) in the case of a Mortgage Loan described in clause (c) of this
paragraph, that the conditions to sale or transfer have been satisfied, the
Servicer or the Special Servicer, as applicable, is authorized to take or enter
into an assumption agreement from or with the proposed transferee as obligor
thereon provided that (a) the credit status of the prospective transferee is in
compliance with the Servicer's or Special Servicer's, as applicable, regular
commercial mortgage origination or servicing standards and criteria and the
terms of the related Mortgage and (b) the Servicer or the Special Servicer, as
applicable, has received written confirmation that such assumption or
substitution would not, in and of itself, cause a downgrade, qualification or
withdrawal of the then-current ratings assigned to the Certificates or Companion
Loan Securities from (i) S&P with respect to Mortgage Loans (other than the
Non-Serviced Mortgage Loans) that (A) represent more than 5% of the then-current
aggregate Stated Principal Balance of the Mortgage Loans (taking into account
for the purposes of this calculation, in the case of any such Mortgage Loan with
respect to which the related borrower or its affiliate is a borrower with
respect to one or more other Mortgage Loans, such other Mortgage Loans), (B)
have a Stated Principal Balance that is more than $35,000,000 or (C) are among
the ten largest Mortgage Loans in the Trust (based on its Stated Principal
Balance), or (ii) Moody's and DBRS with respect to any Mortgage Loan which
(together with any Mortgage Loans cross-collateralized with such Mortgage Loan)
represent one of the ten largest Mortgage Loans in the Trust (based on its
Stated Principal Balance). The Servicer or Special Servicer may not approve an
assumption or substitution without requiring the related borrower to pay any
fees owed to the rating agencies associated with the approval of such assumption
or substitution. However, in the event that the related borrower is required but
fails to pay such fees, such fees will be an expense of the Trust Fund. No
assumption agreement may contain any terms that are different from any term of
any Mortgage or related Note, except pursuant to the provisions described under
"--Realization Upon Defaulted Mortgage Loans" and "--Modifications" in this
prospectus supplement. The Special Servicer will have the right to consent to
any assumption of a Mortgage Loan or Serviced Whole Loan
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that is not a Specially Serviced Mortgage Loan and to any determination by the
Servicer that the conditions to transfer or assumption of a Mortgage Loan or
Serviced Whole Loan described in clause (c) of this paragraph have been
satisfied; and the Special Servicer will also be required to obtain the consent
of the Directing Certificateholder to any such assumption, in each case, to the
extent described in this prospectus supplement under "--Special Servicing." In
addition, the Special Servicer will also be required to obtain the consent of
the Directing Certificateholder with respect to any assumption with respect to a
Specially Serviced Mortgage Loan, to the extent described in this prospectus
supplement under "--Special Servicing."
In general, the Mortgage Loans and Serviced Whole Loans contain provisions
in the nature of a "due-on-encumbrance" (including, without limitation, any
mezzanine financing of the borrower or the Mortgaged Property or any sale or
transfer of preferred equity in the borrower or its owners) clause which by
their terms (a) provide that the Mortgage Loans or Serviced Whole Loans will (or
may at the lender's option) become due and payable upon the creation of any lien
or other encumbrance on the related Mortgaged Property, (b) require the consent
of the related lender to the creation of any such lien or other encumbrance on
the related Mortgaged Property or (c) provide that such Mortgaged Property may
be further encumbered without the consent of the lender provided certain
conditions are satisfied. The Servicer or the Special Servicer, as applicable,
will not be required to enforce such due-on-encumbrance clauses and in
connection therewith, will not be required to (i) accelerate payments thereon or
(ii) withhold its consent to such lien or encumbrance if the Servicer or the
Special Servicer, as applicable, (A) determines, in accordance with the
Servicing Standard, that such enforcement would not be in the best interests of
the Trust or that in the case of a Mortgage Loan or Serviced Whole Loan
described in clause (c) of this paragraph, that the conditions to further
encumbrance have been satisfied and (B) receives prior written confirmation from
S&P, Moody's and DBRS that granting such consent would not, in and of itself,
cause a downgrade, qualification or withdrawal of any of the then-current
ratings assigned to the Certificates or Companion Loan Securities; provided,
that in the case of S&P, such confirmation will only be required with respect to
any Mortgage Loan that (1) represents 2% or more of the Stated Principal Balance
of all of the Mortgage Loans held by the Trust Fund (or 5% if the aggregate
Stated Principal Balance of all of the Mortgage Loans held by the Trust Fund is
less than $100 million), (2) has a Stated Principal Balance greater than
$20,000,000, (3) is one of the ten largest mortgage loans based on Stated
Principal Balance, (4) has a loan-to-value ratio (which includes additional debt
of the related borrower, if any) that is greater than or equal to 85% or (5) has
a Debt Service Coverage Ratio (which includes additional debt of the related
borrower, if any) that is less than 1.20x or, in the case of Moody's and DBRS,
such confirmation will only be required with respect to any Mortgage Loan which
(together with any Mortgage Loans cross-collateralized with such Mortgage Loans)
represent one of the ten largest Mortgage Loans in the Trust (based on its then
Stated Principal Balance). The Servicer or Special Servicer may not approve the
creation of any lien or other encumbrance without requiring the related borrower
to pay any fees owed to the rating agencies associated with the approval of such
lien or encumbrance. However, in the event that the related borrower is required
but fails to pay such fees, such fees will be an expense of the Trust Fund. The
Special Servicer will have the right to consent to the waiver of any
due-on-encumbrance clauses with regard to any Mortgage Loan or Serviced Whole
Loan that is not a Specially Serviced Mortgage Loan and to any determination by
the Servicer that the conditions to further encumbrance of a Mortgage Loan or
Serviced Whole Loan described in clause (c) of this paragraph have been
satisfied, and the Special Servicer will also be required to obtain the consent
of the Directing Certificateholder to any such waiver of a due-on-encumbrance
clause, to the extent described in this prospectus supplement under "--Special
Servicing." See "Certain Legal Aspects of Mortgage Loans--Due-on-Sale and
Due-on-Encumbrance Provisions" in the prospectus. If the Special Servicer, in
accordance with the Servicing Standard, (a) notifies the Servicer of its
determination with respect to any Mortgage Loan or Serviced Whole Loan, (which
by its terms permits transfer, assumption or further encumbrance without lender
consent provided certain conditions are satisfied) that the
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conditions required under the related Loan Documents have not been satisfied or
(b) the Special Servicer objects in writing to the Servicer's determination that
such conditions have been satisfied, then the Servicer shall not permit
transfer, assumption or further encumbrance of such Mortgage Loan or Serviced
Whole Loan.
Neither the Servicer nor the Special Servicer will be responsible for
enforcing a "due-on-sale" or a "due-on-encumbrance" clause with respect to any
Non-Serviced Mortgage Loan.
INSPECTIONS
The Servicer (or with respect to any Specially Serviced Mortgage Loan and
REO Property, the Special Servicer) is required to inspect or cause to be
inspected each Mortgaged Property (other than the Mortgaged Properties securing
the Non-Serviced Mortgage Loans) at such times and in such manner as is
consistent with the Servicing Standard, but in any event is required to inspect
each Mortgaged Property securing a Note, with a Stated Principal Balance (or in
the case of a Note secured by more than one Mortgaged Property, having an
allocated loan amount) of (a) $2,000,000 or more at least once every 12 months
and (b) less than $2,000,000 at least once every 24 months, in each case
commencing in 2005; provided, however, that if any Mortgage Loan becomes a
Specially Serviced Mortgage Loan, the Special Servicer is required to inspect or
cause to be inspected the related Mortgaged Property as soon as practicable but
in no event more than 60 days after the Mortgage Loan becomes a Specially
Serviced Mortgage Loan and annually thereafter for so long as the Mortgage Loan
remains a Specially Serviced Mortgage Loan. The reasonable cost of each such
inspection performed by the Special Servicer will be paid by the Servicer as a
Property Advance or if such Property Advance would not be recoverable, as an
expense of the Trust Fund. The Servicer or the Special Servicer, as applicable,
will be required to prepare a written report of the inspection describing, among
other things, the condition of and any damage to the Mortgaged Property and
specifying the existence of any material vacancies in the Mortgaged Property,
any sale, transfer or abandonment of the Mortgaged Property of which it has
actual knowledge, any material adverse change in the condition of the Mortgaged
Property, or any visible material waste committed on the Mortgaged Property.
Inspection of the Mortgaged Properties securing the Garden State Plaza Loan,
Tysons Corner Center Loan and the AFR/Bank of America Portfolio Loan will be in
accordance with the terms of the LB-UBS Series 2004-C4 Pooling and Servicing
Agreement, the COMM 2004-LNB2 Pooling and Servicing Agreement and the GMACCM
2003-C3 Pooling and Servicing Agreement, respectively.
INSURANCE POLICIES
In the case of each Mortgage Loan (but excluding any Mortgage Loan as to
which the related Mortgaged Property has become an REO Property and the
Non-Serviced Mortgage Loans), the Servicer will be required to use reasonable
efforts consistent with the Servicing Standard to cause the related borrower to
maintain (including identifying the extent to which such borrower is maintaining
insurance coverage and, if such borrower does not so maintain, the Servicer will
be required to itself cause to be maintained) for the related Mortgaged
Property:
(i) except where the Mortgage Loan Documents permit a borrower to rely
on self-insurance provided by a tenant, a fire and casualty extended
coverage insurance policy which does not provide for reduction due to
depreciation, in an amount that is at least equal to the lesser of the full
replacement cost of the improvements securing the Mortgage Loan or the
outstanding principal balance of the Mortgage Loan or the Serviced Whole
Loan, as applicable, but, in any event, in an amount sufficient to avoid
the application of any co-insurance clause, and
(ii) all other insurance coverage as is required (including, but not
limited to, coverage for acts of terrorism), subject to applicable law,
under the related Mortgage Loan Documents,
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provided, however, that:
(i) the Servicer will not be required to maintain any earthquake or
environmental insurance policy on any Mortgaged Property unless such
insurance policy was in effect at the time of the origination of such
Mortgage Loan and is available at commercially reasonable rates (and if the
Servicer does not cause the borrower to maintain or itself maintain such
earthquake or environmental insurance policy on any Mortgaged Property, the
Special Servicer will have the right, but not the duty, to obtain (in
accordance with the Servicing Standard), at the Trust's expense, earthquake
or environmental insurance on any REO Property so long as such insurance is
available at commercially reasonable rates);
(ii) if and to the extent that any Mortgage Loan or Serviced Whole
Loan grants the lender thereunder any discretion (by way of consent,
approval or otherwise) as to the insurance provider from whom the related
borrower is to obtain the requisite insurance coverage, the Servicer must
(to the extent consistent with the Servicing Standard) require the related
borrower to obtain the requisite insurance coverage from qualified insurers
that meet the required ratings set forth in the Pooling and Servicing
Agreement;
(iii) the Servicer will have no obligation beyond using its reasonable
efforts consistent with the Servicing Standard to enforce those insurance
requirements against any borrower; provided, however, that this will not
limit the Servicer's obligation to obtain and maintain a force-placed
insurance policy as set forth in the Pooling and Servicing Agreement;
(iv) except as provided below (including under clause (vii)), in no
event will the Servicer be required to cause the borrower to maintain, or
itself obtain, insurance coverage that the Servicer has determined is
either (A) not available at any rate or (B) not available at commercially
reasonable rates and the related hazards are not at the time commonly
insured against for properties similar to the related Mortgaged Property
and located in or around the region in which the related Mortgaged Property
is located (in each case, as determined by the Servicer in accordance with
the Servicing Standard, not less frequently than annually, and such
Servicer will be entitled to rely on insurance consultants, retained at its
own expense, in making such determination);
(v) the reasonable efforts of the Servicer to cause a borrower to
maintain insurance must be conducted in a manner that takes into account
the insurance that would then be available to the Servicer on a
force-placed basis;
(vi) to the extent the Servicer itself is required to maintain
insurance that the borrower does not maintain, the Servicer will not be
required to maintain insurance other than what is available on a
force-placed basis at commercially reasonable rates, and only to the extent
the Trustee as lender has an insurable interest thereon; and
(vii) any explicit terrorism insurance requirements contained in the
related Mortgage Loan Documents are required to be enforced by the Servicer
in accordance with the Servicing Standard (unless the Special Servicer and
the Directing Certificateholder have consented to a waiver (including a
waiver to permit the Servicer to accept insurance that does not comply with
specific requirements contained in the Mortgage Loan Documents) in writing
of that provision in accordance with the Servicing Standard).
provided, however, that any determination by the Servicer that a particular type
of insurance is not available at commercially reasonable rates will be subject
to the approval of the Special Servicer and the Directing Certificateholder;
provided, further, that the Servicer will not be permitted to obtain insurance
on a force-placed basis with respect to terrorism insurance without the consent
of the Special Servicer and the Directing Certificateholder; and, provided
further, that while approval is pending, the Servicer will not be in default or
liable for any loss.
Notwithstanding the provision described in clause (iv) above, the Servicer,
prior to availing itself of any limitation described in that clause with respect
to any Mortgage Loan, will be
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required to obtain the approval or disapproval of the Special Servicer and the
Directing Certificateholder (and, in connection therewith, the Special Servicer
will be required to comply with any applicable provisions of the Pooling and
Servicing Agreement described herein under "--Modifications" and "--Special
Servicing"). The Servicer will be entitled to conclusively rely on the
determination of the Special Servicer.
In addition, you should assume that the Pooling and Servicing Agreement
will prohibit the Servicer from making various determinations that it is
otherwise authorized to make in connection with its efforts to maintain
insurance or cause insurance to be maintained unless it obtains the consent of
the Special Servicer and that the Special Servicer will not be permitted to
consent to those determinations unless the Special Servicer has complied with
any applicable provisions of the Pooling and Servicing Agreement described
herein under "--Modifications" and "--Special Servicing." The Pooling and
Servicing Agreement may also provide for the Special Servicer to fulfill the
duties otherwise imposed on the Servicer as described above with respect to a
particular Mortgage Loan if the Special Servicer has a consent right described
above and disapproves the proposed determination, or if certain other
circumstances occur in connection with an insurance-related determination by the
Servicer, with respect to that Mortgage Loan.
With respect to each REO Property, the Special Servicer will generally be
required to use reasonable efforts, consistent with the Servicing Standard, to
maintain with an insurer meeting certain criteria set forth in the Pooling and
Servicing Agreement (subject to the right of the Special Servicer to direct the
Servicer to make a Property Advance for the costs associated with coverage that
the Special Servicer determines to maintain, in which case the Servicer will be
required to make that Property Advance (subject to the recoverability
determination and Property Advance procedures described above under "--Advances"
in this prospectus supplement) (a) a fire and casualty extended coverage
insurance policy, which does not provide for reduction due to depreciation, in
an amount that is at least equal to the lesser of the full replacement value of
the Mortgaged Property or the Stated Principal Balance of the Mortgage Loan or
the Serviced Whole Loan, as applicable (or such greater amount of coverage
required by the related Mortgage Loan Documents (unless such amount is not
available or the Directing Certificateholder has consented to a lower amount)),
but, in any event, in an amount sufficient to avoid the application of any
co-insurance clause, (b) a comprehensive general liability insurance policy with
coverage comparable to that which would be required under prudent lending
requirements and in an amount not less than $1,000,000 per occurrence and (c) to
the extent consistent with the Servicing Standard, a business interruption or
rental loss insurance covering revenues or rents for a period of at least 12
months. However, the Special Servicer will not be required in any event to
maintain or obtain (or direct the Servicer to maintain or obtain) insurance
coverage described in this paragraph beyond what is reasonably available at a
cost customarily acceptable and consistent with the Servicing Standard. With
respect to each Specially Serviced Mortgage Loan, the Special Servicer will be
required to cause the related borrower to maintain the insurance set forth in
clauses (a), (b) and/or (c) of this paragraph, as applicable, provided that if
such borrower fails to maintain such insurance, the Special Servicer will be
required to direct the Servicer to cause that coverage to be maintained under
the Servicer's force-placed insurance policy. In such case, the Servicer will be
required to so cause that coverage to be maintained to the extent that the
identified coverage is available under the Servicer's existing force-placed
policy.
If either (x) the Servicer or the Special Servicer obtains and maintains,
or causes to be obtained and maintained, a blanket policy or master force-placed
policy insuring against hazard losses on all of the Mortgage Loans (other than
the Non-Serviced Mortgage Loans) or the Serviced Whole Loans or REO Properties,
as applicable, as to which it is the Servicer or the Special Servicer, as the
case may be, then, to the extent such policy (i) is obtained from an insurer
meeting certain criteria set forth in the Pooling and Servicing Agreement, and
(ii) provides protection equivalent to the individual policies otherwise
required or (y) the Servicer
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(or its corporate parent) or Special Servicer has long-term unsecured debt
obligations that are rated not lower than "A" by S&P and "A2" by Moody's and "A"
by Fitch if any Companion Loan Security is rated by Fitch and the Servicer or
Special Servicer self-insures for its obligation to maintain the individual
policies otherwise required, then the Servicer or Special Servicer, as the case
may be, will conclusively be deemed to have satisfied its obligation to cause
hazard insurance to be maintained on the related Mortgaged Properties or REO
Properties, as applicable. Such a blanket or master force-placed policy may
contain a deductible clause (not in excess of a customary amount), in which case
the Servicer or the Special Servicer, as the case may be, that maintains such
policy shall, if there shall not have been maintained on any Mortgaged Property
or REO Property thereunder a hazard insurance policy complying with the
requirements described above, and there shall have been one or more losses that
would have been covered by such an individual policy, promptly deposit into the
Collection Account (or with respect to a Serviced Whole Loan, the related
separate custodial account), from its own funds, the amount not otherwise
payable under the blanket or master force-placed policy in connection with such
loss or losses because of such deductible clause to the extent that any such
deductible exceeds the deductible limitation that pertained to the related
Mortgage Loan or the related Serviced Whole Loan (or, in the absence of any such
deductible limitation, the deductible limitation for an individual policy which
is consistent with the Servicing Standard).
The costs of the insurance premiums incurred by the Servicer or the Special
Servicer may be recovered by the Servicer or the Special Servicer, as
applicable, from reimbursements received from the related borrower or, if the
borrower does not pay those amounts, as a Property Advance (to the extent that
such Property Advances are recoverable advances) as set forth in the Pooling and
Servicing Agreement. However, even if such Property Advance would be a
nonrecoverable advance, the Servicer or the Special Servicer, as applicable, may
make such payments using funds held in the Collection Account (or with respect
to a Serviced Whole Loan, the related separate custodial account) or may be
permitted or required to make such Property Advance, subject to certain
conditions set forth in the Pooling and Servicing Agreement.
No pool insurance policy, special hazard insurance policy, bankruptcy bond,
repurchase bond or certificate guarantee insurance will be maintained with
respect to the Mortgage Loans or Serviced Whole Loan, nor will any Mortgage Loan
be subject to FHA insurance.
ASSIGNMENT OF THE MORTGAGE LOANS
The Depositor will purchase the Mortgage Loans to be included in the
Mortgage Pool on or before the Closing Date from GACC, LaSalle and PNC Bank
pursuant to three separate mortgage loan purchase agreements (the "Mortgage Loan
Purchase Agreements"). See "Description of the Mortgage Pool--The Mortgage Loan
Sellers" in this prospectus supplement.
On the Closing Date, the Depositor will sell, transfer or otherwise convey,
assign or cause the assignment of the Mortgage Loans, without recourse, together
with the Depositor's rights and remedies against the Mortgage Loan Sellers in
respect of breaches of representations and warranties regarding the Mortgage
Loans, to the Trustee for the benefit of the holders of the Certificates. On or
prior to the Closing Date, the Depositor will deliver to the custodian
designated by the Trustee (the "Custodian"), the Note and certain other
documents and instruments (the "Mortgage Loan Documents") with respect to each
Mortgage Loan. The Custodian will hold such documents in trust for the benefit
of the holders of the Certificates. The Custodian is obligated to review certain
documents for each Mortgage Loan within 60 days after the later of the Closing
Date or actual receipt (but not later than 120 days after the Closing Date) and
report any missing documents or certain types of defects therein to the
Depositor, the Servicer, the Special Servicer, the Directing Certificateholder
and the related Mortgage Loan Seller. Each of the Mortgage Loan Sellers will
retain a third party vendor (which may be the Trustee or the Custodian) to
complete the assignment and recording of the
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related Mortgage Loan Documents to the Custodian. Each Mortgage Loan Seller will
be required to effect (at its expense) the assignment and recordation of the
related Mortgage Loan Documents until the assignment and recordation of all
Mortgage Loan Documents has been completed.
REPRESENTATIONS AND WARRANTIES; REPURCHASE; SUBSTITUTION
In the Pooling and Servicing Agreement, the Depositor will assign to the
Trustee for the benefit of Certificateholders the representations and warranties
made by the Mortgage Loan Sellers to the Depositor in the Mortgage Loan Purchase
Agreements.
Each of the Mortgage Loan Sellers will in its respective Mortgage Loan
Purchase Agreement represent and warrant with respect to its respective Mortgage
Loans, subject to certain exceptions set forth in its 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 to
the effect that:
(1) the information pertaining to each Mortgage Loan set forth in the
schedule of Mortgage Loans attached to the applicable Mortgage Loan
Purchase Agreement was true and correct in all material respects as of the
Cut-off Date;
(2) 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 the Mortgage Loan Seller is transferring
such Mortgage Loan free and clear of any and all liens, pledges, charges,
security interests, participation interests and/or any other interests or
encumbrances of any nature whatsoever (other than certain rights of the
holder of a companion loan, if applicable, or certain servicing rights);
(3) the proceeds of each Mortgage Loan have been fully disbursed
(except in those cases where the full amount of the Mortgage Loan has been
disbursed but a portion thereof is being held in escrow or reserve accounts
pending the satisfaction of certain conditions relating to leasing, repairs
or other matters with respect to the related Mortgaged Property), and there
is no obligation for future advances with respect thereto;
(4) each Note, Mortgage and the assignment of leases (if it is a
document separate from the Mortgage) executed in connection with such
Mortgage Loan are legal, valid and binding obligations of the related
borrower or guarantor (subject to any nonrecourse provisions therein and
any state anti-deficiency legislation or market value limit deficiency
legislation), enforceable in accordance with their terms, except (i) 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 provisions 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 principal rights and benefits afforded thereby and (ii)
as such enforcement may be limited by bankruptcy, insolvency, receivership,
reorganization, moratorium, redemption, liquidation or other laws affecting
the enforcement of creditors' rights generally, or by general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(5) each assignment of leases creates a valid collateral or first
priority assignment of, or a valid perfected first priority security
interest in, certain rights under the leases, subject to a license granted
to the related borrower to exercise certain rights and to perform certain
obligations of the lessor under such leases and subject to the limitations
on enforceability set forth in (4) above;
(6) there is no right of offset, abatement, diminution, or rescission
or valid defense or counterclaim with respect to any of the Note,
Mortgage(s) or other agreements executed in
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connection with the Mortgage Loan, subject to limitations on enforceability
set forth in (4) above, and as of the Closing Date, to the Mortgage Loan
Seller's actual knowledge, no such rights have been asserted;
(7) each related assignment of Mortgage and assignment of assignment
of leases will constitute the legal, valid, binding and enforceable
assignment from the Mortgage Loan Seller, subject to the limitations on
enforceability set forth in (4) above;
(8) each related Mortgage is a legal, valid and enforceable first lien
on the related Mortgaged Property subject to the limitations on
enforceability set forth in (4) above and subject to the title exceptions;
(9) all real estate taxes and governmental assessments or charges or
water or sewer bills that prior to the Cut-off Date became delinquent have
been paid, or if in dispute, an escrow of funds in an amount sufficient to
cover such payments has been established;
(10) except as set forth in engineering reports, to the Mortgage Loan
Seller's knowledge as of the Closing Date, each Mortgaged Property is free
and clear of any damage that would materially and adversely affect its
value as security for such Mortgage Loan;
(11) each Mortgaged Property is covered by a title insurance policy
(or a "pro forma" title policy or a "marked up" commitment) insuring that
the related Mortgage is a valid first lien subject only to title
exceptions. No claims have been made under such title insurance policy.
Such title insurance policy is in full force and effect;
(12) as of the date of the origination of each Mortgage Loan, the
related Mortgaged Property was insured by all insurance coverage required
under the related Mortgage and such insurance was in full force and effect
at origination;
(13) other than payments due but not yet 30 days or more delinquent,
there exists no material default, breach, violation or event of
acceleration under the related Mortgage Note or each related Mortgage,
provided, however, that this representation and warranty does not address
or otherwise cover any default, breach, violation or event of acceleration
that specifically pertains to any matter otherwise covered by any
representation and warranty made by the Mortgage Loan Seller elsewhere in
the related Mortgage Loan Purchase Agreement or any exception to any
representation and warranty made therein;
(14) each Mortgage Loan is 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 without giving effect to any applicable grace or cure
period;
(15) the Mortgaged Property, or any material portion thereof, is not
the subject of, and no borrower is a debtor in, any state or federal
bankruptcy or insolvency or similar proceeding;
(16) the Mortgage Loan Documents provide for the acceleration of the
related Mortgage Loan if, without the prior written consent of the holder
of the Mortgage, either the Mortgaged Property or any direct equity
interest in the borrower is directly or indirectly pledged, transferred or
sold, other than by reason of certain exceptions which are customarily
acceptable to prudent commercial and multifamily mortgage lending
institutions lending on the security of property comparable to the related
Mortgaged Property or transfers that are subject to the approval of the
holder of the Mortgage Loan; and
(17) since origination, no portion of the related Mortgaged Property
has been released from the lien of the related Mortgage in any manner which
materially and adversely affects the value, use or operation of the
Mortgaged Property or materially interferes with the security intended to
be provided by such Mortgage.
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The Pooling and Servicing Agreement requires that the Custodian, the
Servicer, the Special Servicer, the Trustee or the Bond Administrator notify the
Depositor, the Bond Administrator, the affected Mortgage Loan Seller, the
Directing Certificateholder, the Custodian, the Servicer, the Special Servicer
and the Trustee, as applicable, upon its becoming aware of any failure to
deliver Mortgage Loan Documents in a timely manner, any defect in the Mortgage
Loan Documents (as described in the Pooling and Servicing Agreement) or any
breach of any representation or warranty contained in the preceding paragraph
that materially and adversely affects the value of such Mortgage Loan, the
related Mortgaged Property or the interests of the Trustee or any holders of the
Certificates. Each of the Mortgage Loan Purchase Agreements provides that, with
respect to any such Mortgage Loan, within 90 days following the earlier of its
receipt of notice from the Servicer, the Special Servicer, the Trustee, the
Custodian or the Bond Administrator or its discovery of such breach or defect,
the affected Mortgage Loan Seller must either (a) cure such breach or defect in
all material respects, (b) repurchase such Mortgage Loan as well as, if such
affected Mortgage Loan is a cross-collateralized Mortgage Loan and not otherwise
un-crossed as set forth below, the other Mortgage Loan or Mortgage Loans in such
cross-collateralized group (and such other Mortgage Loan or Mortgage Loans so
repurchased will be deemed to be in breach of the representations and warranties
by reason of its cross-collateralization with the affected Mortgage Loan) at an
amount equal to the sum of (1) the outstanding principal balance of the Mortgage
Loan or Mortgage Loans as of the date of purchase, (2) all accrued and unpaid
interest on the Mortgage Loan or Mortgage Loans at the related Mortgage Rates in
effect from time to time, to but not including the Due Date in the month of
purchase, (3) all related unreimbursed Property Advances plus accrued and unpaid
interest on related Advances at the Advance Rate and unpaid Special Servicing
Fees and Workout Fees allocable to the Mortgage Loan or Mortgage Loans, (4) any
payable Liquidation Fee, as specified below in "--Special Servicing--Special
Servicing Compensation" and (5) all reasonable out-of-pocket expenses reasonably
incurred or to be incurred by the Servicer, the Special Servicer, the Depositor
and the Trustee in respect of the defect or breach giving rise to the repurchase
obligation, including any expenses arising out of the enforcement of the
repurchase obligation (such price, the "Repurchase Price") or (c) substitute,
within two years of the Closing Date, a Qualified Substitute Mortgage Loan (a
"Replacement Mortgage Loan") for the affected Mortgage Loan (including any other
Mortgage Loans which are cross-collateralized with such Mortgage Loan and are
not otherwise un-crossed as described in clause (b) above and the immediately
succeeding paragraph) (collectively, the "Removed Mortgage Loan") and pay any
shortfall amount equal to the excess of the Repurchase Price of the Removed
Mortgage Loan calculated as of the date of substitution over the stated
principal balance of the Qualified Substitute Mortgage Loan as of the date of
substitution; provided, that the applicable Mortgage Loan Seller generally has
an additional 90-day period (as set forth in the Pooling and Servicing
Agreement) to cure the material defect or material breach if such material
defect or material breach is not capable of being cured within the initial
90-day period, the Mortgage Loan Seller is diligently proceeding with that cure,
and such material defect or material breach is not related to the Mortgage Loan
not being a "qualified mortgage" within the meaning of Section 860G(a)(3) of the
Code. In addition, the applicable Mortgage Loan Seller will have an additional
90 days to cure the material breach or material defect if the Mortgage Loan
Seller has commenced and is diligently proceeding with the cure of such material
breach or material defect and the failure to cure such material breach or
material defect is solely the result of a delay in the return of documents from
the local filing or recording authorities. See "The Pooling and Servicing
Agreement--Servicing Compensation and Payment of Expenses" in this prospectus
supplement.
If one of a group of cross-collateralized Mortgage Loans is to be
repurchased or substituted for by the related Mortgage Loan Seller as
contemplated above, then, prior to such repurchase or substitution, the related
Mortgage Loan Seller or its designee is required to use its reasonable efforts
to prepare and have executed all documentation necessary to terminate the
cross-collateralization between such Mortgage Loans; provided, that such
Mortgage Loan
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Seller cannot effect such termination unless the Controlling Class
Representative has consented in its sole discretion and the Trustee has received
from the related Mortgage Loan Seller (i) an opinion of counsel to the effect
that such termination would neither endanger the status of the applicable Loan
REMIC, the Lower-Tier REMIC or the Upper-Tier REMIC as a REMIC nor result in the
imposition of any tax on the applicable Loan REMIC, the Lower-Tier REMIC or the
Upper-Tier REMIC or the Trust Fund and (ii) written confirmation from each
Rating Agency that such termination would not cause the then-current ratings of
the Certificates to be qualified, withdrawn or downgraded; and provided,
further, that such Mortgage Loan Seller may, at its option and within the 90-day
cure period described above (as the same may be extended), purchase or
substitute for all such cross-collateralized Mortgage Loans in lieu of effecting
a termination of the cross-collateralization. All costs and expenses incurred by
the Trustee in connection with such termination are required to be included in
the calculation of the Repurchase Price for the Mortgage Loan to be repurchased.
If the cross-collateralization cannot be terminated as set forth above, then,
for purposes of (i) determining the materiality of any breach or defect, as the
case may be, and (ii) the application of remedies, the related
cross-collateralized Mortgage Loans are required to be treated as a single
Mortgage Loan.
A "Qualifying Substitute Mortgage Loan" is a Mortgage Loan that, among
other things: (i) has a Stated Principal Balance of not more than the Stated
Principal Balance of the related Removed Mortgage Loan, (ii) accrues interest at
a rate of interest at least equal to that of the related Removed Mortgage Loan,
(iii) has a remaining term to stated maturity of not greater than, and not more
than two years less than, the remaining term to stated maturity of the related
Removed Mortgage Loan and (iv) is approved by the Directing Certificateholder.
The obligations of the Mortgage Loan Sellers to repurchase, substitute or
cure described in the second and third preceding paragraphs constitute the sole
remedies available to holders of Certificates or the Trustee for a document
defect in the related mortgage file or a breach of a representation or warranty
by a Mortgage Loan Seller with respect to an affected Mortgage Loan. None of the
Servicer, the Special Servicer, the Trustee or the Bond Administrator will be
obligated to purchase or substitute a Mortgage Loan if a Mortgage Loan Seller
defaults on its obligation to repurchase, substitute or cure, and no assurance
can be given that a Mortgage Loan Seller will fulfill such obligations. If such
obligation is not met as to a Mortgage Loan that is not a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the Upper-Tier REMIC, the
Lower-Tier REMIC or the applicable Loan REMIC may fail to qualify to be treated
as a REMIC for federal income tax purposes.
CERTAIN MATTERS REGARDING THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
Each of the Servicer and Special Servicer may assign its rights and
delegate its duties and obligations under the Pooling and Servicing Agreement in
connection with the sale or transfer of a substantial portion of its mortgage
servicing or asset management portfolio, provided that certain conditions are
satisfied including obtaining written confirmation of each rating agency then
rating any Certificates or Companion Loan Securities that such assignment or
delegation will not cause a qualification, withdrawal or downgrading of the
then-current ratings assigned to the Certificates or Companion Loan Securities.
The Pooling and Servicing Agreement provides that the Servicer or Special
Servicer may not otherwise resign from its obligations and duties as Servicer or
Special Servicer thereunder, except upon either (a) the determination that
performance of its duties is no longer permissible under applicable law and
provided that such determination is evidenced by an opinion of counsel delivered
to the Trustee and the Bond Administrator or (b) the appointment of, and the
acceptance of the appointment by, a successor and receipt by the Trustee of
written confirmation from each rating agency then rating any Certificates or
Companion Loan Securities that the resignation and appointment will, in and of
itself, not cause a downgrade, withdrawal or qualification of the then-current
rating assigned by such rating agency to any Class of Certificates or Companion
Loan Securities. No such resignation may become effective until the Trustee or a
successor Servicer
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or Special Servicer has assumed the obligations of the Servicer or Special
Servicer under the Pooling and Servicing Agreement. The Trustee or any other
successor Servicer or Special Servicer assuming the obligations of the Servicer
or Special Servicer under the Pooling and Servicing Agreement generally will be
entitled to the compensation to which the Servicer or Special Servicer would
have been entitled. If no successor Servicer or Special Servicer can be obtained
to perform such obligations for such compensation, additional amounts payable to
such successor Servicer or Special Servicer will be treated as Realized Losses.
In addition, the Pooling and Servicing Agreement provides that the Trustee is
permitted to remove the Servicer or the Special Servicer upon receipt of notice
from any rating agency then rating any Certificates or Companion Loan Securities
that if such Servicer or Special Servicer is not removed there is the risk of a
downgrade, qualification or withdrawal of the then current rating of any Class
of Certificates or Companion Loan Securities.
The Pooling and Servicing Agreement also provides that none of the
Depositor, the Servicer or the Special Servicer, or any director, officer,
employee, member, manager or agent (including subservicers) of the Depositor,
the Servicer or the Special Servicer will be under any liability to the Trust or
the holders of Certificates for any action taken or for refraining from the
taking of any action in good faith pursuant to the Pooling and Servicing
Agreement (including actions taken at the direction of the Directing
Certificateholder), or for errors in judgment; provided, however, that none of
the Depositor, the Servicer or the Special Servicer or any director, officer,
employee, member, manager or agent (including subservicers) of the Depositor,
the Servicer and the Special Servicer will be protected against any breach of
its representations and warranties made in the Pooling and Servicing Agreement
or any liability which would otherwise be imposed by reason of willful
misconduct, bad faith, fraud or negligence (or in the case of the Servicer or
Special Servicer, by reason of any specific liability imposed for a breach of
the Servicing Standard) in the performance of duties thereunder or by reason of
negligent disregard of obligations and duties thereunder. The Pooling and
Servicing Agreement further provides that the Depositor, the Servicer and the
Special Servicer and any director, officer, employee, member, manager or agent
(including subservicers) of the Depositor, the Servicer and the Special Servicer
will be entitled to indemnification by the Trust for any loss, liability or
expense incurred in connection with any claim or legal action relating to the
Pooling and Servicing Agreement or the Certificates, other than any loss,
liability or expense (including legal fees and expenses) (i) incurred by reason
of willful misconduct, bad faith, fraud or negligence in the performance of
duties thereunder or by reason of negligent disregard of obligations and duties
thereunder or (ii) in the case of the Depositor and any of its directors,
officers, members, managers, employees and agents, incurred in connection with
any violation by any of them of any state or federal securities law. With
respect to a Serviced Whole Loan, the expenses, costs and liabilities described
in the preceding sentence that relate to the applicable Whole Loan will be paid
out of amounts on deposit in the separate custodial account maintained with
respect to such Whole Loan (with respect to a Serviced Whole Loan, such expenses
will first be allocated to the related B Loan, if any, and then will be
allocated to the related Mortgage Loan and any related Pari Passu Companion
Loans, on a pro rata basis (based on each such loan's outstanding principal
balance). If funds in the applicable custodial account relating to a Serviced
Whole Loan are insufficient, then any deficiency will be paid from amounts on
deposit in the Collection Account.
The Pooling and Servicing Agreement will also provide that the servicer,
special servicer and trustee of the Non-Serviced Mortgage Loans, and any
director, officer, employee or agent of any of them will be entitled to
indemnification by the Trust Fund and held harmless against the Trust's pro rata
share of any liability or expense incurred in connection with any legal action
or claim that relates to the applicable Whole Loan under the related pooling and
servicing agreement or the Pooling and Servicing Agreement; provided, however,
that such indemnification will not extend to any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence on the part
of such party in the performance of its
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obligations or duties or by reason of negligent disregard of its obligations or
duties under the applicable pooling and servicing agreement.
In addition, the Pooling and Servicing Agreement provides that none of the
Depositor, the Servicer or the Special Servicer will be under any obligation to
appear in, prosecute or defend any legal action unless such action is related to
its duties under the Pooling and Servicing Agreement and which in its opinion
does not expose it to any expense or liability. The Depositor, the Servicer or
the Special Servicer may, however, in its discretion undertake any such action
which it may deem necessary or desirable with respect to the Pooling and
Servicing Agreement and the rights and duties of the parties thereto and the
interests of the holders of Certificates and Companion Loan Securities, if
applicable, thereunder. In such event, the legal expenses and costs of such
action and any liability resulting therefrom will be expenses, costs and
liabilities of the Trust, and the Depositor, the Servicer and the Special
Servicer will be entitled to be reimbursed therefor and to charge the Collection
Account (or with respect to a Serviced Whole Loan, the related separate
custodial account, as described in the second preceding paragraph).
The Depositor is not obligated to monitor or supervise the performance of
the Servicer, the Special Servicer, the Trustee or the Bond Administrator under
the Pooling and Servicing Agreement. The Depositor may, but is not obligated to,
enforce the obligations of the Servicer or the Special Servicer under the
Pooling and Servicing Agreement and may, but is not obligated to, perform or
cause a designee to perform any defaulted obligation of the Servicer or the
Special Servicer or exercise any right of the Servicer or the Special Servicer
under the Pooling and Servicing Agreement. In the event the Depositor undertakes
any such action, it will be reimbursed by the Trust from the Collection Account
(or with respect to a Serviced Whole Loan, to the extent such reimbursement is
allocable to such Serviced Whole Loan, from the related custodial account) to
the extent not recoverable from the Servicer or Special Servicer, as applicable.
Any such action by the Depositor will not relieve the Servicer or the Special
Servicer of its obligations under the Pooling and Servicing Agreement.
Any person into which the Servicer, the Special Servicer or the Depositor
may be merged or consolidated, or any person resulting from any merger or
consolidation to which the Servicer, the Special Servicer or the Depositor is a
party, or any person succeeding to the business of the Servicer, the Special
Servicer or the Depositor, will be the successor of the Servicer, the Special
Servicer or the Depositor under the Pooling and Servicing Agreement, and shall
be deemed to have assumed all of the liabilities and obligations of the
Servicer, the Special Servicer or the Depositor under the Pooling and Servicing
Agreement if each of the rating agencies then rating any Certificates or
Companion Loan Securities has confirmed in writing that such merger or
consolidation or transfer of assets or succession, in and of itself, will not
cause a downgrade, qualification or withdrawal of the then-current ratings
assigned by such rating agency for any Class of Certificates or Companion Loan
Securities.
EVENTS OF DEFAULT
"Events of Default" under the Pooling and Servicing Agreement with respect
to the Servicer or the Special Servicer, as the case may be, will include,
without limitation:
(a) (i) any failure by the Servicer to make a required deposit to the
Collection Account on the day such deposit was first required to be made,
which failure is not remedied within one business day, or (ii) any failure
by the Servicer to deposit into, or remit to the Bond Administrator for
deposit into, the Distribution Account any amount required to be so
deposited or remitted (including any required P&I Advance, unless the
Servicer determines that such P&I Advance would not be recoverable), which
failure is not remedied (with interest) by 11:00 a.m. (New York City time)
on the relevant Distribution Date or any failure by the Servicer to remit
to any holder of a Serviced Companion Loan, in a timely manner as required
by the Pooling and Servicing Agreement or any related intercreditor
agreement, any amount required to be so remitted;
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(b) any failure by the Special Servicer to deposit into the REO
Account on the day such deposit is required to be made, or to remit to the
Servicer for deposit in the Collection Account (or, in the case of a
Serviced Whole Loan, the related custodial account) any such remittance
required to be made, under the Pooling and Servicing Agreement; provided,
however, that the failure of the Special Servicer to remit such remittance
to the Servicer will not be an Event of Default if such failure is remedied
within one business day and if the Special Servicer has compensated the
Servicer for any loss of income on such amount suffered by the Servicer due
to and caused by the late remittance of the Special Servicer and reimbursed
the Trust for any resulting advance interest due to the Servicer;
(c) any failure by the Servicer or the Special Servicer duly to
observe or perform in any material respect any of its other covenants or
obligations under the Pooling and Servicing Agreement, which failure
continues unremedied for 30 days (15 days in the case of the Servicer's
failure to make a Property Advance or 45 days in the case of failure to pay
the premium for any insurance policy required to be force-placed by the
Servicer pursuant to the Pooling and Servicing Agreement and 10 days in the
case of a failure to provide reports and items specified under "Description
of the Pooling Agreements--Evidence as to Compliance" in the prospectus,
but solely with respect to the first time such reports and items are
required to be provided) after written notice of the failure has been given
to the Servicer or the Special Servicer, as the case may be, by any other
party to the Pooling and Servicing Agreement, or to the Servicer or the
Special Servicer, as the case may be, with a copy to each other party to
the Pooling and Servicing Agreement, by the Certificateholders of any
Class, evidencing, as to that Class, Percentage Interests aggregating not
less than 25% or by a holder of a Serviced Companion Loan, if affected;
provided, however, if that failure (other than the failure to provide
reports and items specified under "Description of the Pooling
Agreements--Evidence as to Compliance" in the prospectus on the first date
on which such reports and items are required to be provided) is capable of
being cured and the Servicer or Special Servicer, as applicable, is
diligently pursuing that cure, that 30 or 45-day period, as applicable,
will be extended an additional 30 days;
(d) any breach on the part of the Servicer or the Special Servicer of
any representation or warranty in the Pooling and Servicing Agreement which
materially and adversely affects the interests of any Class of
Certificateholders or holders of a Serviced Companion Loan and which
continues unremedied for a period of 30 days after the date on which notice
of that breach, requiring the same to be remedied, will have been given to
the Servicer or the Special Servicer, as the case may be, by the Depositor
or the Trustee, or to the Servicer, the Special Servicer, the Depositor and
the Trustee by the holders of Certificates of any Class evidencing, as to
that Class, Percentage Interests aggregating not less than 25% or by a
holder of a Serviced Companion Loan, if affected; provided, however, if
that breach is capable of being cured and the Servicer or Special Servicer,
as applicable, is diligently pursuing that cure, that 30-day period will be
extended an additional 30 days;
(e) certain events of insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings in respect of or relating to
the Servicer or the Special Servicer, and certain actions by or on behalf
of the Servicer or the Special Servicer indicating its insolvency or
inability to pay its obligations;
(f) receipt by the Trustee of notice from either Fitch or DBRS to the
effect that the continuation of the Servicer or Special Servicer, as
applicable, in such capacity would result in the downgrade, qualification
or withdrawal of any rating then assigned by Fitch or DBRS (i) in the case
of DBRS, to any Class of Certificates or Companion Loan Securities and (ii)
in the case of Fitch, to any Companion Loan Securities;
(g) receipt by the Trustee of written notice from S&P to the effect
that the Servicer or the Special Servicer has been removed from S&P's
approved master servicer list or special servicer list, as the case may be,
and any of the ratings assigned to the Certificates or any Companion Loan
Securities have been qualified, downgraded or withdrawn in connection with
such removal; and
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(h) Moody's has placed the rating of any Certificates or Companion
Loan Securities on "watchlist" status for possible ratings downgrade or
withdrawal (or Moody's has downgraded or withdrawn its rating for any
Certificates or Companion Loan Securities) citing servicing concerns with
respect to the servicing of the Certificates or the related Serviced
Companion Loan by the Servicer or Special Servicer, as the case may be, as
the sole cause or a material factor in such rating action, and, in the case
of watch list status, such watch is not withdrawn by Moody's within 60
days.
RIGHTS UPON EVENT OF DEFAULT
If an Event of Default with respect to the Servicer or the Special
Servicer, as applicable, occurs, then the Trustee may, and at the written
direction of the holders of Certificates evidencing at least 51% of the
aggregate Voting Rights of all Certificateholders, the Trustee will be required
to, terminate all of the rights (other than certain rights to indemnification
and compensation as provided in the Pooling and Servicing Agreement) and
obligations of the Servicer as servicer or the Special Servicer as special
servicer under the Pooling and Servicing Agreement and in and to the Trust.
Notwithstanding the foregoing, upon any termination of the Servicer or the
Special Servicer, as applicable, under the Pooling and Servicing Agreement, the
Servicer or the Special Servicer, as applicable, will continue to be entitled to
receive all accrued and unpaid servicing compensation through the date of
termination plus reimbursement for all Advances and interest thereon as provided
in the Pooling and Servicing Agreement. In the event that the Servicer is also
the Special Servicer and the Servicer is terminated, the Servicer will also be
terminated as Special Servicer. Except for the Directing Certificateholder's
right to terminate the Special Servicer, as described in this prospectus
supplement, a Certificateholder may not terminate the Servicer or Special
Servicer if an Event of Default with respect to the Servicer or Special Servicer
only affects a holder of a Serviced Companion Loan but does not affect a
Certificateholder. If an Event of Default affects a holder of a Serviced
Companion Loan, the Trustee, at the direction of such holder of a Serviced
Companion Loan, will be required to appoint a sub-servicer (or, if such Serviced
Whole Loan is currently being sub-serviced then the Trustee may replace such
sub-servicer with a new sub-servicer) to service or specially service such
Serviced Whole Loan.
On and after the date of termination following an Event of Default by the
Servicer or the Special Servicer, the Trustee will succeed to all authority and
power of the Servicer or the Special Servicer, as applicable, under the Pooling
and Servicing Agreement (and any sub-servicing agreements) and generally will be
entitled to the compensation arrangements to which the Servicer or the Special
Servicer, as applicable, would have been entitled. If the Trustee is unwilling
or unable so to act, or if the holders of Certificates evidencing at least 25%
of the aggregate Voting Rights of all Certificateholders so request, or if the
Trustee is not an "approved" servicer by any of the Rating Agencies for mortgage
pools similar to the one held by the Trust, the Trustee must appoint, or
petition a court of competent jurisdiction for the appointment of, a mortgage
loan servicing institution the appointment of which will not result in the
downgrading, qualification or withdrawal of the rating or ratings then assigned
to any Class of Certificates or Companion Loan Securities, as evidenced in
writing by each rating agency then rating such Certificates or Companion Loan
Securities, to act as successor to the Servicer or the Special Servicer, as
applicable, under the Pooling and Servicing Agreement. Pending such appointment,
the Trustee is obligated to act in such capacity. The Trustee and any such
successor may agree upon the servicing compensation to be paid.
No Certificateholder will have any right under the Pooling and Servicing
Agreement to institute any proceeding with respect to the Pooling and Servicing
Agreement or the Mortgage Loans, unless, with respect to the Pooling and
Servicing Agreement, such holder previously has given to the Trustee a written
notice of a default under the Pooling and Servicing Agreement, and of the
continuance thereof, and unless also the holders of Certificates of any Class
affected thereby evidencing Percentage Interests of at least 25% of such Class
have made written request of the Trustee to institute such proceeding in its
capacity as Trustee
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under the Pooling and Servicing Agreement and have offered to the Trustee such
reasonable security or indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, neglected or
refused to institute such proceeding.
Notwithstanding the foregoing in this "--Rights Upon Event of Default"
section, if an Event of Default on the part of the Servicer affects a pari passu
Serviced Companion Loan and the Servicer is not otherwise terminated, the
Trustee, at the direction of the holders of such Serviced Whole Loan (determined
in accordance with the terms of the related intercreditor agreement) will be
required to appoint a sub-servicer that will be responsible for servicing such
Serviced Whole Loan.
The Trustee will have no obligation to make any investigation of matters
arising under the Pooling and Servicing Agreement or to institute, conduct or
defend any litigation thereunder or in relation thereto at the request, order or
direction of any of the holders of Certificates, unless such holders of
Certificates shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby.
AMENDMENT
The Pooling and Servicing Agreement may be amended at any time by the
Depositor, the Servicer, the Special Servicer, the Trustee and the Bond
Administrator without the consent of any of the holders of Certificates or
holders of any Serviced Companion Loans (i) to cure any ambiguity or to correct
any error; (ii) to cause the provisions therein to conform or be consistent with
or in furtherance of the statements herein made with respect to the
Certificates, the Trust or the Pooling and Servicing Agreement or to correct or
supplement any provisions therein which may be defective or inconsistent with
any other provisions therein; (iii) to amend any provision thereof to the extent
necessary or desirable to maintain the rating or ratings then assigned to each
Class of Certificates or Companion Loan Securities, if applicable (provided,
that such amendment does not adversely affect in any material respect the
interests of any Certificateholder or holder of a Companion Loan not consenting
thereto) and (iv) to amend or supplement a provision, or to supplement any
provisions therein to the extent not inconsistent with the provisions of the
Pooling and Servicing Agreement, or any other change which will not adversely
affect in any material respect the interests of any Certificateholder or holder
of a Serviced Companion Loan not consenting thereto, as evidenced in writing by
an opinion of counsel or, if solely affecting any Certificateholder or holder of
a Serviced Companion Loan, confirmation in writing from each rating agency then
rating any Certificates or Companion Loan Securities that such amendment will
not result in a qualification, withdrawal or downgrading of the then-current
ratings assigned to the Certificates or any Companion Loan Securities, if
applicable. The Pooling and Servicing Agreement requires that no such amendment
shall cause the Upper-Tier REMIC, Lower-Tier REMIC or the applicable Loan REMIC
to fail to qualify as a REMIC.
The Pooling and Servicing Agreement may also be amended from time to time
by the Depositor, the Servicer, the Special Servicer, the Trustee and the Bond
Administrator with the consent of the holders of Certificates evidencing at
least 66 2/3% of the Percentage Interests of each Class of Certificates affected
thereby for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Pooling and Servicing Agreement or
modifying in any manner the rights of the holders of Certificates; provided,
however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on the Mortgage Loans which are required
to be distributed on any Certificate, without the consent of the holder of such
Certificate, or which are required to be distributed to the holder of any
Serviced Companion Loan, without the consent of the holder of such Serviced
Companion Loan; (ii) alter the obligations of the Servicer or the Trustee to
make a P&I Advance or a Property Advance or alter the Servicing Standard set
forth in the Pooling and Servicing Agreement; (iii) change the percentages of
Voting Rights of holders of Certificates which are required to consent to any
action or inaction under the
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Pooling and Servicing Agreement; or (iv) amend the section in the Pooling and
Servicing Agreement relating to the amendment of the Pooling and Servicing
Agreement, in each case, without the consent of the holders of all Certificates
representing all the Percentage Interests of the Class or Classes affected
thereby and the consent of the holder of any affected Serviced Companion Loans.
VOTING RIGHTS
At all times during the term of the Pooling and Servicing Agreement, 98% of
the voting rights for the Certificates (the "Voting Rights") shall be allocated
among the holders of the respective Classes of Regular Certificates (other than
the Class X Certificates) in proportion to the Certificate Balances of their
Certificates, and 2% of the Voting Rights shall be allocated among the holders
of the Class X Certificates. Voting Rights allocated to a Class of
Certificateholders shall be allocated among such Certificateholders in
proportion to the Percentage Interests in such Class evidenced by their
respective Certificates.
SALE OF DEFAULTED MORTGAGE LOANS
The Pooling and Servicing Agreement contains provisions requiring, within
60 days after a Mortgage Loan (other than a Non-Serviced Mortgage Loan) becomes
a Defaulted Mortgage Loan (or, in the case of a Balloon Loan, if a payment
default has occurred with respect to the related Balloon Payment, then after a
Servicing Transfer Event has occurred with respect to such Balloon Payment
default), the Special Servicer to determine the fair value of such Mortgage Loan
in accordance with the Servicing Standard. A "Defaulted Mortgage Loan" is a
Mortgage Loan which is delinquent at least 60 days in respect of its Monthly
Payments or more than 30 days delinquent in respect of its Balloon Payment, if
any, 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 Mortgage Loan or the Serviced
Whole Loan. The Special Servicer will be required to recalculate, if necessary,
from time to time, but not less often than every 90 days, 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. The
Special Servicer will be permitted to retain, at the expense of the Trust Fund,
an independent third party to assist the Special Servicer in determining such
fair value and will be permitted to conclusively rely, to the extent it is
reasonable to do so in accordance with the Servicing Standard, on the opinion of
such third party in making such determination.
In the event a Mortgage Loan (other than the Non-Serviced Mortgage Loan
and, with respect to the 731 Lexington Avenue-Bloomberg Headquarters Loan and
the Saks, Inc.-North Riverside Loan, subject to the purchase option of the
holder of the related B Loan) or a Serviced Whole Loan becomes a Defaulted
Mortgage Loan, the Controlling Class Representative and the Special Servicer, in
that order (only if the Controlling Class Representative or the Special
Servicer, as applicable, is not an affiliate of the related Mortgage Loan
Seller), will each have an assignable option to purchase the Defaulted Mortgage
Loan from the Trust Fund (a "Purchase Option") 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 unreimbursed Property Advances and accrued and unpaid interest
on such Advances, 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.
The Controlling Class Representative will also have a purchase option with
respect to the Garden State Plaza Loan, the Tysons Corner Center Loan and the
AFR/Bank of America Portfolio Loan. For a description of the purchase option
relating to the Garden State Plaza Loan, the Tysons Corner Center Loan and the
AFR/Bank of America Portfolio Loan, see
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"Description of the Mortgage Pool--Split Loan Structures--The Garden State Plaza
Loan--Sale of Defaulted Mortgage Loan," "--The Tysons Corner Center Loan --Sale
of Defaulted Mortgage Loan" and "--The AFR/Bank of America Portfolio
Loan--Rights of the Holder of the AFR/Bank of America Portfolio B Loan--Purchase
Option" and "--Sale of Defaulted Mortgage Loan" in this prospectus supplement.
With respect to the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan
(subject to the rights of the holder the 731 Lexington Avenue-Bloomberg
Headquarters B Loan as described under "Description of the Mortgage Pool--Split
Loan Structures--The 731 Lexington Avenue-Bloomberg Headquarters Loan--Rights of
the Holder of the 731 Lexington Avenue-Bloomberg Headquarters B Loan--Purchase
Option" and "--Sale of Defaulted Mortgage Loan" in this prospectus supplement)
and the DDR-Macquarie Portfolio Whole Loan, the party that exercises the
foregoing Purchase Option will only be entitled to purchase the related Mortgage
Loan and not any related Companion Loans. The Purchase Option with respect to
the Saks, Inc.-North Riverside Loan will be subject to rights of the holder of
the Saks, Inc.-North Riverside B Loan as described under "Description of the
Mortgage Pool--Split Loan Structures--The Saks, Inc.-North Riverside
Loan--Rights of the Holder of the Saks, Inc.-North Riverside B Loan--Purchase
Option" in this prospectus supplement.
There can be no assurance that the Special Servicer's fair market value
determination for any Defaulted Mortgage Loan will equal the amount that could
have actually been realized in an open bid or will be equal to or greater than
the amount that could have been realized through foreclosure or a workout of
such Defaulted Mortgage Loan.
Except with respect to a Non-Serviced Mortgage Loan, unless and until the
Purchase Option with respect to a Defaulted Mortgage Loan is exercised (or, with
respect to the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan and the
Saks, Inc.-North Riverside Whole Loan, a purchase option is exercised by the
holder of the related B Loan), the Special Servicer will be required to pursue
such other resolution strategies available under the Pooling and Servicing
Agreement, including workout and foreclosure, as are consistent with the
Servicing Standard, but the Special Servicer 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 borrower's cure
of all defaults on the Defaulted Mortgage Loan, (ii) the acquisition by, or on
behalf of, the Trust Fund of title to the related Mortgaged Property through
foreclosure or deed in lieu of foreclosure, (iii) the modification or pay-off
(full or discounted) of the Defaulted Mortgage Loan in connection with a
workout, (iv) a repurchase of a Defaulted Mortgage Loan by the applicable
Mortgage Loan Seller due to the Mortgage Loan Seller's breach of a
representation or warranty with respect to such Defaulted Mortgage Loan or a
document defect in the related mortgage file and (v) with respect to the 731
Lexington Avenue-Bloomberg Headquarters Loan and the Saks, Inc.-North Riverside
Loan, a purchase of such Defaulted Mortgage Loan by the holder of the related B
Loan. With respect to clause (v) of the preceding sentence, see "Description of
the Mortgage Pool--Split Loan Structures--The 731 Lexington Avenue-Bloomberg
Headquarters Loan--Rights of the Holder of the 731 Lexington Avenue-Bloomberg
Headquarters B Loan--Purchase Option" and "Description of the Mortgage
Pool--Split Loan Structures--The Saks, Inc.-North Riverside Loan--Rights of the
Holder of the Saks, Inc.-North Riverside B Loan--Purchase Option." The purchase
option for the Non-Serviced Mortgage Loans will terminate under similar
circumstances described in clause (i) through (iv) of the second preceding
sentence applicable to the pooling and servicing agreement that governs such
Non-Serviced Mortgage Loan. In addition, with respect to the AFR/Bank of America
Portfolio Loan, the Purchase Option will also terminate if such defaulted
Mortgage Loan is purchased by the holder of the related B Loan, see "--The
AFR/Bank of America Portfolio Loan--Rights of the Holder of the AFR/Bank of
America Portfolio B Loan--Purchase Option." 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 a Purchase Option.
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If (a) a 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 Special Servicer or, if the Controlling Class
Representative is affiliated with the Special Servicer, the Controlling Class
Representative, or any affiliate of any of them (in other words, the Purchase
Option has not been assigned to an 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 Servicer will be required to determine, in
accordance with the Servicing Standard, whether the Option Price represents a
fair price. The Servicer will be required to retain, at the expense of the Trust
Fund, an independent third party who is an MAI qualified appraiser or an
independent third party that is of recognized standing having experience in
evaluating the value of Defaulted Mortgage Loans in accordance with the Pooling
and Servicing Agreement, to assist the Servicer to determine if the Option Price
represents a fair price for the Defaulted Mortgage Loan. In making such
determination and absent manifest error, the Servicer will be entitled to
conclusively rely on the opinion of such person in accordance with the terms of
the Pooling and Servicing Agreement.
REALIZATION UPON DEFAULTED MORTGAGE LOANS
If a payment default or material non-monetary default on a Mortgage Loan
(other than a Non-Serviced Mortgage Loan) has occurred or, in the Special
Servicer's judgment with the consent of the Directing Certificateholder, a
payment default or material non-monetary default is imminent, then, pursuant to
the Pooling and Servicing Agreement, the Special Servicer, on behalf of the
Trustee, may, in accordance with the terms and provisions of the Pooling and
Servicing Agreement, 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. The Special Servicer is not permitted, however,
to acquire title to any Mortgaged Property, have a receiver of rents appointed
with respect to any Mortgaged Property or take any other action with respect to
any Mortgaged Property that would cause the Trustee, for the benefit of the
Certificateholders, or any other specified person to be considered to hold title
to, to be a "mortgagee-in-possession" of, or to be an "owner" or an "operator"
of such Mortgaged Property within the meaning of certain federal environmental
laws, unless the Special Servicer has previously received a report prepared by a
person who regularly conducts environmental audits (which report will be an
expense of the Trust) and either:
(i) such report indicates that (a) the Mortgaged Property is in
compliance with applicable environmental laws and regulations and (b) there
are no circumstances or conditions present at the Mortgaged Property
relating to the use, management or disposal of any hazardous materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any applicable environmental laws and
regulations; or
(ii) the Special Servicer, based solely (as to environmental matters
and related costs) on the information set forth in such report, determines
that taking such actions as are necessary to bring the Mortgaged Property
into compliance with applicable environmental laws and regulations and/or
taking the actions contemplated by clause (i) above, would be in the best
economic interest of the Trust.
Such requirement precludes enforcement of the security for the related
Mortgage Loan until a satisfactory environmental site assessment is obtained (or
until any required remedial action is taken), but will decrease the likelihood
that the Trust will become liable for a material adverse environmental condition
at the Mortgaged Property. However, there can be no assurance that the
requirements of the Pooling and Servicing Agreement will effectively insulate
the Trust from potential liability for a materially adverse environmental
condition at any Mortgaged Property.
If title to any Mortgaged Property is acquired by the Trust, the Special
Servicer, on behalf of the Trust, will be required to sell the Mortgaged
Property prior to the close of the third
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calendar year following the year in which the Trust acquires such Mortgaged
Property, 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 beyond such
period will not result in the imposition of a tax on the Trust or cause the
Trust (or any designated portion thereof) or either Loan REMIC to fail to
qualify as a REMIC under the Code at any time that any Certificate is
outstanding. Subject to the foregoing and any other tax-related limitations, the
Special Servicer will generally be required to attempt to sell any Mortgaged
Property so acquired on the same terms and conditions it would if it were the
owner. If title to any Mortgaged Property is acquired by the Special Servicer on
behalf of the Trust, the Special Servicer will also be required to ensure that
the Mortgaged Property is administered so that it constitutes "foreclosure
property" within the meaning of Code Section 860G(a)(8) at all times and that
the sale of such property does not result in the receipt by the Trust of any
income from non-permitted assets as described in Code Section 860F(a)(2)(B) with
respect to such property. If the Trust acquires title to any Mortgaged Property,
the Special Servicer, on behalf of the Trust, generally will be required to
retain an independent contractor to manage and operate such property. The
retention of an independent contractor, however, will not relieve the Special
Servicer of its obligation to manage such Mortgaged Property as required under
the Pooling and Servicing Agreement.
In general, the Special Servicer will be obligated to cause any Mortgaged
Property acquired as an REO Property to be operated and managed in a manner that
would, in its good faith and reasonable judgment and to the extent commercially
feasible, maximize the Trust's net after-tax proceeds from such property. After
the Special Servicer reviews the operation of such property and consults with
the Bond Administrator to determine the Trust's federal income tax reporting
position with respect to income it is anticipated that the Trust would derive
from such property, the Special Servicer could determine, pursuant to the
Pooling and Servicing Agreement, that it would not be commercially feasible to
manage and operate such property in a manner that would avoid the imposition of
a tax on "net income from foreclosure property" within the meaning of the REMIC
Regulations (such tax referred to herein as the "REO Tax"). To the extent that
income the Trust receives from an REO Property is subject to a tax on "net
income from foreclosure property," such income would be subject to federal tax
at the highest marginal corporate tax rate (currently 35%). The determination as
to whether income from an REO Property would be subject to an REO Tax will
depend on the specific facts and circumstances relating to the management and
operation of each REO Property. Any REO Tax imposed on the Trust's income from
an REO Property would reduce the amount available for distribution to
Certificateholders. Certificateholders are advised to consult their own tax
advisors regarding the possible imposition of the REO Tax in connection with the
operation of commercial REO Properties by REMICs. The Special Servicer will be
required to sell any REO Property acquired on behalf of the Trust within the
time period and in the manner described above.
Under the Pooling and Servicing Agreement, the Special Servicer is required
to establish and maintain one or more REO Accounts, to be held on behalf of the
Trustee in trust for the benefit of the Certificateholders and with respect to a
Serviced Whole Loan, the holders of the related Serviced Companion Loans, for
the retention of revenues and insurance proceeds derived from each REO Property.
The Special Servicer is required to use the funds in the REO Account to pay for
the proper operation, management, maintenance and disposition of any REO
Property, but only to the extent of amounts on deposit in the REO Account relate
to such REO Property. To the extent that amounts in the REO Account in respect
of any REO Property are insufficient to make such payments, the Servicer is
required to make a Property Advance, unless it determines such Property Advance
would be nonrecoverable. Within one business day following the end of each
Collection Period, the Special Servicer is required to deposit all amounts
received in respect of each REO Property during such Collection Period, net of
any amounts withdrawn to make any permitted disbursements, to the Collection
Account (or with
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respect to a Serviced Whole Loan, the related separate custodial account),
provided that the Special Servicer may retain in the REO Account permitted
reserves.
Under the Pooling and Servicing Agreement, the Bond Administrator is
required to establish and maintain an Excess Liquidation Proceeds Account, to be
held on behalf of the Trustee for the benefit of the Certificateholders and with
respect to each Serviced Whole Loan, the holders of the related Serviced
Companion Loans. Upon the disposition of any REO Property as described above, to
the extent that Liquidation Proceeds (net of related liquidation expenses of
such Mortgage Loan or Serviced Whole Loan or related REO Property) exceed the
amount that would have been received if a principal payment and all other
amounts due with respect to such Mortgage Loan and any related Serviced
Companion Loans have been paid in full on the Due Date immediately following the
date on which proceeds were received (such excess being "Excess Liquidation
Proceeds"), such amount will be deposited in the Excess Liquidation Proceeds
Account for distribution as provided in the Pooling and Servicing Agreement.
MODIFICATIONS
The Servicer or the Special Servicer, as applicable, may agree to any
modification, waiver or amendment of any term of, forgive or defer interest on
and principal of, capitalize interest on, permit the release, addition or
substitution of collateral securing any Mortgage Loan (other than the
Non-Serviced Mortgage Loans) or Serviced Whole Loan, and/or permit the release
of the borrower on or any guarantor of any Mortgage Loan and/or permit any
change in the management company or franchise with respect to any Mortgaged
Property (each of the foregoing, a "Modification") without the consent of the
Trustee or any Certificateholder (other than the Directing Certificateholder),
subject, however, to each of the following limitations, conditions and
restrictions:
(i) other than with respect to the waiver of late payment charges or
waivers in connection with "due-on-sale" or "due-on-encumbrance" clauses in
the Mortgage Loans or Serviced Whole Loans, as described under the heading
"--Enforcement of "Due-on-Sale" and "Due-on-Encumbrance" Clauses" above,
neither the Servicer nor the Special Servicer may agree to any
modification, waiver or amendment of any term of, or take any of the other
above referenced actions with respect to, any Mortgage Loan or Serviced
Whole Loan that would affect the amount or timing of any related payment of
principal, interest or other amount payable thereunder or, as applicable,
in the Servicer's or the Special Servicer's, as applicable, good faith and
reasonable judgment, would materially impair the security for such Mortgage
Loan or Serviced Whole Loan or reduce the likelihood of timely payment of
amounts due thereon or materially alter, substitute or increase the
security for such Mortgage Loan (other than the alteration or construction
of improvements thereon) or Serviced Whole Loan or any guarantee or other
credit enhancement with respect thereto (other than the substitution of a
similar commercially available credit enhancement contract), unless, with
respect to a Specially Serviced Mortgage Loan, in the Special Servicer's
judgment, a material default on such Mortgage Loan or Serviced Whole Loan
has occurred or a default in respect of payment on such Mortgage Loan or
Serviced Whole Loan is reasonably foreseeable, and such modification,
waiver, amendment or other action is reasonably likely to produce a greater
recovery to Certificateholders and if a Serviced Companion Loan is
involved, the holders of the related Serviced Companion Loans, on a present
value basis than would liquidation;
(ii) the Special Servicer may not extend the maturity of any Specially
Serviced Mortgage Loan or Serviced Whole Loan to a date occurring later
than the earlier of (A) (i) two years prior to the Rated Final Distribution
Date and (ii) with respect to a Serviced Whole Loan the date that is the
earlier of two years from the Rate Final Distribution Date or the "rated
final distribution date" of the related Companion Loan Securities unless
100% of the holders of the related Companion Loan Securities have consented
to such extension and (B) if the Specially Serviced Mortgage Loan is
secured by a ground lease, the date 20
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years prior to the expiration of the term of such ground lease (or 10 years
prior to the expiration of such ground lease with the consent of the
Directing Certificateholder if the Special Servicer gives due consideration
to the remaining term of the ground lease);
(iii) neither the Servicer nor the Special Servicer may make or permit
any modification, waiver or amendment of any term of any Mortgage Loan or
Serviced Whole Loan that is not in default or with respect to which default
is not reasonably foreseeable that would (A) be a "significant
modification" of such Mortgage Loan within the meaning of Treasury
Regulations Section 1.860G-2(b) or (B) cause any Mortgage Loan or Serviced
Whole Loan to cease to be a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code (provided that neither the Servicer nor the
Special Servicer will be liable for judgments as regards decisions made
under this subsection that were made in good faith and, unless it would
constitute bad faith or negligence to do so, the Servicer or the Special
Servicer, as applicable, may rely on opinions of counsel in making such
decisions);
(iv) neither the Servicer nor the Special Servicer may permit any
borrower to add or substitute any collateral for an outstanding Mortgage
Loan or Serviced Whole Loan, which collateral constitutes real property,
unless (i) the Servicer or the Special Servicer, as applicable, has first
determined in its good faith and reasonable judgment, based upon a Phase I
environmental assessment (and such additional environmental testing as the
Servicer or the Special Servicer, as applicable, deems necessary and
appropriate), that such additional or substitute collateral is in
compliance with applicable environmental laws and regulations and that
there are no circumstances or conditions present with respect to such new
collateral relating to the use, management or disposal of any hazardous
materials for which investigation, testing, monitoring, containment,
clean-up or remediation would be required under any then applicable
environmental laws and/or regulations and (ii) such addition/and or
substitution would not result in the downgrade, qualification or withdrawal
of the rating then assigned by any Rating Agency to any Class of
Certificates or the ratings assigned to the Companion Loan Securities, if
applicable; and
(v) with limited exceptions, neither the Servicer nor the Special
Servicer shall release any collateral securing an outstanding Mortgage Loan
or Serviced Whole Loan;
provided that notwithstanding clauses (i) through (v) above, neither the
Servicer nor the Special Servicer will be required to oppose the confirmation of
a plan in any bankruptcy or similar proceeding involving a borrower if in its
reasonable and good faith judgment such opposition would not ultimately prevent
the confirmation of such plan or one substantially similar.
The Special Servicer will have the right to consent to any Modification
with regard to any Mortgage Loan or Serviced Whole Loan that is not a Specially
Serviced Mortgage Loan (other than certain non-material Modifications, to which
the Servicer may agree without consent of any other party), and the Special
Servicer will also be required to obtain the consent of the Directing
Certificateholder to any such Modification, to the extent described in this
prospectus supplement under "--Special Servicing". The Special Servicer is also
required to obtain the consent of the Directing Certificateholder to any
Modification with regard to any Specially Serviced Mortgage Loan to the extent
described under "--Special Servicing--The Special Servicer" below.
Subject to the provisions of the Pooling and Servicing Agreement, the
Servicer, with the consent of the Directing Certificateholder, may extend the
maturity of any Mortgage Loan or Serviced Whole Loan with an original term to
maturity of 5 years or less for up to two six-month extensions; provided,
however, that the related borrower is in default with respect to the Mortgage
Loan or Serviced Whole Loan or, in the judgment of the Servicer, such default is
reasonably foreseeable. After such extensions by the Servicer, the Special
Servicer may, subject to the Servicing Standard and with the consent of the
Directing Certificateholder, extend the maturity of any Mortgage Loan or
Serviced Whole Loan that is not, at the time of such extension, a Specially
Serviced Mortgage Loan, in each case for up to two years (subject
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to a limit of a total of four years of extensions); provided that a default on a
Balloon Payment with respect to the subject Mortgage Loan or Serviced Whole Loan
has occurred.
Any modification, extension, waiver or amendment of the payment terms of a
Serviced Whole Loan will be required to be structured so as to be consistent
with the allocation and payment priorities in the related Mortgage Loan
Documents and intercreditor agreement, if any, such that neither the Trust as
holder of the Mortgage Loan nor a holder of any related Serviced Companion Loan
gains a priority over the other such holder that is not reflected in the related
Mortgage Loan Documents and intercreditor agreement.
See also "--Special Servicing--The Special Servicer" below for a
description of the Directing Certificateholder's rights with respect to
reviewing and approving the Asset Status Report.
OPTIONAL TERMINATION
Any holder of Certificates representing greater than 50% of the Percentage
Interest of the then Controlling Class, and, if such holder does not exercise
its option, the Servicer, and if the Servicer does not exercise its option, the
Special Servicer, will have the option to purchase all of the Mortgage Loans and
all property acquired in respect of any Mortgage Loan remaining in the Trust,
and thereby effect termination of the Trust and early retirement of the then
outstanding Certificates, on any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans remaining in the Trust is less than 1%
of the aggregate principal balance of such Mortgage Loans as of the Cut-off
Date. The purchase price payable upon the exercise of such option on such a
Distribution Date will be an amount equal to the greater of (i) the sum of (A)
100% of the outstanding principal balance of each Mortgage Loan included in the
Trust as of the last day of the month preceding such Distribution Date (less any
P&I Advances previously made on account of principal); (B) the fair market value
of all other property included in the Trust as of the last day of the month
preceding such Distribution Date, as determined by an independent appraiser as
of a date not more than 30 days prior to the last day of the month preceding
such Distribution Date; (C) all unpaid interest accrued on the outstanding
principal balance of each Mortgage Loan (including any Mortgage Loans as to
which title to the related Mortgaged Property has been acquired) at the Mortgage
Rate (plus the Excess Rate, to the extent applicable) to the last day of the
month preceding such Distribution Date (less any P&I Advances previously made on
account of interest); and (D) unreimbursed Advances (with interest thereon),
unpaid Servicing Fees and Trustee Fees and unpaid Trust expenses, and (ii) the
aggregate fair market value of the Mortgage Loans and all other property
acquired in respect of any Mortgage Loan in the Trust, on the last day of the
month preceding such Distribution Date, as determined by an independent
appraiser acceptable to the Servicer, together with one month's interest thereon
at the Mortgage Rate. The Trust may also be terminated in connection with an
exchange by a sole remaining Certificateholder of all the then outstanding
Certificates (excluding the Class Q, Class R and Class LR Certificates)
(provided, however, that the Class A through Class E Certificates are no longer
outstanding), for the Mortgage Loans remaining in the Trust.
THE TRUSTEE AND THE BOND ADMINISTRATOR
Wells Fargo Bank, N.A. ("Wells Fargo Bank") will act as Trustee pursuant to
the Pooling and Servicing Agreement. Wells Fargo Bank maintains an office at
Wells Fargo Center, Sixth and Marquette Avenue, Minneapolis, Minnesota
55479-0113. Wells Fargo Bank also conducts trustee administration services at
its offices in Columbia, Maryland. Its address there is 9062 Old Annapolis Road,
Columbia, Maryland 21045-1951. In addition, Wells Fargo Bank maintains a
customer service help desk at (301) 815-6600.
LaSalle Bank National Association will serve as Bond Administrator. In
addition, LaSalle Bank National Association will serve as paying agent and
registrar for the Certificates. The office of LaSalle Bank National Association
responsible for performing its duties under the
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Pooling and Servicing Agreement is located at 135 South LaSalle Street, Suite
1625, Chicago, Illinois 60603, Attention: Asset-Backed Securities Trust Services
Group, COMM 2004-LNB3. LaSalle Bank National Association is a Mortgage Loan
Seller and an affiliate of ABN AMRO Incorporated, one of the Underwriters.
The Trustee and the Bond Administrator may resign at any time by giving
written notice to the Depositor, the Bond Administrator (in the case of the
Trustee), the Servicer, the Special Servicer, the Trustee (in the case of the
Bond Administrator) and the Rating Agencies, provided that no such resignation
will be effective until a successor has been appointed. Upon such notice, the
Servicer will appoint a successor trustee and the Trustee will appoint a
successor bond administrator (which may be the Trustee). If no successor trustee
or successor bond administrator is appointed within 30 days after the giving of
such notice of resignation, the resigning Trustee or Bond Administrator may
petition the court for appointment of a successor trustee or successor bond
administrator.
The Servicer or the Depositor may remove the Trustee or the Bond
Administrator if, among other things, the Trustee or the Bond Administrator
ceases to be eligible to continue as such under the Pooling and Servicing
Agreement or if at any time the Trustee or the Bond Administrator becomes
incapable of acting, or is adjudged bankrupt or insolvent, or a receiver of the
Trustee or the Bond Administrator or of either of their property is appointed or
any public officer takes charge or control of the Trustee or the Bond
Administrator or of either of their property. The holders of Certificates
evidencing aggregate Voting Rights of at least 50% of all Certificateholders may
remove the Trustee or the Bond Administrator upon written notice to the
Depositor, the Servicer, the Trustee and the Bond Administrator. Any resignation
or removal of the Trustee or the Bond Administrator and appointment of a
successor trustee or successor bond administrator will not become effective
until acceptance of the appointment by the successor trustee or successor bond
administrator. Notwithstanding the foregoing, upon any termination of the
Trustee or the Bond Administrator under the Pooling and Servicing Agreement, the
Trustee or Bond Administrator, as applicable, will continue to be entitled to
receive from the Trust all accrued and unpaid compensation and expenses through
the date of termination plus, in the case of the Trustee, the reimbursement of
all Advances made by the Trustee and interest thereon as provided in the Pooling
and Servicing Agreement. In addition, if the Trustee or the Bond Administrator
is terminated without cause, the terminating party is required to pay all of the
expenses of the Trustee or the Bond Administrator, as applicable, necessary to
effect the transfer of its responsibilities to the successor trustee or
successor bond administrator, as applicable. Any successor trustee or bond
administrator must have a combined capital and surplus of at least $50,000,000
and have debt ratings that satisfy certain criteria set forth in the Pooling and
Servicing Agreement.
Pursuant to the Pooling and Servicing Agreement, the Trustee will be paid a
monthly fee equal to a portion of the fee calculated at the "Trustee Fee Rate"
as described in the Pooling and Servicing Agreement (the "Trustee Fee"), which
constitutes a portion of the Servicing Fee. Pursuant to the Pooling and
Servicing Agreement, the Bond Administrator will be paid a monthly fee equal to
a portion of the fee calculated at the "Bond Administrator Fee Rate" as
described in the Pooling and Servicing Agreement (the "Bond Administrator Fee"),
which constitutes a portion of the Trustee Fee.
The Trust will indemnify the Trustee and the Bond Administrator against any
and all losses, liabilities, damages, claims or unanticipated expenses
(including reasonable attorneys' fees) arising in respect of the Pooling and
Servicing Agreement or the Certificates other than those resulting from the
fraud, negligence, bad faith or willful misconduct of the Trustee or the Bond
Administrator, as applicable, or to the extent such party is indemnified
pursuant to the second succeeding sentence. Neither the Trustee nor the Bond
Administrator will be required to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties under the
Pooling and Servicing Agreement, or in the exercise of any of its rights or
powers, if in the Trustee's or Bond Administrator's opinion, as applicable, the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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Each of the Servicer, the Special Servicer, the Depositor, the Paying Agent, the
Certificate Registrar and the Custodian will indemnify the Trustee, the Bond
Administrator and certain related parties for similar losses incurred related to
the willful misconduct, bad faith, fraud and/or negligence in the performance of
each such party's respective duties under the Pooling and Servicing Agreement or
by reason of reckless disregard of its obligations and duties under the Pooling
and Servicing Agreement.
At any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust or property securing the same is
located, the Trustee will have the power to appoint one or more persons or
entities approved by the Trustee to act (at the expense of the Trustee) as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such
co-trustee or separate trustee such powers, duties, obligations, rights and
trusts as the Trustee may consider necessary or desirable. Except as required by
applicable law, the appointment of a co-trustee or separate trustee will not
relieve the Trustee of its responsibilities, obligations and liabilities under
the Pooling and Servicing Agreement to the extent set forth therein.
The Bond Administrator will be the REMIC Administrator, as described in the
prospectus. See "Description of the Pooling Agreements--Certain Matters
Regarding the Master Servicer, the Special Servicer, the REMIC Administrator and
the Depositor" in the prospectus.
DUTIES OF THE TRUSTEE
The Trustee (except for the information under the first paragraph of "--The
Trustee and the Bond Administrator" above) will make no representation as to the
validity or sufficiency of the Pooling and Servicing Agreement, the Certificates
or the Mortgage Loans, this prospectus supplement or related documents. The
Trustee will not be accountable for the use or application by the Depositor, the
Servicer or the Special Servicer of any Certificates issued to it or of the
proceeds of such Certificates, or for the use of or application of any funds
paid to the Depositor, the Servicer or the Special Servicer in respect of the
assignment of the Mortgage Loans to the Trust, or any funds deposited in or
withdrawn from the lock box accounts, Reserve Accounts, Collection Account,
Distribution Account, Interest Reserve Account or any other account maintained
by or on behalf of the Servicer, the Special Servicer or the Bond Administrator,
nor will the Trustee be required to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer or the Special Servicer
under the Pooling and Servicing Agreement (unless the Trustee has assumed the
duties of the Servicer or the Special Servicer as described above under
"--Rights Upon Event of Default").
If no Event of Default has occurred, and after the curing of all Events of
Default which may have occurred, the Trustee is required to perform only those
duties specifically required under the Pooling and Servicing Agreement. Upon
receipt of the various certificates, reports or other instruments required to be
furnished to it, the Trustee is required to examine such documents and to
determine whether they conform on their face to the requirements of the Pooling
and Servicing Agreement to the extent set forth therein.
THE SERVICER
Midland Loan Services, Inc. ("Midland") will be responsible for servicing
the Mortgage Loans (other than the Non-Serviced Mortgage Loans) pursuant to the
Pooling and Servicing Agreement (in such capacity, the "Servicer"). The Garden
State Plaza Loan will be serviced by the LB-UBS Series 2004-C4 Servicer, which
initially is Wachovia Bank, National Association, pursuant to a separate pooling
and servicing agreement. The Tysons Corner Center Loan will be serviced by the
COMM 2004-LNB2 Servicer, which initially is GMAC Commercial Mortgage
Corporation, pursuant to a separate pooling and servicing agreement. The
AFR/Bank of America Portfolio Loan will be serviced by the GMACCM 2003-C3
Servicer, which initially is GMAC Commercial Mortgage Corporation, pursuant to a
separate pooling and servicing agreement.
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Midland, a subsidiary of PNC Bank, National Association, is a real estate
financial services company that provides loan servicing and asset management for
large pools of commercial and multifamily real estate assets and that originates
commercial real estate loans. Midland's address is 10851 Mastin Street, Building
82, Suite 700, Overland Park, Kansas 66210. Midland is approved as a master
servicer, special servicer and primary servicer for investment-grade rated
commercial and multifamily mortgage-backed securities by S&P, Moody's and Fitch.
Midland has received the highest rankings as a master, primary and special
servicer from both S&P and Fitch. S&P ranks Midland as "Strong" and Fitch ranks
Midland as "1" for each category. Midland is also a HUD/FHA-approved mortgagee
and a Fannie Mae-approved multifamily loan servicer.
As of March 31, 2004, Midland was servicing approximately 13,941 commercial
and multifamily loans with a principal balance of approximately $86.4 billion.
The collateral for such loans is located in all 50 states, the District of
Columbia, Puerto Rico, Guam and Canada. Approximately 9,171 of such loans, with
a total principal balance of approximately $63.4 billion, pertain to commercial
and multifamily mortgage-backed securities. The related loan pools include
multifamily, office, retail, hospitality and other income-producing properties.
As of March 31, 2004, Midland was named the special servicer in approximately 79
commercial mortgage-backed securities transactions with an aggregate outstanding
principal balance of approximately $42.3 billion. With respect to such
transactions as of such date, Midland was administering approximately 131 assets
with an outstanding principal balance of approximately $942.9 million.
The information set forth herein concerning Midland, as Servicer, has been
provided by it. Accordingly, neither the Depositor nor the Underwriters make any
representation or warranty as to the accuracy or completeness of such
information.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Pursuant to the Pooling and Servicing Agreement, the Servicer will be
entitled to withdraw the Master Servicing Fee from the Collection Account. The
"Master Servicing Fee" will be payable monthly and will accrue at a rate per
annum (the "Master Servicing Fee Rate") ranging from 0.03% to 0.15%. As of the
Cut-off Date, the weighted average Master Servicing Fee Rate will be 0.0334%. In
addition to the Master Servicing Fee, a separate primary servicing fee at a rate
per annum of 0.02% calculated based on an actual/360 basis will be charged by
the LB-UBS Series 2004-C4 Servicer with respect to Garden State Plaza Loan; a
separate primary servicing fee at a rate per annum of 0.02% calculated based on
an actual/360 basis will be charged by the COMM 2004-LNB2 Servicer with respect
to the Tysons Corner Center Loan and a separate primary master servicing fee at
a rate per annum of 0.02% calculated based on an actual/360 basis with respect
to the AFR/Bank of America Portfolio Loan will be charged by the GMACCM 2003-C3
Servicer. The "Servicing Fee" will be payable monthly on a loan-by-loan basis
and will accrue at a percentage rate per annum (the "Servicing Fee Rate") set
forth on Annex A-1 to this prospectus supplement for each Mortgage Loan and will
include the Master Servicing Fee, the Trustee Fee, the Bond Administrator Fee,
and any fee for primary servicing functions (which varies with each Mortgage
Loan). The Master Servicing Fee will be retained by the Servicer from payments
and collections (including insurance proceeds, condemnation proceeds and
liquidation proceeds) in respect of each Mortgage Loan. The Servicer will also
be entitled to retain as additional servicing compensation (together with the
Master Servicing Fee, "Servicing Compensation") (i) all investment income earned
on amounts on deposit in the Collection Account (and with respect to each
Serviced Whole Loan, the related separate custodial account) and certain Reserve
Accounts (to the extent consistent with the related Mortgage Loan), (ii) to the
extent permitted by applicable law and the related Mortgage Loans, 50% of any
loan modification, extension and assumption fees (for as long as the Mortgage
Loan is not a Specially Serviced Mortgage Loan at which point the Special
Servicer will receive 100% of such fees), 100% of loan service transaction fees,
beneficiary statement charges, or similar items (but not including Prepayment
Premiums or Yield
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Maintenance Charges), (iii) Net Prepayment Interest Excess, if any, and (iv) Net
Default Interest and any late payment fees collected by the Servicer during a
Collection Period on any non-Specially Serviced Mortgage Loan remaining after
application thereof to reimburse interest on Advances with respect to such
Mortgage Loan and to reimburse the Trust for certain expenses of the Trust
relating to such Mortgage Loan; provided, however, that with respect to any
Serviced Whole Loan the related Net Default Interest and late payments fees
shall be allocated pro rata between the Mortgage Loan and the related Companion
Loans (after netting out Property Advances and certain other Trust expenses) in
accordance with the related intercreditor agreement and the Pooling and
Servicing Agreement. In addition, provided that a Non-Serviced Mortgage Loan is
not in special servicing, the Servicer will be entitled to any net default
interest and any late payment fees collected by the servicer servicing the
related Non-Serviced Mortgage Loan that are allocated to such Non-Serviced
Mortgage Loan (in accordance with the related intercreditor agreement and the
related pooling and servicing agreement) during a collection period remaining
after application thereof to reimburse interest on P&I Advances and to reimburse
the Trust for certain expenses of the Trust, if applicable, as provided in the
Pooling and Servicing Agreement. The Servicer will not be entitled to the
amounts specified in clause (ii) and (iii) of this paragraph with respect to the
Non-Serviced Mortgage Loans. If a Mortgage Loan is a Specially Serviced Mortgage
Loan, the Special Servicer will be entitled to the full amount of any
modification, extension or assumption fees, as described below under "--Special
Servicing." The Master Servicing Fee, the Trustee Fee and the Bond Administrator
Fee will accrue on the same basis as the Mortgage Loans except that with respect
to the AFR/Bank of America Portfolio Loan, the servicing fee of the GMACCM
2003-C3 Servicer will be calculated on an actual/360 basis.
In connection with any Servicer Prepayment Interest Shortfall, the Servicer
will be obligated to reduce its Servicing Compensation as provided in this
prospectus supplement under "Description of the Offered
Certificates--Distributions--Prepayment Interest Shortfall."
The Servicer will pay all expenses incurred in connection with its
responsibilities under the Pooling and Servicing Agreement (subject to
reimbursement to the extent and as described in the Pooling and Servicing
Agreement). The Bond Administrator will withdraw monthly from the Distribution
Account the portion of the Servicing Fee payable to the Trustee and the Bond
Administrator.
SPECIAL SERVICING
The Special Servicer. Lennar Partners, Inc., a Florida corporation
("Lennar") and a subsidiary of LNR Property Corporation ("LNR"), will initially
be appointed under the Pooling and Servicing Agreement as special servicer of
all of the Mortgage Loans other than the Non-Serviced Mortgage Loans (in such
capacity, the "Special Servicer"). The Garden State Plaza Loan will be specially
serviced by the LB-UBS Series 2004-C4 Special Servicer, which initially is
Lennar, pursuant to a separate pooling and servicing agreement. The Tysons
Corner Center Loan will be specially serviced by the COMM 2004-LNB2 Special
Servicer, which initially is Lennar, pursuant to a separate pooling and
servicing agreement. The AFR/Bank of America Portfolio Loan will be specially
serviced by the GMACCM 2003-C3 Special Servicer, which initially is Midland,
pursuant to a separate pooling and servicing agreement.
The principal executive offices of Lennar are located at 1601 Washington
Avenue, Miami Beach, Florida 33139, and its telephone number is (305) 695-5600.
LNR, its subsidiaries and affiliates are involved in the real estate investment,
finance and management business and engage principally in (i) purchasing,
enhancing, repositioning and/or developing commercial real estate properties,
(ii) purchasing and originating high yielding loans backed by commercial real
estate properties, and (iii) investing in, and managing as special servicer,
unrated and non-investment grade rated commercial mortgage-backed securities.
LNR and its affiliates have regional offices located across the country in
Florida, Georgia, Oregon and California.
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As of November 30, 2003, Lennar and its affiliates were managing a
portfolio which included an original count of 15,200 assets in most states
across the country and in Europe (France and the United Kingdom) with an
original face value of over $100 billion, most of which are commercial real
estate assets. Included in this managed portfolio are $99 billion of commercial
real estate assets representing 112 securitization transactions, for which
Lennar is master servicer or special servicer.
The Special Servicer may elect to subservice some or all of its special
servicing duties with respect to each of the Mortgage Loans.
The Pooling and Servicing Agreement will provide that more than one Special
Servicer may be appointed, but only one Special Servicer may specially service
any Mortgage Loan.
The Directing Certificateholder. The Directing Certificateholder may at any
time with or without cause terminate substantially all of the rights and duties
of the Special Servicer (other than with respect to the Non-Serviced Mortgage
Loans) and appoint a replacement to perform such duties under substantially the
same terms and conditions as applicable to the Special Servicer. The Directing
Certificateholder will designate a replacement to so serve by the delivery to
the Trustee of a written notice stating such designation. The Trustee will be
required to, promptly after receiving any such notice, notify the Rating
Agencies. The designated replacement will become the replacement Special
Servicer as of the date the Trustee has received: (i) written confirmation from
each rating agency stating that if the designated replacement were to serve as
Special Servicer under the Pooling and Servicing Agreement, none of the
then-current ratings of any of the outstanding Classes of the Certificates or
Companion Loan Securities, as applicable, would be qualified, downgraded or
withdrawn as a result thereof; (ii) a written acceptance of all obligations of
such replacement Special Servicer, executed by the designated replacement; and
(iii) an opinion of counsel to the effect that the designation of such
replacement to serve as Special Servicer is in compliance with the Pooling and
Servicing Agreement, that the designated replacement will be bound by the terms
of the Pooling and Servicing Agreement and that the Pooling and Servicing
Agreement will be enforceable against such designated replacement in accordance
with its terms. The existing Special Servicer will be deemed to have resigned
from its duties under the Pooling and Servicing Agreement in respect of
Specially Serviced Mortgage Loans and REO Properties simultaneously with such
designated replacement's becoming the Special Servicer under the Pooling and
Servicing Agreement. Any replacement Special Servicer may be similarly so
replaced by the Directing Certificateholder.
With respect to the Garden State Plaza Loan, the LB-UBS Series 2004-C4
Special Servicer may not be terminated and replaced without cause. See
"Description of the Mortgage Pool--Split Loan Structures--The Garden State Plaza
Loan--Termination of LB-UBS Series 2004-C4 Special Servicer" in this prospectus
supplement.
With respect to the Tysons Corner Center Loan, the COMM 2004-LNB2 Special
Servicer may be terminated and replaced by the holder of the majority of the
controlling class under the COMM 2004-LNB2 Pooling and Servicing Agreement. The
Controlling Class Representative will not have a right to terminate the COMM
2004-LNB2 Special Servicer without cause. See "Description of the Mortgage
Pool--Split Loan Structures--The Tysons Corner Center Loan--Termination of COMM
2004-LNB2 Special Servicer" in this prospectus supplement.
With respect to the AFR/Bank of America Portfolio Loan, the GMACCM 2003-C3
Special Servicer may be terminated and replaced (initially by the holder of the
AFR/Bank of America Portfolio B Loan) as provided by the GMACCM 2003-C3 Pooling
and Servicing Agreement. See "Description of the Mortgage Pool--Split Loan
Structures--The AFR/Bank of America Portfolio Loan--Termination of GMACCM
2003-C3 Special Servicer" in this prospectus supplement.
The Controlling Class Representative will have no liability whatsoever to
the Trust Fund or any Certificateholders other than the Controlling Class
Certificateholders and will have no liability to any Controlling Class
Certificateholder for any action taken, or for refraining from
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the taking of any action, pursuant to the Pooling and Servicing Agreement, or
for errors in judgment; provided, however, that with respect to Controlling
Class Certificateholders, the Controlling Class Representative will not be
protected against any liability 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. Each Certificateholder
acknowledges and agrees, by its acceptance of its Certificates, that the
Controlling Class Representative may have special relationships and interests
that conflict with those of holders of one or more Classes of Certificates, that
the Controlling Class Representative may act solely in the interests of the
holders of the Controlling Class, that the Controlling Class Representative does
not have any duties to the holders of any Class of Certificates other than the
Controlling Class, that the Controlling Class Representative may take actions
that favor the interests of the holders of the Controlling Class over the
interests of the holders of one or more other Classes of Certificates, that the
Controlling Class Representative will have no liability whatsoever for having
acted solely in the interest of the Controlling Class and that no
Certificateholder may take any action whatsoever against the Controlling Class
Representative or any director, officer, employee, agent or principal of the
Controlling Class Representative for having so acted.
The "Controlling Class" will be, as of any date of determination, the Class
of Principal Balance Certificates with the latest alphabetical Class designation
that has a then aggregate Certificate Balance at least equal to 25% of the
initial aggregate Certificate Balance of such Class of Principal Balance
Certificates as of the Closing Date. As of the Closing Date, the Controlling
Class will be the Class P Certificates. For purposes of determining the
Controlling Class, the Class A-1, Class A-2 and Class A-1A Certificates
collectively will be treated as one Class.
The "Directing Certificateholder" means:
o with respect to any Mortgage Loan, other than any Whole Loan, the
Controlling Class Representative;
o with respect to the DDR-Macquarie Portfolio Loan, the noteholders then
holding a majority of the outstanding principal balance of the
DDR-Macquarie Portfolio Whole Loan;
o with respect the 731 Lexington Avenue-Bloomberg Headquarters Whole
Loan, (a) prior to a 731 Lexington Avenue-Bloomberg Headquarters
Change of Control Event, the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan and (b) so long as a 731
Lexington Avenue-Bloomberg Headquarters Change of Control Event
exists, the outstanding principal balance of the 731 Lexington
Avenue-Bloomberg Headquarters Senior Loans; and
o with respect the Saks, Inc.-North Riverside Whole Loan, (a) prior to a
Saks, Inc.-North Riverside Change of Control Event, the holder of the
Saks, Inc.-North Riverside B Loan and (b) so long as a Saks,
Inc.-North Riverside Change of Control Event exists, the Controlling
Class Representative;
provided, however, that if noteholders then holding a majority of the
outstanding principal balance of the DDR-Macquarie Portfolio Whole Loan or
the 731 Lexington Avenue-Bloomberg Headquarters Senior Loans are not able
to agree on a course of action that satisfies the Servicing Standard within
30 days after receipt of a request for consent to any action by the
Servicer or the Special Servicer, as applicable, the Controlling Class
Representative will be entitled to direct the Servicer or the Special
Servicer, as applicable, on a course of action to follow that satisfies the
requirements set forth in the Pooling and Servicing Agreement.
The "Controlling Class Representative" will be the Controlling Class
Certificateholder selected by more than 50% of the Controlling Class
Certificateholders, by Certificate Balance, as certified by the Bond
Administrator from time to time; provided, however, that (i) absent
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such selection, or (ii) until a Controlling Class Representative is so selected
or (iii) upon receipt of a notice from a majority of the Controlling Class
Certificateholders, by Certificate Balance, that a Controlling Class
Representative is no longer designated, the Controlling Class Certificateholder
that owns the largest aggregate Certificate Balance of the Controlling Class
will be the Controlling Class Representative.
A "Controlling Class Certificateholder" is each holder (or Certificate
Owner, if applicable) of a Certificate of the Controlling Class as certified to
the Bond Administrator from time to time by such holder (or Certificate Owner).
Servicing Transfer Event. The duties of the Special Servicer relate to
Specially Serviced Mortgage Loans and to any REO Property. The Pooling and
Servicing Agreement will define a "Specially Serviced Mortgage Loan" to include
any Mortgage Loan (other than the Non-Serviced Mortgage Loans) and any Serviced
Companion Loan with respect to which: (i) either (x) with respect to any
Mortgage Loan or Serviced Companion Loan other than a Balloon Loan, a payment
default shall have occurred on such Mortgage Loan or Serviced Companion Loan at
its maturity date or, if the maturity date of such Mortgage has been extended in
accordance with the Pooling and Servicing Agreement, a payment default occurs on
such Mortgage Loan or Serviced Companion Loan at its extended maturity date or
(y) with respect to a Balloon Loan, a payment default shall have occurred with
respect to the related Balloon Payment (each a "Servicing Transfer Event");
provided, however, if (A) the related borrower is diligently seeking a
refinancing commitment (and delivers a statement to that effect to the Servicer,
with a copy to the Special Servicer and the Directing Certificateholder within
30 days after the default), (B) the related borrower continues to make its
Assumed Scheduled Payment, (C) no other Servicing Transfer Event has occurred
with respect to that Mortgage Loan or Serviced Companion Loan and (D) the
Directing Certificateholder consents, a Servicing Transfer Event will not occur
until 60 days beyond the related maturity date; and provided, further, if the
related borrower has delivered to the Special Servicer and the Directing
Certificateholder, on or before the 60th day after the related maturity date, a
refinancing commitment reasonably acceptable to the Special Servicer and the
Directing Certificateholder, and the borrower continues to make its Assumed
Scheduled Payments (and no other Servicing Transfer Event has occurred with
respect to that Mortgage Loan or Serviced Companion Loan), a Servicing Transfer
Event will not occur until the earlier of (1) 120 days beyond the related
maturity date and (2) the termination of the refinancing commitment; (ii) any
Monthly Payment (other than a Balloon Payment) is 60 days or more delinquent;
(iii) the date upon which the Servicer or Special Servicer (with the Directing
Certificateholder's consent) determines that a payment default or any other
default under the applicable Mortgage Loan Documents that (with respect to such
other default) would materially impair the value of the Mortgaged Property as
security for the Mortgage Loan and, if applicable, Serviced Companion Loan or
otherwise would materially adversely affect the interests of Certificateholders
and, if applicable, the holders of the related Serviced Companion Loans and
would continue unremedied beyond the applicable grace period under the terms of
the Mortgage Loan or Serviced Companion Loan (or, if no grace period is
specified, for 60 days and provided that a default that would give rise to an
acceleration right without any grace period will be deemed to have a grace
period equal to zero) is imminent and is not likely to be cured by the related
borrower within 60 days or, except as provided in clause (i)(y) above, in the
case of a Balloon Payment, for at least 30 days, (iv) the date upon which the
related borrower has become the subject of a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises in an
involuntary case under any present or future federal or state bankruptcy,
insolvency or similar law, or the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, provided that if such decree or order has been dismissed, discharged or
stayed within 60 days thereafter, the Mortgage Loan or Serviced Companion Loan
will no longer be a Specially Serviced Mortgage Loan and no Special Servicing
Fees will be payable with respect thereto;
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(v) the date on which the related borrower consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
such borrower of or relating to all or substantially all of its property; (vi)
the date on which the related borrower admits in writing its inability to pay
its debts generally as they become due, files a petition to take advantage of
any applicable insolvency or reorganization statute, makes an assignment for the
benefit of its creditors, or voluntarily suspends payment of its obligations;
(vii) a default, of which the Servicer or the Special Servicer has notice (other
than a failure by such related borrower to pay principal or interest) and which
in the opinion of the Servicer or the Special Servicer materially and adversely
affects the interests of the Certificateholders or any holder of a Serviced
Companion Loan, if applicable, occurs and remains unremedied for the applicable
grace period specified in the Mortgage Loan Documents for such Mortgage Loan or
Serviced Companion Loan (or if no grace period is specified for those defaults
which are capable of cure, 60 days); or (viii) the date on which the Servicer or
Special Servicer receives notice of the foreclosure or proposed foreclosure of
any lien on the related Mortgaged Property; provided, however, that a Mortgage
Loan or Serviced Companion Loan will cease to be a Specially Serviced Mortgage
Loan (each, a "Corrected Mortgage Loan") (A) with respect to the circumstances
described in clauses (i) and (ii), above, when the borrower thereunder has
brought the Mortgage Loan or Serviced Companion Loan current and thereafter made
three consecutive full and timely Monthly Payments, including pursuant to any
workout of the Mortgage Loan or Serviced Companion Loan, (B) with respect to the
circumstances described in clause (iii), (iv), (v), (vi) and (viii) above, when
such circumstances cease to exist in the good faith judgment of the Special
Servicer or (C) with respect to the circumstances described in clause (vii)
above, when such default is cured; provided, in each case, that at that time no
circumstance exists (as described above) that would cause the Mortgage Loan or
Serviced Companion Loan to continue to be characterized as a Specially Serviced
Mortgage Loan.
Notwithstanding the foregoing, the determination that a transfer to special
servicing for the 731 Lexington Avenue-Bloomberg Headquarters Whole Loan is
required as a result of the occurrence of a determination of an imminent payment
default described in clause (iii) of the preceding paragraph will be delayed
(unless an event described in clause (i) or (ii) of the preceding paragraph has
occurred that has not been or is not being cured by the related borrower or
unless an event described in clause (iv), (v), (vi), (vii) or (viii) of the
preceding paragraph is also occurring) (a "731 Lexington Avenue-Bloomberg
Headquarters Special Servicing Delay"), if, within the time frame specified in
the Pooling and Servicing Agreement, the holder of the 731 Lexington
Avenue-Bloomberg Headquarters B Loan has deposited with the Servicer an amount
equal to the monthly debt service payment for the 731 Lexington Avenue-Bloomberg
Headquarters Whole Loan due on the first Due Date following such deposit;
provided, however, that such deposit will be irrevocable at any time on or prior
to such first Due Date. Such deposit will be applied by the Servicer to debt
service in the event that the related borrower fails to make the monthly debt
service payment on such Due Date (each such deposit will constitute a 731
Lexington Avenue-Bloomberg Headquarters Cure Event); provided, however,
(A) if the related borrower makes the monthly debt service payment on
the first Due Date but the payment default described in clause (iii) above
is continuing, such deposit will either be retained by the Servicer for
application on the second Due Date following the date of such deposit or,
upon the business day following written request (so long as such request is
made on or prior to the fifth business day following the first Due Date
following the date for deposit), will be returned to the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan (in which event there will
no longer exist a 731 Lexington Avenue-Bloomberg Headquarters Special
Servicing Delay and a transfer of servicing from the Servicer to the
Special Servicer may be determined to be required) and
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(B) if the related borrower makes the monthly debt service payment on
the first Due Date and the event described in clause (iii) above is not
continuing, such deposit will be returned to the holder of the 731
Lexington Avenue-Bloomberg Headquarters B Loan.
If a Servicing Transfer Event exists with respect to the Mortgage Loan
included in a Serviced Whole Loan, then it will also be deemed to exist with
respect to the related Serviced Companion Loans. If a servicing transfer event
under LB-UBS Series 2004-C4 Pooling and Servicing Agreement, the COMM 2004-LNB2
Pooling and Servicing Agreement or the GMACCM 2003-C3 Pooling and Servicing
Agreement, as applicable, exists with respect to a Companion Loan related to a
Non-Serviced Mortgage Loan, then it will also be deemed to exist with respect to
the related Non-Serviced Mortgage Loan. The Whole Loans are intended to always
be serviced or specially serviced, as the case may be, together.
A servicing transfer event under (i) the GMACCM 2003-C3 Pooling and
Servicing Agreement with respect to the AFR/Bank of America Portfolio Whole Loan
or (ii) the Pooling and Servicing Agreement with respect to the 731 Lexington
Avenue-Bloomberg Headquarters Whole Loan or the Saks, Inc.-North Riverside Whole
Loan, will generally be delayed if the holder of the related B Loan is making
all cure payments required by the related intercreditor agreement and subject to
limitations upon the number of cure payments that may be made in any twelve
calendar month period (or, in the case of the 731 Lexington Avenue-Bloomberg
Headquarters loan, a material non-monetary default has occurred, the holder of
the 731 Lexington Avenue-Bloomberg Headquarters B Loan is diligently attempting
to cure the same, and no more than thirty days have passed, subject to no more
than six cure events or special servicing delays in any twelve month period). In
addition, so long as the holder of the related B Loan is exercising its right to
cure certain events of default with respect to the related Whole Loan pursuant
to and in accordance with the related intercreditor agreement, neither the
servicer nor the special servicer servicing such Whole Loan may treat such event
of default as such for purposes of accelerating the related Whole Loan or
commencing foreclosure proceedings.
Asset Status Report. The Special Servicer will prepare a report (an "Asset
Status Report") for each Mortgage Loan (other than the Non-Serviced Mortgage
Loans) and each Serviced Whole Loan which becomes a Specially Serviced Mortgage
Loan not later than 30 days after the servicing of such Mortgage Loan or such
Serviced Whole Loan is transferred to the Special Servicer. Each Asset Status
Report will be delivered to the Servicer, the Controlling Class Representative
and the Rating Agencies. If the Controlling Class Representative does not
disapprove an Asset Status Report within 10 business days, the Special Servicer
will implement the recommended action as outlined in such Asset Status Report;
provided, however, that the Special Servicer may not take any actions that are
contrary to applicable law or the terms of the applicable Mortgage Loan
Documents. The Controlling Class Representative may object to any Asset Status
Report within 10 business days of receipt; provided, however, that the Special
Servicer will be required to implement the recommended action as outlined in the
Asset Status Report if it makes a determination in accordance with the Servicing
Standard that the objection is not in the best interests of all the
Certificateholders (and with respect to a Serviced Whole Loan, the holders of
the related Serviced Companion Loans). If the Controlling Class Representative
disapproves such Asset Status Report and the Special Servicer has not made the
affirmative determination described above, the Special Servicer will revise such
Asset Status Report as soon as practicable thereafter, but in no event later
than 30 business days after such disapproval. In any event, if the Controlling
Class Representative does not approve an Asset Status Report within 60 business
days from the first submission of an Asset Status Report, the Special Servicer
may act upon the most recently submitted form of Asset Status Report and in
compliance with the Servicing Standard. The Special Servicer will revise such
Asset Status Report until the Controlling Class Representative fails to
disapprove such revised Asset Status Report as described above or until the
Special Servicer makes a determination, consistent with the Servicing Standard,
that such objection is not in the best interests of all the Certificateholders
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and the holders of the related Serviced Companion Loans, if applicable. The
Asset Status Report is not intended to replace or satisfy any specific consent
or approval right which the Controlling Class Representative may have.
Notwithstanding the foregoing, with respect to any Serviced Whole Loan, the
procedure and timing for approval by the Directing Certificateholder of the
related Asset Status Report will be governed by the terms of the related
intercreditor agreement and the Pooling and Servicing Agreement.
Certain Rights of the Controlling Class Representative. In addition to its
rights and obligations with respect to Specially Serviced Mortgage Loans, the
Special Servicer has the right to approve any modification, whether or not the
applicable Mortgage Loan or Serviced Companion Loan is a Specially Serviced
Mortgage Loan, to the extent described above under "--Modifications" and to
approve any waivers of due-on-sale or due-on-encumbrance clauses as described
above under "--Enforcement of "Due-on-Sale" and "Due-on Encumbrance" Clauses,"
whether or not the applicable Mortgage Loan or Serviced Companion Loan is a
Specially Serviced Mortgage Loan. With respect to non-Specially Serviced
Mortgage Loans, the Servicer must notify the Special Servicer of any request for
approval (a "Request for Approval") received relating to the Special Servicer's
above-referenced approval rights and forward to the Special Servicer its written
recommendation, analysis and any other information or documents reasonably
requested by the Special Servicer (to the extent such information or documents
are in the Servicer's possession). The Special Servicer will have 10 business
days (from the date that the Special Servicer receives the information it
requested from the Servicer) to analyze and make a recommendation with respect
to a Request for Approval with respect to a non-Specially Serviced Mortgage Loan
and, immediately following such 10 business day period, is required to notify
the Controlling Class Representative of such Request for Approval and its
recommendation with respect thereto. Following such notice, the Controlling
Class Representative will have five business days from the date it receives the
Special Servicer recommendation and any other information it may reasonably
request to approve any recommendation of the Special Servicer relating to any
Request for Approval. In any event, if the Controlling Class Representative does
not respond to a Request for Approval within the required 5 business days, the
Special Servicer may deem its recommendation approved by the Controlling Class
Representative. With respect to a Specially Serviced Mortgage Loan, the Special
Servicer must notify the Controlling Class Representative of any Request for
Approval received relating to the Controlling Class Representative's
above-referenced approval rights and its recommendation with respect thereto.
The Controlling Class Representative will have 10 business days to approve any
recommendation of the Special Servicer relating to any such Request for
Approval. In any event, if the Controlling Class Representative does not respond
to any such Request for Approval within the required 10 business days, the
Special Servicer may deem its recommendation approved by the Controlling Class
Representative. Notwithstanding the foregoing, with respect to any Serviced
Whole Loan, the procedure and timing for approval by the Directing
Certificateholder of the related Request for Approval will be governed by the
terms of the related intercreditor agreement and the Pooling and Servicing
Agreement.
The Controlling Class may have conflicts of interest with other Classes of
Certificates or with the Trust. The Controlling Class Representative has no duty
to act in the interests of any Class other than the Controlling Class.
Neither the Servicer nor the Special Servicer will be required to take or
refrain from taking any action pursuant to instructions from the Controlling
Class Representative that would cause it to violate applicable law, the Pooling
and Servicing Agreement, including the Servicing Standard, or the REMIC
Regulations.
The Servicer and the Special Servicer, as applicable, will be required to
discuss with the Controlling Class Representative, on a monthly basis, the
performance of any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or
Serviced Whole Loan which is a Specially Serviced Mortgage Loan, is delinquent,
has been placed on a "Watch List" or has been identified by the Servicer or
Special Servicer, as exhibiting deteriorating performance.
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With respect to the Garden State Plaza Loan, any decision to be made with
respect to the Garden State Plaza Whole Loan that requires the approval of the
majority certificateholder of the controlling class under the LB-UBS Series
2004-C4 Pooling and Servicing Agreement [(other than removal of the LB-UBS
Series 2004-C4 Special Servicer)] will require the approval of noteholders (or
their designees) then holding a majority of the outstanding principal balance of
the Garden State Plaza Loan Whole Loan. If noteholders (or their designees) then
holding a majority of the outstanding principal balance of the Garden State
Plaza Whole Loan are not able to agree on a course of action that satisfies the
servicing standard under the LB-UBS Series 2004-C4 Pooling and Servicing
Agreement within 30 days (or such shorter period as may be required by the
Mortgage Loan Documents to the extent the lender's approval is required) after
receipt of a request for consent to any action by the LB-UBS Series 2004-C4
Servicer or the LB-UBS Series 2004-C4 Special Servicer, as applicable, LB-UBS
Series 2004-C4 Servicer or the LB-UBS Series 2004-C4 Special Servicer, as
applicable, will implement such action or inaction in accordance with the
servicing standard set forth in the LB-UBS Series 2004-C4 Pooling and Servicing
Agreement. The Controlling Class Representative will be designated in the
Pooling and Servicing Agreement to be the party entitled exercise the rights of
the holder of the Garden State Plaza Loan.
With respect to the Tysons Corner Center Loan, any decision to be made with
respect to the Tysons Corner Center Whole Loan that requires the approval of the
majority certificateholder of the controlling class under the COMM 2004-LNB2
Pooling and Servicing Agreement (other than removal of the COMM 2004-LNB2
Special Servicer) will require the approval of noteholders (or their designees)
then holding a majority of the outstanding principal balance of the Tysons
Corner Center Whole Loan (including the Controlling Class Representative). If
noteholders (or their designees) then holding a majority of the outstanding
principal balance of the Tysons Corner Center Whole Loan are not able to agree
on a course of action that satisfies the servicing standard set forth under the
COMM 2004-LNB2 Pooling and Servicing Agreement within 30 days after receipt of a
request for consent to any action by the COMM 2004-LNB2 Servicer or the COMM
2004-LNB2 Special Servicer, as applicable, the majority certificateholder of the
controlling class under the COMM 2004-LNB2 Pooling and Servicing Agreement will
be entitled to direct the COMM 2004-LNB2 Servicer or the COMM 2004-LNB2 Special
Servicer, as applicable, on a course of action to follow that satisfies the
requirements set forth in the COMM 2004-LNB2 Pooling and Servicing Agreement.
The Controlling Class Representative will be designated in the Pooling and
Servicing Agreement to be the party entitled exercise the rights of the holder
of the Tysons Corner Center Loan.
With respect to the AFR/Bank of America Portfolio Loan, any decision to be
made with respect to the AFR/Bank of America Portfolio Whole Loan that requires
the approval of the majority certificateholder of the controlling class under
the GMACCM 2003-C3 Pooling and Servicing Agreement will (a) prior to the
occurrence of an AFR/Bank of America Portfolio Change of Control Event require
the approval of holder of the AFR/Bank of America Portfolio B Loan and so long
as an AFR/Bank of America Portfolio Change of Control Event exists, noteholders
(or their designees) then holding a majority of the outstanding principal
balance of the AFR/Bank of America Portfolio Whole Loan. If noteholders (or
their designees) then holding a majority of the outstanding principal balance of
the AFR/Bank of America Portfolio Senior Loans are not able to agree on a course
of action that satisfies the Servicing Standard within 60 days after receipt of
a request for consent to any action by the GMACCM 2003-C3 Servicer or the GMACCM
2003-C3 Special Servicer, as applicable, the majority certificateholder of the
controlling class under the GMACCM 2003-C3 Pooling and Servicing Agreement will
be entitled to direct the GMACCM 2003-C3 Servicer or the GMACCM 2003-C3 Special
Servicer, as applicable, on a course of action to follow that satisfies the
requirements set forth in the GMACCM 2003-C3 Pooling and Servicing Agreement.
Special Servicing Compensation. Pursuant to the Pooling and Servicing
Agreement, the Special Servicer will be entitled to certain fees including a
special servicing fee, payable with respect to each Collection Period, equal to
0.25% per annum of the Stated Principal Balance of
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each related Specially Serviced Mortgage Loan and REO Loan (the "Special
Servicing Fee") other than the Non-Serviced Mortgage Loans. The LB-UBS Series
2004-C4 Special Servicer will accrue a comparable special servicing fee with
respect to the Garden State Plaza Whole Loan under the LB-UBS Series 2004-C4
Pooling and Servicing Agreement; the COMM 2004-LNB2 Special Servicer will accrue
a comparable special servicing fee with respect to the Tysons Corner Center
Whole Loan under the COMM 2004-LNB2 Pooling and Servicing Agreement; and the
GMACCM 2003-C3 Special Servicer will accrue a comparable special servicing fee
with respect to the AFR/Bank of America Portfolio Whole Loan under the GMACCM
2003-C3 Pooling and Servicing Agreement.
The Special Servicer will not be entitled to retain any portion of the
Excess Interest paid on the ARD Loans.
A "Workout Fee" will in general be payable to the Special Servicer with
respect to each Mortgage Loan (other than the Non-Serviced Mortgage Loans) or
Serviced Whole Loan that ceases to be a Specially Serviced Mortgage Loan
pursuant to the definition thereof. As to each such Mortgage Loan (other than
the Non-Serviced Mortgage Loans) or Serviced Whole Loan, the Workout Fee will be
payable out of, and will be calculated by application of, a "Workout Fee Rate"
of 1.0% to each collection of interest and principal (including scheduled
payments, prepayments, Balloon Payments and payments at maturity) received on
such Mortgage Loan or Serviced Whole Loan for so long as it remains a Corrected
Mortgage Loan. The Workout Fee with respect to any such Mortgage Loan will cease
to be payable if such loan again becomes a Specially Serviced Mortgage Loan or
if the related Mortgaged Property becomes an REO Property; provided that a new
Workout Fee will become payable if and when such Mortgage Loan or Serviced Whole
Loan again ceases to be a Specially Serviced Mortgage Loan. If the Special
Servicer is terminated (other than for cause) or resigns with respect to any or
all of its servicing duties, it will retain the right to receive any and all
Workout Fees payable with respect to Mortgage Loans or Serviced Whole Loans that
cease to be Specially Serviced Mortgage Loans during the period that it had
responsibility for servicing Specially Serviced Mortgage Loans and that had
ceased being Specially Serviced Mortgage Loans (or for any Specially Serviced
Mortgage Loan that had not yet become a Corrected Mortgage Loan because as of
the time that the Special Servicer is terminated the borrower has not made three
consecutive monthly debt service payments and subsequently the Specially
Serviced Mortgage Loan becomes a Corrected Mortgage Loan) at the time of such
termination or resignation (and the successor Special Servicer will not be
entitled to any portion of such Workout Fees), in each case until the Workout
Fee for any such loan ceases to be payable in accordance with the preceding
sentence. The LB-UBS Series 2004-C4 Special Servicer will accrue a comparable
workout fee with respect to the Garden State Plaza Whole Loan under the LB-UBS
Series 2004-C4 Pooling and Servicing Agreement; the COMM 2004-LNB2 Special
Servicer will accrue a comparable workout fee with respect to the Tysons Corner
Center Whole Loan under the COMM 2004-LNB2 Pooling and Servicing Agreement; and
the GMACCM 2003-C3 Special Servicer will accrue a comparable workout fee with
respect to the AFR/Bank of America Portfolio Whole Loan under the GMACCM 2003-C3
Pooling and Servicing Agreement.
A "Liquidation Fee" will be payable to the Special Servicer with respect to
each Specially Serviced Mortgage Loan (other than the Non-Serviced Mortgage
Loans) or Mortgage Loan repurchased by a Mortgage Loan Seller outside of the
applicable cure period as to which the Special Servicer obtains a full, partial
or discounted payoff from the related borrower or Mortgage Loan Seller, as
applicable, and, except as otherwise described below, with respect to any
Specially Serviced Mortgage Loan or REO Property as to which the Special
Servicer recovered any proceeds ("Liquidation Proceeds"). As to each such
Specially Serviced Mortgage Loan and REO Property or Mortgage Loan repurchased
by a Mortgage Loan Seller outside of the applicable cure period, the Liquidation
Fee will be payable from, and will be calculated by application of, a
"Liquidation Fee Rate" of 1.0% to the related payment or proceeds. The LB-UBS
Series 2004-C4 Special Servicer will accrue a comparable liquidation fee with
respect to the Garden State Plaza Whole Loan under the LB-UBS Series 2004-C4
Pooling
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and Servicing Agreement; the COMM 2004-LNB2 Special Servicer will accrue a
comparable liquidation fee with respect to the Tysons Corner Center Whole Loan
under the COMM 2004-LNB2 Pooling and Servicing Agreement; and the GMACCM 2003-C3
Special Servicer will accrue a comparable liquidation fee with respect to the
AFR/Bank of America Portfolio Whole Loan under the GMACCM 2003-C3 Pooling and
Servicing Agreements. Notwithstanding anything to the contrary described above,
no Liquidation Fee will be payable based on, or out of, Liquidation Proceeds
received in connection with:
o the purchase of any Specially Serviced Mortgage Loan or REO Property
by the Servicer, the Special Servicer or the Controlling Class
Representative,
o the purchase of all of the Mortgage Loans and REO Properties by the
Servicer, the Special Servicer or the Controlling Class Representative
in connection with the termination of the Trust,
o a repurchase of a Mortgage Loan by a Mortgage Loan Seller due to a
breach of a representation or warranty or a document defect in the
mortgage file prior to the expiration of certain time periods
(including any applicable extension thereof) set forth in the Pooling
and Servicing Agreement,
o the purchase of the 731 Lexington Avenue-Bloomberg Headquarters Loan,
the AFR/Bank of America Portfolio Loan or the Saks, Inc.-North
Riverside Loan by the holder of the related B Loan, unless the related
Mortgage Loan is purchased more than 90 days after the default giving
rise to the right of the holder of the related B Loan to purchase the
Mortgage Loan, and
o the purchase of a Mortgage Loan by the holder of any related mezzanine
debt unless the related mezzanine documents require the purchaser to
pay such fees.
