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Proc-Type: 2001,MIC-CLEAR
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Filed
Pursuant to Rule 433 Prospectus Supplement $2,810,773,000
(Approximate) Commercial Mortgage Pass-Through Certificates German American Capital Corporation Sponsors and Mortgage Loan
Sellers Deutsche Mortgage & Asset
Receiving
Corporation Depositor CD
2006-CD2 Mortgage Trust Issuing Entity The
CD 2006-CD2 Commercial Mortgage Pass-Through Certificates will
represent beneficial ownership interests in, and represent obligations
of, the issuing entity only. The trust’s assets will primarily
be 197 fixed-rate mortgage loans secured by first liens on 211
commercial and multifamily properties. The CD 2006-CD2
Commercial Mortgage Pass-Through Certificates are not obligations of
Deutsche Bank AG, Deutsche Mortgage & Asset Receiving Corporation,
the sponsors or any of their respective affiliates, and neither the
certificates nor the underlying mortgage loans are insured or
guaranteed by any governmental agency. Each class
of certificates will receive distributions of interest, principal or
both, four business days following the determination date in each
month, commencing April 17, 2006. Credit enhancement will be provided
by certain classes of subordinate certificates that will be subordinate
to certain classes of senior certificates as described in this
prospectus supplement under ‘‘Description of the
Certificates—Distributions—Subordination; Allocation of
Collateral Support
Deficit.’’ Certain
characteristics of the certificates offered in this prospectus
supplement include:
(Footnotes
to table to begin 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
in this prospectus supplement involves risks. See ‘‘Risk
Factors’’ beginning on page S-37 of this prospectus
supplement and page 12 of the
prospectus.
Deutsche Bank Securities Inc. and
Citigroup Global Markets Inc. are acting as joint bookrunning managers
in the following manner: Deutsche Bank Securities Inc. is acting as
sole bookrunning manager with respect to 57.18% of each class of
offered certificates and Citigroup Global Markets Inc. is acting as
sole bookrunning manager with respect to 42.82 of each class of offered
certificates. PNC Capital Markets LLC, J.P. Morgan Securities Inc.,
Nomura Securities International, Inc. and Wachovia Capital Markets, LLC
are acting as co-managers of the offering. The underwriters will offer
the certificates offered in this prospectus supplement to the public in
negotiated transactions at varying prices to be determined at the time
of sale. Deutsche Bank Securities Inc., Citigroup
Global Markets Inc., PNC Capital Markets LLC, J.P. Morgan Securities
Inc., Nomura Securities International, Inc. and Wachovia Capital
Markets, LLC are required to purchase the certificates offered in this
free writing prospectus (in the amounts to be set forth in the
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 in this free writing prospectus approximately
100.46% of the initial aggregate certificate balance of the
certificates offered in this free writing prospectus, plus accrued
interest, before deducting expenses payable by it. The underwriters
expect to deliver the certificates offered in this prospectus
supplement to purchasers on or about March 14,
2006.
File No.:
333-125499-02
(to
Prospectus Dated February 27, 2006)
CD 2006-CD2
Citigroup Global Markets Realty Corp.
PNC Bank, National
Association
Initial
Certificate
Balance(2)
Approximate
Initial
Pass-Through Rate
Assumed Final
Distribution
Date(3)
Rated Final
Distribution
Date(3)
S&P/Moody’s
Anticipated
Ratings(1)
Class A-1(5)
$
72,000,000
5.302
%
December
15,
2010
January
2046
AAA/Aaa
Class A-2(5)
$
239,000,000
5.408
%
March
15, 2011
January
2046
AAA/Aaa
Class A-3(5)
$
53,000,000
5.608
%(7)
January
15, 2013
January
2046
AAA/Aaa
Class A-AB(5)
$
111,000,000
5.575
%(7)
May
15, 2015
January
2046
AAA/Aaa
Class A-4(5)
$
839,906,000
5.545
%(7)
December
15, 2015
January
2046
AAA/Aaa
Class A-1A(5)
$
308,000,000
5.415
%(10)
January
15, 2011
January
2046
AAA/Aaa
Class A-1B(5)
$
518,636,000
5.546
%(7)
January
15, 2016
January 2046
AAA/Aaa
Class
A-M
$
305,934,000
5.592
%(7)
January
15, 2016
January
2046
AAA/Aaa
Class A-J
$
217,979,000
5.631
%(7)
February
15, 2016
January
2046
AAA/Aaa
Class B
$
22,945,000
5.654
%(7)
February
15, 2016
January
2046
AA+/Aa1
Class C
$
34,417,000
5.654
%(7)
February
15, 2016
January
2046
AA/Aa2
Class D
$
38,242,000
5.654
%(7)
February
15, 2016
January
2046
AA−/Aa3
Class
E
$
49,714,000
5.654
%(7)
February
15, 2016
January
2046
A/A2
Deutsche Bank
Securities
Citigroup
Co-Book Running Managers and Co-Lead Managers
PNC Capital Markets LLC | JPMorgan | Nomura | Wachovia Securities | |||||||||||
Co-Manager | Co-Manager | Co-Manager | Co-Manager | |||||||||||
The date of this Prospectus Supplement is February 27, 2006.
IMPORTANT
NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS
Information about the certificates offered in this prospectus supplement 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 in this prospectus supplement; and (b) this prospectus supplement, which describes the specific terms of the certificates offered in this prospectus supplement. The Annexes to this prospectus supplement are incorporated into and are a part of 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 in this prospectus supplement. 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 room, 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. 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 in this prospectus supplement and this offering. The capitalized terms used in this prospectus supplement are defined on the pages indicated under the caption "Index of Defined Terms" beginning on page S-241 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 128 in the prospectus.
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 (i) are outside the United Kingdom, or (ii) have professional experience in matters relating to investments, or (iii) are persons falling within Article 49(2)(a) through (d) (‘‘high net worth
S-1
companies, unincorporated associations, etc.’’) of the Financial Services and Markets 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 (i) are outside the United Kingdom, or (ii) have professional experience in participating in unregulated collective investment schemes, or (iii) are persons falling within Article 22(2)(a) through (d) (‘‘high net worth companies, unincorporated associations, etc.’’) of the Financial Services and Markets 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 offered certificates, 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-2
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 relating to the certificates offered in this prospectus supplement and the underlying mortgage loans. This executive summary also describes the certificates that are not offered by this prospectus supplement (other than the Class S, Class R and Class LR Certificates) which have not been registered under the Securities Act of 1933, as amended, and which will be sold to investors in private transactions.
Class | Anticipated Ratings S&P/Moody’s(1) |
Initial Certificate Balance or Notional Balance(2) |
Approximate Percent of Total Certificates |
Approximate Credit Support(12) |
Description
of Pass-Through Rate |
Assumed Final Distribution Date(3) |
Approximate Initial Pass-Through Rate |
Weighted Average Life (Yrs.)(4) |
Principal Window(4) |
|||||||||||||||||||||||||||||
Certificates Offered | ||||||||||||||||||||||||||||||||||||||
A-1(5) | AAA/Aaa | $ | 72,000,000 | 2.35 | % | 30.000 | %(6) | Fixed | 12/15/10 | 5.302 | % | 2.99 | 4/06-12/10 | |||||||||||||||||||||||||
A-2(5) | AAA/Aaa | $ | 239,000,000 | 7.81 | % | 30.000 | %(6) | Fixed | 3/15/11 | 5.408 | % | 4.82 | 12/10-3/11 | |||||||||||||||||||||||||
A-3(5) | AAA/Aaa | $ | 53,000,000 | 1.73 | % | 30.000 | %(6) | WAC(7) | 1/15/13 | 5.608 | % | 6.77 | 9/12-1/13 | |||||||||||||||||||||||||
A-AB(5) | AAA/Aaa | $ | 111,000,000 | 3.63 | % | 30.000 | %(6) | WAC(7) | 5/15/15 | 5.575 | % | 7.23 | 3/11-5/15 | |||||||||||||||||||||||||
A-4(5) | AAA/Aaa | $ | 839,906,000 | 27.45 | % | 30.000 | %(6) | WAC(7) | 12/15/15 | 5.545 | % | 9.63 | 5/15-12/15 | |||||||||||||||||||||||||
A-1A(5) | AAA/Aaa | $ | 308,000,000 | 10.07 | % | 30.000 | %(6) | Fixed(10) | 1/15/11 | 5.415 | % | 4.59 | 2/07-1/11 | |||||||||||||||||||||||||
A-1B(5) | AAA/Aaa | $ | 518,636,000 | 16.95 | % | 30.000 | %(6) | WAC(7) | 1/15/16 | 5.546 | % | 9.41 | 4/06-1/16 | |||||||||||||||||||||||||
A-M | AAA/Aaa | $ | 305,934,000 | 10.00 | % | 20.000 | % | WAC(7) | 1/15/16 | 5.592 | % | 9.84 | 1/16-1/16 | |||||||||||||||||||||||||
A-J | AAA/Aaa | $ | 217,979,000 | 7.13 | % | 12.875 | % | WAC(7) | 2/15/16 | 5.631 | % | 9.89 | 1/16-2/16 | |||||||||||||||||||||||||
B | AA+/Aa1 | $ | 22,945,000 | 0.75 | % | 12.125 | % | WAC(7) | 2/15/16 | 5.654 | % | 9.92 | 2/16-2/16 | |||||||||||||||||||||||||
C | AA/Aa2 | $ | 34,417,000 | 1.12 | % | 11.000 | % | WAC(7) | 2/15/16 | 5.654 | % | 9.92 | 2/16-2/16 | |||||||||||||||||||||||||
D | AA-/Aa3 | $ | 38,242,000 | 1.25 | % | 9.750 | % | WAC(7) | 2/15/16 | 5.654 | % | 9.92 | 2/16-2/16 | |||||||||||||||||||||||||
E | A/A2 | $ | 49,714,000 | 1.62 | % | 8.125 | % | WAC(7) | 2/15/16 | 5.654 | % | 9.92 | 2/16-2/16 | |||||||||||||||||||||||||
Private Certificates(9) | ||||||||||||||||||||||||||||||||||||||
X(8) | AAA/Aaa | $ | 3,059,345,770 | N/A | N/A | Variable Interest Only(8) |
N/A | 0.130 | % | N/A | N/A | |||||||||||||||||||||||||||
F | A-/A3 | $ | 42,066,000 | 1.37 | % | 6.750 | % | WAC(7) | 2/15/16 | 5.654 | % | 9.92 | 2/16-2/16 | |||||||||||||||||||||||||
G | BBB+/Baa1 | $ | 38,242,000 | 1.25 | % | 5.500 | % | WAC(7) | 2/15/16 | 5.654 | % | 9.92 | 2/16-2/16 | |||||||||||||||||||||||||
H | BBB/Baa2 | $ | 34,418,000 | 1.13 | % | 4.375 | % | WAC(7) | 3/15/16 | 5.654 | % | 9.93 | 2/16-3/16 | |||||||||||||||||||||||||
J | BBB-/Baa3 | $ | 34,418,000 | 1.13 | % | 3.250 | % | WAC(7) | 3/15/16 | 5.654 | % | 10.00 | 3/16-3/16 | |||||||||||||||||||||||||
K | BB+/Ba1 | $ | 15,296,000 | 0.50 | % | 2.750 | % | Fixed(10) | 3/15/16 | 5.085 | % | 10.00 | 3/16-3/16 | |||||||||||||||||||||||||
L | BB/Ba2 | $ | 11,473,000 | 0.38 | % | 2.375 | % | Fixed(10) | 3/15/16 | 5.085 | % | 10.00 | 3/16-3/16 | |||||||||||||||||||||||||
M | BB-/Ba3 | $ | 11,472,000 | 0.37 | % | 2.000 | % | Fixed(10) | 6/15/17 | 5.085 | % | 10.64 | 3/16-6/17 | |||||||||||||||||||||||||
N | B+/B1 | $ | 7,649,000 | 0.25 | % | 1.750 | % | Fixed(10) | 6/15/17 | 5.085 | % | 11.25 | 6/17-6/17 | |||||||||||||||||||||||||
O | B/B2 | $ | 7,648,000 | 0.25 | % | 1.500 | % | Fixed(10) | 6/15/17 | 5.085 | % | 11.25 | 6/17-6/17 | |||||||||||||||||||||||||
P | B-/B3 | $ | 7,648,000 | 0.25 | % | 1.250 | % | Fixed(10) | 1/15/18 | 5.085 | % | 11.30 | 6/17-1/18 | |||||||||||||||||||||||||
Q | NR/NR | $ | 38,242,770 | 1.25 | % | 0.000 | % | Fixed(10) | 1/15/24 | 5.085 | % | 13.55 | 1/18-1/24 | |||||||||||||||||||||||||
VPM-1(11) | BBB/Baa1 | $ | 10,300,000 | N/A | N/A | Loan-Specific(13) | 10/15/10 | 5.805 | % | 4.59 | 10/10-10/10 | |||||||||||||||||||||||||||
VPM-2(11) | BBB−/Baa2 | $ | 18,200,000 | N/A | N/A | Loan-Specific(13) | 10/15/10 | 5.805 | % | 4.59 | 10/10-10/10 | |||||||||||||||||||||||||||
VPM-3(11) | −/Baa2 | $ | 2,700,000 | N/A | N/A | Loan-Specific(13) | 10/15/10 | 5.805 | % | 4.59 | 10/10-10/10 | |||||||||||||||||||||||||||
VPM-4(11) | −/Baa3 | $ | 18,800,000 | N/A | N/A | Loan-Specific(13) | 10/15/10 | 5.805 | % | 4.59 | 10/10-10/10 | |||||||||||||||||||||||||||
(1) | It is a condition to issuance of the certificates that the certificates receive the ratings set forth above. |
(2) | Approximate; subject to a variance of plus or minus 5%. |
(3) | The assumed final distribution date with respect to any class of certificates offered in this prospectus supplement is the distribution date on which the final distribution would occur for that 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 in this prospectus supplement is the distribution date in January 2046. See ‘‘Yield and Maturity Considerations’’ and ‘‘Ratings’’ in this prospectus supplement. |
(4) | 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 |
S-3
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. |
(5) | For purposes of making distributions to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates, the pool of mortgage loans will be deemed to consist of three distinct Loan Groups, Loan Group 1, Loan Group 2A and Loan Group 2B. Loan Group 1 will consist of 155 mortgage loans, representing approximately 72.98% of the outstanding pool balance. Loan Group 2A will consist of 2 mortgage loans, representing approximately 10.07% of the outstanding pool balance. Loan Group 2B will consist of 40 mortgage loans, representing approximately 16.95% of the outstanding pool balance. Loan Group 2A will include approximately 34.50% of all the mortgage loans secured by multifamily properties. Loan Group 2B will include approximately 58.10% of all the mortgage loans secured by multifamily 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-3, Class A-AB, Class A-4, Class A-1A, Class A-1B and Class X Certificates, interest distributions on the Class A-1, Class A-2, Class A-3, Class A-AB, and Class A-4 Certificates will be based upon amounts available relating to mortgage loans in Loan Group 1, interest distributions on the Class A-1A Certificates will be based upon amounts available relating to mortgage loans in Loan Group 2A and interest distributions on the Class A-1B Certificates will be based upon amounts available relating to the mortgage loans in Loan Group 2B. In addition, generally, (i) the Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 Certificates will be entitled to receive distributions of principal collected or advanced in respect of mortgage loans in Loan Group 1, and after the certificate principal balance of the Class A-1A and Class A-1B Certificates has been reduced to zero, Loan Group 2A and Loan Group 2B, (ii) the Class A-1A Certificates will be entitled to receive distributions of principal collected or advanced in respect of mortgage loans in Loan Group 2A and after the certificate balance of the Class A-1B Certificates has been reduced to zero, from Loan Group 2B and after the certificate balance of the Class A-4 certificates has been reduced to zero, from Loan Group 1 (iii) the Class A-1B Certificates will be entitled to receive distributions of principal collected or advanced in respect of mortgage loans in Loan Group 2B and after the certificate balance of the Class A-1A Certificates has been reduced to zero, from Loan Group 2A and after the certificate balance of the Class A-4 certificates has been reduced to zero, from Loan Group 1. However, on and after any distribution date on which the certificate principal balances of the Class A-M, Class A-J and Class B through Class Q 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, Class A-3, Class A-AB, Class A-4, Class A-1A and A-1B Certificates, pro rata. |
(6) | Represents the approximate credit support for the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4 and Class A-1A and Class A-1B Certificates in the aggregate. |
(7) | The pass-through rate applicable to the Class A-3, Class A-AB, Class A-4, Class A-1B, Class A-M and Class A-J Certificates will, at all times, equal the weighted average net mortgage pass-through rate (in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only) minus 0.0460%, 0.0790%, 0.1090%, 0.1080%, 0.0620% or 0.0230%, respectively. |
The pass-through rate applicable to the Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Certificates will, at all times, equal the weighted average net mortgage pass-through rate (in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only). |
(8) | The Class X Certificates will not have a certificate balance. The interest accrual amounts on the Class X Certificates will be calculated by reference to a notional amount equal to the aggregate of the class principal balances of all of the classes of certificates (other than the Class X, Class VPM, Class S, Class R and Class LR Certificates). The pass-through rate applicable to the Class X Certificates for the initial distribution date will equal approximately 0.130% 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 (or in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only) and the weighted average pass-through rate of the certificates (based on their certificate balances) other than the Class X, Class VPM, Class S, Class R and Class LR certificates. With respect to the pooled trust component of the Villas Parkmerced loan representing approximately 9.81% of the outstanding pool balance as of the cut-off date, the related mortgaged property also secures subordinate companion loans and a non-pooled trust component. The Class X certificates were structured assuming that the subordinate companion loans and the non-pooled trust component absorb any loss prior to the related mortgage loan. |
(9) | Not offered hereby. |
(10) | The pass-through rates on the Class A-1A, Class K, Class L, Class M, Class N, Class O, Class P and Class Q Certificates will, at all times, equal to the lesser of (i) the weighted average net mortgage pass-through rate, (in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only) and (ii) the related fixed rate set forth in the table above. |
(11) | The Class VPM-1, VPM-2, VPM-3 and VPM-4 Certificates are collectively referred to herein as the "Class VPM Certificates." The Class VPM Certificates will only receive distributions from and will only incur losses with respect to the non-pooled trust component of the Villas Parkmerced loan. |
(12) | Except with respect to the Class VPM Certificates, the credit support for each class of certificates does not include the non-pooled trust component of the Villas Parkmerced loan. |
(13) | The pass-through rate for each of the Class VPM Certificates will be the net mortgage rate of the non-pooled trust component of the Villas Parkmerced loan, which will be converted to the annualized rate of interest at which interest would have to accrue on the |
S-4
principal balance of such Certificates (on the basis of a 360-day year consisting of twelve 30-day months) to produce the aggregate amount of interest that actually accrues on such Class of Certificates. |
The Class S, 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(1)
Outstanding Pool Balance as of the Cut-off Date(2) | $3,059,345,771 | |||||
Number of Mortgage Loans | 197 | |||||
Number of Mortgaged Properties | 211 | |||||
Average Mortgage Loan Balance | $15,529,674 | |||||
Weighted Average Mortgage Rate | 5.5088% | |||||
Weighted Average Remaining Term to Maturity (in months)(3) | 106 | |||||
Weighted Average Debt Service Coverage Ratio(4) | 1.51 | |||||
Weighted Average Loan-to-Value Ratio(4) | 69.24% | |||||
(1) | Statistical information in this table does not include the non-pooled trust component of the Villas Parkmerced loan. |
(2) | Subject to a permitted variance of plus or minus 5%. |
(3) | Calculated with respect to the anticipated repayment date for four mortgage loans, representing 2.06% of the outstanding pool balance as of the cut-off date. |
(4) | In the case of two mortgage loans, representing 9.93% of the outstanding pool balance and 0.17% of the Loan Group 1 balance and 97.40% of the Loan Group 2A Balance as of the cut-off date, each with one or more subordinate companion loans that are not included in the trust and one of which has a related non-pooled trust component, unless otherwise indicated, LTV ratio and DSCR have been calculated based on the mortgage loan included in the trust, but excluding such subordinate companion loans and the non-pooled trust component. See footnote 7 to Annex A-1 for the DSCR and LTV ratio for such mortgage loans including the related subordinate companion loans and the related non-pooled trust component. DSCR was calculated based on the mortgage loan principal balance as of the cut-off date, after netting out holdback reserve amounts for five mortgage loans with an aggregate principal balance as of the cut-off date of $86,030,000, representing 2.81% of the outstanding pool balance, 2.87% of the Loan Group 1 balance and 4.24% of the Loan Group 2B Balance as of the cut-off date, as described in the definition of ‘‘UW NCF DSCR’’ in the section ‘‘Description of the Mortgage Pool—Additional Loan Information—Definitions’’ in this prospectus supplement. LTV ratio was calculated based on the mortgage loan principal balance as of the cut-off date, after netting out holdback reserve amounts for four mortgage loans with an aggregate principal balance as of the cut-off date of $64,400,000, representing 2.11% of the outstanding pool balance, 1.90% of the Loan Group 1 and 4.24% of the Loan Group 2B Balance as of the cut-off date, as described in the definition of "LTV" in the section "Description of the Mortgage Pool—Additional Loan Information—Definitions" in this prospectus supplement. In the case of four mortgage loans, representing 2.57% of the outstanding pool balance as of the cut-off date, 0.81% of the initial Loan Group 1 Balance and 11.69% of the initial Loan Group 2B Balance, the mortgage loans are recourse to the related sponsor up to varying amounts until the related mortgaged property achieves a specified minimum DSCR, as described in the definition of ‘‘UW NCF DSCR’’ in the section below ‘‘Description of the Mortgage Pool—Additional Loan Information—Definitions.’’ The DSCR for each of these mortgage loans is shown throughout this prospectus supplement at a higher DSCR than the actual DSCR, which higher DSCR reflects the threshold at which the full recourse guaranty will be released. With respect to two mortgage loans, representing 0.49% of the outstanding pool balance and 2.90% of the initial Loan Group 2B Balance as of the cut-off date, various amounts have been escrowed until certain conditions under the mortgage loan documents have been met. The DSCR for such mortgage loan is shown throughout this prospectus supplement at the rate which would exist assuming these conditions under the mortgage loan have been met. The DSCRs for such mortgage loans as of the cut-off date, net of any holdback amounts and without assuming such conditions have been satisfied are set forth in the definitions of "UW NCF DSCR" in the section below "Description of the Mortgage Pool—Additional Loan Information—Definitions." |
S-5
TABLE OF CONTENTS
EXECUTIVE SUMMARY | S-3 | |||||
SUMMARY OF THE PROSPECTUS SUPPLEMENT | S-8 | |||||
THE MORTGAGE POOL | S-21 | |||||
Characteristics of the Mortgage Pool | S-21 | |||||
RISK FACTORS | S-37 | |||||
Conflicts of Interest | S-66 | |||||
The Villas Parkmerced Loan | S-68 | |||||
The Arrowhead Shopping Center Loan | S-68 | |||||
Risks Related to the Offered Certificates | S-69 | |||||
TRANSACTION PARTIES | S-74 | |||||
The Sponsors | S-74 | |||||
The Depositor | S-82 | |||||
The Issuing Entity | S-82 | |||||
The Master Servicers | S-84 | |||||
The Special Servicer | S-88 | |||||
The Trustee | S-91 | |||||
Paying Agent, Certificate Registrar, Custodian and Authenticating Agent | S-94 | |||||
Certain Relationships and Related Transactions | S-95 | |||||
DESCRIPTION OF THE MORTGAGE POOL | S-96 | |||||
General | S-96 | |||||
Security for the Mortgage Loans | S-97 | |||||
Significant Mortgage Loans and Significant Obligors | S-97 | |||||
The Mortgage Loan Sellers | S-98 | |||||
Certain Underwriting Matters | S-99 | |||||
Split Loan Structures | S-101 | |||||
The Villas Parkmerced Loan | S-101 | |||||
The Arrowhead Shopping Center Loan Combination | S-108 | |||||
ARD Loans | S-111 | |||||
Additional Loan Information | S-111 | |||||
Certain Terms and Conditions of the Mortgage Loans | S-127 | |||||
Changes in Mortgage Pool Characteristics | S-144 | |||||
DESCRIPTION OF THE OFFERED CERTIFICATES | S-145 | |||||
General | S-145 | |||||
Distributions | S-147 | |||||
Fees and Expenses | S-153 | |||||
Class A-AB Planned Principal Balance | S-161 | |||||
Prepayment Premiums and Yield Maintenance Charges | S-161 | |||||
Assumed Final Distribution Date; Rated Final Distribution Date | S-163 | |||||
Realized Losses | S-164 | |||||
Prepayment Interest Shortfalls | S-165 | |||||
Subordination | S-166 | |||||
Appraisal Reductions | S-167 | |||||
Delivery, Form and Denomination | S-170 | |||||
Book-Entry Registration | S-171 | |||||
Definitive Certificates | S-173 | |||||
YIELD AND MATURITY CONSIDERATIONS | S-174 | |||||
Yield Considerations | S-174 | |||||
Weighted Average Life | S-176 | |||||
Certain Price/Yield Tables | S-184 | |||||
THE POOLING AND SERVICING AGREEMENT | S-188 | |||||
General | S-188 | |||||
Servicing of the Mortgage Loans; Collection of Payments | S-188 | |||||
Advances | S-189 | |||||
Accounts | S-194 | |||||
Enforcement of ‘‘Due-On-Sale’’ and ‘‘Due-On-Encumbrance’’ Clauses | S-196 | |||||
Inspections | S-199 | |||||
Insurance Policies | S-199 | |||||
Assignment of the Mortgage Loans | S-202 | |||||
Representations and Warranties; Repurchase; Substitution | S-203 | |||||
Certain Matters Regarding the Depositor, the Master Servicers and the Special Servicer | S-207 | |||||
Events of Default | S-209 | |||||
Rights Upon Event of Default | S-211 | |||||
Amendment | S-212 | |||||
Evidence of Compliance | S-213 | |||||
Voting Rights | S-213 | |||||
Sale of Defaulted Mortgage Loans | S-213 | |||||
Realization Upon Defaulted Mortgage Loans | S-215 | |||||
Modifications | S-217 | |||||
Optional Termination | S-220 | |||||
Servicing Compensation and Payment of Expenses | S-221 | |||||
S-6
Special Servicing | S-222 | |||||
Master Servicers and Special Servicer Permitted to Buy Certificates | S-229 | |||||
Reports to Certificateholders; Available Information | S-229 | |||||
Other Information | S-233 | |||||
Exchange Act Filings | S-233 | |||||
USE OF PROCEEDS | S-234 | |||||
CERTAIN FEDERAL INCOME TAX CONSEQUENCES | S-234 | |||||
ERISA CONSIDERATIONS | S-236 | |||||
LEGAL INVESTMENT | S-238 | |||||
METHOD OF DISTRIBUTION | S-238 | |||||
LEGAL MATTERS | S-240 | |||||
RATINGS | S-240 | |||||
LEGAL ASPECTS OF MORTGAGE LOANS | S-241 | |||||
INDEX OF DEFINED TERMS | S-242 | |||||
ANNEX A-1—CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS | A-1-1 | |||||
ANNEX A-2A—CERTAIN CHARACTERISTICS OF THE MULTIFAMILY MORTGAGE LOANS | A-2A-1 | |||||
ANNEX A-2B—CERTAIN CHARACTERISTICS OF THE MULTIFAMILY MORTGAGE LOANS | A-2B-1 | |||||
ANNEX A-3—CLASS A-AB PLANNED PRINCIPAL BALANCE | A-3-1 | |||||
ANNEX B—TERM SHEET (INCLUDING DESCRIPTION OF TOP TEN MORTGAGE LOANS) | B-1 | |||||
ANNEX C—GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES | C-1 | |||||
S-7
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.
Title of Certificates | CD 2006-CD2 Commercial Mortgage Pass-Through Certificates. | |
RELEVANT PARTIES AND DATES
Issuing Entity | The issuing entity is CD 2006-CD2 Mortgage Trust, a common law trust fund to be formed on the closing date under the laws of the State of New York pursuant to a pooling and servicing agreement by and among the depositor, the trustee, the master servicers and the special servicer. See ‘‘The Issuing Entity’’ in this prospectus supplement. | |
Depositor | Deutsche Mortgage & Asset Receiving Corporation, a Delaware Corporation. Our principal offices are located at 60 Wall Street, New York, New York 10005. Our telephone number is (212) 250-2500. See ‘‘Transaction Parties—The Depositor’’ in this prospectus supplement and the prospectus. | |
Sponsors | German American Capital Corporation, Citigroup Global Markets Realty Corp. and PNC Bank, National Association each have acted as the sponsor with respect to the issuance of the certificates. The sponsors are the entities that will organize and initiate the issuance of the certificates by transferring or causing the transfer of the mortgage loans to the depositor. The depositor in turn will transfer the mortgage loans to the trust fund and the trust fund will issue the certificates. See ‘‘Transaction Parties—The Sponsors’’ in this prospectus supplement and ‘‘The Sponsor’’ in the prospectus. | |
Mortgage Loan Sellers | German American Capital Corporation, a sponsor and an affiliate of (a) Deutsche Bank Securities Inc., an underwriter, and (b) Deutsche Mortgage & Asset Receiving Corporation, the depositor. Citigroup Global Markets Realty Corp., a sponsor and an affiliate of Citigroup Global Markets Inc., an underwriter. PNC Bank, National Association, a sponsor and an affiliate of PNC Capital Markets LLC, an underwriter and Midland Loan Services, Inc., a master servicer. See ‘‘Description of the Mortgage Pool—The Mortgage Loan Sellers’’ in this prospectus supplement. | |
S-8
The mortgage loans were originated or purchased by the mortgage loan sellers (or an affiliate of such mortgage loan seller) as follows: | ||
Mortgage Loan Seller | Number of Mortgage Loans |
Initial Outstanding Pool Balance(1) |
%
of Cut-off Date Principal Balance |
%
of Initial Loan Group 1 Balance |
%
of Initial Loan Group 2A Balance |
%
of Initial Loan Group 2B Balance |
||||||||||||||||||||
German American Capital Corporation | 59 | $ | 1,340,202,555 | 43.81 | % | 34.87 | % | 100.00 | % | 48.89 | % | |||||||||||||||
Citigroup Global Markets Realty Corp. | 104 | $ | 1,309,862,511 | 42.82 | % | 50.00 | % | 0.00 | % | 37.32 | % | |||||||||||||||
PNC Bank, National Association | 34 | $ | 409,280,705 | 13.38 | % | 15.13 | % | 0.00 | % | 13.79 | % | |||||||||||||||
(1) | Does not include the non-pooled trust component of the Villas Parkmerced loan |
Originators | Each mortgage loan seller or its affiliate originated the loans as to which it is acting as mortgage loan seller. No party other than German American Capital Corporation, Citigroup Global Markets Realty Corp. or PNC Bank, National Association, or their respective affiliates, originated more than 10% of the mortgage loans in the trust fund. See ‘‘Transaction Parties—The Sponsors’’ in this prospectus supplement. | |
Master Servicer | (a) Midland Loan Services, Inc., a Delaware corporation, will act as master servicer with respect to all of the mortgage loans sold to the depositor by German American Capital Corporation and PNC Bank, National Association and (b) Wachovia Bank, National Association, a national banking association, will act as master servicer with respect to all of the mortgage loans sold to the depositor by Citigroup Global Markets Realty Corp. See ‘‘Transaction Parties—The Master Servicers’’ in this prospectus supplement. The master servicers will be primarily responsible for servicing and administering, directly or through sub-servicers, the applicable mortgage loans: (a) as to which there is no default or reasonably foreseeable default that would give rise to a transfer of servicing to the special servicer; and (b) as to which any such default or reasonably foreseeable default has been corrected, including as part of a work-out. In addition, the master servicers will be the primary parties responsible for making principal and interest advances and property advances under the pooling and servicing agreement with respect to the mortgage loans that they are servicing, subject in each case to a nonrecoverability determination. The fee of each master servicer will be payable monthly on a loan-by-loan basis from amounts received in respect of interest on each mortgage loan serviced by that master servicer (prior to application of | |
S-9
such interest payments to make payments on the certificates), and will equal a rate per annum equal to the administrative fee rate set forth on Annex A-1 of this prospectus supplement (net of the trustee fee rate) multiplied by the stated principal balance of the related mortgage loan. Each master servicer will also be entitled to receive income from investment of funds in certain accounts and certain fees paid by the borrowers. See ‘‘Transaction Parties—The Master Servicers’’ and ‘‘The Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses’’ in this prospectus supplement. | ||
Midland Loan Services, Inc. is an affiliate of PNC Bank, National Association, one of the mortgage loan sellers and PNC Capital Markets LLC, one of the underwriters. Midland Loan Services, Inc.’s principal address is 10851 Mastin Street, Building 82, Suite 700, Overland Park, Kansas 66210. | ||
Wachovia Bank, National Association’s principal servicing offices are located at NC 1075, 8739 Research Drive URP4, Charlotte, North Carolina 28262-1075. | ||
Special Servicer | LNR Partners, Inc., a Florida corporation, will be responsible for the servicing and administration of the specially serviced mortgage loans and REO properties. See ‘‘Transaction Parties—The Special Servicer’’ and ‘‘The Pooling and Servicing Agreement—Special Servicing’’ in this prospectus supplement. The principal compensation to be paid to the special servicer in respect of its special servicing activities will be the special servicing fee, the workout fee and the liquidation fee. LNR Partners, Inc.’s address is 1601 Washington Avenue, Suite 700, Miami Beach, Florida 33139. | |
The special servicing fee will equal 0.35% per annum of the stated principal balance of the related specially serviced mortgage loan subject to a minimum monthly amount equal to $4,000 with respect to each such specially serviced loan and REO property, and will be payable monthly. | ||
The workout fee will generally be payable with respect to each specially serviced mortgage loan which has become a ‘‘corrected mortgage loan’’ (which will occur (i) with respect to a specially serviced mortgage loan as to which there has been a payment default, when the borrower has brought the mortgage loan current and thereafter made three consecutive full and timely monthly payments, including pursuant to any workout and (ii) with respect to any other specially serviced mortgage loan, when the related default is cured or the other circumstances pursuant to which it became a specially serviced mortgage loan cease to exist in the good faith judgment of the special servicer). The workout fee will be calculated by application of a workout fee rate of 1.00% to each collection of interest and principal | ||
S-10
(including scheduled payments, prepayments, balloon payments, and payments at maturity) received on the related mortgage loan for so long as it remains a corrected mortgage loan. | ||
A liquidation fee will be payable with respect to each specially serviced mortgage loan as to which the special servicer obtains a full or discounted payoff with respect thereto from the related borrower or which is repurchased by the related mortgage loan seller outside the applicable cure period and, except as otherwise described herein, with respect to any specially serviced mortgage loan or REO property as to which the special servicer receives any liquidation proceeds. The liquidation fee for each specially serviced mortgage loan will be payable from, and will be calculated by application of a liquidation fee rate of 1.00% to the related payment or proceeds. The special servicer will also be entitled to receive income from investment of funds in certain accounts and certain fees paid by the borrowers. | ||
The foregoing compensation to the special servicer will be paid from the applicable distributions on the mortgage loans prior to application of such distributions to make payments on the certificates, and may result in shortfalls in payments to certificateholders. See ‘‘Transaction Parties—The Special Servicer’’ and ‘‘The Pooling and Servicing Agreement—Special Servicing— Special Servicing Compensation’’ in this prospectus supplement. | ||
The depositor anticipates that an affiliate of the special servicer will purchase the controlling class and will be the initial controlling class representative. | ||
Trustee | Wells Fargo Bank, N.A., a national banking association. The Trustee’s address is 9062 Old Annapolis Road, Columbia, Maryland 21045-1951. Following the transfer of the underlying mortgage loans into the trust, the trustee, on behalf of the trust, will become the holder of each mortgage loan transferred to the trust. The trustee will also have additional duties with respect to tax administration. In addition, (subject to the terms of the pooling and servicing agreement) the trustee will be primarily responsible for back-up advancing and providing certain reports to certificateholders. The fee of the trustee will be payable monthly from amounts received in respect of interest on each mortgage loan (prior to application of such interest payments to make payments on the certificates), and will be equal to 0.001% per annum of the stated principal balance of the related mortgage loan. The trustee will also be entitled to receive income from investment of funds in certain accounts maintained on behalf of the trust. See ‘‘Transaction Parties—The Trustee’’ in this prospectus supplement. | |
S-11
Affiliates | All the shares of capital stock of Deutsche Mortgage & Asset Receiving Corporation, which is the depositor, are held by DB U.S. Financial Markets Holding Corporation. German American Capital Corporation, which is one of the sponsors, is an affiliate of (a) Deutsche Bank Securities, Inc., one of the underwriters and (b) the depositor. Citigroup Global Markets Realty Corp., which is one of the sponsors is an affiliate of Citigroup Global Markets Inc., an underwriter. PNC Bank, National Association, which is one of the sponsors, is an affiliate of PNC Capital Markets LLC, an underwriter and Midland Loan Services, Inc., a master servicer. Wachovia Capital Markets, LLC, which is one of the underwriters, is an affiliate of Wachovia Bank, National Association, a master servicer. | |
The Directing Holder | With respect to each mortgage loan, other than a mortgage loan that is part of a split loan structure, the directing holder will be the controlling class representative. With respect to each mortgage loan that is part of a split loan structure, the directing holder will be as specified in the definition of ‘‘Directing Holder’’ as set forth in ‘‘The Pooling and Servicing Agreement—Special Servicing—The Directing Holder’’ 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. | |
Underwriters | Deutsche Bank Securities Inc., Citigroup Global Markets Inc., PNC Capital Markets LLC, J.P. Morgan Securities Inc., Nomura Securities International, Inc. and Wachovia Capital Markets, LLC are the underwriters. Deutsche Bank Securities Inc. is an affiliate of German American Capital Corporation, one of the sponsors, and of the depositor. Citigroup Global Markets Inc. is an affiliate of Citigroup Global Markets Realty Corp., one of the sponsors. PNC Capital Markets LLC is an affiliate of PNC Bank, National Association, one of the sponsors and of Midland Loan Services, Inc., a master servicer. Wachovia Capital Markets, LLC is an affiliate of Wachovia Bank, National Association, one of the master servicers. The underwriters are required to purchase the certificates offered in this prospectus supplement from the Depositor (in the amounts set forth under the heading ‘‘Method of Distribution’’ in this prospectus supplement), subject to certain conditions. | |
Cut-off Date | With respect to each mortgage loan, the related due date of such mortgage loan in March 2006. | |
Closing Date | On or about March 14, 2006. | |
S-12
Distribution Date | The fourth business day following the determination date, commencing in April 2006. | |
Record Date | With respect to any distribution date, the close of business on the last business day of the preceding month. | |
Determination Date | The 11th day of each month or, if such 11th day is not a business day, the next succeeding business day, commencing in April 2006. | |
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 that 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 that distribution date occurs. | |
Interest Accrual Period | With respect to any distribution date, the calendar month immediately preceding the month in which the 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 13 classes of commercial mortgage pass-through certificates: | |
• | Class A-1 | ||
• | Class A-2 | ||
• | Class A-3 | ||
• | Class A-AB | ||
• | Class A-4 | ||
• | Class A-1A | ||
• | Class A-1B | ||
• | Class A-M | ||
• | Class A-J | ||
• | Class B | ||
• | Class C | ||
• | Class D | ||
• | Class E | ||
The trust created by the Depositor will consist of a total of 32 classes, the following 19 of which are not being offered through this prospectus supplement and the accompanying prospectus: Class X, Class F, Class G, Class H, Class J, | ||
S-13
Class K, Class L, Class M, Class N, Class O, Class P, Class Q, Class VPM-1, Class VPM-2, Class VPM-3, Class VPM-4, Class S, Class R and Class LR. | ||
The certificates will represent beneficial ownership interests in the trust. The trust’s assets will primarily consist of 197 mortgage loans secured by first liens on 211 commercial and multifamily properties. | ||
The Villas Parkmerced loan will be sub-divided into a pooled trust component having a cut-off date balance of $300,000,000 and a non-pooled trust component having a cut-off date balance of $50,000,000. The pooled trust component of the Villas Parkmerced loan will be pooled together with the other mortgage loans and interest and principal received in respect of the pooled trust component of the Villas Parkmerced loan will be available to make distributions in respect of each class of certificates other than the Class VPM Certificates. Payments of interest and principal received in respect of the non-pooled trust component of the Villas Parkmerced loan will be available to make distributions in respect of the Class VPM Certificates. Losses with respect to the Villas Parkmerced loan will be allocated first to the non-pooled trust component and then to the mortgage pool. Losses with respect to the other mortgage loans will not be allocated to the non-pooled trust component of the Villas Parkmerced loan. The Class VPM Certificates are not being offered pursuant to this prospectus supplement. | ||
Although the non-pooled trust component of the Villas Parkmerced loan is an asset of the trust, unless otherwise indicated, for purposes of numerical and statistical information contained in this prospectus supplement, the non-pooled trust component of the Villas Parkmerced loan is not reflected in this prospectus supplement and the term "mortgage loan" in that context does not include the non-pooled trust component of the Villas Parkmerced loan unless otherwise indicated. | ||
Certificate Balances | Your certificates have the approximate aggregate initial certificate balance set forth below, subject to a permitted variance of plus or minus 5%. | |
S-14
Class A-1 | $72,000,000 principal balance | |||||
Class A-2 | $239,000,000 principal balance | |||||
Class A-3 | $53,000,000 principal balance | |||||
Class A-AB | $111,000,000 principal balance | |||||
Class A-4 | $839,906,000 principal balance | |||||
Class A-1A | $308,000,000 principal balance | |||||
Class A-1B | $518,636,000 principal balance | |||||
Class A-M | $305,934,000 principal balance | |||||
Class A-J | $217,979,000 principal balance | |||||
Class B | $22,945,000 principal balance | |||||
Class C | $34,417,000 principal balance | |||||
Class D | $38,242,000 principal balance | |||||
Class E | $49,714,000 principal balance | |||||
The certificates that are not offered in this prospectus supplement (other than the Class S, Class R and Class LR Certificates) will have the initial aggregate certificate balances or notional balance, as applicable, as set forth under ‘‘Executive Summary—The Certificates’’ in this prospectus supplement. | ||
The Class X Certificates will not have certificate balances or entitle their holders to distributions of principal. The Class X Certificates will, however, represent the right to receive distributions of interest accrued as described in this prospectus supplement on a notional balance. The notional balance of the Class X Certificates will be based on the aggregate of the certificate balances of all of the certificates (other than the Class X, Class VPM, Class S, Class R and Class LR Certificates). | ||
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 (other than for the Class VPM Certificates) is set forth below: | |
• | The pass-through rate applicable to the Class A-1 Certificates will, at all times, equal 5.302%. The pass-through rate applicable to the Class A-2 Certificates will, at all times, equal 5.408%. The pass-through rate applicable to the Class A-3, Class A-AB, Class A-4, Class A-1B, Class A-M and Class A-J Certificates will, at all times, equal the weighted average net mortgage pass-through rate (in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only) minus 0.0460%, 0.0790%, 0.1090%, 0.1080%, 0.0620% or 0.0230%, respectively. | ||
• | The pass-through rate applicable to the Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Certificates will, at all times, equal the weighted average net mortgage pass-through rate (in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only). | ||
S-15
• | The pass-through rates on the Class A-1A, Class K, Class L, Class M, Class N, Class O, Class P and Class Q Certificates will, at all times, equal to the lesser of (i) the weighted average net mortgage pass-through rate (in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only), and (ii) the related fixed rate set forth on the table in the Executive Summary on page S-3 of this prospectus supplement. | ||
• | The pass-through rates applicable to the Class K, Class L, Class M, Class N, Class O, Class P and Class Q Certificates will, at all times, be equal to a fixed rate per annum subject to a cap at the weighted average net mortgage pass-through rate. | ||
• | The Class S, 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. | ||
• | The pass-through rate applicable to the Class X certificates for the initial distribution date will equal approximately 0.130% 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 (or in the case of the Villas Parkmerced loan, taking into account the interest rate and principal balance of the pooled trust component only) and the weighted average pass-through rate of the certificates (based on their certificate balances) other than the Class X, Class VPM, Class S, Class R and Class LR certificates. | ||
Assumed Final Distribution Date; Rated Final Distribution Date | The assumed final distribution dates of the offered certificates are set forth below. Such dates were calculated based on numerous assumptions as described herein under ‘‘Description of the Offered Certificates—Assumed Final Distribution Date; Rated Final Distribution Date.’’ Accordingly, in the event of defaults on the mortgage loans, the actual final distribution date for one or more classes of the offered certificates may be later, and could be substantially later, than the related assumed final distribution date(s). | |
S-16
Class Designation | Assumed Final Distribution Date | |||||
Class A-1 | December 15, 2010 | |||||
Class A-2 | March 15, 2011 | |||||
Class A-3 | January 15, 2013 | |||||
Class A-AB | May 15, 2015 | |||||
Class A-4 | December 15, 2015 | |||||
Class A-1A | January 15, 2011 | |||||
Class A-1B | January 15, 2016 | |||||
Class A-M | January 15, 2016 | |||||
Class A-J | February 15, 2016 | |||||
Class B | February 15, 2016 | |||||
Class C | February 15, 2016 | |||||
Class D | February 15, 2016 | |||||
Class E | February 15, 2016 | |||||
The ‘‘Rated Final Distribution Date’’ of the offered certificates will be January 2046, the first distribution date after the 36th month following the end of the amortization term for the mortgage loan that, as of the cut-off date, will have the longest remaining amortization term. | ||
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 A-2, Class A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B and Class X Certificates, which will have the same senior priority and except that distributions to the Class A-M and Class A-J Certificates are paid after distributions to the foregoing classes with the Class A-M senior in right of payment to the Class A-J), and | ||
(ii) | if applicable, payment of the respective principal entitlement for such distribution date to outstanding classes of certificates having an earlier alphanumeric designation; provided, however, that the Class A-AB Certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance, as described in this prospectus supplement, and provided, that the Class A-M and then Class A-J Certificates receive distributions in that order only after distributions are made to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates. | ||
For purposes of making distributions to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates, the pool of mortgage loans (other than the non-pooled trust component of the Villas Parkmerced loan) will be deemed to consist of three distinct groups. Loan Group 1, Loan Group 2A and Loan Group 2B. Loan Group 1 will consist of 155 mortgage loans, representing approximately 72.98% of the outstanding pool | ||
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balance, Loan Group 2A will consist of 2 mortgage loans, representing approximately 10.07% of the outstanding pool balance. Loan Group 2B will consist of 40 mortgage loans, representing approximately 16.95% of the outstanding pool balance. Loan Group 2A will include approximately 34.50% of all the mortgage loans secured by multifamily properties. Loan Group 2B will include approximately 58.10% of all the mortgage loans secured by multifamily properties. Annex A-1 to this prospectus supplement will set forth the Loan Group designation with respect to each of these mortgage loans. | ||
The Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 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 2A. The Class A-1B Certificates will have priority to payments received in respect of mortgage loans included in Loan Group 2B. A description of the principal and interest entitlement of each class of certificates offered in this prospectus supplement 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— Prepayment Premiums and 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 in this prospectus supplement will be sensitive to the rate and timing of principal payments (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 that 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. | |
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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.) | |
Class A-1(2),
Class A-2(2), Class A-3(2),
Class A-AB(1)(2), Class A-4(2), Class A-1A(2), Class A-1B(2) and Class X(3) Class A-M Class A-J Class B Class C Class D Class E Class F Class G Class H Class J Class K Class L Class M Class N Class O Class P Class Q Class VPM(4) |
||
(1) | The Class A-AB Certificates have certain priority with respect to reducing the principal balance of those certificates to their planned principal balance, as described in this prospectus supplement. | ||
(2) | The Class A-1A Certificates have a priority entitlement to principal payments received in respect of mortgage loans included in Loan Group 2A. The Class A-1B Certificates will have a priority entitlement to principal payments received in respect of mortgage loans included in Loan Group 2B. The Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 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. | ||
(3) | The Class X Certificates are not offered by this prospectus supplement and are not entitled to distributions of principal. | ||
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(4) | Reflects each of the Class VPM Certificates. Losses with respect to the Villas Parkmerced loan will be allocated first to the non-pooled trust component and then to the mortgage pool. Losses with respect to the other mortgage loans will not be allocated to the non-pooled trust component of the Villas Parkmerced loan. | ||
No other form of credit enhancement will be available for the benefit of the holders of the certificates offered in this prospectus supplement. | ||
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 applicable master 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 (other than the Class X, Class S, Class R and Class LR Certificates), pro rata, based upon amounts distributable in respect of interest to each 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: | |
• | shortfalls resulting from additional servicing compensation which each master servicer or special servicer is entitled to receive; | ||
• | shortfalls resulting from interest on advances made by the master servicers, the special servicer or the trustee (to the extent not covered by default interest and late payment fees paid by the related borrower); | ||
• | 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 | ||
• | 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. | ||
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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: | |
• | Description of the Mortgage Pool; | ||
• | Annex A-1 (Certain Characteristics of the Mortgage Loans); and | ||
• | Annex A-2A and Annex A-2B (Certain Characteristics of the Multifamily Mortgage 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, the Loan Group 2A balance or the Loan Group 2B 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. | ||
The trust's assets also include the non-pooled trust component of the Villas Parkmerced loan. Although the non-pooled trust component of the Villas Parkmerced loan is an asset of the trust, unless otherwise indicated, for the purpose of numerical and statistical information contained in this prospectus supplement, the non-pooled trust component of the Villas Parkmerced loan is not reflected in this prospectus supplement and the term "mortgage loan" in that context does not include the non-pooled trust component of the Villas Parkmerced loan unless otherwise indicated. The non-pooled trust component of the Villas Parkmerced loan supports only the Class VPM Certificates. These certificates are not being offered pursuant to this prospectus supplement. Information in the tables in this prospectus supplement excludes the non-pooled trust component of the Villas Parkmerced loan unless otherwise stated. | ||
The information contained in the footnotes to the chart below is applicable throughout this prospectus supplement, unless otherwise indicated. | ||
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All Mortgage Loans | Loan Group 1 | Loan Group 2A | Loan Group 2B | |||||||||||||||
Number of Mortgage Loans | 197 | 155 | 2 | 40 | ||||||||||||||
Number of Mortgaged Properties | 211 | 167 | 2 | 42 | ||||||||||||||
Number of Balloon Mortgage Loans(1) | 70 | 62 | 0 | 8 | ||||||||||||||
Number of Hyper-Amortizing Loans | 4 | 4 | 0 | 0 | ||||||||||||||
Number of Fully Amortizing Mortgage Loans | 1 | 1 | 0 | 0 | ||||||||||||||
Number of Interest-Only Mortgage Loans(2) | 19 | 16 | 1 | 2 | ||||||||||||||
Number of Partial Interest-Only Balloon Mortgage Loans(3) | 103 | 72 | 1 | 30 | ||||||||||||||
Aggregate Initial Principal Balance (plus or minus 5%) | $3,059,345,771 | $2,232,709,173 | $308,000,000 | $518,636,598 | ||||||||||||||
Range of Mortgage Loan Principal Balances | $2,278,389 to $300,000,000 |
$2,278,389 to $125,000,000 |
$8,000,000
to $300,000,000 |
$2,465,462
to $38,500,000 |
||||||||||||||
Average Mortgage Loan Principal Balance | $15,529,674 | $14,404,575 | $154,000,000 | $12,965,915 | ||||||||||||||
Range of Mortgage Rates | 4.9890% to 7.0000% |
4.9890% to 6.1570% |
5.6480% to 5.6590% |
5.0150%
to 7.0000% |
||||||||||||||
Weighted Average Mortgage Rate | 5.5088% | 5.5004% | 5.6492% | 5.4614% | ||||||||||||||
Range of Remaining Terms to Maturity(4) | 55 months to 214 months |
57 months to 175 months |
55 months
to 58 months |
97 months to 214 months |
||||||||||||||
Weighted Average Remaining Term to Maturity(4) | 106 months | 111 months | 55 months | 117 months | ||||||||||||||
Range of Remaining Amortization Term(4)(5) | 118 months
to 420 months |
118 months to 420 months |
360
months to 360 months |
356 months to 360 months |
||||||||||||||
Weighted Average Remaining Amortization Term(4)(5) | 355 months | 353 months | 360 months | 360 months | ||||||||||||||
Range of Loan-to-Value Ratios(6)(7) | 26.41% to 87.55% | 26.41% to 80.00% | 42.43% to 75.47% | 34.53% to 87.55% | ||||||||||||||
Weighted Average Loan-to-Value Ratio(6)(7) | 69.24% | 71.58% | 43.29% | 74.60% | ||||||||||||||
Range of Debt Service Coverage Ratios(6)(7) | 1.12x to 3.50x | 1.12x to 3.50x | 1.31x to 2.38x | 1.20x to 3.08x | ||||||||||||||
Weighted Average Debt Service Coverage Ratio(6)(7) | 1.51x | 1.44x | 2.35x | 1.28x | ||||||||||||||
(1) | Does not include interest-only mortgage loans or partial interest-only mortgage loans. |
(2) | 19 mortgage loans, representing 29.44% of the outstanding pool balance and 26.49% of the Loan Group 1 balance, 97.40% of the Loan Group 2A balance as of the cut-off date and 1.76% of Loan Group 2B as of the cut-off date, pay interest-only until the maturity date. Annual debt service, monthly debt service and the debt service coverage ratios are calculated using the interest payments for the first twelve payment periods. |
(3) | The interest-only period for these mortgage loans ranges from 7 to 82 months following the cut-off date. |
(4) | Calculated with respect to the anticipated repayment date for 4 mortgage loans, representing 2.06% of the outstanding pool balance and 2.82% of the outstanding Loan Group 1 balance as of the cut-off date. |
(5) | Excludes 19 mortgage loans, each of which pays interest-only until its maturity date. |
(6) | In the case of 2 mortgage loans, representing 9.93% of the outstanding pool balance and 0.17% of the outstanding Loan Group 1 balance, 97.40% of the Loan Group 2A balance as of the cut-off date, each with one or more subordinate companion loans that are not included in the trust and in the case of one such mortgage loan a non-pooled trust component, unless otherwise indicated, DSCR and LTV ratio have been calculated based on the mortgage loan included in the trust, but excluding the subordinate companion loan(s) and in the case of one such mortgage loan a non-pooled trust component. For the DSCR and LTV ratios including the applicable subordinate companion loan and in the case of one such mortgage loan a non-pooled trust component, see footnote 7 to Annex A-1. |
(7) | DSCR was calculated based on the mortgage loan principal balance as of the cut-off date, after netting out holdback reserve amounts for 5 mortgage loans with an aggregate principal balance as of the cut-off date of $86,030,000, representing 2.81% of the outstanding pool balance, 2.87% of the Loan Group 1 balance and 4.24% of Loan Group 2B as of the cut-off date, as described in the definition of ‘‘UW NCF DSCR’’ in the section ‘‘Description of the Mortgage Pool—Additional Loan Information—Definitions’’ in this prospectus supplement. LTV ratio was calculated based on the Mortgage Loan principal balance as of the cut-off date, after netting out holdback reserve amounts for four mortgage loans with an aggregate principal balance as of the cut-off date of $64,400,000, representing 2.11% of the outstanding |
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pool balance, 1.90% of the Loan Group 1 balance and 4.24% of Loan Group 2B as of the cut-off date, as described in the definition of "LTV" in the section "Description of the Mortgage Pool—Additional Loan Information—Definitions" in this prospectus supplement. In the case of 4 mortgage loans, representing 2.57% of the outstanding pool balance as of the cut-off date, 0.81% of the initial Loan Group 1 Balance and 11.69% of the Loan Group 2B balance, the mortgage loans are recourse to the related sponsor up to varying amounts until the related mortgaged property achieves a specified minimum DSCR, as described in the definition of ‘‘UW NCF DSCR’’ in the section below ‘‘Description of the Mortgage Pool—Additional Loan Information—Definitions.’’ The DSCR for each of these mortgage loans is shown throughout this prospectus supplement at a higher DSCR than the actual DSCR, which higher DSCR reflects the threshold at which the full recourse guaranty will be released. With respect to two mortgage loans representing 0.49% of the outstanding pool balance and 2.90% of the Loan Group 2B balance as of the cut-off date, various amounts have been escrowed until certain conditions under the mortgage loan documents have been met. The DSCR for such mortgage loan is shown throughout this prospectus supplement at the rate which would exist assuming these conditions under the mortgage loan have been met. The DSCRs for such mortgage loans as of the cut-off date, net of any holdback amounts and without assuming such conditions have been satisfied are set forth in the definitions of "UW NCF DSCR" in the section below "Description of the Mortgage Pool—Additional Loan Information—Definitions." |
B. Split Loan Structures | The mortgaged properties securing the mortgage loans known as the Villas Parkmerced loan and the Arrowhead Shopping Center loan also secure companion loans that are not included in the mortgage pool. | |
The pooled trust component of the mortgage loan known as the ‘‘Villas Parkmerced’’ loan, represents 9.81% of the outstanding pool balance, 97.40% of the Loan Group 2A balance as of the cut-off date and has an outstanding principal balance as of the cut-off date of $300,000,000, is evidenced by one senior note, which is included in the trust and is part of the mortgage pool. Such senior note also evidences the non-pooled trust component of the Villas Parkmerced loan with an outstanding principal balance as of the cut-off date of $50,000,000, which is included in the trust fund but is not part of the mortgage pool. | ||
The Villas Parkmerced loan is secured by a mortgaged property that also secures one or more subordinate companion loans that are not included in the trust, each of which has an outstanding principal balance as of the cut-off date and current holder as listed in the table below: | ||
Note(1) | Principal Balance | Current Holder | ||||||||
B-1 | $ | 50,000,000 | GACC | |||||||
B-2 | $ | 25,000,000 | GACC | |||||||
C | $ | 35,000,000 | GACC | |||||||
D-1 | $ | 20,000,000 | GACC | |||||||
D-2 | $ | 10,000,000 | GACC | |||||||
D-3 | $ | 30,000,000 | GACC | |||||||
E | $ | 30,000,000 | GACC | |||||||
(1) | With respect to the Villas Parkmerced Subordinate Companion loans, on or before the closing date, GACC may split one or more of such subordinate companion loans into additional classes of notes or consolidate two or more classes of notes, provided that the subordinate companion loans will in each case equal $200 million in the aggregate. |
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The holders of the Villas Parkmerced subordinate companion loans and the Class VPM Certificateholder have certain rights with respect to the Villas Parkmerced loan as described under ‘‘Description of the Mortgage Pool—Split Loan Structures—Rights of the Holders of the Villas Parkmerced B Loans and the Class VPM Certificateholder.’’ The pooling and servicing agreement will govern the servicing of the Villas Parkmerced loan (including the non-pooled trust component) and the Villas Parkmerced subordinate companion loans. For additional information regarding the Villas Parkmerced loan, see ‘‘Description of the Mortgage Pool—Split Loan Structures—The Villas Parkmerced Loan’’ in this prospectus supplement and ‘‘The Villas Parkmerced Loan’’ in Annex B to this prospectus supplement. | ||
The mortgage loan known as the ‘‘Arrowhead Shopping Center’’ loan, representing, approximately 0.12% of the outstanding pool balance and 0.17% of the Loan Group 1 balance as of the cut-off date, is secured by a mortgaged property that also secures a subordinate companion loan that is not included in the trust. The outstanding principal balances of the Arrowhead Shopping Center loan as of the cut-off date is $3,794,786 and the outstanding principal balance as of the cut off date of the related subordinate companion loan is $237,274. | ||
The Arrowhead Shopping Center subordinate companion loan is currently held by CBA Mezzanine Capital Finance, LLC. | ||
The holder of the Arrowhead Shopping Center subordinate companion loan has certain rights with respect to the senior loan included in the trust as described under ‘‘Description of the Mortgage Pool—Split Loan Structures—Rights of the Holders of the Arrowhead Shopping Center B Loan.’’ The pooling and servicing agreement will govern the servicing of the Arrowhead Shopping Center loan and its corresponding subordinate companion loan. For additional information regarding the Arrowhead Shopping Center loan, see ‘‘Description of the Mortgage Pool—Split Loan Structures—The Arrowhead Shopping Center Loan’’ in this prospectus supplement. | ||
Each of the mortgage loans described in this section ‘‘—Split Loan Structures’’ 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. | |
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D. Fee Simple/Leasehold Estate | Each mortgage loan is secured by, among other things, a first mortgage lien on the fee simple estate in an income-producing real property (or in the case of 4 mortgaged properties, securing mortgage loans which represent 1.70% of the outstanding pool balance and 2.32% 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 a portion of the mortgaged property or (b) a leasehold (or subleasehold) estate in the mortgaged property and no mortgage on the related fee estate), as set forth below: | |
Interest of Borrower Encumbered | No. of Mortgaged Properties |
% of
Initial Outstanding Pool Balance(1) |
%
of Initial Loan Group 1 Balance(1) |
%
of Initial Loan Group 2A Balance(1) |
%
of Initial Loan Group 2B Balance(1) |
|||||||||||||||||
Fee Simple Estate(2) | 207 | 98.30 | % | 97.68 | % | 100.00 | % | 100.00 | % | |||||||||||||
Leasehold Estate | 2 | 1.08 | % | 1.47 | % | 0.00 | % | 0.00 | % | |||||||||||||
Partial Fee/Partial Leasehold Estate | 2 | 0.62 | % | 0.85 | % | 0.00 | % | 0.00 | % | |||||||||||||
Total | 211 | 100.00 | % | 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. |
E. Property Purpose | 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: | |
Property Type | No.
of Mortgaged Properties |
Aggregate Principal Balance of the Mortgage Loans(1) |
%
of Initial Pool |
%
of Initial Loan Group 1 Balance |
%
of Initial Loan Group 2A Balance |
%
of Initial Loan Group 2B Balance |
||||||||||||||||||||
Office | 44 | $ | 903,893,615 | 29.55 | % | 40.48 | % | 0.00 | % | 0.00 | % | |||||||||||||||
Multifamily | 49 | 892,638,907 | 29.18 | % | 2.96 | % | 100.00 | % | 100.00 | % | ||||||||||||||||
Retail | 68 | 835,508,586 | 27.31 | % | 37.42 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Anchored | 48 | 709,435,937 | 23.19 | % | 31.77 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Unanchored | 18 | 115,879,067 | 3.79 | % | 5.19 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Single Tenant | 2 | 10,193,582 | 0.33 | % | 0.46 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Hotel | 23 | 207,191,571 | 6.77 | % | 9.28 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Industrial | 11 | 90,967,183 | 2.97 | % | 4.07 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Mixed Use | 8 | 84,534,451 | 2.76 | % | 3.79 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Self Storage | 5 | 24,775,399 | 0.81 | % | 1.11 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Other(2) | 2 | 11,613,714 | 0.38 | % | 0.52 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Land | 1 | 8,222,344 | 0.27 | % | 0.37 | % | 0.00 | % | 0.00 | % | ||||||||||||||||
Total | 211 | $ | 3,059,345,771 | 100.00 | % | 100.00 | % | 100.00 | % | 100.00 | % | |||||||||||||||
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(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) | Consists of one mortgage loan for which the related mortgaged property is currently primarily used as a parking garage, and one mortgage loan for which the related mortgaged property is currently primarily used as a health club. |
F. | Property Locations | The tables below show the number of mortgaged properties, aggregate principal balance of the related mortgage loans, and percentage of initial pool balance, Loan Group 1 balance, Loan Group 2A and Loan Group 2B balance, as applicable, secured by mortgaged properties that are located in the top five jurisdictions of (i) the outstanding pool balance, (ii) Loan Group 1 balance, (iii) Loan Group 2A balance and (iv) Loan Group 2B Balance, respectively, in each case, as of the cut-off date: | |
All Mortgaged Properties(1) | ||
State | No.
of Mortgaged Properties |
Aggregate Principal Balance of the Mortgage Loans |
% of Pool | |||||||||||
California | 29 | $ | 685,939,413 | 22.42 | % | |||||||||
Texas | 12 | 293,131,064 | 9.58 | % | ||||||||||
Florida | 13 | 210,237,875 | 6.87 | % | ||||||||||
Pennsylvania | 11 | 198,456,575 | 6.49 | % | ||||||||||
New York | 13 | 164,915,485 | 5.39 | % | ||||||||||
Other(2) | 133 | 1,506,665,359 | 49.25 | % | ||||||||||
Total | 211 | $ | 3,059,345,771 | 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. |
Loan Group 1(1) | ||
State | No.
of Mortgaged Properties |
Aggregate Principal Balance of the Mortgage Loans |
%
of Initial Loan Group 1 Balance |
|||||||||||
California | 27 | $ | 382,514,326 | 17.13 | % | |||||||||
Texas | 6 | 194,156,064 | 8.70 | % | ||||||||||
Florida | 12 | 189,237,875 | 8.48 | % | ||||||||||
Pennsylvania | 9 | 178,056,575 | 7.97 | % | ||||||||||
New York | 11 | 158,328,528 | 7.09 | % | ||||||||||
Other(2) | 102 | 1,130,415,804 | 50.63 | % | ||||||||||
Total | 167 | $ | 2,232,709,173 | 100.00 | % | |||||||||
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(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 26 states. |
Loan Group 2A(1) | ||
State | No.
of Mortgaged Properties |
Aggregate Principal Balance of the Mortgage Loans |
%
of Initial Loan Group 2A Balance |
|||||||||||
California | 1 | $ | 300,000,000 | 97.40 | % | |||||||||
Ohio | 1 | 8,000,000 | 2.60 | % | ||||||||||
Total | 2 | $ | 308,000,000 | 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). |
Loan Group 2B(1) | ||
State | No.
of Mortgaged Properties |
Aggregate Principal Balance of the Mortgage Loans |
%
of Initial Loan Group 2B Balance |
|||||||||||
Texas | 6 | $ | 98,975,000 | 19.08 | % | |||||||||
Tennessee | 4 | 67,740,000 | 13.06 | % | ||||||||||
Georgia | 2 | 40,750,000 | 7.86 | % | ||||||||||
Arizona | 1 | 38,500,000 | 7.42 | % | ||||||||||
North Carolina | 3 | 34,200,000 | 6.59 | % | ||||||||||
Other(2) | 26 | 238,471,598 | 45.98 | % | ||||||||||
Total | 42 | $ | 518,636,598 | 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 18 states. |
See ‘‘Description of the Mortgage Pool—Additional Loan Information’’ in this prospectus supplement. | ||
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G. | Amortization Types | The mortgage loans have the amortization characteristics set forth in the following table: | |
Type of Amortization | No.
of Mortgage Loans |
Aggregate Principal Balance of the Mortgage Loans |
%
of Initial Pool Balance |
|||||||||||
Partial Interest-only Balloon Loans(1) | 103 | $ | 1,513,474,500 | 49.47 | % | |||||||||
Interest-only loans | 19 | 900,645,000 | 29.44 | % | ||||||||||
Balloon Loans(2) | 70 | 579,441,146 | 18.94 | % | ||||||||||
Anticipated Repayment Date Loans | 4 | 63,070,027 | 2.06 | % | ||||||||||
Fully Amortizing Loans | 1 | 2,715,098 | 0.09 | % | ||||||||||
Total | 197 | $ | 3,059,345,771 | 100.00 | % | |||||||||
(1) | Includes 103 mortgage loans representing approximately 49.47% of the outstanding pool balance, 46.22% of the Loan Group 1 balance, 2.60% of the Loan Group 2A balance and 91.30% of the Loan Group 2B balance as of the cut-off date that pay interest-only for the first 7 to 82 scheduled payments from 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 mortgage loan. Such mortgage loans therefore have an expected balloon balance at the maturity date. |
(2) | Does not include interest-only or partial interest-only mortgage loans. |
H. | Voluntary Prepayment
Provisions; Defeasance Loans |
As of the cut-off date, all of the mortgage loans (other than the Villas Parkmerced loan, Woodbury Lakes loan, Stadium Gateway loan, the Canyon Corporate Plaza loan, and the Conexant Building 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. | |
173 of the mortgage loans, representing 77.72% of the outstanding pool balance, 85.15% of the Loan Group 1 balance, 2.60% of the Loan Group 2A balance and 90.37% of the Loan Group 2B balance as of the cut-off date, permit defeasance following a lock-out period of at least two years from the closing date. | ||
24 of the mortgage loans, representing 22.28% of the outstanding pool balance, 14.85% of the Loan Group 1 balance, 97.40% of the Loan Group 2A balance and 9.63% of the Loan Group 2B balance as of the cut-off date, permit, following a lock-out period, prepayment with a yield maintenance charge (which charge, in most cases, is at least 1% of the prepaid amount), but do not permit defeasance. | ||
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Each of the following mortgage loans (or the pooled trust component in the case of the Villas Parkmerced loan), representing in the aggregate 15.68% of the outstanding pool balance, 8.05% of the Loan Group 1 balance and 97.40% of the Loan Group 2A balance as of the cut-off date, permits prepayment with a yield maintenance charge (which charge is at least 1% of the prepaid amount) following a lock-out period of less than two years from the closing date as set forth below, but does not permit defeasance: | ||
Mortgage Loan | Cut-Off Date Principal Balance |
%
of Initial Pool Balance |
Lock-Out Period (months from Closing Date) |
|||||||||||
Villas Parkmerced | $ | 300,000,000 | 9.81% | 19 | ||||||||||
Woodbury Lakes | $ | 65,000,000 | 2.12% | 21 | ||||||||||
Stadium Gateway | $ | 52,000,000 | 1.70% | 17 | ||||||||||
Canyon Corporate Plaza | $ | 31,750,000 | 1.04% | 8 | ||||||||||
Conexant Building | $ | 31,000,000 | 1.01% | 9 | ||||||||||
The mortgage loans generally provide for a period prior to maturity (generally 1 to 6 months) during which prepayments may be made without penalty or yield maintenance charge. | ||
All of the mortgage loans that permit voluntary prepayments or defeasances require that the prepayment or defeasance be made on the due date or, if on a different date, that any prepayment or defeasance be accompanied by the interest that would be due on the next due date. | ||
I. | Mortgage Loans with Related Borrowers |
Several 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 4.22%, 4.17% and 2.46%, respectively, of the outstanding pool balance the three largest of these groups in Loan Group 1 representing 5.78%, 3.47% and 2.47%, respectively, of the Loan Group 1 balance and the three largest of these groups in Loan Group 2B representing 14.51%, 11.69% and 9.66% respectively of the Loan Group 2B balance. See Annex A-1 for additional information. | |
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J. | Significant Loans | |
|
Ten Largest Mortgage Loans or Related Groups | ||
Property Name | Aggregate Cut-off Date Balance |
Percentage | Mortgage Rate |
Stated Remaining Term (mos) |
DSCR | LTV | LTV
at Maturity |
|||||||||||||||||||||||
Villas Parkmerced(1) | $ | 300,000,000 | 9.81 | % | 5.6480 | % | 55 | 2.38 | x | 42.43 | % | 42.43 | % | |||||||||||||||||
Valley View Center | 125,000,000 | 4.09 | % | 5.7180 | % | 58 | 1.66 | 73.96 | % | 73.96 | % | |||||||||||||||||||
SunTrust Center | 77,000,000 | 2.52 | % | 5.3360 | % | 118 | 2.45 | 50.33 | % | 50.33 | % | |||||||||||||||||||
Westin Philadelphia Hotel | 72,000,000 | 2.35 | % | 6.1570 | % | 57 | 1.60 | 79.12 | % | 79.12 | % | |||||||||||||||||||
Rock Pointe Corporate Center | 70,384,463 | 2.30 | % | 5.2150 | % | 117 | 1.29 | 77.77 | % | 64.60 | % | |||||||||||||||||||
Woodbury Lakes | 65,000,000 | 2.12 | % | 5.4500 | % | 118 | 1.68 | 70.27 | % | 70.27 | % | |||||||||||||||||||
The Harrisburg Portfolio | 61,000,000 | 1.99 | % | 5.3000 | % | 115 | 1.26 | 79.53 | % | 72.30 | % | |||||||||||||||||||
Beyman Multifamily Portfolio | 60,640,000 | 1.98 | % | 5.7680 | % | 117 | 1.25 | 78.96 | % | 73.63 | % | |||||||||||||||||||
Sunset Media Tower | 55,000,000 | 1.80 | % | 5.2300 | % | 118 | 1.30 | 66.67 | % | 61.69 | % | |||||||||||||||||||
Stadium Gateway | 52,000,000 | 1.70 | % | 5.6560 | % | 119 | 1.50 | 64.20 | % | 64.20 | % | |||||||||||||||||||
$ | 938,024,463 | 30.66 | % | 5.5856 | % | 85 | 1.84 | x | 62.08 | % | 59.98 | % | ||||||||||||||||||
(1) | If the pooled trust component of the Villas Parkmerced loan and the non-pooled trust component of the Villas Parkmerced loan were aggregated they would represent approximately 11.26% of the initial pool balance and constitute a significant obligor. |
With respect to each of the above mortgage loans, additional information is set forth on Annex B hereto. | ||
Advances A. General |
The applicable master servicer is required to advance delinquent monthly mortgage loan payments (including payments with respect to the non-pooled trust component of the Villas Parkmerced loan) if that master servicer 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 master servicers will not be required to advance interest in excess of a mortgage loan’s regular interest rate (i.e., not including any default rate or any excess interest accruing on an anticipated repayment date loan). The master servicers are also not required to advance, among other things, prepayment premiums or yield maintenance charges, or balloon payments. If an advance is made, the applicable master servicer will defer (rather than advance) its servicing fees, but will advance the trustee’s fees. Neither the master servicers nor the trustee will be required to make a principal and interest advance on any companion loan. In addition, neither the master servicers 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 applicable master servicer will be required on and after such date and until final | ||
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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. | ||
In addition to principal and interest advances, the applicable master servicer will also be obligated (subject to the limitations described in this prospectus supplement) to make 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. 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 Midland Loan Services, Inc. master servicer will also be required to make property advances with respect to the mortgaged property securing the Villas Parkmerced loan combination and the Arrowhead Shopping Center loan combination (each of which includes a loan that is included in the trust and one or more related subordinate companion loans that are not included in the trust). | ||
If the applicable master servicer fails to make any required advance, the trustee will be required to make the advance. The obligation of the master servicers 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 applicable master servicer or the special 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 master servicers, the special servicer and the trustee will be entitled to interest on any advances made. | ||
This interest will accrue at the rate and is 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. | ||
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See ‘‘The Pooling and Servicing Agreement—Advances’’ in this prospectus supplement. | ||
B. Appraisal Reduction Event | Certain adverse events affecting a mortgage loan (including the non-pooled trust component of the Villas Parkmerced 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 holder (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. 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 (including the non-pooled trust component of the Villas Parkmerced loan) that has been subject to an appraisal reduction event will be reduced so that the applicable master 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. | |
ADDITIONAL CONSIDERATIONS
See ‘‘Description of the Offered Certificates—Appraisal Reductions’’ in this prospectus supplement. | ||
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 (other than the Class VPM Certificates), (ii) the Midland Loan Services, Inc. master servicer, (iii) the Wachovia Bank, National Association master servicer, or (iv) 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 (including the Class VPM and Class X Certificates), excluding the Class S, Class R and Class LR Certificates (provided, however, that the Class A-1 through Class E Certificates are no longer outstanding) for the mortgage loans remaining in the trust. | |
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See ‘‘The Pooling and Servicing Agreement—Optional Termination’’ in this prospectus supplement and ‘‘Description of the Certificates—Termination’’ in the prospectus. | ||
Repurchase Obligation | Each mortgage loan seller will make certain representations and warranties with respect to the mortgage loans sold by such mortgage loan seller, as described herein under ‘‘The Pooling and Servicing Agreement—Representations and Warranties; Repurchase; Substitution.’’ If a mortgage loan seller has been notified of a material breach of any of its representations and warranties or a material default in the documentation of any mortgage loan, then that mortgage loan seller will be required to either cure the breach, repurchase the affected mortgage loan from the trust fund or substitute the affected mortgage loan with another mortgage loan. If the related mortgage loan seller opts to repurchase the affected mortgage loan, the repurchase would have the same effect on the offered certificates as a prepayment in full of the affected mortgage loan, except that the repurchase will not be accompanied by any prepayment premium or yield maintenance charge. | |
Sale of Defaulted Loans | Pursuant to the pooling and servicing agreement, each of the controlling class representative and the special servicer has the option to purchase from the trust any defaulted mortgage loan (including with respect to the Villas Parkmerced loan, the non-pooled trust component) that is at least 60 days delinquent as to any monthly debt service payment or is at least 30 days delinquent in respect of its balloon payment. In addition, certain of the mortgage loans are subject to a purchase option upon certain events of default in favor of a subordinate lender or a mezzanine lender or in the case of the Villas Parkmerced loan, the Class VPM Certificateholders. For more information relating to the sale of defaulted mortgage loans, see ‘‘The Pooling and Servicing Agreement—Sale of Defaulted Mortgage Loans’’ in this prospectus supplement. | |
Certain Federal Income Tax Consequences |
Elections will be made to treat portions of the trust as three separate REMICs, known as the Villas Parkmerced Loan REMIC, the Lower-Tier REMIC and the Upper-Tier REMIC for federal income tax purposes. In the opinion of counsel, such portions of the trust will qualify for this treatment pursuant to their elections. | |
Federal income tax consequences of an investment in the certificates offered in this prospectus supplement include: | ||
• | Each class of offered certificates will constitute a class of ‘‘regular interests’’ in the Upper Tier REMIC. | ||
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• | The regular interests 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 those certificates in accordance with the accrual method of accounting. | ||
In addition, the portion of the trust consisting of the right to excess interest (above the amount of interest that would have accrued on an anticipated repayment date loan if the interest rate did not increase as a result of the anticipated repayment date loan not paying off on its anticipated repayment date) and the related proceeds in the grantor trust distribution account will be treated as a grantor trust for federal income tax purposes. | ||
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 in this prospectus supplement 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 Deutsche Bank Securities Inc. an administrative exemption, Department Final Authorization Number 97-03E, as amended by Prohibited Transaction Exemption (‘‘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. will generally apply to the certificates offered in this prospectus supplement, 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 in this prospectus supplement receive from Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and Moody’s Investors Service, Inc., the credit ratings indicated below. | |
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S&P | Moody’s | |||||||||
Class A-1 | AAA | Aaa | ||||||||
Class A-2 | AAA | Aaa | ||||||||
Class A-3 | AAA | Aaa | ||||||||
Class A-AB | AAA | Aaa | ||||||||
Class A-4 | AAA | Aaa | ||||||||
Class A-1A | AAA | Aaa | ||||||||
Class A-1B | AAA | Aaa | ||||||||
Class A-M | AAA | Aaa | ||||||||
Class A-J | AAA | Aaa | ||||||||
Class B | AA+ | Aa1 | ||||||||
Class C | AA | Aa2 | ||||||||
Class D | AA− | Aa3 | ||||||||
Class E | A | A2 | ||||||||
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. Each of the rating agencies identified above has agreed to perform rating surveillance with respect to its ratings for so long as the offered certificates remain outstanding. Fees for such ratings surveillance have been prepaid by the depositor. | ||
Legal Investment | The certificates will not constitute ‘‘mortgage related securities’’ within the meaning of the Secondary Mortgage Market Enhancement Act of 1984, as amended. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the certificates. Investors should consult their own legal advisors for assistance in determining the suitability and consequences of the purchase, ownership, and sale of the certificates. See ‘‘Legal Investment’’ in this prospectus supplement and in the prospectus. | |
Denominations; Clearance and Settlement |
The certificates offered in this prospectus supplement will be issuable in registered form, in minimum denominations of certificate balance of (i) $10,000 with respect to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M and Class A-J 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 | ||
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Clearstream International, société 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 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 date, as applicable, is primarily dependent upon the market value of the mortgaged property and 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 were originated within 18 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 that mortgage loan.
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:
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• | the age, design and construction quality of the mortgaged property; |
• | perceptions regarding the safety, convenience and attractiveness of the mortgaged property; |
• | the proximity and attractiveness of competing properties; |
• | the adequacy of the mortgaged property’s management and maintenance; |
• | increases in operating expenses at the mortgaged property and in relation to competing properties; |
• | an increase in the capital expenditures needed to maintain the mortgaged property or make improvements; |
• | the dependence upon a single tenant, or a concentration of tenants in a particular business or industry; |
• | a decline in the financial condition of a major tenant; |
• | an increase in vacancy rates; and |
• | a decline in rental rates as leases are renewed or entered into with new tenants. |
Others factors are more general in nature, such as:
• | national, regional or local economic conditions (including plant closings, military base closings, industry slowdowns and unemployment rates); |
• | local real estate conditions (such as an oversupply of competing properties, space, multifamily housing or hotel rooms); |
• | demographic factors; |
• | decreases in consumer confidence; |
• | changes in consumer tastes and preferences; |
• | retroactive changes in building codes; |
• | changes or continued weakness in specific industry segments; and |
• | 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:
• | the length of tenant leases and other lease terms, including co-tenancy provisions and early termination rights; |
• | the creditworthiness of tenants; |
• | tenant defaults; |
• | in the case of rental properties, the rate at which new rentals occur; and |
• | 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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The Prospective Performance of the Commercial and Multifamily Mortgage Loans Included in the Trust Fund Should Be Evaluated Separately from the Performance of the Mortgage Loans in any of our Other Trusts
While there may be certain common factors affecting the performance and value of income-producing real properties in general, those factors do not apply equally to all income-producing real properties and, in many cases, there are unique factors that will affect the performance and/or value of a particular income-producing real property. Moreover, the effect of a given factor on a particular real property will depend on a number of variables, including but not limited to property type, geographic location, competition, sponsorship and other characteristics of the property and the related mortgage loan. Each income-producing real property represents a separate and distinct business venture; and, as a result, each of the multifamily and commercial mortgage loans included in one of the depositor’s trusts requires a unique underwriting analysis. Furthermore, economic and other conditions affecting real properties, whether worldwide, national, regional or local, vary over time. The performance of a pool of mortgage loans originated and outstanding under a given set of economic conditions may vary significantly from the performance of an otherwise comparable mortgage pool originated and outstanding under a different set of economic conditions. Accordingly, investors should evaluate the mortgage loans underlying the offered certificates independently from the performance of mortgage loans underlying any other series of offered certificates.
As a result of the distinct nature of each pool of commercial mortgage loans, and the separate mortgage loans within the pool, this prospectus supplement does not include disclosure concerning the delinquency and loss experience of static pools of periodic originations by the sponsor of assets of the type to be securitized (known as ‘‘static pool data’’). Because of the highly heterogeneous nature of the assets in commercial mortgage backed securities transactions, static pool data for prior securitized pools, even those involving the same asset types (e.g., hotels or office buildings), may be misleading, since the economics of the properties and terms of the loans may be materially different. In particular, static pool data showing a low level of delinquencies and defaults would not be indicative of the performance of this pool or any other pools of mortgage loans originated by the same sponsor or sponsors. Therefore, investors should evaluate this offering on the basis of the information set forth in this prospectus supplement with respect to the mortgage loans, and not on the basis of any successful performance of other pools of securitized commercial mortgage loans.
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 restrictions, condominium documents for mortgage loans secured by condominium units, covenants or agreements to which the related mortgaged properties or the owners thereof are subject 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.
Some of the mortgaged properties have been designated as historic or landmark buildings or are located in areas designated as historic or landmark. Such properties may have restrictions related to renovations, construction or other restrictions and may not be permitted to be converted to alternative uses because of such restrictions.
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:
• | changes in governmental regulations, fiscal policy, zoning or tax laws; |
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• | potential environmental legislation or liabilities or other legal liabilities; |
• | the availability of refinancing; and |
• | 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 if a few tenants make up a significant portion of the rental income. In the event of a default by a significant tenant, if the related lease expires prior to the mortgage loan maturity date and the related tenant fails to renew its lease or the tenant exercises an early termination right, there would likely be an interruption of rental payments under the lease and, accordingly, insufficient funds available to the borrower to pay the debt service on the mortgage loan. This is so because: (i) the financial effect of the absence of rental income from such tenant are typically 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 33 mortgaged properties, collectively representing 10.61% of the outstanding pool balance (and 14.54% of the Loan Group 1 balance), as of the cut-off date, the related mortgage loans are secured by liens on mortgaged properties that are 100% leased to a single tenant. For a list of each mortgaged property leased to a single tenant, along with the lease maturity dates with respect to each single tenant, see Annex A-1.
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 or lease guarantors 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. Certain single tenants have lease expiration dates that are prior to the related loan maturity date. See Annex A-1 for lease expiration dates and loan maturity dates. In addition, certain single tenants, or significant tenants, may have specific termination rights under their leases that may be exercised prior to the related loan maturity date under certain circumstances, such as the failure to timely complete tenant buildouts or early termination upon notice. There can be no assurance that if a tenant exercises an early termination option prior to the loan maturity date that the related borrower will have adequate cash flow available to satisfy debt service payments.
Mortgaged 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 these cases, a problem with a particular tenant could have a disproportionately large impact on the pool of mortgage loans and adversely affect distributions to certificateholders. Similarly, an issue with respect to a particular industry could also have a disproportionately large impact on the pool of mortgage loans. For additional information regarding significant tenants, see Annex A-1 in this prospectus supplement.
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.
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Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks
If a mortgaged property is leased in whole or substantial part to the borrower under the mortgage loan or to an affiliate of the borrower, a deterioration in the financial condition of the borrower or its affiliates can be particularly significant to the borrower’s ability to perform under the mortgage loan as it can directly interrupt the cash flow from the mortgaged property if the borrower’s or its affiliate’s financial condition worsens. Certain mortgaged properties or portions thereof are master leased to affiliates of the borrower under arrangements whereby the affiliate tenant operates and/or leases the mortgaged property or the master leased premises. Such master lease arrangements present additional risks, such as the potential limitations on the ability of a lender upon default to obtain a receiver to obtain control of, and collect the underlying revenues from, the mortgaged property unless and until the master lease is terminated and the affiliate tenant evicted from the mortgaged property or master leased premises (which may not be possible if the master lease is not in default or may be limited by an affiliate tenant bankruptcy or by requirements of local laws pertaining to the dispossession of defaulted tenants under the leases) and the risk that a master lease termination may result in a termination or interruption of rent payments under the underlying subleases between the subtenants and the affiliated master tenant. These risks may be mitigated when mortgaged properties are leased to unrelated third parties.
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 or groups of cross collateralized Mortgage Loans represent approximately 30.66% of the outstanding pool balance, approximately 25.86% of the Loan Group 1 balance, 97.40% of the Loan Group 2A balance and 11.69% of the Loan Group 2B balance as of the cut-off date. Losses on any of these loans may have a particularly adverse effect on the certificates offered in this prospectus supplement.
The ten largest loans are described in Annex B to this prospectus supplement.
Each of the other mortgage loans represents no more than 1.70% 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 4.22%, 4.17% and 2.46%, respectively, of the outstanding pool balance, the three largest of the related loan groups in Loan Group 1 representing approximately 5.78%, 3.47% and 2.47%, respectively, of the Loan Group 1 balance and the three largest of these groups in Loan Group 2B representing 14.51%, 11.69% and 9.66%, respectively of the Loan Group 2B 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. See Annex A-1 for Mortgage Loans with related borrowers.
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
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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 2A and Loan Group 2B are secured primarily by multifamily properties. Because principal distributions on the Class A-1A and Class A-1B Certificates are generally received from collections on the mortgage loans in Loan Group 2A and Loan Group 2B, respectively, an adverse event with respect to multifamily properties would have a substantially greater impact on the Class A-1A and Class A-1B Certificates than if that 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 A-M, Class A-J and Class B through Class Q Certificates have been reduced to zero, the Class A-1A and Class A-1B Certificates will receive principal distributions from the collections on the pool of mortgage loans, pro rata, with the Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 Certificates. Furthermore, because the amount of principal that will be distributed to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates will generally be based upon the particular loan group that the related mortgage loan is deemed to be in, the yield on the Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 Certificates will be particularly sensitive to prepayments on mortgage loans in Loan Group 1 and the yield on the Class A-1A and Class A-1B Certificates will be particularly sensitive to prepayments on mortgage loans in Loan Group 2A and Loan Group 2B, respectively.
The following are certain property type concentrations of the pool of mortgage loans as of the cut-off date (based on the allocated loan amount):
• | 44 office properties representing 29.55% of the outstanding pool balance and 40.48% of the Loan Group 1 balance as of the cut-off date; |
• | 49 multifamily properties representing 29.18% of the outstanding pool balance, 2.96% of the Loan Group 1 balance, 100.00% of the Loan Group 2A balance and 100% of the Loan Group 2B balance as of the cut-off date; |
• | 68 retail properties representing 27.31% of the outstanding pool balance and 37.42% of the Loan Group 1 balance as of the cut-off date; |
• | 23 hotel properties representing 6.77% of the outstanding pool balance and 9.28% of the Loan Group 1 balance as of the cut-off date; |
• | 11 industrial properties representing 2.97% of the outstanding pool balance and 4.07% of the Loan Group 1 balance as of the cut-off date. |
• | 8 mixed use properties representing 2.76% of the outstanding pool balance and 3.79% of the Loan Group 1 balance as of the cut-off date; |
• | 5 self storage properties representing 0.81% of the outstanding pool balance and 1.11% of the Loan Group 1 balance as of the cut-off date; |
• | 1 land property representing 0.27% of the outstanding pool balance and 0.37% of the Loan Group 1 balance as of the cut-off date. |
• | 1 health club property representing 0.25% of the outstanding pool balance and 0.35% of the Loan Group 1 balance as of the cut-off date; and. |
• | 1 parking garage property representing 0.13% of the outstanding pool balance and 0.17% 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 35 states. 29 mortgaged properties, securing mortgage loans representing 22.42% of the outstanding pool balance, are located in California. 12 mortgaged properties, securing mortgage loans representing 9.58% of the outstanding pool balance, are located in Texas. 13 mortgaged properties, securing mortgage loans representing 6.87% of the outstanding pool balance as of the cut-off date, are
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located in Florida. 11 mortgaged properties, securing mortgage loans representing 6.49% of the outstanding pool balance as of the cut-off date, are located in Pennsylvania. 13 mortgaged properties, securing mortgage loans representing 5.39% of the outstanding pool balance as of the cut-off date, are located in New York. See the table entitled ‘‘Geographic Concentration of Mortgage Loans’’ under ‘‘Description of the Mortgage Pool’’ in this prospectus supplement. Also for certain legal aspects of mortgage loans secured by mortgaged properties located in California, see ‘‘Legal Aspects of Mortgage Loans’’ in this prospectus supplement. Except as set forth in this paragraph, no state contains more than 3.87% 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:
• | certain developments particularly affecting industries concentrated in such state or region; |
• | conditions in the real estate markets where the mortgaged properties are located; |
• | changes in governmental rules and fiscal policies; |
• | acts of nature, including earthquakes, floods and hurricanes (which may result in uninsured losses); see ‘‘Risk Factors—Risks Related to the Mortgage Loans—Property Insurance’’ in this prospectus supplement; and |
• | 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
44 of the mortgaged properties, which represent security for 29.55% of the outstanding pool balance and 40.48% of the Loan Group 1 balance as of the cut-off date, are office properties.
Various factors may adversely affect the value of office properties, including:
• | the quality of an office building’s tenants; |
• | provisions in tenant leases that may include early termination provisions; |
• | an economic decline in the business operated by the tenants; |
• | the diversity of an office building’s tenants (or reliance on a single or dominant tenant); |
• | 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); |
• | the desirability of the area as a business location; |
• | the strength and nature of the local economy (including labor costs and quality, tax environment and quality of life for employees); and |
• | an adverse change in population, patterns of telecommuting or sharing of office space, and employment growth (which creates demand for office space). |
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Moreover, the cost of refitting office space for a new tenant is often higher than the cost of refitting other types of property.
Multifamily Properties Have Special Risks
49 of the mortgaged properties, which represent security for 29.18% of the outstanding pool balance, 2.96% of the Loan Group 1 balance, 100% of the Loan Group 2A balance and 100% of the Loan Group 2B balance as of the cut-off date, are multifamily properties. 5 of these mortgaged properties, representing security for 2.79% of the outstanding pool balance and 16.44% of the Loan Group 2B 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:
• | the physical attributes of the apartment building (e.g., its age, appearance and construction quality); |
• | the location of the property (e.g., a change in the neighborhood over time); |
• | the ability of management to provide adequate maintenance and insurance; |
• | the types of services the property provides; |
• | the property’s reputation; |
• | the level of mortgage interest rates (which may encourage tenants to purchase rather than rent housing); |
• | 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; |
• | the presence of competing properties in the local market; |
• | 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; |
• | 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; |
• | state and local regulations; |
• | government assistance/rent subsidy programs; and |
• | 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 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,
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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.
Retail Properties Have Special Risks
68 of the mortgaged properties, which represent security for 27.31% of the outstanding pool balance and 37.42% of the Loan Group 1 balance as of the cut-off date, are retail properties. Of these, 48 mortgaged properties, representing security for 23.19% of the outstanding pool balance and 31.77% 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. 18 mortgaged properties, representing security for 3.79% of the outstanding pool balance and 5.19% 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 0.33% of the outstanding pool balance and 0.46% of the Loan Group 1 balance as of the cut-off date, are single tenant properties. 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 may have rents tied to a percentage of gross sales. In addition, certain tenants have early termination options, some of which may impact the termination rights of other tenants under different leases.
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:
• | an anchor tenant’s or shadow anchor tenant’s failure to renew its lease; |
• | 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; |
• | the bankruptcy or economic decline of an anchor tenant, shadow anchor or self-owned anchor; or |
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• | 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 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:
• | factory outlet centers; |
• | discount shopping centers and clubs; |
• | catalogue retailers; |
• | home shopping networks; |
• | internet web sites; and |
• | 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.
Hotel Properties Have Special Risks
There are 23 hotel properties, securing approximately 6.77% of the outstanding pool balance as of the cut-off date (or approximately 9.28% of the Loan Group 1 balance as of the cut-off date). 4 of such hotel properties are considered full service, securing approximately 3.21% of the outstanding pool balance as of the cut-off date (or approximately 4.40% of the Loan Group 1 balance as of the cut-off date), 16 of such hotel properties, securing approximately 2.56% of the outstanding pool balance as of the cut-off date (or approximately 3.50% of the Loan Group 1 balance as of the cut-off date), are considered limited service; and 3 of such hotel properties, securing approximately 1.01% of the outstanding pool balance as of the cut-off date (or approximately 1.38% of the Loan Group 1 balance as of the cut-off date), are considered extended stay.
Various factors may adversely affect the economic performance of a hotel, including:
• | adverse economic and social conditions, either local, regional or national (which may limit the amount that can be charged per room and reduce occupancy levels); |
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• | the construction of competing hotels or resorts; |
• | continuing expenditures for modernizing, refurbishing and maintaining existing facilities prior to the expiration of their anticipated useful lives; |
• | conversion to alternative uses which may not be readily made; |
• | a deterioration in the financial strength or managerial capabilities of the owner and operator of a hotel; |
• | changes in travel patterns (including, for example, the decline in air travel following the terrorist attacks on September 11, 2001) caused by changes in access, energy prices, strikes, relocation of highways, the construction of additional highways or other factors; |
• | management ability of property managers; |
• | desirability of particular locations; |
• | location, quality and hotel management company’s affiliation, each of which affects the economic performance of a hotel; and |
• | relative illiquidity of hotel investments which limits the ability of the borrowers and property managers to respond to changes in economic or other conditions. |
Because hotel rooms generally are rented for short periods of time, the financial performance of hotels tends to be affected by adverse economic conditions and competition more quickly than other commercial properties.
Moreover, the hotel and lodging industry is generally seasonal in nature and different seasons affect different hotels depending on type and location. This seasonality can be expected to cause periodic fluctuations in a hotel property’s room and restaurant revenues, occupancy levels, room rates and operating expenses.
The liquor licenses for most of the applicable mortgaged properties are commonly held by affiliates of the mortgagors, unaffiliated managers and operating lessees. The laws and regulations relating to liquor licenses generally prohibit the transfer of such licenses to any person. In the event of a foreclosure of a hotel property that holds a liquor license, a purchaser in a foreclosure sale would likely have to apply for a new license, which might not be granted or might be granted only after a delay which could be significant. There can be no assurance that a new license could be obtained promptly or at all. The lack of a liquor license in a full-service hotel could have an adverse impact on the revenue from the related mortgaged property or on the hotel’s occupancy rate.
The hotel properties (other than the mortgaged property securing the mortgage loan known as the Bahama House loan) are affiliated with a hotel management company through management agreements or with a hotel chain through a franchise agreement. The performance of a hotel property affiliated with a franchise or hotel management company depends in part on:
• | the continued existence, reputation, and financial strength of the franchisor or hotel management company; |
• | the public perception of the franchise or management company or hotel chain service mark; and |
• | the duration of the franchise licensing agreement or management agreement. |
Any provision in a franchise agreement providing for termination because of the bankruptcy of a franchisor generally will not be enforceable. Replacement franchises may require significantly higher fees.
Transferability of franchise license agreements is generally restricted. In the event of a foreclosure, the lender or its agent would not have the right to use the franchise license without the franchisor’s consent.
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No assurance can be given that a franchise or management agreement will not be terminated during the term of the related mortgage loan or that the trust fund could renew a franchise or management agreement or obtain a new franchise or management agreement following termination of the agreement in place at the time of foreclosure.
