424B5 1 file001.txt PRELIMINARY MATERIALS The information contained in this prospectus supplement is not complete and may be changed. This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where such an offer or sale is not permitted. Filed Pursuant to Rule 424(b)(5) Registration File No.: 333-105805 SUBJECT TO COMPLETION, DATED SEPTEMBER 15, 2003 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED SEPTEMBER 15, 2003) $732,086,000 (APPROXIMATE) [GRAPHIC OMITTED] J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. DEPOSITOR COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-LN1 JPMORGAN CHASE BANK LASALLE BANK NATIONAL ASSOCIATION NOMURA CREDIT & CAPITAL, INC. MORTGAGE LOAN SELLERS ---------------- J.P. Morgan Chase Commercial Mortgage Securities Corp. is offering certain classes of the Series 2003-LN1 Commercial Mortgage Pass-Through Certificates, which represent the beneficial ownership interests in a trust. The trust's assets will primarily be 186 fixed rate mortgage loans secured by first liens on 199 commercial, multifamily and manufactured housing community properties and are generally the sole source of payments on the Series 2003-LN1 certificates. The Series 2003-LN1 certificates are not obligations of J.P. Morgan Chase Commercial Mortgage Securities Corp., the mortgage loan sellers or any of their respective affiliates, and neither the Series 2003-LN1 certificates nor the underlying mortgage loans are insured or guaranteed by any governmental agency or any other person or entity. ----------------
INITIAL PASS- ASSUMED EXPECTED INITIAL CLASS PASS- THROUGH FINAL RATINGS RATED FINAL CERTIFICATE THROUGH RATE DISTRIBUTION (MOODY'S/ DISTRIBUTION BALANCE (1) RATE DESCRIPTION DATE (3) S&P) (5) DATE (3) --------------- --------- ------------- -------------------- ----------- ----------------- Class A-1 ......... $258,300,000 % (6) June 15, 2013 Aaa/AAA October 15, 2037 Class A-2 ......... $380,415,000 % (6) September 15, 2013 Aaa/AAA October 15, 2037 Class B ........... $ 34,638,000 % (6) September 15, 2013 Aa2/AA October 15, 2037 Class C ........... $ 13,553,000 % (6) September 15, 2013 Aa3/AA- October 15, 2037 Class D ........... $ 30,120,000 % (6) September 15, 2013 A2/A October 15, 2037 Class E ........... $ 15,060,000 % (6) October 15, 2013 A3/A- October 15, 2037
---------- (Footnotes to table on page S-7) -------------------------------------------------------------------------------- YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE S-28 OF THIS PROSPECTUS SUPPLEMENT AND PAGE 9 OF THE PROSPECTUS. Neither the certificates nor the underlying mortgage loans are insured or guaranteed by any governmental agency or instrumentality or any other person or entity. The certificates will represent interests in the trust fund only. They will not represent interests in or obligations of the depositor, any of its affiliates or any other entity. -------------------------------------------------------------------------------- THE SECURITIES AND EXCHANGE COMMISSION AND STATE REGULATORS HAVE NOT APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS ARE TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. WILL NOT LIST THE OFFERED CERTIFICATES ON ANY SECURITIES EXCHANGE OR ON ANY AUTOMATED QUOTATION SYSTEM OF ANY SECURITIES ASSOCIATION. THE UNDERWRITERS, J.P. MORGAN SECURITIES INC., ABN AMRO INCORPORATED, NOMURA SECURITIES INTERNATIONAL, INC. AND CREDIT SUISSE FIRST BOSTON LLC, WILL PURCHASE THE OFFERED CERTIFICATES FROM J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. AND WILL OFFER THEM TO THE PUBLIC AT NEGOTIATED PRICES, PLUS, IN CERTAIN CASES, ACCRUED INTEREST, DETERMINED AT THE TIME OF SALE. J.P. MORGAN SECURITIES INC., ABN AMRO INCORPORATED AND NOMURA SECURITIES INTERNATIONAL, INC. ARE ACTING AS CO-LEAD MANAGERS FOR THIS OFFERING. CREDIT SUISSE FIRST BOSTON LLC IS ACTING AS CO-MANAGER FOR THIS OFFERING. J.P. MORGAN SECURITIES INC. IS ACTING AS SOLE BOOKRUNNER FOR THIS OFFERING. THE UNDERWRITERS EXPECT TO DELIVER THE OFFERED CERTIFICATES TO PURCHASERS IN BOOK-ENTRY FORM ONLY THROUGH THE FACILITIES OF THE DEPOSITORY TRUST COMPANY IN THE UNITED STATES AND CLEARSTREAM BANKING, SOCIETE ANONYME AND EUROCLEAR BANK, AS OPERATOR OF THE EUROCLEAR SYSTEM, IN EUROPE, AGAINST PAYMENT IN NEW YORK, NEW YORK ON OR ABOUT SEPTEMBER 30, 2003. WE EXPECT TO RECEIVE FROM THIS OFFERING APPROXIMATELY % OF THE INITIAL CERTIFICATE BALANCE OF THE OFFERED CERTIFICATES, PLUS ACCRUED INTEREST FROM SEPTEMBER 1, 2003, BEFORE DEDUCTING EXPENSES PAYABLE BY US. JPMORGAN ABN AMRO INCORPORATED [NOMURA LOGO] CREDIT SUISSE FIRST BOSTON SEPTEMBER , 2003 [LOGO] J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Commercial Mortgage Pass-Through Certificates, Series 2003-LN1 [MAP OF THE UNITED STATES OMITTED] ALASKA IDAHO UTAH 1 property 1 property 1 property $5,000,000 $1,099,098 $7,300,000 0.4% of total 0.1% of total 0.6% of total MONTANA MINNESOTA WISCONSIN 1 property 2 properties 6 properties $3,250,000 $15,616,088 $23,367,099 0.3% of total 1.3% of total 1.9% of total ILLINOIS INDIANA MICHIGAN 15 properties 2 properties 11 properties $45,823,788 $15,340,000 $76,650,210 3.8% of total 1.3% of total 6.4% of total PENNSYLVANIA NEW YORK OHIO 5 properties 7 properties 10 properties $30,418,517 $54,652,954 $36,133,774 2.5% of total 4.5% of total 3.0% of total MAINE NEW HAMPSHIRE MASSACHUSETTS 1 property 8 properties 4 properties $2,237,620 $16,564,654 $130,837,109 0.2% of total 1.4% of total 10.9% of total NEW JERSEY MARYLAND VIRGINIA 1 property 4 properties 5 properties $3,528,165 $79,646,001 $63,940,460 0.3% of total 6.6% of total 5.3% of total WEST VIRGINIA SOUTH CAROLINA NORTH CAROLINA 1 property 4 properties 8 properties $2,993,655 $10,145,799 $26,680,538 0.2% of total 0.8% of total 2.2% of total GEORGIA TENNESSEE FLORIDA 13 properties 5 properties 14 properties $60,413,314 $21,552,928 $85,634,769 5.0% of total 1.8% of total 7.1% of total ALABAMA KENTUCKY MISSISSIPPI 3 properties 1 property 4 properties $26,009,383 $11,326,686 $20,266,957 2.2% of total 0.9% of total 1.7% of total KANSAS TEXAS COLORADO 2 properties 21 properties 3 properties $11,913,310 $108,753,750 $10,010,674 1.0% of total 9.0% of total 0.8% of total NEW MEXICO ARIZONA NEVADA 1 property 11 properties 1 property $2,400,000 $49,126,497 $2,497,461 0.2% of total 4.1% of total 0.2% of total CALIFORNIA OREGON WASHINGTON 15 properties 1 property 4 properties $106,135,158 $3,771,347 $8,260,734 8.8% of total 0.3% of total 0.7% of total HAWAII [LEGEND OMITTED] 2 properties $25,488,828 2.1% of total ONE POST OFFICE SQUARE (Boston, MA) [Photo Omitted] IAC - BOSTON (Boston, MA) [Photo Omitted] TINDECO WHARF (Baltimore, MD) [Photo Omitted] SHERATON INNER HARBOR HOTEL (Baltimore, MD) [Photo Omitted] TOWER PLACE 200 (Atlanta, GA) [Photo Omitted] CHASEWOOD OFFICE PORTFOLIO (Houston, TX) [Photo Omitted] LILLIAN VERNON CORPORATION (Virginia Beach, VA) [Photo Omitted] METRO FOUR OFFICE BUILDING (Springfield, VA) [Photo Omitted] THE PRADO AT SPRING CREEK (Bonita Springs, FL) [Photo Omitted] IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS Information about the offered certificates 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 offered certificates; and (b) this prospectus supplement, which describes the specific terms of the offered certificates. If the terms of the offered certificates vary between this prospectus supplement and the accompanying prospectus, you should rely on the information contained in this prospectus supplement. You should rely only on the information contained in this prospectus supplement and the 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 contained in this prospectus supplement is accurate only as of the date of this prospectus supplement. This prospectus supplement begins with several introductory sections describing the Series 2003-LN1 certificates and the trust in abbreviated form: Summary of Certificates, commencing on page S-7 of this prospectus supplement, which sets forth important statistical information relating to the Series 2003-LN1 certificates; Summary of Terms, commencing on page S-9 of this prospectus supplement, which gives a brief introduction of the key features of the Series 2003-LN1 certificates and a description of the underlying mortgage loans; and Risk Factors, commencing on page S-28 of this prospectus supplement, which describe risks that apply to the Series 2003-LN1 certificates which are in addition to those described in the prospectus with respect to the securities issued by the trust generally. 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 offered certificates and this offering. The capitalized terms used in this prospectus supplement are defined on the pages indicated under the caption "Index of Principal Definitions" commencing on page S-157 of this prospectus supplement. The capitalized terms used in the prospectus are defined on the pages indicated under the caption "Index of Principal Definitions" commencing on page 108 of the prospectus. In this prospectus supplement, the terms "Depositor," "we," "us" and "our" refer to J.P. Morgan Chase Commercial Mortgage Securities Corp. S-3 TABLE OF CONTENTS
PAGE ---- SUMMARY OF CERTIFICATES ...................... S-7 SUMMARY OF TERMS ............................. S-9 RISK FACTORS ................................. S-28 Geographic Concentration Entails Risks .................................. S-28 Risks to the Mortgaged Properties Relating to Terrorist Attacks and Foreign Conflicts ...................... S-29 Risks Relating to Loan Concentrations...... S-29 Risks Relating to Enforceability of Cross-Collateralization ................ S-31 The Borrower's Form of Entity May Cause Special Risks .................... S-32 Ability To Incur Other Borrowings Entails Risk ........................... S-33 Borrower May Be Unable to Repay Remaining Principal Balance on Maturity Date or Anticipated Repayment Date ......................... S-35 Commercial and Multifamily Lending Is Dependent Upon Net Operating Income ................................. S-36 Tenant Concentration Entails Risk ......... S-37 Certain Additional Risks Relating to Tenants ................................ S-37 Mortgaged Properties Leased to Multiple Tenants Also Have Risks ....... S-38 Mortgaged Properties Leased to Borrowers or Borrower Affiliated Entities Also Have Risks ............... S-38 Tenant Bankruptcy Entails Risks ........... S-38 Mortgage Loans Are Nonrecourse and Are Not Insured or Guaranteed .......... S-39 Multifamily Properties Have Special Risks .................................. S-39 Retail Properties Have Special Risks ...... S-40 Office Properties Have Special Risks ...... S-41 Industrial Properties Have Special Risks .................................. S-42 Manufactured Housing Communities Have Special Risks ..................... S-42 Hotel Properties Have Special Risks ....... S-43 Risks Relating to Affiliation with a Franchise or Hotel Management Company ................................ S-44 Lack of Skillful Property Management Entails Risks .......................... S-45 Some Mortgaged Properties May Not Be Readily Convertible to Alternative Uses ....................... S-45
PAGE ---- Property Value May Be Adversely Affected Even When Current Operating Income Is Not ................ S-46 Mortgage Loans Secured By Leasehold Interests May Expose Investors To Greater Risks of Default and Loss ...... S-46 Limitations of Appraisals ................. S-47 Your Lack of Control Over the Trust Fund Can Create Risks .................. S-47 Potential Conflicts of Interest ........... S-47 Special Servicer May Be Directed to Take Actions ........................... S-48 Bankruptcy Proceedings Entail Certain Risks .................................. S-49 Risks Relating to Prepayments and Repurchases ............................ S-50 Mortgage Loan Sellers May Not Be Able to Make a Required Repurchase or Substitution of a Defective Mortgage Loan ................ S-52 Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions .................. S-52 Risks Relating to Borrower Default ........ S-52 Risks Relating to Interest on Advances and Special Servicing Compensation...... S-53 Risks of Limited Liquidity and Market Value .................................. S-53 Different Timing of Mortgage Loan Amortization Poses Certain Risks ....... S-53 Subordination of Subordinate Offered Certificates ........................... S-54 Environmental Risks Relating to the Mortgaged Properties ................... S-54 Tax Considerations Relating to Foreclosure ............................ S-55 Risks Associated with One Action Rules .................................. S-55 Risks Related to Enforceability ........... S-55 Potential Absence of Attornment Provisions Entails Risks ............... S-56 Property Insurance May Not Be Sufficient ............................. S-56 Zoning Compliance and Use Restrictions May Adversely Affect Property Value ......................... S-58 Risks Relating to Costs of Compliance with Applicable Laws and Regulations ............................ S-59
S-4
PAGE ---- No Reunderwriting of the Mortgage Loans ................................ S-59 Litigation or Other Legal Proceedings Could Adversely Affect the Mortgage Loans ....................... S-59 Risks Related to Book-Entry Registration ......................... S-59 Risks of Inspections Related to Properties ........................... S-59 Other Risks ............................. S-60 DESCRIPTION OF THE MORTGAGE POOL............ S-61 General ................................. S-61 Additional Debt ......................... S-62 The One Post Office Square Whole Loan ................................. S-66 Significant Mortgage Loans .............. S-69 ARD Loans ............................... S-71 Certain Terms and Conditions of the Mortgage Loans ....................... S-72 Additional Mortgage Loan Information .......................... S-78 The Mortgage Loan Sellers ............... S-81 JPMorgan Chase Bank ..................... S-81 LaSalle Bank National Association ....... S-81 Nomura Credit & Capital, Inc. ........... S-82 Underwriting Guidelines and Processes ............................ S-82 Representations and Warranties; Repurchases and Substitutions ........ S-83 Repurchase or Substitution of Cross-Collateralized Mortgage Loans ................................ S-87 Lockbox Accounts ........................ S-88 DESCRIPTION OF THE CERTIFICATES ............ S-89 General ................................. S-89 Paying Agent, Certificate Registrar and Authenticating Agent ................. S-91 Book-Entry Registration and Definitive Certificates ......................... S-92 Distributions ........................... S-94 Allocation of Yield Maintenance Charges .............................. S-106 Assumed Final Distribution Date; Rated Final Distribution Date ........ S-107 Subordination; Allocation of Collateral Support Deficit ...................... S-108 Advances ................................ S-110 Appraisal Reductions .................... S-112 Reports to Certificateholders; Certain Available Information ................ S-114
PAGE ---- Voting Rights ........................... S-118 Termination; Retirement of Certificates ......................... S-119 The Trustee ............................. S-119 SERVICING OF THE MORTGAGE LOANS ............ S-121 General ................................. S-121 The Directing Certificateholder and the One Post Office Square Operating Advisor .................... S-124 Limitation on Liability of Directing Certificateholder and One Post Office Square Operating Advisor ...... S-126 The Master Servicer ..................... S-127 The Special Servicer .................... S-127 Replacement of the Special Servicer ..... S-128 Servicing and Other Compensation and Payment of Expenses .............. S-128 Maintenance of Insurance ................ S-130 Modifications, Waiver and Amendments ........................... S-132 Realization Upon Defaulted Mortgage Loans ................................ S-134 Inspections; Collection of Operating Information .......................... S-137 Certain Matters Regarding the Master Servicer, the Special Servicer and the Depositor ............................ S-137 Events of Default ....................... S-139 Rights Upon Event of Default ............ S-140 Amendment ............................... S-140 YIELD AND MATURITY CONSIDERATIONS........... S-143 Yield Considerations .................... S-143 Weighted Average Life ................... S-145 CERTAIN FEDERAL INCOME TAX CONSEQUENCES ............................ S-151 METHOD OF DISTRIBUTION ..................... S-152 LEGAL MATTERS .............................. S-153 RATINGS .................................... S-153 LEGAL INVESTMENT ........................... S-154 ERISA CONSIDERATIONS ....................... S-154 INDEX OF PRINCIPAL DEFINITIONS ............. S-157
S-5 SCHEDULE I CLASS X REFERENCE RATES ANNEX A-1 CERTAIN LOAN LEVEL CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES ANNEX A-2 CERTAIN POOL CHARACTERISTICS OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES ANNEX B CERTAIN CHARACTERISTICS OF THE MULTIFAMILY AND MANUFACTURED HOUSING COMMUNITY MORTGAGE LOANS AND MORTGAGED PROPERTIES ANNEX C ONE POST OFFICE SQUARE LOAN AMORTIZATION SCHEDULE ANNEX D STRUCTURAL AND COLLATERAL TERM SHEET ANNEX E FORM OF REPORT TO CERTIFICATEHOLDERS S-6 SUMMARY OF CERTIFICATES
INITIAL CLASS CERTIFICATE ASSUMED WEIGHTED BALANCE OR APPROXIMATE PASS-THROUGH FINAL INITIAL AVERAGE NOTIONAL CREDIT RATE DISTRIBUTION PASS-THROUGH LIFE CLASS AMOUNT(1) SUPPORT(2) DESCRIPTION DATE(3) RATE (APPROX.) (YRS.)(4) -------------- ----------------- ------------- ---------------- -------------------- ---------------- ----------- Offered Certificates A-1 $ 258,300,000 16.625% (6) June 15, 2013 % 5.70 A-2 $ 380,415,000 16.625% (6) September 15, 2013 % 9.86 B $ 34,638,000 13.750% (6) September 15, 2013 % 9.96 C $ 13,553,000 12.625% (6) September 15, 2013 % 9.96 D $ 30,120,000 10.125% (6) September 15, 2013 % 9.96 E $ 15,060,000 8.875% (6) October 15, 2013 % 9.98 Non-Offered Certificates X-1 $1,204,787,325 N/A Variable(7) N/A % N/A X-2 $1,129,226,000 N/A Variable(7) N/A % N/A A-1A $ 365,776,000 16.625% (6) N/A % N/A F $ 16,566,000 7.500% (6) N/A % N/A G $ 13,554,000 6.375% (6) N/A % N/A H $ 16,565,000 5.000% (6) N/A % N/A J $ 6,024,000 4.500% Fixed(8) N/A % N/A K $ 12,048,000 3.500% Fixed(8) N/A % N/A L $ 6,024,000 3.000% Fixed(8) N/A % N/A M $ 10,542,000 2.125% Fixed(8) N/A % N/A N $ 3,012,000 1.875% Fixed(8) N/A % N/A P $ 3,012,000 1.625% Fixed(8) N/A % N/A NR $ 19,578,325 N/A Fixed(8) N/A % N/A PS-1 $ 11,100,000 N/A Variable N/A % N/A PS-2 $ 5,400,000 N/A Variable N/A % N/A PS-3 $ 5,300,000 N/A Variable N/A % N/A PS-4 $ 6,500,000 N/A Variable N/A % N/A PS-5 $ 6,500,000 N/A Variable N/A % N/A PS-6 $ 10,800,000 N/A Variable N/A % N/A PS-7 $ 9,400,000 N/A Variable N/A % N/A EXPECTED RATINGS (MOODY'S/ PRINCIPAL CLASS S&P)(5) WINDOW(4) -------------- ----------- ------------ Offered Certificates A-1 Aaa/AAA 10/03-06/13 A-2 Aaa/AAA 06/13-09/13 B Aa2/AA 09/13-09/13 C Aa3/AA-- 09/13-09/13 D A2/A 09/13-09/13 E A3/A- 09/13-10/13 Non-Offered Certificates X-1 Aaa/AAA N/A X-2 Aaa/AAA N/A A-1A Aaa/AAA N/A F Baa1/BBB+ N/A G Baa2/BBB N/A H Baa3/BBB- N/A J Ba1/BB+ N/A K Ba2/BB N/A L Ba3/BB- N/A M B1/B+ N/A N B2/B N/A P B3/B- N/A NR NR/NR N/A PS-1 A2/NR N/A PS-2 A3/NR N/A PS-3 Baa1/NR N/A PS-4 Baa2/NR N/A PS-5 Baa3/NR N/A PS-6 Ba1/NR N/A PS-7 Ba2/NR N/A
---------- (1) Approximate, subject to a permitted variance of plus or minus 10%. (2) The credit support percentages set forth for Class A-1, Class A-2 and Class A-1A certificates are represented in the aggregate. The credit support percentages do not include the certificate balances for the Class PS-1, Class PS-2, Class PS-3, Class PS-4, Class PS-5, Class PS-6 and Class PS-7 certificates. (3) The assumed final distribution dates set forth in this prospectus supplement have been determined on the basis of the assumptions described in "Description of the Certificates--Assumed Final Distribution Date; Rated Final Distribution Date" in this prospectus supplement. The rated final distribution date for each class of certificates is October 15, 2037. See "Description of the Certificates--Assumed Final Distribution Date; Rated Final Distribution Date" in this prospectus supplement. (4) The weighted average life and period during which distributions of principal would be received set forth in the foregoing table with respect to each class of certificates are based on the assumptions set forth under "Yield and Maturity Considerations--Weighted Average Life" in this prospectus supplement and on the assumptions that there are no prepayments (other than on each anticipated repayment date, if any) or losses on the mortgage loans and that there are no extensions of maturity dates of mortgage loans. (5) Ratings shown are those of Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. (6) The pass-through rates on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates will equal one of (i) a fixed rate, (ii) the weighted average of the net mortgage rates on the mortgage loans (other than the One Post Office Square B Note) (in each case adjusted, if necessary, to accrue on the S-7 basis of a 360-day year consisting of twelve 30-day months), (iii) a rate equal to the lesser of a specified fixed pass-through rate and the rate described in clause (ii) above or (iv) the rate described in clause (ii) above less a specified percentage. (7) The aggregate interest accrual amount on the Class X-1 and Class X-2 certificates will be calculated by reference to a notional amount equal to the aggregate of the class balances of all or some of the other classes of certificates, as applicable. The pass-through rates on the Class X-1 and Class X-2 certificates will be based on the weighted average of the interest strip rates of the components of the Class X-1 and Class X-2 certificates, which will be based on the net mortgage rates applicable to the mortgage loans (other than the One Post Office Square B note) as of the preceding distribution date minus the pass-through rates of such components. See "Description of the Certificates-- Distributions" in this prospectus supplement. (8) For any distribution date, if the weighted average of the net interest rates on the mortgage loans (other than the One Post Office Square B note) (in each case adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months) as of the first day of the related due period is less than the rate specified for any of the Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates with respect to the distribution date, then the pass-through rate for that class of certificates on that distribution date will equal the weighted average of the net interest rates on the mortgage loans (other than the One Post Office Square B note). The Class R and Class LR certificates are not offered by this prospectus supplement or represented in this table. S-8 SUMMARY OF TERMS This summary highlights selected information from this prospectus supplement. It does not contain all of the information you need to consider in making your investment decision. To understand all of the terms of the offering of the offered certificates, read this entire document and the accompanying prospectus carefully. RELEVANT PARTIES AND DATES Depositor..................... J.P. Morgan Chase Commercial Mortgage Securities Corp., a wholly-owned subsidiary of JPMorgan Chase Bank, a New York banking corporation which is a wholly-owned subsidiary of J.P. Morgan Chase & Co., a Delaware corporation. The depositor's address is 270 Park Avenue, New York, New York 10017, and its telephone number is (212) 834-9299. See "The Depositor" in the prospectus. Mortgage Loan Sellers......... JPMorgan Chase Bank, a New York banking corporation, LaSalle Bank National Association, a national banking association and Nomura Credit & Capital, Inc., a Delaware corporation. JPMorgan Chase Bank is an affiliate of the depositor and J.P. Morgan Securities Inc., one of the underwriters. LaSalle Bank National Association is also acting as the paying agent, certificate registrar and authenticating agent and is an affiliate of ABN AMRO Incorporated, one of the underwriters. Nomura Credit & Capital, Inc. is an affiliate of Nomura Securities International, Inc., one of the underwriters. See "Description of the Mortgage Pool--The Mortgage Loan Sellers" in this prospectus supplement. SELLERS OF THE MORTGAGE LOANS
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN MORTGAGE MORTGAGE POOL GROUP 1 GROUP 2 SELLER LOANS LOANS BALANCE BALANCE BALANCE ------------------------------- ----------- ----------------- --------- --------- ---------- JPMorgan Chase Bank ......... 40 $ 452,473,826 37.6% 41.8% 27.8% LaSalle Bank National Association ................. 82 404,419,403 33.6 29.3 43.3 Nomura Credit & Capital, Inc. ........................ 64 347,894,096 28.9 28.9 28.9 -- -------------- ----- ----- ----- Total ....................... 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
Master Servicer............... Wells Fargo Bank, National Association. The master servicer's principal servicing offices are located at 45 Fremont Street, 2nd Floor, San Francisco, California 94105. See "Servicing of the Mortgage Loans--The Master Servicer" in this prospectus supplement. Special Servicer.............. ARCap Servicing, Inc., a Delaware corporation. The special servicer's principal address is 5605 N. MacArthur Boulevard, Suite 950, Irving, Texas 75038. The special servicer may be removed without cause under certain S-9 circumstances described in this prospectus supplement. See "Servicing of the Mortgage Loans--The Special Servicer" in this prospectus supplement. Trustee....................... U.S. Bank, National Association, a national banking association, with its principal offices located in Boston, Massachusetts. The corporate trust office of the trustee is located at One Federal Street, Third Floor, Attention: Corporate Trust Services, Boston, Massachusetts, 02110. See "Description of the Certificates--The Trustee" in this prospectus supplement. Following the transfer of the mortgage loans into the trust, the trustee, on behalf of the trust, will become the mortgagee of record under each mortgage loan. Paying Agent.................. LaSalle Bank National Association, a national banking association, with its principal offices located in Chicago, Illinois. LaSalle Bank National Association will also act as the certificate registrar and authenticating agent. The paying agent's address is 135 S. LaSalle Street, Suite 1625, Chicago, Illinois 60603, Attention: Asset-Backed Securities Trust Services Group, JPMorgan 2003-LN1, and its telephone number is (312) 904-9387. LaSalle Bank National Association is also a mortgage loan seller and an affiliate of one of the underwriters. See "Description of the Certificates--Paying Agent, Certificate Registrar and Authenticating Agent" in this prospectus supplement. Cut-off Date.................. With respect to each mortgage loan, the related due date of such mortgage loan in September 2003 or, with respect to those mortgage loans that were originated in August 2003 and have their first payment date in October 2003, September 1, 2003 or, with respect to those mortgage loans that were originated in September 2003 and have their first payment date in November 2003, the date of origination. Closing Date.................. On or about September 30, 2003. Distribution Date............. The 15th day of each month or, if the 15th day is not a business day, on the next succeeding business day, beginning in October 2003. Interest Accrual Period....... Interest will accrue on the offered certificates during the calendar month prior to the related distribution date and will be calculated assuming that each month has 30 days and each year has 360 days. Due Period.................... For any mortgage loan and any distribution date, the period commencing on the day immediately following the due date for the mortgage loan in the month S-10 preceding the month in which that distribution date occurs and ending on and including the due date for the mortgage loan in the month in which that distribution date occurs. However, in the event that the last day of a due period (or applicable grace period) is not a business day, any periodic payments received with respect to the mortgage loans relating to that due period on the business day immediately following that last day will be deemed to have been received during that due period and not during any other due period. Determination Date............ For any distribution date, the fourth business day prior to that distribution date. OFFERED SECURITIES General....................... We are offering the following six classes of commercial mortgage pass-through certificates as part of Series 2003-LN1: o Class A-1 o Class A-2 o Class B o Class C o Class D o Class E Series 2003-LN1 will consist of a total of 28 classes, the following 22 of which are not being offered through this prospectus supplement and the accompanying prospectus: Class A-1A, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P, Class NR, Class X-1, Class X-2, Class PS-1, Class PS-2, Class PS-3, Class PS-4, Class PS-5, Class PS-6, Class PS-7, Class R and Class LR. The Series 2003-LN1 certificates will collectively represent beneficial ownership interests in a trust created by J.P. Morgan Chase Commercial Mortgage Securities Corp. The trust's assets will primarily be 186 mortgage loans secured by first liens on 199 commercial, multifamily and manufactured housing community properties. The trust's assets also include the subordinate mortgage loan identified in this prospectus supplement as the One Post Office Square B note. Although the One Post Office Square B note is an asset of the trust, for the purpose of the information contained in this prospectus supplement (including the annexes and statistical information contained in this prospectus supplement), the One Post Office Square B note is not reflected in this S-11 prospectus supplement and the term "mortgage loan" does not include the One Post Office Square B note, unless otherwise expressly stated. The One Post Office Square B note supports only the Class PS-1, Class PS-2, Class PS-3, Class PS-4, Class PS-5, Class PS-6 and Class PS-7 certificates, which certificates are not being offered pursuant to this prospectus supplement. Certificate Balances.......... Your certificates will have the approximate aggregate initial certificate balance set forth below, subject to a variance of plus or minus 10%: Class A-1 ......... $258,300,000 Class A-2 ......... $380,415,000 Class B ........... $ 34,638,000 Class C ........... $ 13,553,000 Class D ........... $ 30,120,000 Class E ........... $ 15,060,000
PASS-THROUGH RATES A. Offered Certificates...... Your certificates will accrue interest at an annual rate called a pass-through rate, which is set forth below for each class or a rate equal to, based on, or limited by, the weighted average of the net mortgage rates on the mortgage loans (other than the One Post Office Square B note): Class A-1 ......... % Class A-2 ......... % Class B ........... % Class C ........... % Class D ........... % Class E ........... %
B. Interest Rate Calculation Convention................ Interest on your certificates will be calculated based on a 360-day year consisting of twelve 30-day months, or a "30/360 basis." For purposes of calculating the pass-through rates on the offered certificates and certain other classes of the non-offered certificates, the mortgage loan interest rates will not reflect any default interest rate, any rate increase occurring after an anticipated repayment date, any loan term modifications agreed to by the special servicer or any modifications resulting from a borrower's bankruptcy or insolvency. For purposes of calculating the pass-through rates on the certificates, the interest rate for each mortgage loan that accrues interest on an actual/360 basis will be recalculated, if necessary, so that the amount of interest that would accrue at that recalculated rate in that month, calculated on a 30/360 basis, will equal the amount of interest that is required S-12 to be paid on that mortgage loan in that month, subject to certain adjustments as described in "Description of the Certificates--Distributions --Pass-Through Rates" in this prospectus supplement. See "Description of the Certificates--Distributions--Pass-Through Rates" and "Description of the Certificates-- Distributions--Interest Distribution Amount" in this prospectus supplement. DISTRIBUTIONS A. Amount and Order of Distributions............ On each distribution date, funds available for distribution from the mortgage loans, net of specified trust fees, reimbursements and expenses, will be distributed in the following amounts and order of priority: First/Class A-1, Class A-2, Class A-1A, Class X-1 and Class X-2 certificates: To pay interest concurrently, (i) on the Class A-1 and Class A-2 certificates, pro rata, from the portion of the funds available for distribution attributable to the mortgage loans in loan group 1, (ii) on the Class A-1A from the portion of the funds available for distribution attributable to the mortgage loans in loan group 2 and (iii) on Class X-1 and Class X-2 from the funds available for distribution attributable to all mortgage loans, in each case in accordance with their interest entitlements. However, if on any distribution date, the funds available for distribution (or applicable portion) is insufficient to pay in full the total amount of interest to be paid to any of the classes described above, the funds available for distribution will be allocated among all those classes pro rata in accordance with their interest entitlements for that distribution date. Second/Class A-1, Class A-2 and Class A-1A certificates: To the extent of funds allocated to principal and available for distribution, (i) to principal on Class A-1 and Class A-2 certificates, in sequential order, in an amount equal to the funds attributable to mortgage loans in loan group 1 and, after the Class A-1A certificates have been reduced to zero, the funds attributable to mortgage loans in loan group 2 and (ii) to the Class A-1A certificates, in an amount equal to the funds attributable to mortgage loans in loan group 2 and, after the Class A-2 certificates have been reduced to zero, the funds attributable to mortgage loans in loan group 1, until the Class A-1A certificates are reduced to zero. If the certificate balance of each and every class of certificates other than Class A-1, Class A-2 and Class A-1A certificates has been reduced to zero, funds available for distributions of principal will be distributed to Class S-13 A-1, Class A-2 and Class A-1A certificates, pro rata, rather than sequentially, without regard to loan groups. Third/Class A-1, Class A-2 and Class A-1A certificates: To reimburse Class A-1, Class A-2 and Class A-1A certificates, pro rata, for any previously unreimbursed losses on the mortgage loans allocable to principal that were previously borne by those classes, regardless of the loan group to which the collections relate. Fourth/Class B certificates: To the Class B certificates as follows: (a) first, to interest on Class B certificates in the amount of its interest entitlement; (b) second, to the extent of funds allocated to principal and available for distribution remaining after distributions in respect of principal to each class with a higher priority (in this case, the Class A-1, Class A-2 and Class A-1A certificates), to principal on Class B certificates until reduced to zero; and (c) third, to reimburse Class B certificates for any previously unreimbursed losses on the mortgage loans allocable to principal that were previously borne by that class. Fifth/Class C certificates: To the Class C certificates in a manner analogous to the Class B certificates allocations of priority Fourth above. Sixth/Class D certificates: To the Class D certificates in a manner analogous to the Class B certificates allocations of priority Fourth above. Seventh/Class E certificates: To the Class E certificates in a manner analogous to the Class B certificates allocations of priority Fourth above. Eighth/Non-offered certificates (other than the Class X-1 and Class X-2 certificates): In the amounts and order of priority described in "Description of the Certificates--Distributions --Priority" in this prospectus supplement. For purposes of making distributions to the Class A-1, Class A-2 and Class A-1A certificates, the pool of mortgage loans will be deemed to consist of two distinct groups, loan group 1 and loan group 2. Loan group 1 will consist of 111 mortgage loans, representing approximately 69.6% of the aggregate principal balance of all the mortgage loans as of the cut-off date and loan group 2 will consist of 75 mortgage loans, representing approximately 30.4% of the aggregate principal balance of all the mortgage loans as of the cut-off date. Loan group 2 will include approximately 92.8% of all the mortgage loans secured by multifamily properties and approximately 34.3% of all the mortgage loans secured by manufactured housing properties, in each case, by S-14 aggregate principal balance of all the mortgage loans as of the cut-off date. Annex A-1 to this prospectus supplement will set forth the loan group designation with respect to each mortgage loan. B. Interest and Principal Entitlements............. A description of the interest entitlement of each class can be found in "Description of the Certificates-- Distributions--Interest Distribution Amount" in this prospectus supplement. A description of the amount of principal required to be distributed to the classes entitled to principal on a particular distribution date also can be found in "Description of the Certificates--Distributions --Principal Distribution Amount" in this prospectus supplement. C. Yield Maintenance Charges.. Yield maintenance charges with respect to the mortgage loans will be allocated to the certificates as described in "Description of the Certificates--Allocation of Yield Maintenance Charges" in this prospectus supplement. For an explanation of the calculation of yield maintenance charges, see "Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans--Prepayment Provisions" in this prospectus supplement. D. General................... The chart below describes the manner in which the payment rights of certain classes will be senior or subordinate, as the case may be, to the payment rights of other classes. The chart shows the entitlement to receive principal and interest (other than excess interest) on any distribution date in descending order (beginning with the Class A-1, Class A-2, Class A-1A, Class X-1 and Class X-2 certificates). It also shows the manner in which mortgage loan losses are allocated in ascending order (beginning with the other classes of certificates (other than the Class R and Class LR certificates) that are not being offered by this prospectus supplement); provided, that mortgage loan losses will not be allocated to Class PS certificates (other than mortgage loan losses on the One Post Office Square whole loan allocated to the One Post Office Square B note pursuant to the related intercreditor agreement). Additionally, no principal payments or loan losses will be allocated to the Class R, Class LR, Class X-1 or Class X-2 certificates, although principal payments and loan losses may reduce the notional amounts of the Class X-1 and Class X-2 certificates and, therefore, the amount of interest they accrue. S-15 [GRAPHIC OMITTED] ---------------------------------------------- Class A-1, Class A-2, Class A-1A, Class X-1* and Class X-2* ---------------------------------------------- ---------------------- Class B ---------------------- ---------------------- Class C ---------------------- ---------------------- Class D ---------------------- ---------------------- Class E ---------------------- ---------------------- Non-offered certificates** ---------------------- ---------- * The Class X-1 and Class X-2 certificates are interest-only certificates. ** Excluding the Class A-1A, Class X-1, Class X-2 and Class PS certificates. No other form of credit enhancement will be available for the benefit of the holders of the offered certificates. Principal losses on mortgage loans that are allocated to a class of certificates will reduce the certificate balance of that class. See "Description of the Certificates" in this prospectus supplement. E. Shortfalls in Available Funds................... The following types of shortfalls in available funds will reduce distributions to the classes of certificates with the lowest payment priorities: shortfalls resulting from the payment of special servicing fees and other additional compensation that the special servicer is entitled to receive; shortfalls resulting from interest on advances made by the master servicer, the special servicer or the trustee (to the extent not covered by late payment charges or default interest paid by the related borrower); shortfalls resulting from extraordinary expenses of the trust; and shortfalls resulting from a modification of a mortgage loan's interest rate or principal balance or from other unanticipated or default-related expenses of the trust. In addition, prepayment interest shortfalls that are not covered by certain compensating interest payments made by the S-16 master servicer are required to be allocated to the certificates, on a pro rata basis, to reduce the amount of interest payable on the certificates. See "Description of the Certificates--Distributions--Priority" in this prospectus supplement. ADVANCES A. P&I Advances.............. The master servicer is required to advance delinquent periodic mortgage loan payments (including on the One Post Office Square B note) if it determines that the advance will be recoverable. The master servicer will not be required to advance (i) balloon payments due at maturity in excess of the regular periodic payment, (ii) interest in excess of a mortgage loan's regular interest rate or (iii) prepayment premiums or yield maintenance charges. The amount of the interest portion of any advance will be subject to reduction to the extent that an appraisal reduction of the related mortgage loan has occurred. See "Description of the Certificates--Advances" in this prospectus supplement. There may be other circumstances in which the master servicer will not be required to advance one full month of principal and/or interest. If the master servicer fails to make a required advance, the trustee will be required to make the advance. None of the master servicer, the special servicer or the trustee is required to advance amounts determined to be non-recoverable. See "Description of the Certificates--Advances" in this prospectus supplement. If an interest advance is made by the master servicer, the master servicer will not advance its servicing fee, but will advance the trustee's fee. B. Property Protection Advances................ The master servicer may be required, and the special servicer may be permitted, to make advances to pay delinquent real estate taxes, assessments and hazard insurance premiums and similar expenses necessary to (i) protect and maintain the related mortgaged property, (ii) maintain the lien on the related mortgaged property or (iii) enforce the related mortgage loan documents. If the master servicer fails to make a required advance of this type, the trustee is required to make this advance. None of the master servicer, the special servicer or the trustee is required to advance amounts determined to be non-recoverable. See "Description of the Certificates--Advances" in this prospectus supplement. C. Interest on Advances...... The master servicer, the special servicer and the trustee, as applicable, will be entitled to interest on the above described advances at the "Prime Rate", as published in S-17 The Wall Street Journal, as described in this prospectus supplement. Interest accrued on outstanding advances may result in reductions in amounts otherwise payable on the certificates. Neither the master servicer nor the trustee will be entitled to interest on advances made with respect to principal and interest due on a mortgage loan, including the One Post Office B note, until the related due date has passed and any grace period applicable to such mortgage loan has expired. See "Description of the Certificates-- Advances" and "--Subordination; Allocation of Collateral Support Deficit" in this prospectus supplement and "Description of the Certificates-- Advances in Respect of Delinquencies" and "Description of the Pooling Agreements--Certificate Account" in the prospectus. THE MORTGAGE LOANS The Mortgage Pool............. The trust's primary assets will be 186 fixed rate mortgage loans, each evidenced by one or more promissory notes secured by first mortgages, deeds of trust or similar security instruments on the fee and/or leasehold estate of the related borrower in 199 commercial, multifamily and manufactured housing community properties. The aggregate principal balance of the mortgage loans and the One Post Office Square B note as of the cut-off date will be approximately $1,259,787,325. The One Post Office Square loan (identified as Loan No. 1 on Annex A-1 to this prospectus supplement), representing approximately 5.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 7.2% of the aggregate principal balance of loan group 1 as of the cut-off date), is one of three mortgage loans that are part of a split loan structure, each of which is secured by the same mortgage instrument on the related mortgaged property. The second mortgage loan, the One Post Office Square companion note, which is part of the split loan structure but is not included in the trust, is pari passu in right of payment with the One Post Office Square loan and has an outstanding principal balance as of the cut-off date of $60,000,000. The third loan, the One Post Office Square B note, which is included in the trust, has an aggregate unpaid principal balance as of the cut-off date of $55,000,000 and is subordinate in right of payment to the One Post Office Square loan and the One Post Office Square companion note. However, for purposes of the information contained in this prospectus supplement (including the appendices), the One Post Office Square B note is not reflected in this S-18 prospectus supplement and the term "mortgage loan" does not include the One Post Office Square B note. The One Post Office Square B note supports only the Class PS-1, Class PS-2, Class PS-3, Class PS-4, Class PS-5, Class PS-6 and Class PS-7 certificates, which certificates are not being offered pursuant to this prospectus supplement. With respect to the One Post Office Square loan referenced in the immediately preceding paragraph, the loan amount used in this prospectus supplement for purposes of weighting the individual loan-to-value ratios and debt service coverage ratios is the principal balance of the One Post Office Square loan. The loan amount used in this prospectus supplement for purposes of calculating its loan-to-value ratios and debt service coverage ratio is the aggregate principal balance of the One Post Office Square loan and the One Post Office Square companion note. The principal balance of the One Post Office Square B note is included in the calculation of loan-to-value ratios and debt service coverage ratios only where specifically indicated. See "Description of the Mortgage Pool--The One Post Office Square Whole Loan" in this prospectus supplement. The following tables set forth certain anticipated characteristics of the mortgage loans as of the cut-off date (unless otherwise indicated). Except as described in the immediately preceding paragraph, all information presented in this prospectus supplement (including loan-to-value ratios and debt service coverage ratios) with respect to a mortgage loan with a companion loan is calculated without regard to the related companion loan. The sum in any column may not equal the indicated total due to rounding. Unless otherwise indicated, all figures presented in this summary section are calculated as described under "Description of the Mortgage Pool--Additional Mortgage Loan Information" in this prospectus supplement and all percentages represent the indicated percentage of the aggregate principal balance of the pool of mortgage loans, the mortgage loans in loan group 1 or the mortgage loans in loan group 2, in each case, as of the cut-off date. The principal balance of each mortgage loan as of the cut-off date assumes the timely receipt of principal scheduled to be paid on or before the cut-off date and no defaults, delinquencies or prepayments on any mortgage loan on or prior to the cut-off date. The mortgage loans will have the following approximate characteristics as of the cut-off date: S-19 CUT-OFF DATE MORTGAGE LOAN CHARACTERISTICS
ALL MORTGAGE LOANS LOAN GROUP 1 LOAN GROUP 2 ---------------------- ----------------------- ---------------------- Aggregate outstanding principal balance(1) ................................ $1,204,787,325 $839,010,606 $365,776,719 Number of mortgage loans ................... 186 111 75 Number of mortgaged properties ............. 199 113 86 Number of crossed loan pools ............... 9 7 4 Crossed loan pools as a percentage of the aggregate outstanding principal balance ................................... 8.5% 10.8% 3.0% Range of mortgage loan principal balances .................................. $923,360 to $60,000,000 $1,000,000 to $60,000,000 $923,360 to $33,952,685 Average mortgage loan principal balance ................................... $6,477,351 $7,558,654 $4,877,023 Range of mortgage rates .................... 4.2000% to 8.6650% 4.2500% to 8.6650% 4.2000% to 6.2700% Weighted average mortgage rate ............. 5.6145% 5.7398% 5.3269% Range of original terms to maturity(2)...... 60 to 240 months 60 to 240 months 60 to 120 months Weighted average original term to maturity(2) ............................... 119 months 121 months 115 months Range of remaining terms to maturity(2) ............................... 57 to 240 months 57 to 240 months 113 to 120 months Weighted average remaining term to maturity(2) ............................... 117 months 119 months 58 months Range of original amortization terms(3) .................................. 120 to 360 months 120 to 360 months 120 to 360 months Weighted average original amortization term(3) ...................... 339 months 336 months 345 months Range of remaining amortization terms(3) .................................. 117 to 360 months 118 to 360 months 117 to 360 months Weighted average remaining amortization term(3) ...................... 337 months 334 months 343 months Range of loan-to-value ratios(6) ........... 6.8% to 80.0% 6.8% to 80.0% 38.4% to 80.0% Weighted average loan-to-value ratio(6) .................................. 70.4% 68.6% 74.4% Range of loan-to-value ratios as of the maturity date(2)(4)(6) .................... 6.8% to 73.8% 6.8% to 73.8% 38.4% to 72.8% Weighted average loan-to-value ratio as of the maturity date(2)(4)(6) .......... 59.2% 58.0% 62.0% Range of debt service coverage ratios(6) ................................. 1.20x to 22.55x 1.20x to 22.55x 1.20x to 3.13x Weighted average debt service coverage ratio(6) ......................... 1.70x 1.79x 1.51x Percentage of aggregate outstanding principal balance consisting of: Balloon mortgage loans(5) ................ 83.9% 81.5% 89.5% Anticipated repayment dates mortgage loans .......................... 2.4% 2.0% 3.2% Fully amortizing mortgage loans........... 4.3% 5.7% 1.1% Partial Interest-only mortgage loans ................................... 7.2% 9.9% 1.1% Interest-only mortgage loans ............. 2.1% 0.8% 5.1%
---------- (1) Subject to a permitted variance of plus or minus 10%. (2) In the case of the mortgage loans with anticipated repayment dates, as of the anticipated repayment date. (3) Excludes the mortgage loans that pay interest-only for their respective terms. (4) Excludes the fully amortizing mortgage loans. (5) Excludes the mortgage loans with an anticipated repayment date and/or a full or partial interest-only period. S-20 (6) The loan-to-value ratios and debt service coverage ratios for the 1 mortgage loan, representing approximately 0.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date, secured by a residential cooperative are based on projected net operating income at the mortgaged property assuming that the mortgaged property was operated as a rental property with rents set at prevailing market rates, taking into account the presence of, if any, existing rent-controlled or rent-stabilized occupants, reduced by underwritten capital expenditures, property operating expenses, a market-rate vacancy assumption and projected reserves. It was assumed that 100% of the cooperative property would be available for lease. The mortgage loans accrue interest based on the following conventions: INTEREST ACCRUAL BASIS
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN INTEREST ACCRUAL MORTGAGE MORTGAGE POOL GROUP 1 GROUP 2 BASIS LOANS LOANS BALANCE BALANCE BALANCE ---------------------- ----------- ----------------- --------- --------- ----------- Actual/360 ......... 183 $1,163,876,439 96.6% 95.1% 100.0% 30/360 ............. 3 40,910,886 3.4 4.9 0.0 --- -------------- ----- ----- ----- Total .............. 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
See "Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans" in this prospectus supplement. 8 mortgage loans, representing approximately 4.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (6 mortgage loans in loan group 1, representing approximately 4.4% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 2 mortgage loans in loan group 2, representing approximately 3.2% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), provide for an increase in the related interest rate after a certain date, the anticipated repayment date. The interest accrued in excess of the original rate, together with any interest on that accrued interest, will be deferred and will not be paid until the principal balance of the related mortgage loan has been paid, at which time such deferred interest will be paid to the Class NR certificates. In addition, after the anticipated repayment date, cash flow in excess of that required for debt service and certain budgeted expenses with respect to the related mortgaged property will be applied towards the payment of principal (without payment of a yield maintenance charge) of the related mortgage loan until its principal balance has been reduced to zero. A substantial principal payment would be required to pay off these mortgage loans on their anticipated repayment dates. The amortization terms for these mortgage loans are significantly longer than the periods up to the related mortgage loans' anticipated repayment dates. See "Description of the Mortgage Pool--ARD Loans" in this prospectus supplement. S-21 See "Description of the Mortgage Pool--Additional Mortgage Loan Information" and "--Certain Terms and Conditions of the Mortgage Loans" in this prospectus supplement. The following table contains general information regarding the prepayment provisions of the mortgage loans: OVERVIEW OF PREPAYMENT PROTECTION
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN PREPAYMENT MORTGAGE MORTGAGE POOL GROUP 1 GROUP 2 PROTECTION LOANS LOANS BALANCE BALANCE BALANCE ------------------ ----------- ----------------- --------- --------- ---------- Lockout with defeasance ..... 178 $1,122,105,110 93.1% 91.8% 96.2% Lockout period followed by yield maintenance..... 7 58,250,718 4.8 5.3 3.8 Yield Maintenance..... 1 24,431,497 2.0 2.9 0.0 --- -------------- ----- ----- ----- Total .......... 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
Defeasance permits the related borrower to substitute direct non-callable U.S. Treasury obligations or other government securities for the related mortgaged property as collateral for the related mortgage loan. The mortgage loans generally permit voluntary prepayment without payment of a yield maintenance charge or any prepayment premium during an "open period" within a limited period prior to the stated maturity date or anticipated repayment date as follows: PREPAYMENT OPEN PERIODS
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN OPEN PERIOD MORTGAGE MORTGAGE POOL GROUP 1 GROUP 2 (MONTHS) LOANS LOANS BALANCE BALANCE BALANCE ----------------- ----------- ----------------- --------- --------- ---------- 1 ............. 2 $ 5,769,980 0.5% 0.7% 0.0% 3 ............. 108 548,474,506 45.5 39.6 59.2 4 ............. 40 327,599,041 27.2 26.7 28.4 5 ............. 2 63,150,000 5.2 7.5 0.0 6 ............. 25 165,198,077 13.7 14.3 12.4 7 ............. 8 84,664,578 7.0 10.1 0.0 13 ............ 1 9,931,143 0.8 1.2 0.0 --- -------------- ----- ----- ----- Total ......... 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
See "Description of the Mortgage Pool--Additional Mortgage Loan Information" and "--Certain Terms and Conditions of the Mortgage Loans--Defeasance; Collateral Substitution" in this prospectus supplement. S-22 CURRENT USES OF THE MORTGAGED PROPERTIES(1)
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN MORTGAGED MORTGAGE POOL GROUP 1 GROUP 2 CURRENT USE PROPERTIES LOANS BALANCE BALANCE BALANCE ------------------ ------------ ----------------- --------- --------- ---------- Multifamily .... 75 $ 348,115,377 28.9% 3.0% 88.3% Retail ......... 53 294,747,505 24.5 35.1 0.0 Office ......... 22 233,445,762 19.4 27.8 0.0 Manufactured Housing Community....... 31 124,736,095 10.4 9.8 11.7 Mixed Use ...... 4 73,615,781 6.1 8.8 0.0 Industrial ..... 8 73,317,209 6.1 8.7 0.0 Hotel .......... 1 36,000,000 3.0 4.3 0.0 Self Storage ... 4 13,459,597 1.1 1.6 0.0 Parking Garage ......... 1 7,350,000 0.6 0.9 0.0 -- -------------- ----- ----- ----- Total .......... 199 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
---------- (1) Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts as stated in Annex A--1. The mortgaged properties are located in 37 states. The following table lists the states which have concentrations of mortgaged properties of 5% or more: GEOGRAPHIC DISTRIBUTION--ALL LOANS(1)
AGGREGATE PRINCIPAL NUMBER OF BALANCE OF % OF INITIAL MORTGAGED MORTGAGE POOL STATE PROPERTIES LOANS BALANCE ------------------------- ------------ ----------------- ------------- Massachusetts ......... 4 $ 130,837,109 10.9% Texas ................. 21 108,753,750 9.0 California ............ 15 106,135,158 8.8 Florida ............... 14 85,634,769 7.1 Maryland .............. 4 79,646,001 6.6 Michigan .............. 11 76,650,210 6.4 Virginia .............. 5 63,940,460 5.3 Georgia ............... 13 60,413,314 5.0 Other States .......... 112 492,776,554 40.9 --- -------------- ----- Total ................. 199 $1,204,787,325 100.0% === ============== =====
---------- (1) Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts as stated in Annex A--1. S-23 GEOGRAPHIC DISTRIBUTION--LOAN GROUP 1(1)
AGGREGATE PRINCIPAL % OF INITIAL NUMBER OF BALANCE OF LOAN MORTGAGED MORTGAGE GROUP 1 STATE PROPERTIES LOANS BALANCE ------------------------- ------------ --------------- ------------- Massachusetts ......... 3 $124,694,941 14.9% California ............ 15 106,135,158 12.7 Texas ................. 12 79,676,748 9.5 Michigan .............. 10 68,067,470 8.1 Virginia .............. 5 63,940,460 7.6 New York .............. 7 54,652,954 6.5 Florida ............... 8 50,337,635 6.0 Georgia ............... 11 50,102,369 6.0 Other States .......... 42 241,402,871 28.8 -- ------------ ----- Total ................. 113 $839,010,606 100.0% === ============ =====
---------- (1) Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts as stated in Annex A--1. GEOGRAPHIC DISTRIBUTION--LOAN GROUP 2(1)
AGGREGATE PRINCIPAL % OF INITIAL NUMBER OF BALANCE OF LOAN MORTGAGED MORTGAGE GROUP 2 STATE PROPERTIES LOANS BALANCE -------------------------- ------------ -------------- ------------- Maryland ............... 2 $ 39,381,768 10.8% Florida ................ 6 35,297,134 9.6 Illinois ............... 11 29,519,786 8.1 Texas .................. 9 29,077,002 7.9 Arizona ................ 7 27,195,324 7.4 North Carolina ......... 7 23,734,254 6.5 Alabama ................ 2 23,267,764 6.4 Wisconsin .............. 5 20,769,760 5.7 Other States ........... 37 137,533,927 37.6 -- ------------ ----- Total .................. 86 $365,776,719 100.0% == ============ =====
---------- (1) Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts as stated in Annex A--1. ADDITIONAL ASPECTS OF CERTIFICATES Denominations................. The offered certificates will be offered in minimum denominations of $10,000 initial certificate balance. Investments in excess of the minimum denominations may be made in multiples of $1. Registration, Clearance and Settlement.................. Each class of offered certificates will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, or DTC. S-24 You may hold your offered certificates through: (1) DTC in the United States; or (2) Clearstream Banking, societe anonyme or Euroclear Bank, as operator of the Euroclear System. Transfers within DTC, Clearstream Banking, societe anonyme or Euroclear Bank, as operator of the Euroclear System, will be made in accordance with the usual rules and operating procedures of those systems. We may elect to terminate the book-entry system through DTC, Clearstream Banking, societe anonyme or Euroclear Bank, as operator of the Euroclear System, with respect to all or any portion of any class of the offered certificates. See "Description of the Certificates--Book-Entry Registration and Definitive Certificates" in this prospectus supplement and in the prospectus. Information Available to Certificateholders.......... On each distribution date, the paying agent will prepare and make available to each certificateholder of record, initially expected to be Cede & Co., a statement as to the distributions being made on that date. Additionally, under certain circumstances, certificateholders of record may be entitled to certain other information regarding the trust. See "Description of the Certificates--Reports to Certificateholders; Certain Available Information" in this prospectus supplement. Deal Information/Analytics.... Certain information concerning the mortgage loans and the offered certificates will be available to you through the following services: o Bloomberg, L.P.; and o the paying agent's website at www.etrustee.net. Optional Termination.......... On any distribution date on which the aggregate principal balance of the pool of mortgage loans remaining in the trust is less than 1% of the aggregate principal balance of the mortgage loans (including the One Post Office Square B note) as of the cut-off date, certain entities specified in this prospectus supplement will have the option to purchase all of the remaining mortgage loans (and all property acquired through exercise of remedies in respect of any mortgage loan) at the price specified in this prospectus supplement. Exercise of this option will terminate the trust and retire the then outstanding certificates. See "Description of the Certificates-- Termination; Retirement of Certificates" in this prospectus supplement and "Description of the Certificates--Termination" in the prospectus. S-25 Tax Status.................... Elections will be made to treat a portion of the trust (exclusive of the interest that is deferred after the anticipated repayment date on the mortgage loans that have anticipated repayment dates and the related distribution account for this deferred interest) as three separate REMICs -- a lower-tier REMIC, an upper-tier REMIC and a loan REMIC (relating to the One Post Office Square B note) -- for federal income tax purposes. The portion of the trust representing the deferred interest described above will be treated as a grantor trust for federal income tax purposes. In the opinion of counsel, the portions of the trust referred to above will qualify for this treatment. Pertinent federal income tax consequences of an investment in the offered certificates include: o Each class of offered certificates will represent "regular interests" in the upper-tier REMIC. o The regular interests will be treated as newly originated debt instruments for federal income tax purposes. o You will be required to report income on the regular interests represented by your certificates using the accrual method of accounting. o It is anticipated that the offered certificates will be issued [at a premium]. See "Certain Federal Income Tax Consequences" in this prospectus supplement and in the prospectus. ERISA Considerations.......... Subject to important considerations described under "ERISA Considerations" in this prospectus supplement and "Certain ERISA Considerations" in the prospectus, the offered certificates are eligible for purchase by persons investing assets of employee benefit plans or individual retirement accounts. Legal Investment.............. The offered certificates will not constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements, or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisors for assistance in determining the suitability of and consequences to you of the purchase, ownership, and sale of the offered certificates. S-26 See "Legal Investment" in this prospectus supplement and in the prospectus. Ratings....................... The offered certificates will not be issued unless each of the offered classes receives the following ratings from Moody's Investors Service, Inc. and Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.:
MOODY'S S&P --------- ----- Class A-1 .......... Aaa AAA Class A-2 .......... Aaa AAA Class B ............ Aa2 AA Class C ............ Aa3 AA- Class D ............ A2 A Class E ............ A3 A-
A rating agency may downgrade, qualify or withdraw a security rating at any time. A rating agency not requested to rate the offered certificates may nonetheless issue a rating and, if one does, it may be lower than those stated above. The security ratings do not address the frequency of prepayments (whether voluntary or involuntary) of mortgage loans, the degree to which prepayments might differ from those originally anticipated, the likelihood of collection of excess interest, default interest or yield maintenance charges, or the tax treatment of the certificates. See "Yield and Maturity Considerations" and "Risk Factors" in this prospectus supplement and "Yield and Maturity Considerations" in the prospectus. See "Ratings" in this prospectus supplement and "Rating" in the accompanying prospectus for a discussion of the basis upon which ratings are given and the conclusions that may not be drawn from a rating. S-27 RISK FACTORS You should carefully consider the following risks before making an investment decision. In particular, 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 events or circumstances identified as risks actually occur or materialize, 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. GEOGRAPHIC CONCENTRATION ENTAILS RISKS Mortgaged properties located in Massachusetts, Texas, California, Florida, Maryland, Michigan and Virginia secure mortgage loans representing approximately 10.9%, 9.0%, 8.8%, 7.1%, 6.6%, 6.4%, and 5.3%, respectively, by allocated loan amount of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. Mortgaged properties located in Massachusetts, California, Texas, Michigan, Virginia, New York, Florida, and Georgia secure mortgage loans representing approximately 14.9%, 12.7%, 9.5%, 8.1%, 7.6%, 6.5%, 6.0%, and 6.0%, respectively, by allocated loan amount of the aggregate principal balance of the pool of mortgage loans in loan group 1 as of the cut-off date. Mortgaged properties located in Maryland, Florida, Illinois, Texas, Arizona, North Carolina, Alabama and Wisconsin secure mortgage loans representing approximately 10.8%, 9.6%, 8.1%, 7.9%, 7.4%, 6.5%, 6.4%, and 5.7%, respectively, by allocated loan amount of the aggregate principal balance of the pool of mortgage loans in loan group 2 as of the cut-off date. With respect to the mortgaged properties located in California, 13 of the mortgaged properties securing mortgage loans representing approximately 8.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 11.7% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) by allocated loan amount are in southern California, and 2 of the mortgaged properties securing mortgage loans representing approximately 0.6% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 0.9% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) by allocated loan amount are in northern California. For purposes of determining whether a mortgaged property is in northern California or southern California, mortgaged properties located north of San Luis Obispo County, Kern County and San Bernardino County are included in northern California and mortgaged properties located in or south of such counties are included in southern California. Concentrations of mortgaged properties in geographic areas may increase the risk that adverse economic or other developments or natural disasters affecting a particular region of the country could increase the frequency and severity of losses on mortgage loans secured by those properties. In recent periods, several regions of the United States have experienced significant real estate downturns. Regional economic declines or conditions in regional real estate markets could adversely affect the income from, and market value of, the mortgaged properties. Other regional factors -- e.g., earthquakes, floods, forest fires or hurricanes or changes in governmental rules or fiscal policies -- also may adversely affect the mortgaged properties. For example, mortgaged properties located in California may be more susceptible to certain hazards (such as earthquakes) than mortgaged properties in other parts of the country. S-28 RISKS TO THE MORTGAGED PROPERTIES RELATING TO TERRORIST ATTACKS AND FOREIGN CONFLICTS The terrorist attacks on the World Trade Center and the Pentagon on September 11, 2001 suggest the possibility that large public areas such as shopping malls or large office buildings could become the target of terrorist attacks in the future. The possibility of such attacks could (i) lead to damage to one or more of the mortgaged properties if any such attacks occur, (ii) result in higher costs for security and insurance premiums, particularly for large properties, which could adversely affect the cash flow at such mortgaged properties, or (iii) impact leasing patterns or shopping patterns which could adversely impact leasing revenue and mall traffic and percentage rent. As a result, the ability of the mortgaged properties to generate cash flow may be adversely affected. With respect to shopping patterns, the terrorist attacks have significantly reduced air travel throughout the United States and, therefore, have had a negative effect on revenues in areas heavily dependent on tourism. The decrease in air travel may have a negative effect on certain of the mortgaged properties located in areas heavily dependent on tourism which could reduce the ability of the affected mortgaged properties to generate cash flow. The United States continues to maintain a military presence in Iraq and Afghanistan. It is uncertain what effect the activities of the United States in Iraq, Afghanistan or any future conflict with any other country will have on domestic and world financial markets, economies, real estate markets, insurance costs or business segments. Foreign conflict of any kind could have an adverse effect on the performance of the mortgaged properties. RISKS RELATING TO LOAN CONCENTRATIONS The effect of mortgage pool loan losses will be more severe if the losses relate to mortgage loans that account for a disproportionately large percentage of the pool's aggregate principal balance. In this regard: o The largest mortgage loan represents approximately 5.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (the largest mortgage loan in loan group 1 represents approximately 7.2% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and the largest mortgage loan in loan group 2 represents approximately 9.3% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date). See "Description of the Mortgage Pool--Significant Mortgage Loans" in this prospectus supplement. o The 3 largest mortgage loans (treating as a single mortgage loan all mortgage loans that are cross-collateralized with each other) represent, in the aggregate, approximately 12.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (the 3 largest mortgage loans in loan group 1 represent approximately 17.5% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and the 3 largest mortgage loans in loan group 2 represent approximately 17.2% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date). o The 10 largest mortgage loans (treating as a single mortgage loan all mortgage loans that are cross-collateralized with each other) represent in the aggregate, approximately 26.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (the 10 largest mortgage loans in loan group 1 represent approximately 36.1% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and the 10 largest mortgage loans in loan group 2 represent approximately 35.9% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date). Each of the other mortgage loans represents no more than 1.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date. Each of the other mortgage loans in loan group 1 represents no more than 1.7% of the aggregate principal balance of the mortgage S-29 loans in loan group 1 as of the cut-off date. Each of the other mortgage loans in loan group 2 represents no more than 2.2% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date. A concentration of mortgaged property types can pose increased risks. A concentration of mortgage loans secured by the same types of mortgaged property can increase the risk that a decline in a particular industry or business would have a disproportionately large impact on the pool of mortgage loans. In that regard, the following table lists the property type concentrations in excess of 5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date: PROPERTY TYPE CONCENTRATIONS GREATER THAN 5%(1)
AGGREGATE NUMBER OF PRINCIPAL BALANCE % OF INITIAL % OF INITIAL MORTGAGED OF MORTGAGE % OF INITIAL LOAN GROUP 1 LOAN GROUP 2 PROPERTY TYPE PROPERTIES LOANS POOL BALANCE BALANCE BALANCE ---------------------- ------------ ------------------- -------------- -------------- ------------- Multifamily .......... 75 $348,115,377 28.9% 3.0% 88.3% Retail ............... 53 $294,747,505 24.5% 35.1% 0.0% Office ............... 22 $233,445,762 19.4% 27.8% 0.0% Manufacturing Housing Communities ......... 31 $124,736,095 10.4% 9.8% 11.7% Mixed Use ............ 4 $ 73,615,781 6.1% 8.8% 0.0% Industrial ........... 8 $ 73,317,209 6.1% 8.7% 0.0%
---------- (1) Because this table presents information relating to mortgaged properties and not mortgage loans, the information for mortgage loans secured by more than one mortgaged property is based on allocated loan amounts as stated in Annex A--1. A concentration of mortgage loans with the same borrower or related borrowers can also impose increased risks. o 26 groups of mortgage loans have borrowers related to each other, but no group of mortgage loans having borrowers that are related to each other represents more than 2.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (4.0% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 5.7% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date). o 9 groups of mortgage loans, comprised of 21 mortgage loans that are cross-collateralized and cross-defaulted, represent, in the aggregate, approximately 8.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (15 mortgage loans in loan group 1, representing approximately 10.8% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 6 mortgage loans in loan group 2, representing approximately 3.0% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date). See "--Risks Relating to Enforceability of Cross-Collateralization" below. o 6 mortgage loans, representing approximately 4.9% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (2 mortgage loans in loan group 1, representing approximately 3.6% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 4 mortgage loans in loan group 2, representing approximately 7.9% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), are secured by more than one mortgaged property. S-30 See "Description of the Mortgage Pool--Additional Mortgage Loan Information" in this prospectus supplement. Mortgaged properties owned by related borrowers are likely to: o have common management, increasing the risk that financial or other difficulties experienced by the property manager could have a greater impact on the pool of mortgage loans; and o have common general partners or managing members, which could increase the risk that a financial failure or bankruptcy filing would have a greater impact on the pool of mortgage loans. Except as described below, the terms of the mortgage loans generally require that the borrowers covenant to be single-purpose entities, although in many cases the borrowers are not required to observe all covenants and conditions which typically are required in order for them to be viewed under standard rating agency criteria as "special purpose entities." In general, the borrowers' organizational documents or the terms of the mortgage loans limit their activities to the ownership of only the related mortgaged property or properties and limit the borrowers' ability to incur additional indebtedness. These provisions are designed to mitigate the possibility that the borrowers' financial condition would be adversely impacted by factors unrelated to the mortgaged properties and the mortgage loans in the pool. However, we cannot assure you that the related borrowers will comply with these requirements. The borrowers with respect to 4 of the mortgage loans, representing approximately 4.3% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 6.2% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), are not required to be single-purpose entities. See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws" in the prospectus. RISKS RELATING TO ENFORCEABILITY OF CROSS-COLLATERALIZATION As described above and on Annex A-1 to this prospectus supplement, 9 groups comprised of 21 mortgage loans representing approximately 8.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 10.8% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and approximately 3.0% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), are cross-collateralized and cross-defaulted. Cross-collateralization arrangements may be terminated with respect to some mortgage loan groups in certain circumstances under the terms of the related mortgage loan documents. Cross-collateralization arrangements involving more than one borrower could be challenged as fraudulent conveyances by creditors of the related borrower in an action brought outside a bankruptcy case or, if the borrower were to become a debtor in a bankruptcy case, by the borrower's representative. A lien granted by a borrower could be avoided if a court were to determine that: o the borrower was insolvent when it granted the lien, was rendered insolvent by the granting of the lien, was left with inadequate capital when it allowed its mortgaged property or properties to be encumbered by a lien securing the entire indebtedness, or was not able to pay its debts as they matured when it granted the lien; and o the borrower did not receive fair consideration or reasonably equivalent value when it allowed its mortgaged property or properties to be encumbered by a lien securing the entire indebtedness. Among other things, a legal challenge to the granting of the liens may focus on the benefits realized by that borrower from the respective mortgage loan proceeds, as well as the overall cross-collateralization. If a court were to conclude that the granting of the liens was an avoidable fraudulent conveyance, that court could: o subordinate all or part of the pertinent mortgage loan to existing or future indebtedness of that borrower; S-31 o recover payments made under that mortgage loan; or o take other actions detrimental to the holders of the certificates, including, under certain circumstances, invalidating the mortgage loan or the mortgages securing the cross-collateralization. THE BORROWER'S FORM OF ENTITY MAY CAUSE SPECIAL RISKS Most of the borrowers are legal entities rather than individuals. Mortgage loans made to legal entities may entail risks of loss greater than those of mortgage loans made to individuals. For example, a legal entity, as opposed to an individual, may be more inclined to seek legal protection from its creditors under the bankruptcy laws. Unlike individuals involved in bankruptcies, most of the entities generally do not have personal assets and creditworthiness at stake. The terms of the mortgage loans generally require that the borrowers covenant to be single-purpose entities, although in many cases the borrowers are not required to observe all covenants and conditions which typically are required in order for them to be viewed under standard rating agency criteria as "special purpose entities." In general, borrowers' organizational documents or the terms of the mortgage loans limit their activities to the ownership of only the related mortgaged property or properties and limit the borrowers' ability to incur additional indebtedness. These provisions are designed to mitigate the possibility that the borrowers' financial condition would be adversely impacted by factors unrelated to the mortgaged property and the mortgage loan in the pool. However, we cannot assure you that the related borrowers will comply with these requirements. The bankruptcy of a borrower, or a general partner or managing member of a borrower, may impair the ability of the lender to enforce its rights and remedies under the related mortgage. Borrowers that are not special purpose entities structured to limit the possibility of becoming insolvent or bankrupt, may be more likely to become insolvent or the subject of a voluntary or involuntary bankruptcy proceeding because such borrowers may be: o operating entities with business distinct from the operation of the property with the associated liabilities and risks of operating an ongoing business; or o individuals that have personal liabilities unrelated to the property. However, any borrower, even a special purpose entity structured to be bankruptcy-remote, as an owner of real estate will be subject to certain potential liabilities and risks. We cannot assure you that any borrower will not file for bankruptcy protection or that creditors of a borrower or a corporate or individual general partner or managing member of a borrower will not initiate a bankruptcy or similar proceeding against such borrower or corporate or individual general partner or managing member. Furthermore, with respect to any related borrowers, creditors of a common parent in bankruptcy may seek to consolidate the assets of such borrowers with those of the parent. Consolidation of the assets of such borrowers would likely have an adverse effect on the funds available to make distributions on your certificates, and may lead to a downgrade, withdrawal or qualification of the ratings of your certificates. See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws" in the prospectus. With respect to a number of mortgage loans, the related borrowers own the related mortgaged property as tenants in common. As a result, if a borrower exercises its right of partition, the related mortgage loan may be subject to prepayment. The bankruptcy, dissolution or action for partition by one or more of the tenants in common could result in an early repayment of the related mortgage loan, significant delay in recovery against the tenant in common borrowers, particularly if the tenant in common borrowers file for bankruptcy separately or in series (because each time a tenant-in-common borrower files for bankruptcy, the bankruptcy court stay will be reinstated), a material impairment in property management and a substantial decrease in the amount recoverable upon the related mortgage loan. Not all tenants-in-common for the mortgage loans are special purpose entities. S-32 ABILITY TO INCUR OTHER BORROWINGS ENTAILS RISK When a borrower (or its constituent members) also has one or more other outstanding loans (even if they are subordinated loans), the trust is subjected to additional risk. The borrower may have difficulty servicing and repaying multiple loans. The existence of another loan will generally also make it more difficult for the borrower to obtain refinancing of its mortgage loan and may thereby jeopardize repayment of the mortgage loan. Moreover, the need to service additional debt may reduce the cash flow available to the borrower to operate and maintain the mortgaged property. Additionally, if a borrower (or its constituent members) defaults on its mortgage loan and/or any other loan, actions taken by other lenders such as a foreclosure or an involuntary petition for bankruptcy against the borrower could impair the security available to the trust, including the mortgaged property, or stay the trust's ability to foreclose during the course of the bankruptcy case. The bankruptcy of another lender also may operate to stay foreclosure by the trust. The trust may also be subject to the costs and administrative burdens of involvement in foreclosure or bankruptcy proceedings or related litigation. In this regard, the mortgage loans generally prohibit borrowers from incurring any additional debt secured by their mortgaged property without the consent of the lender. However, the One Post Office Square loan is a senior loan in a split loan structure with the One Post Office Square companion note (pari passu with the One Post Office Square loan) and the One Post Office Square B note. Each of these notes is secured by a single mortgage instrument on the related mortgaged property. The One Post Office Square companion note will not be included as an asset of the trust fund. See "Description of the Mortgage Pool--The One Post Office Square Whole Loan" in this prospectus supplement. In addition to the One Post Office Square loan, 5 mortgage loans representing approximately 1.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (4 mortgage loans in loan group 1, representing approximately 1.4% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 1 mortgage loan in loan group 2, representing approximately 1.7% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), are senior loans in a split loan structure with companion loans. Each pair of senior and companion loans is secured by a single mortgage instrument on the related mortgaged property. The companion loans will not be included as assets of the trust fund. However, the companion loans will be serviced under the pooling and servicing agreement, subject to the related intercreditor agreements. The holder of each companion loan will also have certain rights with respect to the related senior loan and the related mortgaged property, including the right, under certain conditions, to consent to, or provide advice with respect to, certain actions proposed to be taken by the special servicer with respect to the related mortgaged property, make cure payments on the related senior loan or purchase the related senior loan if the senior loan is in default. In exercising such rights, the holder of such companion loan does not have any obligation to consider the interests of, or impact on, the trust or the certificates. See "Description of the Mortgage Pool--Additional Debt" in this prospectus supplement. Although the companion loans and the One Post Office Square companion note are not assets of the trust fund, the related borrowers are still obligated to make interest and principal payments on the companion loans and the One Post Office Square companion note. As a result, the trust fund is subject to additional risks, including: o the risk that the necessary maintenance of the related mortgaged property could be deferred to allow the borrower to pay the required debt service on these other obligations and that the value of the mortgaged property may fall as a result; and o the risk that it may be more difficult for the borrower to refinance the mortgage loan or to sell the mortgaged property for purposes of making any balloon payment on the entire balance of both the senior obligations and the subordinate obligations upon the maturity of the mortgage loan. S-33 See "Description of the Mortgage Pool--General." "--Additional Debt" and "--The One Post Office Square Whole Loan" in this prospectus supplement and "Certain Legal Aspects of Mortgage Loans--Subordinate Financing" in the prospectus. In addition, the mortgage loan sellers have informed us that they are aware of certain permitted existing secured debt provisions in the related mortgage loan documents allow the borrower to incur additional secured debt in the future. In addition, substantially all of the mortgage loans permit the related borrower to incur limited indebtedness in the ordinary course of business that is not secured by the related mortgaged property. In addition, the borrowers under certain of the mortgage loans have incurred and/or may incur in the future unsecured debt other than in the ordinary course of business. Moreover, in general, any borrower that does not meet single-purpose entity criteria may not be restricted from incurring unsecured debt or debt secured by other property of the borrower. See "Description of the Mortgage Pool--Additional Debt" in this prospectus supplement. Additionally, the terms of certain mortgage loans permit or require the borrowers to post letters of credit and/or surety bonds for the benefit of the related mortgage loan, which may constitute a contingent reimbursement obligation of the related borrower or an affiliate. The issuing bank or surety will not typically agree to subordination and standstill protection benefiting the mortgagee. The mortgage loans generally place certain restrictions on the transfer and/or pledging of general partnership and managing member equity interests in a borrower such as specific percentage or control limitations. The terms of the mortgage loans generally permit, subject to certain limitations, the transfer or pledge of less than a controlling portion of the limited partnership or non-managing member equity or other interests in a borrower. Certain of the mortgage loans do not restrict the pledging of ownership interests in the related borrower, but do restrict the transfer of ownership interests in the related borrower by imposing a specific percentage or control limitation or requiring the consent of the mortgagee to any such transfer. Moreover, in general, mortgage loans with borrowers that do not meet single-purpose entity criteria may not restrict in any way the incurrence by the relevant borrower of mezzanine debt. Certain of the mortgage loans permit mezzanine debt, secured by pledges of ownership interests in the borrower, in the future subject to criteria set forth in the loan documents. As of the cut-off date, the applicable mortgage loan sellers have informed us that they are aware of certain mezzanine indebtedness with respect to 1 mortgage loan, representing approximately 0.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 0.7% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date). Mezzanine debt is debt that is incurred by the owner of equity in one or more borrowers and is secured by a pledge of the equity ownership interests in such borrowers. Because mezzanine debt is secured by the obligor's equity interest in the related borrowers, such financing effectively reduces the obligor's economic stake in the related mortgaged property. The existence of mezzanine debt may reduce cash flow on the borrower's mortgaged property after the payment of debt service and may increase the likelihood that the owner of a borrower will permit the value or income producing potential of a mortgaged property to fall and may create a slightly greater risk that a borrower will default on the mortgage loan secured by a mortgaged property whose value or income is relatively weak. Generally, upon a default under mezzanine debt, the holder of such mezzanine debt would be entitled to foreclose upon the equity in the related mortgagor, which has been pledged to secure payment of such mezzanine debt. Although such transfer of equity may not trigger the due on sale clause under the related mortgage loan, it could cause the obligor under such mezzanine debt to file for bankruptcy, which could negatively affect the operation of the related mortgaged property and such borrower's ability to make payments on the related mortgage loan in a timely manner. S-34 BORROWER MAY BE UNABLE TO REPAY REMAINING PRINCIPAL BALANCE ON MATURITY DATE OR ANTICIPATED REPAYMENT DATE Mortgage loans with substantial remaining principal balances at their stated maturity, also known as balloon loans, or with substantial remaining principal balances at the anticipated repayment date of the related mortgage loan involve greater risk than fully amortizing loans. This is because the borrower may be unable to repay the loan at that time. In addition, fully amortizing mortgage loans which may pay interest on an "actual/360" basis but have fixed monthly payments may, in effect, have a small payment due at maturity. A borrower's ability to repay a mortgage loan on its stated maturity date or anticipated repayment date typically will depend upon its ability either to refinance the mortgage loan or to sell the mortgaged property at a price sufficient to permit repayment. A borrower's ability to achieve either of these goals will be affected by a number of factors, including: o the availability of, and competition for, credit for commercial real estate projects; o the prevailing interest rates; o the fair market value of the related mortgaged property; o the borrower's equity in the related mortgaged property; o the borrower's financial condition; o the operating history and occupancy level of the mortgaged property; o reductions in applicable government assistance/rent subsidy programs; o the tax laws; and o the prevailing general and regional economic conditions. 170 of the mortgage loans, representing approximately 93.6% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (104 mortgage loans in loan group 1, representing approximately 93.5% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 66 mortgage loans in loan group 2, representing approximately 93.8% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), are expected to have substantial remaining principal balances as of their respective anticipated repayment dates or stated maturity dates. This includes 4 mortgage loans, representing approximately 7.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (3 mortgage loans in loan group 1, representing approximately 9.9% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 1 mortgage loan in loan group 2, representing approximately 1.1% of the principal balance of the mortgage loans in loan group 2 as of the cut-off date), all of which pay interest-only for the first 12 to 24 months of their respective terms and 9 mortgage loans, representing approximately 2.1% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (1 mortgage loan in loan group 1, representing approximately 0.8% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 8 mortgage loans in loan group 2, representing approximately 5.1% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), which pay interest only for their entire terms. 3 of these mortgage loans, representing approximately 5.6% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (2 mortgage loans in loan group 1, representing approximately 7.5% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 1 mortgage loan in loan group 2, representing approximately 1.1% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), require balloon payments at their stated maturity. 1 mortgage loan, representing approximately 1.7% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 2.4% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), will have a substantial balance outstanding at its anticipated repayment date. 159 of the mortgage loans, representing S-35 approximately 83.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (95 mortgage loans in loan group 1, representing approximately 81.0% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 64 mortgage loans in loan group 2, representing approximately 90.2% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), mature or have an anticipated repayment date in the year 2013. We cannot assure you that each borrower will have the ability to repay the remaining principal balances on the pertinent date. See "Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans" in this prospectus supplement and "Risk Factors--Borrowers May Be Unable to Make Balloon Payments" in the prospectus. COMMERCIAL AND MULTIFAMILY LENDING IS DEPENDENT UPON NET OPERATING INCOME The mortgage loans are secured by various income-producing commercial and multifamily properties. Commercial and multifamily lending are generally thought to expose a lender to greater risk than residential one-to-four family lending because they typically involve larger loans to a single borrower or groups of related borrowers. The repayment of a commercial or multifamily loan is typically dependent upon the ability of the related mortgaged property to produce cash flow through the collection of rents. Even the liquidation value of a commercial property is determined, in substantial part, by the capitalization of the property's cash flow. However, net operating income can be volatile and may be insufficient to cover debt service on the loan at any given time. The net operating incomes and property values of the mortgaged properties may be adversely affected by a large number of factors. Some of these factors relate to the properties themselves, such as: o the age, design and construction quality of the properties; o perceptions regarding the safety, convenience and attractiveness of the properties; o the proximity and attractiveness of competing properties; o the adequacy of the property's management and maintenance; o increases in operating expenses; o an increase in the capital expenditures needed to maintain the properties or make improvements; o dependence upon a single tenant, or a concentration of tenants in a particular business or industry; o a decline in the financial condition of a major tenant; o an increase in vacancy rates; and o a decline in rental rates as leases are renewed or entered into with new tenants. Other factors are more general in nature, such as: o national, regional or local economic conditions, including plant closings, military base closings, industry slowdowns and unemployment rates; o local real estate conditions, such as an oversupply of competing properties, retail space, office space, multifamily housing or hotel capacity; o demographic factors; o consumer confidence; o consumer tastes and preferences; S-36 o retroactive changes in building codes; o changes or continued weakness in specific industry segments; and o the public perception of safety for customers and clients. The volatility of net operating income will be influenced by many of the foregoing factors, as well as by: o the length of tenant leases; o the creditworthiness of tenants; o tenant defaults; o in the case of rental properties, the rate at which new rentals occur; and o the property's "operating leverage" which is generally 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 properties with short-term revenue sources, such as short-term or month-to-month leases, and may lead to higher rates of delinquency or defaults. 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 any tenant makes up a significant portion of the rental income. Mortgaged properties leased to a single tenant or tenants that make up a significant portion of the rental income also are more susceptible to interruptions of cash flow if such a tenant or tenants fail to renew their leases. This is so because the financial effect of the absence of rental income may be severe; more time may be required to re-lease the space; and substantial capital costs may be incurred to make the space appropriate for replacement tenants. In this respect, 24 mortgaged properties, securing mortgage loans, representing approximately 8.6% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 12.4% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), are leased to a single tenant. The underwriting of the single-tenant mortgage loans is based primarily upon the monthly rental payments due from the tenant under the lease of the related mortgaged property. Where the primary lease term expires before the scheduled maturity date of the related mortgage loan, the mortgage loan sellers considered the incentives for the primary tenant to re-lease the premises and the anticipated rental value of the premises at the end of the primary lease term. Additionally, the underwriting of certain of these mortgage loans leased to single tenants may have taken into account the creditworthiness of the tenants under the related leases and consequently may have higher loan-to-value ratios and lower debt service coverage ratios than other types of mortgage loans. Retail and office properties also may be adversely affected if there is a concentration of particular tenants among the mortgaged properties or of tenants in a particular business or industry. In this regard, see "--Retail Properties Have Special Risks" below. CERTAIN ADDITIONAL RISKS RELATING TO TENANTS The income from, and market value of, the mortgaged properties leased to various tenants would be adversely affected if: o space in the mortgaged properties could not be leased or re-leased; o leasing or re-leasing is restricted by exclusive rights of tenants to lease the mortgaged properties or other covenants not to lease space for certain uses or activities, or covenants limiting the types of tenants to which space may be leased; S-37 o substantial re-leasing costs were required and/or the cost of performing landlord obligations under existing leases materially increased; o tenants were unwilling or unable to meet their lease obligations; o a significant tenant were to become a debtor in a bankruptcy case; or o rental payments could not be collected for any other reason. Repayment of the mortgage loans secured by retail, office and industrial properties will be affected by the expiration of leases and the ability of the respective borrowers to renew the leases or relet the space on comparable terms and on a timely basis. Certain of the mortgaged properties may be leased in whole or in part by government-sponsored tenants who have the right to cancel their leases at any time or for lack of appropriations. Additionally, mortgaged properties may have concentrations of leases expiring at varying rates in varying percentages including single-tenant mortgaged properties, during the term of the related mortgage loans. Even if vacated space is successfully relet, the costs associated with reletting, including tenant improvements and leasing commissions, could be substantial and could reduce cash flow from the mortgaged properties. Moreover, if a tenant defaults in its obligations to a borrower, the borrower may incur substantial costs and experience significant delays associated with enforcing its rights and protecting its investment, including costs incurred in renovating and reletting the related mortgaged property. Additionally, in certain jurisdictions, if tenant leases are subordinated to the liens created by the mortgage but do not contain attornment provisions (provisions requiring the tenant to recognize as landlord under the lease a successor owner following foreclosure), the leases may terminate upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Accordingly, if a mortgaged property is located in such a jurisdiction and is leased to one or more desirable tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants' leases were terminated. With respect to certain of the mortgage loans, the related borrower has given to certain tenants or others an option to purchase, a right of first refusal or a right of first offer to purchase all or a portion of the mortgaged property in the event a sale is contemplated, and such right is not subordinate to the related mortgage. This may impede the mortgagee's ability to sell the related mortgaged property at foreclosure, or, upon foreclosure, this may affect the value and/or marketability of the related mortgaged property. 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-tenant mortgaged properties also may experience higher continuing vacancy rates and greater volatility in rental income and expenses. 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 or its affiliate's financial condition worsens, which risk may be mitigated when mortgaged properties are leased to unrelated third parties. 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 S-38 property. Under the federal bankruptcy code a tenant has the option of assuming or rejecting any unexpired lease. If the tenant rejects the lease, the landlord's claim for breach of the lease would be a general unsecured claim against the tenant (absent collateral securing the claim). The claim would be limited to the unpaid rent reserved under the lease for the periods prior to the bankruptcy petition (or earlier surrender of the leased premises) which are unrelated to the rejection, plus the greater of one year's rent or 15% of the remaining reserved rent (but not more than three years' rent). MORTGAGE LOANS ARE NONRECOURSE AND ARE NOT INSURED OR GUARANTEED The mortgage loans are not insured or guaranteed by any person or entity, governmental or otherwise. Investors should treat each mortgage loan as a nonrecourse loan. If a default occurs, recourse generally may be had only against the specific properties and other assets that have been pledged to secure the loan. Consequently, payment prior to maturity is dependent primarily on the sufficiency of the net operating income of the mortgaged property. Payment at maturity is primarily dependent upon the market value of the mortgaged property or the borrower's ability to refinance the mortgaged property. MULTIFAMILY PROPERTIES HAVE SPECIAL RISKS 75 multifamily properties secure mortgage loans representing approximately 28.9% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (3 mortgaged properties securing mortgage loans in loan group 1, representing approximately 3.0% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 72 mortgaged properties securing mortgage loans in loan group 2, representing approximately 88.3% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date) by allocated loan amount. A large number of factors may adversely affect the value and successful operation of a multifamily property, including: o the physical attributes of the apartment building such as its age, condition, design, appearance, access to transportation and construction quality; o the location of the property, for example, a change in the neighborhood over time; o the ability of management to provide adequate maintenance and insurance; o the types of services or amenities that the property provides; o the property's reputation; o the level of mortgage interest rates, which may encourage tenants to purchase rather than lease housing; o the presence of competing properties; o the tenant mix, such as the tenant population being predominantly students or being heavily dependent on workers from a particular business or personnel from a local military base; o dependence upon governmental programs that provide rent subsidies to tenants pursuant to tenant voucher programs, which vouchers may be used at other properties and influence tenant mobility; o adverse local or national economic conditions, which may limit the amount of rent that may be charged and may result in a reduction of timely rent payments or a reduction in occupancy levels; and o state and local regulations, which may affect the building owner's ability to increase rent to market rent for an equivalent apartment. S-39 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 bases 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 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. 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 are secured by mortgaged properties that are eligible (or 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. We can give you 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 loans. Certain of the mortgage loans are secured or may be secured in the future by mortgaged properties that are subject to certain affordable housing covenants, in respect of various units within the mortgaged properties. RETAIL PROPERTIES HAVE SPECIAL RISKS 53 retail properties secure mortgage loans representing approximately 24.5% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 35.1% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) by allocated loan amount. The quality and success of a retail property's tenants significantly affect the property's market value and the related borrower's ability to refinance such property. For example, if the sales revenues of retail tenants were to decline, rents tied to a percentage of gross sales revenues may decline and those tenants may be unable to pay their rent or other occupancy costs. 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 shopping 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 or adjacent to 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. 39 of the mortgaged properties, securing mortgage loans representing approximately 18.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 26.1% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), are retail properties that are considered by the applicable mortgage loan seller to have an "anchor tenant." 8 of the mortgaged properties, securing mortgage loans representing approximately S-40 3.9% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 5.6% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), are retail properties that are considered by the applicable mortgage loan seller to be "shadow anchored." 6 of the mortgaged properties, securing mortgage loans representing approximately 2.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 3.5% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), are retail properties that are considered by the applicable mortgage loan seller to be "unanchored." If anchor stores in a mortgaged property were to close, the related borrower may be unable to replace those anchors in a timely manner or without suffering adverse economic consequences. Certain of the tenants or anchor stores of the retail properties may have co-tenancy clauses and/or operating covenants in their leases or operating agreements which permit those tenants or anchor stores to cease operating under certain conditions, including, without limitation, certain other stores not being open for business at the mortgaged property or a subject store not meeting the minimum sales requirement under its lease. In addition, in the event that a "shadow anchor" fails to renew its lease, terminates its lease or otherwise ceases to conduct business within a close proximity to the mortgaged property, customer traffic at the mortgaged property may be substantially reduced. We cannot assure you that such space will be occupied or that the related mortgaged property will not suffer adverse economic consequences. In this regard, see "--Tenant Bankruptcy Entails Risks" above. 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 dollars: factory outlet centers; discount shopping centers and clubs; catalogue retailers; home shopping networks; internet websites; and telemarketing. 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 pool of mortgage loans, as well as the income from, and market value of, the mortgaged properties and the related borrower's ability to refinance such property. Moreover, additional competing retail properties may be built in the areas where the retail properties are located. OFFICE PROPERTIES HAVE SPECIAL RISKS 22 office properties secure mortgage loans representing approximately 19.