If, however, Liquidation Proceeds are received with respect to any
Specially Mortgage Loan as to which the Special Servicer is properly entitled to
a Workout Fee, such Workout Fee will be payable based on and out of the portion
of such Liquidation Proceeds that constitute principal and/or interest. The
Special Servicer, however, will only be entitled to receive a Liquidation Fee or
a Workout Fee, but not both, with respect to Liquidation Proceeds received on
any Mortgage Loan or Specially Serviced Mortgage Loan.
In addition, the Special Servicer will be entitled to receive:
o any loan modification, extension and assumption fees related to the
Specially Serviced Mortgage Loans (which will not include the
Non-Serviced Mortgage Loans),
o any income earned on deposits in the REO Accounts,
o 50% of any extension fees, modification and assumption fees of
non-Specially Serviced Mortgage Loans (other than the Non-Serviced
Mortgage Loans), and
o any late payment fees collected by the Servicer during a Collection
Period on any Specially Serviced Mortgage Loan remaining after
application thereof during such Collection Period to reimburse
interest on Advances with respect to such Mortgage Loan and to
reimburse the Trust for certain expenses of the Trust with respect to
such Mortgage Loan; provided, however, that with respect to any
Mortgage Loan that has a related Serviced Companion Loan, late payment
fees will be allocated as provided in the related intercreditor
agreement and the Pooling and Servicing Agreement.
The LB-UBS Series 2004-C4 Special Servicer, the COMM 2004-LNB2 Special
Servicer and the GMACCM 2003-C3 Special Servicer will be entitled to comparable
fees with respect to the Garden State Plaza Loan, the Tysons Corner Center Loan
and the AFR/Bank of America Portfolio Loan, respectively.
SERVICING OF THE NON-SERVICED MORTGAGE LOANS
The Garden State Plaza Loan
Pursuant to the terms of the related intercreditor agreement, all of the
mortgage loans included in the Garden State Plaza Whole Loan are being serviced
under the provisions of the
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LB-UBS Series 2004-C4 Pooling and Servicing Agreement, which are similar to, but
not necessarily identical with, the provisions of the Pooling and Servicing
Agreement. In that regard,
o Wells Fargo Bank, N.A., which is the trustee under the LB-UBS Series
2004-C4 Pooling and Servicing Agreement (the "LB-UBS Series 2004-C4
Trustee"), is, in that capacity, the lender of record with respect to
the mortgaged property securing the Garden State Plaza Whole Loan;
o Wachovia Bank, National Association, which is the master servicer
under the LB-UBS Series 2004-C4 Pooling and Servicing Agreement (the
"LB-UBS Series 2004-C4 Servicer"), is, in that capacity, the master
servicer for the Garden State Plaza Whole Loan under the LB-UBS Series
2004-C4 Pooling and Servicing Agreement. However, P&I Advances with
respect to the Garden State Plaza Loan will be made by the Servicer or
the Trustee, as applicable, as described in "Description of the
Certificates-- Advances" in the prospectus supplement; and
o Lennar Partners, Inc., which is the special servicer of the Garden
State Plaza Whole Loan under the LB-UBS Series 2004-C4 Pooling and
Servicing Agreement (the "LB-UBS Series 2004-C4 Special Servicer"),
is, in that capacity, the special servicer with respect to the Garden
State Plaza Whole Loan under the LB-UBS Series 2004-C4 Pooling and
Servicing Agreement.
The Controlling Class Representative will not have any rights with respect
to the servicing and administration of the Garden State Plaza Loan under the
LB-UBS Series 2004-C4 Pooling and Servicing Agreement except as set forth under
"Description of the Mortgage Pool--Split Loan Structures--The Garden State Plaza
Loan" in this prospectus supplement.
The Tysons Corner Center Loan
Pursuant to the terms of the related intercreditor agreement, all of the
mortgage loans included in the Tysons Corner Center Whole Loan are being
serviced under the provisions of the COMM 2004-LNB2 Pooling and Servicing
Agreement, which are similar to, but not necessarily identical with, the
provisions of the Pooling and Servicing Agreement. In that regard,
o Wells Fargo Bank, N.A., which is the trustee under the COMM 2004-LNB2
Pooling and Servicing Agreement (the "COMM 2004-LNB2 Trustee"), is, in
that capacity, the lender of record with respect to the mortgaged
property securing the Tysons Corner Center Whole Loan;
o GMAC Commercial Mortgage Corporation, which is the master servicer
under the COMM 2004-LNB2 Pooling and Servicing Agreement (the "COMM
2004-LNB2 Servicer"), is, in that capacity, the master servicer for
the Tysons Corner Center Whole Loan under the COMM 2004-LNB2 Pooling
and Servicing Agreement. However, P&I Advances with respect to the
Tysons Corner Center Loan will be made by the Servicer or the Trustee,
as applicable, as described in "Description of the Certificates--
Advances" in the prospectus supplement; and
o Lennar Partners, Inc., which is the special servicer of the Tysons
Corner Center Whole Loan under the COMM 2004-LNB2 Pooling and
Servicing Agreement (the "COMM 2004-LNB2 Special Servicer"), is, in
that capacity, the special servicer with respect to the Tysons Corner
Center Portfolio Whole Loan under the COMM 2004-LNB2 Pooling and
Servicing Agreement.
The Controlling Class Representative will not have any rights with respect
to the servicing and administration of the Tysons Corner Center Loan under the
COMM 2004-LNB2 Pooling and Servicing Agreement except as set forth under
"Description of the Mortgage Pool--Split Loan Structures--The Tysons Corner
Center Loan" in this prospectus supplement.
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The AFR/Bank of America Portfolio Loan
Pursuant to the terms of the related intercreditor agreements, all of the
mortgage loans included in the AFR/Bank of America Portfolio Whole Loan are
being serviced under the provisions of the GMACCM 2003-C3 Pooling and Servicing
Agreement, which are similar to, but not necessarily identical with, the
provisions of the Pooling and Servicing Agreement. In that regard,
o LaSalle Bank National Association, which is the trustee under the
GMACCM 2003-C3 Pooling and Servicing Agreement (the "GMACCM 2003-C3
Trustee"), is, in that capacity, the lender of record with respect to
the mortgaged properties securing the AFR/Bank of America Portfolio
Whole Loan;
o GMAC Commercial Mortgage Corporation, which is the master servicer
under the GMACCM 2003-C3 Pooling and Servicing Agreement (the "GMACCM
2003-C3 Servicer"), is, in that capacity, the master servicer for the
AFR/Bank of America Portfolio Whole Loan under the GMACCM 2003-C3
Pooling and Servicing Agreement. However, P&I Advances with respect to
the AFR/Bank of America Portfolio Loan will be made by the Servicer or
the Trustee, as applicable, as described in "Description of the
Certificates--Advances" in the prospectus supplement; and
o Midland Loan Services, Inc., which is the special servicer of the
AFR/Bank of America Portfolio Whole Loan under the GMACCM 2003-C3
Pooling and Servicing Agreement (the "GMACCM 2003-C3 Special
Servicer"), is, in that capacity, the special servicer with respect to
the AFR/Bank of America Portfolio Whole Loan under the GMACCM 2003-C3
Pooling and Servicing Agreement.
The Controlling Class Representative will not have any rights with respect
to the servicing and administration of the AFR/Bank of America Portfolio Loan
under the GMACCM 2003-C3 Pooling and Servicing Agreement except as set forth
under "Description of the Mortgage Pool--Split Loan Structures--The AFR/Bank of
America Portfolio Loan--Rights of the AFR/Bank of America Portfolio B Loan" in
this prospectus supplement. For a discussion regarding the rights of the holder
of the AFR/Bank of America Portfolio B Loan, see "Description of the Mortgage
Pool--Split Loan Structures--The AFR/Bank of America Portfolio Loan--Rights of
the AFR/Bank of America Portfolio B Loan" in this prospectus supplement.
SERVICER AND SPECIAL SERVICER PERMITTED TO BUY CERTIFICATES
Midland, the initial Servicer, and Lennar, the initial Special Servicer,
are permitted to purchase any Class of Certificates. Such a purchase by the
Servicer or Special Servicer could cause a conflict relating to the Servicer's
or Special Servicer's duties pursuant to the Pooling and Servicing Agreement and
the Servicer's or Special Servicer's interest as a holder of Certificates,
especially to the extent that certain actions or events have a disproportionate
effect on one or more Classes of Certificates. The Pooling and Servicing
Agreement provides that the Servicer or Special Servicer will administer the
Mortgage Loans or Serviced Whole Loans in accordance with the Servicing
Standard, without regard to ownership of any Certificate by the Servicer or
Special Servicer or any affiliate thereof.
REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION
Bond Administrator Reports
Based on information provided in monthly reports prepared by the Servicer
and the Special Servicer and delivered to the Bond Administrator, the Bond
Administrator will prepare and make available on each Distribution Date to each
Certificateholder, the Depositor, the Servicer, the Special Servicer, the
Trustee, each Underwriter, each Rating Agency and, if requested, any potential
investors in the Certificates (i) a statement (a "Distribution Date Statement")
and (ii) a report containing information regarding the Mortgage Loans as of the
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end of the related Collection Period, which report shall contain substantially
the categories of information regarding the Mortgage Loans set forth in this
prospectus supplement in the tables under the caption "Description of the
Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans."
Certain information regarding the Mortgage Loans will be made accessible at
the website maintained by LaSalle Bank National Association at www.etrustee.net
or such other mechanism as the Bond Administrator may have in place from time to
time.
After all of the Certificates have been sold by the Underwriters, certain
information will be made accessible on the website maintained by the Servicer as
the Servicer may have in place from time to time.
Servicer Reports
The Servicer is required to deliver to the Bond Administrator prior to each
Distribution Date, and the Bond Administrator is to make available to each
Certificateholder, each holder of a Serviced Companion Loan, the Depositor, each
Underwriter, each Rating Agency, the Special Servicer, the Controlling Class
Representative and, if requested, any potential investor in the Certificates, on
each Distribution Date, the following six CMSA reports:
o A "comparative financial status report."
o A "delinquent loan status report."
o A "historical loan modification and corrected mortgage loan report."
o A "historical liquidation report."
o An "REO status report."
o A "Servicer watch list."
o A loan level reserve/LOC report.
o A reconciliation of funds report.
In addition, the Servicer will deliver to the Bond Administrator an
additional monthly report regarding recoveries and reimbursements, if
applicable, relating to, among other things, Workout Delayed Reimbursement
Amounts.
Subject to the receipt of necessary information from any subservicer, such
loan-by-loan listing will be made available electronically in the form of the
standard CMSA Reports; provided, however, the Bond Administrator will provide
Certificateholders with a written copy of such report upon request. The
information that pertains to Specially Serviced Mortgage Loans and REO
Properties reflected in such reports shall be based solely upon the reports
delivered by the Special Servicer to the Servicer no later than four business
days prior to the related Servicer Remittance Date. Absent manifest error, none
of the Servicer, the Special Servicer, the Bond Administrator or the Trustee
will be responsible for the accuracy or completeness of any information supplied
to it by a borrower or third party that is included in any reports, statements,
materials or information prepared or provided by the Servicer, the Special
Servicer, the Bond Administrator or the Trustee, as applicable.
The Trustee, the Bond Administrator, the Servicer and the Special Servicer
will be indemnified by the Trust against any loss, liability or expense incurred
in connection with any claim or legal action relating to any statement or
omission based upon information supplied by a borrower or third party under a
Mortgage Loan or Serviced Whole Loan and reasonably relied upon by such party.
The Servicer is also required to deliver to the Bond Administrator and the
Rating Agencies the following materials, which Operation Statement Analysis
Report and NOI Adjustment Worksheet shall be delivered in electronic format and
any items relating thereto may be delivered in electronic or paper format:
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(a) Annually, on or before June 30 of each year, commencing with June
30, 2005, with respect to each Mortgaged Property and REO Property, an
"Operating Statement Analysis Report" together with copies of the related
operating statements and rent rolls (but only if the related borrower is
required by the Mortgage to deliver, or has otherwise agreed to provide
such information) for such Mortgaged Property or REO Property for the
preceding calendar year-end, if available. The Servicer (or the Special
Servicer in the case of Specially Serviced Mortgage Loans and REO
Properties) is required to use its best reasonable efforts to obtain annual
and other periodic operating statements and related rent rolls and promptly
update the Operating Statement Analysis Report.
(b) Within 60 days of receipt by the Servicer (or within 45 days of
receipt by the Special Servicer with respect to any Specially Serviced
Mortgage Loan or REO Property) of annual year-end operating statements, if
any, with respect to any Mortgaged Property or REO Property, an "NOI
Adjustment Worksheet" for such Mortgaged Property (with the annual
operating statements attached thereto as an exhibit), presenting the
computations made in accordance with the methodology described in the
Pooling and Servicing Agreement to "normalize" the full year-end net
operating income or net cash flow and debt service coverage numbers used by
the Servicer or Special Servicer in the other reports referenced above.
The Bond Administrator is to make available a copy of each Operating
Statement Analysis Report and NOI Adjustment Worksheet that it receives from the
Servicer upon request to the Depositor, each Underwriter, the Controlling Class
Representative, each Rating Agency, the Certificateholders and the Special
Servicer promptly after its receipt thereof. Any potential investor in the
Certificates may obtain a copy of any NOI Adjustment Worksheet for a Mortgaged
Property or REO Property in the possession of the Bond Administrator upon
request.
In addition, within a reasonable period of time after the end of each
calendar year, the Bond Administrator 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 reasonably required to enable such Certificateholders to
prepare their federal income tax returns. The Bond Administrator will also make
available information regarding the amount of original issue discount accrued on
each Class of Certificate held by persons other than holders exempted from the
reporting requirements and information regarding the expenses of the Trust.
OTHER INFORMATION
The Pooling and Servicing Agreement will require that the Bond
Administrator make available at its offices, during normal business hours, for
review by any Certificateholder, any holder of a Serviced Companion Loan (with
respect to items (iv)-(vii) below, only to the extent such information relates
to the related Serviced Companion Loan), the Depositor, the Servicer, the
Special Servicer, any Rating Agency or any potential investor in the
Certificates, originals or copies of, among other things, the following items
(except to the extent not permitted by applicable law or under any of the
related Mortgage Loan Documents): (i) the Pooling and Servicing Agreement and
any amendments thereto, (ii) all Distribution Date Statements made available to
holders of the relevant Class of Offered Certificates since the Closing Date,
(iii) all annual officers' certificates and accountants' reports delivered by
the Servicer and the Special Servicer to the Bond Administrator since the
Closing Date regarding compliance with the relevant agreements, (iv) the most
recent property inspection report prepared by or on behalf of the Servicer or
the Special Servicer with respect to each Mortgaged Property and delivered to
the Bond Administrator, (v) the most recent annual (or more frequent, if
available) operating statements, rent rolls (to the extent such rent rolls have
been made available by the related borrower) and/or lease summaries and retail
"sales information," if any, collected by or on behalf of the Servicer or the
Special Servicer with respect to each Mortgaged Property and
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delivered to the Bond Administrator, (vi) any and all modifications, waivers and
amendments of the terms of a Mortgage Loan or Serviced Whole Loan entered into
by the Servicer and/or the Special Servicer and delivered to the Bond
Administrator, and (vii) any and all officers' certificates and other evidence
delivered to or by the Bond Administrator to support the Servicer's, the Special
Servicer's or the Trustee's, as the case may be, determination that any Advance,
if made, would not be recoverable. Copies of any and all of the foregoing items
will be available upon request at the expense of the requesting party from the
Bond Administrator to the extent such documents are in the Bond Administrator's
possession.
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USE OF PROCEEDS
The net proceeds from the sale of Offered Certificates will be used by the
Depositor to pay part of the purchase price of the Mortgage Loans.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary and the discussion in the prospectus under the
heading "Certain Federal Income Tax Consequences--Federal Income Tax
Consequences for REMIC Certificates" are a general discussion of the anticipated
material federal income tax consequences of the purchase, ownership and
disposition of the Offered Certificates and constitute the opinion of
Cadwalader, Wickersham & Taft LLP as to the accuracy of matters discussed herein
and therein. The summary below and such discussion in the Prospectus do not
purport to address all federal income tax consequences that may be applicable to
particular categories of investors, some of which may be subject to special
rules. In addition, such summary and such discussion do not address state, local
or foreign tax issues with respect to the acquisition, ownership or disposition
of the Offered Certificates. The authorities on which such summary and such
discussion are based are subject to change or differing interpretations, and any
such change or interpretation could apply retroactively. Such summary and such
discussion are based on the applicable provisions of the Code, as well as
regulations (the "REMIC Regulations") promulgated by the U.S. Department of the
Treasury as of the date hereof. Investors should consult their own tax advisors
in determining the federal, state, local, foreign or any other tax consequences
to them of the purchase, ownership and disposition of Certificates.
Elections will be made to treat designated portions of the Trust (exclusive
of Excess Interest and the Excess Interest Distribution Account) and proceeds
thereof (such nonexcluded portion of the Trust, the "Trust REMICs"), as two
separate REMICs within the meaning of Code Section 860D (the "Lower-Tier REMIC"
and the "Upper-Tier REMIC"). In addition, the AFR/Bank of America Portfolio Loan
and two of the AFR/Bank of America Portfolio Pari Passu Companion Loans and the
related interests in any related REO property and proceeds thereof constitutes
the assets of a separate REMIC (the "AFR/Bank of America Portfolio Loan REMIC").
The Trust Fund holds a portion of the class of "regular interests" (the
"AFR/Bank of America Portfolio Loan REMIC Regular Interest") and a portion of
the class of "residual interests" (the "AFR/Bank of America Portfolio Loan REMIC
Residual Interest") in the AFR/Bank of America Portfolio Loan REMIC. In
addition, the Saks, Inc.-North Riverside Loan and any related REO property and
proceeds thereof will constitute the assets of a separate REMIC (the "Saks,
Inc.-North Riverside Loan REMIC" and together with the AFR/Bank of America
Portfolio Loan REMIC, the "Loan REMICs"). The Saks, Inc.-North Riverside Loan
REMIC has issued a class of "regular interests" (the "Saks, Inc.-North Riverside
Loan REMIC Regular Interest") and a class of "residual interests" (the "Saks,
Inc.-North Riverside Loan REMIC Residual Interest" and, together with the
AFR/Bank of America Portfolio Loan REMIC Residual Interest, each a "Loan REMIC
Residual Interest"). The Lower-Tier REMIC will hold the Mortgage Loans
(exclusive of the AFR/Bank of America Portfolio Loan and the Saks, Inc.-North
Riverside Loan, which are held in the respective Loan REMICs) and the class of
"regular interests" issued by the related Loan REMIC, proceeds thereof held in
the Collection Account, the Interest Reserve Account, the Lower-Tier
Distribution Account, the Excess Liquidation Proceeds Account and any related
REO Property, and will issue several uncertificated classes of regular interests
(the "Lower-Tier Regular Interests") to the Upper-Tier REMIC and the Class LR
Certificates, which will represent the sole class of residual interests in the
Lower-Tier REMIC and each of the Loan REMICs. The Upper-Tier REMIC will hold the
Lower-Tier Regular Interests and the Upper-Tier Distribution Account in which
distributions on the Lower-Tier Regular Interests will be deposited, and will
issue the Class X, Class A-1, Class A-2, Class A-1A, 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 (the "Regular Certificates") as classes of
regular interests and the Class R Certificates as the sole class of residual
interests in the Upper-Tier REMIC. Qualification as a REMIC requires
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ongoing compliance with certain conditions. Assuming (i) the making of
appropriate elections, (ii) compliance with the Pooling and Servicing Agreement,
(iii) compliance with the LB-UBS Series 2004-C4 Pooling and Servicing Agreement,
the COMM 2004-LNB2 Pooling and Servicing Agreement and the GMACCM 2003-C3
Pooling and Servicing Agreement and the continuing qualification of the REMICs
governed thereby and (iv) compliance with any changes in the law, including any
amendments to the Code or applicable temporary or final regulations of the
United States Department of the Treasury ("Treasury Regulations") thereunder, in
the opinion of Cadwalader, Wickersham & Taft LLP, the Lower-Tier REMIC, the
Upper-Tier REMIC and each of the Loan REMICs will each qualify as a REMIC.
References in this discussion to the "REMIC" will, unless the context dictates
otherwise, refer to each of the Upper-Tier REMIC, the Lower-Tier REMIC and the
Loan REMICs. In addition, in the opinion of Cadwalader, Wickersham & Taft LLP,
the portions of the Trust Fund consisting of (i) the Loan REMIC Residual
Interests and (ii) the Excess Interest and the Excess Interest Distribution
Account will be treated as a grantor trust for federal income tax purposes under
subpart E, Part I of subchapter J of the Code and the Class LR Certificates and
the Class Q Certificates, respectively, will represent undivided beneficial
interests therein.
The Offered Certificates will be treated as "loans . . . secured by an
interest in real property which is . . . residential real property" within the
meaning of Section 7701(a)(19)(C) of the Code, for domestic building and loan
associations (but only to the extent of the allocable portion of the Mortgage
Loans secured by multifamily properties and manufactured housing properties). As
of the Cut-off Date, Mortgage Loans secured by multifamily properties and
manufactured housing properties represented approximately 22.07% of the Mortgage
Loans by Initial Outstanding Pool Balance.
The Offered Certificates will be treated as "real estate assets," within
the meaning of Section 856(c)(5)(B) of the Code, for real estate investment
trusts and interest thereon will be treated as "interest on mortgages on real
property," within the meaning of Section 856(c)(3)(B) of the Code, to the extent
described in the prospectus under the heading "Certain Federal Income Tax
Consequences--Federal Income Tax Consequences for REMIC Certificates--Status of
REMIC Certificates." Mortgage Loans which have been defeased with U.S. Treasury
obligations will not qualify for the foregoing treatments.
The Offered Certificates will be treated as "regular interests" in the
Upper-Tier REMIC and therefore generally will be treated as newly originated
debt instruments for federal income tax purposes. Beneficial owners of the
Offered Certificates will be required to report income on such regular interests
in accordance with the accrual method of accounting.
The IRS has issued Treasury Regulations under Sections 1271 to 1275 of the
Code generally addressing the treatment of debt instruments issued with original
issue discount (the "OID Regulations"). 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 applicable to,
prepayable 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 of the issuer. Accordingly,
it is possible that holders of Certificates may be able to select a method for
recognizing any original issue discount that differs from that used by the Bond
Administrator in preparing reports to Certificateholders and the IRS.
Prospective purchasers of Certificates are advised to consult their tax advisors
concerning the treatment of any original issue discount with respect to
purchased Certificates. See "Certain Federal Income Tax Consequences--Federal
Income Tax Consequences for REMIC Certificates--Taxation of Regular
Certificates--Original Issue Discount" in the prospectus.
Whether any holder of any such Class of 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. It is
anticipated that the Offered Certificates will be issued
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at a premium for federal income tax purposes. Holders of each such Class of
Certificates should consult their tax advisors regarding the possibility of
making an election to amortize such premium. See "Certain Federal Income Tax
Consequences--Federal Income Tax Consequences for REMIC Certificates--Taxation
of Regular Certificates--Premium" in the prospectus.
For purposes of accruing original issue discount, if any, determining
whether such original issue discount is de minimis and amortizing any premium,
the Prepayment Assumption will be 0% CPR. See "Yield and Maturity
Considerations" in this prospectus supplement. No representation is made as to
the rate, if any, at which the Mortgage Loans will prepay.
Prepayment Premiums and Yield Maintenance Charges actually collected on the
Mortgage Loans will be distributed to the holders of each Class of Certificates
entitled thereto as described herein. It is not entirely clear under the Code
when the amount of a Prepayment Premium or a Yield Maintenance Charge should be
taxed to the holder of a Class of Certificates entitled to a Prepayment Premium
or a Yield Maintenance Charge. For federal income tax reporting purposes,
Prepayment Premiums and Yield Maintenance Charges will be treated as income to
the holders of a Class of Certificates entitled to Prepayment Premiums and Yield
Maintenance Charges only after the Servicer's actual receipt of a Prepayment
Premium or a Yield Maintenance Charge as to which such Class of Certificates is
entitled under the terms of the Pooling and Servicing Agreement. It appears that
Prepayment Premiums and Yield Maintenance Charges are to be treated as ordinary
income rather than capital gain. However, the correct characterization of such
income is not entirely clear and Certificateholders should consult their tax
advisors concerning the treatment of Prepayment Premiums and Yield Maintenance
Charges.
For a discussion of the tax consequences of the acquisition ownership and
disposition of Offered Certificates by any person who is not a citizen or
resident of the United States, a corporation or partnership or other entity
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia or is a foreign estate or trust, see
"Certain Federal Income Tax Consequences--Federal Income Tax Consequences for
REMIC Certificates--Taxation of Certain Foreign Investors--Regular Certificates"
in the prospectus.
ERISA CONSIDERATIONS
The purchase by or transfer to an employee benefit plan or other retirement
arrangement, including an individual retirement account or a Keogh plan, which
is subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or Section 4975 of the Code, or a governmental plan (as
defined in Section 3(32) of ERISA) that is subject to any federal, state or
local law ("Similar Law") which is, to a material extent, similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), or a collective
investment fund in which such Plans are invested, an insurance company using the
assets of separate accounts or general accounts which include assets of Plans
(or which are deemed pursuant to ERISA or any Similar Law to include assets of
Plans) or other Persons acting on behalf of any such Plan or using the assets of
any such Plan to acquire the Offered Certificates may constitute or give rise to
a prohibited transaction under ERISA or the Code or Similar Law. There are
certain exemptions issued by the United States Department of Labor (the
"Department") that may be applicable to an investment by a Plan in the Offered
Certificates. The Department has granted an administrative exemption to Deutsche
Bank Securities Inc. as Department Final Authorization Number 97-03E, as amended
by Prohibited Transaction Exemption ("PTE") 2002-41 (the "DBS Exemption"), ABN
AMRO Incorporated as Department Final Authorization Number 98-08E, as amended by
PTE 2002-41 (the "ABN Exemption"), and PNC Capital Markets, Inc. as PTE 98-08,
as amended by PTE 2002-41 (the "PNC Exemption" and collectively with the DBS
Exemption and the ABN Exemption, the "Exemption"), for certain mortgage-backed
and asset-backed certificates underwritten in whole or in part by the
Underwriters. The Exemption might be applicable to the initial purchase, the
holding, and the subsequent resale by a Plan of certain certificates, such as
the Offered Certificates,
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underwritten by the co-lead managers, representing interests in pass-through
trusts that consist of certain receivables, loans and other obligations,
provided that the conditions and requirements of the Exemption are satisfied.
The loans described in the Exemption include mortgage loans such as the Mortgage
Loans. However, it should be noted that in issuing the Exemption, the Department
may not have considered interests in pools of the exact nature as some of the
Offered Certificates.
Among the conditions that must be satisfied for the Exemption to apply to
the acquisition, holding and resale of the Offered Certificates are the
following:
(1) The acquisition of Offered Certificates by a Plan is on terms
(including the price for the Certificates) that are at least as favorable
to the Plan as they would be in an arm's length transaction with an
unrelated party;
(2) The Offered Certificates acquired by the Plan have received a
rating at the time of such acquisition that is one of the four highest
generic rating categories from any of S&P, Moody's or Fitch;
(3) The Trustee must not be an affiliate of any other member of the
Restricted Group (as defined below) other than an Underwriter;
(4) The sum of all payments made to and retained by the co-lead
managers in connection with the distribution of Offered Certificates
represents not more than reasonable compensation for underwriting the
Certificates. The sum of all payments made to and retained by the Depositor
pursuant to the assignment of the Mortgage Loans to the Trust represents
not more than the fair market value of such Mortgage Loans. The sum of all
payments made to and retained by the Servicer and any other servicer
represents not more than reasonable compensation for such person's services
under the Pooling and Servicing Agreement and reimbursement of such
person's reasonable expenses in connection therewith; and
(5) The Plan investing in the Certificates is an "accredited investor"
as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange
Commission under the Securities Act of 1933.
The Trust must also meet the following requirements:
(i) the corpus of the Trust 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 rating categories of S&P, Moody's or Fitch for
at least one year prior to the Plan's acquisition of the Offered
Certificates pursuant to the Exemption; and
(iii) certificates evidencing interests in such other investment pools
must have been purchased by investors other than Plans for at least one
year prior to any Plan's acquisition of the Offered Certificates pursuant
to the Exemption.
If all of the conditions of the Exemption are met, then whether or not a
Plan's assets would be deemed to include an ownership interest in the Mortgage
Loans in the Mortgage Pool, the acquisition, holding and resale by Plans of the
Offered Certificates with respect to which the conditions were met would be
exempt from the prohibited transaction provisions of ERISA and the Code to the
extent indicated in the Exemption.
Moreover, the Exemption can provide relief from certain
self-dealing/conflict of interest prohibited transactions that may occur if a
Plan fiduciary causes a Plan to acquire certificates in a trust holding
receivables, loans or obligations on which the fiduciary (or its affiliate) is
an obligor, provided that, among other requirements, (a) in the case of an
acquisition in connection with the initial issuance of certificates, at least
fifty percent of each class of certificates in which Plans have invested is
acquired by persons independent of the Restricted Group (as defined below) and
at least fifty percent of the aggregate interest in the Trust is
S-219
acquired by persons independent of the Restricted Group (as defined below); (b)
such fiduciary (or its affiliate) is an obligor with respect to five percent or
less of the fair market value of the obligations contained in the Trust; (c) the
Plan's investment in certificates of any class does not exceed twenty-five
percent of all of the certificates of that class outstanding at the time of the
acquisitions; and (d) immediately after the acquisition no more than twenty-five
percent of the assets of the Plan with respect to which such person is a
fiduciary are invested in certificates representing an interest in one or more
trusts containing assets sold or serviced by the same entity.
The Exemption does not apply to the purchasing or holding of Offered
Certificates by Plans sponsored by the Depositor, the Underwriters, the Trustee,
the Servicer, any obligor with respect to Mortgage Loans included in the Trust
constituting more than five percent of the aggregate unamortized principal
balance of the assets in the Trust, any party considered a "sponsor" within the
meaning of the Exemption, or any affiliate of such parties (the "Restricted
Group").
The co-lead managers believe that the conditions to the applicability of
their respective Exemption will generally be met with respect to the Offered
Certificates, other than possibly those conditions which are dependent on facts
unknown to the co-lead managers or which it cannot control, such as those
relating to the circumstances of the Plan purchaser or the Plan fiduciary making
the decision to purchase any such Certificates. However, before purchasing an
Offered Certificate, a fiduciary of a Plan should make its own determination as
to the availability of the exemptive relief provided by the Exemption or the
availability of any other prohibited transaction exemptions or similar exemption
under Similar Law, and whether the conditions of any such exemption will be
applicable to such purchase. As noted above, the Department, in granting the
Exemption, may not have considered interests in pools of the exact nature as
some of the Offered Certificates. A fiduciary of a Plan that is a governmental
plan should make its own determination as to the need for and the availability
of any exemptive relief under any Similar Law.
Any fiduciary of a Plan considering whether to purchase an Offered
Certificate should also carefully review with its own legal advisors the
applicability of the fiduciary duty and prohibited transaction provisions of
ERISA and the Code to such investment. See "Certain ERISA Considerations" in the
prospectus.
The sale of Offered Certificates to a Plan is in no respect a
representation by the Depositor or the Underwriters that this investment meets
all relevant legal requirements with respect to investments by Plans generally
or any particular Plan, or that this investment is appropriate for Plans
generally or any particular Plan.
LEGAL INVESTMENT
The Offered Certificates will not constitute "mortgage related securities"
for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as
amended.
No representation is made as to the proper characterization of the Offered
Certificates for legal investment purposes, financial institution regulatory
purposes, or other purposes, or as to the ability of particular investors to
purchase the Offered Certificates under applicable legal investment or other
restrictions. These uncertainties may adversely affect the liquidity of the
Offered Certificates. Accordingly, all institutions whose investment activities
are subject to legal investment laws and regulations, regulatory capital
requirements or review by regulatory authorities should consult with their own
legal advisors in determining whether and to what extent the Offered
Certificates constitute a legal investment or are subject to investment, capital
or other restrictions.
See "Legal Investment" in the prospectus.
METHOD OF DISTRIBUTION
Subject to the terms and conditions set forth in an Underwriting
Agreement, dated June , 2004 (the "Underwriting Agreement"), Deutsche Bank
Securities Inc. ("DBS"), ABN
S-220
AMRO Incorporated ("ABN"), PNC Capital Markets, Inc. ("PNC Capital"), J.P.
Morgan Securities Inc. ("JPMorgan"), Merrill, Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and Nomura Securities International, Inc.
("Nomura"), (collectively, the "Underwriters") have agreed to purchase and the
Depositor has agreed to sell to the Underwriters the Offered Certificates. It is
expected that delivery of the Offered Certificates will be made only in
book-entry form through the Same Day Funds Settlement System of DTC on or about
June , 2004, against payment therefor in immediately available funds. DBS and
ABN will act as co-lead managers of the offering of the Offered Certificates and
PNC Capital, JPMorgan, Merrill Lynch and Nomura are acting as co-managers and
underwriters of the offering of Offered Certificates. DBS is acting as sole
bookrunner of the offering.
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase the Certificate Balances of
each class of Offered Certificates set forth below, subject in each case to a
variance of 5%:
MERRILL, LYNCH,
PIERCE, FENNER
DEUTSCHE BANK ABN AMRO PNC CAPITAL J.P. MORGAN & SMITH NOMURA SECURITIES
CLASS SECURITIES INC. INCORPORATED MARKETS, INC. SECURITIES INC. INCORPORATED INTERNATIONAL, INC.
- ------------------- ----------------- -------------- --------------- ----------------- ---------------- --------------------
Class A-1 ......... $ $ $ $ $ $
Class A-2 ......... $ $ $ $ $ $
Class B ........... $ $ $ $ $ $
Class C ........... $ $ $ $ $ $
Class D ........... $ $ $ $ $ $
Class E ........... $ $ $ $ $ $
The Underwriting Agreement provides that the obligation of each Underwriter
to pay for and accept delivery of its Offered Certificates is subject to, among
other things, the receipt of certain legal opinions and to the conditions, among
others, that no stop order suspending the effectiveness of the Depositor's
Registration Statement shall be in effect, and that no proceedings for such
purpose shall be pending before or threatened by the Securities and Exchange
Commission.
The distribution of the Offered Certificates by the Underwriters may be
effected from time to time in one or more negotiated transactions, or otherwise,
at varying prices to be determined at the time of sale. Proceeds to the
Depositor from the sale of the Offered Certificates, before deducting expenses
payable by the Depositor, will be approximately % of the aggregate Certificate
Balance of the Offered Certificates, plus accrued interest. Each Underwriter may
effect such transactions by selling its Offered Certificates to or through
dealers, and such dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Underwriter for whom they act as
agent. In connection with the sale of the Offered Certificates, each Underwriter
may be deemed to have received compensation from the Depositor in the form of
underwriting compensation. Each Underwriter and any dealers that participate
with such 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 of 1933, as amended.
DBS is an affiliate of GACC, one of the Mortgage Loan Sellers; ABN is an
affiliate of LaSalle, one of the Mortgage Loan Sellers; and PNC Capital is an
affiliate of PNC Bank, one of the Mortgage Loan Sellers.
The Underwriting Agreement or a separate indemnification agreement provides
that the Depositor and the Mortgage Loan Sellers will indemnify the Underwriters
against certain civil liabilities under the Securities Act of 1933, as amended,
or contribute to payments to be made in respect thereof.
There can be no assurance that a secondary market for the Offered
Certificates will develop or, if it does develop, that it will continue. The
primary source of ongoing information
S-221
available to investors concerning the Offered Certificates will be the reports
distributed by the Bond Administrator discussed in this prospectus supplement
under "The Pooling and Servicing Agreement--Reports to Certificateholders;
Available Information." Except as described in this prospectus supplement under
"The Pooling and Servicing Agreement-- Reports to Certificateholders; Available
Information," there can be no assurance that any additional information
regarding the Offered Certificates will be available through any other source.
In addition, the Depositor is not aware of any source through which price
information about the Offered Certificates will be generally available on an
ongoing basis. The limited nature of such information regarding the Offered
Certificates may adversely affect the liquidity of the Offered Certificates,
even if a secondary market for the Offered Certificates becomes available.
LEGAL MATTERS
The validity of the Offered Certificates and the material federal income
tax consequences of investing in the Offered Certificates will be passed upon
for the Depositor by Cadwalader, Wickersham & Taft LLP, New York, New York.
Certain legal matters with respect to the Offered Certificates will be passed
upon for the Underwriters by Cadwalader, Wickersham & Taft LLP, New York, New
York.
RATINGS
It is a condition to the issuance of the Offered Certificates that (i) the
Class A-1 and Class A-2 Certificates be rated "AAA" by Standard & Poor's Rating
Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), "Aaa" by
Moody's Investors Service, Inc. ("Moody's") and "AAA" by Dominion Bond Rating
Service Limited ("DBRS" and together with Moody's and S&P, the "Rating
Agencies"), (ii) the Class B Certificates be rated at least "AA" by S&P, "Aa2"
by Moody's and "AA" by DBRS, (iii) the Class C Certificates be rated at least
"AA--" by S&P, "Aa3" by Moody's and "AA (Low)" by DBRS, (iv) the Class D
Certificates be rated at least "A" by S&P, "A2" by Moody's and "A" by DBRS, and
(v) the Class E Certificates be rated at least "A--" by S&P, "A3" by Moody's and
"A (Low)" by DBRS. The "Rated Final Distribution Date" of each Class of
Certificates is the Distribution Date in July 2037.
The Rating Agencies' ratings on mortgage pass-through certificates address
the likelihood of the timely payment of interest and the ultimate repayment of
principal by the Rated Final Distribution Date. The Rating Agencies' ratings
take into consideration the credit quality of the Mortgage Pool, structural and
legal aspects associated with the Certificates, and the extent to which the
payment stream in the Mortgage Pool is adequate to make payments required under
the Certificates. Ratings on mortgage pass-through certificates do not, however,
represent an assessment of the likelihood, timing or frequency of principal
prepayments (both voluntary and involuntary) by borrowers, or the degree to
which such prepayments might differ from those originally anticipated. The
security ratings do not address the possibility that Certificateholders might
suffer a lower than anticipated yield. In addition, ratings on mortgage
pass-through certificates do not address the likelihood of receipt of Prepayment
Premiums, Default Interest or the timing or frequency of the receipt thereof. In
general, the ratings address credit risk and not prepayment risk. Also, a
security rating does not represent any assessment of the yield to maturity that
investors may experience. The ratings do not address the fact that the
Pass-Through Rates of the Offered Certificates to the extent that they are based
on the Weighted Average Net Mortgage Pass-Through Rate may be affected by
changes thereon.
There can be no assurance as to whether any rating agency not requested to
rate the Offered Certificates will nonetheless issue a rating and, if so, what
such rating would be. A rating assigned to the Offered Certificates by a rating
agency that has not been requested by the Depositor to do so may be lower than
the rating assigned by the Rating Agencies pursuant to the Depositor's request.
S-222
The rating of the Offered Certificates should be evaluated independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision or
withdrawal at any time by the assigning rating agency.
S-223
INDEX OF PRINCIPAL TERMS
PAGE
----
731 Lexington Avenue Cure Event......... S-91
731 Lexington Avenue-Bloomberg
Headquarters Additional Interest..... S-88
731 Lexington Avenue-Bloomberg
Headquarters Additional
Principal ........................... S-88
731 Lexington Avenue-Bloomberg
Headquarters Anticipated
Repayment Date ...................... S-88
731 Lexington Avenue-Bloomberg
Headquarters B Loan ................. S-86
731 Lexington Avenue-Bloomberg
Headquarters Change of Control
Event ............................... S-90
731 Lexington Avenue-Bloomberg
Headquarters Companion Loans......... S-86
731 Lexington Avenue-Bloomberg
Headquarters Pari Passu Loans ....... S-86
731 Lexington Avenue-Bloomberg
Headquarters Special Servicing
Delay ............................... S-205
731 Lexington Avenue-Bloomberg
Headquarters Whole Loan ............. S-86
731 Lexington Avenue-Bloomberg
Headquarters" ....................... S-86
731 Lexington Servicing Transfer
Event ............................... S-87
ABN .................................... S-221
ABN Exemption .......................... S-218
Advance Rate ........................... S-171
Advances ............................... S-170
AFR/Bank of America Portfolio .......... S-99
AFR/Bank of America Portfolio B
Loan ................................ S-99
AFR/Bank of America Portfolio
Change of Control Event ............. S-105
AFR/Bank of America Portfolio
Companion Loans ..................... S-99
AFR/Bank of America Portfolio
Cure Event .......................... S-103
AFR/Bank of America Portfolio S-127,
Loan REMIC .......................... S-216
AFR/Bank of America Portfolio
Loan REMIC Regular Interest ......... S-216
AFR/Bank of America Portfolio
Loan REMIC Residual Interest ........ S-216
AFR/Bank of America Portfolio Pari
Passu Loans ......................... S-99
AFR/Bank of America Portfolio
Senior Loans ........................ S-99
PAGE
----
AFR/Bank of America Portfolio
Whole Loan .......................... S-99
Annual Debt Service .................... S-111
Anticipated Repayment Date ............. S-109
S-140,
Appraisal Reduction Amount ............. S-151
Appraisal Reduction Event .............. S-151
Appraised Value ........................ S-111
ARD Loans .............................. S-109
Asset Status Report .................... S-206
Assumed Scheduled Payment .............. S-142
Available Funds ........................ S-137
Balloon Balance ........................ S-112
Bond Administrator ..................... S-74
Bond Administrator Fee ................. S-198
Bond Administrator Fee Rate ............ S-198
CBE .................................... S-164
Certificate Balance .................... S-136
Certificate Owners ..................... S-157
Certificate Registrar .................. S-154
Certificateholder ...................... S-154
Certificates ........................... S-136
Class .................................. S-136
Class A Certificates ................... S-151
S-37,
Clearstream ............................ S-154
Clearstream Participants ............... S-156
Code ................................... S-85
Collection Account ..................... S-173
Collection Period ...................... S-139
COMM 2004-LNB2 Pooling and
Servicing Agreement ................. S-96
S-96,
COMM 2004-LNB2 Servicer ................ S-211
COMM 2004-LNB2 Special S-96,
Servicer ............................ S-211
COMM 2004-LNB2 Trustee ................. S-211
Companion Loan Securities .............. S-175
Comparable Treasury Rate ............... S-128
Controlling Class ...................... S-203
Controlling Class Certificateholder..... S-204
Controlling Class Representative ....... S-203
Corrected Mortgage Loan ................ S-205
CPR .................................... S-160
Crossover Date ......................... S-147
Current LTV ............................ S-112
Custodian .............................. S-181
Cut-off Date ........................... S-73
Cut-off Date Balance ................... S-73
S-224
PAGE
----
Cut-off Date Loan-to-Value Ratio ......... S-112
Cut-off Date LTV ......................... S-112
Cut-off Date LTV Ratio ................... S-112
DBRS ..................................... S-222
DBS ...................................... S-220
DBS Exemption ............................ S-218
DDR-Macquarie Portfolio .................. S-93
DDR-Macquarie Portfolio Pari
Passu A4 Note ......................... S-93
DDR-Macquarie Portfolio Pari
Passu Loans ........................... S-93
DDR-Macquarie Portfolio Whole
Loan .................................. S-93
Debt Service Coverage Ratio .............. S-111
Default Interest ......................... S-140
Default Rate ............................. S-140
Defaulted Mortgage Loan .................. S-191
Defeasance ............................... S-129
Defeasance Collateral .................... S-129
Defeasance Lock-Out Period ............... S-129
Defeasance Option ........................ S-129
Definitive Certificate ................... S-154
Department ............................... S-218
Depositaries ............................. S-155
Depositor ................................ S-73
Determination Date ....................... S-140
Directing Certificateholder .............. S-203
Discount Rate ............................ S-127
Distribution Account ..................... S-174
Distribution Date ........................ S-137
Distribution Date Statement .............. S-212
DSCR ..................................... S-111
DTC ...................................... S-37
Due Date ................................. S-141
Eckerd-Peoria ............................ S-109
ERISA .................................... S-218
ESA ...................................... S-81
Euroclear ................................ S-37
Euroclear Participants ................... S-156
Events of Default ........................ S-187
Excess Interest .......................... S-174
Excess Interest Distribution
Account ............................... S-174
Excess Liquidation Proceeds .............. S-195
Exemption ................................ S-218
S-80,
FIRREA ................................... S-82
Form 8-K ................................. S-135
FPO Persons .............................. S-4
FSMA ..................................... S-4
PAGE
----
GAAP ..................................... S-110
GACC ..................................... S-74
Garden State Plaza ....................... S-83
Garden State Plaza Loan .................. S-83
Garden State Plaza Pari Passu
Loans ................................. S-83
Garden State Plaza Whole Loan ............ S-83
GLA ...................................... S-113
GMACCM 2003-C3 Pooling and
Servicing Agreement ................... S-100
S-100,
GMACCM 2003-C3 Servicer .................. S-212
GMACCM 2003-C3 Special S-100,
Servicer .............................. S-212
GMACCM 2003-C3 Trustee ................... S-212
Group 1 Principal Distribution
Amount ................................ S-142
Group 2 Principal Distribution
Amount ................................ S-142
Holders .................................. S-157
Indirect Participants .................... S-155
Initial Loan Group 1 Balance ............. S-73
Initial Loan Group 2 Balance ............. S-73
Initial Outstanding Pool Balance ......... S-73
Initial Rate ............................. S-109
Interest Accrual Amount .................. S-140
Interest Accrual Period .................. S-140
Interest Rate ............................ S-112
Interest Reserve Account ................. S-174
Interest Shortfall ....................... S-140
LaSalle .................................. S-74
LB-UBS Series 2004-C4 Pooling
and Servicing Agreement ............... S-84
S-84,
LB-UBS Series 2004-C4 Servicer ........... S-211
LB-UBS Series 2004-C4 Special S-84,
Servicer .............................. S-211
LB-UBS Series 2004-C4 Trustee ............ S-211
Lennar ................................... S-201
Liquidation Fee .......................... S-209
Liquidation Fee Rate ..................... S-209
Liquidation Proceeds ..................... S-209
LNR ...................................... S-201
Loan Group 1 ............................. S-73
Loan Group 2 ............................. S-73
Loan Groups .............................. S-73
Loan REMIC Residual Interest ............. S-216
Loan REMICs .............................. S-216
Loan-to-Value Ratio ...................... S-112
Lock-Out Period .......................... S-126
S-225
PAGE
----
Lower-Tier Regular Interests .......... S-216
Lower-Tier REMIC ...................... S-216
LTV ................................... S-112
LTV Ratio at Maturity ................. S-112
MAI ................................... S-77
Master Servicing Fee .................. S-200
Master Servicing Fee Rate ............. S-200
Midland ............................... S-199
Modeling Assumptions .................. S-161
Modification .......................... S-195
Modified Mortgage Loan ................ S-154
Monthly Payment ....................... S-139
S-175,
Moody's ............................... S-222
Mortgage .............................. S-73
Mortgage Loan Documents ............... S-181
Mortgage Loan Purchase
Agreement .......................... S-74
Mortgage Loan Purchase
Agreements ......................... S-181
Mortgage Loan Sellers ................. S-74
Mortgage Loans ........................ S-73
Mortgage Pool ......................... S-73
S-112,
Mortgage Rate ......................... S-141
Mortgaged Properties .................. S-73
Net Default Interest .................. S-140
Net Mortgage Pass-Through Rate ........ S-141
Net Prepayment Interest Excess ........ S-150
Net Prepayment Interest Shortfall ..... S-150
Net REO Proceeds ...................... S-139
Nonrecoverable Advance ................ S-172
Non-Serviced Mortgage Loan ............ S-73
Note .................................. S-73
Notional Balance ...................... S-137
NRA ................................... S-113
Occupancy Rate ........................ S-112
Offered Certificates .................. S-136
OID Regulations ....................... S-217
Option Price .......................... S-191
Pads .................................. S-112
PAR ................................... S-81
Participants .......................... S-154
Pass-Through Rate ..................... S-140
PCIS Persons .......................... S-4
Percentage Interest ................... S-137
Permitted Investments ................. S-175
P&I Advance ........................... S-168
Plan .................................. S-218
PNC Bank .............................. S-74
PAGE
----
PNC Capital ........................... S-221
PNC Exemption ......................... S-218
PNC Financial ......................... S-75
Pooling and Servicing Agreement........ S-167
Prepayment Interest Excess ............ S-149
Prepayment Interest Shortfall ......... S-149
Prepayment Premium .................... S-128
Prime Rate ............................ S-171
Principal Balance Certificate ......... S-136
Principal Balance Certificates ........ S-136
Principal Distribution Amount ......... S-141
Principal Prepayments ................. S-139
Private Certificates .................. S-136
PTE ................................... S-218
Purchase Option ....................... S-191
Qualifying Substitute Mortgage
Loan ............................... S-185
Rated Final Distribution Date ......... S-222
Rating Agencies ....................... S-222
Realized Loss ......................... S-148
Record Date ........................... S-137
Regular Certificates .................. S-216
Related Proceeds ...................... S-172
Release Date .......................... S-129
Release H.15 .......................... S-127
Relevant Persons ...................... S-4
REMIC ................................. S-217
REMIC Regulations ..................... S-216
Removed Mortgage Loan ................. S-184
REO Account ........................... S-136
REO Loan .............................. S-142
REO Property .......................... S-136
REO Tax ............................... S-194
Replacement Mortgage Loan ............. S-184
Repurchase Price ...................... S-184
Request for Approval .................. S-207
Reserve Accounts ...................... S-74
Restricted Group ...................... S-220
Revised Rate .......................... S-109
Rooms ................................. S-112
Rules ................................. S-156
Saks, Inc.-North Riverside ............ S-105
Saks, Inc.-North Riverside B Loan ..... S-105
Saks, Inc.-North Riverside Change
of Control Event ................... S-108
Saks, Inc.-North Riverside Loan
REMIC .............................. S-216
Saks, Inc.-North Riverside Loan
REMIC Regular Interest ............. S-216
S-226
PAGE
----
Saks, Inc.-North Riverside Loan
REMIC Residual Interest .......... S-216
Saks, Inc.-North Riverside Whole
Loan ............................. S-105
Serviced Companion Loan ............. S-73
S-74,
Servicer ............................ S-199
Servicer Prepayment Interest
Shortfall ........................ S-150
Servicer Remittance Date ............ S-168
Servicing Compensation .............. S-200
Servicing Fee ....................... S-200
S-113,
Servicing Fee Rate .................. S-200
Servicing Standard .................. S-168
Servicing Transfer Event ............ S-204
Similar Law ......................... S-218
Single-Tenant Mortgage Loan ......... S-135
Small Loan Appraisal Estimate ....... S-152
S&P ................................. S-222
S-74,
Special Servicer .................... S-201
Special Servicing Fee ............... S-209
Specially Serviced Mortgage Loan..... S-204
Sq. Ft. ............................. S-112
Square Feet ......................... S-112
Stated Principal Balance ............ S-149
Subordinate Certificates ............ S-150
Tenant Affiliate .................... S-89
Tenant Default Period ............... S-90
Term to Maturity .................... S-113
Terms and Conditions ................ S-156
S-127,
Treasury Rate ....................... S-128
Treasury Regulations ................ S-217
PAGE
----
Trust ............................... S-73
Trust Fund .......................... S-73
Trust REMICs ........................ S-216
Trustee ............................. S-74
Trustee Fee ......................... S-198
Trustee Fee Rate .................... S-198
Tysons Corner Center ................ S-96
Tysons Corner Center Pari Passu
Loans ............................ S-96
Tysons Corner Center Whole Loan...... S-96
Underwriters ........................ S-221
Underwriting Agreement .............. S-220
Underwritten NCF .................... S-110
Underwritten NCF DSCR ............... S-111
Underwritten Net Cash Flow .......... S-110
Units ............................... S-112
Unliquidated Advance ................ S-173
Unscheduled Payments ................ S-139
Updated Appraisal ................... S-153
Upper-Tier REMIC .................... S-216
UW NCF .............................. S-110
UW NCF DSCR ......................... S-111
U/W Revenue ......................... S-113
Voting Rights ....................... S-191
Weighted Average Net Mortgage
Pass-Through Rate ................ S-141
Wells Fargo Bank .................... S-197
Withheld Amounts .................... S-174
Workout Fee ......................... S-209
Workout Fee Rate .................... S-209
Workout-Delayed Reimbursement
Amount ........................... S-172
Yield Maintenance Charge ............ S-127
Yield Maintenance Period ............ S-126
S-227
COMM 2004-LNB3
ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
- ----------------------------------------------------------------------------------
% OF % OF APPLICABLE MORTGAGE
INITIAL POOL LOAN GROUP LOAN GROUP # OF LOAN ORIGINAL
ID PROPERTY NAME BALANCE ONE OR TWO BALANCE PROPERTIES SELLER (1) BALANCE
- ------------------------------------------------------------------------------------------------------------------------------------
1 Garden State Plaza 9.71% 1 12.09% 1 GACC 130,000,000
2 731 Lexington Avenue - Bloomberg Headquarters 9.33% 1 11.63% 1 GACC 125,000,000
3 DDR-Macquarie Portfolio (11) 5.60% 1 6.98% 10 GACC 75,000,000
3.01 Clarence Portfolio 1.04% 1.29% 1 GACC 13,883,721
3.02 BJ's Plaza/Tops Plaza/Batavia Commons 0.24% 0.30% 1 GACC 3,244,186
- ------------------------------------------------------------------------------------------------------------------------------------
3.03 Cheektowaga Properties 1.63% 2.03% 1 GACC 21,837,209
3.04 Riverdale Village-Inner Ring 0.60% 0.75% 1 GACC 8,093,023
3.05 Erie Marketplace 0.16% 0.20% 1 GACC 2,127,907
3.06 Spring Creek Center and Steele Crossing 0.70% 0.87% 1 GACC 9,348,837
3.07 Towne Center 0.23% 0.29% 1 GACC 3,104,651
- ------------------------------------------------------------------------------------------------------------------------------------
3.08 The Marketplace 0.28% 0.35% 1 GACC 3,802,326
3.09 Township Marketplace 0.35% 0.43% 1 GACC 4,674,419
3.10 River Hills 0.36% 0.45% 1 GACC 4,883,721
G REIT Portfolio (Crossed Rollup) 5.48% 1 6.83% 5 LaSalle 73,400,000
4 Public Ledger Building 1.87% 1 2.33% 1 LaSalle 25,000,000
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5 824 Market Street 1.40% 1 1.74% 1 LaSalle 18,750,000
6 Brunswig Square 1.18% 1 1.47% 1 LaSalle 15,830,000
7 1150 Gemini Plaza 0.77% 1 0.96% 1 LaSalle 10,300,000
8 The Atrium Building 0.26% 1 0.33% 1 LaSalle 3,520,000
9 Tysons Corner Center 4.67% 1 5.81% 1 GACC 62,500,000
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10 Centreville Square I&II 4.48% 1 5.58% 1 LaSalle 60,000,000
11 Equity Industrial Partners Portfolio (11) 4.18% 1 5.21% 5 LaSalle 56,000,000
11.1 85 Moosup Road 1.11% 1.39% 1 LaSalle 14,925,710
11.2 151 Suffolk Lane 0.14% 0.18% 1 LaSalle 1,911,390
11.3 600 North Bedford Street 0.63% 0.78% 1 LaSalle 8,387,743
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11.4 1111 South Hampton Road 1.37% 1.71% 1 LaSalle 18,411,187
11.5 625 University Avenue 0.92% 1.15% 1 LaSalle 12,363,969
12 International Jewelry Center 3.72% 1 4.64% 1 LaSalle 50,000,000
13 660 Figueroa Tower 3.36% 1 4.19% 1 GACC 45,000,000
14 3 Beaver Valley 3.21% 1 4.00% 1 GACC 43,000,000
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15 Stonegate Oklahoma (11) 2.88% 1 3.59% 2 GACC 38,600,000
15.1 Quail Springs 1.62% 2.02% 1 GACC 21,739,405
15.2 1200 Urban Center 1.26% 1.57% 1 GACC 16,860,595
16 Beau Terre Office Building 2.87% 1 3.57% 1 GACC 38,400,000
17 Alexan Mira Vista 2.58% 2 13.04% 1 GACC 34,500,000
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18 Wiener Portfolio VII (11) 2.33% 2 11.82% 5 GACC 31,275,000
18.1 25-35 Hillside Avenue 0.75% 3.80% 1 GACC 10,045,671
18.2 2 West 120th Street 0.57% 2.89% 1 GACC 7,651,976
18.3 281-295 Wadsworth Avenue 0.40% 2.02% 1 GACC 5,336,763
18.4 509 West 155th Street 0.31% 1.57% 1 GACC 4,159,536
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18.5 34-44 Seaman Avenue 0.30% 1.54% 1 GACC 4,081,054
Beyman Crossed Rollup 1.87% 9.49% 3 GACC 25,100,000
19 Windover of Melbourne 0.86% 2 4.34% 1 GACC 11,480,000
20 Windover Goldenpoint 0.63% 2 3.21% 1 GACC 8,480,000
21 Wedgewood Park 0.38% 2 1.94% 1 GACC 5,140,000
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22 Santa Monica Medical Plaza 1.75% 1 2.18% 1 GACC 23,445,000
23 The Tower 1.72% 1 2.14% 1 GACC 23,000,000
24 Williamstowne Apartments 1.70% 2 8.61% 1 LaSalle 22,760,000
25 Larkins Corner Shopping Center 1.48% 1 1.85% 1 GACC 19,850,000
26 AFR Portfolio (11) 1.48% 1 1.85% 150 GACC 20,000,000
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26.001 Bank of America Center 0.19% 0.23% 1 GACC 2,509,601
26.002 Van Ness & Market 0.12% 0.15% 1 GACC 1,585,384
26.003 525 N Tryon-Odell Building 0.09% 0.11% 1 GACC 1,173,092
26.004 Bank of America Financial Ctr 0.09% 0.11% 1 GACC 1,143,911
26.005 Jacksonville Ops CTR/#600 0.07% 0.09% 1 GACC 951,314
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26.006 Jacksonville Ops CTR/#100 0.05% 0.07% 1 GACC 703,272
26.007 Jacksonville Ops CTR/#400 0.04% 0.05% 1 GACC 569,037
26.008 South Region TPC 0.03% 0.04% 1 GACC 405,622
26.009 Catalina-Bank of America Ctr 0.03% 0.04% 1 GACC 396,283
26.010 Jacksonville Ops CTR/#200 0.03% 0.04% 1 GACC 385,195
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26.011 Jacksonville Ops CTR/#700 0.03% 0.04% 1 GACC 382,276
26.012 South Mountain-Bank of America 0.03% 0.04% 1 GACC 377,170
26.013 Jacksonville Ops CTR/#500 0.03% 0.04% 1 GACC 376,440
26.014 Jacksonville Ops CTR/#300 0.03% 0.03% 1 GACC 364,768
26.015 Miami Lakes Operation CTR 0.03% 0.03% 1 GACC 334,940
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26.016 Spokane Bankcard Services 0.02% 0.02% 1 GACC 262,633
26.017 Century Park 0.02% 0.02% 1 GACC 233,451
26.018 Bank of America Plaza 0.02% 0.02% 1 GACC 218,861
26.019 Mendham Operations Center 0.01% 0.02% 1 GACC 189,679
26.020 Glendale Main 0.01% 0.02% 1 GACC 175,088
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26.021 Fort Sam Houston 0.01% 0.02% 1 GACC 173,629
26.022 Ellinwood Center #300 0.01% 0.02% 1 GACC 165,750
26.023 Ellinwood Center #400 0.01% 0.02% 1 GACC 164,583
26.024 Long Beach Financial 0.01% 0.01% 1 GACC 151,743
26.025 Maricopa-Bank of America Ctr 0.01% 0.01% 1 GACC 141,238
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26.026 Camelback-Bank of America CTR 0.01% 0.01% 1 GACC 140,071
26.027 McDowell-Bank of America Ctr 0.01% 0.01% 1 GACC 140,071
26.028 Stockton Main Office 0.01% 0.01% 1 GACC 137,153
26.029 Inland Empire Cash Vault 0.01% 0.01% 1 GACC 134,234
26.030 Lake & Colorado Br 0.01% 0.01% 1 GACC 128,398
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26.031 Pomona Main 0.01% 0.01% 1 GACC 128,398
26.032 Ellinwood Center #500 0.01% 0.01% 1 GACC 126,384
26.033 Sunnyvale Main Branch 0.01% 0.01% 1 GACC 116,726
26.034 Coronado Branch 0.01% 0.01% 1 GACC 113,807
26.035 Riverside Main 0.01% 0.01% 1 GACC 113,807
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26.036 La Jolla Main 0.01% 0.01% 1 GACC 109,414
26.037 Whittier Office 0.01% 0.01% 1 GACC 107,971
26.038 Hallandale Beach 0.01% 0.01% 1 GACC 105,053
26.039 Annapolis Church Circle - BAL 0.01% 0.01% 1 GACC 105,053
26.040 Greenspoint 0.01% 0.01% 1 GACC 105,053
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26.041 Redding Main Branch 0.01% 0.01% 1 GACC 102,135
26.042 Albuquerque Operations Center 0.01% 0.01% 1 GACC 99,217
26.043 Santa Barbara 0.01% 0.01% 1 GACC 94,840
26.044 Charlottesville 0.01% 0.01% 1 GACC 94,840
26.045 Plaza 0.01% 0.01% 1 GACC 90,462
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26.046 Irvine Industrial 0.01% 0.01% 1 GACC 81,708
26.047 Gardena Main 0.01% 0.01% 1 GACC 80,541
26.048 Westshore Mall 0.01% 0.01% 1 GACC 78,790
26.049 Inglewood Main Office 0.01% 0.01% 1 GACC 77,623
26.050 Jacksonville Ops Ctr/School 0.01% 0.01% 1 GACC 75,872
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26.051 Jacksonville Ops CTR/Daycare 0.01% 0.01% 1 GACC 74,413
26.052 Bull Street 0.01% 0.01% 1 GACC 71,494
26.053 Bellingham 0.01% 0.01% 1 GACC 70,035
26.054 Lighthouse Point 0.01% 0.01% 1 GACC 68,576
26.055 Richland 0.01% 0.01% 1 GACC 68,576
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26.056 North Hollywood 0.01% 0.01% 1 GACC 68,284
26.057 Torrance Sartori 0.00% 0.01% 1 GACC 65,950
26.058 Escondido Main Office 0.00% 0.01% 1 GACC 64,199
26.059 San Bernadino Main 0.00% 0.01% 1 GACC 64,199
26.060 Winter Park 0.00% 0.01% 1 GACC 64,199
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26.061 Santa Maria Branch 0.00% 0.01% 1 GACC 62,156
26.062 Salinas Main Branch 0.00% 0.01% 1 GACC 61,281
26.063 Oak Trafficway Facility 0.00% 0.01% 1 GACC 61,281
26.064 Paradise Valley 0.00% 0.01% 1 GACC 61,281
26.065 University 0.00% 0.01% 1 GACC 61,281
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26.066 Fresno Proof/Vault 0.00% 0.01% 1 GACC 60,114
26.067 Cordova 0.00% 0.01% 1 GACC 59,530
26.068 Yuba City Branch 0.00% 0.01% 1 GACC 56,174
26.069 Ocala Downtown 0.00% 0.01% 1 GACC 55,445
26.070 Roanoke 0.00% 0.01% 1 GACC 55,445
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26.071 Mesa Main 0.00% 0.00% 1 GACC 52,527
26.072 Auburn 0.00% 0.00% 1 GACC 52,527
26.073 Valdosta Main 0.00% 0.00% 1 GACC 50,338
26.074 Gulf to Bay 0.00% 0.00% 1 GACC 49,608
26.075 Waco 0.00% 0.00% 1 GACC 49,608
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26.076 Yakima Valley Bldg/BR 0.00% 0.00% 1 GACC 49,608
26.077 Lynchburg 0.00% 0.00% 1 GACC 46,892
26.078 El Segundo 0.00% 0.00% 1 GACC 45,815
26.079 Mission Facility 0.00% 0.00% 1 GACC 45,231
26.080 Aiken Main Office 0.00% 0.00% 1 GACC 44,648
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26.081 Cartersville Main 0.00% 0.00% 1 GACC 43,772
26.082 Murfreesboro Main Office 0.00% 0.00% 1 GACC 43,772
26.083 Bremerton 0.00% 0.00% 1 GACC 43,772
26.084 Columbia Facility 0.00% 0.00% 1 GACC 42,897
26.085 South Austin 0.00% 0.00% 1 GACC 42,313
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26.086 Hampton-Main Facility 0.00% 0.00% 1 GACC 41,729
26.087 Concord Village 0.00% 0.00% 1 GACC 41,438
26.088 Ventura Main Office 0.00% 0.00% 1 GACC 41,146
26.089 East Bakersfield Office 0.00% 0.00% 1 GACC 40,854
26.090 North Sacramento Branch 0.00% 0.00% 1 GACC 40,854
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26.091 Coeur D'alene BDLG/BR 0.00% 0.00% 1 GACC 40,270
26.092 Mexico Facility 0.00% 0.00% 1 GACC 40,270
26.093 Cedar & Shields 0.00% 0.00% 1 GACC 39,687
26.094 Sepulveda-Devonshire BR 0.00% 0.00% 1 GACC 39,687
26.095 William Street Facility 0.00% 0.00% 1 GACC 38,665
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26.096 Stockdale 0.00% 0.00% 1 GACC 37,936
26.097 Walla Walla 0.00% 0.00% 1 GACC 37,936
26.098 Fort Worth East 0.00% 0.00% 1 GACC 37,206
26.099 Port Charlotte 0.00% 0.00% 1 GACC 36,477
26.100 Moultrie Main 0.00% 0.00% 1 GACC 35,018
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26.101 Florissant Facility 0.00% 0.00% 1 GACC 35,018
26.102 East Central Facility 0.00% 0.00% 1 GACC 35,018
26.103 Independence Square 0.00% 0.00% 1 GACC 34,726
26.104 Henderson 0.00% 0.00% 1 GACC 33,559
26.105 Calwa 0.00% 0.00% 1 GACC 33,267
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26.106 Bixby-Atlantic 0.00% 0.00% 1 GACC 32,100
26.107 Lincoln Heights Branch 0.00% 0.00% 1 GACC 32,100
26.108 Oak Park Branch 0.00% 0.00% 1 GACC 32,100
26.109 San Jose 0.00% 0.00% 1 GACC 31,808
26.110 Carrollton 0.00% 0.00% 1 GACC 30,640
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26.111 Lynwood Branch 0.00% 0.00% 1 GACC 29,473
26.112 Palmdale Branch 0.00% 0.00% 1 GACC 29,181
26.113 Dumas Banking Center 0.00% 0.00% 1 GACC 29,181
26.114 Old Hampton 0.00% 0.00% 1 GACC 29,181
26.115 Moses Lake 0.00% 0.00% 1 GACC 29,181
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26.116 Dalhart Banking Center 0.00% 0.00% 1 GACC 26,993
26.117 Willow-Daisy Branch 0.00% 0.00% 1 GACC 26,263
26.118 North Hialeah 0.00% 0.00% 1 GACC 26,263
26.119 South Glenstone Facility 0.00% 0.00% 1 GACC 26,263
26.120 Admiral 0.00% 0.00% 1 GACC 26,263
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26.121 N Wenatchee 0.00% 0.00% 1 GACC 26,263
26.122 Denison 0.00% 0.00% 1 GACC 25,534
26.123 Brownwood 0.00% 0.00% 1 GACC 24,804
26.124 Albany Main Office 0.00% 0.00% 1 GACC 24,562
26.125 Penn Street Facility 0.00% 0.00% 1 GACC 24,075
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26.126 Mount Pleasant 0.00% 0.00% 1 GACC 24,075
26.127 Ridgewood 0.00% 0.00% 1 GACC 23,446
26.128 East Compton Branch 0.00% 0.00% 1 GACC 23,345
26.129 Pasco 0.00% 0.00% 1 GACC 23,345
26.130 Port Angeles 0.00% 0.00% 1 GACC 22,329
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26.131 Harrison Main 0.00% 0.00% 1 GACC 21,213
26.132 Downtown Palmetto 0.00% 0.00% 1 GACC 21,157
26.133 Mission 0.00% 0.00% 1 GACC 21,011
26.134 Forks 0.00% 0.00% 1 GACC 20,427
26.135 Pico-Vermont Branch 0.00% 0.00% 1 GACC 20,135
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26.136 Winder (BS) 0.00% 0.00% 1 GACC 18,968
26.137 Highlandtown - BAL 0.00% 0.00% 1 GACC 17,863
26.138 South Boston 0.00% 0.00% 1 GACC 16,189
26.139 Downtown Facility 0.00% 0.00% 1 GACC 15,758
26.140 Norton - 7th Street 0.00% 0.00% 1 GACC 14,591
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26.141 Lexington Facility 0.00% 0.00% 1 GACC 12,402
26.142 Clermont 0.00% 0.00% 1 GACC 10,213
26.143 Camelback Uptown 0.00% 0.00% 1 GACC -
26.144 Red Bluff Branch 0.00% 0.00% 1 GACC -
26.145 Hollywood/Tyler 0.00% 0.00% 1 GACC -
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26.146 Richland Facility 0.00% 0.00% 1 GACC -
26.147 West Sunshine Facility 0.00% 0.00% 1 GACC -
26.148 Muskogee Main Facility 0.00% 0.00% 1 GACC -
26.149 Aransas Pass (CCNB) 0.00% 0.00% 1 GACC -
26.150 Aberdeen Bldg/BR 0.00% 0.00% 1 GACC -
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27 Southwind Apartments 1.30% 2 6.58% 1 PNC 17,400,000
28 The Arboretum 1.28% 1 1.59% 1 GACC 17,115,000
29 1234 Broadway 1.19% 1 1.49% 1 GACC 16,000,000
30 Briar Meadows Apartment Homes 1.12% 2 5.69% 1 PNC 15,050,000
31 Garden Village Apartments 1.04% 2 5.28% 1 LaSalle 13,960,000
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32 Cameron Court 0.82% 1 1.02% 1 LaSalle 11,000,000
33 University Courtyard Valdosta 0.78% 2 3.93% 1 GACC 10,400,000
34 Vista Via Apartments 0.69% 2 3.49% 1 PNC 9,225,000
35 Plaza del Oro 0.63% 1 0.79% 1 LaSalle 8,500,000
36 Brooks Flex Industrial Portfolio (11) 0.63% 1 0.79% 2 LaSalle 8,500,000
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36.1 15-19 Keewaydin Drive 0.46% 0.58% 1 LaSalle 6,189,755
36.2 16 Route 111 0.17% 0.21% 1 LaSalle 2,310,245
37 Cornell Street Apartments 0.63% 2 3.18% 1 LaSalle 8,430,630
38 Saks, Inc.: North Riverside 0.63% 1 0.78% 1 GACC 8,372,716
39 530 West 47th Street 0.50% 1 0.63% 1 GACC 6,725,000
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40 Waterway MHP & RV 0.47% 1 0.58% 1 LaSalle 6,280,000
41 Elm Grove Apartments 0.46% 2 2.34% 1 LaSalle 6,200,000
42 Arizona Heart Institute 0.46% 1 0.57% 1 PNC 6,167,000
43 The Garden Apartments 0.46% 2 2.33% 1 LaSalle 6,168,000
44 Christy Estates Apartments 0.46% 2 2.32% 1 PNC 6,200,000
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45 Leesburg Plaza 0.45% 1 0.57% 1 PNC 6,100,000
46 Ocean State Plaza 0.45% 1 0.56% 1 PNC 6,000,000
47 Artist Loft Apartments 0.42% 1 0.52% 1 PNC 5,650,000
48 Lackland Self Storage 0.39% 1 0.48% 1 PNC 5,200,000
49 Day Creek Village 0.37% 1 0.47% 1 LaSalle 5,000,000
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50 O'Connell's RV Resort 0.37% 1 0.46% 1 LaSalle 5,000,000
51 Cactus Gardens MHP & RV 0.36% 2 1.85% 1 LaSalle 4,880,000
52 Broadway Place 0.34% 2 1.73% 1 GACC 4,600,000
53 Shangri-La MHP 0.34% 2 1.71% 1 LaSalle 4,535,000
54 39 Olympia Avenue 0.33% 1 0.41% 1 PNC 4,400,000
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55 Pinetree Garden Apartments 0.32% 2 1.64% 1 LaSalle 4,336,000
56 Congress and Erin Way Apartments (11) 0.32% 2 1.62% 2 LaSalle 4,300,000
56.1 Congress Apartments 0.22% 1.13% 1 LaSalle 2,989,524
56.2 Erin Way Apartments 0.10% 0.50% 1 LaSalle 1,310,476
57 Walgreens - Compass Road 0.31% 1 0.38% 1 LaSalle 4,100,000
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58 Walgreens - Baltimore 0.31% 1 0.38% 1 LaSalle 4,100,000
59 Southaven Shopping Center 0.30% 1 0.38% 1 LaSalle 4,100,000
60 Penbrook Apartments 0.29% 2 1.47% 1 LaSalle 3,900,000
61 Concord Business Center 0.29% 1 0.36% 1 LaSalle 3,900,000
62 Walgreens Jacksonville 0.29% 1 0.36% 1 GACC 3,850,000
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63 Walgreens - Hesperia, CA 0.28% 1 0.35% 1 LaSalle 3,755,000
64 Maple Manor / Glenmont Manor Apartment Portfolio(11) 0.27% 2 1.38% 2 LaSalle 3,656,000
64.1 Maple Manor Apartments 0.13% 0.66% 1 LaSalle 1,740,952
64.2 Glenmont Manor Apartments 0.14% 0.72% 1 LaSalle 1,915,048
65 Lake Forest Apartments 0.27% 2 1.36% 1 LaSalle 3,600,000
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66 Walgreens - Whitehall, OH 0.26% 1 0.33% 1 LaSalle 3,550,000
67 Cactus Corner Shopping Center 0.26% 1 0.32% 1 PNC 3,464,000
68 Cordova Shops 0.25% 1 0.31% 1 PNC 3,300,000
69 Alpine Meadows Townhomes 0.25% 2 1.25% 1 LaSalle 3,300,000
70 Collegiate Court Apartments 0.24% 1 0.30% 1 LaSalle 3,200,000
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71 Eckerds - Peoria 0.21% 1 0.26% 1 LaSalle 2,850,000
72 Courtyard & Seaside Apartments (11) 0.21% 2 1.06% 2 LaSalle 2,800,000
72.1 Courtyard Apartments 0.14% 0.71% 1 LaSalle 1,866,667
72.2 Seaside Apartments 0.07% 0.35% 1 LaSalle 933,333
73 3950-3960 Turkeyfoot Road 0.19% 1 0.24% 1 PNC 2,600,000
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74 Savon - Lomita, CA 0.19% 1 0.23% 1 LaSalle 2,500,000
75 Office Max 0.18% 1 0.23% 1 LaSalle 2,475,000
76 Melbourne Park Apartments 0.18% 2 0.92% 1 GACC 2,440,000
77 962 Potomac Circle 0.18% 1 0.22% 1 GACC 2,400,000
78 Troy Retail Center 0.18% 1 0.22% 1 LaSalle 2,400,000
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79 Legacy Coit Village 0.18% 1 0.22% 1 LaSalle 2,392,000
80 Winslow Arms Apartments 0.17% 2 0.85% 1 LaSalle 2,257,000
81 Oak Creek MHC 0.16% 1 0.20% 1 LaSalle 2,100,000
82 Alta Loma Apartments 0.16% 2 0.83% 1 LaSalle 2,200,000
83 1295 Hamner Avenue 0.14% 1 0.17% 1 PNC 1,875,000
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84 Rancho Niguel Office Building 0.14% 1 0.17% 1 LaSalle 1,850,000
85 Stony Creek Apartments 0.13% 2 0.68% 1 LaSalle 1,800,000
86 Governor's Gate Apartments 0.13% 2 0.67% 1 LaSalle 1,760,000
87 Vista Industrial Building 0.13% 1 0.16% 1 LaSalle 1,725,000
88 Crosby & Meadowlark MHP (11) 0.13% 2 0.64% 2 LaSalle 1,700,000
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88.1 Crosby MHP 0.05% 0.23% 1 LaSalle 604,217
88.2 Meadowlark MHP 0.08% 0.41% 1 LaSalle 1,095,783
89 Oak Bend MHP 0.12% 2 0.62% 1 LaSalle 1,650,000
90 Mission Retail Center 0.12% 1 0.15% 1 LaSalle 1,600,000
91 Fairway Apartments 0.11% 2 0.56% 1 LaSalle 1,480,000
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92 South Sound Villa Apartments 0.11% 2 0.56% 1 LaSalle 1,472,000
93 Jacobs Crossing Apartments 0.10% 2 0.50% 1 LaSalle 1,325,000
94 A Better Place MHC 0.09% 1 0.11% 1 LaSalle 1,200,000
95 Mountain Shadows MHC 0.07% 1 0.09% 1 LaSalle 1,000,000
CUT-OFF GENERAL DETAILED
DATE PROPERTY PROPERTY INTEREST ADMINISTRATIVE
ID BALANCE (9)(14) TYPE TYPE RATE (10) FEE RATE
- ------------------------------------------------------------------------------------------------------------------------------------
1 130,000,000 Retail Super Regional Mall 4.9796% 0.03170%
2 125,000,000 Office CBD 5.3300% 0.03170%
3 75,000,000 Retail Anchored 4.1800% 0.03170%
3.01 13,883,721 Retail Anchored
3.02 3,244,186 Retail Anchored
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3.03 21,837,209 Retail Anchored
3.04 8,093,023 Retail Anchored
3.05 2,127,907 Retail Anchored
3.06 9,348,837 Retail Anchored
3.07 3,104,651 Retail Anchored
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3.08 3,802,326 Retail Anchored
3.09 4,674,419 Retail Anchored
3.10 4,883,721 Retail Anchored
73,400,000 Office Various 5.2000% 0.03170%
4 25,000,000 Office CBD 5.2000% 0.03170%
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5 18,750,000 Office CBD 5.2000% 0.03170%
6 15,830,000 Office Suburban 5.2000% 0.03170%
7 10,300,000 Office Suburban 5.2000% 0.03170%
8 3,520,000 Office CBD 5.2000% 0.03170%
9 62,500,000 Retail Anchored 5.2240% 0.03170%
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10 60,000,000 Retail Anchored 5.4500% 0.03170%
11 56,000,000 Industrial Various 5.2870% 0.03170%
11.1 14,925,710 Industrial Distribution/Warehouse
11.2 1,911,390 Industrial Office/Warehouse
11.3 8,387,743 Industrial Office/Warehouse
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11.4 18,411,187 Industrial Distribution/Warehouse
11.5 12,363,969 Industrial Distribution/Warehouse
12 49,847,735 Office CBD 5.3500% 0.09170%
13 45,000,000 Office CBD 5.5000% 0.03170%
14 43,000,000 Office Suburban 5.0550% 0.03170%
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15 38,600,000 Office Suburban 5.6900% 0.03170%
15.1 21,739,405 Office Suburban
15.2 16,860,595 Office Suburban
16 38,400,000 Office Suburban 6.1300% 0.03170%
17 34,500,000 Multifamily Conventional 5.3200% 0.03170%
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18 31,275,000 Multifamily Conventional 4.4300% 0.03170%
18.1 10,045,671 Multifamily Conventional
18.2 7,651,976 Multifamily Conventional
18.3 5,336,763 Multifamily Conventional
18.4 4,159,536 Multifamily Conventional
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18.5 4,081,054 Multifamily Conventional
25,100,000 Multifamily Conventional 5.2100% 0.03170%
19 11,480,000 Multifamily Conventional 5.2100% 0.03170%
20 8,480,000 Multifamily Conventional 5.2100% 0.03170%
21 5,140,000 Multifamily Conventional 5.2100% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
22 23,445,000 Office Medical Office 5.8300% 0.03170%
23 23,000,000 Office Suburban 5.9300% 0.03170%
24 22,760,000 Multifamily Conventional 4.9500% 0.03170%
25 19,850,000 Retail Anchored 5.5400% 0.03170%
26 19,834,205 Office Office, Operation Centers, and Retail Bank Branches 5.4891% 0.03170%
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26.001 2,509,601 Office Office Space
26.002 1,585,384 Office Office Space
26.003 1,173,092 Office Office Space
26.004 1,143,911 Office Office Space
26.005 951,314 Office Operations Center
- ------------------------------------------------------------------------------------------------------------------------------------
26.006 703,272 Office Office Space
26.007 569,037 Office Office Space
26.008 405,622 Office Operations Center
26.009 396,283 Office Operations Center
26.010 385,195 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.011 382,276 Office Office Space
26.012 377,170 Office Operations Center
26.013 376,440 Office Office Space
26.014 364,768 Office Office Space
26.015 334,940 Office Operations Center
- ------------------------------------------------------------------------------------------------------------------------------------
26.016 262,633 Office Office Space
26.017 233,451 Office Office Space
26.018 218,861 Office Office Space
26.019 189,679 Office Operations Center
26.020 175,088 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.021 173,629 Office Office Space
26.022 165,750 Office Office Space
26.023 164,583 Office Office Space
26.024 151,743 Office Office Space
26.025 141,238 Office Operations Center
- ------------------------------------------------------------------------------------------------------------------------------------
26.026 140,071 Office Operations Center
26.027 140,071 Office Operations Center
26.028 137,153 Office Office Space
26.029 134,234 Office Operations Center
26.030 128,398 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.031 128,398 Office Office Space
26.032 126,384 Office Office Space
26.033 116,726 Office Office Space
26.034 113,807 Office Office Space
26.035 113,807 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.036 109,414 Office Office Space
26.037 107,971 Office Office Space
26.038 105,053 Office Office Space
26.039 105,053 Office Office Space
26.040 105,053 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.041 102,135 Office Office Space
26.042 99,217 Office Operations Center
26.043 94,840 Office Office Space
26.044 94,840 Office Office Space
26.045 90,462 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.046 81,708 Office Office Space
26.047 80,541 Office Office Space
26.048 78,790 Office Office Space
26.049 77,623 Office Office Space
26.050 75,872 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.051 74,413 Office Office Space
26.052 71,494 Office Office Space
26.053 70,035 Office Office Space
26.054 68,576 Office Office Space
26.055 68,576 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.056 68,284 Office Office Space
26.057 65,950 Office Office Space
26.058 64,199 Office Office Space
26.059 64,199 Office Office Space
26.060 64,199 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.061 62,156 Office Office Space
26.062 61,281 Office Office Space
26.063 61,281 Office Office Space
26.064 61,281 Office Office Space
26.065 61,281 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.066 60,114 Office Operations Center
26.067 59,530 Office Office Space
26.068 56,174 Mixed Use Office / Retail
26.069 55,445 Office Office Space
26.070 55,445 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.071 52,527 Office Office Space
26.072 52,527 Office Office Space
26.073 50,338 Office Office Space
26.074 49,608 Office Office Space
26.075 49,608 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.076 49,608 Office Office Space
26.077 46,892 Office Office Space
26.078 45,815 Mixed Use Office / Retail
26.079 45,231 Office Office Space
26.080 44,648 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.081 43,772 Office Office Space
26.082 43,772 Office Office Space
26.083 43,772 Office Office Space
26.084 42,897 Mixed Use Office / Retail
26.085 42,313 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.086 41,729 Office Office Space
26.087 41,438 Office Office Space
26.088 41,146 Office Office Space
26.089 40,854 Office Office Space
26.090 40,854 Mixed Use Office / Retail
- ------------------------------------------------------------------------------------------------------------------------------------
26.091 40,270 Office Office Space
26.092 40,270 Office Office Space
26.093 39,687 Mixed Use Office / Retail
26.094 39,687 Mixed Use Office / Retail
26.095 38,665 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.096 37,936 Mixed Use Office / Retail
26.097 37,936 Mixed Use Office / Retail
26.098 37,206 Office Office Space
26.099 36,477 Mixed Use Office / Retail
26.100 35,018 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.101 35,018 Office Office Space
26.102 35,018 Office Office Space
26.103 34,726 Office Office Space
26.104 33,559 Mixed Use Office / Retail
26.105 33,267 Mixed Use Office / Retail
- ------------------------------------------------------------------------------------------------------------------------------------
26.106 32,100 Mixed Use Office / Retail
26.107 32,100 Mixed Use Office / Retail
26.108 32,100 Mixed Use Office / Retail
26.109 31,808 Mixed Use Office / Retail
26.110 30,640 Mixed Use Office / Retail
- ------------------------------------------------------------------------------------------------------------------------------------
26.111 29,473 Mixed Use Office / Retail
26.112 29,181 Mixed Use Office / Retail
26.113 29,181 Mixed Use Office / Retail
26.114 29,181 Office Office Space
26.115 29,181 Mixed Use Office / Retail
- ------------------------------------------------------------------------------------------------------------------------------------
26.116 26,993 Mixed Use Office / Retail
26.117 26,263 Mixed Use Office / Retail
26.118 26,263 Mixed Use Office / Retail
26.119 26,263 Mixed Use Office / Retail
26.120 26,263 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.121 26,263 Mixed Use Office / Retail
26.122 25,534 Office Office Space
26.123 24,804 Office Office Space
26.124 24,562 Office Office Space
26.125 24,075 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.126 24,075 Office Office Space
26.127 23,446 Office Office Space
26.128 23,345 Mixed Use Office / Retail
26.129 23,345 Office Office Space
26.130 22,329 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.131 21,213 Office Office Space
26.132 21,157 Office Office Space
26.133 21,011 Mixed Use Office / Retail
26.134 20,427 Mixed Use Office / Retail
26.135 20,135 Mixed Use Office / Retail
- ------------------------------------------------------------------------------------------------------------------------------------
26.136 18,968 Mixed Use Office / Retail
26.137 17,863 Office Office Space
26.138 16,189 Office Office Space
26.139 15,758 Mixed Use Office / Retail
26.140 14,591 Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.141 12,402 Mixed Use Office / Retail
26.142 10,213 Mixed Use Banking Center
26.143 - Mixed Use Office / Retail
26.144 - Office Office Space
26.145 - Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
26.146 - Mixed Use Office / Retail
26.147 - Mixed Use Office / Retail
26.148 - Office Office Space
26.149 - Mixed Use Office / Retail
26.150 - Office Office Space
- ------------------------------------------------------------------------------------------------------------------------------------
27 17,400,000 Multifamily Conventional 4.9900% 0.06170%
28 17,115,000 Office Office 5.7100% 0.03170%
29 15,984,441 Mixed Use Multifamily / Retail 5.3700% 0.03170%
30 15,050,000 Multifamily Conventional 4.9200% 0.08170%
31 13,960,000 Multifamily Conventional 4.9500% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
32 11,000,000 Office Suburban 6.2240% 0.03170%
33 10,400,000 Multifamily Student / Military Housing 6.0600% 0.03170%
34 9,225,000 Multifamily Conventional 5.7100% 0.08170%
35 8,500,000 Retail Anchored 4.9200% 0.03170%
36 8,500,000 Industrial Office/Warehouse 6.0800% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
36.1 6,189,755 Industrial Office/Warehouse
36.2 2,310,245 Industrial Office/Warehouse
37 8,410,641 Multifamily Conventional 4.7880% 0.03170%
38 8,372,716 Retail CTL 7.1600% 0.03170%
39 6,725,000 Multifamily Conventional 5.5800% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
40 6,262,493 Manufactured Housing Manufactured Housing 5.8100% 0.03170%
41 6,188,143 Multifamily Conventional 5.8000% 0.03170%
42 6,167,000 Office Medical 6.1500% 0.11170%
43 6,155,381 Multifamily Conventional 5.4900% 0.03170%
44 6,138,654 Multifamily Conventional/Extended Stay Hotel 6.1500% 0.16170%
- ------------------------------------------------------------------------------------------------------------------------------------
45 6,086,864 Office Suburban 5.2500% 0.11170%
46 5,993,847 Retail Unanchored 5.1500% 0.09170%
47 5,637,390 Multifamily Conventional 5.0800% 0.06170%
48 5,182,311 Self Storage Self Storage 5.6000% 0.06170%
49 5,000,000 Retail Shadow Anchored 5.3300% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
50 4,985,589 Manufactured Housing Manufactured Housing 5.6650% 0.03170%
51 4,880,000 Manufactured Housing Manufactured Housing 5.3750% 0.03170%
52 4,586,818 Multifamily Conventional 5.6900% 0.03170%
53 4,522,358 Manufactured Housing Manufactured Housing 5.8100% 0.03170%
54 4,400,000 Industrial Warehouse/Distribution 5.9000% 0.11170%
- ------------------------------------------------------------------------------------------------------------------------------------
55 4,327,186 Multifamily Conventional 5.5200% 0.03170%
56 4,295,798 Multifamily Conventional 5.3500% 0.11170%
56.1 2,986,602 Multifamily Conventional
56.2 1,309,196 Multifamily Conventional
57 4,100,000 Retail Anchored 4.9600% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
58 4,100,000 Retail Anchored 4.9600% 0.03170%
59 4,084,708 Retail Anchored 6.1500% 0.03170%
60 3,900,000 Multifamily Conventional 5.8300% 0.03170%
61 3,900,000 Industrial Office/Warehouse 6.1900% 0.03170%
62 3,843,442 Retail CTL 6.0500% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
63 3,755,000 Retail Anchored 5.8000% 0.03170%
64 3,645,427 Multifamily Conventional 5.6500% 0.03170%
64.1 1,735,917 Multifamily Conventional
64.2 1,909,509 Multifamily Conventional
65 3,596,881 Multifamily Conventional 5.8300% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
66 3,546,772 Retail Anchored 5.6400% 0.03170%
67 3,464,000 Retail Shadow Anchored 6.2300% 0.11170%
68 3,300,000 Retail Shadow Anchored 6.0000% 0.06170%
69 3,295,112 Multifamily Conventional 5.2150% 0.03170%
70 3,196,019 Multifamily Conventional 6.1300% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
71 2,831,681 Retail Anchored 6.1000% 0.03170%
72 2,797,555 Multifamily Conventional 5.8000% 0.03170%
72.1 1,865,037 Multifamily Conventional
72.2 932,518 Multifamily Conventional
73 2,592,201 Retail Anchored 5.4400% 0.06170%
- ------------------------------------------------------------------------------------------------------------------------------------
74 2,500,000 Retail Anchored 6.0550% 0.08170%
75 2,475,000 Retail Anchored 5.2700% 0.03170%
76 2,437,586 Multifamily Conventional 5.3000% 0.03170%
77 2,400,000 Office Medical Office 6.4300% 0.03170%
78 2,400,000 Retail Unanchored 6.2200% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
79 2,392,000 Retail Unanchored 5.3400% 0.03170%
80 2,257,000 Multifamily Conventional 5.4800% 0.03170%
81 2,100,000 Manufactured Housing Manufactured Housing 6.4610% 0.03170%
82 2,200,000 Multifamily Conventional 6.0620% 0.03170%
83 1,875,000 Retail Unanchored 5.2700% 0.11170%
- ------------------------------------------------------------------------------------------------------------------------------------
84 1,846,284 Office Suburban 5.5750% 0.03170%
85 1,796,286 Multifamily Conventional 5.4500% 0.03170%
86 1,760,000 Multifamily Conventional 6.4490% 0.03170%
87 1,725,000 Industrial Office/Warehouse 6.5150% 0.03170%
88 1,700,000 Manufactured Housing Manufactured Housing 5.7570% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
88.1 604,217 Manufactured Housing Manufactured Housing
88.2 1,095,783 Manufactured Housing Manufactured Housing
89 1,646,447 Manufactured Housing Manufactured Housing 5.2500% 0.03170%
90 1,600,000 Retail Unanchored 6.6700% 0.03170%
91 1,480,000 Multifamily Conventional 5.0840% 0.03170%
- ------------------------------------------------------------------------------------------------------------------------------------
92 1,472,000 Multifamily Conventional 5.4700% 0.03170%
93 1,322,911 Multifamily Conventional 6.6500% 0.03170%
94 1,200,000 Manufactured Housing Manufactured Housing 5.9570% 0.03170%
95 998,111 Manufactured Housing Manufactured Housing 6.3900% 0.03170%
INTEREST ORIGINAL STATED REMAINING ORIGINAL REMAINING FIRST MATURITY
ACCRUAL TERM TO MATURITY TERM TO MATURITY AMORTIZATION AMORTIZATION PAYMENT DATE
ID BASIS OR ARD (MOS.) OR ARD (MOS.) TERM (MOS.) TERM (MOS.) (15) DATE OR ARD
- ---------------------------------------------------------------------------------------------------------------------------------
1 Actual/360 120 120 0 0 07/6/2004 06/6/2014
2 Actual/360 120 117 237 237 04/1/2004 03/1/2029
3 30/360 60 60 0 0 07/1/2004 06/1/2009
3.01
3.02
- ---------------------------------------------------------------------------------------------------------------------------------
3.03
3.04
3.05
3.06
3.07
- ---------------------------------------------------------------------------------------------------------------------------------
3.08
3.09
3.10
Actual/360 84 84 360 360 07/1/2004 06/1/2011
4 Actual/360 84 84 360 360 07/1/2004 06/1/2011
- ---------------------------------------------------------------------------------------------------------------------------------
5 Actual/360 84 84 360 360 07/1/2004 06/1/2011
6 Actual/360 84 84 360 360 07/1/2004 06/1/2011
7 Actual/360 84 84 360 360 07/1/2004 06/1/2011
8 Actual/360 84 84 360 360 07/1/2004 06/1/2011
9 30/360 120 117 360 360 04/1/2004 03/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
10 Actual/360 120 120 360 360 07/1/2004 06/1/2014
11 Actual/360 120 120 324 324 07/1/2004 06/1/2014
11.1
11.2
11.3
- ---------------------------------------------------------------------------------------------------------------------------------
11.4
11.5
12 Actual/360 120 118 300 298 05/1/2004 04/1/2014
13 Actual/360 120 117 360 360 04/1/2004 03/1/2014
14 Actual/360 127 127 360 360 07/1/2004 01/1/2015
- ---------------------------------------------------------------------------------------------------------------------------------
15 Actual/360 85 85 360 360 07/1/2004 07/1/2011
15.1
15.2
16 Actual/360 121 121 360 360 07/1/2004 07/1/2014
17 Actual/360 120 119 360 360 06/1/2004 05/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
18 Actual/360 60 60 360 360 07/1/2004 06/1/2009
18.1
18.2
18.3
18.4
- ---------------------------------------------------------------------------------------------------------------------------------
18.5
Actual/360 61 61 360 360 07/1/2004 07/1/2009
19 Actual/360 61 61 360 360 07/1/2004 07/1/2009
20 Actual/360 61 61 360 360 07/1/2004 07/1/2009
21 Actual/360 61 61 360 360 07/1/2004 07/1/2009
- ---------------------------------------------------------------------------------------------------------------------------------
22 Actual/360 120 120 360 360 07/1/2004 06/1/2014
23 Actual/360 85 85 360 360 07/1/2004 07/1/2011
24 Actual/360 120 120 336 336 07/1/2004 06/1/2014
25 Actual/360 120 120 360 360 07/1/2004 06/1/2014
26 Actual/360 120 114 330 330 01/1/2004 12/1/2013
- ---------------------------------------------------------------------------------------------------------------------------------
26.001
26.002
26.003
26.004
26.005
- ---------------------------------------------------------------------------------------------------------------------------------
26.006
26.007
26.008
26.009
26.010
- ---------------------------------------------------------------------------------------------------------------------------------
26.011
26.012
26.013
26.014
26.015
- ---------------------------------------------------------------------------------------------------------------------------------
26.016
26.017
26.018
26.019
26.020
- ---------------------------------------------------------------------------------------------------------------------------------
26.021
26.022
26.023
26.024
26.025
- ---------------------------------------------------------------------------------------------------------------------------------
26.026
26.027
26.028
26.029
26.030
- ---------------------------------------------------------------------------------------------------------------------------------
26.031
26.032
26.033
26.034
26.035
- ---------------------------------------------------------------------------------------------------------------------------------
26.036
26.037
26.038
26.039
26.040
- ---------------------------------------------------------------------------------------------------------------------------------
26.041
26.042
26.043
26.044
26.045
- ---------------------------------------------------------------------------------------------------------------------------------
26.046
26.047
26.048
26.049
26.050
- ---------------------------------------------------------------------------------------------------------------------------------
26.051
26.052
26.053
26.054
26.055
- ---------------------------------------------------------------------------------------------------------------------------------
26.056
26.057
26.058
26.059
26.060
- ---------------------------------------------------------------------------------------------------------------------------------
26.061
26.062
26.063
26.064
26.065
- ---------------------------------------------------------------------------------------------------------------------------------
26.066
26.067
26.068
26.069
26.070
- ---------------------------------------------------------------------------------------------------------------------------------
26.071
26.072
26.073
26.074
26.075
- ---------------------------------------------------------------------------------------------------------------------------------
26.076
26.077
26.078
26.079
26.080
- ---------------------------------------------------------------------------------------------------------------------------------
26.081
26.082
26.083
26.084
26.085
- ---------------------------------------------------------------------------------------------------------------------------------
26.086
26.087
26.088
26.089
26.090
- ---------------------------------------------------------------------------------------------------------------------------------
26.091
26.092
26.093
26.094
26.095
- ---------------------------------------------------------------------------------------------------------------------------------
26.096
26.097
26.098
26.099
26.100
- ---------------------------------------------------------------------------------------------------------------------------------
26.101
26.102
26.103
26.104
26.105
- ---------------------------------------------------------------------------------------------------------------------------------
26.106
26.107
26.108
26.109
26.110
- ---------------------------------------------------------------------------------------------------------------------------------
26.111
26.112
26.113
26.114
26.115
- ---------------------------------------------------------------------------------------------------------------------------------
26.116
26.117
26.118
26.119
26.120
- ---------------------------------------------------------------------------------------------------------------------------------
26.121
26.122
26.123
26.124
26.125
- ---------------------------------------------------------------------------------------------------------------------------------
26.126
26.127
26.128
26.129
26.130
- ---------------------------------------------------------------------------------------------------------------------------------
26.131
26.132
26.133
26.134
26.135
- ---------------------------------------------------------------------------------------------------------------------------------
26.136
26.137
26.138
26.139
26.140
- ---------------------------------------------------------------------------------------------------------------------------------
26.141
26.142
26.143
26.144
26.145
- ---------------------------------------------------------------------------------------------------------------------------------
26.146
26.147
26.148
26.149
26.150
- ---------------------------------------------------------------------------------------------------------------------------------
27 Actual/360 120 120 360 360 07/1/2004 06/1/2014
28 Actual/360 85 85 360 360 07/1/2004 07/1/2011
29 Actual/360 120 119 360 359 06/1/2004 05/1/2014
30 Actual/360 120 120 360 360 07/1/2004 06/1/2014
31 Actual/360 120 120 336 336 07/1/2004 06/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
32 Actual/360 121 121 300 300 07/1/2004 07/1/2014
33 Actual/360 121 121 360 360 07/1/2004 07/1/2014
34 Actual/360 121 121 360 360 07/1/2004 07/1/2014
35 Actual/360 120 120 360 360 07/1/2004 06/1/2014
36 Actual/360 120 120 360 360 07/1/2004 06/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
36.1
36.2
37 Actual/360 84 82 360 358 05/1/2004 04/1/2011
38 Actual/360 235 235 235 235 07/1/2004 01/1/2024
39 Actual/360 60 60 360 360 07/1/2004 06/1/2009
- ---------------------------------------------------------------------------------------------------------------------------------
40 Actual/360 120 117 360 357 04/1/2004 03/1/2014
41 Actual/360 120 118 360 358 05/1/2004 04/1/2014
42 Actual/360 120 120 360 360 07/1/2004 06/1/2014
43 Actual/360 120 118 360 358 05/1/2004 04/1/2014
44 Actual/360 180 177 180 177 04/1/2004 03/1/2019
- ---------------------------------------------------------------------------------------------------------------------------------
45 Actual/360 120 118 360 358 05/1/2004 04/1/2014
46 Actual/360 120 119 360 359 06/1/2004 05/1/2014
47 Actual/360 84 82 360 358 05/1/2004 04/1/2011
48 Actual/360 120 119 180 179 06/1/2004 05/1/2014
49 Actual/360 120 120 300 300 07/1/2004 06/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
50 Actual/360 120 117 360 357 04/1/2004 03/1/2014
51 Actual/360 120 120 360 360 07/1/2004 06/1/2014
52 Actual/360 120 117 360 357 04/1/2004 03/1/2014
53 Actual/360 120 117 360 357 04/1/2004 03/1/2014
54 Actual/360 121 121 360 360 07/1/2004 07/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
55 Actual/360 120 118 360 358 05/1/2004 04/1/2014
56 Actual/360 120 119 360 359 06/1/2004 05/1/2014
56.1
56.2
57 Actual/360 120 120 360 360 07/1/2004 06/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
58 Actual/360 120 120 360 360 07/1/2004 06/1/2014
59 Actual/360 120 116 360 356 03/1/2004 02/1/2014
60 Actual/360 120 120 360 360 07/1/2004 06/1/2014
61 Actual/360 120 120 240 240 07/1/2004 06/1/2014
62 Actual/360 264 263 264 263 06/1/2004 05/1/2026
- ---------------------------------------------------------------------------------------------------------------------------------
63 Actual/360 121 121 360 360 07/1/2004 07/1/2014
64 Actual/360 120 117 360 357 04/1/2004 03/1/2014
64.1
64.2
65 Actual/360 120 119 360 359 06/1/2004 05/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
66 Actual/360 120 119 360 359 06/1/2004 05/1/2014
67 Actual/360 120 120 360 360 07/1/2004 06/1/2014
68 Actual/360 120 120 360 360 07/1/2004 06/1/2014
69 Actual/360 120 119 300 299 06/1/2004 05/1/2014
70 Actual/360 120 119 300 299 06/1/2004 05/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
71 Actual/360 120 113 360 353 12/1/2003 11/1/2013
72 Actual/360 120 119 360 359 06/1/2004 05/1/2014
72.1
72.2
73 Actual/360 120 118 300 298 05/1/2004 04/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
74 Actual/360 180 180 180 180 07/1/2004 06/1/2019
75 Actual/360 180 180 180 180 07/1/2004 06/1/2019
76 Actual/360 120 119 360 359 06/1/2004 05/1/2014
77 Actual/360 120 120 240 240 07/1/2004 06/1/2014
78 Actual/360 120 120 360 360 07/1/2004 06/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
79 Actual/360 120 120 360 360 07/1/2004 06/1/2014
80 Actual/360 120 120 360 360 07/1/2004 06/1/2014
81 Actual/360 120 120 360 360 07/1/2004 06/1/2014
82 Actual/360 120 120 360 360 07/1/2004 06/1/2014
83 Actual/360 120 120 360 360 7/1/2004 6/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
84 Actual/360 120 118 360 358 5/1/2004 4/1/2014
85 Actual/360 120 118 360 358 5/1/2004 4/1/2014
86 Actual/360 120 120 300 300 7/1/2004 6/1/2014
87 Actual/360 120 120 360 360 7/1/2004 6/1/2014
88 Actual/360 60 60 360 360 7/1/2004 6/1/2009
- ---------------------------------------------------------------------------------------------------------------------------------
88.1
88.2
89 Actual/360 60 58 360 358 5/1/2004 4/1/2009
90 Actual/360 120 120 300 300 7/1/2004 6/1/2014
91 Actual/360 120 120 336 336 7/1/2004 6/1/2014
- ---------------------------------------------------------------------------------------------------------------------------------
92 Actual/360 120 120 360 360 7/1/2004 6/1/2014
93 Actual/360 180 178 360 358 5/1/2004 4/1/2019
94 Actual/360 84 84 360 360 7/1/2004 6/1/2011
95 Actual/360 120 119 240 239 6/1/2004 5/1/2014
ANNUAL MONTHLY REMAINING CROSSED
DEBT DEBT INTEREST ONLY ARD WITH RELATED
ID SERVICE (2) SERVICE (2) PERIOD (MOS.) LOCKBOX (3) (YES/NO) OTHER LOANS (16) BORROWER
- ------------------------------------------------------------------------------------------------------------------------------------
1 6,563,389 546,949 120 Hard No No No
2 10,247,121 853,927 21 Hard Yes No No
3 3,135,000 261,250 60 Hard No No No
3.01 0 No
3.02 - No
- ------------------------------------------------------------------------------------------------------------------------------------
3.03 - No
3.04 - No
3.05 - No
3.06 - No
3.07 - No
- ------------------------------------------------------------------------------------------------------------------------------------
3.08 - No
3.09 - No
3.10 - No
4,836,569 403,047 12 Hard No Yes - A Yes - H
4 1,647,333 137,278 12 Hard No Yes - A Yes - H
- ------------------------------------------------------------------------------------------------------------------------------------
5 1,235,499 102,958 12 Hard No Yes - A Yes - H
6 1,043,091 86,924 12 Hard No Yes - A Yes - H
7 678,701 56,558 12 Hard No Yes - A Yes - H
8 231,944 19,329 12 Hard No Yes - A Yes - H
9 4,129,458 344,122 21 Hard No No No
- ------------------------------------------------------------------------------------------------------------------------------------
10 4,065,522 338,794 36 Soft at Closing, Springing Hard No No No
11 3,899,089 324,924 - Hard No No No
11.1 - No
11.2 - No
11.3 - No
- ------------------------------------------------------------------------------------------------------------------------------------
11.4 - No
11.5 - No
12 3,630,972 302,581 - None at Closing, Springing Hard No No No
13 3,066,061 255,505 9 Soft No No No
14 2,787,370 232,281 1 Hard No No Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
15 2,685,480 223,790 25 Soft No No No
15.1 - No
15.2 - No
16 2,801,359 233,447 1 Hard No No No
17 2,304,106 192,009 35 None No No No
- ------------------------------------------------------------------------------------------------------------------------------------
18 1,886,012 157,168 - None No No No
18.1 - No
18.2 - No
18.3 - No
18.4 - No
- ------------------------------------------------------------------------------------------------------------------------------------
18.5 - No
1,655,783 137,982 31 None No Yes - B Yes - F
19 757,306 63,109 31 None No Yes - B Yes - F
20 559,404 46,617 31 None No Yes - B Yes - F
21 339,073 28,256 31 None No Yes - B Yes - F
- ------------------------------------------------------------------------------------------------------------------------------------
22 1,656,150 138,012 12 None No No No
23 1,642,359 136,863 25 Soft No No No
24 1,503,739 125,312 24 None No No Yes - E
25 1,358,457 113,205 48 None No No No
26 1,411,893 117,658 12 Hard No No Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.001 - Yes - A
26.002 - Yes - A
26.003 - Yes - A
26.004 - Yes - A
26.005 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.006 - Yes - A
26.007 - Yes - A
26.008 - Yes - A
26.009 - Yes - A
26.010 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.011 - Yes - A
26.012 - Yes - A
26.013 - Yes - A
26.014 - Yes - A
26.015 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.016 - Yes - A
26.017 - Yes - A
26.018 - Yes - A
26.019 - Yes - A
26.020 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.021 - Yes - A
26.022 - Yes - A
26.023 - Yes - A
26.024 - Yes - A
26.025 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.026 - Yes - A
26.027 - Yes - A
26.028 - Yes - A
26.029 - Yes - A
26.030 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.031 - Yes - A
26.032 - Yes - A
26.033 - Yes - A
26.034 - Yes - A
26.035 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.036 - Yes - A
26.037 - Yes - A
26.038 - Yes - A
26.039 - Yes - A
26.040 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.041 - Yes - A
26.042 - Yes - A
26.043 - Yes - A
26.044 - Yes - A
26.045 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.046 - Yes - A
26.047 - Yes - A
26.048 - Yes - A
26.049 - Yes - A
26.050 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.051 - Yes - A
26.052 - Yes - A
26.053 - Yes - A
26.054 - Yes - A
26.055 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.056 - Yes - A
26.057 - Yes - A
26.058 - Yes - A
26.059 - Yes - A
26.060 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.061 - Yes - A
26.062 - Yes - A
26.063 - Yes - A
26.064 - Yes - A
26.065 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.066 - Yes - A
26.067 - Yes - A
26.068 - Yes - A
26.069 - Yes - A
26.070 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.071 - Yes - A
26.072 - Yes - A
26.073 - Yes - A
26.074 - Yes - A
26.075 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.076 - Yes - A
26.077 - Yes - A
26.078 - Yes - A
26.079 - Yes - A
26.080 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.081 - Yes - A
26.082 - Yes - A
26.083 - Yes - A
26.084 - Yes - A
26.085 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.086 - Yes - A
26.087 - Yes - A
26.088 - Yes - A
26.089 - Yes - A
26.090 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.091 - Yes - A
26.092 - Yes - A
26.093 - Yes - A
26.094 - Yes - A
26.095 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.096 - Yes - A
26.097 - Yes - A
26.098 - Yes - A
26.099 - Yes - A
26.100 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.101 - Yes - A
26.102 - Yes - A
26.103 - Yes - A
26.104 - Yes - A
26.105 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.106 - Yes - A
26.107 - Yes - A
26.108 - Yes - A
26.109 - Yes - A
26.110 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.111 - Yes - A
26.112 - Yes - A
26.113 - Yes - A
26.114 - Yes - A
26.115 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.116 - Yes - A
26.117 - Yes - A
26.118 - Yes - A
26.119 - Yes - A
26.120 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.121 - Yes - A
26.122 - Yes - A
26.123 - Yes - A
26.124 - Yes - A
26.125 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.126 - Yes - A
26.127 - Yes - A
26.128 - Yes - A
26.129 - Yes - A
26.130 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.131 - Yes - A
26.132 - Yes - A
26.133 - Yes - A
26.134 - Yes - A
26.135 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.136 - Yes - A
26.137 - Yes - A
26.138 - Yes - A
26.139 - Yes - A
26.140 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.141 - Yes - A
26.142 - Yes - A
26.143 - Yes - A
26.144 - Yes - A
26.145 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
26.146 - Yes - A
26.147 - Yes - A
26.148 - Yes - A
26.149 - Yes - A
26.150 - Yes - A
- ------------------------------------------------------------------------------------------------------------------------------------
27 1,119,608 93,301 24 No No
28 1,193,328 99,444 1 Hard No No No
29 1,074,546 89,546 - None No No No
30 960,689 80,057 24 No No
31 922,329 76,861 24 None No No Yes - E
- ------------------------------------------------------------------------------------------------------------------------------------
32 868,643 72,387 1 None at Closing, Springing Hard No No No
33 753,060 62,755 1 Soft No No No
34 643,205 53,600 1 No No
35 542,582 45,215 - None at Closing, Springing Hard No No No
36 616,798 51,400 - None at Closing, Springing Hard No No No
- ------------------------------------------------------------------------------------------------------------------------------------
36.1 - No
36.2 - No
37 530,058 44,171 - None at Closing, Springing Hard No No No
38 771,605 64,300 - None No No No
39 462,264 38,522 24 None No No No
- ------------------------------------------------------------------------------------------------------------------------------------
40 442,657 36,888 - None No No Yes - D
41 436,544 36,379 - None No No Yes - C
42 450,853 37,571 - Hard NA No No
43 419,790 34,983 - None No No Yes - G
44 633,875 52,823 - No No
- ------------------------------------------------------------------------------------------------------------------------------------
45 404,213 33,684 - No No
46 393,139 32,762 - No No
47 367,287 30,607 - NA No No
48 513,177 42,765 - NA No No
49 362,386 30,199 - None at Closing, Springing Hard No No No
- ------------------------------------------------------------------------------------------------------------------------------------
50 346,911 28,909 - None No No Yes - D
51 327,919 27,327 - None No No Yes - D
52 320,031 26,669 - None No No No
53 319,658 26,638 - None No No Yes - D
54 313,176 26,098 1 No No
- ------------------------------------------------------------------------------------------------------------------------------------
55 296,085 24,674 - None No No Yes - G
56 288,141 24,012 - None No No No
56.1 - No
56.2 - No
57 262,915 21,910 - None No No Yes - B
- ------------------------------------------------------------------------------------------------------------------------------------
58 262,915 21,910 - None No No Yes - B
59 299,740 24,978 - None at Closing, Springing Hard No No No
60 275,495 22,958 - None No No No
61 340,440 28,370 - None at Closing, Springing Hard No No No
62 319,389 26,616 - Hard No No No
- ------------------------------------------------------------------------------------------------------------------------------------
63 264,391 22,033 1 None No No No
64 253,245 21,104 - None No No No
64.1 - No
64.2 - No
65 254,303 21,192 - None No No No
- ------------------------------------------------------------------------------------------------------------------------------------
66 245,633 20,469 - Hard No No No
67 255,401 21,283 - No No
68 237,422 19,785 - No No
69 236,485 19,707 - None No No No
70 250,472 20,873 - None at Closing, Springing Hard No No No
- ------------------------------------------------------------------------------------------------------------------------------------
71 207,250 17,271 - None at Closing, Springing Hard Yes No No
72 197,149 16,429 - None No No Yes - C
72.1 - Yes - C
72.2 - Yes - C
73 190,479 15,873 - Soft at Closing, Springing Hard NA No No