Industrial Properties Have Special Risks
There are 11 industrial properties, securing approximately 2.97% of the outstanding pool balance and 4.07% of the Loan Group 1 balance as of the cut-off date. Significant factors determining the value of industrial properties are:
• | the quality of tenants; |
• | building design and adaptability; and |
• | 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. Because of the construction utilized in connection with certain industrial facilities, it might be difficult or costly to convert such a facility to an alternative use.
Self Storage Properties Have Special Risks
There are 5 self storage properties, securing approximately 0.81% of the outstanding pool balance and 1.11% of the Loan Group 1 balance, as of the cut-off date.
The self storage facilities market contains low barriers to entry. In addition, due to the short-term nature of self storage leases, self storage properties also may be subject to more volatility in terms of supply and demand than loans secured by other types of properties.
Because of the construction utilized in connection with certain self storage facilities, it might be difficult or costly to convert such a facility to an alternative use. Thus, liquidation value of self storage properties may be substantially less than would be the case if the same were readily adaptable to other uses. In addition, it is difficult to assess the environmental risks posed by these facilities due to tenant privacy, anonymity and unsupervised access to these facilities. Therefore, these facilities may pose additional environmental risks to investors. The environmental site assessments discussed in this prospectus supplement did not include an inspection of the contents of the self storage units included in the self storage properties. We therefore cannot provide assurance that all of the units included in the self storage properties are free from hazardous substances or other pollutants or contaminants, or that they will remain so in the future.
Properties with Condominium Ownership Have Special Risks
Some of the mortgage loans are secured, in whole or in part, by the related borrower’s fee simple ownership interest in one or more condominium units. The management and operation
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of a condominium is generally controlled by a condominium 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 and a unit owner’s ability to control decisions of the board are generally related to the number of units owned by such owner as a percentage of the total number of units in the condominium. 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. 3 mortgage loans, representing 1.58% of the outstanding pool balance and 2.17% of the Loan Group 1 balance are secured by the borrower’s fee simple interest in one or more condominium units and the related borrower does not control the condominium board, as described below:
• | With respect to the mortgage loan known as ‘‘425 Fifth Avenue,’’ representing 0.18% of the outstanding pool balance and 0.25% of the Loan Group 1 balance, the condominium consists of 175 residential units and one retail unit (which unit is collateral for the mortgage loan). Decisions related solely to the commercial unit are made by board members controlled by the borrower. Decisions related to the common areas are decided by majority vote of all of the board members. However, to the extent any vote may limit or affect the rights of any lender against its borrower, consent or approval of the lender is required. |
• | The mortgage loan known as ‘‘The Ansonia’’ loan, representing 1.24% of the outstanding pool balance or 1.70% of the Loan Group 1 balance as of the Cut-Off Date, is secured by a commercial condominium unit. The Building initially had 465 residential units (several of which were split or severed pursuant to amendments to the Declaration of Condominium), and one commercial unit. The commercial unit consists of all the commercial space on the second floor, a portion of the ground floor and a portion of the cellar and subcellar floors, including the garage and the ramps providing access thereto (with the exception of the certain residential limited common elements located therein and general common elements) and the facilities which service solely the commercial unit. The Borrower owns 100% of the commercial unit and has the right to change the use and tenancy of the commercial unit (except for specific prohibited uses) without obtaining the consent of the Condominium Board for the residential units or the residential unit owners, provided that the zoning for the property and the then existing certificate of occupancy permits the proposed use or a zoning variance is obtained. The Borrower also has the right, without obtaining the consent of the Condominium Board for the residential units or the residential unit owners, to make alterations, additions or improvements in and to the commercial unit, to change the layout of, or the number of rooms in the commercial unit, and to change the size and/or number of the commercial unit. |
• | With respect to the mortgage loan known as ‘‘Bentley Retail,’’ representing 0.16% of the outstanding pool balance or 0.21% of the Loan Group 1 balance as of the cut-off date, the mortgaged property consists of four commercial units in a condominium |
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complex with residential units. Per the condominium documents, the mortgaged property may be transferred, conveyed, leased or disposed of without association consent. The association maintains insurance covering all units in the condominium, including the commercial units that comprise the mortgaged property. The loan documents require Borrower to provide Lender a copy of any notice of default under the condominium documents from the condominium association. Under the loan documents, Borrower has assigned Lender the right to act on Borrower’s behalf in connection with any condominium issues. |
In addition, 2 mortgage loans, representing 2.06% of the outstanding pool balance, 2.26% of the Loan Group 1 balance and 2.41% of the Loan Group 2B balance, are secured by the borrower’s fee simple interest in one or more condominium units and the related borrower controls the condominium board.
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 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:
• | space in the mortgaged properties could not be leased or re-leased; |
• | the mortgaged property is re-leased at a rental rate significantly below the rental rate paid by the tenant at the space when the loan was originated; |
• | tenants were unable to meet their lease obligations; |
• | a significant tenant were to become a debtor in a bankruptcy case; or |
• | 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 tenants (which may include 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 on 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
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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, that mortgaged property could experience a further decline in value if the tenants’ leases were terminated.
The borrower under certain of the mortgage loans has given to one or more tenants at the related mortgaged real property a right of first offer, a right of first refusal or another option to purchase all or a portion of the related mortgaged properties, which must in any event be greater than the outstanding balance of the mortgage loan. These rights, which may not be subordinated to the related mortgage, may impede the lender’s ability to sell the related mortgaged real property at foreclosure or after acquiring the mortgaged real property pursuant to foreclosure, or adversely affect the value and/or marketability of the related mortgaged real property. Additionally, the exercise of a purchase option may result in the related mortgage loan being prepaid during a period when voluntary prepayments are otherwise prohibited.
Additionally with respect to the mortgage loan known as ‘‘Peapod Distribution Warehouse’’ loan, representing 0.21% of the outstanding pool balance or 0.29% of the Loan Group 1 balance as of the Cut-Off Date, the tenant has an option to purchase the Mortgaged Property for fair market value pursuant to the applicable lease. Pursuant to the SNDA with the tenant, the purchase option can not be exercised during the loan prepayment lockout period. Additionally the tenant has acknowledged in the SNDA that it must meet the defeasance requirements set forth in the related loan documents in order to prepay the loan or meet the loan assumption requirements of the related loan documents in order to assume the loan in connection with the purchase option.
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 property. One or more tenants at a particular mortgaged property may have been or may currently be the subject of bankruptcy or insolvency proceedings. 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 that lease.
The Sellers of the Mortgage Loans Are Subject to Bankruptcy or Insolvency Laws That May Affect the Trust’s Ownership of the Mortgage Loans
In the event of the insolvency of any mortgage loan seller, it is possible the trust’s right to payment from or ownership of the mortgage loans could be challenged, and if such challenge were successful, delays or reductions in payments on your certificates could occur.
Based upon opinions of counsel that the conveyance of the mortgage loans would generally be respected in the event of insolvency of the mortgage loan sellers, which opinions are subject to various assumptions and qualifications, the depositor believes that such a challenge will be unsuccessful, but there can be no assurance that a bankruptcy trustee, if applicable, or other interested party will not attempt to assert such a position. Even if actions
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seeking such results were not successful, it is possible that payments on the certificates would be delayed while a court resolves the claim.
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 that 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:
• | an environmental consultant investigated those conditions and recommended no further investigations or remedial action; |
• | a responsible third party was identified as being responsible for the remedial action; or |
• | the related originator of the subject mortgage loan generally required the related borrower to: |
(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;
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(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;
(e) obtain environmental insurance or provide an indemnity or guaranty from an individual or an entity (which may include the sponsor); or
(f) the circumstance or condition has been remediated in all material respects.
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 18 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. 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.
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
196 mortgage loans, representing 99.91% of the outstanding pool balance, 99.88% of the Loan Group 1 balance, 100.00% of the Loan Group 2A balance and 100% of the Loan Group 2B balance as of the cut-off date, are balloon loans or anticipated repayment date loans that provide for substantial payments of principal due at their stated maturities or anticipated repayment dates, as applicable. 81 of the 196 mortgage loans identified above, representing 36.41% of the outstanding pool balance, or 39.40% of the Loan Group 1 balance and 45.18% of the Loan Group 2B balance as of the cut-off date, have a balloon payment or anticipated repayment date in the year 2016 and 97 of the 196 mortgage loans identified above, representing 40.78% of the outstanding pool balance, or 44.01% of the Loan Group 1 balance
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and 51.11% of the Loan Group 2B balance as of the cut-off date, have a balloon payment or an anticipated repayment date in the year 2015.
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 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:
• | the availability of, and competition for, credit for commercial real estate projects; |
• | prevailing interest rates; |
• | the fair market value of the related properties; |
• | the borrower’s equity in the related properties; |
• | the borrower’s financial condition; |
• | the operating history and occupancy level of the property; |
• | tax laws; and |
• | 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.
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 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 applicable master 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 extension or modification will increase the present value of recoveries in a given case. Any delay in collection of a balloon payment that would otherwise be distributable in respect of a class of certificates offered in this prospectus supplement, whether such delay is due to borrower default or to modification of the related mortgage loan by the special servicer, 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
With respect to most of the mortgage loans, 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, subject to exceptions, generally limit the borrowers’ ability to incur additional indebtedness other than trade payables and equipment financing relating to the mortgaged properties in the ordinary course of business. For example, with respect to the Villas Parkmerced loan, in addition to its interest in the mortgaged property, the borrower owns 100% of the equity interests in Parkmerced Investors Properties Manager, LLC, an entity that holds certain income-producing off-site management contracts. 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.
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However, we cannot assure you that the related borrowers will comply with these requirements. Also, although a borrower may currently be structured as a single-purpose entity, such 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’’ under standard rating agency criteria. There can be no assurance that circumstances that arose or may arise when the borrower did not or does not observe the required covenants will not impact the borrower or the related mortgaged property. In addition, most 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 33 mortgage loans, representing 18.47% of the outstanding pool balance, 12.36% of the Group 1 Loan Balance and 55.76% of the Group 2B Loan Balance, two or more borrowers own the related mortgaged property as tenants-in-common. The mortgage loans are:
• | Hawthorne Exchange |
• | Empirian at Steele Park |
• | Colonnade at Germantown |
• | Mission Galleria Apartments |
• | Vistas at Seven Bar Ranch |
• | The Exchange at Tallahassee Apts |
• | South Duff Community Park I & II |
• | Sunwest Medical Center |
• | Tramore Village Apartments |
• | Trafalgar Plaza Portfolio |
• | Charleston Arms Apartments |
• | Battenkill Plaza |
• | Mission Madison Priest Lake Apartments |
• | Sunset Media Tower |
• | National Road Marketplace |
• | Stratford Plaza |
• | Mission Fairways Apartments |
• | Heritage at Lakeside Apartment Homes |
• | Walnut Hills Apartments |
• | Top Food & Drug — Auburn, WA |
• | Safeway — Vancouver, WA |
• | Larry's Market—Tukwila, WA |
• | Sherm's Thunderbird Market—Roseburg, OR |
• | One Town Center |
• | Buena Park Promenade |
• | Northwest Corners Apartments |
• | Lewisville Commons |
• | Hillcrest Shopping Center |
• | Pacific Willow Center |
• | Spanish Oaks Apartments |
• | Brookfield Commons |
• | 5 Omni |
• | Willowbrook West Apartments |
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Under certain circumstances, a tenant-in-common can be forced to sell its property, including by a bankruptcy trustee, one or more other 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. These factors could cause losses to certificateholders. 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 or partial recourse to the related tenant-in-common borrower and the related guarantor if a tenant-in-common borrower 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 servicers, the special servicer 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—Certain Terms and Conditions of the Mortgage Loans—Other Financing.’’
Except to the extent set forth in 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. This additional debt may be secured by other property owned by such borrower. Certain of these borrowers may have already incurred additional debt. Also, in certain cases, co-mortgagors have executed the mortgage in order to encumber adjoining property or related property interests. Such co-mortgagors may not be special purpose entities, and in such cases could have obligations, debt and activities unrelated to the mortgaged property. 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—Certain Terms and Conditions of the Mortgage Loans—Other Financing.’’
Although the mortgage loans generally restrict the transfer or pledging of controlling general partnership and managing member equity interests in a borrower subject to certain exceptions and except to the extent set forth in this paragraph, 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 general partnership, managing membership, limited partnership or non-managing membership equity interests in a borrower. In addition, 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. With respect to mezzanine financing, while a mezzanine
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lender has no security interest in or rights to the related mortgaged properties, a default under a mezzanine loan could cause a change in control of the related borrower. With respect to mortgage loans that permit mezzanine financing, the relative rights of the mortgagee and the related mezzanine lender will generally be set forth in an intercreditor agreement, which agreements typically provide that the rights of the mezzanine lender (including the right to payment) against the mortgage loan borrower and mortgaged property are subordinate to the rights of the mortgage loan lender and that the mezzanine lender may not take any enforcement action against the mortgage loan borrower and mortgaged property. The mortgage loan sellers have informed us that they are aware of existing or potential mezzanine debt with respect to the mortgage loans described under ‘‘Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans—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 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 makes 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. In addition, with respect to the mezzanine financing, in most of these cases a mezzanine lender will have a right to purchase a mortgage loan in certain default situations. This may cause an early prepayment of the related mortgage loan.
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 or, in the case of a mezzanine loan, the related mezzanine lender may exercise its purchase rights, in each case, 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:
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• | grant a debtor a reasonable time to cure a payment default on a mortgage loan; |
• | reduce monthly payments due under a mortgage loan; |
• | change the rate of interest due on a mortgage loan; or |
• | 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.
Certain of the mortgage loans may have had a sponsor that has filed for bankruptcy protection more than ten years ago. In all cases of which we are aware, the entity that was in bankruptcy has emerged from bankruptcy, although such entity may have emerged from bankruptcy within the last ten years. However, we cannot assure you that, with respect to a sponsor that has filed for bankruptcy in the past, such sponsor will not be more likely than other sponsors to utilize their rights in bankruptcy in the event of any threatened action by the lender to enforce its rights under the related loan documents. Nor can we assure you that the bankruptcies of sponsors have in all cases been disclosed to us.
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:
• | responding to changes in the local market; |
• | planning and implementing the rental structure; |
• | operating the property and providing building services; |
• | managing operating expenses; and |
• | assuring that maintenance and capital improvements are carried out in a timely fashion. |
Properties deriving revenues primarily from short-term sources, such as hotels and 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
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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. 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 a large mortgaged property, 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 hotel properties and
those mortgaged properties in tourist areas, which could reduce the
ability of those 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 and continues to maintain a military presence in Afghanistan. In addition, the government of the United States has stated that it is likely that 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 domestic and world economy, financial markets, real estate markets, insurance costs 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.
Recent Hurricanes
The damage caused by Hurricane Katrina, Hurricane Rita and Hurricane Wilma and related windstorms, floods and tornadoes in areas of Louisiana, Mississippi, Texas and Florida in 2005 may adversely affect certain of the mortgaged properties. As of the cut-off date, 26 of the mortgaged properties, securing 16.87% of the initial outstanding pool balance (representing 17.17% of the initial outstanding Loan Group 1 balance and 25.59% of the Loan Group 2B balance) are secured by mortgaged properties located in Texas, Louisiana, Mississippi and Florida. Although it is too soon to assess the full impact of Hurricane Katrina, Hurricane Rita and Hurricane Wilma on the United States and local economies, in the short term the effects of the storm are expected to have a material adverse effect on the local economies and income producing real estate in the affected areas. Areas affected by Hurricane Katrina,
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Hurricane Rita and Hurricane Wilma have suffered severe flooding, wind and water damage, forced evacuations, lawlessness, contamination, gas leaks and fire and environmental damage. The devastation caused by Hurricane Katrina, Hurricane Rita and Hurricane Wilma could lead to a general economic downturn, including increased oil prices, loss of jobs, regional disruptions in travel, transportation and tourism and a decline in real-estate related investments, in particular, in the areas most directly damaged by the storm. Specifically, there can be no assurance that displaced residents of the affected areas will return, that the economies in the affected areas will recover sufficiently to support income producing real estate at pre-storm levels or that the costs of clean-up will not have a material adverse effect on the national economy. Additionally, the standard all-risk insurance policies that borrowers under the mortgage loans are required to maintain typically do not cover flood damage. Although certain mortgage loans may require borrowers to maintain additional flood insurance, there can be no assurance that such additional insurance will be sufficient to cover damage to a mortgaged property in a heavily flooded area.
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 that 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, environmental hazards, certain acts of nature, terrorist activities or other insurable conditions or events.
In addition certain of the mortgaged properties are located in California, Washington, Texas, Oregon, Nevada and along the Southeastern coastal areas of the United States. These areas have historically been at greater risk regarding acts of nature (such as earthquakes, floods, landslides and hurricanes) than other states. The loans do not generally require the borrowers to maintain earthquake or windstorm insurance and the related borrowers 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.
In addition, following the September 11, 2001 terrorist attacks in New York City, the Washington, D.C. area and Pennsylvania, the comprehensive general liability and business interruption or rent loss insurance policies required by typical mortgage loans, which are generally subject to periodic renewals during the term of the related mortgage loans, have been affected. To give time for private markets to develop a pricing mechanism and to build capacity to absorb future losses that may occur due to terrorism, on November 26, 2002, the Terrorism Risk Insurance Act of 2002 was enacted, which established the Terrorism Insurance Program. The Terrorism Insurance Program was originally scheduled to expire on December 31, 2005. However, on December 22, 2005, the Terrorism Risk Insurance Extension Act of 2005 was enacted, which extended the duration of the Terrorism Insurance Program until December 31, 2007.
The Terrorism Insurance Program is administered by the Secretary of the Treasury and, through December 31, 2007, will provide some financial assistance from the United States Government to insurers in the event of another terrorist attack that results in an insurance claim. The program applies to United States risks only and to acts that are committed by an individual or individuals acting on behalf of a foreign person or foreign interest as an effort to influence or coerce United States civilians or the United States Government.
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In addition, with respect to any act of terrorism occurring after March 31, 2006, no compensation will be paid under the Terrorism Insurance Program unless the aggregate industry losses relating to such act of terror exceed $50 million (or, if such insured losses occur in 2007, $100 million). As a result, unless the borrowers obtain separate coverage for events that do not meet that threshold (which coverage may not be required by the respective loan documents and may not otherwise be obtainable), such events would not be covered.
The Treasury Department has established procedures for the program under which the federal share of compensation will be equal to 90% (or, in 2007, 85%) of that portion of insured losses that exceeds an applicable insurer deductible required to be paid during each program year. The federal share in the aggregate in any program year may not exceed $100 billion (and the insurers will not be liable for any amount that exceeds this cap). An insurer that has paid its deductible is not liable for the payment of any portion of total annual United States wide losses that exceed $100 billion, regardless of the terms of the individual insurance contracts.
Through December 2007, insurance carriers are required under the program to provide terrorism coverage in their basic ‘‘all risk’’ policies. Any commercial property and casualty terrorism insurance exclusion that was in force on November 26, 2002 is automatically voided to the extent that it excludes losses that would otherwise be insured losses. Any state approval of such types of exclusions in force on November 26, 2002 are also voided.
Because it is a temporary program, there is no assurance that it will create any long term changes in the availability and cost of such insurance.
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 and the amounts available could be insufficient to cover insured risks at such mortgaged property.
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 standard extended coverage casualty insurance but may not specify the nature of the specific risks required to be covered by these insurance policies.
With respect to certain of the mortgage loans, the standard extended coverage policy specifically excludes terrorism insurance from its coverage. In certain of those cases, the related borrower obtained supplemental terrorism insurance. In other cases, the lender did not require that terrorism insurance be maintained.
In addition, in many cases where terrorism insurance is required, such insurance may be required only to the extent it can be obtained for premiums less than or equal to the ‘‘cap’’ amount specified in the related mortgage loan documents, only if it can be purchased at commercially reasonable rates and/or only with a deductible at a certain threshold.
Even if the mortgage loan documents specify that the related borrower must maintain standard extended coverage casualty insurance or other insurance that covers acts of terrorism, the borrower may fail to maintain such insurance and the applicable master servicer or the 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 holder (which is generally (except with respect to the mortgage loans that are part of a split loan structure) the 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 described under ‘‘The Pooling and Servicing Agreement—Special
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Servicing—The Directing Holder’’ 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 applicable master 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 this 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 Annex A-1 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 Villas Parkmerced Loan REMIC or the Lower-Tier REMIC, as 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 proceeds available for distribution to certificateholders will be reduced. The special servicer may permit the Villas Parkmerced Loan REMIC or the Lower-Tier REMIC to
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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 the properties. These state or local taxes may reduce net proceeds available for distribution with respect to the certificates.
Increases in Real Estate Taxes Due to Termination of a PILOT Program or Other Tax Abatement Arrangements May Reduce Payments to Certificateholders
Certain of the mortgaged properties securing the mortgage loans have or may in the future have the benefit of reduced real estate taxes under a local government program of payment in lieu of taxes (often known as a PILOT program) or other tax abatement arrangements. Some of these programs or arrangements are scheduled to terminate or have significant tax increases prior to the maturity of the related mortgage loan, resulting in higher, and in some cases substantially higher, real estate tax obligations for the related borrower. An increase in real estate taxes may impact the ability of the borrower to pay debt service on the mortgage loans. There are no assurances that any such program will continue for the duration of the related mortgage loan or would survive a mortgage loan foreclosure or deed in lieu of foreclosure.
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, subject in some cases to a right of the court to revoke such acceleration and reinstate the mortgage loan if a payment default is cured. 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 or if a material default is cured.
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 which event, the receiver, rather than the lender, would be entitled to collect the rents. A receiver generally may not be appointed as a matter of right, and appointment of a receiver may be delayed or subject to a court’s approval. In addition, as discussed above, 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
9 mortgage loans, representing 7.51% of the outstanding pool balance, 7.82% of the Loan Group 1 balance and 10.65% of the Loan Group 2B balance as of the cut-off date, are secured by more than one mortgaged property. In addition, there are 4 groups of crossed-collateralized and crossed-defaulted mortgage loans representing 4.55% of the outstanding pool balance, 2.72% of the Loan Group 1 balance and 15.12% of the Loan Group 2B balance.
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
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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
4 mortgaged properties, which represent security for 1.70% of the outstanding pool balance, or 2.32% of the Loan Group 1 balance as of the cut-off date, are secured by a mortgage on (i) the borrower’s leasehold (subleasehold) interest in the related mortgaged property and not the related fee simple interest or (ii) the borrower’s leasehold interest in portion of the related mortgaged property and the borrower’s fee simple interest in the remainder of the related mortgaged property.
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 or in connection with a lessor or lessee bankruptcy, 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 may contain certain other provisions beneficial to a mortgagee. 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 generally 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), although in certain cases a bankrupt lessor may obtain court approval to dispose of the related property free and clear of the lessee’s interest. 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.
The ground leases securing the mortgaged properties may 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.
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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 that 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. These changes may limit the ability of the related borrower to rebuild the premises ‘‘as is’’ in the event of a substantial casualty loss and may adversely affect the ability of a borrower to meet its mortgage loan obligations from cash flow. Insurance proceeds may not be sufficient to pay off such mortgage loan in full. In addition, if the mortgaged property 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 the 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. Certain mortgaged properties may currently have a temporary certificate of occupancy related to renovations at the mortgaged property. 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 that are not subject to reserves or other loan document provisions that adequately address such non-compliance.
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.
With respect to the mortgage loan known as ‘‘Riverview Square’’, which represents security for 1.44% of the outstanding pool balance, or 1.97% of the Loan Group 1 balance as of the cut off date, certain litigation was commenced in Connecticut State Court against a number of parties, including the borrower and principals of borrower. The litigation alleges that Jonathan Keller (a sponsor) (and a number of entities owned by him, including the borrower) breached a duty of care to the plaintiffs, was aware of certain acts of malfeasance committed by third parties and was unjustly enriched. The suit does not specify the amount of monetary damages the plaintiffs are seeking. The plaintiffs are not seeking rescission of the sale of the Mortgaged Property to Jonathan Keller/borrower. At the time of the closing of the loan, the litigation was in the discovery phase.
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. To the extent that a mortgaged property securing a mortgage loan does not comply with the Americans with Disabilities Act of 1990, the related borrowers may incur costs complying with
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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.
Conflicts of Interest
Directing Holder 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 holder 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 holder, 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 holder, with respect to the mortgage loans that are part of a split loan structure and are serviced by the servicer, is as described in ‘‘The Pooling and Servicing Agreement—Special Servicing—The Directing Holder’’ in this prospectus supplement. The directing holder is also generally entitled to remove (at its own expense if such removal is not for cause) the special servicer with or without cause. See ‘‘The Pooling and Servicing Agreement— Special Servicing—The Directing Holder’’ 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 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. The directing holder has no duty to act in the interests of any class of certificates (other than the controlling class if the controlling class representative is the directing holder). However, the pooling and servicing agreement provides that neither the master servicers nor the special servicer may follow a direction of the directing holder if such direction could cause it to violate the servicing standards. See also "—Conflicts Between Certificateholders and Holders of Companion Loans’’ in this prospectus supplement.
Related Parties May Acquire Certificates or Experience Other Conflicts
Affiliates of the depositor, the mortgage loan sellers, the master servicers or the special servicer may purchase a portion of the certificates. The purchase of certificates could cause a conflict between the master servicers’ 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 holder generally has the right to remove the special servicer (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) 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 master servicers, the special servicer or any of their affiliates. See ‘‘The Pooling and Servicing Agreement—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 in this prospectus supplement. 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
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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, the servicers are not required to act in a manner more favorable to the certificates offered in this prospectus supplement or any particular class of certificates that are subordinate to the certificates offered in this prospectus supplement.
Additionally, the master servicers 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 master servicers 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 master servicers 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 a particular mortgage loan seller or its affiliates that engage in the acquisition, development, operation, financing and disposition of real estate if such mortgage loan seller acquires 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 acquirers, developers, operators, financers or sellers of real estate related assets.
Additionally, certain of the mortgage loans included in the trust may have been refinancings of debt previously held by a mortgage loan seller or an affiliate of a mortgage loan seller and the mortgage loan sellers or their affiliates may have or have had equity investments in the borrowers (or in the owners of the borrowers) or properties under certain of the mortgage loans included in the trust. Each of the mortgage loan sellers and their affiliates have made and/or may make or have preferential rights to make loans to, or equity investments in, affiliates of the borrowers under the mortgage loans.
PNC Bank, National Association is a wholly-owned indirect subsidiary of The PNC Financial Services Group, Inc., a Pennsylvania corporation and is PNC Financial Services Group, Inc.'s principal bank subsidiary. PNC Bank, National Association is an affiliate of PNC Capital Markets LLC, one of the Underwriters. Midland Loan Services Inc., a master servicer, is a wholly owned subsidiary of PNC Bank, National Association.
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 or may in the future 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.
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Conflicts Between Certificateholders and Holders of Companion Loans
The Villas Parkmerced Loan
With respect to the pooled trust component of the Villas Parkmerced loan, representing 9.81% of the outstanding pool balance, 97.40% of the Loan Group 2A balance as of the cut-off date, the related mortgaged property also secures the non-pooled trust component of the Villas Parkmerced loan and the Villas Parkmerced subordinate companion loans. The Villas Parkmerced loan combination (which includes the pooled trust component of the Villas Parkmerced loan, the non-pooled trust component of the Villias Parkmerced loan and the Villas Parkmerced subordinate companion loans) 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 Structures—Rights of the Holders of the Villas Parkmerced B Loans and the Class VPM Certificateholder’’ in this prospectus supplement, the holders of the Villas Parkmerced subordinate companion loans and the Class VPM Certificateholders will have the right under certain circumstances to advise and direct the Midland Loan Services, Inc. master servicer or the special servicer, as applicable, with respect to various servicing matters affecting the Villas Parkmerced loan combination and to approve various decisions affecting the Villas Parkmerced loan combination. These holders also generally have the right to terminate the special servicer and to appoint a successor special servicer but only with respect to the Villas Parkmerced loan combination. These holders may have interests in conflict with those of the holders of the certificates offered in this prospectus supplement.
Following the occurrence of a control appraisal event with respect to each of the Villas Parkmerced subordinate companion loans and the Class VPM Certificates, any decision with respect to the Villas Parkmerced loan combination that requires the approval of the directing holder or otherwise requires approval under the related co-lender agreement or the pooling and servicing agreement, as applicable (including terminating the special servicer and appointing a successor special servicer) will require the approval of the controlling class representative. As a result, any determinations made by the controlling class representative will not necessarily be implemented and approvals to proposed actions of the Midland Loan Services, Inc. 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 in this prospectus supplement.
No certificateholder may take any action against any holder of a Villas Parkmerced companion loan or the Class VPM Certificateholder (or its designee) for having acted solely in its respective interest. The holders of the Villas Parkmerced subordinate companion loans may have interests in conflict with, and their decisions may adversely affect, holders of the classes of certificates offered in this prospectus supplement.
The Arrowhead Shopping Center Loan
With respect to the ‘‘Arrowhead Shopping Center’’ loan, representing in the aggregate approximately 0.12% of the outstanding pool balance and 0.17% of the Loan Group 1 balance as of the cut-off date, the related mortgaged property also secures a subordinate companion loan. The Arrowhead Shopping Center loan combinations (which includes the Arrowhead Shopping Center loan identified in the immediately preceding sentence and its related subordinate companion loan) will be serviced under the pooling and servicing agreement except that prior to or after the curing of a material default, payments with respect to the Arrowhead Shopping Center subordinate companion loan may be collected by a separate servicer for such loan.
The holder of the Arrowhead Shopping Center subordinate companion loan will have the right under certain circumstances to approve various modifications or waivers affecting the Arrowhead Shopping Center loan combination. This holder may have interests in conflict with those of the holders of the certificates offered in this prospectus supplement.
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No certificateholder may take any action against any holder of the Arrowhead Shopping Center subordinate companion loan (or its designee) for having acted solely in its respective interests. The holder of the Arrowhead Shopping Center subordinate companion loan may have interests in conflict with, and its decisions may adversely affect, the holders of the classes of certificates offered 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, the exercise of a purchase option by the holder of the Class VPM Certificates, a mezzanine lender, a subordinate companion loan noteholder or other party with such option.
In addition, because the amount of principal that will be distributed to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates will generally be based upon the particular Loan Group in which the related mortgage loan is deemed to be a part, the yield on the Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 Certificates will be particularly sensitive to prepayments on mortgage loans in Loan Group 1 and the yield on the Class A-1A and Class A-1B Certificates will be particularly sensitive to prepayments on mortgage loans in Loan Group 2A and Loan Group 2B, respectively.
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 ‘‘—Risks Related to the Mortgage Loans—Borrower May Be Unable to Repay the Remaining Principal Balance on the Maturity Date or Anticipated Repayment Date’’ above.
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. 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:
• | the terms of the mortgage loans; |
• | the length of any prepayment lock-out period; |
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• | the level of prevailing interest rates; |
• | the availability of mortgage credit; |
• | the applicable yield maintenance charges or prepayment premiums; |
• | the servicer’s or special servicer’s ability to enforce those charges or premiums; |
• | the occurrence of casualties or natural disasters; and |
• | economic, demographic, tax, legal or other factors. |
Generally, no yield maintenance charge or prepayment premium will be required for partial or full prepayments in connection with a casualty or condemnation (regardless of whether the source of such prepayment includes funds of the borrower in addition to the casualty or condemnation proceeds) unless, in the case of certain 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 or a mezzanine lender, subordinate noteholder or subordinate companion loan holder exercises an option to purchase a mortgage loan under the circumstances set forth in the related mezzanine loan documents or intercreditor agreement, 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 pooled trust component of the Villas Parkmerced loan, which is secured by a mortgaged property that also secures the non-pooled trust component of the Villas Parkmerced loan, yield maintenance charges may not be payable if a holder of the Class VPM Certificates exercises a purchase option that is triggered due to certain default circumstances under such mortgage loan and purchases the Villas Parkmerced loan. This circumstance generally would have the same effect on the certificates offered in this prospectus supplement as a prepayment in full of such mortgage loan.
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 in this prospectus supplement 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:
• | the interest rate for such certificate; |
• | 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; |
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• | the rate, timing and severity of losses on or in respect of the mortgage loans or unanticipated expenses of the trust; |
• | the timing and severity of any interest shortfalls resulting from prepayments; |
• | the timing and severity of any appraisal reductions; and |
• | the extent to which prepayment premiums are collected and, in turn, distributed on such certificate. |
The investment performance of the certificates offered in this prospectus supplement may be materially different from what you expected if the assumptions you made with respect to the factors listed above are incorrect.
The yield on any class of certificates whose pass-through rate is affected by the weighted average net mortgage interest rate could also be adversely affected if mortgage loans with higher interest rates pay faster than the mortgage loans with lower interest rates, since those classes bear interest at a rate limited by the weighted average net mortgage interest rate of the mortgage loans. The pass-through rates on such certificates may be limited by the weighted average of the net mortgage interest rates on the mortgage loans even if principal prepayments do not occur.
Risks Related to Borrower Default
The rate and timing of delinquencies or defaults on the mortgage loans will affect:
• | the aggregate amount of distributions on the certificates offered in this prospectus supplement; |
• | their yield to maturity; |
• | the rate of principal payments; and |
• | their weighted average life. |
As described in this prospectus supplement unless your certificates are Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A or Class A-1B 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 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 Q, 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, Class B, Class A-J and Class A-M Certificates, in that order, reducing amounts otherwise payable to each class. Any remaining losses will then be allocated to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates, pro rata, and with respect to interest losses only, the Class X Certificates based on their respective entitlements pro rata.
Each class of certificates (other than the Class Q, Class VPM, Class S, 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
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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 master servicers, 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.
Subject to certain conditions, Midland Loan Services, Inc. is entitled, under the pooling and servicing agreement, to receive, or to assign a portion of the master servicing fee referred to as the excess servicing strip. If Midland Loan Services, Inc. resigns or is terminated as master servicer, it (or its assignee) will continue to be entitled to receive the excess servicing strip and will be paid that excess servicing strip (except to the extent that any portion of that excess servicing strip is needed to compensate any successor master servicer for assuming the duties of Midland Loan Services, Inc. as master servicer for the mortgage loans that it is servicing under the pooling and servicing agreement). There can be no assurance that following any resignation or termination of Midland Loan Services, Inc. as master servicer, (a) any holder of the excess servicing strip would dispute the trustee's determination that any portion of the excess servicing strip was necessary to compensate a successor master servicer or (b) the ability of the trustee to successfully recapture the excess servicing strip or any portion of that strip from any holder of the excess servicing strip, in particular if that holder were the subject of a bankruptcy or insolvency proceeding.
Risks of Limited Liquidity and Market Value
There is currently no secondary market for the certificates offered in this prospectus supplement. While the underwriters have advised that they currently intend to make a secondary market in the certificates offered in this prospectus supplement, they are under no obligation to do so. There is no assurance that a secondary market for the certificates offered in this prospectus supplement 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 in this prospectus supplement. The certificates offered in this prospectus supplement 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 in this prospectus supplement. In addition, the market value of the certificates offered in this prospectus supplement 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 in this prospectus supplement at any time.
The primary source of ongoing information available to investors concerning the Offered Certificates will be the reports distributed by the trustee discussed in this prospectus supplement under ‘‘The Pooling and Servicing Agreement—Reports to Certificateholders;
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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.
Subordination of Subordinate Offered Certificates
As described in this prospectus supplement, unless your certificates are the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A or Class A-1B, your rights to receive distributions of amounts collected or advanced on or in respect of the mortgage loans will be subordinated to those of the holders of the certificates with an earlier alphabetical designation (or in the case of the Class A-M and Class A-J Certificates, to the rights of the holders of the foregoing specified classes with the Class A-M Certificates senior in right of payment to the Class A-J Certificates) 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 master servicers, the special servicer, the trustee 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 in this prospectus supplement 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 the certificates.
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TRANSACTION PARTIES
The Sponsors
German American Capital Corporation. German American Capital Corporation (‘‘GACC’’) is a sponsor of this securitization transaction. GACC or an affiliate of GACC originated all of the GACC Loans and underwrote all of the GACC Loans in this transaction. GACC is a wholly-owned subsidiary of Deutsche Bank Americas Holding Corp., which in turn is a wholly-owned subsidiary of 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. The principal offices of GACC are located at 60 Wall Street, New York, New York 10005. For more information regarding GACC and its securitization program, see ‘‘The Sponsor’’ in the prospectus.
A description of the underwriting standards of GACC is set forth in the prospectus under ‘‘The Sponsor —Underwriting Standards.’’
Citigroup Global Markets Realty Corp.
Citigroup Global Markets Realty Corp ("CGMRC") is a New York corporation, which is a wholly owned subsidiary of Citigroup Financial Products Inc. CGMRC makes, and purchases from lenders, commercial and multifamily mortgage loans primarily for the purpose of securitizing them in commercial mortgage-backed securitization ("CMBS") transactions. CGMRC also purchases and finances residential mortgage loans, consumer receivables and other financial assets.
For information regarding certain Mortgage Loans originated by CGMRC that were pre-approved by LNR, see "Transaction Parties – Certain Relationships and Related Transactions."
CGMRC's Commercial Real Estate Securitization Program
CGMRC, directly or through correspondents or affiliates, originates multifamily and commercial mortgage loans throughout the United States and abroad. CGMRC has been engaged in the origination of multifamily and commercial mortgage loans for securitization since 1996 and has been involved in the securitization of residential mortgage loans since 1987. The multifamily and commercial mortgage loans originated by CGMRC include both fixed-rate loans and floating-rate loans. Most of the multifamily and commercial mortgage loans included in commercial mortgage securitizations sponsored by CGMRC have been originated, directly or through correspondents, by CGMRC or an affiliate. CGMRC securitized approximately $717 million, $822 million, $1.23 billion, $1.91 billion and $3.24 billion of commercial mortgage loans in public offerings during the fiscal years 2001, 2002, 2003, 2004 and 2005, respectively.
When CGMRC originates mortgage loans in conjunction with third-party correspondents, another third party due diligence provider generally performs the underwriting based on various criteria established or reviewed by CGMRC, and CGMRC originates or acquires the subject mortgage loan prior to inclusion in a securitization.
In addition, in the normal course of its business, CGMRC may also acquire multifamily and commercial mortgage loans from various third party originators. These mortgage loans may have been originated using underwriting guidelines not established by CGMRC.
CGMRC has also sponsored, in private placement transactions, multifamily and commercial mortgage loans which it either originated or acquired from third-party originators that underwrote them to their own underwriting criteria.
In connection with the commercial mortgage securitization transactions it participates in, CGMRC generally transfers the subject mortgage assets to a depositor, who then transfers
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those mortgage assets to the issuing entity for the related securitization. In return for the transfer of the subject mortgage assets by the depositor to the issuing entity, the issuing entity issues commercial mortgage pass-through certificates backed by, and supported by the cash flows generated by, those mortgage assets.
CGMRC generally works with rating agencies, unaffiliated mortgage loan sellers, servicers, affiliates and underwriters in structuring a securitization transaction. CGMRC will generally act as a sponsor, originator or mortgage loan seller in the commercial mortgage securitization transactions it participates in. In such transactions there may be a co-sponsor and/or other mortgage loan sellers and originators. Generally CGMRC and/or the related depositor contract with other entities to service the multifamily and commercial mortgage loans following their transfer into a trust fund for a series of offered certificates.
In connection with CGMRC contributing mortgage loans to a commercial mortgage securitization transaction, CGMRC may be obligated, specifically with respect to the mortgage loans that it is contributing, generally pursuant to a mortgage loan purchase agreement or other comparable agreement, to:
• | deliver various specified loan documents; |
• | file and/or record various specified loan documents and assignments of those documents; and |
• | make various loan-specific representations and warranties. |
If it is later determined that any mortgage asset contributed by CGMRC fails to conform to the specified representations and warranties or there is a defect in or an omission with respect to certain specified mortgage loan documents related to that mortgage asset, which breach, defect or omission, as the case may be, is determined to have a material adverse effect on the value of the subject mortgage asset and/or the interests of holders of securities issued in connection with the subject commercial mortgage securitization transaction, then CGMRC will generally have an obligation to cure the subject defect, omission or breach or to repurchase or replace the mortgage asset.
Underwriting Standards
General. Set forth below is a discussion of certain general underwriting guidelines of CGMRC with respect to multifamily and commercial mortgage loans originated by CGMRC. The underwriting guidelines described below may not—and generally will not—apply to multifamily and commercial mortgage loans acquired by CGMRC from third party originators.
Notwithstanding the discussion below, given the unique nature of income-producing real properties, the underwriting and origination procedures and the credit analysis with respect to any particular multifamily or commercial mortgage loan may differ significantly from one asset to another, and will be driven by circumstances particular to that property, including, among others, its type, current use, physical quality, size, environmental condition, location, market conditions, capital reserve requirements and additional collateral, tenants and leases, borrower identity, borrower sponsorship and/or performance history. Consequently, there can be no assurance that the underwriting of any particular multifamily or commercial mortgage loan will conform to the general guidelines described in this "—Underwriting Standards" section.
Loan Analysis. CGMRC performs both a credit analysis and a collateral analysis with respect to each multifamily and commercial mortgage loan it originates. The credit analysis of the borrower may include a review of third-party credit reports, reports resulting from 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, although exceptions may be made from time to time on a case-by-case basis. The collateral analysis includes an analysis, in each case to the extent
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available, of historical property operating statements, rent rolls and a projection of future performance and a review of tenant leases. Depending on the type of real property collateral involved and other relevant circumstances, CGMRC's underwriting staff and/or legal counsel will review leases of significant tenants. CGMRC may also perform a limited qualitative review with respect to certain tenants located at the real property collateral, particularly significant tenants, credit tenants and sole tenants. CGMRC generally requires third-party appraisals, as well as environmental reports, building condition reports and, if applicable, seismic reports. Each report is reviewed for acceptability by a CGMRC staff member or a third-party reviewer. The results of these reviews are incorporated into the underwriting report.
Loan Approval. Prior to commitment, all multifamily and commercial mortgage loans to be originated by CGMRC must be approved by one or more—depending on loan size—specified officers of CGMRC. The officer or officers responsible for loan approval may approve a mortgage loan as recommended, request additional due diligence, modify the loan terms or decline a loan transaction.
Debt Service Coverage Ratio. The repayment of a multifamily or commercial mortgage loan is typically dependent upon the successful operation of the related real property collateral and the ability of that property to generate income sufficient to make payments on the loan. Accordingly, in connection with the origination of any multifamily or commercial mortgage loan, CGMRC will analyze whether cash flow expected to be derived from the subject real property collateral will be sufficient to make the required payments under that mortgage loan, taking into account, among other things, revenues and expenses for, and other debt currently secured by, or that in the future may be secured by, the subject real property collateral as well as debt secured by pledges of the ownership interests in the related borrower.
The debt service coverage ratio of a multifamily or commercial mortgage loan is an important measure of the likelihood of default on the loan. In general, the debt service coverage ratio of a multifamily or commercial mortgage loan at any given time is the ratio of—
• | the amount of income, net of operating expenses, capital expenditures and other amounts required to be reserved for various purposes, derived or expected to be derived from the related real property collateral for a given period that is available to pay debt service on the subject mortgage loan, to |
• | the scheduled payments of principal and/or interest during that given period on the subject mortgage loan and any other loans that are secured by liens of senior or equal priority on the related real property collateral. |
However, the amount described in the first bullet of the preceding sentence is often a highly subjective number based on variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property collateral.
For example, when calculating the debt service coverage ratio for a multifamily or commercial mortgage loan, CGMRC may utilize annual net cash flow that was calculated based on assumptions regarding projected rental income, expenses and/or occupancy, including, without limitation, one or more of the following:
• | the assumption that a particular tenant at the subject real property collateral that has executed a lease, but has not yet taken occupancy and/or has not yet commenced paying rent, will take occupancy and commence paying rent on a future date; |
• | the assumption that an unexecuted lease that is currently being negotiated with respect to a particular tenant at the subject real property collateral or is out for signature will be executed and in place on a future date; |
• | the assumption that a portion of currently vacant and unleased space at the subject real property collateral will be leased at current market rates and consistent with occupancy rates of comparable properties in the subject market; |
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• | the assumption that certain rental income that is to be payable commencing on a future date under a signed lease, but where the subject tenant is in an initial rent abatement or free rent period or has not yet taken occupancy, will be paid commencing on such future date; |
• | assumptions regarding the probability of renewal of particular leases and/or the re-leasing of certain space at the subject real property collateral and the anticipated effect on capital and re-leasing expenditures; and |
• | various additional lease-up assumptions and other assumptions regarding the payment of rent not currently being paid. |
In addition, CGMRC may "normalize" operating expenses by discounting certain extraordinary property-related expenses that may have occurred during the period under review or by assuming the existence of certain expenses that did not occur during the period under review.
There is no assurance that the foregoing assumptions made with respect to any prospective multifamily or commercial mortgage loan will, in fact, be consistent with actual property performance.
Generally, the debt service coverage ratio for multifamily and commercial mortgage loans originated by CGMRC, calculated as described above, will be equal to or greater than 1.20:1 (subject to the discussion under "—Additional Debt" below); however, exceptions may be made when consideration is given to circumstances particular to the mortgage loan or related real property collateral. For example, CGMRC may originate a multifamily or commercial mortgage loan with a debt service coverage ratio below 1.20:1 based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization) the type of tenants and leases at the subject real property collateral, the taking of additional collateral such as reserves, letters of credit and/or guarantees, CGMRC's judgment of improved property performance in the future and/or other relevant factors.
Loan-to-Value Ratio. CGMRC also looks at the loan-to-value ratio of a prospective multifamily or commercial mortgage loan as one of the factors it takes into consideration in evaluating the likelihood of recovery if a property is liquidated following a default. In general, the loan-to-value ratio of a multifamily or commercial mortgage loan at any given time is the ratio, expressed as a percentage, of—
• | the then outstanding principal balance of the subject mortgage loan and any other loans that are secured by liens of senior or equal priority on the related real property collateral, to |
• | the estimated value of the related real property collateral based on an appraisal, a cash flow analysis, a recent sales price or another method or benchmark of valuation. |
Generally, the loan-to-value ratio for multifamily and commercial mortgage loans originated by CGMRC, calculated as described above, will be equal to or less than 80% (subject to the discussion under "—Additional Debt" below); however, exceptions may be made when consideration is given to circumstances particular to the mortgage loan or related real property collateral. For example, CGMRC may originate a multifamily or commercial mortgage loan with a loan-to-value ratio above 80% based on, among other things, the amortization features of the mortgage loan (for example, if the mortgage loan provides for relatively rapid amortization), the type of tenants and leases at the subject real property collateral, the taking of additional collateral such as reserves, letters of credit and/or guarantees, CGMRC's judgment of improved property performance in the future and/or other relevant factors.
Additional Debt. When underwriting a multifamily or commercial mortgage loan, CGMRC will take into account whether the subject real property collateral and/or direct or indirect interest in a related borrower are encumbered by additional debt and will analyze the likely
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effect of that additional debt on repayment of the subject mortgage loan. It is possible that CGMRC or an affiliate will be the lender on that additional debt.
The debt service coverage ratios described above under "—Debt Service Coverage Ratio" and the loan-to-value ratios described above under "—Loan-to-Value Ratio" may be below 1.20:1 and above 80%, respectively, based on the existence of additional debt secured by the related real property collateral or directly or indirectly by equity interests in the related borrower.
Assessments of Property Condition. As part of the underwriting process, CGMRC will analyze the condition of the real property collateral for a prospective multifamily or commercial mortgage loan. To aid in that analysis, CGMRC may, subject to certain exceptions, inspect or retain a third party to inspect the property and will obtain the property assessments and reports described below.
Appraisals. CGMRC will, in most cases, require that the real property collateral for a prospective multifamily or commercial mortgage loan be appraised by a state certified appraiser or an appraiser belonging to the Appraisal Institute, a membership association of professional real estate appraisers. In addition, CGMRC will generally require that those appraisals be conducted in accordance with the Uniform Standards of Professional Appraisal Practices developed by The Appraisal Foundation, a not-for-profit organization established by the appraisal profession. Furthermore, the appraisal report will usually include or be accompanied by a separate letter that includes a statement by the appraiser that the guidelines in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing the appraisal. In some cases, however, CGMRC may establish the value of the subject real property collateral based on a cash flow analysis, a recent sales price or another method or benchmark of valuation.
Environmental Assessment. CGMRC may require a Phase I environmental assessment with respect to the real property collateral for a prospective multifamily or commercial mortgage loan. However, when circumstances warrant, CGMRC may utilize an update of a prior environmental assessment, a transaction screen or a desktop review. Alternatively, CGMRC might forego an environmental assessment in limited circumstances, such as when it has obtained the benefits of an environmental insurance policy or an environmental guarantee. Furthermore, an environmental assessment conducted at any particular real property collateral will not necessarily cover all potential environmental issues. For example, an analysis for radon, lead-based paint and lead in drinking water will usually be conducted only at multifamily rental properties and only when CGMRC or the environmental consultant believes that such an analysis is warranted under the circumstances.
Depending on the findings of the initial environmental assessment, CGMRC may require additional record searches or environmental testing, such as a Phase II environmental assessment with respect to the subject real property collateral.
Engineering Assessment. In connection with the origination process, CGMRC may require that an engineering firm inspect the real property collateral for any prospective multifamily or commercial mortgage loan to assess the structure, exterior walls, roofing, interior structure and/or mechanical and electrical systems. Based on the resulting report, CGMRC will determine the appropriate response to any recommended repairs, corrections or replacements and any identified deferred maintenance.
Seismic Report. If the subject real property collateral includes any material improvements and is located in California or in seismic zones 3 or 4, CGMRC may require a report to establish the probable maximum or bounded loss for the improvements at the property as a result of an earthquake. If that loss is in excess of 20% of the estimated replacement cost for the improvements at the property, CGMRC may require retrofitting of the improvements or that the borrower obtain earthquake insurance if available at a commercially reasonable price. It should be noted, however, that because the seismic assessments may not
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necessarily have used the same assumptions in assessing probable maximum loss, it is possible that some of the real properties that were considered unlikely to experience a probable maximum loss in excess of 20% of estimated replacement cost might have been the subject of a higher estimate had different assumptions been used.
Zoning and Building Code Compliance. In connection with the origination of a multifamily or commercial mortgage loan, CGMRC will generally examine whether the use and occupancy of the related real property collateral is in material compliance with zoning, land-use, building rules, regulations and orders then applicable to that property. Evidence of this compliance may be in the form of one or more of the following: legal opinions; surveys; recorded documents; temporary or permanent certificates of occupancy; letters from government officials or agencies; title insurance endorsements; engineering or consulting reports; and/or representations by the related borrower.
Where a property as currently operated is a permitted nonconforming use and/or structure and the improvements may not be rebuilt to the same dimensions or used in the same manner in the event of a major casualty, CGMRC will analyze whether—
• | any major casualty that would prevent rebuilding has a sufficiently remote likelihood of occurring; |
• | casualty insurance proceeds together with the value of any additional collateral would be available in an amount estimated by CGMRC to be sufficient to pay off the related mortgage loan in full; |
• | the real property collateral, if permitted to be repaired or restored in conformity with current law, would in CGMRC's judgment constitute adequate security for the related mortgage loan; and/or |
• | to require the related borrower to obtain law and ordinance insurance. |
Escrow Requirements. Based on its analysis of the real property collateral, the borrower and the principals of the borrower, CGMRC may require a borrower under a multifamily or commercial mortgage loan to fund various escrows for taxes and/or insurance, capital expenses, replacement reserves and/or environmental remediation. CGMRC conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every multifamily and commercial mortgage loan originated by CGMRC. Furthermore, CGMRC may accept an alternative to a cash escrow or reserve from a borrower, such as a letter of credit or a guarantee from the borrower or an affiliate of the borrower or periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed.
Notwithstanding the foregoing discussion under this "—Underwriting Standards" section, CGMRC may include mortgage loans in a trust fund which vary from, or do not comply with, CGMRC's underwriting guidelines. In addition, in some cases, CGMRC may not have strictly applied these underwriting guidelines as the result of a case-by-case permitted exception based upon other compensating factors.
PNC Bank, National Association.
PNC Bank, National Association, a national banking association (‘‘PNC Bank’’) , is a sponsor of this transaction and one of the Mortgage Loan Sellers. PNC Bank is an affiliate of Midland Loan Services, Inc., one of the Master Servicers, and PNC Capital Markets LLC, one of the underwriting co-managers. PNC Bank is a wholly owned indirect subsidiary of The PNC Financial Services Group, Inc., a Pennsylvania corporation ("PNC Financial") and is PNC Financial’s principal bank subsidiary. As of December 31, 2005, PNC Bank, National Association had total consolidated assets representing 89.9% of The PNC Financial Group, Inc.'s consolidated assets. The principal office of PNC Bank is located in Pittsburgh, Pennsylvania. PNC Bank originated all of the mortgage loans it is selling to the Depositor.
PNC Bank originates and purchases commercial and multifamily mortgage loans for securitization or resale. PNC Bank is PNC Financial’s principal bank subsidiary, and its business
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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 Financial and its subsidiaries offer a wide range of commercial banking, retail banking and trust and asset management services to its customers.
PNC Bank’s Commercial Real Estate Securitization Program
PNC Bank and its predecessor entities have been active as participants in the securitizations of commercial mortgage loans since 1995. PNC Bank, in its current form, has been active since April 1998, when the acquisition of Midland Loan Services, Inc. led to the combination of two separate origination and securitization operations; the predecessor Midland Loan Services, Inc. operation participated in its first securitization in 1995, while the predecessor PNC operation participated in its first securitization in 1996.
PNC Bank originates or acquires mortgage loans and, together with other mortgage loan sellers, participates in the securitization of those loans by transferring them to a securitization depositor or another entity that acts in a similar capacity. In coordination with its affiliate, PNC Capital Markets LLC, and with other underwriters, PNC Bank works with rating agencies, investors, mortgage loan sellers and servicers in structuring the securitization transaction. PNC Bank currently acts as sponsor and mortgage loan seller in transactions in which other entities act as sponsors, mortgage loan sellers and/or depositors. Prior to April 2001, PNC Bank was a mortgage loan seller in multiple-seller transactions in which entities affiliated with PNC Bank acted as the depositors.
As of December 31, 2005, the total amount of commercial and multifamily mortgage loans originated by PNC Bank for securitization since the inception of its commercial mortgage securitization program in April 1998 was approximately $9.9 billion, of which roughly $9.6 billion, by aggregate original principal balance, has been included in securitizations as to which PNC Bank acted as sponsor or mortgage loan seller (the ‘‘PNC Securitized Loans’’). As of December 31, 2005, the PNC Securitized Loans included approximately 1,500 mortgage loans (all fixed-rate loans) which have been included in approximately 33 securitizations. In its fiscal year ended December 31, 2005, PNC Bank originated over $3.1 billion in commercial and multifamily mortgage loans for securitization, of which roughly $3.0 billion was included in securitizations in which unaffiliated entities acted as depositors.
The commercial mortgage loans originated for securitization by PNC Bank have, to date, consisted entirely of fixed-rate loans. Such loans generally are secured by multifamily, office, retail, industrial, hotel, manufactured housing and self-storage properties. PNC Bank does not have distinct small- or large-loan programs, but rather originates and securitizes under a single program (which is the program under which PNC Bank originated the mortgage loans that will be deposited into the transaction described in this prospectus supplement).
Servicing
PNC Bank currently contracts with its wholly-owned subsidiary, Midland Loan Services, Inc., for servicing the mortgage loans it originates. Midland Loan Services, Inc. will act as a Master Servicer in this transaction. See ‘‘Transaction Parties—The Master Servicers’’ in this prospectus supplement for more information.
Underwriting Standards
Conduit mortgage loans originated for securitization by PNC Bank will generally be originated in accordance with the underwriting criteria described below. Each lending situation is unique, however, and the facts and circumstance surrounding the mortgage loan, such as the quality and location of the real estate collateral, the sponsorship of the borrower and the tenancy of the collateral, will impact the extent to which the general guidelines below are applied to a specific mortgage loan. The underwriting criteria below are general, and in many cases exceptions may be approved to one or more of these guidelines. Accordingly, no representation is made that every mortgage loan will comply in all respects with the criteria set forth below.
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The PNC Bank credit underwriting team for each mortgage loan is comprised of real estate professionals of PNC Bank. The underwriting team for each mortgage loan is required to conduct a review of the related mortgaged property, generally including an analysis of the historical property operating statements, if available, rent rolls, current and historical real estate taxes, and a review of tenant leases. The review includes a market analysis which includes a review of supply and demand trends, rental rates and occupancy rates. The credit of the borrower and certain key principals of the borrower are examined for financial strength and character prior to approval of the loan. This analysis generally includes a review of historical financial statements (which are generally unaudited), historical income tax returns of the borrower and its principals, third-party credit reports, judgment, lien, bankruptcy and pending litigation searches. Depending on the type of real property collateral involved and other relevant circumstances, the credit of key tenants also may be examined as part of the underwriting process. Generally, a member of the PNC Bank underwriting team (or someone on its behalf) visits the property for a site inspection to ascertain the overall quality and competitiveness of the property, including its physical attributes, neighborhood and market, accessibility and visibility and demand generators. As part of its underwriting procedures, PNC Bank also generally performs the procedures and obtains the third party reports or other documents described in this prospectus supplement under ‘‘Description of the Mortgage Pool—Certain Underwriting Matters.’’
Prior to commitment, all mortgage loans must be approved by a loan committee comprised of senior real estate professionals from PNC Bank. The loan committee may either approve a mortgage loan as recommended, request additional due diligence, modify the terms, or reject a mortgage loan.
Debt Service Coverage Ratio and LTV Ratio. PNC Bank’s underwriting standards generally require a minimum debt service coverage ratio of 1.20x and maximum LTV Ratio of 80%. However, these requirements constitute solely a guideline, and exceptions to these guidelines may be approved based on the individual characteristics of a mortgage loan. For example, PNC Bank may originate a mortgage loan with a lower debt service coverage ratio or higher LTV Ratio based on the types of tenants and leases at the subject real property, the taking of additional collateral such as reserves, letters of credit and/or guarantees, PNC Bank’s judgment of improved property performance in the future and/or other relevant factors. In addition, with respect to certain mortgage loans originated by PNC Bank there may exist subordinate debt secured by the related mortgaged property and/or mezzanine debt secured by direct or indirect ownership interests in the borrower. Such mortgage loans may have a lower debt service coverage ratio, and a higher LTV Ratio, if such subordinate or mezzanine debt is taken into account.
The debt service coverage ratio guidelines set forth above are calculated based on Underwritten Net Cash Flow at origination. Therefore, the debt service coverage ratio for each mortgage loan as reported in this prospectus supplement and Annex A-I hereto may differ from the amount calculated at the time of origination. In addition, PNC Bank’s underwriting guidelines generally permit a maximum amortization period of 30 years. However, certain mortgage loans may provide for interest-only payments prior to maturity, or for an interest-only period during a portion of the term of the mortgage loan. See ‘‘Description of the Mortgage Pool’’ in this prospectus supplement.
Escrow Requirements. PNC Bank often requires a borrower to fund various escrows for taxes and insurance, and may also require reserves for deferred maintenance, re-tenanting expenses and capital expenses, 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, or provide periodic evidence that the items for which the escrow or reserve would have been established are being paid or addressed, in lieu of funding a given reserve or escrow. PNC Bank conducts a case-by-case analysis to determine the need for a particular escrow or reserve. Consequently, the aforementioned escrows and reserves are not established for every multifamily and commercial mortgage loan originated by PNC Bank.
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The Depositor
The Depositor is Deutsche Mortgage & Asset Receiving Corporation. 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.
The Depositor does not have, nor is it expected in the future to have, any significant assets and is not engaged in activities unrelated to the securitization of mortgage loans.
During the five years ending December 31, 2005, the Depositor has acted as depositor with respect to securitization transactions in an aggregate amount of approximately $25 billion. GACC has acted as sponsor of such transactions and contributed a substantial portion of the mortgage loans in such transactions, with the remainder having been contributed by other third party loan sellers. While the Depositor was depositor with respect to public securitizations in 1998 through 2000, in 2001 through 2003 it acted as depositor primarily in private securitizations of floating rate loans. In 2004 and 2005, the Depositor’s securitizations included approximately $3.0 billion and $4.3 billion, respectively, of publicly offered conduit or combined conduit/large loan securitizations, as well as several private transactions.
The Depositor will not have any business operations other than securitizing mortgage assets and related activities.
The Depositor has minimal ongoing duties with respect to the certificates and the mortgage loans. The Depositor’s duties pursuant to the pooling and servicing agreement include, without limitation, (i) the duty to appoint a successor Trustee in the event of the resignation or removal of the Trustee, (ii) to provide information in its possession to the Trustee to the extent necessary to perform REMIC tax administration, (iii) to indemnify the Trustee against certain expenses and liabilities resulting from the Depositor’s willful misconduct, bad faith, fraud or negligence, and (iv) to sign any distribution report on form 10 D and current report on form 8-K and annual report on Form 10-K, including the required certification therein under the Sarbanes-Oxley Act, required to be filed by the Trust and review filings pursuant to the Securities Exchange Act of 1934 prepared by the Trustee on behalf of the Trust. The Depositor is required under the underwriting agreement to indemnify the underwriters for certain securities law liabilities.
The Issuing Entity
The issuing entity for the certificates will be CD 2006-CD2 Mortgage Trust (the ‘‘Trust’’). The Trust is a New York common law trust that will be formed on the closing date pursuant to the pooling and servicing agreement. The only activities that the Trust may perform are those set forth in the pooling and servicing agreement, which are generally limited to owning and administering the mortgage loans and any REO property, disposing of defaulted mortgage loans and REO property, issuing the certificates, making distributions, providing reports to certificateholders and the other activities described in this prospectus supplement. Accordingly, the Trust may not issue securities other than the certificates, or invest in securities, other than investing funds in the collection account and other accounts maintained under the pooling and servicing agreement in certain short-term high-quality investments. The Trust may not lend or borrow money, except that a Master Servicer and/or the Trustee, if applicable, may make advances to the Trust only to the extent that such party deems such advances to be recoverable from the related mortgage loan. These advances are intended to provide liquidity, rather than credit support. The pooling and servicing agreement may be amended as set forth herein under ‘‘The Pooling and Servicing Agreement— Amendments.’’
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The Trust administers the mortgage loans through the Trustee, the Master Servicers and Special Servicer. A discussion of the duties of the Trustee, Master Servicers and Special Servicer, including any discretionary activities performed by each of them, is set forth in this prospectus supplement under ‘‘Transaction Parties—The Master Servicers,’’ ‘‘Transaction Parties—The Special Servicer,’’ ‘‘Transaction Parties—The Trustee’’ and ‘‘The Pooling and Servicing Agreement.’’
The only assets of the Trust other than the Mortgage Loans and any REO Properties are the Collection Account and other accounts maintained pursuant to the Pooling and Servicing Agreement and the short-term investments in which funds in the collection account and other accounts are invested. The Trust has no present liabilities, but has potential liability relating to the three REMIC elections, its ownership of the Mortgage Loans and any REO Properties, and the indemnity obligations to the Trustee, Master Servicers and Special Servicer. The fiscal year of the Trust is the calendar year. The Trust has no executive officers or a Board of Directors. It acts through the Trustee, Master Servicers and Special Servicer.
The Depositor is contributing the Mortgage Loans to the Trust. The Depositor is purchasing the Mortgage Loans from the Mortgage Loan Sellers, as described herein under ‘‘Description of the Mortgage Pool—Sale of the Mortgage Loans.’’
Since the Trust is a common law trust, it may not be eligible for relief under the United States Bankruptcy Code (the ‘‘Bankruptcy Code’’), unless it can be characterized as a ‘‘business trust’’ for purposes of the Bankruptcy Code. Bankruptcy courts look at various considerations in making this determination, so it is not possible to predict with any certainty whether or not the Trust would be characterized as a ‘‘business trust.’’ The Depositor has been formed to be a special purpose bankruptcy remote entity. In connection with the sale of the Mortgage Loans from a Mortgage Loan Seller to the Depositor and from the Depositor to the Trust, legal opinions are required to be rendered to the effect that:
1. (A) If such mortgage loan seller were to become a debtor in a case under the Bankruptcy Code, a federal bankruptcy court, which acted reasonably and correctly applied the law to the facts as set forth in such legal opinion after full consideration of all relevant factors, would hold that (i) the mortgage loans and payments thereunder and proceeds thereof are not property of the estate of such mortgage loan seller under Bankruptcy Code section 541 and (ii) the automatic stay arising pursuant to Bankruptcy Code section 362 upon the commencement of a bankruptcy case involving such mortgage loan seller is not applicable to payments on the Certificates or (B) if the Federal Deposit Insurance Corporation (the ‘‘FDIC’’) were to be appointed receiver or conservator for such mortgage loan seller pursuant to the Federal Deposit Insurance Act, as amended, a court after full consideration of all relevant factors would hold that the mortgage loans and payments thereunder and proceeds thereof are not subject to repudiation, reclamation, recovery, or recharacterization by the FDIC.
2. If the Depositor were to become a debtor in a case under the Bankruptcy Code, a federal bankruptcy court, which acted reasonably and correctly applied the law to the facts as set forth in such legal opinion after full consideration of all relevant factors, would hold (i) the mortgage loans, and payments thereunder and proceeds thereof are not property of the estate of the Depositor under Bankruptcy Code section 541 and (ii) the automatic stay arising pursuant to Bankruptcy Code section 362 upon the commencement of a bankruptcy case of the Depositor is not applicable to payments on the Certificates.
Such legal opinions are based on numerous assumptions, and there can be no assurance that all of such assumed facts are true, or will continue to be true. Moreover, there can be no assurance that a court would rule as anticipated in the foregoing legal opinions. Accordingly, although the Depositor has been structured as a bankruptcy remote entity, and the transfer of the mortgage loans from each mortgage loan seller to the Depositor and from the Depositor to the Trust has been structured as a sale, there can be no assurance that the Depositor will not be subject to a bankruptcy proceeding or that the sale of the mortgage loans will not be
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recharacterized as a pledge, with the result that the Depositor or Trust is deemed to be a creditor of the related mortgage loan seller rather than an owner of the mortgage loans. See ‘‘Risk Factors —The Sellers of The Mortgage Loans Are Subject To Bankruptcy Or Insolvency Laws That May Affect the Trust’s Ownership Of Mortgage Loans.’’
The Master Servicers
The Midland Master Servicer
Midland Loan Services, Inc. (‘‘Midland’’ also referred to herein as, the ‘‘Midland Master Servicer’’) will be one of the master servicers and in this capacity will be responsible for the master servicing and administration of certain of the Mortgage Loans pursuant to the Pooling and Servicing Agreement.
Midland is a Delaware corporation and a wholly-owned subsidiary of PNC Bank, one of the Mortgage Loan Sellers. Midland is an affiliate of PNC Capital Markets LLC, one of the Underwriters. Midland’s principal servicing office is located at 10851 Mastin Street, Building 82, Suite 700, Overland Park, Kansas 66210.
Midland is a real estate financial services company that provides loan servicing, asset management and technology solutions for large pools of commercial and multifamily real estate assets. Midland is approved as a master servicer, special servicer and primary servicer for investment-grade 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.
Midland has adopted written policies and procedures relating to its various servicing functions to maintain compliance with its servicing obligations and the servicing standards under Midland's servicing agreements, including procedures for managing delinquent loans. Midland has made certain changes to its servicing policies, procedures and controls in the past three years, which address, among other things, (i) Midland's conversion to its proprietary Enterprise!® Loan Management System as its central servicing and investor reporting system; and (ii) an updated disaster recovery plan.
Midland will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. Midland may from time to time have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent that Midland has custody of any such documents for any such servicing purposes, such documents will be maintained in a manner consistent with the servicing standard.
No securitization transaction involving commercial or multifamily mortgage loans in which Midland was acting as master servicer, primary servicer or special servicer has experienced an event of default as a result of any action or inaction of Midland as master servicer, primary servicer or special servicer, as applicable, including as a result of Midland's failure to comply with the applicable servicing criteria in connection with any securitization transaction. Midland has made all advances required to be made by it under the related servicing agreements on the commercial and multifamily mortgage loans serviced by Midland in securitization transactions.
Midland currently maintains an Internet-based investor reporting system, CMBS Investor Insight®, that contains performance information at the portfolio, loan and property levels on the various commercial mortgage-backed securities transactions that it services. Certificateholders, prospective transferees of the certificates and other appropriate parties may obtain access to CMBS Investor Insight through Midland's website at www.midlandls.com. Midland may require registration and execution of an access agreement in connection with providing access to CMBS Investor Insight.
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As of December 31, 2005, Midland was servicing approximately 17,350 commercial and multifamily mortgage loans with a principal balance of approximately $136 billion. The collateral for such loans is located in all 50 states, the District of Columbia, Puerto Rico, Guam and Canada. Approximately 12,800 of such loans, with a total principal balance of approximately $104 billion, pertain to commercial and multifamily mortgage-backed securities. The related loan pools include multifamily, office, retail, hospitality and other income-producing properties.
Midland has been servicing mortgage loans in commercial mortgage-backed securities transactions since 1992. The table below contains information on the size and growth of the portfolio of commercial and multifamily mortgage loans in commercial mortgage-backed securities and other servicing transactions for which Midland has acted as master and/or primary servicer from 2003 to 2005.
Portfolio Growth – Master/Primary | Calendar
Year End (Approximate amounts in billions) |
|||||||||||||
2003 | 2004 | 2005 | ||||||||||||
CMBS | $ | 60 | $ | 70 | $ | 104 | ||||||||
Other | $ | 23 | $ | 28 | $ | 32 | ||||||||
Total | $ | 83 | $ | 98 | $ | 136 | ||||||||
Midland’s affiliates own and are in the business of acquiring assets similar in type to the assets of the Trust. Accordingly, assets of Midland’s affiliates may compete with the mortgaged properties for tenants, purchasers, financing and other parties and services relevant to the business of acquiring similar assets.
Midland acted as servicer with respect to some or all of the Mortgage Loans being contributed by its parent company, PNC Bank, prior to their inclusion in the Trust.
The information set forth in the preceeding paragraphs in this section "—The Midland Master Servicer" concerning Midland has been provided by it. Midland makes no representations as to the validity or sufficiency of the Pooling and Servicing agreement (other than as to its being a valid obligation of Midland), the certificates, the Mortgage Loans, this prospectus supplement (other than as to the accuracy of the information regarding Midland set forth in this section "Transaction Parties—The Midland Master Servicer") or any related documents.
The Wachovia Master Servicer
Wachovia Bank, National Association. (‘‘Wachovia’’ also referred to herein as, the ‘‘Wachovia Master Servicer’’ and together with the Midland Master Servicer, each a ‘‘Master Servicer’’ ) will be the Master Servicer under the Pooling and Servicing Agreement with respect to all of the Mortgage Loans sold to the Depositor by CGMRC. Wachovia is a national banking association organized under the laws of the United States of America and is a wholly owned subsidiary of Wachovia Corporation. Wachovia’s principal servicing offices are located at NC 1075, 8739 Research Drive URP4, Charlotte, North Carolina 28262.
Wachovia has been servicing commercial and multifamily mortgage loans in excess of ten years. Wachovia’s primary servicing system runs on EnableUs (formerly known as McCracken) Strategy software and Wachovia reports to trustees in the CMSA format. The table below sets forth information about Wachovia’s portfolio of master or primary serviced commercial and multifamily mortgage loans as of the dates indicated:
Commercial and Multifamily Mortgage Loans | As of December 31, 2003 |
As of December 31, 2004 |
As of December
31, 2005 |
|||||||||||
By Approximate Number | 10,015 | 15,531 | 17,641 | |||||||||||
By
Approximate Aggregate Unpaid Principal Balance (in Billions) |
$ | 88.6 | $ | 141.3 | $ | 182.5 | ||||||||
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Within this portfolio, as of December 31, 2005, are approximately 15,007 commercial and multifamily mortgage loans with an unpaid principal balance of approximately $146.4 billion related to commercial mortgage-backed securities. In addition to servicing loans related to commercial mortgage-backed securities, Wachovia also services whole loans for itself and a variety of investors. The properties securing loans in Wachovia’s servicing portfolio as of January 31, 2006, were located in all 50 states, the District of Columbia, Guam, Mexico, the Virgin Islands and Puerto Rico and include retail, office, multifamily, industrial, hospitality and other types of income-producing properties.
Wachovia utilizes a mortgage-servicing technology platform with multiple capabilities and reporting functions. This platform allows Wachovia to process mortgage servicing activities including but not limited to: (i) performing account maintenance; (ii) tracking borrower communications; (iii) tracking real estate tax escrows and payments, insurance escrows and payments, replacement reserve escrows and operating statement data and rent rolls; (iv) entering and updating transaction data; and (v) generating various reports.
The table below sets forth information regarding the aggregate amount of principal and interest advances and property protection advances (i) made by Wachovia on commercial and multifamily mortgage loans included in commercial mortgage-backed securitizations master serviced by Wachovia and (ii) outstanding as of the dates indicated:
Date | Securitized Master Serviced Portfolio (UPB)* |
Outstanding Advances (P&I and PPA)* |
Outstanding Advances as % of UPB |
|||||||||||
December 31, 2003 | $ | 74,461,414,561 | $ | 84,616,014 | 0.1% | |||||||||
December 31, 2004 | $ | 113,159,013,933 | $ | 129,858,178 | 0.1% | |||||||||
December 31, 2005 | $ | 142,222,662,628 | $ | 164,516,780 | 0.1% | |||||||||
* | ‘‘UPB’’ means unpaid principal balance, ‘‘P&I’’ means principal and interest advances and ‘‘PPA’’ means property protection advances. |
Wachovia is rated by Fitch and S&P as a primary servicer and master servicer. Wachovia’s ratings by each of these agencies is outlined below:
Fitch | S&P | |||||||||
Primary Servicer | CPS2+ | Strong | ||||||||
Master Servicer | CMS2 | Strong | ||||||||
The short-term debt ratings of Wachovia Corporation are A-1+ by S&P, P-1 by Moody’s, F-1+ by Fitch.
Wachovia has developed policies, procedures and controls relating to its servicing functions to maintain compliance with applicable servicing agreements and servicing standards, including procedures for handling delinquent loans during the period prior to the occurrence of a special servicing transfer event. Wachovia’s servicing policies and procedures are updated periodically to keep pace with the changes in the commercial mortgage-backed securities industry and have been generally consistent for the last three years in all material respects. The only significant changes in Wachovia’s policies and procedures have come in response to changes in federal or state law or investor requirements, such as updates issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. Wachovia may perform any of its obligations under the Pooling and Servicing Agreement through one or more third-party vendors, affiliates or subsidiaries. Wachovia may engage third-party vendors to provide technology or process efficiencies. Wachovia monitors its third-party vendors in compliance with its internal procedures and applicable law. Wachovia has entered into contracts with third-party vendors for the following functions:
• | monitoring and applying interest rate changes with respect to adjustable rate mortgage loans in accordance with loan documents |
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• | provision of Strategy and Strategy CS software |
• | identification, classification, imaging and storage of documents |
• | analysis and determination of amounts to be escrowed for payment of taxes and insurance |
• | entry of rent roll information and property performance data from operating statements |
• | tracking and reporting of flood zone changes |
• | tracking, maintenance and payment of rents due under ground leases |
• | abstracting of insurance requirements contained in loan documents |
• | comparison of insurance certificates to insurance requirements contained in loan documents and reporting of expiration dates and deficiencies, if any |
• | abstracting of leasing consent requirements contained in loan documents |
• | legal representation |
• | assembly of data regarding buyer and seller (borrower) with respect to proposed loan assumptions and preparation of loan assumption package for review by Wachovia |
• | maintenance and storage of letters of credit |
• | tracking of anticipated repayment dates for loans with such terms |
• | reconciliation of deal pricing, tapes and annexes prior to securitization |
• | entry of new loan data and document collection |
• | initiation of loan payoff process and provision of payoff quotes |
• | printing, imaging and mailing of statements to borrowers |
• | performance of property inspections |
• | performance of tax parcel searches based on property legal description, monitoring and reporting of delinquent taxes, and collection and payment of taxes |
• | review of financial spreads performed by sub-servicers |
• | review of borrower requests for disbursements from reserves for compliance with loan documents, which are submitted to Wachovia for approval |
• | performance of UCC searches and filing of UCCs |
Wachovia may also enter into agreements with certain firms to act as a primary servicer and to provide cashiering or non-cashiering sub-servicing on certain loans.
Generally, all amounts received by Wachovia on the Mortgage Loans are initially deposited into a common clearing account with collections on other mortgage loans serviced by Wachovia and are then allocated and transferred to the appropriate account described under ‘‘The Pooling and Servicing Agreement—Accounts’’ in this prospectus supplement within the time required by the Pooling and Servicing Agreement. On the day any amount is to be disbursed by Wachovia, that amount is transferred to a common disbursement account prior to disbursement.
Wachovia will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. On occasion, Wachovia may have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent Wachovia performs custodial functions as the master servicer, documents will be maintained in a manner consistent with the Servicing Standard.
There are no legal proceedings pending against Wachovia, or to which any property of Wachovia is subject, that are material to the Certificateholders, nor does Wachovia have actual knowledge of any proceedings of this type contemplated by governmental authorities.
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The information set forth in the preceding paragraphs in this section "—The Wachovia Master Servicer" concerning Wachovia has been provided by it. Wachovia makes no representations as to the validity or sufficiency of the Pooling and Servicing agreement (other than as to its being a valid obligation of Wachovia), the certificates, the Mortgage Loans, this prospectus supplement (other than as to the accuracy of the information regarding Wachovia set forth in this section "Transaction Parties—The Wachovia Master Servicer) or any related documents.
General
Each Master Servicer may elect to sub-service some or all of its servicing duties with respect to each of the applicable mortgage loans and any such sub-servicer will receive a fee for the services specified in such sub-servicing agreement; provided that the Master Servicers may not appoint a sub-servicer after the Closing Date if such sub-servicer is listed on a ‘‘do not hire’’ list to be provided by the Depositor, which ‘‘do not hire’’ list will reflect any parties who have failed to comply with Exchange Act reporting requirements in connection with this or any other securitization conducted by the Depositor. Additionally, any subservicing is subject to various other conditions set forth in the Pooling and Servicing Agreement including the requirement that the related Master Servicer will remain liable for its servicing obligations under the Pooling and Servicing Agreement. CGMRC has informed the Wachovia Master Servicer that one or more sub-servicers will act as sub-servicer on certain of the Mortgage Loans sold to the Depositor by CGMRC. In particular, CGMRC has informed the Wachovia Master Servicer that GEMSA Loan Services, L.P. will act as sub-servicer with respect to certain of the Mortgage Loans originated by CGMRC.
Certain of the duties of the Master Servicers and the provisions of the Pooling and Servicing Agreement are set forth herein under ‘‘The Pooling and Servicing Agreement.’’ The manner in which collections on the Mortgage Loans are to be maintained is described herein under ‘‘The Pooling and Servicing Agreement— Accounts.’’ The advance obligations of the Master Servicers are described herein under ‘‘The Pooling and Servicing Agreement—Advances’’ and ‘‘Description of the Offered Certificates—Appraisal Reductions.’’ Certain limitations on the Master Servicers’ liability under the Pooling and Servicing Agreement are described herein under ‘‘The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor, the Master Servicers and the Special Servicer.’’ Certain terms of the Pooling and Servicing Agreement regarding the Master Servicers’ removal, replacement, resignation or transfer are described herein under ‘‘The Pooling and Servicing Agreement—Events of Default,’’ ‘‘—Rights Upon Event of Default’’ and ‘‘—Certain Matters Regarding the Depositor, the Master Servicers and the Special Servicer.’’ For a description of the Master Servicers’ compensation see ‘‘The Pooling and Servicing Agreement—Servicing Compensation and Payment of Expenses.’’
The Special Servicer
LNR Partners, Inc. ("LNR Partners"), a Florida corporation and a subsidiary of LNR Property Holdings, Ltd. ("LNR"), will initially be appointed as Special Servicer for the Mortgage Pool. The principal executive offices of LNR Partners are located at 1601 Washington Avenue, Suite 700, Miami Beach, Florida 33139 and its telephone number is (305)-695-5600. LNR through its subsidiaries, affiliates and joint ventures, is involved in the real estate investment, finance and management business and engages principally in:
• | acquiring, developing, repositioning, managing and selling commercial and multifamily residential real estate properties, |
• | investing in high-yielding real estate loans, and |
• | investing in, and managing as special servicer, unrated and non-investment grade rated commercial mortgaged backed securities ("CMBS"). |
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LNR Partners and its affiliates have substantial experience in working out loans and in performing the other obligations of the special servicer as more particularly described in the Pooling and Servicing Agreement, including, but not limited to, processing borrower requests for lender consent to assumptions, leases, easements, partial releases, subordinate financing and expansion and/or redevelopment of the Mortgaged Properties. LNR Partners and its affiliates have been engaged in the special servicing of commercial real estate assets for over 13 years. The number of CMBS pools specially serviced by LNR Partners and its affiliates has increased from 46 in December 1998 to over 160 as of August 31, 2005. More specifically, LNR Partners (and its predecessors in interest) acted as special servicer with respect to: (a) 84 domestic CMBS pools as of December 31, 2001, with a then current face value in excess of $53 billion; (b) 102 domestic CMBS pools as of December 31, 2002, with a then current face value in excess of $67 billion; (c) 113 domestic CMBS pools as of December 31, 2003, with a then current face value in excess of $79 billion; (d) 134 domestic CMBS pools as of December 31, 2004, with a then current face value in excess of $111 billion; and (e) 136 domestic CMBS pools as of August 31, 2005, with a then current face value in excess of $131 billion. Additionally, LNR Partners has resolved over $23 billion of U.S. commercial and multifamily loans over the past 13 years, including $1.1 billion of U.S. commercial and multifamily mortgage loans during 2001, $1.9 billion of U.S. commercial and multifamily mortgage loans during 2002, $1.5 billion of U.S. commercial and multifamily mortgage loans during 2003, $2.1 billion of U.S. commercial and multifamily mortgage loans during 2004 and $1.1 billion of U.S. commercial and multifamily mortgage loans during the period of January 1 through August 31, 2005.
LNR or one of its affiliates generally seeks investments where it has the right to appoint LNR Partners as the special servicer. LNR Partners and its affiliates have regional offices located across the country in Florida, Georgia, Texas, Massachusetts, North Carolina and California, and in Europe in London, England, Paris, France and Munich, Germany. As of May 31, 2005, LNR Partners had 159 employees responsible for the special servicing of commercial real estate assets. As of August 31, 2005, LNR Partners and its affiliates specially service a portfolio which included approximately 16,000 assets in the 50 states and in Europe with a then current face value in excess of $146 billion, all of which are commercial real estate assets. Those commercial real estate assets include mortgage loans secured by the same types of income producing properties as secure the mortgage loans backing the Certificates. Accordingly, the assets of LNR Partners and its affiliates may, depending upon the particular circumstances, including the nature and location of such assets, compete with the mortgaged real properties securing the underlying mortgage loans for tenants, purchasers, financing and so forth. LNR Partners does not service any assets other than commercial real estate assets.
LNR Partners maintains internal and external watch lists, performs monthly calls with master servicers and conducts overall deal surveillance and shadow servicing. LNR Partners has developed distinct strategies and procedures for working with borrowers on problem loans (caused by delinquencies, bankruptcies or other breaches of the loan documents) designed to maximize value from the assets for the benefit of the certificateholders. These strategies and procedures vary on a case by case basis, and include, but are not limited to, liquidation of the underlying collateral, note sales, discounted payoffs, and borrower negotiation or workout in accordance with the Servicing Standard. Generally, four basic factors are considered by LNR Partners' as part of its analysis and determination of what strategies and procedures to utilize in connection with problem loans. They are (i) the condition and type of mortgaged property, (ii) the borrower, (iii) the jurisdiction in which the mortgaged property is located, and (iv) the actual terms, conditions and provisions of the underlying loan documents. Once each of these items is evaluated and considered, LNR Partners' strategy is guided by the Servicing Standard and all relevant provisions of the applicable pooling and servicing agreement pertaining to specially serviced and REO mortgage loans.
LNR Partners has many measures of its success in this area. LNR Partners has the highest ratings afforded to special servicers by S&P and Moody's, respectively.
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There have not been, during the past three years, any material changes to the policies or procedures of LNR Partners in the servicing function it will perform under the Pooling and Servicing Agreement for assets of the same type included in the Trust. LNR Partners has not engaged, and currently does not have any plans to engage, any sub-servicers to perform on its behalf any of its duties with respect to the Trust. LNR Partners does not believe that its financial condition will have any adverse effect on the performance of its duties under the Pooling and Servicing Agreement and, accordingly, will not have any material impact on the mortgage pool performance or the performance of the Certificates. Generally, LNR Partners' servicing functions under the Pooling and Servicing Agreement do not include collection on the pool assets, however LNR Partners does maintain certain operating accounts with respect to REO mortgage loans in accordance with the terms of the Pooling and Servicing Agreement and consistent with the Servicing Standard. LNR Partners does not have any material primary advancing obligations with respect to the CMBS pools as to which it acts as special servicer, except with respect to the obligation to make servicing advances only on specially serviced mortgage loans in six commercial mortgage securitization transactions, and the obligation to make advances of delinquent debt service payments on specially serviced mortgage loans in one commercial mortgage securitization transaction.
LNR Partners will not have primary responsibility for custody services of original documents evidencing the underlying mortgage loans. On occasion, LNR Partners may have custody of certain of such documents as necessary for enforcement actions involving particular mortgage loans or otherwise. To the extent that LNR Partners has custody of any such documents, such documents will be maintained in a manner consistent with the Servicing Standard.
No securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer has experienced an event of default as a result of any action or inaction performed by LNR Partners as special servicer. LNR Partners has not been terminated as servicer in a commercial mortgage loan securitization, either due to a servicing default or to application of a servicing performance test or trigger. In addition, there has been no previous disclosure of material noncompliance with servicing criteria by LNR Partners with respect to any other securitization transaction involving commercial or multifamily mortgage loans in which LNR Partners was acting as special servicer.
There are currently no legal proceedings pending, and no legal proceedings known to be contemplated by governmental authorities, against LNR Partners or of which any of its property is the subject, that is material to the certificateholders.
LNR Partners is not an affiliate of the Depositor, the Sponsor(s), the Trust, the Master Servicer, the Trustee or any originator of any of the underlying mortgage loans identified in this prospectus supplement.
LNR Securities Holdings, LLC an affiliate of LNR Partners, will acquire one or more classes of certificates. Otherwise, except for LNR Partners acting as Special Servicer for the Trust, there are no specific relationships involving or relating to the Trust or the securitized Mortgage Loans between LNR Partners or any of its affiliates, on the one hand, and the Depositor, Sponsor(s) or the Trust, on the other hand, that currently exist or that existed during the past two years. In addition, there are no business relationships, agreements, arrangements, transactions or understandings that have been entered into outside the ordinary course of business or on terms other than would be obtained in an arm's length transaction with an unrelated third party—apart from the subject securitization transaction—between LNR Partners or any of its affiliates, on the one hand, and the Depositor, the Sponsor(s) or the Trust, on the other hand, that currently exist or that existed during the past two years and that are material to an investor's understanding of the offered certificates. Additionally, the Depositor anticipates that LNR Securities Holdings, LLC will purchase the Initial Controlling Class and will be the Controlling Class Representative.
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The Special Servicer may elect to sub-service some or all of its servicing duties with respect to each of the Specially Serviced Mortgage Loans and REO Properties and any such sub-servicer will receive a fee for the services specified in such sub-servicing agreement; provided that the Special Servicer may not appoint a sub-servicer after the closing date without the Depositor’s prior consent to the extent set forth in the Pooling and Servicing Agreement, which consent may not be unreasonably withheld. Additionally, any subservicing is subject to various other conditions set forth in the Pooling and Servicing Agreement including the requirement that the Special Servicer will remain liable for its servicing obligations under the Pooling and Servicing Agreement.
Certain of the duties of the Special Servicer and the provisions of the pooling and servicing agreement regarding the Special Servicer, including without limitation information regarding the rights of the Special Servicer with respect to delinquencies, losses, bankruptcies and recoveries and the ability of the Special Servicer to waive or modify the terms of the Mortgage Loans are set forth herein under ‘‘The Pooling and Servicing Agreement—Modifications’’ and ‘‘—Realization Upon Defaulted Mortgage Loans.’’ Certain limitations on the Special Servicer’s liability under the Pooling and Servicing Agreement are described herein under ‘‘The Pooling and Servicing Agreement—Certain Matters Regarding the Depositor, the Master Servicers and the Special Servicer.’’ Certain terms of the Pooling and Servicing Agreement regarding the Special Servicer’s removal, replacement, resignation or transfer are described herein under ‘‘The Pooling and Servicing Agreement—Events of Default,’’ ‘‘—Rights Upon an Event of Default’’ and ‘‘Certain Matters Regarding the Depositor, the Master Servicers and the Special Servicer.’’ For a description of the Special Servicer’s compensation see ‘‘The Pooling and Servicing Agreement—Special Servicing—Special Servicing Compensation.’’
The information set forth in this section "Transaction Parties—The Special Servicer" concerning the Special Servicer (other than the two immediately preceding paragraphs) has been provided by the Special Servicer. The Special Servicer makes no representations as to the validity or sufficiency of the pooling and servicing agreement (other than as to its being binding on the Special Servicer), the certificates, the Mortgage Loans, this prospectus supplement (other than as to the accuracy of the information regarding the Special Servicer under this section "Transaction Parties—The Special Servicer") or any related documents.
The Trustee
Wells Fargo Bank, National Association (the ‘‘Trustee’’) will act as Trustee under the Pooling and Servicing Agreement. The Trustee is a national banking association and a wholly-owned subsidiary of Wells Fargo & Company. A diversified financial services company with approximately $397 billion in assets, 24 million customers and 143,000 employees as of December 31, 2005, Wells Fargo & Company is among the leading U.S. bank holding companies, providing banking, insurance, trust, mortgage and consumer finance services throughout the United States. The Trustee provides retail and commercial banking services and corporate trust, custody, securities lending, securities transfer, cash management, investment management and other financial and fiduciary services. The Depositor, the Mortgage Loan Sellers, the Master Servicers and the Special Servicer may maintain banking and other commercial relationships with Wells Fargo Bank and its affiliates. The Trustee’s principal corporate trust offices are located at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951 and its office for certificate transfer services is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-0113.
As compensation for the performance of its routine duties, the Trustee will be paid a fee (the ‘‘Trustee Fee’’). The Trustee Fee will be payable monthly from amounts received in respect of interest on each Mortgage Loan (prior to application of such interest payments to make payments on the certificates) and will accrue at a rate (the ‘‘Trustee Fee Rate’’), equal to 0.0001% per annum, and will be computed on the basis of the Stated Principal Balance of the related mortgage loan as of the preceding distribution date. The Trustee will also be entitled to receive income from investment of funds in certain accounts maintained on behalf of the
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Trust. In addition, the Trustee will be entitled to recover from the Trust Fund all reasonable unanticipated expenses and disbursements incurred or made by the Trustee in accordance with any of the provisions of the pooling and servicing agreement, but not including routine expenses incurred in the ordinary course of performing its duties as Trustee under the pooling and servicing agreement, and not including any expense, disbursement or advance as may arise from its willful misfeasance, negligence or bad faith.
The Trustee shall at all times be, and will be required to resign if it fails to be, (i) a corporation, national bank, national banking association or a trust company, organized and doing business under the laws of any state or the United States of America, authorized under such laws to exercise corporate trust powers and to accept the trust conferred under the pooling and servicing agreement, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal or state authority and shall not be an affiliate of the Master Servicers or the Special Servicer (except during any period when the Trustee is acting as, or has become successor to, the Master Servicers or the Special Servicer, as the case may be, as described herein under ‘‘The Pooling and Servicing Agreement—Rights Upon Event of Default’’), and (iii) an institution whose long-term senior unsecured debt is rated ‘‘Aa3’’ by Moody’s and ‘‘A+’’ by S&P or such other ratings as are acceptable to the rating agencies or has a fiscal agent appointed with such minimum ratings.
The Trustee has provided corporate trust services since 1934. As of December 31, 2005, the Trustee was acting as trustee with respect to over 10,000 series of securities with an aggregate outstanding principal balance of approximately $800 billion. This portfolio includes corporate and municipal bonds, mortgage-backed and asset-backed securities and collateralized debt obligations. As of November 30, 2005, the Trustee was acting as trustee on more than 260 series of commercial mortgage-backed securities with an aggregate principal balance of approximately $180 billion.
In its capacity as trustee on commercial mortgage securitizations, the Trustee is generally required to make an advance if the related master servicer or special servicer fails to make a required advance. In the past three years, the Trustee has not been required to make an advance on a commercial mortgage-backed securities transaction.
Certain information set forth in this prospectus supplement concerning the Trustee has been provided by it. The Trustee makes no representations as to the validity or sufficiency of the Pooling and Servicing Agreement (other than as to its being a valid obligation of the Trustee), the certificates, the Mortgage Loans, this prospectus supplement (other than as to the accuracy of the information regarding the Trustee) or any related documents and will not be accountable for the use or application by or on behalf of the Master Servicers of any funds paid to the Master Servicers or any Special Servicer in respect of the certificates or the mortgage loans, or any funds deposited into or withdrawn from the certificate account or any other account by or on behalf of the Master Servicers or any Special Servicer. The Pooling and Servicing Agreement provides that no provision of such agreement shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith; provided, however, that if no event of default has occurred and is continuing, the Trustee will be required to perform, and will be liable for, only those duties specifically required under the pooling and servicing agreement. Upon receipt of any of the various certificates, reports or other instruments required to be furnished to it pursuant to the pooling and servicing agreement, the Trustee will be required to examine those documents and to determine whether they conform to the requirements of that agreement. Within 30 days after the occurrence of any event of default, the Trustee is required to transmit by mail to the Depositor, each rating agency and all certificateholders notice of such occurrence, unless such default shall have been cured.
The Pooling and Servicing Agreement provides that the Trustee shall not be liable for an error of judgment made in good faith by a responsible officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts. In addition, the
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Trustee is not liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of holders of Certificates entitled to at least 50% of the voting rights relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Pooling and Servicing Agreement (unless a higher percentage of voting rights is required for such action). If no event of default shall have occurred and be continuing, the Trustee will not be bound to make any investigation into the facts or matters stated in any document, unless requested in writing to do so by holders of Certificates entitled to at least 25% of the voting rights; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of the Pooling and Servicing Agreement, the Trustee may require reasonable indemnity from such requesting holders against such expense or liability as a condition to taking any such action.
The Trustee and any director, officer, employee or agent of the Trustee, will be entitled to indemnification by the Trust, to the extent of amounts held in the Collection Account from time to time, for any loss, liability damages, claims or unanticipated expenses (including reasonable attorneys’ fees) arising out of or incurred by the Trustee in connection with any act or omission of the Trustee relating to the exercise and performance of any of the powers and duties of the Trustee under the Pooling and Servicing Agreement. However, the indemnification will not extend to any loss, liability or expense that constitutes a specific liability imposed on the Trustee pursuant to the Pooling and Servicing Agreement, or to any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence on the part of the Trustee in the performance of its obligations and duties under the Pooling and Servicing Agreement, or by reason of its negligent disregard of those obligations or duties, or as may arise from a breach of any representation, warranty or covenant of the Trustee made in the Pooling and Servicing Agreement.
The Trustee will be entitled to execute any of its trusts or powers under the Pooling and Servicing Agreement or perform any of its duties under the Pooling and Servicing Agreement either directly or by or through agents or attorneys, and the Trustee will not be relieved of any of its duties or obligations by virtue of the appointment of any agents or attorneys.
The Trustee will be permitted at any time to resign from its obligations and duties under the Pooling and Servicing Agreement by giving written notice to the Depositor, the Master Servicers, the Special Servicer and each rating agency. Upon receiving this notice of resignation, the Master Servicers will be required to promptly appoint a successor Trustee acceptable to the Master Servicers. If no successor Trustee shall have accepted an appointment within a specified period after the giving of notice of resignation, the resigning Trustee may petition any court of competent jurisdiction to appoint a successor Trustee.
If at any time a Trustee ceases to be eligible to continue as Trustee under the Pooling and Servicing Agreement, or if at any time the Trustee becomes incapable of acting, or if certain events of, or proceedings in respect of, bankruptcy or insolvency occur with respect to the Trustee, any public officer takes charge or control of the Trustee or its property, the Master Servicers or the Depositor will be authorized to remove the Trustee and appoint a successor Trustee. In addition, holders of the Certificates entitled to at least 51% of the voting rights may at any time, remove the Trustee under the Pooling and Servicing Agreement and appoint a successor Trustee.
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
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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 Trustee will be the REMIC Administrator, as described in the prospectus. See ‘‘Description of the Pooling Agreements—Certain Matters Regarding the Master Servicers, the Special Servicer, the REMIC Administrator and the Depositor’’ in the prospectus.