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 27.8% of the aggregate principal balance of the mortgaged properties in loan group 1 as of the cut-off date) by allocated loan amount. A large number of factors may adversely affect the value of office properties, including: o the quality of an office building's tenants; o an economic decline in the business operated by the tenants; o the physical attributes of the building in relation to competing buildings (e.g., age, condition, design, appearance, location, access to transportation and ability to offer certain amenities, such as sophisticated building systems and/or business wiring requirements); o the physical attributes of the building with respect to the technological needs of the tenants, including the adaptability of the building to changes in the technological needs of the tenants; o the diversity of an office building's tenants (or reliance on a single or dominant tenant); o the desirability of the area as a business location; o the strength and nature of the local economy, including labor costs and quality, tax environment and quality of life for employees; and S-41 o an adverse change in population, patterns of telecommuting or sharing of office space, and employment growth (which creates demand for office space). Moreover, the cost of refitting office space for a new tenant is often higher than the cost of refitting other types of properties for new tenants. See "--Risks Relating to Loan Concentrations" above. MANUFACTURED HOUSING COMMUNITIES HAVE SPECIAL RISKS 31 manufactured housing community properties secure mortgage loans representing approximately 10.4% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (17 mortgaged properties securing mortgage loans in loan group 1, representing approximately 9.8% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 14 mortgaged properties securing mortgage loans in loan group 2, representing approximately 11.7% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date) by allocated loan amount. Mortgage loans secured by liens on manufactured housing community properties pose risks not associated with mortgage loans secured by liens on other types of income-producing real estate. The successful operation of a manufactured housing community property may depend upon the number of other competing residential developments in the local market, such as: o other manufactured housing community properties; o apartment buildings; and o site-built single family homes. Other factors may also include: o the physical attributes of the community, including its age and appearance; o location of the manufactured housing community property; o the ability of management to provide adequate maintenance and insurance; o the types of services or amenities it provides; o the property's reputation; and o state and local regulations, including rent control and rent stabilization. The manufactured housing community properties are "special purpose" properties that could not be readily converted to general residential, retail or office use. Thus, if the operation of any of the manufactured housing community properties becomes unprofitable due to competition, age of the improvements or other factors such that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that manufactured housing community property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the manufactured housing community property were readily adaptable to other uses. INDUSTRIAL PROPERTIES HAVE SPECIAL RISKS 8 industrial properties secure mortgage loans representing approximately 6.1% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 8.7% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) by allocated loan amount. Significant factors determining the value of industrial properties are: o the quality of tenants; o reduced demand for industrial space because of a decline in a particular industry segment; S-42 o property becoming functionally obsolete; o building design and adaptability; o unavailability of labor sources; o changes in access, energy prices, strikers, relocation of highways, the construction of additional highways or other factors; o changes in proximity of supply sources; o the expenses of converting a previously adapted space to general use; and o the location of the property. Concerns about the quality of tenants, particularly major tenants, are similar in both office properties and industrial properties, although industrial properties may be more frequently dependent on a single or a few tenants. 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 or warehouse property that suited the needs of its original tenant may be difficult to relet to another tenant or may become functionally obsolete relative to newer properties. In addition, lease terms with respect to industrial properties are generally for shorter periods of time and may result in a substantial percentage of leases expiring in the same year at any particular industrial property. In addition, mortgaged properties used for many industrial purposes are more prone to environmental concerns than other property types. Aspects of building site design and adaptability affect the value of an industrial property. Site characteristics which are generally desirable to a warehouse/industrial property include high clear ceiling heights, wide column spacing, a large number of bays (loading docks) and large bay depths, divisibility, a layout that can accommodate large truck minimum turning radii and overall functionality and accessibility. In addition, because of unique construction requirements of many industrial properties, any vacant industrial property space may not be easily converted to other uses. Thus, if the operation of any of the industrial properties becomes unprofitable due to competition, age of the improvements or other factors such that the borrower becomes unable to meet its obligations on the related mortgage loan, the liquidation value of that industrial property may be substantially less, relative to the amount owing on the related mortgage loan, than would be the case if the industrial property were readily adaptable to other uses. 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. HOTEL PROPERTIES HAVE SPECIAL RISKS A hotel property secures 1 of the mortgage loans representing approximately 3.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 4.3% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) by allocated loan amount. Various factors may adversely affect the economic performance of a hotel, including: o adverse economic and social conditions, either local, regional or national (which may limit the amount that can be charged for a room and reduce occupancy levels); o the presence or construction of competing hotels or resorts; o continuing expenditures for modernizing, refurbishing and maintaining existing facilities prior to the expiration of their anticipated useful lives; o a deterioration in the financial strength or managerial capabilities of the owner or operator of a hotel; and S-43 o changes in travel patterns caused by changes in access, energy prices, strikes, relocation of highways, the construction of additional highways, concerns about travel safety and other factors. Because hotel rooms are generally 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. Additionally, as a result of high operating costs, relatively small decreases in revenue can cause significant stress on a property's cash flow. Furthermore, the terrorist attacks in the United States in September 2001 and the potential for future terrorist attacks may have adversely affected the occupancy rates and, accordingly, the financial performance of hotel properties. See "--Risks to the Mortgaged Properties Relating to Terrorist Attacks and Foreign Conflicts" above. Moreover, the hotel and lodging industry is generally seasonal in nature and different seasons affect different hotels differently 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. Limited-service hotels may subject a lender to more risk than full-service hotels as they generally require less capital for construction than full-service hotels. In addition, as limited service hotels generally offer fewer amenities than full-service hotels, they are less distinguishable from each other. As a result, it is easier for limited-service hotels to experience increased or unforeseen competition. The liquor licenses for most of the mortgaged properties are held by affiliates of the borrowers, unaffiliated managers or 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, the trustee or 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. RISKS RELATING TO AFFILIATION WITH A FRANCHISE OR HOTEL MANAGEMENT COMPANY The hotel property that secures the mortgage loan (the Sheraton Inner Harbor loan), representing approximately 3.0% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (representing approximately 4.3% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), is affiliated with a hotel management company through a management agreement. The performance of a hotel property affiliated with a franchise or hotel management company depends in part on: o the continued existence and financial strength of the franchisor or hotel management company; o the public perception of the franchise or hotel chain service mark; and o the duration of the franchise licensing or management agreements. Any provision in a franchise agreement or management agreement providing for termination because of a bankruptcy of a franchisor or manager generally will not be enforceable. Replacement franchises may require significantly higher fees. The transferability of franchise license agreements is restricted. In the event of a foreclosure, the lender or its agent would not have the right to use the franchise license without the franchisor's consent. Conversely, the lender may be unable to remove a franchisor or a hotel management company that it desires to replace following a foreclosure. With respect to the Sheraton Inner Harbor loan, the related mortgage loan seller has informed us that the borrower and the manager of the hotel are involved in a dispute over S-44 incentive fees owed to the manager under the management agreement. This dispute has been ongoing since 1985. The manager claims that to date, the borrower owes the manager approximately $3.92 million in incentive fees under the management agreement. The manager will also seek to recover additional incentive fees that accrue through December 2005, the expiration date of the management agreement. The borrower disputes the amount of these incentive fees. The borrower delivered two letters of credit to the lender in connection with this dispute. The first letter of credit is in the amount of $5 million. The lender may draw on this letter of credit to recover any amounts that the borrower fails to pay to the lender that results in a monetary event of default under the mortgage loan documents. This letter of credit may be released upon the earlier to occur of (i) resolution of the dispute and (ii) one year following the earlier to occur of (x) the rebranding of the hotel with a new operator and (y) the expiration of the current management agreement. In addition, this letter of credit may be released in part, in proportion to any settlement of the dispute. The second letter of credit is in the amount of $2.8 million (approximately the amount of annual debt service required under the Sheraton Inner Harbor loan). If the current manager terminates the management agreement or fails to renew the management agreement, and the borrower fails to pay to the lender any amount that results in a monetary event of default under the mortgage loan documents during the one-year period following such termination or non-renewal, the lender may draw on this letter of credit for such amounts the borrower failed to pay. If no monetary event of default occurs by the borrower during this one-year period, the amount of the letter of credit will be reduced quarterly on a pro rata basis and the letter of credit will expire at the end of this period. This letter of credit may be released upon the earlier to occur of (i) the current manager electing to renew the management agreement and the resolution of the dispute and (ii) one year following the rebranding of the hotel with a new operator. LACK OF SKILLFUL PROPERTY MANAGEMENT ENTAILS RISKS The successful operation of a real estate project depends upon the property manager's performance and viability. The property manager is responsible for: o responding to changes in the local market; o planning and implementing the rental structure; o operating the property and providing building services; o managing operating expenses; and o assuring that maintenance and capital improvements are carried out in a timely fashion. Properties deriving revenues primarily from short-term sources, such as short-term or month-to-month leases, are generally more management intensive than properties leased to creditworthy tenants under long-term leases. We make no representation or warranty as to the skills of any present or future managers. In many cases, the property manager is the borrower or an affiliate of the borrower and may not manage properties for non-affiliates. Additionally, we cannot assure you that the property managers will be in a financial condition to fulfill their management responsibilities throughout the terms of their respective management agreements. 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. For example, any vacant theater space would not easily be converted to other uses due to the unique construction requirements of theaters. Converting commercial properties to alternate uses generally requires substantial S-45 capital expenditures and could result in a significant adverse effect on, or interruption of, the revenues generated by such properties. The liquidation value of a mortgaged property consequently may be substantially less than would be the case if the property were readily adaptable to other uses. Zoning or other restrictions also may prevent alternative uses. See "--Zoning Compliance and Use Restrictions May Adversely Affect Property Value" below. See also "--Industrial Properties Have Special Risks" and "--Manufactured Housing Communities Have Special Risks" above. PROPERTY VALUE MAY BE ADVERSELY AFFECTED EVEN WHEN CURRENT OPERATING INCOME IS NOT Various factors may adversely affect the value of a mortgaged property without affecting the property's current net operating income. These factors include, among others: o the existence of, or changes in, governmental regulations, fiscal policy, zoning or tax laws; o potential environmental legislation or liabilities or other legal liabilities; o the availability of refinancing; and o changes in interest rate levels. MORTGAGE LOANS SECURED BY LEASEHOLD INTERESTS MAY EXPOSE INVESTORS TO GREATER RISKS OF DEFAULT AND LOSS 1 mortgage loan, representing approximately 4.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 6.1% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) is secured by a first mortgage lien on a leasehold interest on the related mortgaged property. In addition, 1 mortgage loan, representing approximately 1.1% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 1.6% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date), is secured by a first mortgage lien on both a fee parcel and a leasehold interest in a separate adjacent parcel. Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the related borrower's leasehold were to be terminated upon a lease default, the lender would lose its security. Generally, each related ground lease requires the lessor to give the lender notice of the borrower's defaults under the ground lease and an opportunity to cure them, permits the leasehold interest to be assigned to the lender or the purchaser at a foreclosure sale, in some cases only upon the consent of the lessor, and contains certain other protective provisions typically included in a "mortgageable" ground lease. Upon the bankruptcy of a lessor or a lessee under a ground lease, the debtor has the right to assume or reject the lease. If a debtor lessor rejects the lease, the lessee has the right to remain in possession of its leased premises for the rent otherwise payable under the lease for the term of the ground lease (including renewals). If a debtor lessee/borrower rejects the lease, 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 right to refuse to treat a ground lease rejected by a bankrupt lessor as terminated. In such circumstances, a ground lease could be terminated notwithstanding lender protection provisions contained in the ground lease or in the mortgage. Further, in a recent decision by the United States Court of Appeals for the Seventh Circuit (Precision Indus. v. Qualitech Steel SBQ, LLC, 327 F.3d 537 (2003)), the court ruled that where a statutory sale of the leased property occurs under Section 363(f) of the U.S. Bankruptcy Code S-46 upon the bankruptcy of a landlord, that sale terminates a lessee's possessory interest in the property, and the purchaser assumes title free and clear of any interest, including any leasehold estates. Pursuant to Section 363(e) of the U.S. Bankruptcy Code, a lessee may request the bankruptcy court to prohibit or condition the statutory sale of the property so as to provide adequate protection of the leasehold interest; however, the court ruled that this provision does not ensure continued possession of the property, but rather entitles the lessee to compensation for the value of its leasehold interest, typically from the sale proceeds. As a result, there can be no assurance that, in the event of a statutory sale of leased property pursuant to Section 363(f) of the U.S. Bankruptcy Code, the lessee may be able to maintain possession of the property under the ground lease. In addition, there can be no assurance that the lessee and/or the lender (to the extent it can obtain standing to intervene) will be able to recoup the full value of the leasehold interest in bankruptcy court. See "Certain Legal Aspects of Mortgage Loans--Foreclosure--Leasehold Risks" in the prospectus. LIMITATIONS OF APPRAISALS Appraisals were obtained with respect to each of the mortgaged properties at or about the time of the origination of the applicable mortgage loan. In general, appraisals represent the analysis and opinion of qualified appraisers, but appraisals are not guarantees of present or future value. One appraiser may reach a different conclusion than the conclusion that would be reached if a different appraiser were appraising that property. Moreover, appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller and, in certain cases, may have taken into consideration the purchase price paid by the borrower. That amount could be significantly higher than the amount obtained from the sale of a mortgaged property under a distress or liquidation sale. We cannot assure you that the information set forth in this prospectus supplement regarding appraised values or loan-to-value ratios accurately reflects past, present or future market values of the mortgaged properties. Any engineering report, site inspection or appraisal represents only the analysis of the individual consultant, engineer or inspector preparing such report at the time of such report, and may not reveal all necessary or desirable repairs, maintenance and capital improvement items. YOUR LACK OF CONTROL OVER THE TRUST FUND CAN CREATE RISKS You and other certificateholders generally do not have a right to vote and do not have the right to make decisions with respect to the administration of the trust. See "Servicing of the Mortgage Loans--General" in this prospectus supplement. Those decisions are generally made, subject to the express terms of the pooling and servicing agreement, by the master servicer, the trustee or the special servicer, as applicable. Any decision made by one of those parties in respect of the trust, even if that decision is determined to be in your best interests by that party, may be contrary to the decision that you or other certificateholders would have made and may negatively affect your interests. POTENTIAL CONFLICTS OF INTEREST The pooling and servicing agreement provides that the mortgage loans are required to be administered in accordance with the servicing standards without regard to ownership of any certificate by a servicer or any of its affiliates. See "Servicing of the Mortgage Loans--General" in this prospectus supplement. Notwithstanding the foregoing, the master servicer, the special servicer or any of their respective affiliates may have interests when dealing with the mortgage loans that are in conflict with those of holders of the offered certificates, especially if the master servicer, the special servicer or any of their respective affiliates holds Series 2003-LN1 non-offered certificates, or has financial interests in or other financial dealings with a borrower under any of the mortgage loans. For instance, a special servicer or its affiliate that holds Series 2003-LN1 non-offered S-47 certificates could seek to reduce the potential for losses allocable to those certificates from a troubled mortgage loan by deferring acceleration in hope of maximizing future proceeds. However, that action could result in less proceeds to the trust than would be realized if earlier action had been taken. In general, no servicer is required to act in a manner more favorable to the offered certificates or any particular class of offered certificates than to Series 2003-LN1 non-offered certificates. Each servicer services and will, in the future, service, in the ordinary course of its business, 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 mortgaged properties securing the mortgage loans that will be included in the trust. Consequently, personnel of any of the servicers 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 servicer or the special servicer. In addition, 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 seller or its affiliates may have or have had equity investments in the borrowers or mortgaged 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 loans to, or equity investments in, affiliates of the borrowers under the mortgage loans. Each mortgage loan seller is obligated to repurchase or substitute for a mortgage loan sold by it under the circumstances described under "Description of the Mortgage Pool-- Representations and Warranties; Repurchases and Substitutions" in this prospectus supplement. LaSalle Bank National Association is one of the mortgage loan sellers and is also acting as paying agent, certificate registrar and authenticating agent and is an affiliate of one of the underwriters. The managers of the mortgaged properties and the borrowers may experience conflicts of interest in the management and/or ownership of the mortgaged properties because: o a substantial number of the mortgaged properties are managed by property managers affiliated with the respective borrowers; o these property managers also may manage and/or franchise additional properties, including properties that may compete with the mortgaged properties; and o affiliates of the managers and/or the borrowers, or the managers and/or the borrowers themselves, also may own other properties, including competing properties. The companion loans will not be included as assets of the trust fund. However, the companion loans will be serviced under the pooling and servicing agreement, subject to the related intercreditor agreements. The holder of each companion loan will also have certain rights with respect to the related senior loan and the related mortgaged property, including the right, under certain conditions to consent to, or provide advice with respect to, certain actions proposed by the special servicer with respect to the related mortgaged property, to make cure payments on the related senior loan or purchase the related senior loan if the senior loan is in default. In exercising such rights, the holder of such companion loan does not have any obligation to consider the interests of, or impact on, the trust or the certificates. SPECIAL SERVICER MAY BE DIRECTED TO TAKE ACTIONS In connection with the servicing of the specially serviced mortgage loans, the special servicer may, at the direction of the directing certificateholder, take actions with respect to the specially serviced mortgage loans that could adversely affect the holders of some or all of the classes of offered certificates. Similarly, the special servicer may, at the direction of the operating advisor S-48 for the One Post Office Square loan (provided no change of control event has occurred or is continuing), take actions with respect to the One Post Office Square loan that could adversely affect the holders of some or all of the classes of offered certificates. See "Servicing of the Mortgage Loans--The Directing Certificateholder and the One Post Office Square Operating Advisor" in this prospectus supplement. The directing certificateholder will be controlled by the controlling class certificateholders and the One Post Office Square operating advisor will be designated by certain holders of Class PS certificates, any of whom may have interests in conflict with those of the certificateholders of the classes of offered certificates. As a result, it is possible that the directing certificateholder or the One Post Office Square operating advisor may direct the special servicer to take actions which conflict with the interests of certain classes of the offered certificates. However, the special servicer is not permitted to take actions which are prohibited by law or violate the servicing standards or the terms of the mortgage loan documents. In addition, the special servicer may be removed without cause by the directing certificateholder as described in this prospectus supplement. See "Servicing of the Mortgage Loans--General," "--The Special Servicer" and "--The Directing Certificateholder and the One Post Office Square Operating Advisor" in this prospectus supplement. BANKRUPTCY PROCEEDINGS ENTAIL CERTAIN RISKS Under federal bankruptcy law, the filing of a petition in bankruptcy by or against a borrower will stay the sale of the mortgaged property owned by that borrower, as well as the commencement or continuation of a foreclosure action. In addition, even if a court determines that the value of the mortgaged property is less than the principal balance of the mortgage loan it secures, the court may prevent a 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, which 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: (1) grant a debtor a reasonable time to cure a payment default on a mortgage loan; (2) reduce periodic payments due under a mortgage loan; (3) change the rate of interest due on a mortgage loan; or (4) otherwise alter the mortgage loan's repayment schedule. Moreover, the filing of a petition in bankruptcy by, or on behalf of, a junior lienholder may stay the senior lienholder from taking action to foreclose on the junior lien. Additionally, the borrower's trustee or the borrower, as debtor-in-possession, has certain special powers to avoid, subordinate or disallow debts. In certain circumstances, the claims of the trustee may be subordinated to financing obtained by a debtor-in-possession subsequent to its bankruptcy. Under federal bankruptcy law, the lender will be stayed from enforcing a borrower's assignment of rents and leases. Federal bankruptcy law also may interfere with the master servicer's or special servicer's ability to enforce lockbox requirements. The legal proceedings necessary to resolve these issues can be time consuming and costly and may significantly delay or diminish the receipt of rents. Rents also may escape an assignment to the extent they are used by the borrower to maintain the mortgaged property or for other court authorized expenses. Additionally, pursuant to subordination agreements for certain of the mortgage loans, the subordinate lenders may have agreed that they will not take any direct actions with respect to the related subordinated debt, including any actions relating to the bankruptcy of the borrower, and that the holder of the mortgage loan will have all rights to direct all such actions. There can be no assurance that in the event of the borrower's bankruptcy, a court will enforce such restrictions against a subordinated lender. In its decision in In re 203 North LaSalle Street Partnership, 246 B.R. 325 (Bankr. N.D. Ill. March 10, 2000), the United States Bankruptcy Court for the Northern District of Illinois refused to enforce a provision of a subordination agreement that allowed a first mortgagee to vote a second mortgagee's claim with respect to a Chapter 11 reorganization plan on the grounds that prebankruptcy contracts cannot override rights expressly provided by the Bankruptcy Code. This S-49 holding, which at least one court has already followed, potentially limits the ability of a senior lender to accept or reject a reorganization plan or to control the enforcement of remedies against a common borrower over a subordinated lender's objections. As a result of the foregoing, the trustee's recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed. Certain of the mortgage loans may have sponsors that have previously filed bankruptcy, which in some cases may have involved the same property which currently secures the mortgage loan. In each case, the related entity or person has emerged from bankruptcy. However, we cannot assure you that such sponsors will not be more likely than other sponsors to utilize their rights in bankruptcy in the event of any threatened action by the mortgagee to enforce its rights under the related loan documents. RISKS RELATING 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, defaults and liquidations or repurchases upon breaches of representations and warranties. In addition, because the amount of principal that will be distributed to the Class A-1, Class A-2 and Class A-1A certificates will generally be based upon the particular loan group in which the related mortgage loan is deemed to be a part, the yield on the Class A-1 and Class A-2 certificates will be particularly sensitive to prepayments on mortgage loans in loan group 1 and the yield on the Class A-1A certificates will be particularly sensitive to prepayments on mortgage loans in loan group 2. The yield on the offered certificates could also be adversely affected if mortgage loans with higher interest rates pay faster than the mortgage loans with lower interest rates, if those classes bear interest at a rate equal to, based on, or limited by, the weighted average net mortgage rate of the mortgage loans (other than the One Post Office Square B note). The pass-through rates on those classes of certificates may be limited by the weighted average of the net mortgage rates on the mortgage loans even if principal prepayments do not occur. The investment performance of your certificates may vary materially and adversely from your expectations if the actual rate of prepayment on the mortgage loans is higher or lower than you anticipate. Any changes in the weighted average lives of your certificates may adversely affect your yield. Prepayments resulting in a shortening of weighted average lives of your certificates may be made at a time of low interest rates when you may be unable to reinvest the resulting payment of principal on your certificates at a rate comparable to the effective yield anticipated by you in making your investment in the certificates, while delays and extensions resulting in a lengthening of those weighted average lives may occur at a time of high interest rates when you may have been able to reinvest principal payments that would otherwise have been received by you at higher rates. Although all of the mortgage loans have prepayment protection in the form of lockout periods with defeasance provisions or with yield maintenance or prepayment premium provisions, we cannot assure you that the related borrowers will refrain from prepaying their mortgage loans due to the existence of yield maintenance charges or prepayment premiums or that involuntary prepayments will not occur. Voluntary prepayments, if permitted, generally require the payment of a yield maintenance charge or a prepayment premium unless the loan is prepaid within a 3-month period prior to the stated maturity date or anticipated repayment date, or after the anticipated repayment date, as S-50 the case may be. However, 36 mortgage loans representing approximately 26.8% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (28 mortgage loans in loan group 1, representing approximately 33.1% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and 8 mortgage loans in loan group 2, representing approximately 12.4% of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date) permit voluntary prepayment without payment of a yield maintenance charge at any time after a date ranging from 4 months to 12 months prior to the stated maturity date. Additionally, none of the mortgage loans with anticipated repayment dates require a yield maintenance charge after the related anticipated repayment date. See "Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans--Prepayment Provisions" in this prospectus supplement. In any case, we cannot assure you that the related borrowers will refrain from prepaying their mortgage loans due to the existence of yield maintenance charges or prepayment premiums or that involuntary prepayments will not occur. The rate at which voluntary prepayments occur on the mortgage loans will be affected by a variety of factors, including: o the terms of the mortgage loans; o the length of any prepayment lockout period; o the level of prevailing interest rates; o the availability of mortgage credit; o the applicable yield maintenance charges and prepayment premiums; o the master servicer's or special servicer's ability to enforce those charges or premiums; o the failure to meet certain requirements for the release of escrows; o the occurrence of casualties or natural disasters; and o economic, demographic, tax, legal or other factors. Generally, no yield maintenance charge will be required for prepayments in connection with a casualty or condemnation unless, in the case of some of the mortgage loans, an event of default has occurred and is continuing. We cannot assure you that the obligation to pay any yield maintenance charge or prepayment premium will be enforceable. See "--Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions" below. In addition, certain of the mortgage loans permit the related borrower, after a partial casualty or partial condemnation, to prepay the remaining principal balance of the mortgage loan (after application of the related insurance proceeds or condemnation award to pay the principal balance of the mortgage loan), which may in certain cases not be accompanied by any prepayment consideration, provided that the prepayment of the remaining balance is made within a specified period of time following the date of the application of proceeds or award. Certain shortfalls in interest as a result of involuntary prepayments may reduce the available distribution amount. In addition, if a mortgage loan seller repurchases any mortgage loan from the trust due to breaches of representations or warranties, 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, and no yield maintenance charge will be payable. A repurchase or the exercise of a purchase option may adversely affect the yield to maturity on your certificates. 1 mortgage loan, representing approximately 4.2% of the aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 6.1% of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date) has a performance holdback of $5.1 million. If the required occupancy level at the mortgaged property is not reached by November 2003, the $5.1 million holdback amount will be used to pay down the S-51 principal balance of the mortgage loan. The borrower is required to pay a yield maintenance charge in connection with such pay down. See "Description of the Mortgage Pool--Significant Mortgage Loans--IAC International Cargo Port--Boston" in this prospectus supplement. MORTGAGE LOAN SELLERS MAY NOT BE ABLE TO MAKE A REQUIRED REPURCHASE OR SUBSTITUTION OF A DEFECTIVE MORTGAGE LOAN Each mortgage loan seller is the sole warranting party in respect of the mortgage loans sold by such mortgage loan seller to us. Neither we nor any of our affiliates (except, in certain circumstances, for JPMorgan Chase Bank in its capacity as a mortgage loan seller) are obligated to repurchase or substitute any mortgage loan in connection with either a breach of any mortgage loan seller's representations and warranties or any document defects, if such mortgage loan seller defaults on its obligation to do so. We cannot provide assurances that the mortgage loan sellers will have the financial ability to effect such repurchases or substitutions. Any mortgage loan that is not repurchased or substituted and that is not a "qualified mortgage" for a REMIC may cause the trust fund to fail to qualify as one or more REMICs or cause the trust fund to incur a tax. See "Description of the Mortgage Pool--The Mortgage Loan Sellers" and "--Representations and Warranties; Repurchases and Substitutions" in this prospectus supplement and "Description of the Pooling Agreements--Representations and Warranties; Repurchases" in the prospectus. RISKS RELATING TO ENFORCEABILITY OF YIELD MAINTENANCE CHARGES, PREPAYMENT PREMIUMS OR DEFEASANCE PROVISIONS Provisions requiring yield maintenance charges, prepayment premiums or lockout periods may not be enforceable in some states and under federal bankruptcy law. Provisions requiring yield maintenance charges or prepayment premiums also may be interpreted as constituting the collection of interest for usury purposes. Accordingly, we cannot assure you that the obligation to pay any yield maintenance charge or prepayment premium will be enforceable. Also, we cannot assure you that 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, we cannot assure you that a court would not interpret those provisions as requiring a yield maintenance charge. In certain jurisdictions, those collateral substitution provisions might be deemed unenforceable under applicable law or public policy, or usurious. RISKS RELATING TO BORROWER DEFAULT The rate and timing of delinquencies or defaults on the mortgage loans will affect: o the aggregate amount of distributions on the offered certificates; o their yield to maturity; o their rate of principal payments; and o their weighted average life. If losses on the mortgage loans exceed the aggregate certificate balance of the classes of certificates subordinated to a particular class, that class will suffer a loss equal to the full amount of the excess (up to the outstanding certificate balance of that class). If you calculate your anticipated yield based on assumed rates of defaults and losses that are lower than the default rate and losses actually experienced, and those losses are allocated to your certificates, your actual yield to maturity will be lower than the assumed yield. Under certain extreme scenarios, that yield could be negative. In general, the earlier a loss borne by you on your certificates occurs, the greater the effect on your yield to maturity. S-52 Even if losses on the mortgage loans are not borne by your certificates, those losses may affect the weighted average life and yield to maturity of your certificates. This may be so, because those losses lead to your certificates having a higher percentage ownership interest in the trust and related distributions of principal payments on the mortgage loans than would otherwise have been the case and the related prepayment may affect the pass-through rate on your certificates. The effect on the weighted average life and yield to maturity of your certificates will depend upon the characteristics of the remaining mortgage loans. Delinquencies and defaults on the mortgage loans may significantly delay the receipt of distributions by you on your certificates, unless advances are made to cover delinquent payments or the subordination of another class of certificates fully offsets the effects of any delinquency or default. Additionally, the courts of any state may refuse the foreclosure of a mortgage or deed of trust when an acceleration of the indebtedness would be inequitable or unjust or the circumstances would render the action unconscionable. See "Certain Legal Aspects of the Mortgage Loans--Foreclosure" in the prospectus. RISKS RELATING TO INTEREST ON ADVANCES AND SPECIAL SERVICING COMPENSATION To the extent described in this prospectus supplement, the master servicer, the special servicer or the trustee, as applicable, will be entitled to receive interest on unreimbursed advances at the "Prime Rate" as published in The Wall Street Journal. 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/or interest, a mortgage loan will be specially serviced and the special servicer is entitled to compensation for special servicing activities. The right to receive interest on advances or special servicing compensation is generally senior to the rights of certificateholders to receive distributions on the offered certificates. The payment of interest on advances and the payment of compensation to the special servicer may lead to shortfalls in amounts otherwise distributable on your certificates. RISKS OF LIMITED LIQUIDITY AND MARKET VALUE Your certificates will not be listed on any national securities exchange or traded on any automated quotation systems of any registered securities association, and there is currently no secondary market for your certificates. While the underwriters currently intend to make a secondary market in the offered certificates, they are not obligated to do so. Additionally, one or more purchasers may purchase substantial portions of one or more classes of offered certificates. Accordingly, you may not have an active or liquid secondary market for your certificates. Lack of liquidity could result in a substantial decrease in the market value of your certificates. The market value of your certificates also may be affected by many other factors, including the then-prevailing interest rates and market perceptions of risks associated with commercial mortgage lending. 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 mortgage loans, the pool will be subject to more concentration risks with respect to the diversity of mortgaged properties, types of mortgaged properties and number of borrowers, as described in this prospectus supplement. 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 a higher priority. This is so because principal on the offered certificates is generally payable in sequential order, and no class entitled to distribution of principal generally receives principal until the certificate balance of the preceding class or classes entitled to receive principal has been reduced to zero. S-53 SUBORDINATION OF SUBORDINATE OFFERED CERTIFICATES As described in this prospectus supplement, unless your certificates are Class A-1 or Class A-2 certificates, your rights to receive distributions of amounts collected or advanced on or in respect of the mortgage loans will be subordinated to those of the holders of the offered certificates with an earlier alphabetical designation and to the Class A-1A, Class X-1 and Class X-2 certificates. See "Description of the Certificates--Distributions--Priority" and "Description of the Certificates--Subordination; Allocation of Collateral Support Deficit" in this prospectus supplement. ENVIRONMENTAL RISKS RELATING TO THE MORTGAGED PROPERTIES The trust could become liable for a material adverse environmental condition at an underlying mortgaged property. Any such potential liability could reduce or delay payments on the offered certificates. Each of the mortgaged properties was either (i) subject to environmental site assessments prior to the time of origination of the related mortgage loan (or in certain limited cases, after origination), including Phase I site assessments or updates of previously performed Phase I site assessments, or (ii) subject to a secured creditor environmental insurance policy. In some cases, Phase II site assessments also have been performed. Although assessments were made on the majority of the mortgaged properties and these involved site visits and other types of review, we cannot assure you that all environmental conditions and risks were identified. Except as described below, none of the environmental assessments revealed any material adverse environmental condition or circumstance at any mortgaged property except for those: o which will be remediated or abated in all material respects by the closing date; o for which an escrow for the remediation was established; o for which an environmental insurance policy was obtained from a third party insurer; o for which the consultant recommended an operations and maintenance plan with respect to the applicable mortgaged property or periodic monitoring of nearby properties, which recommendations are consistent with industry practice; o for which the principal of the borrower or another financially responsible party has provided an indemnity or is required to take, or is liable for the failure to take, such actions, if any, with respect to such matters as have been required by the applicable governmental authority or recommended by the environmental assessments; o for which such conditions or circumstances were investigated further and the environmental consultant recommended no further action or remediation; o as to which the borrower or other responsible party obtained a "no further action" letter or other evidence that governmental authorities are not requiring further action or remediation; or o that would not require substantial cleanup, remedial action or other extraordinary response under environmental laws. In certain cases, the identified condition was related to the presence of asbestos-containing materials, lead-based paint and/or radon. Where these substances were present, the environmental consultant generally recommended, and the related loan documents, with certain exceptions, generally required, the establishment of an operation and maintenance plan to address the issue or, in the case of asbestos-containing materials and lead-based paint, a containment, abatement or removal program. Other identified conditions could, for example, include leaks from storage tanks and on-site spills. Corrective action, as required by the regulatory agencies, has been or is currently being undertaken and, in some cases, the related borrowers have made deposits into environmental reserve accounts. However, we cannot assure S-54 you that any environmental indemnity, insurance or reserve amounts will be sufficient to remediate the environmental conditions or that all environmental conditions have been identified or that operation and maintenance plans will be put in place and/or followed. Additionally, we cannot assure you that actions of tenants at mortgaged properties will not adversely affect the environmental condition of the mortgaged properties. See "Servicing of the Mortgage Loans--Realization Upon Defaulted Mortgage Loans" in this prospectus supplement and "Risk Factors--Failure to Comply with Environmental Law May Result in Additional Losses" and "Certain Legal Aspects of Mortgage Loans--Environmental Risks" in the prospectus. TAX CONSIDERATIONS RELATING TO FORECLOSURE If the trust acquires a mortgaged property pursuant to a foreclosure or deed in lieu of foreclosure, the special servicer must retain an independent contractor to operate the property. Among other items, 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 defaulted or the default of the mortgage loan becomes imminent. Any net income from the operation of the property (other than qualifying "rents from real property"), or any rental income based on the net profits of a tenant or sub-tenant or allocable to a non-customary service, will subject the lower-tier REMIC or, if applicable, the loan REMIC to federal tax (and possibly state or local tax) on that income at the highest marginal corporate tax rate (currently 35%). In that event, the net proceeds available for distribution to certificateholders will be reduced. The special servicer may permit the lower-tier REMIC or the loan REMIC to earn "net income from foreclosure property" that is subject to tax if it determines that the net after-tax benefit to certificateholders is greater than under another method of operating or net leasing the mortgaged property. In addition, if the trust were to acquire one or more mortgaged properties pursuant to a foreclosure or deed in lieu of foreclosure, upon acquisition of those mortgaged properties, the trust may in certain jurisdictions, particularly in New York, be required to pay state or local transfer or excise taxes upon liquidation of such properties. Such state or local taxes may reduce net proceeds available for distribution to the certificateholders. RISKS ASSOCIATED WITH ONE ACTION RULES The ability to realize upon the mortgage loans may be limited by the application of state and federal laws. For example, several states (including California) have laws that prohibit more than one "judicial action" to enforce a mortgage obligation, and some courts have construed the term "judicial action" broadly. Accordingly, the special servicer is required to obtain advice of counsel prior to enforcing any of the trust fund's rights under any of the mortgage loans that include mortgaged properties where a "one action" rule could be applicable. In the case of a multi-property mortgage loan which is secured by mortgaged properties located in multiple states, the special servicer may be required to foreclose first on properties located in states where "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. The application of other state and federal laws may delay or otherwise limit the ability to realize on defaulted mortgage loans. See "Certain Legal Aspects of Mortgage Loans--Foreclosure" in the prospectus. RISKS RELATED TO ENFORCEABILITY All of the mortgages permit the lender to accelerate the debt upon default by the borrower. The courts of all states will enforce acceleration clauses in the event of a material payment default. Courts, however, may refuse to permit foreclosure or acceleration if a default is deemed immaterial or the exercise of those remedies would be unjust or unconscionable. If a mortgaged property has tenants, the borrower typically assigns its income as landlord to the lender as further security, while retaining a license to collect rents as long as there is no S-55 default. If the borrower defaults, the license terminates and the lender is entitled to collect rents. In certain jurisdictions, such assignments may not be perfected as security interests until the lender takes actual possession of the property's cash flow. In some jurisdictions, the lender may not be entitled to collect rents until the lender takes possession of the property and secures the appointment of a receiver. In addition, as previously discussed, if bankruptcy or similar proceedings are commenced by or for the borrower, the lender's ability to collect the rents may be adversely affected. POTENTIAL ABSENCE OF ATTORNMENT PROVISIONS ENTAILS RISKS In some jurisdictions, if tenant leases are subordinate to the liens created by the mortgage and do not contain attornment provisions (i.e., provisions requiring the tenant to recognize a successor owner following foreclosure as landlord under the lease), the leases may terminate upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Not all leases were reviewed to ascertain the existence of attornment or subordination provisions. Accordingly, if a mortgaged property is located in such a jurisdiction and is leased to one or more desirable tenants under leases that are subordinate to the mortgage and do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants' leases were terminated. This is particularly likely if such tenants were paying above-market rents or could not be replaced. If a lease is not subordinate to a mortgage, the trust will not possess the right to dispossess the tenant upon foreclosure of the mortgaged property (unless otherwise agreed to 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. PROPERTY INSURANCE MAY NOT BE SUFFICIENT All of the mortgage loans require the related borrower to maintain, or cause to be maintained, property insurance (which, in some cases, is provided by allowing a tenant to self-insure). However, the mortgaged properties may suffer casualty losses due to risks that were not covered by insurance or for which insurance coverage is inadequate. In addition, approximately 9.0%, 8.8% and 7.1% of the mortgaged properties, by aggregate principal balance of the pool of mortgage loans as of the cut-off date (approximately 9.5%, 12.7% and 6.0%, respectively, of the aggregate principal balance of the mortgage loans in loan group 1 as of the cut-off date and approximately 7.9%, 0.0% and 9.6%, respectively, of the aggregate principal balance of the mortgage loans in loan group 2 as of the cut-off date), are located in Texas, California and Florida, respectively, states that have historically been at greater risk regarding acts of nature (such as earthquakes, floods and hurricanes) than other states. We cannot assure you that borrowers will be able to maintain adequate insurance. 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. Certain mortgage loans are secured by improvements for which coverage for acts of terrorism have been waived or are required only if certain conditions (such as availability at reasonable rates or maximum cost limits) are satisfied. In light of the September 11, 2001 terrorist attacks in New York City and the Washington, D.C. area, many reinsurance companies (which assume some of the risk of policies sold by primary insurers) have eliminated coverage for acts of terrorism from their reinsurance policies. Without that reinsurance coverage, primary insurance companies would have to assume that risk themselves, which may cause them to eliminate such coverage in their policies, increase the amount of the deductible for acts of terrorism or charge higher premiums for such coverage. In order to offset this risk, Congress passed the Terrorism Risk Insurance Act of 2002, which established the Terrorism Insurance Program. The Terrorism Insurance Program is administered by S-56 the Secretary of the Treasury and will provide financial assistance from the United States government to insurers in the event of another terrorist attack that results in an insurance claim. The Treasury Department will establish procedures for the Terrorism Insurance Program under which the federal share of compensation will be equal to 90% of that portion of insured losses that exceeds an applicable insurer deductible required to be paid during each program year. The federal share in the aggregate in any program year may not exceed $100 billion. An insurer that has paid its deductible is not liable for the payment of any portion of total annual United States-wide losses that exceed $100 billion, regardless of the terms of the individual insurance contracts. The Terrorism Insurance Program requires that each insurer for policies in place prior to November 26, 2002, provide its insureds with a statement of the proposed premiums for terrorism coverage, identifying the portion of the risk that the federal government will cover, within 90 days after November 26, 2002. Insureds will have 30 days to accept the continued coverage and pay the premium. If an insured does not pay the premium, insurance for acts of terrorism may be excluded from the policy. All policies for insurance issued after November 26, 2002 must make similar disclosure. The Terrorism Risk Insurance Act of 2002 does not require insureds to purchase the coverage nor does it stipulate the pricing of the coverage. In addition, there can be no assurance that all of the borrowers under the mortgage loans have accepted the continued coverage or, if any have, that they will continue to maintain the coverage. Through December 2004, insurance carriers are required under the program to provide terrorism coverage in their basic "all-risk" policies. By September 1, 2004, the Secretary of the Treasury must determine whether mandatory participation should be extended through December 2005. Any commercial property and casualty terrorism insurance exclusion that was in force on November 26, 2002 is automatically voided to the extent that it excludes losses that would otherwise be insured losses, subject to the immediately preceding paragraph. Any state approval of such types of exclusions in force on November 26, 2002 is also voided. However, the Terrorism Insurance Program applies to United States risks only and to acts that are committed by an individual or individuals acting on behalf of foreign person or foreign interest as an effort to influence or coerce United States civilians or the United States government. It remains unclear what acts will fall under the purview of the Terrorism Insurance Program. Furthermore, because the Terrorism Insurance Program has only been recently passed into law, there can be no assurance that it or state legislation will substantially lower the cost of obtaining terrorism insurance. Finally, the Terrorism Insurance Program terminates on December 31, 2004 (with a potential to extend to December 31, 2005). There can be no assurance that such temporary program will create any long-term changes in the availability and cost of such insurance. Moreover, there can be no assurance that such program will be renewed or extended, or that subsequent terrorism insurance legislation will be passed upon its expiration. The various forms of insurance maintained with respect to any of the mortgaged properties, including casualty insurance, environmental insurance and earthquake insurance, may be provided under a blanket insurance policy. That blanket insurance policy will also cover other real properties, some of which may not secure mortgage loans in the trust. As a result of total limits under any of those blanket policies, losses at other properties covered by the blanket insurance policy may reduce the amount of insurance coverage with respect to a property securing one of the loans in the trust. With respect to certain of the mortgage loans, the "all-risk" policy specifically excludes terrorism insurance from its coverage. In some such cases, the related borrower obtained supplemental insurance to cover terrorism risk. In other cases, the lender waived the requirement that such insurance be maintained. S-57 With respect to certain of the mortgage loans, the related mortgage loan documents generally provide that the borrowers are required to maintain comprehensive all-risk casualty insurance but may not specify the nature of the specific risks required to be covered by such insurance policies. Even if the mortgage loan documents specify that the related borrower must maintain all-risk casualty insurance or other insurance that covers acts of terrorism, the borrower may fail to maintain such insurance and the servicer or special servicer may not enforce such default or cause the borrower to obtain such insurance if the special servicer has determined, in accordance with the servicing standards, that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonable rates (which determination, with respect to terrorism insurance, will be subject to consent of the directing certificateholder (or in the case of the One Post Office Square loan, the operating advisor for that loan)) 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, the servicer or the special servicer, as applicable, will not be required to maintain such terrorism insurance coverage if the special servicer determines, in accordance with the servicing standards, that such insurance is not available for the reasons set forth in (a) or (b) of the preceding sentence. Furthermore, at the time existing insurance policies are subject to renewal, there is no assurance that terrorism insurance coverage will be available and covered under the new policies or, if covered, whether such coverage will be adequate. Most insurance policies covering commercial real properties such as the mortgaged properties are subject to renewal on an annual basis. If such coverage is not currently in effect, is not adequate or is ultimately not continued with respect to some of the mortgaged properties and one of those properties suffers a casualty loss as a result of a terrorist act, then the resulting casualty loss could reduce the amount available to make distributions on your certificate. We cannot assure you that all of the mortgaged properties will be insured against the risks of terrorism and similar acts. As a result of any of the foregoing, the amount available to make distributions on your certificates could be reduced. ZONING COMPLIANCE AND USE RESTRICTIONS MAY ADVERSELY AFFECT PROPERTY VALUE Certain of the mortgaged properties may not comply with current zoning laws, including density, use, parking, height and set back requirements, due to changes in zoning requirements after such mortgaged properties were constructed. These properties, as well as those for which variances or special permits were issued or for which non-conformity with current zoning laws are otherwise permitted, are considered to be a "legal non-conforming use" and/or the improvements are considered to be "legal non-conforming structures." This means that the borrower is not required to alter its use or structure to comply with the existing or new law; however, the borrower may not be able to continue the non-conforming use or rebuild the non-conforming premises "as is" in the event of a substantial casualty loss. This may adversely affect the cash flow of the property following the loss. If a substantial casualty were to occur, we cannot assure you that insurance proceeds would be available to pay the mortgage loan in full. In addition, if a non-conforming use were to be discontinued and/or the property were repaired or restored in conformity with the current law, the value of the property or the revenue-producing potential of the property may not be equal to that before the casualty. In addition, certain of the mortgaged properties which 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 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. In addition, certain of the mortgaged properties may be subject to certain restrictions imposed pursuant to restrictive covenants, condominium documents (in the case of mortgaged S-58 properties that are part of a condominium regime), reciprocal easement agreements or operating agreements or historical landmark designations. Such use restrictions could include, for example, limitations on the use or character of the improvements or the properties, limitations affecting noise and parking requirements, among other things, and limitations on the borrowers' right to operate certain types of facilities within a prescribed radius. These limitations could adversely affect the ability of the related borrower to lease the mortgaged property on favorable terms, thus adversely affecting the borrower's ability to fulfill its obligations under the related mortgage loan. RISKS RELATING TO COSTS OF COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS A borrower may be required to incur costs to comply with various existing and future federal, state or local laws and regulations applicable to the related mortgaged property, for example, zoning laws and the Americans with Disabilities Act of 1990, as amended, which requires all public accommodations to meet certain federal requirements related to access and use by persons with disabilities. See "Certain Legal Aspects of Mortgage Loans--Americans with Disabilities Act" in the prospectus. The expenditure of these costs or the imposition of injunctive relief, penalties or fines in connection with the borrower's noncompliance could negatively impact the borrower's cash flow and, consequently, its ability to pay its mortgage loan. NO REUNDERWRITING OF THE MORTGAGE LOANS We have not reunderwritten the mortgage loans. Instead, we have relied on the representations and warranties made by the mortgage loan sellers, and the applicable mortgage loan seller's obligation to repurchase, substitute or cure a mortgage loan in the event that a representation or warranty was not true when made and such breach materially and adversely affects the value of the mortgage loan or the interests of the certificateholders. These representations and warranties do not cover all of the matters that we would review in underwriting a mortgage loan and you should not view them as a substitute for reunderwriting the mortgage loans. If we had reunderwritten the mortgage loans, it is possible that the reunderwriting process may have revealed problems with a mortgage loan not covered by a representation or warranty. In addition, we can give no assurance that the applicable mortgage loan seller will be able to repurchase a mortgage loan if a representation or warranty has been breached. See "Description of the Mortgage Pool--Representations and Warranties; Repurchases and Substitutions" in this prospectus supplement. LITIGATION OR OTHER LEGAL PROCEEDINGS COULD ADVERSELY AFFECT THE MORTGAGE LOANS 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. In certain cases, principals and/or affiliates of the borrowers are involved or may have been involved in prior litigation or property foreclosures or deed-in-lieu of foreclosures. We cannot assure you that any litigation or other legal proceedings will not have a material adverse effect on your investment. RISKS RELATED TO BOOK-ENTRY REGISTRATION Your certificates will be initially represented by one or more certificates registered in the name of Cede & Co., as the nominee for DTC, and will not be registered in your name. As a result, you will not be recognized as a certificateholder, or holder of record of your certificates. See "Risk Factors--Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment" in the prospectus for a discussion of important considerations relating to not being a certificateholder of record. RISKS OF INSPECTIONS RELATED TO PROPERTIES Licensed engineers or consultants inspected the mortgaged properties at or about the time of the origination of the mortgage loans to assess items such as structural integrity of the S-59 buildings and other improvements on the mortgaged property, including exterior walls, roofing, interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements. However, we cannot assure you that all conditions requiring repair or replacement were identified. No additional property inspections were conducted in connection with the closing of the offered certificates. OTHER RISKS See "Risk Factors" in the prospectus for a description of certain other risks and special considerations that may be applicable to your certificates. S-60 DESCRIPTION OF THE MORTGAGE POOL GENERAL All percentages of the mortgage loans and Mortgaged Properties, or of any specified group of mortgage loans and Mortgaged Properties, referred to in this prospectus supplement without further description are approximate percentages by Initial Pool Balance. All numerical and statistical information presented herein (including cut off date balances, loan to value ratios and debt service coverage ratios ("DSCR") with respect to each mortgage loan with a Companion Loan is calculated without regard to the related Companion Loan. The trust will consist primarily of 186 fixed rate mortgage loans secured by 199 commercial, multifamily and manufactured housing community Mortgaged Properties with an aggregate principal balance of approximately $1,204,787,325 as of the cut-off date (the "Initial Pool Balance"). The trust's assets will also include the One Post Office Square B Note. The One Post Office Square B Note supports only the Class PS Certificates. Although that mortgage loan is an asset of the trust, for the purpose of information contained in this prospectus supplement (including the annexes and statistical information contained in this prospectus supplement), the One Post Office Square B Note is not reflected in this prospectus supplement and the term "mortgage loan" does not include the One Post Office Square B Note unless otherwise expressly stated. The aggregate principal balance of the One Post Office Square B Note, together with all of the other mortgage loans held by the trust, will be $1,259,787,325. The pool of mortgage loans will be deemed to consist of two loan groups ("Loan Group 1" and "Loan Group 2" and, collectively, the "Loan Groups"). Loan Group 1 will consist of 111 mortgage loans, representing approximately 69.6% of the Initial Pool Balance (the "Initial Loan Group 1 Balance"). Loan Group 2 will consist of 75 mortgage loans (representing approximately 92.8% of the aggregate principal balance of all the mortgage loans secured by multifamily properties and 34.3% of the aggregate principal balance of all the mortgage loans secured by manufactured housing properties), representing approximately 30.4% of the Initial Pool Balance (the "Initial Loan Group 2 Balance"). Annex A-1 to this prospectus supplement sets forth the loan group designation with respect to each mortgage loan. The "Cut-off Date Balance" of any mortgage loan (including the One Post Office Square B Note) will be the unpaid principal balance of that mortgage loan as of the cut-off date, after application of all payments due on or before that date, whether or not received. Each mortgage loan is evidenced by a promissory note (a "Mortgage Note") and secured by a mortgage, deed of trust or other similar security instrument (a "Mortgage") that creates a first mortgage lien: (1) on a fee simple estate in one or more commercial, multifamily and manufactured housing community mortgaged properties; (2) with respect to 1 mortgage loan (as identified on Annex A--1 to this prospectus supplement), representing approximately 1.1% of the Initial Pool Balance (approximately 1.6% of the Initial Loan Group 1 Balance), the fee simple estate and a separate leasehold estate in an adjacent portion of the commercial property; or (3) with respect to 1 mortgage loan (as identified on Annex A--1 to this prospectus supplement), representing approximately 4.2% of the Initial Pool Balance (approximately 6.1% of the Initial Loan Group 1 Balance), a leasehold estate in a commercial property (each of clauses (1) through (3), a "Mortgaged Property"). Mortgage loans secured by ground leases present certain bankruptcy and foreclosure risks not present with mortgage loans secured by fee simple estates. See "Certain Legal Aspects of Mortgage Loans--Foreclosure--Leasehold Risks" and "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws" in the prospectus. On or about September 30, 2003 (the "Closing Date"), J.P. Morgan Chase Commercial Mortgage Securities Corp. (the "Depositor") will acquire the mortgage loans from JPMorgan Chase Bank, LaSalle Bank National Association and Nomura Credit & Capital, Inc. (collectively, the S-61 "Mortgage Loan Sellers") pursuant to three mortgage loan purchase agreements (the "Purchase Agreements"), between the Depositor and the applicable Mortgage Loan Seller. The Depositor will then assign its interests in the mortgage loans, without recourse, to U.S. Bank, National Association, as trustee (the "Trustee"), for the benefit of the holders of the Certificates (the "Certificateholders"). See "--The Mortgage Loan Sellers" below and "Description of the Pooling Agreements--Assignment of Mortgage Loans; Repurchases" in the prospectus. In addition, on the Closing Date, the applicable Mortgage Loan Sellers will be required to remit to Trustee an amount that will be sufficiant to cover the interest shortfalls that would otherwise occur on the first Distribution Date as a result of certain mortgage loans not having their first due date until November 2003. This amount will be distributed to Certificateholders on the first Distribution Date as part of their regular interest distribution. The mortgage loans were originated in the period between June 2000 and September 2003. The mortgage loans are not insured or guaranteed by the Mortgage Loan Sellers or any other person or entity. You should consider all of the mortgage loans to be nonrecourse loans as to which recourse in the case of default will be limited to the specific property and other assets, if any, pledged to secure a mortgage loan. Borrowers under certain of the mortgage loans may receive subsidies or other assistance from government programs. Generally, the mortgaged property must satisfy certain requirements, the borrower must observe certain leasing practices and/or the tenant must regularly meet certain income tests for the related mortgaged property. There is no certainty that such government program will continue or that the borrower will continue to comply with the requirements of such program to enable it to receive such subsidies in the future. ADDITIONAL DEBT General. Substantially all of the mortgage loans permit the related borrower to incur limited indebtedness in the ordinary course of business that is not secured by the related Mortgaged Property. The terms of certain mortgage loans permit the borrowers to post letters of credit and/or surety bonds for the benefit of the mortgagee under the mortgage loans, which may constitute a contingent reimbursement obligation of the related borrower or an affiliate. The issuing bank or surety will not typically agree to subordination and standstill protection benefiting the mortgagee. AB Loans. The One Post Office Square Loan is a senior loan in a split loan structure with the One Post Office Square Companion Note (pari passu with the One Post Office Square Loan) and the One Post Office Square B Note. See "--The One Post Office Square Whole Loan" below. In addition, 5 mortgage loans (each, an "AB Loan") (identified as loan numbers 63,105,111,132 and 151 on Annex A-1 to this prospectus supplement), representing approximately 1.5% of the Initial Pool Balance (4 mortgage loans in Loan Group 1, representing approximately 1.4% of the Initial Loan Group 1 Balance and 1 mortgage loan in Loan Group 2, representing approximately 1.7% of the Initial Group 2 Balance), are each a senior loan in a split loan structure with a junior loan (with respect to each AB Loan, the "Companion Loan"). No Companion Loan is an asset of the trust. Each pair of senior and junior loans is evidenced by one of two notes each secured by a single mortgage instrument on the related mortgaged property. o The first such AB Loan (the "Maple Gardens AB Loan") (identified as loan number 63 on Annex A-1 to this prospectus supplement) has a principal balance as of the cut-off date of $6,100,000. The related Companion Loan (the "Maple Gardens Companion Loan"), which is not included in the trust, had an original principal balance of $200,000. In the event that certain defaults exist under the Maple Gardens AB Loan or the Maple Gardens Companion Loan, the holder of the Maple Gardens Companion Loan will have the right to purchase the Maple Gardens AB Loan for a price generally equal to the outstanding principal balance of the Maple Gardens AB Loan, together with accrued and unpaid S-62 interest on, and all unpaid servicing expenses and advances relating to, the Maple Gardens AB Loan. Until the expiration of the period of time that the holder of the Maple Gardens Companion Loan has the right to purchase the Maple Gardens AB Loan (generally 30 days after notice of certain defaults under the Maple Gardens AB Loan or the Maple Gardens Companion Loan), the Master Servicer and the Special Servicer will generally not be able to work out or modify the Maple Gardens AB Loan without the consent of the holder of the Maple Gardens Companion Loan. o The second such AB Loan (the "Sav On-LA AB Loan") (identified as loan number 111 on Annex A-1 to this prospectus supplement) has a principal balance as of the cut off date of $3,309,000. The related Companion Loan (the "Sav On-LA Companion Loan"), which is not included in the trust, had an original principal balance of $437,426. In the event that certain defaults exist under the Sav On-LA AB Loan or the Sav On-LA Companion Loan, the holder of the Sav On-LA Companion Loan will have the right to make cure payments and cure other defaults with respect to the Sav On-LA AB Loan and to purchase the Sav On-LA AB Loan for a price generally equal to the outstanding principal balance of the Sav On-LA AB Loan, together with accrued and unpaid interest on, and all unpaid servicing expenses and advances relating to, the Sav On-LA AB Loan and other amounts payable to the holder of the Sav On-LA AB Loan under the mortgage loan documents (other than any applicable prepayment premium or comparable yield maintenance amount payable on default) and interest on those amounts at the prime rate as set forth in the Wall Street Journal. In addition, the holder of the Sav On-LA Companion Loan is given certain rights pursuant to an intercreditor agreement it entered into with the holder of the Sav On-LA AB Loan, which include: (i) directing defaulted lease claims of the borrower against a defaulting or bankrupt tenant prior to foreclosure to the extent either holder of the Sav On-LA AB Loan or the Sav On-LA Companion Loan is entitled to do so under the loan documents, (ii) in the event that the Master Servicer or the Special Servicer fail to cure a lease termination condition within the time period provided, taking action to prevent and cure any lessor lease default and any lease termination condition, including making Servicing Advances, (iii) directing the Master Servicer or the Special Servicer to enforce the rights of the holder of the Sav On-LA Companion Loan under the loan documents to receive the proceeds of defaulted lease claims, (iv) requiring foreclosure of the mortgage upon certain defaults under the loan documents, subject to the right of Master Servicer or the Special Servicer to cure any such default and prevent such foreclosure, (v) approving (together with the Master Servicer or the Special Servicer) any modifications to the Sav On-LA AB Loan that affect the rights of the Sav On-LA AB Loan borrower or the holder of the Sav On-LA Companion Loan under the credit lease or the assignment of the credit lease as collateral for the Sav On-LA AB Loan, (vi) preferential treatment with respect to receipt of any proceeds relating to any claims for accelerated future rent under the lease after a default under the lease and (vii) restrictions on the modification of the loan documents and the prohibition of the Master Servicer and the Special Servicer from waiving rights under the Sav On-LA loan documents in a manner that would have a material adverse effect on the holder of the Sav On-LA Companion Loan. Capital Lease Funding, LLC is the holder of the Sav On-LA Companion Loan and may elect to sell the Sav On-LA Companion Loan subject to the terms of the intercreditor agreement. o The third such AB Loan (the "CVS-Commerce AB Loan") (identified as loan number 151 on Annex A-1 to this prospectus supplement) has a principal balance as of the cut off date of $2,241,815. The related Companion Loan (the "CVS-Commerce Companion Loan"), which is not included in the trust, had an original principal balance of $500,546. In the event that certain defaults exist under the CVS-Commerce AB Loan or the CVS-Commerce Companion Loan, the holder of the CVS-Commerce Companion Loan will have the right to make cure payments and cure other defaults with respect to the CVS-Commerce AB Loan and to purchase the CVS-Commerce AB Loan for a price S-63 generally equal to the outstanding principal balance of the CVS-Commerce AB Loan, together with accrued and unpaid interest on, and all unpaid servicing expenses and advances relating to, the CVS-Commerce AB Loan and other amounts payable to the holder of the CVS-Commerce AB Loan under the mortgage loan documents (other than any applicable prepayment premium or comparable yield maintenance amount payable on default) and interest on those amounts at the prime rate as set forth in the Wall Street Journal. In addition, the holder of the CVS-Commerce Companion Loan is given certain rights pursuant to an intercreditor agreement it entered into with the holder of the CVS-Commerce AB Loan, which include: (i) directing defaulted lease claims of the borrower against a defaulting or bankrupt tenant prior to foreclosure to the extent either holder of the CVS-Commerce AB Loan or the CVS-Commerce Companion Loan is entitled to do so under the loan documents, (ii) in the event that the Master Servicer or the Special Servicer fail to cure a lease termination condition within the time period provided, taking action to prevent and cure any lessor lease default and any lease termination condition, including making Servicing Advances, (iii) directing the Master Servicer or the Special Servicer to enforce the rights of the holder of the CVS-Commerce Companion Loan under the loan documents to receive the proceeds of defaulted lease claims, (iv) requiring foreclosure of the mortgage upon certain defaults under the loan documents, subject to the right of Master Servicer or the Special Servicer to cure any such default and prevent such foreclosure, (v) approving (together with the Master Servicer or the Special Servicer) any modifications to the CVS-Commerce AB Loan that affect the rights of the CVS-Commerce AB Loan borrower or the holder of the CVS-Commerce Companion Loan under the credit lease or the assignment of the credit lease as collateral for the CVS-Commerce AB Loan, (vi) preferential treatment with respect to receipt of any proceeds relating to any claims for accelerated future rent under the lease after a default under the lease and (vii) restrictions on the modification of the loan documents and the prohibition of the Master Servicer and the Special Servicer from waiving rights under the CVS-Commerce loan documents in a manner that would have a material adverse effect on the holder of the CVS-Commerce Companion Loan. Capital Lease Funding, LLC (a) originated the CVS-Commerce AB Loan and sold it to LaSalle Bank National Association and (b) is the holder of the CVS-Commerce Companion Loan and may elect to sell the CVS-Commerce Companion Loan subject to the terms of the intercreditor agreement. o The fourth such AB Loan (the "CVS-Garwood AB Loan") (identified as loan number 105 on Annex A-1 to this prospectus supplement) has a principal balance as of the cut off date of $3,528,165. The related Companion Loan (the "CVS-Garwood Companion Loan"), which is not included in the trust, had an original principal balance of $879,016. In the event that certain defaults exist under the CVS-Garwood AB Loan or the CVS-Garwood Companion Loan, the holder of the CVS-Garwood Companion Loan will have the right to make cure payments and cure other defaults with respect to the CVS-Garwood AB Loan and to purchase the CVS-Garwood AB Loan for a price generally equal to the outstanding principal balance of the CVS-Garwood AB Loan, together with accrued and unpaid interest on, and all unpaid servicing expenses and advances relating to, the CVS-Garwood AB Loan and other amounts payable to the holder of the CVS-Garwood AB Loan under the mortgage loan documents (other than any applicable prepayment premium or comparable yield maintenance amount payable on default) and interest on those amounts at the prime rate as set forth in the Wall Street Journal. In addition, the holder of the CVS-Garwood Companion Loan is given certain rights pursuant to an intercreditor agreement it entered into with the holder of the CVS-Garwood AB Loan, which include: (i) directing defaulted lease claims of the borrower against a defaulting or bankrupt tenant prior to foreclosure to the extent either holder of the CVS-Garwood AB Loan or the CVS-Garwood Companion Loan is entitled to do so under the loan documents, (ii) in the event that the Master Servicer or the Special Servicer fail to cure a lease termination condition within the time period provided, taking action to prevent and cure any lessor S-64 lease default and any lease termination condition, including making Servicing Advances, (iii) directing the Master Servicer or the Special Servicer to enforce the rights of the holder of the CVS-Garwood Companion Loan under the loan documents to receive the proceeds of defaulted lease claims, (iv) requiring foreclosure of the mortgage upon certain defaults under the loan documents, subject to the right of Master Servicer or the Special Servicer to cure any such default and prevent such foreclosure, (v) approving (together with the Master Servicer or the Special Servicer) any modifications to the CVS-Garwood AB Loan that affect the rights of the CVS-Garwood AB Loan borrower or the holder of the CVS-Garwood Companion Loan under the credit lease or the assignment of the credit lease as collateral for the CVS-Garwood AB Loan, (vi) preferential treatment with respect to receipt of any proceeds relating to any claims for accelerated future rent under the lease after a default under the lease and (vii) restrictions on the modification of the loan documents and the prohibition of the Master Servicer and the Special Servicer from waiving rights under the CVS-Garwood loan documents in a manner that would have a material adverse effect on the holder of the CVS-Garwood Companion Loan. Capital Lease Funding, LLC (a) originated the CVS-Garwood AB Loan and sold it to LaSalle Bank National Association and (b) is the holder of the CVS-Garwood Companion Loan and may elect to sell the CVS-Garwood Companion Loan subject to the terms of the intercreditor agreement. o The fifth such AB Loan (the "150 Technology AB Loan") (identified as loan number 132 on Annex A-1 to this prospectus supplement) has a principal balance as of the cut off date of $2,741,619. The related Companion Loan (the "150 Technology Companion Loan"), which is not included in the trust, had an original principal balance of $547,782. In the event that certain defaults exist under the 150 Technology AB Loan or the 150 Technology Companion Loan, the holder of the 150 Technology Companion Loan will have the right to make cure payments and cure other defaults with respect to the 150 Technology AB Loan and to purchase the 150 Technology AB Loan for a price generally equal to the outstanding principal balance of the 150 Technology AB Loan, together with accrued and unpaid interest on, and all unpaid servicing expenses and advances relating to, the 150 Technology AB Loan and other amounts payable to the holder of the 150 Technology AB Loan under the mortgage loan documents (other than any applicable prepayment premium or comparable yield maintenance amount payable on default) and interest on those amounts at the prime rate as set forth in the Wall Street Journal. In addition, the holder of the 150 Technology Companion Loan is given certain rights pursuant to an intercreditor agreement it entered into with the holder of the 150 Technology AB Loan, which include: (i) directing defaulted lease claims of the borrower against a defaulting or bankrupt tenant prior to foreclosure to the extent either holder of the 150 Technology AB Loan or the 150 Technology Companion Loan is entitled to do so under the loan documents, (ii) in the event that the Master Servicer or the Special Servicer fail to cure a lease termination condition within the time period provided, taking action to prevent and cure any lessor lease default and any lease termination condition, including making Servicing Advances, (iii) directing the Master Servicer or the Special Servicer to enforce the rights of the holder of the 150 Technology Companion Loan under the loan documents to receive the proceeds of defaulted lease claims, (iv) requiring foreclosure of the mortgage upon certain defaults under the loan documents, subject to the right of Master Servicer or the Special Servicer to cure any such default and prevent such foreclosure, (v) approving (together with the Master Servicer or the Special Servicer) any modifications to the 150 Technology AB Loan that affect the rights of the 150 Technology AB Loan borrower or the holder of the 150 Technology Companion Loan under the credit lease or the assignment of the credit lease as collateral for the 150 Technology AB Loan, (vi) preferential treatment with respect to receipt of any proceeds relating to any claims for accelerated future rent under the lease after a default under the lease and (vii) restrictions on the modification of the loan documents and the prohibition of the S-65 Master Servicer and the Special Servicer from waiving rights under the 150 Technology loan documents in a manner that would have a material adverse effect on the holder of the 150 Technology Companion Loan. Capital Lease Funding, LLC (a) originated the 150 Technology AB Loan and sold it to LaSalle Bank National Association and (b) is the holder of the 150 Technology Companion Loan and may elect to sell the 150 Technology Companion Loan subject to the terms of the intercreditor agreement. Secured Subordinate Indebtedness. The Mortgaged Property securing 1 mortgage loan identified as loan number 80 on Annex A-1 to this prospectus supplement, representing approximately 0.4% of the Initial Pool Balance secures subordinated indebtedness in the amount of $1,407,000, which indebtedness is subject to a subordination and/or standstill agreement in favor of the holder of the mortgage loan. In addition, with respect to the mortgage loan identified as loan number 6 on Annex A to this prospectus supplement, representing approximately 2.0% of the Initial Pool Balance, the borrower may incur secured subordinated indebtedness subject to satisfaction of certain conditions, including without limitation, debt service coverage ratio and loan-to-value ratio thresholds. Mezzanine Debt. Although the mortgage loans generally place certain restrictions on incurring mezzanine debt by the pledging of general partnership and managing member equity interests in a borrower, such as specific percentage or control limitations, the terms of the mortgages generally permit, subject to certain limitations, the pledge of less than a controlling portion of the limited partnership or non-managing membership equity interests in a borrower. However, certain of the mortgage loans do not restrict the pledging of ownership interests in the borrower, but do restrict the transfer of ownership interests in a borrower by imposing limitations on transfer of control or a specific percentage of ownership interests. In addition, in general, a borrower that does not meet single-purpose entity criteria may not be restricted in any way from incurring mezzanine debt. As of the cut-off date, the applicable Mortgage Loan Sellers have informed us that they are aware of the following mezzanine indebtedness with respect to the mortgage loans: o In the case of the mortgage loan identified as loan number 69 on Annex A-1 to this prospectus supplement, representing approximately 0.5% of the Initial Pool Balance, a mezzanine loan in the amount of $478,000 has been made to the owners of the related borrower. This mezzanine loan is secured by the related owner's ownership interest in the borrower. Upon default under a mezzanine loan, the holder of the mezzanine loan may foreclose upon the ownership interests in the borrower. In addition, the holder of the mezzanine loan has the right to cure certain defaults occurring on the mortgage loan. o In the case of 18 mortgage loans representing in the aggregate approximately 11.7% of the Initial Pool Balance, the owners of the related borrowers are permitted to pledge their ownership interests in the borrowers as collateral for mezzanine debt. The incurrence of this mezzanine indebtedness is generally subject to the satisfaction of certain conditions, including the consent of the mortgage lender. Unsecured Subordinate Indebtedness. In general, any borrower that does not meet single-purpose entity criteria may not be restricted from incurring unsecured debt. Certain risks relating to additional debt are described in "Risk Factors--Ability to Incur Other Borrowings Entails Risk" in this prospectus supplement and "Certain Legal Aspects of Mortgage Loans--Subordinate Financing" in the prospectus. THE ONE POST OFFICE SQUARE WHOLE LOAN The Loans. One mortgage loan (identified as Loan No. 1 on Annex A to this prospectus supplement) (the "One Post Office Square Loan"), representing approximately 5.0% of the Initial Pool Balance (approximately 7.2% of the Initial Loan Group 1 Balance), is one of three mortgage loans that are part of a split loan structure, each of which is secured by the same mortgage instrument on the One Post Office Square Mortgaged Property. The One Post Office Square Loan S-66 is evidenced by promissory note A1. The mortgage loan evidenced by promissory note A2 is referred to in this prospectus supplement as the "One Post Office Square Companion Note". The One Post Office Square Companion Note, which has a principal balance of $60,000,000 as of the cut-off date, is not included in the trust. The One Post Office Square Loan and the One Post Office Square Companion Note are pari passu with each other and are referred to in this prospectus supplement as the "One Post Office Square Senior Notes." The remaining mortgage loan evidenced by the B Note is referred to in this prospectus supplement as the "One Post Office Square B Note." The One Post Office Square B Note, which has a principal balance of $55,000,000 as of the cut-off date, is subordinate to the One Post Office Square Senior Notes. Only the One Post Office Square Loan and the One Post Office Square B Note are included in the trust. The One Post Office Square Loan, the One Post Office Square Companion Note and the One Post Office Square B Note are collectively referred to in this prospectus supplement as the "One Post Office Square Whole Loan." The holders of the One Post Office Square Senior Notes (the "One Post Office Square Senior Noteholders") have entered into an intercreditor agreement with the holder of the One Post Office Square B Note (the "One Post Office Square B Noteholder"), which sets forth the respective rights of the One Post Office Square Senior Noteholders and the One Post Office Square B Noteholder (the "One Post Office Square Intercreditor Agreement"). Pursuant to the terms of the One Post Office Square Intercreditor Agreement, the One Post Office Square Whole Loan will be serviced and administered pursuant to the Pooling and Servicing Agreement by the Master Servicer and Special Servicer, as applicable, according to the Servicing Standards. The One Post Office Square Intercreditor Agreement provides that expenses, losses and shortfalls relating to the One Post Office Square Whole Loan will be allocated first, to the holder of the One Post Office Square B Note and thereafter, to the One Post Office Square Senior Noteholders, pro rata and pari passu. As used in this prospectus supplement, the term "One Post Office Square Controlling Holder" will refer to (a) prior to a One Post Office Square Control Appraisal Event, the holder of the One Post Office Square B Note and (b) following the occurrence and during the continuance of a One Post Office Square Control Appraisal Event, the holder of the One Post Office Square Loan. The holders of the Class PS Certificates will be entitled to exercise the rights and powers granted to the One Post Office Square B Noteholder. A "One Post Office Square Control Appraisal Event" will exist if, and for so long as, the initial principal balance of the One Post Office Square B Note (minus (i) the sum of any principal payments (whether as scheduled amortization, principal prepayments or otherwise) allocated to, and received on, the One Post Office Square B Note after the cut-off date, (ii) any Appraisal Reduction for the One Post Office Square B Note and (iii) realized losses with respect to the One Post Office Square Whole Loan) is less than 25% of its initial principal balance (minus the sum of any principal payments whether as scheduled amortization, principal prepayments or otherwise received on, the One Post Office Square B Note after the Cut-off Date). Servicing. The One Post Office Square Intercreditor Agreement generally provides that the One Post Office Square Whole Loan will be serviced by the Master Servicer and the Special Servicer according to the Servicing Standards under the Pooling and Servicing Agreement. Distributions. Under the terms of the One Post Office Square Intercreditor Agreement, prior to the occurrence and continuance of a monetary event of default or other material non-monetary event of default with respect to the One Post Office Square Whole Loan, after payment of amounts payable or reimbursable under the Pooling and Servicing Agreement, payments and proceeds received with respect to the One Post Office Square Whole Loan will generally be paid in the following manner: first, each of the trust and the holder of the One Post Office Square Companion Note will receive accrued and unpaid interest on its outstanding principal at its interest rate, pro rata; S-67 second, any scheduled principal payments will be paid to each of the holders of the One Post Office Square Loan and the One Post Office Square Companion Note, pro rata, based on the principal balance of each loan, relative to the aggregate principal balance of the One Post Office Square Whole Loan; third, the holder of the One Post Office Square B Note will receive accrued and unpaid interest on its outstanding principal balance at its interest rate; fourth, any remaining scheduled principal payments will be paid to the One Post Office Square B Note, in accordance with its amortization schedule; fifth, any unscheduled principal payments will be paid to the One Post Office Square Loan, the One Post Office Square Companion Note and the One Post Office Square B Note, pro rata, based on the principal balance of each such loan, first to the One Post Office Square Senior Notes and then to the One Post Office Square B Note; sixth, any Yield Maintenance Charge that is allocable to the One Post Office Square Loan and the One Post Office Square Companion Note on the one hand, and the One Post Office Square B Note on the other hand, to the extent actually paid by the borrower, will be paid to the trust and the holder of the One Post Office Square Companion Note, pro rata, and then to the holder of the One Post Office Square B Note, respectively; seventh, any default interest will be paid to each of the holders of the One Post Office Square Loan, the One Post Office Square Companion Note and the One Post Office Square B Note, on a pro rata basis in accordance with the respective principal balance of each loan; and eighth, if any excess amount is paid by the borrower, and not otherwise applied in accordance with the foregoing clauses first through seventh above, such amount will be paid to each of the holders of the One Post Office Square Loan, the One Post Office Square Companion Note and the One Post Office Square B Note on a pro rata basis in accordance with the respective principal balance of each loan. Following the occurrence and during the continuance of a monetary event of default or other material non-monetary event of default with respect to the One Post Office Square Whole Loan, after payment of all amounts then payable or reimbursable under the Pooling and Servicing Agreement, Liquidation Proceeds and other collections with respect to the One Post Office Square Whole Loan will generally be applied in the following manner: first, each of the trust, the holder of the One Post Office Square Companion Note will receive accrued and unpaid interest on its outstanding principal balance at its interest rate, pro rata; second, any scheduled principal payments will be paid to each of the trust and the holder of the One Post Office Square Companion Note, pro rata, based on the principal balance of each such loan; third, the holder of the One Post Office Square B Note will receive accrued and unpaid interest on its outstanding principal balance at its interest rate; fourth, any remaining principal payments will be paid to each of the trust and the holder of the One Post Office Square Companion Note, pro rata, until the principal balance of the related loan is reduced to zero; fifth, the holder of the One Post Office Square B Note will receive an amount up to its principal balance, until such principal has been paid in full; sixth, if the proceeds of any foreclosure sale or any liquidation of the One Post Office Square Whole Loan or the One Post Office Square Mortgaged Property exceed the amounts required to be applied in accordance with the foregoing clauses first through fifth and, as a result of a workout, the principal balance of either the One Post Office Square Loan and the One Post Office Square Companion Note on the one hand, and the One Post Office Square B Note on the other hand have been reduced, such excess amount will first be paid to the trust and the holder of the S-68 One Post Office Square Companion Note, pro rata, in an amount up to the reduction, if any, of the respective principal balance as a result of such workout, and then to the holder of the One Post Office Square B Note in an amount up to the reduction, if any, of its principal balance as a result of such workout; seventh, any Yield Maintenance Charge that is allocable to the One Post Office Square Loan and the One Post Office Square Companion Note on the one hand, and the One Post Office Square B Note on the other hand, to the extent actually paid by the borrower, will be paid to the trust and the holder of the One Post Office Square Companion Note, pro rata, and the holder of the One Post Office Square B Note, respectively; eighth, any default interest in excess of the interest paid in accordance with clauses first and third above, will be paid to the trust and the holder of the One Post Office Square Companion Note, pro rata, and then to the holder of the One Post Office Square B Note based on the total amount of default interest then owing to each such party; and ninth, if any excess amount is paid by the borrower that is not otherwise applied in accordance with the foregoing clauses first through eighth or the proceeds of any foreclosure sale or any liquidation of the One Post Office Square Whole Loan or the One Post Office Square Mortgaged Property are received in excess of the amounts required to be applied in accordance with the foregoing clauses first through eighth, such amount will generally be paid, pro rata, to the holders of the One Post Office Square Loan and One Post Office Square Companion Note (on a pro rata basis) on the one hand, and the holder of the One Post Office Square B Note on the other hand, in accordance with the respective initial principal balances of each loan. SIGNIFICANT MORTGAGE LOANS The following summaries describe each mortgage loan with a Cut-off Date Balance equal to at least 3.0% of the Initial Pool Balance. THE ONE POST OFFICE SQUARE LOAN
LOAN INFORMATION PROPERTY INFORMATION ---------------------------------------------------- ------------------------------------------ Cut-off Date Balance $60,000,000 Property Type Office % of Initial Pool Balance 5.0% Location Boston, MA Origination Date September 12, 2003 Square Footage 766,462 Maturity Date October 1, 2013 Year Built/Renovated 1981 Mortgage Rate 5.2990% Appraised Value $280,000,000 Annual Debt Service $3,179,400 Occupancy 90.9% UW DSCR 3.10x Occupancy Date August 7, 2003 Cut-off Date LTV 42.9% UW NOI $21,122,367 Balloon LTV 37.8% UW NCF $19,705,493
The One Post Office Square Mortgage Loan is a senior loan in a split loan structure with the One Post Office Square Companion Note (pari passu with One Post Office Square Loan) and the One Post Office Square B Note. The Class PS Certificates will be entitled to distributions from the One Post Office Square B Note only, which has a principal balance of $55,000,000 as of the cut-off date. The Class PS Certificates are not being offered by this prospectus supplement. The Loan. The One Post Office Square Whole Loan was originated by JPMorgan Chase Bank and is secured by a first mortgage encumbering a 42-story office building and a 385-space parking garage located in the financial district of Boston, Massachusetts (the "One Post Office Square Property"). The One Post Office Square Whole Loan was made to One Post Office Square, L.L.C. (the "One Post Office Square Borrower"), a single purpose, bankruptcy-remote entity controlled by The Equitable Life Assurance Society of the United States, on behalf of its Separate Account No. 8, also known as the Prime Property Fund and Equity Office Properties Trust. The One Post Office Square Loan has a remaining amortization term of 360 months and matures on October 1, 2013. The One Post Office Square Loan requires payments of interest only S-69 through October 2005. The One Post Office Square Loan may not be prepaid prior to June 1, 2013. The One Post Office Square Loan may be prepaid, in whole, without payment of a prepayment premium at any time thereafter. The One Post Office Square Loan is subject to Defeasance, in whole, beginning on October 1, 2005. The Property. The One Post Office Square Property consists of a 42-story office building containing 766,462 square feet of net rentable space and an eight-level parking garage with 385 spaces, located within the financial district of Boston, Massachusetts. The One Post Office Square Property was completed in 1981. Major tenants at the One Post Office Square Property include: Putnam Investments (occupying 298,589 square feet, approximately 39.0% of the net rentable area ("NRA")); PricewaterhouseCoopers (occupying 179,105 square feet, approximately 23.4% of the NRA); and Sullivan & Worcester (occupying 105,840 square feet, approximately 13.8% of the NRA). As of August 7, 2003, the One Post Office Square Property was approximately 90.9% leased by 29 tenants. Property Management. The One Post Office Square Property is managed by a division of Equity Office Properties Trust ("EOP"), a full service real estate company that owns and manages over 700 properties totaling 124 million square feet of office space. EOP is a publicly-traded company on the New York Stock Exchange. Lockbox and Reserves. The One Post Office Square Loan documents require that the One Post Office Square Borrower instruct all tenants that any and all payments due under the leases are required to be paid directly into a lockbox account pursuant to the terms of a cash management agreement. Funds in the lockbox account are required to be swept each business day and returned to the One Post Office Square Borrower. Upon the occurrence of an event of default under the One Post Office Square Loan documents, funds in the lockbox account are required to be swept at least twice a month to the cash management account controlled by the lender. The One Post Office Square Borrower is obligated to make deposits into certain reserves if the net operating income for the One Post Office Square falls below $17,000,000. Additionally, the One Post Office Square Borrower is obligated to make deposits into certain leasing reserves in connection with certain lease terminations. In lieu of cash deposits, the One Post Office Square Borrower may provide a guaranty from EOP Operating Limited Partnership and The Equitable Life Assurance Society of the United States, on behalf of its Separate Account No. 8, also known as the Prime Property Fund, so long as both such entities have a long term debt rating of at least "BBB--" by S&P and "Baa3" by Moody's. IAC INTERNATIONAL CARGO PORT -- BOSTON
LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------- ---------------------------------------------- Cut-off Date Balance $50,871,090 Property Type Industrial/Office % of Initial Pool Balance 4.2% Location Boston, MA Origination Date May 20, 2003 Square Footage 376,267 Maturity Date June 1, 2013 Year Built/Renovated 2000 Mortgage Rate 6.227% Appraised Value $68,500,000.00 Annual Debt Service $3,759,039.24 Occupancy 88.9% UW DSCR 1.36x Occupancy Date 7/31/2003 Cut-off Date LTV 74.3% UW NOI $5,378,114 Balloon LTV 63.6% UW NCF $5,097,664
The Loan. The International Airport Centers--Boston Loan (the "IAC Loan") was originated by LaSalle Bank National Association and is secured by a first mortgage encumbering the ground lessee's interest in an approximately 376,267 square foot office/warehouse facility located in South Boston, Massachusetts (the "IAC Property"). The IAC Loan was made to International Cargo Port -- Boston L.L.C., a single purpose, bankruptcy-remote entity controlled by International Airport Centers, L.L.C. ("International"). S-70 The IAC Loan is structured with a $5,100,000 performance holdback. The borrower has 180 days from the date of origination to lease the IAC Property to a tenant occupancy level of 91.5% or greater and to generate sufficient income to support a debt service coverage ratio of at least 1.30x. If the borrower has not met the 91.5% occupancy requirement within 180 days from closing, the $5,100,000 performance holdback (or any undisbursed portion thereof) will be used to pay down the outstanding loan balance, prorated based on the actual income level and occupancy rate at the time of pay down, and the IAC Loan will be re-amortized. A yield maintenance charge will be attributable to the portion of the holdback not disbursed to International and deducted from the portion of the holdback earned by International. See "Risk Factors--Risks Relating to Prepayments and Repurchases" in this prospectus supplement. The IAC Loan (i) has a remaining term of 117 months and (ii) matures on June 1, 2013. The IAC Loan may be prepaid, in whole, without payment of a prepayment premium at any time after March 31, 2013. The IAC Loan is subject to Defeasance, in whole, after the second anniversary of the Closing Date. Under the terms of the IAC Loan documents, International is permitted to incur up to $1,000,000 of additional indebtedness that may be secured by purchase money security interests in personal property. The Property. The IAC Property consists of an approximately 376,267 square foot facility comprised of approximately 185,224 square feet of office space on two floors, and approximately 191,043 square feet of warehouse space on one level. The warehouse portion of the IAC Property is approximately 99.1% leased to eleven (11) tenants, which occupy space ranging from approximately 1,393 square feet to approximately 60,638 square feet. The office portion is approximately 78.3% leased to twenty-one (21) tenants, which occupy space ranging from approximately 785 square feet to approximately 27,885 square feet. Included in the eleven (11) warehouse tenants and twenty-one (21) office tenants are three (3) tenants that lease both office and warehouse space. The largest tenants on the IAC Property are EGL Eagle Global Logistics (60,638 square feet), Tighe Warehousing and Distribution, Inc. (33,711 square feet) and Wall USA, Inc. (28,395 square feet). Overall, the occupancy rate for the IAC Property is approximately 88.9%. The IAC Property is leased from the Massachusetts Port Authority ("MPA") pursuant to a ground lease having a 50-year term which expires on June 30, 2050. The MPA can terminate the ground lease after 10 years (in 2010) upon giving the borrower 12 months prior notice of such termination. The MPA must also pay the borrower the greater of (i) the fair market value of International's interest under the ground lease for the remainder of the then current term or (ii) the amount of debt then encumbering the IAC Property together with any prepayment premium, which amounts are required to be used to pay the principal balance of the IAC Loan. Property Management. The IAC Property is managed by International (the "IAC Manager"), which is the Manager of the IAC Borrower. International was formed in 1995 to construct, own and manage a portfolio of transportation related cargo, warehouse distribution and office properties at major airports throughout the country. International currently owns and manages over 4 million square feet of industrial airport centers. Lockbox and Reserves. The IAC Loan has a springing lockbox in place pursuant to the terms of a cash management agreement. Upon the occurrence of a monetary event of default, all amounts collected by the IAC Manager are required to be paid directly into a lockbox account. The IAC Loan documents require an annual replacement reserve in the amount of $37,632.00 and a reserve for tenant improvements and leasing commissions to be collected at an annual rate of $244,536. All reserves are collected in monthly installments. There are no reserves for real property taxes or insurance. ARD LOANS 8 mortgage loans (the "ARD Loans"), representing approximately 4.0% of the Initial Pool Balance (6 mortgage loans in Loan Group 1, representing approximately 4.4% of the Initial Loan S-71 Group 1 Balance and 2 mortgage loans in Loan Group 2, representing approximately 3.2% of the Initial Loan Group 2 Balance), provide that, if after a certain date (each, an "Anticipated Repayment Date"), the borrower has not prepaid the respective ARD 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"). The Anticipated Repayment Date for each ARD Loan is generally 10 years after the closing of such ARD Loan. The Revised Rate for each ARD Loan is generally equal to the greater of the Initial Rate plus at least 2% or the then-current treasury rate corresponding to a term equal to the remaining amortization period of such ARD Loan plus at least 2% per annum. After the Anticipated Repayment Date, these ARD Loans further require that all cash flow available from the related Mortgaged Property after payment of the Periodic Payments required under the terms of the related loan documents and all escrows and property expenses required under the related loan documents be used to accelerate amortization of principal on the respective ARD Loan. While interest at the Initial Rate continues to accrue and be payable on a current basis on the ARD Loans after their Anticipated Repayment Dates, 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 (to the extent permitted under applicable law and the related mortgage loan documents), only after the outstanding principal balance of the respective ARD Loan has been paid in full, at which time the deferred interest will be paid to the holders of the Class NR certificates. Additionally, an account was established at the origination of each ARD Loan into which the related borrower, property manager and/or tenants is required to directly deposit rents or other revenues from the related Mortgaged Property. In certain instances, the lockbox structure does not spring until prior to, or upon the Anticipated Repayment Date. See "--Lockbox Accounts" below. The foregoing features, to the extent applicable, are designed to increase the likelihood that the ARD Loans will be prepaid by the respective borrower on or about their Anticipated Repayment Dates. However, we cannot assure you that the ARD Loans will be prepaid on their Anticipated Repayment Dates. CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS Mortgage Loans. 130 mortgage loans, representing approximately 75.8% of the Initial Pool Balance (79 mortgage loans in Loan Group 1, representing approximately 77.3% of the Initial Loan Group 1 Balance and 51 mortgage loans in Loan Group 2, representing approximately 72.6% of the Initial Loan Group 2 Balance) have due dates that occur on the 1st day of each month. 56 mortgage loans, representing approximately 24.2% of the Initial Pool Balance (32 mortgage loans in Loan Group 1, representing approximately 22.7% of the Initial Loan Group 1 Balance and 24 mortgage loans in Loan Group 2, representing approximately 27.4 of the Initial Loan Group 2 Balance) have due dates that occur on the 11th day of each month. 65 mortgage loans, representing approximately 27.3% of the Initial Pool Balance (40 mortgage loans in Loan Group 1, representing approximately 26.6% of the Initial Loan Group 1 Balance and 25 mortgage loans in Loan Group 2, representing approximately 28.9% of the Initial Loan Group 2 Balance), provide for no grace period for the payment of monthly principal and/or interest. 82 mortgage loans, representing approximately 37.3% of the Initial Pool Balance (45 mortgage loans in Loan Group 1, representing approximately 34.6% of the Initial Loan Group 1 Balance and 37 mortgage loans in Loan Group 2, representing approximately 43.3% of the Initial Loan Group 2 Balance), provide for a grace period of 5 days for the payment of monthly principal and/or interest. 37 mortgage loans, representing approximately 32.6% of the Initial Pool Balance (24 mortgage loans in Loan Group 1, representing approximately 34.7% of the Initial Loan Group 1 Balance and 13 mortgage loans in Loan Group 2, representing approximately 27.8% of the Initial Loan Group 2 Balance) provide for a grace period of 7 days for the payment of monthly principal and/or interest. 2 mortgage loans, representing approximately 2.8% of the Initial Pool Balance (approximately 4.0% of the Initial Loan Group 1 Balance) provide for a grace period of 10 days for the payment of monthly principal and/or interest. In some cases, there are exceptions to the strict operation of the grace period (or lack thereof), allowing a notice and cure right, for S-72 example, prior to acceleration of the mortgage loan or in the event that the failure to make timely principal and interest payments is relatively infrequent. The mortgage loans accrue interest on the basis of the actual number of days in a month, assuming a 360-day year ("Actual/360 Basis") or on the basis of twelve 30-day months, assuming a 360-day year ("30/360 Basis"), as set forth in the following table. INTEREST ACCRUAL BASIS