- ------------------------------------------------------------------------------------------------------------------------------------
74 254,049 21,171 - None at Closing, Springing Hard No No No
75 239,064 19,922 - None No No No
76 162,593 13,549 - None No No No
77 213,540 17,795 - Hard No No No
78 176,765 14,730 - None at Closing, Springing Hard No No No
- ------------------------------------------------------------------------------------------------------------------------------------
79 160,108 13,342 - None at Closing, Springing Hard No No No
80 153,440 12,787 - None No No Yes - I
81 158,635 13,220 - None No No No
82 159,335 13,278 - None No No No
83 124,525 10,377 - Soft at Closing, Springing Hard No No
- ------------------------------------------------------------------------------------------------------------------------------------
84 127,096 10,591 - None at Closing, Springing Hard No No No
85 121,966 10,164 - None No No No
86 141,931 11,828 - None No No No
87 131,042 10,920 - None at Closing, Springing Hard No No No
88 119,140 9,928 - None No No No
- ------------------------------------------------------------------------------------------------------------------------------------
88.1 - No
88.2 - No
89 109,336 9,111 - None No No No
90 131,687 10,974 - None at Closing, Springing Hard No No No
91 99,212 8,268 24 None No No Yes - E
- ------------------------------------------------------------------------------------------------------------------------------------
92 99,962 8,330 - None No No Yes - I
93 102,072 8,506 - None No No No
94 85,938 7,161 - None No No No
95 88,693 7,391 - None No No No
CUT-OFF
DSCR GRACE PAYMENT APPRAISED DATE LTV LTV RATIO AT
ID (2)(4)(5)(16)(17) PERIOD DATE VALUE (6) RATIO (4)(5)(9)(16) MATURITY/APD (4)(9)(16)
- ---------------------------------------------------------------------------------------------------------------------------
1 2.36 2 6 977,200,000 53.21% 53.21%
2 1.48 2 1 535,000,000 58.69% 42.01%
3 3.62 5 1 395,875,000 54.31% 54.31%
3.01 74,000,000
3.02 17,000,000
- ---------------------------------------------------------------------------------------------------------------------------
3.03 115,000,000
3.04 42,200,000
3.05 12,650,000
3.06 49,300,000
3.07 16,275,000
- ---------------------------------------------------------------------------------------------------------------------------
3.08 20,200,000
3.09 23,450,000
3.10 25,800,000
1.38 5 1 107,780,000 68.10% 61.80%
4 1.38 5 1 34,100,000 68.10% 61.80%
- ---------------------------------------------------------------------------------------------------------------------------
5 1.38 5 1 31,000,000 68.10% 61.80%
6 1.38 5 1 23,880,000 68.10% 61.80%
7 1.38 5 1 15,100,000 68.10% 61.80%
8 1.38 5 1 3,700,000 68.10% 61.80%
9 1.88 5 1 650,000,000 52.31% 45.14%
- ---------------------------------------------------------------------------------------------------------------------------
10 1.41 5 1 80,500,000 74.53% 66.62%
11 1.31 5 1 72,800,000 76.92% 60.69%
11.1 18,000,000
11.2 3,500,000
11.3 11,500,000
- ---------------------------------------------------------------------------------------------------------------------------
11.4 24,000,000
11.5 15,800,000
12 1.83 5 1 83,000,000 60.06% 45.61%
13 1.25 5 1 59,900,000 75.13% 64.33%
14 1.31 5 1 54,000,000 79.63% 64.69%
- ---------------------------------------------------------------------------------------------------------------------------
15 1.26 5 1 53,800,000 71.75% 66.84%
15.1 30,300,000
15.2 23,500,000
16 1.25 5 1 49,000,000 78.37% 66.71%
17 1.23 5 1 44,400,000 77.70% 69.27%
- ---------------------------------------------------------------------------------------------------------------------------
18 1.21 5 1 39,850,000 76.73% 71.74%
18.1 12,800,000
18.2 9,750,000
18.3 6,800,000
18.4 5,300,000
- ---------------------------------------------------------------------------------------------------------------------------
18.5 5,200,000
1.20 5 1 33,600,000 74.70% 72.08%
19 1.20 5 1 15,500,000 74.70% 72.08%
20 1.20 5 1 11,300,000 74.70% 72.08%
21 1.20 5 1 6,800,000 74.70% 72.08%
- ---------------------------------------------------------------------------------------------------------------------------
22 1.29 5 1 31,500,000 74.43% 64.30%
23 1.25 5 1 29,000,000 79.31% 74.13%
24 1.41 5 1 28,500,000 79.86% 67.43%
25 1.30 5 1 24,870,000 79.82% 72.86%
26 1.95 5 1 712,955,000 47.29% 39.85%
- ---------------------------------------------------------------------------------------------------------------------------
26.001 86,000,000
26.002 71,000,000
26.003 40,200,000
26.004 39,200,000
26.005 32,600,000
- ---------------------------------------------------------------------------------------------------------------------------
26.006 24,100,000
26.007 19,500,000
26.008 13,900,000
26.009 13,580,000
26.010 13,200,000
- ---------------------------------------------------------------------------------------------------------------------------
26.011 13,100,000
26.012 12,925,000
26.013 12,900,000
26.014 12,500,000
26.015 15,000,000
- ---------------------------------------------------------------------------------------------------------------------------
26.016 9,000,000
26.017 8,000,000
26.018 7,500,000
26.019 6,500,000
26.020 6,000,000
- ---------------------------------------------------------------------------------------------------------------------------
26.021 5,950,000
26.022 5,680,000
26.023 5,640,000
26.024 5,200,000
26.025 4,840,000
- ---------------------------------------------------------------------------------------------------------------------------
26.026 4,800,000
26.027 4,800,000
26.028 4,700,000
26.029 4,600,000
26.030 4,400,000
- ---------------------------------------------------------------------------------------------------------------------------
26.031 4,400,000
26.032 5,660,000
26.033 4,000,000
26.034 3,900,000
26.035 3,900,000
- ---------------------------------------------------------------------------------------------------------------------------
26.036 4,900,000
26.037 3,700,000
26.038 3,600,000
26.039 3,600,000
26.040 3,600,000
- ---------------------------------------------------------------------------------------------------------------------------
26.041 3,500,000
26.042 3,400,000
26.043 3,250,000
26.044 3,250,000
26.045 3,100,000
- ---------------------------------------------------------------------------------------------------------------------------
26.046 2,800,000
26.047 2,760,000
26.048 2,700,000
26.049 2,660,000
26.050 2,600,000
- ---------------------------------------------------------------------------------------------------------------------------
26.051 2,550,000
26.052 2,450,000
26.053 2,400,000
26.054 2,350,000
26.055 2,350,000
- ---------------------------------------------------------------------------------------------------------------------------
26.056 2,340,000
26.057 1,140,000
26.058 2,200,000
26.059 2,200,000
26.060 2,200,000
- ---------------------------------------------------------------------------------------------------------------------------
26.061 2,130,000
26.062 2,100,000
26.063 2,100,000
26.064 2,100,000
26.065 2,100,000
- ---------------------------------------------------------------------------------------------------------------------------
26.066 2,060,000
26.067 2,040,000
26.068 1,925,000
26.069 1,900,000
26.070 1,900,000
- ---------------------------------------------------------------------------------------------------------------------------
26.071 1,800,000
26.072 1,800,000
26.073 1,725,000
26.074 1,700,000
26.075 1,700,000
- ---------------------------------------------------------------------------------------------------------------------------
26.076 1,700,000
26.077 2,100,000
26.078 1,570,000
26.079 1,550,000
26.080 1,530,000
- ---------------------------------------------------------------------------------------------------------------------------
26.081 1,500,000
26.082 1,500,000
26.083 1,500,000
26.084 1,470,000
26.085 1,450,000
- ---------------------------------------------------------------------------------------------------------------------------
26.086 1,430,000
26.087 1,420,000
26.088 2,260,000
26.089 1,400,000
26.090 1,400,000
- ---------------------------------------------------------------------------------------------------------------------------
26.091 1,380,000
26.092 1,390,000
26.093 1,360,000
26.094 1,360,000
26.095 1,325,000
- ---------------------------------------------------------------------------------------------------------------------------
26.096 1,300,000
26.097 1,300,000
26.098 1,275,000
26.099 1,250,000
26.100 850,000
- ---------------------------------------------------------------------------------------------------------------------------
26.101 1,200,000
26.102 1,200,000
26.103 1,190,000
26.104 1,150,000
26.105 1,140,000
- ---------------------------------------------------------------------------------------------------------------------------
26.106 1,100,000
26.107 1,100,000
26.108 1,100,000
26.109 1,090,000
26.110 1,050,000
- ---------------------------------------------------------------------------------------------------------------------------
26.111 1,010,000
26.112 1,000,000
26.113 1,000,000
26.114 1,000,000
26.115 1,000,000
- ---------------------------------------------------------------------------------------------------------------------------
26.116 925,000
26.117 900,000
26.118 900,000
26.119 900,000
26.120 900,000
- ---------------------------------------------------------------------------------------------------------------------------
26.121 900,000
26.122 875,000
26.123 850,000
26.124 900,000
26.125 825,000
- ---------------------------------------------------------------------------------------------------------------------------
26.126 825,000
26.127 1,050,000
26.128 800,000
26.129 800,000
26.130 1,000,000
- ---------------------------------------------------------------------------------------------------------------------------
26.131 950,000
26.132 725,000
26.133 720,000
26.134 700,000
26.135 690,000
- ---------------------------------------------------------------------------------------------------------------------------
26.136 650,000
26.137 800,000
26.138 725,000
26.139 540,000
26.140 500,000
- ---------------------------------------------------------------------------------------------------------------------------
26.141 425,000
26.142 350,000
26.143 600,000
26.144 2,100,000
26.145 1,500,000
- ---------------------------------------------------------------------------------------------------------------------------
26.146 575,000
26.147 1,200,000
26.148 1,375,000
26.149 825,000
26.150 900,000
- ---------------------------------------------------------------------------------------------------------------------------
27 1.38 5 1 23,500,000 74.04% 64.05%
28 1.24 5 1 21,700,000 77.93% 70.86%
29 1.41 5 1 20,200,000 79.13% 65.90%
30 1.28 5 1 18,880,000 79.71% 68.84%
31 1.36 5 1 18,000,000 77.56% 65.49%
- ---------------------------------------------------------------------------------------------------------------------------
32 1.25 5 1 14,900,000 73.83% 57.60%
33 1.24 5 1 13,500,000 77.04% 65.45%
34 1.20 5 1 13,000,000 70.96% 59.66%
35 1.48 5 1 11,350,000 74.89% 61.41%
36 1.45 5 1 11,900,000 71.43% 60.71%
- ---------------------------------------------------------------------------------------------------------------------------
36.1 7,200,000
36.2 4,700,000
37 1.52 5 1 10,740,000 78.31% 69.16%
38 1.47 5 1 13,500,000 62.02% 0.00%
39 1.20 5 1 9,100,000 73.90% 70.98%
- ---------------------------------------------------------------------------------------------------------------------------
40 1.32 5 1 7,900,000 79.27% 67.04%
41 1.37 5 1 7,800,000 79.34% 67.01%
42 1.41 5 1 8,300,000 74.30% 63.28%
43 1.49 5 1 7,780,000 79.12% 66.20%
44 1.87 5 1 10,700,000 57.37% 0.85%
- ---------------------------------------------------------------------------------------------------------------------------
45 1.50 7 1 8,100,000 75.15% 62.41%
46 1.29 5 1 8,010,000 74.83% 61.89%
47 1.39 5 1 7,150,000 78.84% 70.07%
48 1.51 5 1 8,000,000 64.78% 28.47%
49 1.70 5 1 9,100,000 54.95% 41.57%
- ---------------------------------------------------------------------------------------------------------------------------
50 1.28 5 1 6,550,000 76.12% 64.09%
51 1.32 5 1 6,100,000 80.00% 66.56%
52 1.21 5 1 5,775,000 79.43% 66.93%
53 1.23 5 1 5,900,000 76.65% 64.82%
54 1.59 5 1 5,800,000 75.86% 64.15%
- ---------------------------------------------------------------------------------------------------------------------------
55 1.38 5 1 5,460,000 79.25% 66.38%
56 1.37 5 1 5,500,000 78.11% 65.00%
56.1 3,823,810
56.2 1,676,190
57 1.63 5 1 6,310,000 64.98% 53.35%
- ---------------------------------------------------------------------------------------------------------------------------
58 1.54 5 1 5,960,000 68.79% 56.48%
59 1.34 5 1 5,250,000 77.80% 66.52%
60 1.30 5 1 5,250,000 74.29% 62.68%
61 1.27 5 1 6,575,000 59.32% 39.17%
62 1.20 5 1 5,300,000 72.52% 0.00%
- ---------------------------------------------------------------------------------------------------------------------------
63 1.37 5 1 5,590,000 67.17% 56.63%
64 1.40 5 1 4,775,000 76.34% 64.26%
64.1 1,975,000
64.2 2,800,000
65 1.65 5 1 4,700,000 76.53% 64.63%
- ---------------------------------------------------------------------------------------------------------------------------
66 1.37 5 1 5,050,000 70.23% 58.98%
67 1.35 5 1 4,900,000 70.69% 60.35%
68 1.39 5 1 4,400,000 75.00% 63.60%
69 1.32 5 1 4,300,000 76.63% 57.83%
70 1.25 5 1 4,000,000 79.90% 62.22%
- ---------------------------------------------------------------------------------------------------------------------------
71 1.45 5 1 4,350,000 65.10% 55.73%
72 1.42 5 1 3,500,000 79.93% 67.44%
72.1 2,500,000
72.2 1,000,000
73 1.49 5 1 3,785,000 68.49% 52.17%
- ---------------------------------------------------------------------------------------------------------------------------
74 1.38 5 1 5,230,000 47.80% 0.67%
75 1.70 5 1 4,220,000 58.65% 0.65%
76 1.26 5 1 3,050,000 79.92% 66.41%
77 1.21 5 1 3,300,000 72.73% 48.46%
78 1.28 5 1 3,000,000 80.00% 68.28%
- ---------------------------------------------------------------------------------------------------------------------------
79 1.86 5 1 3,850,000 62.13% 51.64%
80 1.56 5 1 4,000,000 56.43% 47.10%
81 1.56 5 1 2,750,000 76.36% 65.62%
82 1.54 5 1 3,640,000 60.44% 51.35%
83 1.98 5 1 3,700,000 50.68% 42.02%
- ---------------------------------------------------------------------------------------------------------------------------
84 1.40 5 1 2,450,000 75.36% 63.22%
85 1.40 15 1 2,250,000 79.83% 66.72%
86 1.34 5 1 2,600,000 67.69% 53.20%
87 1.37 5 1 2,500,000 69.00% 59.38%
88 1.61 5 1 2,145,000 79.25% 73.89%
- ---------------------------------------------------------------------------------------------------------------------------
88.1 1,065,000
88.2 1,080,000
89 1.49 5 1 2,100,000 78.40% 72.73%
90 1.68 5 1 3,150,000 50.79% 40.21%
91 1.27 5 1 1,850,000 80.00% 67.79%
- ---------------------------------------------------------------------------------------------------------------------------
92 1.63 5 1 2,260,000 65.13% 54.35%
93 1.26 5 1 1,900,000 69.63% 52.49%
94 1.75 5 1 2,000,000 60.00% 54.17%
95 1.25 5 1 1,250,000 79.85% 53.24%
ID ADDRESS CITY COUNTY STATE ZIP CODE
- --------------------------------------------------------------------------------------------------------------------------------
1 One Garden State Plaza Paramus Bergen NJ 07652
2 731 Lexington Avenue New York New York NY 10022
3 Various Various Various Various Various
3.01 Transit Road Clarence-Amherst-Lancaster Erie NY 14202, 14221
3.02 West Main Street and Lewiston Road Batavia Genesee NY 14020
- --------------------------------------------------------------------------------------------------------------------------------
3.03 Union Road and Walden Avenue Cheektowaga Erie NY 14225
3.04 12785 Riverdale Boulevard Coon Rapids Anoka MN 55448
3.05 US Route 19 (Peach Street) Erie Erie PA 16509
3.06 352-464 and 637 East Joyce Boulevard Fayetteville Washington AR 72703
3.07 Old Forte Parkway Murfreesboro Rutherford TN 37129
- --------------------------------------------------------------------------------------------------------------------------------
3.08 Charlotte Pike Nashville Davidson TN 37209
3.09 State Route 18 Monaca Beaver PA 15061
3.10 299 Swannanoa River Road Asheville Buncombe NC 28805
Various Various Various Various Various
4 150 South Independence Mall West Philadelphia Philadelphia PA 19106
- --------------------------------------------------------------------------------------------------------------------------------
5 824 North Market Street Wilmington New Castle DE 19801
6 360 East Second Street Los Angeles Los Angeles CA 90012
7 1150 Gemini Avenue Houston Harris TX 77058
8 1200 North Street Lincoln Lancaster NE 63508
9 1961 Chain Bridge Road McLean Fairfax VA 22102
- --------------------------------------------------------------------------------------------------------------------------------
10 Route 29 and Route 28 at Centrewood Drive Centreville Fairfax VA 21012
11 Various Various Various Various Various
11.1 85 Moosup Road Plainfield Windham CT 06387
11.2 151 Suffolk Lane Gardner Worcester MA 01440
11.3 600 North Bedford Street East Bridgewater Plymouth MA 02333
- --------------------------------------------------------------------------------------------------------------------------------
11.4 1111 Southampton Road Westfield Hampden MA 01085
11.5 625 University Avenue Norwood Norfolk MA 02062
12 550 South Hill Street Los Angeles Los Angeles CA 90013
13 660 South Figueroa Street Los Angeles Los Angeles CA 90017
14 3 Beaver Valley Road Wilmington New Castle DE 19803
- --------------------------------------------------------------------------------------------------------------------------------
15 Various Various Various Various Various
15.1 14000 Quail Springs Parkway Oklahoma City Oklahoma OK 73134
15.2 1200 Urban Center Drive Birmingham Jefferson AL 35242
16 1003 Beau Terre Drive Bentonville Benton AR 72712
17 401 Little Texas Lane Austin Travis TX 78745
- --------------------------------------------------------------------------------------------------------------------------------
18 Various New York New York NY Various
18.1 25-35 Hillside Avenue New York New York NY 10040
18.2 2 West 120th Street New York New York NY 10027
18.3 281-295 Wadsworth Avenue New York New York NY 10040
18.4 509 West 155th Street New York New York NY 10032
- --------------------------------------------------------------------------------------------------------------------------------
18.5 34-44 Seaman Avenue New York New York NY 10034
Various Various Various FL Various
19 2255 Kingly Court Melbourne Brevard FL 32904
20 2255 Friday Court Melbourne Brevard FL 32904
21 4355 Corporate Avenue Lakeland Polk FL 33809
- --------------------------------------------------------------------------------------------------------------------------------
22 1260 15th Street Santa Monica Los Angeles CA 90404
23 270 Davidson Avenue Franklin Township Somerset NJ 08873
24 2940 William Street Cheektowaga Erie NY 14227
25 605 Conchester Road Boothwyn Delaware PA 19061
26 Various Various Various Various Various
- --------------------------------------------------------------------------------------------------------------------------------
26.001 231 South LaSalle Street Chicago Cook IL 60604
26.002 One South Van Ness Boulevard San Francisco San Francisco CA 94103
26.003 525 North Tryon Street Charlotte Mecklenberg NC 28202
26.004 601 West Riverside Avenue Spokane Spokane WA 99210
26.005 9000 Southside Boulevard Jacksonville Duval FL 32256
- --------------------------------------------------------------------------------------------------------------------------------
26.006 9000 Southside Boulevard Jacksonville Duval FL 32256
26.007 9000 Southside Boulevard Jacksonville Duval FL 32256
26.008 17100 North West 59th Avenue Miami Lakes Miami-Dade FL 33015
26.009 1825 East Buckeye Road Phoenix Maricopa AZ 85034
26.010 9000 Southside Boulevard Jacksonville Duval FL 32256
- --------------------------------------------------------------------------------------------------------------------------------
26.011 9000 Southside Boulevard Jacksonville Duval FL 32256
26.012 1825 East Buckeye Road Phoenix Maricopa AZ 85034
26.013 9000 Southside Boulevard Jacksonville Duval FL 32256
26.014 9000 Southside Boulevard Jacksonville Duval FL 32256
26.015 5875 North West 163rd Street Miami Lakes Miami-Dade FL 33014
- --------------------------------------------------------------------------------------------------------------------------------
26.016 1616 South Rustle Spokane Spokane WA 99224
26.017 1000 Century Park Road Tampa Hillsborough FL 33607
26.018 820 A Street Tacoma Pierce WA 98402
26.019 707 Mendham Boulevard Orlando Orange FL 32825
26.020 345 North Brand Boulevard Glendale Los Angeles CA 91203
- --------------------------------------------------------------------------------------------------------------------------------
26.021 1422 East Grayson Street San Antonio Bexar TX 78208
26.022 300 Ellinwood Way Pleasant Hill Contra Costa CA 94523
26.023 400 Ellinwood Way Pleasant Hill Contra Costa CA 94523
26.024 150 Long Beach Boulevard Long Beach Los Angeles CA 90802
26.025 1825 East Buckeye Road Phoenix Maricopa AZ 85034
- --------------------------------------------------------------------------------------------------------------------------------
26.026 1825 East Buckeye Road Phoenix Maricopa AZ 85034
26.027 1825 East Buckeye Road Phoenix Maricopa AZ 85034
26.028 110 East Weber Street Stockton San Joaquin CA 95202
26.029 1275 South Dupont Avenue Ontario San Bernadino CA 91761
26.030 880 East Colorado Boulevard Pasadena Los Angeles CA 91106
- --------------------------------------------------------------------------------------------------------------------------------
26.031 444 South Garey Avenue Pomona Los Angeles CA 91766
26.032 500 Ellinwood Way Pleasant Hill Contra Costa CA 94523
26.033 444 South Mathilda Avenue Sunnyvale Santa Clara CA 94086
26.034 1199 Orange Avenue Coronado San Diego CA 92118
26.035 3650 14th Street Riverside Riverside CA 92501
- --------------------------------------------------------------------------------------------------------------------------------
26.036 7680 Girard Avenue La Jolla San Diego CA 92037
26.037 7255 South Greenleaf Avenue Whittier Los Angeles CA 90602
26.038 801 E. Hallandale Boulevard Hallandale Broward FL 33009
26.039 10 Church Circle Annapolis Anne Arundel MD 21401
26.040 12400 Interstate 45 North Houston Harris TX 77060
- --------------------------------------------------------------------------------------------------------------------------------
26.041 1661 East Street Redding Shasta CA 96001
26.042 725 6th Street North West Albuquerque Bernalillo NM 87102
26.043 834 State Street Santa Barbara Santa Barbara CA 93101
26.044 300 East Main Street Charlottesville Charlottesville VA 22902
26.045 900 South Federal Highway Stuart Martin FL 34994
- --------------------------------------------------------------------------------------------------------------------------------
26.046 4101 MacArthur Boulevard Newport Beach Orange CA 92660
26.047 1450 West Redondo Beach Boulevard Gardena Los Angeles CA 90247
26.048 100 North Westshore Boulevard Tampa Hillsborough FL 33609
26.049 330 East Manchester Boulevard Inglewood Los Angeles CA 90301
26.050 9000 Southside Boulevard Jacksonville Duval FL 32256
- --------------------------------------------------------------------------------------------------------------------------------
26.051 9000 Southside Boulevard Jacksonville Duval FL 32256
26.052 22 Bull Street Savannah Chatham GA 31401
26.053 112 East Holly Street Bellingham Whatcom WA 98255
26.054 2850 North Federal Highway Lighthouse Point Broward FL 33064
26.055 1007 Knight Street Richland Benton WA 99352
- --------------------------------------------------------------------------------------------------------------------------------
26.056 5025 Lankershim Boulevard North Hollywood Los Angeles CA 91601
26.057 1255 Sartori Avenue Torrance Los Angeles CA 90501
26.058 220 South Escondido Boulevard Escondido San Diego CA 92025
26.059 303 North D Street San Bernardino San Bernadino CA 92418
26.060 750 South Orlando Avenue Winter Park Orange FL 32789
- --------------------------------------------------------------------------------------------------------------------------------
26.061 300 Town Center East Santa Maria Santa Barbara CA 93454
26.062 405 Main Street Salinas Monterey CA 93901
26.063 8320 North Oak Trafficway Kansas City Clay MO 64118
26.064 1077 East Sahara Avenue Las Vegas Clark NV 89104
26.065 4701 University Way North East Seattle King WA 98105
- --------------------------------------------------------------------------------------------------------------------------------
26.066 2111 Tuolumne Street Fresno Fresno CA 93721
26.067 5061 Bayou Boulevard Pensacola Escambia FL 32503
26.068 1100 Butte House Road Yuba City Sutter CA 95991
26.069 35 SE 1st Avenue Ocala Marion FL 34471
26.070 302 South Jefferson Street, South East Roanoke Roanoke City VA 24011
- --------------------------------------------------------------------------------------------------------------------------------
26.071 63 West Main Street Mesa Maricopa AZ 85201
26.072 900 High Street Auburn Placer CA 95603
26.073 106 South Patterson Street Valdosta Lowndes GA 31601
26.074 1640 Gulf to Bay Boulevard Clearwater Pinellas FL 33755
26.075 514 Austin Avenue Waco McLennan TX 76701
- --------------------------------------------------------------------------------------------------------------------------------
26.076 101 North 2nd Street Yakima Yakima WA 98901
26.077 801 Main Street Lynchburg Lynchburg City VA 24504
26.078 835 North Sepulveda Boulevard El Segundo Los Angeles CA 90245
26.079 9500 Mission Road Overland Park Johnson KS 66206
26.080 167 Laurens Street Aiken Aiken SC 29801
- --------------------------------------------------------------------------------------------------------------------------------
26.081 102 East Main Street Cartersville Bartow GA 30120
26.082 120 East Main Street Murfreesboro Rutherford TN 37130
26.083 1000 6th Street South Bremerton Kitsap WA 98337
26.084 800 Cherry Street Columbia Boone MO 65201
26.085 2501 South Congress Austin Travis TX 78704
- --------------------------------------------------------------------------------------------------------------------------------
26.086 4301 and 4400 Hampton Avenue St. Louis St. Louis MO 63109
26.087 5353 South Lindbergh Boulevard St. Louis Saint Louis MO 63126
26.088 1130 South Victoria Ventura Ventura CA 93003
26.089 1201 Baker Street Bakersfield Kern CA 93305
26.090 1830 Del Paso Boulevard Sacramento Sacramento CA 95815
- --------------------------------------------------------------------------------------------------------------------------------
26.091 401 Front Street Coeur D'Alene Kootenai ID 83814
26.092 222 South Jefferson Mexico Audrain MO 65265
26.093 3435 North Cedar Avenue Fresno Fresno CA 93726
26.094 10300-10306 Sepul Veda Boulevard Mission Hills Los Angeles CA 91345
26.095 2001 William Street Cape Girardeau Cape Girardeau MO 63703
- --------------------------------------------------------------------------------------------------------------------------------
26.096 5021 California Avenue Bakersfield Kern CA 93309
26.097 111 West Main Street Walla Walla Walla Walla WA 99362
26.098 5651 East Lancaster Avenue Fort Worth Tarrant TX 76112
26.099 21175 Olean Boulevard Port Charlotte Charlotte FL 33952
26.100 300 South Main Street Moultrie Colquitt GA 31768
- --------------------------------------------------------------------------------------------------------------------------------
26.101 880 Rue St. Francois Florissant Saint Louis MO 63031
26.102 4401 Central Avenue North East Albuquerque Bernalillo NM 87108
26.103 129 West Lexington Independence Jackson MO 64050
26.104 107 Water Street Henderson Clark NV 89015
26.105 2611 South Cedar Avenue Fresno Fresno CA 93725
- --------------------------------------------------------------------------------------------------------------------------------
26.106 3804 Atlantic Avenue Long Beach Los Angeles CA 90807
26.107 2400 North Broadway Los Angeles Los Angeles CA 90031
26.108 3810 Broadway Sacramento Sacramento CA 95817
26.109 3535 University Boulevard West Jacksonville Duval FL 32217
26.110 1101 South Josey Lane Carrollton Dallas TX 75006
- --------------------------------------------------------------------------------------------------------------------------------
26.111 3505 East Imperial Highway Lynwood Los Angeles CA 90262
26.112 839 East Palmdale Boulevard Palmdale Los Angeles CA 93550
26.113 501 Bliss Avenue Dumas Moore TX 79029
26.114 1 West Queens Way Hampton Hampton City VA 23669
26.115 103 East 3rd Avenue Moses Lake Grant WA 98837
- --------------------------------------------------------------------------------------------------------------------------------
26.116 323 Denver Avenue Dalhart Dallam TX 79022
26.117 600 West Willow Street Long Beach Los Angeles CA 90806
26.118 1 East 49th Street Hialeah Miami-Dade FL 33013
26.119 2940 South Glenstone Springfield Greene MO 65804
26.120 5950 East Admiral Place Tulsa Tulsa OK 74115
- --------------------------------------------------------------------------------------------------------------------------------
26.121 830 North Wenatchee Avenue Wenatchee Chelan WA 98801
26.122 300 West Main Street Denison Grayson TX 75020
26.123 One Center Avenue Brownwood Brown TX 76801
26.124 128 South Washington Street Albany Dougherty GA 31701
26.125 501 Pennsylvania Ave Independence Montgomery KS 67301
- --------------------------------------------------------------------------------------------------------------------------------
26.126 302 North Jefferson Avenue Mt. Pleasant Titus TX 75455
26.127 231 South Ridgewood Drive Sebring Highlands FL 33870
26.128 518 South Long Beach Boulevard Compton Los Angeles CA 90221
26.129 350 West Lewis Street Pasco Franklin WA 99301
26.130 102 East Front Street Port Angeles Clallam WA 98362
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26.131 204 East Rush Harrison Boone AR 72601
26.132 700 8th Avenue West Palmetto Manatee FL 34221
26.133 1101 North Conway Mission Hidalgo TX 78572
26.134 481 South Forks Avenue Forks Clallam WA 98331
26.135 1232 South Vermont Avenue Los Angeles Los Angeles CA 90006
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26.136 102 North Broad Street Winder Barrow GA 30680
26.137 3415/17 Eastern Avenue Baltimore Baltimore City MD 21224
26.138 606 Broad Street South Boston Halifax VA 24592
26.139 210 West 8th Street Rolla Phelps MO 65401
26.140 702 Park Avenue North West Norton Norton City VA 24273
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26.141 1016 Main Street Lexington Lafayette MO 64607
26.142 690 East Highway 50 Clermont Lake FL 34711
26.143 51 East Camelback Road Phoenix Maricopa AZ 85012
26.144 955 Main Street Red Bluff Tehama CA 96080
26.145 1900 Tyler Street Hollywood Broward FL 33020
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26.146 112 McClurg Richland Pulaski MO 65556
26.147 710 West Sunshine Springfield Greene MO 65807
26.148 230 West Broadway Muskogee Muskogee OK 74401
26.149 221 South Commercial Aransas Pass Asansas/San Patricio TX 78336
26.150 101 East Market Street Aberdeen Grays Harbor WA 98520
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27 9720 Broadway Pearland Brazoria TX 77584
28 12700 Sunrise Valley Drive Reston Fairfax VA 20191
29 1234 Broadway New York New York NY 10001
30 1414 South Dairy Ashford Houston Harris TX 77077
31 70 Garden Village Drive Cheektowaga Erie NY 14227
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32 1501-1521 West Cameron Avenue West Covina Los Angeles CA 91790
33 480 Murray Road Valdosta Lowndes GA 31602
34 1390-1430 W. Foothill Boulevard Upland San Bernardino CA 91786
35 4605-4645 Frazee Road Oceanside San Diego CA 92057
36 Various Various Rockingham NH Various
- --------------------------------------------------------------------------------------------------------------------------------
36.1 15-19 Keewaydin Drive Salem Rockingham NH 03079
36.2 16 Route 111 Derry Rockingham NH 03038
37 5493, 5500 & 5508 South Cornell Avenue Chicago Cook IL 60637
38 7501 West Cermak Road North Riverside Cook IL 60546
39 530 West 47th Street New York New York NY 10036
- --------------------------------------------------------------------------------------------------------------------------------
40 850 Cedar Point Boulevard Cedar Point Carteret NC 28584
41 2921 Sycamore Springs Drive Kingwood Harris TX 77339
42 2632 N. 20th Street Phoenix Maricopa AZ 85006
43 75 SW 75th Street Gainesville Alachua FL 32605
44 3942 Holly Road Corpus Christi Nueces TX 78415
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45 50 Catoctin Circle Leesburg Loudoun VA 20176
46 361 Reservoir Avenue Providence Providence RI 02907
47 900 East 1st Street Los Angeles Los Angeles CA 90012
48 300 Allwood Road Clifton Passaic NJ 07012
49 12223-12273 Highland Avenue Rancho Cucamonga San Bernardino CA 91701
- --------------------------------------------------------------------------------------------------------------------------------
50 970 Green Wing Road Amboy Lee IL 61310
51 10657 South Avenue 9 East Yuma Yuma AZ 85365
52 1500 Coastal Lane Myrtle Beach Horry SC 29577
53 249 Jasper Street Northwest Largo Pinellas FL 33770
54 39 Olympia Avenue Woburn Middlesex MA 01801
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55 4100 Southwest 20th Avenue Gainesville Alachua FL 32607
56 Various Various Milwaukee WI Various
56.1 3939 West National Avenue West Milwaukee Milwaukee WI 53215
56.2 5946 South Honey Creek Drive Greenfield Milwaukee WI 53221
57 401 Compass Road East Baltimore Baltimore MD 21220
- --------------------------------------------------------------------------------------------------------------------------------
58 2204 North Rolling Road Baltimore Baltimore MD 21244
59 451-521 Stateline Road West Southaven DeSoto MS 38671
60 7227 US 290 East Austin Travis TX 78723
61 124-134 Hall Street Concord Merrimack NH 03301
62 390 State Road 13 Jacksonville St. John's FL 32259
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63 17383 Main Street Hesperia San Bernardino CA 92345
64 Various Various Albany NY Various
64.1 101 Cherry Avenue Delmar Albany NY 12054
64.2 371 Route 9W Glenmont Albany NY 12077
65 500 Jackson Street Daphne Baldwin AL 36526
- --------------------------------------------------------------------------------------------------------------------------------
66 4617 East Main Street Whitehall Franklin OH 43213
67 5016, 5026, 5036 West Cactus Road and
12251 North 51st Avenue Phoenix Maricopa AZ 85304
68 1204 Houston Levee Road Cordova Shelby TN 38016
69 1001-1087 West Menk Drive St. Peter Nicollet MN 56082
70 100-106 Collegiate Court Blacksburg Montgomery VA 24060
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71 9093 West Union Hills Drive Peoria Maricopa AZ 85382
72 Various Gulfport Harrison MS 39507
72.1 133 Debuys Road Gulfport Harrison MS 39507
72.2 224 17th Street Gulfport Harrison MS 39507
73 3950-3960 Turkeyfoot Road Independence Kenton KY 41018
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74 2019 Pacific Coast Highway Lomita Los Angeles CA 90717
75 1649 Florida Mall Avenue Orlando Orange FL 32809
76 1601 Melbourne Drive Greenville Pitt NC 27858
77 962 Potomac Circle Aurora Arapahoe CO 80011
78 3111-3119 Crooks Road Troy Oakland MI 48084
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79 3948 Legacy Drive and 6940 Coit Road Plano Collin TX 75023
80 220 Parfitt Way Southwest Bainbridge Island Kitsap WA 98110
81 3550 Rock Prairie Road West College Station Brazos TX 77845
82 1598 Crestview Drive Madison Davidson TN 37115
83 1295 Hamner Avenue Norco Riverside CA 92860
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84 28281 Crown Valley Parkway Laguna Niguel Orange CA 92677
85 100 Wheeless Drive Nashville Nash NC 27856
86 405 Governors Park Road Bellefonte Centre PA 16823
87 1235 Activity Drive Vista San Diego CA 92083
88 Various Various Various TX Various
- --------------------------------------------------------------------------------------------------------------------------------
88.1 2929 Highway 90 Crosby Harris TX 77532
88.2 3001 8th Street Port Neches Jefferson TX 77651
89 14818 Shark Street Hudson Pasco FL 34667
90 1950 South 4th Street El Centro Imperial CA 92243
91 2410 Colvin Boulevard Tonawanda Erie NY 14150
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92 4101 Lacey Boulevard Southeast Lacey Thurston WA 98503
93 28 Jacobs Crossing Drive Crossville Cumberland TN 38555
94 1305 Nature's Woods Boulevard DeLand Volusia FL 32724
95 8080 State Highway 78 West Beulah Pueblo CO 81023
NET UNITS LOAN PER NET PREPAYMENT
YEAR YEAR RENTABLE OF RENTABLE AREA PROVISIONS
ID BUILT RENOVATED AREA SF/UNITS (7) MEASURE SF/UNITS (4)(7) (# OF PAYMENTS) (8)(13)
- ----------------------------------------------------------------------------------------------------------------
1 1957 1997 1,470,454 Sq. Ft. 353.63 L(24);D(89);O(7)
2 2004 694,634 Sq. Ft. 452.04 L(27);D(90);O(3)
3 Various Various 3,255,827 Sq. Ft. 66.04 L(24);D(29);O(7)
3.01 1972-1995 1998 684,442 Sq. Ft. 58.15
3.02 1991-1996 182,417 Sq. Ft. 50.98
- ----------------------------------------------------------------------------------------------------------------
3.03 1982-1995 2004 906,721 Sq. Ft. 69.04
3.04 2002-2004 249,366 Sq. Ft. 93.04
3.05 2000-2003 112,988 Sq. Ft. 53.99
3.06 1994-2002 399,830 Sq. Ft. 67.03
3.07 1998 108,188 Sq. Ft. 82.26
- ----------------------------------------------------------------------------------------------------------------
3.08 1998-1999 167,795 Sq. Ft. 64.96
3.09 1997-2002 1998 253,110 Sq. Ft. 52.94
3.10 1996 190,970 Sq. Ft. 73.31
Various Various 1,133,428 Sq. Ft. 64.76 L(24),D(57),O(3)
4 1927 2003 471,217 Sq. Ft. 53.05 L(24),D(57),O(3)
- ----------------------------------------------------------------------------------------------------------------
5 1982 2003 200,700 Sq. Ft. 93.42 L(24),D(57),O(3)
6 1931 1986 135,982 Sq. Ft. 116.41 L(24),D(57),O(3)
7 1983 2001 158,627 Sq. Ft. 64.93 L(24),D(57),O(3)
8 1917 1995 166,902 Sq. Ft. 21.09 L(24),D(57),O(3)
9 1968 2004 1,554,116 Sq. Ft. 218.77 L(27);D(86);O(7)
- ----------------------------------------------------------------------------------------------------------------
10 1986/1992 312,026 Sq. Ft. 192.29 L(24),D(92),O(4)
11 Various Various 1,992,267 Sq. Ft. 28.11 L(35),D(82),O(3)
11.1 1958 531,000 Sq. Ft. 28.11
11.2 1999 68,000 Sq. Ft. 28.11
11.3 1960 2003 298,404 Sq. Ft. 28.11
- ----------------------------------------------------------------------------------------------------------------
11.4 1969 1996 655,000 Sq. Ft. 28.11
11.5 1969 2003 439,863 Sq. Ft. 28.11
12 1981 2003 369,976 Sq. Ft. 134.73 L(35),D(82),O(3)
13 1989 278,657 Sq. Ft. 161.49 L(27);D(89);O(4)
14 1995 263,058 Sq. Ft. 163.46 L(24);D(99);O(4)
- ----------------------------------------------------------------------------------------------------------------
15 Various 475,185 Sq. Ft. 81.23 L(24);D(57);O(4)
15.1 1987 291,060 Sq. Ft. 74.69
15.2 1998 184,125 Sq. Ft. 91.57
16 1994-2004 370,967 Sq. Ft. 103.51 L(24);D(93);O(4)
17 2002 528 Units 65,340.91 L(25);D(91);O(4)
- ----------------------------------------------------------------------------------------------------------------
18 Various Various 446 Units 70,123.32 L(24);D(32);O(4)
18.1 1920 1985 142 Units 70,744.16
18.2 1900 1985 106 Units 72,188.45
18.3 1924 1986 84 Units 63,532.89
18.4 1922 1985 54 Units 77,028.44
- ----------------------------------------------------------------------------------------------------------------
18.5 1925 1985 60 Units 68,017.57
Various 538 Units 46,654.28 L(24);D(33);O(4)
19 1982-1985 260 Units 44,153.85 L(24);D(33);O(4)
20 1985 188 Units 45,106.38 L(24);D(33);O(4)
21 1998 90 Units 57,111.11 L(24);D(33);O(4)
- ----------------------------------------------------------------------------------------------------------------
22 1973 1993 78,893 Sq. Ft. 297.17 L(24);D(89);O(7)
23 1987 228,200 Sq. Ft. 100.79 L(24);D(57);O(4)
24 1971 1997 528 Units 43,106.06 L(35),D(82),O(3)
25 1994 225,404 Sq. Ft. 88.06 L(24);D(92);O(4)
26 Various Various 7,712,231 Sq. Ft. 43.72 L(24);D(91);O(5)
- ----------------------------------------------------------------------------------------------------------------
26.001 1923 2004 1,027,783 Sq. Ft. 41.51
26.002 1959 1989 481,064 Sq. Ft. 56.02
26.003 1996 413,407 Sq. Ft. 48.24
26.004 1979 359,843 Sq. Ft. 54.04
26.005 1990 295,895 Sq. Ft. 54.66
- ----------------------------------------------------------------------------------------------------------------
26.006 1990 233,311 Sq. Ft. 51.24
26.007 1990 172,511 Sq. Ft. 56.08
26.008 1995 115,662 Sq. Ft. 59.62
26.009 1989 170,151 Sq. Ft. 39.59
26.010 1990 122,666 Sq. Ft. 53.38
- ----------------------------------------------------------------------------------------------------------------
26.011 1990 118,963 Sq. Ft. 54.63
26.012 1995 150,000 Sq. Ft. 42.75
26.013 1990 116,749 Sq. Ft. 54.81
26.014 1990 113,861 Sq. Ft. 54.46
26.015 1983 141,366 Sq. Ft. 40.28
- ----------------------------------------------------------------------------------------------------------------
26.016 1983 1988 85,154 Sq. Ft. 52.43
26.017 1984 68,868 Sq. Ft. 57.63
26.018 1980 1992 79,243 Sq. Ft. 46.95
26.019 1985 112,217 Sq. Ft. 28.73
26.020 1968 46,338 Sq. Ft. 64.23
- ----------------------------------------------------------------------------------------------------------------
26.021 1968/1973 1983 61,095 Sq. Ft. 48.31
26.022 1981/1982 43,104 Sq. Ft. 65.37
26.023 1982/1983 42,766 Sq. Ft. 65.42
26.024 1981 42,941 Sq. Ft. 60.07
26.025 1989 62,482 Sq. Ft. 38.43
- ----------------------------------------------------------------------------------------------------------------
26.026 1989 62,457 Sq. Ft. 38.13
26.027 1989 62,469 Sq. Ft. 38.12
26.028 1971-1973 1995 36,250 Sq. Ft. 64.32
26.029 1988 62,659 Sq. Ft. 36.42
26.030 1952 33,033 Sq. Ft. 66.08
- ----------------------------------------------------------------------------------------------------------------
26.031 1979 33,513 Sq. Ft. 65.13
26.032 1983/1984 42,971 Sq. Ft. 50.00
26.033 1978 34,559 Sq. Ft. 57.42
26.034 1983 21,356 Sq. Ft. 90.59
26.035 1976 38,500 Sq. Ft. 50.25
- ----------------------------------------------------------------------------------------------------------------
26.036 1975 31,482 Sq. Ft. 59.08
26.037 1980 37,996 Sq. Ft. 48.31
26.038 1960's 1996 42,944 Sq. Ft. 41.59
26.039 1970 24,922 Sq. Ft. 71.66
26.040 1976 37,846 Sq. Ft. 47.19
- ----------------------------------------------------------------------------------------------------------------
26.041 1978 32,200 Sq. Ft. 53.92
26.042 1973/1983 1997 59,489 Sq. Ft. 28.35
26.043 1926 1963 24,406 Sq. Ft. 66.06
26.044 1875 1972 57,945 Sq. Ft. 27.82
26.045 1973 35,389 Sq. Ft. 43.46
- ----------------------------------------------------------------------------------------------------------------
26.046 1981 21,511 Sq. Ft. 64.57
26.047 1979/1983 27,906 Sq. Ft. 49.06
26.048 1997 20,740 Sq. Ft. 64.58
26.049 1948/1954 28,909 Sq. Ft. 45.65
26.050 1990 21,879 Sq. Ft. 58.95
- ----------------------------------------------------------------------------------------------------------------
26.051 1990 21,425 Sq. Ft. 59.04
26.052 1905 1995 23,969 Sq. Ft. 50.71
26.053 1960 24,361 Sq. Ft. 48.87
26.054 1970 25,659 Sq. Ft. 45.43
26.055 1979 25,878 Sq. Ft. 45.05
- ----------------------------------------------------------------------------------------------------------------
26.056 1971 22,780 Sq. Ft. 50.96
26.057 1936 16,200 Sq. Ft. 69.21
26.058 1978 22,400 Sq. Ft. 48.72
26.059 1970 46,273 Sq. Ft. 23.59
26.060 1955 32,951 Sq. Ft. 33.12
- ----------------------------------------------------------------------------------------------------------------
26.061 1976 20,956 Sq. Ft. 50.42
26.062 1968 20,967 Sq. Ft. 49.69
26.063 1978 1990 34,145 Sq. Ft. 30.51
26.064 1966 1994 19,908 Sq. Ft. 52.33
26.065 1957 20,076 Sq. Ft. 51.89
- ----------------------------------------------------------------------------------------------------------------
26.066 1965 22,065 Sq. Ft. 46.31
26.067 1975 1993 27,585 Sq. Ft. 36.69
26.068 1981 18,900 Sq. Ft. 50.53
26.069 1965/1985 31,532 Sq. Ft. 29.89
26.070 1915 1986 27,726 Sq. Ft. 34.00
- ----------------------------------------------------------------------------------------------------------------
26.071 1990 20,847 Sq. Ft. 42.83
26.072 1955 15,900 Sq. Ft. 56.16
26.073 1970 1995 29,343 Sq. Ft. 29.16
26.074 1971 2001 17,191 Sq. Ft. 49.06
26.075 1885 34,108 Sq. Ft. 24.73
- ----------------------------------------------------------------------------------------------------------------
26.076 1951 28,702 Sq. Ft. 29.38
26.077 1913 63,374 Sq. Ft. 12.58
26.078 1980 13,117 Sq. Ft. 59.38
26.079 1964 24,945 Sq. Ft. 30.83
26.080 1898/1911/1960 1998 20,918 Sq. Ft. 36.28
- ----------------------------------------------------------------------------------------------------------------
26.081 1977 21,455 Sq. Ft. 34.68
26.082 1978 25,655 Sq. Ft. 29.01
26.083 1970 1990 20,435 Sq. Ft. 36.41
26.084 1948 1985 20,094 Sq. Ft. 36.29
26.085 1964 1972 26,417 Sq. Ft. 27.23
- ----------------------------------------------------------------------------------------------------------------
26.086 1972 24,416 Sq. Ft. 29.05
26.087 1978 20,429 Sq. Ft. 34.48
26.088 1978 21,576 Sq. Ft. 32.42
26.089 1972 14,860 Sq. Ft. 46.74
26.090 1954/1975/1980 14,437 Sq. Ft. 48.11
- ----------------------------------------------------------------------------------------------------------------
26.091 1969 1992 18,229 Sq. Ft. 37.56
26.092 1979 25,669 Sq. Ft. 26.67
26.093 1981 14,539 Sq. Ft. 46.40
26.094 1955 16,178 Sq. Ft. 41.70
26.095 1973 29,301 Sq. Ft. 22.43
- ----------------------------------------------------------------------------------------------------------------
26.096 1981 16,000 Sq. Ft. 40.31
26.097 1979 14,450 Sq. Ft. 44.63
26.098 1956 28,562 Sq. Ft. 22.15
26.099 1971 2002 13,119 Sq. Ft. 47.27
26.100 1989 22,692 Sq. Ft. 26.23
- ----------------------------------------------------------------------------------------------------------------
26.101 1970 1980 21,600 Sq. Ft. 27.56
26.102 1958 1968 23,855 Sq. Ft. 24.95
26.103 1929 1990 32,530 Sq. Ft. 18.15
26.104 1964 1977 12,642 Sq. Ft. 45.13
26.105 1981 12,971 Sq. Ft. 43.60
- ----------------------------------------------------------------------------------------------------------------
26.106 1955 11,937 Sq. Ft. 45.71
26.107 1976 16,285 Sq. Ft. 33.51
26.108 1960 10,560 Sq. Ft. 51.68
26.109 1997 10,670 Sq. Ft. 50.68
26.110 1978 12,853 Sq. Ft. 40.53
- ----------------------------------------------------------------------------------------------------------------
26.111 1974 12,720 Sq. Ft. 39.39
26.112 1980 13,278 Sq. Ft. 37.36
26.113 1976 19,176 Sq. Ft. 25.87
26.114 1970 24,059 Sq. Ft. 20.62
26.115 1955 1960 16,540 Sq. Ft. 29.99
- ----------------------------------------------------------------------------------------------------------------
26.116 1955 1995 21,292 Sq. Ft. 21.55
26.117 1962 10,736 Sq. Ft. 41.59
26.118 1963 10,212 Sq. Ft. 43.72
26.119 1970 1982 15,946 Sq. Ft. 28.00
26.120 1952 19,088 Sq. Ft. 23.39
- ----------------------------------------------------------------------------------------------------------------
26.121 1960 11,413 Sq. Ft. 39.12
26.122 1965 23,236 Sq. Ft. 18.68
26.123 1972 22,643 Sq. Ft. 18.62
26.124 1960 1995 35,610 Sq. Ft. 11.73
26.125 1980 24,150 Sq. Ft. 16.95
- ----------------------------------------------------------------------------------------------------------------
26.126 1960 21,710 Sq. Ft. 18.85
26.127 1961 1999 31,699 Sq. Ft. 12.57
26.128 1962 1976 10,990 Sq. Ft. 36.11
26.129 1968/1974 23,709 Sq. Ft. 16.74
26.130 1922 1973 16,187 Sq. Ft. 23.45
- ----------------------------------------------------------------------------------------------------------------
26.131 1964 1980 23,521 Sq. Ft. 15.33
26.132 1950 2002 28,909 Sq. Ft. 12.44
26.133 1950 2001 12,079 Sq. Ft. 29.57
26.134 1980 12,327 Sq. Ft. 28.17
26.135 1959 10,660 Sq. Ft. 32.11
- ----------------------------------------------------------------------------------------------------------------
26.136 1970 11,500 Sq. Ft. 28.04
26.137 1950 28,484 Sq. Ft. 10.66
26.138 1974 24,151 Sq. Ft. 11.40
26.139 1927 1983 12,715 Sq. Ft. 21.07
26.140 1905 1992 20,058 Sq. Ft. 12.37
- ----------------------------------------------------------------------------------------------------------------
26.141 1894 1979 12,300 Sq. Ft. 17.14
26.142 1973 13,572 Sq. Ft. 12.79
26.143 1970 10,067 Sq. Ft. 0.00
26.144 1983 2001 20,320 Sq. Ft. 0.00
26.145 1958 27,712 Sq. Ft. 0.00
- ----------------------------------------------------------------------------------------------------------------
26.146 1951 10,981 Sq. Ft. 0.00
26.147 1965 1981 15,904 Sq. Ft. 0.00
26.148 1920 1990 27,495 Sq. Ft. 0.00
26.149 1972 14,970 Sq. Ft. 0.00
26.150 1960 30,724 Sq. Ft. 0.00
- ----------------------------------------------------------------------------------------------------------------
27 2003 312 Units 55,769.23 L(36),D(80),O(4)
28 1999 95,584 Sq. Ft. 179.06 L(24);D(57);O(4)
29 1868/1905 2004 277 Units 57,705.56 L(25);D(91);O(4)
30 1992 256 Units 58,789.06 L(35),YM1(81),O(4)
31 1967 2000 315 Units 44,317.46 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
32 1982 114,398 Sq. Ft. 96.16 L(36),D(82),O(3)
33 1996-1997/2002 131 Units 79,389.31 L(24);D(93);O(4)
34 1975 143 Units 64,510.49 L(36),D(81),O(4)
35 2001 35,058 Sq. Ft. 242.46 L(24),D(93),O(3)
36 Various Various 170,681 Sq. Ft. 49.80 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
36.1 1972/1980 2004 124,291 Sq. Ft. 49.80
36.2 1994 2003 46,390 Sq. Ft. 49.80
37 1901 1998 68 Units 123,685.90 L(35),D(46),O(3)
38 1975 180,550 Sq. Ft. 46.37 L(0);D(229);O(6)
39 1999 33 Units 203,787.88 L(24);D(32);O(4)
- ----------------------------------------------------------------------------------------------------------------
40 1960 1999 341 Pads 18,365.08 L(27),D(90),O(3)
41 1979 2004 136 Units 45,501.05 L(35),D(82),O(3)
42 1988 47,286 Sq. Ft. 130.42 L(36),D(80),O(4)
43 1980 1993 124 Units 49,640.17 L(35),D(82),O(3)
44 1970 2001 259 Units 23,701.37 L(36),D(140),O(4)
- ----------------------------------------------------------------------------------------------------------------
45 2003 36,611 Sq. Ft. 166.26 L(36),D(80),O(4)
46 1959 1988 61,006 Sq. Ft. 98.25 L(36),D(80),O(4)
47 1895 2000 45 Units 125,275.34 L(36),D(44),O(4)
48 1956 1998 933 Units 5,554.46 L(36),D(80),O(4)
49 2004 25,002 Sq. Ft. 199.98 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
50 1972 693 Pads 7,194.21 L(27),D(90),O(3)
51 1987 1997 428 Pads 11,401.87 L(24),D(93),O(3)
52 1998 72 Units 63,705.80 L(27);D(89);O(4)
53 1960 160 Pads 28,264.74 L(27),D(90),O(3)
54 1960 2004 77,000 Sq. Ft. 57.14 L(36),D(81),O(4)
- ----------------------------------------------------------------------------------------------------------------
55 1977 1993 96 Units 45,074.85 L(35),D(82),O(3)
56 1981 Various 105 Units 40,912.36 L(35),D(82),O(3)
56.1 1981 1996 73 Units 40,912.36
56.2 1981 2002 32 Units 40,912.36
57 2002 14,021 Sq. Ft. 292.42 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
58 2002 14,490 Sq. Ft. 282.95 L(35),D(82),O(3)
59 1983 1986 83,750 Sq. Ft. 48.77 L(35),D(82),O(3)
60 1984 163 Units 23,926.38 L(35),D(82),O(3)
61 1979 2004 161,505 Sq. Ft. 24.15 L(35),D(82),O(3)
62 2004 14,560 Sq. Ft. 263.97 L(25);D(238);O(1)
- ----------------------------------------------------------------------------------------------------------------
63 2004 14,560 Sq. Ft. 257.90 L(36),D(82),O(3)
64 Various Various 84 Units 43,397.94 L(35),D(82),O(3)
64.1 1978 1998 40 Units 43,397.94
64.2 1981 2003 44 Units 43,397.94
65 1979 2002 128 Units 28,100.63 L(25),D(92),O(3)
- ----------------------------------------------------------------------------------------------------------------
66 2004 14,560 Sq. Ft. 243.60 L(35),D(82),O(3)
67 1989/1996 25,192 Sq. Ft. 137.50 L(36),D(80),O(4)
68 2003 25,060 Sq. Ft. 131.68 L(36),D(80),O(4)
69 2003 44 Units 74,888.91 L(35),D(82),O(3)
70 1997 2002 30 Units 106,533.96 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
71 2003 13,813 Sq. Ft. 205.00 L(35),D(82),O(3)
72 Various 87 Units 32,155.81 L(25),D(92),O(3)
72.1 1972 58 Units 32,155.81
72.2 1981 29 Units 32,155.81
73 1995 43,400 Sq. Ft. 59.73 L(36),D(80),O(4)
- ----------------------------------------------------------------------------------------------------------------
74 2000 14,884 Sq. Ft. 167.97 L(35),D(142),O(3)
75 1993 23,484 Sq. Ft. 105.39 L(35),D(142),O(3)
76 2002 64 Units 38,087.29 L(25);D(91);O(4)
77 2004 13,177 Sq. Ft. 182.14 L(11);YM1(105);O(4)
78 2003 7,530 Sq. Ft. 318.73 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
79 1987 2001 21,695 Sq. Ft. 110.26 L(35),D(82),O(3)
80 1982 1999 60 Units 37,616.67 L(24),D(93),O(3)
81 1999 193 Pads 10,880.83 L(35),D(82),O(3)
82 1972 1994 132 Units 16,666.67 L(35),D(82),O(3)
83 2003 8,050 Sq. Ft. 232.92 L(36),D(80),O(4)
- ----------------------------------------------------------------------------------------------------------------
84 1991 11,897 Sq. Ft. 155.19 L(35),D(82),O(3)
85 2002 48 Units 37,422.62 L(35),D(82),O(3)
86 1979 1992 66 Units 26,666.67 L(35),D(82),O(3)
87 2003 24,944 Sq. Ft. 69.15 L(24),D(93),O(3)
88 Various 166 Pads 10,240.96 L(35),D(22),O(3)
- ----------------------------------------------------------------------------------------------------------------
88.1 1965 59 Pads 10,240.96
88.2 1975 107 Pads 10,240.96
89 1986 71 Pads 23,189.39 L(36),D(21),O(3)
90 1991 19,307 Sq. Ft. 82.87 L(35),D(82),O(3)
91 1960 1999 32 Units 46,250.00 L(35),D(82),O(3)
- ----------------------------------------------------------------------------------------------------------------
92 1977 1996 70 Units 21,028.57 L(24),D(93),O(3)
93 2001 64 Units 20,670.49 L(35),D(142),O(3)
94 1987 108 Pads 11,111.11 L(24),D(57),O(3)
95 1972 57 Pads 17,510.73 L(35),D(82),O(3)
FOURTH FOURTH THIRD THIRD MOST
MOST RECENT RECENT NOI MOST RECENT RECENT NOI
ID PROPERTY NAME NOI DATE NOI DATE
- ------------------------------------------------------------------------------------------------------------------------------------
1 Garden State Plaza 58,181,230 12/31/2001 59,669,733 12/31/2002
2 731 Lexington Avenue - Bloomberg Headquarters
3 DDR-Macquarie Portfolio (11) 9,681,867 27,494,444
3.01 Clarence Portfolio 2,074,413 12/31/2001 5,683,558 12/31/2002
3.02 BJ's Plaza/Tops Plaza/Batavia Commons 1,406,851 12/31/2001 1,304,750 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
3.03 Cheektowaga Properties 6,200,603 12/31/2001 20,506,136 12/31/2002
3.04 Riverdale Village-Inner Ring
3.05 Erie Marketplace
3.06 Spring Creek Center and Steele Crossing
3.07 Towne Center
- ------------------------------------------------------------------------------------------------------------------------------------
3.08 The Marketplace
3.09 Township Marketplace
3.10 River Hills
G REIT Portfolio (Crossed Rollup)
4 Public Ledger Building 3,566,946 12/31/2001 2,691,016 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
5 824 Market Street
6 Brunswig Square
7 1150 Gemini Plaza 801,156 12/31/2001 1,041,595 12/31/2002
8 The Atrium Building 667,140 12/31/2001 575,378 12/31/2002
9 Tysons Corner Center 38,192,742 06/30/2002
- ------------------------------------------------------------------------------------------------------------------------------------
10 Centreville Square I&II 5,322,333 12/31/2001 5,752,347 12/31/2002
11 Equity Industrial Partners Portfolio (11)
11.1 85 Moosup Road
11.2 151 Suffolk Lane
11.3 600 North Bedford Street
- ------------------------------------------------------------------------------------------------------------------------------------
11.4 1111 South Hampton Road
11.5 625 University Avenue
12 International Jewelry Center 6,790,359 12/31/2001 7,513,910 12/31/2002
13 660 Figueroa Tower 2,880,790 12/31/2001 3,687,523 12/31/2002
14 3 Beaver Valley 3,301,137 7 Mos Ann. 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
15 Stonegate Oklahoma (11) 4,391,447 12/31/2001 3,942,853 12/31/2002
15.1 Quail Springs 2,602,779 12/31/2001 2,115,109 12/31/2002
15.2 1200 Urban Center 1,788,667 12/31/2001 1,827,744 12/31/2002
16 Beau Terre Office Building 2,839,161 12/31/2001 3,545,469 12/31/2002
17 Alexan Mira Vista
- ------------------------------------------------------------------------------------------------------------------------------------
18 Wiener Portfolio VII (11) 694,668 Various 667,762 Various
18.1 25-35 Hillside Avenue
18.2 2 West 120th Street 471,425 12/31/2001 419,086 12/31/2002
18.3 281-295 Wadsworth Avenue
18.4 509 West 155th Street 223,243 12/31/2001 248,676 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
18.5 34-44 Seaman Avenue
Beyman Crossed Rollup 2,195,203 12/31/2002
19 Windover of Melbourne 974,736 12/31/2002
20 Windover Goldenpoint 744,792 12/31/2002
21 Wedgewood Park 475,674 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
22 Santa Monica Medical Plaza 1,846,066 12/31/2001 1,794,912 12/31/2002
23 The Tower 3,002,541 12/31/2001 2,894,192 12/31/2002
24 Williamstowne Apartments 2,297,117 12/31/2002
25 Larkins Corner Shopping Center 1,982,193 12/31/2001 1,954,829 12/31/2002
26 AFR Portfolio (11)
- ------------------------------------------------------------------------------------------------------------------------------------
26.001 Bank of America Center
26.002 Van Ness & Market
26.003 525 N Tryon-Odell Building
26.004 Bank of America Financial Ctr
26.005 Jacksonville Ops CTR/#600
- ------------------------------------------------------------------------------------------------------------------------------------
26.006 Jacksonville Ops CTR/#100
26.007 Jacksonville Ops CTR/#400
26.008 South Region TPC
26.009 Catalina-Bank of America Ctr
26.010 Jacksonville Ops CTR/#200
- ------------------------------------------------------------------------------------------------------------------------------------
26.011 Jacksonville Ops CTR/#700
26.012 South Mountain-Bank of America
26.013 Jacksonville Ops CTR/#500
26.014 Jacksonville Ops CTR/#300
26.015 Miami Lakes Operation CTR
- ------------------------------------------------------------------------------------------------------------------------------------
26.016 Spokane Bankcard Services
26.017 Century Park
26.018 Bank of America Plaza
26.019 Mendham Operations Center
26.020 Glendale Main
- ------------------------------------------------------------------------------------------------------------------------------------
26.021 Fort Sam Houston
26.022 Ellinwood Center #300
26.023 Ellinwood Center #400
26.024 Long Beach Financial
26.025 Maricopa-Bank of America Ctr
- ------------------------------------------------------------------------------------------------------------------------------------
26.026 Camelback-Bank of America CTR
26.027 McDowell-Bank of America Ctr
26.028 Stockton Main Office
26.029 Inland Empire Cash Vault
26.030 Lake & Colorado Br
- ------------------------------------------------------------------------------------------------------------------------------------
26.031 Pomona Main
26.032 Ellinwood Center #500
26.033 Sunnyvale Main Branch
26.034 Coronado Branch
26.035 Riverside Main
- ------------------------------------------------------------------------------------------------------------------------------------
26.036 La Jolla Main
26.037 Whittier Office
26.038 Hallandale Beach
26.039 Annapolis Church Circle - BAL
26.040 Greenspoint
- ------------------------------------------------------------------------------------------------------------------------------------
26.041 Redding Main Branch
26.042 Albuquerque Operations Center
26.043 Santa Barbara
26.044 Charlottesville
26.045 Plaza
- ------------------------------------------------------------------------------------------------------------------------------------
26.046 Irvine Industrial
26.047 Gardena Main
26.048 Westshore Mall
26.049 Inglewood Main Office
26.050 Jacksonville Ops Ctr/School
- ------------------------------------------------------------------------------------------------------------------------------------
26.051 Jacksonville Ops CTR/Daycare
26.052 Bull Street
26.053 Bellingham
26.054 Lighthouse Point
26.055 Richland
- ------------------------------------------------------------------------------------------------------------------------------------
26.056 North Hollywood
26.057 Torrance Sartori
26.058 Escondido Main Office
26.059 San Bernadino Main
26.060 Winter Park
- ------------------------------------------------------------------------------------------------------------------------------------
26.061 Santa Maria Branch
26.062 Salinas Main Branch
26.063 Oak Trafficway Facility
26.064 Paradise Valley
26.065 University
- ------------------------------------------------------------------------------------------------------------------------------------
26.066 Fresno Proof/Vault
26.067 Cordova
26.068 Yuba City Branch
26.069 Ocala Downtown
26.070 Roanoke
- ------------------------------------------------------------------------------------------------------------------------------------
26.071 Mesa Main
26.072 Auburn
26.073 Valdosta Main
26.074 Gulf to Bay
26.075 Waco
- ------------------------------------------------------------------------------------------------------------------------------------
26.076 Yakima Valley Bldg/BR
26.077 Lynchburg
26.078 El Segundo
26.079 Mission Facility
26.080 Aiken Main Office
- ------------------------------------------------------------------------------------------------------------------------------------
26.081 Cartersville Main
26.082 Murfreesboro Main Office
26.083 Bremerton
26.084 Columbia Facility
26.085 South Austin
- ------------------------------------------------------------------------------------------------------------------------------------
26.086 Hampton-Main Facility
26.087 Concord Village
26.088 Ventura Main Office
26.089 East Bakersfield Office
26.090 North Sacramento Branch
- ------------------------------------------------------------------------------------------------------------------------------------
26.091 Coeur D'alene BDLG/BR
26.092 Mexico Facility
26.093 Cedar & Shields
26.094 Sepulveda-Devonshire BR
26.095 William Street Facility
- ------------------------------------------------------------------------------------------------------------------------------------
26.096 Stockdale
26.097 Walla Walla
26.098 Fort Worth East
26.099 Port Charlotte
26.100 Moultrie Main
- ------------------------------------------------------------------------------------------------------------------------------------
26.101 Florissant Facility
26.102 East Central Facility
26.103 Independence Square
26.104 Henderson
26.105 Calwa
- ------------------------------------------------------------------------------------------------------------------------------------
26.106 Bixby-Atlantic
26.107 Lincoln Heights Branch
26.108 Oak Park Branch
26.109 San Jose
26.110 Carrollton
- ------------------------------------------------------------------------------------------------------------------------------------
26.111 Lynwood Branch
26.112 Palmdale Branch
26.113 Dumas Banking Center
26.114 Old Hampton
26.115 Moses Lake
- ------------------------------------------------------------------------------------------------------------------------------------
26.116 Dalhart Banking Center
26.117 Willow-Daisy Branch
26.118 North Hialeah
26.119 South Glenstone Facility
26.120 Admiral
- ------------------------------------------------------------------------------------------------------------------------------------
26.121 N Wenatchee
26.122 Denison
26.123 Brownwood
26.124 Albany Main Office
26.125 Penn Street Facility
- ------------------------------------------------------------------------------------------------------------------------------------
26.126 Mount Pleasant
26.127 Ridgewood
26.128 East Compton Branch
26.129 Pasco
26.130 Port Angeles
- ------------------------------------------------------------------------------------------------------------------------------------
26.131 Harrison Main
26.132 Downtown Palmetto
26.133 Mission
26.134 Forks
26.135 Pico-Vermont Branch
- ------------------------------------------------------------------------------------------------------------------------------------
26.136 Winder (BS)
26.137 Highlandtown - BAL
26.138 South Boston
26.139 Downtown Facility
26.140 Norton - 7th Street
- ------------------------------------------------------------------------------------------------------------------------------------
26.141 Lexington Facility
26.142 Clermont
26.143 Camelback Uptown
26.144 Red Bluff Branch
26.145 Hollywood/Tyler
- ------------------------------------------------------------------------------------------------------------------------------------
26.146 Richland Facility
26.147 West Sunshine Facility
26.148 Muskogee Main Facility
26.149 Aransas Pass (CCNB)
26.150 Aberdeen Bldg/BR
- ------------------------------------------------------------------------------------------------------------------------------------
27 Southwind Apartments
28 The Arboretum 1,578,866 12/31/2001 1,634,969 12/31/2002
29 1234 Broadway 2,025,285 12/31/2001 2,137,717 12/31/2002
30 Briar Meadows Apartment Homes
31 Garden Village Apartments 1,390,627 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
32 Cameron Court 873,310 12/31/2002
33 University Courtyard Valdosta 641,422 12/31/2001 1,075,571 12/31/2002
34 Vista Via Apartments
35 Plaza del Oro 98,206 12/31/2001 593,232 12/31/2002
36 Brooks Flex Industrial Portfolio (11) 80,501 12/31/2001 293,144 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
36.1 15-19 Keewaydin Drive
36.2 16 Route 111
37 Cornell Street Apartments
38 Saks, Inc.: North Riverside
39 530 West 47th Street
- ------------------------------------------------------------------------------------------------------------------------------------
40 Waterway MHP & RV 525,949 12/31/2001 480,345 12/31/2002
41 Elm Grove Apartments 667,464 12/31/2001 674,336 12/31/2002
42 Arizona Heart Institute
43 The Garden Apartments 596,233 12/31/2001 600,526 12/31/2002
44 Christy Estates Apartments 944,335 10/31/2000 1,005,192 10/31/2001
- ------------------------------------------------------------------------------------------------------------------------------------
45 Leesburg Plaza
46 Ocean State Plaza
47 Artist Loft Apartments 414,533 12/31/2001
48 Lackland Self Storage
49 Day Creek Village
- ------------------------------------------------------------------------------------------------------------------------------------
50 O'Connell's RV Resort 379,331 12/31/2001 388,232 12/31/2002
51 Cactus Gardens MHP & RV 389,587 12/31/2001 384,542 12/31/2002
52 Broadway Place 394,189 12/31/2001 454,445 12/31/2002
53 Shangri-La MHP 402,026 12/31/2001 408,876 12/31/2002
54 39 Olympia Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
55 Pinetree Garden Apartments 411,800 12/31/2001 467,094 12/31/2002
56 Congress and Erin Way Apartments (11) 618,770 12/31/2001 643,359 12/31/2002
56.1 Congress Apartments
56.2 Erin Way Apartments
57 Walgreens - Compass Road
- ------------------------------------------------------------------------------------------------------------------------------------
58 Walgreens - Baltimore
59 Southaven Shopping Center 418,637 12/31/2001 425,412 12/31/2002
60 Penbrook Apartments 532,710 12/31/2001 419,388 12/31/2002
61 Concord Business Center 624,602 12/31/2001 454,391 12/31/2002
62 Walgreens Jacksonville
- ------------------------------------------------------------------------------------------------------------------------------------
63 Walgreens - Hesperia, CA
64 Maple Manor / Glenmont Manor Apartment Portfolio (11) 160,727 12/31/2001 144,546 12/31/2002
64.1 Maple Manor Apartments
64.2 Glenmont Manor Apartments
65 Lake Forest Apartments 494,390 12/31/2001 479,023 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
66 Walgreens - Whitehall, OH
67 Cactus Corner Shopping Center
68 Cordova Shops
69 Alpine Meadows Townhomes
70 Collegiate Court Apartments 227,905 12/31/2001 309,096 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
71 Eckerds - Peoria
72 Courtyard & Seaside Apartments (11) 316,618 12/31/2001 320,770 12/31/2002
72.1 Courtyard Apartments
72.2 Seaside Apartments
73 3950-3960 Turkeyfoot Road 367,593 12/21/2000 349,884 12/31/2001
- ------------------------------------------------------------------------------------------------------------------------------------
74 Savon - Lomita, CA 82,182 12/31/2001 366,024 12/31/2002
75 Office Max
76 Melbourne Park Apartments
77 962 Potomac Circle
78 Troy Retail Center
- ------------------------------------------------------------------------------------------------------------------------------------
79 Legacy Coit Village 254,333 12/31/2001 349,604 12/31/2002
80 Winslow Arms Apartments 266,833 12/31/2001 221,332 12/31/2002
81 Oak Creek MHC 158,086 12/31/2002
82 Alta Loma Apartments 284,808 12/31/2001 243,264 12/31/2002
83 1295 Hamner Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
84 Rancho Niguel Office Building 168,227 12/31/2001 211,717 12/31/2002
85 Stony Creek Apartments
86 Governor's Gate Apartments 214,600 12/31/2001 211,625 12/31/2002
87 Vista Industrial Building
88 Crosby & Meadowlark MHP (11) 171,007 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
88.1 Crosby MHP
88.2 Meadowlark MHP
89 Oak Bend MHP 162,323 12/31/2001 177,950 12/31/2002
90 Mission Retail Center 148,317 12/31/2001 103,444 12/31/2002
91 Fairway Apartments 166,535 12/31/2002
- ------------------------------------------------------------------------------------------------------------------------------------
92 South Sound Villa Apartments 227,958 12/31/2001 215,394 12/31/2002
93 Jacobs Crossing Apartments 103,030 12/31/2002
94 A Better Place MHC 101,374 12/31/2001 131,862 12/31/2002
95 Mountain Shadows MHC 111,166 12/31/2001 105,275 12/31/2002
SECOND SECOND MOST MOST RECENT
MOST RECENT RECENT NOI MOST RECENT NOI UNDERWRITTEN UNDERWRITTEN UNDERWRITTEN
ID NOI DATE NOI DATE NOI REVENUE EGI
- ------------------------------------------------------------------------------------------------------------------------------------
1 60,913,274 12/31/2003 62,884,051 56,290,862 81,714,670
2 35,990,430 37,820,233 54,926,083
3 9,415,321 30,478,108 28,098,257 39,522,728
3.01 5,764,093 5,350,545 7,415,743
3.02 1,457,283 1,430,911 2,035,116
- ------------------------------------------------------------------------------------------------------------------------------------
3.03 8,768,138 7,777,018 11,399,301
3.04 3,350,169 2,970,997 4,624,224
3.05 371,181 12/31/2003 998,930 807,452 1,385,154
3.06 3,436,941 12/31/2003 3,663,029 3,255,434 4,445,939
3.07 1,009,958 12/31/2003 1,252,562 1,248,017 1,624,473
- ------------------------------------------------------------------------------------------------------------------------------------
3.08 1,476,828 12/31/2003 1,517,684 1,547,857 1,838,552
3.09 1,519,432 12/31/2003 1,860,485 1,819,570 2,492,278
3.10 1,600,981 12/31/2003 1,845,735 1,890,456 2,261,948
- 8,190,507 15,682,525 18,164,839
4 - 2,147,256 Ann 11/30/2003 2,988,184 6,991,484 7,494,648
- ------------------------------------------------------------------------------------------------------------------------------------
5 - 1,011,620 T-12 3/31/2004 1,932,985 3,557,439 3,862,505
6 2,089,004 12/31/2003 2,130,246 T-12 1/31/2004 1,683,570 2,460,205 2,923,072
7 - 1,229,807 T-11 3/31/2004 1,124,962 1,243,754 2,375,832
8 - 440,744 T-12 3/31/2004 460,806 1,429,644 1,508,783
9 41,320,162 11/30/2003 43,158,704 35,837,555 63,222,014
- ------------------------------------------------------------------------------------------------------------------------------------
10 5,930,197 12/31/2003 6,100,181 04/30/2004 5,903,746 6,257,943 7,545,820
11 1,979,832 3/31/2004 (January-March) 5,728,024 6,772,522 11,915,990
11.1 1,662,223 1,662,500 2,068,170
11.2 331,568 332,059 682,268
11.3 823,520 823,400 1,359,490
- ------------------------------------------------------------------------------------------------------------------------------------
11.4 9,325 12/31/2003 T-12 3/31/2004 2,059,983 2,060,355 4,719,306
11.5 888,559 12/31/2003 697,072 T-12 3/31/2004 850,729 1,894,207 3,086,756
12 6,687,010 12/31/2003 6,687,010 T-12 12/31/2003 7,072,501 10,573,390 11,591,633
13 4,079,047 10/31/2003 4,212,387 6,276,074 7,074,183
14 4,294,985 12/31/2003 4,240,543 4,241,204 6,335,469
- ------------------------------------------------------------------------------------------------------------------------------------
15 3,612,614 12/31/2003 3,595,926 T-12 2/29/2004 3,997,623 6,934,475 7,398,508
15.1 1,881,142 12/31/2003 1,831,902 T-12 2/29/2004 2,307,810 3,923,828 4,145,164
15.2 1,731,472 12/31/2003 1,764,024 T-12 2/29/2004 1,689,813 3,010,647 3,253,344
16 3,804,298 12/31/2003 3,771,141 5,313,904 5,380,919
17 1,994,926 12/31/2003 2,341,450 T-12 4/30/2004 2,931,457 4,961,612 5,480,372
- ------------------------------------------------------------------------------------------------------------------------------------
18 2,154,368 12/31/2003 2,342,957 3,618,132 3,619,332
18.1 715,449 12/31/2003 781,496 1,124,701 1,124,701
18.2 475,308 12/31/2003 505,865 822,375 822,375
18.3 387,798 12/31/2003 408,202 629,216 629,216
18.4 299,354 12/31/2003 318,629 509,261 510,461
- ------------------------------------------------------------------------------------------------------------------------------------
18.5 276,459 12/31/2003 328,765 532,579 532,579
2,158,994 12/31/2003 2,142,956 T-12 3/31/2004 2,126,369 3,376,248 3,494,579
19 983,913 12/31/2003 980,972 T-12 3/31/2004 974,667 1,559,513 1,612,297
20 739,955 12/31/2003 732,521 T-12 3/31/2004 722,089 1,185,721 1,218,332
21 435,126 12/31/2003 429,463 T-12 3/31/2004 429,613 631,014 663,950
- ------------------------------------------------------------------------------------------------------------------------------------
22 2,073,132 12/31/2003 2,305,384 2,561,130 3,523,437
23 2,538,356 12/31/2003 2,388,246 3,718,875 4,183,893
24 2,409,475 12/31/2003 2,736,175 T-12 2/29/2004 2,256,553 3,935,228 4,049,746
25 2,110,284 11/30/2003 1,855,373 1,883,213 2,534,408
26 47,375,588 106,195,461 98,557,641
- ------------------------------------------------------------------------------------------------------------------------------------
26.001 4,815,900 18,768,738 17,373,406
26.002 3,252,726 8,768,839 8,220,935
26.003 4,979,505 8,015,921 8,015,921
26.004 3,329,087 5,613,884 5,613,884
26.005 2,107,372 3,905,218 3,905,218
- ------------------------------------------------------------------------------------------------------------------------------------
26.006 2,097,231 3,472,126 3,472,126
26.007 1,339,155 2,403,980 2,403,980
26.008 990,965 2,017,678 2,017,678
26.009 1,000,895 1,513,386 1,513,386
26.010 1,038,946 1,780,700 1,780,700
- ------------------------------------------------------------------------------------------------------------------------------------
26.011 1,026,539 1,754,192 1,754,192
26.012 558,166 1,001,288 1,001,288
26.013 944,261 1,656,704 1,656,704
26.014 955,610 1,651,351 1,651,351
26.015 (834,555) 551,352 -
- ------------------------------------------------------------------------------------------------------------------------------------
26.016 734,221 1,191,187 1,191,187
26.017 575,558 964,813 964,813
26.018 539,062 944,547 923,656
26.019 188,946 902,519 902,519
26.020 400,327 714,931 714,931
- ------------------------------------------------------------------------------------------------------------------------------------
26.021 522,766 834,049 826,449
26.022 133,042 503,781 503,781
26.023 133,042 503,781 503,781
26.024 364,370 631,843 610,943
26.025 529,565 722,023 722,023
- ------------------------------------------------------------------------------------------------------------------------------------
26.026 545,224 738,030 738,030
26.027 545,329 738,171 738,171
26.028 263,190 494,957 447,456
26.029 350,217 611,728 451,044
26.030 278,805 491,889 491,889
- ------------------------------------------------------------------------------------------------------------------------------------
26.031 212,120 521,512 464,512
26.032 133,042 503,781 503,781
26.033 299,773 484,837 484,837
26.034 217,605 366,636 366,636
26.035 344,328 561,009 561,009
- ------------------------------------------------------------------------------------------------------------------------------------
26.036 65,178 328,068 251,726
26.037 211,006 421,496 396,796
26.038 156,311 535,321 347,202
26.039 216,469 338,085 338,085
26.040 294,137 482,837 482,837
- ------------------------------------------------------------------------------------------------------------------------------------
26.041 87,548 395,033 233,533
26.042 181,593 827,333 766,172
26.043 191,182 372,592 372,592
26.044 387,856 547,763 547,763
26.045 238,337 394,962 394,962
- ------------------------------------------------------------------------------------------------------------------------------------
26.046 185,257 355,189 355,189
26.047 166,670 368,520 323,547
26.048 178,806 334,879 334,879
26.049 210,721 366,128 366,128
26.050 190,542 276,644 276,644
- ------------------------------------------------------------------------------------------------------------------------------------
26.051 186,588 270,907 270,907
26.052 206,799 380,857 380,857
26.053 213,428 257,228 257,228
26.054 202,874 392,300 392,300
26.055 187,306 240,540 204,516
- ------------------------------------------------------------------------------------------------------------------------------------
26.056 153,081 321,872 283,872
26.057 123,935 223,787 208,397
26.058 193,937 328,948 328,948
26.059 243,552 458,745 458,745
26.060 19,188 347,443 250,201
- ------------------------------------------------------------------------------------------------------------------------------------
26.061 150,565 284,070 254,913
26.062 166,888 257,534 257,534
26.063 119,181 375,466 318,465
26.064 77,092 199,193 139,344
26.065 175,529 266,787 266,787
- ------------------------------------------------------------------------------------------------------------------------------------
26.066 161,083 387,171 278,252
26.067 127,209 345,413 261,195
26.068 121,982 242,868 201,828
26.069 130,565 427,864 344,930
26.070 170,199 305,249 257,426
- ------------------------------------------------------------------------------------------------------------------------------------
26.071 179,653 339,664 339,664
26.072 93,761 202,453 159,997
26.073 138,461 356,434 294,779
26.074 125,254 207,905 192,705
26.075 270,288 441,075 441,075
- ------------------------------------------------------------------------------------------------------------------------------------
26.076 61,836 223,019 163,663
26.077 176,603 481,150 419,276
26.078 113,639 189,695 189,695
26.079 136,326 339,800 280,520
26.080 65,978 191,313 170,764
- ------------------------------------------------------------------------------------------------------------------------------------
26.081 35,771 147,621 112,859
26.082 95,866 273,084 217,689
26.083 57,269 196,412 85,565
26.084 111,220 259,635 201,590
26.085 108,339 318,962 271,462
- ------------------------------------------------------------------------------------------------------------------------------------
26.086 103,365 336,959 247,051
26.087 181,996 317,929 317,929
26.088 187,175 301,941 301,941
26.089 129,011 204,004 204,004
26.090 91,966 189,282 157,931
- ------------------------------------------------------------------------------------------------------------------------------------
26.091 50,167 109,238 89,231
26.092 164,644 248,721 248,721
26.093 126,111 204,163 204,163
26.094 156,086 237,739 237,739
26.095 23,873 247,444 152,615
- ------------------------------------------------------------------------------------------------------------------------------------
26.096 113,040 223,279 200,479
26.097 69,916 183,091 131,600
26.098 41,026 291,480 177,480
26.099 95,914 180,626 166,375
26.100 41,162 156,843 120,030
- ------------------------------------------------------------------------------------------------------------------------------------
26.101 70,670 218,418 163,660
26.102 (11,322) 282,688 124,997
26.103 60,319 207,200 207,200
26.104 46,078 136,183 94,459
26.105 112,547 180,678 180,678
- ------------------------------------------------------------------------------------------------------------------------------------
26.106 103,473 170,304 170,304
26.107 111,791 223,118 196,518
26.108 91,807 139,884 139,884
26.109 82,199 157,825 149,274
26.110 93,341 186,737 171,537
- ------------------------------------------------------------------------------------------------------------------------------------
26.111 110,258 181,589 181,589
26.112 99,765 183,598 169,424
26.113 29,077 210,026 89,908
26.114 103,948 179,160 179,160
26.115 26,373 192,861 93,899
- ------------------------------------------------------------------------------------------------------------------------------------
26.116 42,661 230,698 115,825
26.117 93,063 153,167 153,167
26.118 48,744 152,562 124,063
26.119 41,503 212,955 170,964
26.120 52,678 187,107 138,525
- ------------------------------------------------------------------------------------------------------------------------------------
26.121 12,720 132,091 60,689
26.122 67,367 225,543 187,543
26.123 35,148 209,426 135,669
26.124 47,926 216,382 157,483
26.125 26,921 235,517 158,063
- ------------------------------------------------------------------------------------------------------------------------------------
26.126 44,359 210,670 143,333
26.127 1,578 352,106 128,732
26.128 95,240 157,793 157,793
26.129 70,884 257,672 152,374
26.130 18,706 136,512 37,302
- ------------------------------------------------------------------------------------------------------------------------------------
26.131 (23,248) 250,384 65,997
26.132 35,015 250,174 154,795
26.133 77,962 162,410 138,014
26.134 51,372 110,386 65,128
26.135 92,448 150,364 150,364
- ------------------------------------------------------------------------------------------------------------------------------------
26.136 67,128 140,989 107,739
26.137 54,703 99,454 99,454
26.138 26,202 153,669 104,953
26.139 42,604 91,291 91,291
26.140 27,023 98,114 88,614
- ------------------------------------------------------------------------------------------------------------------------------------
26.141 33,613 145,447 87,022
26.142 28,341 223,099 174,592
26.143 12,547 182,531 182,531
26.144 122,029 256,065 202,714
26.145 (4,190) 194,246 165,746
- ------------------------------------------------------------------------------------------------------------------------------------
26.146 35,582 121,375 59,626
26.147 138,248 211,392 211,392
26.148 40,802 300,755 130,477
26.149 106,681 191,528 167,778
26.150 230,260 379,886 379,886
- ------------------------------------------------------------------------------------------------------------------------------------
27 1,621,152 3,005,981 3,129,956
28 1,658,721 12/31/2003 1,515,837 1,528,229 2,327,762
29 2,135,064 09/30/2003 1,614,456 3,189,951 3,227,939
30 1,231,572 12/31/2002 1,172,480 12/31/2003 1,296,016 2,339,803 2,424,824
31 1,332,289 12/31/2003 1,541,818 T-12 2/29/2004 1,333,221 2,335,564 2,370,613
- ------------------------------------------------------------------------------------------------------------------------------------
32 999,113 12/31/2003 999,539 T-12 3/31/2004 1,237,796 2,054,301 2,171,248
33 1,157,024 12/31/2003 1,013,331 1,449,988 1,497,550
34 801,855 12/31/2002 787,821 12/31/2003 812,091 1,261,581 1,281,022
35 810,936 12/31/2003 832,957 T-12 3/31/2004 821,189 840,430 1,134,128
36 588,394 12/31/2003 588,394 T-12 12/31/2003 1,041,214 1,064,085 1,439,995
- ------------------------------------------------------------------------------------------------------------------------------------
36.1 12/31/2003 - -
36.2 - -
37 842,301 1,128,637 1,253,979
38 1,132,502 T-12 6/1/2004 1,132,502 - 1,132,502
39 563,208 823,005 828,153
- ------------------------------------------------------------------------------------------------------------------------------------
40 526,471 12/31/2003 526,471 T-12 12/31/2003 601,841 810,326 972,842
41 695,583 12/31/2003 695,583 T-12 12/31/2003 631,055 1,058,640 1,074,015
42 682,535 1,094,362 1,094,362
43 613,740 12/31/2003 659,681 T-12 2/29/2004 655,436 979,785 1,059,843
44 1,457,937 10/31/2002 1,294,466 10/31/2003 1,289,333 3,441,000 3,474,300
- ------------------------------------------------------------------------------------------------------------------------------------
45 662,637 926,954 926,954
46 574,551 12/31/2002 588,481 12/31/2003 540,588 822,828 829,383
47 466,114 12/31/2002 500,545 12/31/2003 525,647 697,680 720,370
48 552,285 12/31/2002 649,339 12/31/2003 788,715 1,366,326 1,416,693
49 641,980 641,981 791,163
- ------------------------------------------------------------------------------------------------------------------------------------
50 124,066 12/31/2003 124,066 T-12 12/31/2003 478,349 688,675 2,030,831
51 419,704 12/31/2003 481,409 T-12 3/31/2004 454,166 480,606 733,534
52 435,483 12/31/2003 442,885 T-12 1/31/2004 404,969 566,751 597,107
53 397,699 12/31/2003 397,699 T-12 12/31/2003 401,022 662,996 668,555
54 550,732 831,872 831,872
- ------------------------------------------------------------------------------------------------------------------------------------
55 422,689 12/31/2003 435,639 T-12 2/29/2004 431,170 729,032 755,900
56 619,154 12/31/2003 581,589 T-12 1/31/2004 423,435 787,640 790,342
56.1
56.2
57 429,992 444,528 444,528
- ------------------------------------------------------------------------------------------------------------------------------------
58 406,200 420,000 420,000
59 324,277 T-12 1/31/2004 434,980 497,614 623,175
60 379,105 12/31/2003 337,188 T-12 4/30/2004 400,506 885,006 932,742
61 481,843 12/31/2003 481,843 T-12 12/31/2003 564,303 969,514 969,514
62 383,000 383,000 383,000 383,000
- ------------------------------------------------------------------------------------------------------------------------------------
63 364,490 377,000 377,000
64 164,713 12/31/2003 209,693 T-12 12/31/2003 375,509 666,512 679,982
64.1 12/31/2003 - - -
64.2 - - -
65 494,244 12/31/2003 493,934 T-12 2/28/2004 451,787 810,355 819,941
- ------------------------------------------------------------------------------------------------------------------------------------
66 338,300 350,000 350,000
67 238,707 12/31/2002 302,698 12/31/2003 365,856 507,711 507,711
68 352,044 451,198 451,198
69 221,979 12/31/2003 221,979 T-12 12/31/2003 323,660 410,970 410,970
70 330,750 12/31/2003 332,679 T-12 1/31/2004 324,134 402,988 427,493
- ------------------------------------------------------------------------------------------------------------------------------------
71 308,703 318,251 318,251
72 319,459 12/31/2003 319,023 T-12 2/29/2004 302,504 468,825 477,073
72.1
72.2
73 347,591 12/31/2002 354,539 12/31/2003 308,529 398,742 398,742
- ------------------------------------------------------------------------------------------------------------------------------------
74 364,549 12/31/2003 364,549 T-12 12/31/2003 353,543 366,024 366,024
75 419,740 320,491 538,613
76 146,662 12/31/2003 166,558 T-12 1/31/2004 217,812 334,271 337,717
77 270,055 270,633 278,407
78 237,590 273,509 304,121
- ------------------------------------------------------------------------------------------------------------------------------------
79 368,612 12/31/2003 368,612 T-12 12/31/2003 321,688 325,043 440,041
80 328,096 12/31/2003 319,244 T-12 1/31/2004 254,496 463,820 466,317
81 275,244 12/31/2003 290,395 T-12 2/29/2004 257,360 441,213 447,671
82 208,032 12/31/2003 231,309 T-12 2/29/2004 281,161 766,639 788,127
83 255,820.00 323,611.00 323,611.00
- ------------------------------------------------------------------------------------------------------------------------------------
84 213,440 12/31/2003 213,440 T-12 12/31/2003 193,331.00 270,257.00 287,181.00
85 64,852 12/31/2003 64,852 T-12 12/31/2003 183,215.00 274,216.00 277,033.00
86 189,969 12/31/2003 189,969 T-12 12/31/2003 206,389.00 460,127.00 466,872.00
87 0 205,401.00 231,286.00 261,975.00
88 193,664 12/31/2003 193,664 T-12 12/31/2003 200,096.00 316,827.00 316,827.00
- ------------------------------------------------------------------------------------------------------------------------------------
88.1
88.2
89 169,488 12/31/2003 169,488 T-12 12/31/2003 166,235.00 246,582.00 258,197.00
90 219,180 12/31/2003 206,484 T-12 2/29/2004 239,953.00 242,609.00 345,592.00
91 154,931 12/31/2003 183,003 T-12 2/29/2004 133,983.00 257,089.00 262,046.00
- ------------------------------------------------------------------------------------------------------------------------------------
92 233,016 12/31/2003 233,406 T-12 1/31/2004 180,654.00 386,232.00 388,346.00
93 150,839 12/31/2003 158,419 T-12 2/29/2004 144,188.00 320,084.00 324,030.00
94 139,535 12/31/2003 146,758 T-12 3/31/2004 155,926.00 281,136.00 285,169.00
95 105,480 12/31/2003 104,739 T-12 2/29/2004 113,609.00 147,084.00 152,278.00
UNDERWRITTEN UNDERWRITTEN UNDERWRITTEN UNDERWRITTEN NET
ID EXPENSES RESERVES TI/LC (11)(12) CASH FLOW (12)(17) LARGEST TENANT
- -----------------------------------------------------------------------------------------------------------------------------------
1 18,830,619 157,400 750,274 61,976,378 Macy's
2 18,935,653 - - 35,990,430 Bloomberg, L.P.
3 9,044,622 488,374 712,968 29,276,766
3.01 1,651,651 102,666 123,433 5,537,993 Wal-Mart
3.02 577,833 27,363 53,643 1,376,278 BJ's Wholesale Club
- -----------------------------------------------------------------------------------------------------------------------------------
3.03 2,631,164 136,008 146,554 8,485,576 Sam's Club
3.04 1,274,055 37,405 124,683 3,188,081 JC Penney
3.05 386,224 16,948 24,250 957,732 Marshalls
3.06 782,909 59,975 86,921 3,516,134 Kohl's
3.07 371,912 16,228 49,353 1,186,980 TJMaxx
- -----------------------------------------------------------------------------------------------------------------------------------
3.08 320,868 25,169 26,261 1,466,254 Wal-Mart
3.09 631,793 37,967 39,183 1,783,336 Lowe's
3.10 416,213 28,646 38,687 1,778,403 Dick's Sporting Goods
9,974,332 264,475 1,230,049 6,695,983 GSA
4 4,506,463 91,051 501,396 2,395,738 GSA
- -----------------------------------------------------------------------------------------------------------------------------------
5 1,929,520 49,192 220,840 1,662,953 GSA
6 1,239,502 51,396 149,689 1,482,486 GSA
7 1,250,870 31,725 174,491 918,746 United Space Alliance
8 1,047,977 41,111 183,671 236,023 Department of Administrative Services Building
9 20,063,310 300,000 633,849 42,224,855 Bloomingdale's
- -----------------------------------------------------------------------------------------------------------------------------------
10 1,642,074 47,369 112,641 5,743,736 Shoppers Food Warehouse
11 6,187,966 313,690 292,977 5,121,356 Home Depot
11.1 405,947 107,430 78,620 1,476,174 Staples
11.2 350,700 3,367 10,045 318,157 Woods Equipment Company
11.3 535,969 58,348 44,567 720,605 Harte-Hanks
- -----------------------------------------------------------------------------------------------------------------------------------
11.4 2,659,323 63,458 95,400 1,901,125 Home Depot
11.5 2,236,027 81,088 64,346 705,296 Reebok
12 4,519,132 72,957 360,045 6,639,499 Bank of America
13 2,861,795 55,731 309,309 3,847,347 Manning & Marder Kass
14 2,094,926 52,612 538,846 3,649,085 American International Insurance Company
- -----------------------------------------------------------------------------------------------------------------------------------
15 3,400,885 101,144 523,931 3,372,548
15.1 1,837,354 64,262 363,753 1,879,795 Dominion OK/TX Explor & Prod
15.2 1,563,531 36,882 160,178 1,492,753 Vulcan Materials Company
16 1,609,778 74,193 191,844 3,505,104 Clorox
17 2,548,915 105,600 - 2,825,857
- -----------------------------------------------------------------------------------------------------------------------------------
18 1,276,375 111,250 - 2,231,707
18.1 343,205 35,500 - 745,996
18.2 316,510 26,500 - 479,365
18.3 221,014 21,000 - 387,202
18.4 191,832 13,250 - 305,379
- -----------------------------------------------------------------------------------------------------------------------------------
18.5 203,814 15,000 - 313,765
1,368,210 134,500 - 1,991,869
19 637,630 65,000 - 909,667
20 496,243 47,000 - 675,089
21 234,337 22,500 - 407,113
- -----------------------------------------------------------------------------------------------------------------------------------
22 1,218,053 15,779 155,381 2,134,224 Gambro Healthcare SM#0
23 1,795,647 45,640 289,482 2,053,124 Aon Consulting
24 1,793,193 132,000 - 2,124,553
25 679,035 33,811 56,872 1,764,691 Wal-Mart
26 51,182,053 647,938 1,033,319 45,694,326
- -----------------------------------------------------------------------------------------------------------------------------------
26.001 12,557,506 40,365 - 4,775,535 Bank of America N.A.
26.002 4,968,209 53,844 - 3,198,882 Bank of America N.A.
26.003 3,036,415 42,214 - 4,937,291 Bank of America N.A.
26.004 2,284,798 19,735 - 3,309,352 Bank of America N.A.
26.005 1,797,846 4,832 - 2,102,541 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.006 1,374,895 49 - 2,097,182 Bank of America N.A.
26.007 1,064,825 1,067 - 1,338,088 Bank of America N.A.
26.008 1,026,713 - - 990,965 Bank of America N.A.
26.009 512,491 11,639 - 989,255 Bank of America N.A.
26.010 741,754 173 - 1,038,773 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.011 727,652 14 - 1,026,525 Bank of America N.A.
26.012 443,122 13,146 - 545,020 Bank of America N.A.
26.013 712,443 682 - 943,579 Bank of America N.A.
26.014 695,741 90 - 955,520 Bank of America N.A.
26.015 834,555 64,996 - (899,551) Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.016 456,966 132 - 734,089 Bank of America N.A.
26.017 389,255 418 - 575,140 Bank of America N.A.
26.018 384,594 5,094 - 533,968 Bank of America N.A.
26.019 713,572 13,041 - 175,905 Bank of America N.A.
26.020 314,604 - - 400,327 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.021 303,683 75 - 522,691 Bank of America N.A.
26.022 370,739 2,108 - 130,934 Bank of America N.A.
26.023 370,739 2,108 - 130,934 Bank of America N.A.
26.024 246,573 1,976 - 362,394 Bank of America N.A.
26.025 192,458 1,719 - 527,845 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.026 192,806 - - 545,224 Bank of America N.A.
26.027 192,842 - - 545,329 Bank of America N.A.
26.028 184,266 1,898 - 261,292 Bank of America N.A.
26.029 100,828 5,062 - 345,155 Bank of America N.A.
26.030 213,084 501 - 278,305 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.031 252,392 999 - 211,121 Bank of America N.A.
26.032 370,739 2,108 - 130,934
26.033 185,064 - - 299,773 Bank of America N.A.
26.034 149,031 8,314 - 209,290 Bank of America N.A.
26.035 216,681 - - 344,328 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.036 186,548 18,573 - 46,605 Bank of America N.A.
26.037 185,790 1,567 - 209,439 Bank of America N.A.
26.038 190,891 6,198 - 150,113 Bank of America N.A.
26.039 121,616 - - 216,469 Bank of America N.A.
26.040 188,700 3,251 - 290,886 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.041 145,985 4,538 - 83,010 Bank of America N.A.
26.042 584,579 4,537 - 177,056 Bank of America N.A.
26.043 181,410 92 - 191,090 Bank of America N.A.
26.044 159,907 525 - 387,331 Bank of America N.A.
26.045 156,626 1,840 - 236,497 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.046 169,932 - - 185,257 Bank of America N.A.
26.047 156,877 3,013 - 163,657 Bank of America N.A.
26.048 156,073 - - 178,806 Bank of America N.A.
26.049 155,408 982 - 209,738 Bank of America N.A.
26.050 86,103 - - 190,542 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.051 84,320 - - 186,588 Bank of America N.A.
26.052 174,058 - - 206,799 Bank of America N.A.
26.053 43,801 - - 213,428 Bank of America N.A.
26.054 189,426 1,479 - 201,395 Bank of America N.A.
26.055 17,210 639 - 186,667 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.056 130,791 2,807 - 150,274 Bank of America N.A.
26.057 84,462 1,188 - 122,747 Bank of America N.A.
26.058 135,012 - - 193,937 Bank of America N.A.
26.059 215,193 6,854 - 236,698 Bank of America N.A.
26.060 231,013 4,118 - 15,070 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.061 104,348 601 - 149,964 Bank of America N.A.
26.062 90,646 153 - 166,735 Bank of America N.A.
26.063 199,285 5,059 - 114,122 Bank of America N.A.
26.064 62,252 3,491 - 73,601 Bank of America N.A.
26.065 91,259 - - 175,529 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.066 117,170 2,753 - 158,330 Bank of America N.A.
26.067 133,986 15,222 - 111,987 Bank of America N.A.
26.068 79,846 179 - 121,803 Bank of America N.A.
26.069 214,365 4,447 - 126,118 Bank of America N.A.
26.070 87,227 2,245 - 167,954 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.071 160,011 - - 179,653 Bank of America N.A.
26.072 66,236 1,849 - 91,912 Bank of America N.A.
26.073 156,318 12,662 - 125,799 Bank of America N.A.
26.074 67,451 168 - 125,086 Bank of America N.A.
26.075 170,787 220 - 270,068 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.076 101,827 12,038 - 49,798 Bank of America N.A.
26.077 242,673 9,388 - 167,215 Bank of America N.A.
26.078 76,056 - - 113,639 Bank of America N.A.
26.079 144,194 2,711 - 133,614 Bank of America N.A.
26.080 104,786 1,549 - 64,429 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.081 77,088 7,812 - 27,959 Bank of America N.A.
26.082 121,823 5,056 - 90,810 Bank of America N.A.
26.083 28,296 1,877 - 55,392 Bank of America N.A.
26.084 90,370 1,376 - 109,844 Bank of America N.A.
26.085 163,123 5,254 - 103,085 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.086 143,686 5,035 - 98,330 Bank of America N.A.
26.087 135,933 1,347 - 180,650 Bank of America N.A.
26.088 114,767 - - 187,175 Bank of America N.A.
26.089 74,992 - - 129,011 Bank of America N.A.
26.090 65,965 361 - 91,605 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.091 39,063 8,613 - 41,554 Bank of America N.A.
26.092 84,077 8,067 - 156,577 Bank of America N.A.
26.093 78,052 - - 126,111 Bank of America N.A.
26.094 81,653 1,438 - 154,649 Bank of America N.A.
26.095 128,742 8,485 - 15,388 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.096 87,439 333 - 112,707 Bank of America N.A.
26.097 61,685 4,343 - 65,573 Bank of America N.A.
26.098 136,454 7,149 - 33,877 Bank of America N.A.
26.099 70,461 955 - 94,959 Bank of America N.A.
26.100 78,868 6,494 - 34,668 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.101 92,990 4,722 - 65,948 Bank of America N.A.
26.102 136,319 6,485 - (17,807) Bank of America N.A.
26.103 146,881 7,532 - 52,787 Bank of America N.A.
26.104 48,381 1,860 - 44,218 Bank of America N.A.
26.105 68,132 - - 112,547 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.106 66,830 - - 103,473 Bank of America N.A.
26.107 84,727 1,328 - 110,463 Bank of America N.A.
26.108 48,077 - - 91,807 Bank of America N.A.
26.109 67,076 265 - 81,934 Bank of America N.A.
26.110 78,196 776 - 92,565 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.111 71,331 - - 110,258 Bank of America N.A.
26.112 69,659 148 - 99,617 Bank of America N.A.
26.113 60,831 4,249 - 24,828 Bank of America N.A.
26.114 75,212 4,790 - 99,158 Bank of America N.A.
26.115 67,526 2,793 - 23,580 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.116 73,164 1,623 - 41,038 Bank of America N.A.
26.117 60,104 - - 93,063 Bank of America N.A.
26.118 75,319 2,055 - 46,689 Bank of America N.A.
26.119 129,462 6,189 - 35,314 Bank of America N.A.
26.120 85,847 5,565 - 47,113 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.121 47,969 1,517 - 11,203 Bank of America N.A.
26.122 120,176 4,864 - 62,503 Bank of America N.A.
26.123 100,520 5,876 - 29,272 Bank of America N.A.
26.124 109,557 9,577 - 38,349 Bank of America N.A.
26.125 131,142 2,927 - 23,994 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.126 98,974 3,805 - 40,554 Bank of America N.A.
26.127 127,155 6,099 - (4,521) Bank of America N.A.
26.128 62,553 - - 95,240 Bank of America N.A.
26.129 81,490 3,215 - 67,669 Bank of America N.A.
26.130 18,597 2,807 - 15,899 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.131 89,246 7,002 - (30,250) Bank of America N.A.
26.132 119,780 8,017 - 26,998 Bank of America N.A.
26.133 60,052 1,278 - 76,684 Bank of America N.A.
26.134 13,756 3,830 - 47,542 Bank of America N.A.
26.135 57,916 - - 92,448 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.136 40,611 1,516 - 65,612 Bank of America N.A.
26.137 44,750 1,115 - 53,588 Bank of America N.A.
26.138 78,751 5,630 - 20,572 Bank of America N.A.
26.139 48,687 2,449 - 40,155 Bank of America N.A.
26.140 61,591 5,931 - 21,092 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.141 53,409 941 - 32,672 Bank of America N.A.
26.142 146,251 1,423 - 26,918 Bank of America N.A.
26.143 169,983 900 - 11,648 Bank of America N.A.
26.144 80,685 521 - 121,508 Bank of America N.A.
26.145 169,936 1,582 - (5,772) Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
26.146 24,044 1,323 - 34,259 Bank of America N.A.
26.147 73,144 - - 138,248 Bank of America N.A.
26.148 89,675 2,244 - 38,558 Bank of America N.A.
26.149 61,097 1,650 - 105,031 Bank of America N.A.
26.150 149,627 192 - 230,068 Bank of America N.A.
- -----------------------------------------------------------------------------------------------------------------------------------
27 1,508,804 78,000 1,543,152
28 811,925 14,338 33,727 1,467,772 Allen Systems Group
29 1,613,483 66,166 30,024 1,518,266 Rahman, Shamsur
30 1,128,808 64,000 1,232,016
31 1,037,392 78,750 - 1,254,471
- -----------------------------------------------------------------------------------------------------------------------------------
32 933,452 23,044 126,856 1,087,897 State Board of Equalization
33 484,219 76,111 - 937,220
34 468,931 40,183 771,908
35 312,938 4,336 14,023 802,830 Albertson's (Sav-On Drug)
36 398,780 25,452 119,174 896,588 Applicators Sales and Service Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
36.1 - - Applicators Sales and Service Inc.
36.2 - - Cedar Point
37 411,678 20,339 17,407 804,555
38 - - - 1,132,502 Saks, Inc.
39 264,945 6,600 - 556,608
- -----------------------------------------------------------------------------------------------------------------------------------
40 371,001 16,800 - 585,041
41 442,961 34,248 - 596,807
42 411,828 13,713 32,340 636,481 Arizona Heart Institute
43 404,407 31,000 - 624,436
44 2,184,967 103,161 1,186,172
- -----------------------------------------------------------------------------------------------------------------------------------
45 264,318 8,057 48,442 606,137 Keller William Realty
46 288,795 9,820 24,922 505,846 Ocean State Job Lot
47 194,723 14,130 511,517
48 627,978 12,924 775,791
49 149,182 2,500 22,783 616,697 Hollywood Video
- -----------------------------------------------------------------------------------------------------------------------------------
50 1,552,482 33,400 - 444,949
51 279,368 21,400 - 432,766
52 192,138 18,000 - 386,969
53 267,533 9,271 - 391,751
54 281,140 25,685 27,056 497,991 Concepts ETI
- -----------------------------------------------------------------------------------------------------------------------------------
55 324,730 24,000 - 407,170
56 366,907 27,825 - 395,610
56.1
56.2
57 14,536 2,103 - 427,889 Walgreens
- -----------------------------------------------------------------------------------------------------------------------------------
58 13,800 2,174 - 404,027 Walgreens
59 188,196 8,375 24,389 402,217 Kroger
60 532,236 41,000 - 359,506
61 405,211 24,241 108,083 431,979 CLS
62 - - - 383,000 Walgreen Co.
- -----------------------------------------------------------------------------------------------------------------------------------
63 12,510 2,184 - 362,306 Walgreens
64 304,473 21,000 - 354,509
64.1 - - -
64.2 - - -
65 368,154 32,000 - 419,787
- -----------------------------------------------------------------------------------------------------------------------------------
66 11,700 2,184 - 336,116 Walgreens
67 141,854 4,786 15,917 345,152 Kunuden`s Auto Center
68 99,154 3,759 17,102 331,183 Dexter Cleaners
69 87,310 11,000 - 312,660
70 103,359 10,500 - 313,634
- -----------------------------------------------------------------------------------------------------------------------------------
71 9,548 2,072 6,910 299,722 Eckerds
72 174,569 22,087 - 280,417
72.1
72.2
73 90,213 6,900 17,178 284,451 Remke Markets
- -----------------------------------------------------------------------------------------------------------------------------------
74 12,481 2,233 - 351,311 Savon
75 118,874 5,875 7,131 406,734 Office Max
76 119,905 12,800 - 205,012
77 8,352 1,977 9,796 258,282 Renal Care Group of the Rockies, LLC
78 66,531 1,308 9,789 226,493 Noodles & Company
- -----------------------------------------------------------------------------------------------------------------------------------
79 118,352 8,665 14,855 298,168 Sherwin Williams
80 211,822 15,000 - 239,496
81 190,311 9,650 - 247,710
82 506,966 35,933 - 245,227
83 67,790.00 1,208 7,932 246,680 Active Ride Shop
- -----------------------------------------------------------------------------------------------------------------------------------
84 93,850.00 2,758 12,321 178,252 Barrington Capital
85 93,818.00 12,000 - 171,215
86 260,483.00 16,500 - 189,889
87 56,574.00 3,742 21,833 179,827 2J Group, Inc.
88 116,731.00 8,350 - 191,746
- -----------------------------------------------------------------------------------------------------------------------------------
88.1
88.2
89 91,962.00 3,550 - 162,685
90 104,639.00 2,896 15,446 221,611 Frazee Paints
91 128,063.00 8,000 - 125,983
- -----------------------------------------------------------------------------------------------------------------------------------
92 207,692.00 17,500 - 163,154
93 179,842.00 16,000 - 128,188
94 129,243.00 5,400 - 150,526
95 38,669.00 2,800 - 110,809
LEASE LEASE
ID SF EXPIRATION 2ND LARGEST TENANT SF EXPIRATION 3RD LARGEST TENANT
- -----------------------------------------------------------------------------------------------------------------------------------
1 439,632 07/31/2021 Nordstrom 245,348 07/31/2006 J.C. Penney
2 694,634 11/1/2028
3
3.01 194,771 12/31/2019 Regal Cinema 83,758 09/30/2017 Dick's Sporting Goods
3.02 68,160 09/30/2016 Dollar Tree 13,904 03/31/2008 Sears
- -----------------------------------------------------------------------------------------------------------------------------------
3.03 137,742 01/31/2024 Target Stores 119,872 01/31/2015 Dick's Sporting Goods
3.04 93,480 01/31/2024 Borders 21,641 01/31/2023 Petsmart, Inc.
3.05 30,000 09/30/2013 Bed Bath & Beyond 29,173 01/31/2013 Babies R Us
3.06 86,584 01/31/2022 Best Buy 50,000 01/31/2017 Bed Bath & Beyond
3.07 30,000 08/31/2008 Books-a-Million 20,010 01/31/2007 Party City
- -----------------------------------------------------------------------------------------------------------------------------------
3.08 200,084 12/31/2050 Lowe's 135,195 12/11/2019 Fashion Bug
3.09 125,789 08/31/2027 Shop 'N Save 61,712 10/31/2019 Petsmart
3.10 44,000 01/31/2017 Circuit City 33,000 01/31/2017 Carmike Cinemas
250,744 Various United Space Alliance 158,627 05/31/2011 Department of Administrative
Services Building
4 129,476 04/23/2008 Liberty Mutual Insurance Co 32,068 11/30/2008 Ferra Donna
- -----------------------------------------------------------------------------------------------------------------------------------
5 81,368 08/5/2013 Cooch & Taylor, PA 14,604 12/31/2007 Malcom Pirnie, Inc.
6 39,900 05/31/2007 City of LA Dept. of Pension 34,874 04/14/2012 City of LA Retirement System
7 158,627 05/31/2011
8 130,918 07/15/2004 Downtown Lincoln Association 2,066 08/31/2006 Directives Salon
9 255,888 07/22/2008 Hecht's 237,076 07/24/2008 L.L. Bean
- -----------------------------------------------------------------------------------------------------------------------------------
10 47,002 04/30/2008 Legacy Furniture 26,092 10/30/2011 Boyd School
11 603,258 02/1/2011 Staples 531,000 06/1/2007 Reebok
11.1 531,000 06/1/2007
11.2 68,000 10/31/2009
11.3 177,306 09/30/2010 Invensys 71,000 06/1/2005
- -----------------------------------------------------------------------------------------------------------------------------------
11.4 385,000 02/1/2011
11.5 221,605 12/31/2006 Home Depot 218,258 06/30/2012
12 18,862 09/29/2011 Hadar Holdings, Inc. 5,322 01/31/2009 Kattan Diamonds & Jewelry
13 54,103 05/30/2011 Hawkins, Schnabel, Lindahl 24,192 01/31/2009 The Mortgage Store
14 158,033 10/24/2012 Wachovia Bank, N.A. 105,025 12/31/2005
- -----------------------------------------------------------------------------------------------------------------------------------
15
15.1 118,684 11/30/2008 Lucent Technologies Inc. 30,300 04/16/2007 OK Foundation-Medical Qlty Inc.
15.2 184,125 12/31/2013
16 18,420 01/31/2010 Con Agra 14,000 04/30/2005 Coca-Cola
17
- -----------------------------------------------------------------------------------------------------------------------------------
18
18.1
18.2
18.3
18.4
- -----------------------------------------------------------------------------------------------------------------------------------
18.5
19
20
21
- -----------------------------------------------------------------------------------------------------------------------------------
22 10,215 05/17/2008 Santa Monica Bay Physicians 9,835 05/31/2005 Santa Monica Urologic
23 60,099 06/30/2007 Lockwood Greene Engineers, Inc. 51,031 06/1/2010 MS Millenium / Mallen
24
25 125,883 01/31/2021 Super Fresh Food Markets 54,257 12/31/2014 Fashion Bug
26
- -----------------------------------------------------------------------------------------------------------------------------------
26.001 869,916 06/30/2023 Casual Corner Group, Inc. 7,157 04/30/2008 Cafe Baci, Inc
26.002 277,524 06/30/2023 California Pacific Medical Center 77,276 01/31/2012 California State Compensation Fund
26.003 271,335 06/30/2023 HQ Global Workplaces 27,666 03/18/2009 Odell Associates, Inc.
26.004 65,048 06/30/2023 Merrill Lynch 18,125 05/23/2011 Lemaster & Daniels, PLLC
26.005 254,800 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.006 232,441 06/30/2023 AT&T 870 02/15/2009
26.007 158,404 06/30/2023
26.008 115,662 06/30/2023
26.009 129,793 06/30/2023
26.010 120,477 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.011 118,662 06/30/2023
26.012 72,086 06/30/2023
26.013 110,560 06/30/2023
26.014 111,037 06/30/2023
26.015 58,037 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.016 84,515 06/30/2023 US West Communications 210 06/30/2004
26.017 66,203 06/30/2023
26.018 31,548 06/30/2023 Morton McGoldrick, PS 9,234 02/28/2005 Robert Half International
26.019 45,000 06/30/2023 Diamond Technologies, Inc. 8,527 06/30/2004
26.020 46,338 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.021 61,095 06/30/2023
26.022 43,104 06/30/2023
26.023 42,766 06/30/2023
26.024 42,941 06/30/2023
26.025 56,271 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.026 62,457 06/30/2023
26.027 62,469 06/30/2023
26.028 36,250 06/30/2023
26.029 62,659 06/30/2023
26.030 32,405 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.031 33,513 06/30/2023
26.032
26.033 34,559 06/30/2023
26.034 12,434 06/30/2023 Charles Eaton 3,702 06/30/2004 William Shuffet
26.035 38,500 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.036 16,036 06/30/2023 United Studios Self Defense 1,496 10/31/2005
26.037 29,113 06/30/2023
26.038 42,944 06/30/2023
26.039 24,922 06/30/2023
26.040 34,333 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.041 32,200 06/30/2023
26.042 44,905 06/30/2023
26.043 22,804 06/30/2023
26.044 46,192 06/30/2023 Thomas Jefferson Planning District 4,870 07/31/2005 Piedmont Council of the Arts
26.045 24,955 06/30/2023 Title Guaranty & Trust Co. 1,251 10/31/2005 Campo Insurance Agency
- -----------------------------------------------------------------------------------------------------------------------------------
26.046 21,511 06/30/2023
26.047 24,808 06/30/2023 Ctr for Educational Achievement 3,098 12/31/2004
26.048 20,740 06/30/2023
26.049 25,045 06/30/2023
26.050 21,879 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.051 21,425 06/30/2023
26.052 23,969 06/30/2023
26.053 24,361 06/30/2023
26.054 21,159 06/30/2023 The Parent's Info. 4,500 06/30/2006
26.055 25,878 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.056 22,780 06/30/2023
26.057 16,200 06/30/2023
26.058 22,400 06/30/2023
26.059 31,129 06/30/2023
26.060 24,064 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.061 20,956 06/30/2023
26.062 20,423 06/30/2023
26.063 19,679 06/30/2023 Cypress Media 3,833 12/31/2004 Stewart Title Kansas
26.064 16,335 06/30/2023
26.065 20,076 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.066 22,065 06/30/2023
26.067 22,198 06/30/2023 Moulton McEchrn 5,387 05/31/2004
26.068 18,900 06/30/2023
26.069 29,147 06/30/2023
26.070 24,760 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.071 20,847 06/30/2023
26.072 15,900 06/30/2023
26.073 19,109 06/30/2023 General Services Administration 7,100 04/14/2004 Mark Gilbert
26.074 17,191 06/30/2023
26.075 31,462 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.076 17,275 06/30/2023
26.077 17,121 06/30/2023 W.D. Campbell & Son, Inc 14,184 07/31/2006 Lynch's Landing
26.078 13,117 06/30/2023
26.079 23,865 06/30/2023 Integrity Resources Center 540 06/30/2004
26.080 13,019 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.081 11,159 06/30/2023
26.082 18,676 06/30/2023 William P. Nelms 1,550 06/30/2004 John Drake
26.083 20,435 06/30/2023
26.084 20,094 06/30/2023
26.085 21,387 06/30/2023 Score 1,800 06/30/2004 Accion Texas, Inc
- -----------------------------------------------------------------------------------------------------------------------------------
26.086 24,416 06/30/2023
26.087 15,320 06/30/2023 Kinsley & Sons, Inc. 2,652 07/31/2005 National Appraisal Services
26.088 21,576 06/30/2023
26.089 14,860 06/30/2023
26.090 14,437 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.091 8,476 06/30/2023 United Way Kootenai County 1,518 06/30/2004 Scott W. Reed
26.092 14,097 06/30/2023 Van Matre & Krueger LLC 2,758 06/30/2004 Botts & McCure
26.093 14,539 06/30/2023
26.094 12,438 06/30/2023 Sion Noble 3,740 07/31/2006
26.095 19,582 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.096 16,000 06/30/2023
26.097 14,450 06/30/2023
26.098 23,097 06/30/2023
26.099 12,919 06/30/2023
26.100 11,372 06/30/2023 Moultrie Communities 1,835 06/30/2004 Keith L. Brown & Company
- -----------------------------------------------------------------------------------------------------------------------------------
26.101 16,627 06/30/2023
26.102 23,855 06/30/2023
26.103 11,353 06/30/2023 Outreach International 3,066 04/30/2005 June Short
26.104 10,557 06/30/2023 Henderson Jet Sales 1,725 06/30/2004 Finish Line Graphics
26.105 12,971 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.106 11,937 06/30/2023
26.107 16,285 06/30/2023
26.108 10,560 06/30/2023
26.109 10,670 06/30/2023
26.110 12,853 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.111 12,720 06/30/2023
26.112 13,278 06/30/2023
26.113 18,784 06/30/2023
26.114 9,600 06/30/2023 Patrick B. McDermott 4,782 11/30/2005
26.115 16,540 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.116 18,292 06/30/2023 Craig Fuller & Assct, PLLC 3,000 06/30/2006
26.117 10,736 06/30/2023
26.118 10,212 06/30/2023
26.119 13,666 06/30/2023
26.120 14,114 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.121 11,413 06/30/2023
26.122 14,506 06/30/2023 Complete Estate Service, LLC 1,960 08/31/2007
26.123 14,642 06/30/2023 Mesa Family Services 2,600 06/30/2004 BB&G Services
26.124 14,247 06/30/2023 Albany State University 6,572 09/30/2004
26.125 17,653 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.126 16,244 06/30/2023
26.127 31,699 06/30/2023
26.128 10,990 06/30/2023
26.129 21,661 06/30/2023
26.130 14,345 06/30/2023 Clallem County EDC 1,146 06/30/2004
- -----------------------------------------------------------------------------------------------------------------------------------
26.131 23,521 06/30/2023
26.132 18,538 06/30/2023 City of Palmetto 2,501 06/30/2004 Blews and Ritchie Adv
26.133 12,079 06/30/2023
26.134 11,527 06/30/2023
26.135 10,660 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.136 11,500 06/30/2023
26.137 7,382 06/30/2023
26.138 10,128 06/30/2023 Longwood College 2,283 09/30/2004 Rteam Nurse Inc
26.139 6,200 06/30/2023
26.140 6,637 06/30/2023 Appalshop, Inc. 800 06/30/2004 Koltown Props
- -----------------------------------------------------------------------------------------------------------------------------------
26.141 11,600 06/30/2023
26.142 13,447 06/30/2023
26.143 6,544 06/30/2023
26.144 20,320 06/30/2023
26.145 12,203 06/30/2023
- -----------------------------------------------------------------------------------------------------------------------------------
26.146 10,981 06/30/2023
26.147 15,904 06/30/2023
26.148 26,495 06/30/2023 Muskogee Chamber Commerce 1,000 07/31/2004
26.149 14,970 06/30/2023
26.150 10,103 06/30/2023 Preszler, Lrnr, Mrtz & Co. 5,230 06/30/2004 Ingram, Zelatsko & Goodwin
- -----------------------------------------------------------------------------------------------------------------------------------
27
28 95,584 04/30/2011
29 1,561 03/31/2005 Continental Time Group 1,380 12/31/2005 D-Cada, Inc.
30
31
- -----------------------------------------------------------------------------------------------------------------------------------
32 14,836 07/1/2008 Progressive Management 13,045 02/1/2009 Department of Rehabilitation
33
34
35 14,884 11/4/2021 In-N-Out Burger 3,160 12/31/2021 7-Eleven
36 54,470 09/30/2008 Cedar Point 36,500 08/31/2011 South New Hampshire University
- -----------------------------------------------------------------------------------------------------------------------------------
36.1 54,470 09/30/2008 Southern NH University 27,555 05/31/2009 L & L Products
36.2 36,500 08/31/2011 Crotched Mountain 4,000 05/31/2006 Bonne Vie Salon
37
38 180,550 01/31/2024
39
- -----------------------------------------------------------------------------------------------------------------------------------
40
41
42 47,286 04/30/2019
43
44
- -----------------------------------------------------------------------------------------------------------------------------------
45 5,720 06/30/2008 Thoroughbred Brewing Co. 5,328 02/28/2014 Paciulli Simmons & Assoc.