Any resignation or removal of a Trustee and appointment of a successor Trustee will not become effective until acceptance of appointment by the successor Trustee. Notwithstanding the foregoing, upon any termination of the Trustee under the Pooling and Servicing Agreement, the Trustee will continue to be entitled to receive from the Trust all accrued and unpaid compensation and expenses through the date of termination plus, 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 is terminated without cause, the terminating party is required to pay all of the expenses of the Trustee, necessary to effect the transfer of its responsibilities to the successor trustee. Any successor trustee must have a combined capital and surplus of at least $50,000,000 and have a debt rating that satisfies certain criteria set forth in the Pooling and Servicing Agreement.
Paying Agent, Certificate Registrar, Custodian and Authenticating Agent
The Trustee will be the paying agent (in that capacity, the ‘‘Paying Agent’’). In addition, the Trustee will initially serve as registrar (in that capacity, the ‘‘Certificate Registrar’’) for purposes of recording and otherwise providing for the registration of the offered certificates and of transfers and exchanges of the definitive certificates, if issued, and as authenticating agent of the certificates (in that capacity, the ‘‘Authenticating Agent’’). The Trustee will be responsible for paying the fees of each such agent.
Under the terms of the Pooling and Servicing Agreement, the Trustee is responsible for securities administration, which includes pool performance calculations, distribution calculations and the preparation of monthly distribution reports. As securities administrator, the Trustee is responsible for the preparation of all REMIC tax returns on behalf of the Trust REMICs, the preparation of reports on Form 8-K, the preparation of monthly reports on Form 10-D and the filing of annual reports on Form 10-K that are required to be filed with the Securities and Exchange Commission on behalf of the issuing Trust. The Trustee has been engaged in the business of securities administration in connection with mortgage-backed securities in excess of 20 years and in connection with commercial mortgage-backed securities since 1997. It has acted as securities administrator with respect to more than 300 series of commercial mortgage-backed securities, and, as of December 31, 2005, was acting as securities administrator with respect to more than $225 billion of outstanding commercial mortgage-backed securities.
There have been no material changes to Wells Fargo's policies on procedures with respect to its securities administration function other than changes required by applicable laws.
In the past three years, Wells Fargo has not materially defaulted in its securities administration obligations under any pooling and servicing agreement or caused an early amortization or other performance triggering event because of servicing by Wells Fargo with respect to commercial mortgage-backed securities.
The Trustee is acting as custodian of the mortgage loan files pursuant to the pooling and servicing agreement (in such capacity, the ‘‘Custodian’’) .. In that capacity, the Custodian is responsible to hold and safeguard the mortgage notes and other contents of the mortgage files on behalf of the Trustee and the Certificateholders. The Custodian has been engaged in the mortgage document custody business for more than 25 years. The Custodian maintains its commercial document custody facilities in its Minneapolis, Minnesota. As of December 31, 2005, the Custodian was acting as custodian of more than 3,000 commercial mortgage loan files.
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Certain Relationships and Related Transactions
PNC Bank is a wholly-owned indirect subsidiary of PNC Financial and is PNC Financial’s principal bank subsidiary. PNC Bank is an affiliate of PNC Capital Markets LLC, one of the Underwriters. Midland Loan Services Inc., a Master Servicer, is a wholly owned subsidiary of PNC Bank.
Five Mortgage Loans originated by CGMRC (representing approximately 3.01% of the Initial Outstanding Pool Balance and 4.13% of the Initial Group 1 Balance) were pre-approved by LNR prior to origination. LNR received a fee for each of the Mortgage Loans that it pre-approved.
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DESCRIPTION OF THE MORTGAGE POOL
General
The Trust (or the ‘‘Trust Fund’’) to be created by the Depositor will consist of the non-pooled trust component of the Villas Parkmerced Loan and a pool (the ‘‘Mortgage Pool’’) of 197 fixed-rate mortgage loans (each, together with the non-pooled trust component of the Villas Parkmerced Loan, a ‘‘Mortgage Loan,’’ and collectively, the ‘‘Mortgage Loans’’) secured by first liens on 211 commercial and multifamily properties (each a ‘‘Mortgaged Property,’’ and collectively, the ‘‘Mortgaged Properties’’). The Mortgage Pool has an aggregate principal balance as of the Cut-off Date of approximately $3,059,345,771 (the ‘‘Initial Outstanding Pool Balance’’). The principal balances of the Mortgage Loans (other than the non-pooled trust component of the Villas Parkmerced Loan) as of the Cut-off Date (each, a ‘‘Cut-off Date Balance’’) will range from $2,278,389 to $300,000,000 and the average Cut-off Date Balance will be $15,529,674 subject to a variance of plus or minus 5%. The pool of Mortgage Loans (other than the non-pooled trust component of the Villas Parkmerced loan) will be deemed to consist of three Loan Groups (‘‘Loan Group 1’’, ‘‘Loan Group 2A’’ and ‘‘Loan Group 2B’’ and, collectively, the ‘‘Loan Groups’’). Loan Group 1 will consist of 155 Mortgage Loans, representing 72.98% of the Initial Outstanding Pool Balance (the ‘‘Initial Loan Group 1 Balance’’). Loan Group 2A will consist of 2 Mortgage Loans (or 34.50% of the aggregate principal balance of the mortgage loans secured by multifamily properties), representing 10.07% of the Initial Pool Balance (the ‘‘Initial Loan Group 2A Balance’’). Loan Group 2B will consist of 40 Mortgage Loans (or 58.10% of the aggregate principal balance of the mortgage loans secured by multifamily properties), representing 16.95% of the Initial Pool Balance (the ‘‘Initial Loan Group 2B 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.
The Trust's assets will also include the non-pooled trust component of the Villas Parkmerced Loan (the "Villas Parkmerced Non-Pooled Trust Component") having a Cut-Off Date Balance of $50,000,000. The Villas Parkmerced Non-Pooled Trust Component supports only the Class VPM Certificates (the "Class VPM Certificates"). Although the Villas Parkmerced Non-Pooled Trust Component is an asset of the Trust, unless otherwise indicated, for the purpose of numerical and statistical information contained in this prospectus supplement, the Villas Parkmerced Non-Pooled Trust Component is not reflected in this prospectus supplement and the term "Mortgage Loan" in that context does not include the Villas Parkmerced Non-Pooled Trust Component unless otherwise indicated.
Each of the Villas Parkmerced Loan and the Arrowhead Shopping Center Loan has one or more companion loans. Each companion loan is referred to in this prospectus supplement as a ‘‘Companion Loan.’’ Each Mortgage Loan (which in the case of the Villas Parkmerced Loan, includes both the Villas Parkmerced Non-Pooled Trust Component and the Villas Parkmerced Pooled Component) together with its related Companion Loans is referred to in this prospectus supplement as a ‘‘Loan Combination.’’ Neither the Companion Loans nor the Villas Parkmerced Non-Pooled Trust Component are included in the Mortgage Pool. Each of the Companion Loans is subordinate in right of payment to the related Mortgage Loan. Each subordinate Companion Loan is referred to in this prospectus supplement as a ‘‘B Loan.’’ The Companion Loans related to the Villas Parkmerced loan and the Arrowhead Shopping Center Loan are being serviced under the Pooling and Servicing Agreement, except that with respect to the Arrowhead Shopping Center Loan, prior to or after the curing of a Material Default (defined below), payments with respect to the related Companion Loan may be collected by a separate servicer for such Companion Loan, and each such Companion Loan is sometimes referred to in this prospectus supplement as a ‘‘Serviced Companion Loan’’ and together with the related Mortgage Loan, as a, ‘‘Serviced Loan Combination’’).
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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:
Interest of Borrower Encumbered | No. of Mortgaged Properties |
% of Initial Outstanding Pool Balance(1) |
% of Initial
Loan Group 1 Balance(1) |
% of
Initial Loan Group 2A Balance(1) |
%
of Initial Loan Group 2B Balance(1) |
|||||||||||||||||
Fee Simple Estate(2) | 207 | 98.30 | % | 97.68 | % | 100.00 | % | 100.00 | % | |||||||||||||
Leasehold Estate | 2 | 1.08 | % | 1.47 | % | 0.00 | % | 0.00 | % | |||||||||||||
Partial Fee/Partial Leasehold Estate | 2 | 0.62 | % | 0.85 | % | 0.00 | % | 0.00 | % | |||||||||||||
Total | 211 | 100.00 | % | 100.00 | % | 100.00 | % | 100.0 | % | |||||||||||||
(1) | Because this table presents information relating to the Mortgaged Properties and not the Mortgage Loans, the information for Mortgage Loans secured by more than one Mortgaged Property is based on allocated loan amounts (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 Sponsor, the Master Servicers, the Special Servicer or the Trustee 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.
Significant Mortgage Loans and Significant Obligors
No Mortgage Loan has an outstanding principal balance as of the Cut-off Date which exceeds 9.81% of the Initial Pool Balance.
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The following table sets forth information regarding the ten largest Mortgage Loans and/or related groups in the pool, which represent, in the aggregate, approximately 30.66% of the Initial Pool Balance.
Ten Largest Mortgage Loans or Related Groups
Mortgage Loan or Cross-Collateralized Group | Loan No. |
Number
of Mortgage Loans |
Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
%
of Initial Pool Balance |
%
of Applicable Initial Loan Group Balance |
Mortgage Rate |
Stated Remaining Terms (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV Ratio at Maturity |
|||||||||||||||||||||||||||||||||||
Villas Parkmerced(1) | 1 | 1 | 1 | $ | 300,000,000 | 9.81 | % | 97.40 | % | 5.6480 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | |||||||||||||||||||||||||||||
Valley View Center | 2 | 1 | 1 | $ | 125,000,000 | 4.09 | % | 5.60 | % | 5.7180 | % | 58 | 1.66x | 73.96 | % | 73.96 | % | |||||||||||||||||||||||||||||
SunTrust Center | 3 | 1 | 1 | $ | 77,000,000 | 2.52 | % | 3.45 | % | 5.3360 | % | 118 | 2.45x | 50.33 | % | 50.33 | % | |||||||||||||||||||||||||||||
Westin Philadelphia Hotel | 4 | 1 | 1 | $ | 72,000,000 | 2.35 | % | 3.22 | % | 6.1570 | % | 57 | 1.60x | 79.12 | % | 79.12 | % | |||||||||||||||||||||||||||||
Rock Pointe Corporate Center | 5 | 1 | 1 | $ | 70,384,463 | 2.30 | % | 3.15 | % | 5.2150 | % | 117 | 1.29x | 77.77 | % | 64.60 | % | |||||||||||||||||||||||||||||
Woodbury Lakes | 6 | 1 | 1 | $ | 65,000,000 | 2.12 | % | 2.91 | % | 5.4500 | % | 118 | 1.68x | 70.27 | % | 70.27 | % | |||||||||||||||||||||||||||||
The Harrisburg Portfolio | 7 | 1 | 4 | $ | 61,000,000 | 1.99 | % | 2.73 | % | 5.3000 | % | 115 | 1.26x | 79.53 | % | 72.30 | % | |||||||||||||||||||||||||||||
Beyman Multifamily Portfolio | 8, 9 | 2 | 2 | $ | 60,640,000 | 1.98 | % | 11.69 | % | 5.7680 | % | 117 | 1.25x | 78.96 | % | 73.63 | % | |||||||||||||||||||||||||||||
Sunset Media Tower | 10 | 1 | 1 | $ | 55,000,000 | 1.80 | % | 2.46 | % | 5.2300 | % | 118 | 1.30x | 66.67 | % | 61.69 | % | |||||||||||||||||||||||||||||
Stadium Gateway | 11 | 1 | 1 | $ | 52,000,000 | 1.70 | % | 2.33 | % | 5.6560 | % | 119 | 1.50x | 64.20 | % | 64.20 | % | |||||||||||||||||||||||||||||
Total / Weighted Averages | $ | 938,024,463 | 30.66 | % | 5.5856 | % | 85 | 1.84x | 62.08 | % | 59.98 | % | ||||||||||||||||||||||||||||||||||
(1) | If the pooled trust component of the Villas Parkmerced Loan and the non-pooled trust component of the Villas Parkmerced Loan were aggregated they would represent approximately 11.26% of the initial pool balance and constitute a significant obligor. Information with respect to each of the above Mortgage Loans or groups is set forth in Annex B. |
The Mortgage Loan Sellers
The Depositor will purchase the Mortgage Loans to be included in the Trust Fund on or before the Closing Date from GACC, CGMRC 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. 59 Mortgage Loans, which represent security for 43.81% of the Initial Outstanding Pool Balance, 34.87% of the Initial Loan Group 1 Balance, 100.00% of the Initial Loan Group 2A Balance and 48.89% of the Initial Loan Group 2B Balance, will be sold to the Depositor by GACC. All such Mortgage Loans were originated by GACC or an affiliate of GACC. See ‘‘Transaction Parties—The Sponsors—German American Capital Corporation’’ in this prospectus supplement.
CGMRC. 104 Mortgage Loans, which represent security for 42.82% of the Initial Outstanding Pool Balance, 50.00% of the Initial Loan Group 1 Balance, 0.00% of the Initial Loan Group 2A Balance and 37.32% of the Initial Loan Group 2B Balance, will be sold to the Depositor by CGMRC. All such Mortgage Loans were originated by CGMRC or an affiliate of CGMRC. See ‘‘Transaction Parties—The Sponsors—Citigroup Global Markets Realty Corp.’’ in this prospectus supplement.
PNC Bank. 34 Mortgage Loans, which represent security for 13.38% of the Initial Outstanding Pool Balance, 15.13% of the Initial Loan Group 1 Balance, 0.00% of the Initial Loan Group 2A Balance and 13.79% of the Initial Loan Group 2B Balance, will be sold to the Depositor by PNC Bank. All such Mortgage Loans were originated by PNC Bank or an affiliate of PNC Bank. See ‘‘Transaction Parties—The Sponsors—PNC Bank, National Association’’ in this prospective supplement.
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The Mortgage Loans were originated or acquired by the Mortgage Loan Sellers (or an affiliate of such Mortgage Loan Seller) as follows:
Mortgage Loan Seller | Number of Mortgage Loans | Initial Outstanding Pool Balance(1) |
% of Cut-off Date Principal Balance |
% of Initial Loan Group 1 Balance |
% of Initial Loan Group 2A Balance |
% of Initial Loan Group 2B Balance |
||||||||||||||||||||
German American Capital Corporation | 59 | $1,340,202,555 | 43.81% | 34.87% | 100.00% | 48.89% | ||||||||||||||||||||
Citigroup Global Markets Realty Corp. | 104 | $1,309,862,511 | 42.82% | 50.00% | 0.00% | 37.32% | ||||||||||||||||||||
PNC Bank, National Association | 34 | $ 409,280,705 | 13.38% | 15.13% | 0.00% | 13.79% | ||||||||||||||||||||
197 | $3,059,345,771 | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||||||||||||||
(1) | Does not include the Villas Parkmerced Non-Pooled Trust Component. |
Each of the Mortgage Loan Sellers, subject to the exception below, 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 (i) affects the value of a Mortgage Loan sold by it, (ii) affects the value of the related Mortgaged Property or (iii) affects the interests of the Trustee or any holders of the Certificates therein, the related Mortgage Loan Seller will be required to cure the breach or repurchase or substitute for that 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.
A description of the underwriting standards of each Mortgage Loan Seller is set forth above under ‘‘Transaction Parties—The Sponsors.’’
The Mortgage Loans included in this transaction were selected for this transaction from mortgage loans specifically originated or acquired for securitizations of this type by the Sponsors taking into account rating agency criteria and feedback, subordinate investor feedback, property type and geographic location.
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 18-month period prior to the Cut-off Date. In some cases these assessments or updates revealed the existence of material environmental conditions. The Mortgage Loan Sellers have informed the Depositor that where such conditions were identified:
• | the circumstance or condition has been remediated in all material respects, |
• | the borrower has escrowed funds to effect the remediation, |
• | a responsible party (not related to the borrower or, if the cost of remediation is less than the lesser of 2% of the original principal balance of the related mortgage loan or $50,000, the borrower or its sponsor) is currently taking or required to take actions as have been recommended by the environmental assessment or by the applicable governmental authority, |
• | an operations and maintenance plan has been or will be implemented, |
• | environmental insurance with respect to such condition has been obtained, |
• | an indemnity or guaranty with respect to such condition was obtained from a responsible third party or the sponsor, |
• | 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 |
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• | 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.
With respect to certain mortgage loans, an insurance policy was obtained with respect to the related Mortgaged Property in lieu of obtaining indemnification from the sponsor or with respect to environmental matters. 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 an environmental insurance 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.
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 Master Servicers, the Special Servicer, the Trustee 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 18-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 19-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
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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 Loan Combination), 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 lesser of (1) the outstanding principal balance of such Mortgage Loan and with respect to any Mortgage Loan related to a Serviced Companion Loan, the outstanding principal balance of the Loan Combination, (2) the maximum amount of insurance required by the terms of the related Mortgage to the extent 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—Risks Related to the Mortgage Loans—Property Insurance’’ in this prospectus supplement.
Split Loan Structures
The Villas Parkmerced Loan
With respect to the Mortgage Loan known as the ‘‘Villas Parkmerced’’ loan, the pooled trust component (the "Villas Parkmerced Pooled Trust Component’’), representing approximately 9.81% of the Initial Outstanding Pool Balance, 97.40% of the Initial Loan Group 2A Balance, has a Cut-off Date Balance of $300,000,000 (and together with the Villas Parkmerced Non-Pooled Trust Component, the "Villas Parkmerced Loan"). The related Mortgaged Property also secures one or more other loans (each a ‘‘Villas Parkmerced B Loan’’ and collectively, the ‘‘Villas Parkmerced B Loans’’ and, together with the Villas Parkmerced Pooled Trust Component and the Villas Parkmerced Non-Pooled Trust Component, the ‘‘Villas Parkmerced Loan Combination’’) that are subordinate to the Villas Parkmerced Loan and each of which has a Cut-off Date Balance and current holder as listed in the table below:
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Note(1) | Principal Balance | Current Holder | ||||||||
B-1 | $ | 50,000,000 | GACC | |||||||
B-2 | $ | 25,000,000 | GACC | |||||||
C | $ | 35,000,000 | GACC | |||||||
D-1 | $ | 20,000,000 | GACC | |||||||
D-2 | $ | 10,000,000 | GACC | |||||||
D-3 | $ | 30,000,000 | GACC | |||||||
E | $ | 30,000,000 | GACC | |||||||
(1) | With respect to Villas Parkmerced Subordinate Companion loans, on or before the closing date, GACC may split one or more of such subordinate companion loans into additional classes of notes or consolidate two or more classes of notes, provided that the subordinate companion loans will in each case equal $200 million in the aggregate. |
The Villas Parkmerced B Loans have the same maturity date and interest rate as the Villas Parkmerced Loan. The Villas Parkmerced Loan Combination is an interest-only loan. Only the Villas Parkmerced Pooled Trust Component and the Villas Parkmerced Non-Pooled Trust Component are included in the Trust. The Villas Parkmerced B Loans are not assets of the Trust.
For the purpose of the information presented in this prospectus supplement with respect to the Villas Parkmerced Loan, unless otherwise indicated, the debt service coverage ratio and loan-to-value ratio reflect the indebtedness evidenced by the Villas Parkmerced Pooled Trust Component, but excludes the Villas Parkmerced B Loans and the Villas Parkmerced Non-Pooled Trust Component.
General. The Villas Parkmerced Loan Combination 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 Villas Parkmerced Loan Combination will be effected in accordance with the Pooling and Servicing Agreement). The Midland Master Servicer or the Trustee, as applicable, will be obligated to make (i) any required P&I Advances on the Villas Parkmerced Pooled Trust Component and the Villas Parkmerced Non-Pooled Trust Component unless the Midland Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an advance would not be recoverable from collections on the Villas Parkmerced Loan Combination, and (ii) Property Advances with respect to the Villas Parkmerced Loan Combination (including the Villas Parkmerced Non-Pooled Trust Component) unless the Midland Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an advance would not be recoverable from collections on the Villas Parkmerced Loan Combination.
Distributions. The holders of the Villas Parkmerced Loan and the Villas Parkmerced B Loans have entered into a co-lender agreement that sets forth the respective rights of each of the holders of the Villas Parkmerced Loan Combination and provides, in general, that:
• | if no monetary event of default or other material non-monetary event of default has occurred and is continuing (or if a monetary event of default or other material non-monetary event of default has occurred and is continuing, but either a mezzanine lender pursuant to the related intercreditor agreement, or a holder of a Villas Parkmerced B Loan or a holder of the Class VPM Certificates pursuant to the co-lender agreement or the Pooling and Servicing Agreement, as applicable, is exercising its cure right or has cured such monetary event of default or, in the case of a material non-monetary event of default has either cured such event of default or is diligently pursuing the cure thereof, in accordance with the terms of the related co-lender agreement and the Pooling and Servicing Agreement), the holders of the Villas Parkmerced B Loans will generally be entitled to receive their scheduled principal and interest payments after (i) the Midland Master Servicer and/or the Special Servicer, as applicable, receive their servicing fee, advance and interest thereon, workout fee and liquidation fee, (ii) the Midland Master Servicer and the Special Servicer, receive their pro rata share of indemnity payments related to the Villas Parkmerced Loan Combination that may be required, if any, (iii) the holder of the Villas Parkmerced Loan receives its scheduled interest payments and (iv) the holder of the Villas Parkmerced Loan receives any scheduled payments of principal and its percentage interest of any unscheduled payments of principal. Once both the Villas Parkmerced Loan and the Villas |
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Parkmerced B Loans receive their respective interest and principal payments, then any distribution of yield maintenance premium, excess interest and any late fees collected from the borrower during such distribution period, will be allocated to the holder of the Villas Parkmerced Loan and the holders of the Villas Parkmerced B Loans on a pro rata basis (up to the amounts allocated to such loans); and |
• | if a monetary event of default or other material non-monetary event of default has occurred and is continuing (and has not been cured by a mezzanine lender exercising its cure rights in accordance with the related intercreditor agreement, or a holder of a Villas Parkmerced B Loan or a Class VPM Certificate exercising its cure rights in accordance with the terms of the related co-lender agreement and the Pooling and Servicing Agreement), the holders of the Villas Parkmerced B Loans will not be entitled to receive payments of principal or interest until the holder of the Villas Parkmerced Loan receives all accrued interest (including default interest and advance interest) and outstanding principal in full. |
The respective rights of each of the holders of the Villas Parkmerced Pooled Trust Component and the Villas Parkmerced Non-Pooled Trust Component are set forth in the Pooling and Servicing Agreement, which provides, in general, that:
• | if no monetary event of default or other material non-monetary event of default that results in a transfer of the Villas Parkmerced Loan Combination to special servicing has occurred and is continuing (or if a monetary event of default or other material non-monetary event of default has occurred and is continuing, a holder of the Villas Parkmerced B Loans or the Class VPM Certificates has cured such monetary event of default or, in the case of a material non-monetary event of default has either cured such event of default or is diligently pursuing the cure thereof, in accordance with the terms of the related co-lender agreement and the Pooling and Servicing Agreement), the Certificates backed by the Villas Parkmerced Non-Pooled Trust Component will generally be entitled to receive their scheduled interest payments after the Certificates backed by the Villas Parkmerced Pooled Trust Component receive their scheduled interest payments (other than default interest) and their pro rata share of any scheduled, unscheduled or involuntary payments of principal with respect to the Villas Parkmerced Loan and after any advances in respect of the Villas Parkmerced Loan Combination are repaid as and when required under the Pooling and Servicing Agreement, and (after such interest and principal payments have been made to the Certificates backed by the Villas Parkmerced Pooled Trust Component) the Certificates backed by the Villas Parkmerced Non-Pooled Trust Component will be entitled to receive their pro rata share of any scheduled, involuntary and voluntary payments of principal with respect to the Villas Parkmerced Loan; and |
• | if a monetary event of default or other material non-monetary event of default has occurred and is continuing (and has not been cured by a holder of the Villas Parkmerced B Loans or the Class VPM Certificates exercising its cure rights in accordance with the terms of the related co-lender agreement and the Pooling and Servicing Agreement), the Certificates backed by the Villas Parkmerced Non-Pooled Trust Component will not be entitled to receive payments of interest until the Certificates backed by the Villas Parkmerced Pooled Trust Component receive all accrued interest and (to the extent actually collected, after allocating payments to interest on the Villas Parkmerced Loan) the Certificates backed by the Villas Parkmerced Pooled Trust Component will receive any scheduled, unscheduled or involuntary payment of principal on the Villas Parkmerced Loan up to the outstanding principal balance of the Villas Parkmerced Pooled Trust Component, and the holder of the Villas Parkmerced Non-Pooled Trust Component will not be entitled to receive payments of principal until the holder of the Villas Parkmerced Pooled Trust Component receives all its respective outstanding principal in full. |
In accordance with the foregoing rights to receive amounts collected on the Villas Parkmerced Loan, (a) amounts received on the Villas Parkmerced Pooled Trust Component will be available to make distributions of principal and interest on each Class of Certificates other than the Class VPM Certificates and (b) amounts received on the Villas Parkmerced Non-Pooled Trust Component will be available to make distributions on the Class VPM Certificates.
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Rights of the Holders of the Villas Parkmerced B Loans and the Class VPM Certificateholder
Consultation and Consent. Unless a Villas Parkmerced Control Appraisal Event has occurred and is continuing: (i) the Midland Master Servicer or the Special Servicer, as the case may be, will be required to consult with an operating advisor, which will be appointed by and represent one or more of the most subordinate holder or holders of the Villas Parkmerced B Loans upon the occurrence of any event of default for the Villas Parkmerced Loan Combination under the related Mortgage Loan Documents, to consider alternative actions recommended by such holder or holders, and to consult with such holder or holders with respect to certain determinations made by the Midland Master Servicer or the Special Servicer, as the case may be, pursuant to the Pooling and Servicing Agreement, (ii) at any time (whether or not an event of default for the Villas Parkmerced Loan Combination under the related Mortgage Loan Documents has occurred) the Midland Master Servicer or the Special Servicer, as the case may be, will be required to consult with one or more of the most subordinate holder or holders of the Villas Parkmerced B Loans (1) with respect to proposals to take any significant action with respect to the Villas Parkmerced Loan Combination and the related Mortgaged Property and to consider alternative actions recommended by such holder or holders, (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 (3) prior to taking any of the following actions with respect to the Villas Parkmerced Loan Combination, the Midland Master Servicer or the Special Servicer, as the case may be, will be required to notify in writing such holder or holders of any proposal to take any of such actions (and to provide such holder or holders with such information reasonably requested as may be necessary in the reasonable judgment of such holder or holders of the Villas Parkmerced B Loan in order to make a judgment, the expense of providing such information to be an expense of such requesting party) and to receive the written approval of such holder or holders of the Villas Parkmerced B Loan (which approval may be withheld in its sole discretion and will be deemed given if notice of approval or disapproval is not delivered within ten business days of delivery to such holder or holders of the Villas Parkmerced B Loan of written notice of the applicable action, together with information reasonably requested by the applicable holder or holders of the Villas Parkmerced B Loan) with respect to:
(i) Consenting to any modification, amendment, workout, or waiver with respect to, the Villas Parkmerced Loan Combination that would result in the extension of the maturity date thereof, a reduction in the interest rate for the Villas Parkmerced Loan Combination, forgiveness of interest on, principal of, or the amount or timing of any payment due under the Villas Parkmerced Loan Combination, or consenting to any other modification or waiver of any other monetary term of the Villas Parkmerced Loan Combination;
(ii) Consenting to any material amendment or modification of a non-monetary term or provision of the Villas Parkmerced Loan Combination;
(iii) Consenting to any modification or amendment of, or waiver with respect to, the Villas Parkmerced Loan Combination that would result in a discounted pay-off of the Villas Parkmerced Loan Combination;
(iv) Consenting to any proposed or actual foreclosure upon, or comparable conversion of (which may include acquisition of an REO property), the ownership of any portion of the related Mortgaged Property and any other collateral securing the Villas Parkmerced Loan Combination or any acquisition of the related Mortgaged Property and any other collateral securing the Villas Parkmerced Loan Combination by deed-in-lieu of foreclosure, if the Villas Parkmerced Loan Combination is in default and such default is continuing or becomes subject to any other enforcement action under the related Mortgage Loan Documents;
(v) Consenting to any sale or other transfer of the related Mortgaged Property or the Villas Parkmerced Loan Combination (except as otherwise permitted in the related co-lender agreement or as expressly permitted under the related Mortgage Loan Documents);
(vi) Making any decision to bring the related Mortgaged Property or REO property into compliance with applicable environmental laws or to otherwise address hazardous materials located at the related Mortgaged Property or REO property;
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(vii) Selling the Villas Parkmerced Loan Combination for less than the then outstanding principal balance plus any accrued and unpaid interest;
(viii) Consenting to any substitution, release or addition of collateral for the Villas Parkmerced Loan Combination or any release of the borrower or any guarantor under the Villas Parkmerced Loan Combination (other than if required in accordance with the terms of the Villas Parkmerced Loan Combination with no material discretion by the mortgagee or without the mortgagee's consent or upon satisfaction in full of the Villas Parkmerced Loan Combination); or any substitution of liens granted under the terms of the related Mortgage Loan documents in respect of such collateral;
(ix) Consenting to any release of the borrower, any guarantor or other obligor from any liability with respect to the Villas Parkmerced Loan Combination or any modification to, waiver of any provision of, or release of any guaranty or indemnity agreement;
(x) Making any determination to enforce or not to enforce a ‘‘due-on-sale’’ or ‘‘due-on-encumbrance’’ clause, including any transfer of direct or indirect interests in borrower that requires the consent of the mortgagee;
(xi) Any transfer of all or a portion of the related Mortgaged Property and any direct or indirect ownership interest in the borrower (except as expressly permitted the related mortgage loan documents without the mortgagee's consent) or any consent to an assignment and assumption of the Villas Parkmerced Loan Combination pursuant to the related mortgage loan documents;
(xii) Consenting to any incurrence of additional debt by the borrower or any additional mezzanine financing by any beneficial owner of the borrower (to the extent that the lender has consent rights pursuant to the mortgage loan documents with respect thereto), other than that certain existing mezzanine loan in the amount of up to $52,000,000 by and between German American Capital Corporation, as mezzanine lender and Parkmerced Investors Mezzanine, LLC, as mezzanine borrower, dated as of September 30, 2005, and (I) approving, consenting to or making any material waiver or decision under or with respect to (a) the related intercreditor agreement with respect to that certain existing mezzanine loan or (b) future advances of that contain existing mezzanine loan contemplated which require the mortgage lender's consent pursuant to the related intercreditor agreement and/or the mortgage loan documents and (c) any approval of permitted mezzanine loan refinancing (as defined in the related Mortgage Loan Documents) and (II) consenting to any material modification of the related intercreditor agreement;
(xiii) Voting on any plan of reorganization, restructuring or similar plan in the bankruptcy of the borrower;
(xiv) Consenting to any proposed modification or waiver of any material provision of the mortgage loan documents governing the types, nature or amount of insurance coverage required to be obtained and maintained by the mortgage loan borrower;
(xv) Approving any renewal or replacement of the then existing insurance policies (to the extent the mortgagee's approval is required under the applicable Mortgage Loan Documents);
(xvi) Approving the termination or replacement of a property manager or execution, termination, renewal or material modification of any property management agreement (or any other management related approvals), to the extent the mortgagee's approval is required under the Mortgage Loan Documents;
(xvii) Approving any material releases of reserve funds or related letters of credit or adjustment to the amounts of reserve funds required under the mortgage loan agreement with respect to the related Mortgaged Property not expressly required to be released or adjusted pursuant to the mortgagee's Mortgage Loan Documents without the consent of the mortgagee;
(xviii) Consenting to, following an event of default, any exercise of remedies, including the acceleration of the Villas Parkmerced Loan Combination or initiation of any proceedings, judicial or otherwise, under the Mortgage Loan Documents;
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(xix) Approving the settlement of any insurance claim for a cash payment that will be applied to the principal amount of the Villas Parkmerced Loan Combination (instead of rebuilding the related Mortgaged Property) if such repayment would not result in the payment in full of all amounts due and payable to the controlling holder of the Villas Parkmerced B Loan;
(xx) Consenting to any waiver of amounts required to be deposited into escrow or reserve accounts under the mortgage loan documents, or any modification or amendment of any mortgage loan documents that would reduce the amount of funds required to be deposited into the reserve accounts established under the mortgage loan documents (other than changes in the ordinary course of business of the amounts required to be deposited into escrow accounts for real estate taxes, insurance premiums or ground rents, if any or as otherwise permitted in the mortgage loan documents);
(xxi) Consenting to any amendment to the special purpose entity provisions in the mortgage loan agreement;
(xxii) Consenting to the subordination of the Villas Parkmerced Loan Combination to any other interest in the related Mortgaged Property, or subordination of any recorded document recorded in connection with the Villas Parkmerced Loan Combination;
(xxiii) Consenting to the waiver of any of the extension conditions set forth in the mortgage loan agreement; and
(xxiv) Waiving any event of default.
Such rights will terminate and will be exercised by the most subordinate holder of the Class VPM Certificates at any time that a Villas Parkmerced Control Appraisal Event has occurred and is continuing with respect to each of the Villas Parkmerced B Loans and will be exercised by the Controlling Class Representative at any time that a Class VPM Control Appraisal Event has occurred and is continuing with respect to each of the Class VPM Certificates.
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 Midland Master Servicer by the operating advisor of the Villas Parkmerced B Loans or the holders of the Class VPM Certificates or the Controlling Class Representative, as applicable, in no event will the Special Servicer or the Midland Master Servicer be required to take any action or refrain from taking any action that would violate any law of any applicable jurisdiction, be inconsistent with the Servicing Standard, violate any REMIC Provisions of the Code or violate any other provisions of the Pooling and Servicing Agreement or the related Mortgage Loan Documents.
In the event that the Midland Master Servicer or Special Servicer determines that immediate action is necessary to protect the interests of the holders of the Villas Parkmerced Loan Combination (as a collective whole), the Midland Master Servicer or the Special Servicer may take any such action without waiting for the instruction of the holders of Villas Parkmerced Loan Combination.
A ‘‘Villas Parkmerced Control Appraisal Event’’ will be deemed to have occurred and be continuing with respect to each Villas Parkmerced B Loan if (i) the initial principal balance of such Villas Parkmerced B Loan, as reduced by any payments of principal (whether as scheduled amortization, principal prepayments or otherwise) allocated to such Villas Parkmerced B Loan and any appraisal reduction amounts and realized losses allocated to such Villas Parkmerced B Loan, is less than 25% of the initial principal balance of such Villas Parkmerced B Loan, as reduced by any payments of principal (whether as scheduled amortization, principal prepayments or otherwise allocated to such Villas Parkmerced B Loan) provided that no Villas Parkmerced Control Appraisal Event will be deemed to exist if the applicable holder of the related Villas Parkmerced B Loan exercises its right to effectuate a Villas Parkmerced Appraisal Event cure by posting, within a certain specified amount of time, either cash collateral or an unconditional and irrevocable standby letter of credit in an amount which when added to the appraised value of the related Mortgaged Property would cause the Villas Parkmerced Control Appraisal Event not to occur or (ii) if the holder of a Villas Parkmerced B Loan is the related borrower or an affiliate of the related borrower.
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A "Class VPM Control Appraisal Event" will be deemed to have occurred and be continuing with respect to each Class of Class VPM Certificate if (i) the initial principal balance of such Class of Class VPM Certificates, as reduced by any payments of principal (whether as scheduled amortization, principal prepayments or otherwise) allocated to such Class of Class VPM Certificates and any appraisal reduction amounts and realized losses allocated to such Class of Class VPM Certificates, is less than 25% of the initial principal balance of such Class of Class VPM Certificates, as reduced by any payments of principal (whether as scheduled amortization, principal prepayments or otherwise allocated to such Class of VPM Certificates) provided that no Class VPM Control Appraisal Event will be deemed to exist if the a holder of the applicable Class VPM Certificates exercises its right to effectuate a Class VPM Control Appraisal Event cure by posting, within a certain specified amount of time, either cash collateral or an unconditional and irrevocable standby letter of credit in an amount which when added to the appraised value of the related Mortgaged Property would cause such Class VPM Control Appraisal Event not to occur, provided that such collateral shall in no event be less than 25% of the aggregate note principal balance of the applicable holder or (ii) if the holder of a Class VPM Certificate is an affiliate of the related borrower.
Cure Rights. In the event that the borrower fails to make any payment of principal or interest on the Villas Parkmerced Loan Combination, resulting in a monetary event of default, or a material non-monetary event of default exists, the holders of the Villas Parkmerced B Loans (in accordance with the related co-lender agreement) or a holder of the Class VPM Certificates (in accordance with the Pooling and Servicing Agreement) will have the right to cure such event of default (each such cure, a ‘‘Villas Parkmerced Cure Event’’) subject to certain limitations set forth in the related co-lender agreement or the Pooling and Servicing Agreement, as applicable; provided that the right of the holders of the Villas Parkmerced B Loans or a holder of the Class VPM Certificates, as applicable, to effect a Villas Parkmerced Cure Event is subject to the following limitations: (i) that there be no more than four monetary Villas Parkmerced Cure Events in any twelve calendar month period, (ii) that no monetary Villas Parkmerced Cure Event may continue for more than four consecutive months and, (iii) that there be a cap of nine monetary and/or non-monetary Villas Parkmerced Cure Events over the life of the Villas Parkmerced Loan. So long as a holder of a Villas Parkmerced B Loan or a holder of the Class VPM Certificates, as applicable, is exercising its cure right, neither the Midland Master Servicer nor the Special Servicer will be permitted to:
• | accelerate the Villas Parkmerced Loan Combination, |
• | treat such event of default as such for purposes of transferring the Villas Parkmerced Loan Combination to special servicing, or |
• | commence foreclosure proceedings. |
Each holder of a Villas Parkmerced B Loan or a holder of the Class VPM Certificates, as applicable, will not be permitted to exercise any cure rights if it is an affiliate of the related borrower.
Purchase Option. So long as no Villas Parkmerced Control Appraisal Event exists, the holders of the Villas Parkmerced B Loans have the option of purchasing the Villas Parkmerced Loan from the Trust at any time after the Villas Parkmerced Loan Combination becomes a Specially Serviced Loan under the Pooling and Servicing Agreement as a result of an event that constitutes an event of default under the Villas Parkmerced Loan Combination, 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 and that the Villas Parkmerced Loan Combination has not become a Corrected Mortgage Loan.
The purchase price required to be paid by a holder of the Villas Parkmerced B Loans will generally equal the outstanding principal balance of the Villas Parkmerced Loan and the Villas Parkmerced Non-Pooled Trust Component, together with accrued and unpaid interest thereon (excluding default interest), any unreimbursed advances, together with unreimbursed interest thereon, relating to the Villas Parkmerced Loan Combination.
Furthermore, the Class VPM Certificateholders have the option of purchasing the Villas Parkmerced Loan from the Trust at any time after the Villas Parkmerced Loan Combination becomes a Specially Serviced Loan under the Pooling and Servicing Agreement as a result of an event that constitutes an
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event of default under the Villas Parkmerced Loan Combination, 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 and provided that no holder of the Villas Parkmerced B Loans has previously exercised its purchase option as described above.
The purchase price required to be paid by a Class VPM Certificateholder will generally equal the aggregate outstanding principal balance of the Villas Parkmerced Loan, together with accrued and unpaid interest thereon (excluding default interest), any unreimbursed advances, together with unreimbursed interest thereon, relating to the Villas Parkmerced Loan Combination, and, if such purchase price is being paid more than 90 days after the event giving rise to the Class VPM Certificateholder's purchase, a 1% liquidation fee (which will be paid to the Special Servicer).
Termination of Special Servicer. So long as no Villas Parkmerced Control Appraisal Event exists, the most subordinate holder of the Villas Parkmerced B Loans not subject to a Villas Parkmerced Control Appraisal Event is permitted to terminate, at its expense, the Special Servicer for the Villas Parkmerced Loan Combination at any time with or without cause, and to appoint a replacement special servicer for the Villas Parkmerced Loan Combination, subject to satisfaction of the conditions contained in the Pooling and Servicing Agreement. So long as no Class VPM Control Appraisal Event exists with respect to such Class VPM Certificate, and if a Villas Parkmerced Control Appraisal Event exists with respect to each Villas Parkmerced B Loan, the holder of the most subordinate Class of Class VPM Certificates is permitted to terminate, at its expense, the Special Servicer for the Villas Parkmerced Loan Combination at any time with or without cause and to appoint a replacement special servicer for the Villas Parkmerced Loan Combination, subject to satisfaction of certain conditions in the Pooling and Servicing Agreement. If a Class VPM Control Appraisal Event exists, or if the holder of the Class VPM Certificates is an affiliate of the related borrower, the Controlling Class Representative will be entitled to appoint a replacement special servicer. Any successor special servicer will be required to have the rating specified in the related intercreditor agreement and such appointment will be subject to receipt of a ‘‘no downgrade’’ letter from the Rating Agencies.
The Arrowhead Shopping Center Loan Combination
With respect to the Mortgage Loan known as the ‘‘Arrowhead Shopping Center’’ loan (the ‘‘Arrowhead Shopping Center Loan’’), representing in aggregate approximately 0.12% of the Initial Outstanding Pool Balance and 0.17% of the Initial Loan Group 1 Balance, the related Mortgaged Property also secures one other companion loan (the ‘‘Arrowhead Shopping Center B Loan’’ and, together with the related Arrowhead Shopping Center Loan, the ‘‘Arrowhead Shopping Center Loan Combination’’) that is subordinate to the Arrowhead Shopping Center Loan. The Cut-off Date Balance of the Arrowhead Shopping Center Loan is $3,794,786 and the Cut-off Date Balance of the Arrowhead Shopping Center B Loan is $237,274.21.
The Arrowhead Shopping Center B Loan has the same maturity date and amortization term as the Arrowhead Shopping Center Loan, but an interest rate of 12.95% per annum. Only the Arrowhead Shopping Center Loan is included in the trust. The Arrowhead Shopping Center B Loan is not an asset of the trust.
The Arrowhead Shopping Center B Loan is owned by CBA Mezzanine Capital Finance, LLC.
For the purpose of the information presented in this prospectus supplement with respect to the Arrowhead Shopping Center Loan, unless otherwise indicated, the debt service coverage ratio and loan-to-value ratio reflect the indebtedness evidenced by the Arrowhead Shopping Center Loan, but exclude the Arrowhead Shopping Center B Loan.
General. The Arrowhead Shopping Center Loan Combination will be serviced pursuant to the terms of the Pooling and Servicing Agreement and the related intercreditor agreement (and all decisions, consents, waivers, approvals and other actions on the part of any holder of the Arrowhead Shopping Center Loan Combination will be effected in accordance with the Pooling and Servicing Agreement and the related intercreditor agreement). The Midland Master Servicer or the Trustee, as applicable, will be obligated to make (i) any required P&I Advances on the Arrowhead Shopping Center Loan unless the
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Midland Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an advance would not be recoverable from collections on the Arrowhead Shopping Center Loan Combination, and (ii) Property Advances with respect to the Arrowhead Shopping Center Loan Combination unless the Midland Master Servicer, the Special Servicer or the Trustee, as applicable, determines that such an advance would not be recoverable from collections on the Arrowhead Shopping Center Loan Combination.
Distributions. The holders of the Arrowhead Shopping Center Loan and the Arrowhead Shopping Center B Loan have entered into an intercreditor agreement that sets forth the respective rights of each of the holders of the Arrowhead Shopping Center Loan Combination and provides, in general, that:
• | if no Material Default (defined below) has occurred and is continuing (or if a Material Default has occurred but is not continuing) with respect to the Arrowhead Shopping Center Loan Combination, the holder of the Arrowhead Shopping Center B Loan will generally be entitled to receive its scheduled principal and interest payments after (i) the holder of the Arrowhead Shopping Center Loan receives its scheduled interest payments, (ii) the holder of the Arrowhead Shopping Center Loan receives its scheduled payments of principal and (iii) the holder of the Arrowhead Shopping Center Loan receives all amounts in prepayment of principal up to the unpaid principal balance thereof including the corresponding prepayment or yield maintenance premium with respect to the amount prepaid on the Arrowhead Shopping Center Loan. For the Arrowhead Shopping Center Loan Combination, a ‘‘Material Default’’ consists of any of the following events: (a) the acceleration of the Arrowhead Shopping Center Loan or the Arrowhead Shopping Center B Loan; (b) the existence of a continuing monetary event of default; or (c) an event of default caused by the filing of a bankruptcy or insolvency action by, or against, the related borrower or by the related borrower otherwise being the subject of a bankruptcy or insolvency proceeding; |
• | if a Material Default has occurred and is continuing, or if a partial or full prepayment of the Arrowhead Shopping Center Loan Combination results from the payment of insurance proceeds or condemnation awards, the holder of the Arrowhead Shopping Center B Loan will not be entitled to receive payments of principal or interest until the holder of the Arrowhead Shopping Center Loan receives the unreimbursed costs and expenses of the Midland Master Servicer or the Trustee to the extent payable under the Pooling and Servicing Agreement with respect to the Arrowhead Shopping Center Loan Combination, including unreimbursed advances (including advance interest), accrued and unpaid servicing fees and other servicing compensation, accrued and unpaid interest (excluding default interest), the outstanding principal balance and its percentage interest of any prepayment or yield maintenance premium. |
Rights of the Holders of the Arrowhead Shopping Center B Loans
Consent to Modifications. Prior to agreeing to any of the following with respect to the Arrowhead Shopping Center Loan Combination, the Midland Master Servicer and the Special Servicer will be required to obtain the prior written consent of the holder of the Arrowhead Shopping Center B Loan with respect to any amendment, deferral, extension, waiver or other modification of the Arrowhead Shopping Center Loan Combination which:
• | adversely affects the lien priority of the Mortgage; |
• | increases the interest rate or principal amount of the Arrowhead Shopping Center Loan; |
• | increases in any other material respect any monetary obligations of the related borrower under the Mortgage Loan Documents; |
• | decreases, forgives, waives, releases or defers the interest or the interest rate or principal amount of the Arrowhead Shopping Center B Loan or forgives, waives, decreases, defers or releases all or any portion of the Arrowhead Shopping Center B Loan; |
• | shortens the scheduled maturity date of the related Arrowhead Shopping Center Loan; |
• | increases the term of the Arrowhead Shopping Center B Loan to a date occurring after the maturity date of the related Arrowhead Shopping Center Loan; |
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• | accepts a grant of any lien on or security interest in any new collateral not originally granted under the Mortgage Loan Documents unless such new collateral also secures the Arrowhead Shopping Center B Loan; |
• | modifies or amends the terms and provisions of any cash management agreement with respect to the manner, timing and method of the application of payments under the Mortgage Loan Documents; |
• | cross-defaults the Arrowhead Shopping Center Loan with any other indebtedness; |
• | obtains any contingent interest, additional interest or other ‘‘kicker’’ measured on the basis of the cash flow or appreciation of the Mortgaged Property; |
• | releases the lien of the Mortgage as security for the Arrowhead Shopping Center B Loan except in connection with a payment in full of the Arrowhead Shopping Center Loan Combination or the release of a de minimis portion of the Mortgaged Property or as provided in the Mortgage Loan Documents in effect at the origination of the Arrowhead Shopping Center Loan Combination; |
• | spread the lien of the Mortgage to encumber additional real property unless such real property shall also secure the Arrowhead Shopping Center B Loan; |
• | extend the period during which voluntary prepayments are prohibited or impose any prepayment fee or premium or yield maintenance charge in connection with a prepayment of the Arrowhead Shopping Center Loan when none is required under the Mortgage Loan Documents in effect at the origination of the Arrowhead Shopping Center Loan or after the current maturity date of the Arrowhead Shopping Center Loan or increase the amount of such prepayment fee, premium or yield maintenance charge or otherwise modify any prepayment or defeasance provisions in a manner materially adverse to the holder of the Arrowhead Shopping Center B Loan. |
The consent of the holder of the Arrowhead Shopping Center B Loan will not be required in connection with any such modification of the Arrowhead Shopping Center Loan Combination after the expiration of such holder’s right to purchase the Arrowhead Shopping Center Loan (as described under ‘‘—Purchase Option’’ below).
Notwithstanding any approval or disapproval of, or right to approve or disapprove, any such modification by the holder of the Arrowhead Shopping Center B Loan, no such modification may adversely affect the REMIC status of any REMIC under the Pooling and Servicing Agreement or result in the imposition of a ‘‘prohibited transaction’’ or ‘‘prohibited contribution’’ tax under the REMIC provisions of the Code (collectively, the ‘‘REMIC Provisions’’). In addition, neither the Midland Master Servicer nor the Special Servicer shall agree to any modification of the Arrowhead Shopping Center Loan Combination if such modification would constitute a ‘‘significant modification’’ of either the Arrowhead Shopping Center Loan under the Pooling and Servicing Agreement or the Arrowhead Shopping Center B Loan under any pooling and servicing agreement affecting such loan under the REMIC Provisions of the Code unless such modification is permitted by such REMIC Provisions.
Notwithstanding anything herein to the contrary, the Controlling Class Representative will have the right to consult with the Midland Master Servicer and the Special Servicer, at any time, regarding the Arrowhead Shopping Center Loan Combination.
If, during the period of time during which the holder of the Arrowhead Shopping Center B Loan or its designee has the right to purchase the Arrowhead Shopping Center Loan as provided in the intercreditor agreement, the Midland Master Servicer or Special Servicer, as applicable, determines that immediate action is necessary to protect the interests of the holders of the Arrowhead Shopping Center Loan Combination (as a collective whole), the Midland Master Servicer or the Special Servicer, as applicable, may agree to any such modification without obtaining the prior written consent of (but after giving at least three business days’ prior written notice to) the holder of the Arrowhead Shopping Center B Loan provided that such modification would not violate the REMIC Provisions.
Cure Rights. The holder of the Arrowhead Shopping Center B Loan does not have any rights to cure any defaults with respect to the Arrowhead Shopping Center Loan Combination.
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Purchase Option. Upon the occurrence of any one of certain defaults that are set forth in the intercreditor agreement (which generally includes (i) any payment of principal or interest under the Arrowhead Shopping Center Loan Combination is 90 or more days delinquent, (ii) the principal balance of either the Arrowhead Shopping Center Loan or the Arrowhead Shopping Center B Loan is not paid at maturity or (iii) a Material Default occurs), the holder of the Arrowhead Shopping Center B Loan will have the right to purchase the Arrowhead Shopping Center Loan at a purchase price determined under the intercreditor agreement and generally equal to the sum of (a) the outstanding principal balance of the Arrowhead Shopping Center Loan, (b) accrued and unpaid interest on such principal balance (excluding any default interest or other late payment charges), (c) any unreimbursed servicing advances made by the Midland Master Servicer, the Special Servicer or the Trustee with respect to the Arrowhead Shopping Center Loan, together with any advance interest thereon, (d) reasonable out-of-pocket legal fees and costs incurred in connection with the enforcement of the Arrowhead Shopping Center Loan by the Midland Master Servicer or Special Servicer, (e) any unreimbursed interest on any principal and interest advances made by the Midland Master Servicer or the Trustee with respect to the Arrowhead Shopping Center Loan, (f) master servicing fees, special servicing fees and trustee’s fees payable under the Pooling and Servicing Agreement prior to the date of repurchase (excluding any ‘‘success fees’’ or similar fees or termination compensation) and (g) out of pocket expenses incurred by the Midland Master Servicer, the Special Servicer or the Trustee with respect to the Arrowhead Shopping Center Loan Combination together with advance interest thereon. The right of the holder of the Arrowhead Shopping Center B Loan to purchase the Arrowhead Shopping Center Loan is subject to the holder the Arrowhead Shopping Center B Loan giving irrevocable written notice of its intent to purchase within 30 days following receipt from the holder of the Arrowhead Shopping Center Loan of notice of such right.
ARD Loans
4 mortgage loans (the ‘‘ARD Loans’’), representing 2.06% of the outstanding pool balance and 2.82% of the Initial 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 "Riverview Square" loan, "Circuit City – Poughkeepsie, NY," "Peapod Distribution Warehouse" and the ‘‘Circuit City – Manassas, VA’’ loan, the Anticipated Repayment Date for each such Mortgage Loan is 120 months, after the origination date for each Mortgage Loan. The Revised Rate for each of the ARD Loans is equal to the Initial Rate plus 2% for the "Circuit City – Poughkeepsie, NY" loan and the "Circuit City – Manassas, VA" loan and greater of (i) Initial Rate plus 2% per annum and (ii) annualized treasury yield plus 3% per annum for the "Riverview Square" loan and the "Peapod Distribution Warehouse" loan. 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 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. Information with respect to a Mortgaged Property that is part of a Mortgage Loan with multiple properties is based on the allocated loan amount for such Mortgaged Property. With
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regard to the Mortgaged Properties located in California, Northern California properties have a zip code greater than 93600 and Southern California properties have a zip code less than or equal to 93600. 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 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:
(i) ‘‘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.
(ii) ‘‘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 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.
(iii) ‘‘Balloon Balance’’ means, with respect to any Balloon Loan, the principal amount that will be due at maturity for such Balloon Loan.
(iv) ‘‘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 this prospectus supplement, in the following tables, in Annex A-1, Annex A-2A and Annex A-2B and in the tables in Annex B to this prospectus supplement, the Cut-off Date Balance of the following Mortgage Loans, collectively representing approximately 2.11% of the Initial Outstanding Pool Balance, 1.90% of the Initial Loan Group 1 Balance and 4.24% of the Initial Loan Group 2B Balance, has been reduced by the following holdback reserve amounts: (i) with respect to the Mortgage Loan known as ‘‘Hawthorne Exchange’’ by $3,450,000, (ii) with respect to the Mortgage Loan known as ‘‘Galleria Pavilion’’ by $2,150,000, (iii) with respect to the Mortgage Loan known as ’’ Indian Lakes Apartments’’ by $1,300,000, and (iv) with respect to the Mortgage Loan known as ‘‘New Albany Medical Office Building’’ by $2,090,000. Including such holdback reserve amounts, the Cut-off Date LTV Ratio is 78.64%, 73.81%, 77.46% and 94.12%, respectively.
In the case of a Mortgage Loan that is part of a split loan structure, unless otherwise indicated, loan-to-value ratios were calculated only with respect to the Mortgage Loan, excluding any related B Loan and in the case of the Villas Parkmerced Loan, excluding the Villas Parkmerced Non-Pooled Trust
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Component. For a calculation of the loan-to-value ratio for each of these Mortgage Loans including any related B Loan and in the case of the Villas Parkmerced Loan, including the Villas Parkmerced Non-Pooled Trust Component, see footnote 7 to Annex A-1.
(v) ‘‘GLA’’ means gross leasable area.
(vi) ‘‘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.
For purposes of calculating such amounts in this prospectus supplement, in the following tables, in Annex A-1, Annex A-2A and Annex A-2B and in the tables in Annex B to this prospectus supplement, the Cut-off Date Balance of the following Mortgage Loans, collectively representing approximately 2.11% of the Initial Outstanding Pool Balance, 1.90% of the Initial Loan Group 1 Balance and 4.24% of the Initial Loan Group 2B Balance, has been reduced by the following holdback reserve amounts: (i) with respect to the Mortgage Loan known as ‘‘Hawthorne Exchange’’ by $3,450,000, (ii) with respect to the Mortgage Loan known as ‘‘Galleria Pavilion’’ by $2,150,000, (iii) with respect to the Mortgage Loan known as ‘‘Indian Lakes Apartments’’ by $1,300,000, and (iv) with respect to the Mortgage Loan known as ‘‘New Albany Medical Office Building’’ by $2,090,000. Including such holdback reserve amounts, the LTV Ratio at Maturity is 73.18%, 68.84%, 70.82% and 80.58%, respectively.
In the case of each Mortgage Loan that is part of a split loan structure, unless otherwise indicated, loan-to-value ratios were calculated only with respect to the Mortgage Loan included in the Trust, but excluding any related B Loan and in the case of the Villas Parkmerced Loan, including the Villas Parkmerced Non-Pooled Trust Component.
(vii) ‘‘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.
(viii) ‘‘NRA’’ means net rentable area.
(ix) ‘‘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’’). The Occupancy Rate may have been obtained from the borrower, as derived from the Mortgaged Property’s rent rolls, operating statements or appraisals or as determined by a site inspection of such Mortgaged Property. The Occupancy Rate presented in this prospectus supplement may include unoccupied space leased to an affiliate of the borrower and space subject to build out or other construction or renovation. 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.
(x) ‘‘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 applicable Master Servicing Fee Rate, Trustee Fee Rate and the primary fee rate (the servicing fee rate paid to the primary servicer), if any).
(xi) ‘‘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.
(xii) ‘‘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. Annex A-1 indicates which Mortgage Loans have an Anticipated Repayment Date.
(xiii) ‘‘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
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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, the Master Servicers or Special 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 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.
(xiv) ‘‘Net Operating Income,’’ or ‘‘NOI,’’ with respect to any Mortgaged Property, means historical net operating income for the annual or other period specified (or ending on the ‘‘NOI Date’’ specified). In general, it is the 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) and (b) estimated fixed expenses (such as insurance, real estate taxes and, if applicable, ground lease payments). Net operating income generally does not reflect (i.e. it does not deduct for) capital expenditures, including tenant improvement costs and leasing commissions, interest expenses and non-cash items such as depreciation and amortization.
(xv) ‘‘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 hotel property, the number of guest rooms.
S-114
(xvi) ‘‘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 this prospectus supplement, in the following tables, in Annex A-1, Annex A-2A and Annex A-2B and in the tables in Annex B to this prospectus supplement, the Cut-off Date Balance of the following Mortgage Loans, collectively representing approximately 2.81% of the Initial Outstanding Pool Balance, 2.87% of the Initial Loan Group 1 Balance and 4.24% of the Initial Loan Group 2B Balance, has been reduced by the following holdback reserve amounts: (i) with respect to the Mortgage Loan known as ‘‘Hawthorne Exchange’’ by $3,450,000, (ii) with respect to the Mortgage Loan known as ‘‘Galleria Pavilion’’ by $2,150,000, (iii) with respect to the Mortgage Loan known as ‘‘Indian Lakes Apartments’’ by $1,300,000, (iv) with respect to the Mortgage Loan known as "New Albany Medical Office Building" by $2,090,000, and (v) with respect to the Mortgage Loan known as "Story and King Plaza" by $2,336,035. Including such holdback reserve amounts, the UW NCF DSCR is 0.94x, 1.01x, 1.13x, 0.88x and 1.07x, respectively. In the case of the Mortgage Loans known as ‘‘Empirian at Steele Park,’’ ‘‘Colonnade at Germantown,’’ ‘‘Wynnwood Office Buildings,’’ and ‘‘Trafalgar Square Apartments,’’ the Mortgage Loan is recourse to the sponsor (up to $4,800,000, $3,625,000, $2,000,000, and $500,000, respectively, which amount may be reduced under certain circumstances) until the related Mortgaged Property achieves a minimum DSCR of 1.25x (or 1.20x, with respect to Trafalgar Square Apartments). The DSCR for the related Mortgage Loan is shown throughout this prospectus supplement at 1.25x (or 1.20x, with respect to Trafalgar Square Apartments), reflecting the threshold at which the full recourse guaranty will be released. In the case of the Mortgage Loans known as "Empirian at Steele Park," "Colonnade at Germantown" and "Wynwood Office Buildings" the current calculated underwritten DSCR during the related initial interest only period is 1.27x, 1.26x and 1.31x, respectively. In the case of the Mortgage Loans known as "Empirian at Steele Park," "Colonnade at Germantown," "Wynwood Office Buildings" and "Trafalgar Square Apartment" the current calculated underwritten DSCR during the related amortizing period is 1.06x, 1.05x, 1.08x and 1.13x, respectively. With respect to mortgage loans known as "Birnam Wood Apartments" and "Oxford Apartments", $1,300,000 and $225,000 have been escrowed until certain conditions under the mortgage loan documents have been met. For the Birnam Wood Apartments loan, the holdback will be released when the related Property has achieved a minimum DSCR of 1.20x calculated using a 7% constant. For the Oxford Apartments loan, the holdback will be released when the related Property has achieved a minimum DSCR of 1.20x calculated using a 6.75% constant. Including such holdback reserve amounts, the UW NCF DSCR is 1.16x for Birnam Wood Apartments and 1.17x for Oxford Apartments. The DSCR for such mortgage loan is shown throughout this prospectus supplement at the rate which would exist assuming these conditions under the mortgage loan have been met.
In the case of a Mortgage Loan that is part of a split loan structure, unless otherwise indicated, debt service coverage ratios were calculated only with respect to the Mortgage Loan, excluding any related B Loan and in the case of the Villas Parkmerced Loan, excluding the Villas Parkmerced Non-Pooled Trust Component. For a calculation of the debt service coverage ratio for each of these Mortgage Loans including any related B Loan and in the case of the Villas Parkmerced Loan, including the Villas Parkmerced Non-Pooled Trust Component, see footnote 7 to Annex A-1.
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. In addition, with respect to any Mortgage Loan secured by the borrower's interest in a building that is comprised of residential cooperative apartments, the rental rates used in calculating debt service reflect the market rents as determined by the respective appraiser. 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.
(xvii) ‘‘UW Revenue’’ means, with respect to any Mortgage Loan, the gross potential rent, less vacancies and collection loss.
S-115
RANGE OF CUT-OFF DATE BALANCES—ALL MORTGAGE LOANS
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Cut-off Date Balances |
Number of Mortgage Loans |
Aggregate Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV Ratio at Maturity |
||||||||||||||||||||||||||
2,278,389 – 2,999,999 | 7 | $ | 18,411,194 | 0.60 | % | 5.732 | % | 131 | 1.52 | x | 63.06 | % | 48.55 | % | ||||||||||||||||||||
3,000,000 − 3,999,999 | 15 | 54,420,097 | 1.78 | % | 5.491 | % | 117 | 1.41 | x | 66.77 | % | 55.13 | % | |||||||||||||||||||||
4,000,000 − 5,999,999 | 39 | 190,684,110 | 6.23 | % | 5.519 | % | 118 | 1.37 | x | 72.18 | % | 61.31 | % | |||||||||||||||||||||
6,000,000 − 6,999,999 | 13 | 83,323,446 | 2.72 | % | 5.348 | % | 115 | 1.28 | x | 73.74 | % | 63.04 | % | |||||||||||||||||||||
7,000,000 − 9,999,999 | 32 | 260,215,375 | 8.51 | % | 5.494 | % | 113 | 1.33 | x | 71.21 | % | 61.14 | % | |||||||||||||||||||||
10,000,000 − 14,999,999 | 36 | 427,568,313 | 13.98 | % | 5.479 | % | 114 | 1.32 | x | 74.12 | % | 66.16 | % | |||||||||||||||||||||
15,000,000 − 29,999,999 | 35 | 728,263,773 | 23.80 | % | 5.476 | % | 118 | 1.28 | x | 74.03 | % | 66.68 | % | |||||||||||||||||||||
30,000,000 − 69,999,999 | 15 | 652,075,000 | 21.31 | % | 5.460 | % | 116 | 1.50 | x | 70.51 | % | 65.87 | % | |||||||||||||||||||||
70,000,000 − 300,000,000 | 5 | 644,384,463 | 21.06 | % | 5.634 | % | 70 | 2.04 | x | 57.45 | % | 56.01 | % | |||||||||||||||||||||
Total/Weighted Average | 197 | $ | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51 | x | 69.24 | % | 62.97 | % | ||||||||||||||||||||
RANGE OF CUT-OFF DATE BALANCES—LOAN GROUP 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Cut-off Date Balances |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of
Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
2,278,389 – 2,999,999 | 3 | $ | 7,629,992 | 0.34 | % | 5.680 | % | 117 | 1.28 | x | 57.62 | % | 39.32 | % | ||||||||||||||||||||
3,000,000 – 3,999,999 | 12 | 44,161,124 | 1.98 | % | 5.511 | % | 117 | 1.28 | x | 70.02 | % | 57.67 | % | |||||||||||||||||||||
4,000,000 – 5,999,999 | 33 | 162,771,543 | 7.29 | % | 5.532 | % | 118 | 1.37 | x | 71.23 | % | 59.56 | % | |||||||||||||||||||||
6,000,000 – 6,999,999 | 11 | 70,653,446 | 3.16 | % | 5.340 | % | 116 | 1.29 | x | 73.30 | % | 61.93 | % | |||||||||||||||||||||
7,000,000 – 9,999,999 | 28 | 229,791,518 | 10.29 | % | 5.485 | % | 114 | 1.34 | x | 70.94 | % | 60.59 | % | |||||||||||||||||||||
10,000,000 – 14,999,999 | 27 | 318,868,313 | 14.28 | % | 5.549 | % | 113 | 1.34 | x | 73.48 | % | 65.43 | % | |||||||||||||||||||||
15,000,000 – 29,999,999 | 25 | 504,673,773 | 22.60 | % | 5.439 | % | 119 | 1.29 | x | 74.08 | % | 66.22 | % | |||||||||||||||||||||
30,000,000 – 49,999,999 | 7 | 266,375,000 | 11.93 | % | 5.595 | % | 114 | 1.69 | x | 67.76 | % | 62.61 | % | |||||||||||||||||||||
50,000,000 – 69,999,999 | 5 | 283,400,000 | 12.69 | % | 5.348 | % | 118 | 1.42 | x | 70.76 | % | 67.25 | % | |||||||||||||||||||||
70,000,000 – 125,000,000 | 4 | 344,384,463 | 15.42 | % | 5.622 | % | 83 | 1.75 | x | 70.53 | % | 67.84 | % | |||||||||||||||||||||
Total/Weighted Average | 155 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44 | x | 71.58 | % | 64.60 | % | ||||||||||||||||||||
RANGE OF CUT-OFF DATE BALANCES—LOAN GROUP 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Cut-off Date Balances |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of
Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
8,000,000 – 8,000,000 | 1 | $ | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | |||||||||||||||||||||
300,000,000 – 300,000,000 | 1 | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | ||||||||||||||||||||||
Total/Weighted Average | 2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | |||||||||||||||||||||
S-116
RANGE OF CUT-OFF DATE BALANCES—LOAN GROUP 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Cut-off Date Balances |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of
Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
2,465,462 – 2,999,999 | 4 | $ | 10,781,202 | 2.08 | % | 5.768 | % | 140 | 1.69x | 66.91 | % | 55.08 | % | |||||||||||||||||||||
3,000,000 – 3,999,999 | 3 | 10,258,973 | 1.98 | % | 5.405 | % | 117 | 1.97x | 52.80 | % | 44.18 | % | ||||||||||||||||||||||
4,000,000 – 6,999,999 | 8 | 40,582,567 | 7.82 | % | 5.429 | % | 113 | 1.35x | 77.25 | % | 70.80 | % | ||||||||||||||||||||||
7,000,000 – 9,999,999 | 3 | 22,423,857 | 4.32 | % | 5.513 | % | 118 | 1.30x | 72.54 | % | 63.04 | % | ||||||||||||||||||||||
10,000,000 – 14,999,999 | 9 | 108,700,000 | 20.96 | % | 5.274 | % | 115 | 1.26x | 75.99 | % | 68.30 | % | ||||||||||||||||||||||
15,000,000 – 29,999,999 | 10 | 223,590,000 | 43.11 | % | 5.559 | % | 117 | 1.24x | 73.92 | % | 67.71 | % | ||||||||||||||||||||||
30,000,000 – 38,500,000 | 3 | 102,300,000 | 19.72 | % | 5.422 | % | 117 | 1.25x | 76.98 | % | 70.52 | % | ||||||||||||||||||||||
Total/Weighted Average | 40 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | |||||||||||||||||||||
TYPE OF MORTGAGED PROPERTIES—ALL MORTGAGE LOANS
Weighted Averages | ||||||||||||||||||||||||||||||||||||||||||||||
Property Type | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of Outstanding Initial Pool Balance |
Number of Units or NRA |
Cut-off Date Balance per # of Units or NRA |
Mortgage Rate |
Stated Remaining Term (Mos.) |
Occupancy | DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
|||||||||||||||||||||||||||||||||||
Office | 44 | $ | 903,893,615 | 29.55 | % | 6,778,940 | 133.34 | 5.465 | % | 116 | 93.42 | % | 1.50 | x | 70.66 | % | 64.22 | % | ||||||||||||||||||||||||||||
Multifamily | 49 | 892,638,907 | 29.18 | % | 14,039 | 63,582.80 | 5.530 | % | 96 | 95.60 | % | 1.65 | x | 63.77 | % | 59.29 | % | |||||||||||||||||||||||||||||
Retail | 68 | 835,508,586 | 27.31 | % | 5,733,713 | 145.72 | 5.463 | % | 109 | 94.71 | % | 1.38 | x | 72.79 | % | 66.27 | % | |||||||||||||||||||||||||||||
Anchored | 48 | 709,435,937 | 23.19 | % | 5,039,564 | 140.77 | 5.458 | % | 107 | 94.18 | % | 1.39 | x | 72.80 | % | 66.52 | % | |||||||||||||||||||||||||||||
Unanchored | 18 | 115,879,067 | 3.79 | % | 638,954 | 181.36 | 5.488 | % | 117 | 97.48 | % | 1.31 | x | 72.70 | % | 65.00 | % | |||||||||||||||||||||||||||||
Single Tenant | 2 | 10,193,582 | 0.33 | % | 55,195 | 184.68 | 5.553 | % | 118 | 100.00 | % | 1.23 | x | 72.73 | % | 63.39 | % | |||||||||||||||||||||||||||||
Hotel | 23 | 207,191,571 | 6.77 | % | 2,749 | 75,369.80 | 5.915 | % | 94 | 75.55 | % | 1.56 | x | 72.02 | % | 63.35 | % | |||||||||||||||||||||||||||||
Industrial | 11 | 90,967,183 | 2.97 | % | 1,264,052 | 71.96 | 5.432 | % | 119 | 96.65 | % | 1.28 | x | 76.66 | % | 66.35 | % | |||||||||||||||||||||||||||||
Mixed Use | 8 | 84,534,451 | 2.76 | % | 488,178 | 173.16 | 5.279 | % | 113 | 91.25 | % | 1.68 | x | 63.17 | % | 57.49 | % | |||||||||||||||||||||||||||||
Self Storage | 5 | 24,775,399 | 0.81 | % | 4,259 | 5,817.19 | 5.542 | % | 118 | 79.35 | % | 1.25 | x | 61.87 | % | 41.84 | % | |||||||||||||||||||||||||||||
Other | 2 | 11,613,714 | 0.38 | % | 173,000 | 67.13 | 5.626 | % | 116 | 100.00 | % | 1.24 | x | 71.17 | % | 61.32 | % | |||||||||||||||||||||||||||||
Land | 1 | 8,222,344 | 0.27 | % | 63,500 | 129.49 | 5.410 | % | 117 | 100.00 | % | 1.22 | x | 76.84 | % | 64.22 | % | |||||||||||||||||||||||||||||
Total/Weighted Average | 211 | $ | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 93.16 | % | 1.51 | x | 69.24 | % | 62.97 | % | ||||||||||||||||||||||||||||||
S-117
TYPE OF MORTGAGED PROPERTIES—LOAN GROUP 1
Weighted Averages | ||||||||||||||||||||||||||||||||||||||||||||||
Property Type | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of
Loan Group 1 Balance |
Number of Units or NRA |
Cut-off Date Balance per # of Units or NRA |
Mortgage Rate |
Stated Remaining Term (Mos.) |
Occupancy | DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
|||||||||||||||||||||||||||||||||||
Office | 44 | $ | 903,893,615 | 40.48 | % | 6,778,940 | 133.34 | 5.465 | % | 116 | 93.42 | % | 1.50 | x | 70.66 | % | 64.22 | % | ||||||||||||||||||||||||||||
Retail | 68 | 835,508,586 | 37.42 | % | 5,733,713 | 145.72 | 5.463 | % | 109 | 94.71 | % | 1.38 | x | 72.79 | % | 66.27 | % | |||||||||||||||||||||||||||||
Anchored | 48 | 709,435,937 | 31.77 | % | 5,039,564 | 140.77 | 5.458 | % | 107 | 94.18 | % | 1.39 | x | 72.80 | % | 66.52 | % | |||||||||||||||||||||||||||||
Unanchored | 18 | 115,879,067 | 5.19 | % | 638,954 | 181.36 | 5.488 | % | 117 | 97.48 | % | 1.31 | x | 72.70 | % | 65.00 | % | |||||||||||||||||||||||||||||
Single Tenant | 2 | 10,193,582 | 0.46 | % | 55,195 | 184.68 | 5.553 | % | 118 | 100.00 | % | 1.23 | x | 72.73 | % | 63.39 | % | |||||||||||||||||||||||||||||
Hotel | 23 | 207,191,571 | 9.28 | % | 2,749 | 75,369.80 | 5.915 | % | 94 | 75.55 | % | 1.56 | x | 72.02 | % | 63.35 | % | |||||||||||||||||||||||||||||
Industrial | 11 | 90,967,183 | 4.07 | % | 1,264,052 | 71.96 | 5.432 | % | 119 | 96.65 | % | 1.28 | x | 76.66 | % | 66.35 | % | |||||||||||||||||||||||||||||
Mixed Use | 8 | 84,534,451 | 3.79 | % | 488,178 | 173.16 | 5.279 | % | 113 | 91.25 | % | 1.68 | x | 63.17 | % | 57.49 | % | |||||||||||||||||||||||||||||
Multifamily | 5 | 66,002,309 | 2.96 | % | 879 | 75,087.95 | 5.511 | % | 118 | 94.02 | % | 1.23 | x | 74.32 | % | 68.31 | % | |||||||||||||||||||||||||||||
Self Storage | 5 | 24,775,399 | 1.11 | % | 4,259 | 5,817.19 | 5.542 | % | 118 | 79.35 | % | 1.25 | x | 61.87 | % | 41.84 | % | |||||||||||||||||||||||||||||
Other | 2 | 11,613,714 | 0.52 | % | 173,000 | 67.13 | 5.626 | % | 116 | 100.00 | % | 1.24 | x | 71.17 | % | 61.32 | % | |||||||||||||||||||||||||||||
Land | 1 | 8,222,344 | 0.37 | % | 63,500 | 129.49 | 5.410 | % | 117 | 100.00 | % | 1.22 | x | 76.84 | % | 64.22 | % | |||||||||||||||||||||||||||||
Total/Weighted Average | 167 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 92.21 | % | 1.44 | x | 71.58 | % | 64.60 | % | ||||||||||||||||||||||||||||||
TYPE OF MORTGAGED PROPERTIES—LOAN GROUP 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||||||||||||||
Property Type | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of
Loan Group 2A Balance |
Number of Units or NRA |
Cut-off Date Balance per # of Units or NRA |
Mortgage Rate |
Stated Remaining Term (Mos.) |
Occupancy | DSCR | Cut-off Date LTV Ratio |
LTV Ratio at Maturity |
|||||||||||||||||||||||||||||||||||
Multifamily | 2 | $ | 308,000,000 | 100.00 | % | 3,415 | $ | 90,190.34 | 5.649 | % | 55 | 96.33 | % | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||||||||
Total/Weighted Average | 2 | $ | 308,000,000 | 100.00 | % | 3,415 | 5.649 | % | 55 | 96.33 | % | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||||||||||
TYPE OF MORTGAGED PROPERTIES—LOAN GROUP 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||||||||||||||
Property Type | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of
Loan Group 2B Balance |
Number of Units or NRA |
Cut-off Date Balance per # of Units or NRA |
Mortgage Rate |
Stated Remaining Term (Mos.) |
Occupancy | DSCR | Cut-off Date LTV Ratio |
LTV Ratio at Maturity |
|||||||||||||||||||||||||||||||||||
Multifamily | 42 | $ | 518,636,598 | 100.00 | % | 9,745 | $ | 53,220.79 | 5.461 | % | 117 | 95.36 | % | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||||||||
Total/Weighted Average | 42 | $ | 518,636,598 | 100.00 | % | 9,745 | 5.461 | % | 117 | 95.36 | % | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||||||||||
S-118
Mortgaged Properties by State and/or Location—All Mortgage Loans
Weighted Averages | ||||||||||||||||||||||||||||||||||
State/Location | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
California | 29 | 685,939,413 | 22.42 | % | 5.580 | % | 88 | 1.90x | 56.43 | % | 53.06 | % | ||||||||||||||||||||||
Northern | 10 | 404,538,822 | 13.22 | % | 5.616 | % | 68 | 2.31x | 47.67 | % | 46.41 | % | ||||||||||||||||||||||
Southern | 19 | 281,400,591 | 9.20 | % | 5.529 | % | 117 | 1.30x | 69.03 | % | 62.63 | % | ||||||||||||||||||||||
Texas | 12 | 293,131,064 | 9.58 | % | 5.510 | % | 90 | 1.43x | 74.79 | % | 70.46 | % | ||||||||||||||||||||||
Florida | 13 | 210,237,875 | 6.87 | % | 5.365 | % | 117 | 1.74x | 64.72 | % | 58.67 | % | ||||||||||||||||||||||
Pennsylvania | 11 | 198,456,575 | 6.49 | % | 5.609 | % | 94 | 1.38x | 79.21 | % | 73.55 | % | ||||||||||||||||||||||
New York | 13 | 164,915,485 | 5.39 | % | 5.397 | % | 117 | 1.51x | 69.35 | % | 64.39 | % | ||||||||||||||||||||||
Virginia | 14 | 118,383,885 | 3.87 | % | 5.579 | % | 116 | 1.33x | 73.66 | % | 61.96 | % | ||||||||||||||||||||||
Washington | 8 | 111,593,431 | 3.65 | % | 5.263 | % | 117 | 1.30x | 74.54 | % | 62.46 | % | ||||||||||||||||||||||
North Carolina | 10 | 106,197,083 | 3.47 | % | 5.509 | % | 120 | 1.28x | 74.28 | % | 69.43 | % | ||||||||||||||||||||||
Tennessee | 10 | 101,940,000 | 3.33 | % | 5.687 | % | 119 | 1.23x | 75.21 | % | 68.84 | % | ||||||||||||||||||||||
Arizona | 6 | 97,085,151 | 3.17 | % | 5.695 | % | 112 | 1.29x | 72.78 | % | 66.28 | % | ||||||||||||||||||||||
New Jersey | 7 | 84,052,349 | 2.75 | % | 5.266 | % | 118 | 1.30x | 68.55 | % | 57.62 | % | ||||||||||||||||||||||
Georgia | 7 | 83,051,880 | 2.71 | % | 5.551 | % | 118 | 1.34x | 68.75 | % | 64.64 | % | ||||||||||||||||||||||
Maryland | 5 | 81,198,468 | 2.65 | % | 5.556 | % | 119 | 1.28x | 75.75 | % | 67.30 | % | ||||||||||||||||||||||
Illinois | 6 | 75,951,742 | 2.48 | % | 5.692 | % | 118 | 1.30x | 74.45 | % | 65.10 | % | ||||||||||||||||||||||
Michigan | 4 | 75,807,909 | 2.48 | % | 5.386 | % | 126 | 1.28x | 77.07 | % | 63.19 | % | ||||||||||||||||||||||
Massachusetts | 5 | 65,092,869 | 2.13 | % | 5.431 | % | 115 | 1.30x | 73.55 | % | 65.31 | % | ||||||||||||||||||||||
Minnesota | 1 | 65,000,000 | 2.12 | % | 5.450 | % | 118 | 1.68x | 70.27 | % | 70.27 | % | ||||||||||||||||||||||
Connecticut | 3 | 63,665,075 | 2.08 | % | 5.371 | % | 130 | 1.24x | 75.76 | % | 64.66 | % | ||||||||||||||||||||||
Indiana | 8 | 55,079,340 | 1.80 | % | 5.632 | % | 118 | 1.36x | 73.39 | % | 63.43 | % | ||||||||||||||||||||||
Missouri | 4 | 49,044,786 | 1.60 | % | 5.341 | % | 115 | 1.52x | 69.80 | % | 67.88 | % | ||||||||||||||||||||||
South Carolina | 7 | 42,371,536 | 1.38 | % | 5.562 | % | 95 | 1.45x | 76.29 | % | 71.22 | % | ||||||||||||||||||||||
Wisconsin | 5 | 36,919,510 | 1.21 | % | 5.224 | % | 121 | 1.25x | 77.14 | % | 67.40 | % | ||||||||||||||||||||||
New Mexico | 1 | 30,700,000 | 1.00 | % | 5.184 | % | 118 | 1.28x | 71.31 | % | 65.95 | % | ||||||||||||||||||||||
Ohio | 5 | 30,343,582 | 0.99 | % | 5.535 | % | 102 | 1.23x | 74.24 | % | 64.75 | % | ||||||||||||||||||||||
Nevada | 3 | 27,084,371 | 0.89 | % | 5.579 | % | 119 | 1.36x | 64.64 | % | 58.54 | % | ||||||||||||||||||||||
Kentucky | 2 | 21,500,000 | 0.70 | % | 5.730 | % | 118 | 1.51x | 73.90 | % | 65.08 | % | ||||||||||||||||||||||
New Hampshire | 2 | 15,589,801 | 0.51 | % | 5.457 | % | 117 | 1.25x | 78.27 | % | 65.54 | % | ||||||||||||||||||||||
Iowa | 1 | 13,755,000 | 0.45 | % | 5.270 | % | 116 | 1.33x | 70.72 | % | 61.60 | % | ||||||||||||||||||||||
Delaware | 2 | 12,864,465 | 0.42 | % | 5.647 | % | 118 | 1.24x | 72.95 | % | 61.34 | % | ||||||||||||||||||||||
Mississippi | 1 | 12,720,000 | 0.42 | % | 5.485 | % | 118 | 1.24x | 76.17 | % | 68.11 | % | ||||||||||||||||||||||
Oregon | 2 | 11,184,095 | 0.37 | % | 5.624 | % | 117 | 1.62x | 62.31 | % | 52.67 | % | ||||||||||||||||||||||
Alabama | 1 | 6,777,290 | 0.22 | % | 5.430 | % | 117 | 1.29x | 79.73 | % | 66.67 | % | ||||||||||||||||||||||
Utah | 1 | 4,400,000 | 0.14 | % | 5.897 | % | 120 | 1.46x | 63.95 | % | 54.09 | % | ||||||||||||||||||||||
Vermont | 1 | 4,069,071 | 0.13 | % | 5.440 | % | 113 | 1.25x | 73.98 | % | 62.15 | % | ||||||||||||||||||||||
North Dakota | 1 | 3,242,670 | 0.11 | % | 5.740 | % | 118 | 1.30x | 72.06 | % | 60.76 | % | ||||||||||||||||||||||
Total/Weighted Average | 211 | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51x | 69.24 | % | 62.97 | % | ||||||||||||||||||||||
S-119
Mortgaged Properties by State and/or Location—Loan Group 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
State/Location | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
California | 27 | $ | 382,514,326 | 17.13 | % | 5.530 | % | 113 | 1.52x | 67.43 | % | 61.48 | % | |||||||||||||||||||||
Southern | 19 | 281,400,591 | 12.60 | % | 5.529 | % | 117 | 1.30x | 69.03 | % | 62.63 | % | ||||||||||||||||||||||
Northern | 8 | 101,113,735 | 4.53 | % | 5.532 | % | 104 | 2.13x | 63.01 | % | 58.26 | % | ||||||||||||||||||||||
Texas | 6 | 194,156,064 | 8.70 | % | 5.639 | % | 76 | 1.53x | 72.74 | % | 70.19 | % | ||||||||||||||||||||||
Florida | 12 | 189,237,875 | 8.48 | % | 5.369 | % | 117 | 1.79x | 63.73 | % | 57.89 | % | ||||||||||||||||||||||
Pennsylvania | 9 | 178,056,575 | 7.97 | % | 5.653 | % | 92 | 1.39x | 79.22 | % | 74.08 | % | ||||||||||||||||||||||
New York | 11 | 158,328,528 | 7.09 | % | 5.401 | % | 117 | 1.46x | 70.77 | % | 65.85 | % | ||||||||||||||||||||||
Washington | 7 | 106,943,431 | 4.79 | % | 5.261 | % | 117 | 1.30x | 74.70 | % | 62.49 | % | ||||||||||||||||||||||
Virginia | 12 | 89,983,885 | 4.03 | % | 5.590 | % | 116 | 1.37x | 73.79 | % | 60.44 | % | ||||||||||||||||||||||
Maryland | 4 | 78,733,006 | 3.53 | % | 5.511 | % | 116 | 1.27x | 75.50 | % | 67.62 | % | ||||||||||||||||||||||
New Jersey | 6 | 76,262,863 | 3.42 | % | 5.206 | % | 118 | 1.30x | 68.32 | % | 57.39 | % | ||||||||||||||||||||||
Illinois | 6 | 75,951,742 | 3.40 | % | 5.692 | % | 118 | 1.30x | 74.45 | % | 65.10 | % | ||||||||||||||||||||||
Michigan | 4 | 75,807,909 | 3.40 | % | 5.386 | % | 126 | 1.28x | 77.07 | % | 63.19 | % | ||||||||||||||||||||||
North Carolina | 7 | 71,997,083 | 3.22 | % | 5.522 | % | 120 | 1.31x | 74.07 | % | 69.02 | % | ||||||||||||||||||||||
Massachusetts | 5 | 65,092,869 | 2.92 | % | 5.431 | % | 115 | 1.30x | 73.55 | % | 65.31 | % | ||||||||||||||||||||||
Minnesota | 1 | 65,000,000 | 2.91 | % | 5.450 | % | 118 | 1.68x | 70.27 | % | 70.27 | % | ||||||||||||||||||||||
Connecticut | 3 | 63,665,075 | 2.85 | % | 5.371 | % | 130 | 1.24x | 75.76 | % | 64.66 | % | ||||||||||||||||||||||
Arizona | 5 | 58,585,151 | 2.62 | % | 5.647 | % | 109 | 1.32x | 68.72 | % | 61.45 | % | ||||||||||||||||||||||
Missouri | 4 | 49,044,786 | 2.20 | % | 5.341 | % | 115 | 1.52x | 69.80 | % | 67.88 | % | ||||||||||||||||||||||
Georgia | 5 | 42,301,880 | 1.89 | % | 5.694 | % | 119 | 1.47x | 66.86 | % | 64.34 | % | ||||||||||||||||||||||
Tennessee | 6 | 34,200,000 | 1.53 | % | 5.553 | % | 119 | 1.25x | 77.38 | % | 68.88 | % | ||||||||||||||||||||||
Indiana | 7 | 26,479,340 | 1.19 | % | 5.569 | % | 116 | 1.40x | 75.82 | % | 62.94 | % | ||||||||||||||||||||||
Wisconsin | 4 | 24,419,510 | 1.09 | % | 5.272 | % | 123 | 1.27x | 76.27 | % | 64.61 | % | ||||||||||||||||||||||
Kentucky | 2 | 21,500,000 | 0.96 | % | 5.730 | % | 118 | 1.51x | 73.90 | % | 65.08 | % | ||||||||||||||||||||||
Nevada | 2 | 19,700,000 | 0.88 | % | 5.724 | % | 120 | 1.34x | 62.38 | % | 58.47 | % | ||||||||||||||||||||||
Ohio | 3 | 19,493,582 | 0.87 | % | 5.499 | % | 118 | 1.16x | 73.62 | % | 61.69 | % | ||||||||||||||||||||||
New Hampshire | 2 | 15,589,801 | 0.70 | % | 5.457 | % | 117 | 1.25x | 78.27 | % | 65.54 | % | ||||||||||||||||||||||
South Carolina | 1 | 15,451,536 | 0.69 | % | 5.780 | % | 57 | 1.51x | 69.41 | % | 64.94 | % | ||||||||||||||||||||||
Oregon | 2 | 11,184,095 | 0.50 | % | 5.624 | % | 117 | 1.62x | 62.31 | % | 52.67 | % | ||||||||||||||||||||||
Delaware | 1 | 7,781,899 | 0.35 | % | 5.566 | % | 118 | 1.26x | 74.11 | % | 62.17 | % | ||||||||||||||||||||||
Alabama | 1 | 6,777,290 | 0.30 | % | 5.430 | % | 117 | 1.29x | 79.73 | % | 66.67 | % | ||||||||||||||||||||||
Utah | 1 | 4,400,000 | 0.20 | % | 5.897 | % | 120 | 1.46x | 63.95 | % | 54.09 | % | ||||||||||||||||||||||
Vermont | 1 | 4,069,071 | 0.18 | % | 5.440 | % | 113 | 1.25x | 73.98 | % | 62.15 | % | ||||||||||||||||||||||
Total/Weighted Average | 167 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44x | 71.58 | % | 64.60 | % | |||||||||||||||||||||
Mortgaged Properties by State and/or Location—Loan Group 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
State/Location | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
California | 1 | $ | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | |||||||||||||||||||||
Ohio | 1 | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | ||||||||||||||||||||||
2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||
S-120
Mortgaged Properties by State and/or Location—Loan Group 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
State/Location | Number
of Mortgaged Properties |
Aggregate Cut-off Date Balance |
% of Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
Texas | 6 | $ | 98,975,000 | 19.08 | % | 5.257 | % | 116 | 1.24x | 78.83 | % | 70.99 | % | |||||||||||||||||||||
Tennessee | 4 | 67,740,000 | 13.06 | % | 5.755 | % | 118 | 1.23x | 74.11 | % | 68.83 | % | ||||||||||||||||||||||
Georgia | 2 | 40,750,000 | 7.86 | % | 5.404 | % | 117 | 1.20x | 70.70 | % | 64.94 | % | ||||||||||||||||||||||
Arizona | 1 | 38,500,000 | 7.42 | % | 5.768 | % | 117 | 1.25x | 78.96 | % | 73.63 | % | ||||||||||||||||||||||
North Carolina | 3 | 34,200,000 | 6.59 | % | 5.483 | % | 118 | 1.21x | 74.73 | % | 70.30 | % | ||||||||||||||||||||||
New Mexico | 1 | 30,700,000 | 5.92 | % | 5.184 | % | 118 | 1.28x | 71.31 | % | 65.95 | % | ||||||||||||||||||||||
Indiana | 1 | 28,600,000 | 5.51 | % | 5.690 | % | 119 | 1.32x | 71.14 | % | 63.88 | % | ||||||||||||||||||||||
Virginia | 2 | 28,400,000 | 5.48 | % | 5.546 | % | 113 | 1.21x | 73.23 | % | 66.76 | % | ||||||||||||||||||||||
South Carolina | 6 | 26,920,000 | 5.19 | % | 5.437 | % | 117 | 1.42x | 80.25 | % | 74.82 | % | ||||||||||||||||||||||
Florida | 1 | 21,000,000 | 4.05 | % | 5.330 | % | 114 | 1.31x | 73.68 | % | 65.68 | % | ||||||||||||||||||||||
Pennsylvania | 2 | 20,400,000 | 3.93 | % | 5.224 | % | 109 | 1.25x | 79.16 | % | 68.89 | % | ||||||||||||||||||||||
Iowa | 1 | 13,755,000 | 2.65 | % | 5.270 | % | 116 | 1.33x | 70.72 | % | 61.60 | % | ||||||||||||||||||||||
Mississippi | 1 | 12,720,000 | 2.45 | % | 5.485 | % | 118 | 1.24x | 76.17 | % | 68.11 | % | ||||||||||||||||||||||
Wisconsin | 1 | 12,500,000 | 2.41 | % | 5.130 | % | 116 | 1.21x | 78.86 | % | 72.87 | % | ||||||||||||||||||||||
New Jersey | 1 | 7,789,485 | 1.50 | % | 5.860 | % | 119 | 1.28x | 70.81 | % | 59.87 | % | ||||||||||||||||||||||
Nevada | 1 | 7,384,371 | 1.42 | % | 5.190 | % | 116 | 1.41x | 70.66 | % | 58.72 | % | ||||||||||||||||||||||
New York | 2 | 6,586,956 | 1.27 | % | 5.310 | % | 118 | 2.77x | 35.24 | % | 29.31 | % | ||||||||||||||||||||||
Delaware | 1 | 5,082,567 | 0.98 | % | 5.770 | % | 118 | 1.20x | 71.18 | % | 60.08 | % | ||||||||||||||||||||||
Washington | 1 | 4,650,000 | 0.90 | % | 5.290 | % | 116 | 1.22x | 70.88 | % | 61.78 | % | ||||||||||||||||||||||
California | 1 | 3,425,087 | 0.66 | % | 5.240 | % | 116 | 1.45x | 53.73 | % | 44.71 | % | ||||||||||||||||||||||
North Dakota | 1 | 3,242,670 | 0.63 | % | 5.740 | % | 118 | 1.30x | 72.06 | % | 60.76 | % | ||||||||||||||||||||||
Ohio | 1 | 2,850,000 | 0.55 | % | 5.330 | % | 117 | 1.46x | 75.00 | % | 66.85 | % | ||||||||||||||||||||||
Maryland | 1 | 2,465,462 | 0.48 | % | 7.000 | % | 214 | 1.56x | 83.86 | % | 57.09 | % | ||||||||||||||||||||||
42 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||
Range of Debt Service Coverage Ratios as of the Cut-Off Date—All Mortgage Loans
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range
of Debt Service Coverage Ratio |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
1.12x –. 1.19x | 5 | $ | 54,345,098 | 1.78 | % | 5.598 | % | 119 | 1.16x | 65.56 | % | 57.30 | % | |||||||||||||||||||||
1.20x – 1.29x | 112 | 1,480,323,822 | 48.39 | % | 5.473 | % | 118 | 1.23x | 75.59 | % | 66.83 | % | ||||||||||||||||||||||
1.30x – 1.39x | 29 | 375,501,225 | 12.27 | % | 5.337 | % | 114 | 1.32x | 72.18 | % | 63.63 | % | ||||||||||||||||||||||
1.40x – 1.49x | 18 | 155,295,860 | 5.08 | % | 5.389 | % | 114 | 1.44x | 69.62 | % | 61.56 | % | ||||||||||||||||||||||
1.50x – 1.74x | 23 | 509,503,715 | 16.65 | % | 5.718 | % | 92 | 1.60x | 71.10 | % | 68.79 | % | ||||||||||||||||||||||
1.75x – 1.99x | 3 | 18,964,095 | 0.62 | % | 5.337 | % | 115 | 1.89x | 61.83 | % | 56.39 | % | ||||||||||||||||||||||
2.00x – 2.49x | 5 | 422,195,740 | 13.80 | % | 5.549 | % | 73 | 2.37x | 44.94 | % | 44.90 | % | ||||||||||||||||||||||
2.50x – 3.50x | 2 | 43,216,216 | 1.41 | % | 5.751 | % | 85 | 3.47x | 48.28 | % | 47.80 | % | ||||||||||||||||||||||
Total/Weighted Average | 197 | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51x | 69.24 | % | 62.97 | % | ||||||||||||||||||||||
Range of Debt Service Coverage Ratios as of the Cut-Off Date—Loan Group 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range
of Debt Service Coverage Ratio |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
1.12x – 1.19x | 5 | $ | 54,345,098 | 2.43 | % | 5.598 | % | 119 | 1.16x | 65.56 | % | 57.30 | % | |||||||||||||||||||||
1.20x – 1.29x | 85 | 1,072,491,770 | 48.04 | % | 5.473 | % | 119 | 1.23x | 75.58 | % | 65.99 | % | ||||||||||||||||||||||
1.30x – 1.39x | 24 | 300,903,555 | 13.48 | % | 5.294 | % | 115 | 1.33x | 72.15 | % | 63.37 | % | ||||||||||||||||||||||
1.40x – 1.49x | 14 | 129,261,402 | 5.79 | % | 5.441 | % | 114 | 1.44x | 69.35 | % | 61.59 | % | ||||||||||||||||||||||
1.50x – 1.74x | 21 | 502,398,253 | 22.50 | % | 5.715 | % | 91 | 1.60x | 70.89 | % | 68.68 | % | ||||||||||||||||||||||
1.75x – 1.99x | 2 | 14,484,095 | 0.65 | % | 5.361 | % | 115 | 1.91x | 55.76 | % | 48.64 | % | ||||||||||||||||||||||
2.00x – 2.49x | 3 | 119,200,000 | 5.34 | % | 5.303 | % | 118 | 2.34x | 51.47 | % | 51.47 | % | ||||||||||||||||||||||
2.50x – 3.50x | 1 | 39,625,000 | 1.77 | % | 5.796 | % | 82 | 3.50x | 49.53 | % | 49.53 | % | ||||||||||||||||||||||
Total/Weighted Average | 155 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44x | 71.58 | % | 64.60 | % | |||||||||||||||||||||
S-121
Range of Debt Service Coverage Ratios as of the Cut-Off Date—Loan Group 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range
of Debt Service Coverage Ratio |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
1.31x – 1.31x | 1 | $ | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | |||||||||||||||||||||
2.38x – 2.38x | 1 | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | ||||||||||||||||||||||
Total/Weighted Average | 2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | |||||||||||||||||||||
Range of Debt Service Coverage Ratios as of the Cut-Off Date—Loan Group 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range
of Debt Service Coverage Ratio |
Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
1.20x – 1.29x | 27 | $ | 407,832,052 | 78.64 | % | 5.475 | % | 117 | 1.23x | 75.62 | % | 69.04 | % | |||||||||||||||||||||
1.30x – 1.39x | 4 | 66,597,670 | 12.84 | % | 5.492 | % | 117 | 1.32x | 71.90 | % | 63.82 | % | ||||||||||||||||||||||
1.40x – 1.49x | 4 | 26,034,458 | 5.02 | % | 5.129 | % | 116 | 1.45x | 70.97 | % | 61.42 | % | ||||||||||||||||||||||
1.50x – 1.99x | 3 | 11,585,462 | 2.23 | % | 5.630 | % | 134 | 1.73x | 84.41 | % | 78.71 | % | ||||||||||||||||||||||
2.00x – 3.08x | 2 | 6,586,956 | 1.27 | % | 5.310 | % | 118 | 2.77x | 35.24 | % | 29.31 | % | ||||||||||||||||||||||
Total/Weighted Average | 40 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | |||||||||||||||||||||
Range of LTV Ratios as of the Cut-Off Date—All Mortgage Loans
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
26.41% – 50.00% | 6 | $ | 356,127,054 | 11.64 | % | 5.664 | % | 60 | 2.49x | 43.09 | % | 42.74 | % | |||||||||||||||||||||
50.01% – 60.00% | 12 | 174,244,721 | 5.70 | % | 5.363 | % | 117 | 2.11x | 52.67 | % | 49.77 | % | ||||||||||||||||||||||
60.01% – 70.00% | 39 | 457,876,579 | 14.97 | % | 5.510 | % | 113 | 1.37x | 66.51 | % | 60.27 | % | ||||||||||||||||||||||
70.01% – 75.00% | 58 | 877,282,318 | 28.68 | % | 5.510 | % | 110 | 1.38x | 72.73 | % | 66.24 | % | ||||||||||||||||||||||
75.01% – 80.00% | 79 | 1,182,229,637 | 38.64 | % | 5.481 | % | 114 | 1.27x | 77.89 | % | 69.47 | % | ||||||||||||||||||||||
80.01% – 87.55% | 3 | 11,585,462 | 0.38 | % | 5.630 | % | 134 | 1.73x | 84.41 | % | 78.71 | % | ||||||||||||||||||||||
Total/Weighted Average | 197 | $ | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51x | 69.24 | % | 62.97 | % | |||||||||||||||||||||
Range of LTV Ratios as of the Cut-Off Date—Loan Group 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
26.41% – 50.00% | 3 | $ | 49,540,098 | 2.22 | % | 5.806 | % | 81 | 3.09x | 48.13 | % | 46.44 | % | |||||||||||||||||||||
50.01% – 60.00% | 11 | 170,819,634 | 7.65 | % | 5.366 | % | 117 | 2.12x | 52.65 | % | 49.87 | % | ||||||||||||||||||||||
60.01% – 70.00% | 37 | 420,876,579 | 18.85 | % | 5.496 | % | 113 | 1.38x | 66.44 | % | 60.11 | % | ||||||||||||||||||||||
70.01% – 75.00% | 43 | 676,753,225 | 30.31 | % | 5.543 | % | 108 | 1.41x | 72.89 | % | 66.64 | % | ||||||||||||||||||||||
75.01% – 80.00% | 61 | 914,719,637 | 40.97 | % | 5.480 | % | 113 | 1.28x | 77.78 | % | 68.88 | % | ||||||||||||||||||||||
155 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44x | 71.58 | % | 64.60 | % | ||||||||||||||||||||||
S-122
Range of LTV Ratios as of the Cut-Off Date—Loan Group 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
42.43% – 42.43% | 1 | $ | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | |||||||||||||||||||||
75.47% – 75.47% | 1 | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | ||||||||||||||||||||||
2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||
Range of LTV Ratios as of the Cut-Off Date—Loan Group 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
34.53% – 60.00% | 3 | $ | 10,012,043 | 1.93 | % | 5.286 | % | 118 | 2.32x | 41.57 | % | 34.58 | % | |||||||||||||||||||||
60.01% – 70.00% | 2 | 37,000,000 | 7.13 | % | 5.674 | % | 118 | 1.22x | 67.23 | % | 62.12 | % | ||||||||||||||||||||||
70.01% – 75.00% | 15 | 200,529,093 | 38.66 | % | 5.400 | % | 117 | 1.28x | 72.19 | % | 64.87 | % | ||||||||||||||||||||||
75.01% – 77.50% | 4 | 61,570,000 | 11.87 | % | 5.595 | % | 119 | 1.21x | 75.97 | % | 70.13 | % | ||||||||||||||||||||||
77.51% – 87.55% | 16 | 209,525,462 | 40.40 | % | 5.452 | % | 117 | 1.26x | 79.37 | % | 72.26 | % | ||||||||||||||||||||||
40 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||
Range of LTV Ratios as of the Maturity Dates—All Mortgage Loans
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range
of LTV Ratios as of the Maturity Date |
Number of Mortgage Loans |
Aggregate Cut-off Date Balance |
%
of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV Ratio at Maturity |
||||||||||||||||||||||||||
0.17% – 30.00% | 3 | $ | 10,021,448 | 0.33 | % | 5.280 | % | 117 | 1.92x | 38.52 | % | 18.65 | % | |||||||||||||||||||||
30.01% – 40.00% | 2 | 7,175,863 | 0.23 | % | 5.469 | % | 118 | 1.77x | 45.89 | % | 32.49 | % | ||||||||||||||||||||||
40.01% – 50.00% | 14 | 425,097,437 | 13.90 | % | 5.643 | % | 71 | 2.29x | 47.40 | % | 43.88 | % | ||||||||||||||||||||||
50.01% – 60.00% | 35 | 367,182,464 | 12.00 | % | 5.489 | % | 121 | 1.69x | 62.00 | % | 54.48 | % | ||||||||||||||||||||||
60.01% – 70.00% | 113 | 1,466,180,560 | 47.92 | % | 5.457 | % | 116 | 1.29x | 73.66 | % | 65.68 | % | ||||||||||||||||||||||
70.01% – 75.00% | 25 | 678,568,000 | 22.18 | % | 5.484 | % | 105 | 1.37x | 76.50 | % | 72.14 | % | ||||||||||||||||||||||
75.01% – 87.55% | 5 | 105,120,000 | 3.44 | % | 5.946 | % | 70 | 1.57x | 78.98 | % | 78.98 | % | ||||||||||||||||||||||
Total/Weighted Average | 197 | $ | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51x | 69.24 | % | 62.97 | % | |||||||||||||||||||||
Range of LTV Ratios as of the Maturity Dates—Loan Group 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Maturity Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
0.17% – 40.00% | 3 | $ | 10,610,355 | 0.48 | % | 5.389 | % | 117 | 1.29x | 45.54 | % | 21.39 | % | |||||||||||||||||||||
40.01% – 50.00% | 12 | 121,672,350 | 5.45 | % | 5.640 | % | 108 | 2.10x | 59.47 | % | 47.45 | % | ||||||||||||||||||||||
50.01% – 60.00% | 32 | 349,543,145 | 15.66 | % | 5.476 | % | 121 | 1.70x | 61.46 | % | 54.26 | % | ||||||||||||||||||||||
60.01% – 70.00% | 90 | 1,182,905,323 | 52.98 | % | 5.467 | % | 116 | 1.30x | 73.84 | % | 65.68 | % | ||||||||||||||||||||||
70.01% – 79.12% | 18 | 567,978,000 | 25.44 | % | 5.557 | % | 95 | 1.45x | 76.17 | % | 73.17 | % | ||||||||||||||||||||||
155 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44x | 71.58 | % | 64.60 | % | ||||||||||||||||||||||
S-123
Range of LTV Ratios as of the Maturity Dates—Loan Group 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Maturity Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
42.43% – 42.43% | 1 | $ | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | |||||||||||||||||||||
71.46% – 71.46% | 1 | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | ||||||||||||||||||||||
2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||
Range of LTV Ratios as of the Maturity Dates—Loan Group 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of LTV Ratios as of the Maturity Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
28.69% – 40.00% | 2 | $ | 6,586,956 | 1.27 | % | 5.310 | % | 118 | 2.77x | 35.24 | % | 29.31 | % | |||||||||||||||||||||
40.01% – 50.00% | 1 | 3,425,087 | 0.66 | % | 5.240 | % | 116 | 1.45x | 53.73 | % | 44.71 | % | ||||||||||||||||||||||
50.01% – 60.00% | 3 | 17,639,319 | 3.40 | % | 5.739 | % | 131 | 1.37x | 72.57 | % | 59.00 | % | ||||||||||||||||||||||
60.01% – 70.00% | 23 | 283,275,236 | 54.62 | % | 5.415 | % | 116 | 1.26x | 72.90 | % | 65.68 | % | ||||||||||||||||||||||
70.01% – 75.00% | 9 | 198,590,000 | 38.29 | % | 5.521 | % | 117 | 1.22x | 78.40 | % | 72.26 | % | ||||||||||||||||||||||
75.01% – 87.55% | 2 | 9,120,000 | 1.76 | % | 5.260 | % | 112 | 1.77x | 84.55 | % | 84.55 | % | ||||||||||||||||||||||
40 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||
Range of Mortgage Rates as of the Cut-Off Date—All Mortgage Loans
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Mortgage Rates as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
4.989% – 5.249% | 35 | $ | 615,436,120 | 20.12 | % | 5.153 | % | 116 | 1.35x | 72.55 | % | 64.21 | % | |||||||||||||||||||||
5.250% – 5.449% | 47 | 557,758,311 | 18.23 | % | 5.322 | % | 115 | 1.49x | 70.96 | % | 64.29 | % | ||||||||||||||||||||||
5.450% – 5.749% | 84 | 1,432,786,588 | 46.83 | % | 5.611 | % | 101 | 1.56x | 66.39 | % | 61.19 | % | ||||||||||||||||||||||
5.750% – 7.000% | 31 | 453,364,742 | 14.82 | % | 5.899 | % | 101 | 1.56x | 71.65 | % | 65.26 | % | ||||||||||||||||||||||
Total/Weighted Average | 197 | $ | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51x | 69.24 | % | 62.97 | % | |||||||||||||||||||||
Range of Mortgage Rates as of the Cut-Off Date—Loan Group 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Mortgage Rates as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
4.989% – 5.249% | 25 | $ | 458,351,662 | 20.53 | % | 5.146 | % | 116 | 1.38x | 71.52 | % | 63.00 | % | |||||||||||||||||||||
5.250% – 5.449% | 37 | 482,996,355 | 21.63 | % | 5.326 | % | 116 | 1.49x | 70.83 | % | 64.25 | % | ||||||||||||||||||||||
5.450% – 5.749% | 68 | 930,973,929 | 41.70 | % | 5.603 | % | 112 | 1.37x | 72.37 | % | 65.67 | % | ||||||||||||||||||||||
5.750% – 6.157% | 25 | 360,387,228 | 16.14 | % | 5.922 | % | 96 | 1.64x | 70.63 | % | 64.32 | % | ||||||||||||||||||||||
155 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44x | 71.58 | % | 64.60 | % | ||||||||||||||||||||||
S-124
Range of Mortgage Rates as of the Cut-Off Date—Loan Group 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Mortgage Rates as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
5.648% – 5.648% | 1 | $ | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | |||||||||||||||||||||
5.695% – 5.695% | 1 | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | ||||||||||||||||||||||
2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||
Range of Mortgage Rates as of the Cut-Off Date—Loan Group 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Mortgage Rates as of the Cut-off Date | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
5.015% – 5.249% | 10 | $ | 157,084,458 | 30.29 | % | 5.176 | % | 116 | 1.26x | 75.56 | % | 67.75 | % | |||||||||||||||||||||
5.250% – 5.449% | 10 | 74,761,956 | 14.42 | % | 5.299 | % | 112 | 1.49x | 71.79 | % | 64.56 | % | ||||||||||||||||||||||
5.450% – 5.749% | 14 | 193,812,670 | 37.37 | % | 5.588 | % | 118 | 1.23x | 74.40 | % | 68.30 | % | ||||||||||||||||||||||
5.750% – 7.000% | 6 | 92,977,514 | 17.93 | % | 5.811 | % | 120 | 1.26x | 75.62 | % | 68.90 | % | ||||||||||||||||||||||
40 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||
Range of Remaining Terms to Maturity in Months—All Mortgage Loans
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Remaining Terms to Maturity | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Outstanding Initial Pool Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
55 – 84 | 10 | $ | 596,757,601 | 19.51 | % | 5.744 | % | 58 | 2.11x | 56.57 | % | 56.19 | % | |||||||||||||||||||||
85 – 119 | 173 | 2,299,108,143 | 75.15 | % | 5.435 | % | 117 | 1.37x | 72.27 | % | 64.99 | % | ||||||||||||||||||||||
120 – 214 | 14 | 163,480,027 | 5.34 | % | 5.683 | % | 136 | 1.26x | 72.88 | % | 59.26 | % | ||||||||||||||||||||||
197 | $ | 3,059,345,771 | 100.00 | % | 5.509 | % | 106 | 1.51x | 69.24 | % | 62.97 | % | ||||||||||||||||||||||
Range of Remaining Terms to Maturity in Months—Loan Group 1
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Remaining Terms to Maturity | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 1 Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
57 – 84 | 8 | $ | 288,757,601 | 12.93 | % | 5.845 | % | 62 | 1.86x | 70.74 | % | 70.07 | % | |||||||||||||||||||||
85 – 119 | 134 | 1,782,937,007 | 79.86 | % | 5.430 | % | 117 | 1.39x | 71.61 | % | 64.19 | % | ||||||||||||||||||||||
120 – 175 | 13 | 161,014,565 | 7.21 | % | 5.663 | % | 135 | 1.26x | 72.72 | % | 59.30 | % | ||||||||||||||||||||||
155 | $ | 2,232,709,173 | 100.00 | % | 5.500 | % | 111 | 1.44x | 71.58 | % | 64.60 | % | ||||||||||||||||||||||
S-125
Range of Remaining Terms to Maturity in Months—Loan Group 2A
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Remaining Terms to Maturity | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2A Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
55 – 55 | 1 | $ | 300,000,000 | 97.40 | % | 5.648 | % | 55 | 2.38x | 42.43 | % | 42.43 | % | |||||||||||||||||||||
58 – 58 | 1 | 8,000,000 | 2.60 | % | 5.695 | % | 58 | 1.31x | 75.47 | % | 71.46 | % | ||||||||||||||||||||||
2 | $ | 308,000,000 | 100.00 | % | 5.649 | % | 55 | 2.35x | 43.29 | % | 43.18 | % | ||||||||||||||||||||||
Range of Remaining Terms to Maturity in Months—Loan Group 2B
Weighted Averages | ||||||||||||||||||||||||||||||||||
Range of Remaining Terms to Maturity | Number
of Mortgage Loans |
Aggregate Cut-off Date Balance |
% of Loan Group 2B Balance |
Mortgage Rate |
Stated Remaining Term (Mos.) |
DSCR | Cut-off Date LTV Ratio |
LTV
Ratio at Maturity |
||||||||||||||||||||||||||
97 – 115 | 9 | $ | 96,145,000 | 18.54 | % | 5.205 | % | 112 | 1.33x | 77.44 | % | 69.65 | % | |||||||||||||||||||||
116 – 119 | 30 | $ | 420,026,136 | 80.99 | % | 5.511 | % | 118 | 1.27x | 73.89 | % | 67.32 | % | |||||||||||||||||||||
120 – 214 | 1 | 2,465,462 | 0.48 | % | 7.000 | % | 214 | 1.56x | 83.86 | % | 57.09 | % | ||||||||||||||||||||||
40 | $ | 518,636,598 | 100.00 | % | 5.461 | % | 117 | 1.28x | 74.60 | % | 67.70 | % | ||||||||||||||||||||||
S-126
Certain Terms and Conditions of the Mortgage Loans
Calculation of Interest. 100.00% of the Mortgage Loans, based on the Initial Outstanding Pool Balance or 100.00% based on Initial Loan Group 1 Balance, 100.00% of the Initial Loan Group 2A Balance and 100.00% of the Initial Loan Group 2B Balance, accrue interest on the basis of the actual number of days elapsed and a 360-day year.