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN INTEREST ACCRUAL MORTGAGE MORTGAGE POOL GROUP 1 GROUP 2 BASIS LOANS LOANS BALANCE BALANCE BALANCE -------------------- ----------- ----------------- --------- --------- ----------- Actual/360 ......... 183 $1,163,876,439 96.6% 95.1% 100.0% 30/360 ............. 3 40,910,886 3.4 4.9 0.0 --- -------------- ----- ----- ----- Total .............. 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
170 mortgage loans, representing approximately 93.6% of the Initial Pool Balance (104 mortgage loans in Loan Group 1, representing approximately 93.5% of the Initial Loan Group 1 Balance and 66 mortgage loans in Loan Group 2, representing approximately 93.8% of the Initial Loan Group 2 Balance), provide for monthly payments of principal based on amortization schedules significantly longer than the remaining terms of the related mortgage loans. These mortgage loans will have balloon payments due at their stated maturity dates or Anticipated Repayment Dates, as the case may be. 8 mortgage loans, representing approximately 4.0% of the Initial Pool Balance (6 mortgage loans in Loan Group 1, representing approximately 4.4% of the Initial Loan Group 1 Balance and 2 mortgage loans in Loan Group 2, representing approximately 3.2% of the Initial Loan Group 2 Balance), provide for monthly payments of principal that will result in a substantial principal payment at their Anticipated Repayment Dates if the related borrower prepays the mortgage loan on that date. 4 mortgage loans, representing approximately 7.2% of the Initial Pool Balance (3 mortgage loans in Loan Group 1, representing approximately 9.9% of the Initial Loan Group 1 Balance and 1 mortgage loan in Loan Group 2, representing approximately 1.1% of the Initial Loan Group 2 Balance), provide for monthly payments of interest only during their respective interest-only periods (which ranged from 12 to 24 months) followed by payments which would amortize a portion of the principal balance of the mortgage loans during their remaining terms based on an amortization schedule. 7 mortgage loans, representing approximately 4.3% of the Initial Pool Balance (6 mortgage loans in Loan Group 1, representing approximately 5.7% of the Initial Loan Group 1 Balance and 1 mortgage loan in Loan Group 2, representing approximately 1.1% of the Initial Loan Group 2 Balance), provide for monthly payments of principal that fully or substantially amortize the loan over the life of the mortgage loan. 9 mortgage loans, representing approximately 2.1% of the Initial Pool Balance (1 mortgage loan in Loan Group 1, representing approximately 0.8% of the Initial Loan Group 1 Balance and 8 mortgage loans in Loan Group 2, representing approximately 5.1% of the Initial Loan Group 2 Balance) provide for no payments of principal over the life of the loan. Prepayment Provisions. Each mortgage loan prohibits any prepayments (including Defeasance) for a specified period of time after its date of origination (a "Lockout Period"). In addition, each mortgage loan restricts voluntary prepayments or Defeasance in one of the following ways, subject in each case to any described open periods: S-73 OVERVIEW OF PREPAYMENT PROTECTION
AGGREGATE % OF % OF PRINCIPAL % OF INITIAL INITIAL NUMBER OF BALANCE OF INITIAL LOAN LOAN PREPAYMENT MORTGAGE MORTGAGE POOL GROUP 1 GROUP 2 PROTECTION LOANS LOANS BALANCE BALANCE BALANCE --------------------------------- ----------- ----------------- --------- --------- ---------- Lockout with defeasance ......... 178 $1,122,105,110 93.1% 91.8% 96.2% Lockout period followed by yield maintenance .................... 7 58,250,718 4.8 5.3 3.8 Yield maintenance ............... 1 24,431,497 2.0 2.9 0.0 --- -------------- ----- ----- ----- Total ........................... 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
"Yield Maintenance Charge" will generally, subject to variations, be equal to either (or the greater) of (i) a specified percentage of the amount being prepaid or (ii) the present value, as of the prepayment date, of the remaining scheduled payments of principal and interest from the prepayment date through the maturity date (including any balloon payment) determined by discounting such payments at the Discount Rate, less the amount of principal being prepaid. The term "Discount Rate" generally means the rate, which, when compounded monthly, is equivalent to the Treasury Rate when compounded semi-annually, and the term "Treasury Rate" means the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates ("Release H.15") 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 of the mortgage loan. In the event Release H.15 is no longer published, the Master Servicer will select a comparable publication to determine the Treasury Rate. In the case of 2 mortgage loans identified as loan numbers 6 and 123 on Annex A-1 to this prospectus supplement, representing approximately 2.3% of the Initial Pool Balance, the term "Discount Rate" means the yield on a U.S. Treasury selected by the lender two weeks prior to prepayment that has the most closely corresponding maturity date to the maturity date of the mortgage loan and has a coupon rate most closely corresponding to the interest rate on the mortgage loan. Yield Maintenance Charges are distributable as described in this prospectus supplement under "Description of the Certificates--Allocation of Yield Maintenance Charges." The mortgage loans permit voluntary prepayment without the payment of a Yield Maintenance Charge or any prepayment premium during an "open period" immediately prior to the stated maturity date or Anticipated Repayment Date as follows: PREPAYMENT OPEN PERIODS
NUMBER OF % OF INITIAL % OF INITIAL % OF INITIAL MORTGAGE AGGREGATE CUT-OFF POOL LOAN GROUP 1 LOAN GROUP 2 OPEN PERIOD (PAYMENTS) LOANS DATE BALANCE BALANCE BALANCE BALANCE ------------------------ ----------- ------------------- -------------- -------------- ------------- 1 ...................... 2 $ 5,769,980 0.5% 0.7% 0.0% 3 ...................... 108 548,474,506 45.5 39.6 59.2 4 ...................... 40 327,599,041 27.2 26.7 28.4 5 ...................... 2 63,150,000 5.2 7.5 0.0 6 ...................... 25 165,198,077 13.7 14.3 12.4 7 ...................... 8 84,664,578 7.0 10.1 0.0 13 ..................... 1 9,931,143 0.8 1.2 0.0 --- -------------- ----- ----- ----- Total .................. 186 $1,204,787,325 100.0% 100.0% 100.0% === ============== ===== ===== =====
Unless a mortgage loan is relatively near its stated maturity date or unless the sale price or the amount of the refinancing of the related Mortgaged Property is considerably higher than the current outstanding principal balance of the mortgage loan (due to an increase in the value of the Mortgaged Property or otherwise) and depending on the interest rate environment at the time of prepayment, the Yield Maintenance Charge may offset entirely or render insignificant S-74 any economic benefit to be received by a related borrower upon a refinancing or sale of its Mortgaged Property. The Yield Maintenance Charge provision of a mortgage loan creates an economic disincentive for the borrower to prepay its mortgage loan voluntarily and, accordingly, the related borrower may elect not to prepay its mortgage loan. However, we cannot assure you that the imposition of a Yield Maintenance Charge will provide a sufficient disincentive to prevent a voluntary principal prepayment or sufficient compensation to Certificates affected by a prepayment. 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. Certain mortgage loans require the payment of Yield Maintenance Charges or prepayment premiums in connection with a prepayment of the related mortgage loan with Insurance and/or Condemnation Proceeds as a result of a casualty or condemnation. Certain other of the mortgage loans do not require the payment of Yield Maintenance Charges in connection with a prepayment of the related mortgage loan with Insurance and/or Condemnation Proceeds as a result of a casualty or condemnation, provided that no event of default exists. In addition, certain of the mortgage loans permit the related borrower, after a partial casualty or partial condemnation, to prepay the remaining principal balance of the mortgage loan (after application of the related insurance proceeds or condemnation award to pay the principal balance of the mortgage loan), which may in certain cases not be accompanied by any prepayment consideration, provided that the prepayment of the remaining balance is made within a specified period of time following the date of the application of proceeds or award. Furthermore, the enforceability, under the laws of a number of states, of provisions providing for payments comparable to the Yield Maintenance Charges upon an involuntary prepayment is unclear. We cannot assure you that, at the time a Yield Maintenance Charge is required to be made on a mortgage loan in connection with an involuntary prepayment, the obligation to pay the Yield Maintenance Charge will be enforceable under applicable state law. See "Certain Legal Aspects of Mortgage Loans--Default Interest and Limitations on Prepayments" in the prospectus. Defeasance; Collateral Substitution. The terms of 178 of the mortgage loans, representing approximately 93.1% of the Initial Pool Balance (105 mortgage loans in Loan Group 1, representing approximately 91.8% of the Initial Loan Group 1 Balance and 73 mortgage loans in Loan Group 2, representing approximately 96.2% of the Initial Loan Group 2 Balance), permit the applicable borrower on any due date after a specified period (the "Defeasance Lockout Period"), provided no event of default exists, to obtain a release of all or a portion of a Mortgaged Property from the lien of the related Mortgage (a "Defeasance"). The Defeasance Lockout Period is at least two years from the Closing Date. The release is subject to certain conditions, including, among other conditions, that the borrower: (a) pays or delivers to the Master Servicer on any due date (the "Release Date") (1) all interest accrued and unpaid on the principal balance of the Mortgage Note to but not including the Release Date, (2) all other sums due under the mortgage loan and all other loan documents executed in connection with the related mortgage loan, (3) funds to purchase direct non-callable obligations of the United States of America or other U.S. government obligations providing payments (x) on or prior to all successive scheduled payment dates from the Release Date to the related maturity date including the balloon payment (or the Anticipated Repayment Date), assuming, in the case of each ARD Loan, that the loan is prepaid on the related Anticipated Repayment Date and (y) in amounts at least equal to the scheduled payments due on those dates under the mortgage loan or the related defeased amount of the mortgage loan in the case of a partial defeasance (including any balloon payment), and (4) any costs and expenses incurred in connection with the purchase of the U.S. government obligations; and (b) delivers a security agreement granting the trust fund a first priority lien on the U.S. government obligations purchased as substitute collateral and an opinion of counsel relating to the enforceability of such security interest. S-75 The mortgage loans secured by more than one Mortgaged Property that permit release of one or more of the Mortgaged Properties generally require that either (or, in some cases, both) (1) prior to the release of a related Mortgaged Property, a specified percentage (generally between 110% and 125%) of the allocated loan amount for the Mortgaged Property be defeased (or, in the case of certain cross-collateralized mortgage loan pools, that the mortgage loan primarily secured by the released Mortgaged Property be fully defeased and an additional deposit made in an amount either (x) sufficient to defease at least 15% of the amount of the fully defeased mortgage loan, such additional deposit to be available to pay debt service on the undefeased mortgage loan(s) in the cross-collateralized loan pools, or (y) equal to 35% (or in the case of one Mortgaged Property 50%) of the original principal balance of the fully defeased mortgage loan, such additional deposit to be used to partially defease the remaining mortgage loan(s) in the collateral pool) and/or (2) certain debt service coverage ratio and LTV Ratio tests (if applicable) be satisfied with respect to the remaining Mortgaged Properties after the defeasance. The related borrower or, if the borrower is not required to do so under the mortgage loan documents, the Master Servicer, will be responsible for purchasing the U.S. government obligations on behalf of the borrower at the borrower's expense. Simultaneously with these actions, the related Mortgaged Property will be released from the lien of the mortgage loan and the pledged U.S. government obligations (together with any Mortgaged Property not released, in the case of a partial defeasance) will be substituted as the collateral securing the mortgage loan. In general, a successor borrower established or designated by the related borrower (or, if the borrower is not required to do so under the mortgage loan documents, established or designated by the Master Servicer) will assume all of the defeased obligations of a borrower exercising a Defeasance option under a mortgage loan and the borrower will be relieved of all of the defeased obligations under the mortgage loan. In other cases, the existing borrower will remain liable for all of the defeased obligations, subject to the mortgage loan documents, after releasing the Mortgaged Property. Although the collateral substitution provisions related to defeasance are not intended to be, and do not have the same effect on the Certificateholders as, a prepayment of the related mortgage loan, a court could interpret these provisions as being equivalent to an unenforceable Yield Maintenance Charge or prepayment premium. We make no representation as to the enforceability of the defeasance provisions of any mortgage loan. Partial Releases. Certain of the mortgage loans permit a partial release of an unimproved (which may have landscaping, parking or other non-income generating improvements) portion of the related Mortgaged Property upon the satisfaction of certain requirements other than pursuant to Defeasance. "Due-on-Sale" and "Due-on-Encumbrance" Provisions. The mortgage loans contain "due-on-sale" and "due-on-encumbrance" provisions that in each case, with limited exceptions, permit the holder of the Mortgage to accelerate the maturity of the related mortgage loan if the borrower sells or otherwise transfers or encumbers the related Mortgaged Property without the consent of the holder of the Mortgage; provided, however, under the terms of many of the mortgage loans, this consent may not be unreasonably withheld, and in some cases must be granted if certain conditions are met. Certain of the mortgage loans permit or, within a specified time period, require the tenants in common borrowers to transfer ownership into a special purpose entity. Certain of the Mortgaged Properties have been, or may become, subject to additional financing. See "--Additional Debt" above. The Master Servicer with respect to non-Specially Serviced Mortgage Loans and the Special Servicer with respect to Specially Serviced Mortgage Loans, will be required (a) to exercise any right it may have with respect to a mortgage loan containing a "due-on-sale" clause (1) to accelerate the payments on that mortgage loan, or (2) to withhold its consent to any sale or transfer, consistent with the Servicing Standards or (b) to waive its right to exercise such rights; provided however, that with respect to such waiver of rights, (i) with respect to all non-Specially Serviced Mortgage Loans, the Master Servicer has S-76 obtained the prior written consent (or deemed consent) of the Special Servicer, (ii) with respect to all Specially Serviced Mortgage Loans, and all non-Specially Serviced Mortgage Loans having a Stated Principal Balance greater than or equal to $2,500,000, the Special Servicer has obtained the prior written consent (or deemed consent) of the Directing Certificateholder and (iii) with respect to any mortgage loan (x) with a Stated Principal Balance greater than or equal to $20,000,000, (y) with a Stated Principal Balance greater than or equal to 5% of the aggregate Stated Principal Balance of the mortgage loans then outstanding or (z) that is one of the ten largest mortgage loans (by Stated Principal Balance) outstanding, confirmation from each Rating Agency is obtained that such waiver or consent would not result in the downgrade, withdrawal or qualification of the then-current ratings on any class of outstanding Certificates. With respect to a mortgage loan with a "due-on-encumbrance" clause, the Master Servicer, with respect to non-Specially Serviced Mortgage Loans and the Special Servicer, with respect to Specially Serviced Mortgaged Loans will be required (a) to exercise any right it may have with respect to a mortgage loan containing a "due-on-encumbrance" clause (1) to accelerate the payments thereon, or (2) to withhold its consent to the creation of any additional lien or other encumbrance, consistent with the Servicing Standards or (b) to waive its right to exercise such rights, provided that, with respect to such waiver of rights, (i) if the Mortgage Loan is a non-Specially Serviced Mortgage Loan, the Master Servicer has made a recommendation and obtained the consent (or deemed consent) of the Special Servicer and (ii) the Master Servicer or Special Servicer, as the case may be, has obtained from each Rating Agency a confirmation that such waiver would not result in the downgrade, withdrawal or qualification of the then-current ratings on any Class of outstanding Certificates if such mortgage loan (x) (a) has an outstanding principal balance (together with any cross-collateralized mortgage loan) that is greater than or equal to 2% of the Stated Principal Balance of the mortgage loans and (b) has an LTV Ratio greater than 85% (including any proposed debt) and a debt service coverage ratio less than 1.20x (in each case, determined based upon the aggregate of the Stated Principal Balance of the mortgage loan and the principal amount of the proposed additional loan), (y) is one of the ten largest mortgage loans (by Stated Principal Balance) or (z) has a principal balance over $20,000,000. Any confirmation required will be at the related mortgagor's expense, to the extent permitted by the related mortgage loan documents; provided, that to the extent the mortgage loan documents are silent as to who bears the costs of any such confirmation, the Master Servicer or Special Servicer will use reasonable efforts to have the related borrower bear such costs and expenses. Notwithstanding the foregoing, the existence of any additional indebtedness may increase the difficulty of refinancing the related mortgage loan at its maturity date or Anticipated Repayment Date, as applicable, and increase the possibility that reduced cash flow could result in deferred maintenance. Also, if the holder of the additional debt has filed for bankruptcy or been placed in involuntary receivership, foreclosure of the related mortgage loan could be delayed. See "Certain Legal Aspects of Mortgage Loans--Due-on-Sale and Due-on-Encumbrance" and "--Subordinate Financing" in the prospectus. Hazard, Liability and Other Insurance. The mortgage loans generally require that each Mortgaged Property be insured by a hazard insurance policy in an amount (subject to an approved deductible) at least equal to the lesser of the outstanding principal balance of the related mortgage loan and 100% of the replacement cost of the improvements located on the related Mortgaged Property, and if applicable, that the related hazard insurance policy contain appropriate endorsements or have been issued in an amount sufficient to avoid the application of co-insurance and not permit reduction in insurance proceeds for depreciation; provided that, in the case of certain of the mortgage loans, the hazard insurance may be in such other amounts as was required by the related originator. Certain mortgage loans permit a borrower to satisfy its insurance coverage requirement by permitting its tenant to self-insure. In general, the standard form of hazard 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 S-77 exclusions set forth in each policy. Each mortgage loan 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 in an amount generally equal to at least $1,000,000. Each mortgage loan generally further requires the related borrower to maintain business interruption insurance in an amount not less than approximately 100% of the gross rental income from the related Mortgaged Property for not less than 12 months. In general, the mortgage loans (including those secured by Mortgaged Properties located in California) do not require earthquake insurance. 18 of the Mortgaged Properties, securing mortgage loans representing approximately 8.9% of the Initial Pool Balance (15 mortgage loans in Loan Group 1, representing approximately 11.4% of the Initial Loan Group 1 Balance and 3 mortgage loans in Loan Group 2, representing approximately 2.9% of the Initial Loan Group 2 Balance), are located in areas that are considered a high earthquake risk (seismic zones 3 or 4). These areas include all or parts of the States of California, Nevada and Tennessee. No Mortgaged Property has a PML in excess of 20%. In the case of 4 Mortgaged Properties, securing mortgage loans representing approximately 1.1% of the Initial Pool Balance (approximately 3.7% of the Initial Loan Group 2 Balance), a secured creditor environmental insurance policy was obtained from American International Group, Inc. and/or an affiliate in lieu of an environmental site assessment for each of the related Mortgaged Properties. Generally, each environmental insurance policy insures the trust fund against losses up to an amount that is 125% of the outstanding balance of the mortgage loan, resulting from certain known and unknown environmental conditions in violation of applicable environmental standards at the related Mortgaged Property during the applicable policy period, which period continues at least five years beyond the maturity date of the related mortgage loan. Subject to certain conditions and exclusions, the insurance policies, by their terms, generally provide coverage against (i) losses resulting from default under the applicable mortgage loan, up to the amount of the then outstanding loan balance and certain unpaid interest, if on-site environmental conditions in violation of applicable environmental standards are discovered at the related Mortgaged Property during the policy period and no foreclosure of the Mortgaged Property has taken place, (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 in violation of applicable environmental standards discovered during the policy period to the extent required by applicable law, including any court order or other governmental directive. See "Risk Factors--Property Insurance May Not Be Sufficient" in this prospectus supplement for information regarding insurance coverage for acts of terrorism. ADDITIONAL MORTGAGE LOAN INFORMATION The tables presented in Annex A-2 set forth certain anticipated characteristics of the mortgage loans and the Mortgaged Properties. The sum in any column may not equal the indicated total due to rounding. The descriptions in this prospectus supplement of the mortgage loans and the Mortgaged Properties are based upon the pool of mortgage loans as it is expected to be constituted as of the close of business on the Closing Date, assuming that (1) all scheduled principal and/or interest payments due on or before the cut-off date will be made and (2) there will be no principal prepayments on or before the cut-off date. Prior to the issuance of the Certificates, one or more mortgage loans (including mortgage loans specifically described in this prospectus supplement) may be removed from the pool of mortgage loans as a result of prepayments, delinquencies, incomplete documentation or for any other reason, if the Depositor or a Mortgage Loan Seller deems the removal necessary, appropriate or desirable. A limited number of other mortgage loans may be included in the pool of mortgage loans prior to the issuance of the Certificates, unless including those mortgage loans S-78 would materially alter the characteristics of the pool of mortgage loans as described in this prospectus supplement. The Depositor believes that the information set forth in this prospectus supplement will be representative of the characteristics of the pool of mortgage loans as it will be constituted at the time the Certificates are issued, although the range of Mortgage Rates and maturities as well as other characteristics of the mortgage loans described in this prospectus supplement may vary. With respect to mortgage loans secured by more than one Mortgaged Property, the information presented in this prospectus supplement with respect to debt service coverage ratios and LTV Ratios assumes that the debt service coverage ratio and LTV Ratio with respect to each Mortgaged Property is the debt service coverage ratio or LTV Ratio of the mortgage loan in the aggregate. For purposes of the statistical information in this prospectus supplement, unless otherwise noted, all numbers and statistical information do not include the One Post Office Square Companion Note or the One Post Office Square B Note. With respect to the One Post Office Square Loan, the loan amount used in this prospectus supplement for purposes of weighting the individual loan-to-value ratios and debt service coverage ratios is the principal balance of the One Post Office Square loan. The loan amount used in this prospectus supplement for purposes of calculating its loan-to-value ratios and debt service coverage ratio is the aggregate principal balance of the One Post Office Square Loan and the One Post Office Square Companion Note. The principal balance of the One Post Office Square B Note is included in the calculation of loan-to-value ratios and debt service coverage ratios only where specifically indicated. All information presented in this prospectus supplement (including LTV Ratios and debt service coverage ratios) with respect to a mortgage loan with a Companion Loan is calculated without regard to the related Companion Loan. A Current Report on Form 8-K (the "Form 8-K") will be available to purchasers of the Offered Certificates on or shortly after the Closing Date and will be filed, together with the Pooling and Servicing Agreement, with the Securities and Exchange Commission within fifteen days after the initial issuance of the Certificates. For a detailed presentation of certain characteristics of the mortgage loans and the Mortgaged Properties on an individual basis, see Annex A-1. For purposes of numerical and statistical information set forth in this prospectus supplement and Annex A-1, such numerical and statistical information excludes the Companion Loans. The "Underwritten Cash Flow Debt Service Coverage Ratio" or "UW DSCR" for any mortgage loan for any period, as presented in this prospectus supplement, including the tables presented on Annex A-1 and Annex A-2 attached to this prospectus supplement, is the ratio of Underwritten Cash Flow calculated for the related Mortgaged Property to the amount of total annual debt service on such mortgage loan. With respect to any mortgage loan that is part of a cross-collateralized group of mortgage loans, the Underwritten Cash Flow Debt Service Coverage Ratio is the ratio of the Underwritten Cash Flow calculated for the Mortgaged Properties related to the cross-collateralized group to the total annual debt service for all of the mortgage loans in the cross-collateralized group. "Underwritten Cash Flow" or "UW NCF" means the Underwritten NOI for the related Mortgaged Property decreased by an amount that the related Mortgage Loan Seller has determined to be an appropriate allowance for average annual tenant improvements and leasing commissions and/or replacement reserves for capital items based upon its underwriting guidelines. "Underwritten NOI" or "UW NOI" means the Net Operating Income for the related Mortgaged Property as determined by the related Mortgage Loan Seller in accordance with its underwriting guidelines for similar properties. Revenue from a Mortgaged Property ("Effective Gross Income") is generally calculated as follows: rental revenue is calculated using actual rental rates, in some cases adjusted downward to market rates with vacancy rates equal to the higher of the related Mortgaged Property's historical rate, the market rate or an assumed vacancy rate; S-79 other revenue, such as parking fees, laundry and other income items are included only if supported by a trend and/or are likely to be recurring. Operating expenses generally reflect the related Mortgaged Property's historical expenses, adjusted to account for inflation, significant occupancy increases and a market rate management fee. Generally, "Net Operating Income" or "NOI," for a Mortgaged Property equals the operating revenues (consisting principally of rental and related revenue) for that Mortgaged Property minus the operating expenses (such as utilities, repairs and maintenance, general and administrative, management fees, marketing and advertising, insurance and real estate tax expenses) for the Mortgaged Property. NOI generally does not reflect debt service, tenant improvements, leasing commissions, depreciation, amortization and similar non-operating items. The amounts representing Net Operating Income, Underwritten NOI and Underwritten Cash Flow are not a substitute for or an improvement upon net income, as determined in accordance with generally accepted accounting principles, as a measure of the results of the Mortgaged Property's operations or a substitute for cash flows from operating activities, as determined in accordance with generally accepted accounting principles, as a measure of liquidity. No representation is made as to the future cash flow of the Mortgaged Properties, nor are the Net Operating Income, Underwritten NOI and Underwritten Cash Flow set forth in this prospectus supplement intended to represent such future cash flow. The UW NCFs and UW NOIs used as a basis for calculating the UW DSCRs presented in this prospectus supplement, including the tables presented on Annex A-1 and Annex A-2 were derived principally from operating statements obtained from the respective borrowers (the "Operating Statements"). With respect to mortgage loans secured by newly constructed Mortgaged Properties, the UW NCFs and UW NOIs used as a basis for calculating UW DSCRs are derived principally from rent rolls, tenant leases and the appraisers' projected expense levels. The Operating Statements and rent rolls were not audited and in most cases were not prepared in accordance with generally accepted accounting principles. To increase the level of consistency between the Operating Statements and rent rolls, in some instances, adjustments were made to such Operating Statements. These adjustments were principally for real estate tax and insurance expenses (e.g., adjusting for the payment of two years of expenses in one year), and to eliminate obvious items not related to the operation of the Mortgaged Property. However, such adjustments were subjective in nature and may not have been made in a uniform manner. The UW NCF for residential cooperative Mortgaged Properties is based on projected net operating income at the Mortgaged Property, as determined by the appraisal obtained in connection with the origination of the related mortgage loan, assuming that the Mortgaged Property was operated as a rental property with rents set at prevailing market rates taking into account the presence of, if any, existing rent-controlled or rent-stabilized occupants, if any, reduced by underwritten capital expenditures, property operating expenses, a market-rate vacancy assumption and projected reserves. The tables presented in Annex A-2 that are entitled "Cut-off Date LTV Ratios" and "Maturity Date LTV Ratios" set forth the range of LTV Ratios of the mortgage loans as of the cut-off date and the stated maturity dates or Anticipated Repayment Date of the mortgage loans. An "LTV Ratio" for any mortgage loan, as of any date of determination, is a fraction, expressed as a percentage, the numerator of which is the scheduled principal balance of the mortgage loan as of that date (assuming no defaults or prepayments on the mortgage loan prior to that date), and the denominator of which is the appraised value of the related Mortgaged Property or Mortgaged Properties as determined by an appraisal of the property obtained at or about the time of the origination of the mortgage loan. However, in the event that a mortgage loan is part of a cross-collateralized group of mortgage loans, the LTV Ratio is the fraction, expressed as a percentage, the numerator of which is the scheduled principal balance of all the mortgage loans in the cross-collateralized group and the denominator of which is the aggregate of the appraised values of all the Mortgaged Properties related to the cross-collateralized group. The LTV Ratio as of the mortgage loan maturity date or Anticipated Repayment Date, as the case may be, set forth in Annex A-2 was calculated based on the principal balance of the related mortgage loan on the S-80 maturity date or Anticipated Repayment Date, as the case may be, assuming all principal payments required to be made on or prior to the mortgage loan's maturity date or Anticipated Repayment Date, as the case may be (not including the balloon payment), are made. In addition, because it is based on the value of a Mortgaged Property determined as of loan origination, the information set forth in this prospectus supplement, in Annex A-1 and in Annex A-2 is not necessarily a reliable measure of the related borrower's current equity in each Mortgaged Property. In a declining real estate market, the appraised value of a Mortgaged Property could have decreased from the appraised value determined at origination and the current actual LTV Ratio of a mortgage loan may be higher than its LTV Ratio at origination even after taking into account amortization since origination. The characteristics described above and in Annex A-2, along with certain additional characteristics of the mortgage loans presented on a loan-by-loan basis, are set forth in Annex A-1 to this prospectus supplement. Certain additional information regarding the mortgage loans is set forth in this prospectus supplement below under "--Underwriting Guidelines and Processes" and in the prospectus under "Description of the Trust Funds--Mortgage Loans" and "Certain Legal Aspects of Mortgage Loans." THE MORTGAGE LOAN SELLERS The Mortgage Loan Sellers are JPMorgan Chase Bank, LaSalle Bank National Association and Nomura Credit & Capital, Inc. JPMorgan Chase Bank is a subsidiary of J.P. Morgan Chase & Co. and is an affiliate of the Depositor and one of the Underwriters. LaSalle Bank National Association is the paying agent, authenticating agent and certificate registrar and is also an affiliate of one of the Underwriters. Nomura Credit & Capital, Inc. is an affiliate of one of the Underwriters. JPMORGAN CHASE BANK JPMorgan Chase Bank is a wholly-owned bank subsidiary of J.P. Morgan Chase & Co., a Delaware corporation whose principal office is located in New York, New York. JPMorgan Chase Bank is a commercial bank offering a wide range of banking services to its customers both domestically and internationally. Its business is subject to examination and regulation by Federal and New York State banking authorities. As of December 31, 2002, JPMorgan Chase Bank had total assets of $622.4 billion, total net loans of $180.6 billion, total deposits of $300.6 billion, and total stockholder's equity of $35.5 billion. As of December 31, 2001, JPMorgan Chase Bank had total assets of $537.8 billion, total net loans of $174.9 billion, total deposits of $280.5 billion, and total stockholder's equity of $33.3 billion. LASALLE BANK NATIONAL ASSOCIATION LaSalle Bank National Association is a national banking association whose principal offices are in Chicago, Illinois. LaSalle Bank National Association offers a variety of banking services to customers including commercial and retail banking, trust services and asset management. LaSalle Bank National Association's business is subject to examination and regulation by federal banking authorities and its primary federal bank regulatory authority is the Office of the Comptroller of the Currency. LaSalle Bank National Association is a subsidiary of ABN AMRO North America, Inc., which is owned by ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands. As of June 30, 2003, LaSalle Bank National Association had total assets of $53.8 billion. LaSalle Bank National Association is acting as the paying agent, authenticating agent and certificate registrar for this transaction and is an affiliate of ABN AMRO Incorporated, which is an Underwriter. The information set forth in this prospectus supplement concerning the Mortgage Loan Sellers and their underwriting standards has been provided by the Mortgage Loan Sellers, and neither the Depositor nor the Underwriters make any representation or warranty as to the accuracy or completeness of that information. S-81 NOMURA CREDIT & CAPITAL, INC. Nomura Credit & Capital, Inc. is a Delaware corporation whose principal offices are located in New York, New York. Nomura Credit & Capital, Inc. is a subsidiary of Nomura Holding America Inc., and an indirect subsidiary of Nomura Holdings, Inc., one of the largest global investment banking and securities firms, with a market capitalization of approximately $20 billion. Nomura Credit & Capital, Inc. is a HUD approved mortgagee primarily engaged in the business of originating and acquiring mortgage loans and other assets. An affiliate of Nomura Credit & Capital, Inc., Nomura Securities International, Inc., is acting as an Underwriter. UNDERWRITING GUIDELINES AND PROCESSES Each Mortgage Loan Seller has developed guidelines establishing certain procedures with respect to underwriting the mortgage loans originated or purchased by it. Each Mortgage Loan Seller has confirmed to the Depositor and the Underwriters that its guidelines are generally consistent with those described below. All of the mortgage loans were generally underwritten in accordance with such guidelines. Two of the mortgage loans (identified as loan numbers 105 and 151 on Annex A-1 attached to this prospectus supplement) sold to the Depositor by LaSalle Bank National Association were originated by Capital Lease Funding, LLC. LaSalle Bank National Association re-underwrote those mortgage loans. One of the mortgage loans (identified as loan number 6 on Annex A-1 attached to this prospectus supplement) sold to the Depositor by Nomura Credit & Capital, Inc. was originated by Teachers Insurance and Annuity Association of America. Nomura Credit & Capital, Inc. re-underwrote that mortgage loan at the time it acquired the mortgage loan from Teachers. In some instances, one or more provisions of the guidelines were waived or modified where it was determined not to adversely affect the mortgage loans in any material respect. Property Analysis. The related Mortgage Loan Seller generally performs or causes to be performed a site inspection to evaluate the location and quality of the related mortgaged properties. Such inspection generally includes an evaluation of functionality, design, attractiveness, visibility and accessibility, as well as convenience to major thoroughfares, transportation centers, employment sources, retail areas and educational or recreational facilities. The related Mortgage Loan Seller assesses the submarket in which the property is located to evaluate competitive or comparable properties as well as market trends. In addition, the related Mortgage Loan Seller evaluates the property's age, physical condition, operating history, lease and tenant mix, and management. Cash Flow Analysis. The related Mortgage Loan Seller reviews, among other things, historical operating statements, rent rolls, tenant leases and/or budgeted income and expense statements provided by the mortgagor and makes adjustments in order to determine a debt service coverage ratio. See "Description of the Mortgage Pool--Additional Mortgage Loan Information" in this prospectus supplement. Appraisal and Loan-to-Value Ratio. For each Mortgaged Property, the related Mortgage Loan Seller obtains a current full narrative appraisal conforming at least to the requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). The appraisal must be based on the highest and best use of the mortgaged property and must include an estimate of the current market value of the property in its current condition. The related Mortgage Loan Seller then determines the loan-to-value ratio of the mortgage loan at the date of origination based on the value set forth in the appraisal. Evaluation of Mortgagor. The Mortgage Loan Seller evaluates the mortgagor and its principals with respect to credit history and prior experience as an owner and operator of commercial real estate properties. The evaluation will generally include obtaining and reviewing a credit report or other reliable indication of the mortgagor's financial capacity; obtaining and verifying credit references and/or business and trade references; and obtaining and reviewing certifications provided by the mortgagor as to prior real estate experience and current contingent liabilities. Finally, although the mortgage loans generally are non-recourse in nature, S-82 in the case of certain mortgage loans, the mortgagor and certain principals of the mortgagor may be required to assume legal responsibility for liabilities relating to fraud, misrepresentation, misappropriation of funds, breach of environmental or hazardous waste requirements. The related Mortgage Loan Seller evaluates the financial capacity of the mortgagor and such principals to meet any obligations that may arise with respect to such liabilities. Environmental Site Assessment. Prior to origination, the related Mortgage Loan Seller either (i) obtains or updates an environmental site assessment ("ESA") for a mortgaged property prepared by a qualified environmental firm or (ii) obtains an environmental insurance policy for a mortgaged property. If an ESA is obtained or updated, the related Mortgage Loan Seller reviews the ESA to verify the absence of reported violations of applicable laws and regulations relating to environmental protection and hazardous waste. In cases in which the ESA identifies such violations, the related Mortgage Loan Seller requires the mortgagor to carry out satisfactory remediation activities prior to the origination of the mortgage loan, to establish an operations and maintenance plan or to place sufficient funds in escrow at the time of origination of the mortgage loan to complete such remediation within a specified period of time, or to obtain an environmental insurance policy for the Mortgaged Property or to execute an indemnity agreement with respect to such condition. Physical Assessment Report. At origination, the related Mortgage Loan Seller obtains a physical assessment report ("PAR") for each Mortgaged Property prepared by a qualified structural engineering firm. The related Mortgage Loan Seller reviews the PAR to verify that the property is reported to be in satisfactory physical condition, and to determine the anticipated costs of necessary repair, replacement and major maintenance or capital expenditure needs over the term of the mortgage loan. In cases in which the PAR identifies material repairs or replacements needed immediately, the related Mortgage Loan Seller generally requires the mortgagor to carry out such repairs or replacements prior to the origination of the mortgage loan, or to place sufficient funds in escrow at the time of origination of the mortgage loan to complete such repairs or replacements within not more than twelve months. Title Insurance Policy. The mortgagor is required to provide, and the related Mortgage Loan Seller reviews, a title insurance policy for each Mortgaged Property. The title insurance policy must meet the following requirements: (a) the policy must be written by a title insurer licensed to do business in the jurisdiction where the mortgaged property is located, (b) the policy must be in an amount equal to the original principal balance of the mortgage loan, (c) the protection and benefits must run to the mortgagee and its successors and assigns, (d) the policy should be written on a standard policy form of the American Land Title Association or equivalent policy promulgated in the jurisdiction where the mortgaged property is located and (e) the legal description of the mortgaged property in the title policy must conform to that shown on the survey of the mortgaged property, where a survey has been required. Property Insurance. The mortgagor is required to provide, and the related Mortgage Loan Seller reviews, certificates of required insurance with respect to the mortgaged property. Such insurance generally may include: (1) commercial general liability insurance for bodily injury or death and property damage; (2) an "All Risk of Physical Loss" policy; (3) if applicable, boiler and machinery coverage; (4) if the mortgaged property is located in a flood hazard area, flood insurance; and (5) such other coverage as the related Mortgage Loan Seller may require based on the specific characteristics of the Mortgaged Property. REPRESENTATIONS AND WARRANTIES; REPURCHASES AND SUBSTITUTIONS In each Purchase Agreement, the applicable Mortgage Loan Seller will represent and warrant with respect to each mortgage loan (subject to certain exceptions specified in the related Purchase Agreement) sold by that Mortgage Loan Seller as of the Closing Date, or as of another date specifically provided in the representation and warranty, among other things, that: (a) the mortgage loan is not delinquent in payment of principal and interest and has not been 30 or more days past due, without giving effect to any applicable notice and grace period; S-83 (b) the mortgage loan is secured by a Mortgage that is a valid and subsisting first priority lien on the Mortgaged Property (or a leasehold interest therein) free and clear of any liens, claims or encumbrances, subject only to certain permitted encumbrances; (c) the Mortgage, together with any separate security agreements, establishes a first priority security interest in favor of the Mortgage Loan Seller, in all the related borrower's personal property used in, and reasonably necessary to the operation of, the Mortgaged Property, and to the extent a security interest may be created therein, the proceeds arising from the Mortgaged Property and any other collateral securing the Mortgage subject only to certain permitted encumbrances; (d) there is an assignment of leases and rents provision or agreement creating a first priority security interest in leases and rents arising in respect of the related Mortgaged Property, subject only to certain permitted encumbrances; (e) to the Mortgage Loan Seller's actual knowledge, there are no mechanics' or other similar liens affecting the Mortgaged Property which are or may be prior or equal to the lien of the Mortgage, except those insured against pursuant to the applicable title insurance policy; (f) the related borrower has good and indefeasible fee simple or leasehold title to the Mortgaged Property subject to certain permitted encumbrances; (g) the Mortgaged Property is covered by a title insurance policy insuring that the Mortgage is a valid first lien, subject only to certain permitted encumbrances; no claims have been made under the related title insurance policy and such policy is in full force and effect and will provide that the insured includes the owner of the mortgage loan; (h) at the time of the assignment of the mortgage loan to the Depositor, the Mortgage Loan Seller had good title to and was the sole owner of the mortgage loan free and clear of any pledge, lien or encumbrance (other than rights to servicing and related compensation) and such assignment validly transfers ownership of the mortgage loan to the Depositor free and clear of any pledge, lien or encumbrance; (i) the related assignment of mortgage and related assignment of the assignment of leases and rents is legal, valid and binding; (j) the Mortgage Loan Seller's endorsement of the related Mortgage Note constitutes the legal and binding assignment of the Mortgage Note, except as the enforceability thereof may be limited by applicable state law and by bankruptcy, insolvency, reorganization or other laws relating to creditors' rights and general equitable principles, and together with an assignment of mortgage and the assignment of the assignment of leases and rents, legally and validly conveys all right, title and interest in the mortgage loan and related mortgage loan documents; (k) each Mortgage and Mortgage Note is a legal, valid and binding obligation of the parties thereto, enforceable in accordance with its terms, except as the enforceability thereof may be limited by applicable state law and by bankruptcy, insolvency, reorganization or other laws relating to creditors' rights and general equitable principles and except that certain provisions of such documents are or may be unenforceable in whole or in part, but the inclusion of such provisions does not render such documents invalid as a whole, and such documents taken as a whole are enforceable to the extent necessary and customary for the practical realization of the rights and benefits afforded thereby; (m) the terms of the mortgage loan and related mortgage loan documents have not been modified or waived in any material respect except as set forth in the related mortgage loan file; (n) the mortgage loan has not been satisfied, canceled, subordinated, released or rescinded and the related borrower has not been released from its obligations under any mortgage loan document; S-84 (o) except with respect to the enforceability of provisions requiring the payment of default interest, late fees, additional interest, prepayment premiums or yield maintenance charges, none of the mortgage loan documents is subject to any right of rescission, set-off, valid counterclaim or defense; (p) the terms of each mortgage loan document complied in all material respects with all applicable local, state or federal laws including usury to the extent non-compliance would have a material adverse effect on the mortgage loan; (q) to the Mortgage Loan Seller's knowledge, as of the date of origination of the mortgage loan, based on inquiry customary in the industry, and to the Mortgage Loan Seller's actual knowledge, as of the Closing Date, the related Mortgaged Property is, in all material respects, in compliance with, and is used and occupied in accordance with applicable law, except to the extent any non-conformity is a legally non-conforming use or structure or except in respect of which law and ordinance insurance coverage has been obtained; (r) to the Mortgage Loan Seller's knowledge, (i) in reliance on an engineering report, the related Mortgaged Property is in good repair or escrows have been established to cover the estimated costs of repairs and (ii) no condemnation proceedings are pending; (s) as of the date of origination of the mortgage loan, and to Mortgage Loan Seller's actual knowledge, as of the Closing Date, the Mortgaged Property is covered by insurance policies providing coverage against certain losses or damage; (t) all escrow amounts required to be deposited by the borrower at origination have been deposited; and (u) to the Mortgage Loan Seller's knowledge, as of the date of origination of the mortgage loan, and to Mortgage Loan Seller's actual knowledge, as of the Closing Date, there are no pending actions, suits or proceedings by or before any court or other governmental authority against or affecting the related borrower under the mortgage loan or the Mortgaged Property which, if determined against the borrower or property would materially and adversely affect the value of such property or ability of the current use of the Mortgaged Property to generate net cash flow sufficient to enable the borrower to pay principal, interest and other amounts due under the mortgage loan. If a Mortgage Loan Seller has been notified of a breach of any of the foregoing representations and warranties or of a document defect that in any case materially and adversely affects the value of a mortgage loan, the related Mortgaged Property or the interests of the Certificateholders in the mortgage loan, and if the respective Mortgage Loan Seller cannot cure the breach or defect within a period of 90 days following the earlier of its receipt of that notice and its discovery of the breach or defect (the "Initial Resolution Period"), then the respective Mortgage Loan Seller will be obligated, pursuant to the respective Purchase Agreement (the relevant rights under which will be assigned, together with the mortgage loans, to the Trustee), to (a) repurchase the affected mortgage loan or the related REO Loan within the Initial Resolution Period (or with respect to certain document defects, an extended cure period), at a price (the "Purchase Price") equal to the sum of (1) the outstanding principal balance of the mortgage loan (or related REO Loan) as of the date of purchase, (2) all accrued and unpaid interest on the mortgage loan (or the related REO Loan) at the related Mortgage Rate, in effect from time to time (excluding any portion of such interest that represents additional interest on an ARD Loan), to, but not including, the due date immediately preceding the Determination Date for the Due Period of purchase, (3) all related unreimbursed Servicing Advances plus accrued and unpaid interest on all related Advances at the Reimbursement Rate, Special Servicing Fees (whether paid or unpaid) and additional trust fund expenses in respect of the mortgage loan or related REO Loan, if any, (4) solely in the case of a repurchase or substitution by a Mortgage Loan Seller, all reasonable out-of-pocket expenses reasonably incurred or to be incurred by the Master Servicer, the Special Servicer, the Depositor or the Trustee in respect of the breach or defect giving rise to the repurchase obligation, including any expenses arising out of the enforcement S-85 of the repurchase obligation, including, without limitation, legal fees and expenses and any additional trust fund expenses relating to such mortgage loan (or related REO Loan), and (5) Liquidation Fees, if any, payable with respect to the affected mortgage loan or (b) within 2 years following the Closing Date, substitute a Qualified Substitute Mortgage Loan and pay any shortfall amount equal to the difference between the Purchase Price of the mortgage loan calculated as of the date of substitution and 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 immediately following the expiration of the Initial Resolution Period to cure the breach or default if it is diligently proceeding toward that cure, and has delivered to each Rating Agency, the Master Servicer, the Special Servicer, the Trustee and the Directing Certificateholder an officer's certificate that describes the reasons that a cure was not effected within the Initial Resolution Period. Notwithstanding the foregoing, the actions specified in (a) and (b) of the preceding sentence must be taken within 90 days following the earlier of the Mortgage Loan Seller's receipt of notice or discovery of a breach or defect, with no extension, if such breach or defect would cause the mortgage loan not to be a "qualified mortgage" within the meaning of Section 860G(a)(3) of the Code. Any breach of a representation or warranty with respect to a mortgage loan that is cross-collateralized with other mortgage loans may require the repurchase of or substitution for such other mortgage loans to the extent described under "--Repurchase or Substitution of Cross-Collateralized Mortgage Loans" below. A "Qualified Substitute Mortgage Loan" is a mortgage loan which must, on the date of substitution: (a) have an outstanding principal balance, after application of all scheduled payments of principal and/or interest due during or prior to the month of substitution, not in excess of the outstanding principal balance of the deleted mortgage loan as of the due date in the calendar month during which the substitution occurs; (b) have a Mortgage Rate not less than the Mortgage Rate of the deleted mortgage loan; (c) have the same due date and a grace period no longer than that of the deleted mortgage loan; (d) accrue interest on the same basis as the deleted mortgage loan (for example, on the basis of a 360-day year consisting of twelve 30-day months); (e) have a remaining term to stated maturity not greater than, and not more than two years less than, the remaining term to stated maturity of the deleted mortgage loan; (f) have a then-current LTV Ratio not higher than that of the deleted mortgage loan as of the Closing Date and a current LTV Ratio not higher than the then-current LTV Ratio of the deleted mortgage loan, in each case using a "value" for the mortgaged property as determined using an appraisal conducted by a member of the Appraisal Institute ("MAI"); (g) comply with all of the representations and warranties set forth in the applicable Purchase Agreement; (h) have an environmental report with respect to the related Mortgaged Property which will be delivered as a part of the related mortgage file; (i) have a then-current debt service coverage ratio not less than the original debt service coverage ratio of the deleted mortgage loan as of the Closing Date, and a current debt service coverage ratio of not less than the current debt service coverage ratio of the deleted mortgage loan; (j) constitute a "qualified replacement mortgage" within the meaning of Section 860G(a)(4) of the Code as evidenced by an opinion of counsel (provided at the applicable Mortgage Loan Seller's expense); (k) not have an amortization period that extends to a date that is after the date two years prior to the Rated Final Distribution Date; (l) have prepayment restrictions comparable to those of the deleted mortgage loan; (m) not be substituted for a deleted mortgage loan unless the Trustee has received prior confirmation in writing by each Rating Agency that the substitution will not result in the withdrawal, downgrade, or qualification of the then-current rating assigned by such Rating Agency to any Class of Certificates then rated by such Rating Agency, respectively (the cost, if any, of obtaining the confirmation to be paid by the applicable Mortgage Loan Seller); (n) have been approved by the Directing Certificateholder; (o) prohibit Defeasance within two years of the Closing Date; and (p) not be substituted for a deleted mortgage loan if it would result in the termination of the REMIC status of any of the Loan REMIC, the Lower-Tier REMIC or the Upper-Tier REMIC or the imposition of tax on any REMIC other than a tax on income expressly permitted or contemplated to be received by the terms of the Pooling and Servicing Agreement. In the event that more than one mortgage loan is substituted for a deleted mortgage loan or mortgage loans, then (x) the S-86 amounts described in clause (a) are required to be determined on the basis of aggregate principal balances, (y) each proposed substitute mortgage loan shall individually satisfy each of the requirements specified in clauses (a) through (p), except (z) the rates described in clause (b) above and the remaining term to stated maturity referred to in clause (e) above are required to be determined on a weighted average basis, provided that no individual Mortgage Rate (net of the Servicing Fee and the Trustee Fee) shall be lower than the highest fixed Pass-Through Rate (and not subject to a cap equal to the WAC Rate) of any class of Certificates having a principal balance then outstanding. When a Qualified Substitute Mortgage Loan is substituted for a deleted mortgage loan, (i) the applicable Mortgage Loan Seller will be required to certify that the mortgage loan meets all of the requirements of the above definition and send the certification to the Trustee and the Directing Certificateholder and (ii) such Qualified Substitute Mortgage Loan will become a part of the same Loan Group as the deleted mortgage loan. The foregoing repurchase or substitution obligation will constitute the sole remedy available to the Certificateholders and the Trustee under the Pooling and Servicing Agreement for any uncured breach of any Mortgage Loan Seller's representations and warranties regarding the mortgage loans or any uncured document defect. The respective Mortgage Loan Seller will be the sole warranting party in respect of the mortgage loans sold by that Mortgage Loan Seller to the Depositor, and none of the Depositor, the Master Servicer, the Special Servicer, the other Mortgage Loan Sellers, the Trustee, the Paying Agent, the Underwriters or any of their affiliates will be obligated to repurchase any affected mortgage loan in connection with a breach of the Mortgage Loan Seller's representations and warranties or in connection with a document defect if the Mortgage Loan Seller defaults on its obligation to do so. However, the Depositor will not include any mortgage loan in the pool of mortgage loans if anything has come to the Depositor's attention prior to the Closing Date that causes it to believe that the representations and warranties made by a Mortgage Loan Seller regarding the mortgage loan will not be correct in all material respects when made. See "Description of the Pooling Agreements--Representations and Warranties; Repurchases" in the prospectus. REPURCHASE OR SUBSTITUTION OF CROSS-COLLATERALIZED MORTGAGE LOANS To the extent that the related Mortgage Loan Seller repurchases or substitutes for an affected mortgage loan as provided above with respect to a document omission or defect or a breach of a representation or warranty and such mortgage loan is cross-collateralized and cross-defaulted with one or more other mortgage loans (each a "Crossed Loan"), such document omission or defect or breach of a representation or warranty will be deemed to affect all such Crossed Loans. In such event, the applicable Mortgage Loan Seller will be required to (1) repurchase or substitute for all such Crossed Loans which are, or are deemed to be, materially and adversely affected by such document defect or omission or breach of a representation or warranty or (2) if the Crossed Loans meet the criteria listed below, repurchase only the affected mortgage loan in the manner described above in "--Representations and Warranties; Repurchases and Substitutions". The Mortgage Loan Seller may (in its discretion) repurchase or substitute for only the affected mortgage loan if (i) the weighted average debt service coverage ratio for all the remaining Crossed Loans for the four most recent reported calendar quarters preceding the repurchase or substitution is not less than the greater of (x) the weighted average debt service coverage ratio for all such related Crossed Loans, including the affected Crossed Loan for the four most recent reported calendar quarters preceding the repurchase or substitution and (y) 1.25x, (ii) the weighted average loan-to-value ratio for all of the remaining Crossed Loans, excluding the affected Crossed Loan, based upon the appraised values of the related Mortgaged Properties at the time of repurchase or substitution, is not greater than the lesser of (x) the weighted average loan-to-value ratio for all such related Crossed Loans, including the affected Crossed Loan at the time of repurchase or substitution and (y) 75% and (iii) the related Mortgage Loan Seller causes the related mortgage loans to become not cross-collateralized and cross-defaulted with each other prior to such repurchase. S-87 LOCKBOX ACCOUNTS With respect to 103 mortgage loans (the "Lockbox Loans"), representing approximately 57.3% of the Initial Pool Balance (65 mortgage loans in Loan Group 1, representing approximately 59.3% of the Initial Loan Group 1 Balance and 38 mortgage loans in Loan Group 2, representing approximately 52.6% of the Initial Loan Group 2 Balance), one or more accounts (collectively, the "Lockbox Accounts") have been or may be established into which the related borrower, property manager and/or tenants directly deposit rents or other revenues from the related Mortgaged Property. Pursuant to the terms of 8 Lockbox Loans, representing approximately 5.2% of the Initial Pool Balance (8 mortgage loans in Loan Group 1, representing approximately 7.4% of the Initial Loan Group 1 Balance), the related Lockbox Accounts were required to be established on the origination dates of the related mortgage loans into which operating lessees are required to make deposits directly and amounts may not be released to the borrowers, unless, with respect to certain Lockbox Loans, all debt service and required reserve account deposits have been made. Pursuant to the terms of 6 Lockbox Loans, representing approximately 13.9% of the Initial Pool Balance (5 mortgage loans in Loan Group 1, representing approximately 15.9% of the Initial Loan Group 1 Balance and 1 mortgage loan in Loan Group 2, representing approximately 9.3% of the Initial Loan Group 2 Balance), a cash management account was required to be established for such mortgage loans on or about the origination date of such mortgage loans into which the operating lessees are required to deposit rents directly, but the related borrower will have withdrawal rights until the occurrence of certain events specified in the related mortgage loan documents. Pursuant to the terms of 81 Lockbox Loans, representing approximately 33.0% of the Initial Pool Balance (44 mortgage loans in Loan Group 1, representing approximately 28.5% of the Initial Loan Group 1 Balance and 37 mortgage loans in Loan Group 2, representing approximately 43.3% of the Initial Loan Group 2 Balance), the related mortgage loan documents provide for the establishment of a Lockbox Account upon the occurrence of certain events (such as (i) an event of default under the related mortgage loan documents, (ii) the date 3 months prior to the Anticipated Repayment Date or (iii) the related Anticipated Repayment Date). Except as set forth above, the agreements governing the Lockbox Accounts provide that the borrower has no withdrawal or transfer rights with respect to the related Lockbox Account. The Lockbox Accounts will not be assets of any REMIC. S-88 DESCRIPTION OF THE CERTIFICATES GENERAL The Certificates will be issued pursuant to a pooling and servicing agreement, among the Depositor, the Master Servicer, the Special Servicer, the Paying Agent and the Trustee (the "Pooling and Servicing Agreement") and will represent in the aggregate the entire beneficial ownership interest in the trust fund consisting of: (1) the mortgage loans (including the One Post Office Square B Note) and all payments under and proceeds of the mortgage loans received after the cut-off date (exclusive of payments of principal and/or interest due on or before the cut-off date); (2) any REO Property; (3) those funds or assets as from time to time are deposited in the Certificate Account (and, with respect to the One Post Office Square Whole Loan, a separate custodial account), the Distribution Accounts, the Interest Reserve Account, the Excess Interest Distribution Account, the Gain on Sale Reserve Account or the REO Account, if established; (4) the rights of the mortgagee under all insurance policies with respect to the mortgage loans; and (5) certain rights of the Depositor under the Purchase Agreements relating to mortgage loan document delivery requirements and the representations and warranties of each Mortgage Loan Seller regarding the mortgage loans it sold to the Depositor. The Depositor's Commercial Mortgage Pass-Through Certificates, Series 2003-LN1 (the "Certificates") will consist of the following 28 classes (each, a "Class"): the Class A-1, Class A-2 and Class A-1A certificates (collectively, the "Class A Certificates"), the Class X-1 and Class X-2 certificates (collectively, the "Class X Certificates"), 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 P, Class NR, Class PS-1, Class PS-2, Class PS-3, Class PS-4, Class PS-5, Class PS-6, Class PS-7, Class R and Class LR certificates. The Class A Certificates and the Class X Certificates are referred to collectively in this prospectus supplement as the "Senior Certificates." 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 P and Class NR certificates are referred to collectively in this prospectus supplement as the "Subordinate Certificates." The Class B, Class C, Class D and Class E certificates are referred to in this prospectus supplement as the "Subordinate Offered Certificates." The Class R and Class LR certificates are referred to collectively in this prospectus supplement as the "Residual Certificates." The Class PS-1, Class PS-2, Class PS-3, Class PS-4, Class PS-5, Class PS-6 and Class PS-7 certificates are referred to collectively in this prospectus supplement as the "Class PS Certificates." The Class PS Certificates will be entitled to receive distributions only from collections on the One Post Office Square B Note in accordance with the One Post Office Square Intercreditor Agreement and the Pooling and Servicing Agreement. Only the Class A-1, Class A-2, Class B, Class C, Class D and Class E certificates are offered hereby (collectively, the "Offered Certificates"). The Class A-1A, Class X-1, Class X-2, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P, Class NR, Class R and Class LR certificates and the Class PS Certificates (collectively, the "Non-Offered Certificates") have not been registered under the Securities Act of 1933 and are not offered hereby. The "Certificate Balance" of any Class of Certificates (other than the Class X Certificates and Residual Certificates) outstanding at any time represents the maximum amount which its holders are entitled to receive as distributions allocable to principal from the cash flow on the mortgage loans and the other assets in the trust fund. On each Distribution Date, the Certificate Balance of each such Class of Certificates will be reduced by any distributions of principal actually made on, and any Collateral Support Deficit actually allocated to, that Class of Certificates on that Distribution Date. The initial Certificate Balance of each Class of Offered Certificates is expected to be the balance set forth on the cover of this prospectus supplement. The Class X-1 and Class X-2 certificates and the Residual Certificates will not have Certificate Balances or entitle their holders to distributions of principal. The Class X Certificates will not have Certificate Balances, but will represent, in the aggregate, the right to receive distributions of interest in an amount equal to the aggregate interest accrued on the applicable notional amounts (each, a "Notional Amount") of the classes S-89 of Class X Certificates. The Notional Amount of the Class X-1 certificates will equal the aggregate of the Certificate Balances of each Class of Certificates (other than the Class X-1, Class X-2, Class R and Class LR certificates and the Class PS Certificates) (the "Principal Balance Certificates") outstanding from time to time. The initial Notional Amount of the Class X-1 certificates will be approximately $1,204,787,325. The Notional Amount of the Class X-2 certificates will equal: (1) up to and including the Distribution Date in September 2004, the sum of (a) the lesser of $223,594,000 and the Certificate Balance of the Class A-1 certificates, (b) the lesser of $361,065,000 and the Certificate Balance of the Class A-1A certificates and (c) the aggregate of the Certificate Balance of the Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K and Class L certificates; (2) after the Distribution Date in September 2004 through and including the Distribution Date in September 2005, the sum of (a) the lesser of $180,133,000 and the Certificate Balance of the Class A-1 certificates, (b) the lesser of $342,019,000 and the Certificate Balance of the Class A-1A certificates and (c) the aggregate of the Certificate Balance of the Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K and Class L certificates; (3) after the Distribution Date in September 2005 through and including the Distribution Date in September 2006, the sum of (a) the lesser of $135,502,000 and the Certificate Balance of the Class A-1 certificates, (b) the lesser of $322,798,000 and the Certificate Balance of the Class A-1A certificates, (c) the aggregate of the Certificate Balance of the Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K certificates and (d) the lesser of $5,079,000 and the Certificate Balance of the Class L certificates; (4) after the Distribution Date in September 2006 through and including the Distribution Date in September 2007, the sum of (a) the lesser of $93,251,000 and the Certificate Balance of the Class A-1 certificates, (b) the lesser of $304,682,000 and the Certificate Balance of the Class A-1A certificates, (c) the aggregate of the Certificate Balance of the Class A-2, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates and (d) the lesser of $5,894,000 and the Certificate Balance of the Class J certificates; (5) after the Distribution Date in September 2007 through and including the Distribution Date in September 2008, the sum of (a) the lesser of $29,776,000 and the Certificate Balance of the Class A-1 certificates, (b) the lesser of $265,085,000 and the Certificate Balance of the Class A-1A certificates, (c) the aggregate of the Certificate Balance of the Class A-2, Class B, Class C, Class D, Class E, Class F and Class G certificates and (d) the lesser of $6,599,000 and the Certificate Balance of the Class H certificates; (6) after the Distribution Date in September 2008 through and including the Distribution Date in September 2009 the sum of (a) the lesser of $359,587,000 and the Certificate Balance of the Class A-2 certificates, (b) the lesser of $250,086,000 and the Certificate Balance of the Class A-1A certificates, (c) the aggregate of the Certificate Balance of the Class B, Class C, Class D, Class E and Class F certificates and (d) the lesser of $6,552,000 and the Certificate Balance of the Class G certificates; (7) after the Distribution Date in September 2009 through and including the Distribution Date in September 2010, the sum of (a) the lesser of $316,777,000 and the Certificate Balance of the Class A-2 certificates, (b) the lesser of $232,232,000 and the Certificate Balance of the Class A-1A certificates, (c) the aggregate of the Certificate Balance of the Class B, Class C, Class D and Class E certificates and (d) the lesser of $10,650,000 and the Certificate Balance of the Class F certificates; and (8) after the Distribution Date in September 2010, $0. The initial Notional Amount of the Class X-2 certificates will be approximately $1,129,226,000. S-90 The Class A-1A, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will have an aggregate initial Certificate Balance of approximately $472,701,325. The Class PS Certificates will have an aggregate initial Certificate Balance of approximately $55,000,000. The Offered Certificates will be maintained and transferred in book-entry form and issued in denominations of $10,000 initial Certificate Balance, and integral multiples of $1 in excess of that amount. The "Percentage Interest" evidenced by any Certificate (other than the Residual Certificates) is equal to its initial denomination as of the Closing Date, divided by the initial Certificate Balance or Notional Amount of the Class to which it belongs. The Offered Certificates will initially be represented by one or more global Certificates registered in the name of the nominee of The Depository Trust Company ("DTC"). The Depositor has been informed by DTC that DTC's nominee will be Cede & Co. No person acquiring an interest in the Offered Certificates (this person, a "Certificate Owner") will be entitled to receive an Offered Certificate in fully registered, certificated form, a definitive certificate, representing its interest in that class, except as set forth under "--Book-Entry Registration and Definitive Certificates" below. Unless and until definitive certificates are issued, all references to actions by holders of the Offered Certificates will refer to actions taken by DTC upon instructions received from Certificate Owners through its participating organizations (together with Clearstream Banking, societe anonyme ("Clearstream") and Euroclear Bank, as operator of the Euroclear System ("Euroclear"), participating organizations (the "Participants"), and all references in this prospectus supplement to payments, notices, reports and statements to holders of the Offered Certificates will refer to payments, notices, reports and statements to DTC or Cede & Co., as the registered holder of the Offered Certificates, for distribution to Certificate Owners through DTC and its Participants in accordance with DTC procedures. See "Description of the Certificates--Book-Entry Registration and Definitive Certificates" in the prospectus. Until definitive certificates are issued, interests in any Class of Offered Certificates will be transferred on the book-entry records of DTC and its Participants. PAYING AGENT, CERTIFICATE REGISTRAR AND AUTHENTICATING AGENT LaSalle Bank National Association, a national banking association, one of the Mortgage Loan Sellers, will serve as Paying Agent (in that capacity, the "Paying Agent"). LaSalle Bank National Association is also an affiliate of one of the underwriters. In addition, LaSalle Bank National Association will initially serve as registrar (in that capacity, the "Certificate Registrar") for the 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 Paying Agent's address is 135 S. LaSalle Street, Suite 1625, Chicago, Illinois 60603, Attention: Asset-Backed Securities Trust Services Group-JPMorgan 2003-LN1 and its telephone number is (312) 904-9387. As compensation for the performance of its routine duties, the Paying Agent will be paid a fee (the "Paying Agent Fee"). The Paying Agent Fee will be payable monthly from amounts received in respect of the mortgage loans and will accrue at a rate (the "Paying Agent Fee Rate"), which, together with the rate at which the Trustee Fee accrues, is equal to the Trustee Fee Rate and will be calculated as described under "--The Trustee" below. In addition, the Paying Agent will be entitled to recover from the trust fund all reasonable unanticipated expenses and disbursements incurred or made by the Paying Agent 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 Paying Agent under the Pooling and Servicing Agreement, and not including any expense or disbursement as may arise from its willful misfeasance, negligence or bad faith. The Pooling and Servicing Agreement will also provide for the indemnification of the Paying Agent from the trust fund for comparable losses, liabilities and expenses to those subject to indemnification for the Trustee as described under "Description of Pooling Agreements--Certain Matters Regarding the Trustee" in the prospectus. S-91 BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES General. Certificate Owners may hold their Certificates through DTC (in the United States) or Clearstream or Euroclear (in Europe) if they are Participants in that system, or indirectly through organizations that are Participants in those 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 depositories (collectively, the "Depositories") which in turn will hold those positions in customers' securities accounts in the Depositories' 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 ("Direct Participants"). Indirect access to the DTC system also is available to others (such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant), either directly or indirectly ("Indirect Participants"). Transfers between DTC Participants will occur in accordance with DTC rules. Transfers between Clearstream Participants and Euroclear Participants will occur in accordance with their applicable rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly through Clearstream Participants or Euroclear Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its Depository; however, these cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in that 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, it is possible that 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 those credits or any transactions in those securities settled during this processing will be reported to the relevant Clearstream Participant or Euroclear Participant on that 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, due to time-zone differences, may be available in the relevant Clearstream or Euroclear cash account only as of the business day following settlement in DTC. Certificate Owners that are not Direct or Indirect Participants but desire to purchase, sell or otherwise transfer ownership of, or other interests in, the Offered Certificates may do so only through Direct and Indirect Participants. In addition, Certificate Owners will receive all distributions of principal of and interest on the Offered Certificates from the Paying Agent through DTC and its Direct and Indirect Participants. Accordingly, Certificate Owners may experience delays in their receipt of payments, since those payments will be forwarded by the Paying Agent to Cede & Co., as nominee of DTC. DTC will forward those payments to its Participants, which thereafter will forward them to Indirect Participants or beneficial owners of Offered Certificates. Except as otherwise provided under "--Reports to Certificateholders; Certain Available Information" below, Certificate Owners will not be recognized by the Trustee, the Paying Agent, the Special Servicer or the Master Servicer as holders of record of Certificates and Certificate Owners will be permitted to receive information furnished to Certificateholders and to exercise the rights of Certificateholders only indirectly through DTC and its Direct and Indirect Participants. S-92 Under the rules, regulations and procedures creating and affecting DTC and its operations (the "Rules"), DTC is required to make book-entry transfers of the Offered Certificates among Participants and to receive and transmit distributions of principal of, and interest on, the Offered Certificates. Direct and Indirect Participants with which Certificate Owners have accounts with respect to the Offered Certificates similarly are required to make book-entry transfers and receive and transmit the distributions on behalf of their respective Certificate Owners. Accordingly, although Certificate Owners will not possess physical certificates evidencing their interests in the Offered Certificates, the Rules provide a mechanism by which Certificate Owners, through their Direct and Indirect Participants, will receive distributions and will be able to transfer their interests in the Offered Certificates. Because DTC can only act on behalf of Participants, who in turn act on behalf of Indirect Participants and certain banks, the ability of Certificateholders to pledge the Certificates to persons or entities that do not participate in the DTC system, or to otherwise act with respect to the Certificates, may be limited due to the lack of a physical certificate for the 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 those actions are taken on behalf of Participants whose holdings include the undivided interests. 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 the foregoing procedures, and the foregoing procedures may be discontinued at any time. None of the Depositor, the Master Servicer, the Underwriters, the Special Servicer, the Paying Agent or the Trustee will have any liability for any actions taken by DTC, Euroclear or Clearstream, their respective Direct or Indirect Participants or their nominees, including, without limitation, actions for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Offered Certificates held by Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any records relating to that beneficial ownership interest. The information in this prospectus supplement 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 of the information. Definitive Certificates. Definitive certificates will be issued to Certificate Owners or their nominees, respectively, rather than to DTC or its nominee, only under the limited conditions set forth in the prospectus under "Description of the Certificates--Book-Entry Registration and Definitive Certificates." Upon the occurrence of an event described in the prospectus in the second to last paragraph under "Description of the Certificates--Book-Entry Registration and Definitive Certificates," the Paying Agent is required to notify, through DTC, Direct Participants who have ownership of Offered Certificates as indicated on the records of DTC of the availability of definitive certificates. Upon surrender by DTC of the global certificates representing the Offered Certificates and upon receipt of instructions from DTC for re-registration, the Paying Agent will reissue the Offered Certificates as definitive certificates issued in the respective Certificate Balances or Notional Amounts, as applicable, owned by individual Certificate Owners, and thereafter the Trustee, the Paying Agent, the Special Servicer and the Master Servicer will recognize the holders of those definitive certificates as Certificateholders under the Pooling and Servicing Agreement. For additional information regarding DTC and Certificates maintained on the book-entry records of DTC, see "Description of the Certificates--Book-Entry Registration and Definitive Certificates" in the prospectus. S-93 DISTRIBUTIONS Method, Timing and Amount. Distributions on the Certificates are required to be made by the Paying Agent, to the extent of available funds, on the 15th day of each month or, if the 15th day is not a business day, then on the next succeeding business day, commencing in October 2003 (each, a "Distribution Date"). The "Determination Date" for any Distribution Date will be the fourth business day prior to the related Distribution Date. All distributions (other than the final distribution on any Certificate) are required to be made to the Certificateholders in whose names the Certificates are registered at the close of business on each Record Date. With respect to any Distribution Date, the "Record Date" will be the last business day of the month preceding the month in which that Distribution Date occurs. These distributions are required to 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 the Certificateholder has provided the Paying Agent with written wiring instructions no less than five business days prior to the related Record Date (which wiring instructions may be in the form of a standing order applicable to all subsequent distributions) or otherwise by check mailed to the Certificateholder. The final distribution on any Certificate is required to be made in like manner, but only upon presentation and surrender of the Certificate at the location that will be specified in a notice of the pendency of the final distribution. All distributions made with respect to a Class of Certificates will be allocated pro rata among the outstanding Certificates of that Class based on their respective Percentage Interests. The Master Servicer is required to establish and maintain, or cause to be established and maintained, one or more accounts (collectively, the "Certificate Account") as described in the Pooling and Servicing Agreement and, with respect to the One Post Office Square Whole Loan, a separate custodial account (which may be a separately identified sub-account of the Certificate Account). The Master Servicer is required to deposit in the Certificate Account (or, with respect to the One Post Office Square Whole Loan, the separate custodial account as described below) on a daily basis (and in no event later than the business day following receipt in available funds) all payments and collections due after the cut-off date and other amounts received or advanced with respect to the mortgage loans (including, without limitation, all proceeds received under any hazard, title or other insurance policy that provides coverage with respect to a Mortgaged Property or the related mortgage loan or in connection with the full or partial condemnation of a Mortgaged Property (the "Insurance and Condemnation Proceeds") and other amounts received and retained in connection with the liquidation of defaulted mortgage loans or property acquired by foreclosure or otherwise (the "Liquidation Proceeds")), and will be permitted to make withdrawals therefrom as set forth in the Pooling and Servicing Agreement. The Paying Agent is required to establish and maintain accounts (the "Upper-Tier Distribution Account", the "Lower-Tier Distribution Account" and the "Loan REMIC Distribution Account," each of which may be sub-accounts of a single account (collectively, the "Distribution Account")), in the name of the Trustee and for the benefit of the Certificateholders. On each Distribution Date, the Paying Agent is required to apply amounts on deposit in the Upper-Tier Distribution Account (which will include all funds that were remitted by the Master Servicer from the Certificate Account plus, among other things, any P&I Advances less amounts, if any, distributable to the Class LR certificates as set forth in the Pooling and Servicing Agreement) generally to make distributions of interest and principal from the Available Distribution Amount to the Certificateholders as described in this prospectus supplement. Each of the Certificate Account and the Distribution Accounts will conform to certain eligibility requirements set forth in the Pooling and Servicing Agreement. Payments and collections received in respect of the One Post Office Square Whole Loan will not be deposited in the Certificate Account, but will be deposited into a separate custodial account (which may be a separately identified sub-account of the Certificate Account). Such custodial account will be required to conform to certain eligibility requirements set forth in the Pooling and Servicing Agreement. Payments and collections on the One Post Office Square Loan S-94 will be transferred from the custodial account to the Certificate Account no later than the Business Day preceding the related Distribution Date. The Paying Agent is required to establish and maintain an "Interest Reserve Account," which may be a sub-account of the Distribution Account, in the name of the Trustee for the benefit of the holders of the Certificates. On the Master Servicer Remittance Date occurring each February and on any Master Servicer Remittance Date occurring in any January which occurs in a year that is not a leap year, the Paying Agent will be required to deposit amounts remitted by the Master Servicer or P&I Advances made on the related mortgage loans into the Interest Reserve Account during the related interest period, in respect of the mortgage loans (including the One Post Office Square B Note) that accrue interest on an Actual/360 Basis (collectively, the "Withheld Loans"), an amount equal to one day's interest at the Net Mortgage Rate for each Withheld Loan on its Stated Principal Balance as of the Distribution Date in the month preceding the month in which the related Master Servicer Remittance Date occurs, to the extent a Periodic Payment or P&I Advance is made in respect of the mortgage loans (all amounts so deposited in any consecutive January (if applicable) and February, "Withheld Amounts"). On the Master Servicer Remittance Date occurring each March, the Paying Agent will be required to withdraw from the Interest Reserve Account an amount equal to the Withheld Amounts from the preceding January (if applicable) and February, if any, and deposit that amount into the Lower-Tier Distribution Account. The Paying Agent is required to establish and maintain an "Excess Interest Distribution Account," which may be a sub-account of the Distribution Account, in the name of the Trustee for the benefit of the holders of the Class NR Certificates. Prior to the applicable Distribution Date, the Master Servicer is required to remit to the Paying Agent for deposit into the Excess Interest Distribution Account an amount equal to the Excess Interest received prior to the related Determination Date. The Paying Agent is required to establish and maintain an account (the "Gain on Sale Reserve Account"), which may be a sub-account of the Distribution Account, in the name of the Trustee on behalf of the Certificateholders. To the extent that gains realized on sales of Mortgaged Properties, if any, are not used to offset Collateral Support Deficits previously allocated to the Certificates, such gains will be held and applied to offset future Collateral Support Deficits, if any. The Master Servicer is authorized but not required to direct the investment of funds held in the Certificate Account (and in the custodial account maintained with respect to the One Post Office Square Whole Loan) in U.S. government securities and other obligations that are acceptable to each of the Rating Agencies ("Permitted Investments"). The Master Servicer will be entitled to retain any interest or other income earned on such funds and the Master Servicer will be required to bear any losses resulting from the investment of such funds, as provided in the Pooling and Servicing Agreement. Funds held in the Lower-Tier Distribution Account, the Upper-Tier Distribution Account, the Loan REMIC Distribution Account, the Interest Reserve Account, the Gain on Sale Reserve Account and the Excess Interest Distribution Account will not be invested. The aggregate amount available for distribution to Certificateholders (other than the holders of the Class PS Certificates) on each Distribution Date (the "Available Distribution Amount") will, in general, equal the sum of the following amounts (without duplication): (x) the total amount of all cash received on the mortgage loans and any REO Properties that are on deposit in the Certificate Account, the Lower-Tier Distribution Account and, without duplication, the REO Account, as of the business day preceding the related Master Servicer Remittance Date, exclusive of (without duplication): (1) all scheduled payments of principal and/or interest (the "Periodic Payments") and balloon payments collected but due on a due date subsequent to the related Due Period; (2) all unscheduled payments of principal (including prepayments), unscheduled interest, Liquidation Proceeds, Insurance and Condemnation Proceeds and other S-95 unscheduled recoveries received subsequent to the related Determination Date (or, with respect to voluntary prepayments of principal of each mortgage loan with a due date occurring after the related Determination Date, the related due date); (3) all amounts in the Certificate Account that are due or reimbursable to any person other than the Certificateholders; (4) with respect to each Withheld Loan and any Distribution Date occurring in each February and in any January occurring in a year that is not a leap year, the related Withheld Amount to the extent those funds are on deposit in the Certificate Account; (5) Excess Interest; (6) all Yield Maintenance Charges; (7) all amounts deposited in the Certificate Account in error; and (8) any accrued interest on a mortgage loan allocable to the default interest rate for such mortgage loan, to the extent permitted by law, as more particularly defined in the related mortgage loan documents, excluding any interest calculated at the Mortgage Rate for the related mortgage loan; (y) all P&I Advances made by the Master Servicer or the Trustee, as applicable, with respect to the Distribution Date (net of certain amounts that are due or reimbursable to persons other than the Certificateholders) (not including any P&I Advance made on the One Post Office Square Companion Note or One Post Office Square B Note). See "Description of the Pooling Agreements--Certificate Account" in the prospectus; and (z) with respect to the Distribution Date occurring in each March, the related Withheld Amounts (not including any Withheld Amount for the One Post Office Square Companion Note or One Post Office Square B Note) required to be deposited in the Lower-Tier Distribution Account pursuant to the Pooling and Servicing Agreement. The "Due Period" for each Distribution Date and any mortgage loan will be the period commencing on the day immediately following the due date for the mortgage loan in the month preceding the month in which that Distribution Date occurs and ending on and including the due date for the mortgage loan in the month in which that Distribution Date occurs. Notwithstanding the foregoing, in the event that the last day of a Due Period (or applicable grace period) is not a business day, any Periodic Payments received with respect to the mortgage loans relating to the related Due Period on the business day immediately following that day will be deemed to have been received during that Due Period and not during any other Due Period. All amounts received by the trust with respect to the One Post Office Square Whole Loan will be applied to amounts due and owing under that loan (including for principal and accrued and unpaid interest) in accordance with the express provisions of the related loan documents, the One Post Office Square Intercreditor Agreement and the Pooling and Servicing Agreement. The Pooling and Servicing Agreement will prohibit the application of amounts received on the One Post Office Square Companion Note to cover certain REMIC-related expenses payable with respect to the mortgage loans and REO Properties in the trust. Priority. On each Distribution Date, for so long as the Certificate Balances of the Certificates have not been reduced to zero, the Paying Agent is required to apply amounts on deposit in the Upper-Tier Distribution Account, to the extent of the Available Distribution Amount, in the following order of priority: first, to pay interest, concurrently, (i) on the Class A-1 and Class A-2 certificates, pro rata, from the portion of the Available Distribution Amount for such Distribution Date attributable to mortgage loans in Loan Group 1 up to an amount equal to the aggregate Interest Distribution Amount for those Classes; (ii) on the Class A-1A certificates from the portion of the Available Distribution Amount for such Distribution Date attributable to mortgage loans in Loan Group 2 S-96 up to an amount equal to the aggregate Interest Distribution Amount for such Class; and (iii) on the Class X-1 and Class X-2 certificates, pro rata, from the portion of the Available Distribution Amount for such Distribution Date up to an amount equal to the aggregate Interest Distribution Amount for those Classes, in each case based upon their respective entitlements to interest for that Distribution Date; provided, however, on any Distribution Date where the Available Distribution Amount (or applicable portion thereof) is not sufficient to make distributions in full to the related Classes of Certificates as described above, the Available Distribution Amount will be allocated among the above Classes of Certificates without regard to Loan Group, pro rata, in accordance with the respective amounts of Distributable Certificate Interest in respect of such Classes of Certificates on such Distribution Date, in an amount equal to all Interest Distribution Amounts in respect of each such Class of Certificates for such Distribution Date; second, to the Class A-1, Class A-2 and Class A-1A certificates, in reduction of the Certificate Balances thereof: (i)(A) to the Class A-1 certificates, in an amount equal to the Group 1 Principal Distribution Amount and, after the Class A-1A certificates have been reduced to zero, the Group 2 Principal Distribution Amount remaining after payments to the Class A-1A certificates have been made on such Distribution Date, until the Class A-1 certificates are reduced to zero, and (B) to the Class A-2 certificates, in an amount equal to the Group 1 Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1 certificates) and, after the Class A-1A certificates have been reduced to zero, the Group 2 Principal Distribution Amount remaining after payments to the Class A-1A and Class A-1 certificates have been made on such Distribution Date, until the Class A-2 certificates are reduced to zero, and (ii) to the Class A-1A certificates, in an amount equal to the Group 2 Principal Distribution Amount and, after the Class A-2 certificates have been reduced to zero, the Group 1 Principal Distribution Amount remaining after payments to the Class A-1 and Class A-2 certificates have been made on such Distribution Date, until the Class A-1A certificates are reduced to zero; third, to the Class A-1, Class A-2 and Class A-1A certificates, pro rata (based upon the aggregate unreimbursed Collateral Support Deficit allocated to each class), until all amounts of Collateral Support Deficit previously allocated to those Classes, but not previously reimbursed, have been reimbursed in full; fourth, to the Class B certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; fifth, following reduction of the Certificate Balances of the Class A-1, Class A-2 and Class A-1A certificates to zero, to the Class B certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2 and Class A-1A certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; sixth, to the Class B certificates, until all amounts of Collateral Support Deficit previously allocated to the Class B certificates, but not previously reimbursed, have been reimbursed in full; seventh, to the Class C certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; eighth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A and Class B certificates to zero, to the Class C certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A and Class B certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; ninth, to the Class C certificates, until all amounts of Collateral Support Deficit previously allocated to the Class C certificates, but not previously reimbursed, have been reimbursed in full; tenth, to the Class D certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; eleventh, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B and Class C certificates to zero, to the Class D certificates, in reduction of their S-97 Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B and Class C certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; twelfth, to the Class D certificates, until all amounts of Collateral Support Deficit previously allocated to the Class D certificates, but not previously reimbursed, have been reimbursed in full; thirteenth, to the Class E certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; fourteenth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C and Class D certificates to zero, to the Class E certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C and Class D certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; fifteenth, to the Class E certificates, until all amounts of Collateral Support Deficit previously allocated to the Class E certificates, but not previously reimbursed, have been reimbursed in full; sixteenth, to the Class F certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; seventeenth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D and Class E certificates to zero, to the Class F certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D and Class E certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; eighteenth, to the Class F certificates, until all amounts of Collateral Support Deficit previously allocated to the Class F certificates, but not previously reimbursed, have been reimbursed in full; nineteenth, to the Class G certificates, in respect of interest up to an amount equal to the Interest Distribution Amount for that Class; twentieth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E and Class F certificates to zero, to the Class G certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E and Class F certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; twenty-first, to the Class G certificates, until all amounts of Collateral Support Deficit previously allocated to the Class G certificates, but not previously reimbursed, have been reimbursed in full; twenty-second, to the Class H certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; twenty-third, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F and Class G certificates to zero, to the Class H certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F and Class G certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; twenty-fourth, to the Class H certificates, until all amounts of Collateral Support Deficit previously allocated to the Class H certificates, but not previously reimbursed, have been reimbursed in full; S-98 twenty-fifth, to the Class J certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; twenty-sixth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates to zero, to the Class J certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; twenty-seventh, to the Class J certificates, until all amounts of Collateral Support Deficit previously allocated to the Class J certificates, but not previously reimbursed, have been reimbursed in full; twenty-eighth, to the Class K certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; twenty-ninth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J certificates to zero, to the Class K certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class J certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; thirtieth, to the Class K certificates, until all amounts of Collateral Support Deficit previously allocated to the Class K certificates, but not previously reimbursed, have been reimbursed in full; thirty-first, to the Class L certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; thirty-second, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K certificates to zero, to the Class L certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J and Class K certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; thirty-third, to the Class L certificates, until all amounts of Collateral Support Deficit previously allocated to the Class L certificates, but not previously reimbursed, have been reimbursed in full; thirty-fourth, to the Class M certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; thirty-fifth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K and Class L certificates to zero, to the Class M certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K and Class L certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; thirty-sixth, to the Class M certificates, until all amounts of Collateral Support Deficit previously allocated to the Class M certificates, but not previously reimbursed, have been reimbursed in full; thirty-seventh, to the Class N certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; thirty-eighth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L and S-99 Class M certificates to zero, to the Class N certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L and Class M certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; thirty-ninth, to the Class N certificates, until all amounts of Collateral Support Deficit previously allocated to the Class N certificates, but not previously reimbursed, have been reimbursed in full; fortieth, to the Class P certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; forty-first, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M and Class N certificates to zero, to the Class P certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M and Class N certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; forty-second, to the Class P certificates, until all amounts of Collateral Support Deficit previously allocated to the Class P certificates, but not previously reimbursed, have been reimbursed in full; forty-third, to the Class NR certificates, in respect of interest, up to an amount equal to the Interest Distribution Amount for that Class; forty-fourth, following reduction of the Certificate Balances of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N and Class P certificates to zero, to the Class NR certificates, in reduction of their Certificate Balance, an amount equal to the Principal Distribution Amount (or the portion of it remaining after distributions on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N and Class P certificates on that Distribution Date), until the Certificate Balance of that Class is reduced to zero; forty-fifth, to the Class NR certificates, until all amounts of Collateral Support Deficit previously allocated to the Class NR certificates, but not previously reimbursed, have been reimbursed in full; and forty-sixth, to the Class R certificates, the amount, if any, of the Available Distribution Amount remaining in the Upper-Tier Distribution Account, and to the Class LR certificates, the amount remaining in the Lower-Tier Distribution Account and the Loan REMIC Distribution Account, respectively, with respect to that Distribution Date. Reimbursement of previously allocated Collateral Support Deficit will not constitute distributions of principal for any purpose and will not result