46 20,500 03/31/2008 Western Auto 8,300 04/30/2006 Family Dollar
47
48
49 4,915 12/25/2017 Wells Fargo 4,835 03/26/2013 Pizza Factory
- -----------------------------------------------------------------------------------------------------------------------------------
50
51
52
53
54 44,000 07/31/2018 Canteen Corp 18,000 02/28/2014 Velocity Express
- -----------------------------------------------------------------------------------------------------------------------------------
55
56
56.1
56.2
57 14,021 04/30/2021
- -----------------------------------------------------------------------------------------------------------------------------------
58 14,490 08/31/2027
59 58,890 12/1/2008 Magic Dollar 8,000 01/1/2009 Cato
60
61 10,000 10/31/2008 Concord Public Storage 10,000 06/30/2013 Concord Fitness Center
62 14,560 05/31/2029
- -----------------------------------------------------------------------------------------------------------------------------------
63 14,560 05/31/2029
64
64.1
64.2
65
- -----------------------------------------------------------------------------------------------------------------------------------
66 14,560 03/31/2029
67 4,000 01/31/2010 Cardsmart 4,000 08/31/2008 Below Cost
68 2,800 08/31/2008 El Molino Mexican Restaurant 2,415 08/31/2008 Ultra Tan
69
70
- -----------------------------------------------------------------------------------------------------------------------------------
71 13,813 06/25/2023
72
72.1
72.2
73 31,770 09/9/2015 CVS Pharmacy 8,450 11/9/2015 Good Spirits Liquors
- -----------------------------------------------------------------------------------------------------------------------------------
74 14,884 08/10/2020
75 23,484 11/6/2019
76
77 13,177 03/31/2014
78 2,600 09/30/2013 Pot Belly's Sandwich Works 2,400 09/30/2013 Caribou Coffee
- -----------------------------------------------------------------------------------------------------------------------------------
79 3,972 12/31/2005 Millenium Dental 3,417 12/31/2011 Cathy's Wok
80
81
82
83 5,845 12/31/2018 Wahoo's Fish Taco 2,205 3/31/2014
- -----------------------------------------------------------------------------------------------------------------------------------
84 2,990 12/31/2005 Buie Communities 2,960 12/31/2005 Metro Realty
85
86
87 14,672 2/28/2007; Production Embroidery, Inc. 3,821 9/13/2006 Southern California Tribal
Larger space Chairmen's Association
no lease
termination
88
- -----------------------------------------------------------------------------------------------------------------------------------
88.1
88.2
89
90 5,527 9/30/2005 Sprint PCS 2,550 4/30/2006 New Century Mortgage
91
- -----------------------------------------------------------------------------------------------------------------------------------
92
93
94
95
UPFRONT ONGOING
LEASE OCCUPANCY OCCUPANCY ACTUAL REPLACEMENT ACTUAL REPLACEMENT UPFRONT
ID SF EXPIRATION RATE (17) AS-OF DATE RESERVES RESERVES TI/LC
- -----------------------------------------------------------------------------------------------------------------------------------
1 176,713 11/30/2021 98.07% 04/26/2004 - 85,410 -
2 100.00% 11/15/2003 - - -
3 91.25% 05/12/2004 - - -
3.01 50,000 02/28/2011 91.28% 05/12/2004 - - -
3.02 8,248 06/30/2008 91.28% 05/12/2004 - - -
- --------------------------------------------------------------------------------------------------------------------------------
3.03 50,000 03/31/2015 82.72% 05/12/2004 - - -
3.04 19,141 11/30/2018 93.87% 05/12/2004 - - -
3.05 25,124 01/31/2015 87.22% 05/12/2004 - - -
3.06 32,000 11/30/2009 92.62% 05/12/2004 - - -
3.07 12,000 01/31/2009 100.00% 05/12/2004 - - -
- --------------------------------------------------------------------------------------------------------------------------------
3.08 7,500 09/30/2004 100.00% 05/12/2004 - - -
3.09 19,355 01/31/2016 98.65% 05/12/2004 - - -
3.10 31,795 11/30/2017 100.00% 05/12/2004 - - -
130,918 07/15/2004 89.66% Various
4 27,882 12/31/2006 85.24% 02/01/2004 150,000 7,571 -
- --------------------------------------------------------------------------------------------------------------------------------
5 11,832 02/28/2009 94.80% 04/01/2004 3,345 -
6 30,654 08/09/2008 92.88% 04/01/2004 4,307 -
7 100.00% 04/01/2004 2,650 -
8 1,488 09/30/2007 83.49% 04/01/2004 3,479 350,000
9 75,778 05/31/2020 98.11% 09/01/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
10 14,527 08/31/2008 100.00% 04/22/2004 - 3,900 -
11 221,605 12/31/2006 84.00% 05/01/2004 437,748 54,853 360,000
11.1 100.00% 05/01/2004
11.2 100.00% 05/01/2004
11.3 83.21% 05/01/2004
- --------------------------------------------------------------------------------------------------------------------------------
11.4 58.59% 05/01/2004
11.5 100.00% 05/01/2004
12 5,249 09/30/2006 97.82% 03/01/2004 - 6,080 -
13 15,566 04/30/2014 96.29% 02/13/2004 - 4,644 891,080
14 100.00% 03/30/2004 - 4,384 -
- --------------------------------------------------------------------------------------------------------------------------------
15 97.38% 05/03/2004 - 8,429 -
15.1 29,463 10/31/2007 95.73% 05/03/2004 - - -
15.2 100.00% 05/03/2004 - - -
16 13,910 11/30/2007 95.89% 03/21/2004 - 6,183 1,500,000
17 91.70% 03/08/2004 - 8,800 -
- --------------------------------------------------------------------------------------------------------------------------------
18 97.98% 05/14/2004 - 9,230 -
18.1 97.89% 05/14/2004 - - -
18.2 98.11% 05/14/2004 - - -
18.3 98.81% 05/14/2004 - - -
18.4 94.44% 05/14/2004 - - -
- --------------------------------------------------------------------------------------------------------------------------------
18.5 100.00% 05/14/2004 - - -
Various 03/31/2004 - 11,208 -
19 93.85% 03/31/2004 - 5,417 -
20 94.68% 03/31/2004 - 3,917 -
21 93.33% 03/31/2004 - 1,875 -
- --------------------------------------------------------------------------------------------------------------------------------
22 6,066 07/31/2008 92.55% 05/01/2004 - 1,315 -
23 15,831 07/31/2007 87.90% 03/04/2004 - 3,803 250,000
24 95.08% 04/30/2004 - 11,000
25 12,000 01/31/2005 97.78% 02/18/2004 - 2,818 56,872
26 86.67% 09/15/2003 - 54,468 205,965
- --------------------------------------------------------------------------------------------------------------------------------
26.001 4,383 12/31/2007 87.30% 09/15/2003 - - -
26.002 55,043 07/31/2007 85.30% 09/15/2003 - - -
26.003 26,596 02/28/2014 100.00% 09/15/2003 - - -
26.004 15,688 05/31/2012 79.13% 09/15/2003 - - -
26.005 86.11% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.006 100.00% 09/15/2003 - - -
26.007 91.82% 09/15/2003 - - -
26.008 100.00% 09/15/2003 - - -
26.009 76.28% 09/15/2003 - - -
26.010 98.22% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.011 99.75% 09/15/2003 - - -
26.012 48.06% 09/15/2003 - - -
26.013 94.70% 09/15/2003 - - -
26.014 97.52% 09/15/2003 - - -
26.015 41.05% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.016 99.50% 09/15/2003 - - -
26.017 96.13% 09/15/2003 - - -
26.018 3,407 10/31/2005 69.66% 09/15/2003 - - -
26.019 47.70% 09/15/2003 - - -
26.020 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.021 100.00% 09/15/2003 - - -
26.022 100.00% 09/15/2003 - - -
26.023 100.00% 09/15/2003 - - -
26.024 100.00% 09/15/2003 - - -
26.025 90.06% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.026 100.00% 09/15/2003 - - -
26.027 100.00% 09/15/2003 - - -
26.028 100.00% 09/15/2003 - - -
26.029 100.00% 09/15/2003 - - -
26.030 98.10% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.031 100.00% 09/15/2003 - - -
26.032 0.00% 09/15/2003 - - -
26.033 100.00% 09/15/2003 - - -
26.034 2,774 06/30/2004 86.52% 09/15/2003 - - -
26.035 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.036 55.69% 09/15/2003 - - -
26.037 76.62% 09/15/2003 - - -
26.038 100.00% 09/15/2003 - - -
26.039 100.00% 09/15/2003 - - -
26.040 90.72% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.041 100.00% 09/15/2003 - - -
26.042 75.48% 09/15/2003 - - -
26.043 93.44% 09/15/2003 - - -
26.044 900 07/31/2004 91.10% 09/15/2003 - - -
26.045 870 04/30/2005 78.49% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.046 100.00% 09/15/2003 - - -
26.047 100.00% 09/15/2003 - - -
26.048 100.00% 09/15/2003 - - -
26.049 86.63% 09/15/2003 - - -
26.050 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.051 100.00% 09/15/2003 - - -
26.052 100.00% 09/15/2003 - - -
26.053 100.00% 09/15/2003 - - -
26.054 100.00% 09/15/2003 - - -
26.055 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.056 100.00% 09/15/2003 - - -
26.057 100.00% 09/15/2003 - - -
26.058 100.00% 09/15/2003 - - -
26.059 67.27% 09/15/2003 - - -
26.060 73.03% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.061 100.00% 09/15/2003 - - -
26.062 97.41% 09/15/2003 - - -
26.063 1,056 08/31/2004 75.15% 09/15/2003 - - -
26.064 82.05% 09/15/2003 - - -
26.065 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.066 100.00% 09/15/2003 - - -
26.067 100.00% 09/15/2003 - - -
26.068 100.00% 09/15/2003 - - -
26.069 92.44% 09/15/2003 - - -
26.070 89.30% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.071 100.00% 09/15/2003 - - -
26.072 100.00% 09/15/2003 - - -
26.073 750 06/30/2004 94.10% 09/15/2003 - - -
26.074 100.00% 09/15/2003 - - -
26.075 92.24% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.076 60.19% 09/15/2003 - - -
26.077 2,729 06/30/2004 78.50% 09/15/2003 - - -
26.078 100.00% 09/15/2003 - - -
26.079 97.84% 09/15/2003 - - -
26.080 62.24% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.081 52.01% 09/15/2003 - - -
26.082 700 06/30/2004 81.57% 09/15/2003 - - -
26.083 100.00% 09/15/2003 - - -
26.084 100.00% 09/15/2003 - - -
26.085 500 06/30/2004 90.61% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.086 100.00% 09/15/2003 - - -
26.087 1,954 06/30/2004 97.54% 09/15/2003 - - -
26.088 100.00% 09/15/2003 - - -
26.089 100.00% 09/15/2003 - - -
26.090 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.091 1,419 10/31/2005 69.08% 09/15/2003 - - -
26.092 1,765 12/31/2005 87.98% 09/15/2003 - - -
26.093 100.00% 09/15/2003 - - -
26.094 100.00% 09/15/2003 - - -
26.095 66.83% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.096 100.00% 09/15/2003 - - -
26.097 100.00% 09/15/2003 - - -
26.098 80.87% 09/15/2003 - - -
26.099 98.48% 09/15/2003 - - -
26.100 943 08/31/2004 63.87% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.101 76.98% 09/15/2003 - - -
26.102 100.00% 09/15/2003 - - -
26.103 403 06/30/2004 46.61% 09/15/2003 - - -
26.104 360 05/31/2005 100.00% 09/15/2003 - - -
26.105 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.106 100.00% 09/15/2003 - - -
26.107 100.00% 09/15/2003 - - -
26.108 100.00% 09/15/2003 - - -
26.109 100.00% 09/15/2003 - - -
26.110 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.111 100.00% 09/15/2003 - - -
26.112 100.00% 09/15/2003 - - -
26.113 97.96% 09/15/2003 - - -
26.114 59.78% 09/15/2003 - - -
26.115 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.116 100.00% 09/15/2003 - - -
26.117 100.00% 09/15/2003 - - -
26.118 100.00% 09/15/2003 - - -
26.119 85.70% 09/15/2003 - - -
26.120 73.94% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.121 100.00% 09/15/2003 - - -
26.122 70.86% 09/15/2003 - - -
26.123 942 06/30/2004 86.71% 09/15/2003 - - -
26.124 58.46% 09/15/2003 - - -
26.125 73.10% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.126 74.82% 09/15/2003 - - -
26.127 100.00% 09/15/2003 - - -
26.128 100.00% 09/15/2003 - - -
26.129 91.36% 09/15/2003 - - -
26.130 95.70% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.131 100.00% 09/15/2003 - - -
26.132 1,625 01/31/2006 82.46% 09/15/2003 - - -
26.133 100.00% 09/15/2003 - - -
26.134 93.51% 09/15/2003 - - -
26.135 100.00% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.136 100.00% 09/15/2003 - - -
26.137 25.92% 09/15/2003 - - -
26.138 598 10/30/2005 59.24% 09/15/2003 - - -
26.139 48.76% 09/15/2003 - - -
26.140 660 06/30/2004 41.25% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.141 94.31% 09/15/2003 - - -
26.142 99.08% 09/15/2003 - - -
26.143 65.00% 09/15/2003 - - -
26.144 100.00% 09/15/2003 - - -
26.145 44.04% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
26.146 100.00% 09/15/2003 - - -
26.147 100.00% 09/15/2003 - - -
26.148 100.00% 09/15/2003 - - -
26.149 100.00% 09/15/2003 - - -
26.150 4,630 07/31/2004 95.17% 09/15/2003 - - -
- --------------------------------------------------------------------------------------------------------------------------------
27 92.31% 03/16/2004 - $3,900/month for
first five years
and $6,500/month
for last five years.
28 100.00% 01/06/2004 - 1,195 435,000
29 1,313 11/30/2006 99.28% 04/07/2004 198,495 5,514 -
30 96.09% 03/17/2004 - 5,333 -
31 95.56% 04/26/2004 - 6,563
- --------------------------------------------------------------------------------------------------------------------------------
32 10,610 10/31/2009 90.17% 05/19/2004 - -
33 92.18% 03/05/2004 - 4,913 -
34 95.80% 04/02/2004 - 2,979 -
35 3,000 10/30/2021 100.00% 03/26/2004 - 361 -
36 27,555 05/31/2009 94.94% 05/01/2004 - 2,121 275,000
- --------------------------------------------------------------------------------------------------------------------------------
36.1 17,304 02/28/2007 93.06% 05/01/2004
36.2 2,490 10/31/2012 100.00% 05/01/2004
37 70.59% 12/10/2003 - 1,695 -
38 100.00% 06/01/2004 - - -
39 96.97% 03/31/2004 16,512 - -
- --------------------------------------------------------------------------------------------------------------------------------
40 96.77% 01/13/2004 - -
41 95.59% 02/01/2004 - 2,856
42 100.00% 05/01/2004 - 1,143 -
43 98.39% 03/16/2004 - 2,584
44 77.20% 01/26/2004 - 6,550 -
- --------------------------------------------------------------------------------------------------------------------------------
45 4,846 06/30/2013 100.00% 03/18/2004 - 671 -
46 6,300 12/31/2004 100.00% 04/01/2004 - 818 -
47 95.56% 01/26/2004 - 938 -
48 77.10% 12/31/2003 - 1,077 -
49 2,750 06/15/2008 100.00% 03/30/2004 208
- --------------------------------------------------------------------------------------------------------------------------------
50 47.04% 02/03/2004 - -
51 94.86% 03/31/2004 - 1,785
52 95.83% 01/22/2004 - 1,500 -
53 98.75% 02/01/2004 - 780
54 15,000 06/30/2007 100.00% 03/01/2004 - 642 295,000
- --------------------------------------------------------------------------------------------------------------------------------
55 93.75% 03/16/2004 - 2,000
56 97.14% 02/29/2004 - 2,319
56.1 97.26% 02/29/2004
56.2 96.88% 02/29/2004
57 100.00% 06/01/2004 - -
- --------------------------------------------------------------------------------------------------------------------------------
58 100.00% 06/01/2004 - -
59 7,260 01/01/2009 97.13% 02/25/2004 - 698 400,000
60 89.00% 06/01/2004 - 3,417
61 9,898 12/31/2006 96.10% 04/01/2004 - -
62 100.00% 03/18/2004 - - -
- --------------------------------------------------------------------------------------------------------------------------------
63 100.00% 06/01/2004 - -
64 91.67% 01/14/2004 1,750
64.1 100.00% 01/14/2004
64.2 84.09% 01/14/2004
65 96.09% 03/01/2004 - 2,667
- --------------------------------------------------------------------------------------------------------------------------------
66 100.00% 06/01/2004 - -
67 3,566 02/28/2007 100.00% 01/30/2004 - 399 -
68 2,415 08/31/2008 84.78% 02/24/2004 - - -
69 100.00% 04/01/2004 - 734
70 100.00% 01/14/2004 - 875 100,000
- --------------------------------------------------------------------------------------------------------------------------------
71 100.00% 06/01/2004 173
72 98.85% 04/30/2004 - 1,841
72.1 98.28% 04/30/2004
72.2 100.00% 04/30/2004
73 3,180 05/31/2005 100.00% 03/25/2004 - 575 -
- --------------------------------------------------------------------------------------------------------------------------------
74 100.00% 06/01/2004 - -
75 100.00% 05/12/2004 - 489 -
76 92.19% 03/03/2004 - 1,067 -
77 100.00% 04/09/2004 - 165 75,000
78 1,442 12/18/2013 100.00% 04/01/2004 - 109 36,826
- --------------------------------------------------------------------------------------------------------------------------------
79 3,242 12/31/2007 100.00% 03/01/2004 - 723
80 98.33% 04/01/2004 - 1,250
81 96.89% 05/01/2004 804
82 91.67% 01/31/2004 - 2,994
83 100.00% 04/05/2004 - 101 -
- --------------------------------------------------------------------------------------------------------------------------------
84 2,000 12/31/2008 86.23% 02/01/2004 - 199 -
85 93.75% 03/16/2004 - 1,000
86 100.00% 01/01/2004 - 1,375
87 3,432 09/30/2006 100.00% 04/05/2004 - 312 50,000
88 93.98% Various - 696
- --------------------------------------------------------------------------------------------------------------------------------
88.1 98.31% 04/01/2004
88.2 91.59% 04/15/2004
89 100.00% 12/01/2003 - 296
90 2,550 02/04/2008 100.00% 03/30/2004 - 241
91 93.75% 03/02/2004 - 667
- --------------------------------------------------------------------------------------------------------------------------------
92 98.57% 01/01/2004 - 1,458
93 96.88% 03/01/2004 - 1,334
94 93.52% 03/26/2004 - 450
95 91.23% 03/01/2004 - 234
UPFRONT ENVIRONMENTAL
MONTHLY MONTHLY TAX MONTHLY INSURANCE ENGINEERING REPORT ENGINEERING APPRAISAL
ID TI/LC ESCROW ESCROW RESERVE DATE REPORT DATE AS-OF DATE (6)
- -----------------------------------------------------------------------------------------------------------------------------------
1 - - - - 05/07/2004 05/01/2004 03/31/2004
2 - - - - 02/04/2004 02/05/2004 10/01/2004
3 - - - - Various Various Various
3.01 - - - - 05/06/2004 Various 04/01/2004
3.02 - - - - 05/06/2004 Various 04/01/2004
- -----------------------------------------------------------------------------------------------------------------------------------
3.03 - - - - 05/06/2004 04/30/2004 04/01/2004
3.04 - - - - 05/06/2004 04/30/2004 04/01/2004
3.05 - - - - 04/28/2004 04/30/2004 04/01/2004
3.06 - - - - 05/06/2004 04/30/2004 04/01/2004
3.07 - - - - 05/06/2004 04/29/2004 04/03/2004
- -----------------------------------------------------------------------------------------------------------------------------------
3.08 - - - - 05/06/2004 04/29/2004 04/03/2004
3.09 - - - - 05/06/2004 04/30/2004 04/01/2004
3.10 - - - - 04/16/2004 04/16/2004 04/01/2004
Various Various Various
4 41,640 64,131 6,306 150,000 05/18/2004 05/18/2004 01/13/2004
- -----------------------------------------------------------------------------------------------------------------------------------
5 18,397 28,622 4,271 37,500 05/18/2004 05/18/2004 05/14/2004
6 12,467 16,818 2,701 178,856 03/04/2004 03/04/2004 02/19/2004
7 14,575 25,408 3,199 19,700 05/14/2004 05/14/2004 05/10/2004
8 15,308 8,364 2,030 40,325 05/19/2004 05/19/2004 05/11/2004
9 - - - 478,664 09/29/2003 09/25/2003 08/25/2003
- -----------------------------------------------------------------------------------------------------------------------------------
10 - 56,128 5,913 302,250 05/11/2004 05/05/2004 05/08/2004
11 30,000 636,127 31,566 - Various Various Various
11.1 04/23/2004 04/20/2004 04/15/2004
11.2 04/21/2004 04/23/2004 04/26/2004
11.3 04/21/2004 04/21/2004 04/26/2004
- -----------------------------------------------------------------------------------------------------------------------------------
11.4 04/21/2004 04/21/2004 04/26/2004
11.5 04/21/2004 04/22/2004 04/27/2004
12 30,000 45,527 12,667 - 01/30/2004 01/30/2004 01/21/2004
13 25,776 59,960 4,213 - 02/11/2004 02/12/2004 01/08/2004
14 44,904 21,194 10,852 6,250 04/12/2004 04/12/2004 04/02/2004
- -----------------------------------------------------------------------------------------------------------------------------------
15 27,393 57,502 8,796 - 04/26/2004 04/26/2004 05/17/2004
15.1 - - - - 04/26/2004 04/26/2004 05/17/2004
15.2 - - - - 04/26/2004 04/26/2004 05/17/2004
16 - 43,221 5,056 - 03/02/2004 03/02/2004 02/20/2004
17 - 70,100 10,818 - 03/15/2004 03/15/2004 03/04/2004
- -----------------------------------------------------------------------------------------------------------------------------------
18 - 20,871 5,535 65,625 03/30/2004 03/30/2004 Various
18.1 - - - - 03/30/2004 03/30/2004 03/22/2004
18.2 - - - - 03/30/2004 03/30/2004 03/23/2004
18.3 - - - - 03/30/2004 03/30/2004 03/22/2004
18.4 - - - - 03/30/2004 03/30/2004 03/23/2004
- -----------------------------------------------------------------------------------------------------------------------------------
18.5 - - - - 03/30/2004 03/30/2004 03/22/2004
1,627 23,914 11,067 28,125 04/12/2004 04/12/2004 03/26/2004
19 - 10,942 6,067 16,875 04/12/2004 04/12/2004 03/26/2004
20 - 7,750 3,758 10,000 04/12/2004 04/12/2004 03/26/2004
21 1,627 5,222 1,242 1,250 04/12/2004 04/12/2004 03/25/2004
- -----------------------------------------------------------------------------------------------------------------------------------
22 9,862 11,134 9,393 3,750 04/14/2004 04/15/2004 09/30/2005
23 24,124 43,234 4,800 41,313 03/16/2004 03/17/2004 03/17/2004
24 54,573 11,613 - 04/09/2004 05/01/2004 04/05/2004
25 - 10,148 - 15,000 01/12/2004 01/12/2004 01/03/2004
26 86,110 318,078 190,905 2,184,169 Various Various Various
- -----------------------------------------------------------------------------------------------------------------------------------
26.001 - - - - 06/06/2003 06/06/2003 05/01/2003
26.002 - - - - 06/06/2003 06/06/2003 05/02/2003
26.003 - - - - 06/03/2003 06/04/2003 05/01/2003
26.004 - - - - 06/03/2003 06/04/2003 05/01/2003
26.005 - - - - 06/06/2003 06/06/2003 06/01/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.006 - - - - 06/06/2003 06/06/2003 06/01/2003
26.007 - - - - 06/06/2003 06/06/2003 06/01/2003
26.008 - - - - 06/06/2003 06/06/2003 04/30/2003
26.009 - - - - 06/06/2003 06/06/2003 05/01/2003
26.010 - - - - 06/06/2003 06/06/2003 06/01/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.011 - - - - 06/06/2003 06/06/2003 06/01/2003
26.012 - - - - 06/06/2003 06/06/2003 05/01/2003
26.013 - - - - 06/06/2003 06/06/2003 06/01/2003
26.014 - - - - 06/06/2003 06/06/2003 06/01/2003
26.015 - - - - 06/06/2003 06/06/2003 04/30/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.016 - - - - 06/03/2003 06/04/2003 05/16/2003
26.017 - - - - 06/06/2003 06/06/2003 05/15/2003
26.018 - - - - 06/07/2003 06/04/2003 05/15/2003
26.019 - - - - 06/06/2003 06/06/2003 05/01/2003
26.020 - - - - 06/06/2003 06/06/2003 05/15/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.021 - - - - 06/03/2003 06/04/2003 05/15/2003
26.022 - - - - 06/06/2003 06/06/2003 05/07/2003
26.023 - - - - 06/06/2003 06/06/2003 05/07/2003
26.024 - - - - 06/06/2003 06/06/2003 05/15/2003
26.025 - - - - 06/06/2003 06/06/2003 05/01/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.026 - - - - 06/06/2003 06/06/2003 05/01/2003
26.027 - - - - 06/06/2003 06/06/2003 05/01/2003
26.028 - - - - 06/06/2003 06/06/2003 05/15/2003
26.029 - - - - 06/06/2003 06/06/2003 05/07/2003
26.030 - - - - 06/06/2003 06/06/2003 05/15/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.031 - - - - 06/06/2003 06/06/2003 05/08/2003
26.032 - - - - 06/06/2003 06/06/2003 05/07/2003
26.033 - - - - 06/06/2003 06/06/2003 05/09/2003
26.034 - - - - 06/06/2003 06/06/2003 05/21/2003
26.035 - - - - 06/06/2003 06/06/2003 05/07/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.036 - - - - 06/06/2003 06/06/2003 05/21/2003
26.037 - - - - 06/06/2003 06/06/2003 05/15/2003
26.038 - - - - 06/06/2003 06/06/2003 05/07/2003
26.039 - - - - 06/03/2003 06/04/2003 05/15/2003
26.040 - - - - 05/03/2003 06/04/2003 05/15/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.041 - - - - 06/06/2003 06/06/2003 05/15/2003
26.042 - - - - 05/03/2003 06/04/2003 05/15/2003
26.043 - - - - 06/06/2003 06/06/2003 05/09/2003
26.044 - - - - 05/03/2003 06/04/2003 05/22/2003
26.045 - - - - 06/06/2003 06/06/2003 05/07/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.046 - - - - 06/06/2003 06/06/2003 05/22/2003
26.047 - - - - 06/06/2003 06/06/2003 05/16/2003
26.048 - - - - 06/06/2003 06/06/2003 05/15/2003
26.049 - - - - 06/06/2003 06/06/2003 05/14/2003
26.050 - - - - 06/06/2003 06/06/2003 05/01/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.051 - - - - 06/06/2003 06/06/2003 05/01/2003
26.052 - - - - 06/03/2003 06/04/2003 05/14/2003
26.053 - - - - 05/03/2003 06/04/2003 05/12/2003
26.054 - - - - 06/06/2003 06/06/2003 05/21/2003
26.055 - - - - 05/03/2003 06/04/2003 05/12/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.056 - - - - 06/06/2003 06/06/2003 05/08/2003
26.057 - - - - 06/06/2003 06/06/2003 05/06/2003
26.058 - - - - 06/06/2003 06/06/2003 05/21/2003
26.059 - - - - 06/06/2003 06/06/2003 05/07/2003
26.060 - - - - 06/06/2003 06/06/2003 05/01/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.061 - - - - 06/06/2003 06/06/2003 05/05/2003
26.062 - - - - 06/06/2003 05/21/2003 05/16/2003
26.063 - - - - 06/03/2003 06/04/2003 05/19/2003
26.064 - - - - 06/03/2003 06/04/2003 05/15/2003
26.065 - - - - 05/03/2003 06/04/2003 05/15/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.066 - - - - 06/06/2003 06/06/2003 05/14/2003
26.067 - - - - 06/06/2003 06/06/2003 05/22/2003
26.068 - - - - 06/06/2003 06/06/2003 05/15/2003
26.069 - - - - 06/06/2003 06/06/2003 05/01/2003
26.070 - - - - 06/03/2003 06/04/2003 05/01/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.071 - - - - 06/06/2003 06/06/2003 05/21/2003
26.072 - - - - 06/06/2003 06/06/2003 05/12/2003
26.073 - - - - 05/03/2003 06/04/2003 05/13/2003
26.074 - - - - 06/06/2003 06/06/2003 05/15/2003
26.075 - - - - 06/03/2003 06/04/2003 05/20/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.076 - - - - 06/03/2003 06/04/2003 05/15/2003
26.077 - - - - 06/03/2003 06/04/2003 05/28/2003
26.078 - - - - 06/06/2003 06/06/2003 05/06/2003
26.079 - - - - 06/03/2003 06/04/2003 05/15/2003
26.080 - - - - 06/03/2003 06/04/2003 05/19/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.081 - - - - 06/03/2003 06/04/2003 05/27/2003
26.082 - - - - 05/03/2003 06/04/2003 04/29/2003
26.083 - - - - 05/03/2003 06/04/2003 05/14/2003
26.084 - - - - 06/03/2003 06/04/2003 05/13/2003
26.085 - - - - 06/03/2003 06/04/2003 05/15/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.086 - - - - 05/03/2003 06/04/2003 05/13/2003
26.087 - - - - 05/03/2003 06/04/2003 05/13/2003
26.088 - - - - 06/06/2003 06/06/2003 05/05/2003
26.089 - - - - 06/06/2003 06/06/2003 05/16/2003
26.090 - - - - 06/06/2003 06/06/2003 05/12/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.091 - - - - 05/03/2003 06/04/2003 05/11/2003
26.092 - - - - 05/03/2003 06/04/2003 05/10/2003
26.093 - - - - 06/06/2003 06/06/2003 05/13/2003
26.094 - - - - 06/06/2003 06/06/2003 05/08/2003
26.095 - - - - 05/03/2003 06/04/2003 05/19/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.096 - - - - 06/06/2003 06/06/2003 05/16/2003
26.097 - - - - 06/03/2003 06/04/2003 05/15/2003
26.098 - - - - 05/03/2003 06/04/2003 05/17/2003
26.099 - - - - 06/06/2003 06/06/2003 05/15/2003
26.100 - - - - 05/03/2003 06/04/2003 05/05/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.101 - - - - 05/03/2003 06/04/2003 05/27/2003
26.102 - - - - 05/03/2003 06/04/2003 05/15/2003
26.103 - - - - 06/03/2003 06/04/2003 05/19/2003
26.104 - - - - 06/03/2003 06/04/2003 05/16/2003
26.105 - - - - 06/06/2003 06/06/2003 05/13/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.106 - - - - 06/06/2003 06/06/2003 05/15/2003
26.107 - - - - 06/06/2003 06/06/2003 05/14/2003
26.108 - - - - 06/06/2003 06/06/2003 05/12/2003
26.109 - - - - 06/06/2003 06/06/2003 05/01/2003
26.110 - - - - 05/03/2003 06/04/2003 05/14/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.111 - - - - 06/06/2003 06/06/2003 05/16/2003
26.112 - - - - 06/06/2003 06/06/2003 05/15/2003
26.113 - - - - 05/03/2003 06/04/2003 05/26/2003
26.114 - - - - 06/03/2003 06/04/2003 05/29/2003
26.115 - - - - 06/03/2003 06/04/2003 05/12/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.116 - - - - 06/03/2003 06/04/2003 05/26/2003
26.117 - - - - 06/06/2003 06/06/2003 05/15/2003
26.118 - - - - 06/06/2003 06/06/2003 05/07/2003
26.119 - - - - 05/03/2003 06/04/2003 05/20/2003
26.120 - - - - 05/03/2003 06/04/2003 05/20/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.121 - - - - 06/03/2003 06/04/2003 05/12/2003
26.122 - - - - 05/03/2003 06/04/2003 05/19/2003
26.123 - - - - 06/03/2003 06/04/2003 05/15/2003
26.124 - - - - 05/03/2003 06/04/2003 05/05/2003
26.125 - - - - 05/03/2003 06/04/2003 05/15/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.126 - - - - 06/03/2003 06/04/2003 05/19/2003
26.127 - - - - 06/06/2003 06/06/2003 05/16/2003
26.128 - - - - 06/06/2003 06/06/2003 05/16/2003
26.129 - - - - 06/03/2003 06/04/2003 05/12/2003
26.130 - - - - 06/03/2003 06/04/2003 05/13/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.131 - - - - 06/03/2003 06/04/2003 05/22/2003
26.132 - - - - 06/06/2003 06/06/2003 05/15/2003
26.133 - - - - 06/03/2003 06/04/2003 05/19/2003
26.134 - - - - 05/03/2003 06/04/2003 05/13/2003
26.135 - - - - 06/06/2003 06/06/2003 05/14/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.136 - - - - 05/03/2003 06/02/2003 05/27/2003
26.137 - - - - 06/03/2003 06/04/2003 06/01/2003
26.138 - - - - 06/03/2003 06/04/2003 05/28/2003
26.139 - - - - 05/03/2003 06/04/2003 05/15/2003
26.140 - - - - 06/03/2003 06/04/2003 06/02/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.141 - - - - 06/03/2003 06/04/2003 05/19/2003
26.142 - - - - 06/06/2003 06/06/2003 05/01/2003
26.143 - - - - 06/06/2003 06/06/2003 05/21/2003
26.144 - - - - 06/06/2003 06/06/2003 05/15/2003
26.145 - - - - 06/06/2003 06/06/2003 05/07/2003
- -----------------------------------------------------------------------------------------------------------------------------------
26.146 - - - - 05/03/2003 06/04/2003 05/20/2003
26.147 - - - - 05/03/2003 06/04/2003 05/20/2003
26.148 - - - - 05/03/2003 06/04/2003 05/01/2003
26.149 - - - - 06/03/2003 06/04/2003 05/19/2003
26.150 - - - - 05/03/2003 06/04/2003 05/14/2003
- -----------------------------------------------------------------------------------------------------------------------------------
27 - 45,614 10,657 - 04/21/2004 04/13/2004 03/24/2004
28 19,500 15,726 1,832 - 04/23/2004 04/23/2004 04/22/2004
29 2,502 62,233 6,415 75,313 02/03/2004 02/04/2004 01/23/2004
30 - 37,375 5,856 - 04/21/2004 04/13/2004 04/01/2004
31 30,351 5,824 - 04/09/2004 05/01/2004 04/05/2004
- -----------------------------------------------------------------------------------------------------------------------------------
32 - - - 04/23/2004 04/23/2004 04/30/2004
33 - 5,252 2,519 1,250 02/27/2004 02/27/2004 02/25/2004
34 - 7,803 2,705 - 04/14/2004 05/13/2004 03/25/2004
35 1,169 7,807 918 3,375 04/23/2004 04/23/2004 04/22/2004
36 9,932 13,479 2,054 45,000 Various Various 04/02/2004
- -----------------------------------------------------------------------------------------------------------------------------------
36.1 04/13/2004 04/13/2004 04/02/2004
36.2 04/12/2004 04/13/2004 04/02/2004
37 1,451 8,455 4,272 5,625 11/20/2003 12/05/2003 11/07/2003
38 - - - - 04/28/2004 04/26/2004 [Pending]
39 - 14,529 - 6,250 03/25/2004 03/26/2004 03/16/2004
- -----------------------------------------------------------------------------------------------------------------------------------
40 - - - 01/28/2004 12/30/2003 01/13/2004
41 7,788 2,340 2,500 03/01/2004 02/27/2004 02/19/2004
42 - 14,285 350 - 03/30/2004 03/25/2004 03/08/2004
43 6,032 1,811 1,036,250 03/01/2004 03/01/2004 02/18/2004
44 - 11,557 5,425 - 02/09/2004 01/28/2004 02/01/2004
- -----------------------------------------------------------------------------------------------------------------------------------
45 3,333 6,345 438 - 03/02/2004 02/23/2004 05/01/2004
46 - 12,300 1,508 - 03/15/2004 03/15/2004 03/22/2004
47 - 3,715 1,776 - 02/17/2004 02/28/2004 02/04/2004
48 - 16,082 - - 03/02/2004 02/20/2004 03/02/2004
49 5,386 832 - 02/27/2004 02/27/2004 05/01/2004
- -----------------------------------------------------------------------------------------------------------------------------------
50 - - - 12/22/2003 12/10/2003 02/03/2004
51 - - 5,475 05/11/2004 03/26/2004 04/15/2004
52 - 3,772 3,281 1,875 01/09/2004 01/09/2004 01/12/2004
53 - - 31,000 01/12/2004 12/31/2003 01/16/2004
54 1,667 6,738 1,625 - 04/27/2004 04/27/2004 04/20/2004
- -----------------------------------------------------------------------------------------------------------------------------------
55 5,030 1,308 19,406 03/01/2004 03/01/2004 02/18/2004
56 10,986 1,451 - 03/23/2004 03/23/2004 01/28/2004
56.1 03/23/2004 03/23/2004 01/28/2004
56.2 03/23/2004 03/23/2004 01/28/2004
57 - - - 04/15/2004 04/15/2004 04/20/2004
- -----------------------------------------------------------------------------------------------------------------------------------
58 - - - 04/15/2004 04/15/2004 04/20/2004
59 2,033 7,284 - 5,375 01/08/2004 01/08/2004 12/03/2003
60 11,028 2,251 41,250 4/31/2004 04/13/2004 04/15/2004
61 12,230 2,684 6,313 03/08/2004 03/05/2004 03/01/2004
62 - - - - 03/24/2004 03/24/2004 03/18/2004
- -----------------------------------------------------------------------------------------------------------------------------------
63 - - - 05/04/2004 05/04/2004 04/26/2004
64 5,520 1,894 5,813 01/05/2004 01/05/2004 12/17/2003
64.1 01/05/2004 01/05/2004 12/17/2003
64.2 01/05/2004 12/17/2003
65 3,142 2,986 - 03/05/2004 03/05/2004 02/27/2004
- -----------------------------------------------------------------------------------------------------------------------------------
66 - - - 03/10/2004 03/10/2004 02/26/2004
67 666 4,687 378 - 03/24/2004 03/24/2004 03/06/2004
68 1,667 4,177 515 - 04/23/2004 04/16/2004 05/04/2004
69 5,821 1,170 - 02/16/2004 02/16/2004 03/11/2004
70 2,107 488 - 02/11/2004 02/11/2004 02/09/2004
- -----------------------------------------------------------------------------------------------------------------------------------
71 576 - 07/17/2003 07/17/2003 07/18/2003
72 2,227 1,387 15,125 02/27/2004 02/27/2004 02/18/2004
72.1 02/27/2004 02/27/2004 02/18/2004
72.2 02/27/2004 02/27/2004 02/18/2004
73 1,250 3,173 612 - 12/01/2003 12/03/2003
- -----------------------------------------------------------------------------------------------------------------------------------
74 - - - 04/05/2004 04/05/2004 04/08/2004
75 587 - - - 04/09/2004 04/26/2004 04/07/2004
76 - 3,054 743 750 02/05/2004 02/05/2004 01/30/2004
77 818 1,357 188 - 04/16/2004 04/23/2004 08/01/2004
78 816 1,316 249 - 04/30/2004 04/30/2004 04/14/2004
- -----------------------------------------------------------------------------------------------------------------------------------
79 1,266 5,522 902 5,750 04/07/2004 04/26/2004 03/29/2004
80 2,876 895 - 03/25/2004 03/25/2004 03/18/2004
81 3,150 66 63,200 03/10/2004 03/10/2004 03/05/2004
82 4,634 2,720 21,875 03/26/2004 03/26/2004 04/05/2004
83 1,000 3,310 403 - 04/12/2004 04/01/2004 04/02/2004
- -----------------------------------------------------------------------------------------------------------------------------------
84 1,233 1,659 196 - 01/07/2003 01/06/2004 10/16/2003
85 1,175 1,096 15,000 03/02/2004 03/02/2004 02/20/2004
86 4,157 498 - 04/30/2004 4/30/2004 2/25/2004
87 1,819 1,794 361 - 04/05/2004 4/5/2004 4/21/2004
88 - 1,119 720 29,173 Various Various 4/9/2004
- -----------------------------------------------------------------------------------------------------------------------------------
88.1 04/14/2004 4/14/2004 4/9/2004
88.2 04/15/2004 4/15/2004 4/9/2004
89 2,436 845 - 02/16/2004 2/16/2004 2/10/2004
90 1,287 1,268 630 - 03/11/2004 3/11/2004 3/23/2004
91 3,899 717 - 04/09/2004 5/1/2004 4/5/2004
- -----------------------------------------------------------------------------------------------------------------------------------
92 3,128 839 6,450 03/24/2004 3/24/2004 3/26/2004
93 1,577 1,836 - 03/22/2004 3/22/2004 2/18/2004
94 2,608 886 - 04/06/2004 4/6/2004 4/1/2004
95 83 213 - 04/02/2004 4/2/2004 2/19/2004
ID SPONSOR
- -----------------------------------------------------------------------------------------
1 Westfield America, Inc., Aldwych, LLC, Old Kingsway, LP
2 Alexander's Inc.
3 DDR Macquarie GACC Holdings LLC
3.01 DDR Macquarie GACC Holdings LLC
3.02 DDR Macquarie GACC Holdings LLC
- -----------------------------------------------------------------------------------------
3.03 DDR Macquarie GACC Holdings LLC
3.04 DDR Macquarie GACC Holdings LLC
3.05 DDR Macquarie GACC Holdings LLC
3.06 DDR Macquarie GACC Holdings LLC
3.07 DDR Macquarie GACC Holdings LLC
- -----------------------------------------------------------------------------------------
3.08 DDR Macquarie GACC Holdings LLC
3.09 DDR Macquarie GACC Holdings LLC
3.10 DDR Macquarie GACC Holdings LLC
G REIT, Inc.
4 G REIT, Inc.
- -----------------------------------------------------------------------------------------
5 G REIT, Inc.
6 G REIT, Inc.
7 G REIT, Inc.
8 G REIT, Inc.
9 Wilmorite Properties, Inc. and Alaska Permanent Fund Corporation
- -----------------------------------------------------------------------------------------
10 Albert J. Dwoskin
11 Donald A. Levine, Lewis Heafitz, Neal Shalom
11.1
11.2
11.3
- -----------------------------------------------------------------------------------------
11.4
11.5
12 Isaac Hertz, Sarah Hertz, William Z. Hertz
13 Massoud Yashouafar, Solymon Yashouafar
14 American Financial Realty Trust
- -----------------------------------------------------------------------------------------
15 Mark Elgin
15.1 Mark Elgin
15.2 Mark Elgin
16 Robert M. Behringer
17 D. Richard Rothman
- -----------------------------------------------------------------------------------------
18 Joel Wiener
18.1 Joel Wiener
18.2 Joel Wiener
18.3 Joel Wiener
18.4 Joel Wiener
- -----------------------------------------------------------------------------------------
18.5 Joel Wiener
Ezra Beyman
19 Ezra Beyman
20 Ezra Beyman
21 Ezra Beyman
- -----------------------------------------------------------------------------------------
22 Michael Pashaie
23 Abraham Lesser
24 Michael L. Joseph
25 Joseph D.Morris, Robert Morris
26 American Financial Realty Trust
- -----------------------------------------------------------------------------------------
26.001
26.002
26.003
26.004
26.005
- -----------------------------------------------------------------------------------------
26.006
26.007
26.008
26.009
26.010
- -----------------------------------------------------------------------------------------
26.011
26.012
26.013
26.014
26.015
- -----------------------------------------------------------------------------------------
26.016
26.017
26.018
26.019
26.020
- -----------------------------------------------------------------------------------------
26.021
26.022
26.023
26.024
26.025
- -----------------------------------------------------------------------------------------
26.026
26.027
26.028
26.029
26.030
- -----------------------------------------------------------------------------------------
26.031
26.032
26.033
26.034
26.035
- -----------------------------------------------------------------------------------------
26.036
26.037
26.038
26.039
26.040
- -----------------------------------------------------------------------------------------
26.041
26.042
26.043
26.044
26.045
- -----------------------------------------------------------------------------------------
26.046
26.047
26.048
26.049
26.050
- -----------------------------------------------------------------------------------------
26.051
26.052
26.053
26.054
26.055
- -----------------------------------------------------------------------------------------
26.056
26.057
26.058
26.059
26.060
- -----------------------------------------------------------------------------------------
26.061
26.062
26.063
26.064
26.065
- -----------------------------------------------------------------------------------------
26.066
26.067
26.068
26.069
26.070
- -----------------------------------------------------------------------------------------
26.071
26.072
26.073
26.074
26.075
- -----------------------------------------------------------------------------------------
26.076
26.077
26.078
26.079
26.080
- -----------------------------------------------------------------------------------------
26.081
26.082
26.083
26.084
26.085
- -----------------------------------------------------------------------------------------
26.086
26.087
26.088
26.089
26.090
- -----------------------------------------------------------------------------------------
26.091
26.092
26.093
26.094
26.095
- -----------------------------------------------------------------------------------------
26.096
26.097
26.098
26.099
26.100
- -----------------------------------------------------------------------------------------
26.101
26.102
26.103
26.104
26.105
- -----------------------------------------------------------------------------------------
26.106
26.107
26.108
26.109
26.110
- -----------------------------------------------------------------------------------------
26.111
26.112
26.113
26.114
26.115
- -----------------------------------------------------------------------------------------
26.116
26.117
26.118
26.119
26.120
- -----------------------------------------------------------------------------------------
26.121
26.122
26.123
26.124
26.125
- -----------------------------------------------------------------------------------------
26.126
26.127
26.128
26.129
26.130
- -----------------------------------------------------------------------------------------
26.131
26.132
26.133
26.134
26.135
- -----------------------------------------------------------------------------------------
26.136
26.137
26.138
26.139
26.140
- -----------------------------------------------------------------------------------------
26.141
26.142
26.143
26.144
26.145
- -----------------------------------------------------------------------------------------
26.146
26.147
26.148
26.149
26.150
- -----------------------------------------------------------------------------------------
27 Joseph Mandlebaum and Timothy Harris
28 Stephen A.Goldberg
29 Alfred Sabetfard; Edward Sabetfard
30 Michael B. Smuck
31 Michael L. Joseph
- -----------------------------------------------------------------------------------------
32 Rao R Yalamanchilli
33 R. Ryan Holmes, Ronald Holmes, Edward Gray Murray, Nicholas Burke
34 Robert H. Ko and Nancy M. Ko
35 John A. Bonutto, Harry Woloson
36 Harold J. Brooks
- -----------------------------------------------------------------------------------------
36.1
36.2
37 Eli Ungar, David H. Gefsky
38 Wilson CPS, LLC and Wolverine Equities Company 98C L.P.
39 Suresh Sachdev
- -----------------------------------------------------------------------------------------
40 MHC Operating Limited Partnership
41 Ike W. Thrash
42 David T. Reesor, Timothy L. Grant, Edwin H. Grant and Garry A. Jestadt
43 Nathan S. Collier
44 Michael Schuminsky
- -----------------------------------------------------------------------------------------
45 Brian C. Burke, Sr., Dannie G. Burke and Wesley J. Cantrall
46 Constantine F. Alexakos and Kambiz Shahbazi
47 MKD Investments, L.P. and Gregory A. Fowler Living Trust U/T/A April 27, 1995
48 Michael Lackland and Bruce Lackland
49 Mark Draper, Brett Del Valle
- -----------------------------------------------------------------------------------------
50 MHC Operating Limited Partnership
51 MHC Operating Limited Partnership
52 Prestwyck Management LLC, Barry A.R.Cunningham and Ryan E.M.Cunningham
53 MHC Operating Limited Partnership
54 Vincent O'Neill
- -----------------------------------------------------------------------------------------
55 Nathan S. Collier
56 Michael L. Carnahan
56.1
56.2
57 Angelo R Giudice
- -----------------------------------------------------------------------------------------
58 Angelo R Giudice
59 Phillips Edison Ltd.
60 David T. Phillips, David R. Shea
61 Lee B. Marden
62 Mary R. Renfro & Ernest C. Euler
- -----------------------------------------------------------------------------------------
63 Walker Smith
64 Carmelo Crisafulli, Jr., a.k.a. Carmelo Crisafulli, Helen Crisafulli
64.1
64.2
65 Ayubkhan B. Telwar, Fatima K. Telwar, Tamay Ozari
- -----------------------------------------------------------------------------------------
66 Marvin Gelber, Carolyn Lasky
67 Larry Litwin
68 Timothy H. Lehning
69 John M. Volmary, Lisa A. Volmary
70 Jan P. Perfater, Jennifer L. Price-Davis
- -----------------------------------------------------------------------------------------
71 Bernard J. Haddigan
72 Ike W. Thrash
72.1
72.2
73 Joseph Schrieber and Catherine Schrieber
- -----------------------------------------------------------------------------------------
74 Patrick J.W. Chiang, Lee Sen Chiang
75 Robert L. Avery, Ma'an A. Nasir, Arun Patel
76 Ralph C. Tucker, Jr.
77 Steven S.Gittelman and Patrick N.Hill
78 Najib H. Samona, Harvey C. Weiss
- -----------------------------------------------------------------------------------------
79 Michael J. Glass, M.D.
80 Minoru Uchimura
81 Edsel G. Jones, Donald W. Jones
82 Frank F. Ghertner
83 David M. Minck and Philip R. Berry
- -----------------------------------------------------------------------------------------
84 Robert F. Buie
85 Tyler B. Morris, Michael L. Freeman
86 Harlin J. Wall
87 James H. Carstensen, Gary Heidenreich
88 James W. McCartney V
- -----------------------------------------------------------------------------------------
88.1
88.2
89 Hugh Stewart, Alex G. Stewart
90 Albion B. Debree
91 Michael L. Joseph
- -----------------------------------------------------------------------------------------
92 Minoru Uchimura
93 Robert T. Singleton
94 Lamont Garber
95 Brian R. Macey
COMM 2004-LNB3
ANNEX A-2 - CERTAIN CHARACTERISTICS OF THE MULTIFAMILY AND MANUFACTURED
HOUSING LOANS
% OF MORTGAGE CUT-OFF
INITIAL POOL # OF LOAN DATE
ID PROPERTY NAME BALANCE PROPERTIES SELLER (1) BALANCE
- ---------------------------------------------------------------------------------------------------------------------------------
17 Alexan Mira Vista 2.58% 1 GACC 34,500,000
18 Wiener Portfolio VII (2) 2.33% 5 GACC 31,275,000
18.1 25-35 Hillside Avenue 0.75% 1 GACC 10,045,671
18.2 2 West 120th Street 0.57% 1 GACC 7,651,976
18.3 281-295 Wadsworth Avenue 0.40% 1 GACC 5,336,763
- ---------------------------------------------------------------------------------------------------------------------------------
18.4 509 West 155th Street 0.31% 1 GACC 4,159,536
18.5 34-44 Seaman Avenue 0.30% 1 GACC 4,081,054
Beyman Crossed Rollup 1.87% 3 GACC 25,100,000
19 Wedgewood Park 0.38% 1 GACC 5,140,000
20 Windover Goldenpoint 0.63% 1 GACC 8,480,000
- ---------------------------------------------------------------------------------------------------------------------------------
21 Windover of Melbourne 0.86% 1 GACC 11,480,000
24 Williamstowne Apartments 1.70% 1 LaSalle 22,760,000
27 Southwind Apartments 1.30% 1 PNC 17,400,000
30 Briar Meadows Apartment Homes 1.12% 1 PNC 15,050,000
31 Garden Village Apartments 1.04% 1 LaSalle 13,960,000
- ---------------------------------------------------------------------------------------------------------------------------------
33 University Courtyard Valdosta 0.78% 1 GACC 10,400,000
34 Vista Via Apartments 0.69% 1 PNC 9,225,000
37 Cornell Street Apartments 0.63% 1 LaSalle 8,410,641
39 530 West 47th Street 0.50% 1 GACC 6,725,000
40 Waterway MHP & RV 0.47% 1 LaSalle 6,262,493
- ---------------------------------------------------------------------------------------------------------------------------------
41 Christy Estates Apartments 0.46% 1 PNC 6,138,654
43 Elm Grove Apartments 0.46% 1 LaSalle 6,188,143
44 The Garden Apartments 0.46% 1 LaSalle 6,155,381
47 Artist Loft Apartments 0.42% 1 PNC 5,637,390
50 O'Connell's RV Resort 0.37% 1 LaSalle 4,985,589
- ---------------------------------------------------------------------------------------------------------------------------------
51 Cactus Gardens MHP & RV 0.36% 1 LaSalle 4,880,000
52 Broadway Place 0.34% 1 GACC 4,586,818
53 Shangri-La MHP 0.34% 1 LaSalle 4,522,358
55 Pinetree Garden Apartments 0.32% 1 LaSalle 4,327,186
- ---------------------------------------------------------------------------------------------------------------------------------
56 Congress and Erin Way Apartments (2) 0.32% 2 LaSalle 4,295,798
56.1 Congress Apartments 0.22% 1 LaSalle 2,986,602
56.2 Erin Way Apartments 0.10% 1 LaSalle 1,309,196
60 Penbrook Apartments 0.29% 1 LaSalle 3,900,000
64 Maple Manor / Glenmont Manor Apartment Portfolio (2) 0.27% 2 LaSalle 3,645,427
- ---------------------------------------------------------------------------------------------------------------------------------
64.1 Maple Manor Apartments 0.13% 1 LaSalle 1,735,917
64.2 Glenmont Manor Apartments 0.14% 1 LaSalle 1,909,509
65 Lake Forest Apartments 0.27% 1 LaSalle 3,596,881
69 Alpine Meadows Townhomes 0.25% 1 LaSalle 3,295,112
70 Collegiate Court Apartments 0.24% 1 LaSalle 3,196,019
- ---------------------------------------------------------------------------------------------------------------------------------
72 Courtyard & Seaside Apartments (2) 0.21% 2 LaSalle 2,797,555
72.1 Courtyard Apartments 0.14% 1 LaSalle 1,865,037
72.2 Seaside Apartments 0.07% 1 LaSalle 932,518
76 Melbourne Park Apartments 0.18% 1 GACC 2,437,586
- ---------------------------------------------------------------------------------------------------------------------------------
80 Winslow Arms Apartments 0.17% 1 LaSalle 2,257,000
81 Alta Loma Apartments 0.16% 1 LaSalle 2,200,000
82 Oak Creek MHC 0.16% 1 LaSalle 2,100,000
85 Stony Creek Apartments 0.13% 1 LaSalle 1,796,286
86 Governor's Gate Apartments 0.13% 1 LaSalle 1,760,000
- ---------------------------------------------------------------------------------------------------------------------------------
88 Crosby & Meadowlark MHP (2) 0.13% 2 LaSalle 1,700,000
88.1 Crosby MHP 0.05% 1 LaSalle 604,217
88.2 Meadowlark MHP 0.08% 1 LaSalle 1,095,783
89 Oak Bend MHP 0.12% 1 LaSalle 1,646,447
91 Fairway Apartments 0.11% 1 LaSalle 1,480,000
- ---------------------------------------------------------------------------------------------------------------------------------
92 South Sound Villa Apartments 0.11% 1 LaSalle 1,472,000
93 Jacobs Crossing Apartments 0.10% 1 LaSalle 1,322,911
94 A Better Place MHC 0.09% 1 LaSalle 1,200,000
95 Mountain Shadows MHC 0.07% 1 LaSalle 998,111
GENERAL DETAILED
PROPERTY PROPERTY
ID TYPE TYPE ADDRESS
- ---------------------------------------------------------------------------------------------------------------------------
17 Multifamily Conventional 401 Little Texas Lane
18 Multifamily Conventional Various
18.1 Multifamily Conventional 25-35 Hillside Avenue
18.2 Multifamily Conventional 2 West 120th Street
18.3 Multifamily Conventional 281-295 Wadsworth Avenue
- ---------------------------------------------------------------------------------------------------------------------------
18.4 Multifamily Conventional 509 West 155th Street
18.5 Multifamily Conventional 34-44 Seaman Avenue
Multifamily Conventional Various
19 Multifamily Conventional 4355 Corporate Avenue
20 Multifamily Conventional 2255 Friday Court
- ---------------------------------------------------------------------------------------------------------------------------
21 Multifamily Conventional 2255 Kingly Court
24 Multifamily Conventional 2940 William Street
27 Multifamily Conventional 9720 Broadway
30 Multifamily Conventional 1414 South Dairy Ashford
31 Multifamily Conventional 70 Garden Village Drive
- ---------------------------------------------------------------------------------------------------------------------------
33 Multifamily Student / Military Housing 480 Murray Road
34 Multifamily Conventional 1390-1430 W. Foothill Boulevard
37 Multifamily Conventional 5493, 5500 & 5508 South Cornell Avenue
39 Multifamily Conventional 530 West 47th Street
40 Manufactured Housing Manufactured Housing 850 Cedar Point Boulevard
- ---------------------------------------------------------------------------------------------------------------------------
41 Multifamily Conventional/Extended Stay Hotel 3942 Holly Road
43 Multifamily Conventional 2921 Sycamore Springs Drive
44 Multifamily Conventional 75 SW 75th Street
47 Multifamily Conventional 900 East 1st Street
50 Manufactured Housing Manufactured Housing 970 Green Wing Road
- ---------------------------------------------------------------------------------------------------------------------------
51 Manufactured Housing Manufactured Housing 10657 South Avenue 9 East
52 Multifamily Conventional 1500 Coastal Lane
53 Manufactured Housing Manufactured Housing 249 Jasper Street Northwest
55 Multifamily Conventional 4100 Southwest 20th Avenue
- ---------------------------------------------------------------------------------------------------------------------------
56 Multifamily Conventional Various
56.1 Multifamily Conventional 3939 West National Avenue
56.2 Multifamily Conventional 5946 South Honey Creek Drive
60 Multifamily Conventional 7227 US 290 East
64 Multifamily Conventional Various
- ---------------------------------------------------------------------------------------------------------------------------
64.1 Multifamily Conventional 101 Cherry Avenue
64.2 Multifamily Conventional 371 Route 9W
65 Multifamily Conventional 500 Jackson Street
69 Multifamily Conventional 1001-1087 West Menk Drive
70 Multifamily Conventional 100-106 Collegiate Court
- ---------------------------------------------------------------------------------------------------------------------------
72 Multifamily Conventional Various
72.1 Multifamily Conventional 133 Debuys Road
72.2 Multifamily Conventional 224 17th Street
76 Multifamily Conventional 1601 Melbourne Drive
- ---------------------------------------------------------------------------------------------------------------------------
80 Multifamily Conventional 220 Parfitt Way Southwest
81 Multifamily Conventional 1598 Crestview Drive
82 Manufactured Housing Manufactured Housing 3550 Rock Prairie Road West
85 Multifamily Conventional 100 Wheeless Drive
86 Multifamily Conventional 405 Governors Park Road
- ---------------------------------------------------------------------------------------------------------------------------
88 Manufactured Housing Manufactured Housing Various
88.1 Manufactured Housing Manufactured Housing 2929 Highway 90
88.2 Manufactured Housing Manufactured Housing 3001 8th Street
89 Manufactured Housing Manufactured Housing 14818 Shark Street
91 Multifamily Conventional 2410 Colvin Boulevard
- ---------------------------------------------------------------------------------------------------------------------------
92 Multifamily Conventional 4101 Lacey Boulevard Southeast
93 Multifamily Conventional 28 Jacobs Crossing Drive
94 Manufactured Housing Manufactured Housing 1305 Nature's Woods Boulevard
95 Manufactured Housing Manufactured Housing 8080 State Highway 78 West
NET LOAN PER NET
RENTABLE RENTABLE AREA
ID CITY COUNTY STATE ZIP CODE UNITS/PADS UNITS/PADS
- ---------------------------------------------------------------------------------------------------------------------------------
17 Austin Travis TX 78745 528 Units
18 New York New York NY Various 446 Units
18.1 New York New York NY 10040 142 Units
18.2 New York New York NY 10027 106 Units
18.3 New York New York NY 10040 84 Units
- ---------------------------------------------------------------------------------------------------------------------------------
18.4 New York New York NY 10032 54 Units
18.5 New York New York NY 10034 60 Units
Various Various FL Various 538 Units
19 Lakeland Polk FL 33809 90 Units
20 Melbourne Brevard FL 32904 188 Units
- ---------------------------------------------------------------------------------------------------------------------------------
21 Melbourne Brevard FL 32904 260 Units
24 Cheektowaga Erie NY 14227 528 Units
27 Pearland Brazoria TX 77584 312 Units
30 Houston Harris TX 77077 256 Units
31 Cheektowaga Erie NY 14227 315 Units
- ---------------------------------------------------------------------------------------------------------------------------------
33 Valdosta Lowndes GA 31602 131 Units
34 Upland San Bernardino CA 91786 143 Units
37 Chicago Cook IL 60637 68 Units
39 New York New York NY 10036 33 Units
40 Cedar Point Carteret NC 28584 341 Pads
- ---------------------------------------------------------------------------------------------------------------------------------
41 Corpus Christi Nueces TX 78415 259 Units
43 Kingwood Harris TX 77339 136 Units
44 Gainesville Alachua FL 32605 124 Units
47 Los Angeles Los Angeles CA 90012 45 Units
50 Amboy Lee IL 61310 693 Pads
- ---------------------------------------------------------------------------------------------------------------------------------
51 Yuma Yuma AZ 85365 428 Pads
52 Myrtle Beach Horry SC 29577 72 Units
53 Largo Pinellas FL 33770 160 Pads
55 Gainesville Alachua FL 32607 96 Units
- ---------------------------------------------------------------------------------------------------------------------------------
56 Various Milwaukee WI Various 105 Units
56.1 West Milwaukee Milwaukee WI 53215 73 Units
56.2 Greenfield Milwaukee WI 53221 32 Units
60 Austin Travis TX 78723 163 Units
64 Various Albany NY Various 84 Units
- ---------------------------------------------------------------------------------------------------------------------------------
64.1 Delmar Albany NY 12054 40 Units
64.2 Glenmont Albany NY 12077 44 Units
65 Daphne Baldwin AL 36526 128 Units
69 St. Peter Nicollet MN 56082 44 Units
70 Blacksburg Montgomery VA 24060 30 Units
- ---------------------------------------------------------------------------------------------------------------------------------
72 Gulfport Harrison MS 39507 87 Units
72.1 Gulfport Harrison MS 39507 58 Units
72.2 Gulfport Harrison MS 39507 29 Units
76 Greenville Pitt NC 27858 64 Units
- ---------------------------------------------------------------------------------------------------------------------------------
80 Bainbridge Island Kitsap WA 98110 60 Units
81 Madison Davidson TN 37115 132 Units
82 College Station Brazos TX 77845 193 Pads
85 Nashville Nash NC 27856 48 Units
86 Bellefonte Centre PA 16823 66 Units
- ---------------------------------------------------------------------------------------------------------------------------------
88 Various Various TX Various 166 Pads
88.1 Crosby Harris TX 77532 59 Pads
88.2 Port Neches Jefferson TX 77651 107 Pads
89 Hudson Pasco FL 34667 71 Pads
91 Tonawanda Erie NY 14150 32 Units
- ---------------------------------------------------------------------------------------------------------------------------------
92 Lacey Thurston WA 98503 70 Units
93 Crossville Cumberland TN 38555 64 Units
94 DeLand Volusia FL 32724 108 Pads
95 Beulah Pueblo CO 81023 57 Pads
OCCUPANCY OCCUPANCY ELEVATOR(S) UTILITIES
ID RATE AS-OF DATE (YES/NO) PAID BY TENANT
- ---------------------------------------------------------------------------------------------------------------------------------
17 91.70% 3/8/2004 Gas, Electric
18 97.98% 5/14/2004 5 Electric, Gas
18.1 97.89% 5/14/2004 2 Electric, Gas
18.2 98.11% 5/14/2004 2 Electric, Gas
18.3 98.81% 5/14/2004 Electric, Gas
- ---------------------------------------------------------------------------------------------------------------------------------
18.4 94.44% 5/14/2004 1 Electric, Gas
18.5 100.00% 5/14/2004 Electric, Gas
Various 3/31/2004 Electric, Gas, Water
19 93.33% 3/31/2004 Electric, Gas, Water, Trash
20 94.68% 3/31/2004 Electric, Gas, Water
- ---------------------------------------------------------------------------------------------------------------------------------
21 93.85% 3/31/2004 Electric, Gas, Water
24 95.08% 4/30/2004 Electric
27 92.31% 3/16/2004 Water, Electricity
30 96.09% 3/17/2004 Electricity
31 95.56% 4/26/2004 Electric
- ---------------------------------------------------------------------------------------------------------------------------------
33 92.18% 3/5/2004 Electric, Water
34 95.80% 4/2/2004 Electricity
37 70.59% 12/10/2003 Electric
39 96.97% 3/31/2004 1 Electric, Gas
40 96.77% 1/13/2004
- ---------------------------------------------------------------------------------------------------------------------------------
41 77.20% 1/26/2004 Electricity
43 95.59% 2/1/2004 Electric, Gas, Water, Sewer
44 98.39% 3/16/2004 Electric
47 95.56% 1/26/2004 1 Gas, Electricity
50 47.04% 2/3/2004
- ---------------------------------------------------------------------------------------------------------------------------------
51 94.86% 3/31/2004 Electric, Water, Sewer
52 95.83% 1/22/2004 Electric
53 98.75% 2/1/2004
55 93.75% 3/16/2004 Electric, Gas
- ---------------------------------------------------------------------------------------------------------------------------------
56 97.14% 2/29/2004 Electric, Water, Sewer
56.1 97.26% 2/29/2004 1 Electric, Water, Sewer
56.2 96.88% 2/29/2004 Electric, Water, Sewer
60 89.00% 6/1/2004
64 91.67% 1/14/2004 Electric
- ---------------------------------------------------------------------------------------------------------------------------------
64.1 100.00% 1/14/2004 Electric
64.2 84.09% 1/14/2004 Electric
65 96.09% 3/1/2004 Electric
69 100.00% 4/1/2004 Electric, Gas, Water, Sewer
70 100.00% 1/14/2004 Electric, Gas, Water, Sewer
- ---------------------------------------------------------------------------------------------------------------------------------
72 98.85% 4/30/2004 Electric
72.1 98.28% 4/30/2004 Electric
72.2 100.00% 4/30/2004 Electric
76 92.19% 3/3/2004 Electric
- ---------------------------------------------------------------------------------------------------------------------------------
80 98.33% 4/1/2004 1 Electric
81 91.67% 1/31/2004 Electric, Gas
82 96.89% 5/1/2004
85 93.75% 3/16/2004 Electric, Gas
86 100.00% 1/1/2004
- ---------------------------------------------------------------------------------------------------------------------------------
88 93.98% Various Various
88.1 98.31% 4/1/2004 Electric, Water, Sewer
88.2 91.59% 4/15/2004 Electric
89 100.00% 12/1/2003 Electric, Gas, Water, Sewer
91 93.75% 3/2/2004 Electric
- ---------------------------------------------------------------------------------------------------------------------------------
92 98.57% 1/1/2004 1
93 96.88% 3/1/2004 Electric
94 93.52% 3/26/2004 Electric, Water, Sewer
95 91.23% 3/1/2004 Electric, Gas
STUDIOS / PADS 1 BEDROOM 2 BEDROOM
----------------------------------------- ------------------------------------- -------------------------------------
# AVG RENT PER MAX # AVG RENT PER MAX # AVG RENT PER MAX
ID UNITS MO. ($) RENT ($) UNITS MO. ($) RENT ($) UNITS MO. ($) RENT ($)
- ------------------------------------------------------------------------------------------------------------------------------------
17 216 702 750 252 953 1,125
18 22 631 1,475 309 676 1,323 75 737 1,652
18.1 142 697 1,204
18.2 20 614 1,475 59 650 1,323 27 645 1,383
18.3 2 648 681 57 605 993 13 634 1,254
- ------------------------------------------------------------------------------------------------------------------------------------
18.4 12 705 1,129 24 861 1,652
18.5 39 724 1,180 11 806 1,375
19 18 614 614 72 710 710
20 60 580 580 120 610 610
- ------------------------------------------------------------------------------------------------------------------------------------
21 84 577 580 168 610 610
24 54 628 645 474 663 730
27 120 691 790 160 917 1,210
30 156 708 1,085 100 940 1,105
31 315 700 725
- ------------------------------------------------------------------------------------------------------------------------------------
33 44 809 1,500
34 40 706 740 102 800 900 1 825 825
37 43 551 600 1 800 800 14 1,027 1,200
39 9 1,550 1,875 24 2,415 3,500
40
- ------------------------------------------------------------------------------------------------------------------------------------
41 16 538 650 35 657 1,180
43 52 577 577 68 736 790
44 44 569 569 56 735 735
47 45 1,920 1,555
50
- ------------------------------------------------------------------------------------------------------------------------------------
51
52 72 710 850
53
55 1 425 425 24 585 585 48 680 680
- ------------------------------------------------------------------------------------------------------------------------------------
56 72 873 873 25 769 949
56.1 72 873 873 1 949 949
56.2 24 761 761
60 57 375 375 50 483 483 56 637 637
64 35 675 775 49 773 865
- ------------------------------------------------------------------------------------------------------------------------------------
64.1 16 588 600 24 709 760
64.2 19 749 775 25 835 865
65 16 489 489 88 559 559
69 18 775 775
70
- ------------------------------------------------------------------------------------------------------------------------------------
72 10 369 369 30 425 428 46 523 550
72.1 16 428 428 42 520 520
72.2 10 369 369 14 421 421 4 550 550
76 52 464 495 12 600 600
- ------------------------------------------------------------------------------------------------------------------------------------
80 1 590 590 49 670 670 10 725 725
81 32 476 495 100 544 600
82
85 24 462 500 24 550 550
86 30 539 539 36 672 672
- ------------------------------------------------------------------------------------------------------------------------------------
88
88.1
88.2
89
91 32 713 735
- ------------------------------------------------------------------------------------------------------------------------------------
92 70 484 484
93 8 391 391 32 454 454
94
95
3 BEDROOM 4 BEDROOM
------------------------------------- --------------------------------------
# AVG RENT PER MAX # AVG RENT PER MAX
ID UNITS MO. ($) RENT ($) UNITS MO. ($) RENT ($)
- ------------------------------------------------------------------------------------------------------
17 60 1,380 1,380
18 40 955 2,200
18.1
18.2
18.3 12 921 1,400
- ------------------------------------------------------------------------------------------------------
18.4 18 952 2,200
18.5 10 991 1,650
19
20 8 810 810
- ------------------------------------------------------------------------------------------------------
21 8 810 810
24
27 32 1,285 1,335
30
31
- ------------------------------------------------------------------------------------------------------
33 2 1,125 1,125 85 1,733 2,132
34
37 1 1,000 1,000 9 1,776 2,000
39
40
- ------------------------------------------------------------------------------------------------------
41 16 808 1,355
43 16 913 913
44 24 1,010 1,010
47
50
- ------------------------------------------------------------------------------------------------------
51
52
53
55 16 850 850 7 1,100 1,100
- ------------------------------------------------------------------------------------------------------
56 8 1,026 1,026
56.1
56.2 8 1,026 1,026
60
64
- ------------------------------------------------------------------------------------------------------
64.1
64.2
65 24 689 689
69 26 850 850
70 30 1,250 1,250
- ------------------------------------------------------------------------------------------------------
72 1 650 650
72.1
72.2 1 650 650
76
- ------------------------------------------------------------------------------------------------------
80
81
82
85
86
- ------------------------------------------------------------------------------------------------------
88
88.1
88.2
89
91
- ------------------------------------------------------------------------------------------------------
92
93 24 516 516
94
95
FOOTNOTES FOR THE ANNEX A-1
1 GACC - German American Capital Corporation, ABN AMRO - ABN AMRO Bank N.V.,
Chicago Branch, PNC - PNC Bank National Association.
2 Annual Debt Service, Monthly Debt Service and DSCR for loans with partial
interest-only periods are shown after the expiration of the interest-only
period.
3 "Hard" means each tenant transfers its rent directly to the Lock Box
Account; "Soft" means each tenant transfers its rent to the related
borrower or property manager who then is required to transfer the funds
into the Lock Box Account; "Soft at Closing, Springing Hard" means that a
Soft Lock Box exists at closing, but upon the occurrence of a trigger
event, as defined in the related loan documents, each tenant will be
required to transfer its rent directly to the Lock Box Account.
4 For purposes of calculating the Cut-off Date LTV Ratio, LTV Ratio at
Maturity, Loan per Net Rentable Area SF/Units and DSCR, the loan amounts
used for the Garden State Plaza Loan, 731 Lexington Avenue - Bloomberg
Headquarters Loan, DDR - Macquarie Portfolio Loan, Tysons Corner Center
Loan and the AFR/Bank of America Portfolio Loan is the aggregate balance of
(a) such mortgage loans and (b) the other mortgage loans or portions
thereof in the split loan structure that are pari passu in right of payment
with such mortgage loans.
5 With respect to the three loans in the pool which have additional
subordinate debt not included in the trust, the Cut-off Date LTV Ratio and
DSCR figures if calculated including the subordinate financing are as
follows: 731 Lexington Avenue - Bloomberg Headquarters Loan: 74.8% and
1.25x, respectively; AFR/Bank of America Portfolio Loan: 61.2% and 1.51x,
respectively and Saks - North Riverside Loan: 98.39% and 1.00x,
respectively.
6 For those mortgage loans indicating an Appraisal As-Of Date beyond the
Cut-off Date, the Appraised Value and the corresponding Appraisal As-of
Date are based on stabilization.
7 Net Rentable Area SF/Units does not include square footage for ground lease
tenants as it is not collateral for the Mortgage Loan.
8 Prior to December 18, 2005, up to 11.6% of the AFR/Bank of America
Portfolio Whole Loan may be prepaid (subject to a yield charge) in
connection with the release of certain designated properties. Defeasance
for the AFR/Bank of America Portfolio Whole Loan is permitted on and after
December 18, 2005 subject to certain conditions set forth in the loan
documents.
9 For purposes of calculating DSCR and Cut-off Date LTV Ratio, the Cut-off
Date Balance is calculated after netting out holdback amounts for Wiener
Portfolio VII of $700,000 and The Arboretum of $205,000.
10 The AFR/Bank of America Portfolio Mortgage Loan interest rate is
5.489117647%.
11 One loan secured by multiple properties.
12 For purposes of calculating Underwritten Net Cash Flow, Underwritten TI/LC
has been included at the individual AFR/Bank of America Portfolio property
level.
13 Lockout for the Tysons Corner Center Loan is the earlier of: a) 24 months
from the last securitization of the A-1, A-2, A-3 and A-4 notes to occur or
b) 36 months from the first payment date.
14 With respect to the AFR/Bank of America Portfolio Mortgage Loan, the
Cut-off Date Balance has been reduced from $20,000,000 to $19,834,205 due
to the release and payoff of two of the designated release properties on
April 1, 2004 and April 30, 2004, respectively. The aggregate balance of
the allocated loan amounts is higher than the actual aggregate cut-off date
balance due to the prepayment of these two released properties at 110% of
the allocated loan amount of each of the two properties released.
15 With respect to the AFR/Bank of America Portfolio Mortgage Loan, the
Remaining Amortization Term has been reduced from 330 to 324 due to the
release and payoff of two of the designated release properties on April 1,
2004 and April 30, 2004, respectively.
16 With respect to the mortgage loans that are cross-collateralized and
cross-defaulted, Cut-Off Date LTV Ratio, LTV Ratio at Maturity and DSCR
were calculated in the aggregate.
17 With respect to the Garden State Plaza Mortgage Loan, Occupancy Percentage
(%), U/W Net Cash Flow ($), and U/W NCF DSCR reflect a stabilized occupancy
which includes 31,747 square feet of space leased to tenants that are
expected to be in occupancy by August 2004, and a 3,130 square-foot space
with respect to which, according to the related borrower, a lease is being
negotiated with Louis Vuitton (which will bring overall occupancy to the
stabilized level of 98.1% and in-line occupancy to the stabilized value of
95.1%). As of April 26, 2004, the property was 97.9% leased and 96.3%
occupied. Actual in-line occupancy as of April 26, 2004 was 90.7%.
FOOTNOTES FOR THE ANNEX A-2
1 GACC - German American Capital Corporation, ABN AMRO - ABN AMRO Bank N.V.,
Chicago Branch, PNC - PNC Bank National Association.
2 One loan secured by multiple properties.
ANNEX A-3
SCHEDULE I
RATES FOR THE 731 LEXINGTON AVENUE--BLOOMBERG HEADQUARTERS LOAN
DISTRIBUTION DATE PERIOD RATE
------------------- -------- ----------------
7/1/2004 1 5.36252388%
8/1/2004 2 5.36252388%
9/1/2004 3 5.36252388%
10/1/2004 4 5.36252388%
11/1/2004 5 5.36252388%
12/1/2004 6 5.36252388%
1/1/2005 7 5.36252388%
2/1/2005 8 5.36252388%
3/1/2005 9 5.36252388%
4/1/2005 10 5.36252388%
5/1/2005 11 5.36252388%
6/1/2005 12 5.36252388%
7/1/2005 13 5.36252388%
8/1/2005 14 5.36252388%
9/1/2005 15 5.36252388%
10/1/2005 16 5.36252388%
11/1/2005 17 5.36252388%
12/1/2005 18 5.36252388%
1/1/2006 19 5.36252388%
2/1/2006 20 5.36252388%
3/1/2006 21 5.36252388%
4/1/2006 22 5.36252388%
5/1/2006 23 5.36259782%
6/1/2006 24 5.36267862%
7/1/2006 25 5.36275398%
8/1/2006 26 5.36283625%
9/1/2006 27 5.36291308%
10/1/2006 28 5.36299061%
11/1/2006 29 5.36307515%
12/1/2006 30 5.36315420%
1/1/2007 31 5.36324031%
2/1/2007 32 5.36332092%
3/1/2007 33 5.36340230%
4/1/2007 34 5.36350356%
5/1/2007 35 5.36358668%
6/1/2007 36 5.36367701%
7/1/2007 37 5.36376180%
8/1/2007 38 5.36385386%
9/1/2007 39 5.36394037%
10/1/2007 40 5.36402771%
11/1/2007 41 5.36412243%
A-3-1
SCHEDULE I
RATES FOR THE 731 LEXINGTON AVENUE--BLOOMBERG HEADQUARTERS LOAN
DISTRIBUTION DATE PERIOD RATE
------------------- -------- ----------------
12/1/2007 42 5.36421156%
1/1/2008 43 5.36430813%
2/1/2008 44 5.36439909%
3/1/2008 45 5.36449096%
4/1/2008 46 5.36459701%
5/1/2008 47 5.36469086%
6/1/2008 48 5.36479233%
7/1/2008 49 5.36488815%
8/1/2008 50 5.36499166%
9/1/2008 51 5.36508951%
10/1/2008 52 5.36518837%
11/1/2008 53 5.36529503%
12/1/2008 54 5.36539599%
1/1/2009 55 5.36550485%
2/1/2009 56 5.36560800%
3/1/2009 57 5.36571223%
4/1/2009 58 5.36583831%
5/1/2009 59 5.36594497%
6/1/2009 60 5.36605972%
7/1/2009 61 5.36616873%
8/1/2009 62 5.36628593%
9/1/2009 63 5.36639736%
10/1/2009 64 5.36650999%
11/1/2009 65 5.36663096%
12/1/2009 66 5.36674613%
1/1/2010 67 5.36686973%
2/1/2010 68 5.36698752%
3/1/2010 69 5.36710661%
4/1/2010 70 5.36724880%
5/1/2010 71 5.36737080%
6/1/2010 72 5.36750149%
7/1/2010 73 5.36762632%
8/1/2010 74 5.36775996%
9/1/2010 75 5.36788773%
10/1/2010 76 5.36801695%
11/1/2010 77 5.36815515%
12/1/2010 78 5.36828746%
1/1/2011 79 5.36842885%
2/1/2011 80 5.36856434%
3/1/2011 81 5.36870141%
4/1/2011 82 5.36886307%
5/1/2011 83 5.36900367%
6/1/2011 84 5.36915368%
A-3-2
SCHEDULE I
RATES FOR THE 731 LEXINGTON AVENUE--BLOOMBERG HEADQUARTERS LOAN
DISTRIBUTION DATE PERIOD RATE
------------------- -------- ----------------
7/1/2011 85 5.36929775%
8/1/2011 86 5.36945136%
9/1/2011 87 5.36959902%
10/1/2011 88 5.36974848%
11/1/2011 89 5.36990768%
12/1/2011 90 5.37006092%
1/1/2012 91 5.37022404%
2/1/2012 92 5.37038120%
3/1/2012 93 5.37054032%
4/1/2012 94 5.37071768%
5/1/2012 95 5.37088103%
6/1/2012 96 5.37105467%
7/1/2012 97 5.37122232%
8/1/2012 98 5.37140042%
9/1/2012 99 5.37157253%
10/1/2012 100 5.37174687%
11/1/2012 101 5.37193192%
12/1/2012 102 5.37211097%
1/1/2013 103 5.37230091%
2/1/2013 104 5.37248486%
3/1/2013 105 5.37267128%
4/1/2013 106 5.37288621%
5/1/2013 107 5.37307804%
6/1/2013 108 5.37328126%
7/1/2013 109 5.37347850%
8/1/2013 110 5.37368734%
9/1/2013 111 5.37389021%
10/1/2013 112 5.37409591%
11/1/2013 113 5.37431355%
12/1/2013 114 5.37452523%
1/1/2014 115 5.37474908%
2/1/2014 116 5.37496699%
3/1/2014 117 5.37518805%
4/1/2014
and thereafter 118 5.33000000%
A-3-3
CMBS NEW ISSUE
STRUCTURAL AND COLLATERAL TERM SHEET
------------------------
$981,250,000
(APPROXIMATE OFFERED CERTIFICATES)
$1,339,496,992
(APPROXIMATE TOTAL COLLATERAL BALANCE)
COMM 2004-LNB3
------------------------
COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES
GERMAN AMERICAN CAPITAL CORPORATION
LASALLE BANK NATIONAL ASSOCIATION
PNC BANK, NATIONAL ASSOCIATION
MORTGAGE LOAN SELLERS
------------------------
- ----------------------------------------------------------------------------------------------------------------------------
INITIAL PASS- PRINCIPAL
APPROX. SIZE THROUGH RATINGS SUBORDINATION WAL WINDOW ASSUMED FINAL
CLASS (FACE) RATE (S&P / MOODY'S / DBRS) LEVELS (YRS.) (MO.) DISTRIBUTION DATE
- ----------------------------------------------------------------------------------------------------------------------------
A-1 $367,945,000 % AAA/Aaa/AAA 15.250% 5.90 7/04-11/13 NOVEMBER 10, 2013
- ----------------------------------------------------------------------------------------------------------------------------
A-2 $502,796,000 % AAA/Aaa/AAA 15.250% 9.81 11/13-6/14 JUNE 10, 2014
- ----------------------------------------------------------------------------------------------------------------------------
B $ 40,185,000 % AA/Aa2/AA 12.250% 9.95 6/14-6/14 JUNE 10, 2014
- ----------------------------------------------------------------------------------------------------------------------------
C $ 16,744,000 % AA-/Aa3/AA (LOW) 11.000% 9.95 6/14-6/14 JUNE 10, 2014
- ----------------------------------------------------------------------------------------------------------------------------
D $ 28,464,000 % A/A2/A 8.875% 9.95 6/14-6/14 JUNE 10, 2014
- ----------------------------------------------------------------------------------------------------------------------------
E $ 25,116,000 % A-/A3/A (LOW) 7.000% 10.02 6/14-7/14 JULY 10, 2014
- ----------------------------------------------------------------------------------------------------------------------------
DEUTSCHE BANK SECURITIES ABN AMRO INCORPORATED
Sole Book Running Manager and Co-Lead Manager Co-Lead Manager
PNC CAPITAL MARKETS, INC. JPMORGAN MERRILL LYNCH & CO. NOMURA
Co-Manager Co-Manager Co-Manager Co-Manager
June 7, 2004
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-1
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
TRANSACTION FEATURES
o Sellers:
- -----------------------------------------------------------------------------------------
NO. OF CUT-OFF DATE
SELLERS LOANS BALANCE ($) % OF POOL
- -----------------------------------------------------------------------------------------
German American Capital Corporation 26 $ 806,369,207 60.20%
LaSalle Bank National Association 55 440,615,518 32.89%
PNC Bank, National Association 14 92,512,267 6.91%
- -----------------------------------------------------------------------------------------
TOTAL: 95 $1,339,496,992 100.00%
- -----------------------------------------------------------------------------------------
o Loan Pool:
o Average Cut-off Date Balance: $14,099,968
o Largest Mortgage Loan by Cut-off Date Balance:
$ 130,000,000 (Shadow Rated A2/A/AA/A by Moody's/Fitch/S&P/DBRS,
respectively)
o Five largest and ten largest loans or Crossed Loan Group:
34.78% and 53.73% of pool, respectively
o Credit Statistics:
o Weighted average underwritten DSCR of 1.63x
o Weighted average cut-off date LTV ratio of 67.96%; weighted average
balloon LTV ratio of 57.82%
o Property Types:
[GRAPHIC OMITTED]
Office 39.06%
Retail 31.66%
Multifamily(1) 22.07%
Industrial 5.56%
Mixed Use(2) 1.27%
Self Storage 0.39%
(1) Consists of Multifamily (19.95%) and Manufactured Housing (2.11%).
(2) Consists of Office, Retail and Multifamily components.
o Call Protection: (as applicable)
o 96.59% of the pool (Cut-Off Date Balance) has a lockout period ranging
from 24 to 36 payments from origination, then defeasance.
o 1.30% of the pool (Cut-Off Date Balance) has a lockout period ranging
from 11 to 35 payments from origination, then yield maintenance.
o 1.48% of the pool (Cut-Off Date Balance) is open to partial prepayment
with yield maintenance, then defeasance. o 0.63% of the pool (Cut-Off
Date Balance) has call protection as described further in the Prospectus
Supplement.
o Bond Information: Cash flows are expected to be modeled by TREPP, CONQUEST
and INTEX and are expected to be available on BLOOMBERG.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-2
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
OFFERED CERTIFICATES
- -----------------------------------------------------------------------------------------------------------------------------------
AVERAGE PRINCIPAL ASSUMED FINAL INITIAL
INITIAL CERTIFICATE SUBORDINATION RATINGS LIFE WINDOW DISTRIBUTION PASS-THROUGH
CLASS BALANCE (1) LEVELS (S&P/MOODY'S/DBRS) (YRS.)(2) (MO.)(2) DATE(2) RATE (APPROX.)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
A-1 $367,945,000 15.250%(6) AAA/Aaa/AAA 5.90 7/04-11/13 11/10/13 %
- -----------------------------------------------------------------------------------------------------------------------------------
A-2 $502,796,000 15.250%(6) AAA/Aaa/AAA 9.81 11/13-6/14 6/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
B $ 40,185,000 12.250% AA/Aa2/AA 9.95 6/14-6/14 6/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
C $ 16,744,000 11.000% AA-/Aa3/AA (low) 9.95 6/14-6/14 6/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
D $ 28,464,000 8.875% A/A2/A 9.95 6/14-6/14 6/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
E $ 25,116,000 7.000% A/A3/A (low) 10.02 6/14-7/14 7/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
PRIVATE CERTIFICATES (4)
- -----------------------------------------------------------------------------------------------------------------------------------
AVERAGE PRINCIPAL ASSUMED FINAL INITIAL
INITIAL CERTIFICATE SUBORDINATION RATINGS LIFE WINDOW DISTRIBUTION PASS-THROUGH
CLASS BALANCE (1) LEVELS (S&P/MOODY'S/DBRS) (YRS.)(2) (MO.)(2) DATE(2) RATE (APPROX.)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
X(5) $1,339,496,991 NA AAA/Aaa/AAA NA NA 5/10/26 %
- -----------------------------------------------------------------------------------------------------------------------------------
A-1A(7) $ 264,482,000 15.250%(6) AAA/Aaa/AAA 8.17 7/04-6/14 6/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
F $ 15,069,000 5.875% BBB+/Baa1/BBB (high) 10.03 7/14-7/14 7/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
G $ 13,395,000 4.875% BBB/Baa2/BBB 10.03 7/14-7/14 7/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
H $ 11,721,000 4.000% BBB-/Baa3/BBB (low) 10.03 7/14-7/14 7/10/14 %
- -----------------------------------------------------------------------------------------------------------------------------------
J $ 11,720,000 3.125% BB+/Ba1/BB (high) 10.34 7/14-1/15 1/10/15 %
- -----------------------------------------------------------------------------------------------------------------------------------
K $ 6,698,000 2.625% BB/Ba2/BB 10.53 1/15-1/15 1/10/15 %
- -----------------------------------------------------------------------------------------------------------------------------------
L $ 3,348,000 2.375% BB-/Ba3/BB (low) 10.53 1/15-1/15 1/10/15 %
- -----------------------------------------------------------------------------------------------------------------------------------
M $ 5,024,000 2.000% B+/B1/B (high) 10.53 1/15-1/15 1/10/15 %
- -----------------------------------------------------------------------------------------------------------------------------------
N $ 5,023,000 1.625% B/B2/B 10.53 1/15-1/15 1/10/15 %
- -----------------------------------------------------------------------------------------------------------------------------------
O $ 5,023,000 1.250% B-/B3/B (low) 10.53 1/15-1/15 1/10/15 %
- -----------------------------------------------------------------------------------------------------------------------------------
P $ 16,743,991 0.000% NR/NR/NR 14.02 1/15-5/26 5/10/26 %
- -----------------------------------------------------------------------------------------------------------------------------------
NOTES:
(1) Subject to a permitted variance of plus or minus 5%.
(2) Based on the structuring assumptions, assuming 0% CPR, described in the
Prospectus Supplement.
(3) The Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E,
Class F, Class G and Class H Certificates will each accrue interest at
either (i) a fixed rate, (ii) a fixed rate subject to a cap at the weighted
average net mortgage interest rate, (iii) a rate equal to the weighted
average net mortgage interest rate less a specified percentage or (iv) a
rate equal to the weighted average net mortgage interest rate. The Class J,
K, L, M, N, O and P will accrue interest at either (i) a fixed rate, or
(ii) a fixed rate subject to a Net WAC Cap.
(4) Certificates to be offered privately pursuant to Rule 144A and Regulation
S.
(5) The Class X Certificates were structured assuming that the AFR/Bank of
America Portfolio B Loan absorbs any loss prior to the AFR/Bank of America
Portfolio Senior Loans, the 731 Lexington Avenue--Bloomberg Headquarters B
Loan absorbs any loss prior to the 731 Lexington Avenue-Bloomberg
Headquarters Senior Loans, and the Saks, Inc:-North Riverside B Loan
absorbs any loss prior to the Saks, Inc--North Riverside Loan. For more
information regarding these loans, see "Description of the Mortgage Pool --
Split Loan Structures" in the Prospectus Supplement.
(6) Represents the approximate subordination levels for the Class A-1, Class
A-2 and Class A-1A Certificates in the aggregate.
(7) The Mortgage Pool will be deemed to consist of two loan groups ("Loan Group
1" and "Loan Group 2"). Loan Group 1 will consist of (i) 52 of the Mortgage
Loans that are not secured by multifamily properties and/or manufactured
housing properties and (ii) 8 Mortgage Loans that are secured three
multifamily properties and five manufactured housing properties. Loan Group
1 is expected to consist of 60 mortgage Loans, with an aggregate balance as
of the Cut-off Date of $1,075,014,808. Loan Group 2 will consist of 31
Mortgage Loans that are secured by multifamily properties and four Mortgage
Loans that are secured by manufactured housing properties. Loan Group 2 is
expected to consist of 35 Mortgage Loans, with an aggregate balance as of
the Cut-Off Date of $264,482,184.
Generally, the Class A-1 and Class A-2 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 principal balance of
the Class A-1A certificates has been reduced to zero, and the Class A-1A
certificates will only be entitled to receive distributions of principal
collected or advanced in respect of mortgage loans in Loan Group 2 until
the certificate principal balance of the Class A-2 certificates has been
reduced to zero. However, on and after any distribution date on which the
certificate principal balances of the Class B through Class P certificates
have been reduced to zero, distributions of principal collected or advanced
in respect of the pool of Mortgage Loans will be distributed to the Class
A-1, Class A-2, and Class A-1A certificates, pro rata.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-3
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
I. ISSUE CHARACTERISTICS
ISSUE TYPE: Public: Classes A-1, A-2, B, C, D and E (the "Offered Certificates").
Private (Rule 144A, Regulation S): Classes X, A-1A, F, G, H, J, K, L, M, N, O and P.
SECURITIES OFFERED: $981,250,000.00 monthly pay, multi-class, sequential pay commercial mortgage REMIC Pass-Through
Certificates, which will accrue interest at (i) a fixed rate, (ii) a fixed rate subject to a cap
at the weighted average net mortgage interest rate, (iii) a rate equal to the weighted average net
mortgage interest rate less a specified percentage or (iv) a rate equal to the weighted average net
mortgage interest rate.
MORTGAGE POOL: The Mortgage Pool consists of 95 mortgage loans with an aggregate balance as of the Cut-Off Date
of $1,339,496,992. The mortgage loans are secured by 267 properties located throughout 36 states. The
Mortgage Pool will be deemed to consist of two loan groups ("Loan Group 1" and "Loan Group 2"). Loan
Group 1 will consist of (i) 52 of the Mortgage Loans that are not secured by multifamily properties
and/or manufactured housing properties and (ii) eight Mortgage Loans that are secured by three
multifamily properties and five manufactured housing properties. Loan Group 1 is expected to consist of
60 mortgage Loans, with an aggregate balance as of the Cut-off Date of $1,075,014,808. Loan Group 2
will consist of 31 Mortgage Loans that are secured by multifamily properties and four Mortgage Loans
that are secured by manufactured housing properties. Loan Group 2 is expected to consist of 35 Mortgage
Loans, with an aggregate balance as of the Cut-Off Date of $264,482,184.
SELLERS: German American Capital Corporation ("GACC"); LaSalle Bank, N.A. ("LaSalle"); and PNC Bank, National
Association ("PNC")
BOOKRUNNER: Deutsche Bank Securities Inc.
CO-LEAD MANAGERS: Deutsche Bank Securities Inc. and ABN AMRO Incorporated
CO-MANAGERS: PNC Capital Markets, Inc., J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and Nomura Securities International, Inc.
MASTER SERVICER: Midland Loan Services, Inc., a Delaware corporation, with respect to all of the mortgage loans other
than three mortgage loans known as the Garden State Plaza Loan, the Tysons Corner Center Loan and the
AFR/Bank of America Portfolio loan (collectively, the "Non-Serviced Mortgage Loans").
SPECIAL SERVICER: Lennar Partners, Inc., a Florida corporation, with respect to all of the mortgage loans other than the
AFR/Bank of America Portfolio Loan.
TRUSTEE: Wells Fargo Bank, N.A.
BOND ADMINISTRATOR: LaSalle Bank National Association.
CUT-OFF DATE: June 1, 2004
EXPECTED CLOSING DATE: On or about June , 2004.
DISTRIBUTION DATES: The 10th day of each month or, if such 10th day is not a business day, the business day immediately
following such 10th day, beginning on July 2004.
MINIMUM DENOMINATIONS: $10,000 for the Class A-1 and Class A-2 Certificates and $25,000 for the Class B, C, D, and E
Certificates and in multiples of $1 thereafter.
SETTLEMENT TERMS: DTC, Euroclear and Clearstream, same day funds, with accrued interest.
ERISA/SMMEA STATUS: Classes A-1, A-2, B, C, D and E are expected to be ERISA eligible. No Class of Certificates is SMMEA
eligible.
RATING AGENCIES: The Offered Certificates will be rated by Standard & Poor's Rating Services, a division of the
McGraw-Hill Companies, Inc. ("S&P"), Moody's ("Moody's"), and Dominion Bond Rating Services Limited
("DBRS").
RISK FACTORS: THE CERTIFICATES INVOLVE CERTAIN RISKS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. SEE THE "RISK
FACTORS" SECTION OF THE PROSPECTUS SUPPLEMENT AND THE "RISK FACTORS" SECTION OF THE PROSPECTUS.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-4
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
II. FULL COLLATERAL CHARACTERISTICS
CUT-OFF DATE BALANCE ($)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
998,111 - 1,999,999 13 20,422,039 1.52
2,000,000 - 2,999,999 12 29,383,023 2.19
3,000,000 - 3,999,999 12 42,962,652 3.21
4,000,000 - 5,999,999 15 71,236,004 5.32
6,000,000 - 6,999,999 7 43,723,535 3.26
7,000,000 - 9,999,999 6 51,488,357 3.84
10,000,000 - 14,999,999 5 57,140,000 4.27
15,000,000 - 29,999,999 12 234,018,646 17.47
30,000,000 - 49,999,999 7 280,622,735 20.95
50,000,000 - 69,999,999 3 178,500,000 13.33
70,000,000 - 130,000,000 3 330,000,000 24.64
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 998,111 Max: 130,000,000 Wtd. Avg.: 14,099,968
- --------------------------------------------------------------------
STATE(a)(b)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
PROPERTIES BALANCE ($) POOL
- --------------------------------------------------------------------
New York 16 259,794,984 19.39
California 61 191,780,922 14.32
New Jersey 3 158,182,311 11.81
Virginia 11 149,155,020 11.14
Texas 24 100,258,845 7.48
Delaware 2 61,750,000 4.61
Florida 38 55,037,118 4.11
Pennsylvania 5 53,412,326 3.99
Arkansas 3 47,770,050 3.57
Massachusetts 5 45,474,290 3.39
Illinois 4 24,278,547 1.81
Oklahoma 3 21,765,668 1.62
Alabama 2 20,457,476 1.53
Other States (a) 90 150,394,507 11.23
- --------------------------------------------------------------------
TOTAL 267 1,339,512,064 100.00
- --------------------------------------------------------------------
(a) Includes 23 states.
(b) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower in April 2004 of 0.76% of the aggregate initial principal balance
of the AFR/Bank of America Portfolio Whole Loan, which amount reflects 110%
of the allocated loan amount of each of the two properties released.
PROPERTY TYPE(a)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
PROPERTIES BALANCE ($) POOL
- --------------------------------------------------------------------
Office 133 523,162,804 39.06
Retail 34 424,076,365 31.66
Anchored(b) 27 397,599,361 29.68
Unanchored 5 14,260,847 1.06
CTL 2 12,216,157 0.91
Multifamily 51 295,586,787 22.07
Multifamily 41 267,291,789 19.95
Manufactured Housing 10 28,294,999 2.11
Industrial 10 74,525,000 5.56
Mixed Use 38 16,978,797 1.27
Self Storage 1 5,182,311 0.39
- --------------------------------------------------------------------
TOTAL 267 1,339,512,064 100.00
- --------------------------------------------------------------------
(a) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower in April 2004 of 0.76% of the aggregate initial principal balance
of the AFR/Bank of America Portfolio Whole Loan, which amount reflects 110%
of the allocated loan amount of each of the two properties released.
(b) Includes shadow anchored properties.
MORTGAGE RATE (%)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
4.180% - 4.999% 11 330,555,641 24.68
5.000% - 5.249% 14 220,406,349 16.45
5.250% - 5.449% 15 315,013,072 23.52
5.450% - 5.749% 19 256,150,257 19.12
5.750% - 5.999% 12 84,767,430 6.33
6.000% - 6.449% 19 117,483,615 8.77
6.450% - 7.160% 5 15,120,627 1.13
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 4.180 Max: 7.160 Wtd. Avg.: 5.321
- --------------------------------------------------------------------
ORIGINAL TERM TO STATED MATURITY (MOS)(a)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
60 - 80 8 141,446,447 10.56
81 - 100 11 167,363,032 12.49
101 - 120 63 885,854,791 66.13
121 - 264 13 144,832,723 10.81
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 60 Max: 264 Wtd. Avg.: 111
- --------------------------------------------------------------------
(a) Calculated with respect to the anticipated repayment date for two mortgage
loans, representing 9.54% of outstanding pool balance as of the cut-off
date.
REMAINING TERM TO STATED MATURITY (MOS)(a)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
58 - 84 16 230,094,478 17.18
85 - 104 3 78,715,000 5.88
105 - 119 31 447,917,791 33.44
120 - 263 45 582,769,723 43.51
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 58 Max: 263 Wtd. Avg.: 110
- --------------------------------------------------------------------
(a) Calculated with respect to the anticipated repayment date for two mortgage
loan, representing 9.54% of outstanding pool balance as of the cut-off
date.
LOANS WITH RESERVE REQUIREMENTS(a)(b)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
Tax 79 1,011,084,435 75.48
Replacement 79 999,930,981 74.65
Insurance 74 850,242,416 63.47
TI/LC (b) 34 523,949,118 50.44
- --------------------------------------------------------------------
(a) Includes upfront or on-going reserves.
(b) TI/LC % based only on portion of pool secured by retail, office, mixed use
and industrial properties.
CUT-OFF DATE LOAN-TO-VALUE RATIO(%)(a)(b)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
47.29% - 49.99% 2 22,334,205 1.67
50.00% - 59.99% 11 415,745,654 31.04
60.00% - 69.99% 20 166,253,554 12.41
70.00% - 74.99% 19 237,810,060 17.75
75.00% - 79.99% 40 488,593,519 36.48
80.00% - 80.00% 3 8,760,000 0.65
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 47.29 Max: 80.00 Wtd. Avg.: 67.96
- --------------------------------------------------------------------
(a) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(b) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the mortgage
loans included in the Trust and the mortgage loans that are not included in
the Trust but are pari passu in right of payment with the mortgage loans
included in the Trust.
LOAN-TO-VALUE RATIO AT MATURITY (%)(a)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
0.00% - 29.99% 6 28,512,122 2.13
30.00% - 39.99% 2 23,734,205 1.77
40.00% - 49.99% 8 250,479,735 18.70
50.00% - 59.99% 19 262,515,788 19.60
60.00% - 69.99% 49 642,206,305 47.94
70.00% - 74.13% 11 132,048,837 9.86
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 0.00 Max: 74.13 Wtd. Avg.: 57.82
- --------------------------------------------------------------------
(a) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the mortgage
loans included in the Trust and the mortgage loans that are not included in
the Trust but are pari passu in right of payment with the mortgage loans
included in the Trust.
DEBT SERVICE COVERAGE RATIOS(a)(b)
- --------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- --------------------------------------------------------------------
1.20x+ - 1.29x 29 370,901,681 27.69
1.30x+ - 1.39x 26 286,531,603 21.39
1.40x+ - 1.49x 16 278,595,417 20.80
1.50x+ - 1.59x 8 34,736,816 2.59
1.60x+ - 1.74x 7 19,943,881 1.49
1.75x+ - 1.99x 7 143,787,594 10.73
2.00x+ - 2.49x 1 130,000,000 9.71
2.50x+ - 3.62x 1 75,000,000 5.60
- --------------------------------------------------------------------
TOTAL 95 1,339,496,992 100.00
- --------------------------------------------------------------------
Min: 1.20 Max: 3.62 Wtd. Avg.: 1.63
- --------------------------------------------------------------------
(a) Calculated on loan balances after netting out a holdback amount for two
loans (3.61% of the outstanding pool balance as of the cut-off date).
(b) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the mortgage
loans included in the Trust and the mortgage loans that are not included in
the Trust but are pari passu in right of payment with the mortgage loans
included in the Trust.
All numerical information concerning the mortgage loans is approximate. All
weighted average information regarding the mortgage loans reflects the
weighting of the loans based on their outstanding principal balances as of the
Cut-off Date. State and Property Type tables reflect allocated loan amounts in
the case of mortgage loans secured by multiple properties. Sum of Columns may
not match "Total" due to rounding.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-5
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
III. LOAN GROUP I
CUT-OFF DATE BALANCE ($)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
998,111 -- 1,999,999 6 9,244,395 0.86
2,000,000 -- 2,999,999 8 19,690,881 1.83
3,000,000 -- 3,999,999 8 28,525,232 2.65
4,000,000 -- 5,999,999 9 43,483,845 4.04
6,000,000 -- 6,999,999 4 25,241,357 2.35
7,000,000 -- 9,999,999 3 25,372,716 2.36
10,000,000 -- 14,999,999 2 21,300,000 1.98
15,000,000 -- 29,999,999 9 178,808,646 16.63
30,000,000 -- 49,999,999 5 214,847,735 19.99
50,000,000 -- 69,999,999 3 178,500,000 16.60
70,000,000 -- 130,000,000 3 330,000,000 30.70
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 998,111 Max: 130,000,000 Wtd. Avg.: 17,916,913
- ---------------------------------------------------------------------
STATE(a)(b)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
New York 6 186,674,557 17.36
California 60 182,555,922 16.98
New Jersey 3 158,182,311 14.71
Virginia 11 149,155,020 13.87
Delaware 2 61,750,000 5.74
Pennsylvania 4 51,652,326 4.80
Arkansas 3 47,770,050 4.44
Massachusetts 5 45,474,290 4.23
Oklahoma 3 21,765,668 2.02
Alabama 1 16,860,595 1.57
Illinois 3 15,867,905 1.48
Texas 16 15,382,048 1.43
Connecticut 1 14,925,710 1.39
Other States (a) 106 107,013,478 9.95
- ---------------------------------------------------------------------
TOTAL 224 1,075,029,880 100.00
- ---------------------------------------------------------------------
(a) Includes 22 states.
(b) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower in April 2004 of 0.76% of the aggregate initial principal balance
of the AFR/Bank of America Portfolio Whole Loan, which amount reflects 110%
of the allocated loan amount of each of the two properties released.
PROPERTY TYPE(a)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
Office 133 523,162,804 48.66
Retail 34 424,076,365 39.45
Anchored(b) 24 385,835,361 35.89
Unanchored 8 26,024,847 2.42
CTL 2 12,216,157 1.14
Industrial 10 74,525,000 6.93
Multifamily 8 31,104,603 2.89
Multifamily 3 15,558,409 1.45
Manufactured Housing 5 15,546,194 1.45
Mixed Use 38 16,978,797 1.58
Self Storage 1 5,182,311 0.48
- ---------------------------------------------------------------------
TOTAL 224 1,075,029,880 100.00
- ---------------------------------------------------------------------
(a) The total balance reflected is higher than the actual aggregate cut-off
date balance due to the prepayment by the AFR/Bank of America Portfolio
borrower in April 2004 of 0.76% of the aggregate initial principal balance
of the AFR/Bank of America Portfolio Whole Loan, which amount reflects 110%
of the allocated loan amount of each of the two properties released.
(b) Includes shadow anchored properties.
MORTGAGE RATE (%)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
4.180% -- 4.999% 5 221,700,000 20.62
5.000% -- 5.249% 9 190,531,237 17.72
5.250% -- 5.449% 10 267,253,241 24.86
5.450% -- 5.749% 11 222,685,160 20.71
5.750% -- 5.999% 6 62,062,493 5.77
6.000% -- 6.449% 15 96,984,961 9.02
6.450% -- 7.160% 4 13,797,716 1.28
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 4.180 Max: 7.160 Wtd. Avg.: 5.343
- ---------------------------------------------------------------------
ORIGINAL TERM TO STATED MATURITY (MOS)(a)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
60 -- 80 2 81,725,000 7.60
81 -- 100 10 158,952,390 14.79
101 -- 120 39 716,591,260 66.66
121 -- 264 9 117,746,157 10.95
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 60 Max: 264 Wtd. Avg.: 112
- ---------------------------------------------------------------------
(a) Calculated with respect to the anticipated repayment date for two mortgage
loans, representing 11.89% of Loan Group 1 outstanding pool balance as of
the cut-off date.
REMAINING TERM TO STATED MATURITY (MOS)(a)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
58 -- 84 9 161,962,390 15.07
85 -- 104 3 78,715,000 7.32
105 -- 119 18 365,773,260 34.02
120 -- 263 30 468,564,157 43.59
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 60 Max: 263 Wtd. Avg.: 111
- ---------------------------------------------------------------------
(a) Calculated with respect to the anticipated repayment date for two mortgage
loans, representing 11.89% of Loan Group 1 outstanding pool balance as of
the cut-off date.
LOANS WIH RESERVE REQUIREMENTS(a)(b)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
Tax 46 756,004,609 70.33
Replacement 45 752,848,796 70.03
Insurance 41 595,162,590 55.36
TI/LC (b) 34 523,949,118 50.44
- ---------------------------------------------------------------------
(a) Includes upfront or on--going reserves.
(b) TI/LC % based only on portion of pool secured by retail, office, mixed use
and industrial properties.
CUT-OFF DATE LOAN-TO-VALUE RATIO (%)(a)(b)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
47.29% -- 49.99% 2 22,334,205 2.08
50.00% -- 59.99% 9 407,350,000 37.89
60.00% -- 69.99% 16 159,498,643 14.84
70.00% -- 74.99% 13 182,185,060 16.95
75.00% -- 79.99% 19 301,246,900 28.02
80.00% -- 80.00% 1 2,400,000 0.22
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 47.29 Max: 80.00 Wtd. Avg.: 65.91
- ---------------------------------------------------------------------
(a) Calculated on loan balances after netting out a holdback amount for one
loan representing 1.59% of the Loan Group 1 outstanding pool balance as of
the cut-off date.
(b) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the mortgage
loans included in the Trust and the mortgage loans that are not included in
the Trust but are pari passu in right of payment with the mortgage loans
included in the Trust.
LOAN-TO-VALUE RATIO AT MATURITY (%)(a)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
0.00% -- 29.99% 5 22,373,468 2.08
30.00% -- 39.99% 2 23,734,205 2.21
40.00% -- 49.99% 7 248,222,735 23.09
50.00% -- 59.99% 13 243,240,765 22.63
60.00% -- 69.99% 28 465,116,245 43.27
70.00% -- 74.13% 5 72,327,390 6.73
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 0.00 Max: 74.13 Wtd. Avg.: 55.90
- ---------------------------------------------------------------------
(a) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the mortgage
loans included in the Trust and the mortgage loans that are not included in
the Trust but are pari passu in right of payment with the mortgage loans
included in the Trust.
DEBT SERVICE COVERAGE RATIOS(a)(b)
- ---------------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- ---------------------------------------------------------------------
1.20x+ -- 1.29x 16 231,002,008 21.49
1.30x+ -- 1.39x 17 226,525,363 21.07
1.40x+ -- 1.49x 10 239,794,322 22.31
1.50x+ -- 1.59x 5 21,869,175 2.03
1.60x+ -- 1.74x 4 13,175,000 1.23
1.75x+ -- 1.99x 6 137,648,940 12.80
2.00x+ -- 2.49x 1 130,000,000 12.09
2.50x+ -- 3.62x 1 75,000,000 6.98
- ---------------------------------------------------------------------
TOTAL 60 1,075,014,808 100.00
- ---------------------------------------------------------------------
Min: 1.20 Max: 3.62 Wtd. Avg.: 1.71
- ---------------------------------------------------------------------
(a) Calculated on loan balances after netting out a holdback amount for one
loan representing 1.59% of the Loan Group 1 outstanding pool balance as of
the cut-off date.
(b) In the case of five mortgage loans with one or more companion loans that
are not included in the Trust, calculated only with respect to the mortgage
loans included in the Trust and the mortgage loans that are not included in
the Trust but are pari passu in right of payment with the mortgage loans
included in the Trust.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-6
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
IV. LOAN GROUP 2
CUT-OFF DATE BALANCE ($)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
1,322,911 - 1,999,999 7 11,177,644 4.23
2,000,000 - 2,999,999 4 9,692,142 3.66
3,000,000 - 3,999,999 4 14,437,420 5.46
4,000,000 - 5,999,999 6 27,752,160 10.49
6,000,000 - 6,999,999 3 18,482,178 6.99
7,000,000 - 9,999,999 3 26,115,641 9.87
10,000,000 - 14,999,999 3 35,840,000 13.55
15,000,000 - 29,999,999 3 55,210,000 20.87
30,000,000 - 34,500,000 2 65,775,000 24.87
- -----------------------------------------------------------------
GRAND TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 1,322,911 Max: 34,500,000 Wtd. Avg.: 7,556,634
- -----------------------------------------------------------------
STATE
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
PROPERTIES BALANCE ($) POOL
- -----------------------------------------------------------------
Texas 8 84,876,797 32.09
New York 10 73,120,427 27.65
Florida 7 41,751,372 15.79
Georgia 1 10,400,000 3.93
California 1 9,225,000 3.49
Illinois 1 8,410,641 3.18
Arizona 1 4,880,000 1.85
South Carolina 1 4,586,818 1.73
Wisconsin 2 4,295,798 1.62
North Carolina 2 4,233,872 1.60
Washington 2 3,729,000 1.41
Alabama 1 3,596,881 1.36
Tennessee 2 3,522,911 1.33
Other States (a) 4 7,852,668 2.97
- -----------------------------------------------------------------
TOTAL 43 264,482,184 100.00
- -----------------------------------------------------------------
(a) Includes 3 states.
PROPERTY TYPE
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGED CUT-OFF DATE % OF
PROPERTIES BALANCE ($) POOL
- -----------------------------------------------------------------
Multifamily 43 264,482,184 100.00
Multifamily 38 251,733,380 95.18
Manufactured Housing 5 12,748,805 4.82
- -----------------------------------------------------------------
TOTAL 43 264,482,184 100.00
- -----------------------------------------------------------------
MORTGAGE RATE (%)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
4.430% - 4.999% 6 108,855,641 41.16
5.000% - 5.249% 5 29,875,112 11.30
5.250% - 5.449% 5 47,759,831 18.06
5.450% - 5.749% 8 33,465,097 12.65
5.750% - 5.999% 6 22,704,937 8.58
6.000% - 6.449% 4 20,498,654 7.75
6.450% - 6.650% 1 1,322,911 0.50
- -----------------------------------------------------------------
TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 4.430 Max: 6.650 Wtd. Avg.: 5.235
- -----------------------------------------------------------------
ORIGINAL TERM TO STATED MATURITY (MOS)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
60 - 80 6 59,721,447 22.58
81 - 100 1 8,410,641 3.18
101 - 120 24 169,263,530 64.00
121 -180 4 27,086,566 10.24
- -----------------------------------------------------------------
TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 60 Max: 180 Wtd. Avg.: 107
- -----------------------------------------------------------------
REMAINING TERM TO STATED MATURITY (MOS)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
58 - 99 7 68,132,088 25.76
100 - 119 13 82,144,530 31.06
120 - 178 15 114,205,566 43.18
- -----------------------------------------------------------------
TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 58 Max: 178 Wtd. Avg.: 107
- -----------------------------------------------------------------
LOANS WITH RESERVE REQUIREMENTS (A)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
Tax 33 255,079,826 96.44
Insurance 33 255,079,826 96.44
Replacement 34 247,082,184 93.42
- -----------------------------------------------------------------
(a) Includes upfront or on-going reserves.
CUT-OFF DATE LOAN-TO-VALUE RATIO (%)(a)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
56.43% - 59.99% 2 8,395,654 3.17
60.00% - 69.99% 4 6,754,911 2.55
70.00% - 74.99% 6 55,625,000 21.03
75.00% - 80.00% 23 193,706,619 73.24
- -----------------------------------------------------------------
TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 56.43 Max: 80.00 Wtd. Avg.: 76.28
- -----------------------------------------------------------------
(a) Calculated on loan balances after netting out a holdback amount for one
loan representing 11.82% of the Loan Group 2 outstanding pool balance as of
the cut-off date.
LOAN-TO-VALUE RATIO AT MATURITY (%)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
0.85% - 59.99% 8 27,670,678 10.46
60.00% - 69.99% 21 177,090,060 66.96
70.00% - 73.89% 6 59,721,447 22.58
- -----------------------------------------------------------------
TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 0.85 Max: 73.89 Wtd. Avg.: 65.61
- -----------------------------------------------------------------
DEBT SERVICE COVERAGE RATIOS(a)
- -----------------------------------------------------------------
NO. OF AGGREGATE
MORTGAGE CUT-OFF DATE % OF
LOANS BALANCE ($) POOL
- -----------------------------------------------------------------
1.20x+ - 1.29x 13 139,899,673 52.90
1.30x+ - 1.39x 9 60,006,239 22.69
1.40x+ - 1.49x 6 38,801,095 14.67
1.50x+ - 1.59x 3 12,867,641 4.87
1.60x+ - 1.74x 3 6,768,881 2.56
1.75x+ - 1.87x 1 6,138,654 2.32
- -----------------------------------------------------------------
TOTAL 35 264,482,184 100.00
- -----------------------------------------------------------------
Min: 1.20 Max: 1.87 Wtd. Avg.: 1.33
- -----------------------------------------------------------------
(a) Calculated on loan balances after netting out a holdback amount for one
loan representing 11.82% of the Loan Group 2 outstanding pool balance as of
the cut-off date.
All numerical information concerning the mortgage loans is approximate. All
weighted average information regarding the mortgage loans reflects the
weighting of the loans based on their outstanding principal balances as of the
Cut-off Date. State and Property Type tables reflect allocated loan amounts in
the case of mortgage loans secured by multiple properties. Sum of Columns may
not match "Total" due to rounding.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-7
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
VI. LARGE LOAN DESCRIPTION
TEN LARGEST LOANS OR CROSSED LOAN GROUP
- -------------------------------------------------------------------------------------
NO. PROPERTY NAME CITY STATE
- -------------------------------------------------------------------------------------
1. Garden State Plaza(1) Paramus NJ
- -------------------------------------------------------------------------------------
2. 731 Lexington Avenue -- Bloomberg Headquarters(1) New York NY
- -------------------------------------------------------------------------------------
3. DDR-Macquarie Portfolio(1) Various Various
- -------------------------------------------------------------------------------------
4. G REIT Portfolio Various Various
- -------------------------------------------------------------------------------------
5. Tysons Corner Center(1) McLean VA
- -------------------------------------------------------------------------------------
6. Centreville Square I&II Centreville VA
- -------------------------------------------------------------------------------------
7. Equity Industrial Partners Portfolio Various Various
- -------------------------------------------------------------------------------------
8. International Jewelry Center Los Angeles CA
- -------------------------------------------------------------------------------------
9. 660 Figueroa Tower Los Angeles CA
- -------------------------------------------------------------------------------------
10. 3 Beaver Valley Wilmington DE
- -------------------------------------------------------------------------------------
TOTAL / WEIGHTED AVERAGES
- -------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
CUT-OFF DATE LOAN PER CUT-OFF BALLOON
NO. PROPERTY TYPE BALANCE % OF POOL UNITS/SF UNITS/SF DSCR DATE LTV LTV
- -----------------------------------------------------------------------------------------------------------------------
1. Retail $130,000,000 9.71% 1,470,454 353.63 2.36 53.21 53.21
- -----------------------------------------------------------------------------------------------------------------------
2. Office 125,000,000 9.33% 694,634 452.04 1.48 58.69 42.01
- -----------------------------------------------------------------------------------------------------------------------
3. Retail 75,000,000 5.60% 3,255,827 66.04 3.62 54.31 54.31
- -----------------------------------------------------------------------------------------------------------------------
4. Office 73,400,000 5.48% 1,133,428 64.76 1.38 68.10 61.80
- -----------------------------------------------------------------------------------------------------------------------
5. Retail 62,500,000 4.67% 1,554,116 218.77 1.88 52.31 45.14
- -----------------------------------------------------------------------------------------------------------------------
6. Retail 60,000,000 4.48% 312,026 192.29 1.41 74.53 66.62
- -----------------------------------------------------------------------------------------------------------------------
7. Industrial 56,000,000 4.18% 1,992,267 28.11 1.31 76.92 60.69
- -----------------------------------------------------------------------------------------------------------------------
8. Office 49,847,735 3.72% 369,976 134.73 1.83 60.06 45.61
- -----------------------------------------------------------------------------------------------------------------------
9. Office 45,000,000 3.36% 278,657 161.49 1.25 75.13 64.33
- -----------------------------------------------------------------------------------------------------------------------
10. Office 43,000,000 3.21% 263,058 163.46 1.31 79.63 64.69
- -----------------------------------------------------------------------------------------------------------------------
TOTAL / WEIGHTED AVERAGES $719,747,735 53.73% 1.87 62.76 54.11
- -----------------------------------------------------------------------------------------------------------------------
(1) For purposes of calculating Cut-Off Date LTV Ratio, Balloon LTV, Loan per
Units/SF and DSCR, the loan amount used for the Garden State Plaza Loan ,
the 731 Lexington Avenue Loan--Bloomberg Headquarters Loan, the
DDR--Macquarie Portfolio Loan and the Tysons Corner Center Loan is the
principal balance of the Mortgage Loan included in the trust and the
principal balances of their respective companion loans that are pari
passu in right of payment to the subject Mortgage Loans which are not
included in the trust.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-8
VI. COLLATERAL DESCRIPTION
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
PARI PASSU AND COMPANION LOANS(1)
- --------------------------------------------------------------------------------------------
NO. PROPERTY NAME A-NOTE BALANCES TRANSACTION
- --------------------------------------------------------------------------------------------
$130,000,000 LB-UBS 2004-C4
$130,000,000 LB-UBS 2004-C4
1. Garden State Plaza $130,000,000 COMM 2004-LNB3
$130,000,000 TBD
- --------------------------------------------------------------------------------------------
$125,000,000 COMM 2004-LNB3
$ 65,000,000 TBD
2. 731 Lexington Avenue -- Bloomberg Headquarters $ 50,000,000 TBD
$ 74,000,000 TBD
- --------------------------------------------------------------------------------------------
$ 75,000,000 COMM 2004-LNB3
$ 66,000,000 TBD
3. DDR-Macquarie Portfolio $ 24,250,000 TBD
$ 49,750,000 TBD
- --------------------------------------------------------------------------------------------
$147,500,000 COMM 2004-LNB2
$ 95,000,000 GECMC 2004-C2
4. Tysons Corner Center $ 35,000,000 GMAC 2004-C1
$ 62,500,000 COMM 2004-LNB3
- --------------------------------------------------------------------------------------------
$100,000,000 GMAC 2003-C3
$ 75,000,000 GECMC 2004-C1
$ 85,000,000 COMM 2004-LNB2
5. AFR/Bank of America Portfolio $ 20,000,000 GECMC 2004-C2
$ 40,000,000 GMAC 2004-C1
$ 20,000,000 COMM 2004-LNB3
- --------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
NO. SERVICER SPECIAL SERVICER B-NOTE ORIGINAL BALANCE
- -----------------------------------------------------------------------------------------------------------------
Primary: Midland Loan Services, Inc.;
1. Master: Wachovia Bank, National Association(2) Lennar Partners, Inc. None
- -----------------------------------------------------------------------------------------------------------------
2. Midland Loan Services, Inc. Lennar Partners, Inc. $ 86,000,000
- -----------------------------------------------------------------------------------------------------------------
3. Midland Loan Services, Inc.* Lennar Partners, Inc. None
- -----------------------------------------------------------------------------------------------------------------
Primary: Deutsche Bank Trust Company Americas; Lennar Partners, Inc. None
4. Master: GMAC Commercial Mortgage Corporation(2)
- -----------------------------------------------------------------------------------------------------------------
$100,000,000
5. GMAC Commercial Mortgage Corporation(2) Midland Loan Services, Inc. (BBB-/Baa3/BBB- by S/M/F)
- -----------------------------------------------------------------------------------------------------------------
(1) Does not include one mortgage loan with a subordinate companion loan:
Saks, Inc.-North-Riverside ($8,372,716 mortgage loan and $4,924,759
subordinate loan).
(2) Being serviced pursuant to a separate pooling and servicing agreement.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-9
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
[GARDEN STATE PLAZA PICTURES OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-10
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
MORTGAGE LOAN INFORMATION
LOAN SELLER: GACC
LOAN PURPOSE: Refinance
SHADOW RATING
(MOODY'S/FITCH/S&P/DBRS): A2 / A / AA / A
ORIGINAL TMA BALANCE: $130,000,000(1)
CUT-OFF TMA BALANCE: $130,000,000(1)
% BY INITIAL UPB: 9.71%
INTEREST RATE: 4.9796%
PAYMENT DATE: 6th of each month
FIRST PAYMENT DATE: July 6, 2004
MATURITY DATE: June 6, 2014
AMORTIZATION: Interest Only
CALL PROTECTION: Lockout until the earlier of: a) 24
months from the date the entire Garden
State Plaza loan is securitized, or b) 36
months from origination, then
defeasance is permitted. On and after
December 6, 2013, prepayment can be
made without penalty.
SPONSORS: Westfield America Inc., Aldwych, LLC
and Old Kingsway, LP (the latter two
entities are affiliated with Prudential
Assurance Company Limited)
BORROWERS: Westland Garden State
Plaza Limited Partnership
and GSP Holdings LLC
PARI PASSU DEBT: $390,000,000(1)
SUBORDINATE DEBT: None
LOCKBOX: Hard
INITIAL RESERVES(2): None
MONTHLY RESERVES(2): Replacement Reserve: $85,410
1. The subject $130,000,000 represents the (25%) portion funded by GACC of a
$520,000,000 first mortgage loan funded by a consortium of four banks. The
other three A Notes are equal in size, pari passu and are not included in
the Trust. All numbers under the heading "Financial Information" are based
on the combined A notes that comprise the $520,000,000 whole loan.