Except in the case of Mortgage Loans with anticipated repayment dates, none of the Mortgage Loans provide for negative amortization or for the deferral of interest.
Amortization of Principal. The Mortgage Loans provide for one or more of the following:
70 Mortgage Loans (excluding interest-only and partial interest-only Mortgage Loans), representing 18.94% of the Initial Outstanding Pool Balance, 24.34% of the Initial Loan Group 1 Balance and 6.94% of the Initial Loan Group 2B Balance, provide for payments of interest and principal and then have an expected Balloon Balance at the maturity date.
19 Mortgage Loans, representing 29.44% of the Initial Outstanding Pool Balance, 26.49% of the Initial Loan Group 1 Balance, 97.40% of the Initial Loan Group 2A Balance and 1.76% of the Initial Loan Group 2B Balance, are interest-only until the related maturity date or anticipated repayment date.
103 Mortgage Loans, representing 49.47% of the Initial Outstanding Pool Balance, 46.22% of the Initial Loan Group 1 Balance, 2.60% of the Initial Loan Group 2A Balance and 91.30% of the Initial Loan Group 2B Balance, provide for payments of interest-only for the first 7 to 82 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.
4 Mortgage Loans, representing 2.06% of the Initial Outstanding Pool Balance and 2.82% 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 S Certificates.
1 Mortgage Loan, representing 0.09% of the Initial Outstanding Pool Balance and 0.12% of the Initial Loan Group 1 Balance is fully amortizing.
Prepayment Provisions. The Mortgage Loans generally permit voluntary prepayment without the payment of any penalty on the last 1 to 6 scheduled payment dates (including the maturity date or the Anticipated Repayment Date, as applicable). All of the Yield Maintenance Mortgage Loans prohibit voluntary prepayment for a specified period (the ‘‘Yield Maintenance Lock-Out Period’’) and all of the Defeasance Loans prohibit Defeasance (as defined below) for at least two years from the Closing Date (the ‘‘Defeasance Lock-Out Period’’ and collectively with the Yield Maintenance Lock-Out Period the ‘‘Lock-Out Period’’). The weighted average Lock-Out Period remaining from the Cut-off Date for the Mortgage Loans is approximately 24 months. Each Mortgage Loan with a Lock-Out Period restricts voluntary prepayments in one of the following ways:
(1) 173 of the Mortgage Loans (the ‘‘Defeasance Loans’’), representing approximately 77.72% of the Initial Outstanding Pool Balance, 85.15% of the Initial Loan Group 1 Balance, 2.60% of the Initial Loan Group 2A Balance and 90.37% of the Initial Loan Group 2B Balance, permit defeasance (not voluntary prepayment) after the expiration of a Defeasance Lock-Out Period and prior to the related open period (such period, the ‘‘Defeasance Period’’), which period is set forth on Annex A-1 under the heading ‘‘Prepayment Provisions Payments (# of payments).’’ In the case of the Mortgage Loans that permit partial defeasance, the Mortgage Loan Documents require, among other things, that the defeasance collateral be in amount equal to a specified percentage,
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generally between 110% to 125% of the portion of the total loan amount allocated to the Mortgaged Property that is to be released (such amount, the ‘‘Allocated Loan Amount’’). Exceptions include:
• | the Mortgage Loan identified on Annex A-1 as ‘‘Valley View Center,’’ representing 4.09% of the initial Outstanding Pool Balance and 5.60% of the Initial Loan Group 1 Balance, provides for the partial defeasance and release from the lien of the Mortgage of portions of the shopping mall upon delivery of defeasance collateral in an amount sufficient to defease a portion of the Note equal to the fair market value of the release parcel, as determined by a new appraisal pursuant to the terms of the related loan documents, provided, among other things, (i) such release will not result in a loss of more than 25,000 rentable square feet of retail space, (ii) the debt service coverage ratio for the Mortgage Loan, after taking into account any improvement which is proposed to be built on the release parcel and its effect on income and expenses at the Mortgaged Property, will not be less than the greater of 1.45x or 90% of the debt service coverage ratio for the Mortgage Loan as of the date immediately preceding such release and (iii) the fair market value of the release parcel (as determined by a new appraisal) does not exceed $15,000,000. |
• | the Mortgage Loans identified on Annex A-1 as ‘‘AG Portfolio,’’ representing 0.97% of the initial Outstanding Pool Balance and 1.33% of the Initial Loan Group 1 Balance, the applicable loan documents provide for the partial defeasance and release from the lien of the mortgage one or more of the crossed collateralized loans that make up the AG Portfolio upon delivery of defeasance collateral sufficient to defease the loan to be released in an amount equal to the outstanding amount of the loan provided certain conditions are met, including that the loans relating to the mortgaged property not being released have a loan to value ratio of not more than 75%, and the debt service coverage ratio for all of the loans (inclusive of the loan relating to the mortgaged property being released) (i) be at least 1.25x and (ii) not be less than the debt service coverage ratio for the loan relating to the Mortgaged Property being released. |
• | the Mortgage Loan identified on Annex A-1 as ‘‘Trafalgar Plaza Portfolio,’’ representing 0.67% of the initial Outstanding Pool Balance and 0.92% of the Initial Loan Group 1 Balance, the applicable loan documents provide for the partial defeasance and release from the lien of the mortgage of one of the two mortgaged properties securing the loan upon delivery of defeasance collateral sufficient to defease the loan in an amount equal to 125% of the outstanding loan amount times 0.4403, provided that the mortgaged property not subject to the partial release must have a debt service coverage ratio with respect to such unreleased mortgaged property of at least 1.25x. |
• | the Mortgage Loan identified on Annex A-1 as ‘‘Supertel Hotel Portfolio,’’ representing 0.48% of the initial Outstanding Pool Balance and 0.66% of the Initial Loan Group 1 Balance, the applicable loan documents provide for the partial defeasance and release from the lien of the mortgage of one property making up the mortgaged property upon delivery of defeasance collateral sufficient to defease the loan in an amount equal to 125% of the allocated loan amount (as set forth in the related mortgaged loan documents); provided the loan (exclusive of the allocated loan amount relating to mortgaged property being released), has a loan to value ratio of not more than 75%, and have a debt service coverage ratio (exclusive of the mortgaged property being released) of not less than the debt service coverage ratio for the loan (inclusive of the mortgaged property being released). |
(2) 24 of the Mortgage Loans (the ‘‘Yield Maintenance Loans’’), representing approximately 22.28% of the Initial Outstanding Pool Balance, 14.85% of the Initial Loan Group 1 Balance, 97.40% of the Initial Loan Group 2A Balance and 9.63% of the Initial Loan Group 2B Balance, permit voluntary prepayment of the Mortgage Loan accompanied by a Yield Maintenance Charge or a Prepayment Premium (as described below) following
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the expiration of a Lock-Out Period until the commencement of the open period for such Mortgage Loan (such period, the ‘‘Yield Maintenance Period’’). With respect to the Yield Maintenance Loans, the expiration of the Yield Maintenance Lock-Out Period is identified on Annex A-1 under the heading ‘‘Prepayment Provisions (# of Payments).’’
‘‘Yield Maintenance Charge’’ means:
• | with respect to the Mortgage Loan known as ‘‘Villas Parkmerced,’’ representing 9.81% of the initial Outstanding Pool Balance and 97.40% of the Initial Loan Group 2A Balance, an amount equal to the greater of (a) 1% of the principal amount prepaid or (b) an amount equal to the product of: (i) the positive difference (expressed as a percentage of the outstanding principal amount before any prepayment), if any, as of the date of determination between (A) the present value of all future scheduled payments of interest (other than scheduled interest payments due on or after July 1, 2010) and principal, including the principal amount due on the related Maturity Date (assuming for purposes of this calculation that such payment is due on July 1, 2010), to be made on the related Note before the prepayment in question, discounted at an interest rate per annum equal to the Treasury Rate, and (B) the outstanding principal balance immediately before such prepayment; and (ii) the principal amount being prepaid. As used in this definition, ‘‘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 July 1, 2010 (and converted to a monthly equivalent yield), as determined by lender 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 publication is unavailable, such other recognized source of financial market information as shall be selected by lender for the week prior to such payment date. |
• | with respect to the Mortgage Loan known as ‘‘Woodbury Lakes,’’ representing 2.12% of the initial Outstanding Pool Balance and 2.91% of the Initial Loan Group 1 Balance, an amount equal to the greater of: (i) 1% of the principal amount of the Mortgage Loan being prepaid or (ii) the Yield Maintenance Amount. As used in this definition, ‘‘Yield Maintenance Amount’’ means the present value, as of the prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through October 1, 2015 (the ‘‘YM Release Date’’) (including the amount of any balloon payment) determined by discounting such payments at the Discount Rate, less the amount of principal being prepaid. As used in this definition, ‘‘Discount Rate’’ means the rate which, when compounded monthly, is equivalent to the Treasury Rate, when compounded semi-annually. As used in this definition, the term ‘‘Treasury Rate’’ means the yield calculated by lender by the linear interpolation of the yields, as reported in the Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the prepayment date, of U.S. Treasury Constant Maturities with maturity dates (one longer and one shorter) most nearly approximating the YM Release Date plus 50 basis points (0.50%). In the event Release H.15 is no longer published, lender shall select a comparable publication to determine the Treasury Rate. |
• | with respect to the Mortgage Loan known as ‘‘Stadium Gateway,’’ representing 1.70% of the initial Outstanding Pool Balance and 2.33% of the Initial Loan Group 1 Balance, an amount equal to the greater of (a) the Yield Maintenance Amount, or (b) 1% of the unpaid principal balance of the Note at the time of the prepayment. As used in this definition, ‘‘Yield Maintenance Amount’’ means the present value, as of the prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through the loan maturity date (including any balloon payment) determined by discounting such payments at the Discount Rate (hereinafter defined), |
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less the amount of principal being prepaid. As used in this definition, ‘‘Discount Rate’’ means the rate which, when compounded monthly, is equivalent to the Treasury Rate (hereinafter defined) when compounded semi-annually. As used in this definition, ‘‘Treasury Rate’’ means the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the prepayment date, of U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the Maturity Date. (In the event Release H.15 is no longer published, the lender shall select a comparable publication to determine the Treasury Rate.) |
• | with respect to the Mortgage Loans known as "Lodge at Stone Oak Ranch Apartment Homes," "Staybridge Suites – Lincolnshire," "Staybridge Suite – Glenview," "Fairfield Inn & Suites – Lake Oswego" and " Fairfield Inn – Tucson Airport" representing 2.07% of the initial Outstanding Pool Balance and 1.35% of the Initial Loan Group 1 Balance, and 6.38% of the Initial Loan Group 2B Balance, an amount equal to the present value, as of the prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through the loan maturity date (including any balloon payment) determined by discounting such payments at the Discount Rate (hereinafter defined), less the amount of principal being prepaid provided, however, that with respect to the Mortgage Loans known as "Lodge at Stone Oak Ranch Apartment Homes," "Fairfield Inn & Suites – Lake Oswego" and "Fairfield Inn – Tucson Airport," the yield maintenance charge is equal to the greater of (a) 1% of the outstanding principal balance of the related Mortgage Loan at the time of prepayment or (b) the yield maintenance charge calculation set forth in this paragraph. As used in this definition, "Discount Rate" means the rate which, when compounded monthly, is equivalent to the Treasury Rate (hereinafter defined) when compounded semi-annually. As used in this definition, "Treasury Rate" means the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the prepayment date, of U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the Maturity Date. (In the event Release H.15 is no longer published, the lender shall select a comparable publication to determine the Treasury Rate.) |
• | with respect to the Mortgage Loan known as ‘‘Century Center Parkway Portfolio,’’ representing 1.01% of the initial Outstanding Pool Balance and 1.39% of the Initial Loan Group 1 Balance, an amount equal to the greater of (a) the Yield Maintenance Amount or (b) (i) if the prepayment date is prior to the Lockout Date, 5% of the unpaid principal balance of the Note at the time of such prepayment or (ii) if the prepayment is after the Lockout Date, 1% of the unpaid principal balance of the Note at the time of the prepayment. In this definition, ‘‘Yield Maintenance Amount’’ has the same definition as Yield Maintenance Amount as defined above, with respect to the Mortgage Loan known as ‘‘Stadium Gateway.’’ |
• | with respect to the Mortgage Loan known as ‘‘300 Billerica Road,’’ representing 0.25% of the initial Outstanding Pool Balance and 0.34% of the Initial Loan Group 1 Balance, an amount equal to the greater of (i) the Permitted Prepayment Yield Maintenance Amount, or (ii) 1% of the unpaid principal balance of the Note at the time of such prepayment. In this definition, ‘‘Permitted Prepayment Yield Maintenance Amount’’ means the present value, as of prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through the first day the Mortgage Loan is freely prepayable (the ‘‘Open Date’’) for such Mortgage Loan (including any balloon payment) determined by discounting such payments at the Permitted Prepayment Discount Rate, less the amount of principal being prepaid. The term ‘‘Permitted Prepayment Discount Rate’’ means the rate which, when compounded |
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monthly, is equivalent to the Permitted Prepayment Treasury Rate when compounded semi annually. The term ‘‘Permitted Prepayment Treasury Rate’’ means the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15 Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the prepayment date, of U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the period ending on the Open Date. In the event Release H.15 is no longer published, the lender shall select a comparable publication to determine the Permitted Prepayment Treasury Rate. |
• | with respect to the Mortgage Loans known as Canyon Corporate Plaza and 215 West Lake, representing in the aggregate 1.17% of the initial Outstanding Pool Balance and 1.60% of the Initial Loan Group 1 Balance, an amount equal to the sum of (a) the interest which would have accrued on the principal balance of the related Mortgage Loan during the remaining days of the monthly interest period containing the date of prepayment of the Mortgage Loan (the ‘‘YMP Due Date’’), plus (b) the greater of (i) 1% of the unpaid principal balance of the Mortgage Loan on the YMP Due Date or (ii) the product obtained by multiplying (1) the principal balance of the Mortgage Loan on the YMP Due Date (assuming no prepayment of this Note on such date), times (2) the difference obtained by subtracting the Yield Rate (as defined below) from the interest rate on the Mortgage Loan, times (3) the present value factor using the following formula: |
1-(1
+
r/12)-n
r |
||
where: | ||||||
r = n = |
Yield Rate, and the number of monthly interest periods remaining between the YMP Due Date and the scheduled maturity date of the Mortgage Loan |
|||||
The ‘‘Yield Rate’’ shall be the annualized yield on securities selected by the lender issued by the United States Treasury having a maturity corresponding to the scheduled maturity date of the Mortgage Loan as determined by lender, as quoted in Federal Reserve Statistical Release [H. 15(519)] under the heading ‘‘U.S. Government Securities — Treasury Constant Maturities’’ for the fifth business day preceding the YMP Due Date, converted to a monthly equivalent yield. If yields for such securities of such maturity are not shown in such publication, then the Yield Rate shall be determined by the lender by linear interpolation between the yields of securities of the next longer and next shorter maturities. If said Federal Reserve Statistical Release or any other information necessary for determination of the Yield Rate in accordance with the foregoing is no longer published or is otherwise unavailable, then the Yield Rate shall be determined by the lender based on comparable data.
• | with respect to the Mortgage Loan known as Conexant Building, representing 1.01% of the initial Outstanding Pool Balance and 1.39% of the Initial Loan Group 1 Balance, an amount equal to the sum of (i) an amount equal to the interest which would have accrued on the principal balance of the related Mortgage Loan during the remaining days of the interest period containing the date of prepayment of the Mortgage Loan (unless the prepayment is tendered on the first day of an interest period), plus (ii) the greater of (x) one percent of the principal balance of the Mortgage Loan being prepaid, or (y) the excess, if any, of (1) the sum of the present values of all then-scheduled payments of principal and interest under the portion of the Mortgage Loan being prepaid, including, but not limited to, principal and interest on March 11, 2017 (with each such payment discounted to its present value at the first day of the interest period immediately succeeding the date of prepayment (or if the date of prepayment is the 11th day of the month, at the date of prepayment) at the rate which, when |
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compounded monthly, is equivalent to the Prepayment Rate (as defined below), over (2) the principal amount of the Mortgage Loan being prepaid. The ‘‘Prepayment Rate’’ shall mean the bond equivalent yield (in the secondary market) on the United States Treasury Security that as of a determination date which is five business days prior to the date the applicable prepayment is applied has a remaining term to maturity closest to, but not exceeding, the remaining term to the maturity date of the Mortgage Loan, as most recently published in the ‘‘Treasury Bonds, Notes and Bills’’ section of The Wall Street Journal as of such determination date. If more than one issue of United States Treasury Securities has the remaining term to the maturity date, the Prepayment Rate shall be the yield on such United States Treasury Security most recently issued as of such determination date. If the publication of the Prepayment Rate in The Wall Street Journal is discontinued, the lender shall determine the Prepayment Rate on the basis of ‘‘Statistical Release H.15 (519), Selected Interest Rates,’’ or any successor publication, published by the Board of Governors of the Federal Reserve System, or if the Board of Governors of the Federal Reserve System no longer publishes any such information, on the basis of such other publication or statistical guide as the lender may reasonably select. |
• | with respect to the Mortgage Loans known as Rexford Park; Maryland Place and University Club Tower, representing in the aggregate 1.80% of the initial Outstanding Pool Balance and 2.47% of the Initial Loan Group 1 Balance, an amount equal to the sum of (i) an amount equal to the interest which would have accrued on the principal balance of the related Mortgage Loan during the remaining days of the interest period containing the date of prepayment of the Mortgage Loan (the ‘‘Event Date’’), plus (ii) the greater of (x) one percent of the principal balance of the Mortgage Loan on the Event Date, or (y) the sum of one percent of the principal balance of the Mortgage Loan on the Event Date plus an amount equal to the ‘‘Present Value Yield Differential’’, calculated as the excess, if any, of (A) the amount of the monthly interest which would otherwise be payable on the principal balance of the Mortgage Loan from (1) the date (the ‘‘Yield Determination Date’’) which is either (xx) the Event Date (if the required interest payment described in clause (i) above has not been made through the end of the interest period in which the Event Date occurs) or (yy) if the required interest payment described in clause (i) above has been made through the end of the interest period in which the Event Date occurs, the monthly payment date following the end of the interest period containing the Event Date, through and including (2) the maturity date of the Mortgage Loan, minus (B) the amount of the monthly interest the lender would earn if an amount equal to the principal balance of the Mortgage Loan as of the Event Date were invested for the period from the Yield Determination Date through the maturity date of the Mortgage Loan at the Yield Rate (as hereinafter defined), such difference (the ‘‘Yield Differential’’) to be discounted to present value at the Yield Rate using the following formula: |
Yield Differential | ||||||
Present Value Yield Differential = | (1 + r)n | |||||
where: | ||||||
r = n = |
Yield Rate, and the remaining Weighted Average Life to Maturity (as defined below) from the Yield Determination Date. |
|||||
The ‘‘Yield Rate’’ shall be the annualized yield on securities issued by the United States Treasury having a maturity corresponding to the then remaining Weighted Average Life to Maturity (as defined below) of the Mortgage Loan as determined by the lender, as quoted in Federal Reserve Statistical Release [H. 15(519)] under the heading ‘‘U.S. Government Securities — Treasury Constant Maturities’’ for the Yield Rate Determination Date (as defined below), converted to a monthly equivalent yield.
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The term ‘‘Yield Rate Determination Date’’ shall mean the date which is five (5) business days prior to the Yield Determination Date. The term ‘‘Weighted Average Life to Maturity’’ shall mean, at any date, the number of years (including fractional years, expressed as a decimal (e.g., three years and three months = 3.25 years)) obtained by dividing (x) the outstanding principal balance of the Mortgage Loan on the Event Date into (y) the sum total of the Weighted Amortization Products (as defined below) for each Scheduled Principal Payment (as defined below). The ‘‘Scheduled Principal Payment(s)’’ shall mean each then remaining scheduled principal payment (assuming no prepayment or acceleration of the Mortgage Loan), including payment of the outstanding principal balance of the Mortgage Loan on the maturity date of the Mortgage Loan. The ‘‘Weighted Amortization Product’’ for each Scheduled Principal Payment shall mean the product of (A) the amount of such Scheduled Principal Payment multiplied by (B) the number of years (including fractional years, expressed as a decimal) which will elapse between the Yield Determination Date and the date on which such Scheduled Principal Payment is to be made under the Mortgage Loan.
• | with respect to the Mortgage Loans known as Circuit City-Poughkeepsie, NY and Circuit City-Manassas, VA, representing in the aggregate 0.41% of the initial Outstanding Pool Balance and 0.56% of the Initial Loan Group 1 Balance, an amount equal to the sum of (a) interest which would have accrued on the principal balance of the related Mortgage Loan during the remaining days of the monthly interest period containing the date of prepayment of the Mortgage Loan, plus (b) the greater of (i) 1% of the unpaid principal balance of the Mortgage Loan on the date of prepayment or (ii) the aggregate sum (without duplication) of (A) the product obtained by multiplying (1) the entire unpaid principal balance of the Mortgage Loan at the time of prepayment, times (2) the difference obtained by subtracting from the interest rate on the Mortgage Loan the yield rate (the ‘‘Yield Rate’’) on the 4.00% U.S. Treasury Security due February 15, 2015 (or, if the lender has elected to make the Anticipated Repayment Date the maturity date, on the 5.375% U.S. Treasury Security due February 15, 2035) (in either event, the ‘‘Specified U.S. Treasury Security’’), as the Yield Rate is reported in The Wall Street Journal on the fifth business day preceding the date of prepayment, times (3) the present value factor calculated using the following formula: |
1-(1
+
r)-n
r |
||
r = | Yield Rate | |||||
n = | the number of years, and any fraction thereof, remaining between the prepayment date and the Anticipated Repayment Date | |||||
In the event that no Yield Rate is published for the Specified U.S. Treasury Security, then the nearest equivalent U.S. Treasury Security shall be selected at the lender’s sole discretion. If the publication of such Yield Rates in The Wall Street Journal is discontinued, the lender shall determine such Yield Rates from another source selected by the lender.
• | with respect to the Mortgage Loan known as Maverick Creek Villas, representing 0.55% of the initial Outstanding Pool Balance and 3.25% of the Initial Loan Group 2B Balance, an amount equal to the sum of (a) interest which would have accrued on the principal balance of the related Mortgage Loan during the remaining days of the monthly interest period containing the date of prepayment of the Mortgage Loan, plus (b) the greater of (i) 1% of the unpaid principal balance of the Mortgage Loan on the date of prepayment or (ii) the aggregate sum (without duplication) of (A) the product obtained by multiplying (1) the entire unpaid principal balance of the Mortgage Loan at the time of prepayment, times (2) the difference obtained by subtracting from the interest rate on the Mortgage Loan the yield rate (the ‘‘Yield Rate’’) on the 4.25% U.S. Treasury Security due August 15, 2015 (the ‘‘Specified U.S. Treasury Security’’), as the Yield |
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Rate is reported in The Wall Street Journal on the fifth business day preceding the date of prepayment, times (3) the present value factor calculated using the following formula: |
1-(1
+
r)-n
r |
||
r = | Yield Rate | |||||
n = | the number of years, and any fraction thereof, remaining between the prepayment date and the maturity date | |||||
In the event that no Yield Rate is published for the Specified U.S. Treasury Security, then the nearest equivalent U.S. Treasury Security shall be selected at the lender’s sole discretion. If the publication of such Yield Rates in The Wall Street Journal is discontinued, the lender shall determine such Yield Rates from another source selected by the lender.
• | with respect to the Mortgage Loan known as El Clair Medical Building, representing 0.38% of the initial Outstanding Pool Balance and 0.52% of the Initial Loan Group 1 Balance, an amount equal to the sum of (a) interest which would have accrued on the principal balance of the related Mortgage Loan during the remaining days of the monthly interest period containing the date of prepayment of the Mortgage Loan, plus (b) the greater of (i) 2% of the unpaid principal balance of the Mortgage Loan on the date of prepayment or (ii) the aggregate sum (without duplication) of (A) the product obtained by multiplying (1) the entire unpaid principal balance of the Mortgage Loan at the time of prepayment, times (2) the difference obtained by subtracting from the interest rate on the Mortgage Loan the yield rate (the ‘‘Yield Rate’’) on the 4.125% U.S. Treasury Security due May 15, 2015 (the ‘‘Specified U.S. Treasury Security’’), as the Yield Rate is reported in The Wall Street Journal on the fifth business day preceding the date of prepayment, times (3) the present value factor calculated using the following formula: |
1-(1
+
r)-n
r |
||
r = | Yield Rate | |||||
n = | the number of years, and any fraction thereof, remaining between the prepayment date and the maturity date | |||||
In the event that no Yield Rate is published for the Specified U.S. Treasury Security, then the nearest equivalent U.S. Treasury Security shall be selected at the lender’s sole discretion. If the publication of such Yield Rates in The Wall Street Journal is discontinued, the lender shall determine such Yield Rates from another source selected by the lender.
‘‘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 Offered Certificates—Prepayment Premiums and Yield Maintenance Charges.’’
All of the Mortgage Loans that permit voluntary 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 accrue through but excluding 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. The Mortgage Loans generally do not require the payment of Yield Maintenance Charges in connection with a prepayment of the related Mortgage Loan as a result of a casualty or condemnation. Certain
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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 Prepayment Premiums or Yield Maintenance Charges. See ‘‘Risk Factors—Risks Related to the Offered Certificates—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, 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 threshold amount and applied to partially prepay the Mortgage Loan, the borrower will be permitted to supplement such proceeds with an amount sufficient to prepay the entire principal balance or an allocated portion 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 that permit the related borrower to obtain a release of all or a portion of the Mortgaged Property or Mortgaged Properties from the lien of the Mortgage securing such Mortgage Loan.
All of the Defeasance Loans permit the applicable borrower, after 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 a 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) or such other securities as permitted by the Code with respect to a Defeasance, that is 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 the 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. With respect to all of the Defeasance Loans, the Defeasance Lock-Out Period is at least two years from the Closing Date. In certain cases a borrower may post Defeasance Collateral sufficient to make payments through the
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related maturity date and thereafter prepay the Mortgage Loan after the date upon which the related Mortgage Loan is freely prepayable, in which case the remaining Defeasance Collateral will be returned to the borrower.
In some 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.
In the case of the cross collateralized and cross defaulted Mortgage Loans identified on Annex A-1 as:
• | Beyman Multifamily Portfolio Loan, collectively representing 1.98% of the Initial Outstanding Pool Balance and 11.69% of the Initial Loan Group 2B Balance, or |
• | Century Center Parkway Portfolio, collectively representing 1.01% of the Initial Outstanding Pool Balance and 1.39% of the Initial Loan Group 1 Balance, |
• | AG Portfolio, collectively representing 0.97% of the Initial Outstanding Pool Balance and 1.33% of the Initial Loan Group 1 Balance, or |
• | Wilkinson Portfolio, collectively representing 0.58% of the Initial Outstanding Pool Balance and 3.43% of the Initial Loan Group 2B Balance, |
the related Mortgage Loan Documents generally permit each of the related borrowers to obtain a release of the related individual Mortgaged Property securing the related Mortgage Loan from the cross collateralization in the event of a defeasance or prepayment with yield maintenance of a cross collateralized Mortgage Loan or approved transfer of such Mortgaged Property if the remaining Mortgaged Properties meet certain debt service coverage ratio and loan-to-value ratio tests.
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 or substitution of a Mortgaged Property or portion thereof as follows:
(1) | the release of a Mortgaged Property or a portion of a Mortgaged Property where such property is vacant, non-income producing or was given no material value in connection with loan origination and underwriting criteria; |
(2) | the release of a portion of Mortgaged Property (or a single Mortgaged Property that secures a multi-property Mortgage Loan), subject to satisfaction of certain release conditions, including payment of the outstanding loan balance or allocated loan amount, as applicable, plus a Yield Maintenance Charge. |
(3) | with respect to the Mortgage Loan identified as ‘‘Valley View Center’’ on Annex A-1 to this prospectus supplement, representing 4.09% of the initial Outstanding Pool Balance and 5.60% of the Initial Loan Group 1 Balance, the borrower is permitted to purchase the parcel currently owned by Foley’s Department Store and, subject to certain requirements, extend the lien of the Mortgage to include this parcel. Thereafter, the borrower will have the right to sell and release all or a portion of this parcel (at any time), subject to requirements in the loan documents; |
(4) | with respect to the Mortgage Loan known as ‘‘Beyman Multifamily Portfolio,’’ representing 1.98% of the initial Outstanding Pool Balance and 11.69% of the Initial |
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Loan Group 2B Balance, the loan documents permit the release of the related cross collateralization arrangement, subject to the satisfaction of conditions, including but not limited to, (A) in connection with a defeasance, (i) delivery of defeasance collateral in an amount sufficient to defease 110% of the outstanding principal amount of the Mortgage Loan subject to the release (with the extra 10% deposited into a reserve account as additional collateral for the remaining Beyman Rollup loan) and (ii) for the remaining Beyman Rollup loan, a loan to value ratio of not more than 80% and a debt service coverage ratio of at least 1.20x, and (B) in connection with the a sale and assumption of either of the Beyman Rollup loans, (i) for each Mortgaged Property a loan to value ratio of not more than 80% and a debt service coverage ratio of at least 1.05x and (ii) if the partial recourse guaranty is still in effect at the time of transfer, the remaining borrower is required to deposit cash in an amount equal to the applicable recourse amount, which amount will be held as additional collateral until the related Mortgaged Property maintains a minimum occupancy of 90% and a debt service coverage ratio of at least 1.25x. |
(5) | with respect to the Mortgage Loan known as ‘‘Century Center Parkway Portfolio,’’ representing 1.01% of the initial Outstanding Pool Balance and 1.39% of the Initial Loan Group 1 Balance, the loan documents permit the release of a Mortgaged Property at a time when one or more related crossed Mortgage Loans are still outstanding (and a release of the related cross collateralization arrangement), subject to the satisfaction of release conditions (including the satisfaction of debt service coverage and loan to value tests and payment of a Yield Maintenance Charge (as described below above ‘‘—Prepayment Provisions’’), plus the payment of an additional 15% of the original principal balance of the Mortgage Loan to be released from the cross (the ‘‘Overage’’), which amount will be held as additional collateral for the remaining crossed loans. |
(6) | With respect to the mortgage loan known as ‘‘University Club Tower,’’ representing 0.94% of the outstanding pool balance or 1.29% of the Loan Group 1 balance as of the Cut-Off Date, the related loan documents permit the partial release of a portion of the related mortgaged property provided certain conditions are met, including, among other things, that if certain parking spaces are released as part of the parcel to be released, an acceptable parking easement must be granted in connection with the release for the benefit of the portion of the mortgaged property not released providing for, among other things, access to, and a sufficient amount of, parking spaces to meet requirements of any applicable lease. |
(7) | with respect to the Mortgage Loan known as ‘‘Hawthorne Exchange’’ representing 0.57% of the initial Outstanding Pool Balance and 0.77% of the Initial Loan Group 1 Balance, the loan documents permit the partial sale and release of the CountryWide Parcel, the Westcom Parcel (together, the ‘‘Wide West Parcel’’) and the Starbuck’s Parcel (each, an ‘‘Individual Property’’) not sooner than 9 months after the loan closing date and only if all funds on deposit in the Holdback Reserve (as such term is defined in the related deed of trust) have been released, subject to conditions including, but not limited to, (i) payment of an application fee, assumption fee and an amount equal to 1% of the portion of the Note attributable to the Sale Property, (ii) the loan to value ratio for each of the property remaining after the sale (the ‘‘Remaining Property’’) and the Individual Property to be sold (the ‘‘Sale Property’’) is not more than 80% and the debt service coverage ratio for each of the Remaining Property and the Sale Property is at least 1.20x, (iii) the properties that constitute the Wide West Parcel may not be sold individually and (iv) the buyer of the Sale Property assumes the portion of the Mortgage Loan and the allocable amount for such Sale Property. |
(8) | with respect to the Mortgage Loan identified as ‘‘Rexford Park’’ on Annex A-1 to this prospectus supplement, representing 0.53% of the initial Outstanding Pool Balance and 0.73% of the Initial Loan Group 1 Balance, the applicable loan documents provide |
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for the prepayment of the loan in connection with the partial release of either parcel A or parcel B (each as more fully described in the applicable loan documents) in an amount equal to the sum of (i) $9,140,625 for release parcel A and (ii) $11,109,375 for release parcel B plus, in either case, a Yield Maintenance Charge, provided that the portion of the mortgaged property not being released have a debt service coverage ratio of at least 1.3x and a loan to value ratio of not more than 75%. |
(9) | with respect to the mortgage loan known as ‘‘Buena Park Promenade,’’ representing 0.51% of the outstanding pool balance or 0.71% of the Loan Group 1 balance as of the Cut-Off Date, the related loan documents permit the partial release of several improved portions of the related mortgaged property specifically described in the related loan documents provided certain conditions are met, including, among other things, that (i) the release of any portion be completed no later than 24 months after November 23, 2005 and (ii) the debt service coverage ratio, after giving effect to the release of any applicable portion of the mortgaged property must be maintained with respect to the remaining portion of the mortgaged property at no less than 1.2x, provided further, that, if the release occurs in the first twelve months following November 23, 2005, borrower need only provide to lender a certified rent roll that verifies the anchor tenants are current with respect to rent payments and have not provided notice of termination or intent to go dark; |
(10) | with respect to the mortgage loan known as ‘‘Civic Plaza Shopping Center,’’ representing 0.29% of the outstanding pool balance or 0.40% of the Loan Group 1 balance as of the Cut-Off Date, the related loan documents permit the partial release of two income producing parcels of the related mortgaged property described as Parcel 1 and Parcel 2 and specifically described in the applicable loan document provided certain conditions are met, including, among other things with respect to the release of Parcel 2, that, the debt service coverage ratio with respect to the remaining portion of the mortgaged property (not including income generated from either Parcel 1 or Parcel 2) projected for the twelve months following the release of Parcel 2 is equal to or greater than 1.2x; |
(11) | With respect to the mortgage loan known as ‘‘Shaw’s Supermarket—Windham, NH,’’ representing 0.27% of the outstanding pool balance or 0.37% of the Loan Group 1 balance as of the Cut-Off Date, the related loan documents permit the partial release of a portion of the related mortgaged property provided certain conditions are met, including, among other things, that, after giving effect to the release of the applicable portion of the mortgaged property, the debt service coverage ratio and the loan to value ratio for the remainder of the term of the loan with respect to the remaining portion of the mortgaged property must be sufficient enough to support a debt service coverage ratio of 1.2 to 1.0 and a loan to value ratio of no more than 80%; and |
(12) | with respect to the mortgage loan known as ‘‘Battenkill Plaza,’’ representing 0.13% of the outstanding pool balance or 0.18% of the Loan Group 1 balance as of the Cut-Off Date, the related loan documents permit the partial release of improved portions of the related mortgaged property provided certain conditions are met, including, among other things, that, after the release of the applicable portion of the mortgaged property, the remaining portion of the mortgaged property must maintain a debt service coverage ratio of 1.25x at the greater of 7.00% or the actual constant (assuming a thirty year amortization). |
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.
Other Financing. The applicable Mortgage Loan Sellers have informed the Depositor that the Villas Parkmerced Pooled Trust Component and the Arrowhead Shopping Center Loan, collectively representing approximately 9.93% of the Initial Outstanding Pool Balance, 0.17% of
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Initial Loan Group 1 Balance, 97.40% of the Initial Loan Group 2A Balance, are each secured by a Mortgaged Property that also secures one or more additional loans. See ‘‘Description of the Mortgage Pool—Split Loan Structures—The Villas Parkmerced Loans’’ and ‘‘—The Arrowhead Shopping Center 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:
• | With respect to the Mortgage Loans identified as ‘‘3165 Nostrand Avenue’’ and ‘‘Tara Close Apartments’’ on Annex A-1 to this prospectus supplement, representing approximately 0.10% and 0.12%, respectively, of the Initial Outstanding Pool Balance and 0.58% and 0.69%, respectively, of Initial Loan Group 2B Balance, the borrower (in each case) is permitted to obtain an unsecured line of credit from an institutional lender, in an amount up to $1,000,000, provided, among other things, the combined loan-to-value ratio does not exceed 30%. |
• | With respect to the Mortgage Loan known as ‘‘Village Plaza’’, representing approximately 0.30% of the Initial Outstanding Pool Balance and 0.42% of the Initial Loan Group 1 Balance, the borrower is permitted to incur unsecured subordinated debt if made by Ramco/Lion Venture LP, a Delaware limited partnership (‘‘Ramco/Lion’’), provided, among other things, that such loan or loans are made for the sole purpose of funding working capital and/or otherwise to improve, alter and remodel the mortgaged property, the payment terms of any such subordinated loan shall not require payments to be made or payments to become due unless and until the Mortgage Loan is fully paid and satisfied, the aggregate outstanding balance of the such subordinated loan and interest accrued and unpaid thereon together with the Mortgage Loan shall not exceed 80% of the value of the mortgaged property and Ramco/Lion shall, prior to making any subordinate loan, must execute and deliver a subordination and standstill agreement in a pre-approved form. |
• | With respect to the Mortgage Loan known as ‘‘Woodcrest Corporate Center’’, representing approximately 1.65% of the Initial Outstanding Pool Balance and 2.26% of the Initial Loan Group 1 Balance, the borrowers incurred unsecured indebtedness payable to the seller in connection with the borrowers’ purchase of the mortgaged property in the amount of $200,000 payable one year from the date of the closing of the Mortgage Loan. |
The Mortgage Loan Documents generally prohibit the pledge or transfer of the mortgaged property or the controlling ownership interests in the related borrower above certain percentage thresholds without lender consent, other than certain specified transfers, including but not limited to:
• | transfers related to family and estate planning, |
• | transfers related to the death or physical or mental disability of a controlling holder, |
• | transfers of less than a controlling interest in the borrower, |
• | transfers to borrower affiliates or among existing members, partners or shares in the borrower or between holders of tenant-in-common interests in the Mortgaged Property, |
• | transfers of publicly traded entities, |
• | transfers among affiliated borrowers with respect to any cross-collateralized Mortgage Loans or multi-property Mortgage Loans, |
• | transfers which consolidate tenant-in-common ownership into one or more surviving tenant-in-common borrowers; |
• | transfers of minority tenant-in-common interests to third parties, subject in some cases to lender approval or transfers in excess of specified thresholds; |
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• | transfers to any person or entity so long as certain specified persons or entities, or persons or entities satisfying specified criteria, remain in control of the day to day operations of the borrower, or |
• | transfers of a similar nature to the foregoing meeting the requirements of the Mortgage Loan Documents. |
In addition, certain of the Mortgage Loan Documents permit the transfer to certain qualifying entities, which entities generally are required to satisfy specified criteria, such as net worth and/or experience related tests and with respect to mortgage loans secured by cooperative apartment buildings, the loan documents permit and lender consent is not required in connection with transfers or termination of proprietary leases with tenant shareholders. Also, to the extent Mortgage Loan Documents permit mezzanine debt or to the extent a non-controlling equity holder in the borrower is entitled to a preferred return on its investment, under certain circumstances, a transfer of a controlling interest in the borrower to the holder of the mezzanine debt or the preferred equity holder may occur without lender consent and such transfer would not trigger the ‘‘due-on-sale’’ provision in the related Mortgage Loan Documents.
The Mortgage Loan Sellers have notified the Depositor that they are aware of the following existing mezzanine debt:
Mortgage Loan | Cut-off Date Balance |
%
of Initial Pool Balance |
Initial Principal Amount of Mezzanine Debt |
Holder of Mezzanine Loan |
Interest Rate on Mezzanine Loan |
Mezzanine Loan Maturity Date |
Intercreditor Agreement(1) |
|||||||||||||||||||||||
Villas Parkmerced | $ | 300,000,000 | 9.81% | $ | 52,000,000 | (2) | GACC | LIBOR + 5% | 10/09/07(3) | Yes | ||||||||||||||||||||
Westin Philadelphia Hotel | 72,000,000 | 2.35% | $ | 15,000,000 | (4) | HEI
Hospitality Fund, LLC |
14% | 11/08/15 | Yes | |||||||||||||||||||||
The Harrisburg Portfolio | 61,000,000 | 1.99% | $ | 5,600,000 | RAIT Partnership, L.P. |
11.5% | 10/11/15 | Yes | ||||||||||||||||||||||
Research Boulevard Center | 43,000,000 | 1.41% | $ | 2,500,000 | RAIT Partnership, L.P. |
11% | 12/11/15 | Yes | ||||||||||||||||||||||
IBM Call Center | 16,600,000 | 0.54% | $ | 3,920,000 | DBMC(6) | 6.89% | 12/01/13(5) | Yes | ||||||||||||||||||||||
Siempre Viva | 9,230,000 | 0.30% | $ | 425,000 | Siempre
Viva Business Park East, LLC |
6% | 11/14/15 | Yes | ||||||||||||||||||||||
(1) | Includes provisions stating that the mezzanine loan is subordinate to the Mortgage Loan and that no payments will be made on the mezzanine loan from funds derived from the related mortgaged property upon an event of default under the related Mortgage Loan. |
(2) | As of the date of this prospectus supplement, only $28,000,000 has been funded. Up to an additional $24,000,000 is required to be advanced in connection with certain improvements and renovations subject to the satisfaction of certain conditions in the loan documents. |
(3) | With 3 one-year extension options. |
(4) | As of the Cut-off Date, only $5,500,000 has been funded. |
(5) | The mezzanine loan is fully amortizing; the mezzanine loan borrower purchased bond lease insurance on the mezzanine loan to cover any tenant termination or abatement rights due to condemnation or casualty. |
(6) | DBMC means Deutsche Bank Mortgage Capital, L.L.C. (an affiliate of GACC). |
In the case of the above described Mortgage Loans with existing mezzanine debt, the holder of the mezzanine loan generally has the right to cure certain defaults occurring on the related Mortgage Loan and (other than with respect to the Siempre Viva Mortgage Loan) the right to purchase the Mortgage Loan from the trust if certain Mortgage Loan defaults occur. The purchase price required to be paid in connection with such a purchase is generally equal
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to the outstanding principal balance of the Mortgage Loan, together with accrued and unpaid interest on, and all unpaid servicing expenses and advances relating to, the Mortgage Loan.
With respect to the mortgage loans listed in the chart below, the related Mortgage Loan Sellers have informed us that the direct and/or indirect equity owners of the borrower are permitted to pledge their interest in the related borrower as security for a mezzanine loan, subject to the satisfaction of conditions contained in the related loan documents, including, among other things, a combined maximum loan-to-value ratio and a combined minimum debt-service-coverage ratio, as listed below:
Mortgage Loan | Loan Cut-off Date Balance |
Combined Maximum LTV Ratio |
Combined Minimum DSCR |
Intercreditor Agreement Required(1) |
||||||||||||||
Stadium Gateway(2) | $ | 52,000,000 | NA | NA | No | |||||||||||||
Woodcrest Corporate Center | $ | 50,400,000 | 80% | 1.10x | Yes | |||||||||||||
Research Boulevard Center | $ | 43,000,000 | 81.5% | 1.10x | Yes | |||||||||||||
Shorenstein Brisbane | $ | 39,625,000 | 74% | 1.25x | Yes | |||||||||||||
The Ansonia | $ | 38,000,000 | 75% | 1.50x | Yes | |||||||||||||
Conexant Building | $ | 31,000,000 | 75% | 1.10x | Yes | |||||||||||||
Century Center Parkway Portfolio(3) | $ | 31,000,000 | NA | NA | No | |||||||||||||
Willowbrook West Apartments | $ | 28,600,000 | 90% | 1.04x | Yes | |||||||||||||
Canyon Plaza Shopping Center | $ | 24,850,000 | 85% | 1.20x | Yes | |||||||||||||
Indian Lake Apartments(4) | $ | 22,000,000 | 85% | 1.15x | Yes | |||||||||||||
Story and King Plaza | $ | 21,630,000 | 85% | 1.10x | Yes | |||||||||||||
Deerfield Plaza | $ | 14,400,000 | 90% | 1.10x | Yes | |||||||||||||
The Links at North Creek | $ | 12,720,000 | 90% | 1.07x | Yes | |||||||||||||
Courtyard by Marriott — Erlanger | $ | 11,000,000 | 80% | 1.25x | Yes | |||||||||||||
Residence Inn — Cincinnati Airport | $ | 10,500,000 | 80% | 1.25x | Yes | |||||||||||||
Spectrum Fitness | $ | 7,713,714 | 85% | 1.10x | Yes | |||||||||||||
44 Bromfield Street | $ | 7,350,000 | 85% | 1.10x(5) | Yes | |||||||||||||
Crowne Plaza — Phoenix(6) | $ | 7,200,000 | 75% | 1.45x | Yes | |||||||||||||
Best Buy — Menomonee Falls, WI | $ | 6,446,382 | 90% | 1.10x | Yes | |||||||||||||
Oxford Apartments | $ | 4,650,000 | 90% | 1.10x | Yes | |||||||||||||
(1) | Acceptable to lender. |
(2) | One of the sponsors is permitted to pledge its indirect ownership interest in the borrower to an institutional lender as security for a corporate line of credit under which line the institutional lender has no right to foreclose. |
(3) | Certain equity owners are permitted to pledge their ownership interest in the borrower to institutional lenders in connection with corporate financings. |
(4) | In addition, the loan documents also permit sponsors to pledge their equity interest in the borrower to a Qualified Institution (as defined in the loan documents) to secure a loan in the ordinary course of business that is secured by all of the assets of such sponsor. |
(5) | Unless RAIT Partnership, L.P. is the mezzanine lender in which case the required debt service coverage ratio would be 1.07x. |
(6) | Permitted in connection with a sale of the Mortgaged Property. The loan documents also require that if the debt service coverage ratio for any month falls below 1.0x, the borrower will be required to deposit additional funds into a seasonality reserve. |
The specific rights of the related mezzanine lender with respect to any future mezzanine loan will be specified in the related intercreditor agreement and may include rights substantially similar to the cure and repurchase rights described above. Except as disclosed
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under this ‘‘—Other Financing’’ subsection, we are not aware of any other mezzanine debt affecting borrowers under the mortgage loans that we intend to include in the Trust Fund.
The Mortgage Loan Sellers have notified the Depositor that they are aware that with respect to the following mortgage loans, the borrower has transferred or is permitted to transfer a preferred equity interest to an unaffiliated third party investor, which third party investor may effect a change in control in the related borrower upon the failure of the borrower to satisfy certain obligations:
• | With respect to the mortgage loan identified as ‘‘Beyman Multifamily Portfolio’’ on Annex A-1 to this prospectus supplement, representing approximately 1.98% of the Initial Outstanding Pool Balance and 11.69% of Initial Loan Group 2B Balance, the borrower is permitted to add a preferred equity investor. |
Certain risks relating to additional debt are described in ‘‘Risk Factors—Risks Related to the Mortgage Loans—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, generally 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 (other than as permitted in the Mortgage Loan Documents) without the consent of the lender. The Pooling and Servicing Agreement requires the applicable Master Servicer or the Special Servicer (subject to the rights of the Directing Holder), 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 may be 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 or other transfers permitted under the Mortgage Loan Documents. See ‘‘—Other Financing,’’ in this prospectus supplement and ‘‘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.
Loans Subject to Government Assistance. 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.
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, with the three largest of these groups representing 4.22, 4.17%, and 2.46%, respectively, of the Initial Outstanding Pool Balance, the three largest of the related loan
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groups in Loan Group 1 representing approximately 5.78%, 3.47% and 2.47%, respectively, of the Initial Loan Group 1 Balance and the three largest of the related loan groups in Loan Group 2B representing approximately 14.51%, 11.69% and 9.66%, respectively, of the Initial Loan Group 2B Balance. See Annex A-1 for Mortgage Loans with related borrowers.
Single-Tenant Mortgage Loans. In the case of 33 Mortgaged Properties, representing 10.61% of the Initial Outstanding Pool Balance and 14.54% 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 in some cases has a primary lease term that expires on or after the scheduled maturity date of the related Mortgage Loan, but in other cases does not. See Annex A-1 for loan maturity dates and lease expiration dates for the three largest tenants. 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. However, certain Single Tenant Mortgage Loans have lease expiration dates (or tenant termination options) that are prior to the related Mortgage Loan Maturity Date.
Geographic Location. The Mortgaged Properties are located throughout 35 states, with the largest concentrations by Initial Outstanding Pool Balance located in California, Texas and Florida. See ‘‘Summary of the Prospectus Supplement—The Mortgage Pool-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. 4 groups of the Mortgage Loans, collectively representing approximately 4.55% of the Initial Outstanding Pool Balance, are cross-defaulted and cross-collateralized, although in each case, the borrowers are different entities. The following Mortgage Loans are cross-collateralized and cross-defaulted:
• | Empirian at Steele Park and Colonnade at Germantown, collectively representing 1.98% of the Initial Outstanding Pool Balance and 11.69% of the Initial Loan Group 2B Balance; |
• | Century Center Parkway Portfolio, collectively representing 1.01% of the Initial Outstanding Pool Balance and 1.39% of the Initial Loan Group 1 Balance; |
• | Top Food & Drug — Auburn, WA; Safeway — Vancouver, WA; Larry's Market — Tukwila, WA and Sherm's Thunderbird Market — Roseburg, OR, collectively representing 0.97% of the Initial Outstanding Pool Balance and 1.33% of the Initial Loan Group 1 Balance; and |
• | Magnolia Run; Breckenridge; Country Club and Willow Pointe, collectively representing 0.58% of the Initial Outstanding Pool Balance and 3.43% of the Initial Loan Group 2B Balance. |
There can be no assurance that the cross-collateralization and cross-default provisions in the related Mortgage Loan Documents will be enforceable. In addition, under certain circumstances, including upon the assumption or defeasance of the cross-collateralized and cross-defaulted Mortgage Loan(s), the related loan documents permit the Mortgage Loans to be uncrossed. See ‘‘—Property Releases’’ above.
Loan Purpose. 80 of the Mortgage Loans, representing 55.75% of the Initial Outstanding Pool Balance, 48.42% of the Initial Loan Group 1 Balance, 97.40% of the Initial Loan Group 2A Balance and 62.58% of the Initial Loan Group 2B Balance, were originated in connection with the borrower’s acquisition of the related Mortgaged Property. 117 of the Mortgage Loans, representing 44.25% of the Initial Outstanding Pool Balance, 51.58% of the Initial Loan Group 1 Balance, 2.60% of the Initial Loan Group 2A Balance and 37.42% of the Initial Loan Group 2B Balance, were originated in connection with the borrower’s refinancing of a previous mortgage loan.
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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 Trust Fund if the Depositor deems such removal necessary or appropriate or if it is prepaid. This may cause the range of Mortgage Rates and maturities as well as the other characteristics of the Mortgage Loans to vary from those described herein.
A Current Report on Form 8-K (the ‘‘Form 8-K’’) will be available to purchasers of the Offered Certificates and will be filed by the Depositor, together with the Pooling and Servicing Agreement, with the Securities and Exchange Commission within 15 days (except as described below) after the initial issuance of the Offered Certificates. In the event Mortgage Loans are removed from the Trust Fund as set forth in the preceding paragraph, such removal will be noted in the Form 8-K, and, if such removal or any other event results in any material pool characteristic of the actual Mortgage Pool differing by 5% or more (other than by reason of the mortgage loans converting into cash in accordance with their terms) from the description of the Mortgage Pool in the final prospectus supplement filed with the Securities and Exchange Commission, such Form 8-K will be filed no later than four business days after the initial issuance of the Offered Certificates. 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 32 classes (each, a ‘‘Class’’) to be designated as the Class X Certificates, Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates, Class A-AB Certificates, Class A-4 Certificates, Class A-1A Certificates, Class A-1B Certificates, Class A-M Certificates, Class A-J 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 VPM-1 Certificats, Class VPM-2 Certificates, Class VPM-3 Certificates, Class VPM-4 Certificates, , Class S Certificates, Class R Certificates and Class LR Certificates (collectively, the ‘‘Certificates’’). Only the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M, Class A-J, Class B, Class C, Class D and Class E Certificates (the ‘‘Offered Certificates’’) are offered hereby. The 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 VPM-1, Class VPM-2, Class VPM-3, Class VPM-4, Class S, 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 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-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P and Class Q 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%:
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Class | Initial
Aggregate Certificate Balance |
Approximate Percent
of Initial Outstanding Pool Balance |
Approximate Percent
of Credit Support |
|||||||||||
Offered Certificates | ||||||||||||||
A-1 | $ | 72,000,000 | 2.35% | 30.000 | %(1) | |||||||||
A-2 | $ | 239,000,000 | 7.81% | 30.000 | %(1) | |||||||||
A-3 | $ | 53,000,000 | 1.73% | 30.000 | %(1) | |||||||||
A-AB | $ | 111,000,000 | 3.63% | 30.000 | %(1) | |||||||||
A-4 | $ | 839,906,000 | 27.45% | 30.000 | %(1) | |||||||||
A-1A | $ | 308,000,000 | 10.07% | 30.000 | %(1) | |||||||||
A-1B | $ | 518,636,000 | 16.95% | 30.000 | %(1) | |||||||||
A-M | $ | 305,934,000 | 10.00% | 20.000 | % | |||||||||
A-J | $ | 217,979,000 | 7.13% | 12.875 | % | |||||||||
B | $ | 22,945,000 | 0.75% | 12.125 | % | |||||||||
C | $ | 34,417,000 | 1.12% | 11.000 | % | |||||||||
D | $ | 38,242,000 | 1.25% | 9.750 | % | |||||||||
E | $ | 49,714,000 | 1.62% | 8.125 | % | |||||||||
Private Certificates(2) | ||||||||||||||
F | $ | 42,066,000 | 1.37% | 6.750 | % | |||||||||
G | $ | 38,242,000 | 1.25% | 5.500 | % | |||||||||
H | $ | 34,418,000 | 1.13% | 4.375 | % | |||||||||
J | $ | 34,418,000 | 1.13% | 3.250 | % | |||||||||
K | $ | 15,296,000 | 0.50% | 2.750 | % | |||||||||
L | $ | 11,473,000 | 0.38% | 2.375 | % | |||||||||
M | $ | 11,472,000 | 0.37% | 2.000 | % | |||||||||
N | $ | 7,649,000 | 0.25% | 1.750 | % | |||||||||
O | $ | 7,648,000 | 0.25% | 1.500 | % | |||||||||
P | $ | 7,648,000 | 0.25% | 1.250 | % | |||||||||
Q | $ | 38,242,770 | 1.25% | 0.000 | % | |||||||||
(1) | Represents the approximate credit support for the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates in the aggregate. |
(2) | This table does not include the Class VPM Certificates, which have an aggregate certificate balance of $50,000,000. |
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 Notional Balance of the Class X Certificates will not include the certificate balance of the Class VPM Certificates.
Upon initial issuance, the aggregate initial Notional Balance of the Class X Certificates will be $3,059,345,770, subject to a permitted variance of plus or minus 5%. 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 S, Class R and Class LR Certificates will not have Certificate Balances or Notional Balances.
The Certificate Balance of any Principal Balance 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 (other than the Villas Parkmerced Non-Pooled Trust Component) and the other assets in the Trust (other than
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the Villas Parkmerced Non-Pooled Trust Component); provided, however, that in the event that Realized Losses previously allocated to a Class of Principal Balance 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 fourth business day following the related Determination Date, commencing in April, 2006 (each, a ‘‘Distribution Date’’). All distributions (other than the final distribution on any Certificate) will be made by the Trustee 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 Trustee 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 has been reduced to zero) of such Certificate at the location specified in the notice to the holder of that Certificate 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 that 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 (other than the Class VPM Certificates) on any Distribution Date will equal the Available Funds. The ‘‘Available Funds’’ for any Distribution Date will be the sum of the following amounts (not including any amount allocable to the Villas Parkmerced Non-Pooled Trust Component) (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 Liquidation Proceeds) received by or on behalf of the Master Servicers in the Collection Period relating to such Distribution Date, (ii) all P&I Advances made by the Master Servicers or the Trustee, as applicable, in respect of such Distribution Date, (iii) all other amounts received by the Master Servicers in such Collection Period and required to be deposited in the appropriate Collection Account by the Master Servicers 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 Master Servicer Remittance Date, (v) any amounts representing Prepayment Interest Shortfalls remitted by the Master Servicers to the appropriate 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:
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(a) all amounts permitted to be used to reimburse the Master Servicers, the Special Servicer or the Trustee, as applicable, for previously unreimbursed Advances and Workout-Delayed Reimbursement Amounts with 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 Master Servicers and the Trustee 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 Master Servicers and the Trustee, 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— Special Servicing Compensation’’), together with interest on Advances to the extent provided in the Pooling and Servicing Agreement, and reinvestment earnings on payments received with respect to the Mortgage Loans that the Master Servicers or Special Servicer are 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 as described in this prospectus supplement, to which the Master Servicers, the Special Servicer, any subservicer and the Trustee are entitled;
(e) all amounts representing certain fees and expenses, including indemnity amounts, reimbursable or payable to the Master Servicers, the Special Servicer or the Trustee and other amounts permitted to be retained by the Master Servicers or withdrawn pursuant to the Pooling and Servicing Agreement in respect of various items, including interest on Advances 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 or any interest on Permitted Investments in which such funds may be invested;
(h) all amounts received with respect to each Mortgage Loan previously replaced, 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 replaced, purchased or repurchased;
(i) the amount reasonably determined by the Trustee to be necessary to pay any applicable federal, state or local taxes imposed on the Upper-Tier REMIC, the Lower-Tier REMIC or the Villas Parkmerced 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
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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 Master Servicers (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.
If, in connection with any Distribution Date, the Trustee 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 Master Servicers or the Special Servicer, or 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 or the applicable Master Servicer revises its final report and as a result the Trustee revises its report to DTC after the DTC deadline, the Trustee 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 Master Servicers and the Special Servicer 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 Trustee 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 Trustee 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 11th day of each month or, if such 11th day is not a business day, the next succeeding business day, commencing in April, 2006.
‘‘Net Default Interest’’ with respect to any Mortgage Loan is any Default Interest accrued on such Mortgage Loan less amounts required to pay the applicable Master 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 additional trust fund expenses (but not including the Special Servicing Fee, Workout Fees or Liquidation Fees) .
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‘‘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 VPM, Class S, 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 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 rate applicable to the Class A-1 Certificates will, at all times, equal 5.302%. The pass-through rate applicable to the Class A-2 Certificates will, at all times, equal 5.408%. The pass-through rate applicable to the Class A-3, Class A-AB, Class A-4, Class A-1B, Class A-M and Class A-J Certificates will, at all times, equal the Weighted Average Net Mortgage Pass-Through Rate minus 0.0460%, 0.0790%, 0.1090%, 0.1080%, 0.0620% or 0.0230%, respectively.
The pass-through rate applicable to the Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J Certificates will, at all times, equal the Weighted Average Net Mortgage Pass-Through Rate.
The pass-through rates on the Class A-1A, Class K, Class L, Class M, Class N, Class O, Class P and Class Q Certificates will, at all times, equal to the lesser of (i) the Weighted Average Net Mortgage Pass-Through Rate, and (ii) the related fixed rate set forth on the table in the Executive Summary on page S-3 of this prospectus supplement.
The Pass-Through Rate applicable to the Class X Certificates for the initial Distribution Date is equal to approximately 0.130% 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).
Each of the Class S, Class R and Class LR Certificates will not have a Pass-Through Rate. The Class S 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 (other than the Villas Parkmerced Non-Pooled Trust Component)
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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 as of the immediately preceding Distribution Date, and the denominator of which is the sum of the Stated Principal Balances of all Mortgage Loans (other than the Villas Parkmerced Non-Pooled Trust Component) as of the immediately preceding Distribution Date.
The ‘‘Due Date’’ with respect to any Mortgage Loan and any month, is the first or eleventh day of such month in the related collection period as specified in the related Note for that 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 (in the case of the Villas Parkmerced Loan, the Villas Parkmerced Pooled Trust Component only) for the related Interest Accrual Period minus the Servicing Fee Rate. For purposes of calculating the Pass-Through Rates on the Certificates (other than the Class VPM, Class S, Class R and Class LR Certificates), the Net Mortgage Pass-Through Rate of each Mortgage Loan that 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 with respect to such Mortgage Loans, 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 (in the case of the Villas Parkmerced Loan, the Villas Parkmerced Pooled Trust Component only), Serviced Companion Loan and any Interest Accrual Period is the annual rate at which interest accrues on such Mortgage Loan or Serviced Companion Loan during such period (in the absence of a default and excluding any Excess Interest), 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 or Serviced Companion Loan will be determined without regard to any modification, waiver or amendment of the terms of that Mortgage Loan or Serviced Companion Loan, whether agreed to by the applicable Master Servicer or resulting from a bankruptcy, insolvency or similar proceeding involving the related borrower and without regard to any excess interest.
The ‘‘Principal Distribution Amount’’ for any Distribution Date will be equal to the sum of the following items without duplication (but excluding any amounts received or advanced with respect to the Villas Parkmerced Non-Pooled Trust Component):
(i) the principal component of all scheduled Monthly Payments (other than Balloon Payments) due on the Mortgage Loans on the related Due Date (if received during the related Collection Period or advanced);
(ii) the principal component of all Assumed Scheduled Payments due on the related Due Date (if received during the related Collection Period 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’’;
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(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 any Property Advances that are Nonrecoverable Advances, the Serviced Loan Combinations, 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 that are part of a Workout-Delayed Reimbursement Amount, the Serviced Loan Combinations, 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 (that are Nonrecoverable Advances or part of a Workout-Delayed Reimbursement Amount), the Serviced Loan Combinations, are subsequently recovered on the related Mortgage Loan or, with respect to Property Advances, the related Serviced Loan Combination, 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 2A Principal Distribution Amount’’ is the sum of clauses (i) through (vii) above allocable to Mortgage Loans in Loan Group 2A.
The ‘‘Group 2B Principal Distribution Amount’’ is the sum of clauses (i) through (vii) above allocable to Mortgage Loans in Loan Group 2B.
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 as to which the related Mortgaged Property has become an REO Property.
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Fees and Expenses.
The amounts available for distribution on the Certificates on any Distribution Date will generally be net of the following amounts:
Type/Recipient | Amount | Frequency | Source of Payment | |||||||||||
Fees | ||||||||||||||
Master Servicing Fee/ Master Servicers | The Stated Principal Balance of each Mortgage Loan multiplied by the Master Servicing Fee Rate calculated on the same basis as interest accrues on the mortgage loan. | monthly | Interest payment on the related mortgage loan | |||||||||||
Additional Master Servicing Compensation/Master Servicers | Prepayment interest excess. | time to time | Any actual prepayment interest excess | |||||||||||
Additional Master Servicing Compensation/Master Servicers | All late payment fees and net
default interest (other than that accrued on Specially Serviced
Mortgage Loans) to the extent collected by the Trust and not used to
pay interest on Advances and certain additional trust fund expenses
(other than Special Servicing Fees, Workout Fees and Liquidation
Fees). 50% of loan modification, extension and assumption fees (including any related application fees) on non-Specially Serviced Mortgage Loans. 100% of loan service transaction fees, beneficiary statement charges and or similar items (but excluding prepayment premiums and yield maintenance charges). |
time to time | The related fees | |||||||||||
Additional Master Servicing Compensation/Master Servicers | All investment income earned on amounts on deposit in the Collection Account and certain Reserve Accounts. | monthly | The investment income | |||||||||||
Special Servicing Fee/ Special Servicer | The Stated Principal Balance of each Specially Serviced Mortgage Loan and REO Loan multiplied by the Special Servicing Fee Rate calculated on the same basis as interest accrues on the mortgage loan subject to a minimum monthly amount equal to $4,000 with respect to each such specially serviced loan and REO Loan, and will be payable monthly. | monthly | First out of collections on the related Mortgage Loan and then from general collections in the collection account | |||||||||||
Workout Fee/Special Servicer | 1.00% of each collection of principal and interest on each Corrected Mortgage Loan. | monthly | The related collection of principal or interest | |||||||||||
Liquidation Fee/ Special Servicer | 1.00% of each recovery of Liquidation Proceeds, except as specified under ‘‘The Pooling and Servicing Agreement —Special Servicing—Special Servicing Compensation.’’ | upon receipt of Liquidation Proceeds | The related Liquidation Proceeds | |||||||||||
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Type/Recipient | Amount | Frequency | Source of Payment | |||||||||||
Fees | ||||||||||||||
Additional Special Servicing Compensation/Special Servicer | All late payment fees and net
default interest (accrued on Specially Serviced Mortgage Loans) to the
extent collected by the Trust and not used to pay interest on Advances
and certain Trust expenses. 50% of loan modification, extension and assumption fees (including any related application fees) on non-Specially Serviced Mortgage Loans and 100% of such fees on Specially Serviced Mortgage Loans. |
from time to time | The related fees | |||||||||||
All investment income received on funds in any REO Account. | Monthly | The investment income | ||||||||||||
Trustee Fee/Trustee | The Trustee Fee Rate multiplied by the Stated Principal Balance of the Mortgage Loans calculated on the same basis as interest accrues on the mortgage loan. | Monthly | Payment of interest on the related Mortgage Loan | |||||||||||
Expenses | ||||||||||||||
Reimbursement of Property Advances/ Master Servicers and Special Servicer/ Trustee | To the extent of funds available, the amount of any Property Advances. | time to time | Recoveries on the related Mortgage Loan, or to the extent that the party making the advance determines it is nonrecoverable, from general collections in the Collection Account. | |||||||||||
Interest on Property Advances/Master Servicers and Special Servicer/ Trustee | At Prime Rate. | when Advance is reimbursed | First from late payment charges and default interest on the related Mortgage Loan in excess of the regular interest rate, and then from general collections in the Collection Account | |||||||||||
Reimbursement of P&I Advances/Master Servicers/Trustee | To the extent of funds available, the amount of any P&I Advances. | time to time | Recoveries on the related Mortgage Loan, or to the extent that the party making the advance determines it is nonrecoverable, from general collections in the Collection Account. | |||||||||||
Interest on P&I Advances/Master Servicers/Trustee | At Prime Rate. | when Advance is reimbursed | First from late payment charges and default interest on the related Mortgage Loan in excess of the regular interest rate, and then from all collections in the Collection Account. | |||||||||||
Indemnification Expenses/Trustee, Master Servicers and Special Servicer | Amounts for which the Trustee, the Master Servicers and the Special Servicer are entitled to indemnification. | per occurrence or time of claim | All collections in the Collection Account | |||||||||||
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Type/Recipient | Amount | Frequency | Source of Payment | |||||||||||
Fees | ||||||||||||||
Trust Fund Expenses not Advanced (may include environmental remediation, appraisals, expenses of operating REO Property and any independent contractor hired to operate REO Property) | Based on third party charges. | from time to time | First from income on the related REO Property, if applicable, and then from all collections in the Collection Account | |||||||||||
Pursuant to the Pooling and Servicing Agreement, any successor Master Servicer or Special Servicer assuming the obligations of either Master Servicer or the Special Servicer under the Pooling and Servicing Agreement generally will be entitled to the compensation to which the applicable Master Servicer or the Special Servicer would have been entitled. If no successor Master Servicer or Special Servicer can be obtained to perform such obligations for such compensation, additional amounts payable to such successor Master Servicer or Special Servicer will be treated as Realized Losses. The Pooling and Servicing Agreement does not provide for any successor Trustee to receive compensation in excess of that paid to its predecessor Trustee.
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:
First, to pay interest, pro rata,
• | on the Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 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, |
• | on the Class A-1A Certificates from the portion of the Available Funds for such Distribution Date attributable to Mortgage Loans in Loan Group 2A up to an amount equal to the Interest Accrual Amount for such Class, |
• | on the Class A-1B Certificates from the portion of the Available Funds for such Distribution Date attributable to Mortgage Loans in Loan Group 2B up to an amount equal to the Interest Accrual Amount for such Class, and |
• | on the Class X Certificates from the Available Funds for such Distribution Date up to an amount equal to the Interest Accrual Amount for each such Class; |
provided, however, if on any Distribution Date, the Available 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;
Second, pro rata, to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B and Class X Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Classes;
Third, in reduction of the Certificate Balances thereof concurrently,
(A) to the Class A-1, Class A-2, Class A-3, Class A-AB, and Class A-4 Certificates:
(i) first, to the Class A-AB Certificates, in an amount up to the Group 1 Principal Distribution Amount for such Distribution Date and, after the Class A-1A and Class
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A-1B Certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount and Loan Group 2B Principal Distribution Amount remaining after payments to the Class A-1A and Class A-1B Certificates have been made on such Distribution Date, until the Certificate Balance of the Class A-AB Certificates has been reduced to the Planned Principal Balance as set forth on Annex A-3 for such Distribution Date,
(ii) then, to the Class A-1 Certificates, in an amount equal to the Group 1 Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-AB Certificates pursuant to clause (i) above) for such Distribution Date and, after the Class A-1A and Class A-1B Certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount and Loan Group 2B Principal Distribution Amount remaining after payments to the Class A-1A and Class A-1B Certificates, and payments to the Class A-AB Certificates pursuant to clause (i) above have been made on such Distribution Date, until the Class A-1 Certificates have been reduced to zero,
(iii) then, to the Class A-2 Certificates, in an amount equal to the Group 1 Principal Distribution Amount (or the portion thereof remaining after distributions on the Class A-1 Certificates and distributions on the Class A-AB Certificates pursuant to clause (i) above) for such Distribution Date and, after the Class A-1A and Class A-1B Certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount and Loan Group 2B Principal Distribution Amount remaining after payments to the Class A-1A, Class A-1B, and Class A-1 Certificates and payments to the Class A-AB Certificates pursuant to clause (i) above have been made on such Distribution Date, until the Class A-2 Certificates have been reduced to zero,
(iv) then, to the Class A-3 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 and Class A-2 Certificates and distributions on the Class A-AB Certificates pursuant to clause (i) above) for such Distribution Date and, after the Class A-1A and Class A-1B Certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount and Loan Group 2B Principal Distribution Amount remaining after payments to the Class A-1A, Class A-1B, Class A-1 and Class A-2 Certificates and payments to the Class A-AB Certificates pursuant to clause (i) above have been made on such Distribution Date, until the Class A-3 Certificates have been reduced to zero,
(v) then, to the Class A-AB 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, Class A-2 and Class A-3 Certificates and distributions on the Class A-AB Certificates pursuant to clause (i) above) for such Distribution Date and, after the Class A-1A and Class A-1B Certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount and Loan Group 2B Principal Distribution Amount remaining after payments to the Class A-1A, Class A-1B, Class A-1, Class A-2 and Class A-3 Certificates and payments to the Class A-AB Certificates pursuant to clause (i) above have been made on such Distribution Date, until the Class A-AB Certificates have been reduced to zero,
(vi) then, to the Class A-4 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, Class A-2, Class A-3 and Class A-AB Certificates) for such Distribution Date and, after the Class A-1A and Class A-1B Certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount and Loan Group 2B Principal Distribution Amount remaining after payments to the Class A-1A, Class A-1B, Class A-1, Class A-2, Class A-3 and Class A-AB Certificates have been made on such Distribution Date, until the Class A-4 Certificates have been reduced to zero,
(B) to the Class A-1A Certificates, in an amount equal to the Loan Group 2A Principal Distribution Amount for such Distribution Date and after the Class A-1B Certificates have
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been reduced to zero, the Loan Group 2B Principal Distribution Amount remaining after payments to the class A-1B Certificates have been made on such Distribution Date; and after the class Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 Certificates have been reduced to zero, the Loan Group 1 Principal Distribution Amount remaining after payments to the Class A-1, Class A-2, Class A-3, Class A-AB and Class A-4 Certificates have been made on such Distribution Date, until the Class A-1A Certificates have been reduced to zero;
(C) to the Class A-1B Certificates, in an amount equal to the Loan Group 2B Principal Distribution Amount for such Distribution Date and after the Class A-1A certificates have been reduced to zero, the Loan Group 2A Principal Distribution Amount remaining after payments to the class A-1A Certificates have been made on such Distribution Date; and after the class Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4 and A-1A Certificates have been reduced to zero, the Loan Group 1 Principal Distribution Amount remaining after payments to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4 and A-1A Certificates have been made on such Distribution Date, until the Class A-1B Certificates have been reduced to zero;
Fourth, to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B 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;
Fifth, to the Class A-M Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Sixth, to the Class A-M Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Seventh, to the Class A-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;
Eighth, to the Class A-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;
Ninth, to the Class A-J Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Tenth, to the Class A-J Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Eleventh, to the Class A-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;
Twelfth, to the Class A-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;
Thirteenth, to the Class B Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Fourteenth, 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;
Fifteenth, 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;
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Sixteenth, 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;
Seventeenth, to the Class C Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Eighteenth, 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;
Nineteenth, 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;
Twentieth, 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;
Twenty-first, to the Class D Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Twenty-second, 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;
Twenty-third, 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;
Twenty-fourth, 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;
Twenty-fifth, to the Class E Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Twenty-sixth, 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;
Twenty-seventh, 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;
Twenty-eighth, 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;
Twenty-ninth, to the Class F Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Thirtieth, 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;
Thirty-first, 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;
Thirty-second, 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;
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Thirty-third, to the Class G Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Thirty-fourth, 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;
Thirty-fifth, 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;
Thirty-sixth, 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;
Thirty-seventh, to the Class H Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Thirty-eighth, 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;
Thirty-ninth, 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;
Fortieth, 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;
Forty-first, to the Class J Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Forty-second, 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;
Forty-third, 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;
Forty-fourth, 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;
Forty-fifth, to the Class K Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Forty-sixth, 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;
Forty-seventh, 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;
Forty-eighth, 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;
Forty-ninth, to the Class L Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Fiftieth, 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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Fifty-first, 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;
Fifty-second, 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;
Fifty-third, to the Class M Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Fifty-fourth, 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;
Fifty-fifth, 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;
Fifty-sixth, 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;
Fifty-seventh, to the Class N Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Fifty-eighth, 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;
Fifty-ninth, 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;
Sixtieth, 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;
Sixty-first, to the Class O Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Sixty-second, 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;
Sixty-third, 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;
Sixty-fourth, 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;
Sixty-fifth, to the Class P Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Sixty-sixth, 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;
Sixty-seventh, 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;
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Sixty-eighth, 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
Sixty-ninth, to the Class Q Certificates, in respect of interest, up to an amount equal to the Interest Accrual Amount of such Class;
Seventieth, to the Class Q Certificates, in respect of interest, up to an amount equal to the aggregate unpaid Interest Shortfalls previously allocated to such Class;
Seventy-first, to the Class Q 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;
Seventy-second, to the Class Q 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
Seventy-third, 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, Class A-3, Class A-AB, Class A-4, and Class A-1A and Class A-1B 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. 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, Class A-3, Class A-AB, Class A-4, and Class A-1A and Class A-1B Certificates, have been reduced to zero. The Class X Certificates will not be entitled to any distribution of principal.
Class A-AB Planned Principal Balance
On each Distribution Date, the Class A-AB Certificates have priority with respect to receiving distributions of principal to reduce the Class A-AB Certificate Balance to the Planned Principal Balance for such Distribution Date as described in ‘‘—Distributions—Distributions of Available Funds’’ above. The ‘‘Planned Principal Balance’’ for any Distribution Date is the balance shown for such Distribution Date in the table set forth in Annex A-3 to the prospectus supplement. These balances were calculated using, among other things, the Modeling Assumptions. Based on the Modeling Assumptions, the Certificate Balance of the Class A-AB Certificates on each Distribution Date would be reduced to the balance indicated for the related Distribution Date on Annex A-3. We cannot assure you, however, that the Mortgage Loans will perform in conformity with the Modeling Assumptions or that the Certificate Balance of the Class A-AB Certificates on any Distribution Date will equal the balance that is specified for that Distribution Date on Annex A-3. In general, once the Certificate Balances of the Class A-1, Class A-2 and Class A-3 Certificates have been reduced to zero, any remaining portion on any Distribution Date of the Group 1 Principal Distribution Amount will be distributed to the Class A-AB Certificates until the Certificate Balance of the Class A-AB Certificates is reduced to zero.
The Villas Parkmerced Non-Pooled Trust Component will not be included in either Loan Group 1, Loan Group 2A or Loan Group 2B.
Prepayment Premiums and Yield Maintenance Charges
On any Distribution Date, Prepayment Premiums and Yield Maintenance Charges collected in respect of Mortgage Loans included in Loan Group 1 during the related Collection Period
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will be required to be distributed by the Trustee to the holders of the Class A-1 through Class J Certificates (other than the Class A-1A and Class A-1B Certificates in the following manner: Such holders 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 to the holders of the Class A-1 through Class J Certificates (other than the Class A-1A and Class A-1B Certificates), (b) the Base Interest Fraction for the related principal prepayment and such Class of Certificates and (c) Prepayment Premiums or the Yield Maintenance Charges, as applicable, collected on such principal prepayment during the related Collection Period.
Any Yield Maintenance Charges or Prepayment Premiums collected during the related Collection Period remaining after such distributions will be distributed to the holders of the Class X Certificates. No Yield Maintenance Charges or Prepayment Premiums in respect of the Mortgage Loans included in Loan Group 1 will be distributed to holders of any other Class of Certificates.
On any Distribution Date, Prepayment Premiums and Yield Maintenance Charges collected in respect of Mortgage Loans included in Loan Group 2A 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 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 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 Prepayment Premiums or Yield Maintenance Changes, as applicable, collected on such principal prepayment during the related Collection Period.
Any Yield Maintenance Charges or Prepayment Premiums collected during the related Collection Period remaining after such distributions will be distributed to the holders of the Class X Certificates. No Yield Maintenance Charges or Prepayment Premiums in respect of the Mortgage Loans included in Loan Group 2A will be distributed to holders of any other Class of Certificates.
On any Distribution Date, Prepayment Premiums and Yield Maintenance Charges collected in respect of Mortgage Loans included in Loan Group 2B during the related Collection Period will be required to be distributed by the Trustee to the holders of the Class A-1B Certificates in the following manner: the holders of the Class A-1B 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 to the Class A-1B Certificates on such Distribution Date, (b) the Base Interest Fraction for the related principal prepayment and such Class of Certificates and (c) the Prepayment Premiums or Yield Maintenance Changes, as applicable, collected on such principal prepayment during the related Collection Period.
Any Yield Maintenance Charges or Prepayment Premiums collected during the related Collection Period remaining after such distributions will be distributed to the holders of the Class X Certificates. No Yield Maintenance Charges or Prepayment Premiums in respect of the Mortgage Loans included in Loan Group 2B 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 J Certificates, will be a fraction (not greater than one) (a) 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 applicable Master Servicer) used in calculating the Prepayment Premium or Yield Maintenance Charge, as applicable, 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 applicable Master Servicer) used in calculating the Prepayment
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Premium or Yield Maintenance Charge, as applicable, 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 Loan Combinations (other than with respect to the Arrowhead Shopping Center Loan Combination as described under ‘‘Description of the Mortgage Pool—Split Loan Structures— The Arrowhead Shopping Center Loan Combination—Distributions’’ in this prospectus supplement), Prepayment Premiums or Yield Maintenance Charges actually collected in respect of such Loan Combination will be allocated ratably in proportion based on the amount prepaid to the Mortgage Loan and the related Companion Loans (and in the case of the Villas Parkmerced Loan Combination, the Villas Parkmerced Non-Pooled Trust Component).
Assumed Final Distribution Date; Rated Final Distribution Date
The ‘‘Assumed Final Distribution Date’’ with respect to any class of Offered Certificates is the Distribution Date on which the aggregate Certificate Balance or Notional Amount, as the case may be, of that class of Certificates would be reduced to zero based on the assumptions set forth below. The Assumed Final Distribution Date will in each case be as follows:
Class Designation | Assumed Final Distribution Date | |||||
Class A-1 | December 15, 2010 | |||||
Class A-2 | March 15, 2011 | |||||
Class A-3 | January 15, 2013 | |||||
Class A-AB | May 15, 2015 | |||||
Class A-4 | December 15, 2015 | |||||
Class A-1A | January 15, 2011 | |||||
Class A-1B | January 15, 2016 | |||||
Class A-M | January 15, 2016 | |||||
Class A-J | February 15, 2016 | |||||
Class B | February 15, 2016 | |||||
Class C | February 15, 2016 | |||||
Class D | February 15, 2016 | |||||
Class E | February 15, 2016 | |||||
The Assumed Final Distribution Dates set forth above were calculated without regard to any delays in the collection of Balloon Payments and without regard to a reasonable liquidation time with respect to any Mortgage Loans that may become delinquent. Accordingly, in the event of defaults on the Mortgage Loans, the actual final Distribution Date for one or more classes of the Offered Certificates may be later, and could be substantially later, than the related Assumed Final Distribution Date(s).
In addition, the Assumed Final Distribution Dates set forth above were calculated on the basis of a 0% CPR and based on the Modeling Assumptions (as defined herein under ‘‘Yield and Maturity Considerations —Weighted Average Life’’). Since the rate of payment (including prepayments) of the Mortgage Loans may exceed the scheduled rate of payments, and could exceed that scheduled rate by a substantial amount, the actual final Distribution Date for one or more classes of the Offered Certificates may be earlier, and could be substantially earlier, than the related Assumed Final Distribution Date(s). The rate of payments (including prepayments) on the Mortgage Loans will depend on the characteristics of the Mortgage Loans, as well as on the prevailing level of interest rates and other economic factors, and we cannot assure you as to actual payment experience. Finally, the Assumed Distribution Dates were calculated assuming that there would not be an early termination of the Trust Fund.
The ‘‘Rated Final Distribution Date’’ of the Offered Certificates will be January 2046, the first Distribution Date after the 36th month following the end of the amortization term for the Mortgage Loan that, as of the Cut-off Date, will have the longest remaining amortization term.