in an additional reduction in the Certificate Balance of the Class of Certificates in respect of which a reimbursement is made. Notwithstanding the distribution priority second set forth above, on and after the Distribution Date on which the Certificate Balances of the Subordinate Certificates have all been reduced to zero (that date, the "Cross-Over Date"), the Principal Distribution Amount will be distributed pursuant to priority second set forth above, pro rata (based upon their respective Certificate Balances), among the Classes of Class A-1, Class A-2 and Class A-1A certificates without regard to the priorities set forth above. Pass-Through Rates. The interest rate (the "Pass-Through Rate") applicable to each Class of Certificates (other than the Residual Certificates and the Class PS Certificates) for any Distribution Date will equal the rates set forth below or, in the case of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates, a rate equal to, based on, or limited by, the WAC Rate. S-100 The Pass-Through Rate on the Class A-1 certificates is a per annum rate equal to %. The Pass-Through Rate on the Class A-2 certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class A-1A certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class B certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class C certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class D certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class E certificates is a per annum rate equal to %. The Pass-Through Rate on the Class F certificates is a per annum rate equal to %. The Pass-Through Rate on the Class G certificates is a per annum rate equal to % The Pass-Through Rate on the Class H certificates is a per annum rate equal to % The Pass-Through Rate on the Class J certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class K certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class L certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class M certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class N certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class P certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate on the Class NR certificates is a per annum rate equal to %, subject to a maximum rate equal to the WAC Rate. The Pass-Through Rate applicable to the Class X-1 and Class X-2 certificates for the initial Distribution Date will equal approximately % and % per annum, respectively. The Pass-Through Rate for the Class X-1 certificates for each Distribution Date will equal the weighted average of the respective Class X-1 Strip Rates, at which interest accrues from time to time on the respective components (the "Class X-1 Components") of the Class X-1 certificates outstanding immediately prior to such Distribution Date (weighted on the basis of the respective balances of those Class X-1 Components immediately prior to the Distribution Date). Each Class X-1 Component will be comprised of all or a designated portion of the Certificate Balance of one of the classes of Principal Balance Certificates. In general, the Certificate Balance of each Class of Principal Balance Certificates will constitute a separate Class X-1 Component. However, if a portion, but not all, of the Certificate Balance of any particular Class of Principal Balance Certificates is identified under "--General" above as being part of the Notional Amount of the Class X-2 certificates immediately prior to any Distribution Date, then the identified portion of the Certificate Balance will also represent one or more separate Class X-1 Components for purposes of calculating the Pass-Through Rate of the Class X-1 certificates, and the remaining portion of the Certificate Balance will represent one or more separate Class X-1 Components for purposes of calculating the Pass-Through Rate of the Class X-1 certificates. For each Distribution S-101 Date through and including the Distribution Date in September 2010, the "Class X-1 Strip Rate" for each Class X-1 Component will be calculated as follows: (1) if such Class X-1 Component consists of the entire Certificate Balance of any Class of Principal Balance Certificates, and if the Certificate Balance also constitutes, in its entirety, a Class X-2 Component immediately prior to the Distribution Date, then the applicable Class X-1 Strip Rate will equal the excess, if any, of (a) the WAC Rate for the Distribution Date, over (b) the greater of (i) the reference rate specified on Schedule I for such Distribution Date and (ii) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Principal Balance Certificates; (2) if such Class X-1 Component consists of a designated portion (but not all) of the Certificate Balance of any Class of Principal Balance Certificates, and if the designated portion of the Certificate Balance also constitutes a Class X-2 Component immediately prior to the Distribution Date, then the applicable Class X-1 Strip Rate will equal the excess, if any, of (a) the WAC Rate for the Distribution Date, over (b) the greater of (i) the reference rate specified on Schedule I for such Distribution Date and (ii) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Principal Balance Certificates; (3) if such Class X-1 Component consists of the entire Certificate Balance of any Class of Principal Balance Certificates, and if the Certificate Balance does not, in whole or in part, also constitute a Class X-2 Component immediately prior to the Distribution Date, then the applicable Class X-1 Strip Rate will equal the excess, if any, of (a) the WAC Rate for the Distribution Date, over (b) the Pass-Through Rate in effect for the Distribution Date for the Class of Principal Balance Certificates; and (4) if such Class X-1 Component consists of a designated portion (but not all) of the Certificate Balance of any Class of Principal Balance Certificates, and if the designated portion of the Certificate Balance does not also constitute a Class X-2 Component immediately prior to the Distribution Date, then the applicable Class X-1 Strip Rate will equal the excess, if any, of (a) the WAC Rate for the Distribution Date, over (b) the Pass-Through Rate in effect for the Distribution Date for the applicable Class of Principal Balance Certificates. For each Distribution Date after the Distribution Date in September 2010, the Certificate Balance of each Class of Principal Balance Certificates will constitute one or more separate Class X-1 Components, and the applicable Class X-1 Strip Rate with respect to each such Class X-1 Component for each Distribution Date will equal the excess, if any, of (a) the WAC Rate for the Distribution Date, over (b) the Pass-Through Rate in effect for the Distribution Date for the Class of Principal Balance Certificates whose Certificate Balance makes up the applicable Class X-1 Component. The Pass-Through Rate for the Class X-2 certificates, for each Distribution Date through and including the Distribution Date in September 2010, will equal the weighted average of the respective Class X-2 Strip Rates, at which interest accrues from time to time on the respective components (each a "Class X-2 Component") of the Class X-2 certificates outstanding immediately prior to the Distribution Date (weighted on the basis of the balances of the applicable Class X-2 Components immediately prior to the Distribution Date). Each Class X-2 Component will be comprised of all or a designated portion of the Certificate Balance of a specified Class of Principal Balance Certificates. If all or a designated portion of the Certificate Balance of any Class of Principal Balance Certificates is identified under "--General" above as being part of the Notional Amount of the Class X-2 certificates immediately prior to any Distribution Date, then that Certificate Balance (or designated portion of that Certificate Balance) will represent one or more separate Class X-2 Components for purposes of calculating the Pass-Through Rate of the Class X-2 certificates. For each Distribution Date through and including the Distribution Date in September 2010, the "Class X-2 Strip Rate" for each Class X-2 Component will equal the excess, if any, of: S-102 (1) the lesser of (a) the reference rate specified on Schedule I for such Distribution Date and (b) the WAC Rate for such Distribution Date, over (2) the Pass-Through Rate in effect on such Distribution Date for the Class of Principal Balance Certificates whose Certificate Balance, or a designated portion of that Certificate Balance, comprises such Class X-2 Component. After the Distribution Date in September 2010, the Class X-2 certificates will cease to accrue interest and will have a 0% Pass-Through Rate. The Pass-Through Rate on each Class of Offered Certificates for the first Distribution Date is expected to be as set forth on page S-7 of this prospectus supplement. The "WAC Rate" with respect to any Distribution Date is equal to the weighted average of the applicable Net Mortgage Rates for the mortgage loans (other than the One Post Office Square B Note) weighted on the basis of their respective Stated Principal Balances as of the Closing Date, in the case of the first Distribution Date, or, for all other Distribution Dates, the preceding Distribution Date. The "Net Mortgage Rate" for each mortgage loan is equal to the related Mortgage Rate in effect from time to time, less the related Administrative Cost Rate; provided, however, that for purposes of calculating Pass-Through Rates, the Net Mortgage Rate for any mortgage loan will be determined without regard to any modification, waiver or amendment of the terms of the mortgage loan, whether agreed to by the Master Servicer, the Special Servicer or resulting from a bankruptcy, insolvency or similar proceeding involving the related borrower. Notwithstanding the foregoing, for mortgage loans that do not accrue on a 30/360 Basis, then, solely for purposes of calculating the Pass-Through Rate on the Certificates, the Net Mortgage Rate of the mortgage loan 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 Rate; provided, however, that with respect to each Withheld Loan, the Net Mortgage 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 the per annum rate stated in the related Mortgage Note less the related Administrative Cost Rate, and (2) prior to the due date in March, will be determined inclusive of the amounts withheld for the immediately preceding February and, if applicable, January. "Administrative Cost Rate" as of any date of determination will be equal to the sum of the Servicing Fee Rate and the Trustee Fee Rate. "Mortgage Rate" with respect to any mortgage loan is the per annum rate at which interest accrues on the mortgage loan as stated in the related Mortgage Note in each case without giving effect to any default rate or an increased interest rate. "Excess Interest" with respect to each ARD Loan is the interest accrued at the related Revised Rate in respect of each ARD Loan in excess of the interest accrued at the related Initial Rate, plus any related interest, to the extent permitted by applicable law. Interest Distribution Amount. Interest will accrue for each Class of Certificates (other than the Residual Certificates) during the related Interest Accrual Period. The "Interest Distribution Amount" of any Class of Certificates (other than the Residual Certificates) for any Distribution Date is an amount equal to all Distributable Certificate Interest in respect of that Class for that Distribution Date and, to the extent not previously paid, for all prior Distribution Dates. The "Interest Accrual Period" in respect of each Class of Certificates (other than the Residual Certificates) for each Distribution Date will be the calendar month prior to the calendar month in which that Distribution Date occurs and will be calculated assuming that each month has 30 days and each year has 360 days. The "Distributable Certificate Interest" in respect of each Class of Certificates (other than the Residual Certificates) for each Distribution Date is equal to one month's interest at the S-103 Pass-Through Rate applicable to that Class of Certificates for that Distribution Date accrued for the related Interest Accrual Period on the related Certificate Balance or Notional Amount, as the case may be, outstanding immediately prior to that Distribution Date, reduced (other than in the case of the Class X Certificates) (to not less than zero) by such Class's allocable share (calculated as described below) of the aggregate of any Prepayment Interest Shortfalls resulting from any principal prepayments made on the mortgage loans during the related Due Period that are not covered by the Master Servicer's Compensating Interest Payment for the related Distribution Date (the aggregate of the Prepayment Interest Shortfalls that are not so covered, as to the related Distribution Date, the "Net Aggregate Prepayment Interest Shortfall"). The portion of the Net Aggregate Prepayment Interest Shortfall for any Distribution Date that is allocable to each Class of Certificates (other than the Residual Certificates, the Class PS Certificates and the Class X Certificates) will equal the product of (a) the Net Aggregate Prepayment Interest Shortfall, multiplied by (b) a fraction, the numerator of which is equal to the Interest Distribution Amount in respect of that Class of Certificates for the related Distribution Date, and the denominator of which is equal to the aggregate Interest Distribution Amount in respect of all Classes of Certificates (other than the Residual Certificates, the Class PS Certificates, and the Class X Certificates) for the related Distribution Date. Principal Distribution Amount. So long as both the Class A-2 and Class A-1A certificates remain outstanding, the Principal Distribution Amount for each Distribution Date will be calculated on a Loan Group-by-Loan Group basis. On each Distribution Date after the Certificate Balance of either the Class A-2 or Class A-1A certificates has been reduced to zero, a single Principal Distribution Amount will be calculated in the aggregate for both Loan Groups. The "Principal Distribution Amount" for any Distribution Date is an amount equal to the sum of (a) the Principal Shortfall for that Distribution Date, (b) the Scheduled Principal Distribution Amount for that Distribution Date and (c) the Unscheduled Principal Distribution Amount for that Distribution Date. The "Group 1 Principal Distribution Amount" for any Distribution Date is an amount equal to the sum of (a) the Group 1 Principal Shortfall for that Distribution Date, (b) the Scheduled Principal Distribution Amount for Loan Group 1 for that Distribution Date and (c) the Unscheduled Principal Distribution Amount for Loan Group 1 for that Distribution Date. The "Group 2 Principal Distribution Amount" for any Distribution Date is an amount equal to the sum of (a) the Group 2 Principal Shortfall for that Distribution Date, (b) the Scheduled Principal Distribution Amount for Loan Group 2 for that Distribution Date and (c) the Unscheduled Principal Distribution Amount for Loan Group 2 for that Distribution Date. The "Scheduled Principal Distribution Amount" for each Distribution Date will equal the aggregate of the principal portions of (a) all Periodic Payments (excluding balloon payments and Excess Interest) due during or, if and to the extent not previously received or advanced and distributed to Certificateholders on a preceding Distribution Date, prior to the related Due Period and all Assumed Scheduled Payments for the related Due Period, in each case to the extent paid by the related borrower as of the related Determination Date (or, with respect to each mortgage loan with a due date occurring, or a grace period ending, after the related Determination Date, the related due date or, last day of such grace period, as applicable) or advanced by the Master Servicer or the Trustee, as applicable, and (b) all balloon payments to the extent received on or prior to the related Determination Date (or, with respect to each mortgage loan with a due date occurring, or a grace period ending, after the related Determination Date, the related due date or, last day of such grace period, as applicable, to the extent received by the Master Servicer as of the business day preceding the related Master Servicer Remittance Date), and to the extent not included in clause (a) above; provided, that the Scheduled Principal Distribution Amount for any Distribution Date will be reduced by the amount of any reimbursements of (i) Nonrecoverable Advances, with interest on such Nonrecoverable Advances that are paid or reimbursed from principal collections received during the related collection period ended immediately prior to the related Master Servicer Remittance Date and (ii) Advances that existed as of the date of the S-104 modification of the related mortgage loan, with interest on such Advances, that were not repaid at the time of such modification but were paid or reimbursed from principal collections received during the related collection period ended immediately prior to the related Master Servicer Remittance Date. The Scheduled Principal Distribution Amount from time to time will include all late payments of principal made by a borrower, including late payments in respect of a delinquent balloon payment, regardless of the timing of those late payments, except to the extent those late payments are otherwise reimbursable to the Master Servicer or the Trustee, as the case may be, for prior Advances. The "Unscheduled Principal Distribution Amount" for each Distribution Date will equal the aggregate of: (a) all prepayments of principal received on the mortgage loans on or prior to the related Determination Date (or, with respect to voluntary prepayments of principal of each mortgage loan with a due date occurring, or a grace period ending, after the related Determination Date, the related due date or, last day of such grace period, as applicable, to the extent received by the Master Servicer as of the business day preceding the related Master Servicer Remittance Date); and (b) any other collections (exclusive of payments by borrowers) received on the mortgage loans and any REO Properties on or prior to the related Determination Date, whether in the form of Liquidation Proceeds, Insurance and Condemnation Proceeds, net income, rents, and profits from REO Property or otherwise, that were identified and applied by the Master Servicer as recoveries of previously unadvanced principal of the related mortgage loan; provided that all such Liquidation Proceeds and Insurance and Condemnation Proceeds shall be reduced by any unpaid Special Servicing Fees, Liquidation Fees, accrued interest on Advances and other additional trust fund expenses incurred in connection with the related mortgage loan, thus reducing the Unscheduled Principal Distribution Amount. The "Assumed Scheduled Payment" for any Due Period and 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), is an amount equal to the sum of (a) the principal portion of the Periodic Payment that would have been due on that mortgage loan on the related due date based on the constant payment required by the related Mortgage Note or the original amortization schedule of the mortgage loan (as calculated with interest at the related Mortgage Rate), if applicable, assuming the related balloon payment has not become due, after giving effect to any reduction therein occurring in connection with a default or a bankruptcy modification, and (b) interest on the Stated Principal Balance of that mortgage loan at its Mortgage Rate (net of the applicable rate at which the Servicing Fee is calculated). For purposes of the foregoing definition of Principal Distribution Amount, the term "Principal Shortfall" for any Distribution Date means the amount, if any, by which (1) the Principal Distribution Amount for the prior Distribution Date exceeds (2) the aggregate amount distributed in respect of principal on the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates on the preceding Distribution Date. There will be no Principal Shortfall on the first Distribution Date. For purposes of the foregoing definition of Group 1 Principal Distribution Amount, the term "Group 1 Principal Shortfall" for any Distribution Date means the amount, if any, by which (1) the lesser of (a) the Group 1 Principal Distribution Amount for the prior Distribution Date and (b) the Certificate Balance of the Class A-1 and Class A-2 certificates, exceeds (2) the aggregate amount distributed in respect of principal on the Class A-1 and Class A-2 certificates on the preceding Distribution Date. There will be no Group 1 Principal Shortfall on the first Distribution Date. For purposes of the foregoing definition of Group 2 Principal Distribution Amount, the term "Group 2 Principal Shortfall" for any Distribution Date means the amount, if any, by which (1) the lesser of (a) the Group 2 Principal Distribution Amount for the prior Distribution Date and (b) the Certificate Balance of the Class A-1A certificates, exceeds (2) the aggregate amount distributed in respect of principal on the Class A-1A certificates on the preceding Distribution Date. There will be no Group 2 Principal Shortfall on the first Distribution Date. S-105 Certain Calculations with Respect to Individual Mortgage Loans. The Stated Principal Balance of each mortgage loan outstanding at any time represents the principal balance of the mortgage loan ultimately due and payable to the Certificateholders. The "Stated Principal Balance" of each mortgage loan will initially equal its Cut-off Date Balance and, on each Distribution Date, will be reduced by the portion of the Principal Distribution Amount (without regard to the proviso in the definition of the term "Unscheduled Principal Distribution Amount" and without regard to the proviso) in the definition of the term "Scheduled Principal Distribution Amount," solely as it relates to clause (i) in such proviso for that date that is attributable to that mortgage loan. The Stated Principal Balance of a mortgage loan may also be reduced in connection with any forced reduction of its actual unpaid principal balance imposed by a court presiding over a bankruptcy proceeding in which the related borrower is the debtor. See "Certain Legal Aspects of Mortgage Loans--Bankruptcy Laws" in the prospectus. If any mortgage loan is paid in full or the mortgage loan (or any Mortgaged Property acquired in respect of the mortgage loan) is otherwise liquidated, then, as of the first Distribution Date that follows the end of the Due Period in which that payment in full or liquidation occurred and notwithstanding that a loss may have occurred in connection with any liquidation, the Stated Principal Balance of the mortgage loan will be zero. For purposes of calculating distributions on, and allocations of Collateral Support Deficit to the Certificates, as well as for purposes of calculating the Servicing Fee and Trustee Fee payable each month, each REO Property will be treated as if there exists with respect thereto an outstanding mortgage loan or, in the case of the One Post Office Square Whole Loan, any of the loans comprising the One Post Office Square Whole Loan (an "REO Loan"), and all references to mortgage loan, mortgage loans and pool of mortgage loans in this prospectus supplement and in the prospectus, when used in that context, will be deemed to also be references to or to also include, as the case may be, any REO Loans. Each REO Loan will generally be deemed to have the same characteristics as its actual predecessor mortgage loan, including the same fixed Mortgage Rate (and, accordingly, the same Net Mortgage Rate) and the same unpaid principal balance and Stated Principal Balance. Amounts due on the predecessor mortgage loan, including any portion of it payable or reimbursable to the Master Servicer or Special Servicer, will continue to be "due" in respect of the REO Loan; and amounts received in respect of the related REO Property, net of payments to be made, or reimbursement to the Master Servicer or Special Servicer for payments previously advanced, in connection with the operation and management of that property, generally will be applied by the Master Servicer as if received on the predecessor mortgage loan. Excess Interest. On each Distribution Date, the Paying Agent is required to distribute any Excess Interest received with respect to ARD Loans on or prior to the related Determination Date to the Class NR certificates. ALLOCATION OF YIELD MAINTENANCE CHARGES On any Distribution Date, Yield Maintenance Charges, if any, collected in respect of the mortgage loans during the related Due Period will be required to be distributed by the Paying Agent to the holders of each Class of Offered Certificates and the Class A-1A, Class F, Class G and Class H certificates in the following manner: the holders of each Class of Offered Certificates and the Class A-1A, Class F, Class G and Class H certificates will be entitled to receive, with respect to the related Loan Group, on each Distribution Date an amount of Yield Maintenance Charges equal to the product of (a) a fraction whose numerator is the amount of principal distributed to such Class on such Distribution Date and whose denominator is the total amount of principal distributed to all of the Certificates (other than the Class PS Certificates) representing principal payments in respect of mortgage loans on such Distribution Date, (b) the Base Interest Fraction for the related principal prepayment and such Class of Certificates and (c) the Yield Maintenance Charges collected on such principal prepayment during the related Due Period. If there is more than one such Class of Certificates entitled to distributions of principal with respect to the related Loan Group on any particular Distribution Date on which Yield Maintenance Charges are distributable, the aggregate amount of such Yield Maintenance Charges will be allocated among S-106 all such Classes up to, and on a pro rata basis in accordance with, their respective entitlements thereto in accordance with, the first sentence of this paragraph. Any Yield Maintenance Charges collected during the related Due Period remaining after such distributions will be distributed to the holders of the Class X-1 certificates. The "Base Interest Fraction" with respect to any principal prepayment on any mortgage loan and with respect to any Class of the Class A-1, Class A-2, Class A-1A, Class B, Class C, Class D, Class E, Class F, Class G and Class H certificates is a fraction (A) whose numerator is the greater of (x) zero and (y) the difference between (i) the Pass-Through Rate on such Class of Certificates and (ii) the Discount Rate used in calculating the Yield Maintenance Charge with respect to such principal prepayment and (B) whose denominator is the difference between (i) the Mortgage Rate on the related mortgage loan and (ii) the Discount Rate used in calculating the Yield Maintenance Charge with respect with such principal prepayment; provided, however, that under no circumstances will the Base Interest Fraction be greater than one. If such Discount Rate is greater than the Mortgage Rate on the related mortgage loan, then the Base Interest Fraction shall equal zero. For a description of Yield Maintenance Charges, see "Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans--Prepayment Provisions" in this prospectus supplement. See also "Risk Factors--Risks Relating to Enforceability of Yield Maintenance Charges, Prepayment Premiums or Defeasance Provisions" in this prospectus supplement and "Certain Legal Aspects of the Mortgage Loans--Default Interest and Limitations on Prepayments" in the prospectus regarding the enforceability of Yield Maintenance Charges. ASSUMED FINAL DISTRIBUTION DATE; RATED FINAL DISTRIBUTION DATE The "Assumed Final Distribution Date" with respect to any Class of Offered Certificates is the Distribution Date on which the aggregate Certificate Balance of 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 .......... June 15, 2013 Class A-2 .......... September 15, 2013 Class B ............ September 15, 2013 Class C ............ September 15, 2013 Class D ............ September 15, 2013 Class E ............ October 15, 2013
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 assuming the ARD Loans are prepaid in full on their respective Anticipated Repayment Dates. Since the rate of payment (including prepayments) of the mortgage loans may exceed the scheduled rate of payments, and could exceed the 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 Final Distribution Dates were calculated assuming that there would not be an early termination of the trust fund. S-107 The "Rated Final Distribution Date" for each Class of Offered Certificates will be October 15, 2037, the first Distribution Date after the 24th month following the end of the stated amortization term for the mortgage loan that, as of the cut-off date, will have the longest remaining amortization term. SUBORDINATION; ALLOCATION OF COLLATERAL SUPPORT DEFICIT The rights of holders of the Subordinate Certificates to receive distributions of amounts collected or advanced on the mortgage loans will be subordinated, to the extent described in this prospectus supplement, to the rights of holders of the Senior Certificates. Moreover, to the extent described in this prospectus supplement: o the rights of the holders of the Class NR certificates will be subordinated to the rights of the holders of the Class P certificates, o the rights of the holders of the Class NR and Class P certificates will be subordinated to the rights of the holders of the Class N certificates, o the rights of the holders of the Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class M certificates, o the rights of the holders of the Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class L certificates, o the rights of the holders of the Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class K certificates, o the rights of the holders of the Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class J certificates, o the rights of the holders of the Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class H certificates, o the rights of the holders of the Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class G certificates, o the rights of the holders of the Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class F certificates, o the rights of the holders of the Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class E certificates, o the rights of the holders of the Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class D certificates, o the rights of the holders of the Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Class C certificates, o the rights of the holders 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 P and Class NR certificates will be subordinated to the rights of the holders of the Class B certificates, and o the rights of the holders of the Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates will be subordinated to the rights of the holders of the Senior Certificates. S-108 This subordination is intended to enhance the likelihood of timely receipt by the holders of the Senior Certificates of the full amount of all interest payable in respect of the Senior Certificates on each Distribution Date, and the ultimate receipt by the holders of the Class A Certificates of principal in an amount equal to, in each case, the entire Certificate Balance of the Class A Certificates. Similarly, but to decreasing degrees, this subordination is also intended to enhance the likelihood of timely receipt by the holders of the Class B certificates, the holders of the Class C certificates, the holders of the Class D certificates and the holders of the Class E certificates of the full amount of interest payable in respect of that Class of certificates on each Distribution Date, and the ultimate receipt by the holders of the Class B certificates, the holders of the Class C certificates, the holders of the Class D certificates and the holders of the Class E certificates of principal equal to the entire Certificate Balance of each of those Classes of Certificates. The protection afforded to the holders of the Class E certificates by means of the subordination of the Non-Offered Certificates that are Subordinate Certificates (the "Non-Offered Subordinate Certificates"), to the holders of the Class D certificates by the subordination of the Class E certificates and the Non-Offered Subordinate Certificates, to the holders of the Class C certificates by the subordination of the Class D and Class E certificates and the Non-Offered Subordinate Certificates, to the holders of the Class B certificates by the subordination of the Class C, Class D and Class E certificates and the Non-Offered Subordinate Certificates and to the holders of the Senior Certificates by means of the subordination of the Subordinate Certificates will be accomplished by the application of the Available Distribution Amount on each Distribution Date in accordance with the order of priority described under "--Distributions" above and by the allocation of Collateral Support Deficits in the manner described below. No other form of credit support will be available for the benefit of the holders of the Offered Certificates. After the Cross-Over Date has occurred, allocation of principal will be made to the Class A-1, Class A-2 and Class A-1A certificates, pro rata until their Certificate Balances have been reduced to zero. Prior to the Cross-Over Date, allocation of principal will be made (i) with respect to Loan Group 1, first to the Class A-1 certificates until their Certificate Balances have been reduced to zero, and then to the Class A-2 certificates until their Certificate Balances have been reduced to zero, and then, if the Class A-1A certificates are still outstanding, to the Class A-1A certificates until their Certificate Balances have been reduced to zero and (ii) with respect to Loan Group 2, to the Class A-1A certificates until their Certificate Balances have been reduced to zero and then, if any of the Class A-1 or Class A-2 certificates are still outstanding, to the Class A-1 certificates until their Certificate Balances have been reduced to zero, and then to the Class A-2 certificates until their Certificate Balances have been reduced to zero. Allocation to the Class A-1, Class A-2 and Class A-1A certificates, for so long as they are outstanding, of the entire Principal Distribution Amount with respect to the related Loan Group for each Distribution Date will have the effect of reducing the aggregate Certificate Balance of the Class A-1, Class A-2 and Class A-1A certificates at a proportionately faster rate than the rate at which the aggregate Stated Principal Balance of the pool of mortgage loans will decline. Therefore, as principal is distributed to the holders of the Class A-1, Class A-2 and Class A-1A certificates, the percentage interest in the trust fund evidenced by the Class A-1, Class A-2 and Class A-1A certificates will be decreased (with a corresponding increase in the percentage interest in the trust fund evidenced by the Subordinate Certificates), thereby increasing, relative to their respective Certificate Balances, the subordination afforded the Class A-1, Class A-2 and Class A-1A certificates by the Subordinate Certificates. Following retirement of the Class A-1, Class A-2 and Class A-1A certificates, the successive allocation on each Distribution Date of the remaining Principal Distribution Amount to the Class B certificates, the Class C certificates, the Class D certificates and the Class E certificates, in that order, for so long as they are outstanding, will provide a similar benefit to that Class of Certificates as to the relative amount of subordination afforded by the outstanding classes of S-109 Certificates (other than the Class PS Certificates, Class X Certificates and the Residual Certificates) with later alphabetical Class designations. On each Distribution Date, immediately following the distributions to be made to the Certificateholders on that date, the Paying Agent is required to calculate the amount, if any, by which (1) the aggregate Stated Principal Balance of the mortgage loans expected to be outstanding immediately following that Distribution Date is less than (2) the aggregate Certificate Balance of the Certificates (other than the Class PS Certificates) after giving effect to distributions of principal on that Distribution Date (any deficit, "Collateral Support Deficit"). The Paying Agent will be required to allocate any Collateral Support Deficit among the respective classes of Certificates as follows: to the Class NR, Class P, Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C and Class B certificates, in that order, and in each case in respect of and until the remaining Certificate Balance of that Class has been reduced to zero. Following the reduction of the Certificate Balances of all Classes of Subordinate Certificates to zero, the Paying Agent will be required to allocate the Collateral Support Deficit among the Classes of Class A-1, Class A-2 and Class A-1A certificates pro rata (based upon their respective Certificate Balances), until the remaining Certificate Balances of the Class A-1, Class A-2 and Class A-1A certificates have been reduced to zero. Any Collateral Support Deficit allocated to a Class of Certificates will be allocated among respective Certificates of the Class in proportion to the Percentage Interests evidenced by those Certificates. Mortgage loan losses and Collateral Support Deficits will not be allocated to the Class R or Class LR Certificates and will not be directly allocated to the Class X Certificates. However, the Notional Amounts of the Class X Certificates may be reduced if the related Class of Certificates are reduced by such loan losses or such Collateral Support Deficits. In general, Collateral Support Deficits could result from the occurrence of: (1) losses and other shortfalls on or in respect of the mortgage loans, including as a result of defaults and delinquencies on the mortgage loans, Nonrecoverable Advances made in respect of the mortgage loans, the payment to the Special Servicer of any compensation as described in "Servicing of the Mortgage Loans--Servicing and Other Compensation and Payment of Expenses" in this prospectus supplement, and the payment of interest on Advances and certain servicing expenses; and (2) certain unanticipated, non-mortgage loan specific expenses of the trust fund, including certain reimbursements to the Trustee as described under "Description of the Pooling Agreements--Certain Matters Regarding the Trustee" in the prospectus, certain reimbursements to the Paying Agent as described under "Description of the Certificates--Paying Agent, Certificate Registrar and Authenticating Agent" in the prospectus supplement, certain reimbursements to the Master Servicer and the Depositor as described under "Description of the Pooling Agreements--Certain Matters Regarding the Master Servicer and the Depositor" in the prospectus, and certain federal, state and local taxes, and certain tax-related expenses, payable out of the trust fund as described under "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates" and "--Taxes That May Be Imposed on the REMIC Pool" in the prospectus. Accordingly, the allocation of Collateral Support Deficit as described above will constitute an allocation of losses and other shortfalls experienced by the trust fund. A Class of Offered Certificates will be considered outstanding until its Certificate Balance is reduced to zero. However, notwithstanding a reduction of its Certificate Balance to zero, reimbursements of any previously allocated Collateral Support Deficits are required thereafter to be made to a class of Offered Certificates in accordance with the payment priorities set forth in "--Distributions--Priority" above. ADVANCES On the business day immediately preceding each Distribution Date (the "Master Servicer Remittance Date"), the Master Servicer will be obligated, to the extent determined to be recoverable as described below, to make advances (each, a "P&I Advance") out of its own funds S-110 or, subject to the replacement of those funds as provided in the Pooling and Servicing Agreement, certain funds held in the Certificate Account (or with respect to the One Post Office Square Whole Loan, the separate custodial account created for such loan) that are not required to be part of the Available Distribution Amount for that Distribution Date, in an amount equal to (but subject to reduction as described in the following paragraph) the aggregate of: (1) all Periodic Payments (net of any applicable Servicing Fees), other than balloon payments, which were due on the mortgage loans (including the One Post Office Square Whole Loan) and any REO Loan during the related Due Period and not received as of the Master Servicer Remittance Date; and (2) in the case of each mortgage loan delinquent in respect of its balloon payment as of the related Master Servicer Remittance Date (including any REO Loan as to which the balloon payment would have been past due) and each REO Loan, an amount equal to its Assumed Scheduled Payment. The Master Servicer's obligations to make P&I Advances in respect of any mortgage loan (including the One Post Office Square Whole Loan) or REO Property will continue, except if a determination as to non-recoverability is made, through and up to liquidation of the loan or disposition of the REO Property, as the case may be. However, no interest will accrue on any P&I Advance made with respect to a mortgage loan unless the related Periodic Payment is received after the related due date has passed and any applicable grace period has expired or if the related Periodic Payment is received prior to the Master Servicer Remittance Date. To the extent that the Master Servicer fails to make a P&I Advance that it is required to make under the Pooling and Servicing Agreement, the Trustee will make the required P&I Advance in accordance with the terms of the Pooling and Servicing Agreement. Neither the Master Servicer nor the Trustee will be required to make a P&I Advance for default interest, Yield Maintenance Charges or Excess Interest. If an Appraisal Reduction has been made with respect to any mortgage loan (including the One Post Office Square Whole Loan) and such mortgage loan experiences subsequent delinquencies then the interest portion of any P&I Advance in respect of that mortgage loan for the related Distribution Date will be reduced (there will be no reduction in the principal portion of such P&I Advance) to equal the product of (x) the amount of the interest portion of the P&I Advance for that loan for the related Distribution Date without regard to this sentence, and (y) a fraction, expressed as a percentage, the numerator of which is equal to the Stated Principal Balance of that mortgage loan immediately prior to the related Distribution Date, net of the related Appraisal Reduction, if any, and the denominator of which is equal to the Stated Principal Balance of that mortgage loan immediately prior to the related Distribution Date. For purposes of the immediately preceding sentence, the Periodic Payment due on the maturity date for a balloon loan will be the Assumed Scheduled Payment for the related Distribution Date. In addition to P&I Advances, the Master Servicer will also be obligated and the Special Servicer will have the option (subject to the limitations described in this prospectus supplement) to make advances ("Servicing Advances" and, collectively with P&I Advances, "Advances") in connection with the servicing and administration of any mortgage loan (including the One Post Office Square Whole Loan) in respect of which a default, delinquency or other unanticipated event has occurred or is reasonably foreseeable, or, in connection with the servicing and administration of any Mortgaged Property or REO Property, in order 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 or enforce the related mortgage loan documents or to protect, lease, manage and maintain the related Mortgaged Property (and with respect to the CVS-Commerce AB Loan, the CVS-Garwood AB Loan, the 150 Technology AB Loan and the Sav On-LA AB Loan, such Servicing Advances will include advances to prevent a default by the borrower under the lease with its tenant, subject to customary standards of recoverability). To the extent that the Master Servicer fails to make a Servicing Advance that it is required to make under the Pooling and Servicing Agreement and the Trustee has notice of this failure, the Trustee will make the required Servicing Advance in accordance with the terms of the Pooling and Servicing Agreement. S-111 The Master Servicer, the Special Servicer or the Trustee, as applicable, will be entitled to recover any Advance made out of its own funds from any amounts collected in respect of a mortgage loan (including the One Post Office Square Whole Loan) as to which that Advance was made, whether in the form of late payments, Insurance and Condemnation Proceeds, Liquidation Proceeds or otherwise from the mortgage loan ("Related Proceeds"). Notwithstanding the foregoing, none of the Master Servicer, the Special Servicer or the Trustee will be obligated to make any Advance that it determines in its reasonable judgment would, if made, not be recoverable (including interest on the Advance) out of Related Proceeds (a "Nonrecoverable Advance"). Each of the Master Servicer, the Special Servicer and the Trustee will be entitled to recover (i) any Advance made by it that it subsequently determines to be a Nonrecoverable Advance or (ii) any Advance that was outstanding at the time that a mortgage loan was modified but was not repaid in full by the borrower in connection with such modification, in each such case out of general funds on deposit in the Certificate Account (first from principal collections and then from interest collections) (or, with respect to the One Post Office Square Whole Loan, first from funds in the separate custodial account and then from funds in the Certificate Account in accordance with this sentence). In addition, the Special Servicer may, at its option, make a determination in accordance with the Servicing Standards that any P&I Advance or Servicing Advance, if made, would be a Nonrecoverable Advance and may deliver to the Master Servicer and the Trustee notice of such determination. In making such recoverability determination, such person will be entitled to consider (among other things) only the obligations of the borrower under the terms of the related mortgage loan as it may have been modified, to consider (among other things) the related Mortgaged Properties in their "as is" or then current conditions and occupancies, as modified by such party's assumptions regarding the possibility and effects of future adverse change with respect to such Mortgaged Properties, to estimate and consider (among other things) future expenses and to estimate and consider (among other things) the timing of recoveries. In addition, any such person may update or change its recoverability determinations at any time 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, the Master Servicer and the Trustee. The Trustee will be entitled to rely conclusively on any non-recoverability determination of the Master Servicer or the Special Servicer, as applicable. Nonrecoverable Advances will represent a portion of the losses to be borne by the Certificateholders. No P&I Advances will be made with respect to delinquent amounts due on any Companion Loan and no Advances will be made on any Companion Loan if the related AB Loan is no longer a part of the trust. See "Description of the Certificates--Advances in Respect of Delinquencies" and "Description of the Pooling Agreements--Certificate Account" in the prospectus. In connection with its recovery of any Advance, each of the Master Servicer, the Special Servicer and the Trustee will be entitled to be paid, out of any amounts then on deposit in the Certificate Account, interest at the Prime Rate (the "Reimbursement Rate") accrued on the amount of the Advance from the date made to but not including the date of reimbursement. The "Prime Rate" will be the prime rate, for any day, set forth in The Wall Street Journal, New York edition. Each Statement to Certificateholders furnished or made available by the Paying Agent to the Certificateholders will contain information relating to the amounts of Advances made with respect to the related Distribution Date. See "Description of the Certificates--Reports to Certificateholders; Certain Available Information" in this prospectus supplement and "Description of the Certificates--Reports to Certificateholders" in the prospectus. APPRAISAL REDUCTIONS After an Appraisal Reduction Event has occurred, an Appraisal Reduction is required to be calculated. An "Appraisal Reduction Event" will occur on the earliest of: S-112 (1) 120 days after an uncured delinquency (without regard to the application of any grace period) occurs in respect of a mortgage loan (including the One Post Office Square Whole Loan); (2) the date on which a reduction in the amount of Periodic Payments on a mortgage loan (including the One Post Office Square Whole Loan), or a change in any other material economic term of the mortgage loan (other than an extension of its maturity), becomes effective as a result of a modification of the related mortgage loan by the Special Servicer; (3) the date on which a receiver has been appointed; (4) 60 days after a borrower declares bankruptcy; (5) 60 days after the date on which an involuntary petition of bankruptcy is filed with respect to the borrower; (6) 90 days after an uncured delinquency occurs in respect of a balloon payment for a mortgage loan (including the One Post Office Square Whole Loan); and (7) immediately after a mortgage loan becomes an REO Loan. No Appraisal Reduction Event may occur at any time when the aggregate Certificate Balance of all Classes of Certificates (other than the Class A Certificates) has been reduced to zero. The "Appraisal Reduction" for any Distribution Date and for any mortgage loan (including the One Post Office Square Whole Loan) as to which any Appraisal Reduction Event has occurred will be an amount calculated by the Special Servicer, in consultation with the Directing Certificateholder, as of the first Determination Date following the date the Special Servicer receives or performs such appraisal equal to the excess of (a) the Stated Principal Balance of that mortgage loan over (b) the excess of (1) the sum of (a) 90% of the appraised value of the related Mortgaged Property as determined (A) by one or more MAI appraisals with respect to that mortgage loan (together with any other mortgage loan cross-collateralized with such loan) with an outstanding principal balance equal to or in excess of $2,000,000 (the costs of which will be paid by the Master Servicer as an Advance), or (B) by an internal valuation performed by the Special Servicer with respect to that mortgage loan (together with any other mortgage loan cross-collateralized with that mortgage loan) with an outstanding principal balance less than $2,000,000, and (b) all escrows, letters of credit and reserves in respect of that mortgage loan as of the date of calculation over (2) the sum as of the due date occurring in the month of the date of determination of (A) to the extent not previously advanced by the Master Servicer or the Trustee, all unpaid interest on that mortgage loan at a per annum rate equal to the Mortgage Rate, (B) all unreimbursed Advances and interest on those Advances at the Reimbursement Rate in respect of that mortgage loan and (C) all currently due and unpaid real estate taxes and assessments, insurance premiums and ground rents, unpaid Special Servicing Fees and all other amounts due and unpaid under that mortgage loan (which tax, premiums, ground rents and other amounts have not been the subject of an Advance by the Master Servicer, the Special Servicer or the Trustee, as applicable). The Special Servicer will be required to order an appraisal or conduct a valuation promptly upon the occurrence of an Appraisal Reduction Event. On the first Determination Date occurring on or after the delivery of the MAI appraisal or the completion of the valuation, the Special Servicer will be required to calculate in consultation with the Directing Certificateholder and report to the Directing Certificateholder (and, in the case of the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor), the Master Servicer and the Paying Agent, the Appraisal Reduction, taking into account the results of such appraisal or valuation. In the event that the Special Servicer has not received any required MAI appraisal within 60 days after the Appraisal Reduction Event (or, in the case of an appraisal in connection with an Appraisal Reduction Event described in clauses (1) and (6) of the third preceding paragraph, within 120 days after the initial delinquency for the related Appraisal Reduction Event), the amount of the Appraisal Reduction will be deemed to be an amount equal to 25% of the current Stated S-113 Principal Balance of the related mortgage loan (including the One Post Office Square Whole Loan) until the MAI appraisal is received. As a result of calculating one or more Appraisal Reductions, the amount of any required P&I Advance will be reduced, which will have the effect of reducing the amount of interest available to the most subordinate Class of Certificates then outstanding (i.e., first to the Class NR certificates, then to the Class P certificates, then to the Class N certificates, then to the Class M certificates, then to the Class L certificates, then to the Class K certificates, then to the Class J certificates, then to the Class H certificates, then to the Class G certificates, then to the Class F certificates, then to the Class E certificates, then to the Class D certificates, then to the Class C certificates and then to the Class B certificates); provided that with respect to an Appraisal Reduction on the One Post Office Square Whole Loan, such Appraisal Reduction will be applied to the Class PS Certificates prior to any application of such Appraisal Reduction to the One Post Office Square Loan and the One Post Office Square Companion Note. See "--Advances" above. With respect to each mortgage loan (including the One Post Office Square Whole Loan) as to which an Appraisal Reduction has occurred (unless the mortgage loan has remained current for three consecutive Periodic Payments, and with respect to which no other Appraisal Reduction Event has occurred with respect thereto during the preceding three months), the Special Servicer is required, within 30 days of each annual anniversary of the related Appraisal Reduction Event to order an appraisal (which may be an update of a prior appraisal), the cost of which will be a Servicing Advance, or to conduct an internal valuation, as applicable. Based upon the appraisal or valuation, the Special Servicer is required to redetermine in consultation with the Directing Certificateholder and report to the Directing Certificateholder (and, in the case of the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor), the Master Servicer, the Trustee and the Paying Agent, the recalculated amount of the Appraisal Reduction with respect to the mortgage loan. The Directing Certificateholder will have 10 business days to review and approve each calculation of any recalculated Appraisal Reduction; provided, however, that if the Directing Certificateholder (or the One Post Office Square Operating Advisor, as applicable) fails to approve any calculation of the recalculated Appraisal Reduction within 30 days of receipt, such consent will be deemed to be given. Notwithstanding the foregoing, the Special Servicer will not be required to obtain an appraisal or valuation with respect to a mortgage loan which is the subject of an Appraisal Reduction Event to the extent the Special Servicer has obtained an appraisal or valuation with respect to the related Mortgaged Property within the 12-month period prior to the occurrence of the Appraisal Reduction Event. Instead, the Special Servicer may use the prior appraisal or valuation in calculating any Appraisal Reduction with respect to the mortgage loan, provided that the Special Servicer is not aware of any material change to the Mortgaged Property, its earnings potential or risk characteristics, or marketability, or market conditions that has occurred that would affect the validity of the appraisal or valuation. The One Post Office Square Whole Loan will be treated as a single mortgage loan for purposes of calculating an Appraisal Reduction Amount with respect to the mortgage loans that comprise such whole loan. Any Appraisal Reduction calculated with respect to the One Post Office Square Whole Loan will be applied first to the One Post Office Square B Note. Any Appraisal Reduction Amount in respect of the One Post Office Square Whole Loan that exceeds the aggregate balance of the One Post Office Square B Note will be allocated to the One Post Office Square Loan and the One Post Office Square Companion Note, pro rata. Any mortgage loan (including the One Post Office Square Whole Loan) previously subject to an Appraisal Reduction which becomes current and remains current for three consecutive Periodic Payments, and with respect to which no other Appraisal Reduction Event has occurred and is continuing, will no longer be subject to an Appraisal Reduction. REPORTS TO CERTIFICATEHOLDERS; CERTAIN AVAILABLE INFORMATION On each Distribution Date, the Paying Agent will be required to make available on its website to each holder of a Certificate, the Master Servicer, the Underwriters, the Special Servicer, S-114 the Directing Certificateholder (or, in the case of the One Post Office Square Loan, the One Post Office Square Operating Advisor), each Rating Agency and certain assignees of the Depositor, including a financial market publisher (which is anticipated to initially be Bloomberg, L.P.), if any, a statement (a "Statement to Certificateholders") based upon information provided by the Master Servicer in accordance with the Commercial Mortgage Securities Association (or any successor organization reasonably acceptable to the Master Servicer and the Paying Agent) guidelines setting forth, among other things: (1) the amount of the distribution on the Distribution Date to the holders of each Class of Certificates in reduction of the Certificate Balance of the Certificates; (2) the amount of the distribution on the Distribution Date to the holders of each Class of Certificates allocable to Distributable Certificate Interest; (3) the aggregate amount of P&I Advances made in respect of the Distribution Date; (4) the aggregate amount of compensation paid to the Trustee and the Paying Agent and servicing compensation paid to the Master Servicer and the Special Servicer with respect to the Due Period for the Distribution Date; (5) the aggregate Stated Principal Balance of the mortgage loans and any REO Loans outstanding immediately before and immediately after the Distribution Date; (6) the number, aggregate principal balance, weighted average remaining term to maturity and weighted average Mortgage Rate of the mortgage loans as of the end of the related Due Period for the Distribution Date; (7) the number and aggregate principal balance of mortgage loans (A) delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 days or more, (D) current but specially serviced or in foreclosure but not an REO Property and (E) for which the related borrower is subject to oversight by a bankruptcy court; (8) the value of any REO Property included in the trust fund as of the Determination Date for the Distribution Date, on a loan-by-loan basis, based on the most recent appraisal or valuation; (9) the Available Distribution Amount for the Distribution Date; (10) the amount of the distribution on the Distribution Date to the holders of each Class of Certificates allocable to Yield Maintenance Charges; (11) the Pass-Through Rate for each Class of Certificates for the Distribution Date and the next succeeding Distribution Date; (12) the Scheduled Principal Distribution Amount and the Unscheduled Principal Distribution Amount for the Distribution Date; (13) 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 Collateral Support Deficit on the Distribution Date; (14) the fraction, expressed as a decimal carried to eight places, the numerator of which is the then related Certificate Balance or Notional Amount, as the case may be, and the denominator of which is the related initial aggregate Certificate Balance or Notional Amount, as the case may be, for each Class of Certificates (other than the Residual Certificates) immediately following the Distribution Date; (15) the amount of any Appraisal Reductions effected in connection with the Distribution Date on a loan-by-loan basis and the total Appraisal Reduction effected in connection with such Distribution Date; (16) the number and Stated Principal Balances of any mortgage loans extended or modified since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date) on a loan-by-loan basis; S-115 (17) the amount of any remaining unpaid interest shortfalls for each Class of Certificates as of the Distribution Date; (18) a loan-by-loan listing of each mortgage loan which was the subject of a principal prepayment since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date) and the amount and the type of principal prepayment occurring; (19) a loan-by-loan listing of any mortgage loan which was defeased since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date); (20) all deposits into, withdrawals from, and the balance of the Interest Reserve Account on the related Master Servicer Remittance Date; (21) the amount of the distribution on the Distribution Date to the holders of each Class of Certificates in reimbursement of Collateral Support Deficit; (22) the aggregate unpaid principal balance of the mortgage loans outstanding as of the close of business on the related Determination Date; (23) with respect to any mortgage loan as to which a liquidation occurred since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date) (other than a payment in full), (A) its loan number, (B) the aggregate of all Liquidation Proceeds which are included in the Available Distribution Amount and other amounts received in connection with the liquidation (separately identifying the portion allocable to distributions on the Certificates) and (C) the amount of any Collateral Support Deficit in connection with the liquidation; (24) with respect to any REO Property included in the trust as to which the Special Servicer determined, in accordance with accepted Servicing Standards, that all payments or recoveries with respect to the Mortgaged Property have been ultimately recovered since the previous Determination Date, (A) the loan number of the related mortgage loan, (B) the aggregate of all Liquidation Proceeds and other amounts received in connection with that determination (separately identifying the portion allocable to distributions on the Certificates) and (C) the amount of any realized loss in respect of the related REO Loan in connection with that determination; (25) the aggregate amount of interest on P&I Advances paid to the Master Servicer and the Trustee since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date); (26) the aggregate amount of interest on Servicing Advances paid to the Master Servicer, the Special Servicer and the Trustee since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date); (27) the original and then-current credit support levels for each Class of Certificates; (28) the original and then-current ratings for each Class of Certificates; (29) the amount of the distribution on the Distribution Date to the holders of the Residual Certificates; and (30) the aggregate amount of Yield Maintenance Charges collected since the previous Determination Date (or in the case of the first Distribution Date, as of the cut-off date). The Paying Agent will make available the Statements to Certificateholders through its website which is initially located at www.etrustee.net. In addition, the Paying Agent may make certain other information and reports (including the collection of reports specified by The Commercial Mortgage Securities Association (or any successor organization reasonably acceptable to the Paying Agent and the Master Servicer) as the "CMSA Investor Reporting Package") related to the mortgage loans available, to the extent that the Paying Agent receives such information and reports from the Master Servicer, and direction from the Depositor, or is otherwise directed to do so under the Pooling and Servicing Agreement. The Paying Agent will not make any S-116 representations or warranties as to the accuracy or completeness of any information provided by it and may disclaim responsibility for any information for which it is not the original source. In connection with providing access to the Paying Agent's website, the Paying Agent may require registration and acceptance of a disclaimer. The Paying Agent will not be liable for the dissemination of information made in accordance with the Pooling and Servicing Agreement. In the case of information furnished pursuant to clauses (1), (2), (10) and (15) above, the amounts will be expressed as a dollar amount in the aggregate for all Certificates of each applicable Class and per any definitive certificate. In addition, within a reasonable period of time after the end of each calendar year, the Paying Agent is required to furnish to each person or entity who at any time during the calendar year was a holder of a Certificate, a statement containing the information set forth in clauses (1), (2) and (10) above as to the applicable Class, aggregated for the related calendar year or applicable partial year during which that person was a Certificateholder, together with any other information that the Paying Agent deems necessary or desirable, or that a Certificateholder or Certificate Owner reasonably requests, to enable Certificateholders to prepare their tax returns for that calendar year. This obligation of the Paying Agent will be deemed to have been satisfied to the extent that substantially comparable information will be provided by the Paying Agent pursuant to any requirements of the Code as from time to time are in force. The Paying Agent will be required to provide or make available to a financial market publisher, which is anticipated initially to be Bloomberg, L.P., certain current information with respect to the Mortgaged Properties on a monthly basis, including current and original net operating income, debt service coverage ratio based upon borrowers' annual operating statements and occupancy rates, to the extent it has received the information from the Master Servicer pursuant to the Pooling and Servicing Agreement. The Pooling and Servicing Agreement requires that the Paying Agent (except for items (6) and (7) below, which will be made available by the Trustee) make available at its offices, during normal business hours, for review by any holder of an Offered Certificate, the Mortgage Loan Sellers, the Depositor, the Special Servicer, the Master Servicer, the Directing Certificateholder (and, in the case of the One Post Office Square Loan, the One Post Office Square Operating Advisor), each Rating Agency, any designee of the Depositor or any other person to whom the Paying Agent or the Trustee, as applicable, believes the disclosure is appropriate, upon their prior written request, originals or copies of, among other things, the following items: (1) the Pooling and Servicing Agreement and any amendments to that agreement; (2) all Statements to Certificateholders made available to holders of the relevant Class of Offered Certificates since the Closing Date; (3) all officer's certificates delivered to the Trustee and the Paying Agent since the Closing Date as described under "Description of the Pooling Agreements--Evidence as to Compliance" in the prospectus; (4) all accountants' reports delivered to the Trustee and the Paying Agent since the Closing Date as described under "Description of the Pooling Agreements--Evidence as to Compliance" in the prospectus; (5) the most recent property inspection report prepared by or on behalf of the Master Servicer or the Special Servicer and delivered to the Paying Agent in respect of each Mortgaged Property; (6) copies of the mortgage loan documents; (7) any and all modifications, waivers and amendments of the terms of a mortgage loan entered into by the Master Servicer or the Special Servicer and delivered to the Trustee; and (8) any and all statements and reports delivered to, or collected by, the Master Servicer or the Special Servicer, from the borrowers, including the most recent annual property S-117 Operating Statements, rent rolls and borrower financial statements, but only to the extent that the statements and reports have been delivered to the Paying Agent. Copies of any and all of the foregoing items will be available to those named in the above paragraph, from the Paying Agent or the Trustee, as applicable, upon request; however, the Paying Agent or the Trustee, as applicable, will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing the copies, except that the Directing Certificateholder shall be entitled to receive such items free of charge. Pursuant to the Pooling and Servicing Agreement, the Master Servicer will use reasonable efforts to collect certain financial and property information required under the mortgage loan documents, such as operating statements, rent rolls and financial statements. The Pooling and Servicing Agreement will require the Master Servicer and the Paying Agent, subject to certain restrictions (including execution and delivery of a confidentiality agreement) set forth in the Pooling and Servicing Agreement, to provide certain of the reports or, in the case of the Master Servicer and the Controlling Class Certificateholder, access to the reports available as set forth above, as well as certain other information received by the Master Servicer or the Paying Agent, as the case may be, to any Certificateholder, the Underwriters, the Mortgage Loan Sellers, any Certificate Owner or any prospective investor so identified by a Certificate Owner or an Underwriter, that requests reports or information. However, the Paying Agent and the Master Servicer will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing copies of these reports or information, except that, other than for extraordinary or duplicate requests, the Directing Certificateholder shall be entitled to reports and information free of charge. Except as otherwise set forth in this paragraph, until the time definitive certificates are issued, notices and statements required to be mailed to holders of Certificates will be available to Certificate Owners of Offered Certificates only to the extent they are forwarded by or otherwise available through DTC and its Participants. Conveyance of notices and other communications by DTC to Participants, and by Participants to Certificate Owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Except as otherwise set forth in this paragraph, the Master Servicer, the Special Servicer, the Trustee, the Paying Agent and the Depositor are required to recognize as Certificateholders only those persons in whose names the Certificates are registered on the books and records of the Certificate Registrar. The initial registered holder of the Offered Certificates will be Cede & Co., as nominee for DTC. VOTING RIGHTS At all times during the term of the Pooling and Servicing Agreement, the voting rights for the Certificates (the "Voting Rights") will be allocated among the respective classes of Certificateholders as follows: (1) 4% in the case of the Class X Certificates (allocated pro rata between the Class X-1 and Class X-2 Certificates based upon their Notional Amounts), and (2) in the case of any other Class of Certificates (other than the Class PS Certificates and the Residual Certificates), a percentage equal to the product of 96% and a fraction, the numerator of which is equal to the aggregate Certificate Balance of the class, in each case, determined as of the prior Distribution Date, and the denominator of which is equal to the aggregate Certificate Balance of all classes of Certificates (other than the Class PS Certificates), each determined as of the prior Distribution Date. None of the Class PS, Class R or the Class LR certificates will be entitled to any Voting Rights. For purposes of determining Voting Rights, the Certificate Balance of each Class (other than the Class PS Certificates) will not be reduced by the amount allocated to that Class of any Appraisal Reductions related to mortgage loans as to which Liquidation Proceeds or other final payment have not yet been received. Voting Rights allocated to a Class of Certificateholders will be allocated among the Certificateholders in proportion to the Percentage Interests evidenced by their respective Certificates. Solely for purposes of giving any consent, approval or waiver pursuant to the Pooling and Servicing Agreement, neither the Master Servicer, the Special Servicer nor the Depositor will be entitled to exercise any Voting Rights with respect to any Certificates registered in its name, if the consent, approval or waiver would in any way increase S-118 its compensation or limit its obligations in the named capacities under the Pooling and Servicing Agreement; provided, however, that the restrictions will not apply to the exercise of the Special Servicer's rights, if any, as a member of the Controlling Class. TERMINATION; RETIREMENT OF CERTIFICATES The obligations created by the Pooling and Servicing Agreement will terminate upon payment (or provision for payment) to all Certificateholders of all amounts held by the Paying Agent on behalf of the Trustee and required to be paid following the earlier of (1) the final payment (or related Advance) or other liquidation of the last mortgage loan or REO Property subject thereto or (2) the purchase or other liquidation of all of the assets of the trust fund by the holders of the Controlling Class, the Special Servicer, the Master Servicer or the holders of the Class LR certificates, in that order of priority. Written notice of termination of the Pooling and Servicing Agreement will be given to each Certificateholder, and the final distribution will be made only upon surrender and cancellation of the Certificates at the office of the Certificate Registrar or other location specified in the notice of termination. The holders of the Controlling Class, the Special Servicer, the Master Servicer and the holders of the Class LR certificates (in that order) will have the right to purchase all of the assets of the trust fund (including the One Post Office Square B Note). This purchase of all the mortgage loans and other assets in the trust fund is required to be made at a price equal to the sum of (1) the aggregate Purchase Price of all the mortgage loans (including the One Post Office Square B Note) (exclusive of REO Loans) then included in the trust fund and (2) the aggregate fair market value of all REO Properties then included in the trust fund (which fair market value for any REO Property may be less than the Purchase Price for the corresponding REO Loan), as determined by an appraiser selected and mutually agreed upon by the Master Servicer and the Trustee, plus the reasonable out-of-pocket expenses of the Master Servicer related to such purchase, unless the Master Servicer is the purchaser. This purchase will effect early retirement of the then outstanding Offered Certificates, but the rights of the holders of the Controlling Class, the Special Servicer, the Master Servicer or the holders of the Class LR certificates to effect the termination is subject to the requirement that the then aggregate Stated Principal Balance of the pool of mortgage loans (including the One Post Office Square B Note) be less than 1% of the Initial Pool Balance. On the final Distribution Date, the aggregate amount paid by the holders of the Controlling Class, the Special Servicer, the Master Servicer or the holders of the Class LR certificates, as the case may be, for the mortgage loans and other assets in the trust fund (if the trust fund is to be terminated as a result of the purchase described in the preceding paragraph), together with all other amounts on deposit in the Certificate Account and not otherwise payable to a person other than the Certificateholders (see "Description of the Pooling Agreements--Certificate Account" in the prospectus), will be applied generally as described above under "--Distributions--Priority" in this prospectus supplement. Any optional termination by the holders of the Controlling Class, the Special Servicer, the Master Servicer or the holders of the Class LR certificates would result in prepayment in full of the Certificates and would have an adverse effect on the yield of the Class X Certificates because a termination would have an effect similar to a principal prepayment in full of the mortgage loans and, as a result, investors in the Class X Certificates and any other Certificates purchased at premium might not fully recoup their initial investment. See "Yield and Maturity Considerations" in this prospectus supplement. THE TRUSTEE U.S. Bank, National Association, a national banking association, with its principal offices located in Boston, Massachusetts, will act as Trustee on behalf of the Certificateholders. The corporate trust office of the Trustee is located at One Federal Street, Third Floor, Attention: Corporate Trust Series, Boston, Massachusetts 02110. As compensation for the performance of its S-119 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 the mortgage loans and will be equal to the product of a rate equal to 0.002% per annum (the "Trustee Fee Rate") and the Stated Principal Balance of the mortgage loans and in the same manner as interest is calculated on the related mortgage loan. The Trustee Fee includes the Paying Agent Fee, and the Trustee Fee Rate includes the Paying Agent Fee Rate. 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. See "Description of the Pooling Agreements--The Trustee," "--Duties of the Trustee," "--Certain Matters Regarding the Trustee" and "--Resignation and Removal of the Trustee" in the prospectus. S-120 SERVICING OF THE MORTGAGE LOANS GENERAL The servicing of the mortgage loans (including the One Post Office Square Whole Loan) and any REO Properties will be governed by the Pooling and Servicing Agreement. The following summaries describe certain provisions of the Pooling and Servicing Agreement relating to the servicing and administration of the mortgage loans and any REO Properties. The summaries do not purport to be complete and are subject, and qualified in their entirety by reference, to the provisions of the Pooling and Servicing Agreement. Reference is made to the prospectus for additional information regarding the terms of the Pooling and Servicing Agreement relating to the servicing and administration of the mortgage loans (including the One Post Office Square Whole Loan) and any REO Properties, provided that the information in this prospectus supplement supersedes any contrary information set forth in the prospectus. See "Description of the Pooling Agreements" in the prospectus. In general, the One Post Office Square Companion Note and the One Post Office Square B Note will be serviced and administered under the Pooling and Servicing Agreement and the One Post Office Square Intercreditor Agreement as though it were a mortgage loan. If any of the One Post Office Square Companion Note or the One Post Office Square B Note becomes specially serviced, then the One Post Office Square Whole Loan will become a Specially Serviced Mortgage Loan. Each of the Master Servicer (directly or through one or more sub-servicers) and the Special Servicer will be required to service and administer the mortgage loans (including the One Post Office Square Whole Loan) for which it is responsible. The Master Servicer may delegate and/or assign some or all of its servicing obligations and duties with respect to some or all of the mortgage loans to one or more third-party subservicers (although the Master Servicer will remain primarily responsible for the servicing of those mortgage loans). Except in certain limited circumstances set forth in the Pooling and Servicing Agreement, the Special Servicer will not be permitted to appoint sub-servicers with respect to any of its servicing obligations and duties. The Master Servicer and the Special Servicer will be required to service and administer the mortgage loans (including the One Post Office Square Whole Loan) for which each is responsible in accordance with applicable law, the terms of the Pooling and Servicing Agreement and the mortgage loan documents (and in the case of each AB Loan, the terms of the related AB Loan intercreditor agreement and in the case of the One Post Office Square Whole Loan, the terms of the related One Post Office Square Intercreditor Agreement) and, to the extent consistent with the foregoing, in accordance with the higher of the following standards of care: (1) the same manner in which, and with the same care, skill, prudence and diligence with which the Master Servicer or the Special Servicer, as the case may be, services and administers similar mortgage loans for other third-party portfolios, and (2) the same care, skill, prudence and diligence with which the Master Servicer or the Special Servicer, as the case may be, services and administers commercial, multifamily and manufactured housing community mortgage loans owned by the Master Servicer or the Special Servicer, as the case may be, with a view to the maximization of timely recovery of principal and interest on a net present value basis on the mortgage loans or Specially Serviced Mortgage Loans, as applicable, and the best interests of the trust and the certificateholders (and in the case of the One Post Office Square Whole Loan, the holder of the One Post Office Square Companion Note and the holder of the One Post Office Square B Note (as a collective whole)), as determined by the Master Servicer or the Special Servicer, as the case may be, in its reasonable judgment, but without regard to: (A) any known relationship that the Master Servicer or the Special Servicer, or any of their respective affiliates, as the case may be, may have with the related borrower or any affiliate of such borrower, any Mortgage Loan Seller or any other party to the Pooling and Servicing Agreement; S-121 (B) the ownership of any Certificate or other interest in any mortgage loan (including any security that may be backed by the One Post Office Square Companion Note) by the Master Servicer or the Special Servicer or any of their respective affiliates, as the case may be; (C) the Master Servicer's obligation or Special Servicer's election, as the case may be, to make Advances; (D) the Master Servicer's or the Special Servicer's, as the case may be, right to receive compensation for its services under the Pooling and Servicing Agreement or with respect to any particular transaction; (E) the ownership, servicing or management for others of any other mortgage loans or mortgaged properties by the Master Servicer or Special Servicer, as the case may be; and (F) any debt that the Master Servicer or the Special Servicer or any of their respective affiliates, as the case may be, has extended to any borrower or any of its known affiliates (the foregoing, collectively referred to as the "Servicing Standards"). Except as otherwise described under "--Inspections; Collection of Operating Information" below, the Master Servicer will be responsible initially for the servicing and administration of the entire pool of mortgage loans (including the One Post Office Square Whole Loan). The Master Servicer will be required to transfer its servicing responsibilities to the Special Servicer with respect to any mortgage loan (including the One Post Office Square Whole Loan): (1) as to which a payment default has occurred at its original maturity date, or, if the original maturity date has been extended, at its extended maturity date; provided that in the case of a balloon payment, such payment is delinquent and the related borrower has not provided the Master Servicer on the related maturity date with a bona fide written commitment for refinancing, reasonably satisfactory in form and substance to the Master Servicer that provides that such refinancing will occur within 90 days, provided that the mortgage loan will become transferable immediately if the borrower fails to pay any Assumed Monthly Payment at any time before the refinancing or, if such refinancing does not occur, the related mortgage loan will become a Specially Serviced Mortgage Loan at the end of that 90-day period (or for such shorter period beyond the date on which that balloon payment was due within which the refinancing is scheduled to occur); (2) as to which any Periodic Payment (other than a balloon payment or other payment due at maturity) is more than 60 days delinquent (unless, in the case of the One Post Office Square Whole Loan, the holder of the One Post Office Square B Note cured such delinquency pursuant to the One Post Office Square Intercreditor Agreement prior to such Periodic Payment becoming more than 60 days delinquent); (3) as to which the borrower has entered into or consented to bankruptcy, appointment of a receiver or conservator or a similar insolvency proceeding, or the borrower has become the subject of a decree or order for that proceeding (provided that if the appointment, decree or order is stayed or discharged, or the case dismissed within 60 days that mortgage loan will not be considered a Specially Serviced Mortgage Loan during that period), or the related borrower has admitted in writing its inability to pay its debts generally as they become due; (4) as to which the Master Servicer has received notice of the foreclosure or proposed foreclosure of any other lien on the Mortgaged Property; (5) as to which, in the judgment of the Master Servicer or Special Servicer, as applicable, a payment default is imminent and is not likely to be cured by the borrower within 60 days; or (6) as to which a default of which the Master Servicer has notice (other than a failure by the related borrower to pay principal or interest) and which the Master Servicer determines, in its good faith reasonable judgement, may materially and adversely affects the interests of S-122 the Certificateholders (or, with respect to the One Post Office Square Whole Loan, the holder of the One Post Office Square Companion Note or the holder of the One Post Office Square B Note) has occurred and remains unremediated for the applicable grace period specified in the mortgage loan documents, other than, in certain circumstances, the failure to maintain terrorism insurance (or if no grace period is specified for events of default which are capable of cure, 60 days). However, the Master Servicer will be required to continue to (w) receive payments on the mortgage loan (including the One Post Office Square Whole Loan) (including amounts collected by the Special Servicer), (x) make certain calculations with respect to the mortgage loan, (y) make remittances and prepare certain reports to the Certificateholders with respect to the mortgage loan and (z) receive the Servicing Fee in respect of the mortgage loan at the Servicing Fee Rate. If the related Mortgaged Property is acquired in respect of any mortgage loan (including the One Post Office Square Whole Loan) (upon acquisition, an "REO Property") whether through foreclosure, deed-in-lieu of foreclosure or otherwise, the Special Servicer will continue to be responsible for its operation and management. The mortgage loans (including the One Post Office Square Whole Loan) serviced by the Special Servicer and any mortgage loans (including the One Post Office Square Whole Loan) that have become REO Properties are referred to in this prospectus supplement as the "Specially Serviced Mortgage Loans." The Master Servicer will have no responsibility for the performance by the Special Servicer of its duties under the Pooling and Servicing Agreement. Any mortgage loan that is cross-collateralized with a Specially Serviced Mortgage Loan will become a Specially Serviced Mortgage Loan. If any Specially Serviced Mortgage Loan, in accordance with its original terms or as modified in accordance with the Pooling and Servicing Agreement, becomes performing for at least 3 consecutive Periodic Payments (provided no additional event of default is foreseeable in the reasonable judgment of the Special Servicer), the Special Servicer will be required to return servicing of that mortgage loan (a "Corrected Mortgage Loan") to the Master Servicer. The Special Servicer will be required to prepare a report (an "Asset Status Report") for each mortgage loan which becomes a Specially Serviced Mortgage Loan not later than 45 days after the servicing of such mortgage loan is transferred to the Special Servicer. Each Asset Status Report will be required to be delivered to the Directing Certificateholder and, with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor (each as defined below), the Master Servicer, the applicable Mortgage Loan Seller(s), the Trustee, the Paying Agent and each Rating Agency. If the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) does not disapprove an Asset Status Report within ten business days, the Special Servicer will be required to implement the recommended action as outlined in the Asset Status Report. The Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) may object to any Asset Status Report within ten 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 Standards that the objection is not in the best interest of all the Certificateholders (including the holder of the One Post Office Square Companion Note, in the case of the One Post Office Square Whole Loan). If the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) disapproves the Asset Status Report and the Special Servicer has not made the affirmative determination described above, the Special Servicer will be required to revise the Asset Status Report as soon as practicable thereafter, but in no event later than 30 days after the disapproval. The Special Servicer will be required to revise the Asset Status Report until the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) fails to disapprove the revised Asset Status Report as described above or until the Special Servicer makes a determination that the objection is not in the best interests of the Certificateholders; provided, however, in the event that the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office S-123 Square Operating Advisor) and the Special Servicer have not agreed upon an Asset Status Report with respect to a Specially Serviced Mortgage Loan within 90 days (or 60 days with respect to the One Post Office Square Whole Loan) of the Directing Certificateholder's (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor's) receipt of the initial Asset Status Report with respect to such Specially Serviced Mortgage Loan, the Special Servicer will implement the actions described in the most recent Asset Status Report submitted to the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) by the Special Servicer. THE DIRECTING CERTIFICATEHOLDER AND THE ONE POST OFFICE SQUARE OPERATING ADVISOR The Directing Certificateholder (and with respect to the One Post Office Square Whole Loan, so long as a One Post Office Square Control Appraisal Event has not occurred, the One Post Office Square Operating Advisor) will be entitled to advise the Special Servicer with respect to the following actions and others more particularly described in the Pooling and Servicing Agreement and, except as otherwise described below, the Special Servicer will not be permitted to take any of the following actions as to which the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) has objected in writing within ten business days of having been notified of the proposed action (provided that if such written objection has not been delivered to the Special Servicer within the ten day period, the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) will be deemed to have approved such action): (i) any proposed or actual foreclosure upon or comparable conversion (which may include acquisitions of an REO Property) of the ownership of properties securing such of the mortgage loans as come into and continue in default; (ii) any modification or consent to a modification of any monetary term of a mortgage loan or any extension of the maturity date of such mortgage loan; (iii) any proposed sale of a defaulted mortgage loan or REO Property (other than in connection with the termination of the trust as described under "Description of the Certificates--Termination; Retirement of Certificates" in this prospectus supplement) for less than the applicable Purchase Price; (iv) any determination to bring an REO Property into compliance with applicable environmental laws or to otherwise address hazardous material located at an REO Property; (v) any release of collateral or any acceptance of substitute or additional collateral for a mortgage loan or any consent to either of the foregoing, other than pursuant to the specific terms of the related mortgage loan; (vi) any waiver of a "due-on-sale" or "due-on-encumbrance" clause with respect to a Specially Serviced Mortgage Loan or a non-Specially Serviced Mortgage Loan with a principal balance greater than or equal to $2,500,000 or any consent to such a waiver; (vii) any management company changes or franchise changes; (viii) releases of any escrow accounts, reserve accounts or letters of credit held as performance escrows or reserves, other than required pursuant to the specific terms of the mortgage loan and there is no material lender discretion; (ix) any acceptance of an assumption agreement releasing a borrower from liability under a mortgage loan other than pursuant to the specific terms of such mortgage loan; (x) any determination of an Acceptable Insurance Default; (xi) with respect to the One Post Office Square Whole Loan, any acceptance of a discounted payoff; S-124 (xii) with respect to the One Post Office Square Whole Loan, any renewal or replacement of the then existing insurance policies to the extent that such renewal or replacement policy does not comply with the terms of the mortgage loan documents or any waiver, modification or amendment of any insurance requirements under the related mortgage loan documents; (xiii) with respect to the One Post Office Square Whole Loan, any approval of a material capital expenditure; (xiv) with respect to the One Post Office Square Whole Loan, any replacement of the property manager; and (xv) with respect to the One Post Office Square Whole Loan, any adoption or approval of a plan in bankruptcy of the related borrower; provided that, in the event that the Special Servicer determines that immediate action is necessary to protect the interests of the Certificateholders (as a collective whole), the Special Servicer may take any such action without waiting for the Directing Certificateholder's (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor's) response. In addition, the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) may direct the Special Servicer to take, or to refrain from taking, other actions with respect to a mortgage loan, as the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) may reasonably deem advisable; provided that the Special Servicer will not be required to take or refrain from taking any action pursuant to instructions from the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) that would cause it to violate applicable law, the Pooling and Servicing Agreement, including the Servicing Standards, the One Post Office Square Intercreditor Agreement or the REMIC Provisions. Furthermore, the Special Servicer will not be obligated to seek approval from the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor), as contemplated above, for any actions to be taken by the Special Servicer with respect to a mortgage loan if: (i) the Special Servicer has, as described above, notified the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) in writing of various actions that the Special Servicer proposes to take with respect to the workout or liquidation of such mortgage loan and (ii) for 60 days following the first such notice, the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) has objected to all of those proposed actions but has failed to suggest any alternative actions that the Special Servicer considers to be consistent with the Servicing Standards. The "Directing Certificateholder" will be the Controlling Class Certificateholder selected by more than 50% of the Controlling Class Certificateholders, by Certificate Balance, as certified by the Certificate Registrar from time to time; provided, however, that (1) absent that selection, or (2) until a Directing Certificateholder is so selected or (3) upon receipt of a notice from a majority of the Controlling Class Certificateholders, by Certificate Balance, that a Directing Certificateholder is no longer designated, the Controlling Class Certificateholder that owns the largest aggregate Certificate Balance of the Controlling Class will be the Directing Certificateholder. A "Controlling Class Certificateholder" is each holder (or Certificate Owner, if applicable) of a Certificate of the Controlling Class as certified to the Certificate Registrar from time to time by the holder (or Certificate Owner). The "Controlling Class" will be as of any time of determination the most subordinate Class of Certificates (other than the Class X Certificates and the Class PS Certificates) then outstanding S-125 that has a Certificate Balance at least equal to 25% of the initial Certificate Balance of that class. For purposes of determining identity of the Controlling Class, the Certificate Balance of each Class will not be reduced by the amount allocated to that Class of any Appraisal Reductions. The Controlling Class as of the Closing Date will be the Class NR certificates. In addition, the Pooling and Servicing Agreement permits the Controlling Holder of the Class PS Certificates to appoint a representative (the "One Post Office Square Operating Advisor") who may advise the Special Servicer with respect to the One Post Office Square Whole Loan only, so long as a One Post Office Square Control Appraisal Event has not occurred. The "Controlling Holder" of the Class PS Certificates will be, to the extent then outstanding, the most subordinate Class of the Class PS Certificates outstanding for which a Control Change Event has not occurred with respect to that Class. Upon the occurrence of a Control Change Event with respect to all of the Class PS Certificates, no holder of a Certificate of those Classes will be permitted to exercise any of the rights of the related Controlling Holder to advise the Special Servicer through the One Post Office Square Operating Advisor. A "Control Change Event" has occurred with respect to any Class of Class PS Certificates if and for so long as either (i) the initial Certificate Balance of such Class minus principal payments, all Appraisal Reductions and Collateral Support Deficits allocated to such Class as of the date of determination is less than 25% of the initial Certificate Balance of such Class; or (ii) the outstanding Certificate Balance of such Class, after giving effect to all principal distributions, Appraisal Reductions and Collateral Support Deficits allocated to such Class as of the date of determination has been reduced to zero. The Special Servicer will not be required to take or refrain from taking any action pursuant to instructions from the Directing Certificateholder or the One Post Office Square Operating Advisor that would cause the Special Servicer to violate applicable law, the Pooling and Servicing Agreement, including the Servicing Standards, the One Post Office Square Intercreditor Agreement or the REMIC Provisions. Upon the occurrence and continuance of a One Post Office Square Control Appraisal Event, the Directing Certificateholder will be entitled to exercise rights and powers substantially similar to those of the One Post Office Square Operating Advisor set forth above, provided that exercise of such rights and powers does not violate applicable law, the Pooling and Servicing Agreement, the One Post Office Square Intercreditor Agreement or the REMIC Provisions. LIMITATION ON LIABILITY OF DIRECTING CERTIFICATEHOLDER AND ONE POST OFFICE SQUARE OPERATING ADVISOR The Directing Certificateholder (and with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor will not be liable to the trust fund or the Certificateholders for any action taken, or for refraining from the taking of any action for errors in judgment. However, the Directing Certificateholder (and with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) will not be protected against any liability to the Controlling Class Certificateholder (or with respect to the One Post Office Square Operating Advisor, the Controlling Holder of the Class PS Certificates) which would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations or duties. Each Certificateholder acknowledges and agrees, by its acceptance of its Certificates, that the Directing Certificateholder (and with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor: (a) may have special relationships and interests that conflict with those of holders of one or more Classes of Certificates, (b) may act solely in the interests of the holders of the Controlling Class (or with respect to the One Post Office Square Operating Advisor, the Controlling Holder of the Class PS Certificates, S-126 (c) does not have any liability or duties to the holders of any Class of Certificates other than the Controlling Class (or with respect to the One Post Office Square Operating Advisor, the Controlling Holder of the Class PS Certificates), (d) may take actions that favor the interests of the holders of the Controlling Class (or with respect to the One Post Office Square Operating Advisor, the Controlling Holder of the Class PS Certificates) over the interests of the holders of one or more other classes of Certificates, (e) 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 misconduct, by reason of its having acted solely in the interests of the Controlling Class (or with respect to the One Post Office Square Operating Advisor, the Controlling Holder of the Class PS Certificates), and (f) will have no liability whatsoever for having so acted and that no Certificateholder may take any action whatsoever against the Directing Certificateholder (and with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) or any director, officer, employee, agent or principal of the Directing Certificateholder (and with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) for having so acted. The holders of the Companion Loans and their designees will have limitations on liability with respect to actions taken in connection with the related AB Loans similar to the limitations of the Directing Certificateholder described above. THE MASTER SERVICER Wells Fargo Bank, National Association. The Master Servicer's principal servicing offices are located at 45 Fremont Street, 2nd Floor, San Francisco, California 94105. As of June 30, 2003, the Master Servicer was responsible for servicing approximately 5,481 commercial and multifamily mortgage loans, totaling approximately $35.11 billion in aggregate outstanding principal amounts, including loans securitized in mortgage-backed securitization transactions. Wells Fargo & Company is the holding company for the Master Servicer. Wells Fargo & Company files reports with the Securities and Exchange Commission that are required under the Securities Exchange Act of 1934. Such reports include information regarding the Master Servicer and may be obtained at the website maintained by the Securities and Exchange Commission at http://www.sec.gov. The information set forth in this prospectus supplement concerning the Master Servicer has been provided by the Master Servicer, and neither the Depositor nor the Underwriters make any representation or warranty as to the accuracy or completeness of that information. The Master Servicer makes no representations as to the validity or sufficiency of the Pooling and Servicing Agreement, the Certificates, the mortgage loans, this prospectus supplement or related documents. THE SPECIAL SERVICER ARCap Servicing, Inc., a Delaware corporation, in its capacity as Special Servicer under the Pooling and Servicing Agreement (in such capacity, the "Special Servicer"), is a wholly owned subsidiary of ARCap REIT, Inc., headquartered in Irving, Texas, and an affiliate of ARCap CMBS Fund REIT, Inc., the entity that is anticipated to be the initial series 2003-LN1 Controlling Class representative. As of June 30, 2003, ARCap Servicing, Inc. was the named special servicer on 28 CMBS transactions encompassing 4,637 loans with a legal balance of $29.32 billion. The portfolios include office, retail, multifamily, hospitality, industrial and other types of income producing properties in the United States, Canada and Puerto Rico. The information set forth in this prospectus supplement concerning the Special Servicer has been provided by the Special Servicer, and neither the Depositor nor the Underwriters make any representation or warranty as to the accuracy or completeness of that information. S-127 REPLACEMENT OF THE SPECIAL SERVICER The Special Servicer may be removed, and a successor Special Servicer appointed, at any time by the Directing Certificateholder, provided that each Rating Agency confirms in writing that the replacement of the Special Servicer, in and of itself, will not cause a qualification, withdrawal or downgrade of the then-current ratings assigned to any Class of Certificates. SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES The fee of the Master Servicer (the "Servicing Fee") will be payable monthly from amounts received in respect of the mortgage loans (including the One Post Office Square Whole Loan), and will accrue at a rate (the "Servicing Fee Rate"), equal to a per annum rate ranging from 0.0400% to 0.1400%. As of the cut-off date the weighted average Servicing Fee Rate will be 0.0732% per annum. In addition, the Master Servicer will have the right to assign and transfer its rights to receive such portion to another party. In addition to the Servicing Fee, the Master Servicer will be entitled to retain, as additional servicing compensation, (1) 100% of application, defeasance and certain non-material modification, waiver and consent fees, provided, with respect to the non-material modification, waiver and consent fees, the consent of the Special Servicer is not required for the related transaction, (2) 50% of all assumption (subject to certain subservicing agreements), extension, material modification, waiver, consent and earnout fees, in each case, with respect to all mortgage loans which are not Specially Serviced Mortgage Loans, but arise from a transaction that requires the approval of the Special Servicer and (3) late payment charges and default interest paid by the borrowers (that were collected while the related mortgage loans were not Specially Serviced Mortgage Loans), but only to the extent such late payment charges and default interest are not needed to pay interest on Advances or certain additional trust fund expenses incurred with respect to the related mortgage loan since the Closing Date. The Master Servicer also is authorized but not required to invest or direct the investment of funds held in the Certificate Account in Permitted Investments, and the Master Servicer 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, except as set forth in the Pooling and Servicing Agreement. The Master Servicer also is entitled to retain any interest earned on any servicing escrow account to the extent the interest is not required to be paid to the related borrowers. The Servicing Fee is calculated on the Stated Principal Balance of the mortgage loans (including the One Post Office Square Whole Loan) and in the same manner as interest is calculated on the mortgage loans. The Servicing Fee for each mortgage loan is included in the Administrative Cost Rate listed for that mortgage loan on Annex A-1. Any Servicing Fee Rate calculated on an Actual/360 Basis will be recomputed on a 30/360 Basis for purposes of calculating the Net Mortgage Rate. The principal compensation to be paid to the Special Servicer in respect of its special servicing activities will be the Special Servicing Fee, the Workout Fee and the Liquidation Fee. The "Special Servicing Fee" will accrue with respect to each Specially Serviced Mortgage Loan (including the One Post Office Square Whole Loan) at a rate equal to 0.25% per annum (the "Special Servicing Fee Rate") calculated on the basis of the Stated Principal Balance of the related Specially Serviced Mortgage Loans and in the same manner as interest is calculated on the Specially Serviced Mortgage Loans, and will be payable monthly, first from Liquidation Proceeds and Insurance and Condemnation Proceeds and then from general collections on all the mortgage loans and any REO Properties in the trust fund. The "Workout Fee" will generally be payable with respect to each Corrected Mortgage Loan (including the One Post Office Square Whole Loan) and will be calculated by application of a "Workout Fee Rate" of 1% to each collection of interest and principal (including scheduled payments, prepayments, balloon payments, and payments at maturity) received on the respective mortgage loan for so long as it remains a Corrected Mortgage Loan. The Workout Fee with respect to any Corrected Mortgage Loan will cease to be payable if the Corrected Mortgage Loan S-128 again becomes a Specially Serviced Mortgage Loan but will become payable again if and when the mortgage loan again becomes a Corrected Mortgage Loan. If the Special Servicer is terminated (other than for cause) or resigns, it shall retain the right to receive any and all Workout Fees payable with respect to mortgage loans that became Corrected Mortgage Loans during the period that it acted as Special Servicer and remained Corrected Mortgage Loans at the time of that termination or resignation, but such fee will cease to be payable if the Corrected Mortgage Loan again becomes a Specially Serviced Mortgage Loan. The successor special servicer will not be entitled to any portion of those Workout Fees. If the Special Servicer resigns or is terminated other than for cause, it will receive any Workout Fees payable on Specially Serviced Mortgage Loans for which the resigning or terminated Special Servicer had cured the event of default through a modification, restructuring or workout negotiated by the Special Servicer and evidenced by a signed writing, but which had not as of the time the Special Servicer resigned or was terminated become a Corrected Mortgage Loan solely because the borrower had not made three consecutive timely Periodic Payments and which subsequently becomes a Corrected Mortgage Loan as a result of the borrower making such three consecutive timely Periodic Payments. 