2. See "Reserves" section herein.
FINANCIAL INFORMATION(1)
LOAN BALANCE/SF:(3) $353.63
BALLOON BALANCE/SF:(3) $353.63
LTV: 53.2%
BALLOON LTV: 53.2%
DSCR:4 2.36x
3. Calculated on loan collateral square footage.
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Single Asset
PROPERTY TYPE: Super Regional Mall
COLLATERAL: Fee simple interest in a super-
regional mall
LOCATION: Paramus, NJ
YEAR BUILT/RENOVATED: 1957 / 1996,1997
COLLATERAL SF: 1,470,454 SF
TOTAL MALL SF: 1,986,941 SF
PROPERTY MANAGEMENT: Westfield Corporation, Inc., an
affiliate of the borrowers
OVERALL MALL
OCCUPANCY (4/26/04):(4) 98.1%
IN-LINE OCCUPANCY (4/26/04):(4) 95.1%
UNDERWRITTEN NET CASH FLOW:(4) $ 61,976,378
APPRAISED VALUE: $977,200,000
APPRAISAL DATE: March 31, 2004
4. UWNCF, UWNCF DSCR and Occupancy % reflect a stabilized occupancy which
includes 31,747 SF of space leased to tenants that are expected to be in
occupancy by August 2004, and a 3,130 SF space with respect to which,
according to the borrowers, a lease is being negotiated (which will bring
overall occupancy to a stabilized level of 98.1% and in-line occupancy to a
stabilized level of 95.1%). As of April 26, 2004, the property was 97.9%
leased and 96.3% occupied. Actual in-line occupancy as of April 26, 2004
was 90.7%.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-11
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
- ---------------------------------------------------------------------------------------------------------------------------------
ANCHOR TENANTS
- ---------------------------------------------------------------------------------------------------------------------------------
LEASE AREA % OF TOTAL TTM JAN. 2004 TTM JAN. 2004
TENANTS (SF) PROPERTY GLA LEASE EXPIRATION RATINGS (S/M/F)5 TOTAL SALES SALES PSF
- ---------------------------------------------------------------------------------------------------------------------------------
Macy's 439,632 22.1% 7/31/2021 BBB+ / Baa1 / BBB+ $105.5MM $240
- ---------------------------------------------------------------------------------------------------------------------------------
Nordstrom6 245,348 12.3% 7/31/2006 A2 / Baa2 / - $93.0MM $379
- ---------------------------------------------------------------------------------------------------------------------------------
J.C. Penney 176,713 8.9% 11/30/2021 BB+ / Ba2 / BB+ $25.9MM $147
- ---------------------------------------------------------------------------------------------------------------------------------
Neiman Marcus6 141,139 7.1% 8/31/2011 BBB / Baa2 / - $50.6MM $359
- ---------------------------------------------------------------------------------------------------------------------------------
Lord & Taylor6 130,000 6.5% 1/31/2017 BBB+ / Baa1 / BBB+ $28.7MM $221
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL/WA 1,132,832 57.0% $303.7MM $268
- ---------------------------------------------------------------------------------------------------------------------------------
5. Credit ratings are of the parent company whether or not the parent company
guarantees the lease.
6. Nordstrom, Neiman Marcus and Lord & Taylor ground lease their pads and,
therefore, the improvements are not part of the loan collateral.
TTM JAN. 2004 SALES PSF OCC. COST AS % OF SALES
IN-LINE TENANTS $534 16.3%
- ---------------------------------------------------------------------------------------------------------------------------------
MAJOR IN-LINE TENANTS
- ---------------------------------------------------------------------------------------------------------------------------------
LEASE AREA % OF TOTAL NET RENT LEASE TTM JAN. 2004
TENANTS (SF) PROPERTY GLA PSF EXPIRATION RATINGS (S/M/F)(7) SALES PSF
- ---------------------------------------------------------------------------------------------------------------------------------
Old Navy 52,420 2.6% $ 31.38 1/31/2007 BB+ / Ba2 / BB+ $367
- ---------------------------------------------------------------------------------------------------------------------------------
Best Buy (outparcel)8 50,000 2.5% $ 34.50 11/30/2015 BBB- / Baa3 / BBB $867
- ---------------------------------------------------------------------------------------------------------------------------------
Borders Books & Music 33,308 1.7% $ 30.74 1/31/2008 - / - / - $139
- ---------------------------------------------------------------------------------------------------------------------------------
Banana Republic 22,447 1.1% $ 64.81 1/31/2011 BB+ / Ba2 / BB+ $628
- ---------------------------------------------------------------------------------------------------------------------------------
Victoria's Secret9 20,032 1.0% $ 69.31 1/31/2015 BBB+ / Baa1 / - N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Gap 19,512 1.0% $ 60.00 1/31/2011 BB+ / Ba2 / BB+ $559
- ---------------------------------------------------------------------------------------------------------------------------------
Limited / Limited Too 16,314 0.8% $ 48.38 1/31/2010 BBB+ / Baa1 / - $313
- ---------------------------------------------------------------------------------------------------------------------------------
H&M 14,594 0.7% $ 22.50 1/31/2011 - / - / - $363
- ---------------------------------------------------------------------------------------------------------------------------------
Chili's / On The Border
(outparcel) 14,283 0.7% $ 23.26 6/30/2013 - / - / - $447
- ---------------------------------------------------------------------------------------------------------------------------------
Paparazzi / Joe's
American Bar & Grill 13,447 0.7% $ 33.33 1/31/2005 - / - / - $429
- ---------------------------------------------------------------------------------------------------------------------------------
Finish Line 13,358 0.7% $ 30.00 1/31/2009 - / - / - $480
- ---------------------------------------------------------------------------------------------------------------------------------
Express 11,750 0.6% $ 45.00 1/31/2009 BBB+ / Baa1 / - $480
- ---------------------------------------------------------------------------------------------------------------------------------
Abercrombie & Fitch 11,155 0.6% $ 40.00 1/31/2009 - / - / - $600
- ---------------------------------------------------------------------------------------------------------------------------------
Restoration Hardware 10,980 0.6% $ 31.00 1/31/2010 - / - / - $289
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL / WA 303,600 $482(10)
- ---------------------------------------------------------------------------------------------------------------------------------
7. Credit ratings are of the parent company whether or not the parent company
guarantees the lease.
8. Best Buy sales represents three months annualized.
9. Victoria's Secret is relocating from a smaller space and is not currently
in occupancy but has executed a lease and, according to information from the
borrower, is expected to be in-place by August 1, 2004.
10. Weighted average calculation does not include the sales for Victoria's
Secret, which were unavailable for TTM January 2004.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-12
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
THE GARDEN STATE PLAZA LOAN
THE LOAN. The Garden State Plaza loan is secured by a first mortgage on the
1,470,454 SF portion of a 1,986,941 SF super regional mall located in Paramus,
NJ. While the mortgaged property includes the underlying fee interest in the
land on which the Nordstrom, Neiman Marcus, and Lord & Taylor stores are
located, those three anchors own their own stores. The collateral also includes
approximately 64,283 SF of outparcel space.
The whole loan, which was originated by GACC and a consortium of three other
lenders, is a $520 million loan that is shadow rated A2/A/AA/A by
Moody's/Fitch/S&P/DBRS, respectively. The whole loan is bifurcated equally into
four pari passu notes each in the amount of $130MM. Two of the notes have been
securitized in the LB-UBS 2004-C4 transaction and it is anticipated that the
remaining note will be securitized in the near future. Based on an appraised
value of $977.2MM, there is $457.2MM of implied equity in the property.
THE BORROWERS. The borrowers, Westland Garden State Plaza Limited Partnership
and GSP Holdings LLC, are single-purpose, bankruptcy-remote entities for which
non-consolidation opinions were obtained. The sponsorship of the loan is a
joint venture between Westfield America Inc. (41.95%), Prudential Assurance
Company Limited (50%, comprised of affiliated entities Aldwych, LLC and Old
Kingsway, LP) and other investors (8.05%).
WESTFIELD AMERICA, INC. ("WESTFIELD"), has been engaged for over 42 years
in the business of acquiring, owning, financing, operating, leasing,
developing and redeveloping regional and super-regional shopping centers.
As of June 30, 2003, Westfield had interests in 63 major shopping centers
nationally branded as "Westfield Shoppingtowns". The majority of
Westfield's properties are concentrated in 11 geographic clusters in major
markets in the East coast, West coast and Midwest regions of the United
States, serving 11.1% of the US population. The company has shopping
centers in 14 states, comprising 65.7 million SF of space with more than
8,400 specialty stores. The company's 63 shopping center portfolio consists
of 52 super-regional shopping centers with approximately 58 million SF of
space, eight regional shopping centers with approximately five million SF
of space, three power centers with approximately two million SF of space
and eight office buildings adjacent to its centers with approximately one
million SF of space. The company also owns 12 separate department store
properties that are net leased to the May Department Stores Company and
certain other real estate investments. Westfield America, Inc. is the
U.S.-based affiliate of Westfield America Trust, the second largest
publicly traded property trust in Australia. Westfield America Trust is
listed on the Australian Stock Exchange under the symbol WFA.
Westfield is a repeat sponsor of a Deutsche Bank borrower.
PRUDENTIAL ASSURANCE COMPANY LIMITED ("PACL") is a subsidiary of Prudential
plc and is rated AA+ / Aa1 / AA+ by S&P, Moody's and Fitch, respectively.
Established in 1848, today Prudential plc is a leading international
financial services company with approximately 16 million customers,
policyholders and unit holders and approximately 20,000 employees
worldwide. In the UK, Prudential is a leading life and pension provider
with approximately seven million customers. In Asia, Prudential is the
leading European life insurer with 23 life and fund management operations
in 12 countries serving approximately five million customers. In the US,
Prudential owns Jackson National Life, a life insurance company, and has
more than 1.5 million policies and contracts in force. PACL's main
long-term fund had a real estate allocation of 17%, approximately (pounds
sterling)1 billion in 2003.
THE PROPERTY. The Garden State Plaza loan collateral consists of 1,470,454 SF
of the mall's 1,986,941 SF of leaseable space. Located in Paramus, New Jersey
and originally constructed in 1957, the property has been renovated several
times. It now serves as the retail hub for Northern New Jersey and is one of
the largest and most successful shopping centers on the East Coast. In 1996,
the borrowers added 235,000 SF of retail space, expanded the J.C. Penney and
added a Neiman Marcus and a Lord & Taylor. In 1997, the borrowers added an
additional 50,000 SF of in-line space and two multi-level parking decks. The
mall has approximately 269 specialty shops including food court tenants, and is
anchored by five national department stores: Macy's, Nordstrom, J.C. Penney,
Neiman Marcus and Lord & Taylor. The Garden State Plaza mortgaged property
consists of 789,826 SF of in-line mall space, the 439,632 SF Macy's anchor
space, the 176,713 SF J.C. Penney anchor space,
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-13
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR 2.36x
TMA LTV: 53.2%
a 50,000 SF Best Buy outparcel and a 14,283 SF Chili's/On the Border outparcel.
Nordstrom, Neiman Marcus, and Lord & Taylor ground lease their pads and thus
the improvements are not part of the collateral.
Overall, sales for the twelve months ended January 31, 2004, including
annualized sales for Best Buy, were $715.0 million. Garden State Plaza had
comparable in-line sales of $534 PSF for the trailing twelve months ending
January 31, 2004 (these sales levels were achieved despite being closed on
Sunday due to the Bergen County, New Jersey blue laws). In-line occupancy costs
for the year ending December 31, 2003 were 16.3%. As of April 26, 2004, the
mall is 97.9% leased and 96.3% occupied, with in-line occupancy of 94.7%. The
projected 2004/2005 anticipated overall mall occupancy at the property is
98.1%, with in-line occupancy at 95.1% which includes 31,747 SF of space leased
to tenants that are expected to be in occupancy by August 2004, and a 3,130 SF
space which is currently being negotiated.
Beginning in August 2004, and upon satisfaction of certain conditions, the
borrowers plan to acquire a five-acre existing theater site adjacent to the
property and commence a $62.0MM expansion including (i) an approximately 95,000
SF 16-screen Loews cinema complex, (ii) approximately 35,000 SF of new in-line
mall shop space, (iii) approximately 15,000 SF of new restaurant space, (iv) an
upgraded and expanded food court and (v) a grade parking lot or decked parking
facility. This addition will conjoin with the main mall via an adjoining
corridor and the new wing will also feature its own separate outdoor entrance.
SIGNIFICANT TENANTS. The mall is anchored by Macy's, Nordstrom, J.C. Penney,
Neiman Marcus and Lord & Taylor. The 50,000 SF Best Buy and the 14,283 SF
Chili's / On The Border are both located on outparcels. The mall has
approximately 269 tenants and is occupied by many national in-line retailers,
including Abercrombie & Fitch, Aeropostale, Ann Taylor, Brooks Brothers, Bath
and Body Works, Footlocker, Gap, J. Crew, Kenneth Cole, The Limited, Sephora
and Victoria's Secret.
MACY'S, a division of Federated Department Stores, Inc. (NYSE: FD, Ratings:
BBB+ / Baa1 / BBB+ by S&P, Moody's and Fitch, respectively) occupies
439,632 SF under a lease expiring July 31, 2021, with eight renewal options
(the first of which is for 5 years and thereafter, each option is for a
period of 7 years). Founded in 1858, Federated Department Stores, Inc.
(NYSE: FD) operates 455 stores in 34 states, Guam and Puerto Rico as of
February 28, 2004 under the names of Bloomingdale's, Bon-Macy's,
Burdines-Macy's, Goldsmith's-Macy's, Lazarus-Macy's, Macy's and
Rich's-Macy's. It also operates macys.com, Bloomingdale's By Mail, and a
network of online bridal registries operated in conjunction with
weddingchannel.com.
NORDSTROM INC. (NYSE: JWN, Ratings: A2 / Baa1 by S&P and Moody's,
respectively) is one of the nation's leading fashion specialty retailers,
with 136 US stores located in 23 states. Founded in 1901 as a shoe store in
Seattle, Nordstrom operates under the Nordstrom Rack, Faconnable boutiques
and Nordstrom names. Nordstrom occupies 245,348 SF and operates under a
ground lease which expires July 31, 2006. The Nordstrom lease contains ten
10-year renewal options of which two have been exercised.
J.C. PENNEY (NYSE: JCP, Ratings: BB+ / Ba2 / BB+ by S&P, Moody's and Fitch,
respectivey), occupies 176,713 SF under a lease which expires November 30,
2021, with two 10-year renewal options and an additional two 5-year renewal
options). J.C. Penney Corporation, Inc. is one of America's largest
department store, catalog, and e-commerce retailers, employing
approximately 150,000 associates. As of January 31, 2004, J. C. Penney
Corporation, Inc. operated 1,020 JCPenney department stores throughout the
United States and Puerto Rico, and 58 Renner department stores in Brazil.
JCPenney Catalog, including e-commerce, is the nation's largest catalog
merchant of general merchandise, and JCPenney.com is one of the largest
apparel and home furnishings sites on the Internet.
NEIMAN MARCUS (NYSE: NMG, Ratings: BBB / Baa2 by S&P and Moody's,
respectively), occupies 141,139 SF on a ground lease which expires August
31, 2011, with eight 5-year renewal options. The Neiman Marcus Group, Inc.,
through Neiman Marcus Stores, Bergdorf Goodman, and the direct marketing
segment, Neiman Marcus Direct, is a high-end specialty retailer. The
company's stores offer fashion apparel and accessories primarily from
designers. The company operates 35 Neiman Marcus stores across the United
States and two Bergdorf Goodman stores in Manhattan. The company also
operates fourteen clearance centers. These store operations total more than
5 million gross SF.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-14
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
LORD & TAYLOR is a wholly-owned subsidiary of the May Department Stores
Company (NYSE: MAY, Ratings: BBB+ / Baa1 / BBB+ by S&P, Moody's and Fitch,
respectively) and occupies 130,000 SF of space under a ground lease which
expires January 31, 2017. May operates department stores under the names
Lord & Taylor, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, LS
Ayres, Meier & Frank, Strawbridge's, Robinsons-May and The Jones Store.
THE MARKET. The property is located near the intersections of Routes 4 and 17
in New Jersey, and has its own exit off both highways. Both Route 4 and Route
17 are major retail corridors in the Bergen Passaic PMSA. Route 4 provides
direct access to the George Washington Bridge. The subject property is located
less than one mile east of the Garden State Parkway and is approximately 13.5
miles from New York City.
Garden State Plaza is the dominant mall in the area, with in-line sales PSF of
$534.
In 2003, the primary trade area contained an estimated population of 1,630,137.
The average household income in the primary trade area was $88,306, which is
above both the state average of $81,112 and the national average of $63,207.
The primary trade area roughly comprises an irregular radius of 16.5 miles to
the north of the subject, 13.5 miles to the west, 10.1 miles to the south and
3.75 miles to the east.
According to the National Research Bureau, the Bergen-Passaic, NJ PMSA contains
approximately 142.3 million SF of shopping center space in neighborhood,
community and regional centers. The subject property is the largest retail
center in Bergen County. Below is the list of primary competitors:
- -----------------------------------------------------------------------------------------------------------------------------------
DISTANCE
FROM
SUBJECT COMPLETED/ MALL SHOP IN-LINE SALES
PROPERTY NAME (MILES) RENOVATED TOTAL GLA OCCUPANCY PSF ANCHOR TENANTS
- -----------------------------------------------------------------------------------------------------------------------------------
GARDEN STATE PLAZA MACY'S, NORDSTROM, J.C. PENNEY,
(SUPER REGIONAL MALL) N/A 1957 /1996, 1997 1,987,351 94.7% $534 NEIMAN MARCUS, LORD & TAYLOR
- -----------------------------------------------------------------------------------------------------------------------------------
PARAMUS PARK MALL
(SUPER REGIONAL MALL) 4 N 1974 / 1999 1,012,000 100.0% Not Available Macy's, Sears
- -----------------------------------------------------------------------------------------------------------------------------------
RIVERSIDE SQUARE MALL
(FASHION CENTER) 4 E 1977 / 2001 823,000 83.0% $400(5) Bloomingdale's, Saks Fifth Avenue
- -----------------------------------------------------------------------------------------------------------------------------------
WILLOWBROOK MALL Lord & Taylor, Macy's, Sears,
(SUPER REGIONAL MALL) 12 W 1969 / 1997 1,500,000 N/A Not Available Bloomingdales
- -----------------------------------------------------------------------------------------------------------------------------------
THE MALL AT SHORT HILLS Bloomingdale's, Macy's, Neiman
(FASHION CENTER) 26 SW 1980 / 1995 1,350,000 95.0% $550(1) Marcus, Nordstrom, Saks Fifth
Avenue
- -----------------------------------------------------------------------------------------------------------------------------------
PALISADES CENTER Filene's, J.C. Penney, Home Depot,
(SUPER REGIONAL MALL) 19 NE 1998 1,850,000 93.0% Not Available Target, Lord & Taylor, BJ's
- -----------------------------------------------------------------------------------------------------------------------------------
1. Information not included in the appraisal and obtained in connection with
the origination of the loan.
RESERVES. In lieu of making deposits into the tax and insurance reserve
account, Westfield America Inc. and PACL have executed a guaranty of real
estate taxes and insurance premiums and deductibles in favor of the lender.
Westfield America Inc. and PACL guarantee (on a pro rata basis) payment of
TI/LC's and Replacement Reserves for in-line space up to $1.20 PSF per annum.
In the event DSCR falls below 1.10x, based on an assumed constant of 9.00%, or
Westfield America Inc. fails to maintain liquidity of at least $25,000,000, the
borrower must make annunal on-going deposits of $1.20PSF.
CASH MANAGEMENT. The loan has been structured with a hard, pass-through
lockbox. Following the occurrence and during the continuance of an event of
default or if the DSCR falls below 1.10x, funds in the lockbox account will be
allocated to the payment of debt service and reserves as provided in the loan
agreement.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-15
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
PROPERTY MANAGEMENT. The property is managed by Westfield Corporation, Inc.,
an affiliate of Westfield America, Inc., one of the loan sponsors.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Not permitted.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-16
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
GARDEN STATE PLAZA
TMA BALANCE: $130,000,000
TMA DSCR: 2.36x
TMA LTV: 53.2%
[GARDEN STATE PLAZA MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-17
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
[731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS PICTURES OMITTED]
Architect's Rendering
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-18
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
MORTGAGE LOAN INFORMATION
LOAN SELLER: GACC
LOAN PURPOSE: Refinance
ORIGINAL TMA BALANCE: $125,000,0001
CUT-OFF TMA BALANCE: $125,000,0001
SHADOW RATINGS: (SENIOR
LOANS) (S&P/FITCH/
MOODY'S/DBRS) AAA / AAA / A3 / AAA
SHADOW RATINGS: (WHOLE
LOAN) (S&P/FITCH) BBB- / A-
% BY INITIAL UPB 9.33%
INTEREST RATE: 5.3625238854% initially, then by
schedule per Annex A-3
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: April 1, 2004
ANTICIPATED REPAYMENT
DATE: March 1, 2014
MATURITY DATE: March 1, 2029
AMORTIZATION: Interest only through and including the
payment date occurring on March 1,
2006. Thereafter the A-Note amortizes
on a 19.75-year schedule (see
Annex A-3).
CALL PROTECTION: Lockout until 24 months from the date of
the last securitization of the senior
pari passu notes, then defeasance is
permitted. After December 1, 2013,
prepayment can be made without penalty
on any Payment Date.
SPONSOR: Alexander's, Inc. (NYSE: ALX), a REIT
controlled by Vornado Realty Trust
BORROWER: 731 Office One LLC
PARI PASSU DEBT: $189,000,000 1
SUBORDINATE DEBT: A $86,00,000 investment grade B-note,
held outside the trust.2
LOCKBOX: Hard
INITIAL RESERVES3: Debt Service: $11,169,694
Tax: $ 382,217
MONTHLY RESERVES4: None
1. The trust mortgage asset represents the A-1 note from a $400,000,000 first
mortgage loan consisting of a $314,000,000 senior loan (evidenced by pari
passu A-1, A-2, A-3 and A-4 notes), an $86,000,000 subordinate B note and
an $86,000,000 (notional balance) I/O note. The A-2, A-3 and A-4 notes, the
subordinate B note, and the I/O note are not included in the trust. All
numbers under the heading "Financial Information--Trust Mortgage Asset" are
based on the combined A-1, A-2, A-3 and A-4 notes. All numbers under the
heading "Financial Information--Whole Loan" are based on the combined A-1,
A-2, A-3, A-4 and B notes.
2. Note is held by an affiliate of the tenant -- Bloomberg, L.P.
3. Initial Reserves for debt service on whole loan until rent commencement date
and taxes until time when tenant is required to pay 100%.
4. So long as the tenant complies with the obligations under the NNN lease,
there will be no monthly reserves for taxes, insurance, operating expenses
and capital expenditures as permitted under the loan documents.
5. Calculated based on the average rent for the period commencing on the rent
commencement date and ending on the Anticipated Repayment Date. Full rent
commencement date is expected to occur on or about November 9, 2004.
FINANCIAL INFORMATION(1)
TRUST
MORTGAGE WHOLE
ASSET LOAN
------------ ------------
LOAN BALANCE / SF.: $ 452.04 $ 575.84
BALLOON BALANCE / SF: $ 323.54 $ 449.30
LTV: 58.7% 74.8%
BALLOON LTV: 42.0% 58.1%
DSCR: 1.48x 1.25x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Single Asset
PROPERTY TYPE: Office
COLLATERAL: Fee simple interest in an office
condominium
LOCATION: New York, NY
YEAR BUILT / RENOVATED: 2004 / NAP
COLLATERAL SF: 694,634 SF
PROPERTY MANAGEMENT: Vornado Management
Corporation, an affiliate of the
borrower
OCCUPANCY (AS OF 2/9/04): 100.0%
UNDERWRITTEN NET CASH $35,990,430
FLOW:(5)
APPRAISED VALUE (AS OF $535,000,000
RENT COMMENCEMENT
DATE):
APPRAISAL DATE: October 1, 2004
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-19
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
- ----------------------------------------------------------------------------------------------------
MAJOR TENANT
- ----------------------------------------------------------------------------------------------------
TENANT NRSF % NRSF RENT PSF LEASE EXPIRATION RATINGS (S/M/F)
- ----------------------------------------------------------------------------------------------------
Bloomberg, L.P. 694,634 100.0% $ 54.45 11/1/2028 - / - / A-(1)
- ----------------------------------------------------------------------------------------------------
1. See "Tenant" Section herein.
THE 731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS LOAN
THE LOAN. The 731 Lexington Avenue -- Bloomberg Headquarters Loan is primarily
secured by a first mortgage on the borrower's fee simple interest in a 694,634
SF, Class-A office condominium within a larger complex comprising the full
square block from 58th to 59th Street between Lexington Avenue and Third Avenue
in the Plaza District of midtown Manhattan. The Bloomberg office condo consists
of floors 3 -- 19, the exclusive lobby and the lower level space, and is
triple-net leased to Bloomberg, L.P. ("Bloomberg"), which will utilize the
space as its global headquarters.
The subject $125.0MM loan (shadow rated AAA / AAA / A3 / AAA by S&P, Fitch,
Moody's and DBRS, respectively) has an Anticipated Repayment Date of March 1,
2014, with amortization commencing April 1, 2006, based on a 19.75-yr schedule.
The loan is one of four pari passu notes totaling $314.0MM. The remaining three
A-notes, totaling $189.0MM, have the same interest rate, maturity date,
amortization term, and shadow rating as the subject loan and are held outside
of the trust. There also exists an $86.0MM subordinate B-note (shadow rated
BBB- / A- by S&P and Fitch, respectively) which is held outside of the trust by
an affiliate of the tenant.
THE BORROWER. The borrower is a single purpose, bankruptcy remote entity
sponsored by ALEXANDER'S, INC. Alexander's is a publicly traded REIT (NYSE:
ALX, Rated BB+ by S&P) engaged in leasing, managing, developing and
redeveloping properties in the metropolitan and suburban areas of New York City
where its department stores had previously been located.
ALEXANDER'S activities are conducted through its manager, Vornado Realty Trust
(NYSE: VNO). As of September 30, 2003, Vornado (33%) and an affiliate,
Interstate Properties (27%), owned a combined 60% of Alexander's common stock.
Steven Roth is CEO of Alexander's, Chairman/CEO of Vornado, and a general
partner in Interstate Properties. The other two general partners in Interstate
Properties, David Mandelbaum and Russell B. Wight, Jr. are also directors of
Alexander's and trustees of Vornado.
VORNADO REALTY TRUST (rated BBB+/Baa3/BBB by S&P, Moody's and Fitch,
respectively) has been traded on the New York Stock Exchange for over 40 years
and is currently the fourth largest REIT in the United States with a total
market capitalization of approximately $6 billion. Vornado owns, operates,
develops, and manages offices, retail centers, merchandise and furniture marts,
temperature-controlled logistics and real estate properties totaling over 75
million SF, primarily in the Northeast and mid-Atlantic regions of the United
States. Vornado is one of the largest property owners in the New York City
metropolitan area, with ownership interests in 21 office buildings aggregating
more than 13.6 million SF of space. With its recent purchase of Charles E.
Smith Commercial Realty and Kaempfer Company, Vornado is also one of the
largest owners of commercial properties in the Washington DC region.
Vornado Realty Trust and Interstate Properties are both previous sponsors of a
Deutsche Bank borrower.
THE PROPERTY. Vornado took control of Alexander's and the subject site,
formerly home to Alexander's flagship department store, in 1991. The department
store was demolished in 1998 and construction of the current project began in
2001. The subject property will feature newly constructed Class A office and
studio space with column-free floor plates and feature floor to ceiling windows
with excellent views of Central Park, the East River, and Midtown Manhattan.
Collateral for the subject loan consists of the fee simple interest in the
694,634 SF office condominium. The condominium interest consists of floors
3-19, the exclusive lobby and lower level space, of a 1.39 million SF
development that is comprised of a 54-story tower attached to a nine-story
building around a central courtyard, which covers the full square block from
58th to 59th Street between Lexington Avenue and Third Avenue in Manhattan. The
full development contains 900,000 SF of office space, 160,000 SF of retail
space, and 105 luxury residential condominiums (see diagram for stacking plan).
The residential condominium units are currently being marketed for sale.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-20
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
In all, the 731 Lexington Avenue property will be divided into a total of four
condominium units: (i) the Bloomberg office condo consisting of 694,634 SF of
space (collateral for the loan), (ii) a speculative office condo consisting of
205,000 SF that is currently being marketed for lease (additional collateral
for the mortgage loan as described below under the section "Additional
Collateral"), (iii) a retail condo consisting of 160,000 SF that will include a
Home Depot Expo, H&M, Fleet, Wachovia, a high-end restaurant and several other
smaller retail spaces (not collateral for the mortgage loan), and (iv) a
residential condo consisting of 105 units totaling approximately 330,000 SF
(not collateral for the mortgage loan). Portions of the 731 Lexington Avenue
property are currently under construction.
The triple-net lease to Bloomberg, the sole tenant at the mortgaged property,
has a term of 25 years, commenced in stages as outlined below, and has an
average rental rate of $49.71 PSF. Construction costs for the loan collateral
were approximately $442 million, exclusive of Bloomberg's build out. There is a
nine-month free rent period after acceptance of space ("Lease Commencement"),
with the commencement of full rent on November 9, 2004, as more specifically
shown in the schedule below:
- ------------------------------------------------------------------
RENT
LEASE COMMENCEMENT: COMMENCEMENT: SF: % OF TOTAL:
- ------------------------------------------------------------------
11/14/2003 8/14/2004 608,426 87.6%
12/26/2003 9/26/2004 81,947 11.8%
2/2/2004 11/2/2004 3,586 0.52%
2/9/2004 11/9/2004 675 0.10%
------- ------
694,634 100.0%
- ------------------------------------------------------------------
A debt service reserve was funded at closing which covers all debt service
during the free rent period.
THE TENANT. Bloomberg is a global information services, news and media company,
serving customers in 126 countries around the world. Headquartered in New York,
the company employs more than 8,200 people in 110 offices. Bloomberg is the
49th largest private company in the US with 2003 revenues estimated at $3B
according to Forbes. Bloomberg, which will have its global headquarters at 731
Lexington Avenue, is also the second largest news-syndicate (behind Associated
Press and ahead of Reuters and Dow Jones).
BLOOMBERG L.P. IS CURRENTLY PRIVATELY RATED `A-MINUS' (LONG-TERM SENIOR
UNSECURED DEBT RATING) BY FITCH, INC. WITH A POSITIVE OUTLOOK.
STANDARD & POOR'S RATING SERVICES' THREE-YEAR (2000-2002) ADJUSTED KEY U.S.
INDUSTRIAL FINANCIAL RATIOS FOR SINGLE-`A' RATED COMPANIES INCLUDE A MEDIAN
EBITDA INTEREST COVERAGE RATIO OF 8.5X AND A MEDIAN FREE OPERATING CASH FLOW /
TOTAL DEBT RATIO OF 22.3%. BLOOMBERG L.P. MET OR EXCEEDED BOTH OF THESE RATIOS
AS OF JUNE 30, 2003.
Bloomberg provides worldwide financial communication via the Bloomberg
Professional (Registered Trademark) service, Bloomberg Television (Registered
Trademark) , Bloomberg RadioSM, several magazines, a book publishing division,
and websites. Clients include the central banks, investment institutions,
commercial banks, government offices and agencies, corporations and news
organizations.
BLOOMBERG PRODUCTS
Bloomberg Professional (Registered Trademark) service has forged an enviable
position within the financial services industry and is the world's
second-largest provider of global financial data to market professionals with
37% market share. The Professional service provides an excellent combination of
data, analytics, electronic trading and straight-through processing tools on a
single platform. The Bloomberg Professional (Registered Trademark) service's
terminals provide real-time, around-the-clock financial news, market data,
analysis and provides access to more than 3.6 million financial instruments via
170,000 terminals to 260,000 users.
Bloomberg News (Registered Trademark) has more than 1,600 journalists and
editors reporting from 94 bureaus and serves as an electronic newspaper with
unlimited updates and editions. In addition to being a central element of the
Professional service, and providing the content for Bloomberg Television
(Registered Trademark) and Bloomberg RadioSM, more than 350 leading newspapers
worldwide use Bloomberg News as a key source for business news stories. The
news service produces more than 4,000 news stories daily.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-21
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
Bloomberg Television (Registered Trademark) delivers information via 10
networks in seven languages and reaches more than 200 million homes around the
world. Bloomberg also delivers market reports -- integrated into local
newscasts -- to more than 100 television stations in major markets across the
country. Globally syndicated and custom reports are produced for many other
television networks. Bloomberg Radio (Registered Trademark) delivers
information via a 24-hour business station in the New York-metropolitan area
and is available in the U.S. through satellite radio and is distributed as far
away as Singapore and Japan. Bloomberg Radio also distributes syndicated
reports to more than 840 affiliates worldwide in four languages.
THE MARKET. The property is located within Midtown Manhattan's Plaza District,
occupying the entire city block bounded by Lexington and Third Avenues and 58th
and 59th Streets. This location is a gateway between New York's top residential
and retail addresses and its midtown office district. The subject property is
well located within New York City's subway system, with the 4, 5 Express subway
line stops located adjacent to the property and the N, R, W subway line stops
also located within close proximity.
According to the appraisal, the subject property is located in the East Side
subdistrict, which is classified within the Plaza District, and considered one
of Manhattan's premier office and retail locations. The subject property is
also surrounded by many New York landmarks, restaurants, hotels, retail shops
and tourist attractions. It is located near various bus and subway lines. The
Plaza District is generally bound by 47th Street to the south and 65th Street
to the north and to the west from Avenue of the Americas to the East River. The
Plaza District is comprised of four statistical areas tracked by Cushman &
Wakefield: East Side, Park Avenue, Madison/Fifth, and Sixth Avenue/Rockefeller
Center.
As of fourth quarter 2003, the four office subdistricts that comprise the Plaza
District contained 96,519,139 SF of Class A office space and 5,010,082 SF of
Class B office space. There is little Class C office space in these
subdistricts, with Class C space totaling 281,400 SF, or less than one percent.
According to the appraisal, the Plaza District has historically evidenced the
highest rents in midtown Manhattan due to the demand generated by its location
and quality office space. The direct primary (Class A) asking rental rate in
the four Plaza District subdistricts averaged $57.34 in the fourth quarter of
2003, above the overall direct primary midtown Manhattan average of $52.83. The
direct primary vacancy rate for the four Plaza District subdistricts averaged
7.0% in fourth quarter 2003, and the direct secondary (Class B) vacancy rate
averaged 5.3 percent. In comparison, the direct primary vacancy rate for
midtown Manhattan as a whole was 7.6%, while Midtown's direct secondary vacancy
rate was 10.1%. Recent sale prices of comparable office properties include the
GM Building ($729 PSF) in Manhattan, One Lincoln ($675 PSF) in Boston and 399
Park Avenue ($631 PSF) in Manhattan.
The attractiveness of the Plaza District is reflected by the presence of
numerous top firms in a diverse array of businesses, including domestic and
international banking, legal services, manufacturing, printing and publishing,
advertising and communications. Seventeen Fortune 500 Industrial companies have
headquarters in the Plaza District, including RJR Nabisco Holdings,
Bristol-Myers Squibb and Colgate-Palmolive. There are approximately two dozen
Fortune 500 Service companies in the Plaza District as well, notably, JPMorgan
Chase, Citicorp, AOL Time Warner and Bear Stearns & Co., Inc.
The Plaza District boasts several first class hotels that offer luxury
accommodations to business travelers and tourists. Several of New York's finer
hotels are located in the immediate vicinity of the subject, including the
Parker Meridien, the Ritz-Carlton, The Plaza, and the Essex House. Within
walking distance are the New York Palace, the St. Regis Hotel, the Four
Seasons, as well as the Waldorf-Astoria. More moderately priced hotels are
found in the subject's immediate vicinity as well, including the Salisbury, the
Helmsley Windsor, the Wyndham, and the New York Hilton. The presence of many
fine hotels in the area serves as an important inducement to national and
international firms seeking space in Midtown Manhattan.
The comparable properties, as determined by the appraiser, contain a total net
rentable area of 16,216,736 SF. The direct occupancy rate for these buildings
is 89.9%, compared to 91.9% for the East Side subdistrict direct inventory. The
asking rental rates range from $58 to $130 PSF. These average rental rates are
well above the $49.71 PSF that Bloomberg averages over the length of the 25
year lease term.
RESERVES. On a whole loan basis:
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-22
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
Debt service -- $11,169,694 to pay debt service through the free rent period
of the Bloomberg L.P. lease.
Taxes -- $382,217 to pay real estate taxes through the free rent period of
the Bloomberg L.P. lease.
CASH MANAGEMENT. The loan has been structured with a hard lockbox.
PROPERTY MANAGEMENT. The property will be managed by Vornado Management
Corporation, an affiliate of the borrower.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. $86,000,000 investment grade
B-note held outside of the trust (shadow rated BBB- by S&P and A- by Fitch) by
an affiliate of Bloomberg, L.P.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Not permitted.
ADDITIONAL COLLATERAL. The 731 Lexington Avenue -- Bloomberg Headquarters Loan
is also secured by the borrower's fee simple interest in a 205,000 SF
speculative office condominium ("Unit 2") in the building; the lender received
this additional collateral because Bloomberg has certain expansion rights into
Unit 2 which arise under the Bloomberg Condo lease. No value was assigned to
such additional Unit 2 collateral by the Rating Agencies in determining the
rating levels, and no cash flow from Unit 2 was included in the appraisal for
valuation purposes. The Unit 2 collateral is subject to release if space in
Unit 2 is no longer required to be available to Bloomberg pursuant to the
Bloomberg Condo lease; rents and other cash flows from Unit 2 are not required
to be deposited in the lockbox and may be separately financed by the borrower's
parents; and the lender has agreed not to foreclose on the Unit 2 collateral
unless certain Unit 2-specific defaults occur. In addition, subject to the
consent of the holder of the subordinate B-Note and certain other conditions,
the lender is required to enter into loan modifications permitting the borrower
to transfer Unit 2 to another wholly-owned subsidiary of the Sponsor. If such
loan modification becomes effective, the Unit 2 owner may be separately
financed, and, under certain circumstances, the Unit 2 owner may obtain the
release of Unit 2 from the lien of the mortgage of the 731 Lexington Avenue --
Bloomberg Headquarters Loan. No value is attributed to the Unit 2 collateral
and no information on Unit 2 (or any rents or cash flows from Unit 2) is
included in this Collateral Term Sheet. While this speculative office space
serves as additional collateral for this loan, it is excluded from all
valuation calculations such as loan balance PSF and balloon balance PSF and is
not accounted for in the underwritten net cash flow.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-23
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
[731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS PICTURE OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-24
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS
TMA BALANCE: $125,000,000
TMA DSCR: 1.48x
TMA LTV: 58.7%
[731 LEXINGTON AVENUE -- BLOOMBERG HEADQUARTERS MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-25
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR-MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
[PICTURE OMITTED] [PICTURE OMITTED]
Cheektowaga Properties Township Marketplace
Cheektowaga, NY Monaca, PA
[PICTURE OMITTED] [PICTURE OMITTED]
The Marketplace Riverdale Village -- Inner Ring
Nashville, TN Coon Rapids, MN
[PICTURE OMITTED] [PICTURE OMITTED]
Spring Creek Center and Steele Crossing Transit-Wehrle Plaza
Fayetville, AR Clarence, NY
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-26
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
MORTGAGE LOAN INFORMATION
LOAN SELLER: GACC
LOAN PURPOSE: Acquisition
SHADOW RATING
(S&P/MOODY'S/FITCH/DBRS) A / Baa2 / BBB+ / A (low)
ORIGINAL TMA BALANCE: $75,000,000(1)
CUT-OFF TMA BALANCE: $75,000,000(1)
% BY INITIAL UPB: 5.60%
INTEREST RATE: 4.180%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: July 1, 2004
MATURITY DATE: June 1, 2009
AMORTIZATION: Interest only
CALL PROTECTION: Lockout for 24 months, then defeasance
is permitted. On and after December 1,
2008, prepayment can be made without
penalty.
SPONSOR: DDR Macquarie GACC Holdings LLC
BORROWER: 20 special purpose entities
ADDITIONAL FINANCING: Three pari passu notes with an
aggregate principal balance of
$140,000,000, which are not included in
the Trust.(1)
LOCKBOX: Hard
INITIAL RESERVES: None
MONTHLY RESERVES(2): None
1. The subject $75,000,000 represents the A-1 note in a $215,000,000 loan. The
A-2, A-3 and a floating rate note ("A-F") are pari passu with the A-1 note
and are not included in the Trust. All numbers under the heading "Financial
Information" are based on the combined A-1, A-2, A-3 and A-F notes.
2. Monthly reserves for taxes, insurance, replacement reserves and TI and
leasing reserves will only be collected in any period following a test on
which the DSCR declines below 1.05x or if an event of default has occurred
and is continuing.
FINANCIAL INFORMATION(1)
LOAN BALANCE/SQ.FT.: $66.04
BALLOON BALANCE/SQ.FT.: $66.04
LTV: 54.3%
BALLOON LTV: 54.3%
DSCR3: 3.62x
3. Calculated on the combined notes and for the A-F Note assuming LIBOR of
1.50%. If the entire $215,000,000 loan was fixed at the same rate, the DSCR
would be 3.25x.
PROPERTY INFORMATION
SINGLE ASSET/PORTFOLIO: Portfolio
PROPERTY TYPE: 20 anchored retail properties
located in 10 clustered retail
centers
COLLATERAL: Fee simple interest in an
anchored community shopping
center portfolio
LOCATION: The properties are located in six
states: NY, AR, PA, MN, NC and
TN
YEAR BUILT/RENOVATED: 1972-2004/2004
TOTAL AREA: 3,255,827 SF
PROPERTY MANAGEMENT: Developers Diversified Realty
Corporation Management
OVERALL PORTFOLIO OCCUPANCY 91.25% (significant master lease
(AS OF 5/12/04): of vacant space by DDR and
Benderson makes the portfolio
97.0% leased)
UNDERWRITTEN NET CASH FLOW: $29,276,766
APPRAISED VALUE (AGGREGATE): $395,875,000
APPRAISAL DATES: April 1, 2004 and April 3, 2004
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-27
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
- ---------------------------------------------------------------------------------------
ASSETS BASED ON SQUARE FOOTAGE
- ---------------------------------------------------------------------------------------
YEAR(S)
PROPERTY NAME LOCATION NRSF BUILT/RENOVATED
- ---------------------------------------------------------------------------------------
Cheektowaga Properties Cheektowaga, NY 906,721 1982-1995/
(5 properties) 1994/2003/2004
- ---------------------------------------------------------------------------------------
Clarence Portfolio Clarence-Amherst- 684,442 1972-1995/1998
(4 properties) Lancaster, NY
- ---------------------------------------------------------------------------------------
Spring Creek Center and Steele Fayetteville, AR 399,830 1994-2002/NAP
Crossing
(2 properties)
- ---------------------------------------------------------------------------------------
Township Marketplace Monaca, PA 253,110 1997-2002/1998
- ---------------------------------------------------------------------------------------
Riverdale Village-Inner Ring Coon Rapids, MN 249,366 2002-2004/NAP
- ---------------------------------------------------------------------------------------
River Hills Asheville, NC 190,970 1996/NAP
- ---------------------------------------------------------------------------------------
BJ's Plaza/Tops Plaza/Batavia Batavia, NY 182,417 1991-1996/NAP
Commons
(3 properties)
- ---------------------------------------------------------------------------------------
The Marketplace Nashville, TN 167,795 1998-1999/NAP
- ---------------------------------------------------------------------------------------
Erie Marketplace Erie, PA 112,988 2000-2003/NAP
- ---------------------------------------------------------------------------------------
Towne Center Murfreesboro, TN 108,188 1998/NAP
- ---------------------------------------------------------------------------------------
TOTAL/WTD. AVERAGE 3,255,827
- ---------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
APPRAISED ALLOCATED
OVERALL PRIMARY VALUE LOAN AMOUNT
PROPERTY NAME OCCUPANCY ANCHOR ($ MILLIONS) ($ MILLIONS)
- -----------------------------------------------------------------------------------------------------------
Cheektowaga Properties 82.7% Sam's Club $115.0 $62.6
(5 properties)
- -----------------------------------------------------------------------------------------------------------
Clarence Portfolio 91.3% Wal-Mart $74.0 $39.8
(4 properties)
- -----------------------------------------------------------------------------------------------------------
Spring Creek Center and Steele 92.6% Kohl's $49.3 $26.8
Crossing
(2 properties)
- -----------------------------------------------------------------------------------------------------------
Township Marketplace 98.7% Lowe's $23.5 $13.4
- -----------------------------------------------------------------------------------------------------------
Riverdale Village-Inner Ring 93.9% JC Penney $42.2 $23.2
- -----------------------------------------------------------------------------------------------------------
River Hills 100.0% Dick's Sporting Goods $25.8 $14.0
- -----------------------------------------------------------------------------------------------------------
BJ's Plaza/Tops Plaza/Batavia 91.3% BJ's Wholesale Club $17.0 $9.3
Commons
(3 properties)
- -----------------------------------------------------------------------------------------------------------
The Marketplace 100.0% Lowe's $20.2 $10.9
- -----------------------------------------------------------------------------------------------------------
Erie Marketplace 87.2% Marshall's $12.7 $6.1
- -----------------------------------------------------------------------------------------------------------
Towne Center 100.0% TJ Maxx $16.3 $8.9
- -----------------------------------------------------------------------------------------------------------
TOTAL/WTD. AVERAGE 91.3%(1) $215.0
- -----------------------------------------------------------------------------------------------------------
1. Approximately 150,023 vacant SF has been master leased by DDR and Benderson
effectively making the portfolio 97.0% leased.
- --------------------------------------------------------------------------------
TENANTS RATINGS (S/M/F) SF % OF PORTFOLIO NRSF
- --------------------------------------------------------------------------------
Sam's Club/Wal-Mart AA/Aa2/AA 332,513 10.21%
- --------------------------------------------------------------------------------
Lowe's A/A2/A 260,984 8.01%
- --------------------------------------------------------------------------------
Dick's Sporting Goods NA 144,000 4.42%
- --------------------------------------------------------------------------------
Target NA 119,872 3.68%
- --------------------------------------------------------------------------------
PETsMART BB-/Ba2/NA 96,172 2.95%
- --------------------------------------------------------------------------------
TOTAL NA 953,541 29.27%
- --------------------------------------------------------------------------------
THE DDR-MACQUARIE PORTFOLIO LOAN
THE LOAN. The DDR-Macquarie Portfolio Whole Loan is an interest only loan
secured by a first mortgage on 20 anchored community shopping centers located
within ten distinct retail sub-markets. The subject $75,000,000 loan is one of
three pari passu fixed rate notes totaling $165,250,000. A floating rate pari
passu note ("A-F") totaling $49,750,000 was also originated at the same time,
thus providing for a total loan amount of $215,000,000. There is no LIBOR cap
on the A-F note. However, in a stress test scenario, LIBOR could rise to 25%
(from its current 1.15%) and the DSCR on the loan would still be 1.47x. All
four pari passu notes have the same maturity date and the three fixed rate
notes have the same interest rate.
The whole loan is a $215 million loan that is shadow rated A / Baa2 / BBB+ / A
(low) by S&P, Moody's, Fitch and DBRS, respectively. The A-2, A-3 and A-F notes
will not be included in the COMM 2004-LNB3 trust. Based on the acquisition cost
of the portfolio of approximately $395.8MM, the borrower has approximately
$180.8MM (45.7%) of hard equity in the deal.
THE BORROWERS. The borrowers consist of 20 newly formed single-purpose,
bankruptcy-remote entities for which non-consolidation opinions were obtained.
The sponsor of the loan is DDR Macquarie GACC Holdings LLC.
In November 2003, DDR closed a transaction pursuant to which DDR formed an
Australian Stock Exchange listed property trust, Macquarie DDR Trust (ASX:
MDT), with Macquarie Bank Limited. MDT will focus on acquiring ownership
interests in institutional-quality community center properties in the U.S.
MDT operates with a leverage ratio of approximately 50%. Macquarie DDR
Trust is a listed property trust with property assets of approximately $772
million (as of December 31, 2003).
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-28
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
MACQUARIE DDR TRUST
Macquarie DDR Trust ("MDT") is a joint venture between Macquarie Bank
Limited ("MBL") and Developers Diversified Trust ("DDR"). MDT is an
innovative listed property trust that gives investors exposure to a
diversified portfolio of high quality community shopping centres located in
the US. This structure enables shareholders to benefit from each parties'
expertise - Macquarie in capital and funds management and DDR in the
management and development of community shopping centers.
MDT maintains an 81% ownership interest in this portfolio while DDR retains
a 14.5% interest and MBL acquired the remaining 4.5%. DDR remains
responsible for all day-to-day operations of the properties and will
receive fees for property management, leasing, construction management,
acquisitions, due diligence, dispositions (including outparcel sales), and
financing. Through the joint venture company, DDR and MBL will also receive
base asset management fees and incentive fees based on the performance of
MDT. The Trust listed on the Australian Stock Exchange on November 26,
2003.
MACQUARIE BANK LIMITED
Macquarie Bank Limited (ASX: MBL), is a national investment bank providing
various banking and financial services to customers in Australia. The bank
provides lease and leveraged financing, acceptance of deposits,
underwriting services, foreign currency services and corporate and
financial advice. The bank also provides life insurance, acts as a
commodities dealer and investment manager. As of year end 2003 the bank had
assets of approximately $24.2 billion.
DEVELOPERS DIVERSIFIED REALTY TRUST
Developers Diversified Realty Trust (NYSE: DDR) is a publicly traded REIT.
As of December 31, 2003, DDR owned 362 shopping centers located in 44
states, containing an aggregate of approximately 82 million SF of gross
leasable area. The DDR portfolio was 95.1% leased and 94.3% occupied as of
December 31, 2003. DDR had $3.9 billion in assets and $2.1 billion of long
term liabilities as of December 31, 2003.
DDR is a repeat sponsor of a Deutsche Bank borrower.
THE PROPERTIES. The DDR-Macquarie Portfolio properties consist of the
borrowers' fee simple interests in 20 properties, which together contain
3,255,827SF of retail space located in New York (54.47% of NRSF), Arkansas
(12.28% of NRSF), Pennsylvania (11.24% of NRSF), Tennessee (8.48% of NRSF),
Minnesota (7.66% of NRSF) and North Carolina (5.87% of NRSF). The assets range
in size from 108,188 to 906,721 SF.
In May 2004, DDR acquired a total of approximately 110 assets from Benderson
Development Company ("Benderson"), totaling approximately 18.8 million SF, for
a total value of approximately $2.3 billion. Benderson is the largest private
developer, owner and operator of high quality market dominant community centers
in North America. Upon completion of the transaction, DDR will own or manage
over 470 operating and development retail properties in 44 states comprising
over 100 million SF of space. Three of the assets in the subject portfolio
(namely, Cheektowaga Properties, Clarence Portfolio, and BJ's Plaza/Tops
Plaza/Batavia Commons) are part of the DDR acquisition of the Benderson assets,
and the remaining seven assets were contributed by DDR to this financing.
This acquisition marks DDR's entrance into the upstate New York market.
Significant upside in performance is expected from the three acquired assets
due to Benderson's recent concentration on selling their portfolio rather than
leasing and managing the properties. The portfolio is currently 91.25%
occupied, however, approximately 150,023 SF of the vacant space is under master
lease with either Benderson or DDR, effectively making the portfolio
approximately 97.0% leased. DDR is responsible for their portion of the master
lease for three years and will pay agreed upon rents as well as any leasing
costs associated with leasing the space. Benderson's master lease exists for
five years. As vacant space is leased such space will be extinguished under the
master leases.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-29
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
CHEEKTOWAGA PROPERTIES, CHEEKTOWAGA, NEW YORK (906,721 SF; 27.85% OF PORTFOLIO)
PROPERTY INFORMATION. The Cheektowaga Properties consist of five one-story
anchored neighborhood retail shopping centers containing a total of 906,721 SF
on a combined total site of 68 acres. All the properties are located within
close proximity to each other in Central Cheektowaga. This area is considered
to be part of the central portion of the Buffalo-Niagara Falls MSA. Generally,
the boundaries of the Town of Cheektowaga are Amherst to the north, West Seneca
to the south, Lancaster to the east, and the Buffalo CBD to the west. More
specifically, the centers surround the intersection of Walden Avenue and Union
Road (Route 277), and are clustered around the Walden Galleria Mall (anchored
by Bon-Ton, JC Penney, Kaufman's, Lord & Taylor and Sears). The five retail
shopping centers are known as: Union Consumer Square (385,991 SF), Walden
Consumer Square (253,644 SF), Dick's Plaza (170,764 SF), Walden Place (68,502
SF), and Borders Books Plaza (26,500 SF). In addition to the top five retail
tenants below, retailers at the five properties include: Office Max (37,640
SF), Linens and Things (37,000 SF), Marshall's (32,000 SF), Border's Bookstores
(26,500 SF), and Office Depot (24,744 SF). There is a total of 3,644 parking
spaces at the properties.
- ------------------------------------------------------------------------------------------------------------------------
SIGNIFICANT TENANTS
- ------------------------------------------------------------------------------------------------------------------------
TENANTS RATINGS (S/M/F) SF % NRSF RENT PSF LEASE EXPIRATION SALES PSF
- ------------------------------------------------------------------------------------------------------------------------
Sam's Club 1 AA/Aa2/AA 137,742 15.19% $9.28 1/31/24 $401
- ------------------------------------------------------------------------------------------------------------------------
Target Stores A+/A2/A 119,872 13.22% $3.75 1/31/15 NA
- ------------------------------------------------------------------------------------------------------------------------
Dick's Sporting Goods NA 50,000 5.51% $12.00 3/31/15 NA
- ------------------------------------------------------------------------------------------------------------------------
Circuit City NA 42,700 4.71% $18.63 1/31/16 NA
- ------------------------------------------------------------------------------------------------------------------------
Media Play NA 40,000 4.41% $8.00 1/31/10 NA
- ------------------------------------------------------------------------------------------------------------------------
TOTAL/WA 390,314 43.05% $8.82 $401
- ------------------------------------------------------------------------------------------------------------------------
1. Ratings of the parent company, Wal Mart. The Sam's Club will be expanded
this year to approximately 190,000 square with an increase in rent.
MARKET. The subject property is located in the Lackawanna/Cheektowaga/Airport
Area submarket of the Buffalo MSA. The Buffalo MSA contains a total of 17.2
million SF of neighborhood and community retail centers. The
Lackawanna/Cheektowaga/ Airport Area submarket in which the subject is located
consists of 4.2 million SF or 24.5% of the total market. As of fourth quarter
2003, there were 39 shopping centers in the Cheektowaga submarket. This
submarket exhibited an overall vacancy rate of 20.9% as of fourth quarter 2003
compared to the Buffalo MSA vacancy rate of 16.3%. The average asking rent in
the Cheektowaga submarket is $9.19 PSF. The average asking rent in the Buffalo
MSA is $10.83 PSF. As of year-end 2003, average asking prices were up 1.7%
compared to year end 2002. Asking rents posted increases of 1.4%, in the fourth
quarter of 2003. It is also noted that the majority of the vacancy is
concentrated in older product (pre-1980). The subject properties were
constructed in 1982 and underwent renovations in 1994 and 2003-2004. The
current in-place occupancy of the subject properties is 82.7%. Average
household income within a 5 mile radius of the properties was $51,752 in 2002
and is expected to grow at an annual rate of 3.6% through 2007.
CLARENCE PORTFOLIO, CLARENCE-AMHERST-LANCASTER, NEW YORK (684,442 SF; 21.02% OF
PORTFOLIO)
PROPERTY INFORMATION. The Clarence Portfolio consists of four one-story
anchored neighborhood retail shopping centers containing a total of 684,442 SF
of owned collateral on a combined total site of 108.7 acres in the NE retail
corridor of the Buffalo MSA. Each individual retail property within the
portfolio is located along Transit Road (Route 78), between the New York State
Thruway (Interstate 90) and Greiner Road, in the cities of Clarence, Amherst
and Lancaster, New York. All three cities are located within the
Buffalo-Niagara Falls MSA and the Amherst submarket. The four retail shopping
centers are known as: Eastgate Plaza (412,927 SF), Premier Place (142,536 SF),
Regal Cinema (112,941 SF), and Barnes & Noble Plaza (16,030 SF). The Eastgate
Plaza is shadow anchored by a BJ's Wholesale Club. There are a total of 4,467
parking space at the four properties, which equates to a parking ratio of 6.53
spaces per 1,000 SF.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-30
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
- ---------------------------------------------------------------------------------------------------------------------
SIGNIFICANT TENANTS
- ---------------------------------------------------------------------------------------------------------------------
LEASE
TENANTS RATINGS (S/M/F) SF % NRSF RENT PSF EXPIRATION SALES PSF
- ---------------------------------------------------------------------------------------------------------------------
Wal-Mart AA/Aa2/AA 194,771 28.46% $4.98 12/31/19 NA
- ---------------------------------------------------------------------------------------------------------------------
Regal Cinema BB-/B3/- 83,758 12.24% $6.95 9/30/17 $515,164(1)
- ---------------------------------------------------------------------------------------------------------------------
Dick's Sporting Goods NA 50,000 7.31% $9.90 2/28/11 $192.57
- ---------------------------------------------------------------------------------------------------------------------
Linens N' Things NA 38,555 5.63% $11.00 1/31/15 $128.21
- ---------------------------------------------------------------------------------------------------------------------
Stein Mart NA 36,963 5.40% $4.44 12/31/08 NA
- ---------------------------------------------------------------------------------------------------------------------
TOTAL/WA 404,047 59.03% $6.52 $132.40
- ---------------------------------------------------------------------------------------------------------------------
(1) Represents sales per screen. The Regal Cinema is a 16-screen theatre.
MARKET. The four-property retail portfolio includes properties within Amherst,
Clarence, and Lancaster, New York. Clarence abuts Lancaster to the north and
Amherst to the east. All of the subject properties are located in the Amherst
submarket of the Buffalo MSA. The Buffalo MSA contains a total of 17.2 million
SF of neighborhood and community retail centers. The Amherst submarket in which
one of the subject properties is located consists of 4.2 million SF or 24.5% of
the total market. As of fourth quarter 2003, there were 47 shopping centers in
the Amherst submarket. This submarket exhibited a vacancy rate of 15.9% as of
fourth quarter 2003 compared to the Buffalo MSA vacancy rate of 16.3%. The
average asking rent in the Amherst submarket is $12.12 PSF. The average asking
rent in the Buffalo MSA is $10.83 PSF. As of year-end 2003, average rents for
the Buffalo MSA were up 1.7% compared to year end 2002. Asking rents posted
increases of 1.4%, in the fourth quarter of 2003. In 2002, the average
household income within five miles of the properties was $61,028.
SPRING CREEK CENTER AND STEELE CROSSING, FAYETVILLE, ARKANSAS (399,830 SF;
12.28% OF PORTFOLIO)
PROPERTY INFORMATION. The two properties are both multi-tenant anchored power
shopping centers containing 399,830 SF. The two properties contain 38.5-acres
of non-contiguous land. The two properties are located at the intersection of
US 71B, Highway 471 S and Joyce Boulevard. They are centrally located to serve
the entire northwest Arkansas trade area consisting of approximately 300,000
residents in Washington, Benton, Carroll and Madison counties. The two centers
are located adjacent to the Northwest Arkansas Mall, which is anchored by
Dillard's, JCPenney and Sears. More than 15,000 University of Arkansas students
and the corporate headquarters for Wal-Mart, J.B. Hunt and Tyson Foods are
located in this trade area. This location is in the north central portion of
Fayetteville, just south of the town of Springdale. The Spring Creek Center
consists of 262,827 SF of space and Steele Crossing consists of 137,003 SF of
space. The Spring Creek Center is shadow anchored by Wal-Mart Supercenter and
Steele Crossing is shadow anchored by Target.
- ---------------------------------------------------------------------------------------------------------------
SIGNIFICANT TENANTS
- ---------------------------------------------------------------------------------------------------------------
LEASE
TENANTS RATINGS (S/M/F) SF % NRSF RENT PSF EXPIRATION SALES PSF
- ---------------------------------------------------------------------------------------------------------------
Kohl's A-/A3/A 86,584 21.66% $3.25 1/31/22 NA
- ---------------------------------------------------------------------------------------------------------------
Best Buy BBB-/Baa3/BBB 50,000 12.51% $11.75 1/31/17 NA
- ---------------------------------------------------------------------------------------------------------------
Bed, Bath & Beyond BBB/NA/NA 32,000 8.00% $8.91 11/30/09 NA
- ---------------------------------------------------------------------------------------------------------------
Goody's NA 30,230 7.56% $9.50 8/31/13 NA
- ---------------------------------------------------------------------------------------------------------------
TJ Maxx(2) A1/A3/NA 28,000 7.00% $7.25 10/31/05 $304
- ---------------------------------------------------------------------------------------------------------------
TOTAL/WA 226,814 56.73% $7.25 $304
- ---------------------------------------------------------------------------------------------------------------
(1) Ratings of the parent company, TJX Company`s, Inc.
MARKET. These two major regional shopping centers and the Northwest Arkansas
Mall anchor the area as a major retail destination. The subject property
(Spring Creek Center) fronts along Joyce Road and Mall Avenue, both primary
access points for the mall. Steele Crossing is located just south of the
Northwest Arkansas Mall at the intersection of U.S. 71 B and College Avenue.
The merchandising mix of the two centers complement each other and together
they form the dominant retail hub for much of the northwestern suburbs. In the
aggregate, the competitive market (inclusive of the subject) contains a total
GLA of approximately 1,577,956 SF. The weighted average total occupancy in
these centers is about 93.6%. Projections for the year 2010 have the population
over 400,000 persons, while the average household income with a 10-mile radius
is $56,879.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-31
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
TOWNSHIP MARKETPLACE, MONACA, PENNSYLVANIA (253,110 SF; 7.77% OF PORTFOLIO)
PROPERTY INFORMATION. Township Marketplace is a 253,110 SF regional community
center located at the intersection of State Route 18, East of Route 60 (Hershey
Road) in Monaca, Pennsylvania. The property is 30 miles northwest of the
Pittsburgh CBD in a bedroom community. Township Marketplace is anchored by
Lowe's, PETsMART, Shop-N-Save, Pier 1 Imports and shadow anchored by a new
Cinemark, which is currently under construction. The neighborhood is
characterized by commercial uses and low-density residential development, as
well as traffic arteries that feed the area providing for increased traffic
flow. There is a total of 1,812 parking spaces at the properties thus giving
the properties a parking ratio of 7.2 spaces per 1,000 SF.
- ------------------------------------------------------------------------------------------------------------
SIGNIFICANT TENANTS
- ------------------------------------------------------------------------------------------------------------
LEASE
TENANTS RATINGS (S/M/F) SF % NRSF RENT PSF EXPIRATION SALES PSF
- ------------------------------------------------------------------------------------------------------------
Lowe's A/A2/A 125,789 49.70% $7.83 8/31/2027 NA
- ------------------------------------------------------------------------------------------------------------
Shop N' Save NA 61,712 24.38% $3.30 10/31/2019 NA
- ------------------------------------------------------------------------------------------------------------
PETsMART BB-/Ba2/NA 19,355 7.65% $9.84 1/31/2016 NA
- ------------------------------------------------------------------------------------------------------------
Pier 1 Imports BBB-/Baa3/NA 8,110 3.20% $17.00 2/29/2012 NA
- ------------------------------------------------------------------------------------------------------------
Eat N Park NA 7,496 2.96% $10.01 12/31/13 NA
- ------------------------------------------------------------------------------------------------------------
TOTAL/WA 222,462 87.89% $7.16 NA
- ------------------------------------------------------------------------------------------------------------
MARKET. The subject property is located in the northwest portion of the
Pittsburgh MSA within 1.5 miles of the Beaver Valley Mall (anchored by Sears
and JC Penney) and opposite a Wal Mart anchored center in the area's dominant
retail sub-market. For year-end 2003, average asking rents were placed at
$13.71 PSF for non-anchor space within the western submarket. This represents a
slight increase over the year-end 2002 average asking rate of $13.41 PSF and
the year-end 2001 average asking rent of $12.73. The average rent in place is
$11.76, which is 14.2% below market. At the end of 2002, the Pittsburgh MSA had
average household income $56,265. The Township Marketplace has a 15-mile radius
population of 337,000.
RIVERDALE VILLAGE-INNER RING, COON RAPIDS, MINNESOTA (249,366 SF; 7.66% OF
PORTFOLIO)
PROPERTY INFORMATION. Riverdale Village-Inner Ring consists of 13-buildings
that contain 246,743 SF of net rentable area on a 43.84-acre parcel of land.
The center is anchored by JC Penney, Borders Books, and PETsMART. The subject
is part of a larger super power center that will contain approximately 783,000
SF upon completion. The adjacent property is generally referred to as the
"perimeter" section and is anchored by Costco, Sears, Kohl's, Old Navy, Best
Buy, Linen & Things and JoAnn Fabrics. Due to the draw of this new retail hub,
Sears relocated to this property from a nearby retail center. The subject
property is known as the "interior" section or Inner Ring and is in the last
stages of construction. Upon completion the subject property will include an
amphitheater, park, and approximately 285,743 SF of space, including the 39,000
SF yet-to-be built out parcel buildings. The property is located in Anoka
County, within the greater Coon Rapids area. The city of Blaine is located to
the east, Champlin and Brooklyn Park are to the southwest, and Spring Lake Park
is to the south. Generally, the boundaries of the immediate area are within a
two mile radius of the subject property. The Minneapolis CBD is approximately
15 miles southeast of the subject property. More specifically the site is
located on the northeast corner of Round Lake Boulevard and Main Street, west
of Highway 10 and Highway 47. There are a total of 1,598 parking spaces at the
property, thus giving the property a parking ratio of 5.6 spaces per 1,000 SF.
MARKET. The Greater Minneapolis MSA has eight properties which are comparable
to the Riverdale Village-Inner Ring property. According to the appraiser,
in-line occupancy rates of the comps range from 90% to 100% and asking rents
range from $14 to $16 PSF. In the aggregate, these shopping centers contain a
total GLA of approximately 3.3 million SF. According to the appraisal, average
household income within the primary trade area for 2002 was $77,176. The
average household income in the 10-mile area is reported at $78,978. Population
growth in the MSA is forecasted to be approximately 2.0% per year over the next
2 years. Anoka County, where the subject is located, has a current population
of 306,403 and according to the appraisal it is projected to reach 328,445 by
2007 indicating a 1.4% growth rate.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-32
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
- -----------------------------------------------------------------------------------------------------------------
SIGNIFICANT TENANTS
- -----------------------------------------------------------------------------------------------------------------
TENANTS RATINGS (S/M/F) SF % NRSF RENT PSF LEASE EXPIRATION SALES PSF
- -----------------------------------------------------------------------------------------------------------------
JC Penney BB+/Ba3/BB 93,480 37.49% $6.50 1/31/24 NA
- -----------------------------------------------------------------------------------------------------------------
Borders Books NA 21,641 8.68% $12.95 1/31/23 NA
- -----------------------------------------------------------------------------------------------------------------
PETsMART, Inc. BB-/Ba2/NA 19,141 7.68% $12.70 11/30/18 NA
- -----------------------------------------------------------------------------------------------------------------
Ultra Salon NA 10,300 4.13% $19.50 10/31/12 NA
- -----------------------------------------------------------------------------------------------------------------
Pier 1 Imports BBB-/Baa3/NA 10,207 4.09% $18.84 8/31/13 NA
- -----------------------------------------------------------------------------------------------------------------
TOTAL/WA 154,769 62.06% $9.85 NA
- -----------------------------------------------------------------------------------------------------------------
RESERVES. The loan has no initial reserves. Reserves will only be collected
following a test on which the DSCR declines below 1.05x or if an event of
default has occurred and is continuing. If the DSCR declines below 1.05x,
monthly reserves for taxes, insurance, replacement reserves and TI and leasing
reserves will be required.
CASH MANAGEMENT. The loan has been structured with a hard lockbox.
PROPERTY MANAGEMENT. The properties are managed by Developers Diversified
Realty Corporation Management, an affiliate of the sponsor.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Not permitted.
RELEASE PROVISIONS. On and after July 1, 2005, borrower may prepay Note A-F and
in connection therewith obtain a release of certain properties from the loan
subject to the following conditions: i) borrower shall pay an amount equal to
115% of the allocated loan amount for each property (provided that with respect
to the properties located in Clarence, New York; Cheektowaga, New York; and
Batavia, New York, such amount will be equal to 120% of the allocated loan
amount; ii) no event of default shall have occurred or is continuing; iii)
borrower provides lender with rating agency confirmation that the ratings of
the certificates will not be downgraded, qualified or withdrawn; and iv) after
such release, the DSCR with respect to the remaining properties is not less
than 1.35x (calculated using the trailing twelve month NCF and a loan constant
of 9.25%).
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-33
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
[DDR--MACQUARIE MAP OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-34
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
DDR--MACQUARIE PORTFOLIO
TMA BALANCE: $75,000,000
TMA DSCR: 3.62x
TMA LTV: 54.3%
[DDR--MACQUARIE MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-35
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
[G REIT PICTURES OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-36
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
MORTGAGE LOAN INFORMATION
LOAN SELLER: LaSalle Bank National Association
LOAN PURPOSE: Refinance
ORIGINAL TMA BALANCE: $73,400,000
CUT-OFF TMA BALANCE: $73,400,000
% BY INITIAL UPB: 5.48 %
INTEREST RATE: 5.2000%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: July 1, 2004
MATURITY DATE: June 1, 2011
AMORTIZATION: Interest only through the payment
date occurring on June 1, 2005, and
thereafter monthly amortization on
a 30-year schedule.
CALL PROTECTION: Lockout period until the earlier of: a) 24
months from the securitization date or
b) 36 months from the origination date,
then defeasance is permitted. On or
after April 1, 2011, prepayment can be
made without penalty.
SPONSOR: G REIT, Inc.
BORROWER: Various Entities. G REIT-Public Ledger,
LLC; G REIT-Gemini Plaza, LP;
G REIT-Brunswig Square, LP;
G REIT-824 Market Street, LLC; and
G REIT-Atrium Building, LLC.
ADDITIONAL FINANCING: None.
LOCKBOX: Hard.
INITIAL RESERVES: Engineering: $426,381
Environmental: $1,588
Tax: $582,780
Insurance: $111,036
TI/LC: $350,000
MONTHLY RESERVES: Tax: $143,343
Insurance: $18,506
TI/LC: $102,387
Replacement: $21,352
FINANCIAL INFORMATION
LOAN BALANCE / SF: $64.76
BALLOON BALANCE / SF: $58.77
LTV: 68.1%
BALLOON LTV: 61.8%
DSCR: 1.38x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Portfolio
PROPERTY TYPE: Office
COLLATERAL: Five cross collateralized/
defaulted fee properties and two
ground leases on the Atrium
Building property.
LOCATION: Philadelphia, Pennsylvania; Los
Angeles, California; Houston,
Texas; Wilmington, Delaware;
and Lincoln, Nebraska.
YEARS BUILT/RENOVATED: Various (1917-1983)
Various (1986-2003)
TOTAL PORTFOLIO AREA: 1,133,428 SF
PROPERTY MANAGEMENT: Various. Triple Net Properties
Realty, Inc. (affiliate of borrower)
(3); Cambridge Asset Advisors
(1); and Grubb and Ellis (1)
PORTFOLIO OCCUPANCY 89.66%
(AS OF 2/1/04, 4/1/04):
UNDERWRITTEN NET CASH FLOW: $6,695,946
APPRAISED VALUE: $107,780,000
APPRAISAL DATE: 1/13/04-5/14/04
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-37
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
BALANCE: $73,400,000
DSCR: 1.38x
LTV: 68.1%
- -----------------------------------------------------------------------------------------------------------------------
% OF TOTAL LEASE RATINGS
TENANTS SF NRA NET RENT PSF EXPIRATION (S/M/F)
- -----------------------------------------------------------------------------------------------------------------------
VARIOUS ENTITIES: 824 MARKET
STREET; BRUNSWIG SQUARE;
AND PUBLIC LEDGER
BUILDING
- -----------------------------------------------------------------------------------------------------------------------
GSA 250,744 22.1% Various Various AAA / Aaa / AAA
- -----------------------------------------------------------------------------------------------------------------------
GEMINI PLAZA
- -----------------------------------------------------------------------------------------------------------------------
United Space Alliance 158,627 14.0% $9.25 5/31/11 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
ATRIUM BUILDING
- -----------------------------------------------------------------------------------------------------------------------
Department of Administrative
Services Building 130,918 11.6% $10.39 7/15/04 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
BRUNSWIG SQUARE
- -----------------------------------------------------------------------------------------------------------------------
City of Los Angeles 65,528 5.8% Various Various AA / Aa2 / AA
- -----------------------------------------------------------------------------------------------------------------------
PUBLIC LEDGER BUILDING
- -----------------------------------------------------------------------------------------------------------------------
Liberty Mutual Insurance Co. 32,068 2.8% $16.50 11/30/08 A / A2 / A--
- -----------------------------------------------------------------------------------------------------------------------
Ferra Donna 27,882 2.5% $2.38 12/31/06 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
Deutsche Asset Management 23,431 2.1% $17.38 2/28/05 AA-- / Aa3 / AA
- -----------------------------------------------------------------------------------------------------------------------
Nahill & Riedley, P.C. 18,879 1.7% $19.25 6/30/12 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
Center City District 15,077 1.3% $19.00 3/31/14 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
Treatment Research Institute 14,381 1.3% $18.00 11/30/06 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
824 MARKET STREET
- -----------------------------------------------------------------------------------------------------------------------
Cooch & Taylor, PA 14,604 1.3% $17.50 12/31/07 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
Malcom Pirnie, Inc. 11,832 1.0% $20.05 2/28/09 - / - / -
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RENTABLE SPACE 1,133,428
- -----------------------------------------------------------------------------------------------------------------------
THE G REIT PORTFOLIO LOAN
THE LOAN. The G REIT Portfolio Loan is secured by first deeds of trust and
mortgages on five office properties comprising 1,133,428 SF. The loan is
structured with five separate borrowing entities. All five loans are
cross-collateralized and cross-defaulted. The borrowers acquired the properties
through separate transactions between January 2003 and April 2004. The total
purchase price for the five properties was $109,187,000. The borrowers have
$35,787,000 (32.8%) of equity in the G REIT Portfolio Loan based on the total
purchase price.
THE BORROWER. The borrowers are G REIT-Public Ledger, LLC; G REIT-Gemini Plaza,
LP; G REIT-Brunswig Square, LP; G REIT-824 Market Street, LLC; and G
REIT-Atrium Building, LLC. Each of the borrowing entities is sponsored by G
REIT, Inc. G REIT, Inc. operates in an umbrella REIT structure in which its
subsidiary operating partnership. G REIT, Inc. is a real estate investment
trust formed to acquire and operate office, industrial and service properties.
It was incorporated in December of 2001, and held an initial private offering
in October of 2002. As of December 31, 2003, G REIT, Inc. reported assets of
$338,900,000 and shareholder's equity of $153,200,000.
A majority of the members of G REIT's management hold positions in its advisor
company, Triple Net Properties Realty, Inc.. Anthony W. Thompson is the
Chairman of the Board, CEO, President, and Director of all involved entities.
THE PROPERTIES.
The G REIT Portfolio Loan consists of the borrowers fee interest in 5
properties. In addition to its fee interest, the Atrium Property is vested with
two ground lease estates.
PUBLIC LEDGER BUILDING
The Public Ledger Building is a Class B+ building located within the
Philadelphia, Pennsylvania Central Business District. The Public Ledger
Building is a 471,217 SF rentable office building. The property is currently
85% occupied. GSA (Department of Health and Human Services) is the largest
tenant at the property, occupying approximately 27% of the space (Rated AAA /
Aaa
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-38
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
/ AAA by S&P, Moody's and DBRS, respectively; 29% of GPR) April, 2008. Other
large tenants include: Liberty Mutual Insurance (S&P: A; 6.8% of GLA, 6.3% of
GPR), Ferra Donna (5.9% of GLA, 0.8% of GPR), Deutsche Asset Management
(S&P: AA-; 5% of GLA, 4.8% of GPR) and Nahill & Riedley, P.C. (4.0% of GLA, 4.3%
of GPR). No other tenant constitutes more than 4% of the total square footage.
The borrower has $8,950,000 (26%) equity in the Public Ledger Building loan.
GEMINI PLAZA
Gemini Plaza is a 158,627 SF, Class A-, office building located in Houston,
Texas. The property is 100% occupied by the United Space Alliance ("USA"), a
joint venture between two credit tenants: Lockheed Martin Corporation (S&P:
BBB) and The Boeing Company (S&P: A). USA is the prime contractor for NASA's
Space Shuttle Program and is responsible for the day-to-day operation and
management of the U.S. Space Shuttle fleet. Gemini Plaza is less than one mile
from the Johnson Space Center. The space center employs over 15,000 engineers
and scientists that live nearby and work in the general area. The property is
located in an area that is supported by other office facilities related to
NASA. The neighborhood is accessible via Interstate 45 which bisects NASA Road
a short distance from the property. The borrower has $4,700,000 (31%) equity in
the Gemini Plaza mortgaged property.
BRUNSWIG SQUARE
Brunswig Square is a Class A office building located within the Little Tokyo
District of downtown Los Angeles. Brunswig Square contains 135,982 SF of
rentable office space. The property is currently 92.88% occupied. The three
largest tenants are the City of Los Angeles Department of Pensions (S&P: AA;
25.6% of GLA, 23.7% of GPR), GSA (O.P.M and I.N.S.;S&P AAA; 29.3% of GLA and
GPR) and the City of Los Angeles Retirement System (S&P: AA, 22.5% of GLA and
GPR). No other tenant occupies more than 2.25% of the building. The borrower
has $7,975,000 (33%) of equity in the Brunswig Square mortgaged property.
824 MARKET STREET
824 Market Street is a Class A office building located in Wilmington, Delaware.
824 Market Street contains 200,700 SF of rentable space and is currently 94.8%
occupied. GSA (Bankruptcy Court/Probation & Pretrial/Small Business
Administration) is the largest tenant at the property, leasing approximately
40.5% of the space (S&P: AAA; 36.1% of GPR) through August, 2013. The only other
tenant which occupies more than 7% of the space is Cooch & Taylor, a law firm.
Cooch & Taylor occupies 7.3% of the space (5.8% of GPR). The borrower has
$13,150,000 (41%) of equity in the 824 Market Street mortgaged property.
ATRIUM BUILDING
The Atrium Building is a Class B office building located in Lincoln, Nebraska.
The Atrium Building contains 166,902 SF of rentable space and is currently
83.5% occupied. The State of Nebraska Department of Administrative Services is
the largest tenant, occupying 130,918 SF (78.4% of the GLA, 81.6% of the GPR).
No other tenant occupies more than 1.30% of the space. The borrower has
$1,012,000 (22%) of equity in the Atrium Building mortgaged property.
SIGNIFICANT TENANTS.
UNITED STATES GENERAL SERVICES ASSOCIATION (GSA) provides the buildings,
products, services, technology, and other workplace essentials federal agencies
need. 13,000 GSA associates support over one million federal workers located
in 8,000 government-owned and leased buildings in 2,000 U.S. communities and
overseas
UNITED SPACE ALLIANCE (USA) is headquartered in Houston, Texas, and is a space
operations company. Established in 1996 as a Limited Liability Company (LLC),
USA is equally owned by The Boeing Company (NYSE:BA; Rated S&P: A) and Lockheed
Martin Corporation (NYSE:LMT; Rated S&P: BBB) and employs people in Texas,
Florida, Alabama, California and Washington, D.C.
NEBRASKA DEPARTMENT OF ADMINISTRATIVE SERVICES ("DAS") was established by State
Statute 81-101 and has the responsibility to provide centralized support
services to State agencies, boards, and commissions. These functions are
managed by the agency director through twelve (12) separate divisions.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-39
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
THE MARKET.
PUBLIC LEDGER BUILDING
According to the appraisal, the Greater Philadelphia Metropolitan Area office
market contains over 103,000,000 SF of rentable area in 17 submarkets. The
Public Ledger property is located within the Center City (Philadelphia CBD)
office submarket which contains approximately 40,600,000 SF. Overall vacancy
for the entire Philadelphia market was 13.9% as of fourth quarter 2003. The
property's Center City submarket reported vacancy of 11.6% for the same time
period.
Based on the comparables and recently signed/renewed leases at the property,
the office market rental rate of $21 PSF for spaces less than 20,000 SF and
$20.50 PSF for spaces greater than 21,000 SF. The market retail rental rate of
$25.00 PSF for the first floor retail space and $60.00 PSF for the interior
newsstand space. Retail space is minimal at the Public Ledger property,
constituting only 6% of the total rentable area.
GEMINI PLAZA
According to the appraisal, the Johnson Space Center submarket reported a
vacancy rate of 11.9% for similar buildings constructed between 1980-1989 as of
fourth quarter 2003. The overall vacancy rate for the submarket is 15.2%.
Comparable properties reflected a rental rate range of $9.50 PSF to $12.50 PSF,
with an average of $10.35 PSF. The property rental rate of $9.25 PSF compares
favorably with the market rental rate of $9.50 PSF.
BRUNSWIG SQUARE
According to the appraisal, the downtown Los Angeles office market totaled more
than 41,100,000 SF as of first quarter 2004. Total vacancy for the period was
reported at 17.2%, relatively unchanged from the prior quarter vacancy of
17.6%. The downtown market vacancy has improved quarterly from a high of 18.8%
in June, 2002.
The Little Tokyo submarket totaling 715,000 SF, has a submarket vacancy rate of
11.4% (including sublease space). However, a majority of the vacancy is
included in one building, which reported vacancy of 30.9%. Excluding the
building with 30.9% vacancy, the overall Little Tokyo submarket reported an
approximately 8.0% vacancy. Little Tokyo office rental rates ranged from $1.17
PSF per month to $2.00 PSF per month, while retail rents ranged from $1.25 PSF
to $2.74 PSF. Based on the ranges, the market rents of $2.00 PSF per month for
retail space and $1.80 PSF per month for office space. Overall, rental rates at
the property compare favorably to the market.
824 MARKET STREET
According to the appraisal, the Wilmington CBD (Central Business District)
comprises approximately 5,900,000 SF of class A and B office space and consists
of large institutional, governmental and corporate office buildings. Major
employers and occupiers of space within the CBD include MBNA Corp., the State
of Delaware, New Castle County, Wilmington Trust Company, First USA Inc., PNC
Bank Corp., St. Francis Hospital, Bell Atlantic, Chase Manhattan Corp., and
Hercules Inc. Additionally, the top ten law firms within the state are located
within Wilmington's CBD.
As of the first quarter 2004, the Wilmington CBD reported vacancy of 20.2%. The
sub market vacancy rate is 9.6%.
The comparable rentals in the Wilmington CBD range from $17.50 PSF to $28.50
PSF. The 824 Market Street property has a market rental rate of $22.00 PSF.
Overall, the rents at the subject compare favorable with the market rental
rate.
ATRIUM BUILDING
According to the appraisal, the Lincoln, Nebraska office market consisted of
4,324,967 SF of office space as of fourth quarter 2003. Occupancy for the
overall market was 84.9%, with an average rental rate of $14.67 PSF. The
property's central business district submarket consisted of 2,718,307 SF for
the same period. Average occupancy for the submarket was 85.0%, with an average
rental rate of $14.08 PSF. The Atrium property reported occupancy of 83.5% as
of April, 2004, which is consistent with the overall market and submarket.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-40
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
All of the comparable rentals are located within the Lincoln central business
district. The comparable rentals range from $5.00 PSF to $14.50 PSF, however
the $5.00 PSF rent is a net lease. The Atrium property has a market rental rate
of $10.00 PSF for office space, $12.00 PSF for retail space and $4.00 PSF for
storage space. Overall, the rents at the subject compare favorably with the
market rental rate.
PROPERTY MANAGEMENT. Triple Net Properties Realty, Inc
CASH MANAGEMENT. The loan has been structured with a hard lockbox.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Yes, unsecured indebtedness which
cannot at any time exceed 2% of the outstanding principal balance of the G REIT
Portfolio Loan at the time such indebtedness is incurred is permitted.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-41
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
[G REIT MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-42
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
G REIT PORTFOLIO
TMA BALANCE: $73,400,000
TMA DSCR: 1.38x
TMA LTV: 68.1%
[G REIT MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-43
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
[TYSONS CORNER CENTER PICTURE OMITTED]
[TYSONS CORNER CENTER PICTURE OMITTED] [TYSONS CORNER CENTER PICTURE OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-44
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
MORTGAGE LOAN INFORMATION
LOAN SELLER: GACC
LOAN PURPOSE: Refinance
SHADOW RATING
(S&P/MOODY'S/FITCH/
DBRS): AAA / Aa3 / AA / AAA
ORIGINAL TMA BALANCE: $62,500,0001
CUT-OFF TMA BALANCE: $62,500,0001
% BY INITIAL UPB: 4.67%
INTEREST RATE: 5.224%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: April 1, 2004
MATURITY DATE: March 1, 2014
AMORTIZATION: Interest only through the payment date
occurring on March 1, 2006, and
thereafter monthly amortization on a
30-year schedule.
CALL PROTECTION: Lockout until the earlier of: a) 24 months
from the last securitization of the A-1,
A-2, A-3 and A-4 notes to occur, or b) 36
months from origination, then defeasance
is permitted. On and after September 1,
2013, prepayment can be made without penalty.
SPONSOR: Wilmorite Properties, Inc. and the Alaska
Permanent Fund Corporation
BORROWER: Tysons Corner Holdings LLC and Tysons
Corner Property Holdings LLC
ADDITIONAL FINANCING: Three pari passu notes with an
aggregate principal balance of
$277,500,000 which are not included in
the Trust.1
LOCKBOX: Hard
INITIAL RESERVES: Engineering: $478,664
MONTHLY RESERVES2: Tax: $489,126
Insurance: $ 83,507
TI/LC: $ 56,562
Replacement: $ 14,140
Ground Rent: $101,000
1. The subject $62,500,000 represents the A-4 note in a $340,000,000 loan. The
A-1, A-2 and A-3 notes are pari passu with the A-4 note and are not
included in the Trust. All numbers under the heading "Financial
Information" are based on the combined A-1, A-2, A-3 and A-4 notes.
2. Monthly reserves will only be collected in any period following a quarterly
test on which the DSCR declines below 1.45x and ending on the last day of
the third consecutive month on which the DSCR equals or exceeds 1.45x.
FINANCIAL INFORMATION
LOAN BALANCE / SF: $218.77
BALLOON BALANCE / SF: $188.80
LTV: 52.3%
BALLOON LTV: 45.1%
DSCR: 1.88x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Single Asset
PROPERTY TYPE: Super Regional Mall
COLLATERAL: Fee simple interest in a super-
regional mall
LOCATION: McLean, VA
YEAR BUILT / RENOVATED: 1968 / 1988, 2004
COLLATERAL SF3: 1,554,116 SF
TOTAL MALL SF: 1,873,616 SF
PROPERTY MANAGEMENT: An affiliate of the borrowers.
MALL OCCUPANCY (AS OF 9/1/03)4: 98.1%
UNDERWRITTEN NET CASH FLOW: $ 42,224,855
APPRAISED VALUE: $650,000,000
APPRAISAL DATE: August 25, 2003
3. Excludes ground lease tenants, but includes vacant J.C.Penney space.
4. Occupancy calculated including the four anchors and excluding the vacant JC
Penney building, which is part of the contemplated expansion plan.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-45
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
ANCHOR TENANTS
% OF TOTAL OPERATING AGREEMENT TTM OCT. 2003 TTM OCT. 2003
TENANTS SF GLA EXPIRATION RATINGS (S/M/F)(5) TOTAL SALES SALES PSF
- ------------------------------------------------------------------------------------------------------------------------------------
BLOOMINGDALE'S 255,888 13.7% 7/22/20086 BBB+/Baa1/BBB+7 $ 56.6MM $221
- ------------------------------------------------------------------------------------------------------------------------------------
HECHT'S 237,076 12.7% 7/24/20088 BBB+/Baa1/BBB+9 $ 84.9MM $358
- ------------------------------------------------------------------------------------------------------------------------------------
NORDSTROM10 200,000 10.7% 4/15/2025 A-/Baa1/- $ 105.6MM $528
- ------------------------------------------------------------------------------------------------------------------------------------
LORD & TAYLOR11 119,500 6.4% 1/31/2006 BBB+/Baa1/BBB+9 $ 27.8MM $232
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL/WA 812,464 43.4% $ 274.8MM $338
- ------------------------------------------------------------------------------------------------------------------------------------
5. Credit ratings are of the parent company whether or not the parent company
guarantees the lease.
6. Bloomingdale's is currently in its first 10-year renewal option, with two
10-year renewal option outstanding.
7. Ratings of parent company, Federated Department Stores, Inc. (Federated
Department Stores, Inc. has not guaranteed the lease).
8. Hecht's is currently in its first 10-year renewal option, with two 10-year
renewal options outstanding.
9. Ratings of parent company, The May Department Stores Co.
10. Nordstrom operates under a ground lease, which expires April 15, 2025, with
12 five-year renewal options.
11. Lord & Taylor operates under a ground lease, which expires January 31,
2006, with 10 five-year renewal options.
- --------------------------------------------------------------------------------
TTM OCT 2003 SALES PSF OCC. COST AS % OF SALES
- --------------------------------------------------------------------------------
IN-LINE TENANTS $582 13.5%
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
MAJOR IN-LINE TENANTS
- ------------------------------------------------------------------------------------------------------------------------------------
% OF TOTAL NET RENT LEASE TTM OCT. 2003
TENANTS SF MALL SF PSF EXPIRATION RATINGS (S/M/F)12 SALES/SF
- ------------------------------------------------------------------------------------------------------------------------------------
LL BEAN 75,778 4.0% $ 32.00 5/31/2020 - / - / - $ 300
- ------------------------------------------------------------------------------------------------------------------------------------
CIRCUIT CITY 28,000 1.5% $ 21.06 1/31/2005 - / - / - $ 955
- ------------------------------------------------------------------------------------------------------------------------------------
RAINFOREST CAFE 19,162 1.0% $ 33.80 9/30/2006 - / - / - $ 381
- ------------------------------------------------------------------------------------------------------------------------------------
H & M 15,880 0.8% $ 27.83 4/30/2013 - / - / - N/A
- ------------------------------------------------------------------------------------------------------------------------------------
FOOT LOCKER 14,471 0.8% $ 32.00 1/31/2010 - / - / - $ 299
- ------------------------------------------------------------------------------------------------------------------------------------
THE GAP 14,000 0.7% $ 56.00 9/30/2007 BB+ / Ba3 / BB+13 $ 538
- ------------------------------------------------------------------------------------------------------------------------------------
BANANA REPUBLIC 13,116 0.7% $ 58.25 5/31/2005 BB+ / Ba3 / BB+13 $ 840
- ------------------------------------------------------------------------------------------------------------------------------------
RESTORATION HARDWARE 12,889 0.7% $ 35.00 1/15/2010 - / - / - $ 510
- ------------------------------------------------------------------------------------------------------------------------------------
EDDIE BAUER 12,362 0.7% $ 40.00 1/31/2011 - / - / -14 $ 176
- ------------------------------------------------------------------------------------------------------------------------------------
EXPRESS 12,081 0.6% $ 42.00 1/31/2014 BBB+/Baa1/ -15 $ 342
- ------------------------------------------------------------------------------------------------------------------------------------
ABERCROMBIE & FITCH 10,828 0.6% $ 40.00 1/31/2006 - / - / - $ 356
- ------------------------------------------------------------------------------------------------------------------------------------
THE LIMITED 10,662 0.6% $ 42.50 1/31/2006 BBB+/Baa1/ -15 $1,125
- ------------------------------------------------------------------------------------------------------------------------------------
TALBOTS 10,567 0.6% $ 53.49 1/31/2015 - / - / - N/A
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL/WA 249,796 13.3% $ 36.11 $48516
- ------------------------------------------------------------------------------------------------------------------------------------
12. Credit ratings are of the parent company whether or not the parent company
guarantees the lease.
13. Ratings of parent company, The Gap Inc.
14. Parent company, Spiegel Inc., filed for Chapter 11 bankruptcy protection in
March 2003 and in a press release dated December 30, 2003 announced the
closure of 29 Eddie Bauer stores, which did not include the location at
Tysons Corner Center.
15. Ratings of parent company, Limited Brands.
16. Weighted average calculation does not include H&M and Talbots, which did
not report sales for TTM October 2003.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-46
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
THE TYSONS CORNER CENTER LOAN
THE LOAN. The Tysons Corner Center loan is secured by a first mortgage on
1,554,116 SF of retail space located in McLean, VA. The collateral comprises the
major portion of the larger 1,873,616 SF Tysons Corner Center super regional
mall. While the Mortgaged Property includes the underlying fee interest in the
land on which the Nordstrom and Lord & Taylor stores are located, those two
anchors own their own stores.
The loan is a $340 million loan that is shadow rated Aa3/AA/AAA/AAA by Moody's,
Fitch, S&P and DBRS, respectively. The whole loan is comprised of four pari
passu senior notes. The A-1, A-2 and A-3 notes will not be included in the COMM
2004-LNB3 trust. Based on a $650MM appraised value, there is $310MM of implied
equity in the property.
THE BORROWERS. Each borrower, Tysons Corner Property Holdings LLC and Tysons
Corner Holdings LLC, is a single-purpose, bankruptcy-remote entity for which
non-consolidation opinions were obtained. The sponsorship of the loan is a joint
venture between Wilmorite Properties, Inc. (50%) and the Alaska Permanent Fund
Corporation (50%).
WILMORITE PROPERTIES, INC. ("WILMORITE"), a commercial real estate
development and management company, is one of the largest shopping center
owners and managers in the United States. Organized as a private REIT, the
company, through its operating partnership, Wilmorite Holdings, LP, owns
and manages fourteen regional enclosed shopping malls and two open-air
regional shopping centers. In total, the portfolio encompasses more than 15
million SF of retail space and is located in eight states. Additionally,
Wilmorite, Inc. is an affiliated construction management company that is
one of the largest construction companies in upstate New York. J.P. Wilmot
founded the company in 1950 and during the last 50 plus years the company
has developed retail, office, hotel and residential real estate. In 1967,
Wilmorite built Greece Ridge Mall, one of the first enclosed regional malls
in New York State. Since that time, Wilmorite's core business has become
regional mall development and management. Shopping Center World ranks
Wilmorite in the top 30 of retail owners and managers in the United States.
Wilmorite has also been involved with non-retail projects such as the
development and construction of the Rochester Convention Center and Hyatt
Hotel, and the Monroe County International Airport, amongst many other
projects. In the last ten years, Wilmorite has developed over 8 million SF
of commercial real estate.
Wilmorite Properties, Inc. is a repeat sponsor of a Deutsche Bank borrower.
The ALASKA PERMANENT FUND CORPORATION is the manager of a $25 billion fund
that was established in 1976 by a voter-approved amendment to the Alaska
Constitution. The fund's portfolio is comprised of 53% equity, 37% fixed
income and 10% real estate. A six member, governor-appointed board of
trustees is responsible for managing the corporation. The fund's real
estate portfolio consists of 58 properties and also includes a portfolio of
REIT stocks. Of the approximately $2.2 billion real estate fund, 65% is
comprised of direct investments in real estate properties. The fund is
diversified across four property types: 24% office, 17% retail, 16%
residential and 8% industrial. Additionally, the properties are diversified
geographically throughout the East, West, Mid-West and Southern regions of
the United States, with two properties located in Alaska.
THE PROPERTY. The Tysons Corner Center loan collateral encompasses 1,554,116 SF
of retail space, consisting of the major portion of a 1,837,616 SF
super-regional mall. Located in McLean, VA and originally constructed in 1968,
the property was redeveloped to its current format in 1988. Tysons Corner Center
had comparable in-line sales of approximately $600 PSF and total gross sales of
over $615 million in 2002 (placing it in the top 1% of all malls in the U.S.).
Current anchor tenants at Tysons Corner Center include: Bloomingdale's, Hecht's,
Lord & Taylor and Nordstrom. The Hecht's and Nordstrom department stores located
at the subject property are reportedly among the top performing stores in their
respective chains.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-47
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
Tysons Corner Center was one of the first fully enclosed, climate controlled
shopping centers in the Washington, D.C. metropolitan area. Due to the tenant
mix and location, the mall draws customers from a multi-state area. Developed by
the Lerner Corporation, the mall originally consisted of 1.2 million SF. After a
$165 million renovation, which was completed in 1988, the mall now contains over
1.8 million SF, has two levels, four department stores, and more than 210
stores, restaurants, and eateries.
The loan documents for the Tysons Corner Center Loan permit the borrower to
renovate and expand a portion of the mall at its own expense. Construction of
the project is underway and is expected to be completed on or before the fourth
quarter 2005. The scope of work approved under the loan documents, if completed,
will include, (a) the redevelopment of the currently vacant JC Penney building
containing approximately 226,464 SF of gross building area and the construction
of a new attached building containing approximately 288,870 SF of gross building
area (creating approximately 515,334 SF of gross building area and approximately
365,277 SF of gross leasable area on three levels) and the leasing of such space
to a movie theater (approximately 93,711 SF on level three leased to AMC
Theatres), food court, restaurants and additional tenants and (b) the
construction of an adjacent multi-level parking garage, having approximately
1,612 parking spaces. The movie theater, if completed, will be the only modern,
stadium-seating theater in the Tysons Corner market based on current market
conditions. According to an AMC Entertainment Inc. (AMEX: AEN) press release
dated May 14, 2003, the theatre complex is targeted for an August 2005 opening
and will anchor a new entertainment wing at the Tysons Corner Center, which also
will include restaurants, cafes, a bookstore and other leisure and retail
venues. The expansion and renovation, if completed, will provide additional
collateral for the Tysons Corner Center Loan, but no income from such space was
included in the underwriting of the mortgage loan. The loan documents do not
require a reserve or completion guaranty in connection with the project. After
completion of the expansion, the mall will contain a total GLA of approximately
2,202,893 SF THE APPRAISER VALUED THE PROPERTY POST-EXPANSION AT $830 MILLION,
RESULTING IN AN LTV AT THAT TIME OF 41.0% (BASED ON THE INITIAL LOAN AMOUNT).
SIGNIFICANT TENANTS. The subject's in-line occupancy is 95.9%. The mall is
anchored by Bloomingdale's, Hecht's, Nordstrom's and Lord & Taylor and has over
210 in-line tenants. The Bloomingdale's and Hecht's improvements serve as
collateral for the loan; Lord & Taylor and Nordstrom's each occupy their space
under ground leases which expire in 2006 and 2025, respectively, with renewal
options. Overall occupancy including Nordstrom and Lord & Taylor (and excluding
the vacant JCPenney building) is 98.1%. The mall is also home to many national
retailers, including LL Bean, a Circuit City Superstore, The Gap, Inc., The
Limited, Williams Sonoma, Bombay and A/X Armani Exchange, many of which have
chosen to make Tysons Corner their only store location in the Washington, DC
area, due to the superior location and tenant mix of the subject property.
BLOOMINGDALE'S, an upscale department store, occupies 255,888 SF (16.5% of
collateral space) under a lease expiring July 22, 2008 at a fixed rent of
$1.45PSF. Bloomingdale's, a division of Federated Department Stores (NYSE:
FD; Ratings: BBB+, Baa1 and BBB+ by S&P, Moody's and Fitch, respectively),
was founded in 1872 and operates 34 stores in New York, New Jersey,
Massachusetts, Pennsylvania, Maryland, Virginia, Illinois, Minnesota,
Florida, California, Nevada and Georgia.
HECHT'S, a mid-range department store, is owned by parent company, May
Department Stores (NYSE: MAY, Ratings: BBB+, Baa1, BBB+, by S&P, Moody's
and Fitch, respectively). Hecht's occupies 237,076 SF (15.3% of collateral
space) under a lease expiring in July 2008 (currently in its first 10-year
renewal option, with two, 10-year renewal options outstanding), with a rent
of $1.00 annually with additional percentage rent.
NORDSTROM INC. (NYSE: JWN, Ratings: A- and Baa1 by S&P and Moody's,
respectively) is one of the nation's leading fashion specialty retailers,
with 149 US stores located in 27 states. Founded in 1901 as a shoe store in
Seattle, today Nordstrom operates under the Nordstrom Rack, Faconnable
Boutiques and Nordstrom names. Nordstrom occupies 200,000 SF (10.7% of
total GLA). Nordstrom operates under a ground lease which expires in April
2025, with 12 five-year renewal options.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-48
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
LORD & TAYLOR occupies 119,500 SF (6.4% of total GLA) under a ground lease
which expires in January 2006, with 10 five-year renewal options. Lord &
Taylor is owned by The May Department Stores (NYSE: MAY, Ratings: BBB+,
Baa1, BBB+, by S&P, Moody's and Fitch, respectively).
THE MARKET. Tysons Corner Center is located in the Tysons Corner market of
Fairfax County, Virginia. One of the mall's strongest attributes is its
accessibility to the entire Washington DC metropolitan area, including
Montgomery County, Maryland, Arlington, Alexandria, Prince William, and Fairfax
Counties, Virginia. The mall is located at the intersection of two main
thoroughfares for northern Virginia, US Route 7 (Leesburg Pike) and US Route 123
(Chain Bridge Road). In addition, the Capital Beltway (I-495), the major
thoroughfare around Washington DC, is located directly adjacent to the property
and allows convenient ingress and egress to the mall as well as other major
highways, the Dulles Tollway and Route I-66.
According to the appraiser, in 2002 the average household income within five
miles of the subject was approximately $153,580 (or 123% above the Virginia
average of $68,945); within ten miles the average household income was
approximately $125,639 (82% above the Virginia average). REIS, Inc. shows a
total retail inventory for the Tysons Corner sub-market (Suburban Fairfax
County) of 12.5 million SF at the end of 2003, up 3.5% from 2002. Vacancy rates
for this sub-market are low, and have remained stable at 1.9% at the end of
2003.
The area is well served by transportation systems that offer access to regional
markets and make Fairfax County a central location for businesses that serve
both Baltimore and Washington. Washington Dulles Airport is less than 15 minutes
away and Washington National Airport is within a 20-minute drive of the
property. The local market area is best known for its two super regional malls:
the subject property and Tysons Galleria (owned by General Growth Properties).
In addition, the Tysons Corner office market is the 13th largest office market
and that includes headquarters for Freddie Mac, Gannett/USA Today, Capital One
and others. There are several hotels in the immediate area of the mall including
a Ritz Carlton just across Chain Bridge Rd.
DISTANCE 2002
FROM IN-LINE
SUBJECT COMPLETED/ MALL SHOP SALES
PROPERTY NAME (MILES) RENOVATED TOTAL GLA OCCUPANCY PSF ANCHOR TENANTS
- ------------------------------------------------------------------------------------------------------------------------------------
TYSONS CORNER CENTER N/A 1968 / 1988 / 2004 1,873,6161 Bloomingdales, Hecht's,
95.9% $597(1) Nordstrom's, Lord & Taylor
- ------------------------------------------------------------------------------------------------------------------------------------
THE GALLERIA AT TYSONS II (less than)1 1988 / 1997 810,959 Macy's, Neiman Marcus,
88% N/A Saks Fifth Avenue
- ------------------------------------------------------------------------------------------------------------------------------------
FASHION CENTRE AT PENTAGON CITY 10 1990 821,697 98% $ 750 Macy's, Nordstrom
- ------------------------------------------------------------------------------------------------------------------------------------
MONTGOMERY MALL 8 1968 / 1991 1,253,482 (greater than)93% N/A Hecht's, Nordstrom, Sears
- ------------------------------------------------------------------------------------------------------------------------------------
SPRINGFIELD MALL 11 1973 / 1987 / 1991 1,700,000 (greater than)90% $ 340 JC Penney, Macy's, Target
- ------------------------------------------------------------------------------------------------------------------------------------
Hecht's, Lord & Taylor,
FAIR OAKS MALL 10 1980 / 2000 1,584,000 (greater than) 85% N/A Sears, JC Penney, Macy's
- ------------------------------------------------------------------------------------------------------------------------------------
1. Information for total mall GLA; loan collateral is 1,554,116 SF
Source: Appraisal and supplied directly by the borrower.
PROPERTY MANAGEMENT. The property is managed by Wilmorite Property Management,
LLC, an affiliate of the borrower. Wilmorite Property Management manages
fourteen regional enclosed shopping malls and two open-air regional shopping
centers. In total, the portfolio encompasses more than 15 million SF of retail
space and is located in eight states.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Not permitted.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-49
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
TYSONS CORNER CENTER
TMA BALANCE: $62,500,000
TMA DSCR: 1.88x
TMA LTV: 52.3%
[TYSONS CORNER CENTER MAPS OMITTED]
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-50
[THIS PAGE INTENTIONALLY LEFT BLANK]
B-51
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
CENTREVILLE SQUARE I & II
BALANCE: $60,000,000
DSCR: 1.41x
LTV: 74.5%
[CENTREVILLE SQUARE I & II PICTURES OMITTED]
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-52
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
CENTREVILLE SQUARE I & II
BALANCE: $60,000,000
DSCR: 1.41x
LTV: 74.5%
MORTGAGE LOAN INFORMATION
LOAN SELLER: LaSalle Bank National Association
LOAN PURPOSE: Refinance
ORIGINAL TMA BALANCE: $60,000,000
CUT-OFF TMA BALANCE: $60,000,000
% BY INITIAL UPB: 4.48%
INTEREST RATE: 5.4500%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: July 1, 2004
MATURITY DATE: June 1, 2014
AMORTIZATION: Interest only through the payment date
occurring on June 1, 2007, and thereafter
monthly amortization on a 30-year
schedule.
CALL PROTECTION: Lockout period until earlier of: a) 24
months from the securitization date, or
b) 36 months from origination then
defeasance in whole is permitted, but not
in part. On and after March 1, 2014,
prepayment can be made without
penalty.
SPONSOR: Albert J. Dwoskin
BORROWER: Centreville Square Project Limited
Partnership
PARI PASSU DEBT: None.
SUBORDINATE DEBT: None.
LOCKBOX: Soft at closing, springing
hard
INITIAL RESERVES: Tax: $ 56,128
Insurance: $ 47,304
Engineering: $302,250
MONTHLY RESERVES: Tax: $ 56,128
Insurance: $ 5,913
Replacement: $ 3,900
FINANCIAL INFORMATION
LOAN BALANCE /SF: $ 192.29
BALLOON BALANCE /SF: $ 171.88
LTV: 74.5%
BALLOON LTV: 66.6%
DSCR: 1.41x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Single Asset
PROPERTY TYPE: Retail
COLLATERAL: Leased fee estate in a 2 story multi-
tenant shopping center.
LOCATION: Centreville, Virginia
YEAR BUILT / RENOVATED: 1986, 1992/NAP
COLLATERAL AREA / TOTAL AREA: 312,026 SF/312,026 SF
PROPERTY MANAGEMENT: A.J. Dwoskin & Associates Inc.
MALL OCCUPANCY: (04/22/2004) 100%
UNDERWRITTEN NET CASH FLOW: $ 5,743,736
APPRAISED VALUE: $80,500,000
APPRAISAL DATE: May 8, 2004
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-53
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
CENTREVILLE SQUARE I & II
BALANCE: $60,000,000
DSCR: 1.41x
LTV: 74.5%
- --------------------------------------------------------------------------------
ANCHOR TENANTS RATING (S/M/F) LEASE AREA (SF) % OF TOTAL
- --------------------------------------------------------------------------------
SHOPPERS FOOD WAREHOUSE - / - / - 47,002 15.06
- --------------------------------------------------------------------------------
LEGACY FURNITURE - / - / - 26,092 8.36
- --------------------------------------------------------------------------------
BOYD SCHOOL - / - / - 14,527 4.66
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
NET
RENTABLE % OF TOTAL
IN LINE RATINGS AREA NET RENTABLE ACTUAL LEASE
TENANTS S/M/F (SF) AREA RENT (SF) EXPIRATION
- --------------------------------------------------------------------------------------------------
CENTREVILLE TIRE & AUTO - / - / - 9,435 3.02% $ 20.36 10/31/07
- --------------------------------------------------------------------------------------------------
ADVANCE AUTO PARTS BB / Ba2 / - 9,137 2.93% $ 11.00 08/31/08
- --------------------------------------------------------------------------------------------------
NORTHERN VA FAMILY SERVICE - / - / - 8,000 2.56% $ 11.59 04/30/09
- --------------------------------------------------------------------------------------------------
MCKAY'S USED BOOKS - / - / - 7,857 2.52% $ 15.53 12/31/04
- --------------------------------------------------------------------------------------------------
NATIONWIDE INSURANCE CO. A+ / Aa3 / AA 6,809 2.18% $ 19.98 10/31/04
- --------------------------------------------------------------------------------------------------
CENTREVILLE SQUARE I & II LOAN
THE LOAN. The Centreville Square I & II Loan is secured by a first deed of trust
on the Centreville Square shopping center, a 312,026 SF grocery-anchored retail
center located at the intersection of Route 29 (Lee Highway) and Route 28
(Centrewood Drive) in Centreville, Fairfax County, Virginia.
THE BORROWER. The borrower is Centreville Square Project Limited Partnership, a
special purpose, bankruptcy remote entity and is a limited partnership.
Centreville/Square/AJD Corporation (1%) is the general partner of the borrower
and Centreville Square Limited Partnership (99%) is the sole limited partner.
Centreville/Square/AJD Corporation is 100% owned by Albert J. Dwoskin and
Centreville Square Limited Partnership is controlled by Albert J. Dwoskin as the
general partner. The sponsor, Albert J. Dwoskin, has a net worth of over
$80,000,000 of which approximately $4,000,000 is cash and marketable securities.
A.J. Dwoskin & Associates Inc. is a real estate development and management
company founded in 1967 by Albert J. Dwoskin. The company currently manages 16
retail centers containing 1.4 million SF of retail space, ten multifamily
apartment properties with 1,843 units, four mobile home communities with 553 pad
sites, and three land investments.
THE PROPERTY. The Centreville Square shopping center is a 312,026 SF
grocery-anchored retail center located in Centreville, Virginia. The property
has access and visibility from several major roadways in the area. Route 29 (Lee
Highway), which fronts the site, intersects Interstate 66 just one-half mile
west of the property. Route 29 is a major east-west arterial in Fairfax County
that intersects with Route 29 at the northeast corner of the property. The
subject property is located approximately 20 miles west of the Washington, DC
CBD.
SIGNIFICANT TENANTS. The property is 100% occupied by a total of 102 tenants.
The largest tenant is Grand Mart International Food (subleasing from Shoppers
Food Warehouse (since October, 2002)) occupying 47,002 SF (15.06% of total
space, 15.68% of GPR), with sales estimated at $423 PSF Grand Mart is an Asian
specialty grocery store that caters to a large Asian population in the area.
Legacy Furniture, the second largest tenant, occupying 26,092 SF (8.36% of total
space) is a regional furniture store. The third largest tenant, Boyd School,
occupying 14,527 SF (4.66% of total space), is a children's day care center.
The remaining tenants are a mix national retailers including investment grade
tenants, regional service providers, and other tenants offering goods and
services that range from restaurants and boutique shops to sundry stores and a
day care center. The property has been at least 97% occupied since 2001.
THE MARKET. According to the appraisal, the Suburban Virginia retail market
currently contains over 35.1 million SF of space in 520 buildings and is divided
among five submarkets. Fairfax County is the largest submarket, with over 12.5
million SF of space or 35.5% of the area's total inventory. The Suburban
Virginia retail market has been steadily improving since 1995, with declining
vacancy rates and increasing rents. The estimated population within one mile of
the property is 22,174 and is forecasted to grow by 9.58% by 2008. Employment
has grown at a 4.0% annual average rate and increased by nearly 194,000
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-54
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
CENTREVILLE SQUARE I & II
BALANCE: $60,000,000
DSCR: 1.41x
LTV: 74.5%
jobs during the last ten years. During the past decade there has been a
substantial amount of new housing constructed in the immediate area surrounding
the shopping center. The closest of the housing developments is Centre Ridge,
which is located directly south of the property. This community contains
approximately 3,000 housing units.
Trinity Center is directly across from Route 29 from Centreville Square. It
contains two office buildings totaling 250,000 SF, and a 90,000 SF full-service
fitness center.
Centrewood Plaza, an anchored retail center, is located directly behind and
adjacent to Centreville Square. This center acts as a shadow anchor, as
customers driving from Route 29 to the center must go through Centreville
Square.
The median household income for Fairfax County is $90,409 compared to $51,923
for the State of Virginia.
PROPERTY MANAGEMENT. The property is managed by A.J. Dwoskin & Associates, Inc.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Yes, unsecured indebtedness which
cannot at any time exceed 2% of the outstanding principal balance of the
Centreville Square I & II Loan at the time such indebtedness is incurred is
permitted.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-55
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
CENTREVILLE SQUARE I & II
BALANCE: $60,000,000
DSCR: 1.41x
LTV: 74.5%
[CENTREVILLE SQUARE MAPS OMITTED]
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-56
[THIS PAGE INTENTIONALLY LEFT BLANK]
B-57
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
[PHOTO OMITTED]
[PHOTO OMITTED] [PHOTO OMITTED]
[PHOTO OMITTED] [PHOTO OMITTED]
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-58
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
MORTGAGE LOAN INFORMATION
LOAN SELLER: LaSalle Bank National Association
LOAN PURPOSE: Refinance
ORIGINAL BALANCE: $56,000,000
CUT-OFF BALANCE: $56,000,000
% BY INITIAL UPB: 4.18%
INTEREST RATE: 5.2870%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: July 1, 2004
MATURITY DATE: June 1, 2014
AMORTIZATION: 324 months
CALL PROTECTION: Lockout until 35 payments after the
securitization date and defeasance
thereafter. Prepayment without
penalty is permitted after March 1,
2014. The Plainfield property can be
released from the lien of the
mortgage prior to the end of the
defeasance lockout period upon
payment of $19,950,000 and a yield
maintenance charge.
SPONSOR: Donald A. Levin, Neal Shalom, and
Lewis Heafitz.
BORROWER: Equity Industrial Plainfield Limited
Partnership; Equity Industrial
Norwood, LLC; Equity Industrial
Westfield, LLC; Equity Industrial
Gardner, LLC; and Equity Industrial
E. Bridgewater, LLC.
ADDITIONAL FINANCING: None.
LOCKBOX: Hard.
INITIAL RESERVES: Replacement $1,177,065
Tax $ 126,630
Insurance $ 161,170
Other:(1) $8,500,000
MONTHLY RESERVES: Tax: $ 636,127
Insurance: $ 31,566
TI/LC: $ 24,859
Replacement: $ 26,517
(1)The loan has a pre-funded earnout structure whereby the lender has heldback
$8.5 million dollars of loan proceeds as additional collateral in an escrow
account and will continue to be held as additional collateral and is not
permitted to be used as payment on the loan unless an event of default occurs.
It will be released only upon the leasing of certain vacant space at the
Westfield property and satisfaction of other conditions described below.
FINANCIAL INFORMATION
LOAN BALANCE / SF: $ 28.11
BALLOON BALANCE / SF: $ 22.18
LTV: 76.9%
BALLOON LTV: 60.7%
DSCR: 1.31x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Portfolio
PROPERTY TYPE: Industrial Warehouse
COLLATERAL: Four fee properties and one
leasehold property, all
cross-collateralized and
cross-defaulted.
LOCATION: Four properties are located in
Massachusetts and one property
is located in Connecticut.
YEARS BUILT: Various (1958-1999)
YEARS RENOVATED: Various (1996-2003)
TOTAL PORTFOLIO AREA: 1,992,267 SF
PROPERTY MANAGEMENT: Equity Industrial Partners Corp.
PORTFOLIO OCCUPANCY 83.9%
(AS OF 05/01/2004):
UNDERWRITTEN NET CASH FLOW: $ 5,121,356
APPRAISED VALUE: $72,800,000
APPRAISAL DATE: April, 2004
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-59
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
- --------------------------------------------------------------------------------------
% OF TOTAL NET RENT LEASE
TENANTS SF NRA PSF EXPIRATION RATINGS (S/M/F)
- --------------------------------------------------------------------------------------
EAST BRIDGEWATER
- --------------------------------------------------------------------------------------
Harte-Hanks 177,306 8.9% $ 3.75 9/30/10 - / - / -
- --------------------------------------------------------------------------------------
Invensys 71,000 3.6% $ 3.57 6/1/05 - / - / -
- --------------------------------------------------------------------------------------
PLAINFIELD
- --------------------------------------------------------------------------------------
Staples 531,000 26.7% $ 3.30 6/1/07 BBB- / Baa2 / BBB
- --------------------------------------------------------------------------------------
NORWOOD
- --------------------------------------------------------------------------------------
Home Depot 218,258 11.0% $ 4.50 6/30/12 AA/ Aa3 / AA
- --------------------------------------------------------------------------------------
Reebok 221,605 11.1% $ 4.38 12/31/06 BBB / Baa3 / -
- --------------------------------------------------------------------------------------
CHEP USA (land lease) - / - / -
- --------------------------------------------------------------------------------------
GARDNER
- --------------------------------------------------------------------------------------
Woods Equipment Company 68,000 3.4% $ 5.08 10/31/09 - / - / -
- --------------------------------------------------------------------------------------
WESTFIELD
- --------------------------------------------------------------------------------------
Home Depot1 385,000 19.3% $ 3.57 2/1/11 AA/ Aa3 / AA
- --------------------------------------------------------------------------------------
TOTAL OCCUPIED SPACE/WA 1,672,169 83.9% $ 3.79
- --------------------------------------------------------------------------------------
TOTAL RENTABLE SPACE 1,992,267
- --------------------------------------------------------------------------------------
(1) Home Depot at the Norwood property has the right to terminate the lease
unless the borrower constructs an addition to the premises. The borrower is
required to fund all construction costs through capital contributions prior to
construction and satisfaction of other conditions including posting payment and
performance bonds.
THE EQUITY INDUSTRIAL PARTNERS PORTFOLIO LOAN
THE LOAN. The Equity Industrial Partners Portfolio Loan is secured by a first
priority mortgage on five industrial properties comprising 1,992,267 SF located
throughout New England. All five properties are cross-collateralized and
cross-defaulted.
THE BORROWERS. The borrowers are Equity Industrial Plainfield Limited
Partnership; Equity Industrial Norwood, LLC; Equity Industrial Westfield, LLC;
Equity Industrial Gardner, LLC; and Equity Industrial E. Bridgewater, LLC. Each
of the borrowing entities are managed by a limited partnership controlled by
three sponsors, Donald A. Levine, Lewis Heafitz, and Neal Shalom. The sponsors
are the founders of Equity Industrial Partners Corp. ("EIPC"). EIPC acquires
vacant warehouse/distribution facilities and office properties for the purpose
of renovation, repositioning, and re-tenanting. EIPC owns and operates
approximately 12,500,000 SF of industrial space.
The sponsors have developed over 15,000,000 SF of space since the founding of
Equity Industrial Partners Corp.
THE PROPERTIES.
The Equity Industrial Partners Portfolio Loan consists of the borrowers fee
interest in 4 properties and a leasehold interest in one property four of which
are located in Massachusetts and one in Connecticut.
PLAINFIELD
The Plainfield industrial facility is a 531,000 SF warehouse situated on an 81
acre site in Plainfield, Connecticut. The property is 100% occupied by Staples,
and has been previously occupied by such tenants as American Standard,
Frito-Lay, Poland Springs Water, and Nestle. Since acquisition in September
2003, the sponsors have leased-up the building from 83% to 100% occupancy and
invested over $400,000 in improvements to the roof and parking areas. The
Plainfield property can be released from the lien of the mortgage loan prior to
the end of the defeasance lockout period upon prepayment of $19,950,000 and a
yield maintenance charge during the first 24 months of the loan term and after
the defeasance lockout period upon partial defeasance.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-60
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
NORWOOD
The Norwood industrial facility is a 439,863 SF single story warehouse situated
on 55 acres within the University Industrial Park in Norwood, Massachussetts.
The property is 100% occupied by three tenants: Home Depot, Reebok, and Chep,
USA. The property was originally constructed in 1969 and consists of two
buildings. The smaller building contains 17,748 SF and was formerly utilized as
a truck maintenance and general support facility and is not included as part of
the rentable area. The land surrounding this building is occupied by Chep, USA.
The larger building totals approximately 439,863 SF and is leased to Reebok and
Home Depot, with each tenant occupying roughly half of the building. All of the
tenant spaces have been updated since 2003. Home Depot has the right to
terminate the lease unless the borrower constructs an addition to the premises.
The borrower is required to fund all construction costs for the Home Depot
addition through capital contributions prior to construction and satisfaction of
other conditions including posting payment and performance bonds. Since the
borrowers acquired the property they have invested $4,300,000 in capital
improvements.
The Norwood property is subject to a ground lease that expires March 2023 with
six, five year options that are automatically exercised unless the tenant
cancels the lease with one year's notice.
Ground lease payments are based on the original base rent of $1,025,000
increased by two times the amount of the change in Consumer Price Index but set
at a maximum of 110% of the original base rent.