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Realized Losses
The Certificate Balance of the Certificates (other than the Class VPM 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, ‘‘Realized Loss’’ with respect to any Distribution Date means the amount, if any, by which the aggregate Certificate Balance of the Regular Certificates (other than the Class X and Class VPM Certificates) after giving effect to distributions made on such Distribution Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans (other than the Villas Parkmerced Non-Pooled Trust Component) (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 each 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 Q Certificates, second, to the Class P Certificates, third, to the Class O Certificates, fourth, to the Class N Certificates, fifth, to the Class M Certificates, sixth, to the Class L Certificates, seventh, to the Class K Certificates, eighth, to the Class J Certificates, ninth, to the Class H Certificates, tenth, to the Class G Certificates, eleventh, to the Class F Certificates, twelfth, to the Class E Certificates, thirteenth, to the Class D Certificates, fourteenth, to the Class C Certificates, fifteenth, to the Class B Certificates, sixteenth, to the Class A-J Certificates, seventeenth, to the Class A-M Certificates and finally, pro rata, to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B 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:
• | interest on Advances (to the extent not covered by Default Interest and late payment fees); |
• | additional servicing compensation (including the special servicing fee); |
• | extraordinary expenses of the Trust and other additional expenses of the Trust; |
• | 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; or |
• | 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. |
Losses with respect to the Villas Parkmerced Loan will first be allocated to the Villas Parkmerced Non-Pooled Trust Component, up to its Stated Principal Balance, and then to the Villas Parkmerced Pooled Trust Component.
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 (other than the Class VPM Certificates), pro rata, based upon amounts distributable in respect of interest to each such 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
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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 P&I 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.
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 and each Servicer. In such case, the Prepayment Interest Shortfall will generally equal the excess of (a) the aggregate amount of interest (excluding the Excess 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 (excluding the Excess 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, a ‘‘Prepayment Interest Excess’’ will arise since the amount of interest (excluding the Excess 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 (other than the Class S Certificates) and fees payable to the Trustee and the Master Servicers.
With respect to any Mortgage Loan (other than a Specially Serviced Mortgage Loan or a previously Specially Serviced Mortgage Loan with respect to which the Special Servicer has waived or amended the prepayment restrictions) that has been subject to a Principal Prepayment and a Prepayment Interest Shortfall (other than at the request of or with the consent of the Directing Holder), the applicable Master Servicer of such Mortgage Loan will be required to deliver to the Trustee for deposit in the Distribution Account, without any right of reimbursement therefor, a cash payment (the ‘‘Master 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 serviced by it (other than a Specially Serviced Mortgage Loan) during the related Collection Period, and (y) the aggregate of (A) the portion of its Master Servicing Fee that is being paid in such Collection Period with respect to the Mortgage Loans serviced by it (other than a Specially Serviced Mortgage Loan) and (B) all Prepayment Interest Excess received during the related Collection Period on the Mortgage Loans (other than a Specially Serviced Mortgage Loan) serviced by the applicable Master Servicer; provided, however, that
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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) 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 applicable Master 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 Master Servicing Fee described in clause (A) of the preceding sentence shall be limited to that portion of its Master Servicing Fee computed at a rate of 0.02% per annum and paid in such Collection Period with respect to the Mortgage Loans serviced by it (other than Specially Serviced Mortgage Loans).
‘‘Net Prepayment Interest Shortfall’’ means with respect to the Mortgage Loans serviced by the applicable Master Servicer, the aggregate Prepayment Interest Shortfalls in excess of the Master Servicer Prepayment Interest Shortfall. The Net Prepayment Interest Shortfall will generally be allocated to each Class of Certificates (other than the Class VPM Certificates), pro rata, based on interest amounts distributable (without giving effect to any such allocation of Net Prepayment Interest Shortfall) to each such Class. Notwithstanding the foregoing, with respect to the Villas Parkmerced Loan, the excess of any Prepayment Interest Shortfall over the portion of the Servicing Fee for such Mortgage Loan being paid in the applicable period (subject to the 0.02% per annum limitation described above, to the extent applicable to the related prepayment) will be allocated first to the Villas Parkmerced Non-Pooled Trust Component up to its Stated Principal Balance and then to the Villas Parkmerced Pooled Trust Component; the portion of such excess allocated to the Villas Parkmerced Pooled Trust Component shall be included in the Net Prepayment Interest Shortfall allocated to the Certificates (other than the Class VPM Certificates) and the portion of such excess allocated to the Villas Parkmerced Non-Pooled Trust Component shall be allocated to the Class VPM Certificates.
To the extent that the Prepayment Interest Excess for all Mortgage Loans serviced by the applicable Master Servicer exceeds the Master Servicer Prepayment Interest Shortfalls for all Mortgage Loans serviced by the applicable Master Servicer as of any Distribution Date, such excess amount (the ‘‘Net Prepayment Interest Excess’’) will be payable to such Master 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-3, Class A-AB, Class A-4, Class A-1A, Class A-1B 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 A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P and Class Q 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-3, Class A-AB, Class A-4, Class A-1A, Class A-1B and Class X Certificates The Class A-M Certificates will be likewise protected by the subordination of the Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P and Class Q Certificates. The Class A-J Certificates will be likewise protected by the subordination 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, Class P and Class Q 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, Class P and Class Q 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, Class P and Class Q Certificates. The Class D Certificates will be likewise protected by the subordination of the
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Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P and Class Q 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, Class P and Class Q 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 Date in respect of any Classes of Regular Certificates subordinate thereto, and (ii) by the allocation of Realized Losses, first, to the Class Q Certificates, second, to the Class P Certificates, third, to the Class O Certificates, fourth, to the Class N Certificates, fifth, to the Class M Certificates, sixth, to the Class L Certificates, seventh, to the Class K Certificates, eighth, to the Class J Certificates, ninth, to the Class H Certificates, tenth, to the Class G Certificates, eleventh, to the Class F Certificates, twelfth, to the Class E Certificates, thirteenth, to the Class D Certificates, fourteenth, to the Class C Certificates, fifteenth, to the Class B Certificates, sixteenth, to the Class A-J Certificates, seventeenth, to the Class A-M Certificates and finally, pro rata, to the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4 and Class A-1A and Class A-1B 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, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B 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 or Serviced Loan Combination, on the first Distribution Date following the earliest of (i) the date on which such Mortgage Loan or Serviced Loan Combination 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 Loan Combination, (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 Loan Combination, (iv) the date on which the Mortgaged Property securing such Mortgage Loan or Serviced Loan Combination becomes an REO Property, (v) the 60th day after the third anniversary of any extension of a Mortgage Loan or Serviced Loan Combination 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 applicable Master Servicer, who shall promptly deliver a copy to the Special Servicer and the Controlling Class Representative, 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 Loan Combination and (D) the Controlling Class Representative 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 applicable Master Servicer, who shall have promptly delivered a copy to the Special Servicer and the Controlling Class Representative, on or before the 60th day after the related maturity date, a refinancing commitment reasonably acceptable to the Special Servicer and the Controlling Class
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Representative, and the borrower continues to make its Assumed Scheduled Payments (and no other Servicing Transfer Event has occurred with respect to that Mortgage Loan), 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 or the Serviced Loan Combination as to which any Appraisal Reduction Event has occurred will be calculated by the Special Servicer and 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 Loan Combination 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 taxes and insurance)) of the related Mortgaged Properties securing such Mortgage Loan or the applicable Serviced Loan Combination as determined by Updated Appraisals obtained by the Special Servicer (the costs of which shall be paid by the applicable Master Servicer as a Property Advance) minus any downward adjustments the Special Servicer deems appropriate in accordance with the Servicing Standard (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 Loan Combinations 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 applicable Master Servicer or the Trustee, all unpaid interest on such Mortgage Loan or the applicable Serviced Loan Combination at a per annum rate equal to the Mortgage Rate (or with respect to the applicable Serviced Loan Combination, 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 Loan Combination, (C) any other unpaid additional Trust expenses in respect of such Mortgage Loan or the applicable Serviced Loan Combination 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 Loan Combination (which taxes, premiums (net of any escrows or reserves therefor) and other amounts have not been the subject of an Advance by the applicable Master 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 Loan Combination 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 Loan Combination 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 Loan Combination 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 Loan Combination, or (B) to obtain, with the consent of the Controlling Class Representative, an Updated Appraisal. On the first Distribution Date occurring on or after the delivery of such an Updated Appraisal or completion of such Small Loan Appraisal Estimate, as applicable, 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
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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, the Controlling Class Representative may, at its own expense, obtain and deliver to the applicable Master Servicer, the Special Servicer and the Trustee an appraisal satisfactory to the Special Servicer that satisfies the requirements of an Updated Appraisal (as defined below), and upon the written request of the Controlling Class Representative, the Special Servicer must recalculate the Appraisal Reduction Amount in respect of such Mortgage Loan or the applicable Serviced Loan Combination based on such appraisal (but subject to any downward adjustments by the Special Servicer as provided in the preceding paragraph) and will be required to notify the Trustee, the applicable Master Servicer and the Controlling Class Representative 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 Loan Combination, any extension of the maturity date of a Mortgage Loan or Serviced Loan Combination 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 Loan Combination, (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 Appraisal 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 Loan Combination remains specially serviced.
Each Serviced Loan Combination 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 Loan Combination. Any Appraisal Reduction on a Serviced Loan Combination will generally be allocated or deemed allocated, first, to the holder of the related B Loan (up to the full principal balance thereof) if any, and, then, to the holders of the related Mortgage Loan. Any Appraisal Reduction Amount allocable for the Villas Parkmerced Loan will be allocated first to the Villas Parkmerced Non-Pooled Trust Component (up to the full principal balance thereof) and then to the Villas Parkmerced Pooled Trust Component.
In the event that an Appraisal Reduction Event occurs with respect to a Mortgage Loan, the amount advanced by the applicable Master 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.
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 Loan Combination or reduces the likelihood of timely payment of amounts due thereon.
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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, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M and Class A-J 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 Luxembourg, a division of Clearstream International, société 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 Trustee 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 Master Servicers, the Special Servicer, the Trustee (in its individual capacity), a manager of a Mortgaged Property, a borrower or any person affiliated with the Depositor, the Master Servicers, the Special Servicer, the Trustee, 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 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 Master Servicers or Special Servicer or an affiliate will be deemed to be outstanding, provided that such amendment does not relate to compensation of the Master Servicers or Special Servicer or otherwise benefit the Master Servicers 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
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Certificateholder will include any beneficial owner (or, subject to a confidentiality agreement (in the form attached to the Pooling and Servicing Agreement), a 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.
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
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of Offered Certificates will receive all distributions of principal and interest from the Trustee through the Participants who in turn will receive them from DTC. Under a book-entry format, holders of Offered Certificates may experience some delay in their receipt of payments, reports and notices, since such payments, reports and notices will be forwarded by the Trustee to Cede & Co., as nominee for DTC. DTC will forward such payments, reports and notices to its Participants, which thereafter will forward them to Indirect Participants, Clearstream, 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 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 Master Servicers, 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.
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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 Trustee 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 Trustee 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 Certificate Registrar and the Master Servicers 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 Trustee 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 Trustee 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 that Certificate; (ii) the price paid for that Certificate and the rate and timing of payments of principal on that Certificate; and (iii) the aggregate amount of distributions on that Certificate.
Pass-Through Rate. The Pass-Through Rate applicable to each class of Offered Certificates for any Distribution Date will be the rate specified in the definition of the ‘‘Pass-Through Rate’’ in the ‘‘Description of the Offered Certificates—Distributions’’ in this prospectus supplement. 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 applicable to a particular Class of Offered Certificates is not a fixed rate, reducing the Pass-Through Rate on such Class 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 or the dates on which Balloon Payments and the rate and timing of Principal Prepayments (including payments on the Anticipated Repayment Date for ARD Loans) 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 workouts 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. See ‘‘Risk Factors—Risks Related to the Mortgage Loans—Borrower May Be Unable to Repay the Remaining Principal Balance on the Maturity Date or Anticipated Repayment Date’’ in this prospectus supplement.
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 Repayment Dates. The failure of a borrower to prepay an ARD Loan on its Anticipated
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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 Master Servicers 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 applicable Master 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−Risks Related to the Mortgage Loan−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 the 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, 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 or Yield Maintenance Charge, if any, in respect of such Mortgage Loan may not be sufficient economic disincentive to prevent the related borrower
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from voluntarily prepaying 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.
The yield on any class of Certificates whose Pass-Through Rate is affected by the Weighted Average Net Mortgage Pass-Through Rate could also be adversely affected if Mortgage Loans with higher interest rates pay faster than the Mortgage Loans with lower interest rates, since those classes bear interest at a rate limited by the weighted average of the net mortgage interest rates on the Mortgage Loans. The Pass-Through Rates on such Certificates may be limited by the weighted average of the net mortgage interest rates on the Mortgage Loans even if principal prepayments do not occur.
Delay in Payment of Distributions. Because monthly distributions will not be made to Certificateholders until a date that is scheduled to be at least 4 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, Defeasance Period or Yield Maintenance Period, in each case 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
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Period, Defeasance 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, Defeasance 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 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 or eleventh day of each month commencing in April 2006;
(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. See ‘‘Description of the Mortgage Pool—Certain Terms and Conditions of the Mortgage Loans’’ in this prospectus supplement;
(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 or a document defect in the mortgage file and no purchase option holder (permitted to buy out a Mortgage Loan under the related Mortgage Loan Documents, any intercreditor agreement or the Pooling and Servicing Agreement) will exercise its option to purchase such Mortgage Loan; 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; and the holder of the Villas Parkmerced Non-Pooled Trust Component, the Villas Parkmerced B Loan and the Arrowhead Shopping Center B Loan will not exercise its option to purchase the related Mortgage Loan;
(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 fourth business day following the Determination Date occurring in each month, commencing in April 2006;
(xii) no prepayments are received as to any Mortgage Loan during such Mortgage Loan’s Lock-Out Period, if any, Defeasance Period, if any, or Yield Maintenance Period, if any;
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(xiii) the Closing Date is March 14, 2006;
(xiv) each ARD Loan in the Trust is paid in full on its Anticipated Repayment Date;
(xv) with respect to each Mortgage Loan, the primary servicing fee, the Master Servicing Fee and the Trustee Fee accrue on the same basis as interest accrues on such Mortgage Loan; and
(xvi) the Villas Parkmerced Loan was modeled based on the principal balance of the related Loan Combination but only the portions of such cash flow due with respect to the Cut-off Date Balance of the related Villas Parkmerced Pooled Trust Component (and not the Villas Parkmerced Non-Pooled Trust Component or Villas Parkmerced Subordinate Companion Loans) 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 A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M, Class A-J, 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 A-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M, Class A-J, 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.
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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 | |||||||||||||||||
March 2007 | 88 | 88 | 88 | 88 | 88 | |||||||||||||||||
March 2008 | 74 | 74 | 74 | 74 | 74 | |||||||||||||||||
March 2009 | 54 | 54 | 54 | 54 | 54 | |||||||||||||||||
March 2010 | 28 | 28 | 28 | 28 | 28 | |||||||||||||||||
March
2011 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
3.0 | 3.0 | 3.0 | 3.0 | 3.0 | |||||||||||||||||
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2011 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
4.8 | 4.8 | 4.8 | 4.8 | 4.5 | |||||||||||||||||
Percentages
of the Initial Certificate Balance
of the Class A-3
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2013 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
6.8 | 6.8 | 6.7 | 6.7 | 6.6 | |||||||||||||||||
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Percentages of the Initial Certificate
Balance
of the Class A-AB 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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 77 | 77 | 77 | 77 | 77 | |||||||||||||||||
March 2013 | 57 | 57 | 57 | 57 | 57 | |||||||||||||||||
March 2014 | 31 | 31 | 30 | 29 | 25 | |||||||||||||||||
March 2015 | 4 | 0 | 0 | 0 | 0 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
7.2 | 7.2 | 7.2 | 7.2 | 7.1 | |||||||||||||||||
Percentages
of the Initial Certificate Balance
of the Class A-4
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 99 | 98 | 92 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.6 | 9.6 | 9.6 | 9.5 | 9.4 | |||||||||||||||||
Percentages
of the Initial Certificate Balance
of the Class A-1A
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2011 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
4.6 | 4.6 | 4.6 | 4.5 | 4.3 | |||||||||||||||||
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Percentages of the Initial Certificate
Balance
of the Class A-1B 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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 99 | 99 | 99 | 99 | 99 | |||||||||||||||||
March 2010 | 99 | 99 | 99 | 99 | 99 | |||||||||||||||||
March 2011 | 98 | 98 | 98 | 98 | 98 | |||||||||||||||||
March 2012 | 97 | 97 | 97 | 97 | 97 | |||||||||||||||||
March 2013 | 95 | 95 | 95 | 95 | 95 | |||||||||||||||||
March 2014 | 94 | 94 | 93 | 93 | 92 | |||||||||||||||||
March 2015 | 89 | 89 | 89 | 89 | 89 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted Average Life (in years) |
9.4 | 9.4 | 9.4 | 9.4 | 9.2 | |||||||||||||||||
Percentages
of the Initial Certificate Balance
of the Class A-M
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.8 | 9.8 | 9.8 | 9.8 | 9.6 | |||||||||||||||||
S-181
Percentages of the Initial Certificate
Balance
of the Class A-J 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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.9 | 9.9 | 9.9 | 9.8 | 9.6 | |||||||||||||||||
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.9 | 9.9 | 9.9 | 9.8 | 9.7 | |||||||||||||||||
S-182
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.9 | 9.9 | 9.9 | 9.9 | 9.7 | |||||||||||||||||
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.9 | 9.9 | 9.9 | 9.9 | 9.7 | |||||||||||||||||
S-183
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 | |||||||||||||||||
March 2007 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2008 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2009 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2010 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2011 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2012 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2013 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2014 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March 2015 | 100 | 100 | 100 | 100 | 100 | |||||||||||||||||
March
2016 and thereafter |
0 | 0 | 0 | 0 | 0 | |||||||||||||||||
Weighted
Average Life (in years) |
9.9 | 9.9 | 9.9 | 9.9 | 9.7 | |||||||||||||||||
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 March 14, 2006 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 March 1, 2006 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.
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 | |||||||||||||||||
100.125000 | 5.237 | % | 5.236 | % | 5.236 | % | 5.236 | % | 5.236 | % | ||||||||||||
100.187500 | 5.213 | 5.212 | 5.212 | 5.212 | 5.212 | |||||||||||||||||
100.250000 | 5.190 | 5.189 | 5.188 | 5.188 | 5.188 | |||||||||||||||||
100.312500 | 5.166 | 5.165 | 5.165 | 5.165 | 5.165 | |||||||||||||||||
100.375000 | 5.143 | 5.142 | 5.141 | 5.141 | 5.141 | |||||||||||||||||
Weighted Average Life (yrs) | 3.0 | 3.0 | 3.0 | 3.0 | 3.0 | |||||||||||||||||
S-184
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 | |||||||||||||||||
100.375000 | 5.328 | % | 5.328 | % | 5.328 | % | 5.327 | % | 5.321 | % | ||||||||||||
100.437500 | 5.313 | 5.313 | 5.313 | 5.312 | 5.305 | |||||||||||||||||
100.500000 | 5.298 | 5.298 | 5.298 | 5.297 | 5.289 | |||||||||||||||||
100.562500 | 5.283 | 5.283 | 5.283 | 5.282 | 5.273 | |||||||||||||||||
100.625000 | 5.269 | 5.268 | 5.268 | 5.266 | 5.258 | |||||||||||||||||
Weighted Average Life (yrs) | 4.8 | 4.8 | 4.8 | 4.8 | 4.5 | |||||||||||||||||
Pre-Tax
Yield to Maturity (CBE), Weighted Average Life, First Principal Payment
Date and
Last Principal Payment Date for the Class A-3
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 | |||||||||||||||||
100.375000 | 5.450 | % | 5.450 | % | 5.450 | % | 5.450 | % | 5.446 | % | ||||||||||||
100.437500 | 5.439 | 5.439 | 5.439 | 5.438 | 5.435 | |||||||||||||||||
100.500000 | 5.428 | 5.427 | 5.427 | 5.427 | 5.423 | |||||||||||||||||
100.562500 | 5.416 | 5.416 | 5.416 | 5.416 | 5.412 | |||||||||||||||||
100.625000 | 5.405 | 5.405 | 5.405 | 5.404 | 5.400 | |||||||||||||||||
Weighted Average Life (yrs) | 6.8 | 6.8 | 6.7 | 6.7 | 6.6 | |||||||||||||||||
Pre-Tax
Yield to Maturity (CBE), Weighted Average Life, First Principal Payment
Date and
Last Principal Payment Date for the Class A-AB
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 | |||||||||||||||||
100.375000 | 5.418 | % | 5.418 | % | 5.418 | % | 5.418 | % | 5.416 | % | ||||||||||||
100.437500 | 5.408 | 5.407 | 5.407 | 5.407 | 5.405 | |||||||||||||||||
100.500000 | 5.397 | 5.397 | 5.397 | 5.396 | 5.394 | |||||||||||||||||
100.562500 | 5.386 | 5.386 | 5.386 | 5.385 | 5.383 | |||||||||||||||||
100.625000 | 5.376 | 5.375 | 5.375 | 5.375 | 5.373 | |||||||||||||||||
Weighted Average Life (yrs) | 7.2 | 7.2 | 7.2 | 7.2 | 7.1 | |||||||||||||||||
Pre-Tax
Yield to Maturity (CBE), Weighted Average Life, First Principal Payment
Date and
Last Principal Payment Date for the Class A-4
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 | |||||||||||||||||
100.375000 | 5.400 | % | 5.400 | % | 5.400 | % | 5.399 | % | 5.397 | % | ||||||||||||
100.437500 | 5.392 | 5.392 | 5.391 | 5.391 | 5.388 | |||||||||||||||||
100.500000 | 5.383 | 5.383 | 5.383 | 5.382 | 5.380 | |||||||||||||||||
100.562500 | 5.375 | 5.375 | 5.374 | 5.374 | 5.371 | |||||||||||||||||
100.625000 | 5.366 | 5.366 | 5.366 | 5.365 | 5.362 | |||||||||||||||||
Weighted Average Life (yrs) | 9.6 | 9.6 | 9.6 | 9.5 | 9.4 | |||||||||||||||||
S-185
Pre-Tax Yield to Maturity (CBE),
Weighted Average Life, First Principal Payment Date and
Last
Principal Payment Date for the Class A-1A 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 | |||||||||||||||||
100.375000 | 5.329 | % | 5.329 | % | 5.329 | % | 5.328 | % | 5.322 | % | ||||||||||||
100.437500 | 5.314 | 5.313 | 5.313 | 5.312 | 5.305 | |||||||||||||||||
100.500000 | 5.298 | 5.298 | 5.297 | 5.296 | 5.289 | |||||||||||||||||
100.562500 | 5.282 | 5.282 | 5.281 | 5.281 | 5.273 | |||||||||||||||||
100.625000 | 5.267 | 5.266 | 5.266 | 5.265 | 5.256 | |||||||||||||||||
Weighted Average Life (yrs) | 4.6 | 4.6 | 4.6 | 4.5 | 4.3 | |||||||||||||||||
Pre-Tax
Yield to Maturity (CBE), Weighted Average Life, First Principal Payment
Date and
Last Principal Payment Date for the Class A-1B
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 | |||||||||||||||||
100.375000 | 5.401 | % | 5.400 | % | 5.400 | % | 5.400 | % | 5.397 | % | ||||||||||||
100.437500 | 5.392 | 5.392 | 5.391 | 5.391 | 5.388 | |||||||||||||||||
100.500000 | 5.384 | 5.383 | 5.383 | 5.382 | 5.380 | |||||||||||||||||
100.562500 | 5.375 | 5.374 | 5.374 | 5.374 | 5.371 | |||||||||||||||||
100.625000 | 5.366 | 5.366 | 5.365 | 5.365 | 5.362 | |||||||||||||||||
Weighted Average Life (yrs) | 9.4 | 9.4 | 9.4 | 9.4 | 9.2 | |||||||||||||||||
Pre-Tax
Yield to Maturity (CBE), Weighted Average Life, First Principal Payment
Date and
Last Principal Payment Date for the Class A-M
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 | |||||||||||||||||
100.375000 | 5.450 | % | 5.450 | % | 5.450 | % | 5.449 | % | 5.446 | % | ||||||||||||
100.437500 | 5.442 | 5.442 | 5.442 | 5.441 | 5.438 | |||||||||||||||||
100.500000 | 5.434 | 5.434 | 5.433 | 5.433 | 5.429 | |||||||||||||||||
100.562500 | 5.425 | 5.425 | 5.425 | 5.424 | 5.421 | |||||||||||||||||
100.625000 | 5.417 | 5.417 | 5.417 | 5.416 | 5.412 | |||||||||||||||||
Weighted Average Life (yrs) | 9.8 | 9.8 | 9.8 | 9.8 | 9.6 | |||||||||||||||||
Pre-Tax
Yield to Maturity (CBE), Weighted Average Life, First Principal Payment
Date and
Last Principal Payment Date for the Class A-J
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 | |||||||||||||||||
100.375000 | 5.491 | % | 5.490 | % | 5.490 | % | 5.490 | % | 5.487 | % | ||||||||||||
100.437500 | 5.482 | 5.482 | 5.482 | 5.481 | 5.478 | |||||||||||||||||
100.500000 | 5.474 | 5.474 | 5.473 | 5.473 | 5.470 | |||||||||||||||||
100.562500 | 5.466 | 5.465 | 5.465 | 5.464 | 5.461 | |||||||||||||||||
100.625000 | 5.457 | 5.457 | 5.456 | 5.456 | 5.453 | |||||||||||||||||
Weighted Average Life (yrs) | 9.9 | 9.9 | 9.9 | 9.8 | 9.6 | |||||||||||||||||
S-186
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 | |||||||||||||||||
100.175000 | 5.541 | % | 5.541 | % | 5.541 | % | 5.540 | % | 5.538 | % | ||||||||||||
100.237500 | 5.533 | 5.533 | 5.532 | 5.531 | 5.530 | |||||||||||||||||
100.300000 | 5.524 | 5.524 | 5.524 | 5.523 | 5.521 | |||||||||||||||||
100.362500 | 5.516 | 5.516 | 5.516 | 5.515 | 5.513 | |||||||||||||||||
100.425000 | 5.508 | 5.508 | 5.507 | 5.506 | 5.504 | |||||||||||||||||
Weighted Average Life (yrs) | 9.9 | 9.9 | 9.9 | 9.8 | 9.7 | |||||||||||||||||
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 | |||||||||||||||||
100.095000 | 5.552 | % | 5.552 | % | 5.551 | % | 5.551 | % | 5.549 | % | ||||||||||||
100.157500 | 5.543 | 5.543 | 5.543 | 5.543 | 5.541 | |||||||||||||||||
100.220000 | 5.535 | 5.535 | 5.535 | 5.534 | 5.532 | |||||||||||||||||
100.282500 | 5.527 | 5.527 | 5.526 | 5.526 | 5.524 | |||||||||||||||||
100.345000 | 5.518 | 5.518 | 5.518 | 5.518 | 5.515 | |||||||||||||||||
Weighted Average Life (yrs) | 9.9 | 9.9 | 9.9 | 9.9 | 9.7 | |||||||||||||||||
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 | |||||||||||||||||
99.875000 | 5.581 | % | 5.581 | % | 5.581 | % | 5.581 | % | 5.579 | % | ||||||||||||
99.937500 | 5.573 | 5.573 | 5.573 | 5.572 | 5.571 | |||||||||||||||||
100.000000 | 5.564 | 5.564 | 5.564 | 5.564 | 5.562 | |||||||||||||||||
100.062500 | 5.556 | 5.556 | 5.556 | 5.556 | 5.554 | |||||||||||||||||
100.125000 | 5.548 | 5.548 | 5.547 | 5.547 | 5.545 | |||||||||||||||||
Weighted Average Life (yrs) | 9.9 | 9.9 | 9.9 | 9.9 | 9.7 | |||||||||||||||||
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 | |||||||||||||||||
99.375000 | 5.648 | % | 5.648 | % | 5.648 | % | 5.648 | % | 5.648 | % | ||||||||||||
99.437500 | 5.640 | 5.640 | 5.640 | 5.640 | 5.639 | |||||||||||||||||
99.500000 | 5.632 | 5.632 | 5.631 | 5.631 | 5.631 | |||||||||||||||||
99.562500 | 5.623 | 5.623 | 5.623 | 5.623 | 5.622 | |||||||||||||||||
99.625000 | 5.615 | 5.615 | 5.615 | 5.614 | 5.614 | |||||||||||||||||
Weighted Average Life (yrs) | 9.9 | 9.9 | 9.9 | 9.9 | 9.7 | |||||||||||||||||
S-187
THE POOLING AND SERVICING AGREEMENT
General
The Certificates will be issued pursuant to a Pooling and Servicing Agreement, to be dated as of March 1, 2006 (the ‘‘Pooling and Servicing Agreement’’), entered into by the Depositor, the Master Servicers, the Special Servicer and the Trustee.
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 Trustee 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 Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland 21045-1951. Attention: Corporate Trust Services (CD 2006-CD2).
Servicing of the Mortgage Loans; Collection of Payments
The Pooling and Servicing Agreement requires the Master Servicers and the Special Servicer to diligently service and administer their respective Mortgage Loans and the Serviced Loan Combinations.
The Master Servicers and the Special Servicer are required to diligently service and administer the Mortgage Loans and the Serviced Loan Combinations, in the best interests of and for the benefit of the Certificateholders and, with respect to each Serviced Loan Combination, for the benefit of the holder of the related Serviced Companion Loan (as a collective whole, but giving due consideration to the subordinate nature of the related B Loan as determined by the Midland Master Servicer or the Special Servicer, as applicable, 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 Loan Combinations, as applicable, and, to the extent consistent with the foregoing, in accordance with the higher of the following standards of care:
• | the same manner in which, and with the same care, skill, prudence and diligence with which such servicer 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 loan servicers servicing mortgage loans for other third party portfolios or securitization trusts with a view to the maximization of timely recovery of principal and interest on a net present value basis on the Mortgage Loans, and the best interests of the Trust and the Certificateholders and, with respect to any Serviced Loan Combination, the holder of the related Serviced Companion Loan (as a collective whole, but giving due consideration to the subordinate nature of the related B Loan as determined by such servicer in its reasonable judgment); and |
• | the same care, skill, prudence and diligence with which the such servicer services and administers commercial and multifamily mortgage loans owned, if any, by it with a view to the maximization of timely recovery of principal and interest on a net present value basis on the Mortgage Loans, and the best interests of the Trust and the Certificateholders and, with respect to any Serviced Loan Combination, the holder of the related Serviced Companion Loan (as a collective whole but giving due consideration to the subordinate nature of the related B Loan, as determined by such servicer in its reasonable judgment) but without regard to: |
(A) any relationship that such servicer or any affiliate of it, 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;
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(B) the ownership of any Certificate or any Serviced Companion Loan by such servicer or any affiliate of it;
(C) the Master Servicers’ obligation to make Advances;
(D) such servicer’s 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 such servicer or any affiliate of such servicer, as applicable;
(F) any debt that such servicer or any affiliate of such servicer, as applicable, has extended to any borrower or an affiliate of any borrower (including, without limitation, any mezzanine financing); and
(G) any obligation of the applicable Master Servicer, or an affiliate thereof, to repurchase or substitute for a Mortgage Loan as Mortgage Loan Seller (the foregoing, collectively referred to as the ‘‘Servicing Standard’’).
The Master Servicers 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 Master Servicers, 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 either of the Master Servicers 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 applicable Master 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 and the Serviced Loan Combinations, to the extent such procedures are consistent with the Servicing Standard. Consistent with the above, the applicable Master Servicer or the 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
Each Master Servicer will, with respect to the Mortgage Loans it is master servicing, be obligated to advance, on the business day immediately preceding a Distribution Date (the ‘‘Master 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 (included the Villas Parmerced Non-Pooled Trust Component) 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 business day immediately preceding the Master Servicer 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, that the applicable Master 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 applicable Master Servicer will not make an Advance to the extent that it has received written notice that
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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 Master Servicers 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 applicable Master 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 allocable to such Mortgage Loan and the denominator of which is the Stated Principal Balance (as of the last day of the related Collection Period).
With respect to each Mortgage Loan that is part of a Loan Combination, the Midland Master Servicer will 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; provided that in the case of a Mortgage Loan with a related B Loan, reimbursement for a P&I Advance on the Mortgage Loan may also be made first from amounts collected on the B Loan.
Neither the Master 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 Master Servicers will also be obligated (subject to the limitations described herein) 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. In addition if the Special Servicer requests that the applicable Master Servicer make a Property Advance and such Master 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 Midland Master Servicer will also be obligated to make Property Advances with respect to the Serviced Loan Combinations.
With respect to a nonrecoverable Property Advance on each of the Serviced Loan Combinations, the Midland Master Servicer will be entitled to reimbursement first from collections on, and proceeds of, the related B Loan and second, from collections on, and proceeds of, the related Mortgage Loan and then from general collections of the Trust.
To the extent that a Master 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 Master Servicers 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.
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Each Master 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 on that Advance, (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 accordance with the Servicing Standard (with respect to a Master Servicer) or in its reasonable judgment (with respect to the Trustee) that the 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 Loan Combinations).
Each Master 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 the amounts described in the preceding two clauses are insufficient to pay such interest, then, from any other amounts from time to time on deposit in the Collection Account (except as provided in this section with respect to Loan Combinations). Each Master 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. 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 Master Servicers 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. The Advances are subject to the applicable Master Servicer’s or the Trustee’s, as applicable, determination that such Advances are recoverable.
With respect to the payment of insurance premiums and delinquent tax assessments, in the event that a Master Servicer determines that a Property Advance of such amounts would not be recoverable, that Master 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 that Master 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 Loan Combination, the holder of the related Serviced Companion Loan, as a collective whole). 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 Loan Combination, the holder of the related Serviced Companion Loan, as a collective whole), the Special Servicer will be required to direct the applicable Master Servicer to make such payment, who will then be required to make such payment from the Collection Account (or, with respect to a Serviced Loan Combination, the related custodial account) to the extent of available funds.
Recovery of Advances. Subject to the conditions or limitations set forth in the Pooling and Servicing Agreement, the Master Servicers, 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 Loan Combination, from any amounts collected in respect of such Serviced Loan Combination) as to which that Advance was made, whether in the form of
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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 Loan Combination, from any amounts collected in respect of such Serviced Loan Combination) (‘‘Related Proceeds’’) prior to distributions on the Certificates. Notwithstanding the foregoing, none of the Master Servicers, 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 of the Master Servicers or the Special Servicer must be evidenced by an officer’s certificate delivered to the other and to the Depositor and the Trustee and, in the case of the Trustee, delivered to the Depositor, the Master Servicers and the Special Servicer, setting forth such nonrecoverability determination and the considerations of the applicable Master 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 applicable Master 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 Master Servicers and the Trustee notice of such determination, together with the officer’s certificate and supporting information referred to above. Any such determination shall be conclusive and binding on the Master Servicers, the Special Servicer and the Trustee.
Subject to the discussion in this section relating to Loan Combinations, each of the Master Servicers, the Special Servicer and the Trustee will be entitled to recover any Advance (including P&I Advances with respect to the Villas Parkmerced Non-Pooled Trust Component) 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 Loan Combination, first, out of general funds on deposit in the custodial account related to such Serviced Loan Combination and then, out of general funds on deposit in the Collection Account) in each case, first, from principal collections and then, from interest and other collections. If the funds in the Collection Account (or, with respect to a Serviced Loan Combination, 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). At any time after such determination, the applicable Master Servicer or the Trustee, as applicable, may, in its sole discretion, decide to obtain reimbursement out of general collections on the Mortgage Pool immediately. The fact that a decision to recover a Nonrecoverable Advance over time, or not to do so, benefits some Classes of Certificateholders to the detriment of other Classes of Certificateholders will not constitute a violation of the Servicing Standard or a breach of the terms of the Pooling and Servicing Agreement by any party thereto, or a violation of any fiduciary duty owed by any party thereto to the Certificateholders. In addition, the Master Servicers, 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 Loan Combination, 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 Loan
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Combination, first out of the related custodial account), less any amounts applied to reimbursement of any nonrecoverable Advances or interest thereon and second, only upon a determination by the applicable Master Servicer, the Special Servicer or the Trustee, as applicable, that either (a) 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 or (b) such Workout-Delayed Reimbursement Amounts would not ultimately be recoverable, along with any other Workout-Delayed Reimbursement Amounts and Nonrecoverable Advances, out of the principal portion of future collections on all of the Mortgage Loans and the REO Properties, 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 applicable Master 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) the obligations of the borrower under the terms of the related Mortgage Loan (or the Serviced Loan Combination, as applicable) as it may have been modified, (iii) 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 Servicing Standard in the case of the Master Servicers or the Special Servicer) regarding the possibility and effects of future adverse changes with respect to such Mortgaged Properties, (iv) estimate and consider (consistent with the Servicing Standard in the case of the Master Servicers or the Special Servicer) (among other things) future expenses and (v) 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 Master Servicers or the Special Servicer, as applicable, and the Master Servicers 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 Loan Combination, as described above) will represent a portion of the losses to be borne by the Certificateholders.
In addition, the Master Servicers, 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 Master Servicers, 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 Master Servicers 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
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the proceeds of the Mortgage Loan or the applicable Serviced Loan Combination or REO Property in respect of which the Advance was made.
To the extent a P&I Advance in respect of the Villas Parkmerced Non-Pooled Trust Component is determined to be a Nonrecoverable Advance and is required to be reimbursed from the principal portion or interest portion of general collections on the Mortgage Loans as described above, such reimbursement will be made first from the applicable collections in Loan Group 2A and, if the applicable collections in Loan Group 2A are not sufficient to make such reimbursement in full, then from the applicable collections in Loan Group 2B (after giving effect to any reimbursements of Nonrecoverable Advances and Workout-Delayed Reimbursement Amounts that are related to Loan Group 2B) and, if the applicable collections in Loan Group 2B are not sufficient to make such reimbursement in full, then from the applicable collections in Loan Group 1 (after giving effect to any reimbursements of Nonrecoverable Advances and Workout-Delayed Reimbursement Amounts that are related to Loan Group 1).
Accounts
Collection Account. Each Master Servicer will establish and maintain one or more segregated accounts (collectively, 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 Loan Combination, a separate custodial account) all payments in respect of the Mortgage Loans serviced by it, other than amounts permitted to be withheld by each Master Servicer or amounts to be deposited into any Reserve Account. Payments and collections received in respect of each Serviced Loan Combination 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 Trustee will establish and maintain one or more segregated accounts (the ‘‘Distribution Account’’) in its own name for the benefit of the holders of the Certificates. With respect to each Distribution Date, the Master Servicers will remit on or before each Master Servicer Remittance Date to the Trustee, and the Trustee will deposit into the Distribution Account, to the extent of funds on deposit in the Collection Account, on the Master 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. To the extent the Master Servicers fail 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 Trustee will establish and maintain an ‘‘Interest Reserve Account’’ in its own name for the benefit of the holders of the Certificates (other than the Class VPM 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 (excluding the Villas Parkmerced Non-Pooled Trust Component) that does not accrue interest on the basis of a 360-day year consisting 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 (excluding the Villas Parkmerced Non-Pooled Trust Component) equal to the related Withheld Amounts from the preceding January (if applicable) and February, if any, and deposited into the Distribution Account.
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The Trustee will also establish and maintain a "Villas Parkmerced Non-Pooled Interest Reserve Account" in its own name for the benefit of the holders of the Class VPM 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 the Villas Parkmerced Non-Pooled Trust Component, an amount equal to one day's interest at the related mortgage rate (5.6480%) (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, "Villas Parkmerced Non-Pooled Withheld Amounts"). With respect to each Distribution Date occurring in March, an amount is required to be withdrawn from the Villas Parkmerced Interest Reserve Account in respect of the Villas Parkmerced Non-Pooled Withheld Amounts equal to the Villas Parkmerced Non-Pooled Withheld Amounts from the preceding January (if applicable) and February, if any, and deposited into the Distribution Account.
Excess Interest. The Trustee is required to establish and maintain the ‘‘Grantor Trust Distribution Account’’ in its own name for the benefit of the Class S Certificateholders. On each Distribution Date, the Trustee is required to distribute from the Grantor Trust Distribution Account any Excess Interest received with respect to the Mortgage Loans during the related Collection Period to the holders of the Class S 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 Trustee will also establish and maintain one or more segregated accounts or sub-accounts for, the Villas Parkmerced Loan REMIC Distribution Account, the ‘‘Lower-Tier Distribution Account,’’ the ‘‘Upper-Tier Distribution Account’’ and the ‘‘Excess Liquidation Proceeds Account,’’ each in its own name for the benefit of the holders of the Certificates.
The Collection Account, the separate custodial account for each Serviced Loan Combination, the Villas Parkmerced Loan REMIC Distribution Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution Account, the Grantor Trust Distribution Account and the Excess Liquidation Proceeds Account will be held in the name of the Trustee (or the Master Servicers on behalf of the Trustee) on behalf of the holders of Certificates, and, in the case of the Serviced Loan Combinations, the holder of the related Serviced Companion Loan and, with respect to the Villas Parkmerced Loan REMIC Distribution Account and the Lower-Tier Distribution Account, for the benefit of the Trustee as the holder of the related uncertificated regular interests. Each of the Collection Account, the separate custodial account for each Serviced Loan Combination, any REO Account, the Villas Parkmerced Loan REMIC Distribution Account, the Lower-Tier Distribution Account, the Upper-Tier Distribution Account, the "Grantor Trust 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 and ‘‘P-1’’ by Moody’s Investors Service, Inc. (‘‘Moody’s’’), 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 (or ‘‘A+’’ if the related short-term rating is at least ‘‘A-1’’) and ‘‘Aa3’’ by Moody’s or (B) as to which the Trustee has received written confirmation from each rating agency then rating any Certificates that holding funds in such account would not cause any rating agency to qualify, withdraw or downgrade any of its then-current ratings on the Certificates or (ii) a segregated trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution, is subject to regulations substantially similar to 12 C.F.R. Section 9.10(b) and subject to supervision or
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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 that such account would not, in and of itself, cause a downgrade, qualification or withdrawal of the then-current ratings assigned to the Certificates, which may be an account maintained with the Trustee or the Master Servicers, or (iv) with PNC Bank so long as PNC Bank’s long-term unsecured debt rating is at least ‘‘A’’ from S&P and ‘‘A1’’ from Moody’s and its short-term unsecured debt rating is at least ‘‘A-1’’ from S&P (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).
With respect to each of the accounts, the party that maintains such account (i.e. the applicable Master Servicer, with respect to the Collection Account, the Trustee with respect to the Distribution Account, Interest Reserve Account and Excess Liquidation Proceeds Account, and the Special Servicer with respect to any REO Account) shall be the party with the right and obligation to make disbursements from such account. The Trustee will have the right to invest the funds in the Distribution Account, the Interest Reserve Account and the Excess Liquidation Proceeds Account, each Master Servicer will have the right to invest the funds in the Collection Account maintained by it and the Midland Master Servicer will have the right to invest the funds in the separate custodial account for each Serviced Loan Combination, and the Special Servicer will have the right to invest the funds in any REO Account, in each case, in certain short-term high quality investments maturing on the business day prior to the date such funds are required to be applied pursuant to the Pooling and Servicing Agreement. The Trustee, each Master Servicer or the Special Servicer (as applicable) will be entitled to retain any interest or other income earned on those funds and will bear any losses resulting from the investment of these funds other than losses resulting from investments directed by or on behalf of a borrower or that result from the insolvency of any financial institution that 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. The transaction accounts and account activity conducted by the Master Servicers, Special Servicer or Trustee with respect to any account maintained by it will not be independently verified by any other person or entity. Cash in the Collection Account, any REO Account (except to the extent retained to pay certain expenses of maintaining REO Property), and Excess Liquidation Proceeds Account in any Collection Period will generally be disbursed on the next Distribution Date. Cash deposited in the Distribution Account on any Master Servicer Remittance Date will generally be disbursed on the next Distribution Date. Cash in the Interest Reserve Account will be disbursed as described above under ‘‘—Interest Reserve Account.’’
The Master Servicers may make withdrawals from the Collection Account (and the separate custodial account for each Serviced Loan Combination), 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
Due-On-Sale Clauses. In most cases, the Mortgage Loans and Serviced Loan Combinations contain provisions in the nature of ‘‘due-on-sale’’ clauses (including, without limitation, sales or transfers 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 Loan Combinations 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 (including, without limitation, the sale, transfer, pledge or hypothecation of direct or indirect interests in the borrower or its owners), (b) provide that the Mortgage Loans or Serviced Loan Combinations 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 Loan Combinations may be assumed or transferred without the consent of the lender provided certain conditions are satisfied. The Midland Master Servicer (with respect to each Mortgage Loan and any related Companion Loan sold to the Trust by PNC Bank (each a ‘‘PNC Loan’’ ) that is not then a Specially Serviced Mortgage Loan) or the
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Special Servicer (with respect to all other Mortgage Loans and Specially Serviced Mortgage Loans) 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 Midland Master 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 Midland Master 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 Midland Master 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 Midland Master Servicer’s or the Special Servicer’s, as applicable, regular commercial mortgage origination or servicing standards and criteria and the terms of the related Mortgage and (b) the Midland Master 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 from (i) S&P with respect to any Mortgage Loan (together with any Mortgage Loans cross collateralized with such Mortgage Loan) 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 with respect to any Mortgage Loan that (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). To the extent not precluded by the Mortgage Loan Documents, the Midland Master 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 and, in the case of a Serviced Loan Combination, such expense will be allocated (i) first to the related B Loan (up to the full Stated Principal Balance thereof), and, then, (ii) to the holders of the Mortgage Loan. 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 Master Servicers must promptly forward any request for an assumption of a Mortgage Loan or Serviced Loan Combination, other than a performing PNC Loan, to the Special Servicer and such request will be processed by the Special Servicer in the manner described in the preceding paragraph. The Special Servicer will also have the right to review the materials prepared by the Midland Master Servicer in connection with any assumption of a performing PNC Loan and to give final approval to (i) the approval of any such assumption and (ii) any determination by the Midland Master Servicer that in the case of a PNC Loan described in clause (c) of the immediately prior paragraph, that the conditions to transfer or assumption of such PNC Loan have been satisfied. Furthermore, the Special Servicer may approve any assumption of a performing PNC Loan regardless of the initial determination made by the Midland Master Servicer. In each case however, the Special Servicer will also be required to obtain the consent of the Directing Holder to any assumption or substitution
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(whether of a performing PNC Loan, any other performing Mortgage Loan or a Specially Serviced Mortgage Loan), to the extent described in this prospectus supplement under ‘‘—Special Servicing.’’
Due-On-Encumbrance Clauses. In most cases, the Mortgage Loans and Serviced Loan Combinations contain provisions in the nature of a ‘‘due-on-encumbrance’’ clause (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) which by their terms (a) provide that the Mortgage Loans or Serviced Loan Combinations 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 (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), (b) require the consent of the related lender to the creation of any such lien or other encumbrance on the related Mortgaged Property (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) or (c) provide that such Mortgaged Property may be further encumbered without the consent of the lender (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), provided certain conditions are satisfied. The Midland Master Servicer (with respect to each performing PNC Loan) or the Special Servicer (with respect to all other Mortgage Loans and Specially Serviced Mortgage Loans) 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 Midland Master 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 Loan Combination 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 and Moody’s 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; provided, that in the case of S&P, such confirmation will only be required with respect to any Mortgage Loan (together with any Mortgage Loans cross collateralized with such 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 and any related mezzanine debt or preferred equity, 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 and any related mezzanine debt or preferred equity, if any) that is less than 1.20x or, in the case of Moody’s, 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). To the extent not precluded by the Mortgage Loan Documents, the Midland Master 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 and, in the case of a Serviced Loan Combination, such expense will be allocated (i) first to the related B Loan (up to the full Stated Principal Balance thereof), and, then, (ii) to the holders of the Mortgage Loan.
The Master Servicers must promptly forward any request for the waiver of any due on encumbrance clause of a Mortgage Loan or Serviced Loan Combination, other than a performing PNC Loan, to the Special Servicer and such request will be processed by the
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Special Servicer in the manner described in the preceding paragraph. The Special Servicer will also have the right to review the materials prepared by the Midland Master Servicer in connection with the waiver of any due-on-encumbrance clauses with regard to any performing PNC Loan and to give final approval to (i) any such waiver with regard to any Mortgage Loan or Serviced Loan Combination that is not a Specially Serviced Mortgage Loan and (ii) any determination by the Midland Master Servicer that the conditions to further encumbrance of a Mortgage Loan or Serviced Loan Combination described in clause (c) of the immediately preceding paragraph have been satisfied. Furthermore, the Special Servicer may approve any further encumbrance of a performing PNC Loan regardless of the initial determination made by the Midland Master Servicer. In each case however, the Special Servicer will be required to obtain the consent of the Directing Holder to any such waiver of a due-on-encumbrance clause (whether of a performing PNC Loan, any other performing Mortgage Loan or a Specially Serviced Mortgage Loan), 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.
Inspections
Each Master 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 serviced by it 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 2007; 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; provided, further, that a Master Servicer will not be required to inspect a Mortgaged Property that has been inspected in the previous six months. The reasonable cost of each such inspection performed by the Special Servicer will be paid by the applicable Master Servicer as a Property Advance or if such Property Advance would not be recoverable, as an expense of the Trust Fund. The applicable Master 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.
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), the applicable Master Servicer will be required to use commercially 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, each Master 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 that 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
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Loan Combination, 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, provided, however, that:
(a) the Master Servicers 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 or Serviced Loan Combination, as applicable, or was required by the related Mortgage Loan Documents and is available at commercially reasonable rates (and if the applicable Master Servicer does not cause the borrower to maintain or itself maintains 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);
(b) if and to the extent that any Mortgage Loan Document 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 Master Servicers 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;
(c) the Master Servicers will have no obligation beyond using their reasonable efforts consistent with the Servicing Standard to enforce those insurance requirements against any borrower; provided, however, that this will not limit the applicable Master Servicer’s obligation to obtain and maintain a force-placed insurance policy as set forth in the Pooling and Servicing Agreement;
(d) except as provided below (including under clause (vii)), in no event will the applicable Master Servicer be required to cause the borrower to maintain, or itself obtain, insurance coverage that such Master 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 applicable Master Servicer in accordance with the Servicing Standard, not less frequently than annually, and, to the extent consistent with the Servicing Standard, such Master Servicer will be entitled to rely on insurance consultants, retained at its own expense, in making such determination);
(e) to the extent the applicable Master Servicer itself is required to maintain insurance that the borrower does not maintain, such Master 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
(f) any explicit terrorism insurance requirements contained in the related Mortgage Loan Documents are required to be enforced by the applicable Master Servicer in accordance with the Servicing Standard (unless the Special Servicer and the Directing Holder have consented to a waiver (including a waiver to permit the applicable Master 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 Master Servicers 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 Holder; provided, further, that the Master Servicers will
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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 Holder; and, provided, further, that while approval is pending, the Master Servicers will not be in default or liable for any loss.
Notwithstanding the provision described in clause (iv) above, each Master Servicer, prior to availing itself of any limitation described in that clause with respect to any Mortgage Loan or Serviced Loan Combination, will be required to obtain the approval or disapproval of the Special Servicer and the Directing Holder (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 Master Servicers 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 each Master 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 Master Servicers 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 applicable Master 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 applicable Master Servicer to make a Property Advance for the costs associated with coverage that the Special Servicer determines to maintain, in which case such Master 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 Loan Combination, as applicable (or such greater amount of coverage required by the related Mortgage Loan Documents (unless such amount is not available or the Directing Holder 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 Master Servicers 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 use commercially reasonable efforts 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 applicable Master Servicer to cause that coverage to be maintained under that Master Servicer’s force-placed insurance policy. In such case, the applicable Master Servicer will be required to so cause that coverage to be maintained to the extent that the identified coverage is available under that Master Servicer’s existing force-placed policy.
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If either (x) the applicable Master 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 or the Serviced Loan Combinations or REO Properties, as applicable, as to which it is the Master 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) such Master Servicer 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 the applicable Master Servicer or the Special Servicer self-insures for its obligation to maintain the individual policies otherwise required, then such Master 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 Master 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 Loan Combination, 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 Loan Combination (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 Master Servicers or the Special Servicer may be recovered by the Master Servicers 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 Master Servicers or the Special Servicer, as applicable, may make such payments using funds held in the Collection Account (or with respect to a Serviced Loan Combination, 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 Loan Combinations, 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 Trust Fund on or before the Closing Date from the Mortgage Loan Sellers 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
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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 Master Servicers, the Special Servicer, the Controlling Class Representative 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 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 with respect to the subject mortgage loan set forth in the schedule of mortgage loans attached to the applicable mortgage loan purchase agreement (which contains certain of the information set forth in Annex A-1 to this prospectus supplement) was true and correct in all material respects as of the cut-off date;
(2) as of the date of its origination, the subject mortgage loan and the interest (exclusive of any default interest, late charges or prepayment premiums) contracted for thereunder complied in all material respects with, or was exempt from, all requirements of federal, state or local law relating to the origination of such Mortgage Loan, including those pertaining to usury;
(3) immediately prior to the sale, transfer and assignment to us, the applicable mortgage loan seller had good and marketable title to, and was the sole owner of, each mortgage loan, and is transferring the mortgage loan free and clear of any and all liens, pledges, charges or security interests of any nature encumbering the subject mortgage loan;
(4) the proceeds of the subject mortgage loan have been fully disbursed and there is no requirement for future advances thereunder by the lender;
(5) each related mortgage note, mortgage instrument, assignment of leases, if any, and other agreement executed by the mortgagor in connection with the subject mortgage loan is a legal, valid and binding obligation of the related borrower (subject to any nonrecourse provisions therein and any state anti-deficiency or market value limit deficiency legislation), enforceable in accordance with its terms, except (a) that certain provisions contained in such mortgage loan documents are or may be unenforceable in whole or in part under applicable state or federal laws, but neither the application of any such laws to any such provision nor the inclusion of any such provision renders any of the mortgage loan documents invalid as a whole and such mortgage loan documents taken as a whole are enforceable to the extent necessary and customary for the practical realization of the rights and benefits afforded thereby, and (b) as such enforcement may be limited by bankruptcy, insolvency, receivership, reorganization, moratorium, redemption, liquidation or other laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law);
(6) as of the date of its origination, there was no valid offset, defense, counterclaim, abatement or right to rescission with respect to any of the related mortgage note,
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mortgage instrument or other agreements executed in connection therewith, and, as of the cut-off date, there was no valid offset, defense, counterclaim or right to rescission with respect to such mortgage note, mortgage instrument or other agreements, except in each case with respect to the enforceability of any provisions requiring the payment of Default Interest, late fees, Excess Interest, prepayment premiums or yield maintenance charges;
(7) each related assignment of the related mortgage instrument and assignment of any related assignment of leases from the applicable mortgage loan seller to the trustee constitutes the legal, valid and binding assignment from such mortgage loan seller (subject to the customary limitations set forth in clause (v) above);
(8) the related mortgage instrument is a valid and enforceable first lien on the related mortgaged real property except for the exceptions set forth in clause (v) above and subject to (a) the lien of current real property taxes, ground rents, water charges, sewer rents and assessments not yet due and payable, (b) covenants, conditions and restrictions, rights of way, easements and other matters of public record, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the related mortgaged real property or the security intended to be provided by such mortgage instrument or with the borrower’s ability to pay its obligations under the subject mortgage loan when they become due or materially and adversely affects the value of the related mortgaged real property, (c) the exceptions (general and specific) and exclusions set forth in the related title insurance policy or appearing of record, none of which, individually or in the aggregate, materially interferes with the current use of the related mortgaged real property or the security intended to be provided by such mortgage instrument or with the borrower’s ability to pay its obligations under the subject mortgage loan when they become due or materially and adversely affects the value of the related mortgaged real property, (d) other matters to which like properties are commonly subject, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the mortgaged real property or the security intended to be provided by such mortgage instrument or with the borrower’s ability to pay its obligations under the subject mortgage loan when they become due or materially and adversely affects the value of the mortgaged real property, (e) the right of tenants (whether under ground leases, space leases or operating leases) at the related mortgaged real property to remain following a foreclosure or similar proceeding (provided that such tenants are performing under such leases) and (f) if the subject mortgage loan is cross-collateralized with any other mortgage loan, the lien of such mortgage instrument for such other mortgage loan, none of which, individually or in the aggregate, materially and adversely interferes with the current use of the related mortgaged real property or the security intended to be provided by such mortgage instrument or with the mortgagor’s ability to pay its obligations under the subject mortgage loan when they become due or materially and adversely affects the value of the related mortgaged real property;
(9) all real estate taxes and governmental assessments, or installments thereof, which would be a lien on the related mortgaged real property and that prior to the cut-off date have become delinquent in respect of the related mortgaged real property, have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established; provided that for purposes of this representation and warranty, real estate taxes and governmental assessments and installments thereof will not be considered delinquent until the earlier of (x) the date on which interest and/or penalties would first be payable thereon and (y) the date on which enforcement action is entitled to be taken by the related taxing authority.
(10) to the applicable mortgage loan seller’s actual knowledge as of the cut-off date, and to the applicable mortgage loan seller’s actual knowledge based solely upon due diligence customarily performed in connection with the origination of comparable mortgage loans by the applicable mortgage loan seller, each related mortgaged real property was free and clear of any material damage (other than deferred maintenance for
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which escrows were established at origination) that would materially and adversely affect the value of such mortgaged real property as security for the subject mortgage loan and to the applicable mortgage loan sealer’s actual knowledge as of the cut-off date there was no proceeding pending for the total or partial condemnation of such mortgaged real property;
(11) as of the date of its origination, all insurance coverage required under each related mortgage instrument, which insurance covered such risks as were customarily acceptable to prudent commercial and multifamily mortgage lending institutions lending on the security of property comparable to the related mortgaged real property in the jurisdiction in which such mortgaged real property is located, and with respect to a fire and extended perils insurance policy, was in an amount (subject to a customary deductible) at least equal to the lesser of (a) the replacement cost of improvements located on such mortgaged real property, or (b) the initial principal balance of the subject mortgage loan, and in any event, the amount necessary to prevent operation of any coinsurance provisions, was in full force and effect with respect to each related mortgaged real property;
(12) as of the date of initial issuance of the offered certificates, the subject mortgage loan is not, and in the prior 12 months (or since the date of origination if the subject mortgage loan has been originated within the past 12 months), has not been, 30 days or more past due in respect of any scheduled payment; and
(13) one or more environmental site assessments, updates or transaction screens thereof were performed by an environmental consulting firm independent of the applicable mortgage loan seller and the applicable-mortgage loan seller’s affiliates with respect to each related mortgaged real property during the 18-month period preceding the origination of the subject mortgage loan, and the applicable mortgage loan seller, having made no independent inquiry other than to review the report(s) prepared in connection with the assessment(s), updates or transaction screens referenced herein, has no actual knowledge and has received no notice of any material and adverse environmental condition or circumstance affecting such mortgaged real property that was not disclosed in such report(s).
The Pooling and Servicing Agreement requires that the Custodian, each Master Servicer, the Special Servicer or the Trustee notify the Depositor, the affected Mortgage Loan Seller, the Controlling Class Representative, the Custodian, each Master 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, in each case, materially and adversely affects the value of such Mortgage Loan, the value of 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 its receipt of such notice from a Master Servicer, the Special Servicer, the Trustee or the Custodian or, in the case of a breach or defect that would cause the Mortgage Loan not to be a ‘‘qualified mortgage’’ within the meaning of Section 860G(a)(3) of the Code, if earlier, 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
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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 Master Servicers, 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 or more (but not all) 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 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 Villas Parkmerced Loan REMIC, the Lower-Tier REMIC or the Upper-Tier REMIC as a REMIC nor result in the imposition of any tax on the Villas Parkmerced 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.
Notwithstanding the foregoing, if there is a material breach or material defect with respect to one or more Mortgaged Properties with respect to a Mortgage Loan or cross-collateralized group of Mortgage Loans, the Mortgage Loan Seller will not be obligated to repurchase the Mortgage Loan or cross-collateralized group of Mortgage Loans if (i) the affected Mortgaged
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Property may be released pursuant to the terms of any partial release provisions in the related Mortgage Loan Documents (and such Mortgaged Property is, in fact, released), (ii) the remaining Mortgaged Property(ies) satisfy the requirements, if any, set forth in the Mortgage Loan Documents and the Mortgage Loan Seller provides an opinion of counsel to the effect that such release would not cause an adverse REMIC event to occur and (iii) each rating agency then rating the Certificates shall have provided written confirmation that such release would not cause the then-current ratings of the Certificates rated by it to be qualified, withdrawn or downgraded.
A ‘‘Qualified 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, (iv) is approved by the Controlling Class Representative and (v) the Trustee has received prior confirmation in writing by each rating agency that such substitution will not in and of itself result in the withdrawal, downgrade, or qualification of the rating assigned by the rating agency to any Class of Certificates then rated by the rating agency.
The obligations of the Mortgage Loan Sellers to repurchase, substitute or cure described in the second, third and fourth 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 Master Servicers, the Special Servicer or the Trustee 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 Villas Parkmerced Loan REMIC may fail to qualify to be treated as a REMIC for federal income tax purposes.
Certain Matters Regarding the Depositor, the Master Servicers and the Special Servicer
Each Master Servicer and the 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 that such assignment or delegation in and of itself will not cause a qualification, withdrawal or downgrading of the then-current ratings assigned to the Certificates. The Pooling and Servicing Agreement provides that the applicable Master Servicer or Special Servicer may not otherwise resign from its obligations and duties as such Master 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 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 that the resignation and appointment will not, in and of itself, cause a downgrade, withdrawal or qualification of the then-current rating assigned by such rating agency to any Class of Certificates. No such resignation may become effective until the Trustee or a successor Master Servicer or Special Servicer has assumed the obligations of the applicable Master Servicer or Special Servicer under the Pooling and Servicing Agreement. The Trustee or any other successor Master Servicer or Special Servicer assuming the obligations of the applicable Master Servicer or Special Servicer under the Pooling and Servicing Agreement generally will be entitled to the compensation to which such Master Servicer or Special Servicer would have been entitled. If no successor Master Servicer or Special Servicer can be obtained to perform
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such obligations for such compensation, additional amounts payable to such successor Master Servicer or Special Servicer will be treated as Realized Losses.
The Pooling and Servicing Agreement also provides that none of the Depositor, the Master Servicers or the Special Servicer, or any director, officer, employee, member, manager or agent (including subservicers) of the Depositor, the Master Servicers 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 Holder), or for errors in judgment; provided, however, that none of the Depositor, the Master Servicers or the Special Servicer or any director, officer, employee, member, manager or agent (including subservicers) of the Depositor, the Master Servicers and the Special Servicer will be protected against any breach of its respective representations and warranties made in the Pooling and Servicing Agreement or any liability that would otherwise be imposed by reason of willful misconduct, bad faith, fraud or negligence (or in the case of the Master Servicers or the 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 Master Servicers and the Special Servicer and any director, officer, employee, member, manager or agent (including subservicers) of the Depositor, the Master Servicers 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 Loan Combination, the expenses, costs and liabilities described in the preceding sentence that relate to the applicable Loan Combination will be paid out of amounts on deposit in the separate custodial account maintained with respect to such Loan Combination (with respect to a Serviced Loan Combination, such expenses will first be allocated to the related B Loan and then will be allocated to the related Mortgage Loan, except that with respect to the Arrowhead Shopping Center Loan Combination, such allocation first to the related B Loan shall only apply during the occurrence and continuance of a Material Default). If funds in the applicable custodial account relating to a Serviced Loan Combination are insufficient, then any deficiency will be paid from amounts on deposit in the Collection Account.
In addition, the Pooling and Servicing Agreement provides that none of the Depositor, the Master Servicers 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. Each of the Depositor, the Master Servicers or the Special Servicer may, however, in its discretion undertake any such action that 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 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 Master Servicers and the Special Servicer will be entitled to be reimbursed therefor and to charge the Collection Account (or with respect to a Serviced Loan Combination, the related separate custodial account, as described in the second preceding paragraph, except that with respect to the Arrowhead Shopping Center Loan Combination, the Depositor will not be entitled to reimbursement).
The management, prosecution, defense and/or settlement of claims and litigation relating to any Mortgage Loan brought against the Trust Fund or any party to the Pooling and Servicing Agreement will generally be handled by the Master Servicers and the Special
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Servicer; subject to certain rights of the Trustee to appear in any such action to which it is a named party and the rights of certain parties to the Pooling and Servicing Agreement to indemnification for certain costs or liabilities arising from such litigation, all as more specifically provided for in the Pooling and Servicing Agreement.
The Depositor is not obligated to monitor or supervise the performance of the Master Servicers, the Special Servicer or the Trustee under the Pooling and Servicing Agreement. The Depositor may, but is not obligated to, enforce the obligations of the Master Servicers 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 Master Servicers or the Special Servicer or exercise any right of the Master Servicers 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 Loan Combination, to the extent such reimbursement is allocable to such Serviced Loan Combination, from the related custodial account, except that with respect to the Arrowhead Shopping Center Loan Combination, the Depositor will not be entitled to reimbursement), to the extent not recoverable from the Master Servicers or Special Servicer, as applicable. Any such action by the Depositor will not relieve the applicable Master Servicer or the Special Servicer of its obligations under the Pooling and Servicing Agreement.
Any person into which the applicable Master Servicer, the Special Servicer or the Depositor may be merged or consolidated, or any person resulting from any merger or consolidation to which such Master Servicer, the Special Servicer or the Depositor is a party, or any person succeeding to the business of the applicable Master Servicer, the Special Servicer or the Depositor, will be the successor of such Master 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 applicable Master Servicer, the Special Servicer or the Depositor under the Pooling and Servicing Agreement if each of the rating agencies then rating any Certificates 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.
Events of Default
‘‘Events of Default’’ under the Pooling and Servicing Agreement with respect to each Master Servicer or the Special Servicer, as the case may be, will include, without limitation:
(a) (i) any failure by a Master 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 a Master Servicer to deposit into, or remit to the Trustee for deposit into, the Distribution Account any amount required to be so deposited or remitted (including any required P&I Advance, unless such Master Servicer determines that such P&I Advance would not be recoverable), which failure is not remedied by 11:00 a.m. (New York City time) on the relevant Distribution Date (provided, however, that to the extent the Master Servicer does not timely make such remittances to the Trustee, the Master Servicer shall pay the Trustee for the account of the Trustee interest on any amount not timely remitted at the Prime Rate from and including the applicable required remittance date to, but not including, the date such remittance is actually made) or any failure by the Midland Master Servicer to remit to any holder of a Serviced Companion Loan, as and when required by the Pooling and Servicing Agreement or the related intercreditor agreement, any amount required to be so remitted;
(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 Master Servicers for deposit in the Collection Account (or, in the case of a Serviced Loan Combination, 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 Master Servicers will not be an Event of Default if such failure is
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remedied within one business day and if the Special Servicer has compensated the Master Servicers for any loss of income on such amount suffered by the Master Servicers due to and caused by the late remittance of the Special Servicer and reimbursed the Trust for any resulting advance interest due to the Master Servicers;
(c) any failure by a Master Servicer or the Special Servicer duly to observe or perform in any material respect any of its other covenants or obligations under the Pooling and Servicing Agreement, which failure continues unremedied for 30 days (15 days in the case of the Master 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 such Master Servicer pursuant to the Pooling and Servicing Agreement or in any event such shorter period of time as is necessary to avoid the commencement of foreclosure proceedings for any lien relating to unpaid real estate taxes or assessments or a lapse in any required insurance coverage if the Master Servicer had prior notice of the related borrower's failure to pay such taxes, assessments or insurance premium) after written notice of the failure has been given to such Master Servicer or the Special Servicer, as the case may be, by any other party to the Pooling and Servicing Agreement, or to the Master Servicers 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 applicable Master 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 a Master 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 such Master Servicer or the Special Servicer, as the case may be, by the Depositor or the Trustee, or to the Master Servicers, 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 applicable Master 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 applicable Master Servicer or the Special Servicer, and certain actions by or on behalf of such Master Servicer or the Special Servicer indicating its insolvency or inability to pay its obligations;
(f) a Master Servicer or the Special Servicer has been removed from S&P’s Select Servicer List as a U.S. Commercial Mortgage Master Servicer or U.S. Commercial Mortgage Special Servicer, as the case may be, and any of the ratings assigned to the Certificates have been qualified, downgraded or withdrawn in connection with such removal;
(g) a servicing officer of the applicable Master Servicer or Special Servicer, as applicable, obtains actual knowledge that Moody’s has (i) qualified, downgraded or withdrawn its rating or ratings of one or more Classes of Certificates, or (ii) has placed one or more Classes of Certificates on ‘‘watch status’’ in contemplation of a ratings downgrade or withdrawal (and such ‘‘watch status’’ placement shall not have been withdrawn by Moody’s within 60 days of the date such servicing officer obtained such actual knowledge) and, in the case of either of clauses (i) or (ii), cited servicing concerns with the applicable Master Servicer or Special Servicer, as applicable, as the sole or material factor in such rating action; and
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(h) a Master Servicer or Special Servicer, shall fail to deliver any Exchange Act reporting items required to be delivered by such servicer under the Pooling and Servicing Agreement by the time required under the Pooling and Servicing Agreement after any applicable notice or cure period (but that with respect to any primary servicer, sub-servicer or servicing function participant (as more specifically defined in the Pooling and Servicing Agreement) (such entity, the "Sub-Servicing Entity") retained by (x) the Midland Master Servicer or Special Servicer (but excluding one which the Midland Master Servicer has been directed to retain by a Sponsor or Mortgage Loan Seller) the Sub-Servicing Entity will be automatically terminated if it defaults in accordance with the provision of this clause (h) and the Midland Master Servicer or Special Servicer will be required to provide the reports required by the Sub-Servicing Entity and if the Midland Master Servicer or Special Servicer fails to do so it shall be an event of default with respect to the Midland Master Servicer or Special Servicer or (y) the Wachovia Master Servicer (but excluding one which the Wachovia Master Servicer has been directed to retain by a Sponsor or Mortgage Loan Seller), the Wachovia Master Servicer will be in default if the Sub-Servicing Entity defaults in accordance with the provision of this clause (h)).
Rights Upon Event of Default
If an Event of Default with respect to a Master 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 such Master Servicer as master 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 a Master Servicer or the Special Servicer, as applicable, under the Pooling and Servicing Agreement, such Master 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 applicable Master Servicer is also the Special Servicer and such Master Servicer is terminated, then such Master Servicer will also be terminated as Special Servicer. Except for the Directing Holder’s right to terminate the Special Servicer, as described in this prospectus supplement, a Certificateholder may not terminate the Master Servicers or Special Servicer if an Event of Default with respect to the Master Servicers or Special Servicer only affects a holder of a Serviced Companion Loan but does not affect a Certificateholder.
On and after the date of termination following an Event of Default by a Master Servicer or the Special Servicer, the Trustee will succeed to all authority and power of such Master 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 such Master 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, as evidenced in writing by each rating agency then rating such Certificates, to act as successor to the Master Servicers 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; provided, however, that no such compensation may be in excess of that permitted to the terminated Master Servicer or Special Servicer, provided, further, that if no successor can be obtained to perform the obligations of the terminated Master Servicer or Special Servicer after consultation with the Directing Holder, additional amounts may be paid to such successor and such amounts in excess of that
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permitted the terminated Master Servicer or Special Servicer shall be treated as Realized Losses. All reasonable costs and expenses of the Trustee or the successor Master Servicer or successor Special Servicer incurred in connection with transferring the mortgage files to the successor Master Servicer or Special Servicer and amending the Pooling and Servicing Agreement to reflect such succession are required to be paid by the predecessor Master Servicer or the Special Servicer, as applicable, upon presentation of reasonable documentation of such costs and expenses. If the predecessor Master Servicer or Special Servicer (as the case may be) has not reimbursed the Trustee or the successor Master Servicer or Special Servicer for such expenses within 90 days after the presentation of reasonable documentation, such expense is required to be reimbursed by the Trust Fund; provided that the terminated Master Servicer or Special Servicer shall not thereby be relieved of its liability for such expenses.
No Certificateholder or the holder of a Serviced Companion Loan, as applicable, 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 or the holder of such Serviced Companion Loan, as applicable, 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 the holder of such Serviced Companion Loan or the holders of Certificates of any Class affected thereby evidencing Percentage Interests of at least 25% of such Class, as applicable, have made written request of the Trustee to institute such proceeding in its capacity as Trustee 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, failed or refused to institute such proceeding.
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 Master Servicers, the Special Servicer and the Trustee 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 (or in the private placement memorandum relating to the non-offered Certificates) 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 (provided, that such amendment does not adversely affect in any material respect the interests of any Certificateholder or holder of a Serviced 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 that such amendment will not result in a qualification, withdrawal or downgrading of the then-current ratings assigned to the Certificates. The Pooling and Servicing Agreement requires that no such amendment shall cause the Upper-Tier REMIC, the Lower-Tier REMIC or the Villas Parkmerced 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 Master Servicers, the Special Servicer and the Trustee with the consent of the
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holders of Certificates evidencing at least 66% of the Percentage Interests of each Class of Certificates affected thereby and the holders of the Serviced Companion Loans, 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 Master Servicers 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 or Percentage Interests of holders of Certificates which are required to consent to any action or inaction under the 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.
Evidence of Compliance
See ‘‘Description of the Pooling Agreements—Evidence of Compliance’’ in the prospectus for a description of certain provisions of the Pooling and Servicing Agreement requiring the Trustee, the Master Servicers and Special Servicer to provide an annual certification regarding their compliance with the terms of the Pooling and Servicing Agreement, as well as an attestation of compliance with certain servicing criteria and an accountant’s attestation report with respect to such attestation. The Trustee, the Master Servicers and Special Servicer that will be required to provide an annual certification regarding their compliance with the terms of the Pooling and Servicing Agreement in this transaction are Wells Fargo Bank, N.A., Midland Loan Services, Inc., Wachovia Bank, National Association and LNR Partners, Inc. and GEMSA Loan Services, L.P.
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 and Class VPM Certificates) in proportion to the Certificate Balances of their Certificates, and 2% of the Voting Rights shall be allocated pro rata, based on their respective Notional Balances at the time of determination, 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. No Voting Rights will be allocated to the Class VPM Certificates.
Sale of Defaulted Mortgage Loans
The Pooling and Servicing Agreement contains provisions requiring, within 60 days after a 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 (including the Villas Parkmerced Non-Pooled Trust Component) 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
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acceleration of payments under the Mortgage Loan or the Serviced Loan Combination. 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 or a Serviced Loan Combination (and, with respect to a Loan Combination, subject to the purchase option of the holder of the related B Loan and the holder of the Class VPM Certificates, if any, and with respect to any Mortgage Loan whose borrower may have or may in the future incur mezzanine debt, subject to the purchase option of the holder of such mezzanine debt, if any) 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.
With respect to the Villas Parkmerced Loan and the Arrowhead Shopping Center Loan (subject to the rights of the holder of the related B Loan and the holder of the Class VPM Certificates as described under ‘‘Description of the Mortgage Pool—Split Loan Structures—The Villas Parkmerced Loan—Rights of the Holder of the Villas Parkmerced B—Purchase Option’’ and ‘‘—The Arrowhead Shopping Center Loan Combination—Rights of the Holders of the Arrowhead Shopping Center B Loan—Purchase Option’’ in this prospectus supplement), the party that exercises the foregoing Purchase Option will only be entitled to purchase the related Mortgage Loan (but not the B Loan).
There can be no assurance that the Special Servicer’s fair 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.
Unless and until the Purchase Option with respect to a Defaulted Mortgage Loan is exercised (or, with respect to the Serviced Loan Combinations, 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 a Mortgage Loan that has a related B Loan, a purchase option is exercised by the
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holder of the related B Loan, if any, or with respect to any Mortgage Loan whose borrower has incurred mezzanine debt, a purchase option is exercised by the holder of the related mezzanine loan, if any. With respect to clause (v) of the preceding sentence, see ‘‘Description of the Mortgage Pool—Split Loan Structures—The Villas Parkmerced Loan—Rights of the Holder of the Villas Parkmerced B—Purchase Option’’ and ‘‘—The Arrowhead Shopping Center Loan Combination—Rights of the Holders of the Arrowhead Shopping Center B Loan—Purchase Option’’ in this prospectus supplement. 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.
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 applicable Master Servicer will be required to determine, in accordance with the Servicing Standard, whether the Option Price represents a fair price. The applicable Master 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 such Master Servicer to determine if the Option Price represents a fair price for the Defaulted Mortgage Loan. In making such determination and absent manifest error, such Master Servicer will be entitled to conclusively rely on the opinion of such person in accordance with the terms of the Pooling and Servicing Agreement.
In addition, certain of the mortgage loans are subject to a purchase option, upon certain events of default in favor of a mezzanine lender. Such option is exercisable at a par purchase price as set forth in the related intercreditor agreement; provided, that if such option is exercised within 90 days after the occurrence of the relevant default, such price shall not include payment of the Liquidation Fee.
Realization Upon Defaulted Mortgage Loans
If a payment default or material non-monetary default on a Mortgage Loan has occurred or, in the Special Servicer’s judgment with the consent of the Directing Holder, 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
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(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 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) 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 Trustee 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.
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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 Loan Combination, the holder of the related Serviced Companion Loan, 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 applicable Master 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 respect to a Serviced Loan Combination, 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 Trustee is required to establish and maintain an Excess Liquidation Proceeds Account, in its own name for the benefit of the Certificateholders and with respect to each Serviced Loan Combination, the holder of the related Serviced Companion Loan. 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 Loan Combination 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 Master Servicers 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 or Serviced Loan Combination, 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 Holder), 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 Loan Combinations, as described under the heading ‘‘—Enforcement of ‘Due-on-Sale’ and ‘Due-on-Encumbrance’ Clauses’’ above, neither the Master Servicers 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 Loan Combination that would affect the amount or timing of any related payment of principal, interest or other amount payable thereunder or, as applicable, in the applicable Master 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 Loan Combination 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 Loan Combination 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
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judgment, a material default on such Mortgage Loan or Serviced Loan Combination has occurred or a default in respect of payment on such Mortgage Loan or Serviced Loan Combination 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 holder of the related Serviced Companion Loan, as a collective whole, 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 Loan Combination to a date occurring later than the earlier of (A) two years prior to the Rated Final Distribution Date and (B) if the Specially Serviced Mortgage Loan is secured by a ground lease, the date 20 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 Holder if the Special Servicer gives due consideration to the remaining term of the ground lease and such extension is in the best interest of Certificateholders and if the Serviced Loan Combination is involved, the holder of the related Serviced Companion Loan (as a collective whole));
(iii) subject to any modifications to be performed by the applicable Master Servicer with respect to a performing Mortgage Loan or a performing Loan Combination as described below, the Special Servicer may not agree to or permit any modification, waiver or amendment of any term of any Mortgage Loan or Serviced Loan Combination that is not in default or with respect to which default is not reasonably foreseeable unless it provides the Trustee with an opinion of counsel (at the expense of the related Borrower or such other person requesting such modification or, if such expense cannot be collected from the related Borrower or such other person, to be paid by the Master Servicer as a Servicing Advance) to the effect that the contemplated waiver, modification or amendment (A) would not be a ‘‘significant modification’’ of such Mortgage Loan within the meaning of Treasury Regulations Section 1.860G-2(b) and (B) will not cause (x) any of the Villas Parkmerced Loan REMIC, the Lower-Tier REMIC or the Upper-Tier REMIC to fail to qualify as a REMIC for purposes of the Code or (y) any of the Villas Parkmerced Loan REMIC, the Lower-Tier REMIC or the Upper-Tier REMIC to be subject to any tax under the REMIC Provisions;
(iv) neither the Master Servicers nor the Special Servicer may permit any borrower to add or substitute any collateral for an outstanding Mortgage Loan or Serviced Loan Combination, which collateral constitutes real property, unless (i) the applicable Master 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 applicable Master 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; and
(v) with limited exceptions, neither the Master Servicers nor the Special Servicer shall release any collateral securing an outstanding Mortgage Loan or Serviced Loan Combination;
provided that notwithstanding clauses (i) through (v) above, none of the Master Servicers or 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.
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The Special Servicer will have the right to consent to any Modification with regard to any Mortgage Loan or Serviced Loan Combination that is not a Specially Serviced Mortgage Loan (other than certain non-material Modifications, to which the applicable Master Servicer may agree without consent of any other party), and the Special Servicer will also be required to obtain the consent of the Directing Holder 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 Holder 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, a Master Servicer, with the consent of the Directing Holder, may extend the maturity of any Mortgage Loan or Serviced Loan Combination 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 Loan Combination or, in the judgment of such Master Servicer, such default is reasonably foreseeable. In addition, the Special Servicer may, subject to the Servicing Standard and with the consent of the Directing Holder, extend the maturity of any Mortgage Loan or Serviced Loan Combination that is not, at the time of such extension, a Specially Serviced Mortgage Loan, in each case for up to two years (subject 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 Loan Combination has occurred.
Any modification, extension, waiver or amendment of the payment terms of a Serviced Loan Combination 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.
Furthermore, with respect to the Arrowhead Shopping Center Loan Combination, the rights of the Master Servicer and the Special Servicer to agree to certain Modifications are subject to the prior written consent of the holder of the related B Loan under the intercreditor agreement as described under ‘‘Description of the Mortgage Pool—Split Loan Structures—The Arrowhead Shopping Center Loan Combination—Rights of the Holders of the Arrowhead Shopping Center B Loan—Consent to Modifications’’ in this prospectus supplement.
For any performing Mortgage Loan and any performing Loan Combination, and subject to the rights of the Special Servicer, Directing Holder and holders of the Serviced Companion Loan described above, as applicable, the applicable Master Servicer, without the consent of the Special Servicer, will be responsible for any request by a Borrower for the consent or other appropriate action on the part of the lender with respect to:
(a) approving routine leasing activity (subject to certain limitations with respect to subordination and non-disturbance agreements set forth in the Pooling and Servicing Agreement) with respect to any lease for less than the lesser of 15,000 square feet or 20% of the related Mortgaged Property;
(b) approving any waiver affecting the timing of receipt of financial statements from any Borrower; provided that such financial statements are delivered no less than quarterly and within 60 days of the end of the calendar quarter;
(c) approving annual budgets for the related Mortgaged Property; provided that no such budget (i) provides for the payment of operating expenses in an amount equal to more than 110% of the amounts budgeted therefor for the prior year or (ii) provides for the payment of any material expenses to any affiliate of the Borrower (other than the payment of a management fee to any property manager if such management fee is no more than the management fee in effect on the Cut-off Date);
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(d) subject to other restrictions herein regarding Principal Prepayments, waiving any provision of a Mortgage Loan requiring a specified number of days notice prior to a Principal Prepayment;
(e) approving modifications, consents or waivers (other than those specifically prohibited under this ‘‘—Modifications’’ section) in connection with a defeasance permitted by the terms of the related Mortgage Loan or Loan Combination if the applicable Master Servicer receives an opinion of counsel (which opinion of counsel will be an expense of the Borrower) to the effect that such modification, waiver or consent would not cause any REMIC to fail to qualify as a REMIC under the Code or result in a ‘‘prohibited transaction’’ under the REMIC Provisions;
(f) approving consents with respect to non-material right-of-ways and non-material easements and consent to subordination of the related Mortgage Loan or Serviced Loan Combination to such non-material rights-of-way or easements; and
(g) any non-material modifications, waivers or amendments not provided for in clauses (a) through (f) above, which are necessary to cure any ambiguities or to correct scrivener’s errors in the terms of the related Mortgage Loan.
See also ‘‘—Special Servicing—The Special Servicer’’ below for a description of the Directing Holder’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 Midland Master Servicer, and, if the Midland Master Servicer does not exercise its option, the Wachovia Master Servicer, and if the Wachovia Master Servicer does not exercise its option, the Special Servicer, will have the option to purchase all of the Mortgage Loans (including the Villas Parkmerced Non-Pooled Trust Component) 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. Any such party may be an affiliate of the Sponsors, Depositor, Issuing Entity or other related party at the time it exercises such right. 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 Master Servicers, 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 S, Class R and Class LR Certificates), including the Class X, Class VPM Certificates (provided, however, that the Class A-1 through Class E Certificates are no longer outstanding), for the
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Mortgage Loans remaining in the Trust. Following such termination, no further amount shall be payable on the Certificates, regardless of whether any recoveries are received on the REO Properties.
Notice of any such termination is required to be given promptly by the Trustee by letter to the Certificateholders with a copy to the Master Servicers and each rating agency at their addresses shown in the Certificate Registrar as soon as practicable after the Trustee shall have received, given or been deemed to have received a Notice of Termination but in any event not more than 30 days, and not less than ten days, prior to the anticipated termination date. With respect to any book-entry Certificates, such notice will be mailed to DTC and beneficial owners of Certificates will be notified to the extent provided in the procedures of DTC and its participants.
Servicing Compensation and Payment of Expenses
Pursuant to the Pooling and Servicing Agreement, each Master Servicer will be entitled to withdraw the Master Servicing Fee for the Mortgage Loans that it is servicing 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’’) that is a component of the Servicing Fee Rate. 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 (under the heading ‘‘Administrative Fee Rate’’) for each Mortgage Loan (including the Villas Parkmerced Non-Pooled Trust Component) and will include the Master Servicing Fee, the Trustee Fee and any fee for primary servicing functions (which varies with each Mortgage Loan). The Master Servicing Fee will be retained by each Master Servicer from payments and collections (including insurance proceeds, condemnation proceeds and liquidation proceeds) in respect of each Mortgage Loan it is servicing. Such Master 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 with respect to the Mortgage Loans that it is servicing (and with respect to each Serviced Loan Combination, the related separate custodial account) and certain Reserve Accounts (to the extent consistent with the related Mortgage Loan Documents), (ii) to the extent permitted by applicable law and the related Mortgage Loans Documents, 50% of any loan modification, extension and assumption fees (including any related application 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 Maintenance Charges), in each case, with respect to the Mortgage Loans that the applicable Master Servicer is servicing, (iii) Net Prepayment Interest Excess, if any, and (iv) Net Default Interest and any late payment fees that accrued during a Collection Period on any non-Specially Serviced Mortgage Loan to the extent collected by the Trust and 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 (other than Special Servicing Fees, Workout Fees and Liquidation Fees); provided, however, that with respect to (i) the Arrowhead Shopping Center Loan Combination, following the occurrence of an event of default the related Net Default Interest shall be allocated sequentially to the Mortgage Loan and the related Companion Loan (after netting out interest on Advances and certain other Trust expenses) in accordance with the related intercreditor agreement and the Pooling and Servicing Agreement and (ii) with respect to the Arrowhead Shopping Center Loan Combination, assumption and similar fees will be allocated pro rata between the Mortgage Loan and the related Companion Loan in accordance with the related intercreditor agreement. 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 primary servicing fee, Master Servicing Fee and the Trustee Fee will accrue on the same basis as interest accrues on the Mortgage Loans.
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In connection with any Master Servicer Prepayment Interest Shortfall, the applicable Master Servicer will be obligated to reduce its Servicing Compensation as provided in this prospectus supplement under ‘‘Description of the Offered Certificates—Prepayment Interest Shortfalls.’’
Each Master 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 Trustee will withdraw monthly from the Distribution Account the portion of the Servicing Fee payable to the Trustee.
Special Servicing
The Special Servicer. For a description of the Special Servicer see ‘‘Transaction Parties—The Special Servicer’’ in this prospectus supplement.
The Directing Holder. The Directing Holder may at any time with or without cause terminate substantially all of the rights and duties of the Special Servicer and appoint a replacement to perform such duties under substantially the same terms and conditions as applicable to the Special Servicer, provided that in the event that the Directing Holder is not the Controlling Class Representative, such Directing Holder may only terminate and appoint a replacement Special Servicer with respect to the applicable Serviced Loan Combination. The Directing Holder 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, 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 Holder.
The Directing Holder will have no liability whatsoever to the Trust Fund or any Certificateholder (except that if the Directing Holder is the Controlling Class Representative, other than to a Controlling Class Certificateholder and will have no liability to any Controlling Class Certificateholder for any action taken, or for refraining from the taking of any action, in good faith 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 that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties). By its acceptance of a Certificate, each Certificateholder confirms its understanding that the Directing Holder may take actions that favor the interests of one or more Classes of the Certificates over other Classes of the Certificates or one or more Companion Loan or B Loan holders over Certificateholders or other holders of the related Loan Combination, and that the Directing Holder may have special relationships and interests that conflict with those of holders of some Classes of the Certificates or other holders of the related Loan Combination, that the Directing Holder may act solely in its own interest (and if the Directing Holder is the Controlling Class Representative, the interests of the holders of the Controlling Class), that the Directing Holder
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does not have any duties to the holders of any Class of Certificates or other holders of the related Loan Combination (and if the Directing Holder is the Controlling Class Representative, other than the Controlling Class), that the Directing Holder that is not the Controlling Class Representative may take actions that favor its own interest over the interests of Certificateholders or other holders of the related Loan Combination (and if the Directing Holder is the Controlling Class Representative, such Directing Holder may 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 Directing Holder that is not the Controlling Class Representative, absent willful misfeasance, bad faith or negligence, will not be deemed to have been negligent or reckless, or to have acted in bad faith or engaged in willful misfeasance, by reason of its having acted solely in its own interests (and if the Directing Holder is the Controlling Class Representative, in the interests of the holders of the Controlling Class), and that the Directing Holder will have no liability whatsoever for having so acted, and no Certificateholder or Companion Loan Noteholder may take any action whatsoever against the Directing Holder or any director, officer, employee, agent or principal thereof 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 Q Certificates. For purposes of determining the Controlling Class, the Class A-1, Class A-2, Class A-3, Class A-AB, Class A-4, Class A-1A and Class A-1B Certificates collectively will be treated as one Class.
The ‘‘Directing Holder’’ means:
• | with respect to any Mortgage Loan, other than any Serviced Loan Combination, the Controlling Class Representative; |
• | with respect to the Villas Parkmerced Loan Combination, (a) prior to a Villas Parkmerced Control Appraisal Event, one or more of the most subordinate holder or holders of the Villas Parkmerced B Loan not subject to a Villas Parkmerced Control Appraisal Event, (b) so long as a Villas Parkmerced Control Appraisal Event exists with respect to each Villas Parkmerced B Loan, the holder of the Class VPM Certificates and (c) so long as the Class VPM Certificates are subject to a Class VPM Control Appraisal Event, the Controlling Class Representative and |
• | with respect to the Arrowhead Shopping Center Loan Combination, the Controlling Class Representative, except that the holder of the Arrowhead Shopping Center B Loan will have certain rights as described under the ‘‘Description of the Mortgage Pool—Split Loan Structures—The Arrowhead Shopping Center Loan—Rights of the Holders of the Arrowhead Shopping Center B Loan’’ in this prospectus supplement. |
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 Trustee from time to time; provided, however, that (i) absent 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 Trustee 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 and any Serviced Loan
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Combination with respect to which: (i) either (x) with respect to any Mortgage Loan or Serviced Loan Combination other than a Balloon Loan, a payment default shall have occurred on such Mortgage Loan or Serviced Loan Combination 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 Loan Combination 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; provided, however, if (A) the related borrower is diligently seeking a refinancing commitment (and delivers a statement to that effect to the applicable Master Servicer, who shall promptly deliver a copy to the Special Servicer and the Controlling Class Representative 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 Loan Combination and (D) the Controlling Class Representative 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 applicable Master Servicer, who shall have promptly delivered a copy to the Special Servicer and the Controlling Class Representative, on or before the 60th day after the related maturity date, a refinancing commitment reasonably acceptable to the Special Servicer and the Controlling Class Representative, 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 Loan Combination), 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 applicable Master Servicer or the Special Servicer (with the Controlling Class Representative’s consent, in the case of a determination by the Special Servicer) 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 or, if applicable, Serviced Loan Combination or otherwise would materially adversely affect the interests of Certificateholders and, if applicable, the holder of the related Serviced Companion Loan and would continue unremedied beyond the applicable grace period under the terms of the Mortgage Loan or Serviced Loan Combination (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 Loan Combination will no longer be a Specially Serviced Mortgage Loan and no Special Servicing Fees will be payable with respect thereto; (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 applicable Master Servicer or the Special Servicer has notice (other than a failure by such related borrower to pay principal or interest) and that in the opinion of such Master Servicer or the Special Servicer (in the case of the Special Servicer, with the consent of the Controlling Class Representative) materially and adversely affects the interests of the
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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 Loan Combination (or if no grace period is specified for those defaults which are capable of cure, 60 days); or (viii) the date on which the applicable Master Servicer or Special Servicer receives notice of the foreclosure or proposed foreclosure of any lien on the related Mortgaged Property (each, a ‘‘Servicing Transfer Event’’); provided, however, that a Mortgage Loan or Serviced Loan Combination 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 Loan Combination current and thereafter made three consecutive full and timely Monthly Payments, including pursuant to any workout of the Mortgage Loan or the Serviced Loan Combination, (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 Loan Combination to continue to be characterized as a Specially Serviced Mortgage Loan.
If a Servicing Transfer Event exists with respect to the Mortgage Loan included in a Serviced Loan Combination, then it will also be deemed to exist with respect to the related Serviced Companion Loan. The Loan Combinations are intended to always be serviced or specially serviced, as the case may be, together (provided that prior to an event of default on the Arrowhead Shopping Center Loan Combination the holder of the Arrowhead Shopping Center Companion Loan may appoint a separate servicer to collect payments on the Arrowhead Shopping Center Companion Loan). If any Mortgage Loan in a group of cross-collateralized Mortgage Loans becomes a Specially Serviced Loan, subject to approval by the Controlling Class Representative, each other Mortgage Loan in such group of cross-collateralized Mortgage Loans shall also become a Specially Serviced Loan.
A Servicing Transfer Event with respect to the Villas Parkmerced Loan Combination, will generally be delayed if a holder of the related B Loans or the Class VPM Certificateholder is making all cure payments required by the related co-lender agreement. See ‘‘Description of the Mortgage Pool—Split Loan Structures—The Villas Parkmerced Loan— Rights of the Holder of the Villas Parkmerced B—Cure Rights’’ in this prospectus supplement.
Asset Status Report. The Special Servicer will prepare a report (the ‘‘Asset Status Report’’) for each Mortgage Loan and each Serviced Loan Combination that becomes a Specially Serviced Mortgage Loan not later than 30 days after the servicing of such Mortgage Loan or such Serviced Loan Combination is transferred to the Special Servicer. Each Asset Status Report will be delivered to the Master Servicers, the Controlling Class Representative and the rating agencies and in the case of the Arrowhead Shopping Center Loan Combination, the holder of the Arrowhead Shopping Center B Loan. 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 the Certificateholders (and with respect to a Serviced Loan Combination, the holder of the related Serviced Companion Loan, as a collective whole). 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
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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 and the holder of the related Serviced Companion Loan, 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 Loan Combination, the Directing Holder (including, in the case of the Arrowhead Shopping Center Loan Combination, the holder of the Arrowhead Shopping Center B Loan) shall be entitled to a comparable Asset Status Report, but the procedure and timing for approval by the Directing Holder 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 Loan Combination 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 the Serviced Loan Combination is a Specially Serviced Mortgage Loan. With respect to non-Specially Serviced Mortgage Loans, the applicable Master 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 such Master 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 applicable Master 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 Loan Combination, the Directing Holder shall be entitled to a comparable Request for Approval, but the procedure and timing for approval by the Directing Holder of the related Request for Approval will be governed by the terms of the related intercreditor agreement and the Pooling and Servicing Agreement.
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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 Master Servicers 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. In addition, if the Master Servicer or the Special Servicer determines that immediate action is necessary to protect the interests of the Certificateholders (and any holder of a related B Loan), as a collective whole, it may take such action without waiting for a response from the Controlling Class Representative or Directing Holder.
The Master Servicers 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 or Serviced Loan Combination that (i) is a Specially Serviced Mortgage Loan, (ii) is delinquent, (iii) has been placed on a ‘‘Watch List’’ or (iv) has been identified by the Master Servicers or Special Servicer, as exhibiting deteriorating performance.
The Depositor anticipates that an affiliate of the Special Servicer will purchase the initial Controlling Class and will be the initial Controlling Class Representative.
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 0.35% per annum of the Stated Principal Balance of each related Specially Serviced Mortgage Loan and REO Loan subject to a minimum monthly amount equal to $4,000 with respect to each such specially serviced loan and REO property (the ‘‘Special Servicing Fee’’).
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 or Serviced Loan Combination (other than the Arrowhead Shopping Center B Loan) that ceases to be a Specially Serviced Mortgage Loan pursuant to the definition thereof. As to each such Mortgage Loan or Serviced Loan Combination (other than the Arrowhead Shopping Center B Loan), the Workout Fee will be payable out of, and will be calculated by application of, a ‘‘Workout Fee Rate’’ of 1.00% to each collection of interest and principal (including scheduled payments, prepayments, Balloon Payments and payments at maturity) received on such Mortgage Loan or Serviced Loan Combination (other than the Arrowhead Shopping Center B 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 Loan Combination (other than the Arrowhead Shopping Center B 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 the Mortgage Loans or Serviced Loan Combinations that cease to be a Specially Serviced Mortgage Loan during the period that it had responsibility for servicing such Specially Serviced Mortgage Loan and that had ceased being a Specially Serviced Mortgage Loan (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.