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 (or unscheduled partial payment to the extent such prepayment is required by the Special Servicer as a condition to a workout) from the related borrower and, except as otherwise described below, with respect to any Specially Serviced Mortgage Loan or REO Property as to which the Special Servicer receives any Liquidation Proceeds or Insurance and Condemnation 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% to the related payment or proceeds. Notwithstanding anything to the contrary described above, no Liquidation Fee will be payable based upon, or out of, Liquidation Proceeds received in connection with (i) the repurchase of any mortgage loan by a Mortgage Loan Seller for a breach of representation or warranty or for defective or deficient mortgage loan documentation within the time period provided for such repurchases or, if such repurchase occurs after such time period, the Mortgage Loan Seller was acting in good faith to resolve such breach or defect, (ii) the purchase of any Specially Serviced Mortgage Loan by the majority holder of the Controlling Class (or, with respect to the One Post Office Square Loan, the One Post Office Square Operating Advisor), the Special Servicer or the Master Servicer or (iii) the purchase of all of the mortgage loans and REO Properties in connection with an optional termination of the trust fund. The Special Servicer may not receive a Workout Fee and a Liquidation Fee with respect to the same proceeds collected on a mortgage loan. The Special Servicer will also be entitled to additional servicing compensation in the form of all application fees with respect to assumptions, extensions and modifications and all defeasance fees, in each case, received with respect to the Specially Serviced Mortgage Loans, and 50% of all assumption, extension, material modification, waiver, consent and earnout fees received with respect to all mortgage loans which are not Specially Serviced Mortgage Loans and for which the Special Servicer's consent or approval is required. The Special Servicer will also be entitled to late payment charges and default interest paid by the borrowers and collected while the related mortgage loans were Specially Serviced Mortgage Loans and that are not needed to pay interest on Advances or certain additional trust fund expenses with respect to the related mortgage loan since the Closing Date. The Special Servicer will not be entitled to retain any portion of Excess Interest paid on the ARD Loans. Although the Master Servicer and the Special Servicer are each required to service and administer the pool of mortgage loans in accordance with the Servicing Standards above and, accordingly, without regard to their rights to receive compensation under the Pooling and Servicing Agreement, additional servicing compensation in the nature of assumption and modification fees may under certain circumstances provide the Master Servicer or the Special Servicer, as the case may be, with an economic disincentive to comply with this standard. S-129 As and to the extent described in this prospectus supplement under "Description of the Certificates--Advances," the Master Servicer and the Special Servicer, as applicable will be entitled to receive interest on Advances, which will be paid contemporaneously with the reimbursement of the related Advance. Each of the Master Servicer and the Special Servicer will be required to pay its overhead and any general and administrative expenses incurred by it in connection with its servicing activities under the Pooling and Servicing Agreement. Neither the Master Servicer nor the Special Servicer will be entitled to reimbursement for any expenses incurred by it except as expressly provided in the Pooling and Servicing Agreement. The Master Servicer will be responsible for all fees payable to any sub-servicers. See "Description of the Certificates--Distributions--Method, Timing and Amount" in this prospectus supplement and "Description of the Pooling Agreements--Certificate Account" and "--Servicing Compensation and Payment Of Expenses" in the prospectus. If a borrower prepays a mortgage loan (including the One Post Office Square B Note), in whole or in part, after the due date but on or before the Determination Date in any calendar month, the amount of interest (net of related Servicing Fees) accrued on such prepayment from such due date to, but not including, the date of prepayment (or any later date through which interest accrues) will, to the extent actually collected, constitute a "Prepayment Interest Excess." Conversely, if a borrower prepays a mortgage loan (including the One Post Office Square B Note), in whole or in part, after the Determination Date in any calendar month and does not pay interest on such prepayment through the following due date, then the shortfall in a full month's interest (net of related Servicing Fees) on such prepayment will constitute a "Prepayment Interest Shortfall." Prepayment Interest Excesses (to the extent not offset by Prepayment Interest Shortfalls) collected on the mortgage loans (including the One Post Office Square B Note) will be retained by the Master Servicer as additional servicing compensation. The Master Servicer will be required to deliver to the Paying Agent for deposit in the Distribution Account on each Master Servicer Remittance Date, without any right of reimbursement thereafter, a cash payment (a "Compensating Interest Payment") in an amount equal to the lesser of (i) the aggregate amount of Prepayment Interest Shortfalls incurred in connection with voluntary principal prepayments received in respect of the mortgage loans (including the One Post Office Square B Note) for the related Distribution Date, and (ii) the aggregate of (A) that portion of its Servicing Fees for the related Distribution Date that is, in the case of each and every mortgage loan and REO Loan for which such Servicing Fees are being paid in such Due Period, calculated at 0.02% per annum, and (B) all Prepayment Interest Excesses. If a Prepayment Interest Shortfall occurs as a result of the Master Servicer's allowing the related borrower to deviate from the terms of the related mortgage loan documents regarding principal prepayments (other than (X) subsequent to a default under the related mortgage loan documents, (Y) pursuant to applicable law or a court order, or (Z) at the request or with the consent of the Directing Certificateholder), then, for purposes of calculating the Compensating Interest Payment for the related Distribution Date, the amount in clause (ii) above shall be the aggregate of (A) all Servicing Fees for such Due Period, (B) all Prepayment Interest Excesses and (C) to the extent earned on principal prepayments, net investment earnings received by the Master Servicer during such Due Period. In no event will the rights of the Certificateholders to the offset of the aggregate Prepayment Interest Shortfalls be cumulative. MAINTENANCE OF INSURANCE To the extent permitted by the related mortgage loan and required by the Servicing Standards, the Master Servicer or the Special Servicer will be required to use efforts consistent with the Servicing Standards, to cause each borrower to maintain for the related Mortgaged Property all insurance coverage required by the terms of the mortgage loan documents, except to the extent that the failure of the related borrower to do so is an Acceptable Insurance Default (as defined below). This insurance coverage is required to be in the amounts, and from an insurer meeting the requirements, set forth in the related mortgage loan documents. If the borrower does not maintain such coverage, the Master Servicer or the Special Servicer, as the case may be, S-130 will be required to maintain such coverage to the extent such coverage is available at commercially reasonable rates, as determined by the Special Servicer in accordance with the Servicing Standard; provided that the Master Servicer will be obligated to maintain insurance against property damage resulting from terrorist or similar acts unless the borrower's failure is an Acceptable Insurance Default. The coverage of that kind of policy will be in an amount that is not less than the lesser of the full replacement cost of the improvements securing that mortgage loan or the outstanding principal balance owing on that mortgage loan, but in any event, in an amount sufficient to avoid the application of any co-insurance clause unless otherwise noted in the related mortgage loan documents. After the Master Servicer determines that a Mortgaged Property is located in an area identified as a federally designated special flood hazard area (and flood insurance has been made available), the Master Servicer will be required to use efforts consistent with the Servicing Standards to (1) cause each borrower to maintain (to the extent required by the related mortgage loan), and if the borrower does not so maintain, will be required to (2) itself maintain to the extent the Trustee has an insurable interest in the Mortgaged Property and is available at commercially reasonable rates (as determined by the Master Servicer in accordance with the Servicing Standards) a flood insurance policy in an amount representing coverage not less than the lesser of (1) the outstanding principal balance of the related mortgage loan and (2) the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended, but only to the extent that the related mortgage loan permits the lender to require the coverage and maintaining coverage is consistent with the Servicing Standards. Notwithstanding the foregoing, with respect to the mortgage loans which either (x) require the borrower to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the applicable borrower to maintain insurance in types and against such risks as the holder of such mortgage loan reasonably requires from time to time in order to protect its interests, the Master Servicer will be required to (A) actively monitor whether the insurance policies for the related Mortgaged Property contain exclusions in addition to those customarily found in insurance policies prior to September 11, 2001 ("Additional Exclusions"), (B) request the borrower to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance, and (C) notify the Special Servicer if any insurance policy contains Additional Exclusions or if any borrower fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standards that such failure is not an Acceptable Insurance Default, the Special Servicer will be required to notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. If the Special Servicer determines that such failure is an Acceptable Insurance Default, it will be required to inform each Rating Agency as to such conclusions for those mortgage loans that (i) have one of the ten (10) highest outstanding principal balances of the mortgage loans then included in the trust or (ii) comprise more than 5% of the outstanding principal balance of the mortgage loans then included in the trust. "Acceptable Insurance Default" means, with respect to any mortgage loan, a default under the related mortgage loan documents arising by reason of any failure on the part of the related borrower to maintain with respect to the related mortgaged real property specific insurance coverage with respect to, or an all-risk casualty insurance policy that does not specifically exclude, terrorist or similar acts, and/or any failure on the part of the related borrower to maintain with respect to the related mortgaged real property insurance coverage with respect to damages or casualties caused by terrorist or similar acts upon terms no less favorable than those in place as of July 1, 2003, as to which default the Master Servicer and the Special Servicer may forbear taking any enforcement action; provided that the Special Servicer has determined, in its reasonable judgment, based on inquiry consistent with the Servicing Standards and after consultation with the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, consultation with the One Post Office Square Operating Advisor), that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time S-131 commonly insured against for properties similar to the related mortgaged real property and located in or around the region in which such related mortgaged real property is located, or (b) such insurance is not available at any rate; provided, however, the Directing Certificateholder (or with respect to the One Post Office Square Whole Loan, the One Post Office Square Operating Advisor) will not have more than 30 days to respond to the Special Servicer's request for consultation; provided, further, that upon the Special Servicer's determination consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Directing Certificateholder or the One Post Office Square Operating Advisor, as applicable, the Special Servicer will not be required to do so. During the period that the Special Servicer is evaluating the availability of such insurance, the Master Servicer will not be liable for any loss related to its failure to require the borrower to maintain such insurance and will not be in default of its obligations as a result of such failure. The Special Servicer will be required to maintain (or cause to be maintained), fire and hazard insurance on each REO Property, to the extent obtainable, in an amount which is at least equal to the lesser of (1) the full replacement cost of the improvements on the REO Property, or (2) the outstanding principal balance owing on the related mortgage loan, and in any event, the amount necessary to avoid the operation of any co-insurance provisions. In addition, if the REO Property is located in an area identified as a federally designated special flood hazard area, the Special Servicer will be required to cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. The Pooling and Servicing Agreement provides that the Master Servicer and the Special Servicer may satisfy their respective obligations to cause each borrower to maintain a hazard insurance policy by maintaining a blanket or master single interest policy insuring against hazard losses on the mortgage loans and REO Properties. Any losses incurred with respect to mortgage loans or REO Properties due to uninsured risks (including earthquakes, mudflows and floods) or insufficient hazard insurance proceeds may adversely affect payments to Certificateholders and the holder of the One Post Office Square Companion Note. Any cost incurred by the Master Servicer or Special Servicer in maintaining a hazard insurance policy, if the borrower defaults on its obligation to do so, will be advanced by the Master Servicer as a Servicing Advance and will be charged to the related borrower. Generally, no borrower is required by the mortgage loan documents to maintain earthquake insurance on any Mortgaged Property and the Special Servicer will not be required to maintain earthquake insurance on any REO Properties. Any cost of maintaining that kind of required insurance or other earthquake insurance obtained by the Special Servicer will be paid out of a segregated custodial account created and maintained by the Special Servicer on behalf of the Trustee in trust for the Certificateholders and the holder of the One Post Office Square Companion Note (the "REO Account") or advanced by the Master Servicer as a Servicing Advance. The costs of the insurance may be recovered by the Master Servicer or Trustee, as applicable, from reimbursements received from the borrower or, if the borrower does not pay those amounts, as a Servicing Advance as 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, nor will any mortgage loan be subject to FHA insurance. MODIFICATIONS, WAIVER AND AMENDMENTS Except as otherwise set forth in this paragraph, the Special Servicer (or, with respect to non-material modifications, waivers and amendments, the Master Servicer) may not waive, modify or amend (or consent to waive, modify or amend) any provision of a mortgage loan S-132 which is not in default or as to which default is not reasonably foreseeable except for (1) the waiver of any due-on-sale clause or due-on-encumbrance clause to the extent permitted in the Pooling and Servicing Agreement, and (2) any waiver, modification or amendment more than three months after the Closing Date that would not be a "significant modification" of the mortgage loan within the meaning of Treasury Regulations Section 1.860G-2(b). The Master Servicer will not be permitted under the Pooling and Servicing Agreement to agree to any modifications, waivers and amendments without the consent of the Special Servicer except certain non-material consents and waivers described in the Pooling and Servicing Agreement. The Special Servicer will have the sole authority to approve any assumptions, transfers of interest, material modifications, management company changes, franchise affiliation changes, releases of performance escrows, additional indebtedness, due-on-sale or due-on-encumbrance provisions with respect to all mortgage loans (other than non-material modifications, waivers and amendments). If, and only if, the Special Servicer determines that a modification, waiver or amendment (including the forgiveness or deferral of interest or principal or the substitution or release of collateral or the pledge of additional collateral) of the terms of a Specially Serviced Mortgage Loan with respect to which a payment default or other material default has occurred or a payment default or other material default is, in the Special Servicer's judgment, reasonably foreseeable, is reasonably likely to produce a greater recovery on a net present value basis (the relevant discounting to be performed at the related Mortgage Rate) than liquidation of the Specially Serviced Mortgage Loan, then the Special Servicer may, but is not required to, agree to a modification, waiver or amendment of the Specially Serviced Mortgage Loan, subject to the restrictions and limitations described below (and with respect to each AB Loan and the One Post Office Square Loan, subject to any rights of the holder of the related Companion Loan, in the case of an AB Loan, and the holder of the One Post Office Square B Note, in the case of the One Post Office Square Loan, to consent to such modification, waiver or amendment). The Special Servicer will use its reasonable efforts to the extent reasonably possible to fully amortize a modified mortgage loan prior to the Rated Final Distribution Date. The Special Servicer may not agree to a modification, waiver or amendment of any term of any Specially Serviced Mortgage Loan if that modification, waiver or amendment would: (1) extend the maturity date of the Specially Serviced Mortgage Loan 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 leasehold estate and not the related fee interest, the date twenty years or, to the extent consistent with the Servicing Standard, giving due consideration to the remaining term of the ground lease, ten years, prior to the end of the current term of the ground lease, plus any unilateral options to extend; or (2) provide for the deferral of interest unless (A) interest accrues on the mortgage loan, generally, at the related Mortgage Rate and (B) the aggregate amount of deferred interest does not exceed 10% of the unpaid principal balance of the Specially Serviced Mortgage Loan. In the event of a modification which creates a deferral of interest on a mortgage loan and a capitalization of such interest deferral, the Pooling and Servicing Agreement will provide that the amount of deferred interest will be allocated to reduce the Distributable Certificate Interest of the Class or Classes (other than the Class X Certificates and the Class PS Certificates) with the latest alphabetical designation then outstanding, and to the extent so allocated, will be added to the Certificate Balance of the Class or Classes. The Special Servicer or the Master Servicer, as the case may be, will be required to notify each other, the Directing Certificateholder (or in the case of the One Post Office Square Loan, the One Post Office Square Operating Advisor and the holder of the One Post Office Square Companion Note), the applicable Mortgage Loan Seller, each Rating Agency, the Paying Agent and the Trustee of any modification, waiver or amendment of any term of any mortgage loan and will be required to deliver to the Trustee for deposit in the related mortgage file, an original S-133 counterpart of the agreement related to the modification, waiver or amendment, promptly following the execution of that agreement, all as set forth in the Pooling and Servicing Agreement. Copies of each agreement whereby the modification, waiver or amendment of any term of any mortgage loan is effected are required to be available for review during normal business hours at the offices of the Trustee. See "Description of the Certificates--Reports to Certificateholders; Certain Available Information" in this prospectus supplement. Any modification, extension, waiver or amendment of the payment terms of the One Post Office Square Whole Loan will be required to be structured so as to be consistent with the allocation and payment priorities in the related loan documents and the One Post Office Square Intercreditor Agreement, such that neither the trust as holder of the One Post Office Square Loan and the One Post Office Square B Note nor the holder of the One Post Office Square Companion Note gains a priority over the other such holder that is not reflected in the related loan documents and the One Post Office Square Intercreditor Agreement. Further, to the extent consistent with the Servicing Standards, taking into account the subordinate position of the One Post Office Square B Note, no waiver, reduction or deferral of any amounts due on the One Post Office Square Mortgage Loan will be permitted to be effected prior to the waiver, reduction or deferral of the entire corresponding item in respect of the One Post Office Square B Note and no reduction of the mortgage interest rate of the One Post Office Square Loan will be permitted to be effected prior to the reduction of the mortgage interest rate of the One Post Office Square B Note to the maximum extent possible. The modification, waiver or amendment of each AB Loan is subject to certain limitations set forth in the related AB Loan intercreditor agreement and such modification, in certain circumstances, may not be in a manner materially adverse to the holder of the related Companion Loan. REALIZATION UPON DEFAULTED MORTGAGE LOANS Within 30 days after a mortgage loan has become a Specially Serviced Mortgage Loan, the Special Servicer will be required to order an appraisal (which will not be required to be received within that 30-day period) and, not more than 30 days after receipt of such appraisal, determine the fair value of the mortgage loan in accordance with the Servicing Standards. The Special Servicer will be permitted to change, from time to time thereafter, its determination of the fair value of a mortgage loan in default based upon changed circumstances, new information or otherwise, in accordance with the Servicing Standards. In the event a mortgage loan is in default, the Certificateholder holding the largest aggregate Certificate Balance of the Controlling Class and the Special Servicer will each have an assignable option (a "Purchase Option") to purchase the mortgage loan in default from the trust fund (in the case of the One Post Office Square Loan, subject to (i) the purchase right of the One Post Office Square Operating Advisor to purchase the One Post Office Square Loan, (ii) with respect to each AB Loan, the purchase right of the holder of the related Companion Loan, and (iii) in the case of the mortgage loan identified as loan number 69 on Annex A-1 to this prospectus supplement, subject to the purchase rights of the holders of the mezzanine debt described under "Description of the Mortgage Pool--Additional Debt--Mezzanine Debt" in this prospectus supplement) at a price (the "Option Price") equal to, if the Special Servicer has not yet determined the fair value of the mortgage loan in default, (i) (a) the unpaid principal balance of the mortgage loan in default, plus (b) accrued and unpaid interest on such balance, plus (c) all Yield Maintenance Charges and/or prepayment penalties then due (except if the Purchase Option is exercised by the Controlling Class Certificateholder), plus (d) all related unreimbursed Servicing Advances, together with accrued and unpaid interest on all Advances, all accrued Special Servicing Fees allocable to such mortgage loan in default whether paid or unpaid, and any unreimbursed trust fund expenses in respect of such mortgage loan, or (ii) the fair value of the mortgage loan in default as determined by the Special Servicer, if the Special Servicer has made S-134 such fair value determination. The Certificateholder holding the largest aggregate Certificate Balance of the Controlling Class will have an exclusive right to exercise the Purchase Option for a specified period of time. Unless and until the Purchase Option with respect to a mortgage loan in default is exercised, the Special Servicer will be required to pursue such other resolution strategies available under the Pooling and Servicing Agreement, including workout and foreclosure, consistent with the Servicing Standard, but the Special Servicer will not be permitted to sell the mortgage loan in default other than pursuant to the exercise of the Purchase Option. If not exercised sooner, the Purchase Option with respect to any mortgage loan in default will automatically terminate upon (i) the related mortgagor's cure of all defaults on the mortgage loan in default, (ii) the acquisition on behalf of the trust fund of title to the related Mortgaged Property by foreclosure or deed in lieu of foreclosure or (iii) the modification or pay-off (full or discounted) of the mortgage loan in default in connection with a workout. In addition, the Purchase Option with respect to a mortgage loan in default 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 mortgage loan in default and the person expected to acquire the mortgage loan in default pursuant to such exercise is a Controlling Class Certificateholder, the Special Servicer or any of their respective affiliates (in other words, the Purchase Option has not been assigned to another unaffiliated person) and (b) the Option Price is based on the Special Servicer's determination of the fair value of the mortgage loan in default, then the Master Servicer will be required to determine if the Option Price represents a fair value for the mortgage loan in default. The Master Servicer will be entitled to receive, out of general collections on the mortgage loans and any REO Properties in the trust fund, a reasonable fee for each such determination not to exceed $2,500 per mortgage loan plus reasonable out-of-pocket costs and expenses; provided, however, with respect to any mortgage loan, the $2,500 fee shall be collectible once in any six month period. If title to any Mortgaged Property is acquired by the trust fund, the Special Servicer, on behalf of the trust fund, will be required to sell the Mortgaged Property prior to the close of the third calendar year beginning after the year of acquisition, unless (1) the Internal Revenue Service (the "IRS") grants an extension of time to sell the property or (2) the Trustee receives an opinion of independent counsel to the effect that the holding of the property by the trust fund longer than the above-referenced three year period will not result in the imposition of a tax on any of the Loan REMIC, the Upper-Tier REMIC or the Lower-Tier REMIC or cause the trust fund (or any of the Loan REMIC, the Upper-Tier REMIC or the Lower-Tier REMIC) to fail to qualify as a REMIC under the Code at any time that any Certificate is outstanding. Subject to the foregoing and any other tax-related limitations, pursuant to the Pooling and Servicing Agreement, 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. The Special Servicer will also be required to ensure that any Mortgaged Property acquired by the trust fund is administered so that it constitutes "foreclosure property" within the meaning of Code Section 860G(a)(8) at all times, that the sale of the property does not result in the receipt by the trust fund of any income from nonpermitted assets as described in Code Section 860F(a)(2)(B). If the trust fund acquires title to any Mortgaged Property, the Special Servicer, on behalf of the trust fund, will retain, at the expense of the trust fund, an independent contractor to manage and operate the property. The independent contractor generally will be permitted to perform construction (including renovation) on a foreclosed property only if the construction was at least 10% completed at the time default on the related mortgage loan became imminent. The retention of an independent contractor, however, will not relieve the Special Servicer of its obligation to manage the Mortgaged Property as required under the Pooling and Servicing Agreement. Generally, none of the Loan REMIC, the Upper-Tier REMIC or the Lower-Tier REMIC will be taxable on income received with respect to a Mortgaged Property acquired by the trust fund to the extent that it constitutes "rents from real property," within the meaning of Code Section S-135 856(c)(3)(A) and Treasury regulations under the Code. Rents from real property include fixed rents and rents based on the receipts or sales of a tenant but do not include the portion of any rental based on the net income or profit of any tenant or sub-tenant. No determination has been made whether rent on any of the Mortgaged Properties meets this requirement. Rents from real property include charges for services customarily furnished or rendered in connection with the rental of real property, whether or not the charges are separately stated. Services furnished to the tenants of a particular building will be considered as customary if, in the geographic market in which the building is located, tenants in buildings which are of similar Class are customarily provided with the service. No determination has been made whether the services furnished to the tenants of the Mortgaged Properties are "customary" within the meaning of applicable regulations. It is therefore possible that a portion of the rental income with respect to a Mortgaged Property owned by the trust fund would not constitute rents from real property, or that none of such income would qualify if a separate charge is not stated for such non-customary services or they are not performed by an independent contractor. Rents from real property also do not include income from the operation of a trade or business on the Mortgaged Property, such as a hotel. Any of the foregoing types of income may instead constitute "net income from foreclosure property," which would be taxable to the Lower-Tier REMIC, or if applicable, the Loan REMIC, at the highest marginal federal corporate rate (currently 35%) and may also be subject to state or local taxes. The Pooling and Servicing Agreement provides that the Special Servicer will be permitted to cause the Lower-Tier REMIC, or if applicable, the Loan REMIC, to earn "net income from foreclosure property" that is subject to tax if it determines that the net after-tax benefit to Certificateholders is greater than another method of operating or net leasing the Mortgaged Property. Because these sources of income, if they exist, are already in place with respect to the Mortgaged Properties, it is generally viewed as beneficial to Certificateholders to permit the trust fund to continue to earn them if it acquires a Mortgaged Property, even at the cost of this tax. These taxes would be chargeable against the related income for purposes of determining the proceeds available for distribution to holders of Certificates. See "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates--Taxes That May Be Imposed on the REMIC Pool" in the prospectus. To the extent that Liquidation Proceeds collected with respect to any mortgage loan (including the One Post Office Square B Note, if applicable) are less than the sum of: (1) the outstanding principal balance of the mortgage loan, (2) interest accrued on the mortgage loan and (3) the aggregate amount of outstanding reimbursable expenses (including any (i) unpaid servicing compensation, (ii) unreimbursed Servicing Advances, (iii) accrued and unpaid interest on all Advances and (iv) additional trust fund expenses) incurred with respect to the mortgage loan, the trust fund will realize a loss in the amount of the shortfall. The Trustee, the Master Servicer and/or the Special Servicer will be entitled to reimbursement out of the Liquidation Proceeds recovered on any mortgage loan, prior to the distribution of those Liquidation Proceeds to Certificateholders, of any and all amounts that represent unpaid servicing compensation in respect of the related mortgage loan, certain unreimbursed expenses incurred with respect to the mortgage loan and any unreimbursed Advances (including interest thereon) made with respect to the mortgage loan. In addition, amounts otherwise distributable on the Certificates will be further reduced by interest payable to the Master Servicer, the Special Servicer or the Trustee on these Advances. If any Mortgaged Property suffers damage and the proceeds, if any, of the related hazard insurance policy are insufficient to restore fully the damaged property, the Master Servicer will not be required to advance the funds to effect the restoration unless (1) the Special Servicer determines that the restoration will increase the proceeds to Certificateholders on liquidation of the mortgage loan after reimbursement of the Special Servicer or the Master Servicer, as the case may be, for its expenses and (2) the Master Servicer has not determined that the advance would be a Nonrecoverable Advance. S-136 INSPECTIONS; COLLECTION OF OPERATING INFORMATION The Master Servicer will be required to perform, or cause to be performed (at its own expense), physical inspections of each Mortgaged Property on an annual basis commencing in calendar year 2004; provided that if a physical inspection has been performed by the Special Servicer in the previous 12 months the Master Servicer will not be required to perform or cause to be performed, such physical inspection; provided, further, however, that if any scheduled payment becomes more than 60 days delinquent on the related mortgage loan, the Special Servicer is required to inspect the related Mortgaged Property as soon as practicable after the mortgage loan becomes a Specially Serviced Mortgage Loan and annually thereafter for so long as the mortgage loan remains a Specially Serviced Mortgage Loan (the cost of which inspection will be reimbursed first from default charges on the related mortgage loan and then from the Certificate Account as an expense of the trust fund, and, in the case of the One Post Office Square Whole Loan, also an expense of the holder of the One Post Office Square Companion Note). The Special Servicer or the Master 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 of which it has knowledge, of any sale, transfer or abandonment of the Mortgaged Property, of any material change in the condition of the Mortgaged Property, or of any material waste committed on the Mortgaged Property. With respect to each mortgage loan that requires the borrower to deliver those statements, the Special Servicer or the Master Servicer, as applicable, is also required to use reasonable efforts to collect and review the annual Operating Statements of the related Mortgaged Property. Most of the Mortgages obligate the related borrower to deliver annual property Operating Statements. However, we cannot assure you that any Operating Statements required to be delivered will in fact be delivered, nor is the Special Servicer or the Master Servicer likely to have any practical means of compelling the delivery in the case of an otherwise performing mortgage loan. Copies of the inspection reports and Operating Statements referred to above which are delivered to the Directing Certificateholder and the Paying Agent will be available for review by Certificateholders during normal business hours at the offices of the Paying Agent. See "Description of the Certificates--Reports to Certificateholders; Certain Available Information" in this prospectus supplement. CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE SPECIAL SERVICER AND THE DEPOSITOR The Pooling and Servicing Agreement permits the Master Servicer and the Special Servicer to resign from their respective obligations only upon (a) the appointment of, and the acceptance of the appointment by, a successor and receipt by the Trustee of written confirmation from each Rating Agency that the resignation and appointment will, in and of itself, not cause a downgrade, withdrawal or qualification of the rating assigned by such Rating Agency to any Class of certificates; and the approval of such successor by the Directing Certificateholder, which approval shall not be unreasonably withheld, or (b) a determination that their respective obligations are no longer permissible with respect to the Master Servicer or the Special Servicer, as the case may be, under applicable law. No resignation will become effective until the Trustee or other successor has assumed the obligations and duties of the resigning Master Servicer or Special Servicer, as the case may be, under the Pooling and Servicing Agreement. The Pooling and Servicing Agreement will provide that none of the Master Servicer, the Special Servicer, the Depositor or any member, manager, director, officer, employee or agent of any of them will be under any liability to the trust fund or the Certificateholders for any action taken, or not taken, in good faith pursuant to the Pooling and Servicing Agreement or for errors in judgment; provided, however, that none of the Master Servicer, the Special Servicer, the Depositor or similar person will be protected against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of S-137 obligations or duties under the Pooling and Servicing Agreement or by reason of negligent disregard of the obligations and duties. The Pooling and Servicing Agreement will also provide that the Master Servicer, the Special Servicer (or the Special Servicer's members and managers), the Depositor and any director, officer, employee or agent of any of them will be entitled to indemnification by the trust fund against any loss, liability or expense incurred in connection with any legal action or claim that relates to the Pooling and Servicing Agreement or the Certificates; provided, however, that the indemnification will not extend to any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance of obligations or duties under the Pooling and Servicing Agreement, by reason of negligent disregard of such party's obligations or duties, or in the case of the Depositor and any of its directors, officers, members, managers, employees and agents, any violation by any of them of any state or federal securities law. In addition, the Pooling and Servicing Agreement will provide that none of the Master Servicer, the Special Servicer or the Depositor will be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its respective responsibilities under the Pooling and Servicing Agreement or that in its opinion may involve it in any expense or liability not reimbursed by the trust. However, each of the Master Servicer, the Special Servicer and the Depositor will be permitted, in the exercise of its discretion, to undertake any action that it may deem necessary or desirable with respect to the enforcement and/or protection of the rights and duties of the parties to the Pooling and Servicing Agreement and the interests of the Certificateholders (and in the case of the One Post Office Square Whole Loan, the rights of the Certificateholders and the holders of the One Post Office Square Companion Note (as a collective whole)) under the Pooling and Servicing Agreement; provided, however, that if the One Post Office Square Whole Loan and/or holder of the One Post Office Square Companion Note or the holder of the One Post Office Square B Note are involved, such expenses, costs and liabilities will be payable out of the related separate custodial account maintained with respect to the One Post Office Square Whole Loan and will also be payable out of the Certificate Account if amounts on deposit in the separate custodial account maintained with respect to such Whole Loan are insufficient therefor but, if the amount relates to the One Post Office Square Loan, then any subsequent recovery on that mortgage loan will be used to reimburse the trust for the reimbursement that the trust made. In that event, the legal expenses and costs of the action, and any liability resulting therefrom, will be expenses, costs and liabilities of the Certificateholders, and the Master Servicer, the Special Servicer or the Depositor, as the case may be, will be entitled to charge the Certificate Account for the expenses (but, if and to the extent the matter relates solely to the One Post Office Square Companion Note, only if amounts in the separate custodial account maintained with respect to the One Post Office Square Whole Loan are insufficient). Pursuant to the Pooling and Servicing Agreement, the Master Servicer and Special Servicer will each be required to maintain a fidelity bond and errors and omissions policy or their equivalent that provides coverage against losses that may be sustained as a result of an officer's or employee's misappropriation of funds or errors and omissions, subject to certain limitations as to amount of coverage, deductible amounts, conditions, exclusions and exceptions permitted by the Pooling and Servicing Agreement. Notwithstanding the foregoing, the Master Servicer will be allowed to self-insure with respect to an errors and omission policy and a fidelity bond so long as certain conditions set forth in the Pooling and Servicing Agreement are met. Any person into which the Master Servicer, the Special Servicer or the Depositor may be merged or consolidated, or any person resulting from any merger or consolidation to which the Master Servicer, the Special Servicer or the Depositor is a party, or any person succeeding to the business of the Master Servicer, the Special Servicer or the Depositor, will be the successor of the Master Servicer, the Special Servicer or the Depositor, as the case may be, under the Pooling and Servicing Agreement. The Master Servicer and the Special Servicer may have other normal business relationships with the Depositor or the Depositor's affiliates. S-138 EVENTS OF DEFAULT "Events of Default" under the Pooling and Servicing Agreement with respect to the Master Servicer or the Special Servicer, as the case may be, will include, without limitation: (a) (i) any failure by the Master Servicer to make a required deposit to the Certificate Account (or the separate custodial account maintained with respect to the One Post Office Square Whole Loan) on the day such deposit was first required to be made, which failure is not remedied within one business day, or (ii) any failure by the Master Servicer to deposit into, or remit to the Paying Agent for deposit into, the Distribution Account any amount required to be so deposited or remitted, which failure is not remedied by 11:00 a.m. New York City time on the relevant Distribution Date; (b) any failure by the Special Servicer to deposit into the REO Account within one business day after the day such deposit is required to be made, or to remit to the Master Servicer for deposit in the Certificate Account (or the separate custodial account maintained with respect to the One Post Office Square Whole Loan) any such remittance required to be made by the Special Servicer on the day such remittance is required to be made under the Pooling and Servicing Agreement; (c) any failure by the Master Servicer or the Special Servicer duly to observe or perform in any material respect any of its other covenants or obligations under the Pooling and Servicing Agreement, which failure continues unremedied for thirty days (ten days in the case of the Master Servicer's failure to make a Servicing Advance or fifteen days in the case of a failure to pay the premium for any insurance policy required to be maintained under the Pooling and Servicing Agreement) after written notice of the failure has been given to the 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 Servicer or the Special Servicer, as the case may be, with a copy to each other party to the related Pooling and Servicing Agreement, by Certificateholders of any Class, evidencing as to that Class, Percentage Interests aggregating not less than 25%; provided, however, if that failure is capable of being cured and the Master Servicer or Special Servicer, as applicable, is diligently pursuing that cure, that 30-day period will be extended an additional 30 days; (d) any breach on the part of the 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 and which continues unremedied for a period of 30 days after the date on which notice of that breach, requiring the same to be remedied, will have been given to the Master Servicer or the Special Servicer, as the case may be, by the Depositor, the Paying Agent or the Trustee, or to the Master Servicer, the Special Servicer, the Depositor, the Paying Agent and the Trustee by the Certificateholders of any Class, evidencing as to that Class, Percentage Interests aggregating not less than 25%; provided, however, if that breach is capable of being cured and the 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, marshaling of assets and liabilities or similar proceedings in respect of or relating to the Master Servicer or the Special Servicer, and certain actions by or on behalf of the Master Servicer or the Special Servicer indicating its insolvency or inability to pay its obligations; (f) Moody's places its ratings on any Class of Certificates on a "watch" status in contemplation of a ratings downgrade or withdrawal, citing servicing or special servicing concerns, as applicable, as the sole or a contributory factor in such rating action and such "watch" status is not rescinded within 90 days (or such longer period as would not, as confirmed by Moody's in writing, result in a qualification, downgrade or withdrawal of one or more ratings assigned by Moody's to the Certificates); S-139 (g) Moody's downgrades the then-current ratings of any Class of Certificates, citing servicing or special servicing concerns, as applicable, as the sole or a contributory factor in such downgrade; or (h) the Master Servicer or Special Servicer is removed from S&P's or Moody's approved master servicer list or approved special servicer list, as applicable, and is not reinstated to the approved master servicer or special servicer list, as applicable, within 30 days of such removal. RIGHTS UPON EVENT OF DEFAULT If an Event of Default occurs with respect to the Master Servicer or the Special Servicer under the Pooling and Servicing Agreement, then, so long as the Event of Default remains unremedied, the Depositor or the Trustee will be authorized, and at the written direction of Certificateholders entitled to not less than 51% of the Voting Rights or the Directing Certificateholder, the Trustee will be required, to terminate all of the rights and obligations of the defaulting party as Master Servicer or Special Servicer, as applicable (other than certain rights in respect of indemnification and certain items of servicing compensation), under the Pooling and Servicing Agreement. The Trustee, or the Master Servicer with respect to a termination of the Special Servicer, will then succeed to all of the responsibilities, duties and liabilities of the defaulting party as Master Servicer or Special Servicer, as applicable, under the Pooling and Servicing Agreement and will be entitled to similar compensation arrangements. If the Trustee is unwilling or unable so to act, it may (or, at the written request of the Directing Certificateholder or Certificateholders entitled to not less than 51% of the Voting Rights, it will be required to) appoint, or petition a court of competent jurisdiction to appoint, a loan servicing institution or other entity that would not result in the downgrade, qualification or withdrawal of the ratings assigned to any Class of Certificates by either Rating Agency to act as successor to the Master Servicer or Special Servicer, as the case may be, under the Pooling and Servicing Agreement and which has been approved by the Directing Certificateholder, which approval shall not be unreasonably withheld. Notwithstanding anything to the contrary contained in this section, if an event of default on the part of the Master Servicer affects only the One Post Office Square Companion Note, the Master Servicer may not be terminated but, at the direction of the Trustee (acting at the direction of certain holders of the One Post Office Square Companion Note or the One Post Office Square B Note, as applicable), must appoint a sub-servicer that will be responsible for servicing the related loan. No Certificateholder will have any right under the Pooling and Servicing Agreement to institute any proceeding with respect to the Certificates or the Pooling and Servicing Agreement unless the holder previously has given to the Trustee written notice of default and the continuance of the default and unless the holders of Certificates of any Class evidencing not less than 25% of the aggregate Percentage Interests constituting the Class have made written request upon the Trustee to institute a proceeding in its own name (as Trustee) and have offered to the Trustee reasonable indemnity, and the Trustee for 60 days after receipt of the request and indemnity has neglected or refused to institute the proceeding. However, the Trustee will be under no obligation to exercise any of the trusts or powers vested in it by the Pooling and Servicing Agreement or to institute, conduct or defend any related litigation at the request, order or direction of any of the Certificateholders, unless the Certificateholders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred as a result. AMENDMENT The Pooling and Servicing Agreement may be amended by the parties thereto, without the consent of any of the holders of Certificates: (a) to cure any ambiguity to the extent the ambiguity does not materially and adversely affect the interests of any Certificateholder; S-140 (b) to correct or supplement any of its provisions which may be inconsistent with any other provisions of the Pooling and Servicing Agreement or this prospectus supplement or to correct any error; (c) to change the timing and/or nature of deposits in the Certificate Account, the separate custodial account maintained in respect of the One Post Office Square Whole Loan, the Distribution Accounts or the REO Account, provided that (A) the Master Servicer Remittance Date shall in no event be later than the business day prior to the related Distribution Date, (B) the change would not adversely affect in any material respect the interests of any Certificateholder or the holder of the One Post Office Square Companion Note, if applicable, as evidenced by an opinion of counsel (at the expense of the party requesting the amendment) and (C) the change would not result in the downgrade, qualification or withdrawal of the ratings assigned to any Class of Certificates by either Rating Agency, as evidenced by a letter from each Rating Agency; (d) to modify, eliminate or add to any of its provisions (i) to the extent as will be necessary to maintain the qualification of any of the Loan REMIC, the Upper-Tier REMIC or the Lower-Tier REMIC as a REMIC, to maintain the grantor trust portion of the trust fund as a grantor trust or to avoid or minimize the risk of imposition of any tax on the trust fund, provided that the Trustee has received an opinion of counsel (at the expense of the party requesting the amendment) to the effect that (1) the action is necessary or desirable to maintain such qualification or to avoid or minimize such risk and (2) the action will not adversely affect in any material respect the interests of any holder of the Certificates or (ii) to restrict (or to remove any existing restrictions with respect to) the transfer of the Residual Certificates, provided that the Depositor has determined that the amendment will not give rise to any tax with respect to the transfer of the Residual Certificates to a non-permitted transferee (see "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates--Taxation of Residual Certificates--Tax-Related Restrictions on Transfer of Residual Certificates" in the prospectus); (e) to make any other provisions with respect to matters or questions arising under the Pooling and Servicing Agreement or any other change, provided that the required action will not adversely affect in any material respect the interests of any Certificateholder, as evidenced by an opinion of counsel and written confirmation that the change would not result in the downgrade, qualification or withdrawal of the ratings assigned to any Class of Certificates by either Rating Agency; and (f) to amend or supplement any provision of the Pooling and Servicing Agreement to the extent necessary to maintain the ratings assigned to each Class of Certificates by each Rating Agency, as evidenced by written confirmation that the change would not result in the downgrade, qualification or withdrawal of the ratings assigned to any Class of Certificates by either Rating Agency; provided, that no amendment may be made that changes in any manner the obligations of any Mortgage Loan Seller under a Purchase Agreement without the consent of the applicable Mortgage Loan Seller. The Pooling and Servicing Agreement may also be amended by the parties thereto with the consent of the holders of Certificates of each Class affected thereby evidencing, in each case, not less than 662/3% of the aggregate Percentage Interests constituting the Class for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Pooling and Servicing Agreement or of modifying in any manner the rights of the holders of the Certificates, except that the amendment may not (1) reduce in any manner the amount of, or delay the timing of, payments received on the mortgage loans which are required to be distributed on a Certificate of any Class without the consent of the holder of that Certificate, or which are required to be distributed to a holder of a Companion Loan, without the consent of such holder, (2) reduce the aforesaid percentage of Certificates of any Class the holders of which are required to consent to the amendment or remove the requirement to obtain consent of the S-141 holders of the Companion Loans, without the consent of the holders of all Certificates of that Class then outstanding or the holders of the Companion Loans, as applicable, (3) adversely affect the Voting Rights of any Class of Certificates, without the consent of the holders of all Certificates of that Class then outstanding, (4) change in any manner the obligations of any Mortgage Loan Seller under a Purchase Agreement without the consent of the applicable Mortgage Loan Seller, or (5) without the consent of 100% of the holders of Certificates and all the holders of the Companion Loans or written confirmation that such amendment would not result in the downgrade, qualification or withdrawal of the ratings assigned to any Class of Certificates by either Rating Agency, amend the Servicing Standard. Notwithstanding the foregoing, no party will be required to consent to any amendment to the Pooling and Servicing Agreement without having first received an opinion of counsel (at the trust fund's expense) to the effect that the amendment is permitted under the Pooling and Servicing Agreement and that the amendment or the exercise of any power granted to the Master Servicer, the Special Servicer, the Depositor, the Trustee or any other specified person in accordance with the amendment, will not result in the imposition of a tax on any portion of the trust fund or cause any of the Loan REMIC, the Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as a REMIC or cause the grantor trust portion of the trust fund to fail to qualify as a grantor trust. S-142 YIELD AND MATURITY CONSIDERATIONS YIELD CONSIDERATIONS General. The yield on any Offered Certificate will depend on: (1) the Pass-Through Rate for the Certificate; (2) the price paid for the Certificate and, if the price was other than par, the rate and timing of payments of principal on the Certificate; (3) the aggregate amount of distributions on the Certificate; and (4) the aggregate amount of Collateral Support Deficit amounts allocated to a Class of Offered Certificates. Pass-Through Rate. The Pass-Through Rate applicable to each Class of Offered Certificates for any Distribution Date will equal the rate set forth on the cover of this prospectus supplement. See "Description of the Certificates" in this prospectus supplement. Rate and Timing of Principal Payments. The yield to holders of Offered Certificates that are purchased at a discount or premium 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 mortgagors and involuntary liquidations). As described in this prospectus supplement, the Group 1 Principal Distribution Amount (and, after the Class A-1A certificates have been reduced to zero, any remaining Group 2 Principal Distribution Amount) for each Distribution Date will generally be distributable first, in respect of the Class A-1 certificates until the Certificate Balance thereof is reduced to zero, and second, in respect of the Class A-2 certificates until the Certificate Balance thereof is reduced to zero; and the Group 2 Principal Distribution Amount (and, after the Class A-2 certificates have been reduced to zero, any remaining Group 1 Principal Distribution Amount) for each Distribution Date will generally be distributable to the Class A-1A certificates. After those distributions, the remaining Principal Distribution Amount with respect to the pool of mortgage loans will generally be distributable entirely in respect of the Class B, Class C, Class D and Class E certificates and then the Non-Offered Certificates (other than the Class A-1A, Class X-1 and Class X-2 certificates), in that order, in each case until the Certificate Balance of such Class of Certificates is reduced to zero. Consequently, the rate and timing of principal payments on the mortgage loans will in turn be affected by their amortization schedules, Lockout Periods, Yield Maintenance Charges, the dates on which balloon payments are due, any extensions of maturity dates by the Master Servicer or the Special Servicer and the rate and timing of principal prepayments and other unscheduled collections on the mortgage loans (including for this purpose, collections made in connection with liquidations of mortgage loans due to defaults, casualties or condemnations affecting the Mortgaged Properties, or purchases of mortgage loans out of the trust fund). Furthermore, because the amount of principal that will be distributed to the Class A-1, Class A-2 and Class A-1A certificates will generally be based upon the particular Loan Group in which the related mortgage loan is deemed to be included, the yield on the Class A-1 and Class A-2 certificates will be particularly sensitive to prepayments on mortgage loans in Loan Group 1 and the yield on the Class A-1A certificates will be particularly sensitive to prepayments on mortgage loans in Loan Group 2. In addition, although the borrowers under the ARD Loans may have certain incentives to prepay the ARD Loans on their Anticipated Repayment Dates, we cannot assure you 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 Repayment Date will not be an event of default under the terms of the ARD Loans, and pursuant to the terms of the Pooling and Servicing Agreement, neither the Master Servicer nor the Special Servicer will be permitted to take any enforcement action with respect to a borrower's failure to pay Excess Interest, other than requests for collection, until the scheduled maturity of the respective ARD Loan; provided, that the Master Servicer or the Special Servicer, as the case may be, may take action to enforce the trust fund's right to apply excess cash flow to principal in accordance with the terms of the ARD Loan documents. See "Risk Factors--Borrower May Be Unable to Repay Remaining Principal Balance on Maturity Date or Anticipated Repayment Date" in this prospectus supplement. Prepayments and, assuming the respective stated maturity dates for the mortgage loans have not occurred, liquidations and purchases of the mortgage loans, will result in distributions on the S-143 Offered Certificates of amounts that would otherwise be distributed over the remaining terms of the mortgage loans. Defaults on the mortgage loans, particularly at or near their stated maturity dates, may result in significant delays in payments of principal on the mortgage loans (and, accordingly, on the Offered Certificates) while work-outs are negotiated or foreclosures are completed. See "Servicing of the Mortgage Loans--Modifications, Waiver and Amendments" and "--Realization Upon Defaulted Mortgage Loans" in this prospectus supplement and "Certain Legal Aspects of 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), we cannot assure you as to the rate of principal payments or the rate of principal prepayments in particular. We are 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. The extent to which the yield to maturity of any Class of Offered Certificates may vary from the anticipated yield will depend upon the degree to which the Certificates are purchased at a discount or premium and when, and to what degree, payments of principal on the mortgage loans (with respect to the Class A-1, Class A-2 and Class A-1A certificates, the Loan Group in which such mortgage loan is deemed to be included) are in turn distributed on the Certificates. An investor should consider, in the case of any Offered Certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on the mortgage loans will result in an actual yield to the investor that is lower than the anticipated yield and, in the case of any Offered Certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments on the mortgage loans will result in an actual yield to the investor that is lower than the anticipated yield. In general, the earlier a payment of principal is distributed 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 distributed on an 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. Principal payments on the mortgage loans would also affect the yield on any Class of Offered Certificates that has a Pass-Through Rate equal to, based on, or limited by the WAC Rate to the extent the WAC Rate is reduced below the fixed Pass-Through Rate for that Class for one or more future periods. The Pass-Through Rates on those Classes of Certificates may be limited by the WAC Rate even if principal prepayments do not occur. 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 by (i) with respect to the One Post Office Square Whole Loan, the holders of the Class PS Certificates and then to the holders of the Class NR, Class P, Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C and Class B certificates, in that order, and (ii) with respect to any other mortgage loan, the holders of the Class NR, Class P, Class N, Class M, Class L, Class K, Class J, Class H, Class G, Class F, Class E, Class D, Class C and Class B certificates, in that order, in each case to the extent of amounts otherwise distributable in respect of the Class of Certificates. In the event of the reduction of the Certificate Balances of all those Classes of Certificates to zero, the resulting losses and shortfalls will then be borne, pro rata, by the Class A Certificates. Certain Relevant Factors. The rate and timing of principal payments and defaults and the severity of losses on the mortgage loans may be affected by a number of factors, including, without limitation, prevailing interest rates, the terms of the mortgage loans (for example, due-on-sale clauses, Lockout Periods or Yield Maintenance Charges and amortization terms that require balloon payments), the demographics and relative economic vitality of the areas in which the Mortgaged Properties are located and the general supply and demand for rental properties in those 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 S-144 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 the pool of mortgage loans is likely to be affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level as the mortgage loans. When the prevailing market interest rate is below a mortgage coupon, a borrower may have an increased incentive to refinance its mortgage loan. However, under all of the mortgage loans, voluntary prepayments are subject to Lockout Periods and/or Yield Maintenance Charges. See "Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage Loans--Prepayment Provisions" in this prospectus supplement. In any case, we cannot assure you that the related borrowers will refrain from prepaying their mortgage loans due to the existence of Yield Maintenance Charges or prepayment premiums, or that involuntary prepayments will not occur. Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some borrowers may sell Mortgaged Properties in order to realize their equity in the Mortgaged Property, to meet cash flow needs or to make other investments. In addition, some borrowers may be motivated by federal and state tax laws (which are subject to change) to sell Mortgaged Properties prior to the exhaustion of tax depreciation benefits. The Depositor makes no representation as to the particular factors that will affect the rate and timing of prepayments and defaults on the mortgage loans, as to the relative importance of those factors, as to the percentage of the principal balance of the mortgage loans that will be prepaid or as to which a default will have occurred as of any date or as to the overall rate of prepayment or default on the mortgage loans. Delay in Payment of Distributions. Because each monthly distribution is made on each Distribution Date, which is at least 12 days after 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 the prices did not account for the delay). Unpaid Distributable Certificate Interest. As described under "Description of the Certificates--Distributions--Priority" in this prospectus supplement, if the portion of the Available Distribution Amount distributable in respect of interest on any Class of Offered Certificates on any Distribution Date is less than the Distributable Certificate Interest then payable for that class, the shortfall will be distributable to holders of that Class of Certificates on subsequent Distribution Dates, to the extent of available funds. Any shortfall will not bear interest, however, so it will negatively affect the yield to maturity of the Class of Certificates for so long as it is outstanding. WEIGHTED AVERAGE LIFE The weighted average life of an Offered Certificate refers to the average amount of time that will elapse from the date of its issuance until each dollar allocable to principal of the Certificate is distributed to the related investor. The weighted average life of an Offered Certificate will be influenced by, among other things, the rate at which principal on the mortgage loans is paid or otherwise collected, which may be in the form of scheduled amortization, voluntary prepayments, Insurance and Condemnation Proceeds and Liquidation Proceeds. As described in this prospectus supplement, the Group 1 Principal Distribution Amount (and, after the Class A-1A certificates have been reduced to zero, any remaining Group 2 Principal Distribution Amount) for each Distribution Date will generally be distributable first, in respect of the Class A-1 certificates until the Certificate Balance thereof is reduced to zero, and second, in respect of the Class A-2 certificates until the Certificate Balance thereof is reduced to zero; and the Group 2 Principal Distribution Amount (and, after the Class A-2 certificates have been reduced to zero, any remaining Group 1 Principal Distribution Amount) for each Distribution Date will generally be distributable to the Class A-1A certificates. After those distributions, the S-145 remaining Principal Distribution Amount with respect to all the mortgage loans will generally be distributable entirely in respect of the Class B, Class C, Class D and Class E certificates and then the Non-Offered Certificates (other than the Class A-1A, Class X-1 and Class X-2 certificates), in that order, in each case until the Certificate Balance of each such Class of Certificates is reduced to zero. Prepayments on mortgage loans may be measured by a prepayment standard or model. The model used in this prospectus supplement is the "Constant Prepayment Rate" or "CPR" model. The CPR model represents an assumed constant annual rate of prepayment each month, expressed as a per annum percentage of the then-scheduled principal balance of the pool of mortgage loans. As used in each of the following tables, the column headed "0% CPR" assumes that none of the mortgage loans is prepaid before its maturity date or the Anticipated Repayment Date, as the case may be. The columns headed "3% CPR," "6% CPR," "9% CPR" and "12% CPR" assume that prepayments on the mortgage loans are made at those levels of CPR following the expiration of any Lockout Period. We cannot assure you, however, that prepayments of the mortgage loans will conform to any level of CPR, and no representation is made that the mortgage loans will prepay at the levels of CPR shown or at any other prepayment rate. The following tables indicate the percentage of the initial Certificate Balance of each Class of the Offered Certificates that would be outstanding after each of the dates shown at various CPRs and the corresponding weighted average life of each Class of Certificates. The tables have been prepared on the basis of the following assumptions, among others: (a) scheduled periodic payments including payments due at maturity of principal and/or interest on the mortgage loans will be received on a timely basis and will be distributed on the 15th day of the related month, beginning in October 2003; (b) the Mortgage Rate in effect for each mortgage loan as of the cut-off date will remain in effect to the maturity date or the Anticipated Repayment Date, as the case may be, and will be adjusted as required pursuant to the definition of Mortgage Rate; (c) no Mortgage Loan Seller will be required to repurchase any mortgage loan, and none of the holders of the Controlling Class (or any other Certificateholder), the Special Servicer, the Master Servicer or the holders of the Class LR certificates will exercise its option to purchase all the mortgage loans and thereby cause an early termination of the trust fund and the One Post Office Square Operating Advisor will not exercise its option to purchase the One Post Office Square Loan; (d) any principal prepayments on the mortgage loans will be received on their respective due dates after the expiration of any applicable Lockout Period at the respective levels of CPR set forth in the tables; (e) no Yield Maintenance Charges are included in any allocations or calculations; (f) the Closing Date is September 30, 2003; (g) the ARD Loans prepay in full on their Anticipated Repayment Dates; (h) the Pass-Through Rates and initial Certificate Balances of the respective classes of Certificates are as described in this prospectus supplement; and (i) the Administrative Cost Rate is calculated on the Stated Principal Balance of the mortgage loans and in the same manner as interest is calculated on the mortgage loans. To the extent that the mortgage loans have characteristics that differ from those assumed in preparing the tables set forth below, a Class of Offered Certificates may mature earlier or later than indicated by the tables. It is highly unlikely that the mortgage loans will prepay at any constant rate until maturity or that all the mortgage loans will prepay at the same rate. In addition, variations in the actual prepayment experience and the balance of the mortgage loans that prepay may increase or decrease the percentages of initial Certificate Balances (and S-146 weighted average lives) shown in the following tables. These variations may occur even if the average prepayment experience of the mortgage loans were to equal any of the specified CPR percentages. Investors are urged to conduct their own analyses of the rates at which the mortgage loans may be expected to prepay. Based on the foregoing assumptions, the following tables indicate the resulting weighted average lives of each Class of Offered Certificates and set forth the percentage of the initial Certificate Balance of the Class of the Offered Certificate that would be outstanding after each of the dates shown at the indicated CPRs. PERCENT OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-1 CERTIFICATES AT THE RESPECTIVE CPRS SET FORTH BELOW:
DATE 0% CPR 3% CPR 6% CPR 9% CPR 12% CPR ----------------------------------- -------------- -------------- -------------- -------------- -------------- Initial Percentage ................ 100 100 100 100 100 September 15, 2004 ................ 95 95 95 95 94 September 15, 2005 ................ 91 90 89 89 88 September 15, 2006 ................ 85 84 83 83 82 September 15, 2007 ................ 79 78 77 76 76 September 15, 2008 ................ 54 53 51 50 49 September 15, 2009 ................ 40 39 39 39 38 September 15, 2010 ................ 28 28 27 26 26 September 15, 2011 ................ 22 21 20 19 18 September 15, 2012 ................ 15 14 12 11 10 September 15, 2013 ................ 0 0 0 0 0 September 15, 2014 ................ 0 0 0 0 0 Weighted Average Life (years)(1)... 5.70 5.62 5.55 5.48 5.41 Estimated Month of First Principal ........................ 10/15/2003 10/15/2003 10/15/2003 10/15/2003 10/15/2003 Estimated Month of Maturity ....... 6/15/2013 6/15/2013 6/15/2013 6/15/2013 6/15/2013
---------- (1) The weighted average life of the Class A-1 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-1 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the principal balance of the Class A-1 certificates. S-147 PERCENT OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS A-2 CERTIFICATES AT THE RESPECTIVE CPRS SET FORTH BELOW:
DATE 0% CPR 3% CPR 6% CPR 9% CPR 12% CPR -------------------------------------- ------------- ------------- ------------- ------------- ------------- Initial Percentage ................... 100 100 100 100 100 September 15, 2004 ................... 100 100 100 100 100 September 15, 2005 ................... 100 100 100 100 100 September 15, 2006 ................... 100 100 100 100 100 September 15, 2007 ................... 100 100 100 100 100 September 15, 2008 ................... 100 100 100 100 100 September 15, 2009 ................... 100 100 100 100 100 September 15, 2010 ................... 100 100 100 100 100 September 15, 2011 ................... 100 100 100 100 100 September 15, 2012 ................... 100 100 100 100 100 September 15, 2013 ................... 0 0 0 0 0 September 15, 2014 ................... 0 0 0 0 0 Weighted Average Life (years)(1)...... 9.86 9.85 9.85 9.85 9.84 Estimated Month of First Principal ........................... 6/15/2013 6/15/2013 6/15/2013 6/15/2013 6/15/2013 Estimated Month of Maturity .......... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013
---------- (1) The weighted average life of the Class A-2 certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class A-2 certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the principal balance of the Class A-2 certificates. PERCENT OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS B CERTIFICATES AT THE RESPECTIVE CPRS SET FORTH BELOW:
DATE 0% CPR 3% CPR 6% CPR 9% CPR 12% CPR -------------------------------------- ------------- ------------- ------------- ------------- ------------- Initial Percentage ................... 100 100 100 100 100 September 15, 2004 ................... 100 100 100 100 100 September 15, 2005 ................... 100 100 100 100 100 September 15, 2006 ................... 100 100 100 100 100 September 15, 2007 ................... 100 100 100 100 100 September 15, 2008 ................... 100 100 100 100 100 September 15, 2009 ................... 100 100 100 100 100 September 15, 2010 ................... 100 100 100 100 100 September 15, 2011 ................... 100 100 100 100 100 September 15, 2012 ................... 100 100 100 100 100 September 15, 2013 ................... 0 0 0 0 0 September 15, 2014 ................... 0 0 0 0 0 Weighted Average Life (years)(1)...... 9.96 9.96 9.96 9.96 9.96 Estimated Month of First Principal ........................... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013 Estimated Month of Maturity .......... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013
---------- (1) The weighted average life of the Class B certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class B certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the principal balance of the Class B certificates. S-148 PERCENT OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS C CERTIFICATES AT THE RESPECTIVE CPRS SET FORTH BELOW:
DATE 0% CPR 3% CPR 6% CPR 9% CPR 12% CPR -------------------------------------- ------------- ------------- ------------- ------------- ------------- Initial Percentage ................... 100 100 100 100 100 September 15, 2004 ................... 100 100 100 100 100 September 15, 2005 ................... 100 100 100 100 100 September 15, 2006 ................... 100 100 100 100 100 September 15, 2007 ................... 100 100 100 100 100 September 15, 2008 ................... 100 100 100 100 100 September 15, 2009 ................... 100 100 100 100 100 September 15, 2010 ................... 100 100 100 100 100 September 15, 2011 ................... 100 100 100 100 100 September 15, 2012 ................... 100 100 100 100 100 September 15, 2013 ................... 0 0 0 0 0 September 15, 2014 ................... 0 0 0 0 0 Weighted Average Life (years)(1)...... 9.96 9.96 9.96 9.96 9.96 Estimated Month of First Principal ........................... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013 Estimated Month of Maturity .......... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013
---------- (1) The weighted average life of the Class C certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class C certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the principal balance of the Class C certificates. PERCENT OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS D CERTIFICATES AT THE RESPECTIVE CPRS SET FORTH BELOW:
DATE 0% CPR 3% CPR 6% CPR 9% CPR 12% CPR -------------------------------------- ------------- ------------- ------------- ------------- ------------- Initial Percentage ................... 100 100 100 100 100 September 15, 2004 ................... 100 100 100 100 100 September 15, 2005 ................... 100 100 100 100 100 September 15, 2006 ................... 100 100 100 100 100 September 15, 2007 ................... 100 100 100 100 100 September 15, 2008 ................... 100 100 100 100 100 September 15, 2009 ................... 100 100 100 100 100 September 15, 2010 ................... 100 100 100 100 100 September 15, 2011 ................... 100 100 100 100 100 September 15, 2012 ................... 100 100 100 100 100 September 15, 2013 ................... 0 0 0 0 0 September 15, 2014 ................... 0 0 0 0 0 Weighted Average Life (years)(1)...... 9.96 9.96 9.96 9.96 9.96 Estimated Month of First Principal ........................... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013 Estimated Month of Maturity .......... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013
---------- (1) The weighted average life of the Class D certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class D certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the principal balance of the Class D certificates. S-149 PERCENT OF THE INITIAL CERTIFICATE BALANCE OF THE CLASS E CERTIFICATES AT THE RESPECTIVE CPRS SET FORTH BELOW:
DATE 0% CPR 3% CPR 6% CPR 9% CPR 12% CPR -------------------------------------- ------------- ------------- ------------- ------------- ------------- Initial Percentage ................... 100 100 100 100 100 September 15, 2004 ................... 100 100 100 100 100 September 15, 2005 ................... 100 100 100 100 100 September 15, 2006 ................... 100 100 100 100 100 September 15, 2007 ................... 100 100 100 100 100 September 15, 2008 ................... 100 100 100 100 100 September 15, 2009 ................... 100 100 100 100 100 September 15, 2010 ................... 100 100 100 100 100 September 15, 2011 ................... 100 100 100 100 100 September 15, 2012 ................... 100 100 100 100 100 September 15, 2013 ................... 21 9 0 0 0 September 15, 2014 ................... 0 0 0 0 0 Weighted Average Life (years)(1)...... 9.98 9.97 9.96 9.96 9.96 Estimated Month of First Principal ........................... 9/15/2013 9/15/2013 9/15/2013 9/15/2013 9/15/2013 Estimated Month of Maturity .......... 10/15/2013 10/15/2013 9/15/2013 9/15/2013 9/15/2013
---------- (1) The weighted average life of the Class E certificates is determined by (a) multiplying the amount of each principal distribution on it by the number of years from the date of issuance of the Class E certificates to the related Distribution Date, (b) summing the results and (c) dividing the sum by the aggregate amount of the reductions in the principal balance of the Class E certificates. S-150 CERTAIN FEDERAL INCOME TAX CONSEQUENCES Upon the issuance of the Certificates, Cadwalader, Wickersham & Taft LLP, special counsel to the Depositor, will deliver its opinion that, assuming (1) the making of appropriate elections, (2) compliance with the provisions of the Pooling and Servicing Agreement and (3) compliance with applicable changes in the Internal Revenue Code of 1986, as amended (the "Code"), including the REMIC Provisions, for federal income tax purposes, the trust fund, exclusive of the Excess Interest and the Excess Interest Distribution Account, will qualify as three separate real estate mortgage investment conduits (the "Upper-Tier REMIC", the "Lower-Tier REMIC" and the "Loan REMIC," respectively, and, each, a "REMIC") within the meaning of Sections 860A through 860G (the "REMIC Provisions") of the Code, and (1) the Class A-1, Class A-2, Class A-1A, Class X-1, Class X-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L, Class M, Class N, Class P and Class NR certificates and the Class PS Certificates will evidence the "regular interests" in the Upper-Tier REMIC (other than the portion of the Class NR certificates representing the right to receive Excess Interest) and (2) the Class R certificates will represent the sole class of "residual interest" in the Upper-Tier REMIC and the Class LR certificates will represent the sole class of "residual interests" in the Lower-Tier REMIC and the Loan REMIC, within the meaning of the REMIC Provisions. The Certificates (other than the Class R and Class LR certificates) are "Regular Certificates" as defined in the prospectus. In addition, in the opinion of Cadwalader, Wickersham & Taft LLP, the portion of the trust fund consisting of the Excess Interest and the Excess Interest Distribution Account will be treated as a grantor trust for federal income tax purposes under subpart E, Part I of subchapter J of the Code and the Class NR certificates will represent undivided beneficial interests in the grantor trust. The Loan REMIC will hold the One Post Office Square B Note and its proceeds and an allocable portion of any property that secured the One Post Office Square B Whole Loan that was acquired by foreclosure or deed in lieu of foreclosure and will issue certain uncertificated classes of regular interests (the "Loan REMIC Regular Interests") and a sole class of "residual interest", which will be represented by the Class LR Certificates. The Lower-Tier REMIC will hold the mortgage loans (other than the One Post Office Square B Note) and their proceeds, and any property that secured a mortgage loan that was acquired by foreclosure or deed in lieu of foreclosure (in the case of the One Post Office Square Loan, an allocable portion of the property securing the One Post Office Square Whole Loan), and will issue certain uncertificated classes of regular interests (the "Lower-Tier REMIC Regular Interests") and the Class LR certificates, which will represent the sole classes of residual interest in the Lower-Tier REMIC and in the Loan REMIC. The Upper-Tier REMIC will hold the Lower-Tier REMIC Regular Interests and their proceeds and will issue the Regular Certificates as regular interests in the Upper-Tier REMIC and the Class R certificates as the sole Class of residual interest in the Upper-Tier REMIC. Because they represent regular interests, each Class of Offered Certificates generally will be treated as newly originated debt instruments for federal income tax purposes. Holders of the classes of Offered Certificates will be required to include in income all interest on the regular interests represented by their Certificates in accordance with the accrual method of accounting, regardless of a Certificateholder's usual method of accounting. It is anticipated that no Class of Offered Certificates will be issued with original issue discount ("OID") for federal income tax purposes. It is also anticipated that each Class of Offered Certificates will be issued at a premium for federal income tax purposes. The prepayment assumption that will be used in determining the rate of accrual of OID and market discount or whether any such discount is de minimis, and that may be used to amortize premium, if any, for federal income tax purposes will be based on the assumption that subsequent to the date of any determination the mortgage loans will prepay at a rate equal to a CPR of 0%; provided, that it is assumed that the ARD Loans prepay on their Anticipated Repayment Dates (the "Prepayment Assumption"). No representation is made that the mortgage loans will prepay at that rate or at any other rate. See "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates--Taxation of Regular Certificates" in the prospectus. S-151 Yield Maintenance Charges actually collected will be distributed among the holders of the respective classes of Certificates as described under "Description of the Certificates--Allocation of Yield Maintenance Charges" in this prospectus supplement. It is not entirely clear under the Code when the amount of Yield Maintenance Charges so allocated should be taxed to the holder of an Offered Certificate, but it is not expected, for federal income tax reporting purposes, that Yield Maintenance Charges will be treated as giving rise to any income to the holder of an Offered Certificate prior to the Master Servicer's actual receipt of a Yield Maintenance Charge. Yield Maintenance Charges, if any, may be treated as ordinary income, although authority exists for treating such amounts as capital gain if they are treated as paid upon the retirement or partial retirement of a Certificate. Certificateholders should consult their own tax advisers concerning the treatment of Yield Maintenance Charges. Except as provided below, the Offered Certificates will be treated as "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code in the hands of a real estate investment trust or "REIT" and interest (including OID, if any) on the Offered Certificates will be interest described in Section 856(c)(3)(B) of the Code, and the Offered Certificates will be treated as "loans . . . secured by an interest in real property which is . . . residential real property" under Section 7701(a)(19)(C)(v) of the Code to the extent the loans are secured by multifamily and manufactured housing properties. As of the cut-off date, mortgage loans representing approximately 39.2% of the Initial Pool Balance are secured by multifamily properties and manufactured housing community properties. Mortgage loans that have been defeased with U.S. Treasury obligations will not qualify for the foregoing treatments. Moreover, the Offered Certificates will be "qualified mortgages" for another REMIC within the meaning of Section 860G(a)(3) of the Code and "permitted assets" for a "financial asset securitization investment trust" within the meaning of Section 860L(c) of the Code. See "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates" in the prospectus. METHOD OF DISTRIBUTION Subject to the terms and conditions set forth in the underwriting agreement (the "Underwriting Agreement"), between J.P. Morgan Securities Inc. for itself and as representative of ABN AMRO Incorporated, Nomura Securities International, Inc. and Credit Suisse First Boston LLC (collectively, the "Underwriters"), and the Depositor, the Depositor has agreed to sell to the Underwriters, and the Underwriters have severally, but not jointly, agreed to purchase from the Depositor the respective Certificate Balances of each Class of Offered Certificates set forth below.
CREDIT SUISSE CLASS JPMORGAN ABN AMRO NOMURA FIRST BOSTON ------------------- --------------- --------------- -------------- -------------- Class A-1 ......... $ $ $ $ Class A-2 ......... $ $ $ $ Class B ........... $ $ $ $ Class C ........... $ $ $ $ Class D ........... $ $ $ $ Class E ........... $ $ $ $
In the event of a default by any Underwriter, the Underwriting Agreement provides that, in certain circumstances, purchase commitments of the non-defaulting Underwriters may be increased or the Underwriting Agreement may be terminated. Additionally, the Depositor and the Mortgage Loan Sellers have agreed to indemnify the Underwriters, and the Underwriters have agreed to indemnify the Depositor, against certain liabilities, including liabilities under the Securities Act of 1933, as amended. The Depositor has been advised by the Underwriters that they propose to offer the Offered Certificates to the public 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 Offered Certificates will be % of the initial aggregate Certificate Balance of the Offered Certificates, plus accrued interest on the Offered Certificates from September 1, 2003, before S-152 deducting expenses payable by the Depositor estimated to be approximately $ . The Underwriters may effect the transactions by selling the Offered Certificates to or through dealers, and the dealers may receive compensation in the form of underwriting discounts, concessions or commissions from the Underwriters. In connection with the purchase and sale of the Offered Certificates offered hereby, the Underwriters may be deemed to have received compensation from the Depositor in the form of underwriting discounts. We cannot assure you that a secondary market for the Offered Certificates will develop or, if it does develop, that it will continue. The Underwriters expect to make, but are not obligated to make, a secondary market in the Offered Certificates. The primary source of ongoing information available to investors concerning the Offered Certificates will be the monthly statements discussed in the prospectus under "Description of the Certificates--Reports to Certificateholders," which will include information as to the outstanding principal balance of the Offered Certificates and the status of the applicable form of credit enhancement. Except as described in this prospectus supplement under "Description of the Certificates--Reports to Certificateholders; Certain Available Information," we cannot assure you that any additional information regarding the Offered Certificates will be available through any other source. In addition, we are 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 that 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. JPMSI, one of the Underwriters, is an affiliate of the Depositor and JP Morgan Chase Bank, one of the Mortgage Loan Sellers. ABN AMRO, one of the Underwriters, is an affiliate of the Paying Agent and is also an affiliate of LaSalle National Bank Association, one of the Mortgage Loan Sellers. Nomura Securities International, Inc., one of the Underwriters, is an affiliate of one of the Mortgage Loan Sellers. LEGAL MATTERS The validity of the Certificates will be passed upon for the Depositor by Cadwalader, Wickersham & Taft LLP, New York, New York, and for the Underwriters by Sidley Austin Brown & Wood LLP, New York, New York. In addition, certain federal income tax matters will be passed upon for the Depositor 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 Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. ("S&P" and, together with Moody's, the "Rating Agencies"):
CLASS MOODY'S S&P ------- --------- ------ A-1 Aaa AAA A-2 Aaa AAA B Aa2 AA C Aa3 AA- D A2 A E A3 A-
A securities rating on mortgage pass-through certificates addresses the likelihood of the timely receipt by their holders of interest and the ultimate repayment of principal to which they are entitled by the Rated Final Distribution Date. The rating takes into consideration the credit quality of the pool of mortgage loans, structural and legal aspects associated with the certificates, and the extent to which the payment stream from the pool of mortgage loans is adequate to make payments required under the certificates. In addition, rating adjustments may result from a change in the financial position of the Trustee as back-up liquidity provider. The S-153 ratings on the Offered Certificates do not, however, constitute a statement regarding the likelihood, timing or frequency of prepayments (whether voluntary or involuntary) on the mortgage loans or the degree to which the payments might differ from those originally contemplated. In addition, a rating does not address the likelihood or frequency of voluntary or mandatory prepayments of mortgage loans, payment of prepayment premiums, payment of Excess Interest, Yield Maintenance Charges or net default interest. In addition, S&P's rating on the respective classes of certificates does not address (i) the tax attributes of the offered certificates or of the trust, (ii) whether or to what extent the interest payable on any class of certificate may be reduced in connection with Net Prepayment Interest Shortfalls or (iii) the yield to maturity that investors in the certificates may experience. We cannot assure you as to whether any rating agency not requested to rate the Offered Certificates will nonetheless issue a rating to any Class of Offered Certificates and, if so, what the rating would be. A rating assigned to any Class of Offered Certificates by a rating agency that has not been requested by the Depositor to do so may be lower than the rating assigned thereto by the Rating Agencies. The ratings on the Offered Certificates should be evaluated independently from similar ratings on other types of securities. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. LEGAL INVESTMENT The Offered 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 Offered Certificates under various legal investment restrictions, and thus the ability of investors subject to these restrictions to purchase Offered 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 constitute legal investments for them or are subject to investment, capital or other restrictions. See "Legal Investment" in the prospectus. ERISA CONSIDERATIONS A fiduciary of any retirement plan or other employee benefit plan or arrangement, including individual retirement accounts and annuities, Keogh plans and collective investment funds and separate accounts in which those plans, annuities, accounts or arrangements are invested, including insurance company general accounts, that is subject to the fiduciary responsibility rules of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code (an "ERISA Plan") or which is a governmental plan, as defined in Section 3(32) of ERISA, 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 (collectively, with an ERISA Plan, a "Plan") should review with its legal advisors whether the purchase or holding of Offered Certificates could give rise to a transaction that is prohibited or is not otherwise permitted under ERISA, the Code or Similar Law or whether there exists any statutory, regulatory or administrative exemption applicable thereto. Moreover, each Plan fiduciary should determine whether an S-154 investment in the Offered Certificates is appropriate for the Plan, taking into account the overall investment policy of the Plan and the composition of the Plan's investment portfolio. The U.S. Department of Labor has issued to J.P. Morgan Securities Inc. an individual prohibited transaction exemption, PTE 2002-19, 67 Fed. Reg. 14,979 (March 28, 2002) (the "Exemption"). The Exemption generally exempts from the application of the prohibited transaction provisions of Sections 406 and 407 of ERISA, and the excise taxes imposed on the prohibited transactions pursuant to Sections 4975(a) and (b) of the Code, certain transactions, among others, relating to the servicing and operation of pools of mortgage loans, such as the pool of mortgage loans held by the trust, and the purchase, sale and holding of mortgage pass-through certificates, such as the Offered Certificates, underwritten by J.P. Morgan Securities Inc., provided that certain conditions set forth in the Exemption are satisfied. The Exemption sets forth five general conditions which must be satisfied for a transaction involving the purchase, sale and holding of the Offered Certificates to be eligible for exemptive relief. First, the acquisition of the Offered Certificates by a Plan must be on terms (including the price paid for the Certificates) that are at least as favorable to the Plan as they would be in an arm's-length transaction with an unrelated party. Second, the Offered Certificates at the time of acquisition by the Plan must be rated in one of the four highest generic rating categories by Moody's, S&P, or Fitch Ratings. Third, the Trustee cannot be an affiliate of any other member of the Restricted Group other than an Underwriter. The "Restricted Group" consists of any Underwriter, the Depositor, the Trustee, the Master Servicer, the Special Servicer, any sub-servicer, any entity that provides insurance or other credit support to the trust fund and any mortgagor with respect to mortgage loans constituting more than 5% of the aggregate unamortized principal balance of the mortgage loans as of the date of initial issuance of the Offered Certificates, and any affiliate of any of the foregoing entities. Fourth, the sum of all payments made to and retained by the Underwriters must represent not more than reasonable compensation for underwriting the Offered Certificates, the sum of all payments made to and retained by the Depositor pursuant to the assignment of the mortgage loans to the trust fund must represent not more than the fair market value of the mortgage loans and the sum of all payments made to and retained by the Master Servicer, the Special Servicer and any sub-servicer must represent not more than reasonable compensation for that person's services under the Pooling and Servicing Agreement and reimbursement of the person's reasonable expenses in connection therewith. Fifth, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933, as amended. It is a condition of the issuance of the Offered Certificates that they have the ratings specified on the cover page. As of the Closing Date, the third general condition set forth above will be satisfied with respect to the Offered Certificates. A fiduciary of a Plan contemplating purchasing an Offered Certificate in the secondary market must make its own determination that, at the time of purchase, the Offered Certificates continue to satisfy the second and third general conditions set forth above. A fiduciary of a Plan contemplating purchasing an Offered Certificate, whether in the initial issuance of the related Certificates or in the secondary market, must make its own determination that the first, fourth and fifth general conditions set forth above will be satisfied with respect to the related Offered Certificate. The Exemption also requires that the trust fund meet the following requirements: (1) the trust fund must consist solely of assets of the type that have been included in other investment pools; (2) certificates in those other investment pools must have been rated in one of the four highest categories of S&P, Moody's or Fitch Ratings for at least one year prior to the Plan's acquisition of Offered Certificates; and (3) certificates in those other investment pools must have been purchased by investors other than Plans for at least one year prior to any Plan's acquisition of Offered Certificates. If the general conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(a) and 407(a) of ERISA (as well as the S-155 excise taxes imposed by Sections 4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of the Code) in connection with (1) the direct or indirect sale, exchange or transfer of Offered Certificates in the initial issuance of Certificates between the Depositor or the Underwriters and a Plan when the Depositor, any of the Underwriters, the Trustee, the Master Servicer, the Special Servicer, a sub-servicer or a borrower is a party in interest with respect to the investing Plan, (2) the direct or indirect acquisition or disposition in the secondary market of the Offered Certificates by a Plan and (3) the holding of Offered Certificates by a Plan. However, no exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of an Offered Certificate on behalf of an "Excluded Plan" by any person who has discretionary authority or renders investment advice with respect to the assets of the Excluded Plan. For purposes of this prospectus supplement, an "Excluded Plan" is a Plan sponsored by any member of the Restricted Group. If certain specific conditions of the Exemption are also satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(b)(1) and (b)(2) of ERISA and the taxes imposed by Section 4975(c)(1)(E) of the Code in connection with (1) the direct or indirect sale, exchange or transfer of Offered Certificates in the initial issuance of Certificates between the Depositor or the Underwriters and a Plan when the person who has discretionary authority or renders investment advice with respect to the investment of Plan assets in those Certificates is (a) a borrower with respect to 5% or less of the fair market value of the mortgage loans or (b) an affiliate of that person, (2) the direct or indirect acquisition or disposition in the secondary market of Offered Certificates by a Plan and (3) the holding of Offered Certificates by a Plan. Further, if certain specific conditions of the Exemption are satisfied, the Exemption may provide an exemption from the restrictions imposed by Sections 406(a), 406(b) and 407(a) of ERISA, and the taxes imposed by Sections 4975(a) and (b) of the Code by reason of Section 4975(c) of the Code for transactions in connection with the servicing, management and operation of the pool of mortgage loans. Before purchasing an Offered Certificate, a fiduciary of a Plan should itself confirm that the specific and general conditions and the other requirements set forth in the Exemption would be satisfied at the time of purchase. In addition to making its own determination as to the availability of the exemptive relief provided in the Exemption, the Plan fiduciary should consider the availability of any other prohibited transaction exemptions, including with respect to governmental plans, any exemptive relief afforded under Similar Law. See "Certain ERISA Considerations" in the prospectus. A purchaser of an Offered Certificate should be aware, however, that even if the conditions specified in one or more exemptions are satisfied, the scope of relief provided by an exemption may not cover all acts which might be construed as prohibited transactions. THE SALE OF OFFERED CERTIFICATES TO A PLAN IS IN NO RESPECT A REPRESENTATION BY THE DEPOSITOR OR ANY OF THE UNDERWRITERS THAT THIS INVESTMENT MEETS ANY 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. S-156 INDEX OF PRINCIPAL DEFINITIONS
PAGE ---- 150 Technology AB Loan ...................... S-65 150 Technology Companion Loan ............... S-65 30/360 Basis ................................ S-73 AB Loan ..................................... S-62 Acceptable Insurance Default ................ S-131 Actual/360 Basis ............................ S-73 Additional Exclusions ....................... S-131 Administrative Cost Rate .................... S-103 Advances .................................... S-111 Anticipated Repayment Date .................. S-72 Appraisal Reduction ......................... S-113 Appraisal Reduction Event ................... S-112 ARD Loans ................................... S-71 Asset Status Report ......................... S-123 Assumed Final Distribution Date ............. S-107 Assumed Scheduled Payment ................... S-105 Authenticating Agent ........................ S-91 Available Distribution Amount ............... S-95 Base Interest Fraction ...................... S-107 Certificate Account ......................... S-94 Certificate Balance ......................... S-89 Certificate Owner ........................... S-91 Certificate Registrar ....................... S-91 Certificateholders .......................... S-62 Certificates ................................ S-89 Class ....................................... S-89 Class A Certificates ........................ S-89 Class PS Certificates ....................... S-89 Class X Certificates ........................ S-89 Class X-1 Components ........................ S-101 Class X-1 Strip Rate ........................ S-102 Class X-2 Component ......................... S-102 Class X-2 Strip Rate ........................ S-102 Clearstream ................................. S-91 Closing Date ................................ S-61 CMSA Investor Reporting Package ............. S-116 Code ........................................ S-151 Collateral Support Deficit .................. S-110 Companion Loan .............................. S-62 Compensating Interest Payment ............... S-130 Constant Prepayment Rate .................... S-146 Control Change Event ........................ S-126 Controlling Class ........................... S-125 Controlling Class Certificateholder ......... S-125 Controlling Holder .......................... S-126 Corrected Mortgage Loan ..................... S-123 CPR ......................................... S-146 Crossed Loan ................................ S-87
PAGE ---- Cross-Over Date ............................. S-100 Cut-off Date Balance ........................ S-61 CVS-Commerce AB Loan ........................ S-63 CVS-Commerce Companion Loan ................. S-63 CVS-Garwood AB Loan ......................... S-64 CVS-Garwood Companion Loan .................. S-64 Defeasance .................................. S-75 Defeasance Lockout Period ................... S-75 Depositor ................................... S-61 Depositories ................................ S-92 Determination Date .......................... S-94 Direct Participants ......................... S-92 Directing Certificateholder ................. S-125 Discount Rate ............................... S-74 Distributable Certificate Interest .......... S-103 Distribution Account ........................ S-94 Distribution Date ........................... S-94 DSCR ........................................ S-61 DTC ......................................... S-91 Due Period .................................. S-96 Effective Gross Income ...................... S-79 EOP ......................................... S-70 ERISA ....................................... S-154 ERISA Plan .................................. S-154 ESA ......................................... S-83 Euroclear ................................... S-91 Events of Default ........................... S-139 Excess Interest ............................. S-103 Excess Interest Distribution Account .................................. S-95 Excluded Plan ............................... S-156 Exemption ................................... S-155 FIRREA ...................................... S-82 Form 8-K .................................... S-79 Gain on Sale Reserve Account ................ S-95 Group 1 Principal Distribution Amount ................................... S-104 Group 1 Principal Shortfall ................. S-105 Group 2 Principal Distribution Amount ................................... S-104 Group 2 Principal Shortfall ................. S-105 IAC Loan .................................... S-70 IAC Manager ................................. S-71 IAC Property ................................ S-70 Indirect Participants ....................... S-92 Initial Loan Group 1 Balance ................ S-61 Initial Loan Group 2 Balance ................ S-61 Initial Pool Balance ........................ S-61 Initial Rate ................................ S-72
S-157
PAGE ---- Initial Resolution Period ............. S-85 Insurance and Condemnation Proceeds ........................... S-94 Interest Accrual Period ............... S-103 Interest Distribution Amount .......... S-103 Interest Reserve Account .............. S-95 International ......................... S-70 IRS ................................... S-135 Liquidation Fee ....................... S-129 Liquidation Fee Rate .................. S-129 Liquidation Proceeds .................. S-94 Loan Group 1 .......................... S-61 Loan Group 2 .......................... S-61 Loan Groups ........................... S-61 Loan REMIC ............................ S-151 Loan REMIC Distribution Account ....... S-94 Loan REMIC Regular Interests .......... S-151 Lockbox Accounts ...................... S-88 Lockbox Loans ......................... S-88 Lockout Period ........................ S-73 Lower-Tier Distribution Account ....... S-94 Lower-Tier REMIC ...................... S-151 Lower-Tier REMIC Regular Interests..... S-151 LTV Ratio ............................. S-80 MAI ................................... S-86 Maple Gardens AB Loan ................. S-62 Maple Gardens Companion Loan .......... S-62 Master Servicer Remittance Date ....... S-110 Moody's ............................... S-153 Mortgage .............................. S-61 Mortgage Loan Sellers ................. S-62 Mortgage Note ......................... S-61 Mortgage Rate ......................... S-103 Mortgaged Property .................... S-61 MPA ................................... S-71 Net Aggregate Prepayment Interest Shortfall .......................... S-104 Net Mortgage Rate ..................... S-103 Net Operating Income .................. S-80 NOI ................................... S-80 Non-Offered Certificates .............. S-89 Non-Offered Subordinate Certificates ....................... S-109 Nonrecoverable Advance ................ S-112 Notional Amount ....................... S-89 NRA ................................... S-70 Offered Certificates .................. S-89 OID ................................... S-151 One Post Office Square B Note ......... S-67
PAGE ---- One Post Office Square B Noteholder ......................... S-67 One Post Office Square Borrower ....... S-69 One Post Office Square Companion Note ............................... S-67 One Post Office Square Control Appraisal Event .................... S-67 One Post Office Square Controlling Holder ............................. S-67 One Post Office Square Intercreditor Agreement ............ S-67 One Post Office Square Loan ........... S-66 One Post Office Square Operating Advisor ............................ S-126 One Post Office Square Property ....... S-69 One Post Office Square Senior Noteholders ........................ S-67 One Post Office Square Senior Notes .............................. S-67 One Post Office Square Whole Loan ............................... S-67 Operating Statements .................. S-80 Option Price .......................... S-134 PAR ................................... S-83 Participants .......................... S-91 Pass-Through Rate ..................... S-100 Paying Agent .......................... S-91 Paying Agent Fee ...................... S-91 Paying Agent Fee Rate ................. S-91 Percentage Interest ................... S-91 Periodic Payments ..................... S-95 Permitted Investments ................. S-95 P&I Advance ........................... S-110 Plan .................................. S-154 Pooling and Servicing Agreement ....... S-89 Prepayment Assumption ................. S-151 Prepayment Interest Excess. ........... S-130 Prepayment Interest Shortfall. ........ S-130 Prime Rate ............................ S-112 Principal Balance Certificates ........ S-90 Principal Distribution Amount ......... S-104 Principal Shortfall ................... S-105 Purchase Agreements ................... S-62 Purchase Option ....................... S-134 Purchase Price ........................ S-85 Qualified Substitute Mortgage Loan ............................... S-86 Rated Final Distribution Date ......... S-108 Rating Agencies ....................... S-153 Record Date ........................... S-94
S-158
PAGE ---- Regular Certificates ...................... S-151 Reimbursement Rate ........................ S-112 REIT ...................................... S-152 Related Proceeds .......................... S-112 Release Date .............................. S-75 Release H.15 .............................. S-74 REMIC ..................................... S-151 REMIC Provisions .......................... S-151 REO Account ............................... S-132 REO Loan .................................. S-106 REO Property .............................. S-123 Residual Certificates ..................... S-89 Restricted Group .......................... S-155 Revised Rate .............................. S-72 Rules ..................................... S-93 Sav On-LA AB Loan ......................... S-63 Sav On-LA Companion Loan .................. S-63 Scheduled Principal Distribution Amount ................................. S-104 Senior Certificates ....................... S-89 Servicing Advances ........................ S-111 Servicing Fee ............................. S-128 Servicing Fee Rate ........................ S-128 Servicing Standards ....................... S-122 Similar Law ............................... S-154 S&P ....................................... S-153 Special Servicer .......................... S-127 Special Servicing Fee ..................... S-128 Special Servicing Fee Rate ................ S-128 Specially Serviced Mortgage Loans ......... S-123