WESTFIELD
The Westfield industrial facility is a 655,000 SF warehouse situated on a 95
acre site in the city of Westfield, Massachusetts. The property is currently
58.8% occupied by Home Depot. The landlord is in discussions to lease the
balance of the space with potential tenants. Until this space is leased, the
borrowers will provide additional collateral in the form of a $8,500,000 cash
holdback to be held in an escrow account. Release of the holdback amount will be
permitted upon satisfaction of all of the following specific leasing
requirements: 1) delivery to lender of a fully executed lease for 270,000 SF of
space at $3.50 PSF for a minimum term of three years or at $3.25 PSF for a
minimum term of five years; 2) the tenant must be in occupancy, open for
business and paying full contractual rent; and 3) maintenance of a minimum DSCR
of 1.30x and a maximum LTV of 79.9% based on the entire loan amount
($56,000,000). An amount of $6,610,000 of the additional collateral provided
will be disbursed upon the leasing of the vacant space to Home Depot. Release of
the Home Depot holdback amount will be permitted upon satisfaction of all of the
following specific leasing requirements: 1) delivery of an amendment to the
Westfield Home Depot lease for the full 270,000 SF; 2) Home Depot is in
occupancy of the entire leased space, open for business and paying full
regularly scheduled rent; 3) maintenance of a minimum DSCR of 1.30x and a
maximum LTV of 79.9% based on the entire loan amount (unless the space is leased
to Home Depot within the first 6 months after funding, in which case, the lender
will then waive the DCSR minimum and the LTV maximum); and 4) Home Depot
delivers an estoppel certificate acceptable to the lender. After Home Depot has
paid one full year of rent and no event of default has occurred, the lender will
release the balance of the additional collateral.
EAST BRIDGEWATER
The East Bridgewater industrial facility is a 298,404 SF warehouse comprised of
five inter-connected buildings. The property is situated on approximately 120
acres of land at the intersection of North Bedford Street and Highland Street in
East Bridgewater, Massachusetts. The property is currently 83.2% occupied by two
tenants, Harte-Hanks and Invensys and was constructed in 1960. The building
features a concrete block construction and 17.6% office build out. The sponsors
have invested approximately $3,430,000 on renovations and tenant improvements
for Harte-Hanks.
GARDNER
The Gardner industrial facility is a 68,000 SF single story warehouse situated
on a seven acre site in the Summit Industrial Park in Gardner, Massachusetts.
The property is 100% occupied by Woods Equipment Company, a privately held
manufacturer of attachments and implements for the agricultural, landscape and
construction markets. The property was constructed in 1999. Woods Equipment
Company is currently in discussions with the sponsors to expand the building by
17,000 SF. The lender is
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-61
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
holding in escrow a letter of credit in the amount of $634,506 and an annual
improvement fund in the amount of $125,000 for the lease term of Woods. These
amounts are not collateral for the mortgage loan. The lender will make the funds
available to the borrower to disburse in accordance to the Woods Equipment
lease. Rather, this arrangement enables the lender to fulfill the obligations
under the Woods Equipment lease as successor landlord following an event of
default. During the loan term, all payments by the tenant to the improvement
fund will be delivered to the lender to hold in escrow. Upon Woods Equipment
extending its lease, the lender will then release the improvement funds and the
letter of credit back to the tenant.
SIGNIFICANT TENANTS.
STAPLES (S&P: BBB) at the Plainfield industrial facility occupies 531,000
SF (26.7% of collateral space) under a lease expiring 6/1/07 and is the
number one office supply superstore company in the U.S. It sells office
products, furniture, computers, printing and photocopying services at
Staples and Staples Express stores. At the end of 2003, the company
operated 1,358 retail stores in the U.S. and Canada, and an additional 201
stores in Belgium, Germany, Portugal, the Netherlands, and the UK.
HOME DEPOT (S&P: AA) at the Westfield industrial facility occupies 385,000
SF (19.3% of collateral space) under a lease expiring 2/1/11 at a fixed
rent of $3.57 PSF. Home Depot at the Norwood industrial facility occupies
218,258 SF (11.0% of collateral space) under a lease expiring 6/30/12 at a
fixed rent of $4.50. The Company is the world's largest home improvement
retailer, and the second largest U.S. retailer. Home Depot operates retail
warehouse-type stores that sell a wide assortment of building materials and
home improvement products, primarily to the do-it-yourself and home
remodeling markets. At February 1, 2004, it was operating 1,707 stores,
including 1,635 Home Depots in the North America.
REEBOK (S&P: BBB) at Norwood industrial facility occupies 221,605 SF (11.1%
of collateral space) under a lease expiring 12/31/06 at a fixed rent of
$4.38 PSF and is the number two US maker of athletic shoes, behind Nike.
The origins of the company date back to an English shoe company in 1894. In
addition to Reebok sportswear and accessories, Reebok produces the Greg
Norman line of men's casual wear, Rockport walking and casual shoes, Ralph
Lauren and Polo dress and athletic shoes, and Weebok shoes for children. It
runs more than 205 retail stores.
THE MARKET.
PLAINFIELD
The property is a part of the Northern New London/Windham County submarket.
According to the appraisal, the Northern New London/Windham County submarket is
the largest submarket in the area and contains 8,300,000 SF. The New London/
Windham sub-market has an overall vacancy of 6% as of the first quarter 2004.
The size of the property allows it to compete on a statewide basis for tenants,
and is part of the Eastern Connecticut and Interstate Route 395 corridor
industrial market. The overall Eastern Connecticut industrial market has an
inventory of 14,500,000 SF of space and an effective vacancy rate of 5% after
adjusting for aged and obsolete facilities.
NORWOOD
The property is a part of the greater Boston market which has been impacted by a
recent economic slowdown. According to the appraisal, the greater Boston market
first quarter 2004 statistics for the overall suburban industrial market
indicate that there is 24,400,000 SF of available space, or 19.2% availability
out of a total inventory of 127,000,000 SF. The property is located within the
Route 128/South submarket, which is the largest submarket and accounts for
nearly one quarter of total inventory and as of first quarter 2004, there is
5,000,000 SF, or 16.2% vacancy rate within the Route 128/South submarket.
WESTFIELD
The property is a part of the greater Springfield industrial market. According
to the appraisal, the Springfield industrial market had a total inventory of
41,500,000 SF. and a 10.4% vacancy rate as of year end 2002. The Westfield
submarket contains approximately 3,250,000 SF and exhibits an availability rate
of 6.4% as of year end 2003.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-62
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
EAST BRIDGEWATER
According to the appraisal, the property is part of a group of 23 comparable
properties (all industrial buildings over 150,000 sq. ft. within East or West
Bridgewater, Avon, Stoughton, Middleboro, and Brockton) totaling 6,400,000 SF.
These comparables have a current direct vacancy rate of 14.4%.
GARDNER
According to the appraisal, the property is part of a group of 20 comparable
properties (all industrial buildings constructed after 1975 ranging in size from
25,000 to 200,000 SF within Gardner, Leominster, Fitchburg, and Westminster)
totaling 1,296,000 SF. These comparables have a current direct vacancy rate of
4.1% (with one building out of 20 being vacant and the remaining buildings being
100% occupied), providing evidence that the property's immediate competition is
far outperforming the overall suburban submarket.
PROPERTY MANAGEMENT. All five properties are managed by Equity Industrial
Partners Corp. an affiliate of the borrower.
CASH MANAGEMENT. The loan has been structured with a hard lockbox.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. None permitted.
SUBSTITUTION. The mortgage loan to be included in the trust permits the borrower
to obtain a release of up to 3 of the corresponding mortgaged properties (the
"Substituted Property") from the related mortgage liens by substituting another
property of like kind and quality owned or acquired by the borrower (the
"Substitute Property"), subject, in each case, to the fulfillment of certain
conditions in the loan documents including and among other things, payment of a
1% fee of the release amount, satisfaction of LTV and DSCR tests for the
Substituted Property and receipt by the lender of confirmation from the rating
agencies that the substitution will not result in a downgrade, withdrawal or
qualification of any of the then current ratings of the certificates.
RELEASE RIGHTS. The borrower is permitted to release certain vacant outparcels
(except for Norwood) that were not attributed material value in connection with
the underwriting of the loan for future development without payment and subject
to the satisfaction of certain conditions within the loan documents, including
REMIC tax compliance, and the total value of all the released outparcels
comprise less than 10% of the fair market value of the entire collateral as of
the funding date. In the event the borrower is unable to obtain tax
lot/subdivisions for the outparcel, the borrower may form a condominium regime
in accordance with the condominium master deed and bylaws attached to the loan
agreement.
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-63
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
EQUITY INDUSTRIAL PARTNERS PORTFOLIO
BALANCE: $56,000,000
DSCR: 1.31x
LTV: 76.9%
[MAP OMITTED]
This information has been prepared solely for information purposes and is not an
offer to buy or sell or solicitation of an offer to buy or sell any security or
instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be considered
after reading the Statement Regarding Assumptions as to Securities, Pricing
Estimates, and Other Information (the "Statement") which is attached. Do not use
or rely on this information if you have not received the Statement. You may
obtain a copy of the Statement from your sales representative.
B-64
[THIS PAGE INTENTIONALLY LEFT BLANK]
B-65
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
INTERNATIONAL JEWELRY CENTER
BALANCE: $49,847,735
DSCR: 1.83x
LTV: 60.1%
[INTERNATIONAL JEWELRY CENTER PICTURES OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-66
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
INTERNATIONAL JEWELRY CENTER
BALANCE: $49,847,735
DSCR: 1.83x
LTV: 60.1%
MORTGAGE LOAN INFORMATION
LOAN SELLER: LaSalle Bank National
Association
LOAN PURPOSE: Refinance
ORIGINAL TMA BALANCE: $50,000,000
CUT-OFF TMA BALANCE: $49,847,735
% BY INITIAL UPB: 3.72%
INTEREST RATE: 5.3500%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: May 1, 2004
MATURITY DATE: April 1, 2014
AMORTIZATION: 300 Months
CALL PROTECTION: Locked out until the later of two years
from securitization or three years from
the full funding of the loan. On or after
February 1, 2014 prepayment can be
made without penalty.
SPONSOR: Isaac Hertz, Sarah Hertz, and William Z. Hertz.
BORROWER: IJC Holdings, LLC
PARI PASSU DEBT: None.
SUBORDINATE DEBT: None.
LOCKBOX: Springing hard.
INITIAL RESERVES: Tax: $318,692
Insurance: $25,333
MONTHLY RESERVES: Tax: $45,527
Insurance: $12,667
Replacement: $6,080
TI/LC: $30,000
FINANCIAL INFORMATION
LOAN BALANCE / SF(1): $134,73
BALLOON BALANCE / SF: $102.32
LTV: 60.1%
BALLOON LTV: 45.6%
DSCR: 1.83x
(1) Based on collateral SF
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Single Asset
PROPERTY TYPE: Office "A"
COLLATERAL: Leased fee in 16 story wholesale/
retail jewelry and office building.
LOCATION: Los Angeles, California
YEAR BUILT / RENOVATED: 1981/2003
COLLATERAL AREA / TOTAL AREA: 369,976/550,000 SF
PROPERTY MANAGEMENT: The Hertz Investment Group, Inc.
OCCUPANCY (AS OF MARCH 1, 97.8%
2004):
UNDERWRITTEN NET CASH
FLOW: $6,639,499
APPRAISED VALUE: $83,000,000
APPRAISAL DATE: January 21, 2004
- ----------------------------------------------------------------------------------------------------------
MAJOR TENANTS
- ----------------------------------------------------------------------------------------------------------
TENANT SF % NSRF RENT PSF LEASE EXPIRATION RATINGS (S/M/F)
- ----------------------------------------------------------------------------------------------------------
Bank of America 18,862 5.10% $41.57 9/29/2011 AA-/Aa1/AA-
- ----------------------------------------------------------------------------------------------------------
Hadar Holdings, Inc. 5,322 1.44% $36.00 1/31/2009 NAP
- ----------------------------------------------------------------------------------------------------------
Kattan Diamonds & Jewelry 5,249 1.42% $27.00 9/30/2006 NAP
- ----------------------------------------------------------------------------------------------------------
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-67
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
INTERNATIONAL JEWELRY CENTER
BALANCE: $49,847,735
DSCR: 1.83x
LTV: 60.1%
THE INTERNATIONAL JEWELRY CENTER LOAN
THE LOAN. The International Jewelry Center Loan is secured by a first deed of
trust on International Jewelry Center, a 16 story, Class A specialty office
building containing 369,976 SF of net rentable area which is located in the
heart of Los Angeles, California's renowned Jewelry District. The purchase
price of the property was approximately $25 million.
THE BORROWER. The borrower is IJC Holdings, LLC, a recently formed Delaware
limited liability company, and is a single-purpose, bankruptcy remote entity.
The entity is 100% owned by IJC Member, LLC with IJC Manager, Inc. serving as
its managing member. IJC Member, LLC is owned by Isaac Hertz (32%), Sarah Hertz
(32%), William Z. Hertz (32%), and Ernie Goldberger (non-equity 4%). IJC
Manager, Inc., is controlled by Judah Hertz, who is the founder and owner of
the Hertz Investment Group, a national real-estate investment company
specializing in the marketing, acquisition, and management of commercial real
estate. Since its founding, the company has acquired and managed a diverse
collection of more than 100 properties throughout the country.
THE PROPERTY. The International Jewelry Center is a 16-story, 550,000 SF
high-rise Class A specialty office building located in the heart of Los
Angeles' renowned Jewelry District. Built in 1981, the property is the newest
and most sought after location in the Jewelry District. The property has over
400 tenants including Bank of America and some of the world's leading wholesale
and retail jewelers, manufacturers, and gemological laboratories. The building
features enclosed, secure parking, security surveillance including 24-hour
armed security, a helicopter pad and Class A amenities. The borrower purchased
International Jewelry Center in 1996. The property has been nearly 100%
occupied for the last four years and has a two-year plus waiting list.
SIGNIFICANT TENANTS. The property is 97.8% occupied by 394 tenants.
BANK OF AMERICA, (rated AA-/Aa1/AA by S&P, Moody's and Fitch, respectively) is
the largest tenant and occupies 18,862 SF (5.10% of total space). Bank of
America leases a retail bank branch on the ground floor level of the building.
Bank of America has been a tenant since the property was developed in 1982, and
is currently in occupancy pursuant to the terms of a lease amendment dated July
9, 2001 with a commencement date of September, 2001 expiring September 29,
2011. The bank has two remaining ten year options to extend at fair market
rent. The current rental rate is $41.57 PSF.
HADAR HOLDINGS. The remainder of the International Jewelry Center is primarily
leased to two types of jewelry tenants typical of buildings located in the
jewelry district -- street level storefront space and upper floor
retail/wholesale space. Several of the upper floor tenants also have
manufacturing capabilities. The street level space is master leased to Hadar
Holdings at a rental rate of $36.00 PSF. Hadar Holdings in turn, subleases
multiple booths to individual jewelers who occupy the booths on a periodic
basis.
THE MARKET. The International Jewelry Center is located within the Los Angeles
Jewelry District, Los Angeles County, California. According to the appraisal,
the Jewelry District is a distinct downtown sub-market that consists of
primarily older, multi-story buildings with ground floor retail and upper floor
wholesaling and/or manufacturing. This district is bounded by Fifth Street to
the north, Broadway to the east, Seventh Street to the south, and Olive Street
to the west. Approximately 19 buildings in this district are committed
primarily to the jewelry trade business. The Los Angeles Jewelry District is
one of four major Jewelry Districts in the United States, second only to New
York in terms of size. The District houses over 4,900 jewelry manufacturers,
designers, suppliers, and related services. Total employment in the jewelry
district is estimated at 15,000 jobs.
PROPERTY MANAGEMENT. The property is managed by the Hertz Investment Group.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-68
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
INTERNATIONAL JEWELRY CENTER
BALANCE: $49,847,735
DSCR: 1.83x
LTV: 60.1%
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. The borrower may incur mezzanine
debt secured by an ownership interest in the borrower, provided that: (i) the
amount of the mezzanine debt, together with the then outstanding principal
balance of the subject loan, has an LTV not in excess of 60.1%, (ii) the DSCR
is at least 1.83x, based on the combined debt, (iii) the mezzanine financing
terms and intercreditor agreement are acceptable to the lender, and (iv) rating
agency confirmation is received with respect to the certificates.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-69
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
INTERNATIONAL JEWELRY CENTER
BALANCE: $49,847,735
DSCR: 1.83x
LTV: 60.1%
[INTERNATIONAL JEWELRY CENTER MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-70
[THIS PAGE INTENTIONALLY LEFT BLANK]
B-71
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
660 FIGUEROA TOWER
BALANCE: $45,000,000
DSCR: 1.25x
LTV: 75.1%
[660 FIGUEROA TOWER PICTURES OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-72
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
660 FIGUEROA TOWER
BALANCE: $45,000,000
DSCR: 1.25x
LTV: 75.1%
MORTGAGE LOAN INFORMATION
LOAN SELLER: GACC
LOAN PURPOSE: Acquisition
ORIGINAL PRINCIPAL BALANCE: $45,000,000
CUT-OFF PRINCIPAL BALANCE: $45,000,000
% BY INITIAL UPB: 3.36%
INTEREST RATE: 5.5000%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: April 1, 2004
MATURITY DATE: March 1, 2014
AMORTIZATION: Interest only through the payment date
on March 1, 2005. Thereafter monthly
amortization on a 30 year schedule.
CALL PROTECTION: Lockout for 27 months from
securitization date, then defeasance is
permitted. On and after December 1, 2013,
prepayment can be made without penalty.
SPONSOR: Milbank Real Estate
Services
BORROWERS: Figueroa Tower-I LP,
Figueroa Tower-II LP,
Figueroa Tower-III LP
ADDITIONAL FINANCING: None
LOCKBOX: Soft
INITIAL RESERVES: TI/LC: $891,080
Insurance: $42,133
MTA Impound Reserve: $478,000
MONTHLY RESERVES: TI/LC(1): $25,776
Insurance: $4,213
Tax: $59,960
Replacement Reserve: $4,644
1. Subject to a $1,000,000 cap so long as certain conditions are satisfied.
FINANCIAL INFORMATION
LOAN BALANCE / SF: $161.49
BALLOON BALANCE / SF: $138.28
LTV: 75.1%
BALLOON LTV: 64.3%
DSCR: 1.25x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Single Asset
PROPERTY TYPE: Class "A" Office
COLLATERAL: Fee simple interest in a twenty
four-story office building and 119
parking spaces located in the
building
LOCATION: Los Angeles, CA
YEAR BUILT / RENOVATED: 1989 / NAP
TOTAL AREA: 278,657 SF
PROPERTY MANAGEMENT: Milbank Real Estate Services Inc.
OCCUPANCY (AS OF 2/13/04): 96.29%
UNDERWRITTEN NET CASH FLOW: $3,847,347
APPRAISED VALUE: $59,900,000
APPRAISAL DATE: January 8, 2004
MAJOR TENANTS
- ----------------------------------------------------------------------------------------------------------
TENANT NRSF % NRSF RENT PSF LEASE EXPIRATION RATINGS (S/M/F)
- ----------------------------------------------------------------------------------------------------------
Manning & Marder Kass 54,103 19.42% $28.56 5/30/2011 - / - / -
- ----------------------------------------------------------------------------------------------------------
Hawkins, Schnabel, Lindahl 24,192 8.68% $24.00 1/31/2009 - / - / -
- ----------------------------------------------------------------------------------------------------------
The Mortgage Store 15,566 5.59% $26.40 4/30/2014 - / - / -
- ----------------------------------------------------------------------------------------------------------
Kroll Associates, Inc. 15,566 5.59% $25.60 9/30/2008 BB- / B1 / -
- ----------------------------------------------------------------------------------------------------------
Pain & Associates 14,438 5.18% $25.97 12/31/2007 - / - / -
- ----------------------------------------------------------------------------------------------------------
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-73
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
660 FIGUEROA TOWER
BALANCE: $45,000,000
DSCR: 1.25x
LTV: 75.1%
THE 660 FIGUEROA TOWER LOAN
THE LOAN. The loan is secured by the fee simple interest in 660 Figueroa Tower,
a 24-story, Class "A" office building located in the financial district of Los
Angeles CA, which contains containing 278,657 SF of net rentable area. The
collateral includes 119 parking spaces located on five parking levels between
the ground floor and the office floors. The purchase price of the property was
approximately $64.1 million (including estimated closing costs and upfront
holdbacks for TI/LC of $1.7 million), resulting in a loan to cost ratio of
70.2% and cash equity of approximately $19.1 million (30%).
THE BORROWERS. The borrowers, Figueroa Tower I-LP, Figueroa Tower-II, LP, and
Figueroa Tower-III, LP, own the subject jointly and severally as
tenants-in-common, and are structured as single-purpose, bankruptcy-remote
entities for which a non-consolidation opinion was obtained. The loan sponsors
are Massoud Yashouafar and Solyman Yashouafar (brothers), who formed a family
real estate investment company in November 1977 which subsequently was named
Milbank Real Estate Services ("Milbank").
Massoud Yashouafar has over 20 years of real estate experience and is the owner
of Milbank, a commercial real estate investment and management company based in
Los Angeles, California. The company was founded in 1977 by the Yashouafar
brothers and their father, Ataollah; Massoud Yashouafar has served as Milbank's
Chief Executive Officer since 2000. The Yashouafars own over 1.4MM SF of office
and retail space in seven buildings as well as four sites for future
development. Three of these projects, totaling 178,000 SF, were developed by
Milbank Real Estate Services. Milbank has 48 employees in four offices located
in Los Angeles, Encino, Hollywood and Long Beach, California. In addition,
Massoud Yashouafar is a director and owns substantial interest in TMSF
Holdings, Inc., a publicly traded company that owns The Mortgage Store, a
tenant of the subject (see "Significant Tenants" below for detail on The
Mortgage Company). As of December 31, 2003, Massoud Yashouafar had a net worth
of $40.25 million including liquidity of $3.04 million, and Solyman Yashouafar
had a net worth of $38.53 million including liquidity of $3.05 million.
THE PROPERTY. 660 Figueroa Tower is a 24-story Class "A" office building
containing 278,657 SF of net rentable area. Built in 1989 by the parent company
of Home Savings of America, as their headquarters, the building includes
antique marble and handcrafted brass. Figueroa's 24-story edifice, crowned by
its distinctive copper roof, triangular gables and turrets, gives the building
a presence within the prestigious Figueroa Financial Corridor. In both 1991 and
1999, the building won the Greater Los Angeles Building Owners and Managers
Association ("BOMA") "Building of the Year" award for office buildings between
100,000 and 500,000 SF in size. The "Sky Lobby" contains major, commissioned
artworks including murals, mosaics, fountains and statues and is open for the
tenants to enjoy. The property is located above the 7th Street Metro station,
near business clubs, first class hotels and the 7th Street Marketplace. The
tower contains five parking levels (119 spaces in total) that are located on
levels two through six. The subject has parking rights for an additional 300
spaces that are provided by two nearby parking garages. 660 Figueroa is
situated on a 0.43-acre parcel located at the northeast corner of South
Figueroa Street and 7th Street in the central business district of Los Angeles,
California. The property is one block southwest of Wilshire Boulevard, adjacent
to the 7th Street Historic District, and is only one block east of the
Pasadena/Harbor Freeway (I-110). In addition, the location is proximate to the
U.S. Courthouse, Los Angeles County Kenneth Hahn Hall of Administration and
County Courthouse, the County Law Library, and the Criminal Court Building.
SIGNIFICANT TENANTS. The property is 96.29% occupied by 37 tenants all of which
are office tenants except for one retail tenant, Home Savings of America
(12,646 SF, 5% of NRA, 5% of GPR). The five largest tenants are Manning &
Marder Kass (54,103 SF, 19% of NRA, 20.49% of GPR), Lindahl, Schnabel,
Kardassakis & Beck, LLP (24,192 SF, 9% of NRA, 9% of GPR), The Mortgage Store
(a Borrower-affiliated, publicly traded company, 15,566 SF, 6% of NRA, 6% of
GPR), Kroll Associates, Inc. (rated B1 by Moody's, 15,566 SF, 6% of NRA, 6% of
GPR), and Pain & Associates (14,438 SF, 5% or NRA, 6% of GPR). Remaining
tenants range in size from 1,362 SF (Crawford & Company) to 12,646 SF (Home
Savings of America), with no one tenant occupying more than 4.5% of NRA nor
contributing more than 5.24% of GPR. The two largest tenants of the subject are
law firms (law firms represent 36% of all occupied space in the downtown Los
Angeles market and 31 of the 50 largest Los Angeles County law firms have
offices there).
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-74
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
660 FIGUEROA TOWER
BALANCE: $45,000,000
DSCR: 1.25x
LTV: 75.1%
The largest tenant, MANNING & MARDER KASS, leases 54,103 SF (19% of the
NRA; 20% of its GPR) under a 15 year lease expiring in May 2011. Manning &
Marder Kass an AV-rated law firm founded in 1994, employs 100+ attorneys in
five cities. The firm services clients throughout California and the
western United States from offices in Los Angeles (subject location),
Irvine, San Diego, San Francisco, California, and Phoenix, Arizona. The
tenant has been at the subject property since 2001.
The second largest tenant, LINDAHL, SCHNABEL, KARDASSAKIS & BECK, LLP
(formerly known as Hawkins, Schnabel, Lindahl) leases 24,192 SF (9% of NRA,
8% of GPR) under a 20-year lease that expires in January 2009. The firm is
an AV-rated boutique law firm with a primary focus on Civil Litigation and
Trial and Appellate Practice in State and Federal Courts. The tenant has
been in occupancy at the subject since its completion in 1989.
The third largest tenant, THE MORTGAGE STORE, leases 15,566 SF (6% of NRA,
6% of GPR) under a 10 year lease that expires in April 2014. The firm is a
borrower-affiliated tenant that is engaged in nationwide mortgage banking.
The company originates, finances, and sells conforming and non-conforming
mortgage loans secured by single-family residences. The Mortgage Store
originates loans primarily through independent mortgage brokers across the
United States and, to a lesser extent, through a direct sales force in its
retail offices. They primarily sell the loans in whole loan transactions
and currently do not retain any interest in the servicing of the loans. The
Mortgage Store is a wholly-owned subsidiary held by TMSF Holdings, Inc.
("TMSF"). TMSF is a publicly traded company (OTC: TMFZ.OB) that had total
assets of $81.57 million and total stockholders' equity of $6.69 million as
of 3/31/04. The Mortgage Store has been a tenant since February 2004.
The fourth largest tenant, KROLL ASSOCIATES, INC., leases 15,566 SF (6% of
NRA, 6% of GPR) under a 7-year lease that expires in September 2008. Kroll
is rated "B1" by Moody's and is a leading independent risk consulting
company. Headquartered in New York with more than 60 offices on six
continents, Kroll has more than 2,400 employees and serves a global
clientele of law firms, financial institutions, corporations, non-profit
institutions, government agencies and individuals. The subject location
serves as the company's Regional Headquarters for the United States-West
region. Kroll is a publicly traded company (Nasdaq: KROL) that, as of
12/31/03, had total assets of $679.6 million and total stockholders' equity
of $546.8 million. Kroll has been in occupancy since 2001. In addition,
Marsh & McLennan Companies, Inc. ("MMC"), rated A+ by Fitch, A2 by Moody's,
and AA- by S&P, has recently announced that it will acquire Kroll. MMC is a
global professional services firm with annual revenues exceeding $11
billion. It is the parent company of Marsh Inc., the world's leading risk
and insurance services firm. The transaction will significantly broaden the
range of MMC's risk and insurance services businesses and enhance its
leadership position in risk management services. Completion of the
transaction is expected to occur in the third quarter of 2004.
THE MARKET. The subject is located in the Los Angeles Financial District
sub-market, and within the desirable Figueroa Street Corridor, which is the
primary office corridor within the sub-market. A Figueroa Street address is
highly sought after by top-tier tenants. This is exemplified by the low
year-end 2003 vacancy rates of 8% for Class "A" buildings within the Corridor,
and by the low overall direct vacancy rate of 11% for Class A through B
buildings (there are no Class C buildings in the Figueroa Street Corridor).
Dominant land use in the area is high-rise office, with limited ground floor
retail and scattered surface parking lots. Downtown benefits from having better
freeway access than other Los Angeles office centers. It is also a regional
center of public transportation systems, with Metropolitan Transit Authority
buses, Metrolink commuter rail lines, and MetroRail linking downtown to the
outlying areas. The subject has a MetroRail station located directly beneath it
which provides access to the MetroRail Red Line (average weekday boardings of
approximately 121,000) and the MetroRail Blue Line (average weekday boardings
of approximately 63,000).
Los Angeles County is the most populous county among California's 58 counties.
As of 2000, the Los Angeles County population was estimated at 9,519,338. The
county's population is projected to grow by 1.1% annually through 2010. Los
Angeles has a diversified economy driven by service, manufacturing, government,
and retail trade. As of 2003, the county unemployment rate was 6.3%. The nine
largest employers in Los Angeles County (excluding government employees) are
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-75
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
660 FIGUEROA TOWER
BALANCE: $45,000,000
DSCR: 1.25x
LTV: 75.1%
Kaiser Permanente, Boeing North America Inc., Ralph's Grocery Co., Bank of
America, Target, SBC Pacific Bell, CPE (employee benefits consultants),
Northrop Grumman Corp. and University of Southern California.
The subject is located within a Business Improvement District. The BID provides
uniformed security (supplementing the city police), additional street cleaning
and graffiti removal, advertising and marketing, and some political advocacy.
The subject is conveniently located near shopping, restaurants and such
amenities as the Los Angeles Convention Center, the Staples Center sports
arena, and the Walt Disney Concert Hall. It is located across the street from a
full-service hotel and is only one block east of the Pasadena/Harbor Freeway
(I-110). The 2003 estimated population within a 3-mile radius of the subject,
526,178 people, is expected to grow 3.43% by 2008.
CASH MANAGEMENT. The loan has been structured with a soft, pass-through
lockbox.
PROPERTY MANAGEMENT. The subject property is managed by Milbank Holding Corp.
(Milbank Real Estate Services).
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. None permitted.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-76
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
660 FIGUEROA TOWER
BALANCE: $45,000,000
DSCR: 1.25x
LTV: 75.13%
[660 FIGUEROA TOWER MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-77
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
3 BEAVER VALLEY
BALANCE: $43,000,000
DSCR: 1.31x
LTV: 79.6%
[3 BEAVER VALLEY PICTURES OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-78
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
3 BEAVER VALLEY
BALANCE: $43,000,000
DSCR: 1.31x
LTV: 79.6%
MORTGAGE LOAN INFORMATION
LOAN SELLER: GACC
LOAN PURPOSE: Acquisition
ORIGINAL TMA BALANCE: $43,000,000
CUT-OFF TMA BALANCE: $43,000,000
% BY INITIAL UPB: 3.21%
INTEREST RATE: 5.055%
PAYMENT DATE: 1st of each month
FIRST PAYMENT DATE: July 1, 2004
MATURITY DATE: January 1, 2015
AMORTIZATION: 360 months
CALL PROTECTION: Lockout for 24 months from securitization date, then
defeasance is permitted. On and after October 1, 2015,
prepayment can be made without penalty.
SPONSOR: American Financial Realty Trust ("AFR")
BORROWER: First States Wilmington, L.P.
ADDITIONAL FINANCING: None
LOCKBOX: Hard
INITIAL RESERVES: Tax: $63,581
Insurance: $32,556
Engineering: $6,250
Parking Garage Holdback(1): $4,600,000
Debt Service Reserve(1): $358,000
MONTHLY RESERVES: Tax: $21,194
Insurance: $10,852
Replacement: $4,384
TI/LC: $44,904
1. See "Reserves" herein.
FINANCIAL INFORMATION
LOAN BALANCE / SF: $163.46
BALLOON BALANCE / SF: $132.79
LTV: 79.6%
BALLOON LTV: 64.6%
DSCR: 1.31x
PROPERTY INFORMATION
SINGLE ASSET / PORTFOLIO: Single Asset
PROPERTY TYPE: Class "A" Office
COLLATERAL: Fee simple interest in a five-story
office building
LOCATION: Wilmington, DE
YEAR BUILT / RENOVATED: 1995 / NAP
TOTAL AREA: 263,058 SF
PROPERTY MANAGEMENT: First States Management Corp.
OCCUPANCY (AS OF 3/30/04): 100.00%
UNDERWRITTEN NET CASH FLOW: $3,649,085
APPRAISED VALUE: $54,000,000
APPRAISAL DATE: April 2, 2004
TENANTS
TENANT NRSF % NRSF RENT PSF LEASE EXPIRATION RATINGS (S/M/F)
- ------------------------------------------------------------------------------------------------------------------
American International Insurance
Company ("AIIC")(2) 158,033 60.07% $ 16.57 10/24/20124 AAA / Aaa / AAA
Wachovia Bank, N.A.(3) 105,025 39.93% $ 17.82 12/31/20054 A+ / Aa3 / A+
- ------------------------------------------------------------------------------------------------------------------
2. AIIC is a wholly-owned subsidiary of American Home Assurance Co., which, in
turn, is wholly-owned by American International Group ("AIG"). Ratings
reflect those of AIG.
3. Wachovia Bank, N.A. is a wholly-owned subsidiary of Wachovia Corp. ("WB").
Ratings reflect those of WB.
4. AIIC has executed a lease to occupy the existing Wachovia space commencing
April, 2006, subject only to completion of a parking garage which is
currently under construction and expected to be completed in October 2004.
If the lease is executed, both the existing AIIC lease and the new lease
encompassing the Wachovia space will be co-terminous, with a lease
expiration date of 1/1/2015. See "Significant Tenants" herein.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-79
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
3 BEAVER VALLEY
BALANCE: $43,000,000
DSCR: 1.31x
LTV: 79.6%
THE 3 BEAVER VALLEY LOAN
THE LOAN. The loan is secured by a first mortgage on a 5-story, Class "A"
office building located in Wilmington, DE containing 263,058 SF of net rentable
area. The loan sponsor, American Financial Realty Trust, "AFR", acquired the
subject in September 2003 for $51.7 million. AFR has since begun construction
of a parking garage onsite, for which 125% of completion costs was escrowed at
loan closing. Including the cost of the garage ($4.6 million) and estimated
closing costs of $200,000, the borrower's total cost basis is estimated at
$56.5 million, resulting in cash equity of $13.5 million. See "Reserves"
herein.
THE BORROWER. The borrower, First States Wilmington, L.P. is structured as a
single-purpose, bankruptcy-remote entity for which a non-consolidation opinion
was obtained. The sponsor of the borrower, American Financial Realty Trust,
"AFR", successor company to American Financial Realty Group, is a self-managed
and self-administered Maryland real estate investment trust ("REIT") that was
formed in May 2002, and which completed its initial public offering in May 2003
(NYSE: AFR). AFR, headquartered in Jenkintown, Pennsylvania, is a newly
organized, self-administered and self-managed real estate investment trust
(REIT) led by its CEO, Nick Schorsch and its chairman, Lewis Raineri. AFR is
engaged in the acquisition of corporate owned real estate assets, primarily
multi-tenant office buildings and single-tenant bank branches, leased to
financial institutions. AFR provides property management, brokerage, leasing,
project management and other services to its properties. AFR's high credit
client base includes many of the largest financial institutions in the country
including Bank of America, Wachovia Bank, Citibank, Sovereign Bank, and Key
Bank as well as other large regional institutions.
AFR's portfolio consists of 17.2 million SF located in 27 states and the
District of Columbia. The overall occupancy of its portfolio is 88.9% and its
weighted average remaining lease term is 13.3 years as of December 31, 2003. As
of December 31, 2003, AFR had total assets of $2.14 billion and revenues for
the year totaled $55.5 million.
AFR is a repeat sponsor of a Deutsche Bank borrower. Another loan sponsored by
AFR, known as AFR / Bank of America Portfolio, will also be an asset of the
trust.
THE PROPERTY. 3 Beaver Valley is a 5-story Class "A" suburban office building
containing 263,058 SF of net rentable area. Completed in 1995, the building has
two wings with a central core area containing two elevator banks (4 elevators).
Each wing has a 2-story atrium lobby and a security/concierge desk. The
building also has a full-service cafeteria (operated by the tenant American
International Insurance Company ("AIIC") through a third party cafeteria
operator), and a fitness center. The site is currently being improved with a
parking garage at an estimated cost of $4.4 million which, when completed, will
also be part of the collateral for the subject loan. The subject currently
provides parking for 902 vehicles (3.4 spaces per 1,000 SF), and when the
garage is complete, will have approximately 1,315 spaces (5 cars per 1,000 SF).
SIGNIFICANT TENANTS. The property is currently 100% occupied by two tenants
with investment-grade credit ratings: American International Insurance Company,
and Wachovia Bank, N.A.
AMERICAN INTERNATIONAL INSURANCE COMPANY ("AIIC") occupies 158,033 SF
(60.1% of NRA) and contributes 59.1% of GPR. AIIC has a 10-year lease which
expires in October 2012. AIIC is a wholly-owned subsidiary of American Home
Assurance Co. which, in turn, is wholly-owned by American International
Group ("AIG"; rated AAA/Aaa/AAA by S&P/Moody's/Fitch). American Home
Assurance Co. provides AIG's commercial umbrella/excess liability
insurance, workers' compensation insurance for small and middle market
businesses, and provides extended warranty coverage for retailers and
manufacturers.
WACHOVIA BANK, N.A. occupies 105,025 SF (39.9% of NRA) and contributes
40.9% of GPR under a lease expiring in December 2005. Wachovia Bank, N.A.
(rated A/Aa3/A+ by S&P/Moody's/Fitch) was formed in 2001 when First Union
bought Wachovia and took the smaller firm's name. Wachovia is now the
fourth-largest bank in the U.S. behind Citigroup, JP Morgan Chase and Bank
of America. Wachovia has approximately 2,500 locations that offer retail
and corporate banking services in eleven eastern states from Connecticut to
Florida.
Wachovia Bank, N.A. has given notice that it will be vacating the premises upon
the expiration of its lease (December 31, 2005). AIIC has executed a lease for
all of the Wachovia space (at the same rental rate called for in the AIIC
lease), with the only
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-80
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
3 BEAVER VALLEY
BALANCE: $43,000,000
DSCR: 1.31x
LTV: 79.6%
condition being that the sponsor build a parking garage that provides a parking
ratio of 5 cars per 1,000 SF of office space (approximately 1,315 spaces).
Construction on the garage has already begun and is expected to be completed by
October 2004. AIIC is expected to take occupancy of the Wachovia space and
begin paying rent on or about April 1, 2006. AIIC will lease the garage from
the borrower at an annual rental rate of $418,500 beginning on or about October
2004; it will also extend its original lease expiration date to January 1, 2015
to be co-terminus with the new lease for the Wachovia space. The additional
income associated with the garage was not underwritten but will provide
substantial additional income once it's complete.
In addition, at closing, AFR will sign a conditional Master Lease providing
that if AIIC does not take occupancy of, and commence paying rent with respect
to, the space currently occupied by Wachovia, then AFR will master lease the
Wachovia space commencing on the expiration date of the Wachovia lease upon
terms and conditions at least as favorable as the AIIC lease for such space.
The liability of AFR under the Master Lease will continue until one or more
satisfactory replacement tenants are in occupancy and paying rent pursuant to
the signing of satisfactory replacement leases.
THE MARKET. Beaver Valley, located in Wilmington, DE, is easily accessed from
US Route 202, the primary retail/commercial corridor in the area, which extends
from Wilmington into the suburban counties of Philadelphia and is considered by
the appraiser to have excellent visibility from Route 202.
Beaver Valley is located in the greater Philadelphia Office Market, just over
the Pennsylvania state line and thus is conveniently located close to
Philadelphia suburbs. The Philadelphia Office Market includes 116.3 million SF
of Class "A" office space which, as of the third quarter 2003, had an average
vacancy rate of 17.0% and an average asking rental rate of $23.36PSF (modified
gross). The subject is more specifically located within the North New Castle
County Office Sub-market which includes approximately 2.7 million SF of Class
"A" office space, which had an average asking rental rate of $24.59PSF
(modified gross) and 88% vacancy. The subject is currently 100% leased and
occupied by two investment grade tenants at an average rental rate of $17.39PSF
NNN (which equates to a modified gross rental rate of $24.56PSF), consistent
with current market rental rates.
The subject is located 30 miles southwest of Philadelphia and 5 miles north of
Wilmington. The city of Wilmington is the focal point of the area and the
center for banking, finance, government and cultural activities. The subject
property is located in New Castle County which is the most densely populated
county (500,300 as of 2000; an increase of 14.0% since 1990) within both the
Wilmington, DE MSA (586,200 people) and the State of Delaware. The 2001 average
household income for New Castle County ($72,342) exceeds the averages for the
region ($57,034), state ($48,813) and nation ($45,417). The regional economy
has experienced a long term transition over the past 20 years from a
manufacturing oriented economy into a diverse services oriented economy with
extensive development in the financial and services sectors. The area has
become a major center for credit card operations with 23 banks and financial
institutions with operations within New Castle County. Major employers in the
MSA include MBNA, DuPont, Christin Health System, University of Delaware, JP
Morgan Chase, First USA and Daimler Chrysler.
The largest retail development along US Route 202 is Brandywine Town Center, an
850,000SF enclosed regional and big box power center anchored by Target, Lowes
Home Improvement, Old Navy, TJ Maxx, Bed, Bath & Beyond, Dick's Sporting Goods
and Regal Cinemas and located directly across Route 202 from the subject
property. In addition, several limited and full service hotels are located
along US Route 202. The development of modern Class A commercial office
buildings was occurring during the 1980s. Major employers in the area include:
DuPont which operates a 500,000 SF R&D facility and Astra Zeneca which operates
a 500,000 SF major office and R&D facility. Astra Zeneca plans to develop up to
1.75 million SF over the next 5 years and will relocate 3,800 employees to the
immediate area and currently occupies space in several office buildings close
to the subject along US Route 202. Adjacent to the subject property at 1 Beaver
Valley is the office building for the tenant Ace USA.
RESERVES. The loan has been structured to include significant initial reserves
for the following: (i) Debt Service Shortfall Reserve: established to reserve
for the projected shortfall in debt service during the period between the
expiration of the Wachovia lease (12/31/05) and the date AIIC will begin paying
rent on the Wachovia space (anticipated to be 4/1/06), which amount equates to
$358,000 and (ii) Parking Garage Reserve: the sponsor has begun construction of
the garage and 125% of the remaining cost to complete construction has been
escrowed (equates to an initial reserve amount of $4.6 million).
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-81
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
3 BEAVER VALLEY
BALANCE: $43,000,000
DSCR: 1.31x
LTV: 79.6%
In addition, initial reserves for taxes, insurance and engineering; as well as
ongoing monthly reserves for taxes, insurance, replacement and TI/LC have been
taken.
CASH MANAGEMENT. The loan has been structured with a hard, pass-through
lockbox. Commencing at the start of the ninth year of the loan term all excess
cash flow will be swept, which is projected to result in a reserve of
approximately $3.4 million by the time of loan maturity. This amount is only
available in connection with the re-tenanting the AIG space.
PROPERTY MANAGEMENT. Beaver Valley is managed by First States Management Corp.,
an affiliate of the loan sponsor, AFR. First States Management has extensive
experience in real estate acquisitions, financing and asset management, as well
as a strong understanding of bank regulatory requirements. The company provides
property management services for all properties in AFR's portfolio. First
States Management currently manages 578 buildings containing 17.2 million SF of
commercial space; properties are located in 27 states and the District of
Columbia. As of 12/31/03, the overall occupancy rate of its portfolio was 88.9%
and the weighted average remaining lease term was 13.3 years.
CURRENT MEZZANINE OR SUBORDINATE INDEBTEDNESS. None.
FUTURE MEZZANINE OR SUBORDINATE INDEBTEDNESS. Not permitted.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-82
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
COLLATERAL TERM SHEET
3 BEAVER VALLEY
BALANCE: $43,000,000
DSCR: 1.31x
LTV: 79.6%
[3 BEAVER VALLEY MAPS OMITTED]
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-83
$981,250,000 (APPROXIMATE)
COMM 2004-LNB3
STATEMENT REGARDING ASSUMPTIONS AS TO
SECURITIES, PRICING ESTIMATES AND OTHER INFORMATION
The information contained in the attached materials (the "Information") may
include various forms of performance analysis, security characteristics and
securities pricing estimates for the securities addressed. Please read and
understand this entire statement before utilizing the Information. The
Information is provided solely by Deutsche Bank Securities Inc., ABN AMRO
Incorporated, PNC Capital Markets Inc., J.P.Morgan Securities Inc., Merrill
Lynch, Pierce, Fenner, & Smith Incorporated and Nomura Securities
International, Inc. (the "Underwriters") not as agent for any issuer, and
although it may be based on data supplied to it by an issuer, the issuer has
not participated in its preparation and makes no representations regarding its
accuracy or completeness. Should you receive Information that refers to the
"Statement Regarding Assumptions and Other Information", please refer to this
statement instead.
The Information is illustrative and is not intended to predict actual results
which may differ substantially from those reflected in the Information.
Performance analysis is based on certain assumptions with respect to
significant factors that may prove not to be as assumed. You should understand
the assumptions and evaluate whether they are appropriate for your purposes.
Performance results are based on mathematical models that use inputs to
calculate results. As with all models, results may vary significantly depending
upon the value of the inputs given. Inputs to these models include but are not
limited to: prepayment expectations (econometric prepayment models, single
expected lifetime prepayments or a vector of periodic prepayments), interest
rate assumptions (parallel and nonparallel changes for different maturity
instruments), collateral assumptions (actual pool level data, aggregated pool
level data, reported factors or imputed factors), volatility assumptions
(historically observed or implied current) and reported information (paydown
factors, rate resets and trustee statements). Models used in any analysis may
be proprietary making the results difficult for any third party to reproduce.
Contact your registered representative for detailed explanations of any
modeling techniques employed in the Information.
The Information addresses only certain aspects of the applicable security's
characteristics and thus does not provide a complete assessment. As such, the
Information may not reflect the impact of all structural characteristics of the
security, including call events and cash flow priorities at all prepayment
speeds and/or interest rates. You should consider whether the behavior of these
securities should be tested at assumptions different from those included in the
Information. The assumptions underlying the Information, including structure
and collateral, may be modified from time to time to reflect changed
circumstances. Any investment decision should be based only on the data in the
prospectus and prospectus supplement ("Offering Documents") and the then
current version of the Information. The Offering Documents contain data that is
current as of their publication date and after publication may no longer be
complete or current. Contact your registered representative for the Offering
Documents, current Information or additional materials, including other models
for performance analysis, which are likely to produce different results, and
any further explanation regarding the information.
Any pricing estimates an Underwriter has supplied at your request (a) represent
its view, at the time determined, of the investment value of the securities
between the estimated bid and offer levels, the spread between which may be
significant due to market volatility or illiquidity, (b) do not constitute a
bid by any person for any security, (c) may not constitute prices at which the
securities could have been purchased or sold in any market, (d) have not been
confirmed by actual trades, may vary from the value such Underwriter assigns
any such security while in its inventory, and may not take into account the
size of a position you have in the security, and (e) may have been derived from
matrix pricing that uses data relating to other securities whose prices are
more readily ascertainable to produce a hypothetical price based on the
estimated yield spread relationship between the securities.
General Information: The data underlying the Information has been obtained from
sources that the Underwriters believe are reliable, but the Underwriters do not
guarantee the accuracy of the underlying data or computations based thereon.
The Underwriters and/or individuals thereof may have positions in these
securities while the Information is circulating or during such period may
engage in transactions with the issuer or its affiliates. Each Underwriter acts
as principal in transactions with you, and accordingly, you must determine the
appropriateness for you of such transactions and address any legal, tax or
accounting considerations applicable to you. An Underwriter shall not be a
fiduciary or advisor unless it has agreed in writing to receive compensation
specifically to act in such capacities. If you are subject to ERISA, the
Information is being furnished on the condition that it will not form a primary
basis for any investment decision. The Information is not a solicitation of any
transaction in securities which may be made only by prospectus when required by
law, in which event you may obtain such prospectus from your registered
representative.
This information has been prepared solely for information purposes and is not
an offer to buy or sell or solicitation of an offer to buy or sell any security
or instrument or to participate in any trading strategy. No representation or
warranty can be given with respect to the accuracy or completeness of the
information, or that any future offer of securities will conform to the terms
hereof. If any such offer of securities is made, it will be made pursuant to a
definitive Prospectus and Prospectus Supplement, prepared by the Depositor,
which will contain material information not contained herein and to which
prospective purchasers are referred. In the event of any such offering, this
information shall be deemed superseded in its entirety by such Prospectus and
Prospectus Supplement. ANY DECISION TO INVEST IN SUCH SECURITIES SHOULD BE MADE
ONLY AFTER REVIEWING SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. Deutsche Bank
Securities Inc., ABN AMRO Incorporated, PNC Capital Markets Inc., J.P. Morgan
Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Nomura
Securities International, Inc. (the "Underwriters") disclaim any and all
liability relating to this information, including without limitation, any
express or implied representations or warranties for, statements contained in,
and omissions from, this information. This information should only be
considered after reading the Statement Regarding Assumptions as to Securities,
Pricing Estimates, and Other Information (the "Statement") which is attached.
Do not use or rely on this information if you have not received the Statement.
You may obtain a copy of the Statement from your sales representative.
B-84
ANNEX C
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in limited circumstances, the globally offered COMM 2004-LNB3,
Commercial Mortgage Pass-Through Certificates, Class A-1, Class A-2, Class B,
Class C, Class D and Class E will be available only in book-entry form.
The book-entry certificates will be tradable as home market instruments in
both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding book-entry certificates
through Clearstream and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional Eurobond practice, which is seven calendar days' settlement.
Secondary market trading between investors holding book-entry certificates
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between member organizations of Clearstream
or Euroclear and Participants holding book-entry certificates will be
accomplished on a delivery against payment basis through the respective
depositaries of Clearstream and Euroclear, in that capacity, as Participants.
As described under "U.S. Federal Income Tax Documentation Requirements"
below, non-U.S. holders of book-entry certificates will be subject to U.S.
withholding taxes unless those holders meet specific requirements and deliver
appropriate U.S. tax documents to the securities clearing organizations of
their participants.
INITIAL SETTLEMENT
All Certificates of each Class of Offered Certificates will be held in
registered form by DTC in the name of Cede & Co. as nominee of DTC. Investors'
interests in the book-entry certificates will be represented through financial
institutions acting on their behalf as direct and indirect Participants. As a
result, Clearstream and Euroclear will hold positions on behalf of their member
organizations through their respective depositaries, which in turn will hold
positions in accounts as Participants.
Investors' securities custody accounts will be credited with their holdings
against payment in same-day funds on the settlement date.
Investors electing to hold their book-entry certificates through
Clearstream or Euroclear accounts will follow the settlement procedures
applicable to conventional Eurobonds, except that there will be no temporary
global security and no "lock up" or restricted period. Global securities will be
credited to the securities custody accounts on the settlement date against
payment in same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between Participants. Secondary market trading between
Participants will be settled in same-day funds.
Trading between Clearstream and/or Euroclear Participants. Secondary market
trading between member organizations of Clearstream or Euroclear will be settled
using the procedures applicable to conventional Eurobonds in same-day funds.
C-1
Trading between DTC Seller and Clearstream or Euroclear Purchaser. When
book-entry certificates are to be transferred from the account of a Participant
to the account of a member organization of Clearstream or Euroclear, the
purchaser will send instructions to Clearstream or Euroclear through that member
organization at least one business day prior to settlement. Clearstream or
Euroclear, as the case may be, will instruct the respective depositary to
receive the book-entry certificates against payment. Payment will include
interest accrued on the book-entry certificates from and including the first day
of the calendar month in which the last coupon payment date occurs (or, if no
coupon payment date has occurred, from and including June 1, 2004) to and
excluding the settlement date, calculated on the basis of a year of 360 days
consisting of twelve 30-day months. Payment will then be made by the respective
depositary to the Participant's account against delivery of the book-entry
certificates. After settlement has been completed, the book-entry certificates
will be credited to the respective clearing system and by the clearing system,
in accordance with its usual procedures, to the account of the member
organization of Clearstream or Euroclear, as the case may be. The securities
credit will appear the next day, European time, and the cash debit will be
back-valued to, and the interest on the book-entry certificates will accrue
from, the value date, which would be the preceding day when settlement occurred
in New York. If settlement is not completed on the intended value date, which
means the trade fails, the Clearstream or Euroclear cash debit will be valued
instead as of the actual settlement date.
Member organizations of Clearstream and Euroclear will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to pre-position
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Clearstream or Euroclear. Under
this approach, they may take on credit exposure to Clearstream or Euroclear
until the book-entry certificates are credited to their accounts one day later.
As an alternative, if Clearstream or Euroclear has extended a line of
credit to them, member organizations of Clearstream or Euroclear can elect not
to pre-position funds and allow that credit line to be drawn upon to finance
settlement. Under this procedure, the member organizations purchasing book-entry
certificates would incur overdraft charges for one day, assuming they cleared
the overdraft when the book-entry certificates were credited to their accounts.
However, interest on the book-entry certificates would accrue from the value
date. Therefore, in many cases the investment income on the book-entry
certificates earned during that one-day period may substantially reduce or
offset the amount of those overdraft charges, although this result will depend
on the cost of funds of the respective member organization of Clearstream or
Euroclear.
Since the settlement is taking place during New York business hours,
Participants can employ their usual procedures for sending book-entry
certificates to the respective depositary for the benefit of member
organizations of Clearstream or Euroclear. The sale proceeds will be available
to the DTC seller on the settlement date. Thus, to the Participant a
cross-market transaction will settle no differently than a trade between two
Participants.
Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due to
time zone differences in their favor, member organizations of Clearstream or
Euroclear may employ their customary procedures for transactions in which
book-entry certificates are to be transferred by the respective clearing system,
through the respective depositary, to a Participant. The seller will send
instructions to Clearstream or Euroclear through a member organization of
Clearstream or Euroclear at least one business day prior to settlement. In these
cases, Clearstream or Euroclear, as appropriate, will instruct the respective
depositary to deliver the book-entry certificates to the Participant's account
against payment. Payment will include interest accrued on the book-entry
certificates from and including the first day of the calendar month in which the
last coupon payment date occurs (or, if no coupon payment date has occurred,
from and including June 1, 2004) to and excluding the settlement date,
calculated on the basis of a year of 360 days consisting of twelve 30-day
months. The payment will then be reflected in the account of the member
organization of Clearstream or Euroclear the following
C-2
day, and receipt of the cash proceeds in the account of that member organization
of Clearstream or Euroclear would be back-valued to the value date, which would
be the preceding day, when settlement occurred in New York. Should the member
organization of Clearstream or Euroclear have a line of credit with its
respective clearing system and elect to be in debit in anticipation of receipt
of the sale proceeds in its account, the back-valuation will extinguish any
overdraft charges incurred over the one-day period. If settlement is not
completed on the intended value date, which means the trade fails, receipt of
the cash proceeds in the account of the member organization of Clearstream or
Euroclear would be valued instead as of the actual settlement date.
Finally, day traders that use Clearstream or Euroclear and that purchase
book-entry certificates from Participants for delivery to member organizations
of Clearstream or Euroclear should note that these trades would automatically
fail on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
o borrowing through Clearstream or Euroclear for one day, until the
purchase side of the day trade is reflected in their Clearstream or
Euroclear accounts, in accordance with the clearing system's customary
procedures;
o borrowing the book-entry certificates in the United States from a
Participant no later than one day prior to settlement, which would allow
sufficient time for the book-entry certificates to be reflected in their
Clearstream or Euroclear accounts in order to settle the sale side of the
trade; or
o staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the Participant is at least one
day prior to the value date for the sale to the member organization of
Clearstream or Euroclear.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A holder that is not a "United States person" (a "U.S. person") within the
meaning of Section 7701(a)(30) of the Internal Revenue Code (a "non-U.S.
holder") holding a book-entry certificate through Clearstream, Euroclear or DTC
may be subject to U.S. withholding tax unless such holder provides certain
documentation to the issuer of such holder's book-entry certificate, the paying
agent or any other entity required to withhold tax (any of the foregoing, a
"U.S. withholding agent") establishing an exemption from withholding. A
non-U.S. holder may be subject to withholding unless each U.S. withholding
agent receives:
1. from a non-U.S. holder that is classified as a corporation for U.S.
federal income tax purposes or is an individual, and is eligible for the
benefits of the portfolio interest exemption or an exemption (or reduced rate)
based on a treaty, a duly completed and executed IRS Form W-8BEN (or any
successor form);
2. from a non-U.S. holder that is eligible for an exemption on the basis
that the holder's income from the Certificate is effectively connected to its
U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or any
successor form);
3. from a non-U.S. holder that is classified as a partnership for U.S.
federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or
any successor form) with all supporting documentation (as specified in the U.S.
Treasury Regulations) required to substantiate exemptions from withholding on
behalf of its partners; certain partnerships may enter into agreements with the
IRS providing for different documentation requirements and it is recommended
that such partnerships consult their tax advisors with respect to these
certification rules;
4. from a non-U.S. holder that is an intermediary (i.e., a person acting
as a custodian, a broker, nominee or otherwise as an agent for the beneficial
owner of a Certificate):
(a) if the intermediary is a "qualified intermediary" within the
meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury Regulations (a
"qualified intermediary"), a duly completed and executed IRS Form W-8IMY
(or any successor or substitute form)--
C-3
(i) stating the name, permanent residence address and qualified
intermediary employer identification number of the qualified
intermediary and the country under the laws of which the qualified
intermediary is created, incorporated or governed,
(ii) certifying that the qualified intermediary has provided, or will
provide, a withholding statement as required under section
1.1441-1(e)(5)(v) of the U.S. Treasury Regulations,
(iii) certifying that, with respect to accounts it identifies on its
withholding statement, the qualified intermediary is not acting for its
own account but is acting as a qualified intermediary, and
(iv) providing any other information, certifications, or statements
that may be required by the IRS Form W-8IMY or accompanying
instructions in addition to, or in lieu of, the information and
certifications described in section 1.1441-1(e)(3)(ii) or
1.1441-1(e)(5)(v) of the U.S. Treasury Regulations; or
(b) if the intermediary is not a qualified intermediary (a "nonqualified
intermediary"), a duly completed and executed IRS Form W-8IMY (or any
successor or substitute form)--
(i) stating the name and permanent residence address of the
nonqualified intermediary and the country under the laws of which the
nonqualified intermediary is created, incorporated or governed,
(ii) certifying that the nonqualified intermediary is not acting for
its own account,
(iii) certifying that the nonqualified intermediary has provided, or
will provide, a withholding statement that is associated with the
appropriate IRS Forms W-8 and W-9 required to substantiate exemptions
from withholding on behalf of such nonqualified intermediary's
beneficial owners, and
(iv) providing any other information, certifications or statements
that may be required by the IRS Form W-8IMY or accompanying
instructions in addition to, or in lieu of, the information,
certifications, and statements described in section 1.1441-1(e)(3)(iii)
or (iv) of the U.S. Treasury Regulations; or
5. from a non-U.S. holder that is a trust, depending on whether the trust
is classified for U.S. federal income tax purposes as the beneficial owner of
the Certificate, either an IRS Form W-8BEN or W-8IMY; any non-U.S. holder that
is a trust should consult its tax advisors to determine which of these forms it
should provide.
All non-U.S. holders will be required to update the above-listed forms and
any supporting documentation in accordance with the requirements under the U.S.
Treasury Regulations. These forms generally remain in effect for a period
starting on the date the form is signed and ending on the last day of the third
succeeding calendar year, unless a change in circumstances makes any information
on the form incorrect. Under certain circumstances, an IRS Form W-8BEN, if
furnished with a taxpayer identification number, remains in effect until the
status of the beneficial owner changes, or a change in circumstances makes any
information on the form incorrect.
In addition, all holders, including holders that are U.S. persons, holding
book-entry certificates through Clearstream, Euroclear or DTC may be subject to
backup withholding unless the holder--
o provides the appropriate IRS Form W-8 (or any successor or substitute
form), duly completed and executed, if the holder is a non-U.S. holder;
o provides a duly completed and executed IRS Form W-9, if the holder is a
U.S. person; or
o can be treated as a "exempt recipient" within the meaning of section
1.6049-4(c)(1)(ii) of the U.S. Treasury Regulations (e.g., a corporation
or a financial institution such as a bank).
C-4
This summary does not deal with all of the aspects of U.S. federal income
tax withholding or backup withholding that may be relevant to investors that are
non-U.S. holders. Such holders are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of book-entry
certificates.
C-5
DEUTSCHE MORTGAGE & ASSET RECEIVING CORPORATION,
DEPOSITOR
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
(ISSUABLE IN SERIES BY SEPARATE TRUSTS)
---------------------
Deutsche Mortgage & Asset Receiving Corporation will periodically offer
commercial mortgage pass-through certificates in separate series. We will offer
the certificates through this prospectus and a separate prospectus supplement
for each series. Each series of certificates will represent in the aggregate
the entire beneficial ownership interest in a trust fund that we will form. The
primary assets of each trust fund will consist of:
o various types of multifamily or commercial mortgage loans,
o mortgage participations, pass-through certificates or other
mortgaged-backed securities that evidence interests in one or more of
various types of multifamily or commercial mortgage loans, or
o a combination of the assets described above.
The offered certificates will not represent an interest in or an
obligation of us, any of our affiliates, Deutsche Bank AG or any of its
affiliates. Neither the offered certificates nor the assets of the related
trust fund will be guaranteed or insured by us or any of our affiliates or,
unless the related prospectus supplement specifies otherwise, by any
governmental agency of instrumentality.
Neither the Securities and Exchange Commission nor any state securities
regulators have approved or disapproved of the offered certificates or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
YOU SHOULD REVIEW THE INFORMATION APPEARING ON PAGE 9 IN THIS PROSPECTUS
UNDER THE CAPTION "RISK FACTORS" AND UNDER THE CAPTION "RISK FACTORS" IN THE
RELATED PROSPECTUS SUPPLEMENT BEFORE PURCHASING ANY OFFERED CERTIFICATE.
We may offer the offered certificates of any series through one or more
different methods, including offerings through underwriters, as described under
"Method of Distribution" in this prospectus and in the related prospectus
supplement. There will be no secondary market for the offered certificates of
any series prior to the offering thereof. We cannot assure you that a secondary
market for any offered certificates will develop or, if it does develop, that
it will continue. Unless the related prospectus supplement provides otherwise,
the certificates will not be listed on any securities exchange.
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.
---------------------
THE DATE OF THIS PROSPECTUS IS JUNE 7, 2004
IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS AND
THE ACCOMPANYING PROSPECTUS SUPPLEMENT
Information about the certificates being offered to you is contained in
two separate documents that progressively provide more detail: (a) this
prospectus, which provides general information, some of which may not apply to
the series of certificates offered to you; and (b) the accompanying prospectus
supplement, which describes the specific terms of the series of certificates
offered to you. If the terms of the certificates offered to you vary between
this prospectus and the accompanying prospectus supplement, you should rely on
the information in the prospectus supplement.
Further, you should rely only on the information contained in this
prospectus and the accompanying prospectus supplement. We have not authorized
anyone to provide you with information that is different. In addition,
information in this prospectus or any related prospectus supplement is current
only as of the date on its cover. By delivery of this prospectus and any
related prospectus supplement, we are not offering to sell any securities, and
are not soliciting an offer to buy any securities, in any state where the offer
and sale is not permitted.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE AND AVAILABLE INFORMATION
With respect to any series of certificates by this prospectus, there are
incorporated herein by reference all documents and reports filed by or on
behalf of Deutsche Mortgage & Asset Corporation with respect to the related
trust fund pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, that relate specifically to such series of
certificates. Deutsche Mortgage & Asset Receiving Corporation will provide
without charge to any beneficial owner to whom this prospectus is delivered in
connection with the offering of one or more classes of offered certificates,
upon written or oral request of such person, a copy of any or all documents or
reports incorporated herein by reference, in each case to the extent such
documents or reports relate to one or more of such classes of such offered
certificates, other than the exhibits to such documents (unless such exhibits
are specifically incorporated by reference in such documents). Requests for
this information should be directed in writing to the Deutsche Mortgage & Asset
Receiving Corporation at 60 Wall Street, New York, New York 10005, Attention:
Secretary, or by telephone at (212) 250-2500.
Deutsche Mortgage & Asset Receiving Corporation has 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 relating to each series of offered certificates contain summaries of
the material terms of the documents referred to in this prospectus and such
prospectus supplement, but do not contain all of the information set forth in
the registration statement pursuant to the rules and regulations of the
Securities and Exchange Commission. In addition, Deutsche Mortgage & Asset
Receiving Corporation 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.
You can read and copy any document filed by Deutsche Mortgage Asset &
Receiving Corporation at prescribed rates at the Securities and Exchange
Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549. You can obtain information on the operation of the Public Reference Room
by calling the Securities and Exchange Commission at 1-800-SEC-0330. Copies of
such material can also be obtained electronically through the Securities and
Exchange Commission's Electronic Data Gathering, Analysis and Retrieval system
at the Securities and Exchange Commission's Web site (http://www.sec.gov).
ii
TABLE OF CONTENTS
SUMMARY OF PROSPECTUS .................................................................... 1
RISK FACTORS ............................................................................. 9
The Lack of Liquidity May Make it Difficult for You to Resell Your Offered
Certificates and May Have an Adverse Effect on the Market Value of Your Offered
Certificates ......................................................................... 9
The Trust Fund's Assets May Be Insufficient To Allow For Payment In Full On Your
Certificates ......................................................................... 9
Any Credit Support for Your Offered Certificates May Be Insufficient to Protect You
Against All Potential Losses ......................................................... 10
Prepayments May Reduce The Average Life of Your Certificates .......................... 10
Prepayments May Reduce the Yield on Your Certificates ................................. 12
Ratings Do Not Guaranty Payment ....................................................... 12
Commercial and Multifamily Mortgage Loans Are Subject to Certain Risks Which
Could Adversely Affect the Performance of Your Offered Certificates .................. 12
Some Certificates May Not Be Appropriate for ERISA Plans .............................. 17
Residual Interests in a Real Estate Mortgage Investment Conduit Have Adverse Tax
Consequences ......................................................................... 17
Certain Federal Tax Considerations Regarding Original Issue Discount .................. 18
Bankruptcy Proceedings Entail Certain Risks ........................................... 18
Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment......... 19
Inclusion of Delinquent and Nonperforming Mortgage Loans in a Mortgage Asset
Pool ................................................................................. 19
Termination of the Trust Fund Could Affect the Yield on Your Offered Certificates ..... 19
DESCRIPTION OF THE TRUST FUNDS ........................................................... 20
General ............................................................................... 20
Mortgage Loans ........................................................................ 20
MBS ................................................................................... 25
Certificate Accounts .................................................................. 26
Credit Support ........................................................................ 26
Cash Flow Agreements .................................................................. 27
YIELD AND MATURITY CONSIDERATIONS ........................................................ 28
General ............................................................................... 28
Pass-Through Rate ..................................................................... 28
Payment Delays ........................................................................ 28
Certain Shortfalls in Collections of Interest ......................................... 28
Yield and Prepayment Considerations ................................................... 29
Weighted Average Life and Maturity .................................................... 30
Other Factors Affecting Yield, Weighted Average Life and Maturity ..................... 31
THE DEPOSITOR ............................................................................ 33
DEUTSCHE BANK AG ......................................................................... 33
DESCRIPTION OF THE CERTIFICATES .......................................................... 34
General ............................................................................... 34
Distributions ......................................................................... 34
Distributions of Interest on the Certificates ......................................... 35
Distributions of Principal of the Certificates ........................................ 36
iii
Distributions on the Certificates in Respect of Prepayment Premiums or in Respect
of Equity Participations ....................................................... 37
Allocation of Losses and Shortfalls ............................................. 37
Advances in Respect of Delinquencies ............................................ 37
Reports to Certificateholders ................................................... 38
Voting Rights ................................................................... 40
Termination ..................................................................... 40
Book-Entry Registration and Definitive Certificates ............................. 40
DESCRIPTION OF THE POOLING AGREEMENTS .............................................. 43
General ......................................................................... 43
Assignment of Mortgage Loans; Repurchases ....................................... 43
Representations and Warranties; Repurchases ..................................... 45
Collection and Other Servicing Procedures ....................................... 46
Sub-Servicers ................................................................... 48
Certificate Account ............................................................. 48
Modifications, Waivers and Amendments of Mortgage Loans ......................... 51
Realization upon Defaulted Mortgage Loans ....................................... 51
Hazard Insurance Policies ....................................................... 53
Due-on-Sale and Due-on-Encumbrance Provisions ................................... 53
Servicing Compensation and Payment of Expenses .................................. 54
Evidence as to Compliance ....................................................... 54
Certain Matters Regarding the Master Servicer, the Special Servicer, the REMIC
Administrator and the Depositor ................................................ 55
Events of Default ............................................................... 56
Rights upon Event of Default .................................................... 57
Amendment ....................................................................... 58
List of Certificateholders ...................................................... 59
The Trustee ..................................................................... 59
Duties of the Trustee ........................................................... 59
Certain Matters Regarding the Trustee ........................................... 60
Resignation and Removal of the Trustee .......................................... 60
DESCRIPTION OF CREDIT SUPPORT ...................................................... 61
General ......................................................................... 61
Subordinate Certificates ........................................................ 61
Cross-Support Provisions ........................................................ 61
Insurance or Guarantees with Respect to Mortgage Loans .......................... 62
Letter of Credit ................................................................ 62
Certificate Insurance and Surety Bonds .......................................... 62
Reserve Funds ................................................................... 62
Credit Support with Respect to MBS .............................................. 63
Interest Rate Exchange, Cap and Floor Agreements ................................ 63
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS ............................................ 63
General ......................................................................... 63
Types of Mortgage Instruments ................................................... 64
Leases and Rents ................................................................ 64
Personalty ...................................................................... 65
Foreclosure ..................................................................... 65
iv
Bankruptcy Laws ....................................................... 68
Environmental Considerations .......................................... 71
Due-on-Sale and Due-on-Encumbrance Provisions ......................... 73
Junior Liens; Rights of Holders of Senior Liens ....................... 73
Subordinate Financing ................................................. 73
Default Interest and Limitations on Prepayments ....................... 74
Applicability of Usury Laws ........................................... 74
Certain Laws and Regulations .......................................... 74
Americans with Disabilities Act ....................................... 75
Servicemembers Civil Relief Act ....................................... 75
Forfeitures in Drug and RICO Proceedings .............................. 75
CERTAIN FEDERAL INCOME TAX CONSEQUENCES .................................. 77
FEDERAL INCOME TAX CONSEQUENCES FOR REMIC CERTIFICATES ................... 77
General ............................................................... 77
Status of REMIC Certificates .......................................... 78
Qualification as a REMIC .............................................. 78
Taxation of Regular Certificates ...................................... 80
General .............................................................. 80
Original Issue Discount .............................................. 80
Acquisition Premium .................................................. 83
Variable Rate Regular Certificates ................................... 83
Deferred Interest .................................................... 83
Market Discount ...................................................... 83
Premium .............................................................. 84
Election to Treat All Interest Under the Constant Yield Method ....... 85
Sale or Exchange of Regular Certificates ............................. 85
Treatment of Losses .................................................. 86
Taxation of Residual Certificates ..................................... 87
Taxation of REMIC Income ............................................. 87
Basis and Losses ..................................................... 88
Treatment of Certain Items of REMIC Income and Expense ............... 89
Limitations on Offset or Exemption of REMIC Income ................... 90
Tax-Related Restrictions on Transfer of Residual Certificates ........ 90
Sale or Exchange of a Residual Certificate ........................... 94
Mark to Market Regulations ........................................... 94
Taxes that May be Imposed on the REMIC Pool ........................... 95
Prohibited Transactions .............................................. 95
Contributions to the REMIC Pool After the Startup Day ................ 95
Net Income from Foreclosure Property ................................. 95
Liquidation of the REMIC Pool ......................................... 96
Administrative Matters ................................................ 96
Limitations on Deduction of Certain Expenses .......................... 96
Taxation of Certain Foreign Investors ................................. 97
Regular Certificates ................................................. 97
Residual Certificates ................................................ 97
Backup Withholding .................................................... 98
Reporting Requirements ................................................ 98
v
FEDERAL INCOME TAX CONSEQUENCES FOR CERTIFICATES AS TO WHICH NO REMIC
ELECTION IS MADE ................................................... 100
Standard Certificates ............................................ 100
General ......................................................... 100
Tax Status ...................................................... 100
Premium and Discount ............................................ 101
Recharacterization of Servicing Fees ............................ 102
Sale or Exchange of Standard Certificates ....................... 102
Stripped Certificates ............................................ 103
General ......................................................... 103
Status of Stripped Certificates ................................. 104
Taxation of Stripped Certificates ............................... 105
Reporting Requirements and Backup Withholding .................... 106
Taxation of Certain Foreign Investors ............................ 107
STATE AND OTHER TAX CONSEQUENCES .................................... 107
CERTAIN ERISA CONSIDERATIONS ........................................ 107
General .......................................................... 107
Plan Asset Regulations ........................................... 108
Prohibited Transaction Exemptions ................................ 109
Tax Exempt Investors ............................................. 112
LEGAL INVESTMENT .................................................... 112
USE OF PROCEEDS ..................................................... 114
METHOD OF DISTRIBUTION .............................................. 115
LEGAL MATTERS ....................................................... 116
FINANCIAL INFORMATION ............................................... 116
RATING .............................................................. 116
INDEX OF DEFINED TERMS .............................................. 117
vi
SUMMARY OF PROSPECTUS
This summary highlights selected information from this prospectus. It does
not contain all of the information you need to consider in making your
investment decision. TO UNDERSTAND ALL OF THE TERMS OF AN OFFERING OF
CERTIFICATES, READ THIS ENTIRE DOCUMENT AND THE ACCOMPANYING PROSPECTUS
SUPPLEMENT CAREFULLY.
Securities Offered............ Mortgage pass-through certificates, issuable
in series. Each series of certificates will
represent beneficial ownership in a trust fund.
Each trust fund will own a segregated pool of
certain mortgage assets, described below under
"-- The Mortgage Assets."
RELEVANT PARTIES
Who We Are.................... Deutsche Mortgage & Asset Receiving
Corporation, a Delaware corporation. See "The
Depositor." Our principal offices are located
at 60 Wall Street, New York, New York 10005.
Our telephone number is (212) 250-2500.
Trustee....................... The trustee for each series of certificates
will be named in the related prospectus
supplement. See "Description of the Pooling
Agreements -- The Trustee."
Master Servicer............... If a trust fund includes mortgage loans, then
the master servicer, for the corresponding
series of certificates will be named in the
related prospectus supplement. See "Description
of the Pooling Agreements -- Certain Matters
Regarding the Master Servicer, the Special
Servicer, the REMIC Administrator and the
Depositor."
Special Servicer.............. If a trust fund includes mortgage loans, then
the special servicer for the corresponding
series of certificates will be named, or the
circumstances under which a special servicer
may be appointed will be described, in the
related prospectus supplement. See "Description
of the Pooling Agreements -- Collection and
Other Servicing Procedures."
MBS Administrator............. If a trust fund includes mortgage-backed
securities, then the entity responsible for
administering such mortgage-backed securities
will be named in the related prospectus
supplement.
REMIC Administrator........... The person responsible for the various
tax-related administration duties for a series
of certificates as to which one or more REMIC
elections have been made, will be named in the
related prospectus supplement. See "Description
of the Pooling Agreements -- Certain Matters
Regarding the Master Servicer, the Special
Servicer, the REMIC Administrator and the
Depositor."
1
INFORMATION ABOUT THE MORTGAGE POOL
The Mortgage Assets........... The mortgage assets will be the primary
assets of any trust fund. The mortgage assets
with respect to each series of certificates
will, in general, consist:
o various types of multifamily or commercial
mortgage loans,
o mortgage participations, pass-through
certificates or other mortgaged-backed
securities that evidence interests in one
or more of various types of multifamily or
commercial mortgage loans, or
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 the related prospectus supplement
specifies otherwise, by any governmental
agency or instrumentality or by any other
person. If the related prospectus supplement
so provides, some mortgage loans may be
delinquent or nonperforming as of the date the
related trust fund is formed.
If the related prospectus supplement so
provides, a mortgage loan:
o may provide for no accrual of interest or
for accrual of interest at an interest rate
that is fixed over its term, 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 rate,
o 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,
o may be fully amortizing or may be partially
amortizing or nonamortizing, with a balloon
payment due on its stated maturity date,
o may prohibit over its term or for a certain
period prepayments and/or require payment
of a premium or a yield maintenance payment
in connection with certain prepayments, and
o may provide for payments of principal,
interest or both, on regular due dates or
at such other interval as is specified in
the related prospectus supplement.
Each mortgage loan will have had an original
term to maturity of not more than 40 years. We
will not originate any mortgage loans. See
"Description of the Trust Funds -- Mortgage
Loans."
2
If any mortgage loan, or group of related
mortgage loans, constitutes a concentration of
credit risk, financial statements or other
financial information with respect to the
related mortgaged property or mortgaged
properties will be included in the related
Prospectus Supplement. See "Description of the
Trust Funds -- Mortgage Loans -- Mortgage Loan
Information in Prospectus Supplements."
If the related prospectus supplement so
specifies, the mortgage assets with respect to
a series of certificates may also include, or
consist of, mortgage participations, mortgage
pass-through certificates and/or other
mortgage-backed securities, that evidence an
interest in, or are secured by a pledge of,
one or more mortgage loans that conform to the
descriptions of the mortgage loans contained
in this prospectus and which may or may not be
issued, insured or guaranteed by the United
States or an agency or instrumentality
thereof. See "Description of the Trust Funds
-- MBS."
INFORMATION ABOUT THE CERTIFICATES
The Certificates.............. Each series of certificates will be issued in
one or more classes pursuant to a pooling and
servicing agreement or other agreement
specified in the related prospectus supplement
and will represent in the aggregate the entire
beneficial ownership interest in the related
trust fund.
The certificates of each series may consist of
one or more classes of certificates that,
among other things:
o are senior or subordinate to one or more
other classes of certificates in
entitlement to certain distributions on the
certificates;
o are entitled to distributions of principal
with disproportionate, nominal or no
distributions of interest;
o are entitled to distributions of interest,
with disproportionate nominal or no
distributions of principals;
o provide for distributions of interest or
principal that commence only after the
occurrence of certain events, such as the
retirement of one or more other classes of
certificates of such series;
o 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;
3
o provide for distributions of principal to
be made, subject to available funds, based
on a specified principal payment schedule
or other methodology; or
o provide for distribution based on
collections on the mortgage assets in the
related trust fund attributable to
prepayment premiums, yield maintenance
payments or equity participations.
If so specified in the related prospectus
supplement, a series of certificates may
include one or more "controlled amortization
classes," which will entitle the holders
thereof to receive principal distributions
according to a specified principal payment
schedule. See "Risk Factors -- Prepayments May
Reduce the Average Life of Your Certificates"
and " -- Prepayments May Reduce the Yield of
Your Certificates."
If the related prospectus supplement so
provides, a class of certificates may have two
or more component parts, each having
characteristics that are otherwise described
in this prospectus as being attributable to
separate and distinct classes.
The certificates will not be guaranteed or
insured by us or any of our affiliates, by any
governmental agency or instrumentality or by
any other person or entity, unless the related
prospectus supplement specifies otherwise. See
"Risk Factors -- Limited Assets."
Distributions of Interest on the
Certificates................. Each class of certificates, other than
certain classes of principal-only certificates
and certain classes of residual certificates,
will accrue interest on its certificate balance
or, in the case of certain classes of
interest-only certificates, on a notional
amount, based on a fixed, variable or
adjustable interest rate. The related
prospectus supplement will specify the
certificate balance, notional amount and/or
pass-through rate (or, in the case of a
variable or adjustable pass-through rate, the
method for determining such rate), as
applicable, for each class of offered
certificates.
Distributions of interest with respect to one
or more classes of certificates may not
commence until the occurrence of certain
events, such as the retirement of one or more
other classes of certificates, and interest
accrued with respect to a class of such
certificates prior to the occurrence of such
an event will either be added to the
certificate balance thereof or otherwise
deferred as described in the related
prospectus supplement.
Distributions of interest with respect to one
or more classes of certificates may be reduced
to the extent of
4
certain delinquencies, losses and other
contingencies described in this prospectus and
in the related prospectus supplement. See
"Risk Factors -- Prepayments May Reduce the
Average Life of Your Certificates" and "--
Prepayments May Reduce the Yield of Your
Certificates," "Yield and Maturity
Considerations -- Certain Shortfalls in
Collections of Interest" and "Description of
the Certificates -- Distributions of Interest
on the Certificates."
Distributions of Principal of the
Certificates................. Each class of certificates of each series
(other than certain classes of interest-only
certificates and certain classes of residual
certificates) will have a certificate balance.
The certificate balance of a class of
certificates outstanding from time to time will
represent the maximum amount that you are then
entitled to receive in respect of principal
from future cash flow on the assets in the
related trust fund. As described in each
prospectus supplement, distributions of
principal with respect to the related series of
certificates will be made on each distribution
date to the holders of the class or classes of
certificates of such series until the
certificate balances of such certificates have
been reduced to zero.
As described in each prospectus supplement,
distributions of principal with respect to one
or more classes of certificates:
o may be made 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;
o may not commence until the occurrence of
certain events, such as the retirement of
one or more other classes or certificates
of the same series; or
o may be made, subject to certain
limitations, based on a specified principal
payment schedule.
Unless the related prospectus supplement
provides otherwise, distributions of principal
of any class of offered certificates will be
made on a pro rata basis among all of the
certificates of such class. See "Description
of the Certificates -- Distributions of
Principal of the Certificates."
Credit Support and Cash Flow
Agreements................... Partial or full protection against certain
defaults and losses on the mortgage assets in
the related trust fund may be provided to one
or more classes of certificates of
5
the related series in the form of
subordination of one or more other classes of
certificates of such series or by one or more
other types of credit support, which may
include:
o a letter of credit,
o a surety bond,
o an insurance policy,
o a guarantee,
o a reserve fund, or
o a combination of the items described above.
In addition, a trust fund may include:
o 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; or
o interest rate exchange agreements, interest
rate cap or floor agreements, or other
agreements designed to reduce the effects
of interest rate fluctuations on the
mortgage assets or on one or more classes
of certificates.
The related prospectus supplement for a series
of offered certificates will provide certain
relevant information regarding any applicable
credit support or cash flow agreement. See
"Risk Factors -- Any Credit Support For Your
Offered Certificates May Be Insufficient to
Protect You Against All Potential Losses,"
"Description of the Trust Funds -- Credit
Support" and "-- Cash Flow Agreements" and
"Description of Credit Support."
Advances...................... If the related prospectus supplement so
provides, the master servicer, the special
servicer, the trustee, any provider of credit
support and/or any other specified person may
be obligated to make, or have the option of
making, certain advances with respect to
delinquent scheduled payments of principal
and/or interest on mortgage loans included in
the related trust fund. Any such advances made
with respect to a particular mortgage loan will
be reimbursable from subsequent recoveries in
respect of such mortgage loan and otherwise to
the extent described in this prospectus and in
the related prospectus supplement. See
"Description of the Certificates -- Advances in
Respect of Delinquencies." Any entity making
advances may be entitled to receive interest on
such advances, which will be payable from
amounts in the related trust fund. See
"Description of the Certificates -- Advances in
Respect of Delinquencies."
6
If a trust fund includes mortgage
participations, pass-through certificates or
mortgage-backed securities, the related
prospectus supplement will describe any
comparable advancing obligation of a party to
the related pooling and servicing agreement,
or of a party to the related indenture or
similar agreement.
Optional Termination.......... If the related prospectus supplement so
provides, a series of certificates may be
subject to optional early termination through
the repurchase of the mortgage assets in the
related trust fund by the party or parties
specified in the related prospectus supplement,
under the circumstances and in the manner set
forth in the related prospectus supplement. If
the related prospectus supplement so provides,
upon the reduction of the certificate balance
of a specified class or classes of certificates
by a specified percentage or amount or upon a
specified date, a party specified in such
prospectus supplement may be authorized or
required to solicit bids for the purchase of
all of the mortgage assets of the related trust
fund, or of a sufficient portion of such
mortgage assets to retire such class or
classes, under the circumstances and in the
manner set forth in the prospectus supplement.
See "Description of the Certificates --
Termination."
Registration of Book-Entry
Certificates................. If the related prospectus supplement so
provides, one or more classes of the offered
certificates will be offered in book-entry form
through the facilities of the Depository Trust
Company. Each class of book-entry certificates
will be initially represented by one or more
global certificates registered in the name of a
nominee of the Depository Trust Company. No
person acquiring an interest in a class of
book-entry certificates will be entitled to
receive definitive certificates of that class
in fully registered form, except under the
limited circumstances described in this
prospectus. See "Risk Factors -- Book-Entry
System for Certain Classes May Decrease
Liquidity and Delay Payment" and "Description
of the Certificates -- Book-Entry Registration
and Definitive Certificates."
Certain Federal Income Tax
Consequences................. The Certificates of each series will
constitute or evidence ownership of either:
o "regular-interests" and "residual
interests" in a trust fund, or a designated
portion thereof, treated as "real estate
mortgage investment conduit" under Sections
860A through 860G of the Internal Revenue
Code of 1986, or
7
o interests in a trust fund treated as a
grantor trust under applicable provisions
of the Internal Revenue Code of 1986.
You should consult your tax advisor concerning
the specific tax consequences to you of the
purchase, ownership and disposition of the
offered certificates and you should review
"Certain Federal Income Tax Consequences" in
this prospectus and in the related prospectus
supplement.
ERISA Considerations.......... If you are a fiduciary of any employee
benefit plan or certain other retirement plans
and arrangements, including individual
retirement accounts, annuities, Keogh plans,
and collective investment funds and separate
accounts in which such plans, accounts,
annuities or arrangements are invested, that is
subject to the Employee Retirement Income
Security Act of 1974, as amended, or Section
4975 of the Internal Revenue Code of 1986, you
should review with your legal advisor whether
the purchase or holding of offered certificates
could give rise to a transaction that is
prohibited or is not otherwise permissible
under the Employee Retirement Income Security
Act of 1974, as amended, or Section 4975 of the
Internal Revenue Code of 1986. See "Certain
ERISA Considerations" in this prospectus and
"ERISA Considerations" in the related
prospectus supplement.
Legal Investment.............. Your offered certificates will constitute
"mortgage related securities" for purposes of
the Secondary Mortgage Market Enhancement Act
of 1984, as amended, only if the related
prospectus supplement so provides. If your
investment activities are subject to legal
investment laws and regulations, regulatory
capital requirements, or review by regulatory
authorities, you may be subject to restrictions
on investment in the Offered Certificates and
should consult your legal advisor to determine
the suitability and consequences of the
purchase, ownership, and sale of the offered
certificates. See "Legal Investment" in this
prospectus and in the related prospectus
supplement.
Rating........................ At their respective dates of issuance, each
class of offered certificates will be rated not
lower than investment grade by one or more
nationally recognized statistical rating
agencies. See "Rating" in this prospectus and
in the related prospectus supplement.
8
RISK FACTORS
In considering an investment in the offered certificates of any series,
you should consider, among other things, the following risk factors and any
other risk factors set forth under the heading "Risk Factors" in the related
prospectus supplement. In general, to the extent that the factors discussed
below pertain to or are influenced by the characteristics or behavior of
mortgage loans included in a particular trust fund, they would similarly
pertain to and be influenced by the characteristics or behavior of the mortgage
loans underlying any mortgage-backed securities included in such trust fund.
THE LACK OF LIQUIDITY MAY MAKE IT DIFFICULT FOR YOU TO RESELL YOUR OFFERED
CERTIFICATES AND MAY HAVE AN ADVERSE EFFECT ON THE MARKET VALUE OF YOUR OFFERED
CERTIFICATES
Your offered certificates may have limited or no liquidity. Accordingly,
you may be forced to bear the risk of your investment in your offered
certificates for an indefinite period of time. Lack of liquidity could result
in a substantial decrease in the market value of your offered certificates.
Furthermore, except to the extent described in this prospectus and in the
related prospectus supplement, you will have no redemption rights, and your
offered certificates are subject to early retirement only under certain
specified circumstances described in this prospectus and in the related
prospectus supplement. See "Description of the Certificates -- Termination."
The Lack of a Secondary Market May Make it Difficult for You to Resell
Your Offered Certificates. We cannot assure you that a secondary market for
your offered certificates will develop. Even if a secondary market does
develop, it may not provide you with liquidity of investment and it may not
continue for as long as your certificates remain outstanding. The prospectus
supplement may indicate that an underwriter intends to establish a secondary
market in your offered certificates. However, no underwriter will be obligated
to do so. Unless the related prospectus supplement provides otherwise, the
certificates will not be listed on any securities exchange.
The Limited Nature of Ongoing Information May Make it Difficult for You to
Resell Your Offered Certificates. The primary source of ongoing information
regarding your offered certificates, including information regarding the status
of the related assets of the trust fund, will be the periodic reports delivered
to you as described in this prospectus under the heading "Description of the
Certificates -- Reports to Certificateholders." We cannot assure you that any
additional ongoing information regarding your offered certificates will be
available through any other source. The limited nature of this information may
adversely affect the liquidity of your offered certificates.
The Market Value of Your Offered Certificates May Be Adversely Affected by
Fluctuations in Prevailing Interest Rates. Even if a secondary market does
develop for your offered certificates, the market value of your certificates
will be affected by several factors, including:
o the perceived liquidity of your offered certificates, anticipated cash
flow of your offered certificates (which may vary widely depending
upon the prepayment and default assumptions applied in respect of the
underlying mortgage loans) and
o prevailing interest rates.
The price payable at any given time in respect of your offered
certificates may be extremely sensitive to small fluctuations in prevailing
interest rates. Accordingly, if you decide to sell your offered certificates in
any secondary market that may develop, you may have to sell them at a discount
from the price you paid. We are not aware of any source through which price
information about your offered certificates will be generally available on an
ongoing basis.
THE TRUST FUND'S ASSETS MAY BE INSUFFICIENT TO ALLOW FOR PAYMENT IN FULL ON
YOUR CERTIFICATES
Unless the related prospectus supplement specifies otherwise, neither your
offered certificates nor the mortgage assets will be guaranteed or insured by
us or any of our affiliates, by any
9
governmental agency or instrumentality or by any other person or entity. In
addition, your offered certificate will not 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 your offered
certificates, no other assets will be available for payment of the deficiency,
and you will be required to bear the consequent loss. Furthermore, certain
amounts on deposit from time to time in certain funds or accounts constituting
part of a trust fund, including the certificate account and any accounts
maintained as credit support, may be withdrawn under certain conditions for
purposes other than the payment of principal of or interest on your
certificates. If the related series of certificates includes one or more
classes of subordinate certificates, on any distribution date in respect of
which losses or shortfalls in collections on the mortgage assets have been
incurred, all or a portion of the amount of such losses or shortfalls will be
borne first by one or more classes of the subordinate certificates, and,
thereafter, by the remaining classes of certificates in the priority and manner
and subject to the limitations specified in such prospectus supplement.
ANY CREDIT SUPPORT FOR YOUR OFFERED CERTIFICATES MAY BE INSUFFICIENT TO PROTECT
YOU AGAINST ALL POTENTIAL LOSSES
Credit Support May Not Cover All Types of Losses. Use of credit support
will be subject to the conditions and limitations described in this prospectus
and in the related prospectus supplement. Moreover, such credit support may not
cover all potential losses or risks. For example, credit support may or may not
cover loss by reason of fraud or negligence by a mortgage loan originator or
other parties. Any losses not covered by credit support may, at least in part,
be allocated to one or more classes of your offered certificates.
Disproportionate Benefits May Be Given to Certain Classes and Series. A
series of certificates may include one or more classes of senior and
subordinate certificates. Although subordination is intended to reduce the
likelihood of temporary shortfalls and ultimate losses to holders of senior
certificates, the amount of subordination will be limited and may decline under
certain circumstances. In addition, if principal payments on one or more
classes of offered certificates of a series are made in a specified order of
priority, any related credit support may be exhausted before the principal of
the later-paid classes of offered certificates of such series has been repaid
in full. As a result, the impact of losses and shortfalls experienced with
respect to the mortgage assets may fall primarily upon such later-paid classes
of subordinate certificates. Moreover, if a form of credit support covers the
offered certificates of more than one series and losses on the related mortgage
assets exceed the amount of such credit support, it is possible that the
holders of offered certificates of one (or more) such series will be
disproportionately benefited by such credit support to the detriment of the
holders of offered certificates of one (or more) other such series.
The Amount of Credit Support Will Be Limited. The amount of any applicable
credit support supporting one or more classes of offered certificates,
including the subordination of one or more other classes of certificates, will
be determined on the basis of criteria established by each rating agency rating
such classes of certificates based on an assumed level of defaults,
delinquencies and losses on the underlying mortgage assets and certain other
factors. However, we can not assure you that the loss experienced on the
related mortgage assets will not exceed such assumed levels. See "Description
of the Certificates -- Allocation of Losses and Shortfalls" and "Description of
Credit Support." If the losses on the related mortgage assets do exceed such
assumed levels, you may be required to bear such additional losses.
PREPAYMENTS MAY REDUCE THE AVERAGE LIFE OF YOUR CERTIFICATES
As a result of prepayments on the mortgage loans, the amount and timing of
distributions of principal and/or interest on your offered certificates may be
highly unpredictable. Prepayments on the mortgage loans will result in a faster
rate of principal payments on one or more classes of certificates than if
payments on such mortgage loans were made as scheduled. Thus, the
10
prepayment experience on the mortgage loans may affect the average life of one
or more classes of your offered certificates. The rate of principal payments on
pools of mortgage loans varies among pools and from time to time is influenced
by a variety of economic, demographic, geographic, social, tax and legal
factors. For example, if prevailing interest rates fall significantly below the
interest rates borne by the mortgage loans, then principal prepayments on such
mortgage loans are likely to be higher than if prevailing interest rates remain
at or above the rates borne by those mortgage loans. Conversely, if prevailing
interest rates rise significantly above the mortgage rates borne by the
mortgage loans, then principal prepayments on such mortgage loans are likely to
be lower than if prevailing interest rates remain at or below the mortgage
rates borne by those mortgage loans. We cannot assure you as to the actual rate
of prepayment on the mortgage loans or that such rate of prepayment 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, the retirement of any class of your certificates could
occur significantly earlier or later, and the average life thereof could be
significantly shorter or longer, than expected.
The extent to which prepayments on the mortgage loans ultimately affect
the average life of any class of your offered certificates will depend on the
terms and provisions of your offered certificates. Your offered certificates
may provide that your offered certificates are entitled:
o to a pro rata share of the prepayments on the mortgage loans that are
distributable on such date,
o to a disproportionately large share of such prepayments, or
o to a disproportionately small share of such prepayments.
If your certificates entitle you to a disproportionately large share of
the prepayments on the mortgage loans, then there is an increased likelihood
that your certificates will be retired at an earlier date. If your certificates
entitle you to a disproportionately small share of the prepayments on the
mortgage loans, then there is an increased likelihood that the average life of
your certificates will be extended. As described in the related prospectus
supplement, your entitlement to receive payments (and, in particular,
prepayments) of principal of the mortgage loans may vary based on the
occurrence of certain events (e.g., the retirement of one or more classes of
certificates of such series) or may be subject to certain contingencies (e.g.,
prepayment and default rates with respect to such mortgage loans).
A series of certificates may include one or more controlled amortization
classes, which will entitle the holders thereof to receive principal
distributions according to a specified principal payment schedule. Although
prepayment risk cannot be eliminated entirely for any class of certificates, a
controlled amortization class will generally provide a relatively stable cash
flow so long as the actual rate of prepayment on the mortgage loans in the
related trust fund remains relatively constant at the rate, or within the range
of rates, of prepayment used to establish the specific principal payment
schedule for such certificates. Prepayment risk with respect to a given
mortgage asset pool does not disappear, however, and the stability afforded to
a controlled amortization class comes at the expense of one or more companion
classes of the same series, any of which companion classes may also be a class
of offered certificates. In general, and as more specifically described in the
related prospectus supplement, a companion class may entitle the holders
thereof to a disproportionately large share of prepayments on the mortgage
loans in the related trust fund when the rate of prepayment is relatively fast,
and/or may entitle the holders thereof to a disproportionately small share of
prepayments on the mortgage loans in the related trust fund when the rate of
prepayment is relatively slow. As and to the extent described in the related
prospectus supplement, a companion class absorbs some (but not all) of the risk
of early retirement and/or the risk of extension that would otherwise belong to
the related controlled amortization class if all payments of principal of the
mortgage loans in the related trust fund were allocated on a pro rata basis.
11
PREPAYMENTS MAY REDUCE THE YIELD ON YOUR CERTIFICATES
Your offered certificates may be offered at a premium or discount. Yields
on such classes of certificates will be sensitive, and in some cases extremely
sensitive, to prepayments on the mortgage loans and, where the amount of
interest payable with respect to a class is disproportionately large, as
compared to the amount of principal, a holder might fail to recover its
original investment. If you purchase your offered certificate at a discount,
you should consider the risk that a slower than anticipated rate of principal
payments on the mortgage loans could result in an actual yield that is lower
than your anticipated yield. If you purchase your offered certificates at a
premium, you should consider the risk that a faster than anticipated rate of
principal payments could result in an actual yield that is lower than your
anticipated yield. See "Yield and Maturity Considerations."
RATINGS DO NOT GUARANTY PAYMENT
Any rating assigned by a rating agency to a class of your offered
certificates will reflect only its assessment of the likelihood that you will
receive payments to which you are entitled. Such rating will not constitute an
assessment of the likelihood that principal prepayments on the related mortgage
loans will be made, the degree to which the rate of such prepayments might
differ from that originally anticipated or the likelihood of early optional
termination of the related trust fund.
The amount, type and nature of credit support, if any, provided with
respect to your certificates will be determined on the basis of criteria
established by each rating agency rating your certificates. Those criteria are
sometimes based upon an actuarial analysis of the behavior of mortgage loans in
a larger group. However, we cannot assure you 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, such criteria may be based upon determinations of the
values of the mortgaged properties that provide security for the mortgage
loans. However, we cannot assure you that those values will not decline in the
future. As a result, the credit support required in respect of your offered
certificates may be insufficient to fully protect you from losses on the
related mortgage asset pool. See "Description of Credit Support" and "Rating."
COMMERCIAL AND MULTIFAMILY MORTGAGE LOANS ARE SUBJECT TO CERTAIN RISKS WHICH
COULD ADVERSELY AFFECT THE PERFORMANCE OF YOUR OFFERED CERTIFICATES
Repayment of a Commercial or Multifamily Mortgage Loan Depends on the
Performance of the Related Mortgaged Property, of Which We Make No
Assurance. Mortgage loans made on the security of multifamily or commercial
property may have a greater likelihood of delinquency and foreclosure, and a
greater likelihood of loss in the event thereof, than loans made on the
security of an owner-occupied single-family property. See "Description of the
Trust Funds -- Mortgage Loans -- Default and Loss Considerations with Respect
to the Mortgage Loans." Commercial and multifamily lending typically involved
larger loans to single borrowers or groups of related borrowers than
single-family loans. The ability of a borrower to repay a loan secured by an
income-producing property typically is dependent primarily upon the successful
operation of such property rather than upon the existence of independent income
or assets of the borrower. If the net operating income of the property is
reduced (for example, if rental or occupancy rates decline or real estate tax
rates or other operating expenses increase), the borrower's ability to repay
the loan may be impaired.
Commercial and multifamily real estate can be affected significantly by
the supply and demand in the market for the type of property securing the loan
and, therefore, may be subject to adverse economic conditions. Market values
may vary as a result of economic events or governmental regulations outside the
control of the borrower or lender that impact the cash flow
12
of the property. For example, some laws, such as the Americans with
Disabilities Act, may require modifications to properties, and rent control
laws may limit rent collections in the case of multifamily properties.
A number of the mortgage loans may be secured by liens on owner-occupied
mortgaged properties or on mortgaged properties leased to a single tenant or a
small number of significant tenants. Accordingly, a decline in the financial
condition of the borrower or a significant tenant, as applicable, may have a
disproportionately greater effect on the net operating income from such
mortgaged properties than would be the case with respect to mortgaged
properties with multiple tenants.
Furthermore, the value of any mortgaged property may be adversely affected
by risks generally incident to interests in real property, including
o changes in general or local economic conditions and/or specific
industry segments;
o declines in real estate values;
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 natural disasters and civil disturbances such as earthquakes,
hurricanes, floods, eruptions, riots or other acts of God; and
o other circumstances, conditions or events beyond the control of a
master servicer or a special servicer.
Additional considerations may be presented by the type and use of a
particular mortgaged property. For instance,
o Mortgaged properties that operate as hospitals and nursing homes are
subject to significant governmental regulation of the ownership,
operation, maintenance and financing of health care institutions.
o Hotel and motel properties are often operated pursuant to franchise,
management or operating agreements that may be terminable by the
franchisor or operator, and the transferability of a hotel's
operating, liquor and other licenses upon a transfer of the hotel,
whether through purchase or foreclosure, is subject to local law
requirements.
o The ability of a borrower to repay a mortgage loan secured by shares
allocable to one or more cooperative dwelling units may depend on the
ability of the dwelling units to generate sufficient rental income,
which may be subject to rent control or stabilization laws, to cover
both debt service on the loan as well as maintenance charges to the
cooperative. Further, a mortgage loan secured by cooperative shares is
subordinate to the mortgage, if any, on the cooperative apartment
building.
Mortgages on mortgaged properties which are owned by the borrower under a
condominium form of ownership are subject to the declaration, by-laws and other
rules and regulations of the condominium association.
Mortgaged properties which are multifamily properties of cooperatively
owned multifamily properties may be subject to rent control laws, which could
impact the future cash flows of those properties.
Other multifamily properties, hotels, retail properties, office buildings,
manufactured housing properties, nursing homes and self-storage facilities
located in the areas of the mortgaged properties compete with the mortgaged
properties to attract residents and customers. The leasing of real estate is
highly competitive. The principal means of competition are price, location and
the nature and condition of the facility to be leased. A borrower under a
mortgage loan
13
competes with all lessors and developers of comparable types of real estate in
the area in which the mortgaged property is located. Those lessors or
developers could have lower rentals, lower operating costs, more favorable
locations or better facilities. While a borrower under a mortgage loan may
renovate, refurbish or expand the mortgaged property to maintain it and remain
competitive, that renovation, refurbishment or expansion may itself entail
significant risk. Increased competition could adversely affect income from and
market value of the mortgaged properties. In addition, the business conducted
at each mortgaged property may face competition from other industries and
industry segments.
In addition, the concentration of default, foreclosure and loss risks in
individual mortgage loans in a particular trust fund will generally be greater
than for pools of single-family loans because the mortgage loans in a trust
fund will generally consist of a smaller number of higher balance loans than
would a pool of single-family loans of comparable aggregate unpaid principal
balance.
The Mortgage Loans May Be Nonrecourse Loans Or Loans With Limited
Recourse. Some or all of the mortgage loans will be nonrecourse loans or loans
for which recourse may be restricted or unenforceable. As to any such mortgage
loan, recourse in the event of borrower default will be limited to the specific
real property and other assets, if any, that were pledged to secure the
mortgage loan. However, even with respect to those mortgage loans that provide
for recourse against the borrower and its assets generally, we cannot assure
you that enforcement of such recourse provisions will be practicable, or that
the assets of the borrower will be sufficient to permit a recovery in respect
of a defaulted mortgage loan in excess of the liquidation value of the related
mortgaged property. See "Certain Legal Aspects of Mortgage Loans -- Foreclosure
- -- Anti-Deficiency Legislation."
Cross-Collateralization Arrangements May Be Challenged as
Unenforceable. The mortgage asset pool may include groups of mortgage loans
which are cross-collateralized and cross-defaulted. These arrangements are
designed primarily to ensure that all of the collateral pledged to secure the
respective mortgage loans in a cross-collateralized group, and the cash flows
generated by such mortgage loans, are available to support debt service on, and
ultimate repayment of, the aggregate indebtedness evidenced by such mortgage
loans. These arrangements thus seek to reduce the risk that the inability of
one or more of the mortgaged properties securing any such group of mortgage
loans to generate net operating income sufficient to pay debt service will
result in defaults and ultimate losses.
There may not be complete identity of ownership of the mortgaged
properties securing a group of cross-collateralized mortgage loans. In such an
instance, creditors of one or more of the related borrowers could challenge the
cross-collateralization arrangement as a fraudulent conveyance. Generally,
under federal and most state fraudulent conveyance statutes, the incurring of
an obligation or the transfer of property by a person will be subject to
avoidance under certain circumstances if the person did not receive fair
consideration or reasonably equivalent value in exchange for such obligation or
transfer and
o was insolvent or was rendered insolvent by such obligation or
transfer,
o was engaged in business or a transaction, or was about to engage in
business or a transaction, for which any property remaining with the
person was an unreasonably small capital or
o intended to, or believed that it would, incur debts that would be
beyond the person's ability to pay as such debts matured.
Accordingly, a lien granted by a borrower to secure repayment of another
borrower's mortgage loan could be avoided if a court were to determine that
o such borrower was insolvent at the time of granting the lien, was
rendered insolvent by the granting of the lien, or was left with
inadequate capital, or was not able to pay its debts as they matured
and
14
o the borrower did not, when it allowed its mortgaged property to be
encumbered by a lien securing the entire indebtedness represented by
the other mortgage loan, receive fair consideration or reasonably
equivalent value for pledging such mortgaged property for the equal
benefit of the other borrower.
If the lien is avoided, the lender would lose the benefits afforded by
such lien.
The cross-collateralized mortgage loans constituting any group thereof may
be secured by mortgage liens on mortgaged properties located in different
states. 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 any such
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
related mortgages is not impaired or released.
Mortgage Loan With Balloon Payments Have a Greater Risk of Default.
Certain of the mortgage loans may be non-amortizing or only partially
amortizing. The borrower under a mortgage loan of that type is required to make
substantial payments of principal (that is, balloon payments) at their stated
maturity. Mortgage loans of this type involve a greater likelihood of default
than self-amortizing loans because the ability of a borrower to make a balloon
payment depends upon the borrower's ability to refinance the loan or sell the
mortgaged property. The ability of the borrower to refinance the loan or sell
the property will be affected by a number of factors, including:
o the fair market value and condition of the related mortgaged property;
o the level of interest rates;
o the borrower's equity in the related mortgaged property;
o the borrower's financial condition;
o the operating history of the related mortgaged property;
o changes in zoning, tax and (and with respect to residential
properties) rent control laws;
o changes in competition in the relevant area;
o changes in rental rates in the relevant area;
o changes in governmental regulation and fiscal policy;
o prevailing general and regional economic conditions;
o the state of the fixed income and mortgage markets; and
o the availability of credit for multifamily rental or commercial
properties.
Neither we nor any of our affiliates will be obligated to refinance any
mortgage loan underlying your offered certificates.
The related master servicer or special servicer may, within prescribed
limits, extend and modify mortgage loans that are in default or as to which a
payment default is imminent in order to maximize recoveries on such mortgage
loans. See "Description of the Pooling Agreements -- Realization Upon Defaulted
Mortgage Loans." The related master servicer or special servicer is only
required to determine that any such extension or modification is reasonably
likely to produce a greater recovery than a liquidation of the real property
securing such mortgage loan. There is a risk that the decision of the master
servicer or special servicer to extend or modify a mortgage loan may not in
fact produce a greater recovery.
The Master Servicer or the Special Servicer May Experience Difficulty in
Collecting Rents Upon the Default and/or Bankruptcy of a Borrower. Some or all
of the mortgage loans may be secured by an assignment of leases and rents
pursuant to which the related borrower assigns to the lender its right, title
and interest as landlord under the leases of the related mortgaged
15
property, and the income derived from such leases 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, if bankruptcy or similar proceedings are commenced by or in respect
of the borrower, the lender's ability to collect the rents may be adversely
affected. See "Certain Legal Aspects of Mortgage Loans -- Leases and Rents."
Due-on-Sale and Debt-Acceleration Clauses May Be Challenged as
Unenforceable. Some or all of the mortgage loans may contain a due-on-sale
clause, which permits the lender, with some exceptions, to accelerate the
maturity of the related mortgaged loan if the borrower sells, transfers or
conveys the related mortgaged property or its interest in the mortgaged
property.
Mortgages also may include a debt-acceleration clause, which permits the
lender to accelerate the debt upon a monetary or non-monetary default by the
related borrower. The courts of all states will enforce acceleration clauses in
the event of a material payment default. The equity courts of any state,
however, may refuse to allow the foreclosure of a mortgage, deed of trust, or
other security instrument or to permit the acceleration of the indebtedness if
- --
o the exercise of those remedies would be inequitable or unjust; or
o the circumstances would render the acceleration unconscionable.
Environmental Issues at the Mortgaged Properties May Adversely Affect
Payments on Your Certificates. Under federal law and the laws of certain
states, contamination of real property may give rise to a lien on the property
to assure or reimburse the costs of cleanup. In several states, that lien has
priority over an existing mortgage lien on that property. In addition, under
various federal, state and local laws, ordinances and regulations, an owner or
operator of real estate may be liable for the costs of removal or remediation
of hazardous substances or toxic substances on, in or beneath the property.
This liability may be imposed without regard to whether the owner knew of, or
was responsible for, the presence of those hazardous or toxic substances. The
costs of any required remediation and the owner or operator's liability for
them as to any property are generally not limited under these laws, ordinances
and regulations and could exceed the value of the mortgaged property and the
aggregate assets of the owner or operator. In addition, as to the owners or
operators of mortgaged properties that generate hazardous substances that are
disposed of at "offsite" locations, the owners or operators may be held
strictly, jointly and severally liable if there are releases or threatened
releases of hazardous substances at the off-site locations where that person's
hazardous substances were disposed.
The trust may attempt to reduce its potential exposure to cleanup costs
by --
o establishing reserves for cleanup costs when they can be anticipated
and estimated; or
o designating the trust as the named insured in specialized
environmental insurance that is designed for secured lenders.
However, we cannot assure you that reserves or environmental insurance
will in fact be applicable or adequate to cover all costs and any other
liabilities that may eventually be incurred.
Under the federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, as well as other federal and state laws, a
secured lender (such as the trust) may be liable as an "owner" or "operator"
for the costs of dealing with hazardous substances affecting a borrower's
property, if agents or employees of the lender have participated in the
management or operations of the borrower's property. This liability could exist
even if a previous owner caused the environmental damage. The trust's potential
exposure to liability for cleanup costs may increase if the trust actually
takes possession of a borrower's property, or control of its day-to-day
operations, as for example through the appointment of a receiver.
See "Certain Legal Aspects of Mortgage Loans -- Environmental
Considerations."
16
Lack of Insurance Coverage Exposes You to the Risk of Certain Special
Hazard Losses. Unless the related prospectus supplement otherwise provides, the
master servicer and special servicer for the related trust fund will be
required to cause the borrower on each mortgage loan to maintain such insurance
coverage in respect of the related mortgaged property as is required under the
related mortgage (unless each of the master servicer and the special servicer
maintain a blanket policy). 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, and
riot, strike and civil commotion, subject to the conditions and exclusions
specified in each policy. Most policies typically do not cover any physical
damage resulting from, among other things --
o war;
o revolution;
o governmental actions;
o floods and other water-related causes;
o earth movement, including earthquakes, landslides and mudflows;
o wet or dry rot;
o vermin; and
o domestic animals.
Unless the related mortgage loan documents specifically require the
borrower to insure against physical damage arising from such causes, then, the
resulting losses may be borne by you as a holder of offered certificates. See
"Description of the Pooling Agreements -- Hazard Insurance Policies."
Geographic Concentration Within a Trust Fund Exposes Investors to Greater
Risk of Default and Loss. Certain geographic regions of the United States from
time to time will experience weaker regional economic conditions and housing
markets, and, consequently, will experience higher rates of loss and
delinquency than will be experienced on mortgage loans generally. For example,
a region's economic condition and housing market may be directly, or
indirectly, adversely affected by natural disasters or civil disturbances such
as earthquakes, hurricanes, floods, eruptions or riots. The economic impact of
any of these types of events may also be felt in areas beyond the region
immediately affected by the disaster or disturbance. The mortgage loans
securing certain series of certificates may be concentrated in these regions,
and such concentration may present risk considerations in addition to those
generally present for similar mortgage-backed securities without such
concentration.
SOME CERTIFICATES MAY NOT BE APPROPRIATE FOR ERISA PLANS
Generally, ERISA applies to investments made by employee benefit plans and
transactions involving the assets of those plans. Due to the complexity of
regulations that govern those plans, if you are subject to ERISA you should
consult your own counsel regarding consequences under ERISA of acquisition,
ownership and disposition of your offered certificates. See "Certain ERISA
Considerations."
RESIDUAL INTERESTS IN A REAL ESTATE MORTGAGE INVESTMENT CONDUIT HAVE ADVERSE
TAX CONSEQUENCES
If you hold certain classes of certificates that constitute a residual
interest in a "real estate mortgage investment conduit," for federal income tax
purposes, you will be required to report on your federal income tax returns as
ordinary income your pro rata share of the taxable income of the REMIC,
regardless of the amount or timing of your receipt of cash payments, as
described in "Certain Federal Income Tax Consequences -- Federal Income Tax
Consequences for REMIC
17
Certificates." Accordingly, under certain circumstances, if you hold residual
certificates you may have taxable income and tax liabilities arising from your
investment during a taxable year in excess of the cash received during that
period. The requirement to report your pro rata share of the taxable income and
net loss of the REMIC may continue until the principal balances of all classes
of certificates of the related series have been reduced to zero, even though
you have received full payment of your stated interest and principal, if any. A
portion or, in certain circumstances, all, of your share of the REMIC taxable
income may be treated as "excess inclusion" income to you, which generally,
will not be subject to offset by losses from other activities, if you are a
tax-exempt holder, will be treated as unrelated business taxable income, and if
you are a foreign holder, will not qualify for exemption from withholding tax.
If you are an individual and you hold a class of residual certificates,
you may be limited in your ability to deduct servicing fees and other expenses
of the REMIC. In addition, classes of residual certificates are subject to
certain restrictions on transfer. Because of the special tax treatment of
classes of residual certificates, the taxable income arising in a given year on
a class of residual certificates will not be equal to the taxable income
associated with investment in a corporate bond or stripped instrument having
similar cash flow characteristics and pre-tax yield. As a result, the after-tax
yield on the classes of residual certificates may be significantly less than
that of a corporate bond or stripped instrument having similar cash flow
characteristics or may be negative.
CERTAIN FEDERAL TAX CONSIDERATIONS REGARDING ORIGINAL ISSUE DISCOUNT
Certain classes of certificates of a series may be issued with "original
issue discount" for federal income tax purposes, which generally will result in
recognition of some taxable income in advance of the receipt of cash
attributable to that income. See "Certain Federal Income Tax Consequences --
Taxation of Regular Certificates."
BANKRUPTCY PROCEEDINGS ENTAIL CERTAIN RISKS
Under the federal bankruptcy code, the filing of a petition in bankruptcy
by or against a borrower will stay the sale of the related 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 a mortgaged
property is less than the principal balance of the mortgage loan it secures,
the court may prevent a lender from foreclosing on such mortgaged property,
subject to certain protections available to the lender. As part of a
restructuring plan, a court also may reduce the amount of secured indebtedness
to the then-current value of such mortgaged property. This action would make
the lender a general unsecured creditor for the difference between the
then-current value of the property and the amount of its outstanding mortgage
indebtedness.
A bankruptcy court may also --
o grant a debtor a reasonable time to cure a payment default on a
mortgage loan;
o reduce monthly payments due under a mortgage loan;
o change the rate of interest due on a mortgage loan; or
o otherwise alter a 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, as
debtor-in-possession, or its bankruptcy trustee has 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 the federal bankruptcy code, the lender will be stayed from
enforcing a borrower's assignment of rents and leases. The federal bankruptcy
code also may interfere with the trustee's
18
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.
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.
BOOK-ENTRY SYSTEM FOR CERTAIN CLASSES MAY DECREASE LIQUIDITY AND DELAY PAYMENT
If the related prospectus supplement so provides, one or more classes of
your offered certificates will be issued as book-entry certificates. Each class
of book-entry certificates will be initially represented by one or more
certificates registered in the name of a nominee for The Depository Trust
Company, or DTC. Transactions in book-entry certificates of any series
generally can be effected only through The Depository Trust Company and its
participating organizations. You are therefore subject to the following risks:
o The liquidity of book-entry certificates in any secondary trading
market that may develop may be limited because investors may be
unwilling to purchase certificates for which they cannot obtain
physical certificates.
o Your ability to pledge certificates to persons or entities that do not
participate in the DTC system, or otherwise to take action in respect
of the certificates, may be limited due to lack of a physical security
representing the certificates.
o Your access to information regarding the certificates may be limited
since conveyance of notices and other communications by The Depository
Trust Company to its participating organizations, and directly and
indirectly through those participating organizations to you, will be
governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect at that time.
o You may experience some delay in receiving distributions of interest
and principal on your certificates because distributions will be made
by the trustee to DTC and DTC will then be required to credit those
distributions to the accounts of its participating organizations and
only then will they be credited to your account either directly or
indirectly through DTC's participating organizations.
See "Description of the Certificates -- Book-Entry Registration and
Definitive Certificates."
INCLUSION OF DELINQUENT AND NONPERFORMING MORTGAGE LOANS IN A MORTGAGE ASSET
POOL
The trust fund may include mortgage loans that are past due or are
nonperforming. However, mortgage loans which are seriously delinquent loans
(that is, loans more than 60 days delinquent or as to which foreclosure has
been commenced) will not constitute a material concentration of the mortgage
loans, based on principal balance at the time the trust fund is formed. The
related prospectus supplement may provide that the servicing of such mortgage
loans will be performed by the special servicer. However, the same entity may
act as both master servicer and special servicer. Credit support provided with
respect to your certificates may not cover all losses related to such
delinquent or nonperforming mortgage loans, and you should consider the risk
that their inclusion in a mortgage pool may result in a greater rate of
defaults and prepayments and, consequently, reduce yield on your certificates.
See "Description of the Trust Funds -- Mortgage Loans -- General."
TERMINATION OF THE TRUST FUND COULD AFFECT THE YIELD ON YOUR OFFERED
CERTIFICATES
The related prospectus supplement may provide that, upon the reduction of
the certificate balance of a specified class or classes of certificates by a
specified percentage or amount or upon a specified date, a party designated
therein may be authorized or required to solicit bids for the
19
purchase of all the mortgage assets of the related trust fund, or of a
sufficient portion of such mortgage assets to retire such class or classes. The
solicitation of bids will be conducted in a commercially reasonable manner and,
generally, assets will be sold at their fair market value. In addition, the
related prospectus supplement may provide that, upon the reduction of the
aggregate principal balance of some or all of the mortgage assets by a
specified percentage, a party or parties designated in the prospectus
supplement may be authorized to purchase such mortgage assets, generally at a
price equal to, in the case of any mortgage asset, the unpaid principal balance
of such mortgage asset plus accrued interest (or, in some cases, at fair market
value). However, circumstances may arise in which such fair market value may be
less than the unpaid balance of the related mortgage assets sold together with
interest thereon, and you may therefore receive an amount less than the
certificate balance of, and accrued unpaid interest on, your offered
certificates. See "Description of the Certificates -- Termination."
DESCRIPTION OF THE TRUST FUNDS
GENERAL
The primary assets of each trust fund will consist of:
o various types of multifamily or commercial mortgage loans,
o mortgage participations, pass-through certificates or other
mortgage-backed securities ("MBS") that evidence interests in one or
more of various types of multifamily or commercial mortgage loans or
o a combination of mortgage loans and MBS.
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 mortgage asset seller,
which mortgage asset seller may or may not be the originator of such mortgage
loan or the issuer of such MBS. The mortgage assets will not be guaranteed or
insured by the depositor or any of its affiliates or, unless otherwise provided
in the related prospectus supplement, by any governmental agency or
instrumentality or by any other person. The discussion below under the heading
"-- Mortgage Loans," unless otherwise noted, applies equally to mortgage loans
underlying any MBS included in a particular trust fund.
MORTGAGE LOANS
General. The mortgage loans will be evidenced by promissory notes secured
by mortgages, deeds of trust or similar security instruments that create first
or junior liens on fee or leasehold estates in properties consisting of one or
more of the following types of real property:
o 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, and mobile home
parks; and
o commercsial properties consisting of office buildings, retail shopping
facilities, such as shopping centers, malls and individual stores,
hotels or motels, health care-related facilities (such as hospitals,
skilled nursing facilities, nursing homes, congregate care facilities
and senior housing), recreational vehicle parks, warehouse facilities,
mini-warehouse facilities, self-storage facilities, industrial
facilities, parking lots, restaurants, mixed use properties (that is,
any combination of the foregoing), and unimproved land.
The multifamily properties may include mixed commercial and residential
structures and apartment buildings owned by private cooperative housing
corporations. Unless otherwise specified in the related prospectus supplement,
each mortgage will create a first priority mortgage lien on a fee estate in a
mortgaged property. If a mortgage creates a lien on a borrower's leasehold
estate in a property, then, unless otherwise specified in the related
prospectus supplement, the term of any such leasehold will exceed the term of
the mortgage note by at least
20
ten years. Each mortgage loan will have been originated by a person other than
the depositor. In some cases, that originator or assignee will be an affiliate
of the depositor.