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A ‘‘Liquidation Fee’’ will be payable to the Special Servicer with respect to each Specially Serviced Mortgage Loan or REO Loan or Mortgage Loan repurchased by a Mortgage Loan Seller outside of the applicable cure period, in each case, 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 1.00% to the related payment or proceeds. Notwithstanding anything to the contrary described above, no Liquidation Fee will be payable based on, or out of, Liquidation Proceeds received in connection with:
• | the purchase of any Specially Serviced Mortgage Loan or REO Property by the Special Servicer, the Controlling Class Representative, |
• | the purchase of all of the Mortgage Loans and REO Properties by the Servicers, the Special Servicer or the Controlling Class Representative in connection with the termination of the Trust, |
• | 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, |
• | the purchase of the Villas Parkmerced Loan by the holder of the related B Loan or the Class VPM Certificates, unless such Loan is purchased more than 90 days after the holder of the related B Loan received notice of the default giving rise to the right of such holder to purchase the Mortgage Loan; |
• | the purchase of the Arrowhead Shopping Center Loan by the holder of the Arrowhead Shopping Center B Loan pursuant to the related intercreditor agreement, as described under ‘‘Description of the Mortgage Pool—Split Loan Structures—The Arrowhead Shopping Center Loan—Rights of the Holders of the Arrowhead Shopping Center B Loan—Purchase Option’’ in this prospectus supplement; and |
• | the purchase of a Mortgage Loan by the holder of any related mezzanine debt unless the related mezzanine intercreditor agreement requires the purchaser to pay such fees (provided that any future permitted mezzanine debt will generally require the payment of a Liquidation Fee, to the extent not prohibited by the loan documents, if the Mortgage Loan is not purchased within 90 days after the holder of the related mezzanine loan received notice of the default giving rise to the right of such holder to purchase the Mortgage Loan). |
If, however, Liquidation Proceeds are received with respect to any Specially Serviced 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:
• | any loan modification, extension and assumption fees related to the Specially Serviced Mortgage Loans, |
• | any income earned on deposits in the REO Accounts, |
• | 50% of any extension fees, modification and assumption fees (including any related application fees) of non-Specially Serviced Mortgage Loans, and |
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• | any late payment fees that accrued during a Collection Period on any Specially Serviced Mortgage Loan to the extent collected by the Trust and 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 the 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. |
Master Servicers and Special Servicer Permitted to Buy Certificates
The Master Servicers and the Special Servicer are permitted to purchase any Class of Certificates. Such a purchase by the Master Servicers or Special Servicer could cause a conflict relating to the Master Servicers’ or Special Servicer’s duties pursuant to the Pooling and Servicing Agreement and the Master Servicers’ 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 each Master Servicer or Special Servicer will administer the Mortgage Loans or Serviced Loan Combinations in accordance with the Servicing Standard, without regard to ownership of any Certificate by such Master Servicer or Special Servicer or any affiliate thereof.
Reports to Certificateholders; Available Information
Trustee Reports
On each Distribution Date, the Trustee will be required to make available to the general public (including each Certificateholder, the Depositor, the Master Servicers, the Special Servicer, each Underwriter, each rating agency and any potential investors in the Certificates) a statement (a ‘‘Distribution Date Statement’’) based upon information provided by the Master Servicers and Special Servicer (and in certain cases only to the extent received from the applicable Master Servicer or Special Servicer, as applicable) and delivered to the Trustee, in accordance with Commercial Mortgage Securities Association (‘‘CMSA’’) guidelines setting forth, among other things:
(a) the Record Date, Interest Accrual Period, and Determination Date for such Distribution Date;
(b) the amount of the distribution on the Distribution Date to the holders of each class of Certificates (other than the Class S, Class X, Class R and Class LR Certificates) in reduction of the Certificate Balance of the Certificates;
(c) the amount of the distribution on the Distribution Date to the holders of each class of Certificates allocable to Interest Accrual Amount and Interest Shortfalls;
(d) the aggregate amount of Advances made in respect of the Distribution Date and the amount on interest paid on Advances since the prior Distribution Date (including, to the extent material, the general use of funds advanced and general source of funds for reimbursements);
(e) the aggregate amount of compensation paid to the Trustee and servicing compensation paid to the Master Servicers and the Special Servicer for the related Determination Date and any other fees or expenses accrued and paid from the Trust Fund;
(f) the aggregate Stated Principal Balance of the Mortgage Loans and any REO Loans outstanding immediately before and immediately after the Distribution Date;
(g) the number (as of the related and the next preceding Determination Date), and the aggregate principal balance, weighted average remaining term to maturity and weighted average mortgage rate (and interest rates by distributional groups or ranges) of the Mortgage Loans as of the related Determination Date;
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(h) the number and aggregate Stated Principal Balance of the Mortgage Loans or Serviced Loan Combinations (A) delinquent 30-59 days, (B) delinquent 60-89 days, (c) delinquent 90 days or more, (D) that are specially serviced but that are not delinquent, or (E) current, but not specially serviced, as to which foreclosure proceedings have been commenced, but not REO Property;
(i) the Available Funds for the Distribution Date, and any other cash flows received on the mortgage loans and applied to pay fees and expenses (including the components of the Available Funds, or such other cash flows);
(j) the amount of the distribution on the Distribution Date to the holders of any class of Certificates allocable to Prepayment Premiums Yield Maintenance Charges;
(k) the accrued Interest Accrual Amount in respect of each Class of Certificates for such Distribution Date;
(l) the Pass-Through Rate for each class of Certificates for the Distribution Date and the next succeeding Distribution Date;
(m) the Principal Distribution Amount for the Distribution Date;
(n) the Certificate Balance or Notional Amount, as the case may be, of each class of Certificates immediately before and immediately after the Distribution Date, separately identifying any reduction in these amounts as a result of the allocation of any Realized Loss on the Distribution Date;
(o) the fraction, expressed as a decimal carried to at least eight places, the numerator of which is the then related Certificate Balance, and the denominator of which is the related initial aggregate Certificate Balance, for each class of Certificates (other than the Class S and Residual Certificates) immediately following the Distribution Date;
(p) the amount of any Appraisal Reduction Amounts allocated during the related Collection Period on a loan-by-loan basis; the total Appraisal Reduction Amounts allocated during the related Collection Period; and the total Appraisal Reduction Amounts as of such Distribution Date on a loan-by-loan basis;
(q) the number and related principal balances of any Mortgage Loans modified, extended or waived on a loan-by-loan basis since the previous Determination Date (including a description of any material modifications, extensions or waivers to Mortgage Loan terms, fees, penalties or payments during the Collection Period or that have cumulatively become material over time);
(r) the amount of any remaining unpaid Interest Shortfalls for each Class of Certificates as of the Distribution Date;
(s) a loan-by-loan listing of each Mortgage Loan which was the subject of a principal prepayment (other than liquidation proceeds and insurance proceeds) during the related Collection Period and the amount of principal prepayment occurring, together with the aggregate amount of principal prepayments made during the related Collection Period and any excess prepayment interest shortfall for such Distribution Date;
(t) a loan-by-loan listing of any Mortgage Loan which was defeased since the previous Determination Date;
(u) the amount of the distribution to the holders of each class of Certificates on the Distribution Date attributable to reimbursement of Realized Losses;
(v) as to any Mortgage Loan repurchased by a Mortgage Loan Seller or otherwise liquidated or disposed of during the related Collection Period, (A) the Loan Number of the related Mortgage Loan and (B) the amount of proceeds of any repurchase of a Mortgage Loan, Liquidation Proceeds and/or other amounts, if any, received thereon during the related Collection Period and the portion thereof included in the Available Funds for such Distribution Date;
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(w) the amount on deposit in each account established pursuant to the Pooling and Servicing Agreement before and after giving effect to the distribution made on such Distribution Date (and any material account activity since the prior Distribution Date);
(x) the current credit support levels for each class of Certificates;
(y) the original and then current ratings for each class of Certificates;
(z) with respect to any REO Loan as to which the related Mortgaged Property became an REO Property during the preceding calendar month, the city, state, property type, the current Stated Principal Balance and the Stated Principal Balance of such Mortgage Loan as of the date each became an REO Loan;
(aa) the value of any REO Property included in the Trust Fund as of the related Determination Date, on a loan-by-loan basis, based on the most recent appraisal or valuation;
(bb) with respect to any REO Property sold or otherwise disposed of during the related Collection Period and for which a final recovery determination has been made, (A) the Realized Loss attributable to such Mortgage Loan, (B) the amount of sale proceeds and other amounts, if any, received in respect of such REO Property during the related Collection Period and the portion thereof included in the Available Funds for such Distribution Date, (C) the date of the final recovery determination and (E) the balance of the Excess Liquidations Proceeds Account for such Distribution Date;
(cc) the amount of the distribution on the Distribution Date to the holders of the Class S and Residual Certificates;
(dd) material breaches of any covenants under the Pooling and Servicing Agreement of which the Trustee, the Master Servicers or the Special Servicer has received written notice; and
(ee) such other information and in such form as will be specified in the Pooling and Servicing Agreement.
Certain information regarding the Mortgage Loans will be made accessible at the website maintained by the Trustee initially located at www.ctslink.com or such other mechanism as the Trustee may have in place from time to time. In addition, the Trustee will make available on such website any reports on Forms 10-D, 10-K and 8-K that have been filed with respect to the trust through the EDGAR system.
After all of the Certificates have been sold by the Underwriters, certain information may be made accessible on the website maintained by the Master Servicers as the Master Servicers may have in place from time to time.
Master Servicers Reports
Each Master Servicer is required to deliver to the Trustee prior to each Distribution Date, and the Trustee 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 CMSA reports:
• | A ‘‘comparative financial status report.’’ |
• | A ‘‘delinquent loan status report.’’ |
• | A ‘‘historical loan modification and corrected mortgage loan report.’’ |
• | A ‘‘historical liquidation report.’’ |
• | An ‘‘REO status report.’’ |
• | A ‘‘Master Servicer watch list.’’ |
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• | A loan level reserve/LOC report. |
• | A CMSA Advance Recovery Report. |
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 Trustee 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 Master Servicers no later than four business days prior to the related Master Servicer Remittance Date. Absent manifest error, none of the Master Servicers, the Special Servicer 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 Master Servicers, the Special Servicer or the Trustee, as applicable.
The Trustee, the Master Servicers 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 Loan Combination and reasonably relied upon by such party.
Each Master Servicer is also required to deliver to the Trustee 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:
(a) Annually, on or before June 30 of each year, commencing with June 30, 2007, 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 Master Servicers (or the Special Servicer in the case of Specially Serviced Mortgage Loans and REO Properties) are required to use their 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 applicable Master 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 each Master Servicer or the Special Servicer in the other reports referenced above.
The Trustee is to make available a copy of each Operating Statement Analysis Report and NOI Adjustment Worksheet that it receives from the Master Servicers 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 Trustee upon request.
In addition, within a reasonable period of time after the end of each calendar year, the Trustee is required to send to each person who at any time during the calendar year was a Certificateholder of record, a report summarizing on an annual basis (if appropriate) certain items provided to Certificateholders in the monthly Distribution Date Statements and such other information as may be reasonably required to enable such Certificateholders to prepare
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their federal income tax returns. The Trustee 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 Trustee 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 Serviced Companion Loan), the Depositor, the Master Servicers, 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 Master Servicers and the Special Servicer to the Trustee since the Closing Date regarding compliance with the relevant agreements, (iv) the most recent property inspection report prepared by or on behalf of the Master Servicers or the Special Servicer with respect to each Mortgaged Property and delivered to the Trustee, (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 Master Servicers or the Special Servicer with respect to each Mortgaged Property and delivered to the Trustee, (vi) any and all modifications, waivers and amendments of the terms of a Mortgage Loan or Serviced Loan Combination entered into by the Master Servicers and/or the Special Servicer and delivered to the Trustee, and (vii) any and all officers’ certificates and other evidence delivered to or by the Trustee to support the Master Servicers’, or 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 Trustee to the extent such documents are in the Trustee’s possession.
Exchange Act Filings
The Trust will file Distribution Reports on Form 10-D, Annual Reports on Form 10-K and (if applicable) Current Reports on Form 8-K with the Securities and Exchange Commission (the ‘‘Commission’’) regarding the Certificates, to the extent, and for such time, as it shall be required to do so under the Securities Exchange Act of 1934, as amended. Such reports will be filed under the name ‘‘Deutsche Mortgage & Asset Receiving Corp.’’ (Commission file no. 333-125499). Members of the public may read and copy any materials filed with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Members of the public may obtain information regarding the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The address of that internet site is http://www.sec.gov.
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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 and proceeds thereof (such non-excluded portion of the Trust, the ‘‘Trust REMICs’’), as three separate REMICs within the meaning of Code Section 860D (the "Villas Parkmerced Loan REMIC," the ‘‘Lower-Tier REMIC’’ and the ‘‘Upper-Tier REMIC,’’ respectively). The Villas Parkmerced Loan REMIC will hold the Villas Parkmerced Loan, proceeds thereof held in the Collection Account and the Interest Reserve Account, the Villas Parkmerced Loan Distribution Account and any related REO Property, and will issue certain uncertificated classes of regular interests (the "Villas Parkmerced Loan REMIC Regular Interests") to the Lower-Tier REMIC. The Lower-Tier REMIC will hold the Mortgage Loans (other than the Villas Parkmerced Loan), the Villas Parkmerced Loan REMIC Regular Interests), other than Excess Interest, proceeds thereof held in the Collection Account and 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. The Class LR Certificates will represent the sole class of residual interests in the Villas Parkmerced Loan REMIC and the Lower-Tier REMIC. 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-3, Class A-AB, Class A-4, Class A-1A, Class A-1B, Class A-M, Class A-J, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class O, Class P, Class Q and Class VPM 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 ongoing compliance with certain conditions. Assuming (i) the making of appropriate elections, (ii) compliance with the Pooling and Servicing Agreement and (iii) compliance with any changes in the law, including any amendments to the Code or applicable temporary or final regulations of the United States Department of the Treasury (‘‘Treasury Regulations’’) thereunder, in the opinion of Cadwalader, Wickersham & Taft LLP, the Villas Parkmerced Loan REMIC, the Lower-Tier REMIC and the Upper-Tier REMIC 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 Villas Parkmerced Loan REMIC. In addition, in the opinion of Cadwalader, Wickersham & Taft LLP, the portion of the Trust Fund consisting of the Excess
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Interest and related amounts in the Grantor Trust Distribution Account, which are beneficially owned by the Class S Certificates, will be treated as a grantor trust for federal income tax purposes under subpart E, Part I of subchapter J of the Code.
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 to the extent of the allocable portion of the Mortgage Loans secured by multifamily properties. As of the Cut-off Date, Mortgage Loans secured by multifamily properties (excluding mixed-use properties) represented approximately 29.18% 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 Trustee 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 Class of Offered Certificates will be treated as holding a Certificate with amortizable bond premium will depend on such Certificateholder’s purchase price and the distributions remaining to be made on such Certificate at the time of its acquisition by such Certificateholder. It is anticipated that the Offered Certificates (other than the Class E Certificates) will be issued at a premium for federal income tax purposes and that the Class E Certificates will be issued with a de minimis amount of original issue discount. 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, provided that it is assumed that each ARD Loan will prepay in full on its Anticipated Repayment Date. 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
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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.
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 ‘‘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, underwritten by the lead manager, 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;
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(4) The sum of all payments made to and retained by the Underwriters 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 each 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 Trust Fund, 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 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, any Underwriter, the Trustee, the Master Servicers, the Special 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 lead manager believes that the conditions to the applicability of the Exemption will generally be met with respect to the Offered Certificates, other than possibly those conditions which are dependent on facts unknown to the lead manager or which it cannot control, such
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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 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 Certificates will not constitute ‘‘mortgage related securities’’ for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. The appropriate characterization of the Certificates under various legal investment restrictions, and thus the ability of investors subject to these restrictions to purchase certificates, is subject to significant interpretive uncertainties.
No representations are made as to the proper characterization of the Offered Certificates for legal investment, financial institution regulatory, or other purposes, or as to the ability of particular investors to purchase the Offered Certificates under applicable legal investment restrictions. The uncertainties described above (and any unfavorable future determinations concerning the legal investment or financial institution regulatory characteristics of the Offered Certificates) may adversely affect the liquidity of the Offered Certificates. Accordingly, all investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the Offered Certificates will constitute legal investments for them 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 (the "Underwriting Agreement"), between the Depositor and Deutsche Bank Securities Inc. Citigroup Global Markets Inc., PNC Capital Markets LLC, Nomura Securities International, Inc., J.P. Morgan Securities Inc. and Wachovia Capital Markets, LLC (collectively, the "Underwriters") 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 March 14, 2006, against payment therefor in immediately available funds.
Deutsche Bank Securities Inc. is an affiliate of German American Capital Corporation, one of the Sponsors, and of the Depositor. Citigroup Global Markets Inc. is an affiliate of Citigroup Global Markets Realty Corp., one of the Sponsors. PNC Capital Markets LLC is an affiliate of PNC Bank, one of the Sponsors and of the Midland Master Servicer, one of the Master Servicers. Wachovia Capital Markets, LLC is an affiliate of the Wachovia Master Servicer, one of the Master Servicers.
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In the Underwriting Agreement, the Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase the Certificate Balances or Notional Balance, as applicable, of each class of Offered Certificates set forth below, subject in each case to a variance of 5%:
Class | Deutsche
Bank Securities, Inc. |
Citigroup Global Markets Inc. |
PNC Capital Markets LLC |
Nomura Securities International, Inc. |
J.P. Morgan Securities Inc. |
Wachovia Capital Markets, LLC |
||||||||||||||||||||
Class A-1 | $ | 36,000,000 | $ | 36,000,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-2 | $ | 119,500,000 | $ | 119,500,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-3 | $ | 26,500,000 | $ | 26,500,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-AB | $ | 55,500,000 | $ | 55,500,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-4 | $ | 407,453,000 | $ | 407,453,000 | $ | 0.00 | $ | 25,000,000 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-1A | $ | 154,000,000 | $ | 154,000,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-1B | $ | 259,318,000 | $ | 259,318,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-M | $ | 152,967,000 | $ | 152,967,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class A-J | $ | 108,989,500 | $ | 108,989,500 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class B | $ | 11,472,500 | $ | 11,472,500 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class C | $ | 17,208,500 | $ | 17,208,500 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class D | $ | 19,121,000 | $ | 19,121,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
Class E | $ | 24,857,000 | $ | 24,857,000 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||
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 100.46% 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.
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 available to investors concerning the Offered Certificates will be the reports distributed by the Trustee 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
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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 issuance that the Offered Certificates be rated not lower than the following ratings by Standard and Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. (‘‘S&P’’) and Moody’s Investor’s Service, Inc. (‘‘Moody’s’’ and, together with S&P, the ‘‘Rating Agencies’’):
Class | S&P | Moody’s | ||||||||
Class A-1 | AAA | Aaa | ||||||||
Class A-2 | AAA | Aaa | ||||||||
Class A-3 | AAA | Aaa | ||||||||
Class A-AB | AAA | Aaa | ||||||||
Class A-4 | AAA | Aaa | ||||||||
Class A-1A | AAA | Aaa | ||||||||
Class A-1B | AAA | Aaa | ||||||||
Class A-M | AAA | Aaa | ||||||||
Class A-J | AAA | Aaa | ||||||||
Class B | AA+ | Aa1 | ||||||||
Class C | AA | Aa2 | ||||||||
Class D | AA− | Aa3 | ||||||||
Class E | A | A2 | ||||||||
Each of the rating agencies identified above will perform ratings surveillance with respect to its ratings for so long as the Offered Certificates remain outstanding. Fees for such ratings surveillance have been prepaid by the Depositor.
The ‘‘Rated Final Distribution Date’’ of each Class of Certificates is the Distribution Date in January 2046.
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, the degree to which such prepayments might differ from those originally anticipated or the extent to which the Certificateholders might experience any Net Prepayment Interest Shortfalls. 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 or the possibility that the
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holders of the Class X Certificates might not fully recover their initial investment in the event of delinquencies or rapid prepayments of the Mortgage Loans (including both voluntary and involuntary prepayments). As described herein, the amounts payable with respect to the Class X Certificates consist only of interest. If the entire pool were to prepay in the initial month, with the result that the Class X Certificateholders receive only a single month’s interest and thus suffer a nearly complete loss of their investment, all amounts ‘‘due’’ to such holders will nevertheless have been paid, and such result is consistent with the rating received on the Class X Certificates. Accordingly, the ratings of the Class X Certificates should be evaluated independently from similar ratings on other types of securities. The ratings do not address the fact that the Pass-Through Rates of any 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.
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.
LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion summarizes certain legal aspects of mortgage loans secured by real property in California (representing approximately 22.42% of the Initial Outstanding Pool Balance) which are general in nature. This summary does not purport to be complete and is qualified in its entirety by reference to the applicable federal and state laws governing the Mortgage Loans.
California Law. Mortgage loans in California are generally secured by deeds of trust on the related real estate. Foreclosure of a deed of trust in California may be accomplished by a non-judicial trustee’s sale under a specific provision in the deed of trust or by judicial foreclosure. Public notice of either the trustee’s sale or the judgment of foreclosure is given for a statutory period of time after which the mortgaged real estate may be sold by the trustee, if foreclosed pursuant to the trustee’s power of sale, or by court appointed sheriff under a judicial foreclosure. Following a judicial foreclosure sale, the borrower or its successor in interest may, for a period of up to one year, redeem the property. California’s ‘‘one action rule’’ requires the lender to exhaust the security afforded under the deed of trust by foreclosure in an attempt to satisfy the full debt before bringing a personal action (if otherwise permitted) against the borrower for recovery of the debt, except in certain cases involving environmentally impaired real property. California case law has held that acts such as an offset of an unpledged account constitute violations of such statutes. Violations of such statutes may result in the loss of some or all of the security under the loan. Other statutory provisions in California limit any deficiency judgment (if otherwise permitted) against the borrower following a foreclosure to the amount by which the indebtedness exceeds the fair value at the time of the public sale and in no event greater than the difference between the foreclosure sale price and the amount of the indebtedness. Further, under California law, once a property has been sold pursuant to a power-of-sale clause contained in a deed of trust, the lender is precluded from seeking a deficiency judgment from the borrower or, under certain circumstances, guarantors. California statutory provisions regarding assignments of rents and leases require that a lender whose loan is secured by such an assignment must exercise a remedy with respect to rents as authorized by statute in order to establish its right to receive the rents after an event of default. Among the remedies authorized by statute is the lender’s right to have a receiver appointed under certain circumstances.
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INDEX OF PRINCIPAL DEFINITIONS
Administrative Fee Rate | S-221 | |||||
Advance Rate | S-191 | |||||
Advances | S-190 | |||||
Allocated Loan Amount | S-128 | |||||
Annual Debt Service | S-112 | |||||
Anticipated Repayment Date | S-111 | |||||
Appraisal Reduction Amount | S-150, S-168 | |||||
Appraisal Reduction Event | S-168 | |||||
Appraised Value | S-112 | |||||
ARD Loans | S-111 | |||||
Arrowhead Shopping Center B Loan | S-108 | |||||
Arrowhead Shopping Center Loan | S-108 | |||||
Arrowhead Shopping Center Loan Combination | S-108 | |||||
Asset Status Report | S-225 | |||||
Assumed Final Distribution Date | S-163 | |||||
Assumed Scheduled Payment | S-152 | |||||
Authenticating Agent | S-94 | |||||
Available Funds | S-147 | |||||
B Loan | S-96 | |||||
Balloon Balance | S-112 | |||||
Bankruptcy Code | S-83 | |||||
Base Interest Fraction | S-162 | |||||
CBE | S-184 | |||||
Certificate Balance | S-145 | |||||
Certificate Owners | S-173 | |||||
Certificate Registrar | S-94, S-170 | |||||
Certificateholder | S-170 | |||||
Certificates | S-145 | |||||
Class | S-145 | |||||
Class A Certificates | S-167 | |||||
Class VPM Certificates | S-4 | |||||
Class VPM Control Appraisal Event | S-107 | |||||
Clearstream | S-36, S-170 | |||||
Clearstream Participants | S-172 | |||||
CMSA | S-229 | |||||
Collection Account | S-194 | |||||
Collection Period | S-149 | |||||
Commission | S-233 | |||||
Companion Loan | S-96 | |||||
Controlling Class | S-223 | |||||
Controlling Class Certificateholder | S-223 | |||||
Controlling Class Representative | S-223 | |||||
Corrected Mortgage Loan | S-225 | |||||
CPR | S-176 | |||||
Crossover Date | S-161 | |||||
Current LTV | S-112 | |||||
Custodian | S-94, S-202 | |||||
Cut-off Date Balance | S-96 | |||||
Cut-off Date Loan-to-Value Ratio | S-112 | |||||
Cut-off Date LTV | S-112 | |||||
Cut-off Date LTV Ratio | S-112 | |||||
Debt Service Coverage Ratio | S-115 | |||||
Default Interest | S-150 | |||||
Default Rate | S-150 | |||||
Defaulted Mortgage Loan | S-213 | |||||
Defeasance | S-135 | |||||
Defeasance Collateral | S-135 | |||||
Defeasance Loans | S-127 | |||||
Defeasance Lock-Out Period | S-127 | |||||
Defeasance Option | S-135 | |||||
Defeasance Period | S-127 | |||||
Definitive Certificate | S-170 | |||||
Department | S-236 | |||||
Depositaries | S-171 | |||||
Determination Date | S-149 | |||||
Directing Holder | S-223 | |||||
Discount Rate | S-130 | |||||
Distribution Account | S-194 | |||||
Distribution Date | S-147 | |||||
Distribution Date Statement | S-229 | |||||
DSCR | S-115 | |||||
DTC | S-35 | |||||
Due Date | S-151 | |||||
ERISA | S-236 | |||||
Euroclear | S-36 | |||||
Euroclear Participants | S-172 | |||||
Event Date | S-132 | |||||
Events of Default | S-209 | |||||
Excess Interest | S-195 | |||||
Excess Liquidation Proceeds | S-217 | |||||
Exemption | S-236 | |||||
Form 8-K | S-144 | |||||
GAAP | S-112 | |||||
GACC | S-74 | |||||
GLA | S-113 | |||||
Grantor Trust Distribution Account | S-195 | |||||
Group 1 Principal Distribution Amount | S-152 | |||||
Group 2A Principal Distribution Amount | S-152 | |||||
Group 2B Principal Distribution Amount | S-152 | |||||
Holders | S-173 | |||||
Indirect Participants | S-171 | |||||
Initial Loan Group 1 Balance | S-96 | |||||
Initial Loan Group 2A Balance | S-96 | |||||
Initial Loan Group 2B Balance | S-96 | |||||
Initial Outstanding Pool Balance | S-96 | |||||
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Initial Rate | S-111 | |||||
Interest Accrual Amount | S-150 | |||||
Interest Accrual Period | S-150 | |||||
Interest Rate | S-113 | |||||
Interest Reserve Account | S-194 | |||||
Interest Shortfall | S-150 | |||||
Liquidation Fee | S-228 | |||||
Liquidation Fee Rate | S-228 | |||||
Liquidation Proceeds | S-228 | |||||
Loan Combination | S-96 | |||||
Loan Group 1 | S-96 | |||||
Loan Group 2A | S-96 | |||||
Loan Group 2B | S-96 | |||||
Loan Groups | S-96 | |||||
Loan-to-Value Ratio | S-112 | |||||
Lock-Out Period | S-127 | |||||
Lower-Tier Regular Interests | S-234 | |||||
Lower-Tier REMIC | S-234 | |||||
LTV | S-112 | |||||
LTV Ratio at Maturity | S-113 | |||||
MAI | S-100 | |||||
Master Servicer | S-85 | |||||
Master Servicer Prepayment Interest Shortfall | S-165 | |||||
Master Servicer Remittance Date | S-189 | |||||
Master Servicing Fee | S-221 | |||||
Master Servicing Fee Rate | S-221 | |||||
Midland | S-84 | |||||
Midland Master Servicer | S-84 | |||||
Modeling Assumptions | S-177 | |||||
Modification | S-217 | |||||
Modified Mortgage Loan | S-169 | |||||
Monthly Payment | S-148 | |||||
Moody’s | S-240 | |||||
Mortgage | S-97 | |||||
Mortgage Loan | S-96 | |||||
Mortgage Loan Documents | S-202 | |||||
Mortgage Loan Purchase Agreement | S-98 | |||||
Mortgage Loan Purchase Agreements | S-202 | |||||
Mortgage Loans | S-96 | |||||
Mortgage Pool | S-96 | |||||
Mortgage Rate | S-151 | |||||
Mortgaged Properties | S-96 | |||||
Mortgaged Property | S-96 | |||||
Net Default Interest | S-149 | |||||
Net Mortgage Pass-Through Rate | S-151 | |||||
Net Operating Income | S-114 | |||||
Net Prepayment Interest Excess | S-166 | |||||
Net Prepayment Interest Shortfall | S-166 | |||||
Net REO Proceeds | S-149 | |||||
NOI | S-114 | |||||
Nonrecoverable Advance | S-192 | |||||
Note | S-97 | |||||
Notional Balance | S-146 | |||||
NRA | S-113 | |||||
Occupancy Rate | S-113 | |||||
Offered Certificates | S-145 | |||||
OID Regulations | S-235 | |||||
Open Date | S-130 | |||||
Option Price | S-214 | |||||
Pads | S-114 | |||||
Participants | S-170 | |||||
Pass-Through Rate | S-150 | |||||
Paying Agent | S-94 | |||||
Plan | S-236 | |||||
Planned Principal Balance | S-161 | |||||
PNC Bank | S-79 | |||||
PNC Loan | S-196 | |||||
PNC Securitized Loans | S-80 | |||||
Pooling and Servicing Agreement | S-188 | |||||
Prepayment Interest Excess | S-165 | |||||
Prepayment Interest Shortfall | S-165 | |||||
Prepayment Premium | S-134 | |||||
Prepayment Rate | S-132 | |||||
Present Value Yield Differential | S-132 | |||||
Prime Rate | S-191 | |||||
Principal Balance Certificate | S-145 | |||||
Principal Balance Certificates | S-145 | |||||
Principal Distribution Amount | S-151 | |||||
Principal Prepayments | S-149 | |||||
Private Certificates | S-145 | |||||
Property Advances | S-190 | |||||
PTE | S-34, S-236 | |||||
Purchase Option | S-214 | |||||
P&I Advance | S-189 | |||||
Qualified Substitute Mortgage Loan | S-207 | |||||
Rated Final Distribution Date | S-240 | |||||
Rating Agencies | S-240 | |||||
Realized Loss | S-164 | |||||
Record Date | S-147 | |||||
Regular Certificates | S-234 | |||||
Related Proceeds | S-192 | |||||
Release Date | S-135 | |||||
REMIC | S-234 | |||||
REMIC Provisions | S-110 | |||||
REMIC Regulations | S-234 | |||||
Removed Mortgage Loan | S-206 | |||||
REO Account | S-145 | |||||
REO Loan | S-152 | |||||
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REO Property | S-145 | |||||
REO Tax | S-216 | |||||
Replacement Mortgage Loan | S-206 | |||||
Repurchase Price | S-206 | |||||
Request for Approval | S-226 | |||||
Reserve Accounts | S-97 | |||||
Restricted Group | S-237 | |||||
Revised Rate | S-111 | |||||
Rooms | S-114 | |||||
Rules | S-172 | |||||
Scheduled Principal Payment(s) | S-133 | |||||
Serviced Companion Loan | S-96 | |||||
Serviced Loan Combination | S-96 | |||||
Servicing Compensation | S-221 | |||||
Servicing Fee | S-221 | |||||
Servicing Fee Rate | S-221 | |||||
Servicing Standard | S-189 | |||||
Servicing Transfer Event | S-225 | |||||
Similar Law | S-236 | |||||
Single-Tenant Mortgage Loan | S-143 | |||||
Small Loan Appraisal Estimate | S-168 | |||||
Special Servicing Fee | S-227 | |||||
Specially Serviced Mortgage Loan | S-223 | |||||
Specified U.S. Treasury Security | S-133 | |||||
Sq. Ft | S-113 | |||||
Square Feet | S-113 | |||||
Stated Principal Balance | S-164 | |||||
Subordinate Certificates | S-166 | |||||
S&P | S-240 | |||||
Term to Maturity | S-113 | |||||
Terms and Conditions | S-172 | |||||
Treasury Rate | S-130 | |||||
Treasury Regulations | S-234 | |||||
Trust | S-82 | |||||
Trust Fund | S-96 | |||||
Trust REMICs | S-234 | |||||
Trustee | S-91 | |||||
Trustee Fee | S-91 | |||||
Trustee Fee Rate | S-91 | |||||
Underwriters | S-238 | |||||
Underwriting Agreement | S-238 | |||||
Underwritten NCF | S-113 | |||||
Underwritten NCF DSCR | S-115 | |||||
Underwritten Net Cash Flow | S-113 | |||||
Units | S-114 | |||||
Unliquidated Advance | S-193 | |||||
Unscheduled Payments | S-149 | |||||
Updated Appraisal | S-169 | |||||
Upper-Tier REMIC | S-234 | |||||
UW NCF | S-113 | |||||
UW NCF DSCR | S-115 | |||||
UW Revenue | S-115 | |||||
Villas Parkmerced B Loan | S-101 | |||||
Villas Parkmerced B Loans | S-101 | |||||
Villas Parkmerced Control Appraisal Event | S-106 | |||||
Villas Parkmerced Cure Event | S-107 | |||||
Villas Parkmerced Loan | S-101 | |||||
Villas Parkmerced Loan Combination | S-101 | |||||
Villas Parkmerced Loan REMIC | S-234 | |||||
Villas Parkmerced Loan REMIC Regular Interests | S-234 | |||||
Villas Parkmerced Non-Pooled Interest Reserve Account | S-195 | |||||
Villas Parkmerced Non-Pooled Withheld Amounts | S-195 | |||||
Villas Parkmerced Pooled Trust Component | S-101 | |||||
Voting Rights | S-213 | |||||
Wachovia | S-85 | |||||
Wachovia Master Servicer | S-85 | |||||
Weighted Amortization Product | S-133 | |||||
Weighted Average Life to Maturity | S-133 | |||||
Weighted Average Net Mortgage Pass-Through Rate | S-150 | |||||
Withheld Amounts | S-194 | |||||
Workout Fee | S-227 | |||||
Workout Fee Rate | S-227 | |||||
Workout-Delayed Reimbursement Amount | S-192 | |||||
Yield Determination Date | S-132 | |||||
Yield Differential | S-132 | |||||
Yield Maintenance Charge | S-129 | |||||
Yield Maintenance Loans | S-128 | |||||
Yield Maintenance Lock-Out Period | S-127 | |||||
Yield Maintenance Period | S-129 | |||||
Yield Rate | S-133 | |||||
Yield Rate Determination Date | S-133 | |||||
YM Release Date | S-129 | |||||
YMP Due Date | S-131 | |||||
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ANNEX A-1
Certain Characteristics of the Mortgage Loans
A-1-1
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2006-CD2 ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES % OF LOAN % OF INITIAL GROUP APPLICABLE MORTGAGE CUT-OFF POOL 1, 2A LOAN GROUP # OF LOAN ORIGINAL DATE ID PROPERTY NAME BALANCE OR 2B BALANCE PROPERTIES SELLER (1) BALANCE BALANCE - ------------------------------------------------------------------------------------------------------------------------------- 1 Villas Parkmerced 9.81% 2A 97.40% 1 GACC 300,000,000 300,000,000 2 Valley View Center 4.09% 1 5.60% 1 GACC 125,000,000 125,000,000 3 SunTrust Center 2.52% 1 3.45% 1 GACC 77,000,000 77,000,000 4 Westin Philadelphia Hotel 2.35% 1 3.22% 1 GACC 72,000,000 72,000,000 5 Rock Pointe Corporate Center 2.30% 1 3.15% 1 CGM 70,630,000 70,384,463 - ------------------------------------------------------------------------------------------------------------------------------- 6 Woodbury Lakes 2.12% 1 2.91% 1 GACC 65,000,000 65,000,000 7 The Harrisburg Portfolio 1.99% 1 2.73% 4 CGM 61,000,000 61,000,000 7.1 Gateway Office Center - Flank Drive 0.91% 1.25% 1 CGM 27,835,724 27,835,724 7.2 Commerce Business Park 0.50% 0.69% 1 CGM 15,349,413 15,349,413 7.3 Rossmoyne Business Park 0.36% 0.49% 1 CGM 10,975,228 10,975,228 - ------------------------------------------------------------------------------------------------------------------------------- 7.4 Gateway Office Center - Shannon Road 0.22% 0.31% 1 CGM 6,839,635 6,839,635 Beyman Multifamily Portfolio 1.98% 2B 11.69% 2 GACC 60,640,000 60,640,000 8 Empirian at Steele Park 1.26% 2B 7.42% 1 GACC 38,500,000 38,500,000 9 Colonnade at Germantown 0.72% 2B 4.27% 1 GACC 22,140,000 22,140,000 10 Sunset Media Tower 1.80% 1 2.46% 1 PNC 55,000,000 55,000,000 - ------------------------------------------------------------------------------------------------------------------------------- 11 Stadium Gateway 1.70% 1 2.33% 1 GACC 52,000,000 52,000,000 12 Woodcrest Corporate Center 1.65% 1 2.26% 1 CGM 50,400,000 50,400,000 13 Riverview Square 1.44% 1 1.97% 1 CGM 44,000,000 44,000,000 14 Research Boulevard Center 1.41% 1 1.93% 1 CGM 43,000,000 43,000,000 15 Shorenstein Brisbane 1.30% 1 1.77% 2 GACC 39,625,000 39,625,000 - ------------------------------------------------------------------------------------------------------------------------------- 15.1 7000 Marina Boulevard 0.80% 1.10% 1 GACC 24,450,000 24,450,000 15.2 5000 Marina Boulevard 0.50% 0.68% 1 GACC 15,175,000 15,175,000 16 Stratford Plaza 1.27% 1 1.75% 1 PNC 39,000,000 39,000,000 17 The Ansonia 1.24% 1 1.70% 1 CGM 38,000,000 38,000,000 18 Lodge at Stone Oak Ranch Apartment Homes 1.08% 2B 6.38% 1 PNC 33,100,000 33,100,000 - ------------------------------------------------------------------------------------------------------------------------------- 19 Canyon Corporate Plaza 1.04% 1 1.42% 1 CGM 31,750,000 31,750,000 Century Center Parkway Portfolio 1.01% 1 1.39% 5 GACC 31,000,000 31,000,000 20 1620, 1640, 1680 Century Center Parkway 0.48% 1 0.65% 1 GACC 14,600,000 14,600,000 21 1610 Century Center Parkway 0.16% 1 0.22% 1 GACC 4,900,000 4,900,000 22 1670 Century Center Parkway 0.14% 1 0.20% 1 GACC 4,400,000 4,400,000 - ------------------------------------------------------------------------------------------------------------------------------- 23 1600 Century Center Parkway 0.12% 1 0.16% 1 GACC 3,600,000 3,600,000 24 1590 Century Center Parkway 0.11% 1 0.16% 1 GACC 3,500,000 3,500,000 25 Conexant Building 1.01% 1 1.39% 1 CGM 31,000,000 31,000,000 26 Vistas at Seven Bar Ranch 1.00% 2B 5.92% 1 GACC 30,700,000 30,700,000 AG Portfolio 0.97% 1 1.33% 4 CGM 29,800,000 29,800,000 - ------------------------------------------------------------------------------------------------------------------------------- 27 Top Food & Drug - Auburn, WA 0.29% 1 0.39% 1 CGM 8,800,000 8,800,000 28 Safeway - Vancouver, WA 0.26% 1 0.36% 1 CGM 8,000,000 8,000,000 29 Larry's Market - Tukwila, WA 0.23% 1 0.31% 1 CGM 7,000,000 7,000,000 30 Sherm's Thunderbird Market - Roseburg, OR 0.20% 1 0.27% 1 CGM 6,000,000 6,000,000 31 Eastfield Mall 0.97% 1 1.33% 1 GACC 29,760,000 29,760,000 - ------------------------------------------------------------------------------------------------------------------------------- 32 University Club Tower 0.94% 1 1.29% 1 CGM 28,700,000 28,700,000 33 Mission Madison Priest Lake Apartments 0.93% 2B 5.51% 2 GACC 28,600,000 28,600,000 33.1 Mission Madison Square Apartments 0.50% 2.97% 1 GACC 15,379,661 15,379,661 33.2 Mission Priest Lake Apartments 0.43% 2.55% 1 GACC 13,220,339 13,220,339 34 Willowbrook West Apartments 0.93% 2B 5.51% 1 CGM 28,600,000 28,600,000 - ------------------------------------------------------------------------------------------------------------------------------- 35 Johnson Control Building 0.88% 1 1.20% 1 PNC 27,000,000 26,845,171 36 Mission Rockwall and Fairways Apartments 0.87% 2B 5.14% 2 GACC 26,650,000 26,650,000 36.1 Mission Rockwall Apartments 0.46% 2.68% 1 GACC 13,921,642 13,921,642 36.2 Mission Fairways Apartments 0.42% 2.45% 1 GACC 12,728,358 12,728,358 37 Canyon Plaza Shopping Center 0.81% 1 1.11% 1 PNC 24,850,000 24,850,000 - ------------------------------------------------------------------------------------------------------------------------------- 38 Alpine Commons Shopping Center 0.78% 1 1.07% 1 CGM 24,000,000 24,000,000 39 Abbington Place 0.77% 1 1.06% 1 GACC 23,700,000 23,700,000 40 Heritage at Lakeside Apartment Homes 0.73% 1 1.01% 1 PNC 22,475,000 22,475,000 41 Indian Lakes Apartments 0.72% 2B 4.24% 1 GACC 22,000,000 22,000,000 42 Story and King Plaza 0.71% 1 0.97% 1 CGM 21,630,000 21,630,000 - ------------------------------------------------------------------------------------------------------------------------------- 43 Robinson Crossroads 0.69% 1 0.94% 1 CGM 21,000,000 21,000,000 44 The Exchange at Tallahassee Apts 0.69% 2B 4.05% 1 CGM 21,000,000 21,000,000 45 Tramore Village Apartments 0.68% 2B 4.00% 1 CGM 20,750,000 20,750,000 46 Trafalgar Plaza Portfolio 0.67% 1 0.92% 2 CGM 20,440,000 20,440,000 46.1 Trafalgar Plaza 0.37% 0.51% 1 CGM 11,406,592 11,406,592 - ------------------------------------------------------------------------------------------------------------------------------- 46.2 Zimmerman Corporate Center 0.30% 0.40% 1 CGM 9,033,408 9,033,408 47 Mission Galleria Apartments 0.65% 2B 3.86% 1 GACC 20,000,000 20,000,000 48 Old Alabama 0.65% 1 0.90% 2 GACC 20,000,000 20,000,000 48.1 Old Alabama - Phase I 0.56% 0.77% 1 GACC 17,214,765 17,214,765 48.2 Old Alabama - Phase II 0.09% 0.12% 1 GACC 2,785,235 2,785,235 - ------------------------------------------------------------------------------------------------------------------------------- 49 Pricewaterhouse Coopers Office 0.65% 1 0.89% 1 PNC 20,000,000 19,962,738 50 Lake Creek Festival Center 0.64% 1 0.87% 1 CGM 19,500,000 19,500,000 51 Elwood Shopping Center 0.62% 1 0.85% 1 GACC 19,000,000 19,000,000 52 Wellpointe Medical Building 0.62% 1 0.85% 1 CGM 19,000,000 19,000,000 53 One Town Center 0.58% 1 0.80% 1 CGM 17,825,000 17,825,000 - ------------------------------------------------------------------------------------------------------------------------------- Wilkinson Portfolio 0.58% 2B 3.43% 4 GACC 17,800,000 17,800,000 54 Magnolia Run 0.20% 2B 1.21% 1 GACC 6,270,000 6,270,000 55 Breckenridge 0.15% 2B 0.90% 1 GACC 4,660,000 4,660,000 56 Country Club 0.14% 2B 0.85% 1 GACC 4,400,000 4,400,000 57 Willow Pointe 0.08% 2B 0.48% 1 GACC 2,470,000 2,470,000 - ------------------------------------------------------------------------------------------------------------------------------- 58 Hawthorne Exchange 0.57% 1 0.77% 1 GACC 17,300,000 17,300,000 59 928 Broadway 0.56% 1 0.76% 1 GACC 17,000,000 17,000,000 60 Walnut Hills Apartments 0.56% 2B 3.28% 1 PNC 17,000,000 17,000,000 61 Maverick Creek Villas 0.55% 2B 3.25% 1 CGM 16,850,000 16,850,000 62 IBM Call Center 0.54% 1 0.74% 1 GACC 16,600,000 16,600,000 - ------------------------------------------------------------------------------------------------------------------------------- 63 Alhambra Center International 0.54% 1 0.74% 1 GACC 16,500,000 16,500,000 64 Rexford Park 0.53% 1 0.73% 1 CGM 16,200,000 16,200,000 65 Buena Park Promenade 0.51% 1 0.71% 1 CGM 15,750,000 15,750,000 66 Shelton Pointe 0.51% 1 0.70% 1 CGM 15,800,000 15,684,327 67 Galleria Pavilion 0.51% 1 0.69% 1 GACC 15,500,000 15,500,000 - ------------------------------------------------------------------------------------------------------------------------------- 68 Verizon Call Center 0.51% 1 0.69% 1 CGM 15,500,000 15,451,536 69 Supertel Hotel Portfolio 0.48% 1 0.66% 5 CGM 14,830,000 14,743,407 69.1 Comfort Suites - Fort Wayne, IN 0.14% 0.20% 1 CGM 4,445,356 4,419,400 69.2 Comfort Inn - Fayetteville, NC 0.12% 0.16% 1 CGM 3,570,860 3,550,010 69.3 Comfort Suites - Lafayette, IN 0.10% 0.14% 1 CGM 3,097,174 3,079,090 - ------------------------------------------------------------------------------------------------------------------------------- 69.4 Hampton Inn & Suites - Warsaw, IN 0.07% 0.09% 1 CGM 2,040,491 2,028,577 69.5 Comfort Suites - Marion, IN 0.05% 0.07% 1 CGM 1,676,118 1,666,331 70 Deerfield Plaza 0.47% 1 0.64% 1 CGM 14,400,000 14,400,000 71 Chrysler Retail 0.46% 1 0.63% 1 GACC 14,000,000 14,000,000 72 Woods Edge 0.46% 2B 2.69% 1 GACC 13,950,000 13,950,000 - ------------------------------------------------------------------------------------------------------------------------------- 73 South Duff Community Park I & II 0.45% 2B 2.65% 1 CGM 13,755,000 13,755,000 74 21 Astor Place 0.45% 1 0.61% 1 CGM 13,670,000 13,670,000 75 Colonial Square 0.43% 1 0.59% 1 CGM 13,215,000 13,215,000 76 Aston Township Giant Food 0.43% 1 0.59% 1 CGM 13,250,000 13,195,758 77 5 Omni 0.43% 1 0.59% 1 CGM 13,250,000 13,164,324 - ------------------------------------------------------------------------------------------------------------------------------- 78 Ashford Place Apartments 0.42% 2B 2.51% 1 GACC 13,000,000 13,000,000 79 College Square Shopping Center 0.42% 1 0.58% 1 CGM 13,000,000 12,937,156 80 The Links at North Creek 0.42% 2B 2.45% 1 CGM 12,720,000 12,720,000 81 Best Buy - Sunnyvale, CA 0.41% 1 0.56% 1 CGM 12,529,000 12,529,000 82 Fountain Square Apartments 0.41% 2B 2.41% 1 CGM 12,500,000 12,500,000 - ------------------------------------------------------------------------------------------------------------------------------- 83 Northwest Corners Apartments 0.40% 2B 2.39% 1 CGM 12,375,000 12,375,000 84 Centennial Village 0.39% 1 0.54% 1 GACC 12,000,000 12,000,000 85 Wynwood Office Buildings 0.39% 1 0.53% 1 GACC 11,800,000 11,800,000 86 El Clair Medical Building 0.38% 1 0.52% 1 CGM 11,500,000 11,500,000 87 Sunwest Medical Center 0.37% 1 0.51% 1 CGM 11,400,000 11,400,000 - ------------------------------------------------------------------------------------------------------------------------------- 88 Colony Crossings 0.37% 1 0.51% 1 PNC 11,400,000 11,400,000 89 Cortez Plaza East 0.36% 1 0.49% 1 CGM 11,000,000 11,000,000 90 Courtyard by Marriot - Erlanger 0.36% 1 0.49% 1 PNC 11,000,000 11,000,000 91 Bethany and ATI Buildings 0.35% 1 0.47% 2 GACC 10,600,000 10,581,064 91.1 Bethany Building 0.20% 0.28% 1 GACC 6,200,000 6,188,924 - ------------------------------------------------------------------------------------------------------------------------------- 91.2 ATI Building 0.14% 0.20% 1 GACC 4,400,000 4,392,140 92 Residence Inn - Cincinnati Airport 0.34% 1 0.47% 1 PNC 10,500,000 10,500,000 93 Centrelake Corporate Center 0.34% 1 0.47% 1 PNC 10,500,000 10,476,162 94 Birnam Wood Apartments 0.34% 2B 2.01% 1 CGM 10,400,000 10,400,000 95 Maryland Place 0.34% 1 0.46% 1 CGM 10,300,000 10,300,000 - ------------------------------------------------------------------------------------------------------------------------------- 96 Staybridge Suites-Lincolnshire 0.34% 1 0.46% 1 PNC 10,300,000 10,277,953 97 Savannah Place 0.33% 1 0.45% 1 GACC 10,150,000 10,150,000 98 Staybridge Suites-Glenview 0.33% 1 0.45% 1 PNC 10,050,000 10,028,489 99 4100 MacArthur Boulevard 0.33% 1 0.45% 1 GACC 10,000,000 10,000,000 100 Village Oaks Shopping Center 0.33% 1 0.45% 1 CGM 10,000,000 10,000,000 - ------------------------------------------------------------------------------------------------------------------------------- 101 Fossil Ridge Apartments 0.33% 2B 1.93% 1 CGM 10,000,000 10,000,000 102 Stonecreek Apartments-Phase I 0.33% 2B 1.93% 1 CGM 10,000,000 10,000,000 103 Auburn Ridge Office Center 0.33% 1 0.45% 1 PNC 10,000,000 10,000,000 104 1815-1819 East Jericho Turnpike 0.33% 1 0.45% 1 CGM 10,050,000 9,981,454 105 New Albany Medical Office Building 0.31% 1 0.43% 1 CGM 9,600,000 9,600,000 - ------------------------------------------------------------------------------------------------------------------------------- 106 Hampton Inn Dulles Airport 0.31% 1 0.42% 1 PNC 9,500,000 9,470,625 107 Village Plaza 0.30% 1 0.42% 1 CGM 9,300,000 9,300,000 108 Siempre Viva 0.30% 1 0.41% 1 CGM 9,230,000 9,230,000 109 Hilton Garden Inn - Newport News, VA 0.29% 1 0.40% 1 CGM 9,000,000 8,971,674 110 Civic Plaza Shopping Center 0.29% 1 0.40% 1 CGM 8,900,000 8,900,000 - ------------------------------------------------------------------------------------------------------------------------------- 111 1033 Third Street 0.29% 1 0.39% 1 CGM 8,750,000 8,750,000 112 Brookfield Commons 0.28% 1 0.38% 1 CGM 8,550,000 8,550,000 113 Wabash Valley Plaza 0.27% 1 0.37% 1 CGM 8,280,000 8,280,000 114 Garand Lane 0.27% 1 0.37% 2 CGM 8,250,000 8,250,000 114.1 Bankside Business Park 0.13% 0.18% 1 CGM 4,125,000 4,125,000 - ------------------------------------------------------------------------------------------------------------------------------- 114.2 Country Club Business Park 0.13% 0.18% 1 CGM 4,125,000 4,125,000 115 Shaw's Supermarket - Windham, NH 0.27% 1 0.37% 1 CGM 8,250,000 8,222,344 116 Eastgate Business Center 0.26% 1 0.36% 1 PNC 8,100,000 8,100,000 117 Woodstock 0.26% 2A 2.60% 1 GACC 8,000,000 8,000,000 118 Lewisville Commons 0.26% 1 0.36% 1 CGM 7,950,000 7,950,000 - ------------------------------------------------------------------------------------------------------------------------------- 119 Aku Tiki Inn 0.26% 1 0.36% 1 CGM 8,000,000 7,949,950 120 Fairfield Inn by Marriott - Chesapeake, VA 0.26% 1 0.36% 1 CGM 8,025,000 7,949,358 121 Prospect Park Apartments 0.25% 2B 1.50% 1 PNC 7,800,000 7,789,485 122 5209 Concord Pike 0.25% 1 0.35% 1 GACC 7,800,000 7,781,899 123 Spectrum Fitness 0.25% 1 0.35% 1 CGM 7,738,000 7,713,714 - ------------------------------------------------------------------------------------------------------------------------------- 124 300 Billerica Road 0.25% 1 0.34% 1 GACC 7,500,000 7,500,000 125 Morrell Park Apartments 0.24% 2B 1.42% 1 CGM 7,419,000 7,384,371 126 Shaw's Supermarket - Littleton, NH 0.24% 1 0.33% 1 CGM 7,400,000 7,367,457 127 44 Bromfield Street 0.24% 1 0.33% 1 CGM 7,350,000 7,350,000 128 Jillians Boston 0.24% 1 0.33% 1 CGM 7,350,000 7,318,545 - ------------------------------------------------------------------------------------------------------------------------------- 129 Lackland Self Storage - Belleville 0.24% 1 0.32% 1 PNC 7,290,000 7,255,499 130 Waterford Phase III 0.24% 2B 1.40% 1 GACC 7,250,000 7,250,000 131 Crowne Plaza Phoenix 0.24% 1 0.32% 1 GACC 7,200,000 7,200,000 132 Pitt Street Center 0.23% 1 0.32% 1 PNC 7,049,000 7,049,000 133 Main Street Village 0.22% 1 0.30% 1 CGM 6,800,000 6,800,000 - ------------------------------------------------------------------------------------------------------------------------------- 134 Hillcrest Shopping Center 0.22% 1 0.30% 1 CGM 6,800,000 6,777,290 135 Circuit City - Poughkeepsie, NY 0.22% 1 0.30% 1 CGM 6,823,000 6,754,436 136 Peapod Distribution Warehouse 0.21% 1 0.29% 1 CGM 6,595,000 6,573,866 137 Best Buy - Menomonee Falls, WI 0.21% 1 0.29% 1 CGM 6,500,000 6,446,382 138 Aquia Terrace Phase II 0.21% 2B 1.23% 1 GACC 6,400,000 6,400,000 - ------------------------------------------------------------------------------------------------------------------------------- 139 Hunterdon Hills Plaza 0.21% 1 0.29% 1 CGM 6,440,000 6,387,464 140 Habersham Village 0.21% 1 0.28% 1 PNC 6,307,000 6,307,000 141 West Park Retail 0.20% 1 0.28% 1 CGM 6,250,000 6,250,000 142 Trafalgar Square Apartments 0.20% 1 0.28% 1 GACC 6,200,000 6,185,574 143 Heritage Square - St. Charles, IL 0.20% 1 0.28% 1 CGM 6,200,000 6,171,434 - ------------------------------------------------------------------------------------------------------------------------------- 144 Circuit City - Manassas, VA 0.19% 1 0.26% 1 CGM 5,800,000 5,741,724 145 5002-5012 Church Avenue 0.19% 1 0.26% 1 GACC 5,750,000 5,736,939 146 Cypress Corporate Park 0.19% 1 0.25% 1 PNC 5,700,000 5,682,446 147 Thorn Run Crossing 0.18% 1 0.25% 1 CGM 5,650,000 5,650,000 148 425 Fifth Avenue 0.18% 1 0.25% 1 GACC 5,600,000 5,600,000 - ------------------------------------------------------------------------------------------------------------------------------- 149 Barnes & Noble Retail Center 0.18% 1 0.25% 1 CGM 5,500,000 5,473,128 150 Metro Center Diamond Bar 0.18% 1 0.24% 1 CGM 5,400,000 5,400,000 151 Lackland Self Storage - N. Brunswick 0.17% 1 0.24% 1 PNC 5,350,000 5,324,680 152 Lake City Mini-Storage 0.17% 1 0.24% 1 GACC 5,300,000 5,300,000 153 Hoke Plaza 0.17% 1 0.24% 1 CGM 5,300,000 5,300,000 - ------------------------------------------------------------------------------------------------------------------------------- 154 Best Western - Radford, VA 0.17% 1 0.24% 1 CGM 5,300,000 5,250,200 155 Walgreens - Philadelphia, PA 0.17% 1 0.23% 1 CGM 5,240,000 5,210,818 156 Fairfield Inn & Suites - Lake Oswego 0.17% 1 0.23% 1 PNC 5,200,000 5,184,095 157 Whittier Plaza 0.17% 1 0.23% 1 CGM 5,140,000 5,128,464 158 Heritage Square - Fresno, CA 0.17% 1 0.23% 1 CGM 5,088,000 5,088,000 - ------------------------------------------------------------------------------------------------------------------------------- 159 Ivy Hall Apartments 0.17% 2B 0.98% 1 PNC 5,094,000 5,082,567 160 Best Western - Grasonville, MD 0.16% 1 0.22% 1 CGM 5,000,000 4,970,849 161 Bahama House 0.16% 1 0.22% 1 CGM 5,000,000 4,968,719 162 Best Western - Leesburg, VA 0.16% 1 0.22% 1 CGM 5,000,000 4,953,018 163 Bentley Retail 0.16% 1 0.21% 1 CGM 4,800,000 4,779,206 - ------------------------------------------------------------------------------------------------------------------------------- 164 Comfort Inn - Staunton, VA 0.16% 1 0.21% 1 CGM 4,800,000 4,754,898 165 Fairfield Inn - Tucson Airport 0.15% 1 0.21% 1 PNC 4,750,000 4,739,948 166 Oxford Apartments 0.15% 2B 0.90% 1 CGM 4,650,000 4,650,000 167 Charleston Arms Apartments 0.15% 2B 0.89% 1 CGM 4,640,000 4,640,000 168 Best Buy Beaver Creek 0.15% 1 0.21% 1 GACC 4,600,000 4,593,582 - ------------------------------------------------------------------------------------------------------------------------------- 169 The Gaylord Building 0.15% 1 0.21% 1 CGM 4,600,000 4,585,699 170 Spanish Oaks Apartments 0.15% 2B 0.86% 1 CGM 4,480,000 4,480,000 171 Woods Cross Center 0.14% 1 0.20% 1 GACC 4,400,000 4,400,000 172 Hillside Terrace Shopping Center 0.14% 1 0.20% 1 CGM 4,400,000 4,400,000 173 Super Walmart - Tell City, IN 0.14% 1 0.20% 1 CGM 4,400,000 4,369,436 - ------------------------------------------------------------------------------------------------------------------------------- 174 Walgreens - Durham, NC 0.14% 1 0.19% 1 CGM 4,261,500 4,261,500 175 Pueblo Place 0.14% 1 0.19% 1 GACC 4,200,000 4,200,000 176 Lackland Self Storage - Mountainside 0.14% 1 0.19% 1 PNC 4,200,000 4,180,123 177 Century Square 0.14% 1 0.19% 1 GACC 4,175,000 4,175,000 178 Battenkill Plaza 0.13% 1 0.18% 1 CGM 4,100,000 4,069,071 - ------------------------------------------------------------------------------------------------------------------------------- 179 Satellite Shoppes 0.13% 1 0.18% 1 CGM 4,025,000 3,994,880 180 Grove Street Plaza 0.13% 1 0.18% 1 CGM 4,000,000 3,980,748 181 215 West Lake Street 0.13% 1 0.17% 1 CGM 3,900,000 3,900,000 182 Arrowhead Shopping Center 0.12% 1 0.17% 1 PNC 3,800,000 3,794,786 183 1705 West Garvey 0.12% 1 0.17% 1 GACC 3,750,000 3,744,805 - ------------------------------------------------------------------------------------------------------------------------------- 184 Pacific Willow Center 0.12% 1 0.17% 1 CGM 3,760,000 3,743,833 185 Summit Trading Company - Puyallup, WA 0.12% 1 0.17% 1 CGM 3,800,000 3,715,134 186 Tara Close Apartments 0.12% 2B 0.69% 1 GACC 3,600,000 3,591,216 187 Red Mountain Shopping Center 0.11% 1 0.16% 1 PNC 3,500,000 3,495,203 188 Lincoln Gardens Apartments 0.11% 1 0.16% 1 GACC 3,500,000 3,491,735 - ------------------------------------------------------------------------------------------------------------------------------- 189 Berryhill Apartments 0.11% 2B 0.66% 1 CGM 3,441,000 3,425,087 190 Autumn Ridge Apartments 0.11% 2B 0.63% 1 PNC 3,250,000 3,242,670 191 Memorial Plaza 0.10% 1 0.14% 1 GACC 3,200,000 3,200,000 192 3165 Nostrand Avenue 0.10% 2B 0.58% 1 GACC 3,000,000 2,995,740 193 Timber Glen II 0.09% 2B 0.55% 1 PNC 2,850,000 2,850,000 - ------------------------------------------------------------------------------------------------------------------------------- 194 Lackland Self Storage - Dover #2 0.09% 1 0.12% 1 PNC 2,750,000 2,715,098 195 National Road Marketplace 0.09% 1 0.12% 1 PNC 2,640,000 2,636,506 196 Francis Murphy Senior Apartments 0.08% 2B 0.48% 1 PNC 2,470,000 2,465,462 197 Comfort Inn - Charlottesville, VA 0.07% 1 0.10% 1 CGM 2,300,000 2,278,389 STATED ORIGINAL REMAINING MATURITY / GENERAL DETAILED INTEREST TERM TO TERM TO ORIGINAL ARD PROPERTY PROPERTY INTEREST ADMINISTRATIVE ACCRUAL MATURITY MATURITY AMORTIZATION ID BALANCE TYPE TYPE RATE FEE RATE (2) BASIS OR ARD (MOS.) OR ARD (MOS.) TERM (MOS.) - ----------------------------------------------------------------------------------------------------------------------------------- 1 300,000,000 Multifamily Conventional 5.6480% 0.0301% Actual/360 60 55 0 2 125,000,000 Retail Anchored 5.7180% 0.0301% Actual/360 60 58 0 3 77,000,000 Office CBD 5.3360% 0.0301% Actual/360 120 118 0 4 72,000,000 Hotel Full Service 6.1570% 0.0301% Actual/360 60 57 0 5 58,467,359 Office CBD 5.2150% 0.0251% Actual/360 120 117 360 - ----------------------------------------------------------------------------------------------------------------------------------- 6 65,000,000 Retail Anchored 5.4500% 0.0301% Actual/360 120 118 0 7 55,453,318 Office Suburban 5.3000% 0.0301% Actual/360 120 115 360 7.1 Office Suburban 7.2 Office Suburban 7.3 Office Suburban - ----------------------------------------------------------------------------------------------------------------------------------- 7.4 Office Suburban 56,547,346 Multifamily Conventional 5.7680% 0.0301% Actual/360 120 117 360 8 35,901,597 Multifamily Conventional 5.7680% 0.0301% Actual/360 120 117 360 9 20,645,749 Multifamily Conventional 5.7680% 0.0301% Actual/360 120 117 360 10 50,895,648 Office Suburban 5.2300% 0.0401% Actual/360 120 118 360 - ----------------------------------------------------------------------------------------------------------------------------------- 11 52,000,000 Office CBD 5.6560% 0.0301% Actual/360 120 119 0 12 46,539,410 Office Suburban 5.0859% 0.0301% Actual/360 120 118 360 13 40,754,001 Office Suburban 5.2900% 0.0301% Actual/360 120 115 360 14 39,493,219 Office Suburban 5.7800% 0.0301% Actual/360 120 117 420 15 39,625,000 Office Suburban 5.7960% 0.0301% Actual/360 84 82 0 - ----------------------------------------------------------------------------------------------------------------------------------- 15.1 Office Suburban 15.2 Office Suburban 16 34,960,983 Retail Anchored 5.6100% 0.0401% Actual/360 120 119 360 17 38,000,000 Mixed Use Retail/Office 5.2000% 0.0301% Actual/360 120 117 0 18 29,447,474 Multifamily Conventional 5.2400% 0.0601% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 19 28,455,660 Office Suburban 5.6700% 0.0501% Actual/360 120 116 360 Industrial / 27,744,849 Mixed Use Office 5.5310% 0.0301% Actual/360 120 119 360 20 13,066,929 Industrial Flex 5.5310% 0.0301% Actual/360 120 119 360 21 4,385,476 Office Suburban 5.5310% 0.0301% Actual/360 120 119 360 22 3,937,979 Office Suburban 5.5310% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 23 3,221,982 Industrial Flex 5.5310% 0.0301% Actual/360 120 119 360 24 3,132,483 Industrial Warehouse 5.5310% 0.0301% Actual/360 120 119 360 25 26,574,199 Office Suburban 5.9000% 0.0301% Actual/360 137 135 360 26 28,389,786 Multifamily Conventional 5.1840% 0.0301% Actual/360 120 118 360 26,545,223 Retail Anchored 5.3000% 0.0701% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 27 7,838,858 Retail Anchored 5.3000% 0.0701% Actual/360 120 116 360 28 7,126,234 Retail Anchored 5.3000% 0.0701% Actual/360 120 116 360 29 6,235,455 Retail Anchored 5.3000% 0.0701% Actual/360 120 116 360 30 5,344,676 Retail Anchored 5.3000% 0.0701% Actual/360 120 116 360 31 26,499,833 Retail Anchored 5.2800% 0.0301% Actual/360 120 115 360 - ----------------------------------------------------------------------------------------------------------------------------------- 32 28,700,000 Office Suburban 5.3250% 0.0301% Actual/360 120 115 0 33 26,653,718 Multifamily Conventional 5.7300% 0.0301% Actual/360 120 119 360 33.1 Multifamily Conventional 33.2 Multifamily Conventional 34 25,679,446 Multifamily Student Housing 5.6900% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 35 22,311,659 Industrial Industrial 5.1600% 0.0501% Actual/360 120 115 360 36 24,758,496 Multifamily Conventional 5.5000% 0.0301% Actual/360 120 117 360 36.1 Multifamily Conventional 36.2 Multifamily Conventional 37 20,763,718 Retail Anchored 5.5000% 0.0601% Actual/360 120 120 360 - ----------------------------------------------------------------------------------------------------------------------------------- 38 22,263,937 Retail Anchored 5.4000% 0.0301% Actual/360 120 118 360 39 22,743,788 Multifamily Conventional 5.4970% 0.0301% Actual/360 120 118 360 40 20,114,604 Multifamily Conventional 5.5300% 0.0601% Actual/360 120 119 360 41 20,113,239 Multifamily Conventional 5.6290% 0.0301% Actual/360 120 118 360 42 19,221,666 Retail Anchored 5.1880% 0.0701% Actual/360 120 118 360 - ----------------------------------------------------------------------------------------------------------------------------------- 43 18,582,567 Retail Anchored 4.9900% 0.0301% Actual/360 120 116 360 44 18,718,409 Multifamily Student Housing 5.3300% 0.0501% Actual/360 120 114 360 45 18,839,486 Multifamily Conventional 5.2300% 0.0301% Actual/360 120 117 360 46 18,657,807 Office Suburban 5.5350% 0.0401% Actual/360 120 117 360 46.1 Office Suburban - ----------------------------------------------------------------------------------------------------------------------------------- 46.2 Office Suburban 47 18,601,859 Multifamily Conventional 5.5840% 0.0301% Actual/360 120 118 360 48 20,000,000 Retail Various 5.7450% 0.0301% Actual/360 120 119 0 48.1 Retail Anchored 48.2 Retail Anchored - ----------------------------------------------------------------------------------------------------------------------------------- 49 13,183,647 Office CBD 5.5000% 0.0401% Actual/360 156 155 300 50 16,872,443 Retail Anchored 5.0000% 0.0301% Actual/360 120 116 360 51 17,672,588 Retail Unanchored 5.5900% 0.0301% Actual/360 120 119 360 52 17,662,717 Office Medical Office 5.5450% 0.0301% Actual/360 120 117 360 53 16,463,758 Office Suburban 5.1000% 0.0301% Actual/360 120 115 360 - ----------------------------------------------------------------------------------------------------------------------------------- 15,929,937 Multifamily Conventional 5.5280% 0.0301% Actual/360 120 119 360 54 5,611,276 Multifamily Conventional 5.5280% 0.0301% Actual/360 120 119 360 55 4,170,421 Multifamily Conventional 5.5280% 0.0301% Actual/360 120 119 360 56 3,937,738 Multifamily Conventional 5.5280% 0.0301% Actual/360 120 119 360 57 2,210,502 Multifamily Conventional 5.5280% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 58 16,100,364 Retail Anchored 5.6300% 0.0601% Actual/360 120 119 360 59 15,806,097 Office CBD 5.5620% 0.0301% Actual/360 120 119 360 60 15,580,947 Multifamily Conventional 5.7800% 0.0601% Actual/360 120 119 360 61 15,293,246 Multifamily Student Housing 5.2100% 0.0801% Actual/360 120 115 360 62 15,475,448 Office Suburban 5.7540% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 63 13,879,084 Office Suburban 5.7170% 0.0301% Actual/360 120 120 360 64 16,200,000 Office Suburban 5.4950% 0.0301% Actual/360 120 116 0 65 13,728,948 Retail Anchored 5.2950% 0.0401% Actual/360 120 117 360 66 10,585,990 Office Suburban 5.6100% 0.0701% Actual/360 180 174 336 67 14,453,323 Retail Anchored 5.7470% 0.0301% Actual/360 120 120 360 - ----------------------------------------------------------------------------------------------------------------------------------- 68 14,456,059 Office Call Center 5.7800% 0.0301% Actual/360 60 57 360 69 11,469,857 Hotel Limited Service 5.9700% 0.0501% Actual/360 120 116 300 69.1 Hotel Limited Service 69.2 Hotel Limited Service 69.3 Hotel Limited Service - ----------------------------------------------------------------------------------------------------------------------------------- 69.4 Hotel Limited Service 69.5 Hotel Limited Service 70 12,181,637 Retail Anchored 5.0700% 0.0301% Actual/360 120 115 360 71 14,000,000 Retail Unanchored 5.4070% 0.0301% Actual/360 120 117 0 72 13,387,166 Multifamily Conventional 5.4970% 0.0301% Actual/360 120 118 360 - ----------------------------------------------------------------------------------------------------------------------------------- 73 11,982,008 Multifamily Student Housing 5.2700% 0.0301% Actual/360 120 116 360 74 12,672,574 Retail Anchored 5.3500% 0.0301% Actual/360 120 115 360 75 11,864,037 Retail Anchored 5.6800% 0.0501% Actual/360 120 116 360 76 11,198,125 Retail Anchored 5.8900% 0.0301% Actual/360 120 116 360 77 11,071,721 Office Suburban 5.5150% 0.0301% Actual/360 120 114 360 - ----------------------------------------------------------------------------------------------------------------------------------- 78 12,072,582 Multifamily Conventional 5.4750% 0.0301% Actual/360 120 118 360 79 10,686,270 Retail Anchored 5.0000% 0.0501% Actual/360 120 116 360 80 11,374,251 Multifamily Conventional 5.4850% 0.0801% Actual/360 120 118 360 81 11,007,076 Retail Anchored 5.6200% 0.0301% Actual/360 120 117 360 82 11,550,202 Multifamily Conventional 5.1300% 0.0301% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 83 10,956,937 Multifamily Conventional 5.0150% 0.0301% Actual/360 120 115 360 84 12,000,000 Retail Anchored 5.7440% 0.0301% Actual/360 120 119 0 85 10,363,960 Office Suburban 5.6150% 0.0301% Actual/360 120 119 360 86 9,988,705 Office Medical Office 5.1500% 0.0301% Actual/360 120 113 360 87 10,127,460 Office Medical Office 5.1700% 0.0601% Actual/360 120 115 360 - ----------------------------------------------------------------------------------------------------------------------------------- 88 10,006,721 Retail Anchored 5.5900% 0.0601% Actual/360 120 119 360 89 9,778,367 Retail Anchored 5.2000% 0.0901% Actual/360 120 115 360 90 9,688,118 Hotel Full Service 5.7300% 0.0401% Actual/360 120 118 360 91 9,574,087 Office Suburban 5.9400% 0.0301% Actual/360 60 59 300 91.1 Office Suburban - ----------------------------------------------------------------------------------------------------------------------------------- 91.2 Office Suburban 92 9,247,749 Hotel Extended Stay 5.7300% 0.0401% Actual/360 120 118 360 93 8,823,271 Office Suburban 5.7000% 0.0701% Actual/360 120 118 360 94 9,070,872 Multifamily Conventional 5.3200% 0.0501% Actual/360 120 103 360 95 10,300,000 Office Suburban 5.2830% 0.0301% Actual/360 120 115 0 - ----------------------------------------------------------------------------------------------------------------------------------- 96 8,748,451 Hotel Extended Stay 6.0600% 0.0901% Actual/360 120 118 360 97 9,740,483 Multifamily Conventional 5.4970% 0.0301% Actual/360 120 118 360 98 8,536,110 Hotel Extended Stay 6.0600% 0.0901% Actual/360 120 118 360 99 10,000,000 Office Suburban 5.8100% 0.0301% Actual/360 60 58 0 100 9,252,395 Retail Anchored 5.2200% 0.0401% Actual/360 120 118 360 - ----------------------------------------------------------------------------------------------------------------------------------- 101 8,662,879 Multifamily Conventional 5.0450% 0.0301% Actual/360 120 115 360 102 8,680,297 Multifamily Conventional 5.1250% 0.0701% Actual/360 120 115 360 103 8,937,415 Mixed Use Office/ Industrial 5.4600% 0.0401% Actual/360 120 118 360 104 8,325,626 Retail Anchored 5.2400% 0.0501% Actual/360 120 114 360 105 8,219,377 Office Medical Office 5.5050% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 106 7,334,876 Hotel Limited Service 5.9200% 0.0401% Actual/360 120 118 300 107 8,577,330 Retail Anchored 5.0050% 0.0401% Actual/360 120 114 360 108 8,239,443 Industrial Industrial 5.4000% 0.0301% Actual/360 120 117 360 109 6,918,134 Hotel Limited Service 5.7900% 0.0601% Actual/360 120 118 300 110 8,242,131 Mixed Use Office/Retail 5.2700% 0.0301% Actual/360 84 78 360 - ----------------------------------------------------------------------------------------------------------------------------------- 111 7,683,599 Office Medical Office 5.6000% 0.0901% Actual/360 120 115 360 112 7,504,010 Office CBD 5.5800% 0.0301% Actual/360 120 114 360 113 7,344,325 Retail Anchored 5.1000% 0.0301% Actual/360 120 116 360 114 7,634,969 Industrial Various 5.2350% 0.0301% Actual/360 120 116 360 114.1 Industrial Flex - ----------------------------------------------------------------------------------------------------------------------------------- 114.2 Industrial Warehouse 115 6,871,561 Land Retail 5.4100% 0.0301% Actual/360 120 117 360 116 6,955,053 Industrial Flex 5.6100% 0.0701% Actual/360 144 142 360 117 7,575,049 Multifamily Conventional 5.6950% 0.0301% Actual/360 60 58 360 118 7,263,522 Retail Anchored 5.5900% 0.0301% Actual/360 120 114 360 - ----------------------------------------------------------------------------------------------------------------------------------- 119 6,091,378 Hotel Full Service 5.5150% 0.0501% Actual/360 120 116 300 120 5,123,748 Hotel Limited Service 5.3300% 0.0301% Actual/360 120 116 240 121 6,585,351 Multifamily Retirement 5.8600% 0.0701% Actual/360 120 119 360 122 6,527,657 Retail Unanchored 5.5660% 0.0301% Actual/360 120 118 360 123 6,514,804 Other Health Club 5.7600% 0.0401% Actual/360 120 117 360 - ----------------------------------------------------------------------------------------------------------------------------------- 124 7,500,000 Office Flex 5.6890% 0.0301% Actual/360 120 118 0 125 6,136,126 Multifamily Conventional 5.1900% 0.0301% Actual/360 120 116 360 126 6,182,356 Retail Anchored 5.5100% 0.0301% Actual/360 120 116 360 127 6,424,494 Mixed Use Office/Retail 5.4100% 0.0301% Actual/360 120 116 360 128 6,167,992 Retail Unanchored 5.6550% 0.0301% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 129 4,693,181 Self Storage Self Storage 5.5400% 0.0401% Actual/360 120 118 240 130 6,732,062 Multifamily Conventional 5.4700% 0.0301% Actual/360 120 119 360 131 6,935,543 Hotel Full Service 5.9600% 0.0301% Actual/360 60 60 360 132 6,326,674 Office Suburban 5.6500% 0.0601% Actual/360 120 120 360 133 5,929,598 Retail Unanchored 5.3100% 0.0301% Actual/360 120 117 360 - ----------------------------------------------------------------------------------------------------------------------------------- 134 5,667,375 Retail Anchored 5.4300% 0.0301% Actual/360 120 117 360 135 5,655,363 Retail Anchored 5.2536% 0.0301% Actual/360 120 111 360 136 5,533,981 Industrial Warehouse 5.6500% 0.0301% Actual/360 120 117 360 137 5,341,743 Retail Anchored 4.9890% 0.0301% Actual/360 120 113 360 138 5,896,509 Multifamily Conventional 5.2600% 0.0301% Actual/360 99 97 360 - ----------------------------------------------------------------------------------------------------------------------------------- 139 4,837,450 Mixed Use Office/Retail 5.1300% 0.0301% Actual/360 120 115 300 140 5,534,519 Retail Unanchored 5.5700% 0.0401% Actual/360 120 120 360 141 5,567,668 Retail Unanchored 5.3000% 0.0601% Actual/360 120 115 360 142 5,186,095 Multifamily Conventional 5.5500% 0.0301% Actual/360 120 118 360 Multifamily/ 143 5,139,368 Mixed Use Office 5.2600% 0.0301% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 144 4,807,538 Retail Anchored 5.2543% 0.0301% Actual/360 120 111 360 145 4,831,352 Retail Anchored 5.6970% 0.0301% Actual/360 120 118 360 146 4,813,389 Industrial Flex 5.8600% 0.0401% Actual/360 120 117 360 147 4,921,726 Retail Unanchored 5.2700% 0.0901% Actual/360 120 116 360 148 5,016,256 Retail Single Tenant 5.5700% 0.0301% Actual/360 120 118 360 - ----------------------------------------------------------------------------------------------------------------------------------- 149 4,497,047 Retail Unanchored 5.3050% 0.0301% Actual/360 120 116 348 150 4,692,340 Office Suburban 5.1700% 0.0901% Actual/360 120 116 360 151 3,444,241 Self Storage Self Storage 5.5400% 0.0401% Actual/360 120 118 240 152 4,647,833 Self Storage Self Storage 5.5500% 0.0901% Actual/360 120 119 360 153 4,638,219 Retail Unanchored 5.4600% 0.0301% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 154 4,023,620 Hotel Limited Service 5.4300% 0.0301% Actual/360 120 114 300 155 4,350,867 Retail Anchored 5.3100% 0.0901% Actual/360 120 115 360 156 4,025,743 Hotel Limited Service 6.0000% 0.0901% Actual/360 120 118 300 157 4,328,348 Retail Anchored 5.7700% 0.0601% Actual/360 120 118 360 158 4,710,840 Retail Anchored 5.2690% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 159 4,289,611 Multifamily Student Housing 5.7700% 0.0401% Actual/360 120 118 360 160 3,868,418 Hotel Limited Service 5.9800% 0.0301% Actual/360 120 116 300 161 3,807,111 Hotel Limited Service 5.5150% 0.0801% Actual/360 120 116 300 162 3,795,868 Hotel Limited Service 5.4300% 0.0301% Actual/360 120 114 300 163 4,020,076 Retail Unanchored 5.5900% 0.1101% Actual/360 120 116 360 - ----------------------------------------------------------------------------------------------------------------------------------- 164 3,644,034 Hotel Limited Service 5.4300% 0.0301% Actual/360 120 114 300 165 4,042,705 Hotel Limited Service 6.1300% 0.0401% Actual/360 120 118 360 166 4,052,613 Multifamily Conventional 5.2900% 0.1201% Actual/360 120 116 360 167 4,640,000 Multifamily Conventional 5.2600% 0.0301% Actual/360 120 112 0 168 3,845,245 Retail Single Tenant 5.5320% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 169 3,878,680 Industrial Flex 5.8100% 0.0901% Actual/360 120 117 360 170 4,480,000 Multifamily Conventional 5.2600% 0.0301% Actual/360 120 112 0 171 3,721,212 Retail Anchored 5.8970% 0.0601% Actual/360 120 120 360 172 3,896,695 Retail Unanchored 5.0250% 0.0301% Actual/360 120 113 360 173 3,633,988 Retail Anchored 5.1450% 0.0901% Actual/360 120 114 360 - ----------------------------------------------------------------------------------------------------------------------------------- 174 3,231,025 Retail Anchored 5.2800% 0.0301% Actual/360 180 175 360 175 4,200,000 Retail Unanchored 5.6400% 0.0301% Actual/360 120 120 0 176 2,703,890 Self Storage Self Storage 5.5400% 0.0401% Actual/360 120 118 240 177 3,814,685 Retail Unanchored 5.6760% 0.0301% Actual/360 120 118 360 178 3,418,311 Retail Unanchored 5.4400% 0.0801% Actual/360 120 113 360 - ----------------------------------------------------------------------------------------------------------------------------------- 179 3,359,964 Retail Unanchored 5.4800% 0.0501% Actual/360 120 113 360 Multifamily/ 180 3,026,143 Mixed Use Retail 5.3300% 0.0301% Actual/360 120 117 300 181 3,478,459 Other Parking Garage 5.3600% 0.0301% Actual/360 120 114 360 182 3,191,894 Retail Anchored 5.6900% 0.0901% Actual/360 120 119 360 Industrial / 183 3,141,267 Mixed Use Warehouse 5.6000% 0.0301% Actual/360 120 119 360 - ----------------------------------------------------------------------------------------------------------------------------------- 184 3,152,920 Retail Unanchored 5.6300% 0.0901% Actual/360 120 116 360 185 1,627,346 Retail Anchored 5.1100% 0.0901% Actual/360 120 114 180 186 2,984,086 Multifamily Co-Op 5.2600% 0.0301% Actual/360 120 118 360 187 2,940,793 Retail Anchored 5.7000% 0.0901% Actual/360 120 119 360 188 2,919,488 Multifamily Conventional 5.4600% 0.0301% Actual/360 120 118 360 - ----------------------------------------------------------------------------------------------------------------------------------- 189 2,850,536 Multifamily Conventional 5.2400% 0.0301% Actual/360 120 116 360 190 2,734,321 Multifamily Conventional 5.7400% 0.0901% Actual/360 120 118 360 191 2,696,030 Retail Anchored 5.7700% 0.0301% Actual/360 120 120 360 192 2,495,164 Multifamily Co-Op 5.3700% 0.0301% Actual/360 120 119 360 193 2,540,423 Multifamily Conventional 5.3300% 0.0401% Actual/360 120 117 360 - ----------------------------------------------------------------------------------------------------------------------------------- 194 17,070 Self Storage Self Storage 5.5400% 0.0401% Actual/360 120 118 120 195 2,240,760 Retail Unanchored 6.0400% 0.0401% Actual/360 120 119 360 196 1,678,477 Multifamily Section 42 7.0000% 0.0401% Actual/360 216 214 360 197 1,746,099 Hotel Limited Service 5.4300% 0.0301% Actual/360 120 114 300 REMAINING FIRST MATURITY ANNUAL MONTHLY REMAINING CROSSED AMORTIZATION PAYMENT DATE DEBT DEBT INTEREST ONLY ARD WITH ID TERM (MOS.) DATE OR ARD SERVICE (3) SERVICE (3) PERIOD (MOS.) LOCKBOX (4) (YES/NO) OTHER LOANS - ------------------------------------------------------------------------------------------------------------------------------------ 1 0 11/1/2005 10/1/2010 17,179,333 1,431,611 55 Soft No No 2 0 2/1/2006 1/1/2011 7,246,771 603,898 58 Hard No No 3 0 2/1/2006 1/1/2016 4,165,786 347,149 118 Hard No No 4 0 1/1/2006 12/1/2010 4,494,610 374,551 57 Hard No No 5 357 1/11/2006 12/11/2015 4,661,901 388,492 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 6 0 2/1/2006 1/1/2016 3,591,701 299,308 118 Hard No No 7 360 11/11/2005 10/11/2015 4,064,830 338,736 43 Hard No No 7.1 7.2 7.3 - ------------------------------------------------------------------------------------------------------------------------------------ 7.4 360 1/1/2006 12/1/2015 4,254,867 354,572 57 Soft No Yes - Beyman 8 360 1/1/2006 12/1/2015 2,701,392 225,116 57 Soft No Yes - Beyman 9 360 1/1/2006 12/1/2015 1,553,476 129,456 57 Soft No Yes - Beyman 10 360 2/1/2006 1/1/2016 3,636,373 303,031 58 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 11 0 3/1/2006 2/1/2016 2,981,969 248,497 119 None No No 12 360 2/11/2006 1/11/2016 3,278,504 273,209 58 Hard No No 13 360 11/11/2005 10/11/2015 2,928,731 244,061 55 None at Closing, Yes No Springing Hard 14 420 1/11/2006 12/11/2015 2,866,343 238,862 21 Hard No No 15 0 2/1/2006 1/1/2013 2,328,563 194,047 82 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 15.1 15.2 16 360 3/1/2006 2/1/2016 2,689,641 224,137 35 None at Closing, No No Springing Hard 17 0 1/11/2006 12/11/2015 2,003,444 166,954 117 Hard No No 18 360 12/1/2005 11/1/2015 2,190,894 182,574 32 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 19 360 12/11/2005 11/11/2015 2,204,088 183,674 31 None No No 360 3/1/2006 2/1/2016 2,119,416 176,618 35 Hard No Yes - Century 20 360 3/1/2006 2/1/2016 998,177 83,181 35 Hard No Yes - Century 21 360 3/1/2006 2/1/2016 335,004 27,917 35 Hard No Yes - Century 22 360 3/1/2006 2/1/2016 300,820 25,068 35 Hard No Yes - Century - ------------------------------------------------------------------------------------------------------------------------------------ 23 360 3/1/2006 2/1/2016 246,126 20,510 35 Hard No Yes - Century 24 360 3/1/2006 2/1/2016 239,289 19,941 35 Hard No Yes - Century 25 360 2/11/2006 6/11/2017 2,206,468 183,872 22 None at Closing, No No Springing Hard 26 360 2/1/2006 1/1/2016 2,019,285 168,274 58 Soft at Closing, No No Springing Hard 360 12/11/2005 11/11/2015 1,985,769 165,481 32 None at Closing, No Yes - AG Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 27 360 12/11/2005 11/11/2015 586,402 48,867 32 None at Closing, No Yes - AG Springing Hard 28 360 12/11/2005 11/11/2015 533,092 44,424 32 None at Closing, No Yes - AG Springing Hard 29 360 12/11/2005 11/11/2015 466,456 38,871 32 None at Closing, No Yes - AG Springing Hard 30 360 12/11/2005 11/11/2015 399,819 33,318 32 None at Closing, No Yes - AG Springing Hard 31 360 11/1/2005 10/1/2015 1,978,671 164,889 31 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 32 0 11/11/2005 10/11/2015 1,549,501 129,125 115 None No No 33 360 3/1/2006 2/1/2016 1,998,464 166,539 59 None at Closing, No No Springing Hard 33.1 33.2 34 360 3/11/2006 2/11/2016 1,989,760 165,813 35 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 35 355 11/1/2005 10/1/2015 1,771,122 147,593 Hard No No 36 360 1/1/2006 12/1/2015 1,815,789 151,316 57 None at Closing, No No Springing Hard 36.1 36.2 37 360 4/1/2006 3/1/2016 1,693,147 141,096 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 38 360 2/11/2006 1/11/2016 1,617,209 134,767 58 None at Closing, No No Springing Soft 39 360 2/1/2006 1/1/2016 1,614,257 134,521 82 None No No 40 360 3/1/2006 2/1/2016 1,536,407 128,034 35 None No No 41 360 2/1/2006 1/1/2016 1,520,400 126,700 46 None No No 42 360 2/11/2006 1/11/2016 1,423,349 118,612 34 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 43 360 12/11/2005 11/11/2015 1,351,251 112,604 32 None No No 44 360 10/11/2005 9/11/2015 1,404,066 117,006 30 Hard No No 45 360 1/11/2006 12/11/2015 1,371,904 114,325 45 Soft No No 46 360 1/11/2006 12/11/2015 1,398,064 116,505 45 Hard No No 46.1 - ------------------------------------------------------------------------------------------------------------------------------------ 46.2 47 360 2/1/2006 1/1/2016 1,375,369 114,614 58 None at Closing, No No Springing Hard 48 0 3/1/2006 2/1/2016 1,164,958 97,080 119 None No No 48.1 48.2 - ------------------------------------------------------------------------------------------------------------------------------------ 49 299 3/1/2006 2/1/2019 1,473,810 122,818 None at Closing, No No Springing Hard 50 360 12/11/2005 11/11/2015 1,256,163 104,680 20 None No No 51 360 3/1/2006 2/1/2016 1,307,463 108,955 59 None No No 52 360 1/11/2006 12/11/2015 1,301,004 108,417 57 None No No 53 360 11/11/2005 10/11/2015 1,161,370 96,781 55 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 360 3/1/2006 2/1/2016 1,216,552 101,379 35 None No Yes - Wilkinson 54 360 3/1/2006 2/1/2016 428,527 35,711 35 None No Yes - Wilkinson 55 360 3/1/2006 2/1/2016 318,491 26,541 35 None No Yes - Wilkinson 56 360 3/1/2006 2/1/2016 300,721 25,060 35 None No Yes - Wilkinson 57 360 3/1/2006 2/1/2016 168,814 14,068 35 None No Yes - Wilkinson - ------------------------------------------------------------------------------------------------------------------------------------ 58 360 3/1/2006 2/1/2016 1,195,718 99,643 59 None No No 59 360 3/1/2006 2/1/2016 1,166,238 97,186 59 None No No 60 360 3/1/2006 2/1/2016 1,194,379 99,532 47 None No No 61 360 11/11/2005 10/11/2015 1,111,552 92,629 43 None No No 62 360 3/1/2006 2/1/2016 1,162,983 96,915 59 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 63 360 4/1/2006 3/1/2016 1,151,327 95,944 None No No 64 0 12/11/2005 11/11/2015 902,554 75,213 116 None No No 65 360 1/11/2006 12/11/2015 1,048,939 87,412 21 None at Closing, No No Springing Hard 66 330 10/11/2005 9/11/2020 1,120,073 93,339 None No No 67 360 4/1/2006 3/1/2016 1,085,091 90,424 60 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 68 357 1/11/2006 12/11/2010 1,088,993 90,749 Hard No No 69 296 12/11/2005 11/11/2015 1,143,337 95,278 None No No 69.1 69.2 69.3 - ------------------------------------------------------------------------------------------------------------------------------------ 69.4 69.5 70 360 11/11/2005 10/11/2015 935,034 77,920 7 None at Closing, No No Springing Hard 71 0 1/1/2006 12/1/2015 767,494 63,958 117 None No No 72 360 2/1/2006 1/1/2016 950,164 79,180 82 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 73 360 12/11/2005 11/11/2015 913,513 76,126 20 None at Closing, No No Springing Soft 74 360 11/11/2005 10/11/2015 916,022 76,335 55 None No No 75 360 12/11/2005 11/11/2015 918,390 76,533 32 None No No 76 356 12/11/2005 11/11/2015 942,070 78,506 None No No 77 354 10/11/2005 9/11/2015 904,281 75,357 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 78 360 2/1/2006 1/1/2016 883,305 73,609 58 None No No 79 356 12/11/2005 11/11/2015 837,442 69,787 None No No 80 360 2/11/2006 1/11/2016 865,237 72,103 34 None No No 81 360 1/11/2006 12/11/2015 865,013 72,084 21 None at Closing, No No Springing Hard 82 360 12/11/2005 11/11/2015 817,192 68,099 56 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 