PAGE ---- Stated Principal Balance .................. S-106 Statement to Certificateholders ........... S-115 Subordinate Certificates. ................. S-89 Subordinate Offered Certificates .......... S-89 Treasury Rate ............................. S-74 Trustee ................................... S-62 Trustee Fee ............................... S-120 Trustee Fee Rate .......................... S-120 Underwriters .............................. S-152 Underwriting Agreement .................... S-152 Underwritten Cash Flow .................... S-79 Underwritten Cash Flow Debt Service Coverage Ratio ................. S-79 Underwritten NOI .......................... S-79 Unscheduled Principal Distribution Amount ................................. S-105 Upper-Tier Distribution Account ........... S-94 Upper-Tier REMIC .......................... S-151 UW DSCR ................................... S-79 UW NCF .................................... S-79 UW NOI .................................... S-79 Voting Rights ............................. S-118 WAC Rate .................................. S-103 Withheld Amounts .......................... S-95 Withheld Loans ............................ S-95 Workout Fee ............................... S-128 Workout Fee Rate .......................... S-128 Yield Maintenance Charge .................. S-74
S-159 [THIS PAGE INTENTIONALLY LEFT BLANK.] SCHEDULE I CLASS X REFERENCE RATES DISTRIBUTION DATE REFERENCE RATE ----------------- -------------- October 2003 November 2003 December 2003 January 2004 February 2004 March 2004 April 2004 May 2004 June 2004 July 2004 August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 November 2005 December 2005 January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 I-1 DISTRIBUTION DATE REFERENCE RATE ----------------- -------------- September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 August 2010 September 2010 I-2 ANNEX A-1 CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
LOAN # ORIGINATOR PROPERTY NAME STREET ADDRESS ------ ---------- ------------- -------------- 1 JPMCB One Post Office Square One Post Office Square 2 LaSalle IAC - Boston (International Cargo Port) 88 Black Falcon Avenue 3 JPMCB Sheraton Inner Harbor Hotel 300 South Charles Street 4 JPMCB Tindeco Wharf 2809 Boston Street 5 JPMCB Chasewood Office Portfolio Various 5.1 JPMCB Two Chasewood 20405 State Highway 249 5.2 JPMCB Three Chasewood 20445 State Highway 249 6 NCCI Tower Place 200 3348 Peachtree Road 7 JPMCB Lillian Vernon Corporation 2600 International Parkway 8 NCCI Metro Four Office Building 6359 Walker Lane 9 LaSalle The Prado at Spring Creek 25251 Chamber of Commerce Drive 10 JPMCB Piilani Shopping Center 225 Piikea Avenue 11 JPMCB Harbor Place Shopping Center 13190-13220 Harbor Boulevard 12 LaSalle Tarbell Apartment Portfolio Various 12.1 LaSalle Tarbell Apartment Portfolio - Meadowbrook Apts 86-96 Fisherville Road 12.2 LaSalle Tarbell Apartment Portfolio - Pinewood Village 17-29 Bog Road 12.3 LaSalle Tarbell Apartment Portfolio - Pines of West Concord 20 Bog Road 12.4 LaSalle Tarbell Apartment Portfolio - Opechee Garden Apts 1156 North Main Street 12.5 LaSalle Tarbell Apartment Portfolio - Vineyard Terrace Apts. 219 Village Street 12.6 LaSalle Tarbell Apartment Portfolio - Mill Place West 479 North State Street 12.7 LaSalle Tarbell Apartment Portfolio - Ormond Street 23-25 Ormond Street 12.8 LaSalle Tarbell Apartment Portfolio - Prescott Street 43 Prescott Street 13 LaSalle Brook Gardens MHP 38 West Canyon Drive 14 JPMCB Danvers Crossing Shopping Center 10 Newbury Street 15 NCCI 1367 Washington Avenue 1367 Washington Avenue 16 JPMCB Senate Plaza 100 Senate Avenue 17 LaSalle Spring Mill Medical 200 West 103rd Street 18 NCCI Orion MHP 47 Bluebird Hill Drive 19 LaSalle Highland Lakes Apartments 1908 Briarwood Street 20 NCCI Oxford Square Apartments 600 Kenwick Circle 21 NCCI Woodlands North 9240-9280 University Avenue Nothwest 22 JPMCB Paducah Center 4340 Hinkleville Road 23 NCCI Tides Building 331 Santa Monica Boulevard 24 JPMCB Steeple Crest Apartments 5001 5th Avenue Extension 25 JPMCB Silverlake Village Shopping Center Out Pads_OBuild 10504 Broadway 26 LaSalle College Station 110 Lincoln Green Street 27 NCCI West Springfield Center 6208-6230 Rolling Road 28 JPMCB Rockmill Commerce Center 2120 - 2176 Citygate Drive 29 JPMCB Silverlake Village Shopping Center In Line Boxes 10402 Broadway 30 JPMCB Standard Motor Products 37-18 Northern Boulevard 31 JPMCB Continental Shopping Plaza 240 West Continental Road 32 JPMCB Newburgh Plaza Southeast Corner of Six Mile and Newburgh Roads 33 LaSalle Carlin Manor Apartments 1900 Sunny Court 34 LaSalle Archstone Industrial 8515-8545 Arjons Drive 35 NCCI Northpark Shopping Center Northeast Loop 250 and North Midkiff Road 36 NCCI Auburn Hills 2760 Patrick Henry Drive 37 NCCI Greensboro Multifamily Portfolio Various 37.1 NCCI Chapel Walk Apartments 1370 Lees Chapel Road 37.2 NCCI Cross Creek Apartments 629 Creek Ridge Road 37.3 NCCI Millbrook II Apartments 1109A East Barton Street 38 NCCI Spanish Garden Apartments 2838 Royal Lane 39 LaSalle Wildwood MHC Pad Loan One Birch Drive 40 LaSalle Black Mountain Commerce Park 9360 - 9420 Activity Road, 9580 and 9630 Black Mountain Road 41 JPMCB View at Catalina 8000 East Wrightstown Road 42 LaSalle Centerpointe Office 19772 & 19782 MacArthur Boulevard 43 JPMCB St. Clair Plaza 1159 to 1195 South Carney Drive 44 NCCI Victoria Palms Resort 602 North Victoria Road 45 NCCI Detroit Center Garage 414 Renaissance Drive West 46 JPMCB Centennial Plaza 45 West 10000 South 47 NCCI Andover Square 4343 North 21st Street 48 JPMCB Parc Centre 410 Ware Boulevard 49 JPMCB Ralphs Grocery Store 260 South La Brea Avenue 50 LaSalle Grand Reserve Phase II Apartments 1700 Fountain Court 51 NCCI Azusa College Center 1123-1175 East Alosta Avenue 52 NCCI Greenfield Plaza 22555 Greenfield Road 53 JPMCB Birchwood Park Apartments 4395 Birchwood Drive 54 JPMCB Woodridge Apartments 12470 West Euclid Avenue 55 JPMCB 150 Central Park South 150 Central Park South 56 LaSalle 2424 North Clark Street 2420 - 2424 North Clark Street 57 NCCI French Quarter Apartments 999-1001 SW 16th Avenue 58 JPMCB Chesapeake Estates of Thomasville MHP Biesecker Road 59 LaSalle Black Mountain Plaza 9323, 9353, and 9373 - 9393 Activity Road 60 LaSalle Keystone Farms 5360 Edmondson Pike 61 NCCI America's Attic - Miami 2450 Southwest 28th Lane 62 JPMCB Cleveland Circle 1930-1960 Beacon Street and 3-7 Sutherland Road 63 JPMCB Maple Gardens Village 10200 West Maple Street 64 NCCI Boxer - 6201 Bonhomme 6201 Bonhomme Road 65 NCCI 321 Santa Monica 321 Santa Monica Boulevard 66 NCCI Sherwood Square 26101 Greenfield Road 67 NCCI 602 Sawyer 602 Sawyer Street 68 LaSalle Fox Run Apartments 4500 Overland Drive 69 JPMCB 1100 5th Avenue Building 1100 5th Avenue South 70 LaSalle Pinellas Cascades MHP 7840 72nd Street North 71 NCCI College Plaza Shopping Center 2400-2520 East Chapman Avenue & 444-450 State College Boulevard 72 LaSalle Royal Gulf Apartments 190 Gateway Drive 73 NCCI Arbor Village 7940 South Circle Drive 74 JPMCB Long Lake Square 4036 Telegraph Road 75 NCCI Hibiscus Hill Apartments 94-1121 Ka Uka Boulevard 76 LaSalle Windsor Court 10908 East 16th Avenue 77 JPMCB Chesapeake Mobile Court 7630 Ridge Chapel Road 78 NCCI Hendeles Portfolio - Courtyard Apartments 2060 North Trekell Road 79 LaSalle 525 West Arlington Place 525 West Arlington Place 80 LaSalle Whole Foods - Pittsburgh 5880 Centre Avenue 81 LaSalle Tanglewood Apartments 4470 Old Spanish Trail 82 NCCI Glen Cove Avenue Shopping Center 206-214 Glen Cove Avenue 83 JPMCB Glendale Medical Office 28595 Orchard Lake Road 84 LaSalle Shoppes at Wolfchase 8385 Highway 64 85 NCCI Sunrise Apartments 151 and 111 Patterson Street 86 NCCI 26800 Aliso Viejo Parkway 26800 Aliso Viejo Parkway 87 JPMCB Ontario Mills Plaza 4320 and 4330 East Mills Circle 88 LaSalle Knollcrest Apartments 3301Creekwood Drive 89 LaSalle Carmike 12 Athens 1575 Lexington Road 90 LaSalle Eckerd - San Antonio Portfolio Various 90.1 LaSalle Eckerd - San Antonio -Nacogdoches 3027 Nacogdoches Road 90.2 LaSalle Eckerd - San Antonio -Culebra 9285 Culebra Road 91 NCCI Staples & Golf Mart 470 Noor Avenue 92 JPMCB Village Green at Centennial Park 502-564 Town Square Court and 600-654 Village Green Court 93 LaSalle Pheasant Ridge 7848 East Hill Road 94 JPMCB Highlands Center 131-151 North Ely Street and 2810 Kennewick Avenue 95 LaSalle Lake Village MHC 27 Michigan Lane 96 NCCI Brook Creek Apartments 4937 West Myrtle Avenue 97 NCCI Chelsea Arms 615 East Wonsley Drive 98 LaSalle Arbor Village Apartments 652 West Montgomery Avenue 99 NCCI Holiday MHP 4141 New Tampa Highway 100 JPMCB Holgate Terrace 12105 Southeast Holgate Boulevard 101 JPMCB Whitnall Garden Apartments 9521-9603 West Forest Home Avenue 102 NCCI Candler I-20 Self-Storage 2595 Candler Road 103 LaSalle Mallard Cove 2519 Buffalo Church Road 104 JPMCB Alpine Court Apartments 12301-12335 West Oklahoma Avenue 105 LaSalle CVS - Garwood 301 North Avenue 106 LaSalle Land O'Lakes MHP 1800 East Graves Avenue 107 LaSalle Walgreens--Columbus, OH 5690 West Broad Street 108 LaSalle Southside Plaza Shopping Center 1319 South 14th Street 109 NCCI Eckerd - Virginia Beach 3653 Virginia Beach Boulevard 110 NCCI Suburban Woods 7000 Goodson Road 111 LaSalle Sav-on LA 4501 West Slauson Avenue 112 LaSalle 1576 Oak Avenue 1576 - 1598 North Oak Avenue and 1100-1118 West Davis Street 113 LaSalle Cascades Plaza Shopping Center 21950 Cascades Parkway 114 LaSalle Walgreens - Fresno 6010 North Figarden Drive 115 NCCI Countryside Manufactured Home Park 3805 7th Street Northeast 116 NCCI Canada Trace 3291 Shoehorn Drive 117 NCCI Cohen Retail 124-130 West 125th Street 118 LaSalle Arlington West & Pecan Grove West Arlington Boulevard 119 LaSalle Walgreens - Des Plaines 21 Rand Road 120 LaSalle Walgreens Austintown, OH 5501 Mahoning Avenue 121 NCCI Cross Creek Shopping Center 901 and 909 West Spring Creek Parkway 122 NCCI Regions Plaza 944-976 Dawsonville Highway 123 NCCI Scottsdale Airpark Buildings 7860 East McClain Drive and 15649 North Greenway-Hayden Loop 124 LaSalle Independence Hill MHC 1705 Van Voorhis Road 125 LaSalle Walgreens - South Chicago Heights 3120 Chicago Road 126 LaSalle Scenic Mobile Home Park 1314 Tunnel Road 127 LaSalle Michigan Road Shops 8320, 8330, and 8350 North Michigan Road 128 LaSalle Park Place of Grove City 1911 Kendall Place 129 NCCI Pooles Manor 34 Club Circle 130 LaSalle Pine Crest Apartments 400 Swiss Street 131 NCCI Sundowner 105 North Delaware Drive 132 LaSalle 150 Technology Drive 150 Technology Drive 133 NCCI Townhomes of Bearcreek 15357 West Little York Road 134 NCCI Aztec Villa Apartments 4001 East McDowell Road 135 LaSalle Ravenel Town Centre 6323 Savannah Highway 136 LaSalle Mountain View Village Mobile Home Park 19773 & 19874 Highway 24 137 LaSalle Willow Wick Apartments 1200 West Martintown Road 138 LaSalle Walgreens - Lakeline, TX 1495 Cypress Creek Road 139 LaSalle Walgreens - Howard 464 Cardinal Lane 140 JPMCB College Square Apartments 6210-6260 South 51st Street 141 LaSalle Capri Mobile Estates 3150 Arville Street 142 LaSalle Wildwood MHC Clubhouse & Land One Birch Drive 143 LaSalle Market at Byram 5777 Terry Road 144 NCCI Hendeles Portfolio - Falcon Court Apartments 355 North 7th Street 145 LaSalle 75 North Central Avenue 75 North Central Avenue 146 LaSalle Santa Fe West MHP 2284 Henry Lynch Road 147 LaSalle Blue Ridge Shopping Center 4295 Old Highway 76 148 NCCI Eckerd - Dublin 2000 Veterans Boulevard 149 LaSalle 1600 Westgate Circle 1600 Westgate Circle 150 LaSalle 1509 Hinman 1509-15 Hinman Avenue 151 LaSalle CVS - Commerce Township 1325 East Commerce Road 152 LaSalle Tarbell - Stillwater Village 425 College Avenue 153 NCCI Boxer - 6065 Hillcroft 6065 Hillcroft Street 154 LaSalle Saluda Town Centre 605 Travis Avenue 155 NCCI Royal Palms MHP 8705 S Tamiami Trail 156 NCCI Kofdarali Portfolio Various 156.1 NCCI Mayarka Square Apartments 1619 East Grauwyler Road 156.2 NCCI Plantation View Apartments 1100 North Union Bower 157 LaSalle Willow Lake Crossing 2929 Watson Boulevard 158 LaSalle Canterbury Estates MHP 3411-3415 82nd Street South 159 JPMCB Continental Professional Plaza 1131 South La Canada Drive 160 NCCI Dublin-Muirfield Self-Storage 6245 Old Avery Road 161 NCCI Diagonal Plaza Shopping Mall 2850 Iris Avenue 162 LaSalle Eckerd - Double Churches Road 2801 Double Churches Road 163 NCCI Hendeles Portfolio - Sterling Point 500 South Carmichael Avenue 164 LaSalle Delco Ltd. Apartments Portfolio Various 164.1 LaSalle Delco Ltd.- Autumn Chase Apartments 140-284 Grand Circuit Boulevard 164.2 LaSalle Delco Ltd. -Rockridge Village Apartments 2-40 Rockcreek Drive and 42-80 Limetree Drive 165 LaSalle CVS - Franconia, PA 409 Harleysville Pike 166 LaSalle Garden Park Apartments 607 East Park Street 167 LaSalle Eckerd - Beaver Run 6950 Beaver Run Road 168 LaSalle 2914 North Clark Street 2914 - 2922 North Clark Street and 703-707 West Oakdale Avenue 169 LaSalle Cross Creek Townhomes 4810 Refugee Road 170 NCCI Spanish Chase Apartments 3200 West Pioneer Drive 171 LaSalle Paige Mill Court 632 Harkey Road 172 NCCI Vista Hermosa Apartments 465 West 11th Street and 1105 West Okeechobee Road 173 LaSalle Cedar Lake MHP 880 Cedar Lake Road 174 NCCI East Broad Self-Storage 6460 East Broad Street 175 LaSalle Social Security Building 7440 Providence Road 176 LaSalle 2115 Sedgwick 2115 North Sedgwick Street 177 LaSalle 326 West Dempster 326-328 West Dempster Avenue and 1243-1249 Judson Avenue 178 NCCI Westbrook Mobile Home Park 4423 Gassner Road 179 LaSalle 618 Hinman Avenue 618 - 624 Hinman Avenue and 500 - 510 Keeney Street 180 LaSalle 707 West Wellington 707-717 West Wellington Avenue and 2951-2959 North Clark Street 181 NCCI Tuskawilla Trails MHP 1070 Cheyenne Trail 182 NCCI Karwan MHP 2621 84th Street South 183 LaSalle Mill Hollow MHP 98 Marigold Road 184 NCCI Snapfinger Woods Medical Center 5040 Snapfinger Woods Drive 185 NCCI Kendalwood Apartments 1185 Rowlett Road 186 NCCI Snug Harbor 4425 Meridian Avenue North
NUMBER OF PROPERTY LOAN # CITY STATE ZIP CODE COUNTY PROPERTIES TYPE ------ ---- ----- -------- ------ ---------- ---- 1 Boston MA 02109 Suffolk 1 Office 2 Boston MA 02210 Suffolk 1 Mixed Use 3 Baltimore MD 21201 Baltimore City 1 Hotel 4 Baltimore MD 21224 Baltimore City 1 Multifamily 5 Houston TX 77070 Harris 2 Office 5.1 Houston TX 77070 Harris 1 Office 5.2 Houston TX 77070 Harris 1 Office 6 Atlanta GA 30326 Fulton 1 Office 7 Virginia Beach VA 23452 Virginia Beach City 1 Industrial 8 Springfield VA 22310 Fairfax 1 Office 9 Bonita Springs FL 34135 Lee 1 Retail 10 Kihei HI 96753 Maui 1 Retail 11 Garden Grove CA 92843 Orange 1 Retail 12 Various NH Various Various 8 Multifamily 12.1 Concord NH 03303 Merrimack 1 Multifamily 12.2 Concord NH 03303 Merrimack 1 Multifamily 12.3 Concord NH 03303 Merrimack 1 Multifamily 12.4 Laconia NH 03246 Belknap 1 Multifamily 12.5 Concord NH 03303 Merrimack 1 Multifamily 12.6 Concord NH 03301 Merrimack 1 Multifamily 12.7 Concord NH 03301 Merrimack 1 Multifamily 12.8 Concord NH 03301 Merrimack 1 Multifamily 13 Hamburg NY 14075 Erie 1 Manufactured Housing 14 Danvers MA 01923 Essex 1 Retail 15 Albany NY 12206 Albany 1 Office 16 Camp Hill PA 17011 Cumberland 1 Office 17 Indianapolis IN 46290 Hamilton 1 Office 18 Orion MI 48359 Oakland 1 Manufactured Housing 19 Prattville AL 36066 Autauga 1 Multifamily 20 Casselberry FL 32707 Seminole 1 Multifamily 21 Coon Rapids MN 55448 Anoka 1 Multifamily 22 Paducah KY 42001 McCracken 1 Retail 23 Santa Monica CA 90401 Los Angeles 1 Mixed Use 24 Phenix City AL 36867 Russell 1 Multifamily 25 Pearland TX 77584 Brazoria 1 Retail 26 Starkville MS 39759 Oktibbeha 1 Multifamily 27 Springfield VA 22152 Fairfax 1 Retail 28 Columbus OH 43219 Franklin 1 Industrial 29 Pearland TX 77584 Brazoria 1 Retail 30 Long Island City NY 11101 Queens 1 Industrial 31 Green Valley AZ 85614 Pima 1 Retail 32 Livonia MI 48152 Wayne 1 Retail 33 Columbus OH 43229 Franklin 1 Multifamily 34 San Diego CA 92126 San Diego 1 Industrial 35 Midland TX 79701 Midland 1 Retail 36 Auburn Hills MI 48326 Oakland 1 Multifamily 37 Greensboro NC Various Guilford 3 Multifamily 37.1 Greensboro NC 27455 Guilford 1 Multifamily 37.2 Greensboro NC 27406 Guilford 1 Multifamily 37.3 Greensboro NC 27407 Guilford 1 Multifamily 38 Dallas TX 75229 Dallas 1 Multifamily 39 Sandwich IL 60548 LaSalle 1 Manufactured Housing 40 San Diego CA 92126 San Diego 1 Industrial 41 Tucson AZ 85715 Pima 1 Multifamily 42 Irvine CA 92612 Orange 1 Office 43 St. Clair MI 48079 St. Clair 1 Retail 44 Donna TX 78537 Hidalgo 1 Manufactured Housing 45 Detroit MI 48243 Wayne 1 Parking Garage 46 Sandy UT 84070 Salt Lake 1 Office 47 Phoenix AZ 85016 Maricopa 1 Multifamily 48 Tampa FL 33619 Hillsborough 1 Office 49 Los Angeles CA 90036 Los Angeles 1 Retail 50 Columbus GA 31904 Muscogee 1 Multifamily 51 Azusa CA 91702 Los Angeles 1 Retail 52 Southfield MI 48075 Oakland 1 Retail 53 Wilmington NC 28405 New Hanover 1 Multifamily 54 New Berlin WI 53151 Waukesha 1 Multifamily 55 New York NY 10019 New York 1 Multifamily 56 Chicago IL 60614 Cook 1 Multifamily 57 Gainesville FL 32601 Alachua 1 Multifamily 58 Thomasville PA 17364 York 1 Manufactured Housing 59 San Diego CA 92126 San Diego 1 Industrial 60 Nashville TN 37211 Davidson 1 Multifamily 61 Miami FL 33133 Miami-Dade 1 Storage 62 Brighton MA 02135 Suffolk 1 Multifamily 63 Wichita KS 67209 Sedgwick 1 Multifamily 64 Houston TX 77036 Harris 1 Office 65 Santa Monica CA 90401 Los Angeles 1 Mixed Use 66 Southfield MI 48076 Oakland 1 Retail 67 Houston TX 77007 Harris 1 Office 68 Lawrence KS 66049 Douglas 1 Multifamily 69 Naples FL 34102 Collier 1 Office 70 Pinellas Park FL 33781 Pinellas 1 Manufactured Housing 71 Fullerton CA 92831 Orange 1 Retail 72 Biloxi MS 39531 Harrison 1 Multifamily 73 Parma MI 49269 Jackson 1 Manufactured Housing 74 Bloomfield Hills MI 48302 Oakland 1 Mixed Use 75 Waipahu HI 96797 Honolulu 1 Multifamily 76 Aurora CO 80010 Adams 1 Multifamily 77 Hanover MD 21076 Anne Arundel 1 Manufactured Housing 78 Casa Grande AZ 85222 Pinal 1 Multifamily 79 Chicago IL 60614 Cook 1 Multifamily 80 Pittsburgh PA 15206 Allegheny 1 Retail 81 Pensacola FL 32504 Escambia 1 Multifamily 82 Glen Cove NY 11542 Nassau 1 Retail 83 Farmington Hills MI 48334 Oakland 1 Office 84 Memphis TN 38133 Shelby 1 Retail 85 Anchorage AK 99504 Anchorage 1 Multifamily 86 Aliso Viejo CA 92656 Orange 1 Office 87 Ontario CA 91764 San Bernandino 1 Retail 88 Nashville TN 37207 Davidson 1 Multifamily 89 Athens GA 30605 Clarke 1 Retail 90 San Antonio TX Various Bexar 2 Retail 90.1 San Antonio TX 78217 Bexar 1 Retail 90.2 San Antonio TX 78251 Bexar 1 Retail 91 South San Francisco CA 94080 San Mateo 1 Retail 92 Oak Creek WI 53154 Milwaukee 1 Multifamily 93 Mount Airy MD 21771 Carroll 1 Manufactured Housing 94 Kennewick WA 99336 Benton 1 Retail 95 Winona MN 55987 Winona 1 Manufactured Housing 96 Glendale AZ 85301 Maricopa 1 Multifamily 97 Austin TX 78753 Travis 1 Multifamily 98 Allentown PA 18103 Lehigh 1 Multifamily 99 Lakeland FL 33815 Polk 1 Manufactured Housing 100 Portland OR 97266 Multnomah 1 Multifamily 101 Hales Corners WI 53130 Milwaukee 1 Multifamily 102 Decatur GA 30032 DeKalb 1 Storage 103 Sanford NC 27330 Lee 1 Multifamily 104 West Allis WI 53227 Milwaukee 1 Multifamily 105 Garwood NJ 07027 Union 1 Retail 106 Orange City FL 32763 Volusia 1 Manufactured Housing 107 Columbus OH 43228 Franklin 1 Retail 108 Leesburg FL 34748 Lake 1 Retail 109 Virginia Beach VA 23452 Virginia Beach 1 Retail 110 Union City GA 30291 Fulton 1 Manufactured Housing 111 Los Angeles CA 90043 Los Angeles 1 Retail 112 Evanston IL 60201 Cook 1 Multifamily 113 Sterling VA 20164 Loudoun 1 Retail 114 Fresno CA 93722 Fresno 1 Retail 115 Great Falls MT 59404 Cascade 1 Manufactured Housing 116 Lakeland TN 38002 Shelby 1 Manufactured Housing 117 New York NY 10027 New York 1 Retail 118 Greenville NC 27834 Pitt 1 Multifamily 119 Des Plaines IL 60016 Cook 1 Retail 120 Austintown OH 44515 Mahoning 1 Retail 121 Plano TX 75023 Collin 1 Retail 122 Gainesville GA 30501 Hall 1 Retail 123 Scottsdale AZ 85260 Maricopa 1 Industrial 124 Morgantown WV 26505 Monongalia 1 Manufactured Housing 125 South Chicago Heights IL 60411 Cook 1 Retail 126 Asheville NC 28805 Buncombe 1 Manufactured Housing 127 Indianapolis IN 46268 Marion 1 Retail 128 Grove City OH 43123 Franklin 1 Multifamily 129 Ellenwood GA 30294 Henry 1 Manufactured Housing 130 North Augusta SC 29841 Aiken 1 Multifamily 131 Apache Junction AZ 85220 Pinal 1 Manufactured Housing 132 Dothan AL 36303 Houston 1 Industrial 133 Houston TX 77084 Harris 1 Multifamily 134 Phoenix AZ 85008 Maricopa 1 Multifamily 135 Ravenel SC 29470 Charleston 1 Retail 136 Leadville CO 80461 Lake 1 Manufactured Housing 137 North Augusta SC 29841 Aiken 1 Multifamily 138 Cedar Park TX 78813 Williamson 1 Retail 139 Howard WI 54313 Brown 1 Retail 140 Greendale WI 53129 Milwaukee 1 Multifamily 141 Las Vegas NV 89102 Clark 1 Manufactured Housing 142 Sandwich IL 60548 LaSalle 1 Manufactured Housing 143 Byram MS 39272 Hinds 1 Retail 144 Sierra Vista AZ 85635 Cochise 1 Multifamily 145 Elmsford NY 10523 Westchester 1 Office 146 Santa Fe NM 87507 Santa Fe 1 Manufactured Housing 147 Blue Ridge GA 30513 Fannin 1 Retail 148 Dublin GA 31021 Laurens 1 Retail 149 Brentwood TN 37027 Williamson 1 Office 150 Evanston IL 60201 Cook 1 Multifamily 151 Commerce Township MI 48382 Oakland 1 Retail 152 Orono ME 04473 Penobscot 1 Multifamily 153 Houston TX 77081 Harris 1 Office 154 Saluda SC 29138 Saluda 1 Retail 155 Sarasota FL 34238 Sarasota 1 Manufactured Housing 156 Irving TX 75061 Dallas 2 Multifamily 156.1 Irving TX 75061 Dallas 1 Multifamily 156.2 Irving TX 75061 Dallas 1 Multifamily 157 Warner Robins GA 31093 Houston 1 Retail 158 Lakewood WA 98499 Pierce 1 Manufactured Housing 159 Green Valley AZ 85614 Pima 1 Office 160 Dublin OH 43016 Franklin 1 Storage 161 Boulder CO 80301 Boulder 1 Retail 162 Columbus GA 31909 Muscogee 1 Retail 163 Sierra Vista AZ 85635 Cochise 1 Multifamily 164 Delaware OH 43015 Delaware 2 Multifamily 164.1 Delaware OH 43015 Delaware 1 Multifamily 164.2 Delaware OH 43015 Delaware 1 Multifamily 165 Franconia PA 18964 Montgomery 1 Retail 166 Carbondale IL 62901 Jackson 1 Multifamily 167 Midland GA 31820 Muscogee 1 Retail 168 Chicago IL 60657 Cook 1 Multifamily 169 Columbus OH 43232 Franklin 1 Multifamily 170 Irving TX 75061 Dallas 1 Multifamily 171 Sanford NC 27330 Lee 1 Multifamily 172 Hialeah FL 33010 Dade 1 Multifamily 173 Biloxi MS 39532 Harrison 1 Manufactured Housing 174 Columbus OH 43213 Franklin 1 Storage 175 Woodridge IL 60517 Dupage 1 Office 176 Chicago IL 60614 Cook 1 Multifamily 177 Evanston IL 60202 Cook 1 Multifamily 178 Brookshire TX 77423 Waller 1 Manufactured Housing 179 Evanston IL 60202 Cook 1 Multifamily 180 Chicago IL 60657 Cook 1 Multifamily 181 Winter Springs FL 32708 Seminole 1 Manufactured Housing 182 Lakewood WA 98499 Pierce 1 Manufactured Housing 183 Rexburg ID 83440 Madison 1 Manufactured Housing 184 Decatur GA 30035 DeKalb 1 Office 185 Garland TX 75043 Dallas 1 Multifamily 186 Marysville WA 98271 Snohomish 1 Manufactured Housing
PROPERTY YEAR UNIT OF LOAN # SUBTYPE YEAR BUILT RENOVATED TOTAL SF/UNITS MEASURE OCCUPANCY % ------ ------- ---------- --------- -------------- -------- ----------- 1 CBD 1981 766,462 Square Feet 90.9 2 Industrial/Office 2000 376,267 Square Feet 88.9 3 Full Service 1985 2001 337 Rooms 71.0 4 Mid/High Rise 1914 1985 240 Units 95.4 5 Suburban Various Various 250,778 Square Feet 93.3 5.1 Suburban 1985 2001 153,226 Square Feet 90.0 5.2 Suburban 1999 97,552 Square Feet 98.0 6 CBD 1998 259,096 Square Feet 97.0 7 Warehouse/Distribution 1987 827,000 Square Feet 100.0 8 Suburban 2003 144,997 Square Feet 94.4 9 Anchored 2001 152,072 Square Feet 91.3 10 Shadow Anchored 2000 65,702 Square Feet 94.4 11 Anchored 1993 119,857 Square Feet 100.0 12 Garden Various Various 379 Units 100.0 12.1 Garden 1972 1986 120 Units 100.0 12.2 Garden 1987 67 Units 100.0 12.3 Garden 1985 66 Units 100.0 12.4 Garden 1973 1998 42 Units 100.0 12.5 Garden 1986 24 Units 100.0 12.6 Garden 1920 1981 21 Units 100.0 12.7 Garden 1988 21 Units 100.0 12.8 Garden 1987 18 Units 100.0 13 Manufactured Housing 1980 424 Pads 93.4 14 Anchored 1990 176,314 Square Feet 98.7 15 Suburban 2000 103,966 Square Feet 99.4 16 Suburban 1974 2001 230,871 Square Feet 100.0 17 CBD 1998 2003 61,452 Square Feet 100.0 18 Manufactured Housing 1967 423 Pads 91.5 19 Garden 2002 224 Units 82.1 20 Garden 1986 2001 283 Units 91.9 21 Garden 1980 2002 196 Units 94.4 22 Anchored 1999 128,502 Square Feet 97.5 23 Multifamily/Retail 2003 36,535 Square Feet 100.0 24 Garden 2003 200 Units 95.0 25 Anchored 2003 57,089 Square Feet 97.0 26 Garden 1987 1994 281 Units 97.1 27 Unanchored 1979 2000 83,562 Square Feet 100.0 28 Flex 1998 2001 149,760 Square Feet 85.4 29 Anchored 2003 104,576 Square Feet 100.0 30 Flex 1919 294,000 Square Feet 100.0 31 Anchored 1980 1986 155,486 Square Feet 93.6 32 Anchored 1972 1998 154,183 Square Feet 97.0 33 Garden 1967 1977 351 Units 96.9 34 Flex 1985 113,327 Square Feet 89.1 35 Anchored 1984 1997 188,001 Square Feet 95.7 36 Garden 1969 1999 280 Units 87.5 37 Garden Various 255 Units Various 37.1 Garden 2002 128 Units 97.7 37.2 Garden 1999 88 Units 96.6 37.3 Garden 2001 39 Units 97.4 38 Garden 1971 2003 300 Units 89.3 39 Manufactured Housing 1975 2003 427 Pads 93.7 40 Flex 1979 2002 97,497 Square Feet 89.3 41 Garden 1972 1995 268 Units 94.0 42 Suburban 1980 66,345 Square Feet 95.2 43 Anchored 2000 83,945 Square Feet 91.4 44 Manufactured Housing 1983 1,089 Pads 83.0 45 Parking Garage 1978 1,275 Spaces NAP 46 Suburban 1996 74,098 Square Feet 97.9 47 Garden 1999 80 Units 93.8 48 Suburban 1974 1999 134,998 Square Feet 97.1 49 Anchored 1991 40,000 Square Feet 100.0 50 Garden 2001 140 Units 95.0 51 Anchored 1976 70,898 Square Feet 94.6 52 Anchored 1977 76,169 Square Feet 100.0 53 Garden 2002 172 Units 96.5 54 Garden 1969 108 Units 95.4 55 Coop 1931 2000 192 Units 100.0 56 Mid/High Rise 1973 91 Units 95.7 57 Garden 1966 242 Units 97.9 58 Manufactured Housing 1978 2002 316 Pads 94.6 59 Flex 1979 70,098 Square Feet 93.4 60 Garden 1998 90 Units 98.9 61 Storage 2000 61,669 Square Feet 72.6 62 Garden 1911 2003 28 Units 96.4 63 Garden 1979 1999 174 Units 96.0 64 Suburban 1971 1999 142,008 Square Feet 84.7 65 Office/Retail 1997 26,948 Square Feet 100.0 66 Shadow Anchored 1990 86,049 Square Feet 100.0 67 CBD 1982 85,843 Square Feet 97.1 68 Garden 2000 104 Units 95.2 69 Suburban 1982 1999 52,926 Square Feet 100.0 70 Manufactured Housing 1984 238 Pads 94.5 71 Shadow Anchored 1958 1982 77,069 Square Feet 100.0 72 Garden 1996 144 Units 96.5 73 Manufactured Housing 1969 266 Pads 89.5 74 Office/Retail 2002 23,847 Square Feet 100.0 75 Garden 1985 80 Units 93.8 76 Garden 1973 1987 143 Units 97.9 77 Manufactured Housing 1957 1998 195 Pads 96.9 78 Garden 1985 244 Units 88.9 79 Mid/High Rise 1925 2001 108 Units 100.0 80 Anchored 2002 32,000 Square Feet 100.0 81 Garden 1986 136 Units 94.9 82 Anchored 1961 1991 31,205 Square Feet 100.0 83 Suburban 1986 2002 44,181 Square Feet 95.3 84 Shadow Anchored 2002 34,425 Square Feet 100.0 85 Garden 1983 2002 144 Units 95.8 86 Suburban 2000 38,715 Square Feet 100.0 87 Unanchored 2002 25,689 Square Feet 100.0 88 Garden 1973 200 Units 98.0 89 Anchored 1999 52,990 Square Feet 100.0 90 Anchored Various 24,214 Square Feet 100.0 90.1 Anchored 1999 13,306 Square Feet 100.0 90.2 Anchored 2001 10,908 Square Feet 100.0 91 Anchored 1986 1998 44,264 Square Feet 100.0 92 Garden 2001 60 Units 96.7 93 Manufactured Housing 1962 101 Pads 100.0 94 Unanchored 1978 116,886 Square Feet 95.4 95 Manufactured Housing 1970 2000 228 Pads 97.4 96 Garden 1985 112 Units 98.2 97 Garden 1968 2002 114 Units 89.5 98 Garden 1971 2000 294 Units 92.2 99 Manufactured Housing 1961 214 Pads 100.0 100 Garden 2001 72 Units 98.6 101 Garden 1968 86 Units 97.7 102 Storage 1972 2000 81,877 Square Feet 78.2 103 Garden 2002 88 Units 95.5 104 Garden 1974 81 Units 95.1 105 Anchored 2003 11,970 Square Feet 100.0 106 Manufactured Housing 1960 1984 173 Pads 95.4 107 Anchored 2003 14,560 Square Feet 100.0 108 Unanchored 1977 2001 72,833 Square Feet 100.0 109 Anchored 2000 13,050 Square Feet 100.0 110 Manufactured Housing 1973 216 Pads 82.9 111 Anchored 2003 16,457 Square Feet 100.0 112 Garden 1920 2002 52 Units 96.3 113 Unanchored 2002 20,268 Square Feet 87.8 114 Anchored 2002 14,490 Square Feet 100.0 115 Manufactured Housing 1976 226 Pads 94.7 116 Manufactured Housing 1973 229 Pads 95.0 117 Shadow Anchored 1985 2002 19,720 Square Feet 100.0 118 Garden 1986 2000 166 Units 96.5 119 Anchored 2001 15,120 Square Feet 100.0 120 Anchored 2002 14,560 Square Feet 100.0 121 Unanchored 1984 55,815 Square Feet 91.0 122 Shadow Anchored 1999 24,322 Square Feet 100.0 123 Flex 1995 43,413 Square Feet 100.0 124 Manufactured Housing 1974 203 Pads 86.7 125 Anchored 2000 14,725 Square Feet 100.0 126 Manufactured Housing 1979 172 Pads 93.6 127 Anchored 2000 28,650 Square Feet 95.8 128 Garden 1975 112 Units 85.7 129 Manufactured Housing 1972 194 Pads 71.1 130 Garden 1973 120 Units 97.5 131 Manufactured Housing 1950 1970 204 Pads 91.0 132 Flex 1998 1999 28,930 Square Feet 100.0 133 Garden 1980 54 Units 98.1 134 Garden 1975 126 Units 93.7 135 Anchored 1996 48,050 Square Feet 100.0 136 Manufactured Housing 1968 227 Pads 93.8 137 Garden 1970 104 Units 99.0 138 Anchored 2002 14,490 Square Feet 100.0 139 Anchored 2002 14,490 Square Feet 100.0 140 Garden 1971 70 Units 97.1 141 Manufactured Housing 1968 100 Pads 87.1 142 Manufactured Housing 1975 2003 7,778 Square Feet 93.7 143 Anchored 1991 69,054 Square Feet 95.6 144 Garden 1985 112 Units 85.7 145 Suburban 1989 22,300 Square Feet 100.0 146 Manufactured Housing 1969 83 Pads 95.2 147 Anchored 1998 37,400 Square Feet 100.0 148 Anchored 2003 13,824 Square Feet 100.0 149 Suburban 2001 24,232 Square Feet 93.5 150 Garden 1920 2001 33 Units 100.0 151 Anchored 2002 10,880 Square Feet 100.0 152 Garden 1974 2003 84 Units 98.8 153 Suburban 1970 61,851 Square Feet 97.9 154 Anchored 1996 37,450 Square Feet 100.0 155 Manufactured Housing 1954 1999 133 Pads 97.7 156 Garden Various Various 92 Units NAP 156.1 Garden 1972 1999 40 Units 97.5 156.2 Garden 1963 52 Units 90.4 157 Shadow Anchored 2001 13,349 Square Feet 100.0 158 Manufactured Housing 1958 2002 96 Pads 94.8 159 Suburban 1979 1999 31,131 Square Feet 88.9 160 Storage 1999 67,950 Square Feet 75.1 161 Shadow Anchored 1983 21,095 Square Feet 95.1 162 Anchored 2003 13,824 Square Feet 100.0 163 Garden 1985 106 Units 97.2 164 Garden Various 86 Units 89.5 164.1 Garden 1980 46 Units 93.5 164.2 Garden 1985 40 Units 82.5 165 Anchored 2000 11,725 Square Feet 100.0 166 Garden 1968 1995 46 Units 76.1 167 Anchored 2003 13,824 Square Feet 100.0 168 Garden 1916 2003 17 Units 100.0 169 Garden 1968 2001 72 Units 94.4 170 Garden 1967 2002 77 Units 92.2 171 Garden 2000 39 Units 97.4 172 Garden 1968 46 Units 100.0 173 Manufactured Housing 1975 177 Pads 83.6 174 Storage 1999 65,275 Square Feet 68.6 175 Suburban 2003 9000 Square Feet 100.0 176 Garden 1925 2002 30 Units 100.0 177 Garden 1911 2003 19 Units 94.7 178 Manufactured Housing 1975 1998 184 Pads 90.8 179 Garden 1919 2001 25 Units 100.0 180 Garden 1913 2002 19 Units 100.0 181 Manufactured Housing 1980 141 Pads 96.5 182 Manufactured Housing 1967 45 Pads 97.8 183 Manufactured Housing 1977 1999 149 Pads 100.0 184 Suburban 1974 25,949 Square Feet 94.9 185 Garden 1983 24 Units 95.8 186 Manufactured Housing 1968 2001 30 Pads 96.7
OCCUPANCY APPRAISED APPRAISAL ORIGINAL ORIGINAL LOAN # DATE VALUE ($) DATE CURRENT LTV % (1),(2) BALANCE ($) LOAN/UNIT ($) ------ ---- --------- ---- --------------------- ----------- ------------- 1 08/07/03 280,000,000 08/20/03 42.9 60,000,000 157 2 07/31/03 68,500,000 03/05/03 74.3 51,000,000 136 3 07/31/03 57,000,000 07/01/03 63.2 36,000,000 106,825 4 07/01/03 42,900,000 05/07/03 79.1 34,000,000 141,667 5 05/31/03 32,500,000 06/18/03 80.0 26,000,000 104 5.1 05/31/03 17,500,000 06/18/03 80.0 5.2 05/31/03 15,000,000 06/18/03 80.0 6 06/30/03 53,500,000 07/08/03 45.7 25,625,000 99 7 08/20/03 37,400,000 07/24/03 64.2 24,000,000 29 8 07/16/03 30,100,000 07/25/03 76.4 23,000,000 159 9 07/31/03 26,800,000 07/02/03 78.4 21,000,000 138 10 06/01/03 25,000,000 05/11/03 80.0 20,000,000 304 11 06/17/03 23,000,000 04/01/03 76.0 17,500,000 146 12 Various 20,900,000 Various 79.3 16,600,000 43,799 12.1 06/12/03 6,100,000 05/02/03 79.3 12.2 06/12/03 4,200,000 05/02/03 79.3 12.3 06/15/03 3,400,000 05/02/03 79.3 12.4 06/12/03 1,700,000 05/03/03 79.3 12.5 06/12/03 1,200,000 05/02/03 79.3 12.6 06/12/03 1,400,000 05/02/03 79.3 12.7 06/12/03 1,500,000 05/02/03 79.3 12.8 06/12/03 1,400,000 05/02/03 79.3 13 04/28/03 17,900,000 04/16/03 79.4 14,250,000 33,608 14 04/15/03 17,800,000 05/07/03 77.7 13,850,000 79 15 07/31/03 19,000,000 04/30/03 69.4 13,200,000 127 16 08/01/03 20,200,000 05/15/03 64.2 13,000,000 56 17 08/19/03 16,000,000 07/09/03 77.8 12,440,000 202 18 08/07/03 15,500,000 07/16/03 80.0 12,400,000 29,314 19 07/03/03 15,500,000 06/20/03 79.9 12,400,000 55,357 20 06/30/03 15,500,000 04/09/03 79.7 12,400,000 43,816 21 05/01/03 14,700,000 04/24/03 78.1 11,500,000 58,673 22 05/21/03 14,300,000 01/08/03 79.2 11,380,000 89 23 07/09/03 16,000,000 04/18/03 70.3 11,250,000 308 24 07/14/03 13,600,000 07/08/03 80.0 10,880,000 54,400 25 06/01/03 13,240,000 06/13/03 79.8 10,600,000 186 26 05/01/03 13,700,000 04/17/03 76.5 10,500,000 37,367 27 06/01/03 13,850,000 04/02/03 74.0 10,275,000 123 28 07/25/03 13,000,000 07/01/03 78.5 10,200,000 68 29 06/01/03 12,540,000 02/13/03 79.8 10,000,000 96 30 06/12/03 19,000,000 03/05/03 52.3 10,000,000 34 31 07/23/03 13,700,000 06/25/03 69.4 9,700,000 62 32 06/30/03 19,700,000 04/23/03 48.2 9,500,000 62 33 03/31/03 11,450,000 04/10/03 79.3 9,100,000 25,926 34 07/31/03 11,425,000 07/01/03 78.8 9,000,000 79 35 07/01/03 11,650,000 07/21/03 75.0 8,737,500 46 36 06/03/03 11,400,000 05/21/03 75.3 8,600,000 30,714 37 Various 11,000,000 Various 77.2 8,500,000 33,333 37.1 04/17/03 5,740,000 03/11/03 77.2 37.2 04/01/03 3,660,000 01/29/03 77.2 37.3 05/28/03 1,600,000 03/11/03 77.2 38 05/01/03 11,400,000 05/21/03 74.4 8,500,000 28,333 39 06/30/03 10,663,636 04/11/03 79.5 8,500,000 19,906 40 07/31/03 10,530,000 07/01/03 76.9 8,100,000 83 41 05/04/03 11,000,000 05/05/03 72.1 7,950,000 29,664 42 06/19/03 10,200,000 06/03/03 75.6 7,720,000 116 43 06/01/03 9,600,000 05/30/03 79.8 7,670,000 91 44 06/26/03 11,500,000 02/28/03 65.2 7,500,000 6,887 45 NAP 26,400,000 06/11/03 27.8 7,350,000 5,765 46 05/01/03 9,450,000 05/21/03 77.2 7,300,000 99 47 06/26/03 10,015,000 07/10/03 71.6 7,175,000 89,688 48 06/01/03 9,550,000 05/13/03 74.9 7,170,000 53 49 04/17/03 21,000,000 04/07/03 33.3 7,000,000 175 50 06/03/03 9,350,000 03/13/03 74.7 7,000,000 50,000 51 05/01/03 8,800,000 04/28/03 78.2 6,900,000 97 52 04/01/03 9,000,000 04/18/03 72.8 6,750,000 89 53 06/16/03 8,800,000 07/02/03 76.3 6,720,000 39,070 54 07/01/03 8,300,000 05/19/03 79.9 6,640,000 61,481 55 04/29/03 95,000,000 05/01/03 6.8 6,500,000 33,854 56 03/10/03 9,200,000 05/01/03 70.5 6,500,000 71,429 57 08/20/03 8,200,000 06/06/03 78.0 6,400,000 26,446 58 05/08/03 8,200,000 05/22/03 77.9 6,400,000 20,253 59 07/31/03 7,850,000 07/01/03 79.6 6,250,000 89 60 06/20/03 7,800,000 05/20/03 79.4 6,200,000 68,889 61 04/04/03 8,100,000 05/09/03 73.8 6,200,000 101 62 07/25/03 9,200,000 06/19/03 66.8 6,150,000 219,643 63 08/06/03 7,720,000 07/11/03 79.0 6,100,000 35,057 64 06/30/03 8,590,000 08/01/03 71.0 6,100,000 43 65 04/22/03 9,400,000 04/18/03 63.8 6,000,000 223 66 04/01/03 8,500,000 04/18/03 72.8 6,000,000 70 67 01/31/03 9,000,000 4/21/03 64.8 5,850,000 68 68 06/01/03 7,280,000 06/01/03 79.9 5,825,000 56,010 69 05/27/03 8,100,000 06/01/03 71.5 5,800,000 110 70 03/31/03 7,200,000 04/10/03 79.7 5,760,000 24,202 71 04/14/03 10,050,000 04/02/03 56.6 5,700,000 74 72 07/01/03 7,250,000 06/24/03 77.2 5,600,000 38,889 73 08/07/03 7,000,000 07/17/03 80.0 5,600,000 21,053 74 04/30/03 7,000,000 06/30/03 78.5 5,500,000 231 75 06/20/03 8,040,000 06/01/03 68.3 5,500,000 68,750 76 05/22/03 6,800,000 06/16/03 79.9 5,440,000 38,042 77 05/06/03 6,800,000 05/22/03 79.8 5,440,000 27,897 78 06/02/03 7,000,000 06/03/03 76.7 5,370,000 22,008 79 04/15/03 12,750,000 05/15/03 41.4 5,281,000 48,898 80 09/01/03 6,600,000 05/01/03 79.9 5,280,000 165 81 06/01/03 6,500,000 04/04/03 79.9 5,200,000 38,235 82 07/31/03 7,000,000 05/15/03 74.1 5,200,000 167 83 06/01/03 7,300,000 04/23/03 69.8 5,100,000 115 84 07/21/03 6,300,000 07/01/03 80.0 5,040,000 146 85 06/25/03 8,450,000 07/07/03 59.2 5,000,000 34,722 86 07/01/03 7,000,000 06/25/03 70.0 4,900,000 127 87 06/16/03 7,200,000 04/09/03 66.6 4,800,000 187 88 06/30/03 6,500,000 06/28/03 73.1 4,750,000 23,750 89 09/01/03 6,700,000 05/04/00 68.6 4,735,000 89 90 09/01/03 6,280,000 06/05/03 72.7 4,568,000 189 90.1 09/01/03 3,450,000 06/05/03 72.7 90.2 09/01/03 2,830,000 06/05/03 72.7 91 03/31/03 7,000,000 06/10/03 64.2 4,500,000 102 92 07/01/03 5,400,000 05/15/03 79.9 4,320,000 72,000 93 06/18/03 5,360,000 06/13/03 79.6 4,275,000 42,327 94 06/03/03 6,750,000 04/30/03 61.7 4,175,000 36 95 04/30/03 5,220,000 05/19/03 79.3 4,150,000 18,202 96 04/18/03 5,100,000 06/27/03 80.0 4,080,000 36,429 97 05/08/03 5,300,000 04/07/03 75.1 4,000,000 35,088 98 03/14/03 9,000,000 04/08/03 43.6 4,000,000 13,605 99 03/01/03 5,000,000 05/02/03 77.8 3,900,000 18,224 100 07/07/03 5,000,000 06/16/03 75.4 3,775,000 52,431 101 07/01/03 4,600,000 05/15/03 79.9 3,680,000 42,791 102 04/17/03 4,500,000 05/07/03 73.8 3,600,000 44 103 04/28/03 4,690,000 04/04/03 76.5 3,600,000 40,909 104 06/28/03 4,570,000 05/15/03 78.5 3,590,000 44,321 105 09/01/03 4,890,000 05/30/03 72.2 3,531,000 295 106 06/12/03 4,375,000 05/19/03 79.8 3,500,000 20,231 107 09/01/03 4,420,000 06/16/03 77.8 3,440,000 236 108 04/09/03 5,700,000 03/17/03 59.5 3,400,000 47 109 09/11/03 4,350,000 04/15/03 77.9 3,400,000 261 110 07/08/03 5,100,000 08/01/03 64.9 3,325,000 15,394 111 02/13/03 4,300,000 06/02/03 77.0 3,309,000 201 112 04/01/03 6,180,000 05/15/03 53.3 3,295,000 63,365 113 04/28/03 5,650,000 05/14/03 58.3 3,300,000 163 114 09/01/03 4,100,000 05/16/03 79.8 3,275,000 226 115 03/31/03 4,140,000 06/16/03 78.5 3,250,000 14,381 116 06/01/03 5,500,000 06/17/03 64.9 3,250,000 14,192 117 03/01/03 8,600,000 04/28/03 37.2 3,200,000 162 118 07/15/03 4,100,000 05/16/03 78.0 3,200,000 19,277 119 07/08/03 6,450,000 05/26/03 49.6 3,200,000 212 120 09/01/03 4,575,000 07/09/03 68.9 3,150,000 216 121 06/01/03 5,100,000 04/10/03 61.5 3,150,000 56 122 07/01/03 3,900,000 04/24/03 79.9 3,120,000 128 123 04/14/03 5,000,000 04/02/03 61.9 3,100,000 71 124 04/28/03 3,750,000 04/16/03 79.8 3,000,000 14,778 125 09/02/03 3,770,000 06/16/03 78.2 2,948,000 200 126 04/30/03 3,700,000 05/15/03 79.6 2,950,000 17,151 127 08/04/03 3,700,000 07/01/03 78.4 2,900,000 101 128 07/25/03 4,500,000 06/13/03 64.4 2,900,000 25,893 129 07/08/03 3,900,000 08/01/03 64.9 2,835,000 14,613 130 03/06/03 3,475,000 03/12/03 78.9 2,750,000 22,917 131 03/31/03 3,630,000 04/15/03 75.5 2,750,000 13,480 132 09/05/03 3,720,000 07/10/03 73.7 2,745,000 95 133 06/29/03 3,550,000 06/10/03 77.2 2,740,000 50,741 134 07/02/03 3,535,000 06/06/03 76.4 2,700,000 21,429 135 04/02/03 3,425,000 05/22/03 77.3 2,650,000 55 136 07/09/03 4,100,000 04/14/03 64.2 2,640,000 11,630 137 04/04/03 3,300,000 03/12/03 79.8 2,640,000 25,385 138 09/01/03 3,730,000 03/07/03 70.1 2,620,000 181 139 07/25/03 3,430,000 06/20/03 75.7 2,600,000 179 140 07/01/03 3,200,000 05/19/03 79.9 2,560,000 36,571 141 06/01/03 3,450,000 05/13/03 72.4 2,500,000 25,000 142 01/00/00 3,136,364 04/11/03 79.5 2,500,000 321 143 05/13/03 4,750,000 03/12/03 52.0 2,500,000 36 144 06/02/03 3,100,000 06/02/03 79.4 2,460,000 21,964 145 03/01/03 3,200,000 07/01/03 76.2 2,440,000 109 146 07/15/03 3,400,000 07/11/03 70.6 2,400,000 28,916 147 05/22/03 3,200,000 04/28/03 74.8 2,400,000 64 148 09/11/03 3,750,000 04/10/03 63.8 2,400,000 174 149 05/29/03 3,150,000 04/25/03 73.6 2,325,000 96 150 04/01/03 4,450,000 05/15/03 51.2 2,280,000 69,091 151 03/28/03 3,000,000 02/18/03 74.7 2,250,000 207 152 01/01/03 2,800,000 05/08/03 79.9 2,240,000 26,667 153 06/30/03 3,500,000 08/01/03 60.7 2,125,000 34 154 06/17/03 2,675,000 05/23/03 79.4 2,125,000 57 155 04/25/03 3,000,000 04/18/03 68.7 2,060,000 15,489 156 05/13/03 2,760,000 05/13/03 75.3 2,020,000 21,957 156.1 05/13/03 1,430,000 05/13/03 75.3 156.2 05/13/03 1,330,000 05/13/03 75.3 157 03/14/03 2,700,000 04/18/03 73.9 2,000,000 150 158 04/28/03 2,950,000 04/15/03 67.4 2,000,000 20,833 159 07/23/03 3,100,000 06/25/03 69.4 1,975,000 63 160 05/01/03 2,980,000 05/06/03 73.8 1,970,000 29 161 07/15/03 2,850,000 04/13/03 68.1 1,945,000 92 162 04/29/03 3,400,000 06/23/03 56.5 1,925,000 139 163 06/01/03 2,600,000 06/02/03 73.5 1,910,000 18,019 164 07/01/03 2,770,000 06/09/03 68.6 1,900,000 22,093 164.1 07/01/03 1,330,000 06/09/03 68.6 164.2 07/01/03 1,440,000 06/09/03 68.6 165 09/01/03 2,500,000 02/26/03 74.5 1,865,000 159 166 05/19/03 2,400,000 05/08/03 76.3 1,835,000 39,891 167 04/29/03 3,250,000 06/23/03 56.1 1,825,000 132 168 04/18/03 3,875,000 05/03/03 46.5 1,800,000 105,882 169 06/16/03 2,700,000 06/13/03 66.6 1,800,000 25,000 170 05/31/03 2,450,000 05/13/03 73.3 1,800,000 23,377 171 04/28/03 2,200,000 04/04/03 79.3 1,750,000 44,872 172 05/16/03 2,900,000 04/09/03 59.5 1,732,000 37,652 173 06/23/03 2,180,000 06/01/03 78.8 1,720,000 9,718 174 04/03/03 2,660,000 05/06/03 73.8 1,705,000 26 175 05/27/03 2,250,000 03/19/03 74.9 1,687,500 188 176 04/01/03 3,550,000 05/15/03 46.7 1,657,000 55,233 177 05/15/03 2,800,000 05/15/03 58.9 1,648,000 86,737 178 07/01/03 2,325,000 09/18/02 68.8 1,600,000 8,696 179 04/01/03 2,635,000 05/15/03 54.0 1,424,000 56,960 180 03/01/03 3,450,000 05/03/03 38.4 1,325,000 69,737 181 05/13/03 2,520,000 05/20/03 50.0 1,260,000 8,936 182 01/07/03 1,600,000 02/10/03 70.2 1,185,000 26,333 183 06/01/03 1,650,000 06/10/03 66.6 1,100,000 7,383 184 08/01/03 1,500,000 06/02/03 66.7 1,000,000 39 185 05/16/03 1,200,000 05/19/03 75.3 960,000 40,000 186 01/01/03 1,400,000 02/10/03 70.2 925,000 30,833
CURRENT LOAN % OF % OF CURRENT % OF INITIAL BALANCE GROUP LOAN LOAN CROSSED RELATED LOAN # BALANCE ($)(3) POOL BALANCE PER UNIT ($) (2) 1 OR 2 GROUP 1 GROUP 2 LOAN (4) BORROWER (5) ------ -------------- ------------ ---------------- ------ ------- ------- -------- ------------ 1 60,000,000.00 5.0% 157 1 7.2% 2 50,871,089.87 4.2% 135 1 6.1% 3 36,000,000.00 3.0% 106,825 1 4.3% 4 33,952,685.48 2.8% 141,470 2 9.3% 5 26,000,000.00 2.2% 104 1 3.1% 5.1 14,000,000.00 91 5.2 12,000,000.00 123 6 24,431,497.08 2.0% 94 1 2.9% 7 24,000,000.00 2.0% 29 1 2.9% 8 23,000,000.00 1.9% 159 1 2.7% Z 9 21,000,000.00 1.7% 138 1 2.5% 10 20,000,000.00 1.7% 304 1 2.4% 11 17,481,881.09 1.5% 146 1 2.1% 12 16,564,653.88 1.4% 43,706 2 4.5% A 12.1 5,244,745.29 43,706 12.2 2,928,316.12 43,706 12.3 2,884,609.91 43,706 12.4 1,835,660.85 43,706 12.5 1,048,949.06 43,706 12.6 917,830.43 43,706 12.7 917,830.43 43,706 12.8 786,711.79 43,706 13 14,218,931.64 1.2% 33,535 1 1.7% B 14 13,823,850.94 1.1% 78 1 1.6% 15 13,179,630.67 1.1% 127 1 1.6% 16 12,976,714.53 1.1% 56 1 1.5% 17 12,440,000.00 1.0% 202 1 1.5% 18 12,400,000.00 1.0% 29,314 1 1.5% 4 M 19 12,387,764.20 1.0% 55,303 2 3.4% 20 12,349,681.52 1.0% 43,638 2 3.4% 21 11,474,927.29 1.0% 58,546 1 1.4% 22 11,326,686.29 0.9% 88 1 1.4% 23 11,250,000.00 0.9% 308 1 1.3% 24 10,880,000.00 0.9% 54,400 2 3.0% 25 10,581,205.59 0.9% 185 1 1.3% 1 K 26 10,479,681.40 0.9% 37,294 2 2.9% 27 10,255,696.59 0.9% 123 1 1.2% Z 28 10,200,000.00 0.8% 68 1 1.2% 29 9,982,269.41 0.8% 95 1 1.2% 1 K 30 9,931,142.85 0.8% 34 1 1.2% 31 9,688,924.95 0.8% 62 1 1.2% 2 L 32 9,487,737.82 0.8% 62 1 1.1% 33 9,078,460.06 0.8% 25,865 2 2.5% 34 9,000,000.00 0.7% 79 1 1.1% 35 8,737,500.00 0.7% 46 1 1.0% 36 8,582,740.37 0.7% 30,653 2 2.3% 37 8,492,211.76 0.7% 33,303 2 2.3% 37.1 4,595,785.19 35,905 37.2 2,697,526.09 30,654 37.3 1,198,900.48 30,741 38 8,481,034.44 0.7% 28,270 2 2.3% 39 8,473,221.32 0.7% 19,844 1 1.0% 3 C 40 8,100,000.00 0.7% 83 1 1.0% T 41 7,933,462.25 0.7% 29,602 2 2.2% 42 7,712,456.07 0.6% 116 1 0.9% 43 7,661,849.39 0.6% 91 1 0.9% 44 7,500,000.00 0.6% 6,887 2 2.1% 45 7,350,000.00 0.6% 5,765 1 0.9% 46 7,300,000.00 0.6% 99 1 0.9% 47 7,175,000.00 0.6% 89,688 1 0.9% 48 7,150,961.79 0.6% 53 1 0.9% 49 6,991,651.18 0.6% 175 1 0.8% 50 6,985,944.69 0.6% 49,900 2 1.9% 51 6,885,680.74 0.6% 97 1 0.8% 52 6,743,861.74 0.6% 89 1 0.8% 5 N 53 6,712,483.95 0.6% 39,026 2 1.8% 54 6,633,431.99 0.6% 61,421 2 1.8% S 55 6,500,000.00 0.5% 33,854 1 0.8% 56 6,487,344.66 0.5% 71,290 2 1.8% 57 6,400,000.00 0.5% 26,446 2 1.7% 58 6,387,155.62 0.5% 20,213 1 0.8% X 59 6,250,000.00 0.5% 89 1 0.7% T 60 6,194,874.72 0.5% 68,832 2 1.7% 61 6,192,912.96 0.5% 100 1 0.7% 6 O 62 6,142,167.94 0.5% 219,363 2 1.7% 63 6,100,000.00 0.5% 35,057 2 1.7% 64 6,100,000.00 0.5% 43 1 0.7% V 65 6,000,000.00 0.5% 223 1 0.7% 66 5,994,612.32 0.5% 70 1 0.7% 5 N 67 5,831,488.46 0.5% 68 1 0.7% 68 5,813,309.61 0.5% 55,897 2 1.6% 69 5,789,846.91 0.5% 109 1 0.7% 70 5,740,751.14 0.5% 24,121 2 1.6% D 71 5,692,809.98 0.5% 74 1 0.7% 72 5,600,000.00 0.5% 38,889 2 1.5% E 73 5,600,000.00 0.5% 21,053 1 0.7% 4 M 74 5,494,690.81 0.5% 230 1 0.7% 75 5,488,828.40 0.5% 68,610 2 1.5% 76 5,435,021.78 0.5% 38,007 2 1.5% 77 5,429,082.28 0.5% 27,841 2 1.5% X 78 5,370,000.00 0.4% 22,008 2 1.5% W 79 5,281,000.00 0.4% 48,898 2 1.4% F 80 5,272,413.12 0.4% 165 1 0.6% 81 5,190,423.86 0.4% 38,165 2 1.4% E 82 5,184,940.77 0.4% 166 1 0.6% 83 5,092,902.82 0.4% 115 1 0.6% 84 5,040,000.00 0.4% 146 1 0.6% 85 5,000,000.00 0.4% 34,722 2 1.4% 86 4,900,000.00 0.4% 127 1 0.6% 87 4,793,643.28 0.4% 187 1 0.6% 88 4,750,000.00 0.4% 23,750 2 1.3% 89 4,596,703.70 0.4% 87 1 0.5% 90 4,568,000.00 0.4% 189 1 0.5% 90.1 2,510,192.78 189 90.2 2,057,807.22 189 91 4,496,121.41 0.4% 102 1 0.5% 92 4,315,726.84 0.4% 71,929 2 1.2% S 93 4,264,233.61 0.4% 42,220 1 0.5% B 94 4,166,920.94 0.3% 36 1 0.5% 95 4,141,160.93 0.3% 18,163 1 0.5% 96 4,080,000.00 0.3% 36,429 2 1.1% 97 3,981,036.74 0.3% 34,921 2 1.1% 98 3,920,668.19 0.3% 13,336 2 1.1% 99 3,892,078.32 0.3% 18,187 2 1.1% 100 3,771,347.01 0.3% 52,380 2 1.0% 101 3,676,447.67 0.3% 42,749 2 1.0% S 102 3,595,884.95 0.3% 44 1 0.4% 6 O 103 3,588,227.64 0.3% 40,775 2 1.0% G 104 3,586,534.54 0.3% 44,278 2 1.0% S 105 3,528,165.20 0.3% 295 1 0.4% 106 3,492,615.19 0.3% 20,189 1 0.4% D 107 3,436,799.83 0.3% 236 1 0.4% 108 3,391,298.41 0.3% 47 1 0.4% 109 3,389,892.48 0.3% 260 1 0.4% 110 3,325,000.00 0.3% 15,394 2 0.9% 7 P 111 3,309,000.00 0.3% 201 1 0.4% 112 3,295,000.00 0.3% 63,365 2 0.9% F 113 3,294,870.79 0.3% 163 1 0.4% 114 3,271,914.14 0.3% 226 1 0.4% 115 3,250,000.00 0.3% 14,381 1 0.4% 116 3,250,000.00 0.3% 14,192 1 0.4% 7 P 117 3,200,000.00 0.3% 162 1 0.4% 118 3,197,053.20 0.3% 19,259 2 0.9% 119 3,196,678.94 0.3% 211 1 0.4% 120 3,150,000.00 0.3% 216 1 0.4% 121 3,135,812.38 0.3% 56 1 0.4% 122 3,115,408.47 0.3% 128 1 0.4% 123 3,094,447.31 0.3% 71 1 0.4% 124 2,993,655.22 0.2% 14,747 1 0.4% B 125 2,948,000.00 0.2% 200 1 0.4% 126 2,946,283.95 0.2% 17,130 1 0.4% B 127 2,900,000.00 0.2% 101 1 0.3% 128 2,900,000.00 0.2% 25,893 2 0.8% H 129 2,835,000.00 0.2% 14,613 1 0.3% 7 P 130 2,742,613.55 0.2% 22,855 2 0.7% I 131 2,741,861.64 0.2% 13,440 2 0.7% 132 2,741,618.64 0.2% 95 1 0.3% 133 2,740,000.00 0.2% 50,741 2 0.7% 134 2,700,000.00 0.2% 21,429 2 0.7% 135 2,647,378.73 0.2% 55 1 0.3% Y 136 2,634,089.46 0.2% 11,604 1 0.3% 137 2,632,909.00 0.2% 25,316 2 0.7% I 138 2,615,472.22 0.2% 181 1 0.3% 139 2,597,339.49 0.2% 179 1 0.3% 140 2,557,618.86 0.2% 36,537 2 0.7% S 141 2,497,460.58 0.2% 24,975 2 0.7% 142 2,492,123.92 0.2% 320 2 0.7% 3 C 143 2,468,796.29 0.2% 36 1 0.3% 144 2,460,000.00 0.2% 21,964 2 0.7% W 145 2,438,308.45 0.2% 109 1 0.3% 146 2,400,000.00 0.2% 28,916 2 0.7% 147 2,394,965.92 0.2% 64 1 0.3% 148 2,393,746.84 0.2% 173 1 0.3% 149 2,318,052.81 0.2% 96 1 0.3% 150 2,280,000.00 0.2% 69,091 2 0.6% F 151 2,241,815.00 0.2% 206 1 0.3% 152 2,237,619.64 0.2% 26,638 2 0.6% A 153 2,125,000.00 0.2% 34 1 0.3% V 154 2,122,898.04 0.2% 57 1 0.3% Y 155 2,060,000.00 0.2% 15,489 1 0.2% U 156 2,020,000.00 0.2% 21,957 2 0.6% 8 Q 156.1 1,045,000.00 26,125 8 156.2 975,000.00 18,750 8 157 1,994,014.07 0.2% 149 1 0.2% 158 1,987,554.28 0.2% 20,704 2 0.5% 159 1,972,801.19 0.2% 63 1 0.2% 2 L 160 1,967,748.15 0.2% 29 1 0.2% 6 O 161 1,941,562.72 0.2% 92 1 0.2% 162 1,922,509.24 0.2% 139 1 0.2% J 163 1,910,000.00 0.2% 18,019 2 0.5% W 164 1,900,000.00 0.2% 22,093 2 0.5% H 164.1 1,016,279.07 22,093 164.2 883,720.93 22,093 165 1,861,565.48 0.2% 159 1 0.2% 166 1,830,317.77 0.2% 39,790 2 0.5% 167 1,822,638.63 0.2% 132 1 0.2% J 168 1,800,000.00 0.1% 105,882 2 0.5% F 169 1,797,715.15 0.1% 24,968 2 0.5% 170 1,794,930.87 0.1% 23,311 2 0.5% Q 171 1,744,277.33 0.1% 44,725 2 0.5% G 172 1,724,199.06 0.1% 37,483 2 0.5% 173 1,718,478.94 0.1% 9,709 1 0.2% 174 1,703,051.07 0.1% 26 1 0.2% 6 O 175 1,686,101.33 0.1% 187 1 0.2% 176 1,657,000.00 0.1% 55,233 2 0.5% F 177 1,648,000.00 0.1% 86,737 2 0.5% F 178 1,600,000.00 0.1% 8,696 2 0.4% 179 1,424,000.00 0.1% 56,960 2 0.4% F 180 1,325,000.00 0.1% 69,737 2 0.4% F 181 1,260,000.00 0.1% 8,936 1 0.2% U 182 1,182,898.93 0.1% 26,287 2 0.3% 9 R 183 1,099,097.85 0.1% 7,377 2 0.3% 184 1,000,000.00 0.1% 39 1 0.1% 185 960,000.00 0.1% 40,000 2 0.3% 8 Q 186 923,359.92 0.1% 30,779 2 0.3% 9 R
NET MONTHLY DEBT INTEREST ADMIN. MORTGAGE SERVICE ANNUAL DEBT FIRST LOAN # RATE % FEE % RATE % (6) ACCRUAL TYPE ($)(7),(8),(9) SERVICE ($) (10) NOTE DATE PAYMENT DATE ------ ------ ----- ---------- ------------ -------------- ---------------- --------- ------------ 1 5.2990 0.04200 5.2570 Actual/360 264,950.00 3,179,400.00 09/12/03 11/01/03 2 6.2270 0.04200 6.1850 Actual/360 313,253.27 3,759,039.24 05/20/03 07/01/03 3 6.1500 0.09200 6.0580 Actual/360 235,260.59 2,823,127.08 09/17/03 10/01/03 4 5.5500 0.04200 5.5080 Actual/360 209,806.19 2,517,674.28 07/31/03 09/01/03 5 5.0000 0.04200 4.9580 Actual/360 139,573.62 1,674,883.44 08/05/03 10/01/03 5.1 5.2 6 8.0500 0.14200 7.9080 30/360 205,462.40 2,465,548.80 12/22/00 02/01/01 7 6.2700 0.04200 6.2280 Actual/360 175,702.65 2,108,431.80 08/20/03 10/01/03 8 6.2300 0.14200 6.0880 Actual/360 141,315.92 1,695,791.04 09/10/03 10/11/03 9 5.4500 0.04200 5.4080 Actual/360 118,577.74 1,422,932.88 08/04/03 10/01/03 10 5.5900 0.04200 5.5480 Actual/360 114,689.71 1,376,276.52 06/13/03 08/01/03 11 5.1100 0.12200 4.9880 Actual/360 95,123.77 1,141,485.24 07/10/03 09/01/03 12 5.0000 0.04200 4.9580 Actual/360 89,107.32 1,069,287.84 06/30/03 08/01/03 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 4.9000 0.04200 4.8580 Actual/360 75,628.56 907,542.72 06/06/03 08/01/03 14 5.5000 0.04200 5.4580 Actual/360 78,638.78 943,665.36 06/18/03 08/01/03 15 4.9900 0.14200 4.8480 Actual/360 77,089.00 925,068.00 07/28/03 09/11/03 16 5.7100 0.09200 5.6180 Actual/360 75,534.46 906,413.52 06/30/03 08/01/03 17 6.4480 0.04200 6.4060 Actual/360 78,204.32 938,451.84 08/26/03 10/01/03 18 5.8700 0.09200 5.7780 Actual/360 73,311.06 879,732.72 09/11/03 10/11/03 19 5.3100 0.04200 5.2680 Actual/360 68,934.80 827,217.60 07/16/03 09/01/03 20 5.3800 0.14200 5.2380 Actual/360 69,475.09 833,701.08 05/01/03 06/11/03 21 4.9000 0.14200 4.7580 Actual/360 61,033.57 732,402.84 06/12/03 08/11/03 22 5.1200 0.04200 5.0780 Actual/360 67,324.40 807,892.80 05/30/03 07/01/03 23 6.2500 0.14200 6.1080 Actual/360 69,268.19 831,218.28 08/13/03 10/11/03 24 4.9300 0.04200 4.8880 Actual/360 57,941.62 695,299.44 08/07/03 10/01/03 25 5.7500 0.09200 5.6580 Actual/360 61,858.72 742,304.64 06/13/03 08/01/03 26 5.4000 0.04200 5.3580 Actual/360 58,960.73 707,528.76 06/24/03 08/01/03 27 5.5200 0.14200 5.3780 Actual/360 58,469.32 701,631.84 06/12/03 08/01/03 28 6.0100 0.04200 5.9680 Actual/360 61,219.75 734,637.00 08/15/03 10/01/03 29 5.7500 0.09200 5.6580 Actual/360 58,357.29 700,287.48 06/13/03 08/01/03 30 5.5000 0.04200 5.4580 Actual/360 81,708.35 980,500.20 06/27/03 08/01/03 31 4.6900 0.09200 4.5980 Actual/360 50,249.58 602,994.96 07/31/03 09/01/03 32 4.6100 0.04200 4.5680 30/360 48,758.01 585,096.12 07/08/03 09/01/03 33 4.5400 0.04200 4.4980 Actual/360 46,324.90 555,898.80 06/06/03 08/01/03 34 6.1840 0.04200 6.1420 Actual/360 55,028.80 660,345.60 08/27/03 10/01/03 35 6.0700 0.14200 5.9280 Actual/360 52,779.60 633,355.20 08/19/03 10/11/03 36 5.2500 0.14200 5.1080 Actual/360 47,489.52 569,874.24 07/01/03 08/11/03 37 5.6100 0.10200 5.5080 Actual/360 48,850.33 586,203.96 07/24/03 09/11/03 37.1 37.2 37.3 38 4.8000 0.14200 4.6580 Actual/360 44,596.56 535,158.72 07/10/03 08/11/03 39 5.2700 0.04200 5.2280 Actual/360 47,042.66 564,511.92 05/08/03 07/01/03 40 6.1840 0.04200 6.1420 Actual/360 49,525.92 594,311.04 08/27/03 10/01/03 41 5.1000 0.12200 4.9780 Actual/360 43,164.51 517,974.12 06/27/03 08/01/03 42 5.3500 0.04200 5.3080 Actual/360 43,109.54 517,314.48 07/02/03 09/01/03 43 5.0000 0.04200 4.9580 Actual/360 41,174.22 494,090.64 07/23/03 09/01/03 44 6.2500 0.14200 6.1080 Actual/360 46,178.79 554,145.48 09/11/03 10/11/03 45 4.7500 0.14200 4.6080 Actual/360 77,063.09 924,757.08 08/22/03 10/11/03 46 5.7500 0.12200 5.6280 Actual/360 42,600.82 511,209.84 08/06/03 10/01/03 47 5.5200 0.14200 5.3780 Actual/360 40,828.94 489,947.28 08/20/03 10/11/03 48 5.8100 0.04200 5.7680 Actual/360 45,367.26 544,407.12 07/01/03 08/01/03 49 5.0400 0.12200 4.9180 30/360 37,748.82 452,985.84 07/11/03 09/01/03 50 5.2480 0.10200 5.1460 Actual/360 38,645.59 463,747.08 06/16/03 08/01/03 51 5.7300 0.14200 5.5880 Actual/360 48,365.01 580,380.12 07/28/03 09/11/03 52 5.6400 0.14200 5.4980 Actual/360 38,920.76 467,049.12 07/28/03 09/11/03 53 4.7800 0.04200 4.7380 Actual/360 35,176.32 422,115.84 07/24/03 09/01/03 54 5.3000 0.04200 5.2580 Actual/360 36,872.23 442,466.76 07/16/03 09/01/03 55 4.8500 0.04200 4.8080 Actual/360 26,635.71 319,628.52 06/09/03 08/01/03 56 5.3750 0.04200 5.3330 Actual/360 36,398.13 436,777.56 06/20/03 08/01/03 57 5.7500 0.14200 5.6080 Actual/360 37,348.66 448,183.92 08/29/03 10/11/03 58 5.2500 0.04200 5.2080 Actual/360 35,341.04 424,092.48 06/30/03 08/01/03 59 6.1840 0.04200 6.1420 Actual/360 38,214.44 458,573.28 08/27/03 10/01/03 60 6.0100 0.04200 5.9680 Actual/360 37,212.00 446,544.00 07/23/03 09/01/03 61 6.5500 0.09200 6.4580 Actual/360 42,056.76 504,681.12 07/31/03 09/01/03 62 4.2000 0.04200 4.1580 Actual/360 30,074.56 360,894.72 07/30/03 09/01/03 63 4.8300 0.04200 4.7880 Actual/360 32,115.29 385,383.48 08/22/03 10/01/03 64 6.4000 0.14200 6.2580 Actual/360 38,155.86 457,870.32 08/29/03 10/11/03 65 6.2000 0.14200 6.0580 Actual/360 36,748.14 440,977.68 08/13/03 10/11/03 66 5.6900 0.14200 5.5480 Actual/360 34,786.01 417,432.12 07/28/03 09/11/03 67 5.2500 0.14200 5.1080 Actual/360 32,303.92 387,647.04 06/03/03 07/11/03 68 5.2500 0.04200 5.2080 Actual/360 32,165.87 385,990.44 06/30/03 08/01/03 69 5.8000 0.10200 5.6980 Actual/360 34,031.68 408,380.16 06/20/03 08/01/03 70 5.0000 0.04200 4.9580 Actual/360 30,920.93 371,051.16 05/20/03 07/01/03 71 6.0600 0.14200 5.9180 Actual/360 36,934.52 443,214.24 08/11/03 09/11/03 72 6.0300 0.04200 5.9880 Actual/360 33,682.92 404,195.04 08/11/03 10/01/03 73 5.9700 0.09200 5.8780 Actual/360 33,466.90 401,602.80 09/11/03 10/11/03 74 5.4000 0.04200 5.3580 Actual/360 30,884.19 370,610.28 07/28/03 09/01/03 75 5.2000 0.09200 5.1080 Actual/360 30,201.10 362,413.20 06/30/03 08/01/03 76 5.6150 0.07200 5.5430 Actual/360 31,281.37 375,376.44 07/31/03 09/01/03 77 5.2500 0.04200 5.2080 Actual/360 30,039.88 360,478.56 06/30/03 08/01/03 78 5.8900 0.09200 5.7980 Actual/360 31,817.08 381,804.96 09/11/03 11/11/03 79 4.3700 0.04200 4.3280 Actual/360 19,498.75 233,985.00 06/17/03 08/01/03 80 5.3790 0.10200 5.2770 Actual/360 32,043.40 384,520.80 07/07/03 09/01/03 81 5.6000 0.04200 5.5580 Actual/360 29,852.11 358,225.32 06/12/03 08/01/03 82 5.3500 0.09200 5.2580 Actual/360 31,468.42 377,621.04 06/19/03 08/11/03 83 5.5500 0.12200 5.4280 Actual/360 31,470.93 377,651.16 07/02/03 09/01/03 84 5.3000 0.10200 5.1980 Actual/360 27,987.35 335,848.20 08/18/03 10/01/03 85 5.8600 0.09200 5.7680 Actual/360 29,528.97 354,347.64 09/11/03 10/11/03 86 6.1300 0.09200 6.0380 Actual/360 29,788.76 357,465.12 08/21/03 10/01/03 87 5.8100 0.04200 5.7680 Actual/360 30,371.39 364,456.68 07/09/03 09/01/03 88 5.8550 0.04200 5.8130 Actual/360 30,184.68 362,216.16 09/08/03 11/01/03 89 8.6650 0.04200 8.6230 Actual/360 37,871.13 454,453.56 06/16/00 08/01/00 90 7.2200 0.04200 7.1780 Actual/360 32,929.58 395,154.96 08/05/03 10/01/03 90.1 90.2 91 5.8500 0.14200 5.7080 Actual/360 26,547.34 318,568.08 08/07/03 09/11/03 92 5.3000 0.04200 5.2580 Actual/360 23,989.16 287,869.92 07/16/03 09/01/03 93 4.2600 0.04200 4.2180 Actual/360 21,055.46 252,665.52 07/01/03 08/01/03 94 5.4000 0.04200 5.3580 Actual/360 23,443.91 281,326.92 06/19/03 08/01/03 95 5.0000 0.04200 4.9580 Actual/360 22,278.10 267,337.20 06/19/03 08/01/03 96 5.8400 0.09200 5.7480 Actual/360 24,686.94 296,243.28 08/13/03 10/11/03 97 5.0500 0.09200 4.9580 Actual/360 23,500.27 282,003.24 05/30/03 07/11/03 98 4.3500 0.04200 4.3080 Actual/360 41,166.75 494,001.00 05/22/03 07/01/03 99 5.2000 0.14200 5.0580 Actual/360 21,415.32 256,983.84 06/30/03 08/11/03 100 5.3900 0.04200 5.3480 Actual/360 21,174.23 254,090.76 07/11/03 09/01/03 101 5.4000 0.04200 5.3580 Actual/360 20,664.33 247,971.96 07/16/03 09/01/03 102 6.5500 0.09200 6.4580 Actual/360 24,420.05 293,040.60 07/31/03 09/01/03 103 5.1000 0.04200 5.0580 Actual/360 19,546.19 234,554.28 05/02/03 07/01/03 104 5.4000 0.04200 5.3580 Actual/360 20,158.96 241,907.52 07/16/03 09/01/03 105 6.1200 0.04200 6.0780 Actual/360 21,443.31 257,319.72 07/25/03 09/11/03 106 5.0400 0.04200 4.9980 Actual/360 18,874.41 226,492.92 06/30/03 08/01/03 107 5.5480 0.04200 5.5060 Actual/360 19,634.58 235,614.96 07/14/03 09/01/03 108 6.0000 0.08200 5.9180 Actual/360 21,906.25 262,875.00 06/04/03 08/01/03 109 5.5300 0.14200 5.3880 Actual/360 19,368.87 232,426.44 06/10/03 07/11/03 110 6.0400 0.14200 5.8980 Actual/360 20,020.64 240,247.68 09/11/03 10/11/03 111 6.5000 0.04200 6.4580 Actual/360 20,915.13 250,981.56 08/13/03 10/01/03 112 4.3700 0.04200 4.3280 Actual/360 12,165.95 145,991.40 06/17/03 08/01/03 113 4.9500 0.04200 4.9080 Actual/360 19,195.46 230,345.52 07/15/03 09/01/03 114 5.4980 0.04200 5.4560 Actual/360 18,590.98 223,091.76 07/16/03 09/01/03 115 5.9900 0.14200 5.8480 Actual/360 19,971.04 239,652.48 09/10/03 10/11/03 116 6.0400 0.14200 5.8980 Actual/360 19,569.05 234,828.60 09/11/03 10/11/03 117 7.0800 0.14200 6.9380 Actual/360 28,905.82 346,869.84 09/11/03 10/11/03 118 5.5900 0.04200 5.5480 Actual/360 18,350.35 220,204.20 07/16/03 09/01/03 119 5.1000 0.04200 5.0580 Actual/360 17,374.39 208,492.68 07/11/03 09/01/03 120 5.2020 0.04200 5.1600 Actual/360 17,300.88 207,610.56 08/19/03 10/01/03 121 5.3500 0.09200 5.2580 Actual/360 19,062.60 228,751.20 06/09/03 07/11/03 122 5.2500 0.09200 5.1580 Actual/360 18,696.53 224,358.36 07/10/03 09/01/03 123 5.7100 0.14200 5.5680 Actual/360 18,012.06 216,144.72 06/30/03 08/11/03 124 5.0300 0.04200 4.9880 Actual/360 16,159.70 193,916.40 06/06/03 08/01/03 125 6.4300 0.04200 6.3880 Actual/360 18,497.86 221,974.32 08/18/03 10/01/03 126 4.2500 0.04200 4.2080 Actual/360 14,512.23 174,146.76 07/17/03 09/01/03 127 6.3800 0.04200 6.3380 Actual/360 18,101.71 217,220.52 08/14/03 10/01/03 128 6.0600 0.04200 6.0180 Actual/360 18,791.25 225,495.00 08/07/03 10/01/03 129 6.0400 0.14200 5.8980 Actual/360 17,070.23 204,842.76 09/11/03 10/11/03 130 5.7500 0.04200 5.7080 Actual/360 17,300.43 207,605.16 06/24/03 08/01/03 131 5.5500 0.14200 5.4080 Actual/360 15,700.58 188,406.96 05/15/03 07/11/03 132 6.1800 0.04200 6.1380 Actual/360 17,989.33 215,871.96 07/31/03 09/01/03 133 5.8500 0.09200 5.7580 Actual/360 16,164.38 193,972.56 08/21/03 10/11/03 134 5.8600 0.14200 5.7180 Actual/360 17,165.81 205,989.72 08/14/03 10/11/03 135 5.3000 0.04200 5.2580 Actual/360 14,715.57 176,586.84 07/03/03 09/01/03 136 5.1800 0.04200 5.1380 Actual/360 17,686.41 212,236.92 07/16/03 09/01/03 137 5.7500 0.04200 5.7080 Actual/360 16,608.41 199,300.92 06/24/03 08/01/03 138 5.8500 0.04200 5.8080 Actual/360 15,456.45 185,477.40 06/17/03 08/01/03 139 5.1580 0.04200 5.1160 Actual/360 14,208.70 170,504.40 07/31/03 09/01/03 140 5.5500 0.04200 5.5080 Actual/360 14,615.81 175,389.72 07/16/03 09/01/03 141 5.1900 0.04200 5.1480 Actual/360 13,712.33 164,547.96 07/02/03 09/01/03 142 5.2700 0.04200 5.2280 Actual/360 13,836.08 166,032.96 05/08/03 07/01/03 143 5.2000 0.10200 5.0980 Actual/360 26,761.45 321,137.40 06/02/03 08/01/03 144 5.8900 0.09200 5.7980 Actual/360 14,575.42 174,905.04 09/11/03 11/11/03 145 6.6500 0.04200 6.6080 Actual/360 15,663.94 187,967.28 07/02/03 09/01/03 146 5.9600 0.04200 5.9180 Actual/360 14,327.55 171,930.60 08/07/03 10/01/03 147 5.0650 0.07200 4.9930 Actual/360 12,979.23 155,750.76 06/13/03 08/01/03 148 6.1000 0.14200 5.9580 Actual/360 14,543.87 174,526.44 05/30/03 07/11/03 149 5.1800 0.10200 5.0780 Actual/360 13,836.66 166,039.92 06/24/03 08/01/03 150 4.3700 0.04200 4.3280 Actual/360 8,418.32 101,019.84 06/17/03 08/01/03 151 5.8500 0.04200 5.8080 Actual/360 13,273.67 159,284.04 04/24/03 06/11/03 152 5.0000 0.04200 4.9580 Actual/360 12,024.80 144,297.60 07/23/03 09/01/03 153 6.4000 0.14200 6.2580 Actual/360 13,292.00 159,504.00 09/02/03 10/11/03 154 5.3000 0.04200 5.2580 Actual/360 11,800.22 141,602.64 07/03/03 09/01/03 155 6.3300 0.14200 6.1880 Actual/360 12,791.15 153,493.80 08/15/03 10/11/03 156 6.2700 0.14200 6.1280 Actual/360 13,350.31 160,203.72 09/10/03 10/11/03 156.1 156.2 157 5.5000 0.04200 5.4580 Actual/360 11,355.78 136,269.36 05/14/03 07/01/03 158 5.9630 0.04200 5.9210 Actual/360 14,285.96 171,431.52 05/14/03 07/01/03 159 4.8000 0.09200 4.7080 Actual/360 10,362.14 124,345.68 07/31/03 09/01/03 160 6.5500 0.09200 6.4580 Actual/360 13,363.20 160,358.40 07/31/03 09/01/03 161 6.8400 0.14200 6.6980 Actual/360 14,893.33 178,719.96 08/05/03 09/11/03 162 5.9300 0.04200 5.8880 Actual/360 12,320.56 147,846.72 07/30/03 09/01/03 163 6.1300 0.09200 6.0380 Actual/360 11,611.54 139,338.48 09/11/03 11/11/03 164 6.0600 0.04200 6.0180 Actual/360 12,311.51 147,738.12 08/07/03 10/01/03 164.1 164.2 165 5.6000 0.04200 5.5580 Actual/360 10,706.57 128,478.84 06/25/03 08/01/03 166 4.2000 0.04200 4.1580 Actual/360 8,973.47 107,681.64 06/11/03 08/01/03 167 5.9300 0.04200 5.8880 Actual/360 11,680.53 140,166.36 06/30/03 09/01/03 168 4.3700 0.04200 4.3280 Actual/360 6,646.04 79,752.50 06/17/03 08/01/03 169 6.0280 0.04200 5.9860 Actual/360 11,628.25 139,539.00 07/31/03 09/01/03 170 5.5000 0.14200 5.3580 Actual/360 11,053.57 132,642.84 06/27/03 08/11/03 171 5.1000 0.04200 5.0580 Actual/360 9,501.62 114,019.44 05/02/03 07/01/03 172 5.3500 0.09200 5.2580 Actual/360 10,481.40 125,776.80 05/30/03 07/11/03 173 5.7500 0.04200 5.7080 Actual/360 10,037.45 120,449.40 07/16/03 09/01/03 174 6.5500 0.09200 6.4580 Actual/360 11,565.61 138,787.32 07/31/03 09/01/03 175 6.0000 0.04200 5.9580 Actual/360 10,117.42 121,409.04 07/03/03 09/01/03 176 4.3700 0.04200 4.3280 Actual/360 6,118.05 73,416.60 06/17/03 08/01/03 177 4.3700 0.04200 4.3280 Actual/360 6,084.82 73,017.84 06/17/03 08/01/03 178 6.1500 0.14200 6.0080 Actual/360 11,601.78 139,221.36 09/10/03 10/11/03 179 4.3700 0.04200 4.3280 Actual/360 5,257.76 63,093.12 06/17/03 08/01/03 180 4.3700 0.04200 4.3280 Actual/360 4,892.23 58,706.76 06/17/03 08/01/03 181 6.4700 0.14200 6.3280 Actual/360 9,371.98 112,463.76 08/22/03 10/11/03 182 5.7500 0.14200 5.6080 Actual/360 6,915.34 82,984.08 06/25/03 08/11/03 183 6.0400 0.04200 5.9980 Actual/360 6,623.37 79,480.44 07/25/03 09/01/03 184 6.1700 0.09200 6.0780 Actual/360 6,547.33 78,567.96 08/28/03 10/01/03 185 6.2700 0.04200 6.2280 Actual/360 6,344.70 76,136.40 09/10/03 10/11/03 186 5.7500 0.14200 5.6080 Actual/360 5,398.05 64,776.60 06/25/03 08/11/03
PAYMENT GRACE MATURITY/ LOAN # REM. TERM REM. AMORT I/O PERIOD (11) SEASONING DUE DATE PERIOD ARD DATE (12) ARD LOAN ------ --------- ---------- --------------- --------- -------- ------ ------------- -------- 1 120 360 24 0 1 7 10/01/13 No 2 117 357 0 3 1 5 06/01/13 No 3 120 300 0 0 1 7 09/01/13 No 4 119 299 0 1 1 7 08/01/13 No 5 120 360 0 0 1 5 09/01/13 No 5.1 5.2 6 70 239 0 32 1 5 07/01/09 No 7 240 240 0 0 1 10 09/01/23 No 8 120 360 0 0 11 0 09/11/13 No 9 60 360 0 0 1 5 09/01/08 No 10 178 360 12 2 1 7 07/01/18 Yes 11 119 359 0 1 1 7 08/01/13 No 12 118 358 0 2 1 5 07/01/13 No 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 58 358 0 2 1 5 07/01/08 No 14 118 358 0 2 1 7 07/01/13 No 15 119 299 0 1 11 0 08/11/13 No 16 118 358 0 2 1 7 07/01/13 No 17 120 360 0 0 1 5 09/01/13 No 18 120 360 0 0 11 0 09/11/13 No 19 119 359 0 1 1 5 08/01/13 No 20 116 356 0 4 11 0 05/11/13 No 21 118 358 0 2 11 0 07/11/13 No 22 81 297 0 3 1 7 06/01/10 No 23 120 360 0 0 11 0 09/11/13 No 24 120 360 0 0 1 7 09/01/13 No 25 118 358 0 2 1 7 07/01/13 No 26 118 358 0 2 1 5 07/01/13 Yes 27 118 358 0 2 1 0 07/01/13 No 28 120 360 0 0 1 7 09/01/13 No 29 118 358 0 2 1 7 07/01/13 No 30 178 178 0 2 1 7 07/01/18 No 31 119 359 0 1 1 7 08/01/13 No 32 119 359 0 1 1 10 08/01/13 No 33 58 358 0 2 1 5 07/01/08 No 34 120 360 0 0 1 5 09/01/13 No 35 120 360 0 0 11 0 09/11/13 No 36 118 358 0 2 11 0 07/11/13 No 37 119 359 0 1 11 0 08/11/13 No 37.1 37.2 37.3 38 118 358 0 2 11 0 07/11/13 No 39 117 357 0 3 1 5 06/01/13 No 40 120 360 0 0 1 5 09/01/13 No 41 118 358 0 2 1 7 07/01/13 No 42 119 359 0 1 1 5 08/01/13 No 43 119 359 0 1 1 7 08/01/13 No 44 120 360 0 0 11 0 09/11/13 No 45 120 120 0 0 11 0 09/11/13 No 46 120 360 0 0 1 7 09/01/13 No 47 120 360 0 0 11 0 09/11/13 No 48 118 298 0 2 1 7 07/01/13 No 49 155 359 0 1 1 7 08/01/16 No 50 118 358 0 2 1 5 07/01/13 No 51 119 239 0 1 11 0 08/11/13 No 52 119 359 0 1 11 0 08/11/13 No 53 119 359 0 1 1 7 08/01/13 No 54 119 359 0 1 1 7 08/01/13 No 55 118 0 120 2 1 7 07/01/13 No 56 118 358 0 2 1 5 07/01/13 No 57 120 360 0 0 11 0 09/11/13 No 58 118 358 0 2 1 7 07/01/13 No 59 120 360 0 0 1 5 09/01/13 No 60 119 359 0 1 1 5 08/01/13 Yes 61 119 299 0 1 1 0 08/01/13 No 62 83 359 0 1 1 7 08/01/10 No 63 120 360 0 0 1 7 09/01/13 No 64 120 360 0 0 11 0 09/11/13 No 65 120 360 0 0 11 0 09/11/13 No 66 119 359 0 1 11 0 08/11/13 No 67 57 357 0 3 11 0 06/11/08 No 68 118 358 0 2 1 5 07/01/13 No 69 118 358 0 2 1 7 07/01/13 No 70 117 357 0 3 1 5 06/01/13 No 71 119 299 0 1 11 0 08/11/13 No 72 120 360 0 0 1 5 09/01/13 No 73 120 360 0 0 11 0 09/11/13 No 74 119 359 0 1 1 7 08/01/13 No 75 118 358 0 2 1 0 07/01/13 No 76 119 359 0 1 1 5 08/01/13 Yes 77 118 358 0 2 1 7 07/01/13 No 78 120 360 0 0 11 0 10/01/13 No 79 58 0 60 2 1 5 07/01/08 No 80 119 299 0 1 1 5 08/01/13 Yes 81 118 358 0 2 1 5 07/01/13 Yes 82 118 298 0 2 11 0 07/11/13 No 83 119 299 0 1 1 7 08/01/13 No 84 120 360 0 0 1 5 09/01/13 No 85 120 360 0 0 11 0 09/11/13 No 86 120 360 0 0 1 0 09/01/13 No 87 119 299 0 1 1 7 08/01/13 No 88 120 300 0 0 1 5 10/01/13 No 89 82 286 0 38 1 5 07/01/10 No 90 120 300 0 0 1 5 09/01/13 No 90.1 90.2 91 119 359 0 1 11 0 08/11/13 No 92 119 359 0 1 1 7 08/01/13 No 93 58 358 0 2 1 5 07/01/08 No 94 118 358 0 2 1 7 07/01/13 No 95 118 358 0 2 1 5 07/01/13 No 96 120 336 23 0 11 0 09/11/13 No 97 117 297 0 3 11 0 06/11/13 No 98 117 117 0 3 1 5 06/01/13 No 99 118 358 0 2 11 0 07/11/13 No 100 119 359 0 1 1 7 08/01/13 No 101 119 359 0 1 1 7 08/01/13 No 102 119 299 0 1 1 0 08/01/13 No 103 117 357 0 3 1 5 06/01/13 No 104 119 359 0 1 1 7 08/01/13 No 105 119 359 0 1 11 0 08/11/13 Yes 106 118 358 0 2 1 5 07/01/13 No 107 119 359 0 1 1 5 08/01/13 No 108 118 298 0 2 1 5 07/01/13 No 109 117 357 0 3 11 0 06/11/13 No 110 120 360 0 0 11 0 09/11/13 No 111 120 360 0 0 1 5 09/01/13 Yes 112 58 0 60 2 1 5 07/01/08 No 113 119 299 0 1 1 5 08/01/13 No 114 119 359 0 1 1 5 08/01/13 No 115 120 336 24 0 11 0 09/11/13 No 116 120 360 0 0 11 0 09/11/13 No 117 180 180 0 0 11 0 09/11/18 No 118 119 359 0 1 1 5 08/01/13 No 119 119 359 0 1 1 5 08/01/13 No 120 120 360 0 0 1 5 09/01/13 No 121 117 297 0 3 11 0 06/11/13 No 122 119 299 0 1 1 0 08/01/13 No 123 118 358 0 2 11 0 07/11/13 No 124 58 358 0 2 1 5 07/01/08 No 125 120 360 0 0 1 5 09/01/13 No 126 59 359 0 1 1 5 08/01/08 No 127 120 360 0 0 1 5 09/01/13 No 128 120 300 0 0 1 5 09/01/13 No 129 120 360 0 0 11 0 09/11/13 No 130 118 298 0 2 1 5 07/01/13 No 131 117 357 0 3 11 0 06/11/13 No 132 119 299 0 1 1 5 08/01/13 Yes 133 120 360 0 0 11 0 09/11/13 No 134 120 300 0 0 11 0 09/11/13 No 135 119 359 0 1 1 5 08/01/13 No 136 119 239 0 1 1 5 08/01/13 No 137 118 298 0 2 1 5 07/01/13 No 138 118 358 0 2 1 5 07/01/13 No 139 119 359 0 1 1 5 08/01/13 No 140 119 359 0 1 1 7 08/01/13 No 141 119 359 0 1 1 5 08/01/13 No 142 117 357 0 3 1 5 06/01/13 No 143 118 118 0 2 1 5 07/01/13 No 144 120 360 0 0 11 0 10/01/13 No 145 59 359 0 1 1 5 08/01/08 No 146 120 360 0 0 1 5 09/01/13 No 147 118 358 0 2 1 5 07/01/13 No 148 117 357 0 3 11 0 06/11/13 No 149 118 298 0 2 1 5 07/01/13 No 150 58 0 60 2 1 5 07/01/08 No 151 116 356 0 4 11 0 05/11/13 Yes 152 119 359 0 1 1 5 08/01/13 No 153 120 360 0 0 11 0 09/11/13 No 154 119 359 0 1 1 5 08/01/13 No 155 120 360 0 0 11 0 09/11/13 No 156 120 300 0 0 11 0 09/11/13 No 156.1 156.2 157 117 357 0 3 1 5 06/01/13 No 158 117 237 0 3 1 5 06/01/13 No 159 119 359 0 1 1 7 08/01/13 No 160 119 299 0 1 1 0 08/01/13 No 161 119 239 0 1 11 0 08/11/13 No 162 119 299 0 1 1 5 08/01/13 No 163 120 360 0 0 11 0 10/01/13 No 164 120 300 0 0 1 5 09/01/13 No 164.1 164.2 165 118 358 0 2 1 5 07/01/13 No 166 58 358 0 2 1 5 07/01/08 No 167 119 299 0 1 1 5 08/01/13 No 168 58 60 2 1 5 07/01/08 No 169 119 299 0 1 1 5 08/01/13 No 170 118 298 0 2 11 0 07/11/13 No 171 117 357 0 3 1 5 06/01/13 No 172 117 297 0 3 11 0 06/11/13 No 173 119 359 0 1 1 5 08/01/13 No 174 119 299 0 1 1 0 08/01/13 No 175 119 359 0 1 1 5 08/01/13 No 176 58 60 2 1 5 07/01/08 No 177 58 60 2 1 5 07/01/08 No 178 120 240 0 0 11 0 09/11/13 No 179 58 60 2 1 5 07/01/08 No 180 58 60 2 1 5 07/01/08 No 181 240 240 0 0 11 0 09/11/23 No 182 118 358 0 2 11 0 07/11/13 No 183 119 359 0 1 1 5 08/01/13 No 184 120 300 0 0 1 0 09/01/13 No 185 120 300 0 0 11 0 09/11/13 No 186 118 358 0 2 11 0 07/11/13 No
REMAINING FINAL MATURITY/ARD MATURITY LTV % PREPAYMENT LOAN # MAT DATE BALANCE ($) (13) (1),(2),(13) PROVISION (PAYMENTS) (14) 2001 NOI ($) ------ -------- ---------------- ------------ ------------------------- ------------ 1 52,908,384 37.8 L(24),Def(91),O(5) 20,340,518 2 43,548,480 63.6 L(32),Def(82),O(3) 3,770,195 3 28,021,078 49.2 L(24),Def(92),O(4) 7,145,502 4 25,930,494 60.4 L(24),Def(91),O(4) 3,198,134 5 21,377,582 65.8 L(24),Def(92),O(4) 2,940,721 5.1 1,522,052 5.2 1,418,669 6 20,733,328 38.8 L(0),Greater of 1% or YM(67),O(3) 7 617,648 1.7 L(24),Def(209),O(7) 8 19,638,487 65.2 L(24),Def(90),O(6) 9 19,498,576 72.8 L(35),Def(22),O(3) 1,697,211 10 07/01/33 14,845,924 59.4 L(93),Gtr1%orYM(78),O(7) 2,247,656 11 14,441,477 62.8 L(24),Def(91),O(4) 1,853,571 12 13,651,700 65.3 L(33),Def(79),O(6) 1,427,248 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 13,124,490 73.3 L(33),Def(22),O(3) 1,387,248 14 11,572,676 65.0 L(24),Def(87)O(7) 1,248,485 15 9,867,536 51.9 L(24),Def(92),O(3) 1,728,777 16 10,932,849 54.1 L(24),Def(90),O(4) 1,603,427 17 10,687,908 66.8 L(35),Def(82),O(3) 18 10,476,567 67.7 L(24),Def(90),O(6) 19 10,298,555 66.4 L(34),Def(82),O(3) 20 10,322,441 66.6 L(24),Def(89),O(3) 1,347,821 21 9,425,885 64.1 L(24),Def(88),O(6) 1,213,624 22 9,555,929 66.8 L(24),Def(54),O(3) 1,042,287 23 9,611,303 60.1 L(24),Def(93),O(3) 24 8,925,176 65.6 L(24),Def(92),O(4) 25 8,925,313 67.3 L(24),Def(90),O(4) 26 07/01/33 8,746,123 63.8 L(33),Def(82),O(3) 1,151,665 27 8,590,842 62.0 L(24),Def(90),O(4) 1,213,197 28 8,653,669 66.6 L(24),Def(92),O(4) 29 8,420,107 67.3 L(24),Def(90),O(4) 30 123,348 0.6 L(24),Def(141),O(13) 31 7,894,348 56.6 L(24),Def(88),O(7) 1,238,701 32 7,635,110 38.8 L(59),Gtr1%orYM(56),O(4) 1,982,462 33 8,334,034 72.8 L(33),Def(22),O(3) 1,110,872 34 7,674,440 67.2 L(35),Def(79),O(6) 733,642 35 7,425,947 63.7 L(24),Def(93),O(3) 672,797 36 7,129,543 62.5 L(24),Def(88),O(6) 1,199,291 37 7,125,886 64.8 L(24),Def(92),O(3) 37.1 37.2 37.3 38 6,943,834 60.9 L(24),Def(91),O(3) 732,926 39 7,050,653 66.1 L(32),Def(82),O(3) 630,425 40 6,906,996 65.6 L(35),Def(79),O(6) 662,560 41 6,558,965 59.6 L(58),Gtr1%orYM(56),O(4) 675,539 42 6,419,797 62.9 L(34),Def(82),O(3) 870,518 43 6,306,883 65.7 L(24),Def(91),O(4) 580,767 44 6,407,536 55.7 L(24),Def(93),O(3) 625,903 45 37,981 0.1 L(24),Def(93),O(3) 3,221,132 46 6,145,450 65.0 L(24),Def(92),O(4) 736,135 47 5,997,842 59.9 L(24),Def(90),O(6) 466,830 48 5,518,416 57.8 L(24),Def(90),O(4) 1,080,873 49 5,165,471 24.6 L(24),Def(124),O(7) 1,337,188 50 5,802,746 62.1 L(33),Def(82),O(3) 51 4,477,733 50.9 L(24),Def(89),O(6) 544,234 52 5,664,001 61.2 L(24),Def(92),O(3) 867,075 53 5,485,643 62.3 L(24),Def(91),O(4) 54 5,512,962 66.4 L(24),Def(91),O(4) 540,290 55 6,500,000 6.8 L(57),Gtr1%orYM(57),O(4) 2,625,053 56 5,410,009 58.8 L(33),Def(82),O(3) 645,451 57 5,387,792 65.7 L(24),Def(93),O(3) 639,400 58 5,305,707 64.7 L(24),Def(90),O(4) 727,162 59 5,329,473 67.9 L(35),Def(79),O(6) 465,761 60 08/01/33 5,260,643 67.4 L(34),Def(82),O(3) 61 4,890,375 58.3 L(24),Def(91),O(4) 701,396 62 5,345,941 58.1 L(47),GRTR1%orYM(33),O(3) 738,946 63 4,987,473 64.6 L(24),Def(92),O(4) 502,925 64 5,233,771 60.9 L(35),Def(82),O(3) 689,925 65 5,118,658 54.5 L(24),Def(93),O(3) 66 5,042,364 61.2 L(24),Def(92),O(3) 712,112 67 5,416,219 60.2 L(24),Def(27),O(6) 506,448 68 4,829,022 66.3 L(33),Def(82),O(3) 506,977 69 4,891,049 60.4 L(24),Def(90),O(4) 70 4,736,404 65.8 L(32),Def(82),O(3) 567,477 71 4,423,897 44.0 L(24),Def(89),O(6) 809,903 72 4,753,829 65.6 L(35),Def(82),O(3) 731,232 73 4,745,431 67.7 L(24),Def(90),O(6) 74 4,580,893 65.4 L(24),Def(91),O(4) 75 4,552,303 56.6 L(24),Def(90),O(4) 522,278 76 08/01/33 4,561,268 67.1 L(34),Def(82),O(3) 702,000 77 4,509,851 66.3 L(24),Def(90),O(4) 544,700 78 4,540,112 64.9 L(23),Def(91),O(6) 640,197 79 5,281,000 41.4 L(33),Def(22),O(3) 709,289 80 08/01/28 4,002,671 60.6 L(34),Def(82),O(3) 81 07/01/33 4,358,441 67.1 L(33),Def(82),O(3) 577,978 82 3,938,381 56.3 L(24),Def(91),O(3) 116,116 83 3,889,574 53.3 L(59),Gtr1%orYM(53),O(7) 726,142 84 4,184,174 66.4 L(35),Def(82),O(3) 85 4,223,160 50.0 L(24),Def(90),O(6) 747,066 86 4,171,772 59.6 L(24),Def(92),O(4) 457,625 87 3,693,895 51.3 L(24),Def(91),O(4) 88 3,660,959 56.3 L(35),Def(82),O(3) 89 4,126,556 61.6 L(24),Def(55),O(3) 668,973 90 3,679,356 58.6 L(35),Def(82),O(3) 90.1 90.2 91 3,800,099 54.3 L(24),D(89),O(6) 92 3,586,746 66.4 L(24),Def(91),O(4) 93 3,897,328 72.7 L(34),Def(21),O(3) 389,793 94 3,477,625 51.5 L(24),Def(90),O(4) 697,860 95 3,412,727 65.4 L(33),Def(82),O(3) 333,105 96 3,516,987 69.0 L(24),Def(93),O(3) 492,936 97 2,996,768 56.5 L(24),Def(90),O(3) 409,464 98 18,819 0.2 L(32),Def(82),O(3) 528,077 99 3,227,997 64.6 L(24),Def(91),O(3) 329,551 100 3,143,171 62.9 L(24),Def(91),O(4) 101 3,065,034 66.6 L(24),Def(91),O(4) 102 2,839,573 58.3 L(24),Def(91),O(4) 321,156 103 2,969,905 63.3 L(32),Def(82),O(3) 104 2,990,074 65.4 L(24),Def(91),O(4) 286,726 105 06/11/25 3,005,693 61.5 L(24),Def(94),O(1) 106 2,881,968 65.9 L(33),Def(82),O(3) 365,697 107 2,878,557 65.1 L(34),Def(82),O(3) 108 2,633,818 46.2 L(33),Def(82),O(3) 143,232 109 2,843,382 65.4 L(24),Def(90),O(3) 374,160 110 2,823,415 55.1 L(24),Def(90),O(6) 440,123 111 01/01/28 2,847,096 66.2 L(24),Def(93),O(3) 112 3,295,000 53.3 L(33),Def(22),O(3) 346,549 113 2,463,276 43.6 L(34),Def(82),O(3) 114 2,736,077 66.7 L(34),Def(82),O(3) 115 2,817,021 68.0 L(24),Def(93),O(3) 334,074 116 2,759,729 55.1 L(24),Def(90),O(6) 389,757 117 59,656 0.7 L(24),Def(150),O(6) 353,004 118 2,681,037 65.4 L(34),Def(82),O(3) 365,179 119 2,639,873 40.9 L(34),Def(82),O(3) 120 2,606,958 57.0 L(35),Def(80),O(5) 121 2,385,550 46.8 L(24),Def(89),O(4) 469,967 122 2,354,367 60.4 L(24),Def(91),O(4) 377,058 123 2,607,064 52.1 L(24),Greater of 1% or YM(87),O(7) 435,285 124 2,768,527 73.8 L(33),Def(22),O(3) 279,459 125 2,531,511 67.1 L(35),Def(82),O(3) 126 2,688,875 72.7 L(34),Def(22),O(3) 239,391 127 2,486,779 67.2 L(35),Def(82),O(3) 208,227 128 2,250,463 50.0 L(35),Def(82),O(3) (169,751) 129 2,407,333 55.1 L(24),Def(90),O(6) 353,375 130 2,112,183 60.8 L(33),Def(82),O(3) 178,772 131 2,301,218 63.4 L(24),Def(90),O(3) 273,686 132 09/30/19 2,139,030 57.5 L(24),Def(92),O(3) 133 2,313,599 65.2 L(24),Def(92),O(4) 134 2,081,120 58.9 L(24),Def(93),O(3) 313,445 135 2,200,203 64.2 L(34),Def(82),O(3) 331,895 136 1,676,227 40.9 L(34),Def(82),O(3) 333,705 137 2,027,695 61.4 L(33),Def(82),O(3) 238,729 138 2,212,730 59.3 L(33),Def(79),O(6) 139 2,149,042 62.7 L(34),Def(82),O(3) 140 2,142,185 66.9 L(24),Def(91),O(4) 237,495 141 2,068,392 60.0 L(34),Def(82),O(3) 221,836 142 2,073,722 66.1 L(32),Def(82),O(3) 143 15,352 0.3 L(33),Def(82),O(3) 478,033 144 2,079,828 67.1 L(23),Def(91),O(6) 262,241 145 2,302,072 71.9 L(34),Def(22),O(3) 259,581 146 2,033,155 59.8 L(35),Def(82),O(3) 271,619 147 1,977,816 61.8 L(33),Def(82),O(3) 309,291 148 2,041,806 54.4 L(24),Def(90),O(3) 149 1,750,225 55.6 L(33),Def(82),O(3) 150 2,280,000 51.2 L(33),Def(22),O(3) 248,097 151 04/11/25 1,900,283 63.3 L(24),Def(91),O(1) 152 1,841,906 65.8 L(34),Def(79),O(6) 163,711 153 1,823,240 52.1 L(35),Def(82),O(3) 183,413 154 1,764,314 66.0 L(34),Def(82),O(3) 250,667 155 1,763,965 58.8 L(24),Def(93),O(3) 239,687 156 1,578,569 58.8 L(24),Def(93),O(3) 205,385 156.1 95,240 156.2 110,145 157 1,671,021 61.9 L(32),Def(82),O(3) 158 1,309,744 44.4 L(32),Def(82),O(3) 210,906 159 1,613,302 56.6 L(24),Def(88),O(7) 266,806 160 1,553,877 58.3 L(24),Def(91),O(4) 170,039 161 1,316,541 46.2 L(24),Def(89),O(6) 239,833 162 1,487,486 43.7 L(34),Def(82),O(3) 163 1,626,284 62.5 L(23),Def(91),O(6) 205,363 164 1,474,442 53.2 L(35),Def(82),O(3) 206,127 164.1 164.2 165 1,563,172 62.5 L(33),Def(82),O(3) 201,454 166 1,671,219 69.6 L(33),Def(22),O(3) 278,239 167 1,410,214 43.4 L(34),Def(82),O(3) 168 1,800,000 46.5 L(33),Def(22),O(3) 220,580 169 1,395,516 51.7 L(34),Def(82),O(3) 192,614 170 1,370,537 55.9 L(24),Def(91),O(3) 171 1,443,704 65.6 L(32),Def(82),O(3) 126,729 172 1,311,675 45.2 L(24),Def(90),O(3) 173 1,448,114 66.4 L(34),Def(82),O(3) 76,503 174 1,344,853 58.3 L(24),Def(91),O(4) 207,696 175 1,431,406 63.6 L(34),Def(82),O(3) 176 1,657,000 46.7 L(33),Def(22),O(3) 172,654 177 1,648,000 58.9 L(33),Def(22),O(3) 171,005 178 1,055,136 45.4 L(24),Def(93),O(3) 179 1,424,000 54.0 L(33),Def(22),O(3) 155,422 180 1,325,000 38.4 L(33),Def(22),O(3) 208,357 181 34,562 1.4 L(24),Def(213),O(3) 199,404 182 997,782 59.2 L(24),Def(91),O(3) 109,582 183 934,164 56.6 L(34),Def(82),O(3) 115,427 184 778,882 51.9 L(24),Def(92),O(4) 67,786 185 750,211 58.8 L(24),Def(93),O(3) 104,799 186 778,860 59.2 L(24),Def(91),O(3) 95,545
MOST RECENT MOST RECENT UW DSCR LOAN # 2002 NOI ($) NOI ($) NOI DATE UW NOI ($) UW NCF ($) (1),(2),(15) TITLE TYPE PML % ------ ------------ ------- -------- ---------- ---------- ------------ ---------- ----- 1 22,825,836 20,138,744 7/31/03 21,122,367 19,705,493 3.10 Fee 2 3,676,982 3,550,421 6/30/03 5,378,114 5,097,664 1.36 Leasehold 3 5,717,038 5,837,275 7/31/03 5,997,921 5,204,432 1.84 Fee 4 3,443,343 3,443,343 12/31/02 3,242,453 3,112,853 1.24 Fee 5 3,251,464 3,198,548 5/31/03 2,968,045 2,672,960 1.60 Fee 5.1 1,789,583 1,731,240 5/31/03 1,674,806 1,501,661 5.2 1,461,881 1,467,308 5/31/03 1,293,239 1,171,299 6 5,326,793 5,269,284 6/30/03 4,220,471 3,713,111 1.51 Fee 7 3,358,574 3,192,347 1.51 Fee 8 2,513,456 2,281,335 1.35 Fee 9 2,197,153 2,042,343 3/31/03 2,141,976 2,043,694 1.44 Fee 10 2,818,726 2,929,342 4/30/03 1,953,694 1,872,881 1.36 Fee 11 1,839,391 1,832,741 2/28/03 1,784,040 1,691,750 1.48 Fee 18.0 12 1,524,577 1,554,439 3/31/03 1,622,032 1,527,032 1.43 Fee 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 1,373,714 1,409,485 2/28/03 1,373,726 1,352,526 1.49 Fee 14 1,343,571 1,384,531 3/31/03 1,567,565 1,390,610 1.47 Fee 15 1,703,135 1,724,211 3/31/03 1,652,579 1,485,743 1.61 Fee/Leasehold 16 1,653,418 1,653,418 12/31/02 1,615,008 1,394,509 1.54 Fee 17 1,235,145 1,190,180 1.27 Fee 18 1,314,863 1,349,881 7/31/03 1,268,697 1,247,547 1.41 Fee 19 729,256 1,079,477 5/31/03 1,195,916 1,139,916 1.38 Fee 20 1,170,685 1,258,085 5/31/03 1,292,227 1,221,477 1.47 Fee 21 1,138,067 1,025,884 6/30/03 1,190,755 1,141,255 1.56 Fee 22 1,110,064 1,110,064 12/31/02 1,240,793 1,155,006 1.43 Fee 23 1,133,350 1,079,259 1.30 Fee 16.0 24 1,251,691 6/30/03 1,047,544 1,007,544 1.45 Fee 25 1,104,791 1,078,557 1.41 Fee 26 1,054,681 1,058,488 2/28/03 1,187,937 1,089,587 1.54 Fee 27 1,202,924 1,360,820 3/31/03 1,220,351 1,131,731 1.61 Fee 28 738,833 5/31/03 1,112,101 1,020,747 1.39 Fee 29 1,018,767 957,974 1.41 Fee 30 1,545,373 1,407,958 1.44 Fee 31 1,106,080 1,175,521 5/31/03 1,110,266 976,177 1.63 Fee 32 2,082,583 2,082,583 12/31/02 1,631,435 1,456,553 2.49 Fee 33 1,070,185 843,181 3/31/03 1,013,795 926,045 1.67 Fee 34 758,333 793,540 6/30/03 925,113 862,689 1.31 Fee 11.0 35 716,509 760,233 6/30/03 1,019,488 907,609 1.43 Fee 36 1,021,191 986,779 5/31/03 1,002,582 932,582 1.64 Fee 37 351,826 752,249 4/30/03 857,623 793,873 1.35 Fee 37.1 368,273 4/30/03 457,643 425,643 37.2 232,796 261,854 4/30/03 276,752 254,752 37.3 119,030 122,122 4/30/03 123,227 113,477 38 989,387 4/30/03 934,572 859,572 1.61 Fee 39 920,724 1,127,028 6/30/03 1,143,327 1,121,977 1.54 Fee 40 593,014 552,682 6/30/03 864,440 810,603 1.36 Fee 5.0 41 595,059 818,372 3/31/03 792,823 715,907 1.38 Fee 42 914,679 850,875 4/30/03 819,564 717,549 1.39 Fee 17.0 43 625,811 699,540 5/31/03 823,456 770,839 1.56 Fee 44 866,597 808,593 4/30/03 833,309 778,859 1.41 Fee 45 2,731,035 2,711,259 4/30/03 2,404,189 2,276,689 2.46 Fee 46 773,180 773,180 12/31/02 793,688 718,444 1.41 Fee 7.0 47 582,708 571,020 3/31/03 656,236 636,236 1.30 Fee 48 1,005,065 1,002,933 3/31/03 869,864 715,468 1.31 Fee 49 1,572,943 1,572,653 4/30/03 1,447,739 1,384,102 3.06 Fee 13.0 50 545,431 4/30/03 731,054 696,054 1.50 Fee 51 618,462 4/30/03 756,535 698,172 1.20 Fee 17.0 52 956,339 875,133 3/31/03 831,971 760,467 1.52 Fee 53 234,216 697,533 6/30/03 655,114 620,714 1.47 Fee 54 386,434 366,458 5/31/03 658,050 626,902 1.42 Fee 55 2,553,063 2,553,063 12/31/02 7,254,877 7,206,877 22.55 Fee 56 635,587 641,330 2/28/03 654,749 628,582 1.44 Fee 57 613,572 641,900 7/31/03 748,018 675,418 1.51 Fee 58 692,976 688,678 4/30/03 633,365 617,565 1.46 Fee 59 605,950 560,830 6/30/03 630,105 591,571 1.29 Fee 5.0 60 602,035 614,635 4/30/03 654,255 631,755 1.41 Fee 61 687,471 678,742 4/30/03 667,834 661,718 1.33 Fee 62 826,589 830,469 5/31/03 793,469 758,400 2.10 Fee 63 606,005 682,683 6/30/03 625,108 581,358 1.51 Fee 64 846,947 772,244 6/30/03 832,987 686,730 1.50 Fee 65 754,756 750,781 3/31/03 655,120 615,670 1.40 Fee 16.0 66 780,499 754,869 3/31/03 671,218 582,117 1.52 Fee 67 737,448 758,391 3/31/03 702,339 587,245 1.51 Fee 68 575,873 597,143 3/31/03 564,438 538,438 1.39 Fee 69 672,972 699,812 4/30/03 636,448 567,160 1.39 Fee 70 587,018 595,403 3/31/03 599,140 587,240 1.58 Fee 71 884,435 884,435 12/31/02 853,041 771,813 1.74 Fee 15.0 72 741,378 743,641 4/30/03 627,037 588,598 1.46 Fee 73 586,039 584,712 7/31/03 569,287 555,987 1.41 Fee 74 583,534 551,342 1.49 Fee 75 603,077 615,972 5/31/03 572,536 548,776 1.51 Fee 76 774,130 783,254 5/31/03 544,200 508,450 1.35 Fee 77 531,965 517,803 4/30/03 517,189 507,239 1.41 Fee 78 531,752 523,583 4/30/03 562,373 501,373 1.31 Fee 79 661,904 689,631 3/31/03 623,155 595,905 2.55 Fee 80 544,661 539,636 1.40 Fee 81 615,959 612,297 3/31/03 562,634 528,634 1.48 Fee 82 602,220 619,591 2/28/03 585,424 549,511 1.46 Fee 83 724,229 723,641 3/31/03 576,131 512,069 1.36 Fee 84 254,786 369,465 5/31/03 530,541 505,853 1.51 Fee 85 803,660 787,780 7/31/03 723,348 677,988 1.91 Fee 13.0 86 432,544 432,544 12/31/02 573,694 523,649 1.46 Fee 16.0 87 539,107 503,142 1.38 Fee 10.0 88 291,931 278,066 5/31/03 602,867 552,867 1.53 Fee 89 671,356 622,752 588,288 1.29 Fee 90 572,665 499,937 485,816 1.23 Fee 90.1 90.2 91 537,298 537,298 12/31/02 529,077 497,359 1.56 Fee 19.0 92 257,079 330,863 5/31/03 417,756 402,725 1.40 Fee 93 413,577 417,929 3/31/03 421,329 416,279 1.65 Fee 94 707,388 686,729 3/31/03 607,471 485,621 1.73 Fee 10.0 95 389,351 392,305 4/30/03 407,776 396,376 1.48 Fee 96 313,348 372,559 6/30/03 382,957 354,509 1.20 Fee 97 430,471 408,030 4/30/03 418,002 389,502 1.38 Fee 98 679,497 722,283 2/28/03 823,360 749,860 1.52 Fee 99 409,181 423,531 3/31/03 399,247 388,547 1.51 Fee 100 173,452 5/31/03 366,337 351,937 1.39 Fee 11.0 101 242,027 257,201 5/31/03 364,960 341,245 1.38 Fee 102 389,357 392,149 4/30/03 408,557 398,117 1.33 Fee 103 268,967 343,372 2/28/03 400,163 378,163 1.61 Fee 104 319,517 279,845 5/31/03 348,554 328,015 1.36 Fee 105 400,620 6/30/03 387,401 386,204 1.50 Fee 106 358,526 356,118 5/31/03 351,961 343,311 1.52 Fee 107 324,833 324,833 12/31/02 314,589 312,405 1.33 Fee 108 353,554 419,501 2/28/03 490,995 425,890 1.62 Fee 109 374,160 374,160 2/28/03 348,343 346,385 1.49 Fee 110 411,031 235,910 6/30/03 346,888 336,088 1.59 Fee 111 319,731 317,263 1.26 Fee 14.0 112 408,521 426,724 3/31/03 385,996 369,860 2.53 Fee 113 405,372 382,592 1.66 Fee 114 315,044 312,917 1.40 Fee 3.0 115 326,967 7/31/03 327,783 316,257 1.32 Fee 116 460,367 434,481 6/30/03 431,402 419,952 1.59 Fee 117 477,918 477,918 12/31/02 467,848 440,044 1.27 Fee 118 286,248 435,719 4/30/03 361,267 319,267 1.45 Fee 119 405,000 405,000 12/31/02 459,550 457,282 2.19 Fee 120 250,157 4/30/03 324,555 322,382 1.55 Fee 121 512,163 512,163 12/31/02 489,590 417,125 1.82 Fee 122 383,304 419,827 3/31/03 350,146 336,242 1.50 Fee 123 455,652 455,652 12/31/02 382,773 333,989 1.55 Fee 124 292,174 299,411 2/28/03 297,674 287,524 1.48 Fee 125 238,513 238,513 12/31/02 296,733 286,223 1.29 Fee 126 211,559 215,032 4/30/03 302,139 292,039 1.68 Fee 127 280,810 308,573 5/31/03 314,864 288,181 1.33 Fee 128 (23,599) 249,845 3/31/03 343,136 315,136 1.40 Fee 129 386,128 345,186 6/30/03 332,659 322,959 1.59 Fee 130 238,243 264,192 3/31/03 302,725 269,467 1.30 Fee 131 316,364 315,455 1/31/03 291,562 281,362 1.49 Fee 132 298,875 298,875 7/31/03 289,909 287,016 1.33 Fee 133 380,272 310,834 6/30/03 345,460 331,312 1.71 Fee 134 271,907 270,655 5/31/03 287,313 255,813 1.24 Fee 135 330,719 331,665 3/31/03 307,369 277,004 1.57 Fee 136 356,993 344,172 3/31/03 343,031 331,681 1.56 Fee 137 217,437 239,214 3/31/03 301,216 271,741 1.36 Fee 138 274,765 272,591 1.47 Fee 139 261,897 259,724 1.52 Fee 140 264,594 264,635 5/31/03 266,899 249,261 1.42 Fee 141 134,463 242,503 236,720 1.44 Fee 142 1.54 Fee 143 480,976 485,728 2/28/03 445,534 432,622 1.35 Fee 144 272,776 271,705 4/30/03 265,091 232,387 1.33 Fee 145 137,384 137,384 12/31/02 294,520 263,249 1.40 Fee 146 261,226 246,501 5/31/03 273,290 269,140 1.57 Fee 147 290,284 296,424 4/30/03 285,023 265,739 1.71 Fee 148 277,278 275,204 1.58 Fee 149 132,336 84,384 3/31/03 281,790 247,002 1.49 Fee 150 292,771 285,299 3/31/03 256,598 248,348 2.46 Fee 151 230,179 228,547 1.43 Fee 152 238,251 160,241 3/31/03 240,495 219,495 1.52 Fee 153 341,251 361,149 6/30/03 284,678 224,406 1.41 Fee 154 249,417 247,782 3/31/03 239,962 219,158 1.55 Fee 155 145,060 222,232 3/31/03 230,183 223,533 1.46 Fee 156 199,504 203,825 5/31/03 233,754 209,514 1.36 Fee 156.1 92,674 104,680 5/31/03 114,561 104,362 156.2 106,830 99,145 5/31/03 119,193 105,153 157 240,707 240,707 12/31/02 219,966 206,711 1.52 Fee 158 223,303 226,990 2/28/03 226,298 221,337 1.29 Fee 10.0 159 262,099 336,079 5/31/03 245,708 208,248 1.63 Fee 160 174,682 198,863 4/30/03 217,867 210,949 1.33 Fee 161 250,603 217,681 4/30/03 248,955 227,533 1.27 Fee 162 253,308 244,344 1.65 Fee 163 204,495 210,506 4/30/03 212,556 181,074 1.30 Fee 164 218,512 206,554 4/30/03 227,222 204,604 1.38 Fee 164.1 164.2 165 200,930 200,930 12/31/02 200,136 198,590 1.55 Fee 166 290,147 290,147 12/31/02 229,467 213,367 1.98 Fee 167 248,836 239,836 1.71 Fee 168 208,516 294,324 3/31/03 213,258 208,039 2.61 Fee 169 228,534 219,782 4/30/03 223,198 203,038 1.46 Fee 170 249,701 4/30/03 210,359 191,109 1.44 Fee 171 163,220 161,994 12/31/02 187,265 177,515 1.56 Fee 172 250,523 250,750 4/30/03 200,644 189,144 1.50 Fee 173 193,807 188,799 5/31/03 181,482 172,632 1.43 Fee 174 178,335 220,403 4/30/03 190,237 182,644 1.33 Fee 175 185,267 183,438 1.51 Fee 176 143,529 139,635 3/31/03 174,539 167,039 2.28 Fee 177 127,390 117,043 3/31/03 153,371 148,621 2.04 Fee 178 219,679 6/30/03 205,317 196,117 1.41 Fee 179 160,481 152,490 3/31/03 146,832 140,582 2.23 Fee 180 179,936 175,086 3/31/03 190,000 183,844 3.13 Fee 181 204,051 218,070 4/30/03 196,810 189,760 1.69 Fee 182 129,291 129,291 12/31/02 126,000 123,750 1.47 Fee 183 140,394 146,470 5/31/03 143,482 136,032 1.71 Fee 184 129,301 153,976 5/31/03 155,627 120,752 1.54 Fee 185 117,991 113,973 5/31/03 118,476 111,588 1.36 Fee 186 102,785 102,785 12/31/02 95,187 93,687 1.47 Fee
UPFRONT ESCROW ------------------------------------------------------------------------------------------------------------- UPFRONT CAPEX UPFRONT ENVIR. UPFRONT TI/LC UPFRONT RE TAX UPFRONT INS. UPFRONT OTHER LOAN # RESERVE ($) RESERVE ($) RESERVE ($) RESERVE ($) RESERVE ($) RESERVE ($) ------ ----------- ----------- ----------- ----------- ----------- ----------- 1 0 0 0 0 0 0 2 0 0 0 0 0 0 3 0 0 0 0 0 0 4 0 0 0 87,569 108,219 0 5 0 0 0 405,569 30,310 0 5.1 0 0 0 0 0 0 5.2 0 0 0 0 0 0 6 0 0 0 0 0 0 7 200,000 0 0 72,648 117,975 2,108,432 8 0 0 0 0 0 0 9 0 0 0 235,817 0 0 10 0 0 0 84,375 0 0 11 0 0 0 97,012 1,620 0 12 0 0 0 62,551 36,089 0 12.1 0 0 0 0 0 0 12.2 0 0 0 0 0 0 12.3 0 0 0 0 0 0 12.4 0 0 0 0 0 0 12.5 0 0 0 0 0 0 12.6 0 0 0 0 0 0 12.7 0 0 0 0 0 0 12.8 0 0 0 0 0 0 13 35,925 0 0 223,994 8,933 0 14 0 0 0 105,450 54,337 35,000 15 0 0 0 90,620 21,374 0 16 0 0 0 97,267 0 0 17 0 0 0 39,901 14,907 0 18 0 0 0 0 0 0 19 0 0 0 67,120 12,047 50,000 20 0 0 0 19,120 7,135 0 21 0 0 0 88,353 19,771 0 22 0 0 0 64,302 12,215 0 23 0 0 250,000 74,180 7,900 0 24 30,000 0 0 88,863 51,194 0 25 0 0 0 66,675 89,709 0 26 0 0 0 115,469 15,003 0 27 0 1,250 156,341 24,996 12,705 0 28 0 0 0 34,582 8,426 0 29 0 0 0 193,608 69,157 0 30 0 0 0 0 0 0 31 0 0 0 89,362 4,146 0 32 0 0 0 0 0 0 33 0 0 0 28,912 6,818 0 34 0 0 0 46,486 2,648 0 35 0 0 0 145,000 2,801 0 36 0 0 0 36,609 35,324 0 37 0 0 0 80,887 15,583 0 37.1 0 0 0 0 0 0 37.2 0 0 0 0 0 0 37.3 0 0 0 0 0 0 38 0 0 0 100,000 84,852 0 39 16,375.00 0 0 68,149.93 6,140.94 0 40 0 0 0 39,033 2,258 0 41 0 0 0 40,159 38,100 0 42 0 0 160,000 34,484 3,560 0 43 0 0 0 67,746 8,306 0 44 0 0 0 0 0 13,703 45 0 0 0 0 0 0 46 0 0 0 139,019 9,969 0 47 0 0 0 42,875 20,392 0 48 0 0 125,000 100,448 6,310 0 49 0 0 0 0 0 0 50 0 0 0 85,953 12,017 0 51 0 0 250,000 39,923 4,275 0 52 0 0 0 67,980 13,716 600,000 53 0 0 0 91,309 25,917 0 54 0 0 0 32,411 4,731 0 55 0 0 0 0 0 0 56 0 0 0 87,769 4,632 0 57 0 0 0 95,365 6,016 0 58 23,706 0 0 58,673 8,434 0 59 0 0 0 28,792 1,648 0 60 0 0 0 65,966 14,677 0 61 0 0 0 116,674 3,471 0 62 0 0 0 14,740 20,226 0 63 0 0 0 23,625 36,445 0 64 0 0 0 79,162 19,357 25,000 65 0 0 0 28,880 5,350 0 66 0 0 350,000 0 10,723 0 67 0 0 57,893 102,760 13,351 0 68 0 0 0 13,403 3,842 0 69 0 0 0 33,827 8,392 0 70 0 0 0 86,958 4,355 0 71 0 8,125 0 21,765 34,575 0 72 0 0 0 49,844 17,560 0 73 0 0 0 0 0 0 74 0 0 0 27,197 9,286 0 75 0 0 0 0 17,083 0 76 0 0 0 27,888 29,397 0 77 14,940 0 0 53,827 2,824 0 78 0 0 0 36,764 26,979 0 79 0 0 0 0 0 0 80 0 0 0 0 0 0 81 0 0 0 64,892 5,029 0 82 0 0 0 67,924 10,441 0 83 0 0 0 15,914 1,310 0 84 0 0 0 8,714 1,517 0 85 0 0 0 0 0 0 86 0 0 0 52,480 758 0 87 0 0 0 21,019 5,828 0 88 0 0 0 37,867 14,594 5,000 89 0 0 0 0 0 0 90 0 0 0 0 981 0 90.1 0 0 0 0 0 0 90.2 0 0 0 0 0 0 91 0 0 0 24,167 7,625 0 92 0 0 0 32,746 1,967 0 93 0 15,441 0 2,166 1,472 0 94 0 0 75,000 29,019 3,578 0 95 0 0 0 9,732 3,104 0 96 0 0 0 25,434 11,287 0 97 0 0 0 59,010 22,002 0 98 0 0 0 59,975 14,963 0 99 0 0 0 28,269 1,925 0 100 0 0 0 24,234 14,102 0 101 103,625 0 0 34,951 3,200 0 102 0 0 0 34,335 5,871 0 103 0 0 0 22,546 3,892 0 104 0 0 0 34,864 2,577 0 105 0 0 0 0 0 0 106 0 0 0 26,384 1,702 0 107 0 0 0 0 0 0 108 0 0 0 20,547 6,334 0 109 0 0 0 0 0 0 110 0 0 0 13,945 1,678 0 111 0 0 0 0 0 0 112 0 0 0 0 0 0 113 0 0 0 9,674 641 0 114 0 0 0 0 4,619 0 115 0 495 0 0 0 0 116 0 0 0 14,872 3,019 0 117 0 0 0 0 0 0 118 0 0 0 36,527 19,280 0 119 0 0 0 0 348 0 120 0 0 0 0 142 0 121 0 0 150,000 31,236 10,721 10,000 122 0 0 0 0 0 0 123 0 0 100,000 13,779 3,646 0 124 53,375 0 0 9,073 3,067 0 125 0 0 0 0 387 0 126 0 0 0 1,669 2,565 14,820 127 0 0 0 20,601 4,872 0 128 0 0 0 30,215 8,639 0 129 0 0 0 16,171 2,421 0 130 0 0 0 25,144 20,169 0 131 0 0 0 3,300 1,492 10,000 132 0 0 0 0 0 0 133 0 0 0 48,309 2,646 0 134 0 0 0 18,317 10,354 0 135 0 0 45,000 24,723 1,733 0 136 0 0 0 3,409 3,995 0 137 60,000 0 0 23,978 15,600 0 138 0 0 0 0 201 0 139 0 0 0 0 422 0 140 0 0 0 23,910 1,908 0 141 0 0 0 15,494 1,717 0 142 0 0 0 0 0 0 143 0 0 0 28,450 3,255 0 144 0 0 0 9,571 7,953 0 145 0 0 0 26,762 765 0 146 0 0 0 6,241 3,940 0 147 0 0 0 14,023 12,490 0 148 0 0 0 0 0 0 149 0 0 0 12,612 3,035 0 150 0 0 0 0 0 0 151 0 0 0 0 0 24,000 152 0 0 0 34,294 7,750 0 153 0 0 0 31,563 8,245 25,000 154 0 0 50,000 13,476 1,576 0 155 0 0 0 80,415 6,824 0 156 0 0 0 0 0 0 156.1 0 0 0 0 0 0 156.2 0 0 0 0 0 0 157 0 0 0 7,230 3,511 0 158 0 0 0 11,086 882 0 159 0 0 0 16,856 803 175,000 160 0 0 0 27,353 2,350 0 161 0 0 0 22,734 2,441 0 162 0 0 20,700 0 973 0 163 0 0 0 7,527 7,703 0 164 0 0 0 13,317 2,789 0 164.1 0 0 0 0 0 0 164.2 0 0 0 0 0 0 165 0 0 0 0 0 0 166 0 0 0 0 2,689 0 167 0 0 20,700 0 858 0 168 0 0 0 0 0 0 169 0 0 0 8,934 9,066 0 170 0 0 0 28,973 19,307 45,000 171 0 0 0 31,546 2,379 0 172 0 0 0 28,543 7,331 0 173 0 0 0 11,974 1,242 0 174 0 0 0 27,825 2,038 0 175 0 0 0 425 1,060 0 176 0 0 0 0 0 0 177 0 0 0 0 0 0 178 0 0 0 13,497 1,024 0 179 0 0 0 0 0 0 180 0 0 0 0 0 0 181 0 0 0 30,938 0 0 182 0 0 0 4,743 1,342 0 183 0 0 0 5,256 1,164 0 184 0 0 0 6,343 2,320 0 185 0 0 0 0 3,125 0 186 0 0 0 2,118 1,800 0
MONTHLY ESCROW ---------------------------------------------------------------------------------------------------------------- MONTHLY CAPEX MONTHLY ENVIR. MONTHLY TI/LC MONTHLY RE TAX MONTHLY INS. MONTHLY OTHER LOAN # RESERVE ($) RESERVE ($) RESERVE ($) RESERVE ($) RESERVE ($) RESERVE ($) ------ ----------- ----------- ----------- ----------- ----------- ----------- 1 0 0 0 0 0 0 2 3,136 0 20,378 0 0 0 3 66,124 0 0 84,628 155,000 0 4 10,750 0 0 43,784 10,822 0 5 3,135 0 22,988 40,557 7,578 0 5.1 0 0 0 0 0 0 5.2 0 0 0 0 0 0 6 0 0 0 58,750 0 0 7 15,974 0 0 0 0 0 8 2,417 0 13,333 25,500 2,833 33,333 9 1,901 0 6,290 23,582 0 0 10 1,259 0 5,475 14,063 5,440 0 11 0 0 0 16,169 331 0 12 7,917 0 0 31,276 5,156 0 12.1 0 0 0 0 0 0 12.2 0 0 0 0 0 0 12.3 0 0 0 0 0 0 12.4 0 0 0 0 0 0 12.5 0 0 0 0 0 0 12.6 0 0 0 0 0 0 12.7 0 0 0 0 0 0 12.8 0 0 0 0 0 0 13 1,755 0 0 37,332 2,233 0 14 3,371 0 3,205 26,363 3,697 0 15 1,733 0 6,498 33,801 2,137 0 16 0 0 0 24,317 0 0 17 768 0 2,979 7,980 1,863 0 18 1,375 0 0 10,917 1,900 0 19 4,667 0 0 7,458 6,024 0 20 4,717 0 0 19,120 7,135 0 21 4,125 0 0 17,671 4,943 0 22 1,093 0 0 2,570 2,443 0 23 492 0 2,639 14,836 1,317 20,833 24 0 0 0 7,405 3,938 0 25 154 0 6,035 9,525 6,901 0 26 8,196 0 0 16,496 7,501 0 27 1,045 0 6,341 12,498 1,271 0 28 1,000 0 5,800 6,917 702 0 29 347 0 342 27,658 5,320 0 30 4,165 0 0 0 0 0 31 2,574 0 12,961 17,872 1,382 0 32 0 0 0 0 0 0 33 7,313 0 0 14,456 3,409 0 34 1,417 0 3,786 7,748 1,324 0 35 2,350 0 7,834 14,500 2,801 0 36 5,833 0 0 18,304 4,058 0 37 5,313 0 0 8,987 1,948 0 37.1 0 0 0 0 0 0 37.2 0 0 0 0 0 0 37.3 0 0 0 0 0 0 38 6,250 0 0 12,500 7,071 0 39 2,025 0 0 6,815 2,047 0 40 1,219 0 3,268 6,506 1,129 0 41 0 0 0 10,040 8,253 0 42 1,106 0 7,409 3,448 1,187 0 43 517 0 2,708 14,162 1,384 0 44 0 0 0 1,186 329 0 45 0 0 0 0 0 0 46 941 0 6,270 11,585 665 0 47 1,668 0 0 6,125 1,854 0 48 1,692 0 11,199 11,161 3,155 0 49 0 0 0 0 0 0 50 2,917 0 0 10,744 1,502 0 51 0 0 4,431 7,985 713 0 52 950 0 3,333 13,596 1,524 0 53 1,634 0 0 7,024 6,008 0 54 2,596 0 0 8,427 1,183 0 55 0 0 0 0 0 0 56 1,917 0 262 14,628 2,316 0 57 6,050 0 0 8,670 3,008 0 58 0 0 0 5,706 1,205 0 59 877 0 2,335 4,799 824 0 60 1,875 0 0 8,246 1,631 0 61 510 0 0 11,667 3,471 0 62 733 0 0 7,370 2,023 0 63 3,646 0 0 4,725 3,037 0 64 1,775 0 11,834 8,796 1,613 0 65 313 0 2,504 5,776 892 0 66 1,042 0 5,000 0 1,191 0 67 1,738 0 10,731 12,845 2,225 0 68 2,167 0 0 6,702 1,921 0 69 1,096 0 4,678 5,638 1,049 0 70 992 0 0 10,870 1,452 0 71 0 0 0 3,627 3,458 0 72 3,203 0 0 5,538 3,512 0 73 865 0 0 2,833 1,161 0 74 336 0 0 4,533 844 0 75 1,980 0 0 0 1,708 0 76 2,980 0 0 3,984 2,940 0 77 0 0 0 6,079 403 0 78 5,083 0 0 7,353 2,698 0 79 0 0 0 0 0 0 80 419 0 0 0 0 0 81 2,833 0 0 7,210 2,515 0 82 390 0 1,690 13,153 2,088 0 83 564 0 0 7,957 655 0 84 431 0 1,627 8,714 759 0 85 3,780 0 0 9,843 5,003 0 86 645 0 3,300 7,497 758 0 87 321 0 2,569 3,503 530 0 88 4,167 0 0 4,207 3,648 0 89 707 0 2,151 0 0 0 90 273 0 904 0 327 0 90.1 0 0 0 0 0 0 90.2 0 0 0 0 0 0 91 0 0 3,689 4,833 1,089 0 92 1,253 0 0 8,514 492 0 93 421 0 0 2,166 736 0 94 1,948 0 0 7,545 1,193 0 95 950 0 0 2,433 1,552 0 96 2,333 0 0 4,239 1,411 0 97 2,375 0 0 8,430 2,482 0 98 6,125 0 0 11,995 7,481 0 99 0 0 0 3,534 481 0 100 1,097 0 0 2,203 1,007 0 101 1,976 0 0 9,087 800 0 102 870 0 0 3,121 978 0 103 1,835 0 0 2,050 649 0 104 1,712 0 0 9,065 644 0 105 100 0 0 0 0 0 106 721 0 0 3,298 851 0 107 182 0 0 0 0 0 108 912 0 4,781 2,568 704 0 109 163 0 816 0 0 0 110 0 0 0 1,992 559 0 111 206 0 0 0 0 0 112 0 0 0 0 0 0 113 255 0 1,645 3,225 107 0 114 178 0 0 0 385 0 115 0 0 0 4,521 544 0 116 0 0 0 1,859 1,006 0 117 197 0 3,763 8,725 2,083 0 118 3,500 0 0 5,218 1,607 0 119 189 0 0 0 174 0 120 182 0 0 0 71 0 121 1,279 0 4,318 5,206 1,340 0 122 0 0 0 0 0 0 123 724 0 3,618 6,890 729 0 124 846 0 0 1,612 1,022 0 125 185 0 0 0 0 0 126 842 0 0 1,669 1,283 0 127 358 0 1,866 4,120 541 0 128 2,334 0 0 6,043 960 0 129 0 0 0 1,617 807 0 130 2,772 0 0 3,143 2,017 0 131 0 0 0 1,100 746 0 132 242 0 0 0 0 0 133 1,418 0 0 6,039 2,646 0 134 2,625 0 0 2,617 1,294 0 135 601 0 1,561 3,090 867 0 136 946 0 0 1,136 1,332 0 137 2,456 0 0 2,997 1,560 0 138 185 0 0 0 50 0 139 182 0 0 0 0 0 140 1,470 0 0 6,217 477 0 141 482 0 0 2,582 858 0 142 0 0 0 0 0 0 143 1,076 0 0 3,556 1,085 0 144 2,725 0 0 2,393 1,136 0 145 429 0 2,303 8,921 383 0 146 346 0 0 567 563 0 147 468 0 1,140 2,337 833 0 148 173 0 864 0 0 0 149 404 0 2,676 2,102 2,032 0 150 0 0 0 0 0 0 151 0 0 0 0 0 0 152 1,750 0 0 4,899 3,875 0 153 773 0 5,154 3,507 687 0 154 468 0 1,066 1,685 788 0 155 0 0 0 7,310 569 0 156 2,055 0 0 5,505 0 0 156.1 0 0 0 2,399 0 0 156.2 0 0 0 3,106 0 0 157 167 0 936 1,033 585 0 158 415 0 0 3,695 294 0 159 660 0 2,594 3,371 268 0 160 557 0 0 3,419 392 0 161 299 0 1,236 3,789 203 0 162 173 0 575 0 88 0 163 2,624 0 0 1,881 1,100 0 164 1,885 0 0 4,439 558 0 164.1 0 0 0 0 0 0 164.2 0 0 0 0 0 0 165 129 0 0 0 0 0 166 1,342 0 0 1,647 1,345 0 167 173 0 578 0 87 0 168 0 0 0 0 0 0 169 1,680 0 0 2,978 755 0 170 1,765 0 0 4,139 2,865 0 171 815 0 0 2,868 476 0 172 958 0 0 3,171 2,444 0 173 585 0 0 1,497 621 0 174 633 0 0 3,478 340 0 175 153 0 0 2,000 96 0 176 0 0 0 0 0 0 177 0 0 0 0 0 0 178 0 0 0 1,500 341 0 179 0 0 0 0 0 0 180 0 0 0 0 0 0 181 0 0 0 2,813 553 0 182 0 0 0 1,581 192 0 183 621 0 0 1,314 388 0 184 454 0 2,453 1,057 387 0 185 536 0 0 6,280 3,125 0 186 0 0 0 706 150 0
LARGEST TENANT ----------------------------------------------------------------------------------------------------- SINGLE LEASE LOAN # TENANT LARGEST TENANT UNIT SIZE EXPIRATION ------ ------ -------------- --------- ---------- 1 Putnam Investments 298,589 3/31/09 2 EGL Eagle Global Logistics, LP 60,638 4/24/13 3 4 5 RPSI, Inc. 58,183 1/31/11 5.1 RPSI, Inc. 58,183 1/31/11 5.2 Factory Mutual Insurance Company 11,303 7/31/05 6 Siebel Systems, Inc. 42,650 7/31/09 7 Yes Lillian Vernon Corporation 827,000 8/31/23 8 USACE 101,935 8/31/08 9 Regal Cinemas 44,288 1/31/20 10 Outback Steakhouse 6,000 11/30/10 11 Albertson's 80,250 6/30/13 12 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 14 Ann & Hope 33,900 5/31/11 15 Capital Region Orthopaedic Group 44,759 4/30/23 16 Pennsylvania Blue Shield 213,567 12/31/11 17 Yes University Medical Diagnostic Associates, Inc. 30,726 8/31/17 18 19 20 21 22 Office Depot 30,000 12/31/13 23 Burke Williams 20,747 6/15/12 24 25 Office Depot 10,500 5/31/18 26 27 A Womans Fitness Company 10,140 4/30/06 28 Corporate Express 17,028 11/30/06 29 Marshall's 30,336 11/30/12 30 Standard Motor Products, Inc. 196,000 7/31/18 31 Safeway 48,660 2/28/10 32 Busch's Inc. 51,178 11/30/18 33 34 Sungear, Inc. 16,000 5/31/04 35 Hobby Lobby 56,464 1/31/16 36 37 37.1 37.2 37.3 38 39 40 Commercial Furnishings 4,780 3/31/06 41 42 Thomas P. Cox, Architects 11,049 4/30/07 43 Farmer Jack 48,860 12/31/20 44 45 46 Farmers Insurance 23,264 6/30/08 47 48 United Agri-Products Florida 19,330 5/31/06 49 Yes Ralphs Grocery Company 40,000 8/31/11 50 51 Stater Brothers 25,565 6/30/05 52 Art Van 36,084 10/31/15 53 54 55 56 57 58 59 The Window Factory, Inc. 29,258 8/31/06 60 61 62 63 64 Neighborhood Centers, Inc. 52,593 8/31/08 65 Sassoon 12,556 10/31/11 66 Salvation Army 21,820 4/30/04 67 GSA 28,601 9/15/11 68 69 ESS 11,958 2/28/06 70 71 Big! Lots 21,120 1/31/08 72 73 74 Rio Wraps/Pizza Papalis 3,822 2/21/08 75 76 77 78 79 80 Yes Whole Foods 32,000 9/30/22 81 82 CVS 10,790 1/31/08 83 Glendale Neurological Associates 28,208 12/31/15 84 Deals - Nothing Over a Dollar 8,000 7/31/07 85 86 Loan Link 19,224 8/21/18 87 Wescom Credit Union 4,820 9/30/12 88 89 Yes Carmike Cinemas 52,990 6/30/23 90 Yes 90.1 Yes Eckerd Drug 13,306 9/30/19 90.2 Yes Eckerd Drug 10,908 2/23/21 91 Staples 24,264 10/31/13 92 93 94 Albertson subleased Hastings 36,767 12/31/04 95 96 97 98 99 100 101 102 103 104 105 Yes CVS 11,970 6/30/25 106 107 Yes Walgreens 14,560 12/31/77 108 Florida Dept. of Revenue 19,453 12/31/09 109 Yes Eckerd Corporation 13,050 5/8/20 110 111 Yes Sav-On 16,457 1/31/28 112 113 King Buffet 6,300 3/31/12 114 Yes Walgreens 14,490 12/31/77 115 116 117 Threesome Realty, Inc. (Gem Stores) 7,480 8/31/07 118 119 Yes Walgreens 15,120 7/21/61 120 Yes Walgreens 14,560 12/31/77 121 Monarch Paint 5,955 6/30/08 122 Grand Harbour 8,300 11/30/06 123 Infogrames (subleased to WebMD) 21,303 3/31/06 124 125 Yes Walgreens 14,725 10/31/20 126 127 Dollar General Partners 10,250 7/31/10 128 129 130 131 132 Yes Verizon South, Inc. and Contel of the South, Inc. d/b/a Verizon Mid-States 28,930 9/30/19 133 134 135 Food Lion 29,000 12/31/16 136 137 138 Yes Walgreens 14,490 4/1/61 139 Yes Walgreens 14,490 9/30/62 140 141 142 143 Winn Dixie Supermarket 40,264 4/30/11 144 145 Busa Corporation 4,360 1/31/05 146 147 Food Lion 29,000 6/30/18 148 Yes Eckerd 13,824 7/31/22 149 Christian Speakers, et al 4,345 1/31/05 150 151 Yes CVS 10,880 4/21/25 152 153 Saldivar Insurance 2,903 9/30/03 154 Food Lion 29,000 12/31/16 155 156 156.1 156.2 157 Cox Communications 5,000 12/31/06 158 159 Carondelet Health Network 8,506 3/31/05 160 161 Traditions Catering 2,433 10/31/07 162 Yes Eckerd Drug 13,824 1/22/23 163 164 164.1 164.2 165 Yes CVS 11,725 1/31/21 166 167 Yes Eckerd Drug 13,824 3/26/23 168 169 170 171 172 173 174 175 Yes United States of America General Services Administration 9000 4/6/23 176 177 178 179 180 181 182 183 184 Maria L. Walker, P.C. 5,097 10/31/08 185 186
2ND LARGEST TENANT ------------------------------------------------------------------------------------------------------- LEASE LOAN # 2ND LARGEST TENANT UNIT SIZE EXPIRATION ------ ------------------ --------- ---------- 1 PricewaterhouseCoopers 179,105 4/30/05 2 Tighe Warehousing & Distribution, Inc. 33,711 8/2/04 3 4 5 Severn Trent Systems 25,878 3/31/04 5.1 Severn Trent Systems 25,878 3/31/04 5.2 Burr Computer Environments 9,113 8/31/05 6 Palmer & Cay Holdings 28,927 2/28/09 7 8 Object Sciences Corp 12,951 3/31/10 9 Stein Mart 28,000 5/30/14 10 Roy's Restaurant 6,000 2/28/11 11 Ross Stores Inc. 24,790 1/31/04 12 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 14 Big Lots 33,000 1/31/11 15 Capital Region Ambulatory Surgery Center 17,815 10/31/15 16 Commerce Bank 10,792 4/30/05 17 Indiana University Health Care Associates, Inc. 30,726 1/31/18 18 19 20 21 22 T.J. Maxx 27,099 3/31/09 23 Lululemon 3,093 3/14/08 24 25 Johnny Carino's 6,297 5/31/18 26 27 Q-Ball, Inc. 8,005 8/31/04 28 Patient's Choice 17,028 2/28/05 29 Ross Stores Texas, L.P. 30,021 1/31/14 30 Museum of the City of NY 43,000 8/31/08 31 Osco Drug 17,640 5/31/05 32 Rite Aid 13,203 6/4/13 33 34 ServPro 7,735 11/30/04 35 Stein Mart 36,051 1/31/07 36 37 37.1 37.2 37.3 38 39 40 Furniture Update 4,585 6/30/08 41 42 Morpho Technologies 8,578 5/31/04 43 Sears Hardlines 7,767 3/31/08 44 45 46 Arbor Homes 5,212 1/14/12 47 48 Auto Desk 13,264 9/30/04 49 50 51 Marie Calendars 8,827 4/30/06 52 Rite Aid 11,960 10/31/08 53 54 55 56 57 58 59 Miramar Martial Arts 3,360 3/31/07 60 61 62 63 64 Girling Health Care, Inc. 15,000 4/30/04 65 Crew Cuts 7,606 8/31/07 66 Amazing Savings 12,668 8/5/04 67 Greater Harris County 911 15,380 1/31/13 68 69 Auto to Auto 11,032 10/31/04 70 71 Goodwill Industries 10,032 4/1/07 72 73 74 A.F. Jonna Development 3,111 12/31/12 75 76 77 78 79 80 81 82 Southland Corporation 3,248 6/30/06 83 M.I.R.O. 5,047 3/31/08 84 Part Tyme, LLC 5,600 10/31/07 85 86 Steris Corporation 9,893 2/28/11 87 Rockler Wood Working Superstore 4,803 9/30/07 88 89 90 90.1 90.2 91 Golf Mart 20,000 10/31/08 92 93 94 Rite Aid 35,040 11/30/06 95 96 97 98 99 100 101 102 103 104 105 106 107 108 Workforce C. FL/FL DCF 15,400 8/1/07 109 110 111 112 113 International Tobacco Group 1,769 4/30/08 114 115 116 117 Paramount Decorators, Inc. 6,840 1/31/17 118 119 120 121 International Food Market 3,702 6/30/05 122 United States Postal Service 6,500 4/30/10 123 Taser International 11,800 12/31/05 124 125 126 127 Bureau of Motor Vehicles 6,000 2/1/11 128 129 130 131 132 133 134 135 CVS 8,450 10/31/12 136 137 138 139 140 141 142 143 Super D Drugs 6,000 1/31/06 144 145 Sports Plus II 2,390 5/31/06 146 147 Bellsouth Mobility Inc. 2,400 5/31/05 148 149 Carl R. Eaby, DDS 4,110 4/30/13 150 151 152 153 Richard Waghalter 2,546 11/30/06 154 CVS 8,450 11/30/11 155 156 156.1 156.2 157 Sally Beauty 1,600 9/29/06 158 159 Healthsouth Corporation 3,285 4/15/05 160 161 State of Colorado 2,361 6/30/05 162 163 164 164.1 164.2 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 Atlanta Center for Athletes 3,480 2/28/06 185 186
3RD LARGEST TENANT ---------------------------------------------------------------------------------------------- LEASE LOAN # 3RD LARGEST TENANT UNIT SIZE EXPIRATION ------ ------------------ --------- ---------- 1 Sullivan & Worcester 105,840 12/31/11 2 Wall USA, Inc. 28,395 1/23/11 3 4 5 Factory Mutual Insurance Company 11,303 7/31/05 5.1 Samsung Semiconductor, Inc. 5,552 9/14/04 5.2 Intel Americas, Inc. 7,977 10/31/05 6 Retek, Inc. 28,265 6/30/05 7 8 IRS (GSA) 10,241 3/31/08 9 Congress Jewelry 10,000 9/30/10 10 Kihei-Wailea Medical Center 5,592 5/31/12 11 Chief Auto (Auto Zone) 3,900 4/30/04 12 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 13 14 Mike's Gym 25,000 5/31/12 15 Thomas Nicolla Consulting Service, PLLC 11,905 10/31/10 16 Compass Group USA 5,379 12/31/04 17 18 19 20 21 22 Books a Million 21,000 2/28/09 23 Insolito 1,495 2/29/08 24 25 Chili's 5,500 5/31/12 26 27 Accotink Academy, Inc. 6,480 8/31/10 28 Resolution EBS Inc. 11,666 5/31/05 29 Linens n Things 28,549 1/31/13 30 Eric Javits, Inc. 22,000 10/31/10 31 Green Valley True Hardware 8,000 4/15/08 32 ACO, Inc. 13,078 1/31/11 33 34 Imagination Design Studio 5,406 3/31/04 35 Big Lots 27,925 1/31/05 36 37 37.1 37.2 37.3 38 39 40 A & R Henry - Allegro Dance 4,549 M-T-M 41 42 Avalon Digital Communications 4,851 6/30/05 43 Beth's Hallmark II 4,655 4/30/06 44 45 46 Andalex Resources 5,038 4/30/06 47 48 Diamond Escapes 13,264 12/31/05 49 50 51 Fidelity Savings 3,000 8/31/05 52 Avenue 4,820 1/31/06 53 54 55 56 57 58 59 RJS Industries 3,000 7/31/03 60 61 62 63 64 Steinman, Blake & Morgan 5,921 7/31/04 65 Hooters 6,635 11/11/08 66 Minnesota Fabrics 10,428 12/31/05 67 Police Officers Pension 12,982 7/31/04 68 69 AmSouth Bank 5,762 12/31/09 70 71 Hands on Bicycles, Inc 10,000 4/30/13 72 73 74 National Processing 2,345 12/31/12 75 76 77 78 79 80 81 82 All Pet Distributors 2,438 12/31/12 83 Rehabilitation Physicians 3,503 11/7/04 84 Blazing Wings, Inc. 5,370 8/31/12 85 86 Advanced Protection Industries, Inc. 9,598 12/31/06 87 Honey Baked Ham Co. 4,025 12/22/09 88 89 90 90.1 90.2 91 92 93 94 REI 15,000 12/31/10 95 96 97 98 99 100 101 102 103 104 105 106 107 108 Dollar General 9,520 3/1/06 109 110 111 112 113 Tan Dulgence 1,454 4/30/07 114 115 116 117 Rite-Bite Foods, Inc. (Burger King) 5,400 3/31/20 118 119 120 121 Emergency Animal Clinic 3,543 3/31/06 122 Atlanta Bread Company 4,180 1/31/10 123 Simcom/PanAm Flight Academy 10,310 10/15/05 124 125 126 127 Sunshine LLC 2,400 4/1/06 128 129 130 131 132 133 134 135 Family Dollar 7,000 12/31/05 136 137 138 139 140 141 142 143 Only a Buck 4,260 04/30/06 144 145 Executex, Inc. 1,800 2/28/08 146 147 The Money Tree 1,200 3/31/04 148 149 Realty Acquisitions (Realty Executives Fine Homes) 3,826 12/31/08 150 151 152 153 DL&J Physical Medicine 2,391 9/30/03 154 155 156 156.1 156.2 157 Gamestop 1,584 10/31/07 158 159 Terry Lowry M.D. 2,316 8/31/06 160 161 Budget Enviro Cleaners 2,138 11/30/12 162 163 164 164.1 164.2 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 Complete Care of Georgia 2,568 6/30/05 185 186
FOOTNOTES TO ANNEX A-1 -------------------------------------------------------------------------------- (1) With respect to cross-collateralized and cross-defaulted mortgage loans, the UW DSCR, Current LTV and Maturity LTV are calculated on an aggregate basis. (2) With regard to the One Post Office Square loan, the following fields were calculated using the aggregate Current Balance($) for the entire senior component (pooled and non-pooled): (i) Current LTV %, (ii) Current Balance per Unit ($), (iii) Maturity LTV %, and (iv) UW DSCR. (3) For Mortgage Loans secured by multiple Mortgaged Properties, each Mortgage Loan's Current Balance is allocated to the respective Mortgaged Properties based on the Mortgage Loan documentation or the Mortgage Loan Seller's determination of the appropriate allocation. (4) Each number identifies a group of cross collateralized, cross defaulted mortgaged loans. (5) Each letter identifies a group of related borrowers. (6) For each Mortgage Loan, the excess of the related Interest Rate over the related Servicing Fee Rate and the Trustee Fee Rate (together, the "Admin Fee"). (7) The Monthly Debt Service for Loan Numbers 55, 79, 112, 150, 168, 176, 177, 179 and 180 (interest-only loans), is calculated as 1/12th of the product of (i) the Current Balance, (ii) the Interest Rate and (iii) 365/360. (8) With respect to One Post Office Square loan, please refer to Annex B for the complete amortization schedule. (9) With regard to Loan Numbers 1, 78, 88, 144 and 163, the applicable Mortgage Loan Sellers will remit to the Trustee an amount that will be sufficient to cover the interest shortfalls that would otherwise occur on the first Distribution Date as a result of certain mortgage loans not having their first due date until November 2003. (10) Annual Debt Service is calculated by multiplying the monthly debt service by 12. (11) For Mortgage Loans with an I/O component, the I/O Period reflects the initial interest only period as of the respective Note Date of the Mortgage Loan. (12) For ARD Loans, the related Anticipated Repayment Date. (13) For ARD Loans, calculated as of the related Anticipated Repayment Date. (14) The "L" component of the prepayment provision represents remaining lockout payments. (15) The UW DSCR for the One Post Office Square loan was calculated based on the first principal and interest payment made into the trust during the term of the loan. [THIS PAGE INTENTIONALLY LEFT BLANK.] ANNEX A-2 CUT-OFF DATE BALANCES FOR ALL MORTGAGE LOANS
WEIGHTED AVERAGES ------------------------------------------------------------ AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT CUT-OFF DATE BALANCES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- -------- ------------- ---------- ------------ --------- ----------- $923,360 - $1,999,999 30 $49,158,822 4.1% 5.5989% 110 1.65x 66.2% 53.2% $2,000,000 - $2,999,999 33 83,824,628 7.0 5.6395 111 1.49x 73.1 59.6 $3,000,000 - $3,999,999 27 92,336,181 7.7 5.5185 119 1.54x 69.1 54.6 $4,000,000 - $4,999,999 11 49,072,511 4.1 5.9684 110 1.45x 72.2 60.4 $5,000,000 - $6,999,999 37 219,049,632 18.2 5.4870 116 2.18x 70.4 58.2 $7,000,000 - $9,999,999 20 167,818,972 13.9 5.3880 119 1.56x 70.5 55.5 $10,000,000 - $14,999,999 16 190,224,771 15.8 5.4898 112 1.46x 76.5 64.2 $15,000,000 - $24,999,999 7 146,478,032 12.2 6.0681 130 1.44x 70.3 50.4 $25,000,000 - $60,000,000 5 206,823,775 17.2 5.6790 119 1.96x 64.8 53.4 --------- ------------------- -------- ------------- ---------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== ======== ============= ========== ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. MORTGAGE RATES FOR ALL MORTGAGE LOANS WEIGHTED AVERAGES ------------------------------------------------------------ AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT MORTGAGE RATES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- -------- ------------- ---------- ------------ --------- ----------- 4.2000% - 4.9999% 27 $156,233,474 13.0% 4.6927% 98 2.67x 64.4% 53.0% 5.0000% - 5.4999% 56 396,089,877 32.9 5.2295 114 1.77x 70.6 58.7 5.5000% - 5.9999% 52 303,052,287 25.2 5.6852 125 1.41x 74.7 59.3 6.0000% - 6.4999% 40 291,467,018 24.2 6.1946 130 1.46x 71.0 55.0 6.5000% - 6.9999% 7 21,148,468 1.8 6.5803 112 1.32x 74.1 60.0 7.0000% - 7.4999% 2 7,768,000 1.0 7.1623 145 1.25x 58.1 34.7 8.0000% - 8.6650% 2 29,028,201 2.4 8.1474 72 1.48x 49.3 42.4 --------- ------------------- -------- ------------- ---------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== ======== ============= ========== ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. ORIGINAL TERM TO MATURITY IN MONTHS FOR ALL MORTGAGE LOANS (1) WEIGHTED AVERAGES ------------------------------------------------------------ AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO ORIGINAL TERM TO MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT MATURITY IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- -------- ------------- ---------- ------------ --------- ----------- 60 - 84 19 $100,780,533 8.4% 4.8735% 63 1.73x 71.6% 65.9% 85 - 120 161 1,038,623,998 86.2 5.6711 118 1.71x 70.8 58.0 121 - 240 6 65,382,794 5.4 5.8570 200 1.61x 62.3 21.6 --------- ------------------- -------- ------------- ---------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== ======== ============= ========== ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date.