If so provided in the related prospectus supplement, mortgage assets for a
series of certificates may include mortgage loans secured by junior liens, and
the loans secured by the related senior liens may not be included in the
mortgage pool. The primary risk to holders of mortgage loans secured by junior
liens is the possibility that adequate funds will not be received in connection
with a foreclosure of the related senior liens to satisfy fully both the senior
liens and the mortgage loan. In the event that a holder of a senior lien
forecloses on a mortgaged property, the proceeds of the foreclosure or similar
sale will be applied first to the payment of court costs and fees in connection
with the foreclosure, second to real estate taxes, third in satisfaction of all
principal, interest, prepayment or acceleration penalties, if any, and any
other sums due and owing to the holder of the senior liens. The claims of the
holders of the senior liens will be satisfied in full out of proceeds of the
liquidation of the related mortgage property, if such proceeds are sufficient,
before the trust fund as holder of the junior lien receives any payments in
respect of the mortgage loan. If the master servicer were to foreclose on any
mortgage loan, it would do so subject to any related senior liens. In order for
the debt related to such mortgage loan to be paid in full at such sale, a
bidder at the foreclosure sale of such mortgage loan would have to bid an
amount sufficient to pay off all sums due under the mortgage loan and any
senior liens or purchase the mortgaged property subject to such senior liens.
In the event that such proceeds from a foreclosure or similar sale of the
related mortgaged property are insufficient to satisfy all senior liens and the
mortgage loan in the aggregate, the trust fund, as the holder of the junior
lien, (and, accordingly, holders of one or more classes of the certificates of
the related series) bear
o the risk of delay in distributions while a deficiency judgment against
the borrower is obtained, and
o the risk of loss if the deficiency judgment is not obtained and
satisfied. Moreover, deficiency judgments may not be available in
certain jurisdictions, or the particular mortgage loan may be a
nonrecourse loan, 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 were pledged to secure repayment of the
mortgage loan.
If so specified in the related prospectus supplement, the mortgage assets
for a particular series of certificates may include mortgage loans that are
delinquent or nonperforming as of the date such certificates are issued. In
that case, the related prospectus supplement will set forth, as to each such
mortgage loan, available information as to the period of such delinquency or
nonperformance, 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. However, mortgage loans which are
seriously delinquent loans (that is, loans more than 60 days delinquent or as
to which foreclosure has been commenced) will not constitute a material
concentration of the mortgage loans in any trust fund, based on principal
balance at the time such trust fund is formed.
Default and Loss Considerations with Respect to the Mortgage
Loans. Mortgage loans secured by liens on income-producing properties are
substantially different from loans made on the security of 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, as noted
above, some or all of the mortgage loans included in a particular trust fund
may be nonrecourse loans.
Lenders typically look to the Debt Service Coverage Ratio of a loan
secured by income-producing property as an important factor in evaluating the
likelihood of default on such a loan. Unless otherwise defined in the related
prospectus supplement, the "Debt Service Coverage Ratio" of a mortgage loan at
any given time is the ratio of
o the Net Operating Income derived from the related mortgaged property
for a twelve-month period to
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o the annualized scheduled payments of principal and/or interest on the
mortgage loan and any other loans senior thereto that are secured by
the related mortgaged property.
Unless otherwise defined in the related prospectus supplement, "Net
Operating Income" means, for any given period, the total operating revenues
derived from a mortgaged property during such period, minus the total operating
expenses incurred in respect of such mortgaged property during such period
other than
o non-cash items such as depreciation and amortization,
o capital expenditures, and
o debt service on the related mortgage loan or on any other loans that
are secured by such mortgaged property.
The Net Operating Income of a mortgaged property will generally fluctuate
over time and may or may not be sufficient to cover debt service on the related
mortgage loan at any given time. As the primary source of the operating
revenues of a non-owner occupied, income-producing property, rental income
(and, with respect to a mortgage loan secured by a cooperative apartment
building, maintenance payments from tenant-stockholders of a cooperative) may
be affected by the condition of the applicable real estate market and/or area
economy. 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 for longer periods, such as warehouses, retail stores, office
buildings and industrial facilities. Commercial properties may be
owner-occupied or leased to a small number of tenants. Thus, the Net Operating
Income of such a mortgaged property may depend substantially on the financial
condition of the borrower or a tenant, and mortgage loans secured by liens on
such properties may pose a greater likelihood of default and loss than loans
secured by liens on multifamily properties or on multi-tenant commercial
properties.
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 to changes in governmental rules, regulations and
fiscal policies, may also affect the likelihood of default on a mortgage loan.
As may be further described in the related 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 ("Net
Leases"). 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.
Lenders also look to the Loan-to-Value Ratio of a mortgage loan as a
factor in evaluating the likelihood of loss if a property must be liquidated
following a default. Unless otherwise defined in the related prospectus
supplement, the "Loan-to-Value Ratio" of a mortgage loan at any given time is
the ratio (expressed as a percentage) of
o the then outstanding principal balance of the mortgage loan and any
other loans senior thereto that are secured by the related mortgaged
property to
o the Value of the related mortgaged property.
Unless otherwise specified in the related prospectus supplement, the
"Value" of a mortgaged property will be its fair market value as determined by
an appraisal of such property conducted by or on behalf of the originator in
connection with the origination of such loan. The lower the Loan-to-Value
Ratio, the greater the percentage of the borrower's equity in a mortgaged
property, and thus
o the greater the incentive of the borrower to perform under the terms
of the related mortgage loan (in order to protect such equity) and
22
o 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 likelihood 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 Value determined at loan
origination, and will likely continue to fluctuate from time to time based upon
certain factors including 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
o the market comparison method (recent resale value of comparable
properties at the date of the appraisal),
o the cost replacement method (the cost of replacing the property at
such date),
o the income capitalization method (a projection of value based upon the
property's projected net cash flow), or
o upon a selection from or interpolation of the values derived from 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 and discount 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 the
likelihood of default and loss, is even more difficult.
Although there may be multiple methods for determining the value of a
mortgaged property, value will in all cases be affected by property
performance. As a result, if a mortgage loan defaults because the income
generated by the related mortgaged property is insufficient to cover operating
costs and expenses and pay debt service, then the value of the mortgaged
property will reflect such and a liquidation loss may occur.
While we believe that the foregoing considerations are important factors
that generally distinguish loans secured by liens on income-producing real
estate from single-family mortgage loans, we cannot assure you 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 -- Commercial and Multifamily Mortgage Loans Are
Subject to Certain Risks Which Could Adversely Affect the Performance of Your
Offered Certificates -- Repayment of a Commercial or Multifamily Mortgage Loan
Depends on the Performance of the Related Mortgaged Property, of Which We Make
No Assurance" and "-- Commercial and Multifamily Mortgage Loans Are Subject to
Certain Risks Which Could Adversely Affect the Performance of Your Offered
Certificates -- Mortgage Loans With Balloon Payments Have a Greater Risk of
Default."
Payment Provisions of the Mortgage Loans. All of the mortgage loans will
o have had original terms to maturity of not more than 40 years and
o provide for scheduled payments of principal, interest or both, to be
made on due dates that occur monthly, quarterly, semiannually or
annually.
A mortgage loan
o 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,
23
o 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,
o may be fully amortizing or may be partially amortizing or
non-amortizing, with a balloon payment due on its stated maturity
date, and
o may prohibit over its term or for a certain period prepayments (the
period of such prohibition, a "Lock-out Period" and its date of
expiration, a "Lock-out Date") and/or require payment of a premium or
a yield maintenance payment (a "Prepayment Premium") in connection
with certain prepayments, in each case as described in the related
prospectus supplement.
A mortgage loan may also contain a provision that entitles the lender to a
share of appreciation of the related mortgaged property, or profits realized
from the operation or disposition of such mortgaged property or the benefit, if
any, resulting from the refinancing of the mortgage loan (any such provision,
an "Equity Participation"), as described in the related prospectus supplement.
Mortgage Loan Information in Prospectus Supplements. Each prospectus
supplement will contain certain information pertaining to the mortgage loans,
which, to the extent then applicable, will generally include the following:
o the aggregate outstanding principal balance and the largest, smallest
and average outstanding principal balance of the mortgage loans,
o the type or types of property that provide security for repayment of
the mortgage loans,
o the earliest and latest origination date and maturity date of the
mortgage loans,
o the original and remaining terms to maturity of the mortgage loans, or
the respective ranges thereof, and the weighted average original and
remaining terms to maturity of the mortgage loans,
o the Loan-to-Value Ratios of the mortgage loans (either at origination
or as of a more recent date), or the range thereof, and the weighted
average of such Loan-to-Value Ratios,
o the interest rates borne by the mortgage loans, or the range thereof,
and the weighted average interest rate borne by the mortgage loans,
o with respect to mortgage loans with adjustable interest rates ("ARM
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 interest rate adjustments at
the time of any adjustment and over the life of the ARM Loan,
o information regarding the payment characteristics of the mortgage
loans, including, without limitation, balloon payment and other
amortization provisions, Lock-out Periods and Prepayment Premiums,
o the Debt Service Coverage Ratios of the mortgage loans (either at
origination or as of a more recent date), or the range thereof, and
the weighted average of such Debt Service Coverage Ratios, and
o the geographic distribution of the mortgaged properties on a
state-by-state basis.
In appropriate cases, the related prospectus supplement will also contain
certain information available to the depositor that pertains to the provisions
of leases and the nature of tenants of the mortgaged properties. If the
depositor is unable to provide the specific information described above at the
time offered certificates of a series are initially offered, more general
information of the nature described above will be provided in the related
prospectus supplement, and specific information will be set forth in a report
which will be available to purchasers of those 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 fifteen days following
such issuance.
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If any mortgage loan, or group of related mortgage loans, constitutes a
concentration of credit risk, financial statements or other financial
information with respect to the related mortgaged property or mortgaged
properties will be included in the related prospectus supplement.
If and to the extent available and relevant to an investment decision in
the offered certificates of the related series, information regarding the
prepayment experience of a master servicer's multifamily and/or commercial
mortgage loan servicing portfolio will be included in the related prospectus
supplement. However, many servicers do not maintain records regarding such
matters or, at least, not in a format that can be readily aggregated. In
addition, the relevant characteristics of a master servicer's servicing
portfolio may be so materially different from those of the related mortgage
asset pool that such prepayment experience would not be meaningful to an
investor. For example, differences in geographic dispersion, property type
and/or loan terms (e.g., mortgage rates, terms to maturity and/or prepayment
restrictions) between the two pools of loans could render the master servicer's
prepayment experience irrelevant. Because of the nature of the assets to be
serviced and administered by a special servicer, no comparable prepayment
information will be presented with respect to the special servicer's
multifamily and/or commercial mortgage loan servicing portfolio.
MBS
MBS may include
o private-label (that is, not issued, insured or guaranteed by the
United States or any agency or instrumentality thereof) mortgage
participations, mortgage pass-through certificates or other
mortgage-backed securities or
o certificates issued and/or insured or guaranteed by the Federal Home
Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage
Association ("FNMA"), the Governmental National Mortgage Association
("GNMA") or the Federal Agricultural Mortgage Corporation ("FAMC"),
provided that, unless otherwise specified in the related prospectus supplement,
each MBS 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
herein.
Except in the case of a pro rata mortgage participation in a single
mortgage loan or a pool of mortgage loans, each MBS included in a mortgage
asset pool:
o either will (i) have been previously registered under the Securities
Act of 1933, as amended, (ii) be exempt from such registration
requirements or (iii) have been held for at least the holding period
specified in Rule 144(k) under the Securities Act of 1933, as amended;
and
o either (i) will have been acquired (other than from the depositor or
one of its affiliates) in bona fide secondary market transactions or
(ii) if so specified in the related prospectus supplement, may be
derived from the depositor (or its affiliate's) unsold allotments from
the depositor (or its affiliate's) previous offerings.
Any MBS will have been issued pursuant to a participation and servicing
agreement, a pooling and servicing agreement, an indenture or similar agreement
(an "MBS Agreement"). The issuer of the MBS (the "MBS Issuer") and/or the
servicer of the underlying mortgage loans (the "MBS Servicer") will be parties
to the MBS Agreement, generally together with a trustee (the "MBS Trustee") or,
in the alternative, with the original purchaser or purchasers of the MBS.
The MBS may have been issued in one or more classes with characteristics
similar to the classes of certificates described herein. Distributions in
respect of the MBS will be made by the MBS Issuer, the MBS Servicer or the MBS
Trustee on the dates specified in the related prospectus supplement. The MBS
Issuer or the MBS Servicer or another person specified in the related
prospectus supplement may have the right or obligation to repurchase or
substitute assets underlying the MBS after a certain date or under other
circumstances specified in the related prospectus supplement.
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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 MBS. 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 MBS, or by the initial purchasers of the MBS.
The prospectus supplement for a series of certificates that evidence
interests in MBS will specify:
o the aggregate approximate initial and outstanding principal amount(s)
and type of the MBS to be included in the trust fund,
o the original and remaining term(s) to stated maturity of the MBS, if
applicable,
o the pass-through or bond rate(s) of the MBS or the formula for
determining such rate(s),
o the payment characteristics of the MBS,
o the MBS Issuer, MBS Servicer and MBS Trustee, as applicable, of each
of the MBS,
o a description of the related credit support, if any,
o the circumstances under which the related underlying mortgage loans,
or the MBS themselves, may be purchased prior to their maturity,
o the terms on which mortgage loans may be substituted for those
originally underlying the MBS,
o the type of mortgage loans underlying the MBS and, to the extent
appropriate under the circumstances, such other information in respect
of the underlying mortgage loans described under "-- Mortgage Loans --
Mortgage Loan Information in Prospectus Supplements," and
o the characteristics of any cash flow agreements that relate to the
MBS.
If specified in the prospectus supplement for a series of certificates, a
trust fund may contain one or more MBS issued by the depositor that each
represent an interest in one or more mortgage loans. The prospectus supplement
for a series will contain the disclosure concerning the MBS described in the
preceding paragraph and, in particular, will disclose such mortgage loans
appropriately in light of the percentage of the aggregate principal balance of
all assets represented by the principal balance of the MBS.
The depositor will provide the same information regarding the MBS in any
trust fund in its reports filed under the Securities Exchange Act of 1934 with
respect to such trust fund as was provided by the related MBS Issuer in its own
such reports if such MBS was publicly offered or the reports the related MBS
Issuer provides the related MBS Trustee if such MBS was privately issued.
CERTIFICATE ACCOUNTS
Each trust fund will include one or more accounts (collectively, the
"Certificate Account") established and maintained on behalf of the
certificateholders into which all payments and collections received or advanced
with respect to the mortgage assets and other assets in the trust fund will be
deposited to the extent described herein and in the related prospectus
supplement. See "Description of the Pooling Agreements -- Certificate Account."
CREDIT SUPPORT
If so provided in the prospectus supplement for a series of certificates,
partial or full protection against certain defaults and losses on the mortgage
assets in the related trust fund may be provided to one or more classes of
certificates of such series in the form of subordination of one or more other
classes of certificates of such series or by one or more other types of credit
support, which may include
26
o a letter of credit,
o a surety bond,
o an insurance policy,
o a guarantee,
o a reserve fund,
o or any combination thereof (any such coverage with respect to the
certificate of any series, "Credit Support").
The amount and types of such 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 a
series of certificates. See "Risk Factors -- Any Credit Support For Your
Offered Certificates May Be Insufficient" and "Description of Credit Support."
CASH FLOW AGREEMENTS
If so provided in the prospectus supplement for a series of certificates,
the related trust fund may include
o guaranteed investment contracts pursuant to which moneys held in the
funds and accounts established for such series will be invested at a
specified rate,
o interest rate exchange agreements,
o interest rate cap or floor agreements, or
o other agreements designed to reduce the effects of interest rate
fluctuations on the mortgage assets on one or more classes of
certificates (any such agreement, a "Cash Flow Agreement").
The principal terms of any such Cash Flow Agreement, including, without
limitation, provisions relating to the timing, manner and amount of payments
thereunder and provisions relating to the termination thereof, will be
described in the related prospectus supplement. The related prospectus
supplement will also identify the obligor under the Cash Flow Agreement.
27
YIELD AND MATURITY 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
May Reduce the Average Life of Your Certificates." The following discussion
contemplates a trust fund that consists solely of mortgage loans. While the
characteristics and behavior of mortgage loans underlying an MBS can generally
be expected 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 MBS. If a trust fund includes MBS, the related
prospectus supplement will discuss the effect, if any, that the payment
characteristics of the MBS may have on the yield to maturity and weighted
average lives of the offered certificates of the related series.
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 with respect to any series of certificates will specify
o the pass-through rate for each class of offered certificates of such
series 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,
o the effect, if any, of the prepayment of any mortgage loan on the
pass-through rate of one or more classes of offered certificates,
o 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
With respect to any series of certificates, 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 the date they were due.
CERTAIN SHORTFALLS IN COLLECTIONS OF INTEREST
When a principal prepayment in full or in part is made on a mortgage loan,
the borrower is generally charged interest on the amount of such prepayment
only through the date of such prepayment, instead of through the due date for
the next succeeding 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 mortgage loans to their
respective due dates during the related Due Period. A "Due Period" will be a
specified time period (generally corresponding in length to the period between
distribution dates) and all scheduled payments on the mortgage loans in the
related trust fund that are due during a given Due Period will, to the extent
received by a specified date (the "Determination Date") or otherwise advanced
by the related master servicer, special servicer or other specified person, be
distributed to the holders of the certificates of such series on the next
succeeding distribution date. 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 to the due date for
such mortgage loan in the related Due Period, then the interest charged to the
borrower (net of
28
servicing and administrative fees) may be less (such shortfall, a "Prepayment
Interest Shortfall") than the corresponding amount of interest accrued and
otherwise payable on the certificates of the related series. If and to the
extent that any such shortfall is allocated to a class of offered certificates,
the yield thereon will be adversely affected. The prospectus supplement for
each series of certificates will describe the manner in which any such
shortfalls will be allocated among the classes of such certificates. The
related prospectus supplement will also describe any amounts available to
offset such shortfalls.
YIELD AND 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 thereof to reduce the principal balance (or notional amount, if
applicable) of such certificate. The rate of principal payments on the mortgage
loans in any trust fund will in turn be affected by the amortization schedules
thereof (which, in the case of ARM Loans, may change periodically to
accommodate adjustments to the interest rates with respect to such mortgage
loans), the dates on which any balloon payments are due, and the rate of
principal prepayments thereon (including for this purpose, voluntary
prepayments by borrowers and also prepayments resulting from liquidations of
mortgage loans due to defaults, casualties or condemnations affecting the
related mortgaged properties, or purchases of mortgage loans out of the related
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
described below), we cannot assure you as to such rate.
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 interest-only certificates, result in the reduction of the Notional
Amount thereof). If you purchase any offered certificates at a discount, you
should consider the risk that a slower than anticipated rate of principal
payments on the mortgage loans in the related trust fund could result in an
actual yield to you that is lower than the yield you anticipated. If you
purchase any offered certificates at a premium, you should consider the risk
that a faster than anticipated rate of principal payments on such mortgage
loans could result in an actual yield to you that is lower than the yield you
anticipated. In addition, if you purchase an offered certificate at a discount
(or premium), and principal payments are made in reduction of the principal
balance or notional amount of your offered certificates at a rate slower (or
faster) than the rate anticipated by you during any particular period, any
consequent adverse effects on your yield would not be fully offset by a
subsequent like increase (or decrease) in the rate of principal payments.
In general, the Notional Amount of a class of interest-only certificates
will either (i) be based on the principal balances of some or all of the
mortgage assets 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 interest-only certificates will be inversely related to the rate at which
payments and other collections of principal are received on such mortgage
assets or distributions are made in reduction of the Certificate Balances of
such classes of certificates, as the case may be.
Consistent with the foregoing, if a class of certificates of any series
consists of interest-only certificates or principal-only 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
principal-only certificates, and a higher than anticipated rate of principal
prepayments on such mortgage loans will negatively affect the yield to
investors in interest-only certificates. If the offered certificates of a
series include any such certificates, the related prospectus supplement will
include a table showing the effect of various constant assumed levels of
prepayment on yields on such certificates. Such tables will be intended to
illustrate the sensitivity of yields to various constant assumed prepayment
rates and will not be intended to predict, or to provide information that will
enable investors to predict, yields or prepayment rates.
29
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,
o the availability of mortgage credit,
o the relative economic vitality of the area in which the mortgaged
properties are located,
o the quality of management of the mortgaged properties,
o the servicing of the mortgage loans,
o possible changes in tax laws and other opportunities for investment.
In general, those factors which increase the attractiveness of selling a
mortgaged property or refinancing a mortgage loan or which enhance a borrower's
ability to do so, as well as those factors which increase the likelihood of
default under a mortgage loan, would be expected to cause the rate of
prepayment in respect of any mortgage asset pool to accelerate. In contrast,
those factors having an opposite effect would be expected to cause the rate of
prepayment of any mortgage asset pool to slow.
The rate of principal payments on the mortgage loans in any trust fund may
also be affected by the existence of Lock-out Periods and requirements that
principal prepayments be accompanied by Prepayment Premiums, and by the extent
to which such provisions may be practicably enforced. To the extent
enforceable, such provisions could constitute either an absolute prohibition
(in the case of a Lock-out Period) or a disincentive (in the case of a
Prepayment Premium) to a borrower's voluntarily prepaying its Mortgage Loan,
thereby slowing the rate of prepayments.
The rate of prepayment on a pool of mortgage loans 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 coupon, a borrower may have an increased incentive to refinance its
mortgage loan. Even in the case of ARM Loans, as prevailing market interest
rates decline, and without regard to whether the interest rates on such ARM
Loans decline in a manner consistent therewith, the related borrowers may have
an increased incentive to refinance for purposes of either
o converting to a fixed rate loan and thereby "locking in" such rate or
o taking advantage of a different index, margin or rate cap or floor on
another adjustable rate mortgage loan.
Therefore, as prevailing market interest rates decline, prepayment speeds
would be expected to accelerate.
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 makes 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
such mortgage loans that will be paid as of any date or as to the overall rate
of prepayment on such mortgage loans.
WEIGHTED AVERAGE LIFE AND MATURITY
The rate at which principal payments are received on the mortgage loans in
any trust fund will affect the ultimate maturity and the weighted average life
of one or more classes of the certificates of such series. Unless otherwise
specified in the related prospectus supplement, weighted average life refers to
the average amount of time that will elapse from the date of issuance of an
instrument until each dollar allocable as principal of such instrument is
repaid to the investor. The weighted average life and maturity of a class of
certificates of any series will be
30
influenced by the rate at which principal on the related mortgage loans,
whether in the form of scheduled amortization or prepayments (for this purpose,
the term "prepayment" includes voluntary prepayments by borrowers and also
prepayments resulting from liquidations of mortgage loans due to default,
casualties or condemnations affecting the related mortgaged properties and
purchases of mortgage loans out of the related trust fund), is paid to such
class. Prepayment rates on loans are commonly measured relative to a prepayment
standard or model, such as the Constant Prepayment Rate ("CPR") prepayment
model or the Standard Prepayment Assumption ("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 mortgage loans for the life of such 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 mortgage 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 such loans in the
first month of the life of the loans and an additional 0.2% per annum in each
month thereafter until the thirtieth month. Beginning in the thirtieth month,
and in each month thereafter 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 mortgage loans.
Moreover, the CPR and SPA models were developed based upon historical
prepayment experience for single-family mortgage 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 with respect to each series of certificates will
contain tables, if applicable, setting forth the projected weighted average
life of each class of offered certificates of such series with a Certificate
Balance, and the percentage of the initial Certificate Balance of each such
class that would be outstanding on specified Distribution Dates, based on the
assumptions stated in such prospectus supplement, including assumptions that
prepayments on the related mortgage loans are made at rates corresponding to
various percentages of CPR or SPA, or at such other rates specified in such
prospectus supplement. Such tables and assumptions will illustrate the
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.
OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY
Balloon Payments; Extensions of Maturity. Some or all of the mortgage
loans included in a particular 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 related mortgaged property, there is a possibility 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 the special servicer, to the extent and under the
circumstances set forth herein and in the related 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
such certificates and, if such certificates were purchased at a discount,
reduce the yield thereon.
Negative Amortization. The weighted average life of a class of
certificates can be affected by mortgage loans that permit negative
amortization to occur (that is, mortgage loans that provide for the current
payment of interest calculated at a rate lower than the rate at which interest
31
accrues thereon, with the unpaid portion of such interest being added to the
related principal balance). Negative amortization on one or more mortgage loans
in any trust fund may result in negative amortization on the offered
certificates of the related series. The related 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. The portion of any mortgage loan
negative amortization allocated to a class of certificates may result in a
deferral of some or all of the interest payable thereon, which deferred
interest may be added to the Certificate Balance thereof. In addition, an ARM
Loan that permits negative amortization would be expected during a period of
increasing interest rates to amortize at a slower rate (and perhaps not at all)
than if interest rates were declining or were remaining constant. Such slower
rate of mortgage loan amortization would correspondingly be reflected in a
slower 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 that would bear the
effects of a slower rate of amortization on such mortgage loans) may increase
as a result of such feature.
Negative amortization may occur in respect of an ARM Loan that
o limits the amount by which its scheduled payment may adjust in
response to a change in its interest rate,
o provides that its scheduled payment will adjust less frequently than
its interest rate or
o provides for constant scheduled payments notwithstanding adjustments
to its interest rate.
Accordingly, during a period of declining interest rates, the scheduled
payment on such a mortgage loan may exceed the amount necessary to amortize the
loan fully over its remaining amortization schedule and pay interest at the
then applicable interest rate, thereby resulting in the accelerated
amortization of such mortgage loan. Any such acceleration in amortization of
its principal balance will shorten the weighted average life of such mortgage
loan and, correspondingly, the weighted average lives of those classes of
certificates entitled to a portion of the principal payments on such mortgage
loan.
The extent to which the yield on any offered certificate will be affected
by the inclusion in the related trust fund of mortgage loans that permit
negative amortization, will depend upon
o whether such offered certificate was purchased at a premium or a
discount and
o the extent to which the payment characteristics of such mortgage loans
delay or accelerate the distributions of principal on such certificate
(or, in the case of a interest-only certificate, delay or accelerate
the reduction of the notional amount thereof). See " -- Yield and
Prepayment Considerations" above.
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 or otherwise,
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 loans 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
thereof.
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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 respective classes of certificates of the related series in the priority
and manner, and subject to the limitations, specified in the related prospectus
supplement. As described in the related prospectus supplement, such allocations
may be effected by
o a reduction in the entitlements to interest and/or the Certificate
Balances of one or more such classes of certificates and/or
o establishing a priority of payments among such 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
loans in the related trust fund.
Additional Certificate Amortization. One or more classes of certificates
of any series may provide for distributions of principal thereof from
o amounts attributable to interest accrued but not currently
distributable on one or more classes of Accrual Certificates,
o Excess Funds, or
o any other amounts described in the related prospectus supplement.
Unless otherwise specified in the related prospectus supplement, "Excess
Funds" will, in general, represent that portion of the amounts distributable in
respect of the certificates of any series on any distribution date that
represent
o interest received or advanced on the mortgage assets in the related
trust fund that is in excess of the interest currently accrued on the
certificates of such series, or
o prepayment premiums, payments from Equity Participations or any other
amounts received on the mortgage assets in the related 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 such
certificates and, if such certificates were purchased at a premium, reduce the
yield thereon. The related prospectus supplement will discuss the relevant
factors to be considered in determining whether distributions of principal of
any class of certificates out of such sources is likely to have any material
effect on the rate at which such certificates are amortized and the consequent
yield with respect thereto.
THE DEPOSITOR
The depositor is a special purpose corporation incorporated in the State
of Delaware on March 22, 1996, for the purpose of engaging in the business,
among other things, of acquiring and depositing mortgage assets in trust in
exchange for certificates evidencing interest in such trusts and selling or
otherwise distributing such certificates. The principal executive offices of
the depositor are located at 60 Wall Street, New York, New York 10005. The
telephone number is (212) 250-2500. The depositor's capitalization is nominal.
All of the shares of capital stock of the depositor are held by DB U.S.
Financial Markets Holding Corporation, an affiliate of Deutsche Bank AG.
None of the depositor, Deutsche Bank A.G. or any of their respective
affiliates will insure or guarantee distributions on the certificates of any
series.
DEUTSCHE BANK AG
It is anticipated that all or a portion of the assets conveyed to the
trust fund by the depositor will have been acquired by the depositor from
Deutsche Bank AG or an affiliate thereof. Deutsche
33
Bank AG is the largest banking institution in the Federal Republic of Germany
and one of the largest in the world. It is the parent company of a group (the
"Deutsche Bank Group") consisting of commercial banks, capital market
companies, fund management companies, a property finance company, installment
financing companies, research consultancy companies and other domestic and
foreign companies. The Deutsche Bank Group has approximately 69,000 employees
worldwide and operates out of approximately 1,700 facilities around the world.
DESCRIPTION OF THE CERTIFICATES
GENERAL
Each series of certificates will represent the entire beneficial ownership
interest in the trust fund created pursuant to the related Pooling Agreement.
If the related prospectus supplement so provides, a class of certificates
may have two or more component parts, each having characteristics that are
otherwise described herein as being attributable to separate and distinct
classes. For example, a class of certificates may have a Certificate Balance on
which it accrues interest at a fixed, variable or adjustable rate. Such class
of Certificates may also have certain characteristics attributable to
interest-only certificates insofar as it may also entitle the holders thereof
to distributions of interest accrued on a Notional Amount at a different fixed,
variable or adjustable rate. In addition, a class of certificates may accrue
interest on one portion of its Certificate Balance at one fixed, variable or
adjustable rate and on another portion of its Certificate Balance at a
different fixed, variable or adjustable rate.
Each class of offered certificates of a series will be issued in minimum
denominations corresponding to the principal balances or, in case of certain
classes of interest-only certificates or Residual Certificates, notional
amounts or percentage interests, specified in the related prospectus
supplement. If the related prospectus supplement so provides, one or more
classes of offered certificates may be issued in fully registered, definitive
form (such Certificates, "Definitive Certificates") or may be offered in
book-entry format (such Certificates, "Book-Entry Certificates") 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 related prospectus supplement, at the
location specified in the related prospectus supplement, without the payment of
any service charges, 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. If so specified in the related prospectus supplement,
arrangements may be made for clearance and settlement through Clearstream
Banking, societe anonyme or the Euroclear System, if they are participants in
DTC.
DISTRIBUTIONS
Distributions on the certificates of each series will be made on each
distribution date from the Available Distribution Amount for such series and
such Distribution Date. Unless otherwise provided in the related prospectus
supplement, the "Available Distribution Amount" for any series of certificates
and any distribution date will refer to 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 holders of certificates of such series on
such date. The particular components of the Available Distribution Amount for
any series and distribution date will be more specifically described in the
related prospectus supplement.
Except as otherwise specified in the related prospectus supplement,
distributions on the certificates of each series (other than the final
distribution in retirement of any such certificate) will be made to the persons
in whose names such certificates are registered at the close of business on the
last business day of the month preceding the month in which the applicable
distribution date occurs (the "Record Date"), and the amount of each
distribution will be
34
determined as of the close of business on the date (the "Determination Date")
specified in the related 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 such class in proportion to the
respective Percentage Interests evidenced thereby unless otherwise specified in
the related prospectus supplement. Payments will be made 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 person required to make such payments with
wiring instructions no later than the related Record Date or such other date
specified in the related prospectus supplement (and, if so provided in the
related prospectus supplement, such certificateholder holds certificates in the
requisite amount or denomination specified therein), or by check mailed to the
address of such certificateholder as it appears on the Certificate Register;
provided, however, that the final distribution in retirement of any class of
certificates (whether Definitive Certificates or Book-Entry Certificates) will
be made only upon presentation and surrender of such certificates at the
location specified in the notice to Certificateholders of such final
distribution. The undivided percentage interest (the "Percentage Interest")
represented by an offered certificate of a particular class will be equal to
the percentage obtained by dividing the initial principal balance or notional
amount of such certificate by the initial Certificate Balance or Notional
Amount of such class.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Each class of certificates of each series (other than certain classes of
principal-only certificates and certain classes of Residual Certificates that
have no pass-through rate) may have a different pass-through rate, which in
each case may be fixed, variable or adjustable. The related 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 of offered certificates. Unless otherwise specified in the
related 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 with respect to one or more classes of
certificates (collectively, "Accrual Certificates") may not commence until the
occurrence of certain events, such as the retirement of one or more other
classes of certificates, and interest accrued with respect to a class of
Accrual Certificates prior to the occurrence of such an event will either be
added to the Certificate Balance thereof or otherwise deferred as described in
the related prospectus supplement.
Distributions of interest in respect of any class of certificates (other
than a class of Accrual Certificates, and other than any class of
principal-only certificates or 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 that portion, if any, 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 such class
will be added to the Certificate Balance thereof on each distribution date or
otherwise deferred as described in the related prospectus supplement.
With respect to each class of certificates (other than certain classes of
interest-only certificates and certain classes of Residual Certificates), the
"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 most recently ended calendar month) on the outstanding
Certificate Balance of such class of certificates immediately prior to such
distribution date.
Unless otherwise provided in the related prospectus supplement, the
Accrued Certificate Interest for each distribution date on a class of
interest-only certificates will be similarly calculated except that it will
accrue on a Notional Amount that is either
o based on the principal balances of some or all of the mortgage assets
in the related trust fund or
35
o 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 interest-only 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 related 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 may be reduced
to the extent that any Prepayment Interest Shortfalls, as described under
"Yield and Maturity Considerations -- Certain Shortfalls in Collections of
Interest," exceed the amount of any sums that are applied to offset the amount
of such shortfalls. The particular manner in which such shortfalls will be
allocated among some or all of the classes of certificates of that series will
be specified in the related prospectus supplement.
The related 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 related 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 such class. See "Risk Factors -- Prepayments May Reduce the Average Life of
Your Certificates" and "-- Prepayments May Reduce the Yield of Your
Certificates" and "Yield and Maturity Considerations -- Certain Shortfalls in
Collections of Interest."
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
Each class of certificates of each series (other than certain classes of
interest-only certificates and certain classes of Residual Certificates) will
have an initial stated principal amount (a "Certificate Balance"), which, at
any time, will equal the then maximum amount that the holders of certificates
of such class will be entitled to receive as 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 thereon from time to time and, if
and to the extent so provided in the related prospectus supplement, further by
any losses incurred in respect of the related mortgage assets allocated thereto
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 being allocated thereto 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 thereon are
required to commence, by the amount of any Accrued Certificate Interest in
respect thereof (reduced as described above). 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 a
specified date (the "Cut-off Date"), after application of scheduled payments
due on or before such date, whether or not received. The initial Certificate
Balance of each class of a series of certificates will be specified in the
related prospectus supplement. As and to the extent described in the related
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 thereto until the
Certificate Balances of such 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. Distributions of principal
with respect to one or more classes of certificates 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
36
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.
Distributions of principal with respect to one or more classes of
certificates (each such class, a "Controlled Amortization Class") may be made,
subject to available funds, based on a specified principal payment schedule.
Distributions of principal with respect to one or more other classes of
certificates (each such class, a "Companion Class") may be contingent on the
specified principal payment schedule for a Controlled Amortization Class 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 related prospectus supplement, distributions of principal of
any class of offered certificates will be made on a pro rata basis among all of
the certificates of such class.
DISTRIBUTIONS ON THE CERTIFICATES IN RESPECT OF PREPAYMENT PREMIUMS OR IN
RESPECT OF EQUITY PARTICIPATIONS
If so provided in the related prospectus supplement, Prepayment Premiums
or payments in respect of Equity Participations 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. Alternatively, such items may be retained by the
depositor or any of its affiliates or by any other specified person and/or may
be excluded as trust assets.
ALLOCATION OF LOSSES AND SHORTFALLS
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 respective classes of certificates of the related series in the priority
and manner, and subject to the limitations, specified in the related prospectus
supplement. As described in the related prospectus supplement, such allocations
may be effected by
o a reduction in the entitlements to interest and/or the Certificate
Balances of one or more such classes of certificates and/or
o establishing a priority of payments among such classes of
certificates. See "Description of Credit Support."
ADVANCES IN RESPECT OF DELINQUENCIES
If and to the extent provided in the related prospectus supplement, if a
trust fund includes mortgage loans, the master servicer, the special servicer,
the trustee, any provider of Credit Support and/or any other specified person
may be obligated to advance, or have the option of advancing, on or before each
distribution date, from its or their own funds or from excess funds held in the
related Certificate Account that are not part of the Available Distribution
Amount for the related series of certificates for such distribution date, an
amount up to the aggregate of any payments of principal (other than the
principal portion of any balloon payments) and interest that were due on or in
respect of such mortgage loans during the related Due Period and were
delinquent on the related determination date.
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. Accordingly, all
advances made out of a specific entity's own funds will be reimbursable out of
related recoveries on the mortgage loans (including amounts drawn under any
fund or instrument constituting Credit Support) respecting which such advances
were made (as to any mortgage loan, "Related Proceeds") and such other specific
sources as may be identified in the related prospectus supplement, including,
in the case of a series that includes one or more classes of subordinate
certificates, if so identified, collections on other mortgage assets
37
in the related trust fund that would otherwise be distributable to the holders
of one or more classes of such subordinate certificates. No advance will be
required to be made by a master servicer, special servicer or trustee if, in
the judgment of the master servicer, special servicer or trustee, as the case
may be, such advance would not be recoverable from Related Proceeds or another
specifically identified source (any such advance, a "Nonrecoverable Advance");
and, if previously made by a master servicer, special servicer or trustee, a
Nonrecoverable Advance will be reimbursable thereto from any amounts in the
related Certificate Account prior to any distributions being made to the
related series of certificateholders.
If advances have been made by a master servicer, special servicer, trustee
or other entity from excess funds in a Certificate Account, such master
servicer, special servicer, trustee or other entity, as the case may be, will
be required to replace such funds in such Certificate Account on or prior to
any future distribution date to the extent that funds in such Certificate
Account on such distribution date are less than payments required to be made to
the related series of certificateholders on such date. If so specified in the
related prospectus supplement, the obligation of a master servicer, special
servicer, trustee or other entity to make advances may be secured by a cash
advance reserve fund or a surety bond. If applicable, information regarding the
characteristics of, and the identity of any obligor on, any such surety bond,
will be set forth in the related prospectus supplement.
If and to the extent so provided in the related prospectus supplement, any
entity making advances will be entitled to receive interest on certain or all
of such advances for a specified period during which such advances are
outstanding at the rate specified in such prospectus supplement, and such
entity will be entitled to payment of such interest periodically from general
collections on the mortgage loans in the related trust fund prior to any
payment to the related series of certificateholders or as otherwise provided in
the related Pooling Agreement and described in such prospectus supplement. The
prospectus supplement for any series of certificates evidencing an interest in
a trust fund that includes MBS will describe any comparable advancing
obligation of a party to the related Pooling Agreement or of a party to the
related MBS Agreement.
REPORTS TO CERTIFICATEHOLDERS
On each distribution date, together with the distribution to the holders
of each class of the offered certificates of a series, a master servicer,
Manager or Trustee, as provided in the related prospectus supplement, will
forward to each such holder, a statement (a "Distribution Date Statement")
that, unless otherwise provided in the related prospectus supplement, will set
forth, among other things, in each case to the extent applicable:
(i) the amount of such distribution to holders of such class of
offered certificates that was applied to reduce the Certificate Balance
thereof;
(ii) the amount of such distribution to holders of such class of
offered certificates that was applied to pay Accrued Certificate Interest;
(iii) the amount, if any, of such distribution to holders of such
class of offered certificates that was allocable to (A) Prepayment Premiums
and (B) payments on account of Equity Participations;
(iv) the amount, if any, by which such distribution is less than the
amounts to which holders of such class of offered certificates are
entitled;
(v) if the related trust fund includes mortgage loans, the aggregate
amount of advances included in such distribution;
(vi) if the related trust fund includes mortgage loans, the amount of
servicing compensation received by the related master servicer (and, if
payable directly out of the related trust fund, by any special servicer and
any sub-servicer) and, if the related trust fund includes MBS, the amount
of administrative compensation received by the MBS Administrator;
38
(vii) information regarding the aggregate principal balance of the
related mortgage assets on or about such distribution date;
(viii) if the related trust fund includes mortgage loans, information
regarding the number and aggregate principal balance of such mortgage loans
that are delinquent;
(ix) if the related trust fund includes mortgage loans, information
regarding the aggregate amount of losses incurred and principal prepayments
made with respect to such mortgage loans during the related Due Period;
(x) the Certificate Balance or Notional Amount, as the case may be, of
such class of certificates at the close of business on such distribution
date, separately identifying any reduction in such Certificate Balance or
Notional Amount due to the allocation of any losses in respect of the
related mortgage assets, any increase in such Certificate Balance or
Notional Amount due to the allocation of any negative amortization in
respect of the related mortgage assets and any increase in the Certificate
Balance of a class of Accrual Certificates, if any, in the event that
Accrued Certificate Interest has been added to such balance;
(xi) 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 and, if determinable, for the next
succeeding distribution date;
(xii) the amount deposited in or withdrawn from any reserve fund on
such distribution date, and the amount remaining on deposit in such reserve
fund as of the close of business on such distribution date;
(xiii) if the related trust fund includes one or more instruments of
Credit Support, the amount of coverage under each such instrument as of the
close of business on such distribution date; and
(xiv) the amount of Credit Support being afforded by any classes of
subordinate certificates.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts will be expressed as a dollar amount per specified
denomination of the relevant class of offered certificates or as a percentage.
The prospectus supplement for each series of certificates may describe
additional information to be included in reports to the holders of the offered
certificates of such series.
Within a reasonable period of time after the end of each calendar year,
the master servicer, MBS Administrator or trustee for a series of certificates,
as the case may be, will be required to furnish to each person who at any time
during the calendar year was a holder of an offered certificate of such series
a statement containing the information set forth in subclauses (i)-(iii) 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, " -- Book-Entry Registration and Definitive Certificates"
below.
If the trust fund for a series of certificates includes MBS, the ability
of the related master servicer, MBS Administrator or trustee, as the case may
be, to include in any Distribution Date Statement information regarding the
mortgage loans underlying such MBS will depend on the reports received with
respect to such MBS. In such cases, the related 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. The depositor will
provide the same information with respect to any MBSs in its own reports that
were publicly offered and the reports the related MBS Issuer provides to the
Trustee if privately issued.
39
VOTING RIGHTS
The voting rights evidenced by each series of certificates (as to such
series, the "Voting Rights") will be allocated among the respective classes of
such series in the manner described in the related prospectus supplement.
Certificateholders will generally not have a right to vote, except with
respect to required consents to certain amendments to the related Pooling
Agreement and as otherwise specified in the related prospectus supplement. See
"Description of the Pooling Agreements -- Amendment." The holders of specified
amounts of certificates of a particular series will have the right to act as a
group to remove the related trustee and also upon the occurrence of certain
events which if continuing would constitute an Event of Default on the part of
the related master servicer, special servicer or REMIC Administrator. See
"Description of the Pooling Agreements -- Events of Default," "-- Rights Upon
Event of Default" and "-- Resignation and Removal of the Trustee."
TERMINATION
The obligations created by the Pooling Agreement for each series of
certificates will terminate following
o the final payment or other liquidation of the last mortgage asset
subject thereto or the disposition of all property acquired upon
foreclosure of any mortgage loan subject thereto and
o the payment (or provision for payment) to the certificateholders of
that series of all amounts required to be paid to them pursuant to
such Pooling Agreement.
Written notice of termination of a Pooling 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 related prospectus supplement, a series of
certificates may be subject to optional early termination through the
repurchase of the mortgage assets in the related trust fund by the party or
parties specified therein, under the circumstances and in the manner set forth
therein.
In addition, if so provided in the related prospectus supplement upon the
reduction of the Certificate Balance of a specified class or classes of
certificates by a specified percentage or amount or upon a specified date, a
party designated therein may be authorized or required to solicit bids for the
purchase of all the mortgage assets of the related trust fund, or of a
sufficient portion of such mortgage assets to retire such class or classes,
under the circumstances and in the manner set forth therein. The solicitation
of bids will be conducted in a commercially reasonable manner and, generally,
assets will be sold at their fair market value. Circumstances may arise in
which such fair market value may be less than the unpaid balance of the
mortgage loans sold and therefore, as a result of such a sale, the
Certificateholders of one or more classes of certificates may receive an amount
less than the Certificate Balance of, and accrued unpaid interest on, their
certificates.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
If so provided in the prospectus supplement for a series of certificates,
one or more classes of the offered certificates of such 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 The
Depository Trust Company ("DTC") or its nominee. If so provided in the
prospectus supplement, arrangements may be made for clearance and settlement
through the Euroclear System or Clearstream Banking, societe anonyme, if they
are participants in DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking corporation" within the meaning of the New York Banking
Law, a member of the Federal
40
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participating organizations ("DTC Participants") and
facilitate the clearance and settlement of securities transactions between DTC
Participants through electronic computerized book-entry changes in their
accounts, thereby eliminating the need for physical movement of securities
certificates. DTC Participants that maintain accounts with DTC include
securities brokers and dealers, banks, trust companies and clearing
corporations and may include other organizations. DTC is owned by a number of
DTC 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 is also available to others such as banks, brokers, dealers
and trust companies that directly or indirectly clear through or maintain a
custodial relationship with a DTC Participant that maintains as account with
DTC. The rules applicable to DTC and DTC Participants are on file with the
Commission.
Purchases of Book-Entry Certificates under the DTC system must be made by
or through, and will be recorded on the records of, the brokerage firm, bank,
thrift institution or other financial intermediary (each, a "Financial
Intermediary") that maintains the beneficial owner's account for such purpose.
In turn, the Financial Intermediary's ownership of such certificates will be
recorded on the records of DTC (or of a participating firm that acts as agent
for the Financial Intermediary, whose interest will in turn be recorded on the
records of DTC, if the beneficial owner's Financial Intermediary is not a DTC
Participant). Therefore, the beneficial owner must rely on the foregoing
procedures to evidence its beneficial ownership of such certificates. The
beneficial ownership interest of the owner of a Book-Entry Certificate (a
"Certificate Owner") may only be transferred by compliance with the rules,
regulations and procedures of such Financial Intermediaries and DTC
Participants.
DTC has no knowledge of the actual Certificate Owners; DTC's records
reflect only the identity of the DTC Participants to whose accounts such
certificates are credited, which may or may not be the Certificate Owners. The
DTC Participants will remain responsible for keeping account of their holdings
on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC Participants
and by DTC Participants to Financial Intermediaries and 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 DTC 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 DTC Participants to Financial
Intermediaries and 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 DTC Participant (and not of DTC, the depositor or
any trustee, master servicer, special servicer or MBS Administrator), subject
to any statutory or regulatory requirements as may be in effect from time to
time. Accordingly, under a book-entry system, Certificate Owners may receive
payments after the related Distribution Date.
Unless otherwise provided in the related prospectus supplement, the only
"certificateholder" (as such term is used in the related Pooling Agreement) of
Book-Entry Certificates will be the nominee of DTC, and the Certificate Owners
will not be recognized as certificateholders under the Pooling Agreement.
Certificate Owners will be permitted to exercise the rights of
certificateholders under the related Pooling Agreement only indirectly through
the DTC Participants who in turn will exercise their rights through DTC. The
depositor has been informed that DTC will take action permitted to be taken by
a certificateholder under a Pooling Agreement only at the direction of one or
more DTC Participants to whose account with DTC interests in the Book-Entry
Certificates
41
are credited. DTC may take conflicting actions with respect to the Book-Entry
Certificates to the extent that such actions are taken on behalf of Financial
Intermediaries whose holdings include such certificates.
Because DTC can act only on behalf of DTC Participants, who in turn act on
behalf of Financial Intermediaries 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.
Unless otherwise specified in the related 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
o the depositor advises the Trustee in writing that DTC is no longer
willing or able to discharge properly its responsibilities as
depository with respect to such certificates and the depositor is
unable to locate a qualified successor or
o the depositor, at its option, elects to terminate the book-entry
system through DTC with respect to such certificates. Upon the
occurrence of either of the events described in the preceding
sentence, DTC will be required to notify all DTC 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 for the related series 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 and within the meaning of the
related Pooling Agreement.
42
DESCRIPTION OF THE POOLING AGREEMENTS
GENERAL
The certificates of each series will be issued pursuant to a pooling and
servicing agreement or other agreement specified in the related prospectus
supplement (in any case, a "Pooling Agreement"). In general, the parties to a
Pooling Agreement will include the depositor, the trustee, the master servicer,
the special servicer and, if one or more REMIC elections have been made with
respect to the trust fund, a REMIC administrator. However, a Pooling Agreement
that relates to a trust fund that includes MBS may include an MBS Administrator
as a party, but may not include a master servicer, special servicer or other
servicer as a party. All parties to each Pooling Agreement under which
certificates of a series are issued will be identified in the related
prospectus supplement. If so specified in the related prospectus supplement,
the mortgage asset seller or an affiliate thereof may perform the functions of
master servicer, special servicer, MBS Administrator or REMIC administrator. If
so specified in the related prospectus supplement, the master servicer may also
perform the duties of special servicer, and the master servicer, the special
servicer or the trustee may also perform the duties of REMIC administrator. Any
party to a Pooling Agreement or any affiliate thereof may own certificates
issued thereunder; however, except in limited circumstances (including with
respect to required consents to certain amendments to a Pooling Agreement),
certificates issued thereunder that are held by the master servicer or special
servicer for the related series will not be allocated Voting Rights.
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 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 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 Agreement that materially
differs from the description thereof contained in this prospectus and, if the
related trust fund includes MBS, will summarize all of the material provisions
of the related Pooling Agreement. The summaries herein 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 Agreement for each series of
certificates and the description of such provisions in the related prospectus
supplement. The depositor will provide a copy of the Pooling Agreement (without
exhibits) that relates to any series of certificates without charge upon
written request of a holder of a certificate of such series addressed to it at
its principal executive offices specified herein under "The Depositor."
ASSIGNMENT OF MORTGAGE LOANS; REPURCHASES
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
to be included in the related trust fund, together with, unless otherwise
specified in the related 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 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
o the address of the related mortgaged property and type of such
property;
o the mortgage rate and, if applicable, the applicable index, gross
margin, adjustment date and any rate cap information;
o the original and remaining term to maturity;
43
o the amortization term; and
o the original and outstanding principal balance.
In addition, unless otherwise specified in the related prospectus
supplement, the depositor will, as to each mortgage loan to be included in a
trust fund, deliver, or cause to be delivered, to the related trustee (or to a
custodian appointed by the trustee as described below)
o the mortgage note endorsed, without recourse, either in blank or to
the order of such trustee (or its nominee),
o the mortgage with evidence of recording indicated thereon (except for
any mortgage not returned from the public recording office),
o an assignment of the mortgage in blank or to the trustee (or its
nominee) in recordable form, together with any intervening assignments
of the mortgage with evidence of recording thereon (except for any
such assignment not returned from the public recording office), and,
o if applicable, any riders or modifications to such mortgage note and
mortgage, together with certain other documents at such times as set
forth in the related Pooling Agreement.
Such assignments may be blanket assignments covering mortgages on
mortgaged properties located in the same county, if permitted by law.
Notwithstanding the foregoing, a trust fund may include mortgage loans where
the original mortgage note is not delivered to the trustee if the depositor
delivers, or causes to be delivered, to the related trustee (or such custodian)
a copy or a duplicate original of the mortgage note, together with an affidavit
certifying that the original thereof has been lost or destroyed. In addition,
if the depositor cannot deliver, with respect to any mortgage loan, the
mortgage or any intervening assignment with evidence of recording thereon
concurrently with the execution and delivery of the related Pooling Agreement
because of a delay caused by the public recording office, the depositor will
deliver, or cause to be delivered, to the related trustee (or such custodian) a
true and correct photocopy of such mortgage or assignment as submitted for
recording. The depositor will deliver, or cause to be delivered, to the related
trustee (or such custodian) such mortgage or assignment with evidence of
recording indicated thereon after receipt thereof from the public recording
office. If the depositor cannot deliver, with respect to any mortgage loan, the
mortgage or any intervening assignment with evidence of recording thereon
concurrently with the execution and delivery of the related Pooling Agreement
because such mortgage or assignment has been lost, the depositor will deliver,
or cause to be delivered, to the related trustee (or such custodian) a true and
correct photocopy of such mortgage or assignment with evidence of recording
thereon. Unless otherwise specified in the related prospectus supplement,
assignments of mortgage to the trustee (or its nominee) will be recorded in the
appropriate public recording office, except in states where, in the opinion of
counsel acceptable to the trustee, such recording is not required to protect
the trustee's interests in the mortgage loan against the claim of any
subsequent transferee or any successor to or creditor of the depositor or the
originator of such mortgage loan.
The trustee (or a custodian appointed by the trustee) for a series of
certificates will be required to review the mortgage loan documents delivered
to it within a specified period of days after receipt thereof, and the trustee
(or such custodian) will hold such documents in trust for the benefit of the
certificateholders of such series. Unless otherwise specified in the related
prospectus supplement, if any such document is found to be missing or
defective, and such omission or defect, as the case may be, materially and
adversely affects the interests of the certificateholders of the related
series, the trustee (or such custodian) will be required to notify the master
servicer, the special servicer and the depositor, and one of such persons will
be required to notify the relevant mortgage asset seller. 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, except as
otherwise specified below or in the related prospectus supplement, the mortgage
asset seller will be obligated to repurchase the related mortgage loan from the
trustee at a price generally equal to the unpaid principal balance thereof,
together with accrued but
44
unpaid interest through a date on or about the date of purchase, or at such
other price as will be specified in the related prospectus supplement (in any
event, the "Purchase Price"). If so provided in the prospectus supplement for a
series of certificates, a mortgage asset seller, in lieu of repurchasing a
mortgage loan as to which there is missing or defective loan documentation,
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. Unless
otherwise specified in the related prospectus supplement, this repurchase or
substitution obligation will constitute the sole remedy to holders of the
certificates of any series or to the related trustee on their behalf for
missing or defective mortgage loan documentation, and neither the depositor
nor, unless it is the mortgage asset seller, the master servicer or the special
servicer will be obligated to purchase or replace a mortgage loan if a mortgage
asset seller defaults on its obligation to do so.
The trustee will be authorized at any time to appoint one or more
custodians pursuant to a custodial agreement to hold title to the mortgage
loans in any trust fund and to maintain possession of and, if applicable, to
review the documents relating to such mortgage loans, in any case as the agent
of the trustee. The identity of any such custodian to be appointed on the date
of initial issuance of the certificates will be set forth in the related
prospectus supplement.
REPRESENTATIONS AND WARRANTIES; REPURCHASES
Unless otherwise provided in the prospectus supplement for a series of
certificates, the depositor will, with respect to each mortgage loan in the
related trust fund, make or assign, or cause to be made or assigned, certain
representations and warranties (the person making such representations and
warranties, the "Warranting Party") covering, by way of example:
o the accuracy of the information set forth for such mortgage loan on
the schedule of mortgage loans appearing as an exhibit to the related
Pooling Agreement;
o the enforceability of the related mortgage note and mortgage and the
existence of title insurance insuring the lien priority of the related
mortgage;
o the Warranting Party's title to the mortgage loan and the authority of
the Warranting Party to sell the mortgage loan; and
o the payment status of the mortgage loan.
It is expected that in most cases the Warranting Party will be the
mortgage asset seller. However, the Warranting Party may also be an affiliate
of the mortgage asset seller, the depositor or an affiliate of the depositor,
the master servicer, the special servicer or another person acceptable to the
depositor. The Warranting Party, if other than the mortgage asset seller, will
be identified in the related prospectus supplement.
Unless otherwise provided in the related prospectus supplement, each
Pooling 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 certificateholders of the
related series. 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 related prospectus supplement, it will
be obligated to repurchase such mortgage loan from the trustee at the
applicable Purchase Price. 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. Unless otherwise specified in the related prospectus
supplement, this repurchase or substitution obligation will constitute the sole
remedy available to holders of the certificates of any series or to the related
trustee on their behalf for a breach of representation and
45
warranty by a Warranting Party, and neither the Depositor nor the master
servicer, in either case unless it is the Warranting Party, will be obligated
to purchase or replace a mortgage loan if a Warranting Party defaults on its
obligation to do so.
In some cases, representations and warranties will have been made in
respect of a mortgage loan 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 the date of
issuance. The date as of which the representations and warranties regarding the
mortgage loans in any trust fund were made will be specified in the related
prospectus supplement.
COLLECTION AND OTHER SERVICING PROCEDURES
Unless otherwise specified in the related prospectus supplement, the
master servicer and the special servicer for any mortgage pool, directly or
through sub-servicers, will each be obligated under the related pooling
agreement to service and administer the mortgage loans in such mortgage pool
for the benefit of the related certificateholders, in accordance with
applicable law and further in accordance with the terms of such pooling
agreement, such mortgage loans and any instrument of Credit Support included in
the related trust fund. Subject to the foregoing, the master servicer and the
special servicer will each have full power and authority to do any and all
things in connection with such servicing and administration that it may deem
necessary and desirable.
As part of its servicing duties, each of the master servicer and the
special servicer will be required to make reasonable efforts to collect all
payments called for under the terms and provisions of the mortgage loans that
it services and will be obligated 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 (i) such procedures are
consistent with the terms of the related pooling agreement and (ii) do not
impair recovery under any instrument of Credit Support included in the related
trust fund. Consistent with the foregoing, the master servicer and the special
servicer will each be permitted, in its discretion, unless otherwise specified
in the related prospectus supplement, to waive any prepayment premium, late
payment charge or other charge in connection with any mortgage loan.
The master servicer and the special servicer for any trust fund, either
separately or jointly, directly or through sub-servicers, will also be required
to perform as to the mortgage loans in such trust fund various other customary
functions of a servicer of comparable loans, including maintaining escrow or
impound accounts, if required under the related Pooling Agreement, for payment
of taxes, insurance premiums, ground rents and similar items, or otherwise
monitoring the timely payment of those items; attempting to collect delinquent
payments; supervising foreclosures; negotiating modifications; conducting
property inspections on a periodic or other basis; managing (or overseeing the
management of) mortgaged properties acquired on behalf of such trust fund
through foreclosure, deed-in-lieu of foreclosure or otherwise (each, an "REO
Property"); and maintaining servicing records relating to such mortgage loans.
The related prospectus supplement will specify when and the extent to which
servicing of a mortgage loan is to be transferred from the master servicer to
the special servicer. In general, and subject to the discussion in the related
prospectus supplement, a special servicer will be responsible for the servicing
and administration of:
o mortgage loans that are delinquent in respect of a specified number of
scheduled payments;
o mortgage loans as to which the related borrower has entered into or
consented to bankruptcy, appointment of a receiver or conservator or
similar insolvency proceeding, or
46
the related borrower has become the subject of a decree or order for
such a proceeding which shall have remained in force undischarged or
unstayed for a specified number of days; and
o REO Properties.
If so specified in the related prospectus supplement, a pooling agreement
also may provide that if a default on a mortgage loan has occurred or, in the
judgment of the related master servicer, a payment default is reasonably
foreseeable, the related master servicer may elect to transfer the servicing
thereof, in whole or in part, to the related special servicer. Unless otherwise
provided in the related prospectus supplement, when the circumstances no longer
warrant a special servicer's continuing to service a particular mortgage loan
(e.g., the related borrower is paying in accordance with the forbearance
arrangement entered into between the special servicer and such borrower), the
master servicer will resume the servicing duties with respect thereto. If and
to the extent provided in the related Pooling Agreement and described in the
related prospectus supplement, a special servicer may perform certain limited
duties in respect of mortgage loans for which the master servicer is primarily
responsible (including, if so specified, performing property inspections and
evaluating financial statements); and a master servicer may perform certain
limited duties in respect of any mortgage loan for which the special servicer
is primarily responsible (including, if so specified, continuing to receive
payments on such mortgage loan (including amounts collected by the special
servicer), making certain calculations with respect to such mortgage loan and
making remittances and preparing certain reports to the trustee and/or
certificateholders with respect to such mortgage loan. Unless otherwise
specified in the related prospectus supplement, 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 mortgagor'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 mortgagor that is unable to make mortgage loan payments may also
be unable to make timely payment of taxes and otherwise to maintain and insure
the related mortgaged property. In general, the related special servicer will
be required to
o monitor any mortgage loan that is in default,
o 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,
o initiate corrective action in cooperation with the Mortgagor if cure
is likely,
o inspect the related mortgaged property and
o take such other actions as it deems necessary and appropriate.
A significant period of time may elapse before the special servicer is able to
assess the success of any such corrective action or the need for additional
initiatives. The time within which the special 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 of the related series may vary considerably
depending on the particular mortgage loan, the mortgaged property, the
mortgagor, 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
mortgagor files a bankruptcy petition, the special servicer may not be
permitted to accelerate the maturity of the mortgage loan or to foreclose on
the related mortgaged property for a considerable period of time. See "Certain
Legal Aspects of Mortgage Loans -- Bankruptcy Laws."
Mortgagors may, from time to time, request partial releases of the
mortgaged properties, easements, consents to alteration or demolition and other
similar matters. In general, the master
47
servicer may approve such a request if it has determined, exercising its
business judgment in accordance with the applicable servicing standard, that
such approval will not adversely affect the security for, or the timely and
full collectability of, the related mortgage loan. Any fee collected by the
master servicer for processing such request will be retained by the master
servicer as additional servicing compensation.
SUB-SERVICERS
A master servicer or special servicer may delegate its servicing
obligations in respect of the mortgage loans serviced thereby to one or more
third-party servicers; provided that, unless otherwise specified in the related
prospectus supplement, such master servicer or special servicer will remain
obligated under the related Pooling Agreement. Unless otherwise provided in the
related prospectus supplement, each sub-servicing agreement between a master
servicer and a sub-servicer must provide for servicing of the applicable
mortgage loans consistent with the related Pooling Agreement. The master
servicer and special servicer in respect of any mortgage asset pool will each
be required to monitor the performance of sub-servicers retained by it and will
have the right to remove a sub-servicer retained by it at any time it considers
such removal to be in the best interests of certificateholders. Unless
otherwise provided in the related prospectus supplement, a master servicer or
special servicer will be solely liable for all fees owed by it to any
sub-servicer, irrespective of whether the master servicer's or special
servicer's compensation pursuant to the related Pooling Agreement is sufficient
to pay such fees. Each sub-servicer will be reimbursed by the master servicer
or special servicer, as the case may be, that retained it for certain
expenditures which it makes, generally to the same extent such master servicer
or special servicer would be reimbursed under a Pooling Agreement. See "--
Certificate Account" and "-- Servicing Compensation and Payment of Expenses."
CERTIFICATE ACCOUNT
General. The master servicer, the trustee and/or the special servicer
will, as to each trust fund that includes mortgage loans, establish and
maintain or cause to be established and maintained the corresponding
Certificate Account, 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. A Certificate Account may be maintained as
an interest-bearing or a non-interest-bearing account and the funds held
therein may be invested pending each succeeding distribution date in United
States government securities and other investment grade obligations that are
acceptable to each rating agency that has rated any one or more classes of
certificates of the related series ("Permitted Investments"). Such Permitted
Investments include
o federal funds,
o uncertificated certificates of deposit,
o time deposits,
o bankers' acceptances and repurchase agreements,
o certain United States dollar-denominated commercial paper,
o units of money market funds that maintain a constant net asset value
and any other obligations or security acceptable to each rating
agency.
Unless otherwise provided in the related prospectus supplement, any
interest or other income earned on funds in a Certificate Account will be paid
to the related master servicer, Trustee or special servicer as additional
compensation. A Certificate Account may be maintained with the related master
servicer, special servicer, trustee or mortgage asset seller or with a
depository institution that is an affiliate of any of the foregoing or of the
depositor, provided that it complies with applicable rating agency standards.
If permitted by the applicable rating agency or agencies, 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 special servicer or serviced by
either on behalf of others.
48
Deposits. Unless otherwise provided in the related Pooling Agreement and
described in the related prospectus supplement, the following payments and
collections received or made by the master servicer, the trustee or the special
servicer subsequent to the Cut-off Date (other than payments due on or before
the Cut-off Date) are to be deposited in the Certificate Account for each trust
fund that includes mortgage loans, within a certain period following receipt
(in the case of collections on or in respect of the mortgage loans) or
otherwise as provided in the related Pooling Agreement:
(1) all payments on account of principal, including principal prepayments,
on the mortgage loans;
(2) all payments on account of interest on the mortgage loans, including
any default interest collected, in each case net of any portion thereof
retained by the master servicer or the special servicer as its servicing
compensation or as compensation to the trustee;
(3) all proceeds received under any hazard, title or other insurance
policy that provides coverage with respect to a mortgaged property or the
related mortgage loan or in connection with the full or partial condemnation of
a mortgaged property (other than proceeds applied to the restoration of the
property or released to the related borrower) ("Insurance Proceeds" and
"Condemnation Proceeds," respectively) and all other amounts received and
retained in connection with the liquidation of defaulted mortgage loans or
property acquired in respect thereof, by foreclosure or otherwise (such
amounts, together with those amounts listed in clause (7) below, "Liquidation
Proceeds"), 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;
(4) any amounts paid under any instrument or drawn from any fund that
constitutes Credit Support for the related series of certificates;
(5) any advances made with respect to delinquent scheduled payments of
principal and interest on the mortgage loans;
(6) any amounts paid under any Cash Flow Agreement;
(7) all proceeds of 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 loans;
Repurchases" and "-- Representations and Warranties; Repurchases," all proceeds
of the purchase of any defaulted mortgage loan as described under "--
Realization Upon Defaulted Mortgage Loans," and all proceeds of any mortgage
asset purchased as described under "Description of the Certificates --
Termination; Retirement of Certificates";
(8) to the extent that any such item does not constitute additional
servicing compensation to the master servicer or the special servicer and is
not otherwise retained by the depositor or another specified person, any
payments on account of modification or assumption fees, late payment charges,
prepayment premiums or Equity Participations with respect to the mortgage
loans;
(9) all payments required to be deposited in the Certificate Account with
respect to any deductible clause in any blanket insurance policy as described
under "-- Hazard Insurance Policies";
(10) any amount required to be deposited by the master servicer, the
special servicer or the trustee in connection with losses realized on
investments for the benefit of the master servicer, the special servicer or the
trustee, as the case may be, of funds held in the Certificate Account; and
(11) any other amounts received on or in respect of the mortgage loans
required to be deposited in the Certificate Account as provided in the related
Pooling Agreement and described in the related prospectus supplement.
49
Withdrawals. Unless otherwise provided in the related Pooling Agreement
and described in the related prospectus supplement, a master servicer, trustee
or special servicer may make withdrawals from the Certificate Account for each
trust fund that includes mortgage loans for any of the following purposes:
(1) to make distributions to the certificateholders on each distribution
date;
(2) to pay the master servicer or the special servicer any servicing fees
not previously retained thereby, such payment to be made out of payments and
other collections of interest on the particular mortgage loans as to which such
fees were earned;
(3) to reimburse the master servicer, the special servicer or any other
specified person for unreimbursed advances of delinquent scheduled payments of
principal and interest made 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 late payments collected on the particular mortgage loans, Liquidation
Proceeds, Insurance Proceeds and Condemnation Proceeds collected on the
particular mortgage loans and properties, and net income collected on the
particular properties, with respect to which such advances were made or such
expenses were incurred or out of amounts drawn under any form of Credit Support
with respect to such mortgage loans and properties, or if in the judgment of
the master servicer, the special servicer or such other person, as applicable,
such advances and/or expenses will not be recoverable from such amounts, such
reimbursement to be made from amounts collected on other mortgage loans in the
same trust fund or, if and to the extent so provided by the related Pooling
Agreement and described in the related 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;
(4) if and to the extent described in the related prospectus supplement,
to pay the master servicer, the special servicer or any other specified person
interest accrued on the advances and servicing expenses described in clause (3)
above incurred by it while such remain outstanding and unreimbursed;
(5) 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";
(6) to reimburse the master servicer, the special servicer, the REMIC
administrator, the depositor, the trustee, 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, the Special
Servicer, the REMIC Administrator and the Depositor" and "-- Certain Matters
Regarding the Trustee";
(7) if and to the extent described in the related prospectus supplement,
to pay the fees of the trustee, the REMIC administrator and any provider of
Credit Support;
(8) if and to the extent described in the related prospectus supplement,
to reimburse prior draws on any form of Credit Support;
(9) to pay the master servicer, the special servicer or the trustee, as
appropriate, interest and investment income earned in respect of amounts held
in the Certificate Account as additional compensation;
(10) to pay any servicing expenses not otherwise required to be advanced
by the master servicer, the special servicer or any other specified person;
(11) 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 "Certain Federal Income Tax Consequences -- REMICs --
Prohibited Transactions Tax and Other Taxes";
50
(12) to pay for the cost of various opinions of counsel obtained pursuant
to the related Pooling Agreement for the benefit of certificateholders;
(13) to make any other withdrawals permitted by the related Pooling
Agreement and described in the related prospectus supplement; and
(14) to clear and terminate the Certificate Account upon the termination
of the trust fund.
MODIFICATIONS, WAIVERS AND AMENDMENTS OF MORTGAGE LOANS
The master servicer and the special servicer may each agree to modify,
waive or amend any term of any mortgage loan serviced by it in a manner
consistent with the applicable servicing standard; provided that, unless
otherwise set forth in the related prospectus supplement, the modification,
waiver or amendment
o will not affect the amount or timing of any scheduled payments of
principal or interest on the mortgage loan,
o will not, in the judgment of the master servicer or the special
servicer, as the case may be, materially impair the security for the
mortgage loan or reduce the likelihood of timely payment of amounts
due thereon, and
o will not adversely affect the coverage under any applicable instrument
of Credit Support.
Unless otherwise provided in the related prospectus supplement, the
special servicer also may agree to any other modification, waiver or amendment
if, in its judgment,
o a material default on the mortgage loan has occurred or a payment
default is imminent,
o such modification, waiver or amendment is reasonably likely to produce
a greater recovery with respect to the mortgage loan, taking into
account the time value of money, than would liquidation and
o such modification, waiver or amendment will not adversely affect the
coverage under any applicable instrument of Credit Support.
REALIZATION UPON DEFAULTED MORTGAGE LOANS
If a default on a mortgage loan has occurred or, in the special servicer's
judgment, a payment default is imminent, the special servicer, on behalf of the
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. Unless otherwise specified in the related
prospectus supplement, the special servicer may not, however, acquire title to
any mortgaged property, have a receiver of rents appointed with respect to any
mortgaged property or take any other action with respect to any mortgaged
property that would cause the trustee, for the benefit of the related series of
certificateholders, or any other specified person to be considered to hold
title to, to be a "mortgagee-in-possession" of, or to be an "owner" or an
"operator" of such mortgaged property within the meaning of certain federal
environmental laws, unless the special servicer has previously received a
report prepared by a person who regularly conducts environmental audits (which
report will be an expense of the trust fund) and either:
(i) such report indicates that (a) the mortgaged property is in
compliance with applicable environmental laws and regulations and (b) there
are no circumstances or conditions present at the mortgaged property that
have resulted in any contamination for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any applicable environmental laws and regulations; or
(ii) the special servicer, based solely (as to environmental matters
and related costs) on the information set forth in such report, determines
that taking such actions as are necessary to bring the mortgaged property
into compliance with applicable environmental laws and
51
regulations and/or taking the actions contemplated by clause (i)(b) above,
is reasonably likely to produce a greater recovery, taking into account the
time value of money, than not taking such actions. See "Certain Legal
Aspects of Mortgage Loans -- Environmental Considerations."
A Pooling Agreement may grant to the master servicer, the special
servicer, a provider of Credit Support and/or the holder or holders of certain
classes of the related series of certificates an option to purchase from the
trust fund, at fair market value (which, if less than the Purchase Price, will
be specified in the related prospectus supplement), any mortgage loan as to
which a specified number of scheduled payments are delinquent.
Unless otherwise provided in the related prospectus supplement, if title
to any mortgaged property is acquired by a trust fund as to which a REMIC
election has been made, the special servicer, on behalf of the trust fund, will
be required to sell the mortgaged property prior to the close of the third
calendar year beginning after the year of acquisition, unless (i) the Internal
Revenue Service (the "IRS") grants an extension of time to sell such property
or (ii) the trustee receives an opinion of independent counsel to the effect
that the holding of the property by the trust fund beyond such period will not
result in the imposition of a tax on the trust fund or cause the trust fund (or
any designated portion thereof) to fail to qualify as a REMIC under the Code at
any time that any certificate is outstanding. Subject to the foregoing and any
other tax-related limitations, the special servicer will generally be required
to attempt to sell any mortgaged property so acquired on the same terms and
conditions it would if it were the owner. Unless otherwise provided in the
related prospectus supplement, if title to any mortgaged property is acquired
by a trust fund as to which a REMIC election has been made, the special
servicer will also be required to ensure that the mortgaged property is
administered so that it constitutes "foreclosure property" within the meaning
of Code Section 860G(a)(8) at all times, that the sale of such property does
not result in the receipt by the trust fund of any income from nonpermitted
assets as described in Code Section 860F(a)(2)(B), and that the trust fund does
not derive any "net income from foreclosure property" within the meaning of
Code Section 860G(c)(2), with respect to such property. If the trust fund
acquires title to any mortgaged property, the special 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 special servicer of its obligation to manage such mortgaged property as
required under the related Pooling 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 special servicer and/or the master servicer in
connection with such mortgage loan, then, to the extent that such shortfall is
not covered by any instrument or fund constituting Credit Support, the trust
fund will realize a loss in the amount of such shortfall. The special servicer
and/or the master servicer will be entitled to reimbursement out of the
Liquidation Proceeds recovered on any defaulted mortgage loan, prior to the
distribution of such Liquidation Proceeds to certificateholders, any and all
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. In addition, if and to the extent set forth in the related
prospectus supplement, amounts otherwise distributable on the certificates may
be further reduced by interest payable to the master servicer and/or special
servicer on such servicing expenses and advances.
If any mortgaged property suffers damage such that the proceeds, if any,
of the related hazard insurance policy are insufficient to restore fully the
damaged property, neither the special servicer nor the master servicer will be
required to expend its own funds to effect such restoration unless (and to the
extent not otherwise provided in the related prospectus supplement) it
determines
o that such restoration will increase the proceeds to certificateholders
on liquidation of the mortgage loan after reimbursement of the special
servicer or the master servicer, as the case may be, for its expenses
and
52
o that such expenses will be recoverable by it from related Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds and/or amounts
drawn on any instrument or fund constituting Credit Support.
HAZARD INSURANCE POLICIES
Unless otherwise specified in the related prospectus supplement, each
Pooling Agreement will require the master servicer (or the special servicer
with respect to mortgage loans serviced thereby) to use reasonable efforts 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 master servicer's (or special servicer's) normal
servicing procedures. Unless otherwise specified in the related prospectus
supplement, 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 related mortgaged property. The ability of a master servicer (or special
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 a master servicer (or special servicer)
under any such policy (except for amounts to be applied to the restoration or
repair of the mortgaged property or released to the borrower in accordance with
the master servicer's (or special 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 Agreement may
provide that the master servicer (or special 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 the mortgage
loans in a trust fund. If such blanket policy contains a deductible clause, the
master servicer (or special servicer) will be required, in the event of a
casualty covered by such blanket policy, to deposit in the related Certificate
Account all additional sums that would have been deposited therein under an
individual policy but were not because of 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, and 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, floods and other
water-related causes, earth movement (including earthquakes, landslides and
mudflows), wet or dry rot, vermin and domestic animals. Accordingly, a
mortgaged property may not be insured for losses arising from any such cause
unless the related mortgage specifically requires, or permits the holder
thereof to require, such coverage.
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
o the replacement cost of the improvements less physical depreciation
and
o 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
53
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. Unless otherwise provided in the
related prospectus supplement, the master servicer (or special servicer) will
determine whether to exercise any right the trustee may have under any such
provision in a manner consistent with the master servicer's (or special
servicer's) normal servicing procedures. Unless otherwise specified in the
related prospectus supplement, the master servicer or special servicer, as
applicable, 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 -- Due-on-Sale and
Due-on-Encumbrance."
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the related prospectus supplement, a master
servicer's primary servicing compensation with respect to a series of
certificates will come from the periodic payment to it of a specified portion
of the interest payments on each mortgage loan in the related trust fund,
including mortgage loans serviced by the related special servicer. If and to
the extent described in the related prospectus supplement, a special servicer's
primary compensation with respect to a series of certificates may consist of
any or all of the following components:
o a specified portion of the interest payments on each mortgage loan in
the related trust fund, whether or not serviced by it;
o an additional specified portion of the interest payments on each
mortgage loan then currently serviced by it; and
o subject to any specified limitations, a fixed percentage of some or
all of the collections and proceeds received with respect to each
mortgage loan which was at any time serviced by it, including mortgage
loans for which servicing was returned to the master servicer.
Insofar as any portion of the master servicer's or special servicer's
compensation consists of a specified portion of the interest payments on a
mortgage loan, such compensation will generally be based on a percentage of the
principal balance of such mortgage loan outstanding from time to time and,
accordingly, will decrease with the amortization of the mortgage loan. As
additional compensation, a master servicer or special servicer may be entitled
to 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 related Certificate
Account. A more detailed description of each master servicer's and special
servicer's compensation will be provided in the related prospectus supplement.
Any sub-servicer will receive as its sub-servicing compensation a portion of
the servicing compensation to be paid to the master servicer or special
servicer that retained such sub-servicer. In addition to amounts payable to any
sub-servicer, a master servicer or special servicer may be required, to the
extent provided in the related 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,
payment of fees and disbursements of the trustee and any custodians appointed
thereby and payment of 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 related prospectus supplement, interest on such expenses at
the rate specified therein, may be required to be borne by the trust fund.
EVIDENCE AS TO COMPLIANCE
Unless otherwise specified in the related prospectus supplement, each
Pooling Agreement will provide that on or before a specified date in each year,
beginning the first such date that is at least a specified number of months
after the Cut-off Date, there will be furnished to the related trustee a report
of a firm of independent certified public accountants stating that
54
o it has obtained a letter of representation regarding certain matters
from the management of the master servicer which includes an assertion
that the master servicer has complied with certain minimum mortgage
loan servicing standards (to the extent applicable to commercial and
multifamily mortgage loans), identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the master servicer's
servicing of commercial and multifamily mortgage loans during the most
recently completed calendar year and
o on the basis of an examination conducted by such firm in accordance
with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications
that, in the opinion of such firm, such standards require it to
report. In rendering its report such firm may rely, as to the matters
relating to the direct servicing of commercial and multifamily
mortgage loans by sub-servicers, upon comparable reports of firms of
independent public accountants rendered on the basis of examinations
conducted in accordance the same standards (rendered within one year
of such report) with respect to those sub-servicers. The prospectus
supplement may provide that additional reports of independent
certified public accountants relating to the servicing of mortgage
loans may be required to be delivered to the trustee.
Each Pooling Agreement will also provide that, on or before a specified
date in each year, beginning the first such date that is at least a specified
number of months after the Cut-off Date, the master servicer and special
servicer shall each deliver to the related trustee an annual statement signed
by one or more officers of the master servicer or the special servicer, as the
case may be, to the effect that, to the best knowledge of each such officer,
the master servicer or the special servicer, as the case may be, has fulfilled
in all material respects its obligations under the Pooling Agreement throughout
the preceding year or, if there has been a material default in the fulfillment
of any such obligation, such statement shall specify each such known default
and the nature and status thereof. Such statement may be provided as a single
form making the required statements as to more than one Pooling Agreement.
Unless otherwise specified in the related prospectus supplement, copies of
the annual accountants' statement and the annual statement of officers of a
master servicer or special servicer may be obtained by certificateholders upon
written request to the trustee.
CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE SPECIAL SERVICER, THE REMIC
ADMINISTRATOR AND THE DEPOSITOR
Unless otherwise specified in the prospectus supplement for a series of
certificates, the related Pooling Agreement will permit the master servicer,
the special servicer and any REMIC administrator to resign from its obligations
thereunder only upon
o the appointment of, and the acceptance of such appointment by, a
successor thereto and receipt by the trustee of written confirmation
from each applicable rating agency that such resignation and
appointment will not have an adverse effect on the rating assigned by
such rating agency to any class of certificates of such series or
o 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. No such resignation will
become effective until the trustee or other successor has assumed the
obligations and duties of the resigning master servicer, special
servicer or REMIC administrator, as the case may be, under the Pooling
Agreement.
The master servicer and special servicer for each trust fund will be
required to maintain a fidelity bond and errors and omissions policy or their
equivalent that provides coverage against losses that may be sustained as a
result of an officer's or employee's misappropriation of funds or errors and
omissions, subject to certain limitations as to amount of coverage, deductible
amounts, conditions, exclusions and exceptions permitted by the related Pooling
Agreement.
55
Unless otherwise specified in the related prospectus supplement, each
Pooling Agreement will further provide that none of the master servicer, the
special servicer, the REMIC administrator, the depositor or any director,
officer, employee or agent of any 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 Agreement or for errors in judgment.
However, that none of the master servicer, the special servicer, the REMIC
administrator, the depositor or any such person will be protected against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of obligations or duties
thereunder or by reason of reckless disregard of such obligations and duties.
Unless otherwise specified in the related prospectus supplement, each Pooling
Agreement will further provide that the master servicer, the special servicer,
the REMIC administrator, the depositor and any director, officer, employee or
agent of any of them will be entitled to indemnification by the related trust
fund against any loss, liability or expense incurred in connection with any
legal action that relates to such Pooling Agreement or the related series of
certificates.
However, such indemnification will not extend to any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of obligations or duties under such Pooling
Agreement, or by reason of reckless disregard of such obligations or duties. In
addition, each Pooling Agreement will provide that none of the master servicer,
the special servicer, the REMIC administrator or the depositor will be under
any obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective responsibilities under the Pooling Agreement and
that in its opinion may involve it in any expense or liability. However, each
of the master servicer, the special servicer, the REMIC administrator 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 Agreement and the interests of the related series of 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
related series of certificateholders, and the master servicer, the special
servicer, the REMIC administrator or the depositor, as the case may be, will be
entitled to charge the related Certificate Account therefor.
Any person into which the master servicer, the special servicer, the REMIC
administrator or the depositor may be merged or consolidated, or any person
resulting from any merger or consolidation to which the master servicer, the
special servicer, the REMIC administrator or the depositor is a party, or any
person succeeding to the business of the master servicer, the special servicer,
the REMIC administrator or the depositor, will be the successor of the master
servicer, the special servicer, the REMIC administrator or the depositor, as
the case may be, under the related Pooling Agreement.
Unless otherwise specified in the related prospectus supplement, a REMIC
administrator will be entitled to perform any of its duties under the related
Pooling Agreement either directly or by or through agents or attorneys, and the
REMIC administrator will not be responsible for any willful misconduct or gross
negligence on the part of any such agent or attorney appointed by it with due
care.
EVENTS OF DEFAULT
Unless otherwise provided in the prospectus supplement for a series of
certificates, "Events of Default" under the related Pooling Agreement will
include, without limitation,
o any failure by the master servicer to distribute or cause to be
distributed to the certificateholders of such series, or to remit to
the trustee for distribution to such certificateholders, any amount
required to be so distributed or remitted, which failure continues
unremedied for five days after written notice thereof has been given
to the master servicer by any other party to the related Pooling
Agreement, or to the master servicer, with a copy to each other party
to the related Pooling Agreement, by certificateholders entitled to
not less than 25% (or such other percentage specified in the related
prospectus supplement) of the Voting Rights for such series;
56
o any failure by the special servicer to remit to the master servicer or
the trustee, as applicable, any amount required to be so remitted,
which failure continues unremedied for five days after written notice
thereof has been given to the special servicer by any other party to
the related Pooling Agreement, or to the special servicer, with a copy
to each other party to the related Pooling Agreement, by the
certificateholders entitled to not less than 25% (or such other
percentage specified in the related prospectus supplement) of the
Voting Rights of such series;
o 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 related Pooling Agreement, which failure
continues unremedied for sixty days after written notice thereof has
been given to the master servicer or the special servicer, as the case
may be, by any other party to the related Pooling Agreement, or to the
master servicer or the special servicer, as the case may be, with a
copy to each other party to the related Pooling Agreement, by
certificateholders entitled to not less than 25% (or such other
percentage specified in the related prospectus supplement) of the
Voting Rights for such series;
o any failure by a REMIC administrator (if other than the trustee) duly
to observe or perform in any material respect any of its covenants or
obligations under the related Pooling Agreement, which failure
continues unremedied for sixty days after written notice thereof has
been given to the REMIC administrator by any other party to the
related Pooling Agreement, or to the REMIC administrator, with a copy
to each other party to the related Pooling Agreement, by
certificateholders entitled to not less than 25% (or such other
percentage specified in the related prospectus supplement) of the
Voting Rights for such series; and
o certain events of insolvency, readjustment of debt, marshalling of
assets and liabilities, or similar proceedings in respect of or
relating to the master servicer, the special servicer or the REMIC
administrator (if other than the trustee), and certain actions by or
on behalf of the master servicer, the special servicer or the REMIC
administrator (if other than the trustee) 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 related
prospectus supplement. Unless otherwise specified in the related
prospectus supplement, when a single entity acts as master servicer,
special servicer and REMIC administrator, or in any two of the
foregoing capacities, for any trust fund, an Event of Default in one
capacity will constitute an Event of Default in each capacity.
RIGHTS UPON EVENT OF DEFAULT
If an Event of Default occurs with respect to the master servicer, the
special servicer or a REMIC administrator under a Pooling Agreement, then, in
each and every such case, so long as the Event of Default remains unremedied,
the depositor or the trustee will be authorized, and at the direction of
certificateholders of the related series entitled to not less than 51% (or such
other percentage specified in the related prospectus supplement) of the Voting
Rights for such series, the trustee will be required, to terminate all of the
rights and obligations of the defaulting party as master servicer, special
servicer or REMIC administrator, as applicable, under the Pooling Agreement,
whereupon the trustee will succeed to all of the responsibilities, duties and
liabilities of the defaulting party as master servicer, special servicer or
REMIC administrator, as applicable, under the Pooling Agreement (except that if
the defaulting party is required to make advances thereunder regarding
delinquent mortgage loans, but the trustee is prohibited by law from obligating
itself to make such advances, or if the related prospectus supplement so
specifies, the trustee will not be obligated to make such advances) and will be
entitled to similar compensation arrangements. Unless otherwise specified in
the related prospectus supplement, if the trustee is unwilling or unable so to
act, it may (or, at the written request of certificateholders of the related
series entitled to not less than 51% (or such other percentage specified in the
related prospectus supplement) of the Voting Rights for such series, it will be
required to) appoint, or petition a court
57
of competent jurisdiction to appoint, a loan servicing institution or other
entity that (unless otherwise provided in the related prospectus supplement) is
acceptable to each applicable Rating Agency to act as successor to the master
servicer, special servicer or REMIC administrator, as the case may be, under
the Pooling Agreement. Pending such appointment, the trustee will be obligated
to act in such capacity.
If the same entity is acting as both trustee and REMIC administrator, it
may be removed in both such capacities as described under "-- Resignation and
Removal of the Trustee" below.
No certificateholder will have any right under a Pooling Agreement to
institute any proceeding with respect to such Pooling Agreement unless such
holder previously has given to the trustee written notice of default and the
continuance thereof and unless the holders of certificates of any class
evidencing not less than 25% of the aggregate Percentage Interests constituting
such class have made written request upon the trustee to institute such
proceeding in its own name as trustee thereunder and have offered to the
trustee reasonable indemnity and the trustee for sixty days after receipt of
such request and indemnity has neglected or refused to institute any such
proceeding. However, the trustee will be under no obligation to exercise any of
the trusts or powers vested in it by the Pooling Agreement 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 covered by
such Pooling Agreement, 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
Except as otherwise specified in the related prospectus supplement, each
pooling agreement may be amended by the parties thereto, without the consent of
any of the holders of certificates covered by such pooling agreement,
o to cure any ambiguity,
o to correct or supplement any provision therein which may be
inconsistent with any other provision therein or to correct any error,
o to change the timing and/or nature of deposits in the Certificate
Account, provided that (A) such change would not adversely affect in
any material respect the interests of any certificateholder, as
evidenced by an opinion of counsel, and (B) such change would not
adversely affect the then-current rating of any rated classes of
certificates, as evidenced by a letter from each applicable rating
agency,
o if a REMIC election has been made with respect to the related trust
fund, to modify, eliminate or add to any of its provisions (A) to such
extent as shall be necessary to maintain the qualification of the
trust fund (or any designated portion thereof) as a REMIC or to avoid
or minimize the risk of imposition of any tax on the related trust
fund, provided that the trustee has received an opinion of counsel to
the effect that (1) such action is necessary or desirable to maintain
such qualification or to avoid or minimize such risk, and (2) such
action will not adversely affect in any material respect the interests
of any holder of certificates covered by the pooling agreement, or (B)
to restrict the transfer of the Residual certificates, provided that
the depositor has determined that the then-current ratings of the
classes of the certificates that have been rated will not be adversely
affected, as evidenced by a letter from each applicable rating agency,
and that any such amendment will not give rise to any tax with respect
to the transfer of the Residual certificates to a non-permitted
transferee (See "Certain Federal Income Tax Consequences -- REMICs --
Tax and Restrictions on Transfers of Residual certificates to Certain
Organizations" herein),
o to make any other provisions with respect to matters or questions
arising under such pooling agreement or any other change, provided
that such action will not adversely affect in any material respect the
interests of any certificateholder, or
58
o to amend specified provisions that are not material to holders of any
class of certificates offered hereunder.
The pooling agreement may also be amended by the parties thereto with the
consent of the holders of certificates of each class affected thereby
evidencing, in each case, not less than 662/3% (or such other percentage
specified in the related prospectus supplement) of the aggregate Percentage
Interests constituting such class for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of such pooling
agreement or of modifying in any manner the rights of the holders of
certificates covered by such pooling agreement, except that no such amendment
may
o reduce in any manner the amount of, or delay the timing of, payments
received on mortgage loans which are required to be distributed on a
certificate of any class without the consent of the holder of such
certificate or
o reduce the aforesaid percentage of certificates of any class the
holders of which are required to consent to any such amendment without
the consent of the holders of all certificates of such class covered
by such pooling agreement then outstanding.
Notwithstanding the foregoing, if a REMIC election has been made with
respect to the related trust fund, the trustee will not be required to consent
to any amendment to a pooling agreement without having first received an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Master Servicer, the special servicer, the Depositor, the
trustee or any other specified person in accordance with such amendment will
not result in the imposition of a tax on the related trust fund or cause such
trust fund (or any designated portion thereof) to fail to qualify as a REMIC.
LIST OF CERTIFICATEHOLDERS
Unless otherwise specified in the related prospectus supplement, upon
written request of three or more certificateholders 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 Agreement, the trustee or
other specified person will afford such certificateholders access during normal
business hours to the most recent list of certificateholders of that series
held by such person. If such list is as of a date more than 90 days prior to
the date of receipt of such certificateholders' request, then such person, if
not the registrar for such series of certificates, will be required to request
from such registrar a current list and to afford such requesting
certificateholders access thereto promptly upon receipt.
THE TRUSTEE
The trustee under each Pooling 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, special servicer or REMIC administrator and its affiliates.
DUTIES OF THE TRUSTEE
The trustee for each series of certificates will make no representation as
to the validity or sufficiency of the related Pooling Agreement, such
certificates or any underlying mortgage asset or related document and will not
be accountable for the use or application by or on behalf of any master
servicer or special servicer of any funds paid to the master servicer or
special servicer in respect of the certificates or the underlying mortgage
assets. If no Event of Default has occurred and is continuing, the trustee for
each series of certificates will be required to perform only those duties
specifically required under the related Pooling Agreement. However, upon
receipt of any of the various certificates, reports or other instruments
required to be furnished to it pursuant to the related Pooling Agreement, a
trustee will be required to examine such documents and to determine whether
they conform to the requirements of such agreement.
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CERTAIN MATTERS REGARDING THE TRUSTEE
As and to the extent described in the related 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.
Unless otherwise specified in the related prospectus supplement, the
trustee for each series of certificates will be entitled to indemnification,
from amounts held in the Certificate Account for such series, 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 Agreement;
provided, however, that such indemnification will not extend to any loss
liability or expense incurred by reason of willful misfeasance, bad faith or
gross 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.
Unless otherwise specified in the related prospectus supplement, the
trustee for each series of certificates will be entitled to execute any of its
trusts or powers under the related Pooling Agreement or perform any of this
duties thereunder either directly or by or through agents or attorneys, and the
trustee will not be responsible for any willful misconduct or gross negligence
on the part of any such agent or attorney appointed by it with due care.
RESIGNATION AND REMOVAL OF THE TRUSTEE
The trustee may resign at any time, in which event the depositor will be
obligated to appoint a successor trustee. The depositor may also remove the
trustee if the trustee ceases to be eligible to continue as such under the
Pooling Agreement or if the trustee becomes insolvent. Upon becoming aware of
such circumstances, the depositor will be obligated to appoint a successor
trustee. The trustee may also be removed at any time by the holders of
certificates of the applicable series evidencing not less than 51% (or such
other percentage specified in the related prospectus supplement) of the Voting
Rights for such series. Any resignation or removal of the trustee and
appointment of a successor trustee will not become effective until acceptance
of the appointment by the successor trustee. Notwithstanding anything herein to
the contrary, if any entity is acting as both trustee and REMIC administrator,
then any resignation or removal of such entity as the trustee will also
constitute the resignation or removal of such entity as REMIC administrator,
and the successor trustee will serve as successor to the REMIC administrator as
well.
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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
o a letter of credit,
o the subordination of one or more classes of certificates,
o the use of a surety bond,
o an insurance policy or a guarantee,
o the establishment of one or more reserve funds, or
o any combination of the foregoing.
If and to the extent so provided in the related prospectus supplement, any
of the foregoing forms of Credit Support may provide credit enhancement for
more than one series of certificates.
The Credit Support may 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 Agreement. If losses or shortfalls
occur that exceed the amount covered by the related Credit Support or that are
of a type not covered by such Credit Support, certificateholders will bear
their allocable share of deficiencies. Moreover, if a form of Credit Support
covers the offered certificates of more than one series and losses on the
related mortgage assets exceed the amount of such Credit Support, it is
possible that the holders of offered certificates of one (or more) such series
will be disproportionately benefited by such Credit Support to the detriment of
the holders of offered certificates of one (or more) other such series.
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
related prospectus supplement will include a description of
o the nature and amount of coverage under such Credit Support,
o any conditions to payment thereunder not otherwise described herein,
o 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
o the material provisions relating to such Credit Support. Additionally,
the related prospectus supplement will set forth certain information
with respect to the obligor, if any, under any instrument of Credit
Support. See "Risk Factors -- Credit Support Limitations."
SUBORDINATE CERTIFICATES
If so specified in the related prospectus supplement, one or more classes
of certificates of a series may be subordinate certificates. To the extent
specified in the related prospectus supplement, the rights of the holders of
subordinate certificates to receive distributions from the Certificate Account
on any distribution date will be subordinated to the corresponding rights of
the holders of senior certificates. If so provided in the related prospectus
supplement, the subordination of a class may apply only in the event of certain
types of losses or shortfalls. The related prospectus supplement will set forth
information concerning the method and amount of subordination provided by a
class or classes of subordinate certificates in a series and the circumstances
under which such subordination will be 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 the related
series, Credit Support may be provided by
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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. The related prospectus
supplement will describe the nature of such default risks and the extent of
such coverage.
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 other financial institution specified in such prospectus supplement
(the "Letter of Credit Bank"). Under a letter of credit, the Letter of Credit
Bank 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 related prospectus supplement of the aggregate
principal balance of some or all of the related 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 related 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 related prospectus supplement. The
obligations of the Letter of Credit Bank under the letter of credit for each
series of certificates will expire at the earlier of the date specified in the
related prospectus supplement or the termination of the trust fund.
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 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 or distributions of principal on the basis of
a schedule of principal distributions set forth in or determined in the manner
specified in the related prospectus supplement. The related prospectus
supplement will describe any limitations on the draws that may be made under
any such instrument.
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 related
prospectus supplement, the reserve fund for a series may also be funded over
time by a specified amount of certain collections received on the related
mortgage assets.
Amounts on deposit in any reserve fund for a series will be applied for
the purposes, in the manner, and to the extent specified in the related
prospectus supplement if so specified in the related 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 therein may be
released from the reserve fund under the conditions and to the extent specified
in the related prospectus supplement.
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If so specified in the related prospectus supplement, amounts deposited in
any reserve fund will be invested in Permitted Investments. Unless otherwise
specified in the related prospectus supplement, any reinvestment income or
other gain from such investments will be credited to the related reserve fund
for such series, and any loss resulting from such investments will be charged
to such reserve fund. 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 related prospectus supplement.
CREDIT SUPPORT WITH RESPECT TO MBS
If so provided in the prospectus supplement for a series of certificates,
any MBS included in the related trust fund and/or the related underlying
mortgage loans may be covered by one or more of the types of Credit Support
described herein. The related prospectus supplement will specify, as to each
such form of Credit Support, the information indicated above with respect
thereto, to the extent such information is material and available.
INTEREST RATE EXCHANGE, CAP AND FLOOR AGREEMENTS
If so specified in the prospectus supplement for a series of certificates,
the related trust fund may include interest rate exchange agreements or
interest rate cap or floor agreements. These types of agreements may be used to
limit the exposure of the trust fund or investors in the certificates to
fluctuations in interest rates and to situations where interest rates become
higher or lower than specified thresholds. Generally, an interest rate exchange
agreement is a contract between two parties to pay and receive, with a set
frequency, interest payments determined by applying the differential between
two interest rates to an agreed-upon notional principal. Generally, an interest
rate cap agreement is a contract pursuant to which one party agrees to
reimburse another party for a floating rate interest payment obligation, to the
extent that the rate payable at any time exceeds a specified cap. Generally, an
interest rate floor agreement is a contract pursuant to which one party agrees
to reimburse another party in the event that amounts owing to the latter party
under a floating rate interest payment obligation are payable at a rate which
is less than a specified floor. The specific provisions of these types of
agreements will be described in the related prospectus supplement.
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of certain legal
aspects of mortgage loans secured by commercial and multifamily residential
properties. Because such legal aspects are governed by applicable local law
(which laws may differ substantially), the summaries do not purport to be
complete, to reflect the laws of any particular jurisdiction, or to encompass
the laws of all jurisdictions in which the security for the Mortgage Loans (or
mortgage loans underlying any MBS) is situated. Accordingly, the summaries are
qualified in their entirety by reference to the applicable laws of those
jurisdictions. See "Description of the Trust Funds -- Mortgage Loans." If a
significant percentage of mortgage loans (or mortgage loans underlying MBS), by
balance, are secured by properties in a particular jurisdiction, relevant local
laws, to the extent they vary materially from this discussion, will be
discussed in the prospectus supplement.
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 herein
collectively referred to as "mortgages." 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
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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.
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 contrast, 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, irrevocably until the debt is paid, in trust
and generally with a power of sale, to the trustee to secure repayment of the
indebtedness evidenced by the related note. A deed to secure debt typically has
two parties, pursuant to which 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 because legal title to the property is held
by a land trustee under a land trust agreement for the benefit of the borrower.
At origination of a mortgage loan involving a land trust, the borrower may
execute a separate undertaking to make payments on the mortgage note. In no
event is the land trustee personally liable for the mortgage note obligation.
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 and/or may be accompanied by a separate
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.
In most states, hotel and motel room rates are considered accounts
receivable under the Uniform Commercial Code ("UCC"); in cases where hotels or
motels constitute loan security, the rates 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 room
rates and must file continuation statements, generally every five years, to
maintain perfection of such security interest. In certain cases, mortgage loans
secured by hotels or motels may be included in a trust fund even if the
security interest in the room rates was not perfected or the requisite UCC
filings were allowed to lapse. Even if the lender's security interest in room
rates is perfected under applicable nonbankruptcy law, it will generally be
required to commence a foreclosure action or otherwise take possession of the
property in order to enforce its rights to collect the room rates following a
default. In the bankruptcy setting, however, the lender will be stayed from
enforcing its rights to collect room rates, but those room rates constitute
"cash collateral" and therefore cannot be used by the bankruptcy debtor without
a hearing or lender's consent or unless the lender's interest in the room rates
is given adequate protection (e.g., cash payment for otherwise encumbered funds
or a replacement lien on unencumbered property, in either case equal in value
to the amount of room rates that the debtor proposes to use, or other similar
relief). See "-- Bankruptcy Laws."
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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 UCC. Accordingly, if a borrower pledges
personal property as security for a mortgage loan, the lender generally must
file UCC financing statements in order to perfect its security interest
therein, and must file continuation statements, generally every five years, to
maintain that perfection. In certain cases, mortgage loans secured in part by
personal property may be included in a trust fund even if the security interest
in such personal property was not perfected or the requisite UCC filings were
allowed to lapse.
FORECLOSURE
General. Foreclosure is a legal procedure that allows the lender to
recover its mortgage debt by enforcing its rights and available legal remedies
under the mortgage. 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 nonjudicial foreclosure pursuant to a power of sale 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 several years to complete.
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 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 defendants. When the lender's
right to foreclose is contested, the legal proceedings can be time-consuming.
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.
Equitable and Other 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 nonmonetary default, such as
a failure to adequately maintain the mortgaged property or an impermissible
further encumbrance of 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.
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In addition, some states may have statutory protection such as the right
of the borrower to reinstate mortgage loans after commencement of foreclosure
proceedings but prior to a foreclosure sale.
Nonjudicial Foreclosure/Power of Sale. In states permitting nonjudicial
foreclosure proceedings, foreclosure of a deed of trust is generally
accomplished by a nonjudicial 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 allows a nonjudicial 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 who 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 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. Generally,
state law governs the procedure for public sale, the parties entitled to
notice, the method of giving notice and the applicable time periods.
Public Sale. A third party may be unwilling to purchase a mortgaged
property at a public sale because of 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. Therefore,
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, or for a lesser amount in order to preserve its right to seek a
deficiency judgment if such is available under state law and under the terms of
the mortgage loan documents. (The mortgage loans, however, may be nonrecourse.
See "Risk Factors -- Commercial and Multifamily Mortgage Loans Are Subject to
Certain Risks Which Could Adversely Affect the Performance of Your Offered
Certificates -- The Mortgage Loans May Be Nonrecourse Loans or Loans With
Limited Recourse.") 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 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
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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 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 (nonstatutory) 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 foreclosure or sale under a deed of trust. 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 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 fair market
value of the property at the time of the sale.
Leasehold Considerations. 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,
the leasehold mortgagee would lose its security. This risk may be lessened if
the ground lease requires the lessor to give the leasehold mortgagee notices of
lessee defaults and an opportunity to cure them, permits the leasehold estate
to be assigned to and by the leasehold mortgagee or the purchaser at a
foreclosure sale, and contains certain other protective provisions typically
included in a "mortgageable" ground lease. Certain mortgage loans, however, may
be secured by ground leases which do not contain these provisions.
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In addition, where a lender has as its security both the fee and leasehold
interest in the same property, the grant of a mortgage lien on its fee interest
by the land owner/ground lessor to secure the debt of a borrower/ground lessee
may be subject to challenge as a fraudulent conveyance. Among other things, a
legal challenge to the granting of the liens may focus on the benefits realized
by the land owner/ground lessor from the loan. If a court concluded that the
granting of the mortgage lien was an avoidable fraudulent conveyance, it might
take actions detrimental to the holders of the offered certificates, including,
under certain circumstances, invalidating the mortgage lien on the fee interest
of the land owner/ground lessor.
Cooperative Shares. Mortgage loans may be secured by a security interest
on the borrower's ownership interest in shares, and the proprietary leases
appurtenant thereto, allocable to cooperative dwelling units that may be vacant
or occupied by nonowner tenants. Such loans are subject to certain risks not
associated with mortgage loans secured by a lien on the fee estate of a
borrower in real property. Such a loan typically is subordinate to the
mortgage, if any, on the cooperative's building which, if foreclosed, could
extinguish the equity in the building and the proprietary leases of the
dwelling units derived from ownership of the shares of the cooperative.
Further, transfer of shares in a cooperative are subject to various regulations
as well as to restrictions under the governing documents of the cooperative,
and the shares may be cancelled in the event that associated maintenance
charges due under the related proprietary leases are not paid. Typically, a
recognition agreement between the lender and the cooperative provides, among
other things, the lender with an opportunity to cure a default under a
proprietary lease.
Under the laws applicable in many states, "foreclosure" on cooperative
shares is accomplished by a sale in accordance with the provisions of Article 9
of the UCC and the security agreement relating to the shares. Article 9 of the
UCC requires that a sale be conducted in a "commercially reasonable" manner,
which may be dependent upon, among other things, the notice given the debtor
and the method, manner, time, place and terms of the sale. Article 9 of the UCC
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. A recognition agreement, however, generally
provides that the lender's right to reimbursement is subject to the right of
the cooperative to receive sums due under the proprietary leases.
BANKRUPTCY LAWS
Operation of the federal bankruptcy code, as amended from time to time (11
U.S.C.) (the "Bankruptcy Code") and related state laws may interfere with or
affect the ability of a lender to realize upon collateral and/or to enforce a
deficiency judgment. For example, under the Bankruptcy Code, virtually all
actions (including foreclosure actions and deficiency judgment proceedings) are
automatically stayed upon the filing of the bankruptcy petition and, usually,
no interest or principal payments are made during the course of the bankruptcy
case. The delay and the consequences thereof caused by such automatic stay can
be significant. Also, under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a junior lienor may stay the senior lender from
taking action to foreclose out such junior lien.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards protective of the lender 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. In many jurisdictions, the outstanding amount of the loan may be
reduced to the then-current value of the property (with a corresponding partial
reduction of the amount of lender's security interest) pursuant to a confirmed
plan or lien avoidance proceeding, thus leaving the lender a general unsecured
creditor for the difference between such value and the outstanding balance of
the loan. Other modifications may include the 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 courts with federal bankruptcy jurisdiction 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 the Bankruptcy Code, a bankruptcy court
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may permit a debtor, through its rehabilitative plan, to de-accelerate a
secured loan and to reinstate the loan even if the lender accelerated the
mortgage loan and final judgment of foreclosure has been entered in state court
(provided no sale of the property had yet occurred) prior to the filing of the
debtor's petition. This may be done even if the full amount due under the
original loan is never repaid.
The Bankruptcy Code has been amended to provide that a lender's perfected
pre-petition security interest in leases, rents and hotel revenues continues in
the post-petition leases, rents and hotel revenues, unless a bankruptcy court
orders to the contrary "based on the equities of the case." Thus, unless a
court orders otherwise, revenues from a mortgaged property generated after the
date the bankruptcy petition is filed will constitute "cash collateral" under
the Bankruptcy Code. Debtors may only use cash collateral upon obtaining the
lender's consent or a prior court order finding that the lender's interest in
the mortgaged property and the cash collateral is "adequately protected" as the
term is defined and interpreted under the Bankruptcy Code. It should be noted,
however, that the court may find that the lender has no security interest in
either pre-petition or post-petition revenues if the court finds that the loan
documents do not contain language covering accounts, room rents, or other forms
of personality necessary for a security interest to attach to hotel revenues.
The Bankruptcy Code provides generally that rights and obligation 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 Bankruptcy Code solely because
of a provision in the lease to that effect or because of certain other similar
events. This prohibition on so-called "ipso facto clauses" could limit the
ability of the trustee to exercise certain contractual remedies with respect to
the leases on any mortgaged property. 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, which may delay a
trustee's exercise of those remedies in the event that a lessee becomes the
subject of a proceeding under the Bankruptcy Code.
For example, a mortgagee would be stayed from enforcing an assignment of
the lease by a borrower related to a mortgaged property if the related borrower
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
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 related 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 if the assignment is not fully perfected
under state law prior to commencement of the bankruptcy proceeding.
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. These remedies may be
insufficient, however, as the lessor may be forced to continue under the lease
with a lessee that is a poor credit risk or an unfamiliar tenant if the lease
was assigned, and any assurances provided to the lessor may, in fact, be
inadequate. If the lease is rejected, the 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 the
lease, such as the borrower, as lessor under a lease, would have only an
unsecured claim against the debtor for damages resulting from the 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
percent, not to exceed three years, of the remaining term of the lease.
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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 the lease as terminated by the rejection or, in the alternative, the
lessee may remain in possession of the leasehold for the balance of the term
and for any renewal or extension of the 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 a rejection of a lease, the lessee
may offset against rents reserved under the lease for the balance of the term
after the date of rejection of the lease, and the related renewal or extension
of the lease, any damages occurring after that date caused by the
nonperformance of any obligation of the lessor under the lease after that date.
On the bankruptcy of a lessor or a lessee under a ground lease, the debtor
entity has the right to assume (continue) or reject (terminate) the ground
lease. Pursuant to Section 365(h) of the Bankruptcy Code, as it is presently in
effect, a ground lessee whose ground lease is rejected by a debtor ground
lessor has the right to remain in possession of its leased premises under the
rent reserved in the lease for the term (including renewals) of the ground
lease, but is not entitled to enforce the obligation of the ground lessor to
provide any services required under the ground lease. In the event a ground
lessee/borrower in bankruptcy rejects any/or all of its ground leases, the
leasehold mortgagee would have the right to succeed to the ground
lessee/borrower's position under the lease only if the ground lessor had
specifically granted the mortgagee such right. In the event of concurrent
bankruptcy proceedings involving the ground lessor and the ground
lessee/borrower, the trustee may be unable to enforce the ground
lessee/borrower's obligation to refuse to treat a ground lease rejected by a
bankrupt ground lessor as terminated. In such circumstances, a ground lease
could be terminated notwithstanding lender protection provisions contained
herein or in the mortgage. A lender could lose its security unless the borrower
holds a fee mortgage or the bankruptcy court, as a court of equity, allows the
lender to assume the ground lessee's obligations under the ground lease and
succeed to the position of a leasehold mortgagor. Although consistent with the
Bankruptcy Code, such position may not be adopted by a bankruptcy court.
In a bankruptcy or similar proceeding of a borrower, action may be taken
seeking the recovery, as a preferential transfer or on other grounds, of any
payments made by the borrower, 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 borrower
with means to halt a foreclosure proceeding or sale and to force a
restructuring of a mortgage loan on terms a lender would not otherwise accept.
Moreover, the laws of certain states also give priority to certain tax liens
over the lien of a mortgage or deed of trust. Under the Bankruptcy Code, if the
court finds that actions of the mortgagee have been unreasonable, the lien of
the related mortgage may be subordinated to the claims of unsecured creditors.
Certain of the borrowers 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 borrowers 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
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time there was at least one other general partner and the written provisions of
the limited partnership 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 partners to agree within a specified time frame (often 60 days) after
the 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 the partnerships triggers the
dissolution of the partnership, the winding up of its affairs and the
distribution of its assets. Those state laws, however, may not be enforceable
or effective in a bankruptcy case. The dissolution of a borrower, the winding
up of its affairs and the distribution of its assets could result in an
acceleration of its payment obligation under the borrower's mortgage loan,
which may reduce the yield on the notes in the same manner as a principal
prepayment.
In addition, the bankruptcy of the general or limited partner of a
borrower that is a partnership, or the bankruptcy of a member of a borrower
that is a limited liability company or the bankruptcy of a shareholder of a
borrower that is a corporation may provide the opportunity in the bankruptcy
case of the partner, member or shareholder to obtain an order from a court
consolidating the assets and liabilities of the partner, member or shareholder
with those of the mortgagor pursuant to the doctrines of substantive
consolidation or piercing the corporate veil. In such a case, the respective
mortgaged property, for example, would become property of the estate of the
bankrupt partner, member or shareholder. Not only would the mortgaged property
be available to satisfy the claims of creditors of the partner, member or
shareholder, but an automatic stay would apply to any attempt by the trustee to
exercise remedies with respect to the 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 interest 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 or disposal
activity. 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 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 clean-up costs.
Superlien Laws. Under the laws of many states, 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" of contaminated real property for the
costs of clean-up. A secured lender may be liable as an "owner" or "operator"
of a contaminated mortgaged property if agents or employees of the lender have
participated in the management or operation of such mortgaged property. 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 is not limited to the
original or unamortized principal balance of a loan or to the value of the
property securing a loan. Excluded from CERCLA's definition of "owner" or
"operator, " however, is a person "who, without participating in the management
of the facility, holds indicia of ownership primarily to protect his security
interest." This is the so called "secured creditor exemption."
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The Asset Conservation, Lender Liability and Deposit Insurance Protection
Act of 1996 (the "Act") amended, among other things, the provisions of CERCLA
with respect to lender liability and the secured creditor exemption. The Act
offers protection to lenders by defining the activities in which a lender can
engage and still have the benefit of the secured creditor exemption. In order
for a lender to be deemed to have participated in the management of a mortgaged
property, the lender must actually participate in the operational affairs of
the property of the borrower. The Act provides that "merely having the capacity
to influence, or unexercised right to control" operations does not constitute
participation in management. A lender will lose the protection of the secured
creditor exemption if it exercises decision-making control over the borrower's
environmental compliance and hazardous substance handling or disposal
practices, or assumes day-to-day management of environmental or substantially
all other operational functions of the mortgaged property. The Act also
provides that a lender will continue to have the benefit of the secured
creditor exemption even if it forecloses on a mortgaged property, purchases it
at a foreclosure sale or accepts a deed-in-lieu of foreclosure provided that
the lender seeks to sell the mortgaged property at the earliest practicable
commercially reasonable time on commercially reasonable terms.
Certain Other Federal and State Laws. Many states have statutes similar to
CERCLA, and not all those statutes provide for a secured creditor exemption. In
addition, under federal law, there is potential liability relating to hazardous
wastes and underground storage tanks under the federal Resource Conservation
and Recovery Act.
Some federal, state and local laws, regulations and ordinances govern the
management, removal, encapsulation or disturbance of asbestos-containing
materials. These laws, as well as common law standards, may impose liability
for releases of or exposure to asbestos-containing materials, and provide for
third parties to seek recovery from owners or operators of real properties for
personal injuries associated with those releases.
Federal legislation requires owners of residential housing constructed
prior to 1978 to disclose to potential residents or purchasers any known
lead-based paint hazards and will impose treble damages for any failure to
disclose. In addition, the ingestion of lead-based paint chips or dust
particles by children can result in lead poisoning. If lead-based paint hazards
exist at a property, then the owner of that property may be held liable for
injuries and for the costs of removal or encapsulation of the lead-based paint.
In a few states, transfers of some types of properties are conditioned
upon cleanup of contamination prior to transfer. 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 clean up 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 it may be more difficult to hold
a lender liable under common law causes of action, unanticipated or uninsured
liabilities of the borrower may jeopardize the borrower's ability to meet its
loan obligations or may decrease the re-sale value of the collateral.
Federal, state and local environmental laws and regulatory requirements
change often. It is possible that compliance with a new requirement could
impose significant compliance costs on a borrower. Such costs may jeopardize
the borrower's ability to meet its loan obligations or decrease the re-sale
value of the collateral.
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 the owner or operator who created
the environmental hazard, but that individual or entity may be without
substantial assets. 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
related prospectus supplement, the Pooling Agreement will provide that neither
the master servicer nor the special
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servicer, acting on behalf of the trustee, may acquire title to a mortgaged
property or take over its operation unless the special servicer, based solely
(as to environmental matters) on a report prepared by a person who regularly
conducts environmental audits, has made the determination that it is
appropriate to do so, as described under "Description of the Pooling Agreements
- -- Realization Upon Defaulted Mortgage Loans."
If a lender forecloses on a mortgage secured by a property, the operations
on which are subject to environmental laws and regulations, the lender will 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 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.
Environmental Site Assessments. In most cases, an environmental site
assessment of each mortgaged property will have been performed in connection
with the origination of the related mortgage loan or at some time prior to the
issuance of the related certificates. Environmental site assessments, however,
vary considerably in their content, quality and cost. Even when adhering to
good professional practices, environmental consultants will sometimes not
detect significant environmental problems because to do an exhaustive
environmental assessment would be far too costly and time-consuming to be
practical.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
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. However, the Garn-St Germain Depository Institutions Act of
1982 (the "Garn Act") generally preempts state laws that prohibit the
enforcement of due-on-sale clauses and permits lenders to enforce these clauses
in accordance with their terms, subject to certain limitations as set forth in
the Garn Act and the regulations promulgated thereunder. Accordingly, 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, without regard to the master servicer's ability to
demonstrate that a sale threatens its legitimate security interest.
JUNIOR LIENS; RIGHTS OF HOLDERS OF SENIOR LIENS
If so provided in the related prospectus supplement, mortgage assets for a
series of certificates may include mortgage loans secured by junior liens, and
the loans secured by the related senior liens may not be included in the
mortgage pool. See "Description of the Trust Funds -- Mortgage Loans --
General."
SUBORDINATE FINANCING
The terms of 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, or such restrictions may be unenforceable. 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
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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.
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.
Statutes differ in their provisions as to the consequences of a usurious
loan. One group of statutes requires the lender to forfeit the interest due
above the applicable limit or impose a specified penalty. Under this statutory
scheme, the borrower may cancel the recorded mortgage or deed of trust upon
paying its debt with lawful interest, and the lender may foreclose, but only
for the debt plus lawful interest. A second group of statutes is more severe. A
violation of this type of usury law results in the invalidation of the
transaction, thereby permitting the borrower to cancel the recorded mortgage or
deed of trust without any payment or prohibiting the lender from foreclosing.
CERTAIN LAWS AND REGULATIONS
The mortgaged properties will be subject to compliance with various
federal, state and local statutes and regulations. Failure to comply (together
with an inability to remedy any such failure) could result in material
diminution in the value of a mortgaged property which could, together with the
possibility of limited alternative uses for a particular mortgaged property
(i.e., a nursing or convalescent home or hospital), result in a failure to
realize the full principal amount of the related mortgage loan.
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The lender may be subject to additional risk depending upon the type and
use of the mortgaged property in question. See "Risk Factors -- Commercial and
Multifamily Mortgage Loans are Subject to Certain Risks Which Could Adversely
Affect the Performance of Your Offered Certificates."
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 as hotels,
restaurants, shopping centers, hospitals, schools and social service center
establishments) must remove architectural and communication barriers which are
structural in nature from existing places of public accommodation to the extent
"readily achievable." In addition, under the ADA, alterations to a place of
public accommodation or a commercial facility are to be made so that, to the
maximum extent feasible, such altered portions are readily accessible to and
usable by disabled individuals. The "readily achievable" standard takes into
account, among other factors, the financial resources of the affected site,
owner, landlord or other applicable person. In addition to imposing a possible
financial burden on the borrower in its capacity as owner or landlord, the ADA
may also impose such requirements on a foreclosing lender who succeeds to the
interest of the borrower as owner or landlord. Furthermore, since the "readily
achievable" standard may vary depending on the financial condition of the owner
or landlord, a foreclosing lender who is financially more capable than the
borrower of complying with the requirements of the ADA may be subject to more
stringent requirements than those to which the borrower is subject.
SERVICEMEMBERS CIVIL RELIEF ACT
Under the terms of the Servicemembers Civil Relief Act (formerly the
Soldiers' and Sailors' Civil Relief Act of 1940), as amended (the "Relief
Act"), a borrower who enters military service after the origination of such
borrower's mortgage loan (including a borrower who was in reserve status and is
called to active duty after origination of the mortgage loan), upon
notification by such borrower, will not be charged interest, including fees and
charges, in excess of 6% per annum 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 a master servicer or special 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 related 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 master servicer or
special 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.
FORFEITURES IN DRUG AND RICO PROCEEDINGS
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
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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.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the anticipated material federal
income tax consequences of the purchase, ownership and disposition of
certificates. The discussion below does not purport to address all federal
income tax consequences that may be applicable to particular categories of
investors, some of which may be subject to special rules. The authorities on
which this discussion is based are subject to change or differing
interpretations, and any such change or interpretation could apply
retroactively. This discussion reflects the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), as well as regulations
(the "REMIC Regulations") promulgated by the U.S. Department of Treasury (the
"Treasury"). Investors should consult their own tax advisors in determining the
federal, state, local and other tax consequences to them of the purchase,
ownership and disposition of certificates.
For purposes of this discussion:
o references to the mortgage loans include references to the mortgage
loans underlying any MBS included in the mortgage assets; and
o where the applicable prospectus supplement provides for a fixed
retained yield with respect to the mortgage loans underlying a series
of certificates, references to the mortgage loans will be deemed to
refer to that portion of the mortgage loans held by the trust fund
which does not include the portion, if any, of the payments on the
mortgage loan that is retained by the related mortgage asset seller.
References to a "holder" or "certificateholder" in this discussion
generally mean the beneficial owner of a certificate.
FEDERAL INCOME TAX CONSEQUENCES FOR REMIC CERTIFICATES
GENERAL
With respect to a particular series of certificates, one or more elections
may be made to treat the trust fund or one or more segregated pools of assets
therein as one or more real estate mortgage investment conduits (each, a
"REMIC") within the meaning of Code Section 860D. A trust fund or a portion
thereof as to which a REMIC election will be made will be referred to as a
"REMIC Pool." For purposes of this discussion, certificates of a series as to
which one or more REMIC elections are made are referred to as "REMIC
Certificates" and will consist of one or more classes of "Regular Certificates"
and one class of "Residual Certificates" in the case of each REMIC Pool.