83 360 11/11/2005 10/11/2015 798,542 66,545 31 Soft No No 84 0 3/1/2006 2/1/2016 698,853 58,238 119 None No No 85 360 3/1/2006 2/1/2016 814,236 67,853 23 Hard No No 86 360 9/11/2005 8/11/2015 753,516 62,793 17 None at Closing, No No Springing Hard 87 360 11/11/2005 10/11/2015 748,650 62,388 31 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 88 360 3/1/2006 2/1/2016 784,478 65,373 23 None at Closing, No No Springing Hard 89 360 11/11/2005 10/11/2015 724,826 60,402 31 None at Closing, No No Springing Hard 90 360 2/1/2006 1/1/2016 768,640 64,053 22 None No No 91 299 3/1/2006 2/1/2011 814,892 67,908 None No No 91.1 - ------------------------------------------------------------------------------------------------------------------------------------ 91.2 92 360 2/1/2006 1/1/2016 733,702 61,142 22 None No No 93 358 2/1/2006 1/1/2016 731,304 60,942 None at Closing, No No Springing Hard 94 360 11/11/2004 10/11/2014 694,571 57,881 7 None No No 95 0 11/11/2005 10/11/2015 551,707 45,976 115 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 96 358 2/1/2006 1/1/2016 745,819 62,152 None No No 97 360 2/1/2006 1/1/2016 691,338 57,611 82 None No No 98 358 2/1/2006 1/1/2016 727,717 60,643 None No No 99 0 2/1/2006 1/1/2011 589,069 49,089 58 None at Closing, No No Springing Hard 100 360 2/11/2006 1/11/2016 660,416 55,035 58 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 101 360 11/11/2005 10/11/2015 647,490 53,958 19 None No No 102 360 11/11/2005 10/11/2015 653,384 54,449 19 None No No 103 360 2/1/2006 1/1/2016 678,338 56,528 34 Hard No No 104 354 10/11/2005 9/11/2015 665,211 55,434 None at Closing, No No Springing Hard 105 360 3/11/2006 2/11/2016 654,454 54,538 11 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 106 298 2/1/2006 1/1/2016 728,939 60,745 None No No 107 360 10/11/2005 9/11/2015 599,434 49,953 54 None No No 108 360 1/11/2006 12/11/2015 621,952 51,829 33 None at Closing, No No Springing Soft 109 298 2/11/2006 1/11/2016 682,048 56,837 None No No 110 360 10/11/2005 9/11/2012 591,082 49,257 18 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 111 360 11/11/2005 10/11/2015 602,783 50,232 19 None at Closing, No No Springing Hard 112 360 10/11/2005 9/11/2015 587,712 48,976 18 Hard No No 113 360 12/11/2005 11/11/2015 539,475 44,956 32 None at Closing, No No Springing Hard 114 360 12/11/2005 11/11/2015 545,762 45,480 56 None No No 114.1 - ------------------------------------------------------------------------------------------------------------------------------------ 114.2 115 357 1/11/2006 12/11/2015 556,534 46,378 None No No 116 360 2/1/2006 1/1/2018 558,618 46,551 34 None No No 117 360 2/1/2006 1/1/2011 556,880 46,407 10 None No No 118 360 10/11/2005 9/11/2015 547,070 45,589 42 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 119 296 12/11/2005 11/11/2015 590,384 49,199 None No No 120 236 12/11/2005 11/11/2015 653,223 54,435 None No No 121 359 3/1/2006 2/1/2016 552,782 46,065 None No No 122 358 2/1/2006 1/1/2016 535,333 44,611 None No No 123 357 1/11/2006 12/11/2015 542,472 45,206 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 124 0 2/1/2006 1/1/2016 432,601 36,050 118 Hard No No 125 356 12/11/2005 11/11/2015 488,313 40,693 None No No 126 356 12/11/2005 11/11/2015 504,754 42,063 Hard No No 127 360 12/11/2005 11/11/2015 495,821 41,318 20 None at Closing, No No Springing Hard 128 356 12/11/2005 11/11/2015 509,401 42,450 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 129 238 2/1/2006 1/1/2016 603,742 50,312 None No No 130 360 3/1/2006 2/1/2016 492,340 41,028 59 None No No 131 360 4/1/2006 3/1/2011 515,792 42,983 24 None No No 132 360 4/1/2006 3/1/2016 488,272 40,689 36 None at Closing, No No Springing Hard 133 360 1/11/2006 12/11/2015 453,635 37,803 21 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 134 357 1/11/2006 12/11/2015 459,738 38,312 None at Closing, No No Springing Hard 135 351 7/11/2005 6/11/2015 452,305 37,692 None at Closing, Yes No Springing Hard 136 357 1/11/2006 12/11/2015 456,824 38,069 None at Closing, Yes No Springing Hard 137 353 9/11/2005 8/11/2015 418,197 34,850 None at Closing, No No Springing Hard 138 360 2/1/2006 4/1/2014 424,568 35,381 34 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 139 295 11/11/2005 10/11/2015 457,644 38,137 None No No 140 360 4/1/2006 3/1/2016 433,055 36,088 24 None No No 141 360 11/11/2005 10/11/2015 416,478 34,707 31 None No No 142 358 2/1/2006 1/1/2016 424,772 35,398 None No No 143 356 12/11/2005 11/11/2015 411,300 34,275 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 144 351 7/11/2005 6/11/2015 384,519 32,043 None at Closing, Yes No Springing Hard 145 358 2/1/2006 1/1/2016 400,345 33,362 None No No 146 357 1/1/2006 12/1/2015 403,956 33,663 Hard No No 147 360 12/11/2005 11/11/2015 375,234 31,270 20 None No No 148 360 2/1/2006 1/1/2016 384,511 32,043 34 Hard No No - ------------------------------------------------------------------------------------------------------------------------------------ 149 344 12/11/2005 11/11/2015 371,898 30,991 None at Closing, No No Springing Hard 150 360 12/11/2005 11/11/2015 354,624 29,552 20 None No No 151 238 2/1/2006 1/1/2016 443,075 36,923 None No No 152 360 3/1/2006 2/1/2016 363,111 30,259 23 None No No 153 360 12/11/2005 11/11/2015 359,519 29,960 20 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 154 294 10/11/2005 9/11/2015 387,905 32,325 None No No 155 355 11/11/2005 10/11/2015 349,566 29,131 None No No 156 298 2/1/2006 1/1/2016 402,044 33,504 None No No 157 358 2/11/2006 1/11/2016 360,732 30,061 None at Closing, No No Springing Hard 158 360 3/11/2006 2/11/2016 337,872 28,156 59 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 159 358 2/1/2006 1/1/2016 357,503 29,792 None No No 160 296 12/11/2005 11/11/2015 385,848 32,154 None at Closing, No No Springing Soft 161 296 12/11/2005 11/11/2015 368,990 30,749 None No No 162 294 10/11/2005 9/11/2015 365,949 30,496 None No No 163 356 12/11/2005 11/11/2015 330,306 27,526 None at Closing, No No Springing Hard - ------------------------------------------------------------------------------------------------------------------------------------ 164 294 10/11/2005 9/11/2015 351,311 29,276 None at Closing, No No Springing Hard 165 358 2/1/2006 1/1/2016 346,522 28,877 None No No 166 360 12/11/2005 11/11/2015 309,514 25,793 20 None at Closing, No No Springing Hard 167 0 8/11/2005 7/11/2015 247,454 20,621 112 None No No 168 359 3/1/2006 2/1/2016 314,529 26,211 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 169 357 1/11/2006 12/11/2015 324,239 27,020 None No No 170 0 8/11/2005 7/11/2015 238,921 19,910 112 None No No 171 360 4/1/2006 3/1/2016 313,075 26,090 Soft at Closing, No No Springing Hard 172 360 9/11/2005 8/11/2015 284,249 23,687 29 None No No 173 354 10/11/2005 9/11/2015 288,139 24,012 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 174 360 11/11/2005 10/11/2020 283,337 23,611 19 None No No 175 0 4/1/2006 3/1/2016 240,170 20,014 120 None at Closing, No No Springing Hard 176 238 2/1/2006 1/1/2016 347,835 28,986 None No No 177 360 2/1/2006 1/1/2016 290,019 24,168 45 None No No 178 353 9/11/2005 8/11/2015 277,503 23,125 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 179 353 9/11/2005 8/11/2015 273,636 22,803 None No No 180 297 1/11/2006 12/11/2015 289,909 24,159 None No No 181 360 10/11/2005 9/11/2015 261,629 21,802 30 None No No 182 359 3/1/2006 2/1/2016 264,374 22,031 None at Closing, No No Springing Hard 183 359 3/1/2006 2/1/2016 258,336 21,528 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 184 356 12/11/2005 11/11/2015 259,879 21,657 None No No 185 174 10/11/2005 9/11/2015 363,220 30,268 None at Closing, No No Springing Hard 186 358 2/1/2006 1/1/2016 238,820 19,902 None No No 187 359 3/1/2006 2/1/2016 243,768 20,314 None No No 188 358 2/1/2006 1/1/2016 237,418 19,785 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 189 356 12/11/2005 11/11/2015 227,760 18,980 None No No 190 358 2/1/2006 1/1/2016 227,346 18,945 None No No 191 360 4/1/2006 3/1/2016 224,580 18,715 Soft No No 192 359 3/1/2006 2/1/2016 201,477 16,790 None No No 193 360 1/1/2006 12/1/2015 190,552 15,879 33 None No No - ------------------------------------------------------------------------------------------------------------------------------------ 194 118 2/1/2006 1/1/2016 358,791 29,899 None No No 195 359 3/1/2006 2/1/2016 190,753 15,896 None at Closing, No No Springing Hard 196 358 2/1/2006 1/1/2024 197,196 16,433 None No No 197 294 10/11/2005 9/11/2015 168,336 14,028 None at Closing, No No Springing Hard CUT-OFF RELATED DSCR(3)(5) GRACE PAYMENT APPRAISED APPRAISAL DATE LTV LTV RATIO AT ID BORROWER (7)(8) PERIOD DATE VALUE(9) AS-OF DATE(9) RATIO(6)(7)(8) MATURITY/ARD(6)(8) - ------------------------------------------------------------------------------------------------------------------------- 1 2.38 0 1 707,000,000 8/22/2005 42.43% 42.43% 2 1.66 5 1 169,000,000 12/9/2005 73.96% 73.96% 3 Yes - 1 2.45 5 1 153,000,000 11/14/2005 50.33% 50.33% 4 1.60 5 1 91,000,000 9/1/2005 79.12% 79.12% 5 1.29 0 11 90,500,000 10/12/2005 77.77% 64.60% - ------------------------------------------------------------------------------------------------------------------------- 6 1.68 5 1 92,500,000 12/19/2005 70.27% 70.27% 7 1.26 0 11 76,700,000 9/1/2005 79.53% 72.30% 7.1 35,000,000 9/1/2005 7.2 19,300,000 9/1/2005 7.3 13,800,000 9/1/2005 - ------------------------------------------------------------------------------------------------------------------------- 7.4 8,600,000 9/1/2005 1.25 5 1 76,800,000 Various 78.96% 73.63% 8 Yes - 4 1.25 5 1 48,800,000 9/27/2005 78.96% 73.63% 9 Yes - 4 1.25 5 1 28,000,000 9/21/2005 78.96% 73.63% 10 Yes - 2 1.30 5 1 82,500,000 9/30/2005 66.67% 61.69% - ------------------------------------------------------------------------------------------------------------------------- 11 Yes - 1 1.50 5 1 81,000,000 11/18/2005 64.20% 64.20% 12 1.32 0 (5 days for the first 2 missed 11 70,000,000 11/30/2005 72.00% 66.48% payments) 13 1.23 0 11 58,000,000 8/23/2005 75.86% 70.27% 14 1.20 0 11 56,500,000 10/13/2005 76.11% 69.90% 15 3.50 5 1 80,000,000 11/10/2005 49.53% 49.53% - ------------------------------------------------------------------------------------------------------------------------- 15.1 47,300,000 11/10/2005 15.2 32,700,000 11/10/2005 16 1.23 5 1 51,900,000 11/4/2005 75.14% 67.36% 17 Yes - 8 2.14 5 11 71,600,000 7/1/2005 53.07% 53.07% 18 Yes - 2 1.21 5 1 41,400,000 9/19/2005 79.95% 71.13% - ------------------------------------------------------------------------------------------------------------------------- 19 1.20 0 11 43,000,000 9/22/2005 73.84% 66.18% 1.24 5 1 40,000,000 11/10/2005 77.50% 69.36% 20 Yes - 11 1.24 5 1 19,400,000 11/10/2005 77.50% 69.36% 21 Yes - 11 1.24 5 1 6,200,000 11/10/2005 77.50% 69.36% 22 Yes - 11 1.24 5 1 5,500,000 11/10/2005 77.50% 69.36% - ------------------------------------------------------------------------------------------------------------------------- 23 Yes - 11 1.24 5 1 4,500,000 11/10/2005 77.50% 69.36% 24 Yes - 11 1.24 5 1 4,400,000 11/10/2005 77.50% 69.36% 25 1.20 0 11 44,000,000 11/16/2005 70.45% 60.40% 26 1.28 5 1 43,050,000 10/26/2005 71.31% 65.95% 1.35 0 11 42,590,000 Various 69.97% 62.33% - ------------------------------------------------------------------------------------------------------------------------- 27 Yes - 13 1.35 0 11 11,600,000 8/25/2005 69.97% 62.33% 28 Yes - 13 1.35 0 11 10,900,000 8/22/2005 69.97% 62.33% 29 Yes - 13 1.35 0 11 11,950,000 8/25/2005 69.97% 62.33% 30 Yes - 13 1.35 0 11 8,140,000 8/22/2005 69.97% 62.33% 31 1.31 5 1 37,200,000 6/7/2005 80.00% 71.24% - ------------------------------------------------------------------------------------------------------------------------- 32 Yes - 5 1.58 0 11 41,400,000 8/18/2005 69.32% 69.32% 33 Yes - 3 1.20 5 1 38,050,000 12/8/2005 75.16% 70.05% 33.1 20,100,000 12/8/2005 33.2 17,950,000 12/8/2005 34 Yes - 7 1.32 0 11 40,200,000 11/2/2005 71.14% 63.88% - ------------------------------------------------------------------------------------------------------------------------- 35 1.31 5 1 34,000,000 9/8/2005 78.96% 65.62% 36 Yes - 3 1.21 5 1 33,500,000 11/1/2005 79.55% 73.91% 36.1 17,500,000 11/1/2005 36.2 16,000,000 11/1/2005 37 1.23 5 1 33,500,000 8/15/2005 74.18% 61.98% - ------------------------------------------------------------------------------------------------------------------------- 38 1.21 0 11 31,000,000 10/21/2005 77.42% 71.82% 39 Yes - 6 1.22 5 1 32,800,000 10/11/2005 72.26% 69.34% 40 Yes - 2 1.26 5 1 29,000,000 10/20/2005 77.50% 69.36% 41 1.20 5 1 28,400,000 10/4/2005 72.89% 66.24% 42 1.20 0 11 28,000,000 1/1/2006 77.25% 68.65% - ------------------------------------------------------------------------------------------------------------------------- 43 1.22 0 11 26,325,000 9/1/2005 79.77% 70.59% 44 1.31 0 11 28,500,000 4/8/2005 73.68% 65.68% 45 Yes - 9 1.20 0 11 28,400,000 8/8/2005 73.06% 66.34% 46 1.22 0 11 26,700,000 9/13/2005 76.55% 69.88% 46.1 14,900,000 9/13/2005 - ------------------------------------------------------------------------------------------------------------------------- 46.2 11,800,000 9/13/2005 47 Yes - 3 1.20 5 1 29,300,000 10/26/2005 68.26% 63.49% 48 Yes - 10 1.50 5 1 29,800,000 12/4/2005 67.11% 67.11% 48.1 25,650,000 12/4/2005 48.2 4,150,000 12/4/2005 - ------------------------------------------------------------------------------------------------------------------------- 49 Yes - 12 1.25 5 1 26,500,000 12/1/2005 75.33% 49.75% 50 1.41 0 11 32,000,000 8/22/2005 60.94% 52.73% 51 1.21 5 1 24,500,000 11/23/2005 77.55% 72.13% 52 1.25 0 11 24,800,000 6/7/2005 76.61% 71.22% 53 1.36 0 11 24,300,000 7/18/2005 73.35% 67.75% - ------------------------------------------------------------------------------------------------------------------------- 1.24 5 1 22,810,000 1/1/2007 78.04% 69.84% 54 Yes - 19 1.24 5 1 8,050,000 1/1/2007 78.04% 69.84% 55 Yes - 19 1.24 5 1 6,010,000 1/1/2007 78.04% 69.84% 56 Yes - 19 1.24 5 1 5,610,000 1/1/2007 78.04% 69.84% 57 Yes - 19 1.24 5 1 3,140,000 1/1/2007 78.04% 69.84% - ------------------------------------------------------------------------------------------------------------------------- 58 1.18 5 1 22,000,000 1/1/2006 62.95% 57.50% 59 1.20 5 1 22,200,000 12/1/2005 76.58% 71.20% 60 Yes - 2 1.24 5 1 25,750,000 11/23/2005 66.02% 60.51% 61 1.23 0 11 21,500,000 6/3/2005 78.37% 71.13% 62 1.20 5 1 22,500,000 12/15/2005 73.78% 68.78% - ------------------------------------------------------------------------------------------------------------------------- 63 1.20 5 1 21,000,000 12/21/2005 78.57% 66.09% 64 Yes - 5 1.55 0 11 21,600,000 9/14/2005 75.00% 75.00% 65 1.22 0 11 21,700,000 9/1/2005 72.58% 63.27% 66 1.24 0 11 20,000,000 6/1/2006 78.42% 52.93% 67 1.16 5 1 21,000,000 11/1/2005 63.57% 58.59% - ------------------------------------------------------------------------------------------------------------------------- 68 1.51 0 11 22,260,000 10/1/2005 69.41% 64.94% 69 1.60 0 11 20,350,000 Various 72.45% 56.36% 69.1 6,100,000 10/3/2005 69.2 4,900,000 10/5/2005 69.3 4,250,000 10/3/2005 - ------------------------------------------------------------------------------------------------------------------------- 69.4 2,800,000 10/3/2005 69.5 2,300,000 10/3/2005 70 1.23 0 11 18,000,000 8/11/2005 80.00% 67.68% 71 1.45 5 1 18,400,000 11/9/2005 76.09% 76.09% 72 Yes - 6 1.20 5 1 19,530,000 10/12/2005 71.43% 68.55% - ------------------------------------------------------------------------------------------------------------------------- 73 Yes - 7 1.33 0 11 19,450,000 8/15/2005 70.72% 61.60% 74 1.20 0 11 18,800,000 8/15/2005 72.71% 67.41% 75 1.22 0 11 17,100,000 9/26/2005 77.28% 69.38% 76 1.23 0 11 17,000,000 9/30/2005 77.62% 65.87% 77 Yes - 15 1.20 0 11 19,000,000 6/30/2005 69.29% 58.27% - ------------------------------------------------------------------------------------------------------------------------- 78 1.21 5 1 16,800,000 11/17/2005 77.38% 71.86% 79 1.26 0 11 16,250,000 8/11/2005 79.61% 65.76% 80 1.24 0 11 16,700,000 12/1/2005 76.17% 68.11% 81 1.20 0 11 17,922,000 9/28/2005 69.91% 61.42% 82 1.21 0 11 15,850,000 8/9/2005 78.86% 72.87% - ------------------------------------------------------------------------------------------------------------------------- 83 Yes - 9 1.47 0 11 16,500,000 6/22/2005 75.00% 66.41% 84 Yes - 10 1.61 5 1 20,400,000 12/4/2005 58.82% 58.82% 85 1.25 5 1 15,000,000 11/14/2005 78.67% 69.09% 86 1.26 0 11 14,900,000 1/1/2006 77.18% 67.04% 87 1.42 0 11 16,200,000 8/15/2005 70.37% 62.52% - ------------------------------------------------------------------------------------------------------------------------- 88 1.21 5 1 15,750,000 12/5/2005 72.38% 63.53% 89 1.44 0 11 15,000,000 7/27/2005 73.33% 65.19% 90 Yes - 16 1.51 5 1 14,700,000 11/29/2005 74.83% 65.91% 91 1.28 5 1 15,500,000 12/2/2005 68.26% 61.77% 91.1 9,550,000 12/2/2005 - ------------------------------------------------------------------------------------------------------------------------- 91.2 5,950,000 12/2/2005 92 Yes - 16 1.50 5 1 14,400,000 11/29/2005 72.92% 64.22% 93 1.23 5 1 13,420,000 12/21/2005 78.06% 65.75% 94 1.26 0 11 13,120,000 8/20/2004 79.27% 69.14% 95 Yes - 5 1.53 0 11 14,960,000 8/18/2005 68.85% 68.85% - ------------------------------------------------------------------------------------------------------------------------- 96 Yes - 17 1.46 5 1 13,900,000 11/1/2005 73.94% 62.94% 97 Yes - 6 1.22 5 1 13,800,000 10/10/2005 73.55% 70.58% 98 Yes - 17 1.46 5 1 14,000,000 11/1/2005 71.63% 60.97% 99 1.37 5 1 13,000,000 11/2/2005 76.92% 76.92% 100 1.45 0 11 16,500,000 10/11/2005 60.61% 56.08% - ------------------------------------------------------------------------------------------------------------------------- 101 1.20 0 11 12,700,000 7/5/2005 78.74% 68.21% 102 1.23 0 11 12,650,000 7/29/2005 79.05% 68.62% 103 Yes - 12 1.29 5 1 13,100,000 12/1/2005 76.34% 68.22% 104 1.21 0 11 13,100,000 7/18/2005 76.19% 63.55% 105 1.12 0 11 10,200,000 9/28/2005 73.63% 60.09% - ------------------------------------------------------------------------------------------------------------------------- 106 1.57 5 1 13,900,000 10/10/2005 68.13% 52.77% 107 1.89 0 11 16,300,000 2/1/2006 57.06% 52.62% 108 1.18 0 11 12,000,000 10/5/2005 76.92% 68.66% 109 1.45 0 11 12,400,000 11/22/2005 72.35% 55.79% 110 1.44 0 11 13,000,000 7/20/2005 68.46% 63.40% - ------------------------------------------------------------------------------------------------------------------------- 111 1.22 0 11 12,070,000 8/25/2005 72.49% 63.66% 112 Yes - 15 1.34 0 11 10,800,000 7/23/2005 79.17% 69.48% 113 Yes - 21 1.26 0 11 10,350,000 9/22/2005 80.00% 70.96% 114 1.24 0 11 11,550,000 6/22/2005 71.43% 66.10% 114.1 6/22/2005 - ------------------------------------------------------------------------------------------------------------------------- 114.2 6/22/2005 115 1.22 0 11 10,700,000 10/21/2005 76.84% 64.22% 116 1.34 5 1 11,100,000 9/27/2005 72.97% 62.66% 117 1.31 5 1 10,600,000 10/11/2005 75.47% 71.46% 118 1.21 0 11 10,600,000 7/14/2005 75.00% 68.52% - ------------------------------------------------------------------------------------------------------------------------- 119 Yes - 20 1.52 0 11 12,200,000 10/1/2005 65.16% 49.93% 120 1.31 0 11 10,700,000 8/18/2005 74.29% 47.89% 121 1.28 5 1 11,000,000 9/27/2005 70.81% 59.87% 122 1.26 5 1 10,500,000 10/28/2005 74.11% 62.17% 123 1.23 0 11 11,200,000 10/24/2005 68.87% 58.17% - ------------------------------------------------------------------------------------------------------------------------- 124 1.45 5 1 10,100,000 11/28/2005 74.26% 74.26% 125 Yes - 24 1.41 0 11 10,450,000 9/16/2005 70.66% 58.72% 126 1.28 0 11 9,225,000 9/16/2005 79.86% 67.02% 127 1.21 0 11 10,100,000 9/7/2005 72.77% 63.61% 128 1.38 0 11 13,300,000 9/26/2005 55.03% 46.38% - ------------------------------------------------------------------------------------------------------------------------- 129 Yes - 18 1.22 5 1 11,100,000 11/4/2005 65.36% 42.28% 130 1.22 5 1 9,500,000 12/13/2005 76.32% 70.86% 131 1.54 5 1 14,800,000 12/14/2005 48.65% 46.86% 132 1.26 5 1 9,600,000 11/30/2005 73.43% 65.90% 133 1.28 0 11 10,500,000 8/13/2005 64.76% 56.47% - ------------------------------------------------------------------------------------------------------------------------- 134 1.29 0 11 8,500,000 10/21/2005 79.73% 66.67% 135 Yes - 22 1.25 0 11 9,100,000 3/21/2005 74.22% 62.15% 136 1.31 0 11 9,000,000 8/23/2005 73.04% 61.49% 137 Yes - 23 1.26 0 11 8,350,000 9/1/2005 77.20% 63.97% 138 1.23 5 1 8,600,000 3/31/2006 74.42% 68.56% - ------------------------------------------------------------------------------------------------------------------------- 139 1.30 0 11 9,200,000 8/16/2005 69.43% 52.58% 140 1.25 5 1 8,400,000 11/11/2005 75.08% 65.89% 141 1.41 0 11 9,270,000 8/11/2005 67.42% 60.06% 142 1.20 5 1 7,800,000 12/15/2005 79.30% 66.49% 143 1.24 0 11 8,100,000 7/22/2005 76.19% 63.45% - ------------------------------------------------------------------------------------------------------------------------- 144 Yes - 22 1.28 0 11 7,250,000 3/14/2005 79.20% 66.31% 145 1.22 5 1 7,600,000 11/1/2005 75.49% 63.57% 146 1.35 5 1 7,410,000 10/5/2005 76.69% 64.96% 147 1.38 0 11 7,100,000 8/16/2005 79.58% 69.32% 148 1.24 5 1 7,200,000 12/1/2005 77.78% 69.67% - ------------------------------------------------------------------------------------------------------------------------- 149 Yes - 23 1.20 0 11 7,000,000 9/15/2005 78.19% 64.24% 150 1.33 0 11 7,200,000 9/12/2005 75.00% 65.17% 151 Yes - 18 1.28 5 1 7,650,000 11/4/2005 69.60% 45.02% 152 1.27 5 1 7,110,000 11/18/2005 74.54% 65.37% 153 1.20 0 11 6,650,000 12/1/2005 79.70% 69.75% - ------------------------------------------------------------------------------------------------------------------------- 154 Yes - 14 1.50 0 11 7,100,000 8/12/2005 73.95% 56.67% 155 1.25 0 11 6,650,000 8/11/2005 78.36% 65.43% 156 1.94 5 1 9,700,000 11/1/2005 53.44% 41.50% 157 1.24 0 11 7,600,000 10/26/2005 67.48% 56.95% 158 1.24 0 11 6,360,000 4/10/2005 80.00% 74.07% - ------------------------------------------------------------------------------------------------------------------------- 159 1.20 5 1 7,140,000 10/18/2005 71.18% 60.08% 160 Yes - 14 1.57 0 11 7,400,000 8/10/2005 67.17% 52.28% 161 Yes - 20 1.68 0 11 9,400,000 10/1/2005 52.86% 40.50% 162 Yes - 14 1.67 0 11 9,150,000 8/9/2005 54.13% 41.48% 163 1.22 0 11 6,700,000 5/3/2005 71.33% 60.00% - ------------------------------------------------------------------------------------------------------------------------- 164 Yes - 14 1.44 0 11 6,600,000 8/15/2005 72.04% 55.21% 165 1.65 5 1 7,300,000 10/7/2005 64.93% 55.38% 166 1.22 0 11 6,560,000 6/10/2005 70.88% 61.78% 167 Yes - 25 1.72 0 11 5,300,000 5/17/2005 87.55% 87.55% 168 1.21 5 1 6,900,000 12/20/2005 66.57% 55.73% - ------------------------------------------------------------------------------------------------------------------------- 169 1.30 0 11 5,750,000 9/13/2005 79.75% 67.46% 170 Yes - 25 1.83 0 11 5,500,000 5/17/2005 81.45% 81.45% 171 1.46 5 1 6,880,000 11/1/2006 63.95% 54.09% 172 Yes - 21 1.23 0 11 5,600,000 6/21/2005 78.57% 69.58% 173 1.24 0 11 5,900,000 7/27/2005 74.06% 61.59% - ------------------------------------------------------------------------------------------------------------------------- 174 1.28 0 11 5,775,000 8/5/2005 73.79% 55.95% 175 2.00 5 1 7,240,000 12/5/2005 58.01% 58.01% 176 Yes - 18 1.32 5 1 7,900,000 11/4/2005 52.91% 34.23% 177 1.20 5 1 6,750,000 11/7/2005 61.85% 56.51% 178 Yes - 8 1.25 0 11 5,500,000 4/26/2005 73.98% 62.15% - ------------------------------------------------------------------------------------------------------------------------- 179 1.26 0 11 5,200,000 5/1/2005 76.82% 64.61% 180 1.34 0 11 6,200,000 10/1/2005 64.21% 48.81% 181 1.26 0 11 5,150,000 6/10/2005 75.73% 67.54% 182 1.27 5 1 4,750,000 11/5/2005 79.89% 67.20% 183 1.29 5 1 5,680,000 10/3/2005 65.93% 55.30% - ------------------------------------------------------------------------------------------------------------------------- 184 1.23 0 11 5,300,000 10/12/2005 70.64% 59.49% 185 1.37 0 11 7,250,000 6/26/2005 51.24% 22.45% 186 3.08 5 1 10,400,000 11/11/2005 34.53% 28.69% 187 1.25 5 1 5,520,000 10/21/2005 63.32% 53.28% 188 1.28 5 1 5,700,000 9/30/2005 61.26% 51.22% - ------------------------------------------------------------------------------------------------------------------------- 189 Yes - 24 1.45 0 11 6,375,000 9/19/2005 53.73% 44.71% 190 1.30 5 1 4,500,000 10/19/2005 72.06% 60.76% 191 1.36 5 1 4,200,000 10/21/2005 76.19% 64.19% 192 2.40 5 1 8,300,000 11/1/2005 36.09% 30.06% 193 1.46 5 1 3,800,000 10/12/2005 75.00% 66.85% - ------------------------------------------------------------------------------------------------------------------------- 194 Yes - 18 1.15 5 1 10,280,000 11/4/2005 26.41% 0.17% 195 1.28 5 1 3,300,000 1/1/2006 79.89% 67.90% 196 1.56 5 1 2,940,000 10/26/2005 83.86% 57.09% 197 Yes - 14 1.42 0 11 3,300,000 8/12/2005 69.04% 52.91% CD 2006-CD2 ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES ID PROPERTY NAME ADDRESS CITY - ------------------------------------------------------------------------------------------------------------------------------------ 1 Villas Parkmerced 3711 19th Avenue San Francisco 2 Valley View Center 13331 Preston Road Dallas 3 SunTrust Center 200 South Orange Avenue Orlando 4 Westin Philadelphia Hotel 99 South 17th Street at Liberty Place Philadelphia 5 Rock Pointe Corporate Center 1330 North Washington Street Spokane - ------------------------------------------------------------------------------------------------------------------------------------ 6 Woodbury Lakes 9000 Hudson Road Woodbury 7 The Harrisburg Portfolio Various Various 7.1 Gateway Office Center - Flank Drive 6340, 6345, 6360, 6375, 6380, 6385, 6400 and 6405 Harrisburg Flank Drive 7.2 Commerce Business Park 2605 Interstate Drive and 2601 Market Place Harrisburg 7.3 Rossmoyne Business Park 5070 A, 5070 B and 5035 Ritter Road Mechanicsburg - ------------------------------------------------------------------------------------------------------------------------------------ 7.4 Gateway Office Center - Shannon Road 75, 85 and 95 Shannon Road Harrisburg Beyman Multifamily Portfolio Various Various 8 Empirian at Steele Park 411 East Indian School Road Phoenix 9 Colonnade at Germantown 7491 Wyndhurst Place Germantown 10 Sunset Media Tower 6255 Sunset Boulevard Hollywood - ------------------------------------------------------------------------------------------------------------------------------------ 11 Stadium Gateway 1900 South State College Boulevard Anaheim 12 Woodcrest Corporate Center 101 Woodcrest Road Cherry Hill 13 Riverview Square 99-101 East River Drive East Hartford 14 Research Boulevard Center 1801 & 1803 Research Boulevard Rockville 15 Shorenstein Brisbane Various Brisbane - ------------------------------------------------------------------------------------------------------------------------------------ 15.1 7000 Marina Boulevard 7000 Marina Boulevard Brisbane 15.2 5000 Marina Boulevard 5000 Marina Boulevard Brisbane 16 Stratford Plaza 140-166 S. Gary Avenue Bloomingdale 17 The Ansonia 2109 Broadway New York 18 Lodge at Stone Oak Ranch Apartment Homes 5400 West Parmer Austin Lane - ------------------------------------------------------------------------------------------------------------------------------------ 19 Canyon Corporate Plaza 2510-2512 West Dunlap Avenue Phoenix Century Center Parkway Portfolio Various Memphis 20 1620, 1640, 1680 Century Center Parkway 1620, 1640, 1680 Century Center Parkway Memphis 21 1610 Century Center Parkway 1610 Century Center Parkway Memphis 22 1670 Century Center Parkway 1670 Century Center Parkway Memphis - ------------------------------------------------------------------------------------------------------------------------------------ 23 1600 Century Center Parkway 1600 Century Center Parkway Memphis 24 1590 Century Center Parkway 1590 Century Center Parkway Memphis 25 Conexant Building 9808 and 9868 Scranton Road San Diego 26 Vistas at Seven Bar Ranch 10600 Cibola Loop NW Albuquerque AG Portfolio Various Various - ------------------------------------------------------------------------------------------------------------------------------------ 27 Top Food & Drug - Auburn, WA 1702 Auburn Way North Auburn 28 Safeway - Vancouver, WA 13719 Southeast Mill Plain Boulevard Vancouver 29 Larry's Market - Tukwila, WA 3725 South 144th Street Tukwila 30 Sherm's Thunderbird Market - Roseburg, OR 2553 Northwest Stewart Parkway Roseburg 31 Eastfield Mall 1655 Boston Road (US Route 20) Springfield - ------------------------------------------------------------------------------------------------------------------------------------ 32 University Club Tower 1034 South Brentwood Boulevard Saint Louis 33 Mission Madison Priest Lake Apartments Various Various 33.1 Mission Madison Square Apartments 510 Heritage Drive Madison 33.2 Mission Priest Lake Apartments 3555 Bell Road Nashville 34 Willowbrook West Apartments 2053 Willowbrook Drive West Lafayette - ------------------------------------------------------------------------------------------------------------------------------------ 35 Johnson Control Building 7500 Tank Avenue Warren 36 Mission Rockwall and Fairways Apartments Various Various 36.1 Mission Rockwall Apartments 923 Yellow Jacket Lane Rockwall 36.2 Mission Fairways Apartments 801 Interstate Highway 30 Mesquite 37 Canyon Plaza Shopping Center 503-599 Telegraph Canyon Road Chula Vista - ------------------------------------------------------------------------------------------------------------------------------------ 38 Alpine Commons Shopping Center 1357 Route 9 Wappingers Falls 39 Abbington Place 1521 Bridford Parkway Greensboro 40 Heritage at Lakeside Apartment Homes 5900 Baywater Drive Plano 41 Indian Lakes Apartments 1601 Hiawatha Drive Virginia Beach 42 Story and King Plaza 1824 Story Road San Jose - ------------------------------------------------------------------------------------------------------------------------------------ 43 Robinson Crossroads 6511-6541 Steubenville Pike Pittsburgh 44 The Exchange at Tallahassee Apts 2915 Sharer Road Tallahassee 45 Tramore Village Apartments 2222 East-West Connector Austell 46 Trafalgar Plaza Portfolio Various Fort Lauderdale 46.1 Trafalgar Plaza 5300-5310 Northwest 33rd Avenue Fort Lauderdale - ------------------------------------------------------------------------------------------------------------------------------------ 46.2 Zimmerman Corporate Center 2200 West Commercial Boulevard Fort Lauderdale 47 Mission Galleria Apartments 5000 South Lincoln Trace Avenue Smyrna 48 Old Alabama 3005 Old Alabama Road Alpharetta 48.1 Old Alabama - Phase I 3005 Old Alabama Road Alpharetta 48.2 Old Alabama - Phase II 3005 Old Alabama Road Alpharetta - ------------------------------------------------------------------------------------------------------------------------------------ 49 Pricewaterhouse Coopers Office 1900 St. Antonie St Detroit 50 Lake Creek Festival Center 13729 Research Boulevard Austin 51 Elwood Shopping Center 1914-1968 Jericho Turnpike Dix Hills 52 Wellpointe Medical Building 1701 East South Boulevard Rochester Hills 53 One Town Center 4201 Northview Drive Bowie - ------------------------------------------------------------------------------------------------------------------------------------ Wilkinson Portfolio Various Various 54 Magnolia Run 151 Century Drive Greenville 55 Breckenridge 230 Pelham Road Greenville 56 Country Club 200 Country Club Lane Anderson 57 Willow Pointe 201 Miracle Mile Drive Anderson - ------------------------------------------------------------------------------------------------------------------------------------ 58 Hawthorne Exchange 2831-2851-2909 West 120th Street Hawthorne 59 928 Broadway 928 Broadway New York 60 Walnut Hills Apartments 8920 Walnut Grove Memphis Road 61 Maverick Creek Villas 15651 Chase Hill Boulevard San Antonio 62 IBM Call Center 1177 Beltline Road Coppell - ------------------------------------------------------------------------------------------------------------------------------------ 63 Alhambra Center International 150 Alhambra Circle Coral Gables 64 Rexford Park 2100 & 2115 Rexford Road Charlotte 65 Buena Park Promenade 5825 & 5955 Lincoln Avenue Buena Park 66 Shelton Pointe 2 Trap Falls Road Shelton 67 Galleria Pavilion 601-617 Mall Ring Circle Henderson - ------------------------------------------------------------------------------------------------------------------------------------ 68 Verizon Call Center 3400 Forest Drive Columbia 69 Supertel Hotel Portfolio Various Various 69.1 Comfort Suites - Fort Wayne, IN 5775 Coventry Lane Fort Wayne 69.2 Comfort Inn - Fayetteville, NC 1957 Cedar Creek Road Fayetteville 69.3 Comfort Suites - Lafayette, IN 31 Frontage Road Lafayette - ------------------------------------------------------------------------------------------------------------------------------------ 69.4 Hampton Inn & Suites - Warsaw, IN 3328 East Center Street Warsaw 69.5 Comfort Suites - Marion, IN 1345 North Baldwin Avenue Marion 70 Deerfield Plaza 12700 South Orange Blossom Trail Orlando 71 Chrysler Retail 145-157 East 42nd Street New York 72 Woods Edge 4655 Hope Valley Road Durham - ------------------------------------------------------------------------------------------------------------------------------------ 73 South Duff Community Park I & II 416-616 Billy Sunday Road Ames 74 21 Astor Place 21 Astor Place New York 75 Colonial Square 3107 Boulevard Colonial Heights 76 Aston Township Giant Food 3400 Concord Road Aston Township 77 5 Omni 5 Omni Way Chelmsford - ------------------------------------------------------------------------------------------------------------------------------------ 78 Ashford Place Apartments 905 Pineville Point Avenue Charlotte 79 College Square Shopping Center 444 WMC Drive Westminster 80 The Links at North Creek 8786 North Creek Boulevard Southaven 81 Best Buy - Sunnyvale, CA 760 East El Camino Real Sunnyvale 82 Fountain Square Apartments 3115 Fountain Square Boulevard New Berlin - ------------------------------------------------------------------------------------------------------------------------------------ 83 Northwest Corners Apartments 8520 Pitner Road Houston 84 Centennial Village 2300 Holcomb Bridge Road Roswell 85 Wynwood Office Buildings 5160 & 5180 Parkstone Drive Chantilly 86 El Clair Medical Building 6056-6080 Boynton Beach Boulevard Boynton Beach 87 Sunwest Medical Center 5757 West Thunderbird Road Glendale - ------------------------------------------------------------------------------------------------------------------------------------ 88 Colony Crossings 10005 West Hillsborough Avenue Tampa 89 Cortez Plaza East 613-900 Cortez Road West Bradenton 90 Courtyard by Marriot - Erlanger 3990 Olympic Boulevard Erlanger 91 Bethany and ATI Buildings Various Various 91.1 Bethany Building 500 West Bethany Drive Allen - ------------------------------------------------------------------------------------------------------------------------------------ 91.2 ATI Building 10003 West Technology Boulevard Dallas 92 Residence Inn - Cincinnati Airport 2811 Circleport Drive Erlanger 93 Centrelake Corporate Center 3300 E. Guasti Road Ontario 94 Birnam Wood Apartments 900 Macbeth Drive Monroeville 95 Maryland Place 8112 Maryland Avenue Clayton - ------------------------------------------------------------------------------------------------------------------------------------ 96 Staybridge Suites-Lincolnshire 100 Barclay Blvd Lincolnshire 97 Savannah Place 400 Magnolia Branch Drive Winston-Salem 98 Staybridge Suites-Glenview 2600 Lehigh Ave Glenview 99 4100 MacArthur Boulevard 4100 MacArthur Boulevard Newport Beach 100 Village Oaks Shopping Center 1125-1175 Arnold Drive Martinez - ------------------------------------------------------------------------------------------------------------------------------------ 101 Fossil Ridge Apartments 5600 North Beach Street Haltom City 102 Stonecreek Apartments-Phase I One Clubhouse Circle South Strabane Township 103 Auburn Ridge Office Center 3850 Hamlin Rd Auburn Hills 104 1815-1819 East Jericho Turnpike 1815-1819 East Jericho Turnpike Huntington 105 New Albany Medical Office Building 7277 Smith's Mill Road New Albany - ------------------------------------------------------------------------------------------------------------------------------------ 106 Hampton Inn Dulles Airport 4050 Westfax Drive Chantilly 107 Village Plaza 4212-4314 Highway 98 North Lakeland 108 Siempre Viva 8851 Kerns Street San Diego 109 Hilton Garden Inn - Newport News, VA 180 Regal Way Newport News 110 Civic Plaza Shopping Center 501-571 South San Jacinto Street Hemet - ------------------------------------------------------------------------------------------------------------------------------------ 111 1033 Third Street 1033 Third Street San Rafael 112 Brookfield Commons 6600 West Broad Street Richmond 113 Wabash Valley Plaza 4650-4700 South US Highway 41 Terre Haute 114 Garand Lane Various Various 114.1 Bankside Business Park 36-405/411, 36-555 Bankside, 36605 Sunair Cathedral City - ------------------------------------------------------------------------------------------------------------------------------------ 114.2 Country Club Business Park 77-585 Enfield, 39-740, 39-750, 39-760, 39-770 Garand Palm Desert 115 Shaw's Supermarket - Windham, NH Route 111- Indian Rock Road Windham 116 Eastgate Business Center 13040 & 13100 W. Lisbon Brookfield 117 Woodstock 5877 Ross Road Fairfield 118 Lewisville Commons 104-189 Lowes Foods Drive Lewisville - ------------------------------------------------------------------------------------------------------------------------------------ 119 Aku Tiki Inn 2225 South Atlantic Avenue Daytona Beach 120 Fairfield Inn by Marriott - Chesapeake, VA 1560 Crossways Boulevard Chesapeake 121 Prospect Park Apartments 545 Park Avenue East Orange 122 5209 Concord Pike 5209 Concord Pike Wilmington 123 Spectrum Fitness 22235 Sherman Way Canoga Park - ------------------------------------------------------------------------------------------------------------------------------------ 124 300 Billerica Road 300 Billerica Road Chelmsford 125 Morrell Park Apartments 525 Harris Street Henderson 126 Shaw's Supermarket - Littleton, NH 625 Meadow Street Littleton 127 44 Bromfield Street 44 Bromfield Street Boston 128 Jillians Boston 1-9 Lansdowne Street, 145 Ipswich Street Boston - ------------------------------------------------------------------------------------------------------------------------------------ 129 Lackland Self Storage - Belleville 125 Franklin St Belleville 130 Waterford Phase III 2798, 2800, 2804, 2808, 2812, and 2816 Stantonsburg Greenville Road 131 Crowne Plaza Phoenix 2532 West Peoria Avenue Phoenix 132 Pitt Street Center 1240 & 1250 N. Pitt Street Alexandria 133 Main Street Village 135, 175, & 265 East Ontario Avenue Corona - ------------------------------------------------------------------------------------------------------------------------------------ 134 Hillcrest Shopping Center 100 Green Springs Highway Birmingham 135 Circuit City - Poughkeepsie, NY 837 South Road Poughkeepsie 136 Peapod Distribution Warehouse 1325 Ensell Road Lake Zurich 137 Best Buy - Menomonee Falls, WI N94 West 16855 Richfield Way Menomonee Falls 138 Aquia Terrace Phase II 190 White Pine Circle Stafford - ------------------------------------------------------------------------------------------------------------------------------------ 139 Hunterdon Hills Plaza 1392 US Highway 22 Lebanon 140 Habersham Village 5400 Habersham Savannah Road 141 West Park Retail 12601-12653 Olive Boulevard Creve Coeur 142 Trafalgar Square Apartments 2419-2473 County Home Road Greenville 143 Heritage Square - St. Charles, IL 215 5th Avenue St. Charles - ------------------------------------------------------------------------------------------------------------------------------------ 144 Circuit City - Manassas, VA 10640 Davidson Place Manassas 145 5002-5012 Church Avenue 5002-5012 Church Avenue Brooklyn 146 Cypress Corporate Park 10741 Walker Street Cypress 147 Thorn Run Crossing 1132-1136 Thorn Run Road Moon Township 148 425 Fifth Avenue 425 Fifth Avenue New York - ------------------------------------------------------------------------------------------------------------------------------------ 149 Barnes & Noble Retail Center 3300-3400 Rib Mountain Drive Wausau 150 Metro Center Diamond Bar 3333 South Brea Canyon Road Diamond Bar 151 Lackland Self Storage - N. Brunswick 1555 Livingston Avenue North Brunswick 152 Lake City Mini-Storage 3116 NE 130th Street Seattle 153 Hoke Plaza 7700-7734 Hoke Road Englewood - ------------------------------------------------------------------------------------------------------------------------------------ 154 Best Western - Radford, VA 1501 Tyler Avenue Radford 155 Walgreens - Philadelphia, PA 2014-24 South Broad Street Philadelphia 156 Fairfield Inn & Suites - Lake Oswego 6100 Southwest Meadows Road Lake Oswego 157 Whittier Plaza 15214 Whittier Boulevard Whittier 158 Heritage Square - Fresno, CA 3136-3300 East Tulare Avenue Fresno - ------------------------------------------------------------------------------------------------------------------------------------ 159 Ivy Hall Apartments 400 Wollaston Avenue Newark 160 Best Western - Grasonville, MD 3101 Main Street Grasonville 161 Bahama House 2001 South Atlantic Avenue Daytona Beach 162 Best Western - Leesburg, VA 726 East Market Street Leesburg 163 Bentley Retail 510 South Ocean Drive Miami Beach - ------------------------------------------------------------------------------------------------------------------------------------ 164 Comfort Inn - Staunton, VA 1302 Richmond Avenue Staunton 165 Fairfield Inn - Tucson Airport 6955 S. Tucson Blvd Tucson 166 Oxford Apartments 1918-1922 1st Avenue Seattle 167 Charleston Arms Apartments 1551 Sam Rittenberg Boulevard Charleston 168 Best Buy Beaver Creek 2907 Centre Drive Beaver Creek - ------------------------------------------------------------------------------------------------------------------------------------ 169 The Gaylord Building 7282 William Barry Boulevard Syracuse 170 Spanish Oaks Apartments 1515 Ashley River Road Charleston 171 Woods Cross Center 750 South 500 West Woods Cross 172 Hillside Terrace Shopping Center 2726-2736 Hillside Drive Delafield 173 Super Walmart - Tell City, IN 730 US Highway 66 East Tell City - ------------------------------------------------------------------------------------------------------------------------------------ 174 Walgreens - Durham, NC 6405 Fayetteville Road Durham 175 Pueblo Place 2100, 2110, & 2120 North Rampart Boulevard Las Vegas 176 Lackland Self Storage - Mountainside 1229 Route 22 East Mountainside 177 Century Square 10000-10048 Hawthorne Boulevard Inglewood 178 Battenkill Plaza 4757 Main Street Manchester - ------------------------------------------------------------------------------------------------------------------------------------ 179 Satellite Shoppes 3502-3522 Satellite Boulevard Duluth 180 Grove Street Plaza 14-20 Grove Street Darien 181 215 West Lake Street 215 West Lake Street Chicago 182 Arrowhead Shopping Center 17911-18011 E. 24 Highway Independence 183 1705 West Garvey 1705 West Garvey Avenue North West Covina - ------------------------------------------------------------------------------------------------------------------------------------ 184 Pacific Willow Center 4716 Pacific Highway East Fife 185 Summit Trading Company - Puyallup, WA 10409 Canyon Road East Puyallup 186 Tara Close Apartments 77 Carpenter Avenue Mount Kisco 187 Red Mountain Shopping Center 2723-2733 N. Power Rd Mesa 188 Lincoln Gardens Apartments 1802 F Street Napa - ------------------------------------------------------------------------------------------------------------------------------------ 189 Berryhill Apartments 126 West Berryhill Drive Grass Valley 190 Autumn Ridge Apartments 2401 & 2451 36th Ave South Grand Forks 191 Memorial Plaza 1150 Mineral Wells Avenue Paris 192 3165 Nostrand Avenue 3165 Norstrand Avenue Brooklyn 193 Timber Glen II 4486 Timber Glen Drive Batavia - ------------------------------------------------------------------------------------------------------------------------------------ 194 Lackland Self Storage - Dover #2 1929 Rt. 37 East Toms River 195 National Road Marketplace 1455 N. National Rd Columbus 196 Francis Murphy Senior Apartments 20014 Rosebank Way Hagerstown 197 Comfort Inn - Charlottesville, VA 1807 Emmet Street Charlottesville NET UNITS YEAR YEAR RENTABLE AREA OF ID COUNTY STATE ZIP CODE BUILT RENOVATED SF/UNITS MEASURE - --------------------------------------------------------------------------------------------------------------------- 1 San Francisco CA 94132 1944-1951 Ongoing 3,221 Units 2 Dallas TX 75240 1965 2004 733,459 Sq. Ft. 3 Orange FL 32801 1988 Ongoing 646,281 Sq. Ft. 4 Philadelphia PA 19103 1989 1999 290 Rooms 5 Spokane WA 99201 1987-1998 2003 & 2004 565,746 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 6 Washington MN 55125 2005 304,445 Sq. Ft. 7 Various PA Various Various 2004 671,759 Sq. Ft. 7.1 Dauphin PA 17112 1988-2000 2004 353,954 Sq. Ft. 7.2 Dauphin PA 17110 1989-1990 144,867 Sq. Ft. 7.3 Cumberland PA 17055 1988-1989 117,212 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 7.4 Dauphin PA 17112 2000 55,726 Sq. Ft. Various Various Various Various 651 Units 8 Maricopa AZ 85012 1999 399 Units 9 Shelby TN 38138 1997 252 Units 10 Los Angeles CA 90028 1972 1990 314,435 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 11 Orange CA 92806 2001 272,827 Sq. Ft. 12 Camden NJ 08003 1960-1975 2004 333,275 Sq. Ft. 13 Hartford CT 06108 1982 & 1983 321,205 Sq. Ft. 14 Montgomery MD 20850 1980 & 1983 1995 257,280 Sq. Ft. 15 San Mateo CA 94005 Various 167,177 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 15.1 San Mateo CA 94005 1986 104,092 Sq. Ft. 15.2 San Mateo CA 94005 2000 63,085 Sq. Ft. 16 Dupage IL 60108 1992 358,385 Sq. Ft. 17 New York NY 10023 1904 1982 103,928 Sq. Ft. 18 Travis TX 78727 2001 434 Units - --------------------------------------------------------------------------------------------------------------------- 19 Maricopa AZ 85021 1989 & 1999 301,696 Sq. Ft. Shelby TN 38134 Various 520,052 Sq. Ft. 20 Shelby TN 38134 1990, 1995 225,869 Sq. Ft. 21 Shelby TN 38134 2001 48,495 Sq. Ft. 22 Shelby TN 38134 2004 33,688 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 23 Shelby TN 38134 1995 94,000 Sq. Ft. 24 Shelby TN 38134 1995 118,000 Sq. Ft. 25 San Diego CA 92121 1986 & 1993 199,458 Sq. Ft. 26 Bernalillo NM 87114 1986, 1996 572 Units Various Various Various 1993 265,459 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 27 King WA 98002 1993 71,983 Sq. Ft. 28 Clark WA 98684 1993 68,164 Sq. Ft. 29 King WA 98168 1993 57,084 Sq. Ft. 30 Douglas OR 97470 1993 68,228 Sq. Ft. 31 Hampden MA 01129 1968 1986, 1999 274,300 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 32 Saint Louis MO 63117 1973 272,942 Sq. Ft. 33 Davidson TN Various Various 649 Units 33.1 Davidson TN 37115 1973, 1979 349 Units 33.2 Davidson TN 37214 1984, 2002 300 Units 34 Tippecanoe IN 47906 2000-2002 360 Units - --------------------------------------------------------------------------------------------------------------------- 35 Macomb MI 48092 2000 2003 268,000 Sq. Ft. 36 Various TX Various Various 444 Units 36.1 Rockwall TX 75087 1998 224 Units 36.2 Dallas TX 75150 1999 220 Units 37 San Diego CA 91910 1979 2004 117,594 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 38 Dutchess NY 12590 1992-1997 209,200 Sq. Ft. 39 Guilford NC 27407 1995 360 Units 40 Collin TX 75093 2001 181 Units 41 Princess Anne VA 23464 1985 296 Units 42 Santa Clara CA 95122 2005 61,819 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 43 Allegheny PA 15205 1997 120,344 Sq. Ft. 44 Leon FL 32312 2001 324 Units 45 Cobb GA 30106 1998-1999 324 Units 46 Broward FL 33309 Various 167,824 Sq. Ft. 46.1 Broward FL 33309 1986 98,631 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 46.2 Broward FL 33309 1984 69,193 Sq. Ft. 47 Cobb GA 30080 1975 2000 416 Units 48 Fulton GA 30022 Various 103,168 Sq. Ft. 48.1 Fulton GA 30022 2000 89,128 Sq. Ft. 48.2 Fulton GA 30022 2002 14,040 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 49 Wayne MI 48226 2005 105,980 Sq. Ft. 50 Williamson TX 78750 1990 263,055 Sq. Ft. 51 Suffolk NY 11731 1960 1997 85,929 Sq. Ft. 52 Oakland MI 48307 2004 92,597 Sq. Ft. 53 Prince George's MD 20716 1986 2004 101,837 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- Various SC Various Various 764 Units 54 Greenville SC 29607 1974 212 Units 55 Greenville SC 29615 1972 236 Units 56 Anderson SC 29625 1974 180 Units 57 Anderson SC 29621 1972 136 Units - --------------------------------------------------------------------------------------------------------------------- 58 Los Angeles CA 90250 2005 60,304 Sq. Ft. 59 New York NY 10010 1909 2004-2005 76,625 Sq. Ft. 60 Shelby TN 38018 2000 360 Units 61 Bexar TX 78256 1998 258 Units 62 Dallas TX 75019 1998 150,000 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 63 Miami-Dade FL 33134 1984 105,580 Sq. Ft. 64 Mecklenburg NC 28211 1979 & 1980 1995 & 2000 136,299 Sq. Ft. 65 Orange CA 90620 1966 2005 103,973 Sq. Ft. 66 Fairfield CT 06484 1985 1992 158,462 Sq. Ft. 67 Clark NV 89014 2003 64,211 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 68 Richland SC 29204 1990 1996 231,477 Sq. Ft. 69 Various Various Various Various 2005 443 Rooms 69.1 Allen IN 46804 1996 2005 128 Rooms 69.2 Cumberland NC 28312 1985 120 Rooms 69.3 Tippecanoe IN 47905 1997 62 Rooms - --------------------------------------------------------------------------------------------------------------------- 69.4 Kosciusko IN 46582 1997 71 Rooms 69.5 Grant IN 46952 1995 62 Rooms 70 Orange FL 32837 2004 88,103 Sq. Ft. 71 New York NY 10017 1925, 1935 2003, 2005 28,593 Sq. Ft. 72 Durham NC 27707 1985 264 Units - --------------------------------------------------------------------------------------------------------------------- 73 Story IA 50010 2000-2006 209 Units 74 New York NY 10003 1904 2003 11,121 Sq. Ft. 75 Colonial Heights City VA 23834 1967 1996 & 1997 169,026 Sq. Ft. 76 Delaware PA 19014 2005 55,000 Sq. Ft. 77 Middlesex MA 01824 1985 2003 131,252 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 78 Mecklenburg NC 28217 2001 264 Units 79 Carroll MD 21158 1999 81,332 Sq. Ft. 80 Desoto MS 38671 2002 250 Units 81 Santa Clara CA 94087 2005 30,071 Sq. Ft. 82 Waukesha WI 53151 1988 & 1991 & 1998 2005 256 Units - --------------------------------------------------------------------------------------------------------------------- 83 Harris TX 77080 1973 2001 466 Units 84 Fulton GA 30076 1999 95,876 Sq. Ft. 85 Fairfax VA 20151 1991 88,183 Sq. Ft. 86 Palm Beach FL 33437 2004 56,077 Sq. Ft. 87 Maricopa AZ 85306 1984 2003 86,492 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 88 Hillsborough FL 33615 1989 2002 117,176 Sq. Ft. 89 Manatee FL 34207 1968 2004 169,330 Sq. Ft. 90 Boone KY 41018 2000 120 Rooms 91 Various TX Various Various 120,318 Sq. Ft. 91.1 Collin TX 75013 1999 84,518 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 91.2 Dallas TX 75220 2000 35,800 Sq. Ft. 92 Boone KY 41018 1997 2005 150 Rooms 93 San CA 91761 2005 61,298 Sq. Ft. Bernardino 94 Allegheny PA 15146 1964-1967 2003 337 Units 95 Saint Louis MO 63105 1987 80,120 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 96 Lake IL 60069 2003 118 Rooms 97 Forsyth NC 27104 1990 172 Units 98 Cook IL 60026 2003 120 Rooms 99 Orange CA 92660 1976 45,890 Sq. Ft. 100 Contra Costa CA 94553 1984 2001 79,863 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 101 Tarrant TX 76137 1986 2003 288 Units 102 Washington PA 15301 2002-2005 130 Units 103 Oakland MI 48326 2004 64,633 Sq. Ft. 104 Suffolk NY 11743 1996 51,800 Sq. Ft. 105 Franklin OH 43054 2004-2005 59,044 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 106 Fairfax VA 20151 1989 2005 137 Rooms 107 Polk FL 33809 1989 2003 134,548 Sq. Ft. 108 San Diego CA 92154 2003 115,290 Sq. Ft. 109 Newport News City VA 23602 2004 122 Rooms 110 Riverside CA 92543 1971 2004 128,388 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 111 Marin CA 94901 1999 34,025 Sq. Ft. 112 Henrico VA 23230 1976 1993 91,875 Sq. Ft. 113 Vigo IN 47802 1988 2005 129,631 Sq. Ft. 114 Riverside CA Various Various 2002 91,142 Sq. Ft. 114.1 Riverside CA 92234 1988 32,602 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 114.2 Riverside CA 92211 2000 2002 58,540 Sq. Ft. 115 Rockingham NH 03087 2005 63,500 Sq. Ft. 116 Waukesha WI 53005 2000 118,871 Sq. Ft. 117 Butler OH 45014 1975 194 Units 118 Forsyth NC 27023 1999 75,824 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 119 Volusia FL 32118 1968 2005 132 Rooms 120 Chesapeake City VA 23320 1995 2004 105 Rooms 121 Essex NJ 07017 1977 130 Units 122 New Castle DE 19803 1972, 1985 34,495 Sq. Ft. 123 Los Angeles CA 91303 1980-1981 1999 101,000 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 124 Middlesex MA 01824 1984 2005 110,882 Sq. Ft. 125 Clark NV 89015 1981 160 Units 126 Grafton NH 03561 2001 54,985 Sq. Ft. 127 Suffolk MA 02108 1913 2003 42,053 Sq. Ft. 128 Suffolk MA 02215 1890 1985 97,007 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 129 Essex NJ 07109 2001 2004 1,151 Units 130 Pitt NC 27834 2004 120 Units 131 Maricopa AZ 85029 1981 1998, 2004 250 Rooms 132 Alexandria VA 22314 1986 40,355 Sq. Ft. 133 Riverside CA 92879 2005 20,000 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 134 Jefferson AL 35209 1971 1989 114,198 Sq. Ft. 135 Dutchess NY 12601 1996 42,000 Sq. Ft. 136 Lake IL 60047 1999 94,000 Sq. Ft. 137 Waukesha WI 53051 2005 30,519 Sq. Ft. 138 Stafford VA 22554 2005 64 Units - --------------------------------------------------------------------------------------------------------------------- 139 Hunterdon NJ 08833 1985-2004 2002 54,025 Sq. Ft. 140 Chatham GA 31405 1953 1977 63,432 Sq. Ft. 141 Saint Louis MO 63141 1987-1990 39,528 Sq. Ft. 142 Pitt NC 27858 2003-2005 136 Units 143 Kane IL 60174 1900-1920 & 2002-2004 2004 50,640 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 144 Prince William VA 20109 1996 2002 33,879 Sq. Ft. 145 Kings NY 11203 1952 18,500 Sq. Ft. 146 Orange CA 90630 2001 67,000 Sq. Ft. 147 Allegheny PA 15108 1989 1996 47,165 Sq. Ft. 148 New York NY 10016 2002 2004 10,195 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 149 Marathon WI 54401 2002 54,688 Sq. Ft. 150 Los Angeles CA 91765 1982 40,184 Sq. Ft. 151 Middlesex NJ 08982 1984 891 Units 152 Kings WA 98125 1988 2004 821 Units 153 Montgomery OH 45315 2005 28,800 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 154 Radford VA 24141 1983 & 1984 2004 104 Rooms 155 Philadelphia PA 19145 1996 13,396 Sq. Ft. 156 Clackamus OR 97035 1999 2001 124 Rooms 157 Los Angeles CA 90603 1960 2005 33,160 Sq. Ft. 158 Fresno CA 93702 1984 41,870 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 159 New Castle DE 19711 1959 1990 84 Units 160 Queen Anne's MD 21638 1990 2004 92 Rooms 161 Volusia FL 32118 1994 2005 95 Rooms 162 Loudoun VA 20176 1986 2004 99 Rooms 163 Miami-Dade FL 33139 1920 1998 9,232 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 164 Shenandoah VA 24401 1987 2004 98 Rooms 165 Pima AZ 85706 1998 2002 86 Rooms 166 King WA 98101 1909 1987 49 Units 167 Charleston SC 29407 1966 138 Units 168 Greene OH 45324 1994 45,000 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 169 Onondaga NY 13212 2005 71,880 Sq. Ft. 170 Charleston SC 29407 1972 2004 115 Units 171 Davis UT 84047 1997 55,279 Sq. Ft. 172 Waukesha WI 53018 2003 17,120 Sq. Ft. 173 Perry IN 47586 1992 2004 72,113 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 174 Durham NC 27713 2004 13,650 Sq. Ft. 175 Clark NV 89128 2005 16,991 Sq. Ft. 176 Union NJ 07092 2001 640 Units 177 Los Angeles CA 90304 1986 16,103 Sq. Ft. 178 Bennington VT 05254 1850 2005 18,054 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 179 Gwinnett GA 30096 1987 2005 31,315 Sq. Ft. 180 Fairfield CT 06820 2005 15,415 Sq. Ft. 181 Cook IL 60606 1929 1990 72,000 Sq. Ft. 182 Jackson MO 64056 1987 2005 70,849 Sq. Ft. 183 Los Angeles CA 91790 1984 29,096 Sq. Ft. - --------------------------------------------------------------------------------------------------------------------- 184 Pierce WA 98424 2005 12,502 Sq. Ft. 185 Pierce WA 98373 1995 45,859 Sq. Ft. 186 Westchester NY 10549 1969 2005 99 Units 187 Maricopa AZ 85207 2000 17,671 Sq. Ft. 188 Napa CA 94559 2004 30 Units - --------------------------------------------------------------------------------------------------------------------- 189 Nevada CA 95945 1981 96 Units 190 Maricopa ND 58201 2005 72 Units 191 Henry TN 38242 1997 53,219 Sq. Ft. 192 Kings NY 11229 1953 1999 110 Units 193 Clermont OH 45103 1995 72 Units - --------------------------------------------------------------------------------------------------------------------- 194 Ocean NJ 08753 2002 2005 756 Units 195 Bartholomew IN 47201 2005 18,000 Sq. Ft. 196 Washington MD 21742 2002 2004 120 Units 197 Charlottesville City VA 22901 1988 2005 64 Rooms LOAN PER NET FOURTH FOURTH MOST THIRD THIRD MOST SECOND RENTABLE AREA PREPAYMENT PROVISIONS MOST RECENT RECENT NOI MOST RECENT RECENT NOI MOST RECENT ID SF/UNITS(8) (# OF PAYMENTS)(10) NOI DATE NOI DATE NOI - ----------------------------------------------------------------------------------------------------------------------------- 1 93,138.78 L(24);YM1(32);O(4) 24,584,225 12/31/2002 23,556,197 12/31/2003 31,271,530 2 170.43 L(26);D(29);O(5) 10,141,450 3 119.14 L(26);D(89);O(5) 12,137,000 12/31/2002 11,188,400 12/31/2003 10,762,400 4 248,275.86 L(27);D(29);O(4) 4,521,000 12/31/2002 4,312,000 12/31/2003 5,409,000 5 124.41 L(27);D(89);O(4) 7,086,396 12/31/2003 7,049,946 - ----------------------------------------------------------------------------------------------------------------------------- 6 213.50 L(23);YM1(93);O(4) 7 90.81 L(29);D(89);O(2) 7,135,550 12/31/2003 6,048,954 7.1 3,573,246 12/31/2003 2,619,439 7.2 1,633,769 12/31/2003 1,708,218 7.3 1,156,783 12/31/2003 1,010,642 - ----------------------------------------------------------------------------------------------------------------------------- 7.4 771,752 12/31/2003 710,655 93,149.00 L(27);D(89);O(4) 3,246,947 12/31/2003 3,613,530 8 96,491.23 L(27);D(89);O(4) 1,644,562 12/31/2003 1,887,787 9 87,857.14 L(27);D(89);O(4) 1,602,385 12/31/2003 1,725,743 10 174.92 L(36);D(80);O(4) 2,728,172 - ----------------------------------------------------------------------------------------------------------------------------- 11 190.60 L(18);YM1(89);O(13) 5,055,068 12 151.23 L(26);D(90);O(4) 13 136.98 L(29);D(88);O(3) 4,755,977 12/31/2003 4,959,716 14 167.13 L(27);D(90);O(3) 2,929,194 12/31/2003 3,465,936 15 237.02 L(26);D(54);O(4) 8,834,696 12/31/2003 8,753,171 - ----------------------------------------------------------------------------------------------------------------------------- 15.1 4,971,340 12/31/2003 5,081,700 15.2 3,863,355 12/31/2003 3,671,471 16 108.82 L(25);D(91);O(4) 3,506,347 17 365.64 L(27);D(90);O(3) 4,835,179 12/31/2003 5,546,907 18 76,267.28 L(35);YM1(81);O(4) 1,535,902 - ----------------------------------------------------------------------------------------------------------------------------- 19 105.24 L(12);YM1(104);O(4) 3,655,012 12/31/2003 2,087,544 59.61 L(25);YM1(88);O(7) 2,159,307 12/31/2003 2,884,203 20 64.64 L(25);YM1(88);O(7) 1,288,685 12/31/2003 1,484,413 21 101.04 L(25);YM1(88);O(7) 343,813 12/31/2003 626,437 22 130.61 L(25);YM1(88);O(7) 84,340 - ----------------------------------------------------------------------------------------------------------------------------- 23 38.30 L(25);YM1(88);O(7) 286,158 12/31/2003 415,933 24 29.66 L(25);YM1(88);O(7) 240,651 12/31/2003 273,080 25 155.42 L(11);YM1(122);O(4) 3,127,290 12/31/2003 3,147,267 26 53,671.33 L(26);D(90);O(4) 2,496,151 12/31/2003 2,680,427 L(28);D(89);O(3) 2,903,166 12/31/2003 3,022,781 - ----------------------------------------------------------------------------------------------------------------------------- 27 122.25 L(28);D(89);O(3) 792,087 12/31/2003 826,361 28 117.36 L(28);D(89);O(3) 741,088 12/31/2003 773,356 29 122.63 L(28);D(89);O(3) 818,145 12/31/2003 847,188 30 87.94 L(28);D(89);O(3) 551,846 12/31/2003 575,876 31 108.49 L(29);D(87);O(4) 3,125,219 12/31/2002 3,527,169 12/31/2003 3,247,085 - ----------------------------------------------------------------------------------------------------------------------------- 32 105.15 L(29);YM+1(88);O(3) 2,970,796 12/31/2003 3,055,611 33 44,067.80 L(25);D(91);O(4) 2,395,403 12/31/2003 2,437,658 33.1 1,289,416 12/31/2003 1,353,155 33.2 1,105,987 12/31/2003 1,084,503 34 79,444.44 L(25);D(92);O(3) 2,718,486 12/31/2003 2,006,684 - ----------------------------------------------------------------------------------------------------------------------------- 35 100.17 L(36);D(80);O(4) 36 60,022.52 L(27);D(89);O(4) 2,098,386 12/31/2003 2,137,221 36.1 1,128,161 12/31/2003 1,264,312 36.2 970,225 12/31/2003 872,909 37 211.32 L(36);D(80);O(4) 1,643,742 12/31/2003 1,912,434 - ----------------------------------------------------------------------------------------------------------------------------- 38 114.72 L(26);D(90);O(4) 2,122,049 12/31/2003 2,176,838 39 65,833.33 L(26);D(90);O(4) 1,929,943 12/31/2003 2,030,117 40 124,171.27 L(36);D(80);O(4) 1,144,950 41 69,932.43 L(26);D(90);O(4) 1,249,696 12/31/2003 1,666,384 42 349.89 L(26);D(91);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 43 174.50 L(28);D(89);O(3) 1,827,322 12/31/2003 1,846,773 44 64,814.81 L(30);D(86);O(4) 1,650,309 12/31/2003 1,738,426 45 64,043.21 L(27);D(89);O(4) 1,607,107 12/31/2003 1,684,434 46 121.79 L(27);D(90);O(3) 1,957,898 12/31/2003 1,985,598 46.1 1,123,142 12/31/2003 1,161,077 - ----------------------------------------------------------------------------------------------------------------------------- 46.2 834,756 12/31/2003 824,521 47 48,076.92 L(26);D(90);O(4) 1,241,112 12/31/2003 1,448,681 48 193.86 L(25);D(91);O(4) 1,861,990 12/31/2003 1,822,601 48.1 1,609,350 12/31/2003 1,548,963 48.2 252,640 12/31/2003 273,638 - ----------------------------------------------------------------------------------------------------------------------------- 49 188.36 L(36);D(116);O(4) 50 74.13 L(28);D(89);O(3) 2,169,154 12/31/2003 1,974,231 51 221.11 L(25);D(91);O(4) 1,343,502 12/31/2002 1,545,191 12/31/2003 1,649,102 52 205.19 L(27);D(86);O(7) 53 175.03 L(29);D(88);O(3) 1,185,448 12/31/2003 1,717,478 - ----------------------------------------------------------------------------------------------------------------------------- 23,298.43 L(25);D(91);O(4) 1,512,536 12/31/2003 1,576,499 54 29,575.47 L(25);D(91);O(4) 565,703 12/31/2003 529,138 55 19,745.76 L(25);D(91);O(4) 508,778 12/31/2003 451,894 56 24,444.44 L(25);D(91);O(4) 330,365 12/31/2003 363,476 57 18,161.76 L(25);D(91);O(4) 107,690 12/31/2003 231,991 - ----------------------------------------------------------------------------------------------------------------------------- 58 229.67 L(25);D(91);O(4) 59 221.86 L(25);D(82);O(13) 984,089 12/31/2003 1,133,236 60 47,222.22 L(36);D(81);O(3) 1,519,964 61 65,310.08 L(29);YM1(88);O(3) 1,631,997 12/31/2003 1,553,221 62 110.67 L(25);D(89);O(6) 2,127,808 12/31/2003 2,223,685 - ----------------------------------------------------------------------------------------------------------------------------- 63 156.28 L(24);D(92);O(4) 64 118.86 L(28);YM+1(89);O(3) 65 151.48 L(27);D(90);O(3) 66 98.98 L(30);D(147);O(3) 67 207.91 L(24);D(92);O(4) 447,335 12/31/2003 836,885 - ----------------------------------------------------------------------------------------------------------------------------- 68 66.75 L(27);D(30);O(3) 69 33,280.83 L(28);D(89);O(3) 1,953,177 12/31/2003 2,288,896 69.1 430,604 12/31/2003 674,746 69.2 730,817 12/31/2003 609,352 69.3 368,533 12/31/2003 457,726 - ----------------------------------------------------------------------------------------------------------------------------- 69.4 222,464 12/31/2003 313,047 69.5 200,759 12/31/2003 234,025 70 163.45 L(29);D(88);O(3) 1,179,880 71 489.63 L(27);D(89);O(4) 72 52,840.91 L(26);D(90);O(4) 1,317,654 12/31/2003 1,290,495 - ----------------------------------------------------------------------------------------------------------------------------- 73 65,813.40 L(28);D(89);O(3) 844,322 12/31/2003 926,158 74 1,229.21 L(29);D(88);O(3) 75 78.18 L(28);D(89);O(3) 1,125,856 12/31/2003 1,167,809 76 239.92 L(28);D(89);O(3) 77 100.30 L(30);D(87);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 78 49,242.42 L(26);D(90);O(4) 990,491 12/31/2003 594,872 79 159.07 L(28);D(88);O(4) 1,085,379 12/31/2003 1,138,434 80 50,880.00 L(26);D(91);O(3) 777,303 12/31/2003 1,033,067 81 416.65 L(27);D(90);O(3) 82 48,828.13 L(28);D(89);O(3) 1,256,019 12/31/2003 1,126,963 - ----------------------------------------------------------------------------------------------------------------------------- 83 26,555.79 L(29);D(87);O(4) 1,361,359 12/31/2003 1,183,691 84 125.16 L(25);D(91);O(4) 1,230,322 12/31/2003 1,152,861 85 133.81 L(25);D(91);O(4) 1,169,742 12/31/2003 1,056,879 86 205.08 L(31);YM2(86);O(3) 87 131.80 L(29);D(88);O(3) 1,003,491 12/31/2003 1,141,384 - ----------------------------------------------------------------------------------------------------------------------------- 88 97.29 L(36);D(80);O(4) 718,988 12/31/2003 928,746 89 64.96 L(29);D(88);O(3) 835,897 12/31/2003 975,223 90 91,666.67 L(36);D(80);O(4) 992,588 12/31/2002 950,613 12/31/2003 1,171,349 91 87.94 L(25);D(31);O(4) 1,082,413 12/31/2003 1,177,576 91.1 624,422 12/31/2003 679,910 - ----------------------------------------------------------------------------------------------------------------------------- 91.2 457,991 12/31/2003 497,666 92 70,000.00 L(36);D(80);O(4) 1,111,796 12/31/2002 1,218,560 12/31/2003 1,231,255 93 170.91 L(36);D(80);O(4) 94 30,860.53 L(41);D(76);O(3) 817,977 12/31/2003 783,006 95 128.56 L(29);YM+1(88);O(3) 827,817 12/31/2003 854,512 - ----------------------------------------------------------------------------------------------------------------------------- 96 87,101.30 L(35);YM(81);O(4) 1,141,389 97 59,011.63 L(26);D(90);O(4) 852,542 12/31/2003 879,277 98 83,570.74 L(35);YM(81);O(4) 1,061,407 99 217.91 L(26);D(30);O(4) 939,739 12/31/2002 939,324 12/31/2003 904,194 100 125.21 L(26);D(91);O(3) 990,076 12/31/2003 994,416 - ----------------------------------------------------------------------------------------------------------------------------- 101 34,722.22 L(29);D(87);O(4) 642,764 12/31/2003 863,149 102 76,923.08 L(29);D(88);O(3) 103 154.72 L(36);D(80);O(4) 104 192.69 L(30);D(87);O(3) 908,442 12/31/2003 879,002 105 162.59 L(25);D(92);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 106 69,128.65 L(36);D(81);O(3) 427,383 12/31/2003 886,193 107 69.12 L(30);D(87);O(3) 1,148,855 12/31/2003 1,104,219 108 80.06 L(27);D(90);O(3) 109 73,538.31 L(26);D(91);O(3) 792,028 110 69.32 L(30);D(51);O(3) 824,730 12/31/2003 720,955 - ----------------------------------------------------------------------------------------------------------------------------- 111 257.16 L(29);D(88);O(3) 825,307 12/31/2003 928,918 112 93.06 L(30);D(87);O(3) 113 63.87 L(28);D(89);O(3) 790,686 114 90.52 L(28);D(89);O(3) 721,968 114.1 - ----------------------------------------------------------------------------------------------------------------------------- 114.2 115 129.49 L(27);D(89);O(4) 116 68.14 L(26);D(114);O(4) 255,303 12/31/2003 446,608 117 41,237.11 L(26);D(30);O(4) 626,806 12/31/2003 670,423 118 104.85 L(30);D(87);O(3) 671,417 12/31/2003 700,208 - ----------------------------------------------------------------------------------------------------------------------------- 119 60,226.89 L(28);D(89);O(3) 586,410 120 75,708.17 L(28);D(89);O(3) 1,063,038 12/31/2003 827,780 121 59,919.12 L(36);D(80);O(4) 804,535 12/31/2003 750,711 122 225.59 L(26);D(90);O(4) 595,532 12/31/2003 710,254 123 76.37 L(27);D(90);O(3) 674,932 Ann. 12/31/2003 (6 mos) 794,972 - ----------------------------------------------------------------------------------------------------------------------------- 124 67.64 L(26);YM1(69);O(25) 581,499 12/31/2003 578,936 125 46,152.32 L(28);D(89);O(3) 697,225 12/31/2003 761,269 126 133.99 L(28);D(89);O(3) 648,975 12/31/2003 643,746 127 174.78 L(28);D(89);O(3) 910,066 12/31/2003 839,300 128 75.44 L(28);D(89);O(3) 715,756 12/31/2003 748,954 - ----------------------------------------------------------------------------------------------------------------------------- 129 6,303.65 L(36);D(80);O(4) 366,878 12/31/2003 631,265 130 60,416.67 L(25);D(91);O(4) 131 28,800.00 L(24);D(32);O(4) 758,817 132 174.67 L(36);D(81);O(3) 133 340.00 L(27);D(90);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 134 59.35 L(27);D(90);O(3) 571,265 12/31/2003 714,913 135 160.82 L(33);YM1(85);O(2) 646,935 136 69.93 L(27);D(90);O(3) 638,925 12/31/2003 638,925 137 211.23 L(31);D(86);O(3) 138 100,000.00 L(26);D(69);O(4) - ----------------------------------------------------------------------------------------------------------------------------- 139 118.23 L(29);D(88);O(3) 764,305 12/31/2003 630,853 140 99.43 L(36);D(80);O(4) 555,243 12/31/2003 537,533 141 158.12 L(29);D(88);O(3) 476,991 12/31/2003 543,423 142 45,482.16 L(26);D(90);O(4) 143 121.87 L(28);D(89);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 144 169.48 L(33);YM1(85);O(2) 561,680 145 310.10 L(26);D(90);O(4) 478,700 12/31/2003 486,500 146 84.81 L(36);D(80);O(4) 147 119.79 L(28);D(89);O(3) 596,296 12/31/2003 610,881 148 549.29 L(26);D(90);O(4) - ----------------------------------------------------------------------------------------------------------------------------- 149 100.08 L(28);D(89);O(3) 322,954 12/31/2003 427,146 150 134.38 L(28);D(88);O(4) 521,363 12/31/2003 543,227 151 5,976.07 L(36);D(80);O(4) 752,755 12/31/2003 667,650 152 6,455.54 L(25);D(91);O(4) 506,974 12/31/2003 591,942 153 184.03 L(28);D(89);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 154 50,482.69 L(30);D(87);O(3) 680,273 12/31/2003 710,155 155 388.98 L(29);D(88);O(3) 156 41,807.22 L(35);YM1(81);O(4) 613,850 12/31/2002 596,252 12/31/2003 734,486 157 154.66 L(26);D(91);O(3) 356,893 12/31/2003 216,352 158 121.52 L(25);D(92);O(3) 427,045 12/31/2003 405,128 - ----------------------------------------------------------------------------------------------------------------------------- 159 60,506.75 L(36);D(80);O(4) 483,086 12/1/2003 425,982 160 54,030.97 L(28);D(89);O(3) 631,393 12/31/2003 820,170 161 52,302.30 L(28);D(89);O(3) 705,505 12/31/2003 584,983 162 50,030.49 L(30);D(87);O(3) 491,688 12/31/2003 781,339 163 517.68 L(28);D(89);O(3) 364,410 - ----------------------------------------------------------------------------------------------------------------------------- 164 48,519.36 L(30);D(87);O(3) 605,240 12/31/2003 593,126 165 55,115.68 L(59);YM1(58);O(3) -10,741 12/31/2003 393,371 166 94,897.96 L(28);D(89);O(3) 318,572 12/31/2003 296,234 167 33,623.19 L(32);D(85);O(3) 382,146 12/31/2003 302,421 168 102.08 L(25);D(91);O(4) - ----------------------------------------------------------------------------------------------------------------------------- 169 63.80 L(27);D(90);O(3) 170 38,956.52 L(32);D(85);O(3) 411,308 12/31/2003 374,266 171 79.60 L(24);D(92);O(4) 481,441 12/31/2002 560,941 12/31/2003 544,477 172 257.01 L(31);D(86);O(3) 291,741 173 60.59 L(30);D(87);O(3) - ----------------------------------------------------------------------------------------------------------------------------- 174 312.20 L(29);D(146);O(5) 175 247.19 L(24);D(92);O(4) 176 6,531.44 L(36);D(80);O(4) 257,800 12/31/2003 345,423 177 259.27 L(26);D(88);O(6) 366,522 12/31/2002 369,058 12/31/2003 371,160 178 225.38 L(31);D(85);O(4) 310,744 12/31/2003 82,757 - ----------------------------------------------------------------------------------------------------------------------------- 179 127.57 L(31);D(86);O(3) 284,032 12/31/2003 415,721 180 258.24 L(27);D(89);O(4) 181 54.17 L(30);YM1(87);O(3) 182 53.56 L(36);D(80);O(4) 282,354 12/31/2003 183 128.71 L(25);D(91);O(4) 292,812 - ----------------------------------------------------------------------------------------------------------------------------- 184 299.46 L(28);D(89);O(3) 185 81.01 L(30);D(87);O(3) 583,036 12/31/2003 586,881 186 36,274.91 L(26);D(90);O(4) 187 197.79 L(36);D(81);O(3) 325,750 12/31/2003 338,546 188 116,391.18 L(26);D(90);O(4) - ----------------------------------------------------------------------------------------------------------------------------- 189 35,677.99 L(28);D(89);O(3) 349,320 12/31/2003 361,309 190 45,037.08 L(36);D(81);O(3) 191 60.13 L(24);D(92);O(4) 322,961 12/31/2003 343,303 192 27,234.00 L(25);D(91);O(4) 193 39,583.33 L(27);D(90);O(3) 316,488 12/31/2002 320,149 12/31/2003 303,644 - ----------------------------------------------------------------------------------------------------------------------------- 194 3,591.40 L(36);D(80);O(4) 145,134 12/31/2003 251,039 195 146.47 L(36);D(81);O(3) 196 20,545.52 L(36);D(176);O(4) 395,649 197 35,599.82 L(30);D(87);O(3) 350,345 12/31/2003 269,652 SECOND MOST MOST RECENT RECENT NOI MOST RECENT NOI UNDERWRITTEN UNDERWRITTEN UNDERWRITTEN UNDERWRITTEN UNDERWRITTEN ID DATE NOI DATE NOI REVENUE EGI EXPENSES RESERVES - ---------------------------------------------------------------------------------------------------------------------------------- 1 12/31/2004 30,582,043 T-12 5/31/2005 41,647,319 61,969,692 63,183,015 21,535,696 805,250 2 12/31/2004 11,581,748 Ann. 9/30/2005 12,458,705 10,168,430 20,888,009 8,429,304 117,868 3 12/31/2004 10,901,821 Ann. 11/30/2005 10,692,516 15,001,970 17,587,803 6,895,287 174,496 4 12/31/2004 7,281,000 T-12 10/31/2005 7,935,686 15,989,720 25,447,180 17,511,494 763,415 5 12/31/2004 6,758,271 T-12 8/31/2005 6,550,821 9,830,456 9,879,038 3,328,216 84,862 - ---------------------------------------------------------------------------------------------------------------------------------- 6 6,300,800 4,924,703 9,570,424 3,269,624 60,889 7 12/31/2004 5,916,378 Ann. 7/31/2005 5,668,608 8,689,229 8,689,229 3,020,620 100,764 7.1 12/31/2004 2,450,067 Ann. 7/31/2005 2,684,058 3,935,951 3,935,951 1,251,893 53,093 7.2 12/31/2004 1,594,454 Ann. 7/31/2005 1,221,733 2,306,806 2,306,806 1,085,073 21,730 7.3 12/31/2004 1,094,753 Ann. 7/31/2005 1,094,217 1,558,757 1,558,757 464,539 17,582 - ---------------------------------------------------------------------------------------------------------------------------------- 7.4 12/31/2004 777,105 Ann. 7/31/2005 668,600 887,715 887,715 219,115 8,359 12/31/2004 4,427,760 Various 4,633,971 6,563,216 6,957,276 2,323,305 139,020 8 12/31/2004 2,646,148 T-12 9/30/2005 2,937,545 3,993,487 4,209,935 1,272,390 79,800 9 12/31/2004 1,781,612 T-12 10/31/2005 1,696,426 2,569,729 2,747,341 1,050,915 59,220 10 12/31/2004 4,432,422 Ann. 9/30/2005 5,142,405 7,316,683 8,428,932 3,286,527 62,996 - ---------------------------------------------------------------------------------------------------------------------------------- 11 12/31/2004 5,388,132 Ann. 11/30/2005 4,755,774 6,526,476 7,037,985 2,282,211 54,565 12 4,970,625 7,264,486 7,264,486 2,293,861 66,655 13 12/31/2004 4,953,742 Ann. 6/30/2005 4,038,001 7,063,387 7,073,867 3,035,866 51,393 14 12/31/2004 3,785,139 Ann. 8/31/2005 3,700,129 5,878,635 5,931,808 2,231,679 38,592 15 12/31/2004 8,935,086 Ann. 6/30/2005 8,375,781 8,372,781 9,926,607 1,550,826 33,435 - ---------------------------------------------------------------------------------------------------------------------------------- 15.1 12/31/2004 5,170,330 Ann. 6/30/2005 4,870,684 4,870,684 5,819,114 948,430 20,818 15.2 12/31/2004 3,764,756 Ann. 6/30/2005 3,505,097 3,502,097 4,107,493 602,396 12,617 16 12/31/2004 3,438,369 Ann. 11/30/2005 3,526,429 3,773,432 5,012,758 1,486,329 79,485 17 12/31/2004 4,526,964 Ann. 6/30/2005 4,527,646 6,691,467 6,691,467 2,163,822 19,886 18 12/31/2004 1,685,902 Ann. 9/30/2005 2,752,163 4,441,673 4,754,753 2,002,590 108,500 - ---------------------------------------------------------------------------------------------------------------------------------- 19 12/31/2004 2,114,305 T-12 6/30/2005 2,924,985 5,658,366 5,746,662 2,821,677 60,138 12/31/2004 3,305,023 T-12 11/30/2005 3,009,919 2,957,157 4,287,557 1,277,638 78,008 20 12/31/2004 1,356,572 T-12 11/30/2005 1,382,592 1,363,537 1,945,643 563,051 33,880 21 12/31/2004 597,650 T-12 11/30/2005 518,279 546,674 710,011 191,732 7,274 22 12/31/2004 519,222 T-12 11/30/2005 437,670 354,779 618,814 181,145 5,053 - ---------------------------------------------------------------------------------------------------------------------------------- 23 12/31/2004 463,664 T-12 11/30/2005 336,722 337,750 502,375 165,653 14,100 24 12/31/2004 367,915 T-12 11/30/2005 334,656 354,417 510,713 176,058 17,700 25 12/31/2004 3,218,417 Ann. 7/31/2005 2,946,010 3,664,916 3,664,916 718,905 63,827 26 12/31/2004 2,722,433 T-12 9/30/2005 2,725,679 4,005,894 4,535,886 1,810,207 143,000 12/31/2004 3,022,781 Ann. 10/31/2005 2,786,070 2,872,237 2,872,237 86,167 39,819 - ---------------------------------------------------------------------------------------------------------------------------------- 27 12/31/2004 826,361 Ann. 10/31/2005 761,492 785,043 785,043 23,551 10,797 28 12/31/2004 773,356 Ann. 10/31/2005 712,647 734,688 734,688 22,041 10,225 29 12/31/2004 847,188 Ann. 10/31/2005 781,261 805,424 805,424 24,163 8,563 30 12/31/2004 575,876 Ann. 10/31/2005 530,669 547,082 547,082 16,412 10,234 31 12/31/2004 3,390,743 T-12 7/31/2005 2,788,109 4,072,143 7,874,280 5,086,171 54,860 - ---------------------------------------------------------------------------------------------------------------------------------- 32 12/31/2004 3,056,382 Ann. 7/31/2005 2,958,509 4,665,054 5,430,549 2,472,040 52,640 33 12/31/2004 2,520,979 Various 2,518,367 4,481,009 4,811,415 2,293,048 129,800 33.1 12/31/2004 1,499,574 12/31/2005 1,455,397 2,364,914 2,594,876 1,139,479 69,800 33.2 12/31/2004 1,021,405 12/25/2005 1,062,970 2,116,095 2,216,539 1,153,569 60,000 34 12/31/2004 2,010,240 T-12 10/31/2005 2,798,209 4,535,784 4,535,784 1,737,575 175,770 - ---------------------------------------------------------------------------------------------------------------------------------- 35 2,428,373 2,404,630 2,503,477 75,104 26,800 36 12/31/2004 2,249,873 T-12 10/31/2005 2,239,417 3,910,096 4,230,552 1,991,135 50,801 36.1 12/31/2004 1,105,503 T-12 10/31/2005 1,287,803 2,118,324 2,262,424 974,622 25,800 36.2 12/31/2004 1,144,370 T-12 10/31/2005 951,615 1,791,772 1,968,128 1,016,513 25,001 37 12/31/2004 2,096,226 Ann. 11/30/2005 2,172,572 2,037,426 2,894,366 721,794 17,639 - ---------------------------------------------------------------------------------------------------------------------------------- 38 12/31/2004 2,388,537 T-12 9/30/2005 2,029,868 3,148,622 3,148,622 1,118,754 31,380 39 12/31/2004 2,133,526 T-12 11/30/2005 2,046,664 2,898,411 3,190,553 1,143,890 81,000 40 12/31/2004 1,984,861 3,102,450 3,214,834 1,229,973 45,250 41 12/31/2004 1,707,136 T-12 9/30/2005 1,796,660 2,697,044 2,807,729 1,011,069 74,000 42 1,568,570 2,439,635 2,439,635 871,065 9,273 - ---------------------------------------------------------------------------------------------------------------------------------- 43 12/31/2004 1,845,775 T-12 8/31/2005 1,696,514 2,573,479 2,573,479 876,965 18,052 44 12/31/2004 1,972,520 T-12 7/31/2005 1,932,568 4,100,843 4,241,491 2,308,922 87,600 45 12/31/2004 1,611,491 T-12 9/30/2005 1,659,220 2,582,861 3,018,494 1,359,274 11,016 46 12/31/2004 1,999,241 Ann. 10/31/2005 1,760,920 2,962,438 2,967,306 1,206,386 2,841 46.1 12/31/2004 1,144,784 Ann. 10/31/2005 1,027,973 1,721,650 1,723,288 695,315 1,688 - ---------------------------------------------------------------------------------------------------------------------------------- 46.2 12/31/2004 854,457 Ann. 10/31/2005 732,947 1,240,788 1,244,018 511,072 1,153 47 12/31/2004 1,531,278 T-12 11/30/2005 1,715,102 3,179,769 3,279,609 1,564,507 62,001 48 12/31/2004 1,819,533 12/31/2005 1,832,241 1,935,347 2,339,987 507,746 20,634 48.1 12/31/2004 1,552,334 12/31/2005 1,560,796 1,644,358 1,995,455 434,659 17,826 48.2 12/31/2004 267,200 12/31/2005 271,445 290,989 344,532 73,087 2,808 - ---------------------------------------------------------------------------------------------------------------------------------- 49 1,973,448 2,915,250 2,915,250 941,802 21,348 50 12/31/2004 2,404,384 Ann. 5/31/2005 2,098,816 3,060,146 3,060,146 961,330 139,966 51 12/31/2004 1,704,743 12/31/2005 1,641,042 1,791,012 2,430,875 789,833 17,186 52 1,538,720 Ann. 9/30/2005 1,781,235 2,924,695 2,924,695 1,143,461 9,260 53 12/31/2004 1,607,428 T-12 6/30/2005 1,781,039 2,652,459 2,652,459 871,420 20,367 - ---------------------------------------------------------------------------------------------------------------------------------- 12/31/2004 1,637,263 Ann. 11/30/2005 1,685,099 3,630,192 3,969,742 2,284,643 172,376 54 12/31/2004 520,447 Ann. 11/30/2005 582,578 1,115,700 1,215,960 633,382 46,852 55 12/31/2004 501,960 Ann. 11/30/2005 453,527 1,015,945 1,120,410 666,883 58,764 56 12/31/2004 392,703 Ann. 11/30/2005 412,721 899,248 978,876 566,155 38,880 57 12/31/2004 222,153 Ann. 11/30/2005 236,273 599,299 654,496 418,223 27,880 - ---------------------------------------------------------------------------------------------------------------------------------- 58 1,153,548 1,252,920 1,606,126 452,578 9,046 59 12/31/2004 1,445,500 T-12 11/30/2005 1,487,328 2,401,586 2,571,586 1,084,258 15,325 60 12/31/2004 1,467,726 Ann. 12/31/2005 1,573,149 2,963,925 3,090,961 1,517,812 90,000 61 12/31/2004 1,469,892 T-12 4/30/2005 1,443,361 2,598,133 2,669,228 1,225,867 77,700 62 12/31/2004 2,222,951 Ann. 11/30/2005 1,521,270 1,578,205 1,996,159 474,889 22,500 - ---------------------------------------------------------------------------------------------------------------------------------- 63 1,079,121 12/31/2005 1,482,053 2,352,788 2,774,897 1,292,844 21,116 64 1,541,919 Ann. 8/31/2005 1,597,320 2,525,806 2,525,806 928,485 27,260 65 1,346,138 1,745,598 1,745,598 399,460 15,596 66 1,571,532 2,451,949 2,639,160 1,067,628 31,692 67 12/31/2004 554,669 Ann. 9/30/2005 1,137,659 1,175,392 1,418,362 280,702 9,632 - ---------------------------------------------------------------------------------------------------------------------------------- 68 1,781,870 2,428,221 2,428,221 646,351 57,869 69 12/31/2004 2,165,807 T-12 8/31/2005 2,138,274 7,385,549 7,622,695 5,484,421 304,908 69.1 12/31/2004 664,907 T-12 8/31/2005 639,131 2,047,072 2,119,372 1,480,241 84,775 69.2 12/31/2004 515,259 T-12 8/31/2005 513,695 1,651,782 1,700,379 1,186,684 68,015 69.3 12/31/2004 443,874 T-12 8/31/2005 439,202 1,270,746 1,323,915 884,712 52,957 - ---------------------------------------------------------------------------------------------------------------------------------- 69.4 12/31/2004 319,000 T-12 8/31/2005 349,644 1,372,758 1,401,726 1,052,083 56,069 69.5 12/31/2004 222,767 T-12 8/31/2005 196,602 1,043,191 1,077,303 880,701 43,092 70 12/31/2004 1,281,712 Ann. 7/31/2005 1,219,281 1,616,556 1,723,122 503,841 8,810 71 422,281 Ann. 9/30/2005 1,147,043 1,751,580 1,810,770 663,727 4,289 72 12/31/2004 1,241,001 T-12 11/30/2005 1,202,418 1,990,881 2,074,718 872,300 59,400 - ---------------------------------------------------------------------------------------------------------------------------------- 73 12/31/2004 1,073,713 T-12 7/31/2005 1,286,115 1,830,442 2,018,782 732,667 68,380 74 1,078,143 Ann. 6/30/2005 1,098,010 1,284,420 1,284,420 186,410 1,668 75 12/31/2004 1,253,110 Ann. 7/31/2005 1,197,226 1,551,274 1,559,774 362,547 25,354 76 1,206,469 1,491,412 1,491,412 284,942 8,250 77 1,200,965 1,553,174 1,553,174 352,210 13,125 - ---------------------------------------------------------------------------------------------------------------------------------- 78 12/31/2004 901,358 T-12 11/30/2005 1,114,480 1,859,494 1,923,808 809,328 42,240 79 12/31/2004 1,134,679 T-12 6/30/2005 1,088,225 1,751,408 1,761,464 673,239 13,013 80 12/31/2004 985,397 T-12 10/31/2005 1,133,850 1,995,084 2,028,084 894,234 62,500 81 1,060,088 1,092,874 1,092,874 32,786 3,007 82 12/31/2004 1,075,108 Ann. 5/31/2005 1,061,530 2,298,361 2,307,387 1,245,857 73,984 - ---------------------------------------------------------------------------------------------------------------------------------- 83 12/31/2004 1,363,398 T-12 6/30/2005 1,209,513 2,471,064 2,623,739 1,414,226 39,000 84 12/31/2004 1,133,313 12/31/2005 1,192,528 1,268,405 1,632,783 440,255 18,797 85 12/31/2004 1,031,800 12/31/2005 986,169 1,783,648 1,795,145 808,976 17,637 86 1,017,568 1,478,898 1,478,898 461,330 11,215 87 12/31/2004 1,041,405 T-12 6/30/2005 1,212,662 1,946,070 1,983,345 770,683 17,298 - ---------------------------------------------------------------------------------------------------------------------------------- 88 12/31/2004 978,215 Ann. 10/31/2005 1,011,328 1,164,547 1,650,532 639,204 17,576 89 12/31/2004 1,297,883 Ann. 7/31/2005 1,137,057 1,662,143 1,662,143 525,086 25,400 90 12/31/2004 1,314,718 T-12 10/31/2005 1,287,664 2,935,445 3,236,134 1,948,470 129,445 91 12/31/2004 1,249,237 Ann. 11/30/2005 1,156,357 1,197,332 1,613,729 457,372 24,064 91.1 12/31/2004 781,107 Ann. 11/30/2005 695,749 727,856 1,010,975 315,226 16,904 - ---------------------------------------------------------------------------------------------------------------------------------- 91.2 12/31/2004 468,130 Ann. 11/30/2005 460,608 469,476 602,754 142,146 7,160 92 12/31/2004 1,215,675 T-12 10/31/2005 1,232,648 3,203,351 3,320,208 2,087,560 132,808 93 995,673 1,455,949 1,455,949 460,276 12,260 94 Ann. 8/31/2004 626,789 T-12 9/30/2005 891,918 2,115,339 2,173,076 1,281,158 84,250 95 12/31/2004 1,168,039 Ann. 7/31/2005 968,791 1,848,960 2,034,300 1,065,509 14,422 - ---------------------------------------------------------------------------------------------------------------------------------- 96 12/31/2004 1,270,597 T-12 9/30/2005 1,209,998 3,025,362 3,084,850 1,874,852 123,394 97 12/31/2004 905,581 T-12 11/30/2005 880,874 1,286,760 1,413,593 532,719 38,700 98 12/31/2004 1,229,607 T-12 9/30/2005 1,187,429 3,126,461 3,188,916 2,001,487 127,557 99 12/31/2004 873,854 T-12 11/30/2005 855,499 1,375,588 1,432,683 577,184 9,178 100 12/31/2004 1,076,102 Ann. 9/30/2005 989,416 1,299,042 1,301,462 312,045 7,986 - ---------------------------------------------------------------------------------------------------------------------------------- 101 12/31/2004 889,141 T-12 9/25/2005 850,725 1,827,861 1,920,899 1,070,174 72,000 102 754,203 Ann. 8/31/2005 833,608 1,306,776 1,340,292 506,685 32,500 103 441,784 Ann. 9/30/2005 890,929 910,190 1,221,591 330,662 12,933 104 12/31/2004 893,126 Ann. 3/31/2005 843,757 1,196,314 1,196,314 352,558 7,762 105 655,160 1,333,885 1,333,885 678,725 11,809 - ---------------------------------------------------------------------------------------------------------------------------------- 106 12/31/2004 1,242,869 T-12 10/31/2005 1,304,884 3,873,797 4,074,974 2,770,090 162,999 107 12/31/2004 1,147,479 Ann. 6/30/2005 1,231,298 1,651,474 1,651,474 420,176 20,182 108 586,043 Ann. 9/30/2005 780,569 1,094,596 1,094,596 314,027 11,529 109 Ann. 12/31/2004 (6 mos) 1,480,407 T-12 9/30/2005 1,113,954 2,845,467 3,077,634 1,963,680 123,105 110 12/31/2004 1,176,483 Ann. 4/30/2005 959,643 1,382,537 1,385,833 426,190 23,110 - ---------------------------------------------------------------------------------------------------------------------------------- 111 12/31/2004 875,667 Ann. 8/31/2005 790,476 966,409 966,409 175,933 6,805 112 930,284 1,565,727 1,565,727 635,443 16,538 113 12/31/2004 853,134 Ann. 7/31/2005 755,694 1,027,254 1,027,254 271,560 19,445 114 Ann. 12/31/2004 (9 mos) 713,518 T-12 8/31/2005 717,941 922,486 922,486 204,545 14,583 114.1 - ---------------------------------------------------------------------------------------------------------------------------------- 114.2 115 677,545 698,500 698,500 20,955 116 12/31/2004 643,259 Ann. 10/31/2005 813,450 844,466 1,113,751 300,301 17,831 117 12/31/2004 678,553 T-12 9/30/2005 783,511 1,218,383 1,390,448 606,937 53,350 118 12/31/2004 769,533 Ann. 7/31/2005 692,825 924,268 924,268 231,444 11,374 - ---------------------------------------------------------------------------------------------------------------------------------- 119 12/31/2004 743,564 T-12 7/31/2005 1,053,604 3,517,249 3,938,107 2,884,504 157,524 120 12/31/2004 1,000,552 T-12 7/31/2005 956,524 2,531,088 2,565,060 1,608,537 102,602 121 12/31/2004 780,681 T-12 11/30/2005 742,110 1,573,816 1,611,575 869,465 32,500 122 12/31/2004 773,649 Ann. 8/31/2005 701,689 689,170 913,355 211,666 6,899 123 12/31/2004 797,641 T-12 9/30/2005 731,700 760,000 760,000 28,300 15,150 - ---------------------------------------------------------------------------------------------------------------------------------- 124 12/31/2004 567,141 Ann. 9/30/2005 683,968 683,968 856,747 172,779 22,176 125 12/31/2004 775,043 T-12 8/31/2005 726,668 1,317,458 1,419,393 692,725 40,000 126 12/31/2004 621,222 T-12 7/31/2005 650,207 673,566 673,566 23,359 6,598 127 12/31/2004 709,243 Ann. 6/30/2005 651,740 1,025,684 1,025,684 373,944 