A-2-1 REMAINING TERM TO MATURITY IN MONTHS FOR ALL MORTGAGE LOANS (1)
WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO REMAINING TERM TO MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT MATURITY IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 57 - 84 21 $129,808,734 10.8% 5.6056% 65 1.67x 66.6% 60.6% 85 - 120 159 1,009,595,797 83.8 5.5999 119 1.71x 71.4 58.5 121 - 240 6 65,382,794 5.4 5.8570 200 1.61x 62.3 21.6 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. ORIGINAL AMORTIZATION TERM IN MONTHS FOR ALL MORTGAGE LOANS (1) WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO ORIGINAL AMORTIZATION MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT TERM IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 120 - 180 5 $26,870,607 2.3% 5.2877% 148 1.70x 42.5% 0.4% 181 - 240 7 40,308,887 3.4 6.1203 195 1.44x 66.7 18.6 241 - 300 37 222,751,382 18.9 6.0118 112 1.49x 68.3 53.3 301 - 330 1 4,596,704 0.4 8.6650 82 1.29x 68.6 61.6 331 - 360 127 885,049,745 75 5.5174 116 1.60x 72.9 61.5 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 177 $1,179,577,325 100.0% 5.6384% 118 1.58x 71.1% 57.1% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) Does not include the mortgage loans that are interest-only for their entire term. (2) For ARD loans, the respective Anticipated Repayment Date. REMAINING AMORTIZATION TERM IN MONTHS FOR ALL MORTGAGE LOANS (1) WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO REMAINING AMORTIZATION MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT TERM IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 117 - 180 5 $26,870,607 2.3% 5.2877% 148 1.70x 42.5% 0.4% 181 - 240 8 64,740,384 5.5 6.8485 148 1.47x 58.8 26.2 241 - 300 37 202,916,589 17.2 5.8265 116 1.48x 71.0 55.2 331 - 360 127 885,049,745 75.0 5.5174 116 1.60x 72.9 61.5 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 177 $1,179,577,325 100.0% 5.6384% 118 1.58x 71.1% 57.1% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) Does not include the mortgage loans that are interest-only for their entire term. (2) For ARD loans, the respective Anticipated Repayment Date. AMORTIZATION TYPES FOR ALL MORTGAGE LOANS WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT AMORTIZATION TYPES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- Balloon Loans (2) 159 $1,011,393,810 83.9% 5.6436% 113 1.49x 73.3% 60.8% IO - Balloon (3) 3 67,330,000 5.6 5.3651 120 2.90x 46.9 41.1 Fully Amortizing 7 52,130,607 4.3 5.7685 193 1.61x 52.7 1.0 ARD Loans 7 28,722,908 2.4 5.8931 119 1.38x 77.5 64.0 Interest Only 9 25,210,000 2.1 4.4938 73 7.66x 37.3 37.3 IO - ARD 1 20,000,000 1.7 5.5900 178 1.36x 80.0 59.4 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. (2) Excludes the mortgage loans which pay interest-only for a portion of their term. (3) The mortgage loans provides for monthly payments of interest-only for the entire term of the mortgage loans and the payment of the entire principal amount of the mortgage loans at maturity.
A-2-2 UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS FOR ALL MORTGAGE LOANS
WEIGHTED AVERAGES ------------------------------------------------------------- UNDERWRITTEN AGGREGATE % OF STATED CUT-OFF CASH FLOW NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO DEBT SERVICE MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT COVERAGE RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 1.20x - 1.29x 13 $88,859,187 7.4% 6.1611% 120 1.25x 75.9% 59.0% 1.30x - 1.34x 16 72,846,591 6.0 6.0793 119 1.31x 74.9 61.9 1.35x - 1.39x 23 200,618,780 16.7 5.8168 124 1.37x 75.8 62.1 1.40x - 1.44x 28 184,401,858 15.3 5.6164 112 1.42x 75.5 61.6 1.45x - 1.49x 23 135,585,163 11.3 5.3244 111 1.47x 77.1 64.8 1.50x - 1.69x 58 340,214,947 28.2 5.5388 120 1.56x 70.5 54.3 1.70x - 1.99x 10 63,882,563 5.3 5.9135 118 1.82x 63.4 50.5 2.00x - 2.99x 11 43,561,585 3.6 4.5160 90 2.39x 47.7 39.1 3.00x - 4.99x 3 68,316,651 5.7 5.2545 122 3.10x 41.8 36.5 5.00x - 22.55x 1 6,500,000 0.5 4.8500 118 22.55x 6.8 6.8 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. CUT-OFF DATE LTV RATIOS FOR ALL MORTGAGE LOANS WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO CUT-OFF DATE MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT LTV RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 6.8% - 49.9% 13 $135,141,233 11.2% 5.6239% 109 3.52x 40.8% 32.3% 50.0% - 59.9% 14 45,155,265 3.7 5.4321 124 1.76x 55.4 33.6 60.0% - 64.9% 16 119,164,341 9.9 5.9858 141 1.63x 63.7 41.7 65.0% - 69.9% 18 74,991,533 6.2 5.5659 114 1.54x 68.2 54.5 70.0% - 74.9% 36 206,171,814 17.1 5.8815 118 1.42x 73.1 60.8 75.0% - 80.0% 89 624,163,138 51.8 5.4724 114 1.43x 78.5 65.4 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70x 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. MATURITY DATE LTV RATIOS FOR ALL MORTGAGE LOANS (1),(2) WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MATURITY DATE MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT LTV RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 6.8% - 29.9% 2 $13,491,651 1.2% 4.9485% 137 12.45x 20.5% 16.0% 30.0% - 49.9% 20 172,326,259 15.0 5.8494 109 2.28x 50.9 41.9 50.0% - 59.9% 55 238,208,021 20.7 5.6240 121 1.51x 69.6 56.0 60.0% - 64.9% 41 305,499,666 26.5 5.6325 117 1.43x 75.3 62.4 65.0% - 69.9% 54 366,191,248 31.8 5.5737 118 1.43x 79.0 66.3 70.0% - 73.8% 7 56,939,873 4.9 5.0457 59 1.52x 78.9 72.9 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 179 $1,152,656,718 100.0% 5.6075% 114 1.71x 71.2% 59.2% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. (2) Excludes the fully amortizing mortgage loans.
A-2-3 TYPE OF MORTGAGED PROPERTIES FOR ALL MORTGAGE LOANS (1)
WEIGHTED AVERAGES -------------------------------------- AGGREGATE % OF CUT-OFF NUMBER OF CUT-OFF INITIAL DATE MORTGAGED DATE POOL UW LTV PROPERTY TYPE PROPERTIES BALANCE BALANCE DSCR RATIO OCCUPANCY(2) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ MULTIFAMILY Garden 71 $295,894,347 24.6% 1.52x 74.9% 94.6% Mid/High Rise 3 45,721,030 3.8 1.42x 73.5 96.0 Coop 1 6,500,000 0.5 22.55x 6.8 100.0 --------- ------------------- ----------- ------------- --------- ------------ SUBTOTAL 75 $348,115,377 28.9% 1.90x 73.4% 94.9% RETAIL Anchored 39 $218,730,855 18.2% 1.56x 72.5% 97.6% Shadow Anchored 8 46,978,408 3.9 1.45x 72.6 97.4 Unanchored 6 29,038,242 2.4 1.62x 66.2 97.0 --------- ------------------- ----------- ------------- --------- ------------ SUBTOTAL 53 $294,747,505 24.5% 1.55x 71.9% 97.5% OFFICE Suburban 18 $130,742,777 10.9% 1.47x 73.6% 95.9% CBD 4 102,702,986 8.5 2.41x 49.0 93.8 --------- ------------------- ----------- ------------- --------- ------------ SUBTOTAL 22 $233,445,762 19.4% 1.89x 62.8% 95.0% MANUFACTURED HOUSING 31 $124,736,095 10.4% 1.49x 75.7% 92.4% MIXED USE Industrial/Office 1 $50,871,090 4.2% 1.36x 74.3% 88.9% Office/Retail 2 11,494,691 1.0 1.44x 70.8 100.0 Multifamily/Retail 1 11,250,000 0.9 1.30x 70.3 100.0 --------- ------------------- ----------- ------------- --------- ------------ SUBTOTAL 4 $73,615,781 6.1% 1.36x 73.1% 92.3% INDUSTRIAL Flex 7 $49,317,209 4.1% 1.37x 71.8% 92.4% Warehouse/Distribution 1 24,000,000 2.0 1.51x 64.2 100.0 --------- ------------------- ----------- ------------- --------- ------------ SUBTOTAL 8 $73,317,209 6.1% 1.42x 69.3% 94.9% HOTEL Full Service 1 $36,000,000 3.0% 1.84x 63.2% NAP --------- ------------------- ----------- ------------- --------- ------------ SUBTOTAL 1 $36,000,000 3.0% 1.84x 63.2% NAP STORAGE 4 $13,459,597 1.1% 1.33x 73.8% 74.0% PARKING GARAGE 1 $7,350,000 0.6% 2.46x 27.8% NAP --------- ------------------- ----------- ------------- --------- ------------ TOTAL 199 $1,204,787,325 100.0% 1.70X 70.4% 94.9% ========= =================== =========== ============= ========= ============
---------- (1) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. A-2-4 MORTGAGED PROPERTIES BY STATE FOR ALL MORTGAGE LOANS (1)
WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGED DATE POOL MORTGAGE TERM UW LTV AT STATE PROPERTIES BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- Massachusettes 4 $130,837,109 10.9% 5.6295% 117 2.20x 59.9% 51.7% Texas 21 108,753,750 9.0 5.6247 116 1.49x 74.7 62.0 California 15 106,135,158 8.8 5.7981 122 1.50x 70.4 57.8 Florida 14 85,634,769 7.1 5.6024 105 1.46x 75.9 63.8 Maryland 4 79,646,001 6.6 5.7317 116 1.54x 72.0 56.4 Michigan 11 76,650,210 6.4 5.3677 119 1.71x 68.4 54.5 Virginia 5 63,940,460 5.3 6.0281 165 1.48x 70.6 39.7 Georgia 13 60,413,314 5.0 6.8919 96 1.51x 60.0 50.0 New York 7 54,652,954 4.5 5.2732 115 3.99x 60.3 41.1 Arizona 11 49,126,497 4.1 5.4012 119 1.41x 72.7 60.5 Illinois 15 45,823,788 3.8 4.9643 91 1.96x 62.9 56.0 Ohio 10 36,133,774 3.0 5.5887 104 1.47x 75.1 63.6 Pennsylvania 5 30,418,517 2.5 5.3740 118 1.50x 67.8 51.0 North Carolina 8 26,680,538 2.2 5.1467 112 1.48x 77.4 65.0 Alabama 3 26,009,383 2.2 5.2427 119 1.40x 79.3 65.1 Hawaii 2 25,488,828 2.1 5.5060 165 1.39x 77.5 58.8 Wisconsin 6 23,367,099 1.9 5.3427 119 1.41x 79.2 65.9 Tennessee 5 21,552,928 1.8 5.7251 119 1.50x 75.3 61.6 Mississippi 4 20,266,957 1.7 5.5794 119 1.49x 73.9 56.8 New Hampshire 8 16,564,654 1.4 5.0000 118 1.43x 79.3 65.3 Minnesota 2 15,616,088 1.3 4.9265 118 1.54x 78.4 64.4 Indiana 2 15,340,000 1.3 6.4351 120 1.28x 77.9 66.9 Kansas 2 11,913,310 1.0 5.0349 119 1.45x 79.4 65.4 Kentucky 1 11,326,686 0.9 5.1200 81 1.43x 79.2 66.8 South Carolina 4 10,145,799 0.8 5.5384 118 1.44x 78.8 62.9 Colorado 3 10,010,674 0.8 5.7381 119 1.39x 73.5 56.2 Washington 4 8,260,734 0.7 5.6247 118 1.56x 65.2 51.8 Utah 1 7,300,000 0.6 5.7500 120 1.41x 77.2 65.0 Alaska 1 5,000,000 0.4 5.8600 120 1.91x 59.2 50.0 Oregon 1 3,771,347 0.3 5.3900 119 1.39x 75.4 62.9 New Jersey 1 3,528,165 0.3 6.1200 119 1.50x 72.2 61.5 Montana 1 3,250,000 0.3 5.9900 120 1.32x 78.5 68.0 West Virginia 1 2,993,655 0.2 5.0300 58 1.48x 79.8 73.8 Nevada 1 2,497,461 0.2 5.1900 119 1.44x 72.4 60.0 New Mexico 1 2,400,000 0.2 5.9600 120 1.57x 70.6 59.8 Maine 1 2,237,620 0.2 5.0000 119 1.52x 79.9 65.8 Idaho 1 1,099,098 0.1 6.0400 119 1.71x 66.6 56.6 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 199 $1,204,787,325 100.0% 5.6145% 117 1.70X 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (2) For ARD loans, the respective Anticipated Repayment Date.
A-2-5 CURRENT OCCUPANCY RATES FOR ALL MORTGAGE LOANS (1),(2),(3) WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO CURRENT MORTGAGED DATE POOL MORTGAGE TERM UW LTV AT OCCUPANY RATES PROPERTIES BALANCE BALANCE RATE (MOS.)(4) DSCR RATIO MATURITY(4) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 68.6 - 85.0 12 $50,039,879 4.3% 5.9949% 117 1.44x 72.8% 60.4% 85.1 - 90.0 16 140,304,689 12.1 5.7776 117 1.43x 75.5 63.5 90.1 - 95.0 39 310,393,155 26.7 5.3888 115 1.77x 69.6 57.7 95.1 - 100.0 130 660,699,603 56.9 5.6375 118 1.73x 70.3 55.5 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 197 $1,161,437,325 100.0% 5.6033% 117 1.69X 70.9% 57.3% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) Current occupancy rates have been calculated in this table based upon rent rolls made available to the applicable Mortgage Loan Seller by the related borrowers as of the dates set forth on Annex A-1 to this prospectus supplement. (2) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (3) Excludes the hotel and parking garage properties. (4) For ARD loans, the respective Anticipated Repayment Date.
YEARS BUILT/RENOVATED FOR ALL MORTGAGE LOANS (1),(2) WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO YEARS MORTGAGED DATE POOL MORTGAGE TERM UW LTV AT BUILT/RENOVATED PROPERTIES BALANCE BALANCE RATE (MOS.)(3) DSCR RATIO MATURITY(3) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- 1919 - 1959 1 $9,931,143 0.8% 5.5000% 178 1.44x 52.3% 0.6% 1960 - 1969 13 54,279,840 4.5 5.5174 115 1.47x 77.1 64.3 1970 - 1979 24 95,017,224 7.9 5.5155 110 1.54x 70.5 56.6 1980 - 1989 34 245,869,614 20.4 5.5257 126 1.84x 66.2 50.1 1990 - 1999 43 253,295,741 21.0 5.7836 112 1.55x 69.7 57.4 2000 - 2003 84 546,393,764 45.4 5.6049 116 1.77x 72.2 59.6 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 199 $1,204,787,325 100.0% 5.6145% 117 1.70X 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) Range of Years Built/Renovated references the earlier of the year built or with respect to renovated properties, the year of the most recent recent renovation date with respect to each Mortgaged Property. (2) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (3) For ARD loans, the respective Anticipated Repayment Date.
PREPAYMENT PROTECTION FOR ALL MORTGAGE LOANS WEIGHTED AVERAGES ------------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE POOL MORTGAGE TERM UW LTV AT PREPAYMENT PROTECTION LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- LO-Defeasance 178 $1,122,105,110 93.1% 5.5862% 118 1.59x 71.3% 57.5% LO-Yield Maintenance 7 58,250,718 4.8 5.1374 135 4.00x 62.3 49.1 Yield Maintenance 1 24,431,497 2.0 8.0500 70 1.51x 45.7 38.8 --------- ------------------- ----------- ------------- --------- ------------ --------- ----------- TOTAL 186 $1,204,787,325 100.0% 5.6145% 117 1.70X 70.4% 56.7% ========= =================== =========== ============= ========= ============ ========= =========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date.
A-2-6 ANNEX A-2 CUT-OFF DATE BALANCES FOR LOAN GROUP 1 MORTGAGE LOANS WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT CUT-OFF DATE BALANCES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- $1,000,000 - $1,999,999 12 $20,850,471 2.5% 5.9814% 126 1.51x 68.5% 52.4% $2,000,000 - $2,999,999 19 48,422,421 5.8 5.6642 108 1.48x 72.2 58.5 $3,000,000 - $3,999,999 17 56,102,788 6.7 5.7388 122 1.52x 68.3 54.3 $4,000,000 - $4,999,999 8 35,926,784 4.3 6.0783 107 1.47x 70.2 59.2 $5,000,000 - $6,999,999 19 113,044,967 13.5 5.6634 118 2.75x 67.0 54.4 $7,000,000 - $9,999,999 14 117,751,064 14.0 5.4543 124 1.58x 68.9 52.3 $10,000,000 - $14,999,999 12 144,127,644 17.2 5.5635 110 1.46x 75.6 63.8 $15,000,000 - $24,999,999 6 129,913,378 15.5 6.2043 132 1.44x 69.2 48.5 $25,000,000 - $60,000,000 4 172,871,090 20.6 5.7043 119 2.10x 61.9 52.0 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. MORTGAGE RATES FOR LOAN GROUP 1 MORTGAGE LOANS
WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT MORTGAGE RATES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 4.2500% - 4.9999% 11 $84,378,342 10.1% 4.7850% 103 3.38x 61.9% 49.8% 5.0000% - 5.4999% 31 247,706,121 29.5 5.2271 111 1.95x 66.8 55.8 5.5000% - 5.9999% 30 194,321,144 23.2 5.6875 128 1.43x 73.5 57.8 6.0000% - 6.4999% 28 254,660,330 30.4 6.2073 131 1.46x 71.0 54.5 6.5000% - 6.9999% 7 21,148,468 2.5 6.5803 112 1.32x 74.1 60.0 7.0000% - 7.4999% 2 7,768,000 0.9 7.1623 145 1.25x 58.1 34.7 8.0000% - 8.6650% 2 29,028,201 3.5 8.1474 72 1.48x 49.3 42.4 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. ORIGINAL TERM TO MATURITY IN MONTHS FOR LOAN GROUP 1 MORTGAGE LOANS(1) WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO ORIGINAL TERM TO MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT MATURITY IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 60 - 84 8 $65,019,588 7.7% 5.1475% 63 1.48x 77.7% 70.7% 85 - 120 97 708,608,225 84.5 5.7834 117 1.83x 68.4 56.3 121 - 240 6 65,382,794 7.8 5.8570 200 1.61x 62.3 21.6 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date.
A-2-7 REMAINING TERM TO MATURITY IN MONTHS FOR LOAN GROUP 1 MORTGAGE LOANS(1)
WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO REMAINING TERM TO MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT MATURITY IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 57 - 84 10 $94,047,788 11.2% 6.0735% 66 1.48x 68.9% 62.0% 85 - 120 95 679,580,024 81.0 5.6824 119 1.85x 69.2 56.9 121 - 240 6 65,382,794 7.8 5.8570 200 1.61x 62.3 21.6 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. ORIGINAL AMORTIZATION TERM IN MONTHS FOR LOAN GROUP 1 MORTGAGE LOANS(1) WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO ORIGINAL AMORTIZATION MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT TERM IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 120 - 180 4 $22,949,939 2.8% 5.4478% 153 1.73x 42.3% 0.4% 181 - 240 5 36,721,333 4.4 6.1276 202 1.45x 66.5 16.1 241 - 300 24 158,895,292 19.1 6.1572 109 1.56x 65.2 51.2 301 - 330 1 4,596,704 0.6 8.6650 82 1.29x 68.6 61.6 331 - 360 76 609,347,338 73.2 5.6061 116 1.65x 71.3 60.4 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 110 $832,510,606 100.0% 5.7468% 119 1.62X 69.1% 55.1% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) Does not include the mortgage loans that are interest-only for their entire term. (2) For ARD loans, the respective Anticipated Repayment Date.
REMAINING AMORTIZATION TERM IN MONTHS FOR LOAN GROUP 1 MORTGAGE LOANS(1) WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO REMAINING AMORTIZATION MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT TERM IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 118 - 180 4 $22,949,939 2.8% 5.4478% 153 1.73x 42.3% 0.4% 181 - 240 6 61,152,830 7.3 6.8956 149 1.47x 58.2 25.2 241 - 300 24 139,060,499 16.7 5.9076 115 1.56x 68.7 53.8 331 - 360 76 609,347,338 73.2 5.6061 116 1.65x 71.3 60.4 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 110 $832,510,606 100.0% 5.7468% 119 1.62X 69.1% 55.1% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) Does not include the mortgage loans that are interest-only for their entire term. (2) For ARD loans, the respective Anticipated Repayment Date. AMORTIZATION TYPES FOR LOAN GROUP 1 MORTGAGE LOANS WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT AMORTIZATION TYPES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- Balloon Loans (2) 96 $683,957,655 81.5% 5.7750% 112 1.51x 72.0% 60.1% IO - Balloon (3) 2 63,250,000 7.5 5.3345 120 3.01x 44.7 39.4 Fully Amortizing 6 48,209,939 5.7 5.8838 199 1.62x 53.4 1.1 IO - ARD 1 20,000,000 2.4 5.5900 178 1.36x 80.0 59.4 ARD Loans 5 17,093,012 2.0 5.9392 119 1.39x 76.1 61.7 Interest Only 1 6,500,000 0.8 4.8500 118 22.55x 6.8 6.8 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. (2) Excludes the mortgage loans which pay interest-only for a portion of their term. (3) The mortgage loans provides for monthly payments of interest-only for the entire term of the mortgage loans and the payment of the entire principal amount of the mortgage loans at maturity.
A-2-8 UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS
WEIGHTED AVERAGES ----------------------------------------------------------- UNDERWRITTEN AGGREGATE % OF STATED CUT-OFF CASH FLOW NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO DEBT SERVICE MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT COVERAGE RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 1.20x - 1.29x 9 $46,138,947 5.5% 6.6653% 120 1.26x 73.4% 57.8% 1.30x - 1.34x 12 60,363,977 7.2 6.1173 119 1.31x 74.5 61.4 1.35x - 1.39x 10 138,028,735 16.5 5.9919 127 1.36x 75.1 61.5 1.40x - 1.44x 16 119,926,734 14.3 5.6943 109 1.42x 75.4 61.1 1.45x - 1.49x 13 85,009,685 10.1 5.3038 106 1.48x 76.6 64.9 1.50x - 1.69x 39 242,803,313 28.9 5.6853 123 1.56x 69.0 51.9 1.70x - 1.99x 6 53,213,148 6.3 5.9781 119 1.81x 62.6 49.1 2.00x - 2.99x 3 20,034,417 2.4 4.7395 119 2.43x 40.9 24.9 3.00x - 4.99x 2 66,991,651 8.0 5.2720 124 3.10x 41.9 36.4 5.00x - 22.55x 1 6,500,000 0.8 4.8500 118 22.55x 6.8 6.8 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. CUT-OFF DATE LTV RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO CUT-OFF DATE MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT LTV RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 6.8% - 49.9% 8 $121,157,565 14.4% 5.7692% 113 3.66x 40.5% 32.5% 50.0% - 59.9% 8 29,784,066 3.5 5.6734 144 1.58x 55.0 24.3 60.0% - 64.9% 14 112,939,341 13.5 5.9823 142 1.64x 63.6 41.1 65.0% - 69.9% 10 47,476,169 5.7 5.5923 116 1.51x 68.9 54.5 70.0% - 74.9% 25 160,825,378 19.2 6.0384 118 1.40x 73.2 61.1 75.0% - 80.0% 46 366,828,087 43.7 5.5491 113 1.43x 78.5 65.9 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. MATURITY DATE LTV RATIOS FOR LOAN GROUP 1 MORTGAGE LOANS(1),(2) WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MATURITY DATE MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT LTV RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 6.8% - 29.9% 2 $13,491,651 1.7% 4.9485% 137 12.45x 20.5% 16.0% 30.0% - 49.9% 13 156,951,505 19.8 5.9453 112 2.29x 51.0 41.7 50.0% - 59.9% 31 159,275,178 20.1 5.7177 126 1.45x 70.6 55.9 60.0% - 64.9% 24 186,566,386 23.6 5.8038 115 1.44x 74.2 62.5 65.0% - 69.9% 29 226,654,533 28.7 5.7033 117 1.43x 78.7 66.3 70.0% - 73.8% 6 47,861,413 6.1 5.1416 59 1.49x 78.9 73.0 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 105 $790,800,667 100.0% 5.7311% 114 1.80X 69.5% 58.0% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date. (2) Excludes the fully amortizing mortgage loans.
A-2-9 TYPE OF MORTGAGED PROPERTIES FOR LOAN GROUP 1 MORTGAGE LOANS(1)
WEIGHTED AVERAGES ------------------------------------ AGGREGATE % OF CUT-OFF NUMBER OF CUT-OFF INITIAL DATE MORTGAGED DATE LOAN GROUP 1 UW LTV PROPERTY TYPE PROPERTIES BALANCE BALANCE DSCR RATIO OCCUPANCY ------------------------ ---------- ---------------- -------------- ------------ --------- ----------- RETAIL Anchored 39 $218,730,855 26.1% 1.56x 72.5% 97.6% Shadow Anchored 8 46,978,408 5.6 1.45x 72.6 97.4 Unanchored 6 29,038,242 3.5 1.62x 66.2 97.0 -------- ------------------ -------------- ------------ --------- ----------- SUBTOTAL 53 $294,747,505 35.1% 1.55x 71.9% 97.5% OFFICE Suburban 18 $130,742,777 15.6% 1.47x 73.6% 95.8% CBD 4 102,702,986 12.2 2.41x 49.0 93.8 -------- ------------------ -------------- ------------ --------- ----------- SUBTOTAL 22 $233,445,762 27.8% 1.89x 62.8% 94.9% MANUFACTURED HOUSING 17 $81,924,826 9.8% 1.49x 77.1% 92.7% MIXED USE Industrial/Office 1 $50,871,090 6.1% 1.36x 74.3% 88.9% Office/Retail 2 11,494,691 1.4 1.44x 70.8 100.0 Multifamily/Retail 1 11,250,000 1.3 1.30x 70.3 100.0 -------- ------------------ -------------- ------------ --------- ----------- SUBTOTAL 4 $73,615,781 8.8% 1.36x 73.1% 92.3% INDUSTRIAL Flex 7 $49,317,209 5.9% 1.37x 71.8% 92.4% Warehouse/Distribution 1 24,000,000 2.9 1.51x 64.2 100.0 -------- ------------------ -------------- ------------ --------- ----------- SUBTOTAL 8 $73,317,209 8.7% 1.42x 69.3% 94.9% HOTEL Full Service 1 $36,000,000 4.3% 1.84x 63.2% NAP -------- ------------------ -------------- ------------ --------- ----------- SUBTOTAL 1 $36,000,000 4.3% 1.84x 63.2% NAP MULTIFAMILY Garden 2 $18,649,927 2.2% 1.46x 75.6% 94.1% Coop 1 6,500,000 0.8 22.55x 6.8 1.0 -------- ------------------ -------------- ------------ --------- ----------- SUBTOTAL 3 $25,149,927 3.0% 6.91x 57.8% 95.7% STORAGE 4 $13,459,597 1.6% 1.33x 73.8% 74.0% PARKING GARAGE 1 $7,350,000 0.9% 2.46x 27.8% NAP -------- ------------------ -------------- ------------ --------- ----------- Total 113 $839,010,606 100.0% 1.79x 68.6% 95.1% ======== ================== ============== ============ ========= =========== ---------- (1) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement.
A-2-10 MORTGAGED PROPERTIES BY STATE FOR LOAN GROUP 1 MORTGAGE LOANS(1)
WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGED DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT STATE PROPERTIES BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- Massachusettes 3 $124,694,941 14.9% 5.6999% 119 2.21x 59.6% 51.3% California 15 106,135,158 12.7 5.7981 122 1.50x 70.4 57.8 Texas 12 79,676,748 9.5 5.6427 115 1.50x 75.6 63.4 Michigan 10 68,067,470 8.1 5.3825 119 1.71x 67.5 53.5 Virginia 5 63,940,460 7.6 6.0281 165 1.48x 70.6 39.7 New York 7 54,652,954 6.5 5.2732 115 3.99x 60.3 41.1 Florida 8 50,337,635 6.0 5.7469 97 1.43x 74.3 62.8 Georgia 11 50,102,369 6.0 7.1776 92 1.51x 57.6 47.9 Maryland 2 40,264,234 4.8 5.9498 113 1.82x 64.9 51.7 Pennsylvania 4 26,497,849 3.2 5.5255 118 1.49x 71.3 58.5 Arizona 4 21,931,173 2.6 5.1154 119 1.51x 69.1 57.0 Ohio 5 20,457,599 2.4 5.9049 120 1.39x 76.1 63.4 Hawaii 1 20,000,000 2.4 5.5900 178 1.36x 80.0 59.4 Illinois 4 16,304,002 1.9 5.5219 118 1.62x 72.9 61.1 Minnesota 2 15,616,088 1.9 4.9265 118 1.54x 78.4 64.4 Indiana 2 15,340,000 1.8 6.4351 120 1.28x 77.9 66.9 Kentucky 1 11,326,686 1.4 5.1200 81 1.43x 79.2 66.8 Tennessee 3 10,608,053 1.3 5.5005 120 1.53x 74.0 60.6 Utah 1 7,300,000 0.9 5.7500 120 1.41x 77.2 65.0 South Carolina 2 4,770,277 0.6 5.3000 119 1.56x 78.2 65.0 Colorado 2 4,575,652 0.5 5.8844 119 1.44x 65.9 43.1 Mississippi 2 4,187,275 0.5 5.4257 118 1.38x 63.0 27.4 Washington 1 4,166,921 0.5 5.4000 118 1.73x 61.7 51.5 New Jersey 1 3,528,165 0.4 6.1200 119 1.50x 72.2 61.5 Montana 1 3,250,000 0.4 5.9900 120 1.32x 78.5 68.0 West Virginia 1 2,993,655 0.4 5.0300 58 1.48x 79.8 73.8 North Carolina 1 2,946,284 0.4 4.2500 59 1.68x 79.6 72.7 Alabama 1 2,741,619 0.3 6.1800 119 1.33x 73.7 57.5 Wisconsin 1 2,597,339 0.3 5.1580 119 1.52x 75.7 62.7 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 113 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (2) For ARD loans, the respective Anticipated Repayment Date.
A-2-11 CURRENT OCCUPANCY RATES FOR LOAN GROUP 1 MORTGAGE LOANS(1),(2),(3)
WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO CURRENT MORTGAGED DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT OCCUPANY RATES PROPERTIES BALANCE BALANCE RATE (MOS.)(4) DSCR RATIO MATURITY(4) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 68.6 - 85.0 7 $24,113,076 3.0% 6.3951% 119 1.41x 72.4% 59.2% 85.1 - 90.0 9 $106,032,417 13.3 5.9236 117 1.41x 75.9 64.4 90.1 - 95.0 21 233,149,930 29.3 5.4301 115 1.87x 68.2 57.4 95.1 - 100.0 74 432,365,184 54.3 5.8079 122 1.84x 68.0 52.0 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $795,660,606 100.0% 5.7304% 119 1.78X 69.2% 55.4% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) Current occupancy rates have been calculated in this table based upon rent rolls made available to the applicable Mortgage Loan Seller by the related borrowers as of the dates set forth on Annex A-1 to this prospectus supplement. (2) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (3) Excludes the hotel and parking garage properties. (4) For ARD loans, the respective Anticipated Repayment Date. YEARS BUILT/RENOVATED FOR LOAN GROUP 1 MORTGAGE LOANS(1),(2) WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO YEARS MORTGAGED DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT BUILT/RENOVATED PROPERTIES BALANCE BALANCE RATE (MOS.)(3) DSCR RATIO MATURITY(3) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- 1919 - 1959 1 $9,931,143 1.2% 5.5000% 178 1.44x 52.3% 0.6% 1960 - 1969 4 $24,898,323 3.0 5.5438 109 1.47x 78.3 65.7 1970 - 1979 13 51,514,882 6.1 5.5713 112 1.60x 66.8 51.8 1980 - 1989 13 148,412,910 17.7 5.5089 131 2.15x 59.0 42.0 1990 - 1999 30 192,868,298 23.0 5.9049 111 1.57x 67.6 55.5 2000 - 2003 52 411,385,051 49.0 5.7845 119 1.81x 72.6 59.9 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 113 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) Range of Years Built/Renovated references the earlier of the year built or with respect to renovated properties, the year of the most recent recent renovation date with respect to each Mortgaged Property. (2) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (3) For ARD loans, the respective Anticipated Repayment Date. PREPAYMENT PROTECTION FOR LOAN GROUP 1 MORTGAGE LOANS WEIGHTED AVERAGES ----------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 1 MORTGAGE TERM UW LTV AT PREPAYMENT PROTECTION LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- LO-Defeasance 105 $770,404,021 91.8% 5.6933% 119 1.63x 69.8% 55.7% LO-Yield Maintenance 5 44,175,088 5.30 5.2744 145 4.73x 60.0 46.0 Yield Maintenance 1 24,431,497 2.90 8.0500 70 1.51x 45.7 38.8 -------- ------------------ -------------- ------------ --------- ----------- --------- ---------- TOTAL 111 $839,010,606 100.0% 5.7398% 119 1.79X 68.6% 54.7% ======== ================== ============== ============ ========= =========== ========= ========== ---------- (1) For ARD loans, the respective Anticipated Repayment Date.
A-2-12 ANNEX A-2 CUT-OFF DATE BALANCES FOR LOAN GROUP 2 MORTGAGE LOANS
WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT CUT-OFF DATE BALANCES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ $923,360 - $1,999,999 18 $28,308,351 7.7% 5.3172% 98 1.75x 64.5% 53.8% $2,000,000 - $2,999,999 14 35,402,207 9.7 5.6056 115 1.50x 74.4 61.1 $3,000,000 - $3,999,999 10 36,233,393 9.9 5.1775 113 1.56x 70.3 54.9 $4,000,000 - $4,999,999 3 13,145,727 3.6 5.6681 120 1.38x 77.5 63.6 $5,000,000 - $6,999,999 18 106,004,665 29.0 5.2988 114 1.57x 74.0 62.2 $7,000,000 - $9,999,999 6 50,067,909 13.7 5.2321 108 1.52x 74.2 63.0 $10,000,000 - $14,999,999 4 46,097,127 12.6 5.2595 118 1.46x 79.1 65.7 $15,000,000 - $33,952,685 2 50,517,339 13.8 5.3697 119 1.30x 79.2 62.0 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date. MORTGAGE RATES FOR LOAN GROUP 2 MORTGAGE LOANS WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT MORTGAGE RATES LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 4.2000% - 4.9999% 16 $71,855,132 19.6% 4.5844% 91 1.85x 67.3% 56.9% 5.0000% - 5.4999% 25 148,383,756 40.6 5.2336 118 1.46x 77.0 63.7 5.5000% - 5.9999% 22 108,731,143 29.7 5.6810 119 1.38x 76.8 61.8 6.0000% - 6.2700% 12 36,806,688 10.1 6.1063 120 1.43x 71.0 58.5 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date. ORIGINAL TERM TO MATURITY IN MONTHS FOR LOAN GROUP 2 MORTGAGE LOANS(1) WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO ORIGINAL TERM TO MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT MATURITY IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 60 - 84 11 $35,760,946 9.8% 4.3753% 62 2.19x 60.6% 57.1% 85 - 120 64 330,015,773 90.2 5.4300 119 1.44x 75.9 61.7 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date.
A-2-13 REMAINING TERM TO MATURITY IN MONTHS FOR LOAN GROUP 2 MORTGAGE LOANS(1)
WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO REMAINING TERM TO MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT MATURITY IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 58 - 84 11 $35,760,946 9.8% 4.3753% 62 2.19x 60.6% 57.1% 85 - 120 64 330,015,773 90.2 5.4300 119 1.44x 75.9 61.7 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date. ORIGINAL AMORTIZATION TERM IN MONTHS FOR LOAN GROUP 2 MORTGAGE LOANS(1) WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO ORIGINAL AMORTIZATION MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT TERM IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 120 - 180 1 $3,920,668 1.1% 4.3500% 117 1.52x 43.6% 0.2% 181 - 240 2 3,587,554 1.0 6.0464 118 1.34x 68.0 44.8 241 - 300 13 63,856,090 18.4 5.6500 119 1.31x 76.1 58.3 331 - 360 51 275,702,407 79.4 5.3215 115 1.49x 76.4 64.0 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 67 $347,066,719 100.0% 5.3785% 116 1.46X 75.9% 62.0% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) Does not include the mortgage loan that is interest-only for its entire term. (2) For ARD loans, the respective Anticipated Repayment Date. REMAINING AMORTIZATION TERM IN MONTHS FOR LOAN GROUP 2 MORTGAGE LOANS(1) WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO REMAINING AMORTIZATION MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT TERM IN MONTHS LOANS BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 117 - 180 1 $3,920,668 1.1% 4.3500% 117 1.52x 43.6% 0.2% 181 - 240 2 3,587,554 1.0 6.0464 118 1.34x 68.0 44.8 241 - 300 13 63,856,090 18.4 5.6500 119 1.31x 76.1 58.3 331 - 360 51 275,702,407 79.4 5.3215 115 1.49x 76.4 64.0 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 67 $347,066,719 100.0% 5.3785% 116 1.46X 75.9% 62.0% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) Does not include the mortgage loan that is interest-only for its entire term. (2) For ARD loans, the respective Anticipated Repayment Date. AMORTIZATION TYPES FOR LOAN GROUP 2 MORTGAGE LOANS WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT AMORTIZATION TYPES LOANS BALANCE BALANCE RATE (MOS.)(3) DSCR RATIO MATURITY(3) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ Balloon Loans (1) 63 $327,436,154 89.5% 5.3692% 116 1.46x 76.1% 62.5% Interest Only 8 18,710,000 5.1 4.3700 58 2.49x 47.9 47.9 ARD Loans 2 11,629,897 3.2 5.8254 119 1.38x 79.6 67.3 IO - Balloon (2) 1 4,080,000 1.1 5.8400 120 1.20x 80.0 69.0 Fully Amortizing 1 3,920,668 1.1 4.3500 117 1.52x 43.6 0.2 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) Excludes the mortgage loans which pay interest-only for a portion of their term. (2) The mortgage loans provides for monthly payments of interest-only for the entire term of the mortgage loans and the payment of the entire principal amount of the mortgage loans at maturity. (3) For ARD loans, the respective Anticipated Repayment Date.
A-2-14 UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS
WEIGHTED AVERAGES ---------------------------------------------------------- UNDERWRITTEN AGGREGATE % OF STATED CUT-OFF CASH FLOW NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO DEBT SERVICE MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT COVERAGE RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 1.20x - 1.29x 4 $42,720,240 11.7% 5.6165% 119 1.24x 78.5% 60.4% 1.30x - 1.34x 4 12,482,614 3.4 5.8960 120 1.31x 77.2 64.1 1.35x - 1.39x 13 62,590,045 17.1 5.4307 119 1.37x 77.3 63.5 1.40x - 1.44x 12 64,475,125 17.6 5.4715 119 1.42x 75.6 62.4 1.45x - 1.49x 10 50,575,478 13.8 5.3590 118 1.47x 77.9 64.7 1.50x - 1.69x 19 97,411,635 26.6 5.1737 113 1.56x 74.2 60.5 1.70x - 1.99x 4 10,669,416 2.9 5.5912 109 1.85x 67.5 57.9 2.00x - 3.13x 9 24,852,168 6.8 4.3280 64 2.39x 52.6 50.4 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date. CUT-OFF DATE LTV RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO CUT-OFF DATE MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT LTV RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 38.4% - 49.9% 5 $13,983,668 3.8% 4.3644% 75 2.29x 43.0% 30.8% 50.0% - 59.9% 6 15,371,199 4.2 4.9646 85 2.12x 56.3 51.7 60.0% - 64.9% 2 6,225,000 1.7 6.0493 120 1.50x 64.7 52.7 65.0% - 69.9% 8 27,515,364 7.5 5.5204 111 1.59x 66.9 54.6 70.0% - 74.9% 11 45,346,436 12.4 5.3250 118 1.48x 72.8 59.8 75.0% - 80.0% 43 257,335,052 70.4 5.3630 116 1.43x 78.6 64.7 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date. MATURITY DATE LTV RATIOS FOR LOAN GROUP 2 MORTGAGE LOANS(1),(2) WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MATURITY DATE MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT LTV RATIOS LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 38.4% - 49.9% 7 $15,374,753 4.2% 4.8711% 79 2.18x 50.6% 43.5% 50.0% - 59.9% 24 78,932,843 21.8 5.4348 110 1.62x 67.4 56.2 60.0% - 64.9% 17 118,933,280 32.9 5.3639 119 1.41x 77.1 62.3 65.0% - 69.9% 25 139,536,715 38.6 5.3632 118 1.44x 79.4 66.3 70.0% - 72.8% 1 9,078,460 2.5 4.5400 58 1.67x 79.3 72.8 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 74 $361,856,051 100.0% 5.3375% 113 1.51X 74.8% 62.0% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date. (2) Excludes the fully amortizing mortgage loans.
A-2-15 TYPE OF MORTGAGED PROPERTIES FOR LOAN GROUP 2 MORTGAGE LOANS(1)
WEIGHTED AVERAGES ---------------------------------- AGGREGATE % OF CUT-OFF NUMBER OF CUT-OFF INITIAL DATE MORTGAGED DATE LOAN GROUP 2 UW LTV PROPERTY TYPE PROPERTIES BALANCE BALANCE DSCR RATIO OCCUPANCY ------------------------ --------- -------------------------------- ------------- --------- ---------- MULTIFAMILY Garden 68 $266,764,738 72.9% 1.53x 74.8% 94.5% Mid/High Rise 3 45,721,030 12.5 1.42x 73.5 96.0 Student Housing 1 10,479,681 2.9 1.54x 76.5 97.1 --------- -------------------------------- ------------- --------- ---------- SUBTOTAL 72 $322,965,450 88.3% 1.51x 74.6% 94.8% MANUFACTURED HOUSING 14 $42,811,269 11.7% 1.48x 72.9% 91.9% --------- -------------------------------- ------------- --------- ---------- TOTAL 86 $365,776,719 100.0% 1.51X 74.4% 94.5% ========= ================================ ============= ========= ========== ---------- (1) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. MORTGAGED PROPERTIES BY STATE FOR LOAN GROUP 2 MORTGAGE LOANS(1) WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGED DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT STATE PROPERTIES BALANCE BALANCE RATE (MOS.)(2) DSCR RATIO MATURITY(2) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ Maryland 2 $39,381,768 10.8% 5.5086% 119 1.26x 79.2% 61.2% Florida 6 35,297,134 9.6 5.3963 117 1.50x 78.2 65.1 Illinois 11 29,519,786 8.1 4.6563 76 2.15x 57.3 53.2 Texas 9 29,077,002 7.9 5.5753 119 1.49x 72.1 58.0 Arizona 7 27,195,324 7.4 5.6316 119 1.33x 75.7 63.3 North Carolina 7 23,734,254 6.5 5.2580 119 1.45x 77.1 64.0 Alabama 2 23,267,764 6.4 5.1323 119 1.41x 79.9 66.0 Wisconsin 5 20,769,760 5.7 5.3658 119 1.40x 79.7 66.3 New Hampshire 8 16,564,654 4.5 5.0000 118 1.43x 79.3 65.3 Mississippi 2 16,079,681 4.4 5.6194 119 1.51x 76.7 64.4 Ohio 5 15,676,175 4.3 5.1761 84 1.56x 73.8 63.8 Kansas 2 11,913,310 3.3 5.0349 119 1.45x 79.4 65.4 Tennessee 2 10,944,875 3.0 5.9427 119 1.46x 76.7 62.6 Georgia 2 10,310,945 2.8 5.5034 119 1.53x 71.5 59.8 Michigan 1 8,582,740 2.3 5.2500 118 1.64x 75.3 62.5 Massachusettes 1 6,142,168 1.7 4.2000 83 2.10x 66.8 58.1 Hawaii 1 5,488,828 1.5 5.2000 118 1.51x 68.3 56.6 Colorado 1 5,435,022 1.5 5.6150 119 1.35x 79.9 67.1 South Carolina 2 5,375,523 1.5 5.7500 118 1.33x 79.3 61.1 Alaska 1 5,000,000 1.4 5.8600 120 1.91x 59.2 50.0 Washington 3 4,093,813 1.1 5.8534 118 1.38x 68.8 52.0 Pennsylvania 1 3,920,668 1.1 4.3500 117 1.52x 43.6 0.2 Oregon 1 3,771,347 1.0 5.3900 119 1.39x 75.4 62.9 Nevada 1 2,497,461 0.7 5.1900 119 1.44x 72.4 60.0 New Mexico 1 2,400,000 0.7 5.9600 120 1.57x 70.6 59.8 Maine 1 2,237,620 0.6 5.0000 119 1.52x 79.9 65.8 Idaho 1 1,099,098 0.3 6.0400 119 1.71x 66.6 56.6 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 86 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (2) For ARD loans, the respective Anticipated Repayment Date.
A-2-16 CURRENT OCCUPANCY RATES FOR LOAN GROUP 2 MORTGAGE LOANS(1),(2),(3)
WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO CURRENT MORTGAGED DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT OCCUPANY RATES PROPERTIES BALANCE BALANCE RATE (MOS.)(4) DSCR RATIO MATURITY(4) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 76.1 - 85.0 5 $25,926,803 7.1% 5.6230% 115 1.46x 73.1% 61.6% 85.1 - 90.0 7 34,272,272 9.4 5.3260 119 1.49x 74.4 60.9 90.1 - 95.0 18 77,243,225 21.1 5.2640 117 1.47x 74.0 58.8 95.1 - 100.0 56 228,334,419 62.4 5.3150 111 1.53x 74.8 62.2 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 86 $365,776,719 100.0% 5.3270% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) Current occupancy rates have been calculated in this table based upon rent rolls made available to the applicable Mortgage Loan Seller by the related borrowers as of the dates set forth on Annex A-1 to this prospectus supplement. (2) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (3) Excludes the hotel and parking garage properties. (4) For ARD loans, the respective Anticipated Repayment Date. YEARS BUILT/RENOVATED FOR LOAN GROUP 2 MORTGAGE LOANS(1),(2) WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO YEARS MORTGAGED DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT BUILT/RENOVATED PROPERTIES BALANCE BALANCE RATE (MOS.)(3) DSCR RATIO MATURITY(3) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ 1960 - 1969 9 $29,381,517 8.0% 5.4951% 119 1.47x 76.1% 63.2% 1970 - 1979 11 43,502,342 11.9 5.4495 106 1.48x 74.8 62.2 1980 - 1989 21 97,456,704 26.6 5.5512 119 1.36x 77.1 62.4 1990 - 1999 13 60,427,444 16.5 5.3966 117 1.50x 76.4 63.5 2000 - 2003 32 135,008,713 36.9 5.0576 108 1.65x 71.2 58.8 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 86 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) Range of Years Built/Renovated references the earlier of the year built or with respect to renovated properties, the year of the most recent recent renovation date with respect to each Mortgaged Property. (2) Because this table is presented at the Mortgage Property level, certain information is based on allocated loan amounts for mortgage loans secured by more than one Mortgaged Property. As a result, the weighted averages presented in this table may deviate slightly from weighted averages presented at the mortgage loan level in other tables in this prospectus supplement. (3) For ARD loans, the respective Anticipated Repayment Date. PREPAYMENT PROTECTION FOR LOAN GROUP 2 MORTGAGE LOANS WEIGHTED AVERAGES ---------------------------------------------------------- AGGREGATE % OF STATED CUT-OFF NUMBER OF CUT-OFF INITIAL REMAINING DATE LTV RATIO MORTGAGE DATE LOAN GROUP 2 MORTGAGE TERM UW LTV AT PREPAYMENT PROTECTION LOANS BALANCE BALANCE RATE (MOS.)(1) DSCR RATIO MATURITY(1) ------------------------ --------- -------------------------------- ------------- --------- ---------- --------- ------------ LO-Defeasance 73 $351,701,089 96.2% 5.3517% 114 1.50x 74.6% 61.4% Yield Maintenance 2 14,075,630 3.8 4.7073 103 1.69x 69.8 58.9 --------- -------------------------------- ------------- --------- ---------- --------- ------------ TOTAL 75 $365,776,719 100.0% 5.3269% 113 1.51X 74.4% 61.3% ========= ================================ ============= ========= ========== ========= ============ ---------- (1) For ARD loans, the respective Anticipated Repayment Date.