Qualification as a REMIC requires ongoing compliance with certain conditions.
With respect to each series of REMIC Certificates, Cadwalader, Wickersham &
Taft LLP or Latham & Watkins LLP, counsel to the depositor, has advised the
depositor that in the firm's opinion, assuming:
o the making of proper elections;
o compliance with the Pooling Agreement and other related documents and
no amendments thereof;
o the accuracy of all representations made with respect to the mortgage
loans; and
o compliance with any changes in the law, including any amendments to
the Code or applicable Treasury regulations thereunder, each REMIC
Pool will qualify as a REMIC.
In such case, the Regular Certificates will be considered to be "regular
interests" in the REMIC Pool and generally will be treated for federal income
tax purposes as if they were newly originated debt instruments, and the
Residual Certificates will be considered to be "residual interests" in the
REMIC Pool. The prospectus supplement for each series of certificates will
indicate whether one or more REMIC elections with respect to the related trust
fund will be made, in which event references to "REMIC" or "REMIC Pool" herein
shall be deemed to refer to each such REMIC Pool. If so specified in the
applicable prospectus supplement, the portion of a trust fund as to which a
REMIC election is not made may be treated as a grantor trust for federal income
tax purposes. See "-- Federal Income Tax Consequences for Certificates as to
Which No REMIC Election Is Made."
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STATUS OF REMIC CERTIFICATES
REMIC Certificates held by a domestic building and loan association will
be treated as an asset described in Code Section 7701(a)(19)(C)(xi), but only
in the same proportion that the assets of the REMIC Pool would be treated as
"loans . . . secured by an interest in real property which is . . . residential
real property" (such as single family or multifamily properties, but not
commercial properties) within the meaning of Code Section 7701(a)(19)(C)(v) or
as other assets described in Code Section 7701(a)(19)(C), and otherwise will
not qualify for such treatment. REMIC Certificates held by a real estate
investment trust will constitute "real estate assets" within the meaning of
Code Section 856(c)(5)(B), and interest on the Regular Certificates and income
with respect to Residual Certificates will be considered "interest on
obligations secured by mortgages on real property or on interests in real
property" within the meaning of Code Section 856(c)(3)(B) in the same
proportion that, for both purposes, the assets of the REMIC Pool would be so
treated. If at all times 95% or more of the assets of the REMIC Pool qualify
for each of the foregoing respective treatments, the REMIC Certificates will
qualify for the corresponding status in their entirety. For purposes of Code
Section 856(c)(5)(B), payments of principal and interest on the mortgage loans
that are reinvested pending distribution to holders of REMIC Certificates
qualify for such treatment. Where two REMIC Pools are a part of a tiered
structure they will be treated as one REMIC for purposes of the tests described
above respecting asset ownership of more or less than 95%. Mortgage loans that
have been defeased with U.S. Treasury obligations or other government
securities will not qualify for the foregoing treatments. Except as provided in
the related prospectus supplement, Regular Certificates will be "qualified
mortgages" for another REMIC for purposes of Code Section 860G(a)(3) and
"permitted assets" for a financial asset securitization investment trust for
purposes of Section 860L(c). REMIC Certificates held by a regulated investment
company will not constitute "Government Securities" within the meaning of Code
Section 851(b)(3)(A)(i). REMIC Certificates held by certain financial
institutions will constitute "evidences of indebtedness" within the meaning of
Code Section 582(c)(1).
QUALIFICATION AS A REMIC
In order for the REMIC Pool to qualify as a REMIC, there must be ongoing
compliance on the part of the REMIC Pool with the requirements set forth in the
Code. The REMIC Pool must fulfill an asset test, which requires that no more
than a de minimis portion of the assets of the REMIC Pool, as of the close of
the third calendar month beginning after the "Startup Day" (which for purposes
of this discussion is the date of issuance of the REMIC Certificates) and at
all times thereafter, may consist of assets other than "qualified mortgages"
and "permitted investments." The REMIC Regulations provide a safe harbor
pursuant to which the de minimis requirement is met if at all times the
aggregate adjusted basis of the nonqualified assets is less than 1% of the
aggregate adjusted basis of all the REMIC Pool's assets. An entity that fails
to meet the safe harbor may nevertheless demonstrate that it holds no more than
a de minimis amount of nonqualified assets. A REMIC also must provide
"reasonable arrangements" to prevent its residual interest from being held by
"disqualified organizations" and must furnish applicable tax information to
transferors or agents that violate this requirement. The Pooling Agreement for
each Series will contain a provision designed to meet this requirement. See
"Taxation of Residual Certificates -- Tax-Related Restrictions on Transfer of
Residual Certificates -- Disqualified Organizations."
A qualified mortgage is any obligation that is principally secured by an
interest in real property and that is either transferred to the REMIC Pool on
the Startup Day or is purchased by the REMIC Pool within a three-month period
thereafter pursuant to a fixed price contract in effect on the Startup Day.
Qualified mortgages include whole mortgage loans, such as the mortgage loans,
certificates of beneficial interest in a grantor trust that holds mortgage
loans, including certain of the MBS, regular interests in another REMIC, such
as MBS in a trust as to which a REMIC election has been made, loans secured by
timeshare interests and loans secured by shares held by a tenant stockholder in
a cooperative housing corporation, provided, in general:
o the fair market value of the real property security (including
buildings and structural components thereof) is at least 80% of the
principal balance of the related mortgage loan
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or mortgage loan underlying the MBS either at origination or as of the
Startup Day (an original loan-to-value ratio of not more than 125%
with respect to the real property security); or
o substantially all the proceeds of the mortgage loan or the underlying
mortgage loan were used to acquire, improve or protect an interest in
real property that, at the origination date, was the only security for
the mortgage loan or underlying mortgage loan.
If the mortgage loan has been substantially modified other than in
connection with a default or reasonably foreseeable default, it must meet the
loan-to-value test in the first bullet point of the preceding sentence as of
the date of the last such modification or at closing. A qualified mortgage
includes a qualified replacement mortgage, which is any property that would
have been treated as a qualified mortgage if it were transferred to the REMIC
Pool on the Startup Day and that is received either:
o in exchange for any qualified mortgage within a three-month period
thereafter; or
o in exchange for a "defective obligation" within a two-year period
thereafter.
A "defective obligation" includes:
o a mortgage in default or as to which default is reasonably
foreseeable;
o a mortgage as to which a customary representation or warranty made at
the time of transfer to the REMIC Pool has been breached;
o a mortgage that was fraudulently procured by the mortgagor; and
o a mortgage that was not in fact principally secured by real property
(but only if such mortgage is disposed of within 90 days of
discovery).
A mortgage loan that is "defective" as described in the fourth bullet
point above that is not sold or, if within two years of the Startup Day,
exchanged, within 90 days of discovery, ceases to be a qualified mortgage after
such 90-day period.
Permitted investments include cash flow investments, qualified reserve
assets, and foreclosure property. A cash flow investment is an investment,
earning a return in the nature of interest, of amounts received on or with
respect to qualified mortgages for a temporary period, not exceeding 13 months,
until the next scheduled distribution to holders of interests in the REMIC
Pool. A qualified reserve asset is any intangible property held for investment
that is part of any reasonably required reserve maintained by the REMIC Pool to
provide for payments of expenses of the REMIC Pool or amounts due on the
regular or residual interests in the event of defaults (including
delinquencies) on the qualified mortgages, lower than expected reinvestment
returns, prepayment interest shortfalls and certain other contingencies. The
reserve fund will be disqualified if more than 30% of the gross income from the
assets in such fund for the year is derived from the sale or other disposition
of property held for less than three months, unless required to prevent a
default on the regular interests caused by a default on one or more qualified
mortgages. A reserve fund must be reduced "promptly and appropriately" as
payments on the mortgage loans are received. Foreclosure property is real
property acquired by the REMIC Pool in connection with the default or imminent
default of a qualified mortgage and generally not held beyond the close of the
third calendar year following the acquisition of the property by the REMIC
Pool, with an extension that may be granted by the Internal Revenue Service
(the "Service").
In addition to the foregoing requirements, the various interests in a
REMIC Pool also must meet certain requirements. All of the interests in a REMIC
Pool must be either of the following:
o one or more classes of regular interests; or
o a single class of residual interests on which distributions, if any,
are made pro rata.
A regular interest is an interest in a REMIC Pool that is issued on the
Startup Day with fixed terms, is designated as a regular interest, and
unconditionally entitles the holder to receive a
79
specified principal amount (or other similar amount), and provides that
interest payments (or other similar amounts), if any, at or before maturity
either are payable based on a fixed rate or a qualified variable rate, or
consist of a specified, nonvarying portion of the interest payments on
qualified mortgages. Such a specified portion may consist of a fixed number of
basis points, a fixed percentage of the total interest, or a fixed or qualified
variable or inverse variable rate on some or all of the qualified mortgages
minus a different fixed or qualified variable rate. The specified principal
amount of a regular interest that provides for interest payments consisting of
a specified, nonvarying portion of interest payments on qualified mortgages may
be zero. A residual interest is an interest in a REMIC Pool other than a
regular interest that is issued on the Startup Day and that is designated as a
residual interest. An interest in a REMIC Pool may be treated as a regular
interest even if payments of principal with respect to such interest are
subordinated to payments on other regular interests or the residual interest in
the REMIC Pool, and are dependent on the absence of defaults or delinquencies
on qualified mortgages or permitted investments, lower than reasonably expected
returns on permitted investments, unanticipated expenses incurred by the REMIC
Pool or prepayment interest shortfalls. Accordingly, the Regular Certificates
of a series will constitute one or more classes of regular interests, and the
Residual Certificates with respect to that series will constitute a single
class of residual interests on which distributions are made pro rata.
If an entity, such as the REMIC Pool, fails to comply with one or more of
the ongoing requirements of the Code for REMIC status during any taxable year,
the Code provides that the entity will not be treated as a REMIC for such year
and thereafter. In this event, an entity with multiple classes of ownership
interests may be treated as a separate association taxable as a corporation
under Treasury regulations, and the Regular Certificates may be treated as
equity interests therein. The Code, however, authorizes the Treasury Department
to issue regulations that address situations where failure to meet one or more
of the requirements for REMIC status occurs inadvertently and in good faith,
and disqualification of the REMIC Pool would occur absent regulatory relief.
Investors should be aware, however, that the Conference Committee Report to the
Tax Reform Act of 1986 (the "1986 Act") indicates that the relief may be
accompanied by sanctions, such as the imposition of a corporate tax on all or a
portion of the REMIC Pool's income for the period of time in which the
requirements for REMIC status are not satisfied.
TAXATION OF REGULAR CERTIFICATES
General
In general, interest, original issue discount and market discount on a
Regular Certificate will be treated as ordinary income to a holder of the
Regular Certificate (the "Regular Certificateholder") as they accrue, and
principal payments on a Regular Certificate will be treated as a return of
capital to the extent of the Regular Certificateholder's basis in the Regular
Certificate allocable thereto. Regular Certificateholders must use the accrual
method of accounting with regard to Regular Certificates, regardless of the
method of accounting otherwise used by such Regular Certificateholders.
Original Issue Discount
Accrual Certificates and principal-only certificates will be, and other
Classes of Regular Certificates may be, issued with "original issue discount"
within the meaning of Code Section 1273(a). Holders of any class of Regular
Certificates having original issue discount generally must include original
issue discount in ordinary income for federal income tax purposes as it
accrues, in accordance with the constant yield method that takes into account
the compounding of interest, in advance of receipt of the cash attributable to
such income. The following discussion is based in part on Treasury regulations
(the "OID Regulations") under Code Sections 1271 through 1273 and 1275 and in
part on the provisions of the 1986 Act. Regular Certificateholders should be
aware, however, that the OID Regulations do not adequately address certain
issues relevant to prepayable securities, such as the Regular Certificates. To
the extent such issues are
80
not addressed in such regulations, the depositor intends to apply the
methodology described in the Conference Committee Report to the 1986 Act. No
assurance can be provided that the Service will not take a different position
as to those matters not currently addressed by the OID Regulations. Moreover,
the OID Regulations include an anti-abuse rule allowing the Service to apply or
depart from the OID Regulations where necessary or appropriate to ensure a
reasonable tax result in light of the applicable statutory provisions. A tax
result will not be considered unreasonable under the anti-abuse rule in the
absence of a substantial effect on the present value of a taxpayer's tax
liability. Investors are advised to consult their own tax advisors as to the
discussion herein and the appropriate method for reporting interest and
original issue discount with respect to the Regular Certificates.
Each Regular Certificate will be treated as a single installment
obligation for purposes of determining the original issue discount includible
in a Regular Certificateholder's income. The total amount of original issue
discount on a Regular Certificate is the excess of the "stated redemption price
at maturity" of the Regular Certificate over its "issue price." The issue price
of a class of Regular Certificates offered pursuant to this Prospectus
generally is the first price at which a substantial amount of Regular
Certificates of that class is sold to the public (excluding bond houses,
brokers and underwriters). Although unclear under the OID Regulations, the
depositor intends to treat the issue price of a class as to which there is no
substantial sale as of the issue date or that is retained by the depositor as
the fair market value of that class as of the issue date. The issue price of a
Regular Certificate also includes the amount paid by an initial Regular
Certificateholder for accrued interest that relates to a period prior to the
issue date of the Regular Certificate, unless the Regular Certificateholder
elects on its federal income tax return to exclude such amount from the issue
price and to recover it on the first distribution date. The stated redemption
price at maturity of a Regular Certificate always includes the original
principal amount of the Regular Certificate, but generally will not include
distributions of stated interest if such interest distributions constitute
"qualified stated interest." Under the OID Regulations, qualified stated
interest generally means interest payable at a single fixed rate or a qualified
variable rate (as described below), provided that such interest payments are
unconditionally payable at intervals of one year or less during the entire term
of the Regular Certificate. Because there is no penalty or default remedy in
the case of nonpayment of interest with respect to a Regular Certificate, it is
possible that no interest on any class of Regular Certificates will be treated
as qualified stated interest. However, except as provided in the following
three sentences or in the applicable prospectus supplement, because the
underlying mortgage loans provide for remedies in the event of default, the
depositor intends to treat interest with respect to the Regular Certificates as
qualified stated interest. Distributions of interest on an Accrual Certificate,
or on other Regular Certificates with respect to which deferred interest will
accrue, will not constitute qualified stated interest, in which case the stated
redemption price at maturity of such Regular Certificates includes all
distributions of interest as well as principal thereon. Likewise, the depositor
intends to treat an "interest only" class, or a class on which interest is
substantially disproportionate to its principal amount (a so-called
"super-premium" class) as having no qualified stated interest. Where the
interval between the issue date and the first distribution date on a Regular
Certificate is shorter than the interval between subsequent distribution dates,
the interest attributable to the additional days will be included in the stated
redemption price at maturity.
Under a de minimis rule, original issue discount on a Regular Certificate
will be considered to be zero if such original issue discount is less than
0.25% of the stated redemption price at maturity of the Regular Certificate
multiplied by the weighted average maturity of the Regular Certificate. For
this purpose, the weighted average maturity of the Regular Certificate is
computed as the sum of the amounts determined by multiplying the number of full
years (i.e., rounding down partial years) from the issue date until each
distribution is scheduled to be made by a fraction, the numerator of which is
the amount of each distribution included in the stated redemption price at
maturity of the Regular Certificate and the denominator of which is the stated
redemption price at maturity of the Regular Certificate. Although currently
unclear, it appears that
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the schedule of such distributions should be determined in accordance with the
assumed rate of prepayment of the mortgage loans (the "Prepayment Assumption")
relating to the Regular Certificates. The Prepayment Assumption with respect to
a series of Regular Certificates will be set forth in the related prospectus
supplement. Holders generally must report de minimis original issue discount
pro rata as principal payments are received, and such income will be capital
gain if the Regular Certificate is held as a capital asset. However, under the
OID Regulations, Regular Certificateholders may elect to accrue all de minimis
original issue discount as well as market discount and market premium under the
constant yield method. See "Election to Treat All Interest Under the Constant
Yield Method."
A Regular Certificateholder generally must include in gross income for any
taxable year the sum of the "daily portions," as defined below, of the original
issue discount on the Regular Certificate accrued during an accrual period for
each day on which it holds the Regular Certificate, including the date of
purchase but excluding the date of disposition. The depositor will treat the
monthly period ending on the day before each distribution date as the accrual
period. With respect to each Regular Certificate, a calculation will be made of
the original issue discount that accrues during each successive full accrual
period (or shorter period from the date of original issue) that ends on the day
before the related distribution date on the Regular Certificate. The Conference
Committee Report to the 1986 Act states that the rate of accrual of original
issue discount is intended to be based on the Prepayment Assumption. The
original issue discount accruing in a full accrual period would be the excess,
if any, of:
o the sum of (a) the present value of all of the remaining distributions
to be made on the Regular Certificate as of the end of that accrual
period that are included in the Regular Certificate's stated
redemption price at maturity and (b) the distributions made on the
Regular Certificate during the accrual period that are included in the
Regular Certificate's stated redemption price at maturity; over
o the adjusted issue price of the Regular Certificate at the beginning
of the accrual period.
The present value of the remaining distributions referred to in the
preceding sentence is calculated based on:
o the yield to maturity of the Regular Certificate at the issue date;
o events (including actual prepayments) that have occurred prior to the
end of the accrual period; and
o the Prepayment Assumption.
For these purposes, the adjusted issue price of a Regular Certificate at
the beginning of any accrual period equals the issue price of the Regular
Certificate, increased by the aggregate amount of original issue discount with
respect to the Regular Certificate that accrued in all prior accrual periods
and reduced by the amount of distributions included in the Regular
Certificate's stated redemption price at maturity that were made on the Regular
Certificate in such prior periods. The original issue discount accruing during
any accrual period (as determined in this paragraph) will then be divided by
the number of days in the period to determine the daily portion of original
issue discount for each day in the period. With respect to an initial accrual
period shorter than a full accrual period, the daily portions of original issue
discount must be determined according to an appropriate allocation under any
reasonable method.
Under the method described above, the daily portions of original issue
discount required to be included in income by a Regular Certificateholder
generally will increase to take into account prepayments on the Regular
Certificates as a result of prepayments on the mortgage loans that exceed the
Prepayment Assumption, and generally will decrease (but not below zero for any
period) if the prepayments are slower than the Prepayment Assumption. An
increase in prepayments on the mortgage loans with respect to a series of
Regular Certificates can result in both a change in the priority of principal
payments with respect to certain classes of Regular Certificates and either an
increase or decrease in the daily portions of original issue discount with
respect to such Regular Certificates.
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Acquisition Premium
A purchaser of a Regular Certificate at a price greater than its adjusted
issue price but less than its stated redemption price at maturity will be
required to include in gross income the daily portions of the original issue
discount on the Regular Certificate reduced pro rata by a fraction, the
numerator of which is the excess of its purchase price over such adjusted issue
price and the denominator of which is the excess of the remaining stated
redemption price at maturity over the adjusted issue price. Alternatively, such
a subsequent purchaser may elect to treat all such acquisition premium under
the constant yield method, as described below under the heading "Election to
Treat All Interest Under the Constant Yield Method."
Variable Rate Regular Certificates
Regular Certificates may provide for interest based on a variable rate
permitted under the REMIC Regulations.
Unless otherwise indicated in the applicable prospectus supplement, the
depositor intends to treat Regular Certificates that provide for variable rates
in the same manner as obligations bearing a variable rate for original issue
discount reporting purposes. The amount of original issue discount with respect
to a Regular Certificate bearing a variable rate of interest will accrue in the
manner described above under "Original Issue Discount" with the yield to
maturity and future payments on such Regular Certificate generally to be
determined by assuming that interest will be payable for the life of the
Regular Certificate based on the initial rate (or, if different, the value of
the applicable variable rate as of the pricing date) for the relevant class.
Unless otherwise specified in the applicable prospectus supplement, the
depositor intends to treat such variable interest as qualified stated interest,
other than variable interest on an interest-only or super-premium class, which
will be treated as non-qualified stated interest includible in the stated
redemption price at maturity. Ordinary income reportable for any period will be
adjusted based on subsequent changes in the applicable interest rate index.
Although unclear under the OID Regulations, unless required otherwise by
applicable final regulations, the depositor intends to treat Regular
Certificates bearing an interest rate that is a weighted average of the net
interest rates on mortgage loans or MBS having fixed or adjustable rates, as
having qualified stated interest, except to the extent that initial "teaser"
rates cause sufficiently "back-loaded" interest to create more than de minimis
original issue discount. The yield on such Regular Certificates for purposes of
accruing original issue discount will be a hypothetical fixed rate based on the
fixed rates, in the case of fixed rate mortgage loans, and initial "teaser
rates" followed by fully indexed rates, in the case of adjustable rate mortgage
loans. In the case of adjustable rate mortgage loans, the applicable index used
to compute interest on the mortgage loans in effect on the pricing date (or
possibly the issue date) will be deemed to be in effect beginning with the
period in which the first weighted average adjustment date occurring after the
issue date occurs. Adjustments will be made in each accrual period either
increasing or decreasing the amount of ordinary income reportable to reflect
the actual Pass-Through Rate on the Regular Certificates.
Deferred Interest
Under the OID Regulations, all interest on a Regular Certificate as to
which there may be Deferred Interest is includible in the stated redemption
price at maturity thereof. Accordingly, any Deferred Interest that accrues with
respect to a class of Regular Certificates may constitute income to the holders
of such Regular Certificates prior to the time distributions of cash with
respect to such Deferred Interest are made.
Market Discount
A purchaser of a Regular Certificate also may be subject to the market
discount rules of Code Section 1276 through 1278. Under these Code sections and
the principles applied by the OID Regulations in the context of original issue
discount, "market discount" is the amount by which the purchaser's original
basis in the Regular Certificate:
83
o is exceeded by the then-current principal amount of the Regular
Certificate; or
o in the case of a Regular Certificate having original issue discount,
is exceeded by the adjusted issue price of such Regular Certificate at
the time of purchase.
Such purchaser generally will be required to recognize ordinary income to
the extent of accrued market discount on such Regular Certificate as
distributions includible in the stated redemption price at maturity thereof are
received, in an amount not exceeding any such distribution. Such market
discount would accrue in a manner to be provided in Treasury regulations and
should take into account the Prepayment Assumption. The Conference Committee
Report to the 1986 Act provides that until such regulations are issued, such
market discount would accrue either:
o on the basis of a constant interest rate; or
o in the ratio of stated interest allocable to the relevant period to
the sum of the interest for such period plus the remaining interest as
of the end of such period, or in the case of a Regular Certificate
issued with original issue discount, in the ratio of original issue
discount accrued for the relevant period to the sum of the original
issue discount accrued for such period plus the remaining original
issue discount as of the end of such period.
Such purchaser also generally will be required to treat a portion of any
gain on a sale or exchange of the Regular Certificate as ordinary income to the
extent of the market discount accrued to the date of disposition under one of
the foregoing methods, less any accrued market discount previously reported as
ordinary income as partial distributions in reduction of the stated redemption
price at maturity were received. Such purchaser will be required to defer
deduction of a portion of the excess of the interest paid or accrued on
indebtedness incurred to purchase or carry a Regular Certificate over the
interest distributable thereon. The deferred portion of such interest expense
in any taxable year generally will not exceed the accrued market discount on
the Regular Certificate for such year. Any such deferred interest expense is,
in general, allowed as a deduction not later than the year in which the related
market discount income is recognized or the Regular Certificate is disposed of.
As an alternative to the inclusion of market discount in income on the
foregoing basis, the Regular Certificateholder may elect to include market
discount in income currently as it accrues on all market discount instruments
acquired by such Regular Certificateholder in that taxable year or thereafter,
in which case the interest deferral rule will not apply. See "Election to Treat
All Interest Under the Constant Yield Method" below regarding an alternative
manner in which such election may be deemed to be made.
Market discount with respect to a Regular Certificate will be considered
to be zero if such market discount is less than 0.25% of the remaining stated
redemption price at maturity of such Regular Certificate multiplied by the
weighted average maturity of the Regular Certificate (determined as described
above in the third paragraph under "Original Issue Discount") remaining after
the date of purchase. It appears that de minimis market discount would be
reported in a manner similar to de minimis original issue discount. See
"Original Issue Discount" above. Treasury regulations implementing the market
discount rules have not yet been issued, and therefore investors should consult
their own tax advisors regarding the application of these rules. Investors
should also consult Revenue Procedure 92-67 concerning the elections to include
market discount in income currently and to accrue market discount on the basis
of the constant yield method.
Premium
A Regular Certificate purchased at a cost greater than its remaining
stated redemption price at maturity generally is considered to be purchased at
a premium. If the Regular Certificateholder holds such Regular Certificate as a
"capital asset" within the meaning of Code Section 1221, the Regular
Certificateholder may elect under Code Section 171 to amortize such premium
under the constant yield method. Treasury Regulations issued under Code Section
171 do not, by their terms, apply to Regular Certificates, which are prepayable
based on prepayments on the
84
underlying mortgage loans. However, the Conference Committee Report to the 1986
Act indicates a Congressional intent that the same rules that will apply to the
accrual of market discount on installment obligations will also apply to
amortizing bond premium under Code Section 171 on installment obligations such
as the Regular Certificates, although it is unclear whether the alternatives to
the constant yield method described above under "Market Discount" are
available. Amortizable bond premium will be treated as an offset to interest
income on a Regular Certificate rather than as a separate deduction item. See
"Election to Treat All Interest Under the Constant Yield Method" below
regarding an alternative manner in which the Code Section 171 election may be
deemed to be made.
Election to Treat All Interest Under the Constant Yield Method
A holder of a debt instrument such as a Regular Certificate may elect to
treat all interest that accrues on the instrument using the constant yield
method, with none of the interest being treated as qualified stated interest.
For purposes of applying the constant yield method to a debt instrument subject
to such an election:
o "interest" includes stated interest, original issue discount, de
minimis original issue discount, market discount and de minimis market
discount, as adjusted by any amortizable bond premium or acquisition
premium; and
o the debt instrument is treated as if the instrument were issued on the
holder's acquisition date in the amount of the holder's adjusted basis
immediately after acquisition.
It is unclear whether, for this purpose, the initial Prepayment Assumption
would continue to apply or if a new prepayment assumption as of the date of the
holder's acquisition would apply. A holder generally may make such an election
on an instrument by instrument basis or for a class or group of debt
instruments. However, if the holder makes such an election with respect to a
debt instrument with amortizable bond premium or with market discount, the
holder is deemed to have made elections to amortize bond premium or to report
market discount income currently as it accrues under the constant yield method,
respectively, for all debt instruments acquired by the holder in the same
taxable year or thereafter. The election is made on the holder's federal income
tax return for the year in which the debt instrument is acquired and is
irrevocable except with the approval of the Service. Investors should consult
their own tax advisors regarding the advisability of making such an election.
Sale or Exchange of Regular Certificates
If a Regular Certificateholder sells or exchanges a Regular Certificate,
the Regular Certificateholder will recognize gain or loss equal to the
difference, if any, between the amount received and its adjusted basis in the
Regular Certificate. The adjusted basis of a Regular Certificate generally will
equal the cost of the Regular Certificate to the seller, increased by any
original issue discount or market discount previously included in the seller's
gross income with respect to the Regular Certificate and reduced by amounts
included in the stated redemption price at maturity of the Regular Certificate
that were previously received by the seller, by any amortized premium and by
previously recognized losses.
Except as described above with respect to market discount, and except as
provided in this paragraph, any gain or loss on the sale or exchange of a
Regular Certificate realized by an investor who holds the Regular Certificate
as a capital asset will be capital gain or loss and will be long-term or
short-term depending on whether the Regular Certificate has been held for the
long-term capital gain holding period (currently more than one year). Such gain
will be treated as ordinary income:
o if a Regular Certificate is held as part of a "conversion transaction"
as defined in Code Section 1258(c), up to the amount of interest that
would have accrued on the Regular Certificateholder's net investment
in the conversion transaction at 120% of the appropriate applicable
Federal rate under Code Section 1274(d) in effect at the time the
taxpayer
85
entered into the transaction minus any amount previously treated as
ordinary income with respect to any prior distribution of property
that was held as a part of such transaction;
o in the case of a non-corporate taxpayer, to the extent such taxpayer
has made an election under Code Section 163(d)(4) to have net capital
gains taxed as investment income at ordinary rates; or
o to the extent that such gain does not exceed the excess, if any, of
(a) the amount that would have been includible in the gross income of
the holder if its yield on such Regular Certificate were 110% of the
applicable Federal rate as of the date of purchase, over (b) the
amount of income actually includible in the gross income of such
holder with respect to the Regular Certificate.
In addition, gain or loss recognized from the sale of a Regular
Certificate by certain banks or thrift institutions will be treated as ordinary
income or loss pursuant to Code Section 582(c). Capital gains of certain
non-corporate taxpayers generally are subject to a lower maximum tax rate than
ordinary income of such taxpayers for property held for more than one year. The
maximum tax rate for corporations is the same with respect to both ordinary
income and capital gains.
Holders that recognize a loss on a sale or exchange of a Regular
Certificate for federal income tax purposes in excess of certain threshold
amounts should consult their tax advisors as to the need to file IRS Form 8886
(disclosing certain potential tax shelters) on their federal income tax
returns.
Treatment of Losses
Holders of Regular Certificates will be required to report income with
respect to Regular Certificates on the accrual method of accounting, without
giving effect to delays or reductions in distributions attributable to defaults
or delinquencies on the mortgage loans allocable to a particular class of
Regular Certificates, except to the extent it can be established that such
losses are uncollectible. Accordingly, the holder of a Regular Certificate may
have income, or may incur a diminution in cash flow as a result of a default or
delinquency, but may not be able to take a deduction (subject to the discussion
below) for the corresponding loss until a subsequent taxable year. In this
regard, investors are cautioned that while they may generally cease to accrue
interest income if it reasonably appears that the interest will be
uncollectible, the Internal Revenue Service may take the position that original
issue discount must continue to be accrued in spite of its uncollectibility
until the debt instrument is disposed of in a taxable transaction or becomes
worthless in accordance with the rules of Code Section 166. To the extent the
rules of Code Section 166 regarding bad debts are applicable, it appears that
holders of Regular Certificates that are corporations or that otherwise hold
the Regular Certificates in connection with a trade or business should in
general be allowed to deduct as an ordinary loss any such loss sustained during
the taxable year on account of any such Regular Certificates becoming wholly or
partially worthless, and that, in general, holders of Regular Certificates that
are not corporations and do not hold the Regular Certificates in connection
with a trade or business will be allowed to deduct as a short-term capital loss
any loss with respect to principal sustained during the taxable year on account
of a portion of any class or subclass of such Regular Certificates becoming
wholly worthless. Holders of Regular Certificates are urged to consult their
own tax advisors regarding the appropriate timing, amount and character of any
loss sustained with respect to such Regular Certificates. While losses
attributable to interest previously reported as income should be deductible as
ordinary losses by both corporate and non-corporate holders, the Internal
Revenue Service may take the position that losses attributable to accrued
original issue discount may only be deducted as short-term capital losses by
non-corporate holders not engaged in a trade or business. Special loss rules
are applicable to banks and thrift institutions, including rules regarding
reserves for bad debts. Such taxpayers are advised to consult their tax
advisors regarding the treatment of losses on Regular Certificates.
86
TAXATION OF RESIDUAL CERTIFICATES
Taxation of REMIC Income
Generally, the "daily portions" of REMIC taxable income or net loss will
be includible as ordinary income or loss in determining the federal taxable
income of holders of Residual Certificates ("Residual Certificateholders"), and
will not be taxed separately to the REMIC Pool. The daily portions of REMIC
taxable income or net loss of a Residual Certificateholder are determined by
allocating the REMIC Pool's taxable income or net loss for each calendar
quarter ratably to each day in such quarter and by allocating such daily
portion among the Residual Certificateholders in proportion to their respective
holdings of Residual Certificates in the REMIC Pool on such day. REMIC taxable
income is generally determined in the same manner as the taxable income of an
individual using the accrual method of accounting, except that:
o the limitations on deductibility of investment interest expense and
expenses for the production of income do not apply;
o all bad loans will be deductible as business bad debts; and
o the limitation on the deductibility of interest and expenses related
to tax-exempt income will apply.
The REMIC Pool's gross income includes interest, original issue discount
income and market discount income, if any, on the mortgage loans, reduced by
amortization of any premium on the mortgage loans, plus income from
amortization of issue premium, if any, on the Regular Certificates, plus income
on reinvestment of cash flows and reserve assets, plus any cancellation of
indebtedness income upon allocation of realized losses to the Regular
Certificates. The REMIC Pool's deductions include interest and original issue
discount expense on the Regular Certificates, servicing fees on the mortgage
loans, other administrative expenses of the REMIC Pool and realized losses on
the mortgage loans. The requirement that Residual Certificateholders report
their pro rata share of taxable income or net loss of the REMIC Pool will
continue until there are no certificates of any class of the related series
outstanding.
The taxable income recognized by a Residual Certificateholder in any
taxable year will be affected by, among other factors, the relationship between
the timing of recognition of interest and original issue discount or market
discount income or amortization of premium with respect to the mortgage loans,
on the one hand, and the timing of deductions for interest (including original
issue discount) on the Regular Certificates or income from amortization of
issue premium on the Regular Certificates, on the other hand. In the event that
an interest in the mortgage loans is acquired by the REMIC Pool at a discount,
and one or more of such mortgage loans is prepaid, the Residual
Certificateholder may recognize taxable income without being entitled to
receive a corresponding amount of cash because:
o the prepayment may be used in whole or in part to make distributions
in reduction of principal on the Regular Certificates; and
o the discount on the mortgage loans which is includible in income may
exceed the deduction allowed upon such distributions on those Regular
Certificates on account of any unaccrued original issue discount
relating to those Regular Certificates.
When there is more than one class of Regular Certificates that distribute
principal sequentially, this mismatching of income and deductions is
particularly likely to occur in the early years following issuance of the
Regular Certificates when distributions in reduction of principal are being
made in respect of earlier classes of Regular Certificates to the extent that
such classes are not issued with substantial discount. If taxable income
attributable to such a mismatching is realized, in general, losses would be
allowed in later years as distributions on the later classes of Regular
Certificates are made. Taxable income may also be greater in earlier years than
in later years as a result of the fact that interest expense deductions,
expressed as a percentage of the outstanding principal amount of such a series
of Regular Certificates, may increase over time as
87
distributions in reduction of principal are made on the lower yielding classes
of Regular Certificates, whereas to the extent that the REMIC Pool includes
fixed rate mortgage loans, interest income with respect to any given mortgage
loan will remain constant over time as a percentage of the outstanding
principal amount of that loan. Consequently, Residual Certificateholders must
have sufficient other sources of cash to pay any federal, state or local income
taxes due as a result of such mismatching or unrelated deductions against which
to offset such income, subject to the discussion of "excess inclusions" below
under "Limitations on Offset or Exemption of REMIC Income" The timing of such
mismatching of income and deductions described in this paragraph, if present
with respect to a series of certificates, may have a significant adverse effect
upon the Residual Certificateholder's after-tax rate of return.
Basis and Losses
The amount of any net loss of the REMIC Pool that may be taken into
account by the Residual Certificateholder is limited to the adjusted basis of
the Residual Certificate as of the close of the quarter (or time of disposition
of the Residual Certificate if earlier), determined without taking into account
the net loss for the quarter. The initial adjusted basis of a purchaser of a
Residual Certificate is the amount paid for such Residual Certificate. Such
adjusted basis will be increased by the amount of taxable income of the REMIC
Pool reportable by the Residual Certificateholder and will be decreased (but
not below zero), first, by a cash distribution from the REMIC Pool and, second,
by the amount of loss of the REMIC Pool reportable by the Residual
Certificateholder. Any loss that is disallowed on account of this limitation
may be carried over indefinitely with respect to the Residual Certificateholder
as to whom such loss was disallowed and may be used by such Residual
Certificateholder only to offset any income generated by the same REMIC Pool.
A Residual Certificateholder will not be permitted to amortize directly
the cost of its Residual Certificate as an offset to its share of the taxable
income of the related REMIC Pool. However, that taxable income will not include
cash received by the REMIC Pool that represents a recovery of the REMIC Pool's
basis in its assets.
A Residual Certificate may have a negative value if the net present value
of anticipated tax liabilities exceeds the present value of anticipated cash
flows. The REMIC Regulations appear to treat the issue price of such a residual
interest as zero rather than such negative amount for purposes of determining
the REMIC Pool's basis in its assets. Regulations have been proposed addressing
the federal income tax treatment of "inducement fees" received by transferees
of non-economic residual interests. The proposed regulations would require
inducement fees to be included in income over a period reasonably related to
the period in which the related residual interest is expected to generate
taxable income or net loss to its holder. Under two proposed safe harbor
methods, inducement fees would be permitted to be included in income:
o in the same amounts and over the same period that the taxpayer uses
for financial reporting purposes, provided that such period is not
shorter than the period the REMIC is expected to generate taxable
income; or
o ratably over the remaining anticipated weighted average life of all
the regular and residual interests issued by the REMIC, determined
based on actual distributions projected as remaining to be made on
such interests under the Prepayment Assumption.
If the holder of a non-economic residual interest sells or otherwise
disposes of the non-economic residual interest, any unrecognized portion of the
inducement fee would be required to be taken into account at the time of the
sale or disposition. If these rules are adopted without change, they will apply
to taxable years ending on or after the date that they are published as final
regulations, and consequently these rules may govern the treatment of any
inducement fee received in connection with the purchase of the Residual
Certificates. Prospective purchasers of the Residual Certificates should
consult with their tax advisors regarding the effect of these proposed
regulations.
Further, to the extent that the initial adjusted basis of a Residual
Certificateholder (other than an original holder) in the Residual Certificate
is greater that the corresponding portion of the
88
REMIC Pool's basis in the mortgage loans, the Residual Certificateholder will
not recover a portion of such basis until termination of the REMIC Pool unless
future Treasury regulations provide for periodic adjustments to the REMIC
income otherwise reportable by such holder. The REMIC Regulations currently in
effect do not so provide. See "Treatment of Certain Items of REMIC Income and
Expense -- Market Discount" below regarding the basis of mortgage loans to the
REMIC Pool and "Sale or Exchange of a Residual Certificate" below regarding
possible treatment of a loss upon termination of the REMIC Pool as a capital
loss.
Treatment of Certain Items of REMIC Income and Expense
Although the depositor intends to compute REMIC income and expense in
accordance with the Code and applicable regulations, the authorities regarding
the determination of specific items of income and expense are subject to
differing interpretations. The depositor makes no representation as to the
specific method that it will use for reporting income with respect to the
mortgage loans and expenses with respect to the Regular Certificates, and
different methods could result in different timing of reporting of taxable
income or net loss to Residual Certificateholders or differences in capital
gain versus ordinary income.
Original Issue Discount and Premium. Generally, the REMIC Pool's
deductions for original issue discount and income from amortization of issue
premium will be determined in the same manner as original issue discount income
on Regular Certificates as described above under "Taxation of Regular
Certificates -- Original Issue Discount" and "-- Variable Rate Regular
Certificates," without regard to the de minimis rule described therein, and "--
Premium."
Deferred Interest. Any Deferred Interest that accrues with respect to any
adjustable rate mortgage loans held by the REMIC Pool will constitute income to
the REMIC Pool and will be treated in a manner similar to the Deferred Interest
that accrues with respect to Regular Certificates as described above under
"Taxation of Regular Certificates -- Deferred Interest."
Market Discount. The REMIC Pool will have market discount income in
respect of mortgage loans if, in general, the basis of the REMIC Pool allocable
to such mortgage loans is exceeded by their unpaid principal balances. The
REMIC Pool's basis in such mortgage loans is generally the fair market value of
the mortgage loans immediately after the transfer thereof to the REMIC Pool.
The REMIC Regulations provide that such basis is equal in the aggregate to the
issue prices of all regular and residual interests in the REMIC Pool (or the
fair market value thereof at the Closing Date, in the case of a retained
class). Market discount income generally should accrue in the manner described
above under "Taxation of Regular Certificates -- Market Discount."
Premium. Generally, if the basis of the REMIC Pool in the mortgage loans
exceeds the unpaid principal balances thereof, the REMIC Pool will be
considered to have acquired such mortgage loans at a premium equal to the
amount of such excess. As stated above, the REMIC Pool's basis in mortgage
loans is the fair market value of the mortgage loans, based on the aggregate of
the issue prices (or the fair market value of retained classes) of the regular
and residual interests in the REMIC Pool immediately after the transfer thereof
to the REMIC Pool. In a manner analogous to the discussion above under
"Taxation of Regular Certificates -- Premium," a REMIC Pool that holds a
mortgage loan as a capital asset under Code Section 1221 may elect under Code
Section 171 to amortize premium on whole mortgage loans or mortgage loans
underlying MBS that were originated after September 27, 1985 or MBS that are
REMIC regular interests under the constant yield method. Amortizable bond
premium will be treated as an offset to interest income on the mortgage loans,
rather than as a separate deduction item. To the extent that the mortgagors
with respect to the mortgage loans are individuals, Code Section 171 will not
be available for premium on mortgage loans (including underlying mortgage
loans) originated on or prior to September 27, 1985. Premium with respect to
such mortgage loans may be deductible in accordance with a reasonable method
regularly employed by the holder thereof. The allocation of such premium pro
rata among principal payments should be considered a reasonable method;
however, the Service may argue that such premium should be allocated in a
different manner, such as allocating such premium entirely to the final payment
of principal.
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Limitations on Offset or Exemption of REMIC Income
A portion or all of the REMIC taxable income includible in determining the
federal income tax liability of a Residual Certificateholder will be subject to
special treatment. That portion, referred to as the "excess inclusion," is
equal to the excess of REMIC taxable income for the calendar quarter allocable
to a Residual Certificate over the daily accruals for such quarterly period of:
o 120% of the long-term applicable Federal rate that would have applied
to the Residual Certificate (if it were a debt instrument) on the
Startup Day under Code Section 1274(d), multiplied by;
o the adjusted issue price of such Residual Certificate at the beginning
of such quarterly period.
For this purpose, the adjusted issue price of a Residual Certificate at
the beginning of a quarter is the issue price of the Residual Certificate, plus
the amount of such daily accruals of REMIC income described in this paragraph
for all prior quarters, decreased by any distributions made with respect to
such Residual Certificate prior to the beginning of such quarterly period.
Accordingly, the portion of the REMIC Pool's taxable income that will be
treated as excess inclusions will be a larger portion of such income as the
adjusted issue price of the Residual Certificates diminishes.
The portion of a Residual Certificateholder's REMIC taxable income
consisting of the excess inclusions generally may not be offset by other
deductions, including net operating loss carryforwards, on such Residual
Certificateholder's return. However, net operating loss carryovers are
determined without regard to excess inclusion income. Further, if the Residual
Certificateholder is an organization subject to the tax on unrelated business
income imposed by Code Section 511, the Residual Certificateholder's excess
inclusions will be treated as unrelated business taxable income of such
Residual Certificateholder for purposes of Code Section 511. In addition, REMIC
taxable income is subject to 30% withholding tax with respect to certain
persons who are not U.S. Persons (as defined below under "Tax-Related
Restrictions on Transfer of Residual Certificates -- Foreign Investors"), and
the portion thereof attributable to excess inclusions is not eligible for any
reduction in the rate of withholding tax (by treaty or otherwise). See
"Taxation of Certain Foreign Investors -- Residual Certificates" below.
Finally, if a real estate investment trust or a regulated investment company
owns a Residual Certificate, a portion (allocated under Treasury regulations
yet to be issued) of dividends paid by the real estate investment trust or a
regulated investment company could not be offset by net operating losses of its
shareholders, would constitute unrelated business taxable income for tax-exempt
shareholders, and would be ineligible for reduction of withholding to certain
persons who are not U.S. Persons.
The Code provides three rules for determining the effect of excess
inclusions on the alternative minimum taxable income of a Residual
Certificateholder. First, alternative minimum taxable income for a Residual
Certificateholder is determined without regard to the special rule, discussed
above, that taxable income cannot be less than excess inclusions. Second, a
Residual Certificateholder's alternative minimum taxable income for a taxable
year cannot be less than the excess inclusions for the year. Third, the amount
of any alternative minimum tax net operating loss deduction must be computed
without regard to any excess inclusions.
Tax-Related Restrictions on Transfer of Residual Certificates
Disqualified Organizations. If any legal or beneficial interest in a
Residual Certificate is transferred to a Disqualified Organization, a tax would
be imposed in an amount equal to the product of:
o the present value of the total anticipated excess inclusions with
respect to such Residual Certificate for periods after the transfer;
and
o the highest marginal federal income tax rate applicable to
corporations.
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The REMIC Regulations provide that the anticipated excess inclusions are
based on actual prepayment experience to the date of the transfer and projected
payments based on the Prepayment Assumption. The present value rate equals the
applicable Federal rate under Code Section 1274(d) as of the date of the
transfer for a term ending with the last calendar quarter in which excess
inclusions are expected to accrue. Such a tax generally would be imposed on the
transferor of the Residual Certificate, except that where such transfer is
through an agent (including a broker, nominee or other middleman) for a
Disqualified Organization, the tax would instead be imposed on such agent.
However, a transferor of a Residual Certificate would in no event be liable for
such tax with respect to a transfer if the transferee furnishes to the
transferor an affidavit that the transferee is not a Disqualified Organization
and, as of the time of the transfer, the transferor does not have actual
knowledge that such affidavit is false.
In addition, if a Pass-Through Entity has excess inclusion income with
respect to a Residual Certificate during a taxable year and a Disqualified
Organization is the record holder of an equity interest in such entity, then a
tax is imposed on such entity equal to the product of:
o the amount of excess inclusions on the Residual Certificate that are
allocable to the interest in the Pass-Through Entity during the period
such interest is held by such Disqualified Organization; and
o the highest marginal federal corporate income tax rate.
Such tax would be deductible from the ordinary gross income of the
Pass-Through Entity for the taxable year. The Pass-Through Entity would not be
liable for such tax if it has received an affidavit from such record holder
that it is not a Disqualified Organization or stating such holder's taxpayer
identification number and, during the period such person is the record holder
of the Residual Certificate, the Pass-Through Entity does not have actual
knowledge that such affidavit is false.
If an "electing large partnership" holds a Residual Certificate, all
interests in the electing large partnership are treated as held by Disqualified
Organizations for purposes of the tax imposed upon a Pass-Through Entity by
section 860E(c) of the Code. An exception to this tax, otherwise available to a
Pass-Through Entity that is furnished certain affidavits by record holders of
interests in the entity and that does not know such affidavits are false, is
not available to an electing large partnership.
For these purposes:
o "Disqualified Organization" means the United States, any state or
political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of
the foregoing (provided, that such term does not include an
instrumentality if all of its activities are subject to tax and a
majority of its board of directors is not selected by any such
governmental entity), any cooperative organization furnishing electric
energy or providing telephone service to persons in rural areas as
described in Code Section 1381(a)(2)(C), and any organization (other
than a farmers' cooperative described in Code Section 521) that is
exempt from taxation under the Code unless such organization is
subject to the tax on unrelated business income imposed by Code
Section 511;
o "Pass-Through Entity" means any regulated investment company, real
estate investment trust, common trust fund, partnership, trust or
estate and certain corporations operating on a cooperative basis
(except as may be provided in Treasury regulations, any person holding
an interest in a Pass-Through Entity as a nominee for another will,
with respect to such interest, be treated as a Pass-Through Entity);
and
o an "electing large partnership" means any partnership having more than
100 members during the preceding tax year (other than certain service
partnerships and commodity pools), which elect to apply simplified
reporting provisions under the Code.
The Pooling Agreement with respect to a series of certificates will
provide that no legal or beneficial interest in a Residual Certificate may be
transferred unless:
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o the proposed transferee provides to the transferor and the trustee an
affidavit providing its taxpayer identification number and stating
that such transferee is the beneficial owner of the Residual
Certificate, is not a Disqualified Organization and is not purchasing
such Residual Certificates on behalf of a Disqualified Organization
(i.e., as a broker, nominee or middleman thereof); and
o the transferor provides a statement in writing to the depositor and
the trustee that it has no actual knowledge that such affidavit is
false.
Moreover, the Pooling Agreement will provide that any attempted or
purported transfer in violation of these transfer restrictions will be null and
void and will vest no rights in any purported transferee. Each Residual
Certificate with respect to a series will bear a legend referring to such
restrictions on transfer, and each Residual Certificateholder will be deemed to
have agreed, as a condition of ownership thereof, to any amendments to the
related Pooling Agreement required under the Code or applicable Treasury
regulations to effectuate the foregoing restrictions. Information necessary to
compute an applicable excise tax must be furnished to the Service and to the
requesting party within 60 days of the request, and the depositor or the
trustee may charge a fee for computing and providing such information.
Noneconomic Residual Interests. The REMIC Regulations would disregard
certain transfers of Residual Certificates, in which case the transferor would
continue to be treated as the owner of the Residual Certificates and thus would
continue to be subject to tax on its allocable portion of the net income of the
REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual
interest" (as defined below) to a Residual Certificateholder (other than a
Residual Certificateholder who is not a U.S. Person, as defined below under "--
Foreign Investors") is disregarded for all federal income tax purposes if a
significant purpose of the transferor is to impede the assessment or collection
of tax. A residual interest in a REMIC (including a residual interest with a
positive value at issuance) is a "noneconomic residual interest" unless, at the
time of the transfer:
o the present value of the expected future distributions on the residual
interest at least equals the product of the present value of the
anticipated excess inclusions and the highest corporate income tax
rate in effect for the year in which the transfer occurs; and
o the transferor reasonably expects that the transferee will receive
distributions from the REMIC at or after the time at which taxes
accrue on the anticipated excess inclusions in an amount sufficient to
satisfy the accrued taxes.
The anticipated excess inclusions and the present value rate are
determined in the same manner as set forth above under "-- Disqualified
Organizations." The REMIC Regulations explain that a significant purpose to
impede the assessment or collection of tax exists if the transferor, at the
time of the transfer, either knew or should have known that the transferee
would be unwilling or unable to pay taxes due on its share of the taxable
income of the REMIC. A safe harbor is provided if:
o the transferor conducted, at the time of the transfer, a reasonable
investigation of the financial condition of the transferee and found
that the transferee historically had paid its debts as they came due
and found no significant evidence to indicate that the transferee
would not continue to pay its debts as they came due in the future;
o 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
o transferee represents that it will not cause income from the 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 U.S. Person.
The transferor must have no actual knowledge or reason to know that those
statements are false. The Pooling Agreement with respect to each series of
certificates will require the transferee
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of a Residual Certificate to certify to the matters in the bullet points set
forth above as part of the affidavit described above under the heading
"Disqualified Organizations." The transferor must have no actual knowledge or
reason to know that such statements are false.
In addition to the three conditions set forth above for the transferor of
a noneconomic residual interest to be presumed not to have knowledge that the
transferee would be unwilling or unable to pay taxes due on its share of the
taxable income of the REMIC, recently issued Treasury regulations require a
fourth condition for the transferor to be presumed to lack such knowledge. The
condition must be satisfied in one of the 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 must not exceed the sum of:
(i) the present value of any consideration given to the transferee to
acquire the interest;
(ii) the present value of the expected future distributions on the
interest;
(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 "minimum transfer price"
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
generally are 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 such transfer
and the compounding period used by the transferee; or
(b) (i) the transferee must be 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 assets tests (generally, $100 million of gross assets and
$10 million of net assets for the current year and the two
preceding fiscal years);
(ii) the transferee must agree in writing that it will transfer the
Residual Certificate 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 must not reasonably indicate that the
taxes associated with ownership of the Residual Certificate will
not be paid by the transferee.
Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Certificate that has "tax avoidance potential" to a "foreign person"
will be disregarded for all federal tax purposes. This rule appears intended to
apply to a transferee who is not a "U.S. Person" (as defined below), unless
such transferee's income is effectively connected with the conduct of a trade
or business within the United States. A Residual Certificate is deemed to have
tax avoidance potential unless, at the time of the transfer, (i) the future
value of expected distributions equals at least 30% of the anticipated excess
inclusions after the transfer, and (ii) the transferor reasonably expects that
the transferee will receive sufficient distributions from the REMIC Pool at or
after the time at which the excess inclusions accrue and prior to the end of
the next succeeding taxable year for the accumulated withholding tax liability
to be paid. If the non-U.S. Person transfers the Residual Certificate back to a
U.S. Person, the transfer will be disregarded and the foreign transferor will
continue to be treated as the owner unless arrangements are made so that the
transfer does not have the effect of allowing the transferor to avoid tax on
accrued excess inclusions.
The prospectus supplement relating to a series of certificates may provide
that a Residual Certificate may not be purchased by or transferred to any
person that is not a U.S. Person or may
93
describe the circumstances and restrictions pursuant to which such a transfer
may be made. The term "U.S. Person" means a citizen or resident of the United
States, a corporation, partnership (except to the extent provided in applicable
Treasury regulations) or other entity created or organized in or under the laws
of the United States, any state thereof or the District of Columbia, an estate
that is subject to United States federal income tax regardless of the source of
its income or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more
United States persons have the authority to control all substantial decisions
of such trust (or, to the extent provided in applicable Treasury regulations,
certain trusts in existence on August 20, 1996 which are eligible to elect to
be treated as U.S. Persons if such election has been made).
Sale or Exchange of a Residual Certificate
Upon the sale or exchange of a Residual Certificate, the Residual
Certificateholder will recognize gain or loss equal to the excess, if any, of
the amount realized over the adjusted basis (as described above under "Taxation
of Residual Certificates -- Basis and Losses") of such Residual
Certificateholder in such Residual Certificate at the time of the sale or
exchange. In addition to reporting the taxable income of the REMIC Pool, a
Residual Certificateholder will have taxable income to the extent that any cash
distribution to it from the REMIC Pool exceeds such adjusted basis on that
Distribution Date. Such income will be treated as gain from the sale or
exchange of the Residual Certificate. It is possible that the termination of
the REMIC Pool may be treated as a sale or exchange of a Residual
Certificateholder's Residual Certificate, in which case, if the Residual
Certificateholder has an adjusted basis in such Residual Certificateholder's
Residual Certificate remaining when its interest in the REMIC Pool terminates,
and if such Residual Certificateholder holds such Residual Certificate as a
capital asset under Code Section 1221, then such Residual Certificateholder
will recognize a capital loss at that time in the amount of such remaining
adjusted basis.
Any gain on the sale of a Residual Certificate will be treated as ordinary
income (i) if a Residual Certificate is held as part of a "conversion
transaction" as defined in Code Section 1258(c), up to the amount of interest
that would have accrued on the Residual Certificateholder's net investment in
the conversion transaction at 120% of the appropriate applicable Federal rate
in effect at the time the taxpayer entered into the transaction minus any
amount previously treated as ordinary income with respect to any prior
disposition of property that was held as a part of such transaction or (ii) in
the case of a non-corporate taxpayer, to the extent such taxpayer has made an
election under Code Section 163(d)(4) to have net capital gains taxed as
investment income at ordinary income rates. In addition, gain or loss
recognized from the sale of a Residual Certificate by certain banks or thrift
institutions will be treated as ordinary income or loss pursuant to Code
Section 582(c).
The Conference Committee Report to the 1986 Act provides that, except as
provided in Treasury regulations yet to be issued, the wash sale rules of Code
Section 1091 will apply to dispositions of Residual Certificates where the
seller of the Residual Certificate, during the period beginning six months
before the sale or disposition of the Residual Certificate and ending six
months after such sale or disposition, acquires (or enters into any other
transaction that results in the application of Section 1091) any residual
interest in any REMIC or any interest in a "taxable mortgage pool" (such as a
non-REMIC owner trust) that is economically comparable to a Residual
Certificate.
Mark to Market Regulations
The Service has issued regulations under Code Section 475 relating to the
requirement that a securities dealer mark to market securities held for sale to
customers. These regulations provide that, for purposes of this mark-to-market
requirement, a Residual Certificate is not treated as a security and thus may
not be marked to market.
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TAXES THAT MAY BE IMPOSED ON THE REMIC POOL
Prohibited Transactions
Income from certain transactions by the REMIC Pool, called prohibited
transactions, will not be part of the calculation of income or loss includible
in the federal income tax returns of Residual Certificateholders, but rather
will be taxed directly to the REMIC Pool at a 100% rate. Prohibited
transactions generally include:
o the disposition of a qualified mortgage other than for (a)
substitution within two years of the Startup Day for a defective
(including a defaulted) obligation (or repurchase in lieu of
substitution of a defective (including a defaulted) obligation at any
time) or for any qualified mortgage within three months of the Startup
Day, (b) foreclosure, default or imminent default of a qualified
mortgage, (c) bankruptcy or insolvency of the REMIC Pool or (d) a
qualified (complete) liquidation;
o the receipt of income from assets that are not the type of mortgages
or investments that the REMIC Pool is permitted to hold;
o the receipt of compensation for services; or
o the receipt of gain from disposition of cash flow investments other
than pursuant to a qualified liquidation.
Notwithstanding the first or fourth bullet points set forth above, it is
not a prohibited transaction to sell REMIC Pool property to prevent a default
on Regular Certificates as a result of a default on qualified mortgages or to
facilitate a clean-up call (generally, an optional termination to save
administrative costs when no more than a small percentage of the certificates
is outstanding). The REMIC Regulations indicate that the modification of a
mortgage loan generally will not be treated as a disposition if it is
occasioned by a default or reasonably foreseeable default, an assumption of the
mortgage loan, the waiver of a due-on-sale or due-on-encumbrance clause or the
conversion of an interest rate by a mortgagor pursuant to the terms of a
convertible adjustable rate mortgage loan.
Contributions to the REMIC Pool After the Startup Day
In general, the REMIC Pool will be subject to a tax at a 100% rate on the
value of any property contributed to the REMIC Pool after the Startup Day.
Exceptions are provided for cash contributions to the REMIC Pool:
o during the three months following the Startup Day;
o made to a qualified reserve fund by a Residual Certificateholder;
o in the nature of a guarantee;
o made to facilitate a qualified liquidation or clean-up call; and
o as otherwise permitted in Treasury regulations yet to be issued.
Net Income from Foreclosure Property
The REMIC Pool will be subject to federal income tax at the highest
corporate rate on "net income from foreclosure property," determined by
reference to the rules applicable to real estate investment trusts. Generally,
property acquired by deed in lieu of foreclosure would be treated as
"foreclosure property" for a period ending with the third calendar year
following the year of acquisition of such property, with a possible extension.
Net income from foreclosure property generally means gain from the sale of a
foreclosure property that is inventory property and gross income from
foreclosure property other than qualifying rents and other qualifying income
for a real estate investment trust.
It is not anticipated that the REMIC Pool will receive income or
contributions subject to tax under the preceding three paragraphs, except as
described in the applicable prospectus
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supplement with respect to net income from foreclosure property on a commercial
or multifamily residential property that secured a mortgage loan.
LIQUIDATION OF THE REMIC POOL
If a REMIC Pool adopts a plan of complete liquidation, within the meaning
of Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in
the REMIC Pool's final tax return a date on which such adoption is deemed to
occur, and sells all of its assets (other than cash) within a 90-day period
beginning on the date of the adoption of the plan of liquidation, the REMIC
Pool will not be subject to the prohibited transaction rules on the sale of its
assets, provided that the REMIC Pool credits or distributes in liquidation all
of the sale proceeds plus its cash (other than amounts retained to meet claims)
to holders of Regular Certificates and Residual Certificateholders within the
90-day period.
ADMINISTRATIVE MATTERS
The REMIC Pool will be required to maintain its books on a calendar year
basis and to file federal income tax returns for federal income tax purposes in
a manner similar to a partnership. The form for such income tax return is Form
1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.
The trustee will be required to sign the REMIC Pool's returns. Treasury
regulations provide that, except where there is a single Residual
Certificateholder for an entire taxable year, the REMIC Pool will be subject to
the procedural and administrative rules of the Code applicable to partnerships,
including the determination by the Service of any adjustments to, among other
things, items of REMIC income, gain, loss, deduction or credit in a unified
administrative proceeding. The Residual Certificateholder owning the largest
percentage interest in the Residual Certificates will be obligated to act as
"tax matters person, " as defined in applicable Treasury regulations, with
respect to the REMIC Pool. Each Residual Certificateholder will be deemed, by
acceptance of such Residual Certificates, to have agreed:
o to the appointment of the tax matters person as provided in the
preceding sentence; and
o to the irrevocable designation of the master servicer as agent for
performing the functions of the tax matters person.
LIMITATIONS ON DEDUCTION OF CERTAIN EXPENSES
An investor who is an individual, estate or trust will be subject to
limitation with respect to certain itemized deductions described in Code
Section 67, to the extent that such itemized deductions, in the aggregate, do
not exceed 2% of the investor's adjusted gross income. In addition, Code
Section 68 provides that itemized deductions otherwise allowable for a taxable
year of an individual taxpayer will be reduced by the lesser of:
o 3% of the excess, if any, of adjusted gross income over a threshold
amount; or
o 80% of the amount of itemized deductions otherwise allowable for such
year.
These limitations will be phased out over the period 2006--2010. In the
case of a REMIC Pool, such deductions may include deductions under Code Section
212 for the servicing fee and all administrative and other expenses relating to
the REMIC Pool, or any similar expenses allocated to the REMIC Pool with
respect to a regular interest it holds in another REMIC. Such investors who
hold REMIC Certificates either directly or indirectly through certain
pass-through entities may have their pro rata share of such expenses allocated
to them as additional gross income, but may be subject to such limitation on
deductions. In addition, such expenses are not deductible at all for purposes
of computing the alternative minimum tax, and may cause such investors to be
subject to significant additional tax liability. Temporary Treasury regulations
provide that the additional gross income and corresponding amount of expenses
generally are to be allocated entirely to the holders of Residual Certificates
in the case of a REMIC Pool that would not qualify as a fixed investment trust
in the absence of a REMIC election. However, such additional gross
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income and limitation on deductions will apply to the allocable portion of such
expenses to holders of Regular Certificates, as well as holders of Residual
Certificates, where such Regular Certificates are issued in a manner that is
similar to pass-through certificates in a fixed investment trust. In general,
such allocable portion will be determined based on the ratio that a REMIC
Certificateholder's income, determined on a daily basis, bears to the income of
all holders of Regular Certificates and Residual Certificates with respect to a
REMIC Pool. As a result, individuals, estates or trusts holding REMIC
Certificates (either directly or indirectly through a grantor trust,
partnership, S corporation, REMIC, or certain other pass-through entities
described in the foregoing temporary Treasury regulations) may have taxable
income in excess of the interest income at the pass-through rate on Regular
Certificates that are issued in a single class or otherwise consistently with
fixed investment trust status or in excess of cash distributions for the
related period on Residual Certificates. Unless otherwise indicated in the
applicable prospectus supplement, all such expenses will be allocable to the
Residual Certificates.
TAXATION OF CERTAIN FOREIGN INVESTORS
Regular Certificates
Interest, including original issue discount, distributable to Regular
Certificateholders who are nonresident aliens, foreign corporations, or other
Non-U.S. Persons (as defined below), will be considered "portfolio interest"
and, therefore, generally will not be subject to 30% United States withholding
tax, provided that such Non-U.S. Person:
o is not a "10-percent shareholder" within the meaning of Code Section
871(h)(3)(B) or a controlled foreign corporation described in Code
Section 881(c)(3)(C); and
o provides the trustee, or the person who would otherwise be required to
withhold tax from such distributions under Code Section 1441 or 1442,
with an appropriate statement, signed under penalties of perjury,
identifying the beneficial owner and stating, among other things, that
the beneficial owner of the Regular Certificate is a Non-U.S. Person.
If such statement, or any other required statement, is not provided, 30%
withholding will apply unless reduced or eliminated pursuant to an applicable
tax treaty or unless the interest on the Regular Certificate is effectively
connected with the conduct of a trade or business within the United States by
such Non-U.S. Person. In the latter case, such Non-U.S. Person will be subject
to United States federal income tax at regular rates. Prepayment Premiums
distributable to Regular Certificateholders who are Non-U.S. Persons may be
subject to 30% United States withholding tax. Investors who are Non-U.S.
Persons should consult their own tax advisors regarding the specific tax
consequences to them of owning a Regular Certificate. The term "Non-U.S.
Person" means any person who is not a U.S. Person.
The IRS issued final regulations which would provide alternative methods
of satisfying the beneficial ownership certification requirement described
above. For example, these regulations will require, in the case of Regular
Certificates held by a foreign partnership, that:
o the certification described above be provided by the partners rather
than by the foreign partnership; and
o the partnership provide certain information, including a United States
taxpayer identification number. A look-through rule would apply in the
case of tiered partnerships. Non-U.S. Persons should consult their own
tax advisors concerning the application of the certification
requirements in these regulations.
Residual Certificates
The Conference Committee Report to the 1986 Act indicates that amounts
paid to Residual Certificateholders who are Non-U.S. Persons are treated as
interest for purposes of the 30% (or lower treaty rate) United States
withholding tax. Treasury regulations provide that amounts distributed to
Residual Certificateholders may qualify as "portfolio interest," subject to the
conditions described in "Regular Certificates" above, but only to the extent
that:
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o the mortgage loans (including mortgage loans underlying MBS) were
issued after July 18, 1984; and
o the trust fund or segregated pool of assets therein (as to which a
separate REMIC election will be made), to which the Residual
Certificate relates, consists of obligations issued in "registered
form" within the meaning of Code Section 163(f)(1).
Generally, whole mortgage loans will not be, but MBS and regular interests
in another REMIC Pool will be, considered obligations issued in registered
form. Furthermore, a Residual Certificateholder will not be entitled to any
exemption from the 30% withholding tax (or lower treaty rate) to the extent of
that portion of REMIC taxable income that constitutes an "excess inclusion."
See "Taxation of Residual Certificates -- Limitations on Offset or Exemption of
REMIC Income." If the amounts paid to Residual Certificateholders who are
Non-U.S. Persons are effectively connected with the conduct of a trade or
business within the United States by such Non-U.S. Persons, 30% (or lower
treaty rate) withholding will not apply. Instead, the amounts paid to such
Non-U.S. Persons will be subject to United States federal income tax at regular
rates. If 30% (or lower treaty rate) withholding is applicable, such amounts
generally will be taken into account for purposes of withholding only when paid
or otherwise distributed (or when the Residual Certificate is disposed of)
under rules similar to withholding upon disposition of debt instruments that
have original issue discount. See "Tax-Related Restrictions on Transfer of
Residual Certificates -- Foreign Investors" above concerning the disregard of
certain transfers having "tax avoidance potential." Investors who are Non-U.S.
Persons should consult their own tax advisors regarding the specific tax
consequences to them of owning Residual Certificates.
BACKUP WITHHOLDING
Distributions made on the Regular Certificates, and proceeds from the sale
of the Regular Certificates to or through certain brokers, may be subject to a
"backup" withholding tax under Code Section 3406 of 28% (which rate is
scheduled to increase to 31% after 2010) on "reportable payments" (including
interest distributions, original issue discount, and, under certain
circumstances, principal distributions) unless the Regular Certificateholder
complies with certain reporting and/or certification procedures, including the
provision of its taxpayer identification number to the trustee, its agent or
the broker who effected the sale of the Regular Certificate, or such
certificateholder is otherwise an exempt recipient under applicable provisions
of the Code. Any amounts to be withheld from distribution on the Regular
Certificates would be refunded by the Service or allowed as a credit against
the Regular Certificateholder's federal income tax liability. Investors are
urged to contact their own tax advisors regarding the application to them of
backup withholding and information reporting.
REPORTING REQUIREMENTS
Reports of accrued interest, original issue discount and information
necessary to compute the accrual of any market discount on the Regular
Certificates will be made annually to the Service and to individuals, estates,
non-exempt and non-charitable trusts, and partnerships who are either holders
of record of Regular Certificates or beneficial owners who own Regular
Certificates through a broker or middleman as nominee. All brokers, nominees
and all other non-exempt holders of record of Regular Certificates (including
corporations, non-calendar year taxpayers, securities or commodities dealers,
real estate investment trusts, investment companies, common trust funds, thrift
institutions and charitable trusts) may request such information for any
calendar quarter by telephone or in writing by contacting the person designated
in Service Publication 938 with respect to a particular series of Regular
Certificates. Holders through nominees must request such information from the
nominee.
The Service's Form 1066 has an accompanying Schedule Q, Quarterly Notice
to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation.
Treasury regulations require that Schedule Q be furnished by the REMIC Pool to
each Residual Certificateholder by the end of the month following the close of
each calendar quarter (41 days after the end of a quarter under proposed
Treasury regulations) in which the REMIC Pool is in existence.
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Treasury regulations require that, in addition to the foregoing
requirements, information must be furnished quarterly to Residual
Certificateholders, furnished annually, if applicable, to holders of Regular
Certificates, and filed annually with the Service concerning Code Section 67
expenses (see "Limitations on Deduction of Certain Expenses" above) allocable
to such holders. Furthermore, under such regulations, information must be
furnished quarterly to Residual Certificateholders, furnished annually to
holders of Regular Certificates, and filed annually with the Service concerning
the percentage of the REMIC Pool's assets meeting the qualified asset tests
described above under "Status of REMIC Certificates."
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FEDERAL INCOME TAX CONSEQUENCES
FOR CERTIFICATES AS TO WHICH NO
REMIC ELECTION IS MADE
STANDARD CERTIFICATES
General
In the event that no election is made to treat a trust fund (or a
segregated pool of assets therein) with respect to a series of certificates
that are not designated as "Stripped Certificates," as described below, as a
REMIC (Certificates of such a series hereinafter referred to as "Standard
Certificates"), in the opinion of Cadwalader, Wickersham & Taft LLP or Latham &
Watkins LLP, counsel to the depositor, the trust fund will be classified as a
grantor trust under subpart E, Part 1 of subchapter J of the Code and not as an
association taxable as a corporation or a "taxable mortgage pool" within the
meaning of Code Section 7701(i). Where there is no fixed retained yield with
respect to the mortgage loans underlying the Standard Certificates, the holder
of each such Standard Certificate (a "Standard Certificateholder") in such
series will be treated as the owner of a pro rata undivided interest in the
ordinary income and corpus portions of the trust fund represented by its
Standard Certificate and will be considered the beneficial owner of a pro rata
undivided interest in each of the mortgage loans, subject to the discussion
below under "Recharacterization of Servicing Fees." Accordingly, the holder of
a Standard Certificate of a particular series will be required to report on its
federal income tax return its pro rata share of the entire income from the
mortgage loans represented by its Standard Certificate, including interest at
the coupon rate on such mortgage loans, original issue discount (if any),
prepayment fees, assumption fees, and late payment charges received by the
master servicer, in accordance with such Standard Certificateholder's method of
accounting. A Standard Certificateholder generally will be able to deduct its
share of the servicing fee and all administrative and other expenses of the
trust fund in accordance with its method of accounting, provided that such
amounts are reasonable compensation for services rendered to that trust fund.
However, investors who are individuals, estates or trusts who own Standard
Certificates, either directly or indirectly through certain pass-through
entities, will be subject to limitation with respect to certain itemized
deductions described in Code Section 67, including deductions under Code
Section 212 for the servicing fee and all such administrative and other
expenses of the trust fund, to the extent that such deductions, in the
aggregate, do not exceed two percent of an investor's adjusted gross income. In
addition, Code Section 68 provides that itemized deductions otherwise allowable
for a taxable year of an individual taxpayer will be reduced by the lesser of
(i) 3% of the excess, if any, of adjusted gross income over a threshold amount
or (ii) 80% of the amount of itemized deductions otherwise allowable for such
year. These limitations will be phased out over the period 2006--2010. As a
result, such investors holding Standard Certificates, directly or indirectly
through a pass-through entity, may have aggregate taxable income in excess of
the aggregate amount of cash received on such Standard Certificates with
respect to interest at the pass-through rate on such Standard Certificates. In
addition, such expenses are not deductible at all for purposes of computing the
alternative minimum tax, and may cause such investors to be subject to
significant additional tax liability. Moreover, where there is fixed retained
yield with respect to the mortgage loans underlying a series of Standard
Certificates or where the servicing fee is in excess of reasonable servicing
compensation, the transaction will be subject to the application of the
"stripped bond" and "stripped coupon" rules of the Code, as described below
under "Stripped Certificates" and "Recharacterization of Servicing Fees,"
respectively.
Tax Status
Standard Certificates will have the following status for federal income
tax purposes:
1. A Standard Certificate owned by a "domestic building and loan
association" within the meaning of Code Section 7701(a)(19) will be
considered to represent "loans . . . secured by an interest in real
property which is . . . residential real property" within the meaning of
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Code Section 7701(a)(19)(C)(v), provided that the real property securing
the mortgage loans represented by that Standard Certificate is of the type
described in such section of the Code.
2. A Standard Certificate owned by a real estate investment trust will
be considered to represent "real estate assets" within the meaning of Code
Section 856(c)(5)(B) to the extent that the assets of the related trust
fund consist of qualified assets, and interest income on such assets will
be considered "interest on obligations secured by mortgages on real
property" to such extent within the meaning of Code Section 856(c)(3)(B).
3. A Standard Certificate owned by a REMIC will be considered to
represent an "obligation . . . which is principally secured by an interest
in real property" within the meaning of Code Section 860G(a)(3)(A) to the
extent that the assets of the related trust fund consist of "qualified
mortgages" within the meaning of Code Section 860G(a)(3).
Premium and Discount
Standard Certificateholders are advised to consult with their tax advisors
as to the federal income tax treatment of premium and discount arising either
upon initial acquisition of Standard Certificates or thereafter.
Premium. The treatment of premium incurred upon the purchase of a Standard
Certificate will be determined generally as described above under "Certain
Federal Income Tax Consequences for REMIC Certificates -- Taxation of Residual
Certificates -- Treatment of Certain Items of REMIC Income and Expense --
Premium."
Original Issue Discount. The original issue discount rules will be
applicable to a Standard Certificateholder's interest in those mortgage loans
as to which the conditions for the application of those sections are met. Rules
regarding periodic inclusion of original issue discount income are applicable
to mortgages of corporations originated after May 27, 1969, mortgages of
noncorporate mortgagors (other than individuals) originated after July 1, 1982,
and mortgages of individuals originated after March 2, 1984. Under the OID
Regulations, such original issue discount could arise by the charging of points
by the originator of the mortgages in an amount greater than a statutory de
minimis exception, including a payment of points currently deductible by the
borrower under applicable Code provisions or, under certain circumstances, by
the presence of "teaser rates" on the mortgage loans.
Original issue discount must generally be reported as ordinary gross
income as it accrues under a constant interest method that takes into account
the compounding of interest, in advance of the cash attributable to such
income. Unless indicated otherwise in the applicable prospectus supplement, no
prepayment assumption will be assumed for purposes of such accrual. However,
Code Section 1272 provides for a reduction in the amount of original issue
discount includible in the income of a holder of an obligation that acquires
the obligation after its initial issuance at a price greater than the sum of
the original issue price and the previously accrued original issue discount,
less prior payments of principal. Accordingly, if such mortgage loans acquired
by a Standard Certificateholder are purchased at a price equal to the then
unpaid principal amount of such mortgage loans, no original issue discount
attributable to the difference between the issue price and the original
principal amount of such mortgage loans (i.e., points) will be includible by
such holder.
Market Discount. Standard Certificateholders also will be subject to the
market discount rules to the extent that the conditions for application of
those sections are met. Market discount on the mortgage loans will be
determined and will be reported as ordinary income generally in the manner
described above under "Certain Federal Income Tax Consequences for REMIC
Certificates -- Taxation of Regular Certificates -- Market Discount," except
that the ratable accrual methods described therein will not apply and it is
unclear whether a Prepayment Assumption would apply. Rather, the holder will
accrue market discount pro rata over the life of the mortgage loans, unless the
constant yield method is elected. Unless indicated otherwise in the applicable
prospectus supplement, no prepayment assumption will be assumed for purposes of
such accrual.
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Recharacterization of Servicing Fees
If the servicing fee paid to the master servicer were deemed to exceed
reasonable servicing compensation, the amount of such excess would represent
neither income nor a deduction to certificateholders. In this regard, there are
no authoritative guidelines for federal income tax purposes as to either the
maximum amount of servicing compensation that may be considered reasonable in
the context of this or similar transactions or whether, in the case of the
Standard Certificate, the reasonableness of servicing compensation should be
determined on a weighted average or loan-by-loan basis. If a loan-by-loan basis
is appropriate, the likelihood that such amount would exceed reasonable
servicing compensation as to some of the mortgage loans would be increased.
Service guidance indicates that a servicing fee in excess of reasonable
compensation ("excess servicing") will cause the mortgage loans to be treated
under the "stripped bond" rules. Such guidance provides safe harbors for
servicing deemed to be reasonable and requires taxpayers to demonstrate that
the value of servicing fees in excess of such amounts is not greater than the
value of the services provided.
Accordingly, if the Service's approach is upheld, a servicer who receives
a servicing fee in excess of such amounts would be viewed as retaining an
ownership interest in a portion of the interest payments on the mortgage loans.
Under the rules of Code Section 1286, the separation of ownership of the right
to receive some or all of the interest payments on an obligation from the right
to receive some or all of the principal payments on the obligation would result
in treatment of such mortgage loans as "stripped coupons" and "stripped bonds."
Subject to the de minimis rule discussed below under "-- Stripped
Certificates," each stripped bond or stripped coupon could be considered for
this purpose as a non-interest bearing obligation issued on the date of issue
of the Standard Certificates, and the original issue discount rules of the Code
would apply to the holder thereof. While Standard Certificateholders would
still be treated as owners of beneficial interests in a grantor trust for
federal income tax purposes, the corpus of such trust could be viewed as
excluding the portion of the mortgage loans the ownership of which is
attributed to the master servicer, or as including such portion as a second
class of equitable interest. Applicable Treasury regulations treat such an
arrangement as a fixed investment trust, since the multiple classes of trust
interests should be treated as merely facilitating direct investments in the
trust assets and the existence of multiple classes of ownership interests is
incidental to that purpose. In general, such a recharacterization should not
have any significant effect upon the timing or amount of income reported by a
Standard Certificateholder, except that the income reported by a cash method
holder may be slightly accelerated. See "Stripped Certificates" below for a
further description of the federal income tax treatment of stripped bonds and
stripped coupons.
Sale or Exchange of Standard Certificates
Upon sale or exchange of a Standard Certificate, a Standard
Certificateholder will recognize gain or loss equal to the difference between
the amount realized on the sale and its aggregate adjusted basis in the
mortgage loans and the other assets represented by the Standard Certificate. In
general, the aggregate adjusted basis will equal the Standard
Certificateholder's cost for the Standard Certificate, increased by the amount
of any income previously reported with respect to the Standard Certificate and
decreased by the amount of any losses previously reported with respect to the
Standard Certificate and the amount of any distributions received thereon.
Except as provided above with respect to market discount on any mortgage loans,
and except for certain financial institutions subject to the provisions of Code
Section 582(c), any such gain or loss would be capital gain or loss if the
Standard Certificate was held as a capital asset. However, gain on the sale of
a Standard Certificate will be treated as ordinary income:
o if a Standard Certificate is held as part of a "conversion
transaction" as defined in Code Section 1258(c), up to the amount of
interest that would have accrued on the Standard Certificateholder's
net investment in the conversion transaction at 120% of the
appropriate applicable Federal rate in effect at the time the taxpayer
entered into the transaction
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minus any amount previously treated as ordinary income with respect to
any prior disposition of property that was held as a part of such
transaction; or
o in the case of a non-corporate taxpayer, to the extent such taxpayer
has made an election under Code Section 163(d)(4) to have net capital
gains taxed as investment income at ordinary income rates.
Capital gains of certain non-corporate taxpayers generally are subject to
a lower maximum tax rate than ordinary income of such taxpayers for property
held for more than one year. The maximum tax rate for corporations is the same
with respect to both ordinary income and capital gains.
Holders that recognize a loss on a sale or exchange of a Standard
Certificate for federal income tax purposes in excess of certain threshold
amounts should consult their tax advisors as to the need to file IRS Form 8886
(disclosing certain potential tax shelters) on their federal income tax
returns.
STRIPPED CERTIFICATES
General
Pursuant to Code Section 1286, the separation of ownership of the right to
receive some or all of the principal payments on an obligation from ownership
of the right to receive some or all of the interest payments results in the
creation of "stripped bonds" with respect to principal payments and "stripped
coupons" with respect to interest payments. For purposes of this discussion,
certificates that are subject to those rules will be referred to as "Stripped
Certificates." Stripped Certificates include interest-only certificates
entitled to distributions of interest, with disproportionately small, nominal
or no distributions of principal and principal-only certificates entitled to
distributions of principal, with disproportionately small, nominal or no
distributions of interest as to which no REMIC election is made.
The certificates will be subject to those rules if:
o the depositor or any of its affiliates retains (for its own account or
for purposes of resale), in the form of fixed retained yield or
otherwise, an ownership interest in a portion of the payments on the
mortgage loans;
o the master servicer is treated as having an ownership interest in the
mortgage loans to the extent it is paid (or retains) servicing
compensation in an amount greater than reasonable consideration for
servicing the mortgage loans (see "Standard Certificates --
Recharacterization of Servicing Fees" above); and
o certificates are issued in two or more classes or subclasses
representing the right to non-pro-rata percentages of the interest and
principal payments on the mortgage loans.
In general, a holder of a Stripped Certificate will be considered to own
"stripped bonds" with respect to its pro rata share of all or a portion of the
principal payments on each mortgage loan and/or "stripped coupons" with respect
to its pro rata share of all or a portion of the interest payments on each
mortgage loan, including the Stripped Certificate's allocable share of the
servicing fees paid to the master servicer, to the extent that such fees
represent reasonable compensation for services rendered. See discussion above
under "Standard Certificates -- Recharacterization of Servicing Fees." Although
not free from doubt, for purposes of reporting to Stripped Certificateholders,
the servicing fees will be allocated to the Stripped Certificates in proportion
to the respective entitlements to distributions of each class (or subclass) of
Stripped Certificates for the related period or periods. The holder of a
Stripped Certificate generally will be entitled to a deduction each year in
respect of the servicing fees, as described above under "Standard Certificates
- -- General," subject to the limitation described therein. Code Section 1286
treats a stripped bond or a stripped coupon as an obligation issued at an
original issue discount on the date that such stripped interest is purchased.
Although the treatment of Stripped
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Certificates for federal income tax purposes is not clear in certain respects
at this time, particularly where such Stripped Certificates are issued with
respect to a mortgage pool containing variable-rate mortgage loans:
o the trust fund will be treated as a grantor trust under subpart E,
Part 1 of subchapter J of the Code and not as an association taxable
as a corporation or a "taxable mortgage pool" within the meaning of
Code Section 7701(i); and
o unless otherwise specified in the related prospectus supplement, each
Stripped Certificate should be treated as a single installment
obligation for purposes of calculating original issue discount and
gain or loss on disposition.
This treatment is based on the interrelationship of Code Section 1286,
Code Sections 1272 through 1275, and the OID Regulations. While under Code
Section 1286 computations with respect to Stripped Certificates arguably should
be made in one of the ways described below under "Taxation of Stripped
Certificates -- Possible Alternative Characterizations," the OID Regulations
state, in general, that two or more debt instruments issued by a single issuer
to a single investor in a single transaction should be treated as a single debt
instrument for original issue discount purposes. The Pooling Agreement requires
that the trustee make and report all computations described below using this
aggregate approach, unless substantial legal authority requires otherwise.
Furthermore, Treasury regulations issued December 28, 1992 provide for the
treatment of a Stripped Certificate as a single debt instrument issued on the
date it is purchased for purposes of calculating any original issue discount.
In addition, under these regulations, a Stripped Certificate that represents a
right to payments of both interest and principal may be viewed either as issued
with original issue discount or market discount (as described below), at a de
minimis original issue discount, or, presumably, at a premium. This treatment
suggests that the interest component of such a Stripped Certificate would be
treated as qualified stated interest under the OID Regulations. Further, these
final regulations provide that the purchaser of such a Stripped Certificate
will be required to account for any discount as market discount rather than
original issue discount if either:
o the initial discount with respect to the Stripped Certificate was
treated as zero under the de minimis rule; or
o no more than 100 basis points in excess of reasonable servicing is
stripped off the related mortgage loans.
Any such market discount would be reportable as described under "Certain
Federal Income Tax Consequences for REMIC Certificates -- Taxation of Regular
Certificates -- Market Discount," without regard to the de minimis rule
therein, assuming that a prepayment assumption is employed in such computation.
Status of Stripped Certificates
No specific legal authority exists as to whether the character of the
Stripped Certificates, for federal income tax purposes, will be the same as
that of the mortgage loans. Although the issue is not free from doubt, Stripped
Certificates owned by applicable holders should be considered to represent
"real estate assets" within the meaning of Code Section 856(c)(5)(B),
"obligation[s] principally secured by an interest in real property" within the
meaning of Code Section 860G(a)(3)(A), and "loans . . . secured by an interest
in real property which is . . . residential real property" within the meaning
of Code Section 7701(a)(19)(C)(v), and interest (including original issue
discount) income attributable to Stripped Certificates should be considered to
represent "interest on obligations secured by mortgages on real property"
within the meaning of Code Section 856(c)(3)(B), provided that in each case the
mortgage loans and interest on such mortgage loans qualify for such treatment.
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Taxation of Stripped Certificates
Original Issue Discount. Except as described above under "General," each
Stripped Certificate may be considered to have been issued at an original issue
discount for federal income tax purposes. Original issue discount with respect
to a Stripped Certificate must be included in ordinary income as it accrues, in
accordance with a constant interest method that takes into account the
compounding of interest, which may be prior to the receipt of the cash
attributable to such income. Based in part on the OID Regulations and the
amendments to the original issue discount sections of the Code made by the 1986
Act, the amount of original issue discount required to be included in the
income of a holder of a Stripped Certificate (referred to in this discussion as
a "Stripped Certificateholder") in any taxable year likely will be computed
generally as described above under "Federal Income Tax Consequences for REMIC
Certificates -- Taxation of Regular Certificates -- Original Issue Discount"
and "-- Variable Rate Regular Certificates." However, with the apparent
exception of a Stripped Certificate qualifying as a market discount obligation,
as described above under "General," the issue price of a Stripped Certificate
will be the purchase price paid by each holder thereof, and the stated
redemption price at maturity will include the aggregate amount of the payments,
other than qualified stated interest to be made on the Stripped Certificate to
such Stripped Certificateholder, presumably under the Prepayment Assumption.
If the mortgage loans prepay at a rate either faster or slower than that
under the Prepayment Assumption, a Stripped Certificateholder's recognition of
original issue discount will be either accelerated or decelerated and the
amount of such original issue discount will be either increased or decreased
depending on the relative interests in principal and interest on each mortgage
loan represented by such Stripped Certificateholder's Stripped Certificate. It
is unclear under what circumstances, if any, the prepayment of mortgage loans
or MBS will give rise to a loss to the holder of a Stripped Certificate. If the
certificate is treated as a single instrument rather than an interest in
discrete mortgage loans and the effect of prepayments is taken into account in
computing yield with respect to the grantor trust certificate, it appears that
no loss will be available as a result of any particular prepayment unless
prepayments occur at a rate sufficiently faster than the assumed prepayment
rate so that the certificateholder will not recover its investment. However, if
the certificate is treated as an interest in discrete mortgage loans or MBS, or
if no prepayment assumption is used, then when a mortgage loan or MBS is
prepaid, the holder of the certificate should be able to recognize a loss equal
to the portion of the adjusted issue price of the certificate that is allocable
to the mortgage loan or MBS. Holders of Stripped Certificates are urged to
consult with their own tax advisors regarding the proper treatment of these
certificates for federal income tax purposes.
As an alternative to the method described above, the fact that some or all
of the interest payments with respect to the Stripped Certificates will not be
made if the mortgage loans are prepaid could lead to the interpretation that
such interest payments are "contingent" within the meaning of the OID
Regulations. The OID Regulations, as they relate to the treatment of contingent
interest, are by their terms not applicable to prepayable securities such as
the Stripped Certificates. However, if final regulations dealing with
contingent interest with respect to the Stripped Certificates apply the same
principles as the OID Regulations, such regulations may lead to different
timing of income inclusion that would be the case under the OID Regulations.
Furthermore, application of such principles could lead to the characterization
of gain on the sale of contingent interest Stripped Certificates as ordinary
income. Investors should consult their tax advisors regarding the appropriate
tax treatment of Stripped Certificates.
Sale or Exchange of Stripped Certificates. Sale or exchange of a Stripped
Certificate prior to its maturity will result in gain or loss equal to the
difference, if any, between the amount received and the Stripped
Certificateholder's adjusted basis in such Stripped Certificate, as described
above under "Certain Federal Income Tax Consequences for REMIC Certificates --
Taxation of Regular Certificates -- Sale or Exchange of Regular Certificates."
It is not clear for this purpose
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whether the assumed prepayment rate that is to be used in the case of a
Stripped Certificateholder other than an original Stripped Certificateholder
should be the Prepayment Assumption or a new rate based on the circumstances at
the date of subsequent purchase.
Holders that recognize a loss on a sale or exchange of a Stripped
Certificate for federal income tax purposes in excess of certain threshold
amounts should consult their tax advisors as to the need to file IRS Form 8886
(disclosing certain potential tax shelters) on their federal income tax
returns.
Purchase of More Than One Class of Stripped Certificates. Where an
investor purchases more than one class of Stripped Certificates, it is
currently unclear whether for federal income tax purposes such classes of
Stripped Certificates should be treated separately or aggregated for purposes
of the rules described above.
Possible Alternative Characterizations. The characterizations of the
Stripped Certificates discussed above are not the only possible interpretations
of the applicable Code provisions. For example, the Stripped Certificateholder
may be treated as the owner of:
o one installment obligation consisting of such Stripped Certificate's
pro rata share of the payments attributable to principal on each
mortgage loan and a second installment obligation consisting of such
Stripped Certificate's pro rata share of the payments attributable to
interest on each mortgage loan;
o as many stripped bonds or stripped coupons as there are scheduled
payments of principal and/or interest on each mortgage loan; or
o a separate installment obligation for each mortgage loan, representing
the Stripped Certificate's pro rata share of payments of principal
and/or interest to be made with respect thereto. Alternatively, the
holder of one or more classes of Stripped Certificates may be treated
as the owner of a pro rata fractional undivided interest in each
mortgage loan to the extent that such Stripped Certificate, or classes
of Stripped Certificates in the aggregate, represent the same pro rata
portion of principal and interest on each such mortgage loan, and a
stripped bond or stripped coupon (as the case may be), treated as an
installment obligation or contingent payment obligation, as to the
remainder. Final regulations issued on December 28, 1992 regarding
original issue discount on stripped obligations make the foregoing
interpretations less likely to be applicable. The preamble to those
regulations states that they are premised on the assumption that an
aggregation approach is appropriate for determining whether original
issue discount on a stripped bond or stripped coupon is de minimis,
and solicits comments on appropriate rules for aggregating stripped
bonds and stripped coupons under Code Section 1286.
Because of these possible varying characterizations of Stripped
Certificates and the resultant differing treatment of income recognition,
Stripped Certificateholders are urged to consult their own tax advisors
regarding the proper treatment of Stripped Certificates for federal income tax
purposes.
REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
The trustee will furnish, within a reasonable time after the end of each
calendar year, to each Standard Certificateholder or Stripped Certificateholder
at any time during such year, such information (prepared on the basis described
above) as the trustee deems to be necessary or desirable to enable such
certificateholders to prepare their federal income tax returns. Such
information will include the amount of original issue discount accrued on
certificates held by persons other than certificateholders exempted from the
reporting requirements. The amounts required to be reported by the trustee may
not be equal to the proper amount of original issue discount required to be
reported as taxable income by a certificateholder, other than an original
certificateholder that purchased at the issue price. In particular, in the case
of Stripped Certificates, unless provided otherwise in the applicable
prospectus supplement, such reporting will be based upon a representative
initial offering price of each class of Stripped Certificates. The
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trustee will also file such original issue discount information with the
Service. If a certificateholder fails to supply an accurate taxpayer
identification number or if the Secretary of the Treasury determines that a
certificateholder has not reported all interest and dividend income required to
be shown on his federal income tax return, 28% (which rate is scheduled to
increase to 31% after 2010) backup withholding may be required in respect of
any reportable payments, as described above under "Certain Federal Income Tax
Consequences for REMIC Certificates -- Backup Withholding."
On June 20, 2002, the Service published proposed regulations which will,
when effective, 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 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:
o a custodian of a person's account;
o a nominee; and
o 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.
TAXATION OF CERTAIN FOREIGN INVESTORS
To the extent that a certificate evidences ownership in mortgage loans
that are issued on or before July 18, 1984, interest or original issue discount
paid by the person required to withhold tax under Code Section 1441 or 1442 to
nonresident aliens, foreign corporations, or other Non-U.S. Persons generally
will be subject to 30% United States withholding tax, or such lower rate as may
be provided for interest by an applicable tax treaty. Accrued original issue
discount recognized by the Standard Certificateholder or Stripped
Certificateholder on the sale or exchange of such a certificate also will be
subject to federal income tax at the same rate.
Treasury regulations provide that interest or original issue discount paid
by the trustee or other withholding agent to a Non-U.S. Person evidencing
ownership interest in mortgage loans issued after July 18, 1984 will be
"portfolio interest" and will be treated in the manner, and such persons will
be subject to the same certification requirements, described above under
"Certain Federal Income Tax Consequences for REMIC Certificates -- Taxation of
Certain Foreign Investors -- Regular Certificates."
STATE AND OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described in "Certain
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 tax law may differ substantially from the
corresponding federal 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 tax advisors with respect
to the various tax consequences of investments in the offered certificates.
CERTAIN ERISA CONSIDERATIONS
GENERAL
Sections 404 and 406 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), impose certain fiduciary requirements and
prohibited transaction restrictions on employee pension and welfare benefit
plans subject to ERISA ("ERISA Plans") and on certain
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other arrangements, including bank collective investment funds and insurance
company general and separate accounts in which such ERISA Plans are invested.
Section 4975 of the Code imposes essentially the same prohibited transaction
restrictions on tax-qualified retirement plans described in Section 401(a) of
the Code and on Individual Retirement Accounts described in Section 408 of the
Code (collectively, "Tax Favored Plans").
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) (collectively
with ERISA Plans and Tax-Favored plans, "Plans") are not subject to ERISA
requirements. Accordingly, assets of such plans may be invested in offered
certificates without regard to the ERISA considerations described below,
subject to the provisions of other applicable federal and state law ("Similar
Law"). Any such plan which is qualified and exempt from taxation under Sections
401(a) and 501(a) of the Code is subject to the prohibited transaction rules
set forth in Section 503 of 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, Section 406 of ERISA and Section
4975 of the Code prohibit a broad range of transactions involving assets of a
Plan and persons ("Parties in Interest" within the meaning of ERISA and
"disqualified persons" within the meaning of the Code; collectively, "Parties
in Interest") who have certain specified relationships to the Plan, unless a
statutory, regulatory or administrative exemption is available with respect to
any such transaction. Pursuant to Section 4975 of the Code, certain Parties in
Interest to a prohibited transaction may be subject to a nondeductible 15% per
annum excise tax on the amount involved in such transaction, which excise tax
increases to 100% if the Party in Interest involved in the transaction does not
correct such transaction during the taxable period. In addition, such Party in
Interest may be subject to a penalty imposed pursuant to Section 502(i) of
ERISA. The United States Department of Labor ("DOL") and participants,
beneficiaries and fiduciaries of ERISA Plans may generally enforce violations
of ERISA, including the prohibited transaction provisions. If the prohibited
transaction amounts to a breach of fiduciary responsibility under ERISA, a 20%
civil penalty may be imposed on the fiduciary or other person participating in
the breach.
PLAN ASSET REGULATIONS
Certain transactions involving the trust fund, including a Plan's
investment in offered certificates, might be deemed to constitute prohibited
transactions under ERISA, the Code or Similar Law if the underlying Mortgage
Assets and other assets included in a related trust fund are deemed to be
assets of such Plan. Section 2510.3-101 of the DOL regulations (the "Plan Asset
Regulations") defines the term "Plan Assets" for purposes of applying the
general fiduciary responsibility provisions of ERISA and the prohibited
transaction provisions of ERISA and the Code. Under the Plan Asset Regulations,
generally, 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
here apply, or unless the equity participation in the entity by "benefit plan
investors" (i.e., ERISA Plans and certain employee benefit plans not subject to
ERISA) is not "significant," both as defined therein. For this purpose, in
general, equity participation by benefit plan investors will be "significant"
on any date if 25% or more of the value of any class of equity interests in the
entity is held by benefit plan investors. 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.
The prohibited transaction provisions of Section 406 of ERISA and Section
4975 of the Code may apply to a trust fund and cause the depositor, the master
servicer, any special servicer, any sub-servicer, any manager, the trustee, the
obligor under any credit enhancement mechanism or certain affiliates thereof to
be considered or become Parties in Interest with respect to an investing Plan
(or of a Plan holding an interest in an investing entity). If so, the
acquisition or
108
holding of certificates by or on behalf of the investing Plan could also give
rise to a prohibited transaction under ERISA, the Code or Similar Law, unless
some statutory, regulatory or administrative exemption is available.
Certificates acquired by a Plan may be assets of that Plan. Under the Plan
Asset Regulations, the trust fund, including the mortgage assets and the other
assets held in the trust fund, may also be deemed to be Plan Assets of each
Plan that acquires certificates. Special caution should be exercised before
Plan Assets are used to acquire a certificate in such circumstances, especially
if, with respect to such assets, the depositor, the master servicer, any
special servicer, any sub-servicer, any manager, the trustee, the obligor under
any credit enhancement mechanism or an affiliate thereof either:
o has investment discretion with respect to the investment of Plan
Assets; or
o has authority or responsibility to give (or regularly gives)
investment advice with respect to Plan Assets for a fee pursuant to an
agreement or understanding that such advice will serve as a primary
basis for investment decisions with respect to such Plan Assets.
Any person who has discretionary authority or control respecting the
management or disposition of Plan Assets, and any person who provides
investment advice with respect to such assets for a fee, is a fiduciary of the
investing Plan. If the mortgage assets and other assets included in a trust
fund constitute Plan Assets, then any party exercising management or
discretionary control regarding those assets, such as the master servicer, any
special servicer, any sub-servicer, the trustee, the obligor under any credit
enhancement mechanism, or certain affiliates thereof may be deemed to be a Plan
"fiduciary" and thus subject to the fiduciary responsibility provisions and
prohibited transaction provisions of ERISA and the Code with respect to the
investing Plan. In addition, if the mortgage assets and other assets included
in a trust fund 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 or the Code.
The Plan Asset Regulations provide that where a Plan acquires a
"guaranteed governmental mortgage pool certificate," the Plan's assets include
such certificate but do not solely by reason of the Plan's holdings of such
certificate include any of the mortgages underlying such certificate. The Plan
Asset Regulations include in the definition of a "guaranteed governmental
mortgage pool certificate" FHLMC Certificates, GNMA Certificates, FNMA
Certificates and FAMC Certificates. Accordingly, even if such MBS included in a
trust fund were deemed to be assets of Plan investors, the mortgages underlying
such MBS would not be treated as assets of such Plans. Private label mortgage
participations, mortgage pass-through certificates or other mortgage-backed
securities are not "guaranteed governmental mortgage pool certificates" within
the meaning of the Plan Asset Regulations. Potential Plan investors should
consult their counsel and review the ERISA discussion in the related prospectus
supplement before purchasing any such certificates.
PROHIBITED TRANSACTION EXEMPTIONS
The DOL granted an individual exemption, DOL Final Authorization Number
97-03E, as amended by Prohibited Transaction Exemption 97-34, Prohibited
Transaction Exemption 2000-58 and Prohibited Transaction Exemption 2002-41 (the
"Exemption"), to Deutsche Bank AG, New York Branch ("DBNY") and to a
predecessor to Deutsche Bank Securities, Inc. ("DBSI") which generally exempts
from the application of the prohibited transaction provisions of Section 406 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 initial
purchase, holding and subsequent resale of mortgage pass-through certificates
underwritten by an Underwriter (as hereinafter defined), provided that certain
conditions set forth in the Exemption are satisfied. For purposes of this
Section "Certain ERISA Considerations," the term "Underwriter" shall include
(a) DBNY and DBSI, (b) any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with DBNY
and DBSI and (c) any member of the underwriting syndicate or selling group of
which a person described in (a) or (b) is a manager or co-manager with respect
to a class of certificates.
109
The Exemption sets forth five general conditions which must be satisfied
for the Exemption to apply. The conditions are as follows:
first, the acquisition of certificates by a Plan or with Plan Assets 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 certificates at the time of acquisition by a Plan or with Plan
Assets 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., Moody's Investors Service, Inc. or Fitch, Inc. (collectively, the
"Exemption Rating Agencies");
third, the trustee cannot be an affiliate of any member of the Restricted
Group, other than an Underwriter; the "Restricted Group" consists of any
Underwriter, the depositor, the trustee, the master servicer, any sub-servicer,
any party that is considered a "sponsor" within the meaning of the Exemption
and any obligor with respect to assets included in the trust fund constituting
more than 5% of the aggregate unamortized principal balance of the assets in
the 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)
must represent not more than reasonable compensation for underwriting the
certificates; the sum of all payments made to and retained by the depositor
pursuant to the assignment of the 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 Agreement and reimbursement of such
person's reasonable expenses in connection therewith; and
fifth, the Exemption states that the investing Plan or Plan Asset investor
must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of
the Commission under the Securities Act of 1933, as amended.
The Exemption also requires that the trust fund meet the following
requirements:
o the trust fund must consist solely of assets of the type that have
been included in other investment pools;
o certificates evidencing interests in such other investment pools must
have been rated in one of the four highest categories of one of the
Exemption Rating Agencies for at least one year prior to the
acquisition of certificates by or on behalf of a Plan or with Plan
Assets; and
o certificates evidencing interests in such other investment pools must
have been purchased by investors other than Plans for at least one
year prior to any acquisition of certificates by or on behalf of a
Plan or with Plan Assets.
A fiduciary of a Plan or any person investing Plan Assets intending to
purchase a certificate must make its own determination that the conditions set
forth above will be satisfied with respect to such certificate.
If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(a) and
407(a) of ERISA, and 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 the direct or indirect sale, exchange, transfer, holding or the
direct or indirect acquisition or disposition in the secondary market of
certificates by a Plan or with Plan Assets. 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 purposes of the certificates,
an Excluded Plan is a Plan sponsored by any member of the Restricted Group.
110
If certain specific conditions of the Exemption are also satisfied, the
Exemption may provide an exemption from the restrictions imposed by Sections
406(b)(1) and (b)(2) of ERISA, and the excise taxes imposed by Sections 4975(a)
and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code, in
connection with:
o the direct or indirect sale, exchange or transfer of certificates in
the initial issuance of certificates between the depositor or an
Underwriter and a Plan when the person who has discretionary authority
or renders investment advice with respect to the investment of Plan
Assets in the certificates is (a) a mortgagor with respect to 5% or
less of the fair market value of the trust fund or (b) an affiliate of
such a person;
o the direct or indirect acquisition or disposition in the secondary
market of certificates by a Plan; and
o the holding of certificates by a Plan or with Plan Assets.
Further, if certain specific conditions of the Exemption are satisfied,
the Exemption may provide an exemption from the restrictions imposed by
Sections 406(a), 406(b) and 407 of ERISA, and the excise taxes imposed by
Sections 4975(a) and (b) of the Code by reason of Section 4975(c) of the Code
for transactions in connection with the servicing, management and operation of
the trust fund. The depositor expects that the specific conditions of the
Exemption required for this purpose will be satisfied with respect to the
Certificates so that the Exemption would provide an exemption from the
restrictions imposed by Sections 406(a) and (b) of ERISA (as well as the excise
taxes imposed by Sections 4975(a) and (b) of the Code by reason of Section
4975(c) of the Code) for transactions in connection with the servicing,
management and operation of the trust fund, provided that the general
conditions of the Exemption are satisfied.
The Exemption also may provide an exemption from the restrictions imposed
by Sections 406(a) and 407(a) of ERISA, and the excise taxes imposed by Section
4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of
the Code if such restrictions are deemed to otherwise apply merely because a
person is deemed to be a Party in Interest with respect to an investing Plan by
virtue of providing services to the Plan (or by virtue of having certain
specified relationships to such a person) solely as a result of the Plan's
ownership of certificates.
Because the exemptive relief afforded by the Exemption (or any similar
exemption that might be available) will not apply to the purchase, sale or
holding of certain certificates, such as Residual Certificates or any
certificates ("ERISA Restricted Certificates") which are not rated in one of
the four highest generic rating categories by at least one of the Exemption
Rating Agencies, transfers of such certificates to a Plan, to a trustee or
other person acting on behalf of any Plan, or to any other person investing
Plan Assets to effect such acquisition will not be registered by the trustee
unless the transferee provides the depositor, the trustee and the master
servicer with an opinion of counsel satisfactory to the depositor, the trustee
and the master servicer, which opinion will not be at the expense of the
depositor, the trustee or the master servicer, that the purchase of such
certificates by or on behalf of such Plan is permissible under applicable law,
will not constitute or result in any nonexempt prohibited transaction under
ERISA or Section 4975 of the Code or Similar Law and will not subject the
depositor, the trustee or the master servicer to any obligation in addition to
those undertaken in the Agreement.
In lieu of such opinion of counsel with respect to ERISA Restricted
Certificates, the transferee may provide a certification substantially to the
effect that the purchase of ERISA Restricted Certificates by or on behalf of
such Plan is permissible under applicable law, will not constitute or result in
any nonexempt prohibited transaction under ERISA or Section 4975 of the Code,
will not subject the depositor, the trustee or the master servicer to any
obligation in addition to those undertaken in the Pooling Agreement and the
following conditions are satisfied:
o the transferee is an insurance company and the source of funds used to
purchase such ERISA Restricted Certificates is an "insurance company
general account" (as such term is defined in PTCE 95-60); and
o the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied; and
111
o there is no Plan with respect to which the amount of such general
account's reserves and for contracts held by or on behalf of such Plan
and all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same employee
organization exceed 10% of the total of all reserves and liabilities
of such general account (as determined under PTCE 95-60) as of the
date of the acquisition of such ERISA Restricted Certificates.
The purchaser or any transferee of any interest in an ERISA Restricted
Certificate or Residual Certificate that is not a definitive certificate, by
the act of purchasing such certificate, shall be deemed to represent that it is
not a Plan or directly or indirectly purchasing such certificate or interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of a
Plan. The ERISA Restricted Certificates and Residual Certificates will contain
a legend describing such restrictions on transfer and the Pooling Agreement
will provide that any attempted or purported transfer in violation of these
transfer restrictions will be null and void.
There can be no assurance that any DOL exemption will apply with respect
to any particular Plan that acquires the certificates or, even if all the
conditions specified therein were satisfied, that any such exemption would
apply to all transactions involving the trust fund. Prospective Plan investors
should consult with their legal counsel concerning the impact of ERISA, the
Code and Similar Law and the potential consequences to their specific
circumstances prior to making an investment in the certificates. Neither the
depositor, the trustee, the master servicer nor any of their respective
affiliates will make any representation to the effect that the certificates
satisfy all legal requirements with respect to the investment therein by Plans
generally or any particular Plan or to the effect that the certificates are an
appropriate investment for Plans generally or any particular Plan.
Before purchasing a certificate (other than an ERISA Restricted
Certificate, Residual Certificate or any certificate which is not rated in one
of the four highest generic rating categories by at least one of the Exemption
Rating Agencies), a fiduciary of a Plan should itself confirm that (a) all the
specific and general conditions set forth in the Exemption would be satisfied
and (b) the certificate constitutes a "certificate" for purposes of the
Exemption. In addition, a Plan fiduciary should consider its general fiduciary
obligations under ERISA in determining whether to purchase a certificate on
behalf of a Plan. Finally, a Plan fiduciary should consider the fact that the
DOL, in granting the Exemption, may not have had under its consideration
interests in pools of the exact nature of some of the certificates described
herein.
TAX EXEMPT INVESTORS
A Plan that is exempt from federal income taxation pursuant to Section 501
of the Code (a "Tax Exempt Investor") nonetheless will be subject to federal
income taxation to the extent that its income is "unrelated business taxable
income" ("UBTI") within the meaning of Section 512 of the Code. All "excess
inclusions" of a REMIC allocated to a Residual Certificate held by a Tax-Exempt
Investor will be considered UBTI and thus will be subject to federal income
tax. See "Certain Federal Income Tax Consequences -- Federal Income Tax
Consequences for REMIC Certificates -- Taxation of Residual Certificates --
Limitations on Offset or Exemption of REMIC Income."
LEGAL INVESTMENT
If so specified in the related prospectus supplement, certain classes of
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 certificates that qualify as "mortgage related
securities" will be those that:
o are rated in one of two highest rating categories by at least one
nationally recognized statistical rating organization; and
o 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.
112
The appropriate characterization of those 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 certificates, may be subject to
significant interpretive uncertainties. 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 Non-SMMEA Certificates constitute legal investments for them.
Those classes of 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 those entities.
Under SMMEA, a number of states enacted legislation, on or prior to the
October 3, 1991 cutoff for those enactments, limiting to varying 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, certificates satisfying the rating and qualified
originator requirements for "mortgage related securities, " but evidencing
interests in a trust fund consisting, in whole or in part, of first liens on
one or more parcels of real estate upon which are located one or more
commercial structures, states were authorized to enact legislation, on or
before September 23, 2001, specifically referring to Section 347 and
prohibiting or restricting the purchase, holding or investment by
state-regulated entities in such types of certificates. Accordingly, the
investors affected by any state legislation overriding the preemptive effect of
SMMEA will be authorized to invest in certificates qualifying as "mortgage
related securities" only to the extent provided in such 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 "residential mortgage-related securities" and
"commercial mortgage-related securities." As so defined, "residential
mortgage-related security" and "commercial 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 class
of offered certificates will qualify as "commercial mortgage-related
securities, " and thus as "Type IV securities," for investment by national
banks.
113
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,
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 certificates.
All depository institutions considering an investment in the 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 OCC, the Federal Deposit
Insurance Corporation 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
or state authorities should review rules, policies and guidelines adopted from
time to time by those authorities before purchasing any certificates, as
certain series or classes may be deemed unsuitable investments, or may
otherwise be restricted, under such 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 prohibit investment in securities which are not
"interest-bearing" or "income-paying," and, with regard to any 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 certificates for legal investment purposes, financial
institution regulatory purposes, or other purposes, or as to the ability of
particular investors to purchase certificates under applicable legal investment
restrictions. The uncertainties described above (and any unfavorable future
determinations concerning legal investment or financial institution regulatory
characteristics of the certificates) may adversely affect the liquidity of the
certificates.
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 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
that investor.
USE OF PROCEEDS
The net proceeds to be received from the sale of the certificates of any
series will be applied by the depositor to the purchase of the assets of the
trust fund or will be used by the depositor to cover expenses related thereto.
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.
114
METHOD OF DISTRIBUTION
The certificates offered hereby and by the related prospectus supplements
will be offered in series through one or more of the methods described below.
The prospectus supplement prepared for each series will describe the method of
offering being utilized for that series and will state the net proceeds to the
depositor from such sale.
The depositor intends that offered certificates will be offered through
the following methods from time to time and that offerings may be made
concurrently through more than one of these methods or that an offering of the
offered certificates of a particular series may be made through a combination
of two or more of these methods. Such methods are as follows:
1. By negotiated firm commitment or best efforts underwriting and
public offering by one or more underwriters specified in the related
prospectus supplement;
2. By placements by the depositor with institutional investors through
dealers; and
3. By direct placements by the depositor with institutional investors.
In addition, if specified in the related prospectus supplement, the
offered certificates of a series may be offered in whole or in part to the
seller of the related mortgage assets that would comprise the trust fund for
such certificates.
If underwriters are used in a sale of any offered certificates (other than
in connection with an underwriting on a best efforts basis), such certificates
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices to be
determined at the time of sale or at the time of commitment therefor. The
managing underwriter or underwriters with respect to the offer and sale of
offered certificates of a particular series will be set forth on the cover of
the prospectus supplement relating to such series and the members of the
underwriting syndicate, if any, will be named in such prospectus supplement.
In connection with the sale of offered certificates, underwriters may
receive compensation from the depositor or from purchasers of the offered
certificates in the form of discounts, concessions or commissions. Underwriters
and dealers participating in the distribution of the offered certificates may
be deemed to be underwriters in connection with such certificates, and any
discounts or commissions received by them from the depositor and any profit on
the resale of offered certificates by them may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933, as amended.
It is anticipated that the underwriting agreement pertaining to the sale
of the offered certificates of any series will provide that the obligations of
the underwriters will be subject to certain conditions precedent, that the
underwriters will be obligated to purchase all such certificates if any are
purchased (other than in connection with an underwriting on a best efforts
basis) and that, in limited circumstances, the depositor will indemnify the
several underwriters and the underwriters will indemnify the depositor against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended, or will contribute to payments required to be made in respect
thereof.
The prospectus supplement with respect to any series offered by placements
through dealers will contain information regarding the nature of such offering
and any agreements to be entered into between the depositor and purchasers of
offered certificates of such series.
The depositor anticipates that the offered certificates will be sold
primarily to institutional investors. 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. Holders of offered certificates should consult with their
legal advisors in this regard prior to any such reoffer or sale.
All or part of any class of offered certificates may be acquired by the
depositor or by an affiliate of the depositor in a secondary market transaction
or from an affiliate. Such offered
115
certificates may then be included in a trust fund, the beneficial ownership of
which will be evidenced by one or more classes of mortgage-backed certificates,
including subsequent series of certificates offered pursuant to this prospectus
and a prospectus supplement.
As to any series of certificates, only those classes rated in an
investment grade rating category by any nationally recognized rating agency
will be offered hereby. Any unrated class may be initially retained by the
depositor, and may be sold by the depositor at any time to one or institutional
investors.
If and to the extent required by applicable law or regulation, this
prospectus will be used by the Underwriter in connection with offers and sales
related to market-making transactions in the offered certificates with respect
to which the Underwriter acts as principal. The Underwriter may also act as
agent in such transactions. Sales may be made at negotiated prices determined
at the time of sales.
LEGAL MATTERS
Unless otherwise specified in the related 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 or Latham & Watkins LLP.
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 related prospectus
supplement. The depositor has determined that its financial statements will not
be material to the offering of any offered certificates.
RATING
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 nationally
recognized rating agency.
Ratings on 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 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 interest-only might, in
extreme cases fail to recoup their initial investments. Furthermore, ratings on
mortgage pass-through certificates do not address the price of such
certificates or the suitability of such certificates to the investor.
A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning
rating organization. Each security rating should be evaluated independently of
any other security rating.
116
INDEX OF DEFINED TERMS
PAGE
----
1986 Act .............................. 80
1998 Policy Statement ................. 114
Accrual Certificates .................. 35
Accrued Certificate Interest .......... 35
Act ................................... 72
ADA ................................... 75
affiliate ............................. 112
ARM Loans ............................. 24
Available Distribution Amount ......... 34
Bankruptcy Code ....................... 68
Book-Entry Certificates ............... 34
Cash Flow Agreement ................... 27
Certificate Account ................... 26
Certificate Balance ................... 36
Certificate Owner ..................... 41
Code .................................. 77
Companion Class ....................... 37
Controlled Amortization Class ......... 37
CPR ................................... 31
Credit Support ........................ 27
Cut-off Date .......................... 36
DBNY .................................. 109
DBSI .................................. 109
Debt Service Coverage Ratio ........... 21
Definitive Certificates ............... 34
Determination Date .................... 28, 35
Deutsche Bank Group ................... 34
Disqualified Organization ............. 91
Distribution Date Statement ........... 38
DOL ................................... 108
DTC ................................... 40
DTC Participants ...................... 41
Due Period ............................ 28
due-on-sale ........................... 67
electing large partnership ............ 91
Equity Participation .................. 24
ERISA ................................. 107
ERISA Plans ........................... 107
ERISA Restricted Certificates ......... 111
Events of Default ..................... 56
Excess Funds .......................... 33
excess servicing ...................... 102
Exemption ............................. 109
Exemption Rating Agencies ............. 110
FAMC .................................. 25
FHLMC ................................. 25
Financial Intermediary ................ 41
FNMA .................................. 25
PAGE
----
Garn Act .............................. 73
GNMA .................................. 25
Insurance Proceeds .................... 49
IRS ................................... 52
Letter of Credit Bank ................. 62
Liquidation Proceeds .................. 49
Loan-to-Value Ratio ................... 22
Lock-out Date ......................... 24
Lock-out Period ....................... 24
MBS ................................... 20
MBS Agreement ......................... 25
MBS Issuer ............................ 25
MBS Servicer .......................... 25
MBS Trustee ........................... 25
NCUA .................................. 114
Net Leases ............................ 22
Net Operating Income .................. 22
Nonrecoverable Advance ................ 38
Non-U.S. Person ....................... 97
OCC ................................... 113
OID Regulations ....................... 80
OTS ................................... 114
Parties in Interest ................... 108
Pass-Through Entity ................... 91
Percentage Interest ................... 35
Permitted Investments ................. 48
Plan Asset Regulations ................ 108
Plan Assets ........................... 108
Plans ................................. 108
Pooling Agreement ..................... 43
Prepayment Assumption ................. 82
Prepayment Interest Shortfall ......... 29
Prepayment Premium .................... 24
Purchase Price ........................ 45
Record Date ........................... 34
Regular Certificateholder ............. 80
Regular Certificates .................. 77
Related Proceeds ...................... 37
Relief Act ............................ 75
REMIC ................................. 77
REMIC Certificates .................... 77
REMIC Pool. ........................... 77
REMIC Regulations ..................... 77
REO Property .......................... 46
Residual Certificateholders ........... 87
Residual Certificates ................. 77
Service ............................... 79
Similar Law ........................... 108
117
PAGE
----
SMMEA .............................. 112
SPA ................................ 31
Standard Certificateholder ......... 100
Standard Certificates .............. 100
Stripped Certificateholder ......... 105
Stripped Certificates. ............. 103
Tax Exempt Investor ................ 112
Tax Favored Plans .................. 108
Title V ............................ 74
PAGE
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Treasury ........................... 77
UBTI ............................... 112
UCC ................................ 64
Underwriter ........................ 109
U.S. Person ........................ 94
Value .............................. 22
Voting Rights ...................... 40
Warranting Party ................... 45
118
This diskette relates to the prospectus supplement in regard to the COMM
2004-LNB3, Commercial Mortgage Pass-Through Certificates. This diskette should
be reviewed only in conjunction with the entire prospectus supplement. This
diskette does not contain all relevant information relating to the underlying
Mortgage Loans. Such information is described elsewhere in the prospectus
supplement. Any information contained on this diskette will be more fully
described elsewhere in the prospectus supplement. The information on this
diskette should not be viewed as projections, forecasts, predictions or opinions
with respect to value. Prior to making any investment decision, a prospective
investor shall receive and should carefully review the prospectus supplement.
"Annex A COMM 2004-LNB3.xls" is a Microsoft Excel*, Version 5.0 spreadsheet that
provides in electronic format certain loan-level information shown in Annex A,
as well as certain Mortgage Loan and Mortgaged Property information shown in
Annex A. This spreadsheet can be put on a user-specified hard drive or network
drive. Open this file as you would normally open any spreadsheet in Microsoft
Excel. After the file is opened, a disclaimer will be displayed. READ THE
DISCLAIMER CAREFULLY.
NOTHING IN THIS DISKETTE SHOULD BE CONSIDERED AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY THE CERTIFICATES.
- ----------
* Microsoft is a registered trademark of Microsoft Corporation.
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS AND
PROSPECTUS SUPPLEMENT. YOU MUST NOT RELY ON ANY AUTHORIZED INFORMATION OR
REPRESENTATIONS. THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT IS AN OFFER TO SELL
ONLY THE OFFERED CERTIFICATES, BUT ONLY UNDER CIRCUMSTANCES AND IN JURISDICTIONS
WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPECTUS AND
PROSPECTUS SUPPLEMENT IS CURRENT ONLY AS OF ITS DATE.
-------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Executive Summary ........................... S-5
Summary of the Prospectus Supplement ........ S-9
Risk Factors ................................ S-38
Description of the Mortgage Pool ............ S-73
Description of the Offered Certificates ..... S-136
Yield and Maturity Considerations ........... S-158
The Pooling and Servicing Agreement ......... S-167
Use of Proceeds ............................. S-216
Certain Federal Income Tax Consequences...... S-216
ERISA Considerations ........................ S-218
Legal Investment ............................ S-220
Method of Distribution ...................... S-220
Legal Matters ............................... S-222
Ratings ..................................... S-222
Index of Principal Terms .................... S-224
Until the date that is ninety days from the date of this prospectus
supplement, all dealers that buy, sell or trade the Offered Certificates,
whether or not participating in this offering, may be required to deliver a
prospectus supplement and the accompanying prospectus. This is in addition to
the dealers' obligation to deliver a prospectus supplement and the accompanying
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
$981,250,000
(APPROXIMATE)
DEUTSCHE BANK SECURITIES
ABN AMRO INCORPORATED
PNC CAPITAL MARKETS, INC.
JPMORGAN
MERRILL LYNCH & CO.
NOMURA
COMM 2004-LNB3
COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES
--------------------
PROSPECTUS SUPPLEMENT
--------------------
JUNE , 2004
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