7,570 128 12/31/2004 829,043 Ann. 9/30/2005 765,776 1,383,085 1,383,085 617,309 14,551 - ---------------------------------------------------------------------------------------------------------------------------------- 129 12/31/2004 788,031 Ann. 9/30/2005 751,092 1,237,467 1,310,910 559,818 11,894 130 658,852 Ann. 12/31/2005 625,810 991,560 1,044,560 418,750 24,000 131 12/31/2004 1,124,220 T-12 11/30/2005 1,055,598 4,447,184 6,526,109 5,470,511 261,044 132 681,065 Ann. 11/30/2005 671,036 1,015,382 1,033,112 362,076 8,071 133 603,700 800,098 800,098 196,398 3,000 - ---------------------------------------------------------------------------------------------------------------------------------- 134 12/31/2004 786,345 Ann. 9/30/2005 644,232 853,762 853,762 209,529 17,130 135 12/31/2004 646,934 Ann. 5/31/2005 593,026 614,588 614,588 21,562 4,623 136 12/31/2004 694,606 Ann. 9/30/2005 631,763 859,903 859,903 228,140 9,400 137 530,867 592,925 592,925 62,059 4,578 138 596,064 Ann. 11/30/2005 532,937 768,948 786,948 254,011 12,800 - ---------------------------------------------------------------------------------------------------------------------------------- 139 12/31/2004 786,067 Ann. 8/31/2005 677,326 967,319 967,319 289,993 10,805 140 12/31/2004 585,516 Ann. 8/31/2005 588,812 553,848 717,216 128,404 17,805 141 12/31/2004 704,269 T-12 8/30/2005 634,102 953,162 953,162 319,060 15,021 142 404,872 T-12 11/30/2005 506,892 757,269 768,393 261,501 27,200 143 496,772 Ann. 6/30/2005 547,940 747,486 747,486 199,545 10,298 - ---------------------------------------------------------------------------------------------------------------------------------- 144 12/31/2004 561,679 Ann. 5/31/2005 515,728 533,596 533,596 17,868 6,098 145 12/31/2004 509,097 Ann. 11/30/2005 505,879 522,502 621,392 115,513 4,500 146 569,133 572,850 707,124 137,991 6,700 147 12/31/2004 629,824 T-12 6/30/2005 555,097 839,389 844,141 289,044 7,075 148 315,742 Ann. 11/30/2005 487,580 617,111 625,519 137,939 1,529 - ---------------------------------------------------------------------------------------------------------------------------------- 149 12/31/2004 443,079 T-12 8/31/2005 476,885 622,706 622,706 145,821 8,203 150 12/31/2004 516,361 T-12 9/30/2005 512,771 732,803 732,803 220,032 8,037 151 12/31/2004 593,665 T-12 9/30/2005 581,060 941,259 1,002,006 420,946 12,867 152 12/31/2004 513,609 Ann. 7/31/2005 467,032 733,497 744,233 277,201 7,381 153 446,146 654,283 654,283 208,137 2,880 - ---------------------------------------------------------------------------------------------------------------------------------- 154 12/31/2004 703,767 T-12 5/31/2005 649,644 1,636,043 1,681,358 1,031,714 67,254 155 439,313 452,900 452,900 13,587 2,143 156 12/31/2004 877,591 T-12 11/30/2005 869,695 2,215,400 2,269,802 1,400,107 90,792 157 12/31/2004 278,187 Ann. 9/30/2005 480,488 617,738 617,738 137,250 4,974 158 12/31/2004 388,815 T-12 6/30/2005 446,972 611,712 624,678 177,705 6,281 - ---------------------------------------------------------------------------------------------------------------------------------- 159 12/31/2004 503,871 Ann. 9/30/2005 454,264 854,954 866,914 412,650 25,200 160 12/31/2004 875,487 T-12 5/31/2005 680,669 1,800,479 1,835,795 1,115,126 73,432 161 12/31/2004 836,784 T-12 7/31/2005 740,403 2,957,079 2,979,215 2,238,813 119,169 162 12/31/2004 857,511 T-12 5/31/2005 693,140 2,072,972 2,089,747 1,396,608 83,590 163 Ann. 9/30/2005 362,618 Ann. 11/30/2005 422,689 607,348 607,348 184,658 1,385 - ---------------------------------------------------------------------------------------------------------------------------------- 164 12/31/2004 604,653 T-12 5/31/2005 569,520 1,505,198 1,573,773 1,004,253 62,951 165 12/31/2004 648,571 T-12 10/31/2005 646,295 1,880,454 1,893,100 1,246,805 75,724 166 12/31/2004 291,160 T-12 7/31/2005 381,848 453,308 632,894 251,047 13,019 167 12/31/2004 406,360 Ann. 3/31/2005 432,455 845,087 889,409 456,954 7,561 168 402,408 401,620 410,620 8,212 9,000 - ---------------------------------------------------------------------------------------------------------------------------------- 169 553,041 Ann. 9/30/2005 445,136 460,707 460,707 15,571 7,188 170 12/31/2004 425,390 Ann. 3/31/2005 443,465 815,720 848,306 404,841 5,750 171 12/31/2004 524,862 12/31/2005 507,528 505,762 633,991 126,463 11,056 172 12/31/2004 339,363 Ann. 6/30/2005 368,539 559,643 559,643 191,104 2,566 173 357,631 368,692 368,692 11,061 - ---------------------------------------------------------------------------------------------------------------------------------- 174 389,556 Ann. 7/31/2005 362,752 375,000 375,000 12,248 1,365 175 501,448 507,184 615,550 114,102 3,398 176 12/31/2004 431,947 T-12 9/30/2005 467,168 847,731 847,731 380,563 9,058 177 12/31/2004 375,903 T-12 10/31/2005 367,984 404,596 510,034 142,050 3,221 178 12/31/2004 217,595 Ann. 11/30/2005 362,534 495,413 500,054 137,520 2,708 - ---------------------------------------------------------------------------------------------------------------------------------- 179 12/31/2004 470,770 Ann. 5/31/2005 382,635 502,161 502,161 119,526 4,697 180 400,851 545,184 545,184 144,333 5,879 181 342,555 Ann. 7/31/2005 379,527 538,277 538,277 158,749 36,353 182 353,702 Ann. 12/31/2005 365,137 392,508 553,565 188,428 10,860 183 12/31/2004 255,232 Ann. 9/30/2005 356,159 357,022 472,572 116,413 4,364 - ---------------------------------------------------------------------------------------------------------------------------------- 184 220,008 Ann. 9/30/2005 335,127 457,192 457,192 122,066 1,875 185 12/31/2004 574,954 Ann. 7/31/2005 516,785 703,950 703,950 187,165 6,879 186 759,818 1,453,820 1,518,820 759,002 24,750 187 12/31/2004 338,633 Ann. 10/31/2005 319,212 333,097 430,220 111,008 2,651 188 312,243 460,055 460,055 147,811 7,500 - ---------------------------------------------------------------------------------------------------------------------------------- 189 12/31/2004 381,731 T-12 8/31/2005 353,934 770,640 807,227 453,293 24,000 190 263,471 Ann. 10/31/2005 314,018 556,947 589,247 275,229 18,000 191 12/31/2004 349,574 Ann. 11/1/2005 333,870 375,428 431,500 97,630 10,644 192 510,554 1,153,444 1,198,844 688,290 27,500 193 12/31/2004 326,892 Ann. 9/30/2005 295,452 477,979 523,602 228,150 18,000 - ---------------------------------------------------------------------------------------------------------------------------------- 194 12/31/2004 418,492 T-12 9/30/2005 425,499 772,833 808,603 383,104 11,649 195 103,596 Ann. 10/31/2005 257,382 276,024 330,914 73,532 2,700 196 12/31/2004 293,588 Ann. 9/30/2005 338,014 632,700 645,592 307,578 30,000 197 12/31/2004 300,455 T-12 5/31/2005 281,797 1,080,424 1,087,534 805,737 43,501 UNDERWRITTEN UNDERWRITTEN NET LEASE ID TI/LC CASH FLOW LARGEST TENANT SF EXPIRATION - ------------------------------------------------------------------------------------------------------ 1 40,842,069 2 335,459 12,005,378 J.C. Penny 220,378 11/1/2016 3 294,527 10,223,493 SunTrust Banks, Inc. 267,214 7/10/2008 4 7,172,271 5 471,170 5,994,789 State of Washington 98,825 9/30/2008 - ------------------------------------------------------------------------------------------------------ 6 209,097 6,030,814 Linens 'N Things 28,000 1/31/2016 7 431,758 5,136,087 7.1 200,101 2,430,864 Lancaster-Lebanon Int. 68,200 6/30/2007 7.2 108,381 1,091,622 P.E.M.A. 79,456 2/29/2012 7.3 83,432 993,204 Admin. Office of PA Courts 55,596 6/30/2007 - ------------------------------------------------------------------------------------------------------ 7.4 39,844 620,397 New World Pasta Company 34,839 6/30/2009 4,494,951 8 2,857,745 9 1,637,206 10 353,778 4,725,631 VNU, Inc. 70,275 11/30/2013 - ------------------------------------------------------------------------------------------------------ 11 229,545 4,471,664 New Horizons Worlwide 86,097 1/31/2012 12 579,621 4,324,349 EDS/Towers Perrin 200,000 8/31/2015 13 383,228 3,603,380 State of Connecticut 197,583 10/31/2010 14 229,777 3,431,760 Adventist Healthcare, Inc. 77,867 4/30/2013 15 183,004 8,159,342 Wal-Mart.Com, Inc. 167,177 1/31/2012 - ------------------------------------------------------------------------------------------------------ 15.1 107,048 4,742,818 Wal-Mart.Com, Inc. 104,092 1/31/2012 15.2 75,956 3,416,524 Wal-Mart.Com, Inc. 63,085 1/31/2012 16 132,933 3,314,011 KMART 104,231 9/30/2017 17 213,839 4,293,921 A&P (sub-Gristede's) 30,149 9/30/2017 18 2,643,663 - ------------------------------------------------------------------------------------------------------ 19 226,692 2,638,156 American Express Travel Related 169,071 5/31/2014 313,096 2,618,816 20 145,929 1,202,783 Accredo Health 166,511 12/31/2009 21 69,039 441,966 Advertising Checking 24,284 7/31/2007 22 47,959 384,657 Accredo Health 33,688 12/31/2009 - ------------------------------------------------------------------------------------------------------ 23 21,566 301,056 Clear Channel 28,250 8/31/2013 24 28,602 288,354 Caroline Records 47,250 5/30/2008 25 227,765 2,654,419 Conexant Systems, Inc. 199,458 6/20/2017 26 2,582,679 72,331 2,673,920 Associated Grocers, Inc. 265,459 - ------------------------------------------------------------------------------------------------------ 27 19,722 730,973 Associated Grocers, Inc. 71,983 12/20/2013 28 18,523 683,899 Associated Grocers, Inc. 68,164 12/20/2013 29 18,840 753,858 Associated Grocers, Inc. 57,084 10/6/2013 30 15,245 505,190 Associated Grocers, Inc. 68,228 12/20/2013 31 137,619 2,595,631 National Amusements Inc. 66,680 7/31/2019 - ------------------------------------------------------------------------------------------------------ 32 453,991 2,451,877 University Club St Louis 46,200 5/31/2010 33 2,388,567 33.1 1,385,597 33.2 1,002,970 34 2,622,439 - ------------------------------------------------------------------------------------------------------ 35 87,533 2,314,040 Bridgewater Interiors 268,000 10/31/2015 36 2,188,616 36.1 1,262,002 36.2 926,614 37 72,532 2,082,401 Von's Grocery Co. 30,000 4/30/2009 - ------------------------------------------------------------------------------------------------------ 38 49,062 1,949,427 BJ's Wholesale Club 106,684 5/31/2013 39 1,965,664 40 1,939,611 41 1,722,660 42 36,240 1,523,056 FAMSA 20,000 9/30/2020 - ------------------------------------------------------------------------------------------------------ 43 28,427 1,650,036 Giant Eagle 87,519 8/31/2018 44 1,844,968 45 1,648,204 46 46,162 1,711,917 46.1 44,318 981,967 Quickquote 9,351 7/15/2007 - ------------------------------------------------------------------------------------------------------ 46.2 1,844 729,950 Zimmerman & Partners 45,436 1/31/2014 47 1,653,101 48 68,736 1,742,871 48.1 52,869 1,490,101 Fresh Market 18,400 9/30/2020 48.2 15,867 252,770 Aaron Brothers, Inc. 6,041 2/28/2013 - ------------------------------------------------------------------------------------------------------ 49 109,695 1,842,405 PricewaterhouseCoopers 84,500 12/31/2017 50 192,313 1,766,537 Burlington 86,479 11/30/2015 51 47,583 1,576,273 Annie Sez 14,903 1/31/2010 52 147,227 1,624,748 Academic Cardiology Associates 9,111 8/31/2020 53 182,438 1,578,233 R & R/Remax 31,202 4/15/2011 - ------------------------------------------------------------------------------------------------------ 1,512,723 54 535,726 55 394,763 56 373,841 57 208,393 - ------------------------------------------------------------------------------------------------------ 58 16,282 1,128,221 24 Hr Fitness 37,000 7/22/2020 59 73,687 1,398,316 Greg Centeno Design & Co. 4,175 12/31/2018 60 1,483,149 61 1,365,661 62 100,091 1,398,679 IBM Corporation 150,000 12/31/2015 - ------------------------------------------------------------------------------------------------------ 63 80,580 1,380,357 Great Florida Bank 15,502 2/29/2016 64 166,680 1,403,380 Nucor Corporation 32,391 9/14/2006 65 53,477 1,277,065 Marshall's 39,201 10/31/2015 66 148,711 1,391,129 Nielson Media - Office Space 37,335 12/31/2008 67 42,303 1,085,725 Tower Records 14,053 2/28/2016 - ------------------------------------------------------------------------------------------------------ 68 76,538 1,647,463 Verizon Wireless 162,813 11/30/2010 69 1,833,366 69.1 554,356 69.2 445,680 69.3 386,245 - ------------------------------------------------------------------------------------------------------ 69.4 293,575 69.5 153,510 70 58,080 1,152,390 LA Fitness Sports Club 37,500 8/31/2019 71 28,593 1,114,161 Capital Grille Holdings 16,968 7/31/2023 72 1,143,018 - ------------------------------------------------------------------------------------------------------ 73 1,217,735 74 1,096,342 Kinko's of Manhattan, Inc. 6,751 3/20/2011 75 53,909 1,117,964 Ukrop's Super Markets 63,136 12/31/2016 76 39,287 1,158,933 Giant Food Stores, LLC 55,000 11/30/2025 77 105,670 1,082,170 Goodrich Corporation 131,252 4/30/2011 - ------------------------------------------------------------------------------------------------------ 78 1,072,240 79 23,020 1,052,191 Safeway 55,164 7/31/2029 80 1,071,350 81 21,783 1,035,297 Best Buy Company 30,071 9/22/2015 82 987,546 - ------------------------------------------------------------------------------------------------------ 83 1,170,513 84 49,958 1,123,773 Kroger 55,696 11/30/2019 85 88,183 880,349 Integrity Applications 30,441 5/31/2007 86 60,086 946,266 JFK Hospital 22,076 3/31/2015 87 128,857 1,066,507 The Children's Medical Group, Ltd., 8,066 2/28/2014 Agnes Lardizabal, M.D., Jeffrey Maxcy, M.D., and Madhura Bhuskute, M.C. - ------------------------------------------------------------------------------------------------------ 88 48,016 945,736 Publix Supermarket 42,112 10/4/2009 89 65,988 1,045,670 Service Merchandise 53,243 2/28/2019 90 1,158,219 91 90,239 1,042,055 91.1 63,389 615,457 Xtera Communications, Inc. 47,251 1/31/2008 - ------------------------------------------------------------------------------------------------------ 91.2 26,850 426,598 ATI Enterprises, Inc. 35,800 6/30/2015 92 1,099,840 93 82,038 901,375 IndyMac Bank, FSB 41,457 1/20/2012 94 807,668 95 112,469 841,900 Fiduciary Asset Management 16,666 9/30/2008 - ------------------------------------------------------------------------------------------------------ 96 1,086,604 97 842,174 98 1,059,872 99 37,511 808,810 Makar Management, LLC 14,659 7/31/2014 100 21,951 959,479 Albertson's (Ground Lease) 47,074 7/31/2026 - ------------------------------------------------------------------------------------------------------ 101 778,725 102 801,108 103 877,996 Borgwarner 53,060 3/31/2020 104 31,208 804,786 DSW Shoe Warehousing, Inc. 27,746 3/31/2009 105 68,161 575,190 New Albany Musculoskeletal and 13,115 8/31/2015 Neurologic, LLC - ------------------------------------------------------------------------------------------------------ 106 1,141,885 107 75,630 1,135,486 Circuit City 32,383 1/31/2010 108 34,252 734,788 U.S Joiner 66,530 4/30/2012 109 990,849 110 86,944 849,589 County Riverside 71,852 11/30/2014 - ------------------------------------------------------------------------------------------------------ 111 45,365 738,307 Kaiser Foundation Health Plan 34,025 3/31/2009 112 125,968 787,778 University of Phoenix 32,206 6/30/2012 113 59,106 677,143 Hobby Lobby 50,711 1/31/2018 114 27,711 675,647 114.1 Consolidated Electrical 8,509 4/30/2006 - ------------------------------------------------------------------------------------------------------ 114.2 JPS Surface Solutions 14,704 3/31/2010 115 677,545 Shaw's Supermarket, Inc. 63,500 2/28/2026 116 47,407 748,212 Initial Tropical Plants 17,520 1/31/2011 117 730,161 118 17,621 663,830 Lowes Foods 46,024 11/2/2019 - ------------------------------------------------------------------------------------------------------ 119 896,080 120 853,921 121 709,610 122 21,598 673,191 Wilmington Piano 6,645 4/30/2012 123 50,904 665,646 Spectrum Club Holding Company 101,000 7/31/2018 - ------------------------------------------------------------------------------------------------------ 124 34,921 626,870 Kronros Incorporated 110,882 10/31/2012 125 686,668 126 643,609 Shaw's Supermarket 54,985 2/28/2027 127 42,583 601,587 Commonwealth of Mass. 28,281 4/30/2010 128 48,478 702,747 Jillian's Billiard Club, Inc. 74,022 12/31/2008 - ------------------------------------------------------------------------------------------------------ 129 739,198 130 601,810 131 794,554 132 47,194 615,771 Challenger Center 26,750 6/30/2014 133 21,219 579,481 24-Hour Fitness 9,454 9/30/2015 - ------------------------------------------------------------------------------------------------------ 134 32,027 595,075 Office Depot 30,000 4/30/2008 135 22,838 565,565 Circuit City 42,000 5/31/2018 136 23,490 598,873 Peapod, Inc. 94,000 1/31/2020 137 526,289 Best Buy 30,519 1/31/2016 138 520,137 - ------------------------------------------------------------------------------------------------------ 139 69,985 596,536 Kiddie Academy 8,921 1/31/2008 140 29,618 541,389 Jones Red & White 15,974 12/31/2015 141 33,301 585,781 Advanced Vision Institute, Inc. 8,400 4/30/2010 142 479,692 143 28,251 509,391 Midwest Community Bank 3,178 1/15/2008 - ------------------------------------------------------------------------------------------------------ 144 15,534 494,097 Circuit City 33,879 5/31/2018 145 14,252 487,127 R.E.F Realty Corp, dba Planet Kids 12,000 8/31/2015 146 18,330 544,103 International Expo Service, Inc. 67,000 11/17/2020 147 30,101 517,921 Hunan Pavilion 4,200 2/28/2010 148 10,484 475,567 Sleepy's 10,195 11/30/2014 - ------------------------------------------------------------------------------------------------------ 149 21,275 447,407 Jo-Ann Stores, Inc. 23,000 1/31/2014 150 34,622 470,112 Global Pronex, Inc. 2,640 8/31/2007 151 568,193 152 459,652 153 11,561 431,706 LaRosa's Pizza 6,000 11/30/2020 - ------------------------------------------------------------------------------------------------------ 154 582,390 155 437,170 Walgreens 13,396 3/31/2057 156 778,903 157 26,639 448,875 Smart & Final Stores Corp. 19,500 6/30/2020 158 20,890 419,802 Rite Aid Corp. 20,000 5/31/2014 - ------------------------------------------------------------------------------------------------------ 159 429,064 160 607,237 161 621,234 162 609,550 163 17,846 403,458 TGI Friday's 6,582 11/30/2009 - ------------------------------------------------------------------------------------------------------ 164 506,569 165 570,571 166 5,271 363,557 167 424,894 168 13,613 379,795 Best Buy 45,000 2/11/2018 - ------------------------------------------------------------------------------------------------------ 169 17,759 420,188 Gaylord Bros., Inc. 71,880 5/31/2020 170 437,715 171 40,483 455,989 Office Max 23,660 8/31/2012 172 16,920 349,053 Pizza Hut 3,460 1/31/2014 173 357,631 Wal-Mart 72,113 1/31/2024 - ------------------------------------------------------------------------------------------------------ 174 361,387 Walgreens 13,650 12/31/2079 175 16,991 481,059 Shepherd Eye Center 7,000 10/15/2015 176 458,110 177 15,432 349,331 Burger King 3,400 4/30/2012 178 13,379 346,447 The Gap, Inc. 11,211 8/28/2012 - ------------------------------------------------------------------------------------------------------ 179 32,940 344,998 Enterprise 8,000 5/31/2009 180 7,745 387,226 Melting Pot 4,104 4/7/2015 181 14,584 328,591 Valet Parking Services, Inc. 71,541 9/30/2016 182 19,473 334,804 AWG-Sunfresh 37,466 3/1/2008 183 17,529 334,266 Belle Marmick, Inc. 15,630 12/31/2007 - ------------------------------------------------------------------------------------------------------ 184 13,468 319,783 Jiffy Lube 3,565 5/31/2025 185 13,787 496,119 Associated Grocers, Inc. 45,859 6/30/2015 186 735,068 187 11,820 304,741 Blockbuster 4,200 6/30/2010 188 304,743 - ------------------------------------------------------------------------------------------------------ 189 329,934 190 296,018 191 18,715 304,511 Peebles, Inc. 21,049 1/31/2017 192 483,054 193 277,452 - ------------------------------------------------------------------------------------------------------ 194 413,850 195 11,443 243,239 Chuck E Cheese 7,200 12/7/2014 196 308,014 197 238,296 CD 2006-CD2 ANNEX A-1 - CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES LEASE ID PROPERTY NAME 2ND LARGEST TENANT SF EXPIRATION 3RD LARGEST TENANT - ------------------------------------------------------------------------------------------------------------------------------------ 1 Villas Parkmerced 2 Valley View Center AMC Theaters 72,991 5/31/2024 Valley View Sportsplex 3 SunTrust Center Holland & Knight LLP 52,417 11/30/2010 Baker & Hostetler LLP 4 Westin Philadelphia Hotel 5 Rock Pointe Corporate Center Avista Advantage 73,611 4/30/2010 Pitney Bowes - ------------------------------------------------------------------------------------------------------------------------------------ 6 Woodbury Lakes DSW 24,990 1/31/2016 Michaels 7 The Harrisburg Portfolio 7.1 Gateway Office Center - Flank Drive Primedia Enthusiast 46,107 2/28/2009 Pa Coaliation Against Domestic Publications Inc. Violence 7.2 Commerce Business Park Ernst & Young U.S. LLP 17,499 10/31/2007 Quality Insights of PA 7.3 Rossmoyne Business Park Vale National Training Center 17,600 12/31/2009 Roadway Express, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ 7.4 Gateway Office Center - Shannon Road McCormick, Taylor & Associates, 20,887 6/30/2009 Beyman Multifamily Portfolio Inc. 8 Empirian at Steele Park 9 Colonnade at Germantown 10 Sunset Media Tower HOB Entertainment, Inc. 47,607 2/28/2015 Frederick's of Hollywood - ------------------------------------------------------------------------------------------------------------------------------------ 11 Stadium Gateway Countrywide Home Loans, Inc. 52,622 1/31/2008 Alliance Imaging, Inc. 12 Woodcrest Corporate Center Equity One, Inc. 57,166 5/31/2011 American Water Works 13 Riverview Square Computer Sciences Corporation 63,900 10/31/2010 Verizon/Cellco 14 Research Boulevard Center Z Tech Corporation 26,130 9/30/2010 Skanska USA Building, Inc 15 Shorenstein Brisbane - ------------------------------------------------------------------------------------------------------------------------------------ 15.1 7000 Marina Boulevard 15.2 5000 Marina Boulevard 16 Stratford Plaza Dominick's Finer Foods 69,246 8/31/2012 The Sports Authority, Inc. 17 The Ansonia Ansonia Parking 21,306 7/31/2008 The North Face, Inc. 18 Lodge at Stone Oak Ranch Apartment Homes - ------------------------------------------------------------------------------------------------------------------------------------ 19 Canyon Corporate Plaza Liberty Mutual 26,725 7/31/2007 Suburban Mortgage Century Center Parkway Portfolio 20 1620, 1640, 1680 Century Center Avaya 9,245 8/31/2009 Kindred Hospitals Parkway 21 1610 Century Center Parkway ACH Food Companies 24,211 4/30/2008 22 1670 Century Center Parkway - ------------------------------------------------------------------------------------------------------------------------------------ 23 1600 Century Center Parkway Baptist Memorial 28,250 4/30/2006 Boston Brace 24 1590 Century Center Parkway Superior Pool Product 35,500 3/31/2008 Ethan Allan 25 Conexant Building 26 Vistas at Seven Bar Ranch AG Portfolio - ------------------------------------------------------------------------------------------------------------------------------------ 27 Top Food & Drug - Auburn, WA 28 Safeway - Vancouver, WA 29 Larry's Market - Tukwila, WA 30 Sherm's Thunderbird Market - Roseburg, OR 31 Eastfield Mall Old Navy 27,990 2/28/2010 The Gap/Gap Kids - ------------------------------------------------------------------------------------------------------------------------------------ 32 University Club Tower Mueller, Prost et al 16,433 11/30/2010 St. Louis University 33 Mission Madison Priest Lake Apartments 33.1 Mission Madison Square Apartments 33.2 Mission Priest Lake Apartments 34 Willowbrook West Apartments - ------------------------------------------------------------------------------------------------------------------------------------ 35 Johnson Control Building 36 Mission Rockwall and Fairways Apartments 36.1 Mission Rockwall Apartments 36.2 Mission Fairways Apartments 37 Canyon Plaza Shopping Center Rite Aid Corporation/Thrifty 16,520 5/31/2014 Automobile Club of S. Cal. Payless - ------------------------------------------------------------------------------------------------------------------------------------ 38 Alpine Commons Shopping Center Super Stop n Shop 64,898 8/31/2013 A.C. Moore Arts and Crafts 39 Abbington Place 40 Heritage at Lakeside Apartment Homes 41 Indian Lakes Apartments 42 Story and King Plaza Walgreen's 14,560 12/7/2064 Wells Fargo - ------------------------------------------------------------------------------------------------------------------------------------ 43 Robinson Crossroads Staples, Inc. 23,925 11/30/2012 The Pep Boys 44 The Exchange at Tallahassee Apts 45 Tramore Village Apartments 46 Trafalgar Plaza Portfolio 46.1 Trafalgar Plaza Gary Bitner Public Relations 6,045 11/30/2006 Hello Florida - ------------------------------------------------------------------------------------------------------------------------------------ 46.2 Zimmerman Corporate Center State of Florida 4,573 12/31/2008 Webstream 47 Mission Galleria Apartments 48 Old Alabama 48.1 Old Alabama - Phase I Walgreens 15,120 9/30/2060 LA Fitness International 48.2 Old Alabama - Phase II Diane Johnson 4,981 1/31/2008 Vintage Tea - ------------------------------------------------------------------------------------------------------------------------------------ 49 Pricewaterhouse Coopers Office 50 Lake Creek Festival Center Randall's 57,454 5/31/2012 Stein Mart 51 Elwood Shopping Center Eckerd 10,750 10/31/2012 Pet Supplies Plus 52 Wellpointe Medical Building Troy Gastroenterology, P.C. 7,695 8/31/2020 Oakland - McComb Ob/Gyn P.C. 53 One Town Center Legg Mason Wood Walker, Inc. 8,570 5/23/2008 Universal Underwriters - ------------------------------------------------------------------------------------------------------------------------------------ Wilkinson Portfolio 54 Magnolia Run 55 Breckenridge 56 Country Club 57 Willow Pointe - ------------------------------------------------------------------------------------------------------------------------------------ 58 Hawthorne Exchange Wescom Credit Union 4,804 12/31/2015 Wendy's 59 928 Broadway Broadway 21, Inc. 4,000 12/31/2018 Continental Lighting Systems, Inc. 60 Walnut Hills Apartments 61 Maverick Creek Villas 62 IBM Call Center - ------------------------------------------------------------------------------------------------------------------------------------ 63 Alhambra Center International Consulate General of Barbados 12,776 1/31/2010 Int'l Players Championship 64 Rexford Park Southend Enterprises, LLC 15,433 11/30/2008 Agdata, Inc. 65 Buena Park Promenade Joann's Fabric 35,872 1/31/2016 DD's (Ross) 66 Shelton Pointe Butler Service Group 32,437 2/28/2008 Baldwin Technology Co. 67 Galleria Pavilion China Star 6,466 8/31/2013 Buffalo Wild Wing - ------------------------------------------------------------------------------------------------------------------------------------ 68 Verizon Call Center Windsor Richland Mall, LP 68,664 9/9/2025 69 Supertel Hotel Portfolio 69.1 Comfort Suites - Fort Wayne, IN 69.2 Comfort Inn - Fayetteville, NC 69.3 Comfort Suites - Lafayette, IN - ------------------------------------------------------------------------------------------------------------------------------------ 69.4 Hampton Inn & Suites - Warsaw, IN 69.5 Comfort Suites - Marion, IN 70 Deerfield Plaza AC Furniture Gallery 8,976 2/28/2009 Meat Emporium 71 Chrysler Retail Citibank, N.A. 10,967 2/29/2016 CG Painting 72 Woods Edge - ------------------------------------------------------------------------------------------------------------------------------------ 73 South Duff Community Park I & II 74 21 Astor Place Starbucks Corporation 4,370 3/31/2020 75 Colonial Square Peebles Store 35,300 1/31/2007 Brooks/Eckerd Drug Store 76 Aston Township Giant Food 77 5 Omni - ------------------------------------------------------------------------------------------------------------------------------------ 78 Ashford Place Apartments 79 College Square Shopping Center Celebree Learning Center 7,200 1/14/2015 College Square Liquors 80 The Links at North Creek 81 Best Buy - Sunnyvale, CA 82 Fountain Square Apartments - ------------------------------------------------------------------------------------------------------------------------------------ 83 Northwest Corners Apartments 84 Centennial Village Just a Buck 4,500 8/31/2009 Monterrey Mexican Restaurant 85 Wynwood Office Buildings SAIC 27,175 1/31/2009 Advent Systems, Inc. 86 El Clair Medical Building DCA 13,566 10/31/2011 Medical Specialists 87 Sunwest Medical Center Valley Radiologists, Ltd. 6,715 1/31/2007 Pulmonary Associates, PC - ------------------------------------------------------------------------------------------------------------------------------------ 88 Colony Crossings Shapes Family Fitness 10,080 8/31/2009 Pet Supermarket 89 Cortez Plaza East Ross Dress For Less 28,800 1/31/2009 Factory Card Outlet 90 Courtyard by Marriot - Erlanger 91 Bethany and ATI Buildings 91.1 Bethany Building Contemporary Title Solutions 19,832 7/31/2009 Texas Commercial Energy, LLC - ------------------------------------------------------------------------------------------------------------------------------------ 91.2 ATI Building 92 Residence Inn - Cincinnati Airport 93 Centrelake Corporate Center RBF Consulting 19,841 3/14/2011 94 Birnam Wood Apartments 95 Maryland Place AG Edwards & Sons Inc. 16,313 9/30/2007 Psychological Associates Inc. - ------------------------------------------------------------------------------------------------------------------------------------ 96 Staybridge Suites-Lincolnshire 97 Savannah Place 98 Staybridge Suites-Glenview 99 4100 MacArthur Boulevard CPH (Westside) 7,685 6/30/2010 CPH (Eastside) 100 Village Oaks Shopping Center McDonald's (Ground Lease) 4,092 9/1/2014 Country Waffles - ------------------------------------------------------------------------------------------------------------------------------------ 101 Fossil Ridge Apartments 102 Stonecreek Apartments-Phase I 103 Auburn Ridge Office Center 104 1815-1819 East Jericho Turnpike Office Max Inc. 24,054 1/31/2012 105 New Albany Medical Office Building Orthopedic and Neurologic 11,647 12/28/2010 General Medical Consultants, Consultants Inc. Inc. - ------------------------------------------------------------------------------------------------------------------------------------ 106 Hampton Inn Dulles Airport 107 Village Plaza Staples 32,121 12/31/2010 Factory Card Outlet 108 Siempre Viva Mattel 24,752 12/31/2009 Murphy Development Company 109 Hilton Garden Inn - Newport News, VA 110 Civic Plaza Shopping Center Dollar Mart 3,600 3/31/2007 D.J.'s Restaurant - ------------------------------------------------------------------------------------------------------------------------------------ 111 1033 Third Street 112 Brookfield Commons State Lottery Department 18,202 12/31/2009 Met Life 113 Wabash Valley Plaza Big Lots 45,872 1/31/2010 Fashion Bug 114 Garand Lane 114.1 Bankside Business Park Menage Design, Inc 7,146 7/31/2006 Frazee Industries, Inc - ------------------------------------------------------------------------------------------------------------------------------------ 114.2 Country Club Business Park Import Stone 13,392 9/30/2007 Ewing Irrigation Products 115 Shaw's Supermarket - Windham, NH 116 Eastgate Business Center Team Howmedica 12,635 8/31/2010 GTech 117 Woodstock 118 Lewisville Commons Dollar General 6,000 8/31/2006 Blockbuster - ------------------------------------------------------------------------------------------------------------------------------------ 119 Aku Tiki Inn 120 Fairfield Inn by Marriott - Chesapeake, VA 121 Prospect Park Apartments 122 5209 Concord Pike Tally-Ho Liquors 5,100 1/31/2013 WAWA, Inc (Convenience Store). 123 Spectrum Fitness - ------------------------------------------------------------------------------------------------------------------------------------ 124 300 Billerica Road 125 Morrell Park Apartments 126 Shaw's Supermarket - Littleton, NH 127 44 Bromfield Street The Rendon Group 5,908 7/31/2009 The Watch Hospital, Inc. 128 Jillians Boston Concorde Entertainment 16,135 7/31/2010 Ipswich Entertainment - ------------------------------------------------------------------------------------------------------------------------------------ 129 Lackland Self Storage - Belleville 130 Waterford Phase III 131 Crowne Plaza Phoenix 132 Pitt Street Center Job Performance Centers 5,856 3/31/2007 Crossroads Media 133 Main Street Village Red Brick Pizza 1,500 7/31/2015 Tasteful Cakes - ------------------------------------------------------------------------------------------------------------------------------------ 134 Hillcrest Shopping Center Big Lots 25,000 1/31/2010 Tuesday Morning 135 Circuit City - Poughkeepsie, NY 136 Peapod Distribution Warehouse 137 Best Buy - Menomonee Falls, WI 138 Aquia Terrace Phase II - ------------------------------------------------------------------------------------------------------------------------------------ 139 Hunterdon Hills Plaza State of NJ Workman Comp. Court 6,826 6/30/2009 Prudential Insurance Co. 140 Habersham Village Eckerd Drug 8,000 5/31/2007 Punch & Judy 141 West Park Retail Buffalo Wild Wings 5,600 10/31/2014 Studio Branca 142 Trafalgar Square Apartments 143 Heritage Square - St. Charles, IL GMAC Mortgage 1,583 5/31/2007 Midwest Custom Homes & JRD Development - ------------------------------------------------------------------------------------------------------------------------------------ 144 Circuit City - Manassas, VA 145 5002-5012 Church Avenue Payless Shoe Source 2,700 5/31/2013 Park, Suk Hui & Park Song dba B&H Fruit and Vegetables 146 Cypress Corporate Park 147 Thorn Run Crossing Armstrongs Restaurant 4,000 3/31/2011 Prudential Preferred Realty 148 425 Fifth Avenue - ------------------------------------------------------------------------------------------------------------------------------------ 149 Barnes & Noble Retail Center Barnes & Noble 22,493 2/28/2013 2nd Wind Exercise Equipment, Inc. 150 Metro Center Diamond Bar O.S.T.S. INC. 2,199 3/31/2008 Fitzgerald & Flamenbaum 151 Lackland Self Storage - N. Brunswick 152 Lake City Mini-Storage 153 Hoke Plaza Hollywood Video 5,000 8/31/2015 Complete Petmart - ------------------------------------------------------------------------------------------------------------------------------------ 154 Best Western - Radford, VA 155 Walgreens - Philadelphia, PA 156 Fairfield Inn & Suites - Lake Oswego 157 Whittier Plaza Goodwill Industries 13,660 3/31/2015 158 Heritage Square - Fresno, CA Family Fashions 4,160 8/31/2009 Round Table Pizza - ------------------------------------------------------------------------------------------------------------------------------------ 159 Ivy Hall Apartments 160 Best Western - Grasonville, MD 161 Bahama House 162 Best Western - Leesburg, VA 163 Bentley Retail Roma Restaurants 1,850 8/31/2008 South Beach Food Center - ------------------------------------------------------------------------------------------------------------------------------------ 164 Comfort Inn - Staunton, VA 165 Fairfield Inn - Tucson Airport 166 Oxford Apartments 167 Charleston Arms Apartments 168 Best Buy Beaver Creek - ------------------------------------------------------------------------------------------------------------------------------------ 169 The Gaylord Building 170 Spanish Oaks Apartments 171 Woods Cross Center Checker Auto 8,000 6/30/2012 Mac's Lock & Key 172 Hillside Terrace Shopping Center Verlo 2,409 11/30/2008 EB Games 173 Super Walmart - Tell City, IN - ------------------------------------------------------------------------------------------------------------------------------------ 174 Walgreens - Durham, NC 175 Pueblo Place Starbucks 1,899 2/29/2016 Cafe Caubo 176 Lackland Self Storage - Mountainside 177 Century Square Launderland 2,549 10/29/2007 Lux Gift and Beauty 178 Battenkill Plaza Ellen Tracy 3,094 5/31/2007 Zales - ------------------------------------------------------------------------------------------------------------------------------------ 179 Satellite Shoppes Dent 1st 4,725 1/31/2011 Spa's Atlanta 180 Grove Street Plaza JD's Cosmetic Essentials 939 12/31/2009 Birdies in the Nest LLC 181 215 West Lake Street Dunkin Donuts 459 8/31/2015 182 Arrowhead Shopping Center Family Dollar 8,000 12/31/2006 All City DJS's 183 1705 West Garvey Stereo 1 8,966 9/30/2013 Leo Ramirez Auto Care - ------------------------------------------------------------------------------------------------------------------------------------ 184 Pacific Willow Center Desert Sun 2,000 12/31/2015 Starbucks Coffee 185 Summit Trading Company - Puyallup, WA 186 Tara Close Apartments 187 Red Mountain Shopping Center Perfect Teeth 1,980 8/31/2008 Super Cleaners 188 Lincoln Gardens Apartments - ------------------------------------------------------------------------------------------------------------------------------------ 189 Berryhill Apartments 190 Autumn Ridge Apartments 191 Memorial Plaza The Cato Corporation 4,800 1/31/2007 Hibbett Sporting Goods, Inc. 192 3165 Nostrand Avenue 193 Timber Glen II - ------------------------------------------------------------------------------------------------------------------------------------ 194 Lackland Self Storage - Dover #2 195 National Road Marketplace Indiana Regional Blood 4,800 4/30/2011 Malibu Tan 196 Francis Murphy Senior Apartments 197 Comfort Inn - Charlottesville, VA UPFRONT MONTHLY UPFRONT MONTHLY UPFRONT LEASE OCCUPANCY OCCUPANCY REPLACEMENT REPLACEMENT TI/LC TI/LC TAX ID SF EXPIRATION RATE AS-OF DATE RESERVES RESERVES RESERVES RESERVES RESERVES - ------------------------------------------------------------------------------------------------------------------------------------ 1 96.62% 10/31/2005 3,050,000 433,503 2,515,250 2 60,800 7/31/2015 91.04% 11/30/2005 3 52,368 3/31/2014 85.82% 12/9/2005 4 79.90% 10/31/2005 4% of Hotel Revenue 465,294 5 57,964 8/30/2009 91.71% 11/1/2005 7,072 646,900 117,214 - ------------------------------------------------------------------------------------------------------------------------------------ 6 23,644 1/31/2016 84.51% 1/1/2006 2,500,000 7 89.35% 12/8/2005 5,598 3,400,000 90,963 7.1 26,859 12/31/2007 82.50% 12/8/2005 7.2 11,903 8/31/2008 95.69% 12/8/2005 7.3 12,460 8/31/2010 97.14% 12/8/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 7.4 100.00% 12/8/2005 96.62% Various 11,585 504,223 8 94.99% 10/28/2005 6,650 110,262 9 99.20% 11/22/2005 4,935 393,961 10 22,462 2/28/2015 93.50% 12/12/2005 5,248 22,917 405,209 - ------------------------------------------------------------------------------------------------------------------------------------ 11 46,887 7/6/2008 100.00% 12/31/2005 12 54,587 2/28/2011 93.54% 12/28/2005 87,470 13 20,697 2/28/2008 100.00% 9/15/2005 4,283 220,518 14 11,788 6/30/2010 80.01% 11/16/2005 216,115 3,216 600,043 21,440 104,421 15 100.00% 9/20/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 15.1 100.00% 9/20/2005 15.2 100.00% 9/20/2005 16 43,012 11/30/2013 96.40% 12/6/2005 458,130 6,624 500,000 4,167 461,679 17 8,203 1/31/2013 93.63% 12/1/2005 1,732 18 93.80% 9/19/2005 9,042 743,162 - ------------------------------------------------------------------------------------------------------------------------------------ 19 22,681 6/30/2009 92.21% 10/10/2005 5,000 279,872 97.03% 12/1/2005 6,503 16,669 202,800 20 7,722 1/31/2008 93.16% 12/1/2005 2,824 8,334 88,544 21 100.00% 12/1/2005 607 2,084 31,250 22 100.00% 12/1/2005 422 2,084 30,365 - ------------------------------------------------------------------------------------------------------------------------------------ 23 19,000 12/31/2006 100.00% 12/1/2005 1,175 1,792 25,422 24 11,750 11/30/2008 100.00% 12/1/2005 1,475 2,375 27,219 25 100.00% 8/1/2005 26 96.85% 10/24/2005 386,100 70,606 100.00% 10/11/2005 1,570 - ------------------------------------------------------------------------------------------------------------------------------------ 27 100.00% 10/11/2005 28 100.00% 10/11/2005 29 100.00% 10/11/2005 1,570 30 100.00% 10/11/2005 31 9,485 1/31/2010 94.97% 9/28/2005 4,572 300,000 11,430 61,941 - ------------------------------------------------------------------------------------------------------------------------------------ 32 12,941 8/31/2008 84.86% 2/10/2006 127,469 33 97.86% 11/11/2005 10,817 33.1 98.60% 11/11/2005 33.2 97.00% 11/11/2005 34 98.89% 11/10/2005 13,302 166,071 - ------------------------------------------------------------------------------------------------------------------------------------ 35 100.00% 8/31/2005 36 94.37% 11/21/2005 380,000 4,234 36.1 94.20% 11/21/2005 36.2 94.55% 11/21/2005 37 9,252 12/31/2014 100.00% 12/1/2005 1,470 4,167 17,444 - ------------------------------------------------------------------------------------------------------------------------------------ 38 23,000 2/28/2007 100.00% 12/13/2005 2,266 267,254 39 95.00% 12/9/2005 81,000 22,323 40 97.24% 10/17/2005 3,771 89,046 41 91.89% 11/30/2005 6,167 45,970 42 4,000 10/23/2010 89.34% 12/1/2005 773 786,853 161,400 - ------------------------------------------------------------------------------------------------------------------------------------ 43 18,600 10/31/2017 100.00% 9/30/2005 1,504 2,316 44 99.69% 9/29/2005 7,300 404,976 45 96.00% 9/30/2005 700,000 86,104 46 93.83% 12/31/2005 347,764 2,792 2,190,467 67,198.00 46.1 5,882 12/31/2008 91.17% 12/31/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 46.2 4,164 2/28/2011 97.61% 12/31/2005 47 95.65% 12/9/2005 420,000 5,166 63,458 48 93.86% 1/5/2006 1,290 5,243 78,270 48.1 13,040 11/30/2010 94.49% 1/5/2006 48.2 1,595 1/31/2008 89.86% 1/5/2006 - ------------------------------------------------------------------------------------------------------------------------------------ 49 79.73% 12/31/2005 1,779 75,106 50 34,000 10/31/2013 99.14% 10/1/2005 11,664 15,990 399,022 51 10,300 11/30/2008 100.00% 11/22/2005 1,433 3,796 123,166 52 7,513 8/31/2020 93.72% 11/2/2005 772 2,778 164,839 53 7,630 11/30/2006 99.46% 1/1/2006 847 475,884 35,016 - ------------------------------------------------------------------------------------------------------------------------------------ 89.66% Various 14,366 46,908 54 88.21% 12/12/2005 3,905 9,084 55 89.41% 12/14/2005 4,897 8,097 56 95.00% 12/14/2005 3,240 16,705 57 85.29% 12/13/2005 2,324 13,022 - ------------------------------------------------------------------------------------------------------------------------------------ 58 3,245 6/24/2020 76.56% 1/1/2006 795 1,430 31,432 59 3,700 12/31/2009 97.30% 1/11/2006 16,236 81,180 98,469 60 88.06% 11/7/2005 7,500 50,517 61 95.74% 8/31/2005 6,475 31,104 62 100.00% 1/20/2006 3,125 - ------------------------------------------------------------------------------------------------------------------------------------ 63 8,971 1/31/2007 95.76% 1/31/2006 1,763 250,000 8,816 149,055 64 15,253 8/31/2012 90.81% 12/7/2005 1,000,000 65 28,900 2/28/2016 100.00% 11/17/2005 30,000 83,353 66 14,030 12/31/2014 89.69% 8/1/2005 2,641 600,000 64,374 67 5,759 5/4/2013 69.72% 2/15/2006 803 3,525 - ------------------------------------------------------------------------------------------------------------------------------------ 68 100.00% 10/31/2005 69 68.44% 8/31/2005 4% of monthly gross revenues 35,025 69.1 64.43% 8/31/2005 4% of monthly gross revenues 69.2 65.02% 8/31/2005 4% of monthly gross revenues 69.3 72.93% 8/31/2005 4% of monthly gross revenues - ------------------------------------------------------------------------------------------------------------------------------------ 69.4 71.27% 8/31/2005 4% of monthly gross revenues 69.5 75.59% 8/31/2005 4% of monthly gross revenues 70 4,488 2/28/2010 97.59% 9/21/2005 763 1,442 122,105 71 658 5/31/2007 100.00% 11/1/2005 8,578 37,735 72 96.59% 12/9/2005 52,800 15,941 - ------------------------------------------------------------------------------------------------------------------------------------ 73 100.00% 8/31/2005 5,698 66,324 74 100.00% 9/27/2005 41,640 75 11,850 6/30/2018 98.58% 8/30/2005 2,133 4,167 9,917 76 100.00% 12/31/2005 77 100.00% 8/17/2005 1,094 8,333 24,007 - ------------------------------------------------------------------------------------------------------------------------------------ 78 93.56% 12/21/2005 105,600 14,859 79 4,800 10/31/2012 100.00% 9/30/2005 1,084 78,059 80 99.20% 11/30/2005 4,875 21,771 81 100.00% 10/1/2005 251 82 88.67% 12/14/2005 6,165 175,389 - ------------------------------------------------------------------------------------------------------------------------------------ 83 92.70% 5/11/2005 775,000 187,653 84 4,250 10/31/2010 100.00% 1/5/2006 1,175 4,243 54,210 85 6,366 1/31/2007 100.00% 1/24/2006 1,470 7,349 27,136 86 7,951 2/29/2012 97.61% 6/30/2005 935 2,337 78,000 87 6,421 4/30/2011 92.20% 9/30/2005 1,441 250,000 7,205 43,979 - ------------------------------------------------------------------------------------------------------------------------------------ 88 9,520 1/4/2010 95.49% 10/1/2005 1,465 170,000 4,167 83,333 89 12,752 1/31/2009 95.12% 10/1/2005 2,117 5,425 176,418 90 70.00% 10/31/2005 5,394 47,813 91 100.00% 1/1/2006 2,005 600,000 20,812 91.1 16,714 6/30/2013 100.00% 1/1/2006 - ------------------------------------------------------------------------------------------------------------------------------------ 91.2 100.00% 1/1/2006 92 69.10% 10/31/2005 5,534 59,425 93 100.00% 11/1/2005 1,022 4,167 41,403 94 90.80% 11/1/2005 7,021 64,636 95 13,397 9/30/2009 98.44% 9/14/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 96 83.43% 9/30/2005 7,712 64,850 97 91.28% 12/1/2005 38,700 9,159 98 78.67% 9/30/2005 7,972 133,000 99 5,996 6/30/2010 92.65% 12/1/2005 765 3,136 53,227 100 2,980 10/31/2010 95.77% 1/4/2006 72,861 - ------------------------------------------------------------------------------------------------------------------------------------ 101 94.06% 9/23/2005 6,000 253,780 102 97.67% 8/17/2005 2,708 28,538 103 82.09% 9/30/2005 1,066 11,352 104 100.00% 9/2/2005 647 2,156 89,249 105 7,723 5/31/2015 86.34% 1/18/2006 8,717 - ------------------------------------------------------------------------------------------------------------------------------------ 106 79.42% 10/31/2005 634,503 13,470 37,900 107 12,000 1/31/2009 85.43% 8/30/2005 108 5,650 10/31/2011 90.66% 9/12/2005 961 2,882 40,963 109 68.31% 12/31/2005 4% of monthly gross revenues 11,274 110 2,510 6/30/2007 80.09% 9/30/2005 1,934 100,000 93,293 - ------------------------------------------------------------------------------------------------------------------------------------ 111 100.00% 9/28/2005 567 3,780 75,109 112 11,391 5/30/2010 99.25% 11/23/2005 1,531 650,000 11,714 29,758 113 6,843 3/31/2009 100.00% 10/27/2005 1,620 8,102 8,031 114 94.01% 9/20/2005 1,215 2,594 51,945 114.1 6,240 8/31/2010 83.25% 9/20/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 114.2 8,114 4/30/2006 100.00% 9/20/2005 115 100.00% 11/15/2005 116 10,460 7/31/2011 93.90% 10/1/2005 1,484 22,500 10,000 9,449 117 85.57% 2/1/2006 4,414 53,876 118 5,162 5/31/2009 100.00% 12/1/2005 949 3,165 - ------------------------------------------------------------------------------------------------------------------------------------ 119 74.15% 7/31/2005 4% of monthly gross revenues 120 78.90% 7/31/2005 4% of monthly gross revenues 20,616 121 92.31% 11/30/2005 2,708 50,672 122 3,200 10/31/2007 100.00% 11/30/2005 575 1,811 15,065 123 100.00% 10/11/2005 5,510 - ------------------------------------------------------------------------------------------------------------------------------------ 124 100.00% 12/20/2005 125 98.13% 9/25/2005 3,333 17,935 126 100.00% 9/2/2005 550 127 1,862 2/28/2012 88.88% 1/9/2006 631 3,521 9,934 128 4,138 9/30/2006 100.00% 10/27/2005 1,213 4,899 31,846 - ------------------------------------------------------------------------------------------------------------------------------------ 129 77.10% 10/26/2005 991 14,738 130 92.50% 1/26/2006 2,000 60,660 131 65.54% 11/30/2005 21,754 18,399 132 2,921 6/30/2006 94.50% 11/30/2005 673 1,000 39,325 133 1,500 7/31/2010 100.00% 1/12/2006 250 122,230 1,665 27,353 - ------------------------------------------------------------------------------------------------------------------------------------ 134 12,842 7/15/2006 100.00% 10/31/2005 1,428 2,083 5,304 135 100.00% 4/3/2005 136 100.00% 10/20/2005 137 100.00% 6/13/2005 382 138 92.00% 12/16/2005 1,067 11,640 - ------------------------------------------------------------------------------------------------------------------------------------ 139 4,585 4/30/2006 92.77% 10/6/2005 900 210,000 6,508 140 7,112 9/30/2010 100.00% 1/10/2006 1,484 32,744 141 5,578 9/6/2009 100.00% 8/30/2005 108,249 142 91.00% 12/21/2005 2,267 6,148 143 1,569 7/31/2009 97.88% 10/13/2005 506 2,058 28,000 - ------------------------------------------------------------------------------------------------------------------------------------ 144 100.00% 4/3/2005 145 2,000 4/30/2011 100.00% 12/2/2005 9,000 50,000 81,660 146 100.00% 11/18/2005 558 2,167 17,782 147 4,000 9/30/2010 83.36% 8/23/2005 590 120,000 2,086 38,228 148 100.00% 12/16/2005 170 850 4,289 - ------------------------------------------------------------------------------------------------------------------------------------ 149 9,195 10/31/2010 100.00% 9/15/2005 684 150 2,108 10/31/2009 100.00% 10/13/2005 670 2,512 12,839 151 76.80% 10/26/2005 1,073 44,829 152 94.88% 1/4/2006 615 17,787 153 4,400 9/30/2015 100.00% 10/31/2005 240 343,250 833 36,000 - ------------------------------------------------------------------------------------------------------------------------------------ 154 75.80% 5/31/2005 4% of monthly gross revenues 10,177 155 100.00% 9/27/2005 265 156 68.80% 12/20/2005 7,377 33,417 157 100.00% 12/28/2005 415 158 3,960 5/31/2007 100.00% 1/24/2006 523 1,738 2,896 - ------------------------------------------------------------------------------------------------------------------------------------ 159 98.80% 12/1/2005 2,100 12,544 160 67.10% 5/31/2005 4% of monthly gross revenues 15,783 161 78.36% 7/31/2005 4% of monthly gross revenues 162 75.00% 5/31/2005 4% of monthly gross revenues 21,956 163 800 7/31/2012 100.00% 8/31/2005 115 1,487 6,212 - ------------------------------------------------------------------------------------------------------------------------------------ 164 64.90% 5/31/2005 4% of monthly gross revenues 7,237 165 77.70% 10/31/2005 151,284 3,021 35,437 166 95.92% 10/11/2005 1,020 2,823 167 92.65% 9/27/2005 58,621 168 100.00% 1/5/2006 1,135 - ------------------------------------------------------------------------------------------------------------------------------------ 169 100.00% 11/10/2005 599 1,780 170 96.52% 9/26/2005 52,907 171 2,750 11/30/2006 78.97% 10/31/2005 922 100,000 3,363 27,252 172 1,730 1/31/2009 90.39% 8/8/2005 214 1,426 5,629 173 100.00% 9/1/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 174 100.00% 9/7/2005 175 1,866 10/15/2010 100.00% 1/31/2006 284 488,805 551 176 74.40% 10/25/2005 755 5,386 177 2,420 10/22/2006 92.55% 12/6/2005 269 1,289 178 2,249 4/30/2014 91.69% 11/30/2005 226 1,488 28,482 - ------------------------------------------------------------------------------------------------------------------------------------ 179 2,800 11/30/2008 95.53% 9/30/2005 389 2,595 40,379 180 836 12/31/2009 100.00% 10/1/2005 306 490 181 100.00% 8/31/2005 3,029 67,229 182 4,262 5/31/2008 100.00% 12/19/2005 886 833 19,142 183 4,500 12/31/2012 100.00% 8/31/2005 364 150,000 22,789 - ------------------------------------------------------------------------------------------------------------------------------------ 184 1,710 6/30/2015 86.69% 10/25/2005 156 1,042 4,232 185 100.00% 8/5/2005 573 186 100.00% 10/31/2005 32,550 187 1,800 8/31/2008 88.68% 9/16/2005 221 833 17,795 188 80.00% 10/13/2005 625 27,726 - ------------------------------------------------------------------------------------------------------------------------------------ 189 97.92% 9/25/2005 2,000 7,908 190 95.83% 11/7/2005 1,500 8,284 191 4,570 2/28/2010 100.00% 11/29/2005 667 1,553 6,717 192 100.00% 11/9/2005 193 95.83% 11/17/2005 1,500 27,650 - ------------------------------------------------------------------------------------------------------------------------------------ 194 67.70% 10/26/2005 971 31,583 195 3,200 2/28/2011 91.11% 10/28/2005 225 48,000 1,250 10,729 196 100.00% 8/31/2005 2,500 197 73.84% 5/31/2005 4% of monthly gross revenues 10,234 MONTHLY UPFRONT MONTHLY UPFRONT OTHER TAX INSURANCE INSURANCE ENGINEERING OTHER RESERVES ID RESERVES RESERVES RESERVES RESERVE RESERVES DESCRIPTION - ------------------------------------------------------------------------------------------------------------------------------------ 1 287,805 2,600,000 216,667 6,516,000 2 3 4 46,529 20,625 5 58,607 23,811 7,937 - ------------------------------------------------------------------------------------------------------------------------------------ 6 9,605,470 Required Income TI/LC Reserve (6,665,470); Co-tenancy Reserve (2,940,000) 7 90,963 649,185 1,162,013 New World Pasta LOC ($1,000,000), Tenant Holdback Funds ($162,012.98) 7.1 7.2 7.3 - ------------------------------------------------------------------------------------------------------------------------------------ 7.4 57,867 66,046 12,657 8 22,053 49,131 7,019 9 35,815 16,915 5,638 10 81,042 78,679 31,181 Outstanding Issues Escrow - ------------------------------------------------------------------------------------------------------------------------------------ 11 12 29,157 84,398 7,033 686,623 Free Rent & TI Reserve 13 55,129 45,000 CSC Rent Abatement Reserve 14 34,807 41,367 5,171 2,446,969 Shire Space Releasing Reserve / Debt Service Holdback Reserve ($2,000,000), Rent Abatement Reserve ($446,969) 15 - ------------------------------------------------------------------------------------------------------------------------------------ 15.1 15.2 16 65,954 1,541,870 17 18 67,560 28,230 9,410 500,000 750,000 Operating Deficit Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 19 93,291 4,573 4,573 1,690,710 Amex Lease Reserve 61,454 20 26,798 21 9,479 22 9,210 - ------------------------------------------------------------------------------------------------------------------------------------ 23 7,711 24 8,256 25 3,000,000 Conexant Security Deposit LOC 26 17,652 21,602 10,801 - ------------------------------------------------------------------------------------------------------------------------------------ 27 28 29 30 31 61,941 60,860 5,533 37,250 - ------------------------------------------------------------------------------------------------------------------------------------ 32 164,328 Elevator Modernization Reserve 33 35,234 105,740 11,555 23,006 33.1 33.2 34 27,679 11,623 11,623 800,000 Renovation Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 35 36 66,389 73,024 9,265 36.1 36.2 37 17,444 46,311 5,789 - ------------------------------------------------------------------------------------------------------------------------------------ 38 52,484 39 22,323 38,966 3,542 40 44,523 50,963 8,494 400,000 41 15,323 24,192 4,838 29,913 1,300,000 Holdback Reserve 42 26,900 10,773 2,693 2,510,736 DSCR Reserve Holdback (2,336,035), Gap Rent Deposit (174,701) - ------------------------------------------------------------------------------------------------------------------------------------ 43 14,530 2,076 44 36,816 17,530 8,765 45 21,526 11,445 5,723 46 33,599 160,696.00 7,304.38 2,236 46.1 - ------------------------------------------------------------------------------------------------------------------------------------ 46.2 47 23,161 59,139 7,257 4,531 48 15,654 8,877 1,268 6,563 48.1 48.2 - ------------------------------------------------------------------------------------------------------------------------------------ 49 25,035 6,101 1,525 587,377 Certificate of Occupancy & Tenant Allowance 50 36,275 14,235 7,117 32,938 100,213 Wonko's and Wells Fargo Prepaid Rent Reserve 51 30,792 6,250 255,000 Annie Sez Termination Reserve 52 27,473 3,982 1,991 53 17,508 12,835 2,139 3,750 150,503 TI Holdback Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 33,061 16,281 8,141 102,875 1,820,000 Rehab Reserve 54 9,084 4,796 2,398 460,000 Rehab Reserve 55 8,097 4,555 2,278 6,250 570,000 Rehab Reserve 56 8,928 4,160 2,080 46,125 530,000 Rehab Reserve 57 6,953 2,770 1,385 50,500 260,000 Rehab Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 58 4,567 10,709 1,785 3,450,000 Holdback Reserve 59 32,823 21,568 2,696 60 50,517 38,035 9,509 250,000 Cash Management Agreement 61 31,104 7,797 7,797 200,000 Seasonality Reserve (LOC) 62 - ------------------------------------------------------------------------------------------------------------------------------------ 63 29,811 78,273 13,045 64 635,172 Holdback Reserve ($600,000), Wells Fargo and Banker's Bank TI/LC Holdback Reserve ($35,171.80) 65 16,671 676,782 Partial Release Parcel Reserve ($90,000), Ross Gap Rent Holdback Reserve ($120,416) and Jo-Ann's TI Holdback Reserve ($466,366) 66 21,458 278,804 Tenant Holdback Reserve ($272,246), Gap Rent Holdback Reserve ($6,557.50) 67 7,675 8,956 1,279 2,215,642 Holdback Reserve ($2,150,000); Da Yuan Enterprises Reserve ($49,410); CitiFinancial Reserve ($11,440); Kevah Juice Reserve ($4,792) - ------------------------------------------------------------------------------------------------------------------------------------ 68 69 27,143.83 346,918 627,446 Upgrade Reserve 69.1 69.2 69.3 - ------------------------------------------------------------------------------------------------------------------------------------ 69.4 69.5 70 10,175 10,306 5,153 71 37,735 72 15,941 39,416 4,084 164,173 - ------------------------------------------------------------------------------------------------------------------------------------ 73 22,108 8,662 4,331 74 10,410 2,875 411 75 9,917 17,558 2,195 563 76 77 8,002 2,767 2,767 25,000 Post Closing TI Holdback - ------------------------------------------------------------------------------------------------------------------------------------ 78 14,859 26,489 2,649 79 15,612 8,548 1,068 80 21,771 18,154 6,051 48,438 81 82 29,231 35,188 5,027 3,750 - ------------------------------------------------------------------------------------------------------------------------------------ 83 18,765 23,223 11,611 900,000 DSCR Holdback Reserve 84 11,626 20,765 3,461 85 13,568 7,865 1,787 86 13,000 49,376 8,229 592,585 Post Closing TI Holdback Reserve ($525,268.75), Gap Rent Holdback Reserve ($65,982.63) and Debt Service Payment Holdback Reserve ($1,333.45) 87 21,990 1,641 1,641 15,795 - ------------------------------------------------------------------------------------------------------------------------------------ 88 20,833 44,130 11,360 89 14,701 32,909 8,227 221,250 90 8,044 91 20,812 8,363 2,091 91.1 - ------------------------------------------------------------------------------------------------------------------------------------ 91.2 92 11,045 93 10,705 3,872 968 20,000 Outstanding Issue: Final C of O 94 250,000 1,300,000 Debt Service Holdback Reserve (LOC) 95 55,000 Pretium TI Holdback Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 96 12,030 2,050 97 9,159 23,005 2,092 98 12,030 99 9,049 22,022 1,694 100 7,286 14,852 2,122 - ------------------------------------------------------------------------------------------------------------------------------------ 101 23,071 22,972 4,594 69,081 102 14,269 103 11,352 3,946 1,315 104 17,850 2,000 2,000 105 2,906 9,785 979 2,090,000 DSCR Holdback Reserve (LOC) - ------------------------------------------------------------------------------------------------------------------------------------ 106 12,633 15,200 500 Environmental Remediation Reserve 107 108 13,654 2,868 1,434 865,000 Murphy Lease Deposit ($355,000), Murphy & SVBP West TI Reserve ($510,000) 109 5,637 5,000 110 11,662 48,417 4,035 18,636 - ------------------------------------------------------------------------------------------------------------------------------------ 111 8,345 1,276 1,276 112 7,439 2,384 2,384 100,000 44,472 Gap Rent Holdback 113 8,031 13,473 1,925 114 6,493 9,187 1,021 5,625 82,500 Master Lease Reserve 114.1 - ------------------------------------------------------------------------------------------------------------------------------------ 114.2 115 605,250 Gap Rent Deposit ($262,000) and TI/LC Deposit ($343,250) 116 9,449 15,680 1,206 136,500 Buildout of the ADI Suite 117 8,980 20,139 1,679 14,750 118 5,987 2,460 2,460 5,000 4,000 Wraps and Things TI Holdback Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 119 10,779 28,219 14,109 904,365 Renovation Reserve 120 6,872 121 20,063 122 3,013 2,981 1,491 21,056 133,313 Wilmington Piano Reserve (100,000); TH Liquor Replacement 123 14,063 Reserves (33,313). - ------------------------------------------------------------------------------------------------------------------------------------ 124 125 5,978 29,010 2,901 126 127 9,934 7,835 979 128 31,846 12,483 2,497 104,875 - ------------------------------------------------------------------------------------------------------------------------------------ 129 14,738 130 8,666 12,048 1,721 131 18,399 70,829 5,314 44,650 Seasonal Reserve 132 6,554 4,730 719 133 9,118 907 907 166,187 Unopened Tenants Gap Rent Holdback Reserve ($111,201), Gap Rent Holdback Reserve ($54,986 ) - ------------------------------------------------------------------------------------------------------------------------------------ 134 5,304 3,183 1,592 37,650 135 573 286 136 137 72,483 Best Buy Rent Reserve 138 3,880 6,296 787 - ------------------------------------------------------------------------------------------------------------------------------------ 139 6,508 54,099 4,508 140 5,457 5,645 1,411 10,000 Outstanding Issues Escrow 141 10,825 142 6,148 1,488 1,488 143 9,333 4,028 1,343 - ------------------------------------------------------------------------------------------------------------------------------------ 144 341 179 145 6,000 Free Rent Reserve 146 6,444 2,324 775 100,000 Certificate of Occupancy 147 9,557 20,482 2,560 148 4,289 4,650 664 25,000 CO Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 149 150 3,210 11,327 1,030 93,563 151 11,207 152 3,558 1,606 536 153 7,200 559 280 247,625 Dippin Dots/ Rick's Carpet Occupancy Reserve ($207,000); Gap Rent Holdback Reserve ($40,625.00) - ------------------------------------------------------------------------------------------------------------------------------------ 154 2,544 155 156 8,354 157 5,184 2,788 1,394 7,313 158 2,896 7,600 691 130,237 11,310 Payless Holdback Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 159 2,509 2,879 2,879 16,375 160 5,261 192,924 Seasonality Reserve 161 10,140 99,091 9,008 36,000 Seasonality Reserve 162 5,489 163 6,212 75,000 Roma Tenant Reserve - ------------------------------------------------------------------------------------------------------------------------------------ 164 1,809 165 8,859 18,242 4,561 166 2,823 2,990 997 267,659 Holdback Reserve ($225,000), DWR Gap Rent Reserve ($41,195), 167 5,862 609,412 Urchin Gap Rent Reserve ($1,464) 168 23,863 - ------------------------------------------------------------------------------------------------------------------------------------ 169 170 5,291 367,480 171 5,451 1,731 577 172 2,815 2,071 518 173 - ------------------------------------------------------------------------------------------------------------------------------------ 174 5,000 Walgreens Reserve 175 3,225 7,345 816 176 5,386 177 2,552 11,060 1,005 3,750 178 4,069 655 655 571,000 Ground Rent Reserve ($350,000), DSCR Holdback Reserve ($121,000), The Gap Unfunded TI Reserve ($100,000) - ------------------------------------------------------------------------------------------------------------------------------------ 179 3,365 405 405 1,563 10,000 Lease Escrow ($5,000), Post Closing Obligation Reserve ($5,000) 180 3,306 2,263 2,263 181 11,205 2,340 585 182 6,381 10,813 1,352 124,850 183 3,874 2,806 702 - ------------------------------------------------------------------------------------------------------------------------------------ 184 4,232 367 367 125,227 Desert Sun Free Rent Holdback Reserve ($19,953.32) and Holdback Reserve ($105,273.56) 185 186 10,391 7,500 187 3,559 3,875 646 188 4,374 12,137 1,214 - ------------------------------------------------------------------------------------------------------------------------------------ 189 3,954 4,199 2,100 1,500 190 8,284 9,797 1,959 191 3,359 3,365 1,122 62,500 Occupancy Reserve 192 1,875 193 3,950 - ------------------------------------------------------------------------------------------------------------------------------------ 194 7,896 195 2,146 4,685 390 196 2,838 2,323 197 2,558 ENVIRONMENTAL REPORT ENGINEERING ID DATE REPORT DATE SPONSOR - ------------------------------------------------------------------------------------------------------------------------------------ 1 6/29/2005 8/30/2005 Stellar Management and Rockpoint Group, L.L.C. 2 12/15/2005 12/15/2005 The Macerich Company 3 11/16/2005 11/16/2005 EOP Operating Limited Partnership and Macquarie Office Trust 4 10/25/2005 9/7/2005 HEI Hospitality Fund, L.P. 5 10/14/2005 10/5/2005 Hyun J. Um, Rock Pointe Properties LLC - ------------------------------------------------------------------------------------------------------------------------------------ 6 1/5/2006 1/5/2006 Cornerstone Real Estate Advisors LLC 7 Various 12/12/2005 Corporate Office Properties, L.P. 7.1 12/12/2005 12/12/2005 7.2 12/12/2005 & 12/9/2005 12/12/2005 7.3 12/12/2005 12/12/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 7.4 12/12/2005 12/12/2005 Various Various Ezra Beyman; Sam Weiss 8 10/17/2005 10/17/2005 Ezra Beyman; Sam Weiss 9 10/19/2005 10/19/2005 Ezra Beyman; Sam Weiss 10 10/24/2005 10/21/2005 CB Richard Ellis Investors/U.S. Advisor, LLC - ------------------------------------------------------------------------------------------------------------------------------------ 11 12/1/2005 12/1/2005 Maguire Properties, Inc. and Macquarie Office Trust 12 12/11/2005 12/12/2005 Behringer Harvard REIT I, Inc. 13 8/31/2005 8/31/2005 Jonathan Keller 14 10/13/2005 10/12/2005 Jerold E. Williamson, Frank W. Mondell, Jr. 15 9/19/2005 9/16/2005 Shorenstein Realty Investors Seven, LP - ------------------------------------------------------------------------------------------------------------------------------------ 15.1 9/19/2005 9/16/2005 15.2 9/19/2005 9/16/2005 16 11/1/2005 12/12/2005 John Shane, Sandy Sigal 17 9/15/2005 9/15/2005 Herbert Krasnow, Harvey Schussler, Jesse Krasnow 18 10/12/2005 10/21/2005 Michael B. Smuck - ------------------------------------------------------------------------------------------------------------------------------------ 19 9/21/2005 9/23/2005 Saturn Property Investments, Northridge Capital, LLC 12/6/2005 12/12/2005 Windsor Investment Company, Inc. 20 12/6/2005 12/12/2005 Windsor Investment Company, Inc. 21 12/6/2005 12/12/2005 Windsor Investment Company, Inc. 22 12/6/2005 12/12/2005 Windsor Investment Company, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ 23 12/6/2005 12/12/2005 Windsor Investment Company, Inc. 24 12/6/2005 12/12/2005 Windsor Investment Company, Inc. 25 9/13/2005 9/2/2005 General Electric Capital Corporation 26 10/10/2005 10/10/2005 Charlene K. Getz, Robert L. Keen, John Radtke, Irwin Salin, David E. Madje and 8/26/2005 8/26/2005 Patricia Ann Madje, John Saunders Ruben Poplawski - ------------------------------------------------------------------------------------------------------------------------------------ 27 8/26/2005 8/26/2005 Ruben Poplawski 28 8/26/2005 8/26/2005 Ruben Poplawski 29 8/26/2005 8/26/2005 Ruben Poplawski 30 8/26/2005 8/26/2005 Ruben Poplawski 31 9/28/2005 6/6/2005 L. Robert Lieb, Michael Sleeve - ------------------------------------------------------------------------------------------------------------------------------------ 32 8/29/2005 8/29/2005 Lionstone Partners, Ltd. (*but not a guarantor) 33 1/16/2006 1/16/2006 Mission Residential, LLC; Finlay Partners, LLC; Mission Nashville Leaseco, LLC 33.1 1/16/2006 1/16/2006 33.2 1/16/2006 1/16/2006 34 11/4/2005 11/4/2005 Russell Wilkinson and each TIC (Partition and Bankruptcy) - ------------------------------------------------------------------------------------------------------------------------------------ 35 9/22/2005 9/22/2005 Wachovia Corporation 36 Various 9/16/2005 Mission Residential, LLC; Finlay Partners, LLC, Mission NE Dallas Leaseco, LP 36.1 9/15/2005 9/16/2005 36.2 9/26/2005 9/16/2005 37 8/22/2005 9/15/2005 Clint W. Roberts, Norman C. Roberts, Evelyn C. Roberts - ------------------------------------------------------------------------------------------------------------------------------------ 38 10/26/2005 10/21/2005 Adam Ifshin (is not individually a guarantor, but is a principal of Borrower) 39 10/24/2005 10/25/2005 BNP Residential Properties, Inc. 40 11/11/2005 11/17/2005 Michael B. Smuck 41 11/17/2005 11/17/2005 Indian Lakes Management III, LLC 42 7/6/2005 10/27/2005 Carveouts to Bradley N. Blake, Carveouts to L. Gerald Hunt, NAP - ------------------------------------------------------------------------------------------------------------------------------------ 43 9/21/2005 9/21/2005 Alfonso A. Costa 44 6/9/2005 6/11/2005 Luke W. McCarthy, Michael W. Palmer, NAP 45 8/17/2005 8/16/2005 Chad Christensen 46 9/19/2005 9/20/2005 Carlton P. Cabot & Cabot Trafalgar/Avion Leasco LLC, a Delaware limited liability company & individual TIC sponsors for each TIC borrower 46.1 9/19/2005 9/20/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 46.2 9/19/2005 9/20/2005 47 10/19/2005 10/19/2005 Mission Residential, LLC 48 12/13/2005 12/9/2005 Kenneth L. Shimm 48.1 12/13/2005 12/9/2005 48.2 12/13/2005 12/9/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 49 11/3/2005 10/24/2005 Douglas M. Etkin, James A. Ketai 50 8/19/2005 9/30/2005 The William Benstein QTIP Trust, RBC Miller Brothers Trust 51 12/5/2005 12/5/2005 Nathan Shmalo; Frederick S. Fish 52 6/19/2005 6/20/2005 Joel Buchanan 53 7/28/2005 7/27/2005 Joseph A. Sutton, Jr., Robert I. Scheer - ------------------------------------------------------------------------------------------------------------------------------------ 12/13/2005 Various Wilkinson Group, Inc., CGR Realty Investors LLC 54 12/13/2005 12/9/2005 Wilkinson Group, Inc., CGR Realty Investors LLC 55 12/13/2005 12/9/2005 Wilkinson Group, Inc., CGR Realty Investors LLC 56 12/13/2005 12/13/2005 Wilkinson Group, Inc., CGR Realty Investors LLC 57 12/13/2005 12/14/2005 Wilkinson Group, Inc., CGR Realty Investors LLC - ------------------------------------------------------------------------------------------------------------------------------------ 58 8/2/2005 8/2/2005 Mark Frost; Jess Frost 59 12/12/2005 12/12/2005 Michael Grunberg and Fanny Grunberg 60 12/7/2005 12/5/2005 US Advisor, LLC/CBREI 61 6/7/2005 6/7/2005 Ronald Gray, Claudine Gray 62 12/16/2005 12/16/2005 Brandywine Operating Partnership, LP / International Business Machines Corporation - ------------------------------------------------------------------------------------------------------------------------------------ 63 11/28/2005 11/30/2005 Stephen A. Blumenthal; Carlos Lopez-Cantera 64 9/14/2005 9/14/2005 Oregon Public Employees Retirement Fund, NAP, NAP 65 9/9/2005 9/9/2005 Michael H. Mugel 66 6/22/2005 6/21/2005 Robert D. Scinto 67 11/14/2005 11/15/2005 Leslie Dunn; Stephen A. Kollins - ------------------------------------------------------------------------------------------------------------------------------------ 68 6/28/2005 6/28/2005 Spirit Finance Corporation, a Maryland corporation 69 10/12/2005 10/12/2005 Supertel Hospitality, Inc. 69.1 10/12/2005 10/12/2005 69.2 10/12/2005 10/12/2005 69.3 10/12/2005 10/12/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 69.4 10/12/2005 10/12/2005 69.5 10/12/2005 10/12/2005 70 8/9/2005 9/20/2005 Tom Delahanty, Jacob Blatt, Dan Shapira 71 11/14/2005 11/14/2005 Trylons 42, L.L.C. c/o Tishman Speyer Properties, L.P. 72 10/24/2005 10/25/2005 BNP Residential Properties, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ 73 9/30/2005 9/30/2005 Russell Wilkinson 74 8/30/2005 10/5/2005 James Haddad, Jeffery Gindi, Raymond Gindi 75 10/28/2005 10/28/2005 Thomas G. Kappler, Jeffrey H. Berman 76 9/13/2005 9/13/2005 Mark G. Caldwell 77 6/13/2005 6/15/2005 Direct Invest, L.L.C. - ------------------------------------------------------------------------------------------------------------------------------------ 78 11/30/2005 11/30/2005 David F. Couch; Robert C. Collett; Charlie J. Dulin, Jr.; George Cornelson 79 8/15/2005 8/11/2005 R. Dixon H. Harvey Jr. 80 12/7/2005 12/8/2005 Richard A. Hayden, Yee Ling Hayden 81 10/5/2005 10/4/2005 Sunil Bhojwani, Ramesh Bhojwani 82 7/22/2005 7/22/2005 Thomas J. Thomson - ------------------------------------------------------------------------------------------------------------------------------------ 83 7/6/2005 7/6/2005 Chad Christensen 84 12/12/2005 12/8/2005 Kenneth L. Shimm 85 7/18/2005 7/18/2005 Bresler & Reiner, Inc. 86 4/15/2005 4/14/2005 Ronald Turner 87 8/15/2005 8/18/2005 James M. Clark - ------------------------------------------------------------------------------------------------------------------------------------ 88 12/16/2005 11/28/2005 Julius J. Szabo 89 7/18/2005 7/18/2005 Samuel Feinerman, The Lembo Family Trust Dated April 19, 1990 90 12/7/2005 12/5/2005 Corporex Realty & Investment, LLC 91 12/8/2005 Various Gunther Lehmann 91.1 12/8/2005 12/9/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 91.2 12/8/2005 12/8/2005 92 12/7/2005 12/5/2005 William P. Butler 93 12/2/2005 12/8/2005 Gregory L. Butcher, William B. Armstrong 94 9/23/2004 9/17/2004 Myles D. Sampson, RIMCO Properties, Inc. 95 8/25/2005 8/25/2005 Oregon Public Employees Retirement Fund, NAP, NAP - ------------------------------------------------------------------------------------------------------------------------------------ 96 11/15/2005 12/6/2005 Douglas Artusio 97 10/24/2005 10/25/2005 BNP Residential Properties, Inc. 98 11/18/2005 12/7/2005 Douglas Artusio 99 12/22/2005 10/31/2005 Paul Makarechian 100 10/27/2005 10/27/2005 Charles R. Collier - ------------------------------------------------------------------------------------------------------------------------------------ 101 7/29/2005 9/20/2005 Hall Phoenix / Inwood, Ltd., Hall Financial Group, Ltd. 102 8/9/2005 8/9/2005 Clifford H. Sutherland, Dan L. Shearer, III, Steven B. Soloman 103 12/6/2005 11/26/2005 James A. Ketai, Douglas M. Etkin 104 7/20/2005 7/20/2005 Jeffery S. Novick 105 9/14/2005 9/15/2005 Timothy P. Nagy, Adolph V. Lombardi, MD and Gerald M. Rosenberg, MD - ------------------------------------------------------------------------------------------------------------------------------------ 106 12/9/2005 12/14/2005 B.F. Saul Real Estate Investment Trust 107 9/9/2005 9/9/2005 RAMCO/LION VENTURE L.P., a Delaware limited partnership 108 10/7/2005 10/7/2005 J. Patrick Davis, Richard E. Fitzpatrich, James T. Hay, James F. Quigley, Laura W. Nathanson, Gary Marx, Margaret Marx 109 11/30/2005 11/29/2005 Ratnam V. Patel and Pranav V. Patel 110 7/26/2005 7/25/2005 Nathan Leanse - ------------------------------------------------------------------------------------------------------------------------------------ 111 9/1/2005 9/1/2005 Jonathan Parker, Thomas M. Monahan 112 7/7/2005 6/27/2005 Direct Invest, L.L.C. 113 10/4/2005 9/30/2005 David Israel 114 7/12/2005 6/21/2005 Eri S. Kroh, Gregory A. Sackler, John B. Bertram 114.1 7/12/2005 6/21/2005 - ------------------------------------------------------------------------------------------------------------------------------------ 114.2 7/12/2005 6/21/2005 115 10/25/2005 10/25/2005 David Katz 116 10/5/2005 10/5/2005 Michele Nasatir, Andrea & Monroe Rosenthal, Victoria & David Rosenstein 117 11/30/2005 10/18/2005 Lawrence S. Connor 118 7/18/2005 7/19/2005 Dante Massaro, Will Obeid, Christopher LaMack - ------------------------------------------------------------------------------------------------------------------------------------ 119 9/29/2005 9/29/2005 Thomas W. Staed 120 8/23/2005 8/23/2005 Haribhai K. Thakkar, Dilip R. Desai, NAP 121 10/17/2005 10/3/2005 Chris A. Bowden, Charles P. Gendron, Daniel E. Smith 122 12/9/2005 12/9/2005 Andrew L. Miller 123 11/1/2005 11/1/2005 Naty Saidoff - ------------------------------------------------------------------------------------------------------------------------------------ 124 11/9/2005 12/15/2005 Billerica Road, LLC 125 9/22/2005 9/22/2005 Malcolm MacNaughton 126 9/15/2005 9/15/2005 Dave Campbell 127 3/30/2005 10/3/2005 Steven A. Cohen 128 9/20/2005 9/21/2005 Peter Palandjian - ------------------------------------------------------------------------------------------------------------------------------------ 129 11/21/2005 11/11/2005 Michael F. Lackland, Bruce W. Lackland, Linda Lackland Von Thaden 130 12/16/2005 12/16/2005 Thomas F. Taft 131 12/9/2005 12/21/2005 C. Joseph Blackbourn 132 12/5/2005 11/18/2005 James R. Stokes 133 8/30/2005 8/30/2005 Dominic Guadagno, Severina Guadagno - ------------------------------------------------------------------------------------------------------------------------------------ 134 8/11/2005 10/26/2005 Francis Greenburger 135 3/25/2005 3/23/2005 Roger Saunders 136 8/19/2005 8/22/2005 Anthony Mammon, Michael Mammon, Laurence Mammon 137 7/26/2005 7/26/2005 Larry L. Nifong 138 9/2/2005 9/2/2005 H.J. Howard - ------------------------------------------------------------------------------------------------------------------------------------ 139 9/8/2005 8/15/2005 Patrick A. Baldoni 140 12/2/2005 11/28/2005 Marvin Lustbader, Howard Ruskin 141 8/25/2005 8/25/2005 Robert H. Johnson 142 10/12/2005 10/12/2005 Tucker Farms, Inc.; Ralph C Tucker, Jr. 143 7/29/2005 7/28/2005 Robert T. Rasmussen, Philip Corcoran, Charles Wolande - ------------------------------------------------------------------------------------------------------------------------------------ 144 3/25/2005 3/21/2005 Roger Saunders 145 11/8/2005 11/10/2005 David Bawabeh 146 11/3/2005 11/11/2005 Anthony DiGiorgio, Tracy DiGiorgio, Greg Chila, Rosanna Chila 147 8/22/2005 8/23/2005 James A. Rudolph, William C. Rudolph, NAP 148 12/7/2005 12/7/2005 Aby Rosen & Michael Fuchs - ------------------------------------------------------------------------------------------------------------------------------------ 149 9/19/2005 9/16/2005 Larry L. Nifong 150 10/3/2005 10/3/2005 Rodney Freeman 151 11/10/2005 11/11/2005 Michael F. Lackland, Bruce W. Lackland, Linda Lackland Von Thaden 152 11/18/2005 11/23/2005 David M. Dufenhorst 153 9/6/2005 9/6/2005 Patrick J. Kelly, Paul J. Howe - ------------------------------------------------------------------------------------------------------------------------------------ 154 8/23/2005 8/23/2005 Keith D. Stephens 155 8/19/2005 8/18/2005 Steve Berzansky, David Peery 156 11/3/2005 12/22/2005 Donald C. Slawson 157 11/7/2005 11/7/2005 Louis Schainuck 158 4/11/2005 4/8/2005 Moshen Sharif, Albert Minoofar and Mark Vakili - ------------------------------------------------------------------------------------------------------------------------------------ 159 11/4/2005 10/29/2005 Michael S. Purzycki 160 8/24/2005 8/23/2005 Keith D. Stephens 161 9/29/2005 9/29/2005 Thomas W. Staed 162 8/23/2005 8/23/2005 Keith D. Stephens 163 4/8/2005 4/13/2005 Pierre Heafey and Gino Falsetto - ------------------------------------------------------------------------------------------------------------------------------------ 164 8/22/2005 8/23/2005 Keith D. Stephens 165 10/22/2005 10/12/2005 David Roberts 166 6/23/2005 5/25/2005 Jeffery Wysong 167 4/19/2005 4/19/2005 Neil D. Ginsberg, W. Leonard Blevins 168 10/25/2005 1/9/2006 Elaine G. Milestone - ------------------------------------------------------------------------------------------------------------------------------------ 169 9/27/2005 9/27/2005 David C. Nutting 170 4/19/2005 4/19/2005 Neil D. Ginsberg, W. Leonard Blevins 171 11/14/2005 11/14/2005 Craig Burrows and Juliana Burrows 172 7/1/2005 7/1/2005 David Israel 173 7/27/2005 7/27/2005 Rubin Salant - ------------------------------------------------------------------------------------------------------------------------------------ 174 8/22/2005 8/29/2005 Greg Manocherian 175 11/30/2005 12/2/2005 Philip H. Davis 176 11/16/2005 11/11/2005 Michael F. Lackland, Bruce W. Lackland, Linda Lackland Von Thaden 177 11/15/2005 11/11/2005 Iraj Shamtoubi 178 4/29/2005 4/29/2005 Jesse Krasnow, Malka Shalit - ------------------------------------------------------------------------------------------------------------------------------------ 179 4/20/2005 4/18/2005 Gary Eplan, David Barr 180 10/12/2005 10/10/2005 Penelope M. Glassmeyer 181 6/14/2005 7/8/2005 Andrew Hochberg, Mac Blum, Robert Caplin 182 11/18/2005 11/11/2005 David E. Noon, H. Richard Noon 183 10/10/2005 10/14/2005 Michael J. Sidley - ------------------------------------------------------------------------------------------------------------------------------------ 184 10/11/2005 10/11/2005 Joseph S. Mezistrano, Stanley L. Sidell 185 7/25/2005 6/30/2005 Roger Miller, Marilyn Miller, Owen Carlson 186 11/18/2005 11/22/2005 Tara Close Apartments Corp. 187 11/10/2005 11/14/2005 Bruce I. Ash 188 9/29/2005 9/29/2005 Robert M. Gibbs - ------------------------------------------------------------------------------------------------------------------------------------ 189 9/23/2005 9/26/2005 Malcolm MacNaughton 190 10/27/2005 10/22/2005 Randy I. Westby 191 12/2/2005 12/2/2005 D. Scott McLain; Naranjana Patel; Terrell A. Miller; Geraldine P. McLain 192 12/29/2005 11/7/2005 3165 Owners Corp. 193 11/4/2005 12/6/2005 John S. Rosenberg, Linda A. Green, Alfred Kahn III - ------------------------------------------------------------------------------------------------------------------------------------ 194 11/17/2005 11/11/2005 Michael F. Lackland, Bruce W. Lackland, Linda Lackland Von Thaden 195 12/6/2005 11/26/2005 Phuoc B. Vu, Hoan T. Le 196 11/8/2005 10/25/2005 Herald M. Hersch, Jeffrey Laruen, Marc Silverman 197 8/23/2005 8/23/2005 Keith D. Stephens
FOOTNOTES TO ANNEX A-1
1. | GACC – German American Capital Corporation, CGM — Citigroup Global Markets Realty Corp., PNC - PNC Bank, National Association. |
2. | The Administrative Fee Rate includes the primary servicing fee, master servicing fee, correspondent fee, sub-servicing fee and trustee fees applicable to each mortgage loan. |
3. | 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. |
4. | With respect to the lockbox, ‘‘Hard’’ means each tenant is required to transfer its rent directly to the lockbox account; ‘‘Soft’’ means that the borrower or property manager collects rents from the tenants and then the borrower or property manager is required to deposit these rents into the lockbox account; ‘‘None at Closing, Springing Hard’’ or ‘‘Soft at Closing, Springing Hard’’ means that no lockbox or a soft lockbox, as applicable, exists at closing, but upon the occurrence of a trigger event, as defined in the related loan documents, each tenant will be instructed to transfer its rent directly to the lockbox account; "None at Closing, Springing Soft" means that no lockbox exists at closing, but upon occurrence of a trigger event, as defined in the related loan documents, a "Soft" lockbox (as described above) will take effect. |
5. | With respect to the mortgage loans known as : |
i. | Empirian at Steele Park, |
ii. | Colonnade at Germantown, |
iii. | Wynnwood Office Buildings and |
iv. | Trafalgar Square Apartments, |
each mortgage loan is recourse to the related sponsor (up to $4,800,000, $3,625,000, $2,000,000, and $500,000, respectively, which amount may be reduced under certain circumstances) until the related mortgaged property achieves a minimum DSCR of 1.25x (or 1.20x, with respect to Trafalgar Square Apartments). The DSCR for the related Mortgage Loan is shown throughout this prospectus supplement at 1.25x (or 1.20x, with respect to Trafalgar Square Apartments), reflecting the threshold at which the full recourse guaranty will be released.
The current calculated underwritten DSCR during the related initial interest only period for the Empirian at Steele Park, Colonnade at Germantown and Wynwood Office Buildings mortgage loans is 1.27x, 1.26x and 1.31x, respectively. The current calculated underwritten DSCR during the related amortization period for the Empirian at Steele Park, Colonnade at Germantown, Wynwood Office Buildings and Trafalgar Square Apartments mortgage loans is 1.06x, 1.05x, 1.08x and 1.13x, respectively.
With respect to the mortgage loans known as:
i. | Hawthorne Exchange, |
ii. | Galleria Pavilion, |
iii. | Indian Lakes Apartments, |
iv. | New Albany Medical Office Building and |
v. | Story and King Plaza, |
DSCR was calculated after netting out holdback reserve amounts for the applicable mortgage loan.
With respect to the mortgage loans known as:
i. | Birnam Wood Apartments and |
A-1-2
ii. | Oxford Apartments, |
amounts have been escrowed until certain conditions under the mortgage loan have been met. The DSCR for these mortgage loans is shown assuming these conditions under the respective mortgage loan have been met.
6. | With respect to the mortgage loans known as: |
i. | Hawthorne Exchange, |
ii. | Galleria Pavilion, |
iii. | Indian Lakes Apartments and |
iv. | New Albany Medical Office Building, |
Cut-off Date LTV Ratio and LTV Ratio at Maturity were calculated after netting out holdback reserve amounts for the applicable mortgage loan.
7. | A. With respect to the Villas Parkmerced Pooled Trust Component which has subordinate companion loans and the related Villas Parkmerced Non-Pooled Trust Component, each of which is not included in the trust, the Cut-off Date LTV Ratio figures including the subordinate companion loans and the related Villas Parkmerced Non-Pooled Trust Component, each of which is 77.79%, and the DSCR figure is 1.30x. |
B. With respect to the mortgage loan known as Arrowhead Shopping Center, which has a subordinate companion loan not included in the trust, the Cut-off Date LTV Ratio figures including the subordinate companion loan is 84.89%, and the DSCR figure is 1.13x. |
8. | With respect to mortgage loans that are cross-collateralized and cross-defaulted, Cut-off Date LTV Ratio, LTV Ratio at Maturity, Loan per Net Rentable Area SF/Units and DSCR were calculated in the aggregate. |
9. | For those mortgaged properties indicated as Appraisal As-of Date beyond the Cut-off Date, the Appraised Value and the corresponding Appraisal As-of Date are based on stabilization. |
10. | Shown from the respective mortgage loan origination date. |
A-1-3
ANNEX A-2A
Certain Characteristics of the Multifamily Mortgage Loans
A-2A-1
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CD 2006-CD2 ANNEX A-2A - CERTAIN CHARACTERISTICS OF THE MULTIFAMILY AND MANUFACTURED HOUSING LOANS % OF MORTGAGE CUT-OFF INITIAL POOL # OF LOAN DATE ID PROPERTY NAME LOAN GROUP BALANCE PROPERTIES SELLER(1) BALANCE - --------------------------------------------------------------------------------------------------------------------- 1 Villas Parkmerced 2A 9.81% 1 GACC $300,000,000 117 Woodstock 2A 0.26% 1 GACC $8,000,000 GENERAL DETAILED PROPERTY PROPERTY ID TYPE TYPE ADDRESS CITY COUNTY STATE ZIP CODE - -------------------------------------------------------------------------------------------------------------------- 1 Multifamily Conventional 3711 19th Avenue San Francisco San Francisco CA 94132 117 Multifamily Conventional 5877 Ross Road Fairfield Butler OH 45014 NET LOAN PER NET RENTABLE RENTABLE AREA OCCUPANCY OCCUPANCY ELEVATOR(S) UTILITIES ID UNITS/PADS UNITS/PADS RATE AS-OF DATE (YES/NO) PAID BY TENANT - -------------------------------------------------------------------------------------------------------------------------------- 1 3,221 93,138.78 96.62% 10/31/2005 Yes None 117 194 41,237.11 85.57% 2/1/2006 No Electric, Water, Sewer STUDIOS 1 BEDROOM 2 BEDROOM ---------------------------------- ------------------------------------ ---------------------------------- # AVG RENT PER MAX # AVG RENT PER MAX # AVG RENT PER MAX ID Units mo. ($) Rent ($) Units mo. ($) Rent ($) Units mo. ($) Rent ($) - --------------------------------------------------------------------------------------------------------------------------------- 1 11 1,194 1,400 1,116 1,377 2,256 1,859 1,528 3,847 117 98 590 830 96 699 884 3 BEDROOM 4 BEDROOM 5 BEDROOM ---------------------------------- ------------------------------- -------------------------------------- # AVG RENT PER MAX # AVG RENT PER MAX # AVG RENT PER MAX ID UNITS MO. ($) RENT ($) UNITS MO. ($) RENT ($) UNITS MO. ($) RENT ($) - ------------------------------------------------------------------------------------------- -------------------------------------- 1 235 1,983 3,003 117
FOOTNOTES TO ANNEX A-2A