A-2-17 [THIS PAGE INTENTIONALLY LEFT BLANK.] ANNEX B CERTAIN CHARACTERISTICS OF MULTIFAMILY & MANUFACTURED HOUSING LOANS
LOAN # ORIGINATOR PROPERTY NAME STREET ADDRESS ------ ---------- ------------- -------------- 4 JPMCB Tindeco Wharf 2809 Boston Street 12 LaSalle Tarbell Apartment Portfolio Various Locations 12.1 LaSalle Tarbell Apartment Portfolio - Meadowbrook Apts 86-96 Fisherville Road 12.2 LaSalle Tarbell Apartment Portfolio - Pinewood Village 17-29 Bog Road 12.3 LaSalle Tarbell Apartment Portfolio - Pines of West Concord 20 Bog Road 12.4 LaSalle Tarbell Apartment Portfolio - Opechee Garden Apts 1156 North Main Street 12.5 LaSalle Tarbell Apartment Portfolio - Vineyard Terrace Apts. 219 Village Street 12.6 LaSalle Tarbell Apartment Portfolio - Mill Place West 479 North State Street 12.7 LaSalle Tarbell Apartment Portfolio - Ormond Street 23-25 Ormond Street 12.8 LaSalle Tarbell Apartment Portfolio - Prescott Street 43 Prescott Street 13 LaSalle Brook Gardens MHP 38 West Canyon Drive 18 NCCI Orion MHP 47 Bluebird Hill Drive 19 LaSalle Highland Lakes Apartments 1908 Briarwood Street 20 NCCI Oxford Square Apartments 600 Kenwick Circle 21 NCCI Woodlands North 9240-9280 University Avenue Nothwest 24 JPMCB Steeple Crest Apartments 5001 5th Avenue Extension 26 LaSalle College Station 110 Lincoln Green Street 33 LaSalle Carlin Manor Apartments 1900 Sunny Court 36 NCCI Auburn Hills 2760 Patrick Henry Drive 37 NCCI Greensboro Multifamily Portfolio Various 37.1 NCCI Chapel Walk Apartments 1370 Lees Chapel Road 37.2 NCCI Cross Creek Apartments 629 Creek Ridge Road 37.3 NCCI Millbrook II Apartments 1109A East Barton Street 38 NCCI Spanish Garden Apartments 2838 Royal Lane 39 LaSalle Wildwood MHC Pad Loan One Birch Drive 41 JPMCB View at Catalina 8000 East Wrightstown Road 44 NCCI Victoria Palms Resort 602 North Victoria Road 47 NCCI Andover Square 4343 North 21st Street 50 LaSalle Grand Reserve Phase II Apartments 1700 Fountain Court 53 JPMCB Birchwood Park Apartments 4395 Birchwood Drive 54 JPMCB Woodridge Apartments 12470 West Euclid Avenue 55 JPMCB 150 Central Park South 150 Central Park South 56 LaSalle 2424 North Clark Street 2420 - 2424 North Clark Street 57 NCCI French Quarter Apartments 999-1001 SW 16th Avenue 58 JPMCB Chesapeake Estates of Thomasville MHP Biesecker Road 60 LaSalle Keystone Farms 5360 Edmondson Pike 62 JPMCB Cleveland Circle 1930-1960 Beacon Street and 3-7 Sutherland Road 63 JPMCB Maple Gardens Village 10200 West Maple Street 68 LaSalle Fox Run Apartments 4500 Overland Drive 70 LaSalle Pinellas Cascades MHP 7840 72nd Street North 72 LaSalle Royal Gulf Apartments 190 Gateway Drive 73 NCCI Arbor Village 7940 South Circle Drive 75 NCCI Hibiscus Hill Apartments 94-1121 Ka Uka Boulevard 76 LaSalle Windsor Court 10908 East 16th Avenue 77 JPMCB Chesapeake Mobile Court 7630 Ridge Chapel Road 78 NCCI Hendeles Portfolio - Courtyard Apartments 2060 North Trekell Road 79 LaSalle 525 West Arlington Place 525 West Arlington Place 81 LaSalle Tanglewood Apartments 4470 Old Spanish Trail 85 NCCI Sunrise Apartments 151 and 111 Patterson Street 88 LaSalle Knollcrest Apartments 3301Creekwood Drive 92 JPMCB Village Green at Centennial Park 502-564 Town Square Court and 600-654 Village Green Court 93 LaSalle Pheasant Ridge 7848 East Hill Road 95 LaSalle Lake Village MHC 27 Michigan Lane 96 NCCI Brook Creek Apartments 4937 West Myrtle Avenue 97 NCCI Chelsea Arms 615 East Wonsley Drive 98 LaSalle Arbor Village Apartments 652 West Montgomery Avenue 99 NCCI Holiday MHP 4141 New Tampa Highway 100 JPMCB Holgate Terrace 12105 Southeast Holgate Boulevard 101 JPMCB Whitnall Garden Apartments 9521-9603 West Forest Home Avenue 103 LaSalle Mallard Cove 2519 Buffalo Church Road 104 JPMCB Alpine Court Apartments 12301-12335 West Oklahoma Avenue 106 LaSalle Land O'Lakes MHP 1800 East Graves Avenue 110 NCCI Suburban Woods 7000 Goodson Road 112 LaSalle 1576 Oak Avenue 1576 - 1598 North Oak Avenue and 1100-1118 West Davis Street 115 NCCI Countryside Manufactured Home Park 3805 7th Street Northeast 116 NCCI Canada Trace 3291 Shoehorn Drive 118 LaSalle Arlington West & Pecan Grove West Arlington Boulevard 124 LaSalle Independence Hill MHC 1705 Van Voorhis Road 126 LaSalle Scenic Mobile Home Park 1314 Tunnel Road 128 LaSalle Park Place of Grove City 1911 Kendall Place 129 NCCI Pooles Manor 34 Club Circle 130 LaSalle Pine Crest Apartments 400 Swiss Street 131 NCCI Sundowner 105 North Delaware Drive 133 NCCI Townhomes of Bearcreek 15357 West Little York Road 134 NCCI Aztec Villa Apartments 4001 East McDowell Road 136 LaSalle Mountain View Village Mobile Home Park 19773 & 19874 Highway 24 137 LaSalle Willow Wick Apartments 1200 West Martintown Road 140 JPMCB College Square Apartments 6210-6260 South 51st Street 141 LaSalle Capri Mobile Estates 3150 Arville Street 142 LaSalle Wildwood MHC Clubhouse & Land One Birch Drive 144 NCCI Hendeles Portfolio - Falcon Court Apartments 355 North 7th Street 146 LaSalle Santa Fe West MHP 2284 Henry Lynch Road 150 LaSalle 1509 Hinman 1509-15 Hinman Avenue 152 LaSalle Tarbell - Stillwater Village 425 College Avenue 155 NCCI Royal Palms MHP 8705 S Tamiami Trail 156 NCCI Kofdarali Portfolio Various 156.1 NCCI Mayarka Square Apartments 1619 East Grauwyler Road 156.2 NCCI Plantation View Apartments 1100 North Union Bower 158 LaSalle Canterbury Estates MHP 3411-3415 82nd Street South 163 NCCI Hendeles Portfolio - Sterling Point 500 South Carmichael Avenue 164 LaSalle Delco Ltd. Apartments Portfolio Various Locations 164.1 LaSalle Delco Ltd.- Autumn Chase Apartments 140-284 Grand Circuit Boulevard 164.2 LaSalle Delco Ltd. -Rockridge Village Apartments 2-40 Rockcreek Drive and 42-80 Limetree Drive 166 LaSalle Garden Park Apartments 607 East Park Street 168 LaSalle 2914 North Clark Street 2914 - 2922 North Clark Street and 703-707 West Oakdale Avenue 169 LaSalle Cross Creek Townhomes 4810 Refugee Road 170 NCCI Spanish Chase Apartments 3200 West Pioneer Drive 171 LaSalle Paige Mill Court 632 Harkey Road 172 NCCI Vista Hermosa Apartments 465 West 11th Street and 1105 West Okeechobee Road 173 LaSalle Cedar Lake MHP 880 Cedar Lake Road 176 LaSalle 2115 Sedgwick 2115 North Sedgwick Street 177 LaSalle 326 West Dempster 326-328 West Dempster Avenue and 1243-1249 Judson Avenue 178 NCCI Westbrook Mobile Home Park 4423 Gassner Road 179 LaSalle 618 Hinman Avenue 618 - 624 Hinman Avenue and 500 - 510 Keeney Street 180 LaSalle 707 West Wellington 707-717 West Wellington Avenue and 2951-2959 North Clark Street 181 NCCI Tuskawilla Trails MHP 1070 Cheyenne Trail 182 NCCI Karwan MHP 2621 84th Street South 183 LaSalle Mill Hollow MHP 98 Marigold Road 185 NCCI Kendalwood Apartments 1185 Rowlett Road 186 NCCI Snug Harbor 4425 Meridian Avenue North
NUMBER OF PROPERTY LOAN # CITY STATE ZIP CODE COUNTY PROPERTIES TYPE ------ ---- ----- -------- ------ ---------- ---- 4 Baltimore MD 21224 Baltimore City 1 Multifamily 12 Various NH Various Various 8 Multifamily 12.1 Concord NH 03303 Merrimack 1 Multifamily 12.2 Concord NH 03303 Merrimack 1 Multifamily 12.3 Concord NH 03303 Merrimack 1 Multifamily 12.4 Laconia NH 03246 Belknap 1 Multifamily 12.5 Concord NH 03303 Merrimack 1 Multifamily 12.6 Concord NH 03301 Merrimack 1 Multifamily 12.7 Concord NH 03301 Merrimack 1 Multifamily 12.8 Concord NH 03301 Merrimack 1 Multifamily 13 Hamburg NY 14075 Erie 1 Manufactured Housing 18 Orion MI 48359 Oakland 1 Manufactured Housing 19 Prattville AL 36066 Autauga 1 Multifamily 20 Casselberry FL 32707 Seminole 1 Multifamily 21 Coon Rapids MN 55448 Anoka 1 Multifamily 24 Phenix City AL 36867 Russell 1 Multifamily 26 Starkville MS 39759 Oktibbeha 1 Multifamily 33 Columbus OH 43229 Franklin 1 Multifamily 36 Auburn Hills MI 48326 Oakland 1 Multifamily 37 Greensboro NC Various Guilford 3 Multifamily 37.1 Greensboro NC 27455 Guilford 1 Multifamily 37.2 Greensboro NC 27406 Guilford 1 Multifamily 37.3 Greensboro NC 27407 Guilford 1 Multifamily 38 Dallas TX 75229 Dallas 1 Multifamily 39 Sandwich IL 60548 LaSalle 1 Manufactured Housing 41 Tucson AZ 85715 Pima 1 Multifamily 44 Donna TX 78537 Hidalgo 1 Manufactured Housing 47 Phoenix AZ 85016 Maricopa 1 Multifamily 50 Columbus GA 31904 Muscogee 1 Multifamily 53 Wilmington NC 28405 New Hanover 1 Multifamily 54 New Berlin WI 53151 Waukesha 1 Multifamily 55 New York NY 10019 New York 1 Multifamily 56 Chicago IL 60614 Cook 1 Multifamily 57 Gainesville FL 32601 Alachua 1 Multifamily 58 Thomasville PA 17364 York 1 Manufactured Housing 60 Nashville TN 37211 Davidson 1 Multifamily 62 Brighton MA 02135 Suffolk 1 Multifamily 63 Wichita KS 67209 Sedgwick 1 Multifamily 68 Lawrence KS 66049 Douglas 1 Multifamily 70 Pinellas Park FL 33781 Pinellas 1 Manufactured Housing 72 Biloxi MS 39531 Harrison 1 Multifamily 73 Parma MI 49269 Jackson 1 Manufactured Housing 75 Waipahu HI 96797 Honolulu 1 Multifamily 76 Aurora CO 80010 Adams 1 Multifamily 77 Hanover MD 21076 Anne Arundel 1 Manufactured Housing 78 Casa Grande AZ 85222 Pinal 1 Multifamily 79 Chicago IL 60614 Cook 1 Multifamily 81 Pensacola FL 32504 Escambia 1 Multifamily 85 Anchorage AK 99504 Anchorage 1 Multifamily 88 Nashville TN 37207 Davidson 1 Multifamily 92 Oak Creek WI 53154 Milwaukee 1 Multifamily 93 Mount Airy MD 21771 Carroll 1 Manufactured Housing 95 Winona MN 55987 Winona 1 Manufactured Housing 96 Glendale AZ 85301 Maricopa 1 Multifamily 97 Austin TX 78753 Travis 1 Multifamily 98 Allentown PA 18103 Lehigh 1 Multifamily 99 Lakeland FL 33815 Polk 1 Manufactured Housing 100 Portland OR 97266 Multnomah 1 Multifamily 101 Hales Corners WI 53130 Milwaukee 1 Multifamily 103 Sanford NC 27330 Lee 1 Multifamily 104 West Allis WI 53227 Milwaukee 1 Multifamily 106 Orange City FL 32763 Volusia 1 Manufactured Housing 110 Union City GA 30291 Fulton 1 Manufactured Housing 112 Evanston IL 60201 Cook 1 Multifamily 115 Great Falls MT 59404 Cascade 1 Manufactured Housing 116 Lakeland TN 38002 Shelby 1 Manufactured Housing 118 Greenville NC 27834 Pitt 1 Multifamily 124 Morgantown WV 26505 Monongalia 1 Manufactured Housing 126 Asheville NC 28805 Buncombe 1 Manufactured Housing 128 Grove City OH 43123 Franklin 1 Multifamily 129 Ellenwood GA 30294 Henry 1 Manufactured Housing 130 North Augusta SC 29841 Aiken 1 Multifamily 131 Apache Junction AZ 85220 Pinal 1 Manufactured Housing 133 Houston TX 77084 Harris 1 Multifamily 134 Phoenix AZ 85008 Maricopa 1 Multifamily 136 Leadville CO 80461 Lake 1 Manufactured Housing 137 North Augusta SC 29841 Aiken 1 Multifamily 140 Greendale WI 53129 Milwaukee 1 Multifamily 141 Las Vegas NV 89102 Clark 1 Manufactured Housing 142 Sandwich IL 60548 LaSalle 1 Manufactured Housing 144 Sierra Vista AZ 85635 Cochise 1 Multifamily 146 Santa Fe NM 87507 Santa Fe 1 Manufactured Housing 150 Evanston IL 60201 Cook 1 Multifamily 152 Orono ME 04473 Penobscot 1 Multifamily 155 Sarasota FL 34238 Sarasota 1 Manufactured Housing 156 Irving TX 75061 Dallas 2 Multifamily 156.1 Irving TX 75061 Dallas 1 Multifamily 156.2 Irving TX 75061 Dallas 1 Multifamily 158 Lakewood WA 98499 Pierce 1 Manufactured Housing 163 Sierra Vista AZ 85635 Cochise 1 Multifamily 164 Delaware OH 43015 Delaware 2 Multifamily 164.1 Delaware OH 43015 Delaware 1 Multifamily 164.2 Delaware OH 43015 Delaware 1 Multifamily 166 Carbondale IL 62901 Jackson 1 Multifamily 168 Chicago IL 60657 Cook 1 Multifamily 169 Columbus OH 43232 Franklin 1 Multifamily 170 Irving TX 75061 Dallas 1 Multifamily 171 Sanford NC 27330 Lee 1 Multifamily 172 Hialeah FL 33010 Dade 1 Multifamily 173 Biloxi MS 39532 Harrison 1 Manufactured Housing 176 Chicago IL 60614 Cook 1 Multifamily 177 Evanston IL 60202 Cook 1 Multifamily 178 Brookshire TX 77423 Waller 1 Manufactured Housing 179 Evanston IL 60202 Cook 1 Multifamily 180 Chicago IL 60657 Cook 1 Multifamily 181 Winter Springs FL 32708 Seminole 1 Manufactured Housing 182 Lakewood WA 98499 Pierce 1 Manufactured Housing 183 Rexburg ID 83440 Madison 1 Manufactured Housing 185 Garland TX 75043 Dallas 1 Multifamily 186 Marysville WA 98271 Snohomish 1 Manufactured Housing
STUDIO/PAD ------------------------------- AVERAGE PROPERTY CURRENT LOAN NO. OF STUDIO/ LOAN # SUBTYPE BALANCE ($)(2) GROUP TOTAL SF/UNITS STUDIOS/PADS PAD RENT ------ ------- -------------- ----- -------------- ------------ -------- 4 Mid/High Rise 33,952,685.48 2 240 116 1,376 12 Garden 16,564,653.88 1 379 10 460 12.1 Garden 5,244,745.29 1 120 7 437 12.2 Garden 2,928,316.12 1 67 0 0 12.3 Garden 2,884,609.91 1 66 1 525 12.4 Garden 1,835,660.85 1 42 0 0 12.5 Garden 1,048,949.06 1 24 1 475 12.6 Garden 917,830.43 1 21 0 0 12.7 Garden 917,830.43 1 21 0 0 12.8 Garden 786,711.79 1 18 1 545 13 Manufactured Housing 14,218,931.64 2 424 0 0 18 Manufactured Housing 12,400,000.00 2 423 0 0 19 Garden 12,387,764.20 2 224 0 0 20 Garden 12,349,681.52 2 283 0 0 21 Garden 11,474,927.29 2 196 0 0 24 Garden 10,880,000.00 2 200 0 0 26 Garden 10,479,681.40 2 281 0 0 33 Garden 9,078,460.06 2 351 0 0 36 Garden 8,582,740.37 2 280 40 645 37 Garden 8,492,211.76 1 255 0 0 37.1 Garden 4,595,785.19 1 128 0 0 37.2 Garden 2,697,526.09 1 88 0 0 37.3 Garden 1,198,900.48 1 39 0 0 38 Garden 8,481,034.44 1 300 92 499 39 Manufactured Housing 8,473,221.32 1 427 0 0 41 Garden 7,933,462.25 2 268 0 0 44 Manufactured Housing 7,500,000.00 2 1,089 0 0 47 Garden 7,175,000.00 1 80 0 0 50 Garden 6,985,944.69 1 140 0 0 53 Garden 6,712,483.95 1 172 0 0 54 Garden 6,633,431.99 2 108 0 0 55 Coop 6,500,000.00 1 192 60 2,414 56 Mid/High Rise 6,487,344.66 2 91 42 775 57 Garden 6,400,000.00 1 242 0 0 58 Manufactured Housing 6,387,155.62 1 316 0 0 60 Garden 6,194,874.72 1 90 0 0 62 Garden 6,142,167.94 1 28 0 0 63 Garden 6,100,000.00 1 174 17 390 68 Garden 5,813,309.61 1 104 0 0 70 Manufactured Housing 5,740,751.14 2 238 0 0 72 Garden 5,600,000.00 1 144 0 0 73 Manufactured Housing 5,600,000.00 1 266 0 0 75 Garden 5,488,828.40 2 80 0 0 76 Garden 5,435,021.78 2 143 0 0 77 Manufactured Housing 5,429,082.28 2 195 0 0 78 Garden 5,370,000.00 2 244 32 415 79 Mid/High Rise 5,281,000.00 2 108 66 725 81 Garden 5,190,423.86 2 136 0 0 85 Garden 5,000,000.00 1 144 0 0 88 Garden 4,750,000.00 1 200 0 0 92 Garden 4,315,726.84 2 60 0 0 93 Manufactured Housing 4,264,233.61 1 101 0 0 95 Manufactured Housing 4,141,160.93 1 228 0 0 96 Garden 4,080,000.00 2 112 0 0 97 Garden 3,981,036.74 1 114 0 0 98 Garden 3,920,668.19 1 294 0 0 99 Manufactured Housing 3,892,078.32 1 214 0 0 100 Garden 3,771,347.01 1 72 0 0 101 Garden 3,676,447.67 1 86 0 0 103 Garden 3,588,227.64 2 88 0 0 104 Garden 3,586,534.54 1 81 0 0 106 Manufactured Housing 3,492,615.19 1 173 0 0 110 Manufactured Housing 3,325,000.00 2 216 0 0 112 Garden 3,295,000.00 2 52 22 747.50 115 Manufactured Housing 3,250,000.00 1 226 0 0 116 Manufactured Housing 3,250,000.00 2 229 0 0 118 Garden 3,197,053.20 2 166 0 0 124 Manufactured Housing 2,993,655.22 1 203 0 0 126 Manufactured Housing 2,946,283.95 1 172 0 0 128 Garden 2,900,000.00 2 112 0 0 129 Manufactured Housing 2,835,000.00 1 194 0 0 130 Garden 2,742,613.55 2 120 0 0 131 Manufactured Housing 2,741,861.64 2 204 0 0 133 Garden 2,740,000.00 1 54 0 0 134 Garden 2,700,000.00 1 126 30 440 136 Manufactured Housing 2,634,089.46 1 227 0 0 137 Garden 2,632,909.00 1 104 0 0 140 Garden 2,557,618.86 2 70 10 460 141 Manufactured Housing 2,497,460.58 1 100 0 0 142 Manufactured Housing 2,492,123.92 2 7,778 0 0 144 Garden 2,460,000.00 1 112 28 365 146 Manufactured Housing 2,400,000.00 2 83 0 0 150 Garden 2,280,000.00 1 33 0 0 152 Garden 2,237,619.64 1 84 0 0 155 Manufactured Housing 2,060,000.00 2 133 0 0 156 Garden 2,020,000.00 2 92 4 N/A 156.1 Garden 1,045,000.00 2 40 0 0 156.2 Garden 975,000.00 2 52 4 383 158 Manufactured Housing 1,987,554.28 2 96 0 0 163 Garden 1,910,000.00 1 106 62 350 164 Garden 1,900,000.00 2 86 0 0 164.1 Garden 1,016,279.07 1 46 0 0 164.2 Garden 883,720.93 1 40 0 0 166 Garden 1,830,317.77 1 46 0 0 168 Garden 1,800,000.00 2 17 0 0 169 Garden 1,797,715.15 1 72 0 0 170 Garden 1,794,930.87 1 77 1 445 171 Garden 1,744,277.33 2 39 0 0 172 Garden 1,724,199.06 1 46 0 0 173 Manufactured Housing 1,718,478.94 1 177 0 0 176 Garden 1,657,000.00 1 30 10 663 177 Garden 1,648,000.00 1 19 0 0 178 Manufactured Housing 1,600,000.00 1 184 0 0 179 Garden 1,424,000.00 2 25 0 0 180 Garden 1,325,000.00 1 19 0 0 181 Manufactured Housing 1,260,000.00 1 141 0 0 182 Manufactured Housing 1,182,898.93 1 45 0 0 183 Manufactured Housing 1,099,097.85 2 149 0 0 185 Garden 960,000.00 2 24 0 0 186 Manufactured Housing 923,359.92 2 30 0 0
ONE BEDROOM TWO BEDROOM THREE BEDROOM ----------------------------- ---------------------------- ---------------------------- NO. OF AVERAGE NO. OF AVERAGE NO. OF AVERAGE LOAN # 1-BR UNITS 1-BR RENT 2-BR UNITS 2-BR RENT 3-BR UNITS 3-BR RENT ------ ---------- --------- ---------- --------- ---------- --------- 4 39 1,625 67 1,574 18 2,076 12 102 575 239 692 28 835 12.1 29 546 60 649 24 830 12.2 20 644 43 734 4 863 12.3 19 567 46 665 0 0 12.4 13 482 29 593 0 0 12.5 11 534 12 643 0 0 12.6 5 780 16 898 0 0 12.7 0 0 21 806 0 0 12.8 5 626 12 675 0 0 13 0 0 0 0 0 0 18 0 0 0 0 0 0 19 72 662 108 745 44 845 20 95 650 188 765 0 0 21 57 812 102 888 39 1,030 24 32 565 100 726 68 845 26 0 0 185 615 0 0 33 32 399 271 501 48 599 36 60 680 180 720 0 0 37 207 Various 48 Various 0 0 37.1 88 500 40 600 0 0 37.2 88 495 0 0 0 0 37.3 31 505 8 605 0 0 38 96 620 80 753 32 875 39 0 0 0 0 0 0 41 92 479 120 589 44 835 44 0 0 0 0 0 0 47 20 993 44 1,317 16 1,411 50 24 599 96 782 20 959 53 172 528 0 0 0 0 54 36 644 36 842 36 1,001 55 62 4,116 49 6,431 21 10,600 56 49 1,053 0 0 0 0 57 58 462 184 532 0 0 58 0 0 0 0 0 0 60 0 0 58 820 32 1,018 62 0 0 6 1,875 22 2,400 63 98 549 59 709 0 0 68 24 664 64 746 16 905 70 0 0 0 0 0 0 72 36 550 108 650 0 0 73 0 0 0 0 0 0 75 1 900 79 1,000 0 0 76 72 703 71 824 0 0 77 0 0 0 0 0 0 78 100 425 112 533 0 0 79 38 923 4 1,500 0 0 81 48 493 88 640 0 0 85 0 0 96 826 48 908 88 72 458 100 532 24 590 92 0 0 60 940 0 0 93 0 0 0 0 0 0 95 0 0 0 0 0 0 96 40 535 72 652 0 0 97 66 608 48 794 0 0 98 185 477 103 586 6 688 99 0 0 0 0 0 0 100 18 610 47 701 7 815 101 48 575 20 675 18 940 103 24 465 44 535 20 610 104 70 683 11 850 0 0 106 0 0 0 0 0 0 110 0 0 0 0 0 0 112 27 975 2 960 1 1,750 115 0 0 0 0 0 0 116 0 0 0 0 0 0 118 126 331 42 386 0 0 124 0 0 0 0 0 0 126 0 0 0 0 0 0 128 0 0 82 555 30 685 129 0 0 0 0 0 0 130 40 453 80 491 0 0 131 0 0 0 0 0 0 133 18 706 25 881 9 1,108 134 72 525 24 655 0 0 136 0 0 0 0 0 0 137 16 455 72 510 16 625 140 36 540 24 618 0 0 141 0 0 0 0 0 0 142 0 0 0 0 0 0 144 40 420 44 513 0 0 146 0 0 0 0 0 0 150 33 1,200 0 0 0 0 152 31 450 43 565 10 685 155 0 0 0 0 0 0 156 62 N/A 24 N/A 2 N/A 156.1 28 638 10 740 2 875 156.2 34 481 14 583 0 0 158 0 0 0 0 0 0 163 22 425 22 550 0 0 164 43 418 42 525 1 680 164.1 43 418 2 608 1 680 164.2 0 0 40 521 0 0 166 3 465 43 747 0 0 168 0 0 15 1,347 2 1,438 169 8 427 52 544 12 626 170 36 545 34 656 6 775 171 3 435 36 600 0 0 172 0 0 46 658 0 0 173 0 0 0 0 0 0 176 17 925 3 1,275 0 0 177 6 1,095 4 1,223 9 1,438 178 0 0 0 0 0 0 179 14 904 11 1,035 0 0 180 0 0 19 1,218 0 0 181 0 0 0 0 0 0 182 0 0 0 0 0 0 183 0 0 0 0 0 0 185 16 724 4 850 4 969 186 0 0 0 0 0 0
FOUR BEDROOM ----------------------------- NO. OF AVERAGE UTILITIES ELEVATOR LOAN # 4-BR UNITS 4-BR RENT TENANT PAYS PRESENT ------ ---------- --------- ----------- ------- 4 0 0 Electric, Gas Yes 12 0 0 Various No 12.1 0 0 Electric No 12.2 0 0 Electric No 12.3 0 0 Electric No 12.4 0 0 Electric, Gas No 12.5 0 0 Electric, Water No 12.6 0 0 Electric No 12.7 0 0 Electric No 12.8 0 0 Electric No 13 0 0 18 0 0 19 0 0 Electric, Water, Sewer No 20 0 0 Electric, Gas, Water, Sewer 21 0 0 Electric No 24 0 0 Electric No 26 96 1,020 None No 33 0 0 Electric, Gas No 36 0 0 Electric No 37 0 0 37.1 0 0 Electric 37.2 0 0 Electric 37.3 0 0 Electric 38 0 0 Electric 39 0 0 41 12 929 Electric No 44 0 0 No 47 0 0 Electric, Gas, Water, Sewer No 50 0 0 Electric, Gas 53 0 0 Electric, Water, Sewer No 54 0 0 Electric, Gas No 55 0 0 Electric Yes 56 0 0 Electric, gas Yes 57 0 0 Electric No 58 0 0 No 60 0 0 Electric, Water No 62 0 0 Electric No 63 0 0 Electric, Gas Yes 68 0 0 Electric, Gas No 70 0 0 72 0 0 Electric No 73 0 0 75 0 0 Electric No 76 0 0 Electric, Gas No 77 0 0 78 0 0 Electric No 79 0 0 None Yes 81 0 0 Electric No 85 0 0 Electric, Gas 88 4 667 None No 92 0 0 Electric No 93 0 0 95 0 0 96 0 0 Electric 97 0 0 Electric No 98 0 0 Electric No 99 0 0 100 0 0 Electric No 101 0 0 Electric, Gas for 3 Bedrooms only No 103 0 0 Electric No 104 0 0 Electric No 106 0 0 110 0 0 112 0 0 Electric No 115 0 0 116 0 0 118 0 0 Electric No 124 0 0 126 0 0 128 0 0 Electric, Gas No 129 0 0 130 0 0 Electric No 131 0 0 No 133 2 1,300 Electric, Water, Gas 134 0 0 No 136 0 0 137 0 0 Electric No 140 0 0 Electric No 141 0 0 142 0 0 No 144 0 0 Electric No 146 0 0 No 150 0 0 Electric No 152 0 0 Electric No 155 0 0 No 156 N/A N/A No 156.1 0 0 Electric, Water, Sewer No 156.2 0 0 Electric, Water No 158 0 0 163 0 0 Electric No 164 0 0 No 164.1 0 0 Electric, Gas, Water, Sewer No 164.2 0 0 Electric, Gas, Water, Sewer No 166 0 0 Electric, Gas, Water No 168 0 0 Electric No 169 0 0 Electric, Gas No 170 0 0 Electric, Water 171 0 0 Electric No 172 0 0 Electric 173 0 0 176 0 0 Electric, Gas, Water No 177 0 0 Electric No 178 0 0 No 179 0 0 Electric No 180 0 0 Electric No 181 0 0 0 182 0 0 0 183 0 0 0 0 185 0 0 Electric No 186 0 0 0
ANNEX C POST OFFICE LOAN AMORTIZATION SCHEDULE POST OFFICE A-1 POOLED COMPONENT TOTAL DATE INTEREST ($) PRINCIPAL ($) PAYMENT ($) ---- ------------ ------------- ----------- 9/1/03 - - - 10/1/03 264,950.00 - 264,950.00 11/1/03 273,781.67 - 273,781.67 12/1/03 264,950.00 - 264,950.00 1/1/04 273,781.67 - 273,781.67 2/1/04 273,781.67 - 273,781.67 3/1/04 256,118.33 - 256,118.33 4/1/04 273,781.67 - 273,781.67 5/1/04 264,950.00 - 264,950.00 6/1/04 273,781.67 - 273,781.67 7/1/04 264,950.00 - 264,950.00 8/1/04 273,781.67 - 273,781.67 9/1/04 273,781.67 - 273,781.67 10/1/04 264,950.00 - 264,950.00 11/1/04 273,781.67 - 273,781.67 12/1/04 264,950.00 - 264,950.00 1/1/05 273,781.67 - 273,781.67 2/1/05 273,781.67 - 273,781.67 3/1/05 247,286.67 - 247,286.67 4/1/05 273,781.67 - 273,781.67 5/1/05 264,950.00 - 264,950.00 6/1/05 273,781.67 - 273,781.67 7/1/05 264,950.00 - 264,950.00 8/1/05 273,781.67 - 273,781.67 9/1/05 273,781.67 - 273,781.67 10/1/05 264,950.00 - 264,950.00 11/1/05 273,781.67 53,706.15 327,487.82 12/1/05 264,712.84 63,465.53 328,178.37 1/1/06 273,247.01 54,281.52 327,528.53 2/1/06 272,999.32 54,548.07 327,547.39 3/1/06 246,355.21 83,221.03 329,576.24 4/1/06 272,370.68 55,224.58 327,595.26 5/1/06 263,340.66 64,942.20 328,282.86 6/1/06 271,822.35 55,814.66 327,637.01 7/1/06 262,807.42 65,516.05 328,323.47 8/1/06 271,268.72 56,410.45 327,679.17 9/1/06 271,011.31 56,687.46 327,698.77 10/1/06 262,018.69 66,364.83 328,383.52 11/1/06 270,449.82 57,291.70 327,741.52 12/1/06 261,472.65 66,952.46 328,425.11 1/1/07 269,882.89 57,901.80 327,784.69 2/1/07 269,618.69 58,186.13 327,804.82 3/1/07 243,286.74 86,523.15 329,809.89 4/1/07 268,958.37 58,896.72 327,855.09 5/1/07 260,022.22 68,513.33 328,535.55 6/1/07 268,377.00 59,522.37 327,899.37 7/1/07 259,456.83 69,121.77 328,578.60 8/1/07 267,789.99 60,154.07 327,944.06 9/1/07 267,515.51 60,449.46 327,964.97 10/1/07 258,619.04 70,023.36 328,642.40 11/1/07 266,920.16 61,090.14 328,010.30 12/1/07 258,040.06 70,646.42 328,686.48 1/1/08 266,319.04 61,737.03 328,056.07 2/1/08 266,037.33 62,040.19 328,077.52 3/1/08 248,608.80 80,795.84 329,404.64 4/1/08 265,385.57 62,741.59 328,127.16 5/1/08 256,547.68 72,252.44 328,800.12 6/1/08 264,769.58 63,404.47 328,174.05 7/1/08 255,948.65 72,897.09 328,845.74 8/1/08 264,147.64 64,073.78 328,221.42 9/1/08 263,855.27 64,388.41 328,243.68 10/1/08 255,059.48 73,853.97 328,913.45 11/1/08 263,224.46 65,067.25 328,291.71 12/1/08 254,446.02 74,514.13 328,960.15 1/1/09 262,587.55 65,752.66 328,340.21 2/1/09 262,287.52 66,075.54 328,363.06 3/1/09 236,632.53 93,684.07 330,316.60 4/1/09 261,558.53 66,860.04 328,418.57 5/1/09 252,825.91 76,257.61 329,083.52 6/1/09 260,905.48 67,562.81 328,468.29 7/1/09 252,190.83 76,941.06 329,131.89 8/1/09 260,246.10 68,272.40 328,518.50 9/1/09 259,934.58 68,607.65 328,542.23 10/1/09 251,246.63 77,957.15 329,203.78 11/1/09 259,265.80 69,327.35 328,593.15 12/1/09 250,596.25 78,657.06 329,253.31 1/1/10 258,590.54 70,054.03 328,644.57 2/1/10 258,270.88 70,398.03 328,668.91 3/1/10 232,986.78 97,607.42 330,594.20 4/1/10 257,504.27 71,223.02 328,727.29 5/1/10 248,883.17 80,500.58 329,383.75 6/1/10 256,811.95 71,968.05 328,780.00 7/1/10 248,209.89 81,225.12 329,435.01 8/1/10 256,112.92 72,720.31 328,833.23 9/1/10 255,781.10 73,077.40 328,858.50 10/1/10 247,207.40 82,303.96 329,511.36 11/1/10 255,072.09 73,840.40 328,912.49 12/1/10 246,517.89 83,045.97 329,563.86 1/1/11 254,356.21 74,610.78 328,966.99 2/1/11 254,015.76 74,977.16 328,992.92 3/1/11 229,124.58 101,763.72 330,888.30 4/1/11 253,209.29 75,845.04 329,054.33 5/1/11 244,706.33 84,995.47 329,701.80 6/1/11 252,475.37 76,634.85 329,110.22 7/1/11 243,992.59 85,763.55 329,756.14 8/1/11 251,734.34 77,432.30 329,166.64 9/1/11 251,381.01 77,812.53 329,193.54 10/1/11 242,928.34 86,908.85 329,837.19 11/1/11 250,629.39 78,621.40 329,250.79 12/1/11 242,197.39 87,695.46 329,892.85 1/1/12 249,870.48 79,438.09 329,308.57 2/1/12 249,508.00 79,828.17 329,336.17 3/1/12 233,069.95 97,517.92 330,587.87 4/1/12 248,698.76 80,699.03 329,397.79 5/1/12 240,319.87 89,715.94 330,035.81 6/1/12 247,921.16 81,535.85 329,457.01 7/1/12 239,563.65 90,529.75 330,093.40 8/1/12 247,136.02 82,380.77 329,516.79 9/1/12 246,760.11 82,785.30 329,545.41 10/1/12 238,434.54 91,744.84 330,179.38 11/1/12 245,963.72 83,642.33 329,606.05 12/1/12 237,660.06 92,578.29 330,238.35 1/1/13 245,159.62 84,507.66 329,667.28 2/1/13 244,774.01 84,922.63 329,696.64 3/1/13 220,736.20 110,790.84 331,527.04 4/1/13 243,880.97 85,883.68 329,764.65 5/1/13 235,634.59 94,757.99 330,392.58 6/1/13 243,056.69 86,770.72 329,827.41 7/1/13 234,832.99 95,620.63 330,453.62 8/1/13 242,224.44 87,666.35 329,890.79 9/1/13 241,824.41 88,096.83 329,921.24 10/1/13 233,634.61 52,908,383.99 53,142,018.60 POST OFFICE A-2 NON-POOLED COMPONENT TOTAL DATE INTEREST ($) PRINCIPAL ($) PAYMENT ($) ---- ------------ ------------- ----------- 9/1/03 - - - 10/1/03 264,950.00 - 264,950.00 11/1/03 273,781.67 - 273,781.67 12/1/03 264,950.00 - 264,950.00 1/1/04 273,781.67 - 273,781.67 2/1/04 273,781.67 - 273,781.67 3/1/04 256,118.33 - 256,118.33 4/1/04 273,781.67 - 273,781.67 5/1/04 264,950.00 - 264,950.00 6/1/04 273,781.67 - 273,781.67 7/1/04 264,950.00 - 264,950.00 8/1/04 273,781.67 - 273,781.67 9/1/04 273,781.67 - 273,781.67 10/1/04 264,950.00 - 264,950.00 11/1/04 273,781.67 - 273,781.67 12/1/04 264,950.00 - 264,950.00 1/1/05 273,781.67 - 273,781.67 2/1/05 273,781.67 - 273,781.67 3/1/05 247,286.67 - 247,286.67 4/1/05 273,781.67 - 273,781.67 5/1/05 264,950.00 - 264,950.00 6/1/05 273,781.67 - 273,781.67 7/1/05 264,950.00 - 264,950.00 8/1/05 273,781.67 - 273,781.67 9/1/05 273,781.67 - 273,781.67 10/1/05 264,950.00 - 264,950.00 11/1/05 273,781.67 53,706.15 327,487.82 12/1/05 264,712.84 63,465.53 328,178.37 1/1/06 273,247.01 54,281.52 327,528.53 2/1/06 272,999.32 54,548.07 327,547.39 3/1/06 246,355.21 83,221.03 329,576.24 4/1/06 272,370.68 55,224.58 327,595.26 5/1/06 263,340.66 64,942.20 328,282.86 6/1/06 271,822.35 55,814.66 327,637.01 7/1/06 262,807.42 65,516.05 328,323.47 8/1/06 271,268.72 56,410.45 327,679.17 9/1/06 271,011.31 56,687.46 327,698.77 10/1/06 262,018.69 66,364.83 328,383.52 11/1/06 270,449.82 57,291.70 327,741.52 12/1/06 261,472.65 66,952.46 328,425.11 1/1/07 269,882.89 57,901.80 327,784.69 2/1/07 269,618.69 58,186.13 327,804.82 3/1/07 243,286.74 86,523.15 329,809.89 4/1/07 268,958.37 58,896.72 327,855.09 5/1/07 260,022.22 68,513.33 328,535.55 6/1/07 268,377.00 59,522.37 327,899.37 7/1/07 259,456.83 69,121.77 328,578.60 8/1/07 267,789.99 60,154.07 327,944.06 9/1/07 267,515.51 60,449.46 327,964.97 10/1/07 258,619.04 70,023.36 328,642.40 11/1/07 266,920.16 61,090.14 328,010.30 12/1/07 258,040.06 70,646.42 328,686.48 1/1/08 266,319.04 61,737.03 328,056.07 2/1/08 266,037.33 62,040.19 328,077.52 3/1/08 248,608.80 80,795.84 329,404.64 4/1/08 265,385.57 62,741.59 328,127.16 5/1/08 256,547.68 72,252.44 328,800.12 6/1/08 264,769.58 63,404.47 328,174.05 7/1/08 255,948.65 72,897.09 328,845.74 8/1/08 264,147.64 64,073.78 328,221.42 9/1/08 263,855.27 64,388.41 328,243.68 10/1/08 255,059.48 73,853.97 328,913.45 11/1/08 263,224.46 65,067.25 328,291.71 12/1/08 254,446.02 74,514.13 328,960.15 1/1/09 262,587.55 65,752.66 328,340.21 2/1/09 262,287.52 66,075.54 328,363.06 3/1/09 236,632.53 93,684.07 330,316.60 4/1/09 261,558.53 66,860.04 328,418.57 5/1/09 252,825.91 76,257.61 329,083.52 6/1/09 260,905.48 67,562.81 328,468.29 7/1/09 252,190.83 76,941.06 329,131.89 8/1/09 260,246.10 68,272.40 328,518.50 9/1/09 259,934.58 68,607.65 328,542.23 10/1/09 251,246.63 77,957.15 329,203.78 11/1/09 259,265.80 69,327.35 328,593.15 12/1/09 250,596.25 78,657.06 329,253.31 1/1/10 258,590.54 70,054.03 328,644.57 2/1/10 258,270.88 70,398.03 328,668.91 3/1/10 232,986.78 97,607.42 330,594.20 4/1/10 257,504.27 71,223.02 328,727.29 5/1/10 248,883.17 80,500.58 329,383.75 6/1/10 256,811.95 71,968.05 328,780.00 7/1/10 248,209.89 81,225.12 329,435.01 8/1/10 256,112.92 72,720.31 328,833.23 9/1/10 255,781.10 73,077.40 328,858.50 10/1/10 247,207.40 82,303.96 329,511.36 11/1/10 255,072.09 73,840.40 328,912.49 12/1/10 246,517.89 83,045.97 329,563.86 1/1/11 254,356.21 74,610.78 328,966.99 2/1/11 254,015.76 74,977.16 328,992.92 3/1/11 229,124.58 101,763.72 330,888.30 4/1/11 253,209.29 75,845.04 329,054.33 5/1/11 244,706.33 84,995.47 329,701.80 6/1/11 252,475.37 76,634.85 329,110.22 7/1/11 243,992.59 85,763.55 329,756.14 8/1/11 251,734.34 77,432.30 329,166.64 9/1/11 251,381.01 77,812.53 329,193.54 10/1/11 242,928.34 86,908.85 329,837.19 11/1/11 250,629.39 78,621.40 329,250.79 12/1/11 242,197.39 87,695.46 329,892.85 1/1/12 249,870.48 79,438.09 329,308.57 2/1/12 249,508.00 79,828.17 329,336.17 3/1/12 233,069.95 97,517.92 330,587.87 4/1/12 248,698.76 80,699.03 329,397.79 5/1/12 240,319.87 89,715.94 330,035.81 6/1/12 247,921.16 81,535.85 329,457.01 7/1/12 239,563.65 90,529.75 330,093.40 8/1/12 247,136.02 82,380.77 329,516.79 9/1/12 246,760.11 82,785.30 329,545.41 10/1/12 238,434.54 91,744.84 330,179.38 11/1/12 245,963.72 83,642.33 329,606.05 12/1/12 237,660.06 92,578.29 330,238.35 1/1/13 245,159.62 84,507.66 329,667.28 2/1/13 244,774.01 84,922.63 329,696.64 3/1/13 220,736.20 110,790.84 331,527.04 4/1/13 243,880.97 85,883.68 329,764.65 5/1/13 235,634.59 94,757.99 330,392.58 6/1/13 243,056.69 86,770.72 329,827.41 7/1/13 234,832.99 95,620.63 330,453.62 8/1/13 242,224.44 87,666.35 329,890.79 9/1/13 241,824.41 88,096.83 329,921.24 10/1/13 233,634.61 52,908,383.99 53,142,018.60 POST OFFICE B NON-POOLED COMPONENT TOTAL DATE INTEREST ($) PRINCIPAL ($) PAYMENT ($) ---- ------------ ------------- ----------- 9/1/03 - - - 10/1/03 301,714.58 - 301,714.58 11/1/03 311,771.74 - 311,771.74 12/1/03 301,714.58 - 301,714.58 1/1/04 311,771.74 - 311,771.74 2/1/04 311,771.74 - 311,771.74 3/1/04 291,657.43 - 291,657.43 4/1/04 311,771.74 - 311,771.74 5/1/04 301,714.58 - 301,714.58 6/1/04 311,771.74 - 311,771.74 7/1/04 301,714.58 - 301,714.58 8/1/04 311,771.74 - 311,771.74 9/1/04 311,771.74 - 311,771.74 10/1/04 301,714.58 - 301,714.58 11/1/04 311,771.74 - 311,771.74 12/1/04 301,714.58 - 301,714.58 1/1/05 311,771.74 - 311,771.74 2/1/05 311,771.74 - 311,771.74 3/1/05 281,600.28 - 281,600.28 4/1/05 311,771.74 - 311,771.74 5/1/05 301,714.58 - 301,714.58 6/1/05 311,771.74 - 311,771.74 7/1/05 301,714.58 - 301,714.58 8/1/05 311,771.74 - 311,771.74 9/1/05 311,771.74 - 311,771.74 10/1/05 301,714.58 - 301,714.58 11/1/05 311,771.74 49,230.64 361,002.38 12/1/05 301,444.52 58,176.74 359,621.26 1/1/06 311,162.89 49,758.06 360,920.95 2/1/06 310,880.83 50,002.40 360,883.23 3/1/06 280,539.58 76,285.94 356,825.52 4/1/06 310,164.96 50,622.53 360,787.49 5/1/06 299,881.93 59,530.35 359,412.28 6/1/06 309,540.55 51,163.44 360,703.99 7/1/06 299,274.70 60,056.38 359,331.08 8/1/06 308,910.09 51,709.58 360,619.67 9/1/06 308,616.97 51,963.50 360,580.47 10/1/06 298,376.53 60,834.43 359,210.96 11/1/06 307,977.56 52,517.39 360,494.95 12/1/06 297,754.71 61,373.09 359,127.80 1/1/07 307,331.97 53,076.65 360,408.62 2/1/07 307,031.10 53,337.28 360,368.38 3/1/07 277,045.32 79,312.89 356,358.21 4/1/07 306,279.16 53,988.66 360,267.82 5/1/07 296,103.02 62,803.89 358,906.91 6/1/07 305,617.11 54,562.17 360,179.28 7/1/07 295,459.18 63,361.62 358,820.80 8/1/07 304,948.65 55,141.23 360,089.88 9/1/07 304,636.08 55,412.00 360,048.08 10/1/07 294,505.14 64,188.08 358,693.22 11/1/07 303,958.12 55,999.30 359,957.42 12/1/07 293,845.82 64,759.22 358,605.04 1/1/08 303,273.59 56,592.28 359,865.87 2/1/08 302,952.79 56,870.18 359,822.97 3/1/08 283,105.88 74,062.85 357,168.73 4/1/08 302,210.59 57,513.12 359,723.71 5/1/08 292,146.36 66,231.40 358,377.76 6/1/08 301,509.13 58,120.77 359,629.90 7/1/08 291,464.20 66,822.33 358,286.53 8/1/08 300,800.88 58,734.30 359,535.18 9/1/08 300,467.94 59,022.71 359,490.65 10/1/08 290,451.65 67,699.47 358,151.12 11/1/08 299,749.61 59,644.98 359,394.59 12/1/08 289,753.07 68,304.62 358,057.69 1/1/09 299,024.32 60,273.27 359,297.59 2/1/09 298,682.65 60,569.24 359,251.89 3/1/09 269,467.77 85,877.06 355,344.83 4/1/09 297,852.51 61,288.37 359,140.88 5/1/09 287,908.15 69,902.81 357,810.96 6/1/09 297,108.84 61,932.58 359,041.42 7/1/09 287,184.94 70,529.30 357,714.24 8/1/09 296,357.97 62,583.03 358,941.00 9/1/09 296,003.22 62,890.34 358,893.56 10/1/09 286,109.73 71,460.72 357,570.45 11/1/09 295,241.64 63,550.07 358,791.71 12/1/09 285,369.10 72,102.30 357,471.40 1/1/10 294,472.68 64,216.19 358,688.87 2/1/10 294,108.67 64,531.53 358,640.20 3/1/10 265,316.14 89,473.47 354,789.61 4/1/10 293,235.68 65,287.76 358,523.44 5/1/10 283,418.31 73,792.20 357,210.51 6/1/10 292,447.29 65,970.72 358,418.01 7/1/10 282,651.61 74,456.36 357,107.97 8/1/10 291,651.27 66,660.28 358,311.55 9/1/10 291,273.40 66,987.61 358,261.01 10/1/10 281,510.01 75,445.29 356,955.30 11/1/10 290,466.01 67,687.03 358,153.04 12/1/10 280,724.83 76,125.47 356,850.30 1/1/11 289,650.80 68,393.22 358,044.02 2/1/11 289,263.11 68,729.06 357,992.17 3/1/11 260,918.01 93,283.41 354,201.42 4/1/11 288,344.72 69,524.62 357,869.34 5/1/11 278,661.89 77,912.52 356,574.41 6/1/11 287,508.97 70,248.61 357,757.58 7/1/11 277,849.12 78,616.59 356,465.71 8/1/11 286,665.11 70,979.61 357,644.72 9/1/11 286,262.76 71,328.16 357,590.92 10/1/11 276,637.19 79,666.44 356,303.63 11/1/11 285,406.83 72,069.61 357,476.44 12/1/11 275,804.81 80,387.51 356,192.32 1/1/12 284,542.62 72,818.25 357,360.87 2/1/12 284,129.84 73,175.82 357,305.66 3/1/12 265,410.84 89,391.43 354,802.27 4/1/12 283,208.32 73,974.11 357,182.43 5/1/12 273,666.77 82,239.62 355,906.39 6/1/12 282,322.81 74,741.19 357,064.00 7/1/12 272,805.61 82,985.60 355,791.21 8/1/12 281,428.72 75,515.71 356,944.43 9/1/12 281,000.66 75,886.53 356,887.19 10/1/12 271,519.83 84,099.43 355,619.26 11/1/12 280,093.76 76,672.14 356,765.90 12/1/12 270,637.88 84,863.43 355,501.31 1/1/13 279,178.09 77,465.35 356,643.44 2/1/13 278,738.97 77,845.75 356,584.72 3/1/13 251,365.66 101,558.27 352,923.93 4/1/13 277,722.00 78,726.71 356,448.71 5/1/13 268,331.36 86,861.49 355,192.85 6/1/13 276,783.35 79,539.83 356,323.18 7/1/13 267,418.52 87,652.24 355,070.76 8/1/13 275,835.61 80,360.82 356,196.43 9/1/13 275,380.08 80,755.43 356,135.51 10/1/13 266,053.85 48,499,351.99 48,765,405.84 SEPTEMBER 15, 2003 JPMCC 2003-LN1 -------------------------------------------------------------------------------- STRUCTURAL AND COLLATERAL TERM SHEET -------------------------------------------------------------------------------- $732,086,000 (Approximate) J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-LN1 ------------------------- JPMORGAN CHASE BANK LASALLE BANK NATIONAL ASSOCIATION NOMURA CREDIT & CAPITAL, INC. Mortgage Loan Sellers JPMORGAN ABN AMRO INCORPORATED NOMURA CREDIT SUISSE FIRST BOSTON The analyses in this report are based upon information provided by JPMorgan Chase Bank, LaSalle Bank National Association and Nomura Credit & Capital, Inc. (the "Sellers"). J.P. Morgan Securities Inc., ABN AMRO Incorporated, Nomura Securities International, Inc. and Credit Suisse First Boston LLC (the "Underwriters") make no representations as to the accuracy or completeness of the information contained herein. The information contained herein is qualified in its entirety by the information in the Prospectus and Prospectus Supplement for the securities referred to herein (the "Securities"). The information contained herein is preliminary as of the date hereof, supersedes any previous information delivered to you by the Underwriters and will be superseded by the applicable Prospectus and Prospectus Supplement. These materials are subject to change, completion, or amendment from time to time without notice, and the Underwriters are under no obligation to keep you advised of such changes. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any Security. Any investment decision with respect to the Securities should be made by you based upon the information contained in the Prospectus and Prospectus Supplement relating to the Securities. You should consult your own counsel, accountant, and other advisors as to the legal, tax, business, financial and related aspects of a purchase of the Securities. The attached information contains certain tables and other statistical analyses (the "Computational Materials") which have been prepared in reliance upon information furnished by the Sellers. They may not be provided to any third party other than the addressee's legal, tax, financial and/or accounting advisors for the purposes of evaluating said material. Numerous assumptions were used in preparing the Computational Materials which may or may not be reflected therein. As such, no assurance can be given as to the Computational Materials' accuracy, appropriateness or completeness in any particular context; nor as to whether the Computational Materials and/or the assumptions upon which they are based reflect present market conditions or future market performance. These Computational Materials should not be construed as either projections or predictions or as legal, tax, financial or accounting advice. Any weighted average lives, yields and principal payment periods shown in the Computational Materials are based on prepayment assumptions, and changes in such prepayment assumptions may dramatically affect such weighted average lives, yields and principal payment periods. In addition, it is possible that prepayments on the underlying assets will occur at rates slower or faster than the rates shown in the attached Computational Materials. Furthermore, unless otherwise provided, the Computational Materials assume no losses on the underlying assets and no interest shortfalls. The specific characteristics of the Securities may differ from those shown in the Computational Materials due to differences between the actual underlying assets and the hypothetical underlying assets used in preparing the Computational Materials. The principal amount and designation of any Security described in the Computational Materials are subject to change prior to issuance. Neither the Underwriters nor any of their affiliates make any representation or warranty as to the actual rate or timing of payments on any of the underlying assets or the payments or yield on the Securities. THIS INFORMATION IS FURNISHED TO YOU SOLELY BY THE UNDERWRITERS AND NOT BY THE ISSUER OF THE SECURITIES OR ANY OF ITS AFFILIATES. THE UNDERWRITERS ARE NOT ACTING AS AGENT FOR THE ISSUER OR ITS AFFILIATES IN CONNECTION WITH THE PROPOSED TRANSACTION. -------------------------------------------------------------------------------- STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- KEY FEATURES --------------------------------------------------------------------------------
CO-LEAD MANAGERS: J.P. Morgan Securities Inc. (Sole Bookrunner) ABN AMRO Incorporated Nomura Securities International, Inc. CO-MANAGERS: Credit Suisse First Boston LLC MORTGAGE LOAN SELLERS: JPMorgan Chase Bank (37.6%) LaSalle Bank National Association (33.6%) Nomura Credit & Capital, Inc. (28.9%) MASTER SERVICER: Wells Fargo Bank, National Association SPECIAL SERVICER: ARCap Servicing, Inc. TRUSTEE: U.S. Bank, National Association PAYING AGENT: LaSalle Bank National Association RATING AGENCIES: Moody's Investors Service, Inc. Standard & Poor's Ratings Services PRICING DATE: On or about September 25, 2003 CLOSING DATE: On or about September 30, 2003 CUT-OFF DATE: With respect to each mortgage loan, the related due date of such mortgage loan in September 2003 or, such other date in September 2003 specified in the preliminary prospectus supplement. DISTRIBUTION DATE: 15th of each month, or if the 15th day is not a business day, on the next succeeding business day, beginning in October 2003 PAYMENT DELAY: 14 days TAX STATUS: REMIC ERISA CONSIDERATION: Class A-1, A-2, B, C, D & E OPTIONAL TERMINATION: 1.0% (Clean-up Call) MINIMUM DENOMINATIONS: $10,000 SETTLEMENT TERMS: DTC, Euroclear and Clearstream Banking
-------------------------------------------------------------------------------- COLLATERAL CHARACTERISTICS --------------------------------------------------------------------------------
COLLATERAL CHARACTERISTICS All Mortgage Loans Loan Group 1 Loan Group 2 -------------------------- ------------------ ------------ ------------ INITIAL POOL BALANCE (IPB): $1,204,787,325 $839,010,606 $365,776,719 NUMBER OF MORTGAGED LOANS: 186 111 75 NUMBER OF MORTGAGED PROPERTIES: 199 113 86 AVERAGE CUT-OFF BALANCE PER LOAN: $6,477,351 $7,558,654 $4,877,023 AVERAGE CUT-OFF BALANCE PER PROPERTY: $6,054,208 $7,424,873 $4,572,209 WEIGHTED AVERAGE (WA) CURRENT MORTGAGE RATE: 5.6145% 5.7398% 5.3269% WEIGHTED AVERAGE UNDERWRITTEN (UW) DSCR: 1.70x 1.79x 1.51x WEIGHTED AVERAGE CUT-OFF DATE LOAN-TO-VALUE (LTV): 70.4% 68.6% 74.4% WEIGHTED AVERAGE MATURITY DATE LTV: 59.2% 58.0% 62.0% WEIGHTED AVERAGE REMAINING TERM TO MATURITY (MONTHS): 117 119 113 WEIGHTED AVERAGE ORIGINAL AMORTIZATION TERM (MONTHS): 339 336 345 WEIGHTED AVERAGE SEASONING (MONTHS): 2 2 1 10 LARGEST LOANS AS % OF IPB: 26.5% 34.0% 9.3% % OF LOANS WITH ADDITIONAL DEBT: 7.4% 9.9% 1.7% % OF LOANS WITH SINGLE TENANTS: 8.6% 12.4% NAP
2 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- APPROXIMATE SECURITIES STRUCTURE -------------------------------------------------------------------------------- PUBLICLY OFFERED CLASSES
------------------------------------------------------------------------------------------------------------------------------------ EXPECTED RATINGS CREDIT SUPPORT EXPECTED WEIGHTED CLASS (MOODY'S/ S&P) APPROXIMATE FACE AMOUNT (% OF BALANCE)(2) AVG LIFE (YEARS)(3) EXPECTED PAYMENT WINDOW(3) ------------------------------------------------------------------------------------------------------------------------------------ A-1 Aaa/AAA $258,300,000 16.625% 5.70 10/03-06/13 A-2 Aaa/AAA $380,415,000 16.625% 9.86 06/13-09/13 B Aa2/AA $34,638,000 13.750% 9.96 09/13-09/13 C Aa3/AA- $13,553,000 12.625% 9.96 09/13-09/13 D A2/A $30,120,000 10.125% 9.96 09/13-09/13 E A3/A- $15,060,000 8.875% 9.98 09/13-10/13 ------------------------------------------------------------------------------------------------------------------------------------
PRIVATELY OFFERED CLASSES
------------------------------------------------------------------------------------------------------------------------------------ EXPECTED RATINGS APPROXIMATE FACE CREDIT SUPPORT EXPECTED WEIGHTED CLASS (MOODY'S/ S&P) AMOUNT (% OF BALANCE)(2) AVG. LIFE (YEARS)(3) EXPECTED PAYMENT WINDOW(3) ------------------------------------------------------------------------------------------------------------------------------------ X-1 Aaa/AAA $1,204,787,325(1) N/A N/A N/A X-2 Aaa/AAA $1,129,226,000(1) N/A N/A N/A A-1A Aaa/AAA $365,776,000 16.625% N/A N/A F Baa1/BBB+ $16,566,000 7.500% N/A N/A G Baa2/BBB $13,554,000 6.375% N/A N/A H Baa3/BBB- $16,565,000 5.000% N/A N/A J Ba1/BB+ $6,024,000 4.500% N/A N/A K Ba2/BB $12,048,000 3.500% N/A N/A L Ba3/BB- $6,024,000 3.000% N/A N/A M B1/B+ $10,542,000 2.125% N/A N/A N B2/B $3,012,000 1.875% N/A N/A P B3/B- $3,012,000 1.625% N/A N/A NR NR/NR $19,578,325 N/A N/A N/A PS-1 A2/NR $11,100,000 N/A N/A N/A PS-2 A3/NR $5,400,000 N/A N/A N/A PS-3 Baa1/NR $5,300,000 N/A N/A N/A PS-4 Baa2/NR $6,500,000 N/A N/A N/A PS-5 Baa3/ NR $6,500,000 N/A N/A N/A PS-6 Ba1/ NR $10,800,000 N/A N/A N/A PS-7 Ba2/NR $9,400,000 N/A N/A N/A ------------------------------------------------------------------------------------------------------------------------------------
(1) Notional Amount (2) The credit support percentages set forth are for Class A-1, Class A-2 and Class A-1A Certificates represented in the aggregate. (3) The weighted average life and period during which distributions of principal would be received with respect to each class of certificates is based on the assumptions set forth under "Yield and Maturity Considerations-Weighted Average" in the preliminary prospectus supplement, and the assumptions that (a) there are no prepayments or losses on the mortgage loans, (b) each mortgage loan pays off on its scheduled maturity date or anticipated repayment date and (c) no excess interest is generated on the mortgage loans. 3 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- STRUCTURAL OVERVIEW -------------------------------------------------------------------------------- o For the purposes of making distributions to the Class A-1, A-2 and A-1A Certificates, the pool of mortgage loans will be deemed to consist of two loan groups (either "Loan Group 1" or "Loan Group 2"). Generally, interest and principal distributions on the Class A-1 and Class A-2 certificates will be based on amounts available relating to Loan Group 1 and principal distributions on the Class A-1A Certificates will be based on amounts available relating to Loan Group 2. o Interest payments will be concurrent to Classes A-1, A-2, A-1A (pro-rata to Class A-1 and A-2, from Loan Group 1, and to Class A-1A from Loan Group 2, the foregoing classes, together, the "Class A Certificates"), X-1 and X-2 Certificates and then, after payment of the principal distribution amount to such Classes (other than the Class X-1 and X-2 Certificates), interest will be paid sequentially to the Class B, C, D, E, F, G, H, J, K, L, M, N, P and NR Certificates. o The pass-through rates on the Class A-1, A-2, A-1A, B, C, D, E, F, G, H, J, K, L, M, N, P and NR will equal one of (i) a fixed rate, (ii) the weighted average of the net mortgage rates on the mortgage loans (in each case adjusted, if necessary, to accrue on the basis of a 360-day year consisting of twelve 30-day months), (iii) a rate equal to the lesser of a specified fixed pass-through rate and the rate described in clause (ii) above and (iv) the rate described in clause (ii) above less a specified percentage. o All classes will accrue interest on a 30/360 basis. o Generally, the Class A-1 and A-2 Certificates will be entitled to receive distributions of principal collected or advanced only in respect of mortgage loans in Loan Group 1 until the certificate principal balance of the Class A-1A Certificates has been reduced to zero, and the Class A-1A Certificates will be entitled to receive distributions of principal collected or advanced only in respect of mortgage loans in Loan Group 2 until the certificate balance of Class A-2 has been reduced to zero. However, on any distribution date on which the certificate principal balance of the Class B Certificates though Class NR Certificates have been reduced to zero, distributions of principal collected or advanced in respect to the mortgage loans will be distributed (without regard to loan group) to Class A-1, A-2 and A-1A, pro-rata. o Losses will be borne by the Classes (other than the Classes X-1 and X-2 Certificates) in reverse sequential order, from the Class NR Certificates up to the Class B Certificates and then pro-rata to the Class A-1, Class A-2 and Class A-1A Certificates (without regard to loan group). o Yield maintenance charges calculated by reference to a U.S. Treasury rate, to the extent received, will be allocated first to the Offered Certificates and the Class A-1A, F, G and H Certificates in the following manner: the holders of each class of Offered Certificates and the Class A-1A, F, G and H Certificates (will receive, with respect to the related Loan Group, if applicable in the case of the Class A-1, A-2 and A-1A Certificates) on each Distribution Date an amount of Yield Maintenance Charges determined in accordance with the formula specified below (with any remaining amount payable to the Class X-1).
Group Principal Paid to Class (Pass-Through Rate on Class - Discount Rate) YM Charge x ------------------------------ x -------------------------------------------- Group Total Principal Paid (Mortgage Rate on Loan - Discount Rate)
o All prepayment penalties based on a percentage of the amount being prepaid will be distributed to the Class X-1 certificates. o The transaction will provide for a collateral value adjustment feature (an appraisal reduction amount calculation) for problem or delinquent loans. Under certain circumstances, the special servicer will be required to obtain a new appraisal and to the extent any such adjustment is determined, the interest portion of any P&I Advance will be reduced in proportion to such adjustment. -------------------------------------------------------------------------------- 4 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 [THIS PAGE INTENTIONALLY LEFT BLANK] 5 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ALL MORTGAGE LOANS - COLLATERAL CHARACTERISTICS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CUT-OFF DATE PRINCIPAL BALANCE -------------------------------------------------------------------------------- NUMBER WA RANGE OF PRINCIPAL OF PRINCIPAL % OF WA UW BALANCES LOANS BALANCE IPB LTV DSCR -------------------------------------------------------------------------------- $923,360 -$1,999,999 30 $49,158,822 4.1% 66.2% 1.65x $2,000,000 -$2,999,999 33 83,824,628 7.0 73.1% 1.49x $3,000,000 -$3,999,999 27 92,336,181 7.7 69.1% 1.54x $4,000,000 -$4,999,999 11 49,072,511 4.1 72.2% 1.45x $5,000,000 -$6,999,999 37 219,049,632 18.2 70.4% 2.18x $7,000,000 -$9,999,999 20 167,818,972 13.9 70.5% 1.56x $10,000,000 -$14,999,999 16 190,224,771 15.8 76.5% 1.46x $15,000,000 -$24,999,999 7 146,478,032 12.2 70.3% 1.44x $25,000,000 -$60,999,999 5 206,823,775 17.2 64.8% 1.96x -------------------------------------------------------------------------------- TOTAL/WEIGHTED 186 $1,204,787,325 100.0% 70.4% 1.70X AVERAGE: -------------------------------------------------------------------------------- AVERAGE PER LOAN: $6,477,351 -------------------------------------------------------------------------------- AVERAGE PER $6,054,208 PROPERTY: -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- GEOGRAPHIC DISTRIBUTION -------------------------------------------------------------------------------- NUMBER PRINCIPAL OF BALANCE % OF WA UW STATE PROPERTIES IPB WA LTV DSCR -------------------------------------------------------------------------------- MASSACHUSETTS 4 $130,837,109 10.9% 59.9% 2.20x TEXAS 21 108,753,750 9.0 74.7% 1.49x CALIFORNIA 15 106,135,158 8.8 70.4% 1.50x Southern 13 98,367,122 8.2 70.4% 1.50x Northern 2 7,768,036 0.6 70.8% 1.49x FLORIDA 14 85,634,769 7.1 75.9% 1.46x MARYLAND 4 79,646,001 6.6 72.0% 1.54x MICHIGAN 11 76,650,210 6.4 68.4% 1.71x VIRGINIA 5 63,940,460 5.3 70.6% 1.48x OTHER 125 553,189,868 45.9 71.2% 1.75x -------------------------------------------------------------------------------- TOTAL/WEIGHTED 199 $1,204,787,325 100.0% 70.4% 1.70X AVERAGE -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- RANGE OF MORTGAGE INTEREST RATES -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- % WA RANGE OF MORTGAGE NUMBER PRINCIPAL OF WA UW INTEREST RATES OF LOANS BALANCE IPB LTV DSCR -------------------------------------------------------------------------------- 4.2000% - 4.9999% 27 $ 156,233,474 13.0% 64.4 2.67x 5.0000% - 5.4999% 56 396,089,877 32.9 70.6 1.77x 5.5000% - 5.9999% 52 303,052,287 25.2 74.7 1.41x 6.0000% - 6.4999% 40 291,467,018 24.2 71.0 1.46x 6.5000% - 6.9999% 7 21,148,468 1.8 74.1 1.32x 7.0000% - 7.4999% 2 7,768,000 0.6 58.1 1.25x 7.5000% - 8.6650% 2 29,028,201 2.4 49.3 1.48x --------------------- --------- -------------- ------ ------ ----- TOTAL/WEIGHTED 186 $1,204,787,325 100.0% 70.4% 1.70X AVERAGE: --------------------- --------- -------------- ------ ------ ----- WEIGHTED AVERAGE 5.6145% MORTGAGE RATE: -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NUMBER WA OF PRINCIPAL % OF WA UW UW DSCR LOANS BALANCE IPB LTV DSCR -------------------------------------------------------------------------------- 1.20X - 1.29X 13 $88,859,187 7.4% 75.9% 1.25x 1.30X - 1.34X 16 72,846,591 6.0 74.9% 1.31x 1.35X - 1.39X 23 200,618,780 16.7 75.8% 1.37x 1.40X - 1.44X 28 184,401,858 15.3 75.5% 1.42x 1.45X - 1.49X 23 135,585,163 11.3 77.1% 1.47x 1.50X - 1.69X 58 340,214,947 28.2 70.5% 1.56x 1.70X - 1.99X 10 63,882,563 5.3 63.4% 1.82x 2.00X - 2.99X 11 43,561,585 3.6 47.7% 2.39x 3.00X - 4.99X 3 68,316,651 5.7 41.8% 3.10x 5.00X - 22.55X 1 6,500,000 0.5 6.8% 22.55x -------------------------------------------------------------------------------- TOTAL/WEIGHTED 186 $1,204,787,325 100.0% 70.4% 1.70X AVERAGE: -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ORIGINAL TERM TO MATURITY/ARD IN MONTHS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- WA ORIGINAL TERM TO NUMBER PRINCIPAL % OF WA UW MATURITY OF LOANS BALANCE IPB LTV DSCR -------------------------------------------------------------------------------- 60 - 84 19 $ 100,780,533 8.4% 71.6% 1.73x 85 - 120 161 1,038,623,998 6.2 70.8% 1.71x 121 - 240 6 65,382,794 5.4 62.3% 1.61x -------------------------------------------------------------------------------- TOTAL/WEIGHTED 186 $1,204,787,325 100.0% 70.4% 1.70X AVERAGE: -------------------------------------------------------------------------------- WEIGHTED AVERAGE ORIGINAL TERM TO MATURITY: 119 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- REMAINING TERMS TO MATURITY/ARD DATE IN MONTHS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NUMBER WA RANGE OF REMAINING OF PRINCIPAL % OF WA UW TERMS TO MATURITY LOANS BALANCE IPB LTV DSCR -------------------------------------------------------------------------------- 57 - 84 21 $ 129,808,734 10.8% 66.6% 1.67x 85 - 120 159 1,009,595,798 3.8 71.4% 1.71x 121 - 240 6 65,382,794 5.4 62.3% 1.61x -------------------------------------------------------------------------------- TOTAL/WEIGHTED 186 $ 1,204,787,325 100.0% 70.4% 1.70X AVERAGE: -------------------------------------------------------------------------------- WEIGHTED AVERAGE REMAINING TERM TO MATURITY/ARD: 117 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PROPERTY TYPE DISTRIBUTION --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL PROPERTY TYPE SUB PROPERTY TYPE PROPERTIES BALANCE % OF IPB WA LTV WA UW DSCR ------------------------------------------------------------------------------------------------------------------- MULTIFAMILY GARDEN 71 $295,894,347 24.6% 74.9% 1.52x MID/HIGH RISE 3 45,721,030 3.8 73.5% 1.42x COOP 1 6,500,000 0.5 6.8% 22.55x SUBTOTAL 75 $348,115,377 28.9% 73.4% 1.90x ------------------------------------------------------------------------------------------------------------------- RETAIL ANCHORED 39 $218,730,855 18.2% 72.5% 1.56x SHADOW ANCHORED 8 46,978,408 3.9 72.6% 1.45x UNANCHORED 6 29,038,242 2.4 66.2% 1.62x SUBTOTAL 53 $294,747,505 24.15% 71.9% 1.55x ------------------------------------------------------------------------------------------------------------------- OFFICE SUBURBAN 18 $130,742,777 10.9% 73.6% 1.47x CBD 4 102,702,986 8.5 49.0% 2.41x SUBTOTAL 22 $233,445,762 19.4% 62.8% 1.89x ------------------------------------------------------------------------------------------------------------------- MANUFACTURED HOUSING MANUFACTURED HOUSING 31 $124,736,095 40.4 75.7% 1.49x ------------------------------------------------------------------------------------------------------------------- MIXED USE INDUSTRIAL/OFFICE 1 $50,871,090 4.2% 74.3% 1.36x OFFICE/RETAIL 2 11,494,691 1.0 70.8% 1.44x MULTIFAMILY/RETAIL 1 11,250,000 0.9 70.3% 1.30x SUBTOTAL 4 $73,615,781 6.1% 73.1% 1.36x ------------------------------------------------------------------------------------------------------------------- INDUSTRIAL FLEX 7 $49,317,209 4.1% 71.8% 1.37x WAREHOUSE/DISTRIBUTION 1 24,000,000 2.0 64.2% 1.51x SUBTOTAL 8 $73,317,209 6.1% 69.3% 1.42x ------------------------------------------------------------------------------------------------------------------- HOTEL FULL SERVICE 1 $36,000,000 3.0% 63.2% 1.84x ------------------------------------------------------------------------------------------------------------------- SELF STORAGE SELF STORAGE 4 $13,459,597 1.1% 73.8% 1.33x ------------------------------------------------------------------------------------------------------------------- PARKING GARAGE PARKING GARAGE 1 $7,350,000 0.6% 27.8% 2.46x ------------------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE 199 $1,204,787,325 100.0% 70.4% 1.70X -------------------------------------------------------------------------------------------------------------------
6 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ALL MORTGAGE LOANS - COLLATERAL CHARACTERISTICS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ORIGINAL AMORTIZATION TERM IN MONTHS(1) -------------------------------------------------------------------------------- ORIGINAL AMORTIZATION NUMBER OF PRINCIPAL % OF WA WA UW TERM LOANS BALANCE IPB LTV DSCR -------------------------------------------------------------------------------- 120 - 180 5 $26,870,607 2.3% 42.5% 1.70x 181 - 240 7 40,308,887 3.4 66.7% 1.44x 241 - 300 37 222,751,382 18.9 68.3% 1.49x 301 - 330 1 4,596,704 0.4 68.6% 1.29x 331 - 360 127 885,049,745 75.0 72.9% 1.60x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 177 $1,179,577,325 100.0% 71.1% 1.58X -------------------------------------------------------------------------------- WEIGHTED AVERAGE ORIGINAL AMORTIZATION TERM: 339 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- REMAINING AMORTIZATION TERM IN MONTHS(1) -------------------------------------------------------------------------------- REMAINING AMORTIZATION NUMBER OF PRINCIPAL % OF WA UW TERM LOANS BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- 117 - 180 5 $26,870,607 2.3% 42.5% 1.70x 181 - 240 8 64,740,384 5.5 58.8% 1.47x 241 - 300 37 202,916,589 17.2 71.0% 1.48x 301 - 360 127 885,049,745 75.2 72.9% 1.60x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 177 $1,179,577,325 100.0% 71.1% 1.58X -------------------------------------------------------------------------------- WEIGHTED AVERAGE REMAINING AMORTIZATION TERM: 337 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- LTV RATIOS AS OF THE CUT-OFF DATE -------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW CUT-OFF LTV LOANS BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- 6.8% - 49.9% 13 $135,141,233 11.2% 40.8% 3.52x 50.0% - 59.9% 14 45,155,265 3.7 55.4% 1.76x 60.0% - 64.9% 16 119,164,341 9.9 63.7% 1.63x 65.0% - 69.9% 18 74,991,533 6.2 68.2% 1.54x 70.0% - 74.9% 36 206,171,814 17.1 73.1% 1.42x 75.0% - 80.0% 89 624,163,138 51.8 78.5% 1.43x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 186 $1,204,787,325 100.0% 70.4% 1.70X -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- LTV RATIOS AS OF THE MATURITY/ARD DATE(3) -------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW MATURITY LTV LOANS BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- 6.8% - 29.9% 2 $13,491,651 1.2% 20.5% 12.45x 30.0% - 49.9% 20 172,326,259 15.0 50.9% 2.28x 50.0% - 59.9% 55 238,208,021 20.7 69.6% 1.51x 60.0% - 64.9% 41 305,499,666 26.5 75.3% 1.43x 65.0% - 69.9% 54 366,191,248 31.8 79.0% 1.43x 70.0% - 73.8% 7 56,939,873 4.9 78.9% 1.52x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 179 $1,152,656,718 100.0% 71.2% 1.71X -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- AMORTIZATION TYPES -------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW AMORTIZED TYPES LOANS BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- BALLOON LOANS(2) 159 $1,011,393,810 85.9% 73.3% 1.49x INTEREST ONLY-BALLOON 3 67,330,000 5.6 46.9% 2.90x FULLY AMORTIZING 7 52,130,607 4.3 52.7% 1.61x ARD LOANS 7 28,722,908 2.4 77.5% 1.38x INTEREST ONLY 9 25,210,000 2.1 37.3% 7.66x INTEREST ONLY-ARD 1 20,000,000 1.7 80.0% 1.36x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 186 $1,204,787,325 100.0% 70.4% 1.70X -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- YEAR BUILT/RENOVATED -------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW YEAR BUILT/RENOVATED PROPERTIES BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- 1919 - 1959 1 $9,931,143 0.8% 52.3% 1.44x 1960 - 1969 13 54,279,840 4.5 77.1% 1.47x 1970 - 1979 24 95,017,224 7.9 70.5% 1.54x 1980 - 1989 34 245,869,614 20.4 66.2% 1.84x 1990 - 1999 43 253,295,741 21.0 69.7% 1.55x 2000 - 2003 84 546,393,764 45.4 72.2% 1.77x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 199 $1,204,787,325 100.0% 70.4% 1.70X -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CURRENT OCCUPANCY RATES(4) -------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW CURRENT OCCUPANCY RATES PROPERTIES BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- 68.6 - 85.0 12 $50,039,879 4.3% 72.8% 1.44x 85.1 - 90.0 16 140,304,689 12.1 75.5% 1.43x 90.1 - 95.0 39 310,393,155 26.7 69.6% 1.77x 95.1 - 100.0 130 660,699,603 56.9 70.3% 1.73x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 197 $1,161,437,325 100.0% 70.9% 1.69X -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PREPAYMENT PROTECTION -------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW PREPAYMENT PROTECTION LOANS BALANCE IPB WA LTV DSCR -------------------------------------------------------------------------------- LO-DEFEASANCE 178 $1,122,105,110 93.1% 71.3% 1.59x LO-YIELD MAINTENANCE 7 58,250,718 4.8 62.3% 4.00x YIELD MAINTENANCE 1 24,431,497 2.0 45.7% 1.51x -------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 186 $1,204,787,325 100.0% 70.4% 1.70X -------------------------------------------------------------------------------- (1) Excludes loans that are interest only for the entire term. (2) Excludes the mortgage loans which pay interest only for a portion of their term. (3) Excludes the fully amortizing mortgage loans. (4) Excludes the hotel and parking garage properties. 7 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- COLLATERAL CHARACTERISTICS - LOAN GROUP(1) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CUT-OFF DATE PRINCIPAL BALANCE --------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------- RANGE OF PRINCIPAL NUMBER OF PRINCIPAL WA UW BALANCES LOANS BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------- $1,000,000 - $1,999,999 12 $20,850,471 2.5% 68.5% 1.51x $2,000,000 - $2,999,999 19 48,422,421 5.8 72.2% 1.48x $3,000,000 - $3,999,999 17 56,102,788 6.7 68.3% 1.52x $4,000,000 - $4,999,999 8 35,926,784 4.3 70.2% 1.47x $5,000,000 - $6,999,999 19 113,044,967 13.5 67.0% 2.75x $7,000,000 - $9,999,999 14 117,751,064 14.0 68.9% 1.58x $10,000,000 - $14,999,999 12 144,127,644 17.2 75.6% 1.46x $15,000,000 - $24,999,999 6 129,913,378 15.5 69.2% 1.44x $25,000,000 - $60,000,000 4 172,871,090 20.6 61.9% 2.10x ----------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6 1.79X ----------------------------------------------------------------------------------------------- AVERAGE PER LOAN: $7,558,654 ----------------------------------------------------------------------------------------------- AVERAGE PER PROPERTY: $7,424,873 ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- GEOGRAPHIC DISTRIBUTION -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL WA UW STATE PROPERTIES BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------- MASSACHUSETTS 3 $124,694,941 14.9% 59.6% 2.21x CALIFORNIA 15 106,135,158 12.7 70.4% 1.50x Southern California 13 98,367,122 11.7 70.4% 1.50x Northern California 2 7,768,036 0.9 70.8% 1.49x TEXAS 12 79,676,748 9.5 75.6% 1.50x MICHIGAN 10 68,067,470 8.1 67.5% 1.71x VIRGINIA 5 63,940,460 7.6 70.6% 1.48x NEW YORK 7 54,652,954 6.5 60.3% 3.99x FLORIDA 8 50,337,635 6.0 74.3% 1.43x GEORGIA 11 50,102,369 6.0 57.6% 1.51x OTHER 42 241,402,871 28.8 72.9% 1.52x ----------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE 113 $839,010,606 100.0% 68.6% 1.79X ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- RANGE OF MORTGAGE INTEREST RATES -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- RANGE OF MORTGAGE NUMBER OF PRINCIPAL WA UW INTEREST RATES LOANS BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------- 4.2500% - 4.9999% 11 $84,378,342 10.1% 61.9% 3.38x 5.0000% - 5.4999% 31 247,706,121 29.5 66.8% 1.95x 5.5000% - 5.9999% 30 194,321,144 23.2 73.5% 1.43x 6.0000% - 6.4999% 28 254,660,330 30.4 71.0% 1.46x 6.5000% - 6.9999% 7 21,148,468 2.5 74.1% 1.32x 7.0000% - 7.4999% 2 7,768,000 0.9 58.1% 1.25x 7.5000% - 8.6650% 2 29,028,201 3.5 49.3% 1.48x ----------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79X ----------------------------------------------------------------------------------------------- WEIGHTED AVERAGE MORTGAGE RATE: 5.7398% ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL WA UW UW DSCR LOANS BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------- 1.20X - 1.29X 9 $46,138,947 5.5 73.4% 1.26x 1.30X - 1.34X 12 60,363,977 7.2 74.5% 1.31x 1.35X - 1.39X 10 138,028,735 16.5 75.1% 1.36x 1.40X - 1.49X 16 119,926,734 14.3 75.4% 1.42x 1.45X - 1.49X 13 85,009,685 10.1 76.6% 1.48x 1.50X - 1.69X 39 242,803,313 28.9 69.0% 1.56x 1.70X - 1.99X 6 53,213,148 6.3 62.6% 1.81x 2.00X - 2.99X 3 20,034,417 2.4 40.9% 2.43x 3.00X - 4.99X 2 66,991,651 8.0 41.9% 3.10x 5.00X - 22.55X 1 6,500,000 0.8 6.8% 22.55x ----------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79X ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ORIGINAL TERM TO MATURITY/ARD DATE IN MONTHS -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL WA UW ORIGINAL TERM TO MATURITY LOANS BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------- 60 - 84 8 $65,019,588 7.7% 77.7% 1.48x 85 - 120 97 708,608,225 84.5 68.4% 1.83x 121 - 240 6 65,382,794 7.8 62.3% 1.61x ----------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79X ----------------------------------------------------------------------------------------------- WEIGHTED AVERAGE ORIGINAL TERM TO MATURITY: 121 ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- REMAINING TERMS TO MATURITY/ARD DATE IN MONTHS -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- RANGE OF REMAINING TERMS NUMBER OF PRINCIPAL WA UW TO MATURITY LOANS BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------- 57 - 84 10 $94,047,788 11.2% 68.9% 1.48x 85 - 120 95 679,580,024 81.0 69.2% 1.85x 121 - 240 6 65,382,794 7.8 62.3% 1.61x ----------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79X ----------------------------------------------------------------------------------------------- WEIGHTED AVERAGE REMAINING TERM TO MATURITY/ARD: 119 ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PROPERTY TYPE DISTRIBUTION -------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------- NUMBER PRINCIPAL OF BALANCE WA UW PROPERTY TYPE SUB PROPERTY TYPE PROPERTIES % OF IPB WA LTV DSCR ---------------------------------------------------------------------------------------------------------- RETAIL ANCHORED 39 $218,730,855 26.1% 72.5% 1.56x SHADOW ANCHORED 8 46,978,408 5.6 72.6% 1.45x UNANCHORED 6 29,038,242 3.5 66.2% 1.62x SUBTOTAL 53 $294,747,505 35.1% 71.9% 1.55x ---------------------------------------------------------------------------------------------------------- OFFICE SUBURBAN 18 $130,742,777 15.6% 73.6% 1.47x CBD 4 102,702,986 12.2 49.0% 2.41x SUBTOTAL 22 $233,445,762 27.8% 62.8% 1.89x ---------------------------------------------------------------------------------------------------------- MANUFACTURED HOUSING MANUFACTURED HOUSING 17 $81924,826 9.8% 77.1% 1.49x ---------------------------------------------------------------------------------------------------------- MIXED USE INDUSTRIAL/OFFICE 1 $50,871,090 6.1% 74.3% 1.36x OFFICE/RETAIL 2 11,494,691 1.4 70.8% 1.44x MULTIFAMILY/RETAIL 1 11,250,000 1.3 70.3% 1.30x SUBTOTAL 4 $73,615,781 8.8% 73.1% 1.36x ---------------------------------------------------------------------------------------------------------- INDUSTRIAL FLEX 7 $49,317,209 5.9% 71.8% 1.37x WAREHOUSE/DISTRIBUTION 1 24,000,000 2.9 64.2% 1.51x SUBTOTAL 8 $73,317,209 8.7% 69.3% 1.42x ---------------------------------------------------------------------------------------------------------- HOTEL FULL SERVICE 1 $36,000,000 4.3% 63.2% 1.84x ---------------------------------------------------------------------------------------------------------- MULTIFAMILY GARDEN 2 $18,649,927 2.2% 75.6% 1.46x COOP 1 6,500,000 0.8 6.8% 22.55x SUBTOTAL 3 $25,149,927 3.0% 57.8% 6.91x ---------------------------------------------------------------------------------------------------------- STORAGE STORAGE 4 $13,459,597 1.6% 73.8% 1.33x ---------------------------------------------------------------------------------------------------------- PARKING GARAGE PARKING GARAGE 1 $7,350,000 0.9% 27.8% 2.46x ---------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE 113 $839,010,606 100.0% 68.6% 1.79X ----------------------------------------------------------------------------------------------------------
8 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- COLLATERAL CHARACTERISTICS - LOAN GROUP 1 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ORIGINAL AMORTIZATION TERM IN MONTHS(1) --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW ORIGINAL AMORTIZATION TERM LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ 120 - 180 4 $22,949,939 2.8% 42.3% 1.73x 181 - 240 5 36,721,333 4.4 66.5% 1.45x 241 - 300 24 158,895,292 19.1 65.2% 1.56x 301 - 330 1 4,596,704 0.6 68.6% 1.29x 331 - 360 76 609,347,338 73.2 71.3% 1.65x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 110 $832,510,606 100.0% 69.1% 1.62X ------------------------------------------------------------------------------------------------------ WEIGHTED AVERAGE ORIGINAL AMORTIZATION TERM: 336 ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- REMAINING AMORTIZATION TERM IN MONTHS(1) -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW REMAINING AMORTIZATION TERM LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ 118 - 180 4 $22,949,939 2.8% 42.3% 1.73x 181 - 240 6 61,152,830 7.3 58.2% 1.47x 241 - 300 24 139,060,499 16.7 68.7% 1.56x 301 - 360 76 609,347,338 71.3 71.2% 1.65x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 110 $832,510,606 100.0% 69.1% 1.62X ------------------------------------------------------------------------------------------------------ WEIGHTED AVERAGE REMAINING AMORTIZATION TERM: 334 ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- LTV RATIOS AS OF THE CUT-OFF DATE -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW CUT-OFF LTV LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ 6.8% - 49.9% 8 $121,157,565 14.4% 40.5% 3.66x 50.0% - 59.9% 8 29,784,066 3.5 55.0% 1.58x 60.0% - 69.9% 14 112,939,341 13.5 63.6% 1.64x 65.0% - 69.9% 10 47,476,169 5.7 68.9% 1.51x 70.0% - 74.9% 25 160,825,379 19.2 73.2% 1.40x 75.0% - 80.0% 46 366,828,087 43.7 78.5% 1.43x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79X ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- LTV RATIOS AS OF THE MATURITY DATE(3) -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW MATURITY LTV LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ 6.8% - 29.9% 2 $13,491,651 1.7% 20.5% 12.45x 30.0% - 49.9% 13 156,951,505 19.8 51.0% 2.29x 50.0% - 59.9% 31 159,275,178 20.1 70.6% 1.45x 60.0% - 64.9% 24 186,566,386 23.6 74.2% 1.44x 65.0% - 69.9% 29 226,654,533 28.7 78.7% 1.43x 70.0% - 73.8% 6 47,861,413 6.1 78.9% 1.49x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 105 $790,800,667 100.0% 69.5% 1.80X ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- AMORTIZATION TYPES -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW AMORTIZED TYPES LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ BALLOON LOANS(2) 96 $683,957,655 81.5% 72.0% 1.51x INTEREST ONLY-BALLOON 2 63,250,000 7.5 44.7% 3.01x FULLY AMORTIZING 6 48,209,939 5.7 53.4% 1.62x INTEREST ONLY-ARD 1 20,000,000 2.4 80.0% 1.36x ARD LOANS 5 17,093,012 2.0 76.1% 1.39x INTEREST ONLY 1 6,500,000 0.8 6.8% 22.55x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79X ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- YEAR BUILT/RENOVATED -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW YEAR BUILT/RENOVATED PROPERTIES BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ 1919 - 1959 1 $9,931,143 1.2% 52.3% 1.44x 1960 - 1969 4 24,898,323 3.0 78.3% 1.47x 1970 - 1979 13 51,514,882 6.1 66.8% 1.60x 1980 - 1989 13 148,412,910 17.7 59.0% 2.15x 1990 - 1999 30 192,868,298 23.0 67.6% 1.57x 2000 - 2003 52 411,385,051 49.0 72.6% 1.81x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 113 $839,010,606 100.0% 68.6% 1.79X ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- CURRENT OCCUPANCY RATES(4) -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW CURRENT OCCUPANCY RATES PROPERTIES BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ 68.6 - 85.0 7 $24,113,076 3.0% 72.4% 1.41x 85.1 - 90.0.9 9 106,032,417 13.3 75.9% 1.41x 90.1 - 95.0 21 233,149,930 29.3 68.2% 1.87x 95.1 - 100.0 74 432,365,184 54.3 68.0% 1.84x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 111 $795,660,606 100.0% 69.2% 1.78X ------------------------------------------------------------------------------------------------------ -------------------------------------------------------------------------------- PREPAYMENT PROTECTION -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------ NUMBER OF PRINCIPAL WA UW PREPAYMENT PROTECTION LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ LO-DEFEASANCE 105 $770,404,021 91.8% 69.8% 1.63x LO-YIELD MAINTENANCE 5 44,175,088 5.3 60.0% 4.73x YIELD MAINTENANCE 1 24,431,497 2.9 45.7% 1.51x ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 111 $839,010,606 100.0% 68.6% 1.79x ------------------------------------------------------------------------------------------------------
(1) Excludes loans that are interest only for the entire term. (2) Excludes the mortgage loans which pay interest only for a portion of their term. (3) Excludes the fully amortizing mortgage loans. (4) Excludes the hotel and parking garage properties. 9 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- COLLATERAL CHARACTERISTICS - LOAN GROUP 2 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CUT-OFF DATE PRINCIPAL BALANCE --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL WA UW RANGE OF PRINCIPAL BALANCES LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------ $923,360 - $1,999,999 18 $28,308,351 7.7% 64.5% 1.75x $2,000,000 - $2,999,999 14 35,402,207 9.7 74.4% 1.50x $3,000,000 - $3,999,999 10 36,233,393 9.9 70.3% 1.56x $4,000,000 - $4,999,999 3 13,145,727 3.6 77.5% 1.38x $5,000,000 - $6,999,999 18 106,004,665 29.0 74.0% 1.57x $7,000,000 - $9,999,999 6 50,067,909 13.7 74.2% 1.52x $10,000,000 - $14,999,999 4 46,097,127 12.6 79.1% 1.46x $15,000,000 - $33,952,685 2 50,517,339 13.8 79.2% 1.30x ------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51x ------------------------------------------------------------------------------------------------------- AVERAGE PER LOAN: $4,877,023 ------------------------------------------------------------------------------------------------------- AVERAGE PER PROPERTY: 4,253,218 ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- GEOGRAPHIC DISTRIBUTION -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL STATE PROPERTIES BALANCE % OF IPB WA LTV WA UW DSCR ------------------------------------------------------------------------------------------------------- MARYLAND 2 $39,381,768 10.8% 79.2% 1.26x FLORIDA 6 35,297,134 9.6 78.2% 1.50x ILLINOIS 11 29,519,786 8.1 57.3% 2.15x TEXAS 9 29,077,002 7.9 72.1% 1.49x ARIZONA 7 27,195,324 7.4 75.7% 1.33x NORTH CAROLINA 7 23,734,254 6.5 77.1% 1.45x ALABAMA 2 23,267,764 6.4 79.9% 1.41x OTHER 42 158,303,687 43.3 74.6% 1.51x ------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE 86 $365,776,719 100.0% 74.4% 1.51X ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- RANGE OF MORTGAGE INTEREST RATES -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- RANGE OF MORTGAGE INTEREST NUMBER OF PRINCIPAL WA UW RATES LOANS BALANCE % OF IPB WA LTV DSCR ------------------------------------------------------------------------------------------------------- 4.2000% - 4.9999% 16 $71,855,132 19.6% 67.3% 1.85x 5.0000% - 5.4999% 25 148,383,756 40.6 77.0% 1.46x 5.5000% - 5.9999% 22 108,731,143 29.7 76.8% 1.38x 6.0000% - 6.2700% 12 36,806,688 10.1 71.0% 1.43x ------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51X ------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE MORTGAGE RATE: 5.3269% ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNDERWRITTEN CASH FLOW DEBT SERVICE COVERAGE RATIOS -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL WA UW UW DSCR LOANS BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------------- 1.20X - 1.29X 4 $42,720,240 11.7% 78.5% 1.24x 1.30X - 1.34X 4 12,482,614 3.4 77.2% 1.31x 1.35X - 1.39X 13 62,590,045 17.1 77.3% 1.37x 1.40X - 1.44X 12 64,475,125 17.6 75.6% 1.42x 1.45X - 1.49X 10 50,575,478 13.8 77.9% 1.47x 1.50X - 1.69X 19 97,411,635 26.6 74.2% 1.56x 1.70X - 1.99X 4 10,669,416 2.9 67.5% 1.85x 2.00X - 3.13X 9 24,852,168 6.8 52.6% 2.39x ----------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51X ----------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ORIGINAL TERM TO MATURITY IN MONTHS -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL ORIGINAL TERM TO MATURITY LOANS BALANCE % OF IPB WA LTV WA UW DSCR ------------------------------------------------------------------------------------------------------- 60 - 84 11 $35,760,946 9.8% 60.6% 2.19x 85 - 120 64 330,015,773 90.2 75.9% 1.44x TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51X ------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE ORIGINAL TERM TO MATURITY: 115 ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- REMAINING TERMS TO MATURITY/ARD DATE IN MONTHS -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- RANGE OF REMAINING TERMS TO NUMBER OF PRINCIPAL MATURITY LOANS BALANCE % OF IPB WA LTV WA UW DSCR ------------------------------------------------------------------------------------------------------- 58 - 84 11 $35,760,946 9.8% 60.6% 2.19x 85 - 120 64 330,015,773 90.2 75.9% 1.44x TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51X ------------------------------------------------------------------------------------------------------- WEIGHTED AVERAGE ORIGINAL TERM TO MATURITY: 113 ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PROPERTY TYPE DISTRIBUTION -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------- SUB PROPERTY NUMBER OF PRINCIPAL WA UW PROPERTY TYPE TYPE PROPERTIES BALANCE % OF IPB WA LTV DSCR ----------------------------------------------------------------------------------------------------------- MULTIFAMILY GARDEN 69 $277,244,420 75.8% 74.8% 1.53x MID/HIGH RISE 3 45,721,030 12.5 73.5% 1.42x SUBTOTAL 72 $322,965,450 88.3% 74.6% 1.51x ----------------------------------------------------------------------------------------------------------- MANUFACTURED HOUSING MANUFACTURED 14 $42,811,269 11.7% 72.9% 1.48x HOUSING ----------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE 86 $365,776,719 100.0% 74.4% 1.51X -----------------------------------------------------------------------------------------------------------
10 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- COLLATERAL CHARACTERISTICS - LOAN GROUP 2 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ORIGINAL AMORTIZATION TERM IN MONTHS(1) --------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------- ORIGINAL AMORTIZATION NUMBER OF PRINCIPAL % OF WA UW TERM LOANS BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- 120 - 180 1 $3,920,668 1.1% 43.6% 1.52x 181 - 240 2 3,587,554 1.0 68.0% 1.34x 241 - 300 13 63,856,090 18.4 76.1% 1.31x 331 - 360 51 275,702,407 79.4 76.4% 1.49x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 67 $347,066,719 100.0% 75.9% 1.46X --------------------------------------------------------------------------------------------- WEIGHTED AVERAGE ORIGINAL AMORTIZATION TERM: 345 --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- REMAINING AMORTIZATION TERM IN MONTHS(1) --------------------------------------------------------------------------------------------- REMAINING AMORTIZATION NUMBER OF PRINCIPAL WA UW TERM LOANS BALANCE % OF IPB WA LTV DSCR --------------------------------------------------------------------------------------------- 117 - 180 1 $3,920,668 1.1% 43.6% 1.52x 181 - 240 2 3,587,554 1.0 68.0% 1.34x 241 - 300 13 63,856,090 18.4 76.1% 1.31x 301 - 360 51 275,702,407 79.4 76.4% 1.49x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 67 $347,066,719 100.0% 75.9% 1.46X --------------------------------------------------------------------------------------------- WEIGHTED AVERAGE REMAINING AMORTIZATION TERM: 343 --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- LTV RATIOS AS OF THE CUT-OFF DATE -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW CUT-OFF LTV LOANS BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- 38.4% - 49.9% 5 $13,983,668 3.8% 43.0% 2.29x 50.0% - 59.9% 6 15,371,199 4.2 56.3% 2.12x 60.0% - 64.9% 2 6,225,000 1.7 64.7% 1.50x 65.0% - 69.9% 8 27,515,364 7.5 66.9% 1.59x 70.0% - 74.9% 11 45,346,436 12.4 72.8% 1.48x 75.0% - 80.0% 43 257,335,052 70.4 78.6% 1.43x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51X --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- LTV RATIOS AS OF THE MATURITY DATE(3) -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW MATURITY LTV LOANS BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- 38.4% - 49.9% 7 15,374,753 4.2% 50.6% 2.18x 50.0% - 59.9% 24 78,932,843 21.8 67.4% 1.62x 60.0% - 64.9% 17 118,933,280 32.9 77.1% 1.41x 65.0% - 69.9% 25 139,536,715 38.6 79.4% 1.44x 70.0% - 72.8% 1 9,078,460 2.5 79.3% 1.67x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 74 361,856,051 100.0% 74.8% 1.51X --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- AMORTIZATION TYPES -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW AMORTIZED TYPES LOANS BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- BALLOON LOANS(2) 63 $327,436,154 89.5% 76.1% 1.46x INTEREST ONLY 8 18,710,000 5.1 47.9% 2.49x ARD LOANS 2 11,629,897 3.2 79.6% 1.38x INTEREST ONLY-BALLON 1 4,080,000 1.1 80.0% 1.20x FULLY AMORTIZING 1 3,920,668 1.1 43.6% 1.52x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 75 $365,776,719 100.0% 74.4% 1.51x --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- YEAR BUILT/RENOVATED -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW YEAR BUILT/RENOVATED PROPERTIES BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- 1961 - 1969 9 29,381,517 8.0% 76.1% 1.47x 1970 - 1979 11 43,502,342 11.9 74.8% 1.48x 1980 - 1989 21 97,456,704 26.6 77.1% 1.36x 1990 - 1999 13 60,427,444 16.5 76.4% 1.50x 2000 - 2003 32 135,008,713 36.9 71.2% 1.65x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 86 $365,776,719 100.0% 74.4% 1.51X --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CURRENT OCCUPANCY RATES(4) -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW CURRENT OCCUPANCY RATES PROPERTIES BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- 76.1 - 85.0 5 $25,926,803 7.1% 73.1% 1.46x 85.1 - 90.0 7 34,272,272 9.4 74.4% 1.49x 90.1 - 95.0 18 77,243,225 21.1 74.0% 1.47x 95.1 - 100.0 56 228,334,419 62.4 74.8% 1.53x --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 86 $365,776,719 100.0% 74.4% 1.51X --------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PREPAYMENT PROTECTION -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- NUMBER OF PRINCIPAL % OF WA UW PREPAYMENT PROTECTION LOANS BALANCE IPB WA LTV DSCR --------------------------------------------------------------------------------------------- LO-DEFEASANCE 73 351,701,089 96.2 74.6 1.5 LO-YIELD MAINTENANCE 2 14,075,630 3.8 69.8 1.69 --------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 75 365,776,719 100.0 74.4 1.51 ---------------------------------------------------------------------------------------------
(1) Excludes loans that are interest only for the entire term. (2) Excludes the mortgage loans which pay interest only for a portion of their term. (3) Excludes the fully amortizing mortgage loans. (4) Excludes the hotel and parking garage properties. 11 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TOP 10 MORTGAGE LOANS --------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------- LOAN LOAN NAME LOAN CUT-OFF DATE % OF SQUARE FEET(2)/ SELLER(1) (LOCATION) GROUP BALANCE IPB UNIT ------------------------------------------------------------------------------------------------------- JPMCB One Post Office Square(3) 1 $60,000,000 5.0% 766,462 SF (Boston, MA) ABN IAC - Boston (International Cargo Port) 1 50,871,090 4.2% 376,267 SF (Boston, MA) JPMCB Sheraton Inner Harbor Hotel 1 36,000,000 3.0% 337 Rooms (Baltimore, MD) JPMCB Tindeco Wharf 2 33,952,685 2.8% 240 Units (Baltimore, MD) JPMCB Chasewood Office Portfolio 1 26,000,000 2.2% 250,778 SF (Houston, TX) NCCI Tower Place 200 1 24,431,497 2.0% 259,096 SF (Atlanta, GA) JPMCB Lillian Vernon Corporation 1 24,000,000 2.0% 827,000 SF (Virginia Beach, VA) NCCI Metro Four Office Building 1 23,000,000 1.9% 144,997 SF (Springfield, VA) ABN The Prado at Spring Creek 1 21,000,000 1.7% 152,072 SF (Bonita Springs, FL) JPMCB Piilani Shopping Center 1 20,000,000 1.7% 65,702 SF (Kihei, HI) ----------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: $319,255,272 26.5% ----------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CUT-OFF LOAN PER UW LTV PROPERTY SF/UNIT DSCR RATIO TYPE -------------------------------------------------------------------------------- $157 3.10x 42.9% Office $135 1.36x 74.3% Industrial/Office $106,825 1.84x 63.2% Full Service Hotel $141,470 1.24x 79.1% Multifamily $104 1.60x 80.0% Office $94 1.51x 45.7% Office $29 1.51x 64.2% Industrial $159 1.35x 76.4% Office $138 1.44x 78.4% Retail $304 1.36x 80.0% Retail ------------------------------------------------------ ------------------------------------------------------ 1.77X 65.9% ------------------------------------------------------
(1) "JPMCB" = JPMORGAN CHASE BANK; "ABN" = ABN AMRO BANK N.V.; "NCCI" = NOMURA; (2) APPROXIMATE. (3) SEE FOOTNOTES TO THE ONE POST OFFICE SQUARE LOAN DESCRIPTION 12 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 [THIS PAGE INTENTIONALLY LEFT BLANK] 13 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ONE POST OFFICE SQUARE -------------------------------------------------------------------------------- [PHOTO OF ONE POST OFFICE SQUARE OMITTED] -------------------------------------------------------------------------------- 14 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ONE POST OFFICE SQUARE -------------------------------------------------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $60,000,000 (Pari Passu)(1) ASSET/PORTFOLIO: SINGLE ASSET CUT-OFF PRINCIPAL BALANCE:$60,000,000 (Pari Passu)(1) TITLE: Fee % OF POOL BY IPB: 5.0% PROPERTY TYPE: Office LOAN SELLER: JPMorgan Chase Bank SQUARE FOOTAGE: 766,462 BORROWER: One Post Office Square, L.L.C. LOCATION: Boston, MA SPONSOR: Equity Office Properties Trust and the YEAR BUILT/RENOVATED: 1981 Prime Property Fund ORIGINATION DATE: 9/12/2003 OCCUPANCY: 90.9% INTEREST RATE: 5.3676% OCCUPANCY DATE: 8/7/2003 INTEREST ONLY PERIOD: 24 Months NUMBER OF TENANTS: 23 MATURITY DATE: 10/1/2013 HISTORICAL NOI: AMORTIZATION TYPE: Interest Only - Balloon 2001: $20,340,518 ORIGINAL AMORTIZATION: 360 2002: $22,825,836 REMAINING AMORTIZATION: 360 2003: $20,138,744 (TTM as of 7/31/2003) CALL PROTECTION: L(24),Def(91),O(5) UW NOI: $21,122,367 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $19,705,493 LOCK BOX: Cash Management Agreement APPRAISED VALUE: $280,000,000 ADDITIONAL DEBT: Yes APPRAISAL DATE: 8/20/2003 ADDITIONAL DEBT TYPE: Pari Passu and B-Note LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- (1) Represents the A1 component note in a 3 component note whole loan structure in the aggregate amount of $175,000,000. The A1 component note is a Pari Passu with a $60,000,000 A2 component note (not included in the trust). The $55,000,000 B-Note is subordinate to the A1 component note and the A2 component note.
------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- The One Post Square borrower is obligated to make deposits into certain reserve accounts upon the net operating income for One Post Office Square falling below $17,000,000. Additionally, the One Post Office Square borrower may provide a guaranty from EOP Operating Limited Partnership and the Equitable Life Assurance Society of the United States, on behalf of its Separate Account No. 8, also known as the Prime Property Fund, so long as such Whole Loan entities have a long term debt rating of at least BBB- by Pari Passu (Include the Standard and Poor's and Baa3 by Moody's. Notes(2) B-Note)(3) -------------------- ----------------- CUT-OFF DATE LOAN/SF: $157 $228 CUT-OFF DATE LTV: 42.9% 62.5% MATURITY DATE LTV: 37.4% 55.1% UW DSCR: 3.10x 1.62x ------------------------------------------------------------------ ----------------------- -------------------- ----------------- (2) Calculated using a loan amount equal to $120,000,000 (the aggregate Pari Passu Notes balance). (3) Calculated using a loan amount equal to $175,000,000 (the aggregate whole loan balance). ------------------------------------------------------------------------------------------------------------------------------------ SIGNIFICANT TENANTS ------------------------------------------------------------------------------------------------------------------------------------ LEASE MOODY'S/ SQUARE EXPIRATION TENANT NAME PARENT COMPANY S&P(4) FEET % OF GLA BASE RENT PSF YEAR ------------------------------------------------------------------------------------------------------------------------------------ PUTNAM INVESTMENTS Putnam Investments NR/NR 298,589 39.0% $42.94 2009 PRICEWATERHOUSECOOPERS PricewaterhouseCoopers LLP NR/NR 179,105 23.4% $23.01 2005 SULLIVAN & WORCESTER Sullivan & Worcester NR/NR 105,840 13.8% $52.25 2011 ------------------------------------------------------------------------------------------------------------------------------------
(4) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. 15 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ONE POST OFFICE SQUARE -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SPONSOR -------------------------------------------------------------------------------- The property is owned by a joint venture controlled by the Prime Property Fund and Equity Office Properties Trust. The Prime Property Fund, an open-end commingled insurance company separate account of the Equitable Life Assurance Society, is a subsidiary of AXA Financial Group. Founded in 1973, the fund was created as a vehicle for pension funds to invest in real estate. The fund is managed by Lend Lease Real Estate Investments. Equity Office Properties Trust (NYSE: EOP) is the largest REIT and publicly held owner of office properties in the nation, with a total capitalization of approximately $25 billion. Equity Office owns and manages approximately 124 million square feet of primarily Class A office space in 721 buildings in 30 major metropolitan areas across the country. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- COLLATERAL -------------------------------------------------------------------------------- One Post Office Square is a 42-story class A office property consisting of approximately 766,462 square feet and an attached 385-car parking garage. The property is located in the center of Boston's financial district at the corner of Milk and Pearl Streets. The building was originally constructed in 1981 and offers its tenants modern amenities including a three-story lobby finished in patterned marble walls and columns, 24-hour manned security desk, a restaurant, an attached 330-room hotel (not part of the collateral), and a loading dock. The property is approximately 90.9% leased to over twenty tenants including Putnam Investments (approximately 298,589 square feet), Pricewaterhouse Coopers (approximately 179,105 square feet), and Sullivan & Worcester (approximately 105,840 square feet). The building has a view of Post Office Square Park, an urban park located directly across the street. The Property shares its location with the upscale Le Meridien Hotel giving its tenants additional amenities. The property has highway access and is situated four blocks from South Station, which houses the Red MBTA subway line, Amtrak trains, and commuter trains and buses. Express buses from the Western suburbs also stop directly in front of One Post Office Square. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- MARKET(1) -------------------------------------------------------------------------------- The total Boston inventory of office buildings is 66,465,579 square feet. Approximately 34.6 million, or 52% of this inventory, is located in the Central Business District. Approximately 14.0 million or 21% is located in the Back Bay section of Boston. The subject property is situated within the Central Business District in downtown Boston, located in the approximate middle of this district within what is known as Post Office Square. This area is improved primarily with high-rise commercial office buildings but having some class B/C buildings as well as hotels. The CBD is supported by major residential development within the Back Bay to the west, the North End to the north and the South End to the south. In the downtown Boston market, new construction to be delivered between 2001and 2004, is expected to total 4,274,000 square feet. Of these buildings, only two would be directly competitive to One Post Office Square, containing 603,000 square feet (0% committed) and 1,022,000 square feet (100% committed). In second quarter 2003, the overall Boston office market reflects a vacancy rate of 13.1 percent and an "available" rate of 17.1%. The difference between the two rates is that vacancy is defined as space, which is immediately available for occupancy, while available is all currently marketed space. The Class A market within the CBD reported an availability of 19.7% and an actual vacancy of 12.2%. The appraiser's survey of competitive office properties in the subject's area indicated typical rental rates ranged from $38.00 to $60.00 per rentable square foot per year, gross. A substantial amount of sublease space has entered the market, totaling 2,132,878 square feet in downtown Boston. The amount of new sublease space has slowed significantly over the past several quarters. Further support is borne out by the fact that sublease space has shown a steady decline from its peak of over 3.0 million in the first quarter of 2001. -------------------------------------------------------------------------------- (1) Certain information from the CB Richard Ellis appraisal dated August 20, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
------------------------------------------------------------------------------------------------------------------------------------ LEASE ROLLOVER SCHEDULE ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET % OF GLA BASE RENT OF BASE RENT YEAR EXPIRING(2) EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ------------------------------------------------------------------------------------------------------------------------------------ VACANT NAP 69,703 9.1% NAP NAP 69,703 9.1% NAP NAP 2003 & MTM 4 17,927 2.3 $439,416 1.6% 87,630 11.4% $439,416 1.6% 2004 5 11,990 1.6 669,492 2.5 99,620 13.0% $1,108,908 4.1% 2005 9 184,975 24.1 4,413,036 16.4 284,595 37.1% $5,521,944 20.6% 2006 1 3,313 0.4 175,584 0.7 287,908 37.6% $5,697,528 21.2% 2007 6 14,512 1.9 664,596 2.5 302,420 39.5% $6,362,124 23.7% 2008 2 6,180 0.8 292,284 1.1 308,600 40.3% $6,654,408 24.8% 2009 21 311,466 40.6 13,542,960 50.4 620,066 80.9% $20,197,368 75.2% 2010 0 0 0.0 0 0.0 620,066 80.9% $20,197,368 75.2% 2011 5 105,840 13.8 5,530,140 20.6 725,906 94.7% $25,727,508 95.8% 2012 0 0 0.0 0 0.0 725,906 94.7% $25,727,508 95.8% AFTER 10 40,556 5.3 1,140,708 4.2 766,462 100.0% $26,868,216 100.0% --------------- ----------- ---------- ---------- -------------- ---------- -------------- ------------- ------------- ------------- TOTAL 63 766,462 100.0% $26,868,216 100.0% --------------- ----------- ---------- ---------- -------------- ---------- -------------- ------------- ------------- -------------
16 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ONE POST OFFICE SQUARE -------------------------------------------------------------------------------- STACKING PLAN
------------------------------------------------------------------------------------------------------------------------------------ FLOOR TENANT TYPE SQ FT EXPIRATION DATE ------------------------------------------------------------------------------------------------------------------------------------ 42,41 Vacant Not Applicable 8,025 Not Applicable ------------------------------------------------------------------------------------------------------------------------------------ 40 Jefferies Group, Inc. Financial 9,023 2003 ------------------------------------------------------------------------------------------------------------------------------------ 39 ABN Amro Bank, NV Financial 5,870 2005 ------------------------------------------------------------------------------------------------------------------------------------ 39 Vacant Not Applicable 5,312 Not Applicable ------------------------------------------------------------------------------------------------------------------------------------ 38 Anchor Capital Advisors, Inc. Financial 11,909 2013 ------------------------------------------------------------------------------------------------------------------------------------ 38 Vacant Not Applicable 5,592 Not Applicable ------------------------------------------------------------------------------------------------------------------------------------ 38 Loch Capital Management Financial 3,313 2006 ------------------------------------------------------------------------------------------------------------------------------------ 37 Needham & Company, Inc. Financial 6,289 2004 ------------------------------------------------------------------------------------------------------------------------------------ 37 McCall & Almy Inc. Real Estate 5,727 2007 ------------------------------------------------------------------------------------------------------------------------------------ 37 Bulkley, Richardson and Gelinas, LLP Law 3,199 2008 ------------------------------------------------------------------------------------------------------------------------------------ 37 Bank of Scotland, Inc. (BoS) Financial 2,981 2008 ------------------------------------------------------------------------------------------------------------------------------------ 37 Griffith Properties Real Estate 930 2004 ------------------------------------------------------------------------------------------------------------------------------------ 36 Schroder & Co. Financial 8,289 2003 ------------------------------------------------------------------------------------------------------------------------------------ 36 Congress Financial Corporation Financial 7,272 2007 ------------------------------------------------------------------------------------------------------------------------------------ 36 Charles Schwab & Company Financial 4,771 2003 ------------------------------------------------------------------------------------------------------------------------------------ 35 Holiday Fenoglio Fowler Financial 9,980 2009 ------------------------------------------------------------------------------------------------------------------------------------ 35 Vacant Not Applicable 9,438 Not Applicable ------------------------------------------------------------------------------------------------------------------------------------ 34 Jefferies Group, Inc. Financial 19,618 2013 ------------------------------------------------------------------------------------------------------------------------------------ 33 PricewaterhouseCoopers Consulting 23,927 2005 ------------------------------------------------------------------------------------------------------------------------------------ 32 PricewaterhouseCoopers Consulting 22,793 2005 ------------------------------------------------------------------------------------------------------------------------------------ 31 PricewaterhouseCoopers Consulting 22,793 2005 ------------------------------------------------------------------------------------------------------------------------------------ 30 PricewaterhouseCcoopers Consulting 22,764 2005 ------------------------------------------------------------------------------------------------------------------------------------ 29 PricewaterhouseCoopers Consulting 22,017 2005 ------------------------------------------------------------------------------------------------------------------------------------ 28 PricewaterhouseCoopers Consulting 21,872 2005 ------------------------------------------------------------------------------------------------------------------------------------ 27 PricewaterhouseCoopers Consulting 21,877 2005 ------------------------------------------------------------------------------------------------------------------------------------ 26 PricewaterhouseCoopers Consulting 21,062 2005 ------------------------------------------------------------------------------------------------------------------------------------ 25 Sullivan & Worcester Law 21,168 2011 ------------------------------------------------------------------------------------------------------------------------------------ 24 Sullivan & Worcester Law 21,168 2011 ------------------------------------------------------------------------------------------------------------------------------------ 23 Sullivan & Worcester Law 21,168 2011 ------------------------------------------------------------------------------------------------------------------------------------ 22 Sullivan & Worcester Law 21,168 2011 ------------------------------------------------------------------------------------------------------------------------------------ 21 Sullivan & Worcester Law 21,168 2011 ------------------------------------------------------------------------------------------------------------------------------------ 20 Vacant Not Applicable 21,168 Not Applicable ------------------------------------------------------------------------------------------------------------------------------------ 19 Vacant Not Applicable 21,168 Not Applicable ------------------------------------------------------------------------------------------------------------------------------------ 18 Putnam Investments Financial 21,730 2009 ------------------------------------------------------------------------------------------------------------------------------------ 17 Putnam Investments Financial 21,168 2009 ------------------------------------------------------------------------------------------------------------------------------------ 16 Putnam Investments Financial 21,168 2009 ------------------------------------------------------------------------------------------------------------------------------------ 15 Putnam Investments Financial 22,024 2009 ------------------------------------------------------------------------------------------------------------------------------------ 14 Putnam Investments Financial 20,427 2009 ------------------------------------------------------------------------------------------------------------------------------------ 13 Putnam Investments Financial 20,464 2009 ------------------------------------------------------------------------------------------------------------------------------------ 12 Putnam Investments Financial 20,969 2009 ------------------------------------------------------------------------------------------------------------------------------------ 11 Putnam Investments Financial 20,442 2009 ------------------------------------------------------------------------------------------------------------------------------------ 10 Putnam Investments Financial 20,442 2009 ------------------------------------------------------------------------------------------------------------------------------------ 9 Putnam Investments Financial 20,844 2009 ------------------------------------------------------------------------------------------------------------------------------------ 8 Putnam Investments Financial 20,317 2009 ------------------------------------------------------------------------------------------------------------------------------------ 7 Putnam Investments Financial 20,065 2009 ------------------------------------------------------------------------------------------------------------------------------------ 6 Putnam Investments Financial 13,537 2009 ------------------------------------------------------------------------------------------------------------------------------------ 5 Putnam Investments Financial 13,988 2009 ------------------------------------------------------------------------------------------------------------------------------------ 4 Putnam Investments Financial 11,809 2009 ------------------------------------------------------------------------------------------------------------------------------------ 3 Putnam Investments Financial 7,795 2009 ------------------------------------------------------------------------------------------------------------------------------------ 2 Putnam Investments Financial 1,400 2009 ------------------------------------------------------------------------------------------------------------------------------------ 2 Oliver Street Associates (Le Meridien Hotel) Hotel 5,400 2046 ------------------------------------------------------------------------------------------------------------------------------------ 2 Oliver Street Associates (Le Meridien Hotel) Hotel 3,629 2046 ------------------------------------------------------------------------------------------------------------------------------------ 1 Adecco North America Recruiters 2,737 2009 ------------------------------------------------------------------------------------------------------------------------------------ 1 Fleet Bank (Automatic Teller Machine) Retail 1,211 2007 ------------------------------------------------------------------------------------------------------------------------------------ 1 Hunter-Southworth, Inc. (the Lobby Shoppe) Retail 313 2003 ------------------------------------------------------------------------------------------------------------------------------------ 1 Sevag Tavitian (Chantal Jewelers) Retail 302 2003 ------------------------------------------------------------------------------------------------------------------------------------ 1 Sarni Cleaners of Greats Retail 302 2007 ------------------------------------------------------------------------------------------------------------------------------------ 1 Rebecca's Cafe (Bewley's) Retail 160 2009 ------------------------------------------------------------------------------------------------------------------------------------ TOTAL SQUARE FEET = 766,462
17 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- ONE POST OFFICE SQUARE -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING ONE POST OFFICE SQUARE OMITTED] 18 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 [THIS PAGE INTENTIONALLY LEFT BLANK] 19 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- IAC - BOSTON (INTERNATIONAL CARGO PORT) -------------------------------------------------------------------------------- [THREE PHOTOS OF IAC INTERNATIONAL CARGO PORT - BOSTON OMITTED] 20 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- IAC - BOSTON (INTERNATIONAL CARGO PORT) --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $51,000,000 ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $50,871,090 TITLE: Leasehold % OF POOL BY IPB: 4.2% PROPERTY TYPE: Office (49.2%)/Industrial (50.8%) LOAN SELLER: LaSalle Bank National Association SQUARE FOOTAGE: 376,267 BORROWER: International Cargo Port - Boston L.L.C. LOCATION: Boston, MA SPONSOR: International Airport Centers L.L.C. YEAR BUILT/RENOVATED: 2000 ORIGINATION DATE: 5/20/2003 OCCUPANCY: 88.9% INTEREST RATE: 6.2270% OCCUPANCY DATE: 7/31/2003 INTEREST ONLY PERIOD: NAP NUMBER OF TENANTS: 28 MATURITY DATE: 6/1/2013 HISTORICAL NOI: AMORTIZATION TYPE: Balloon 2001: $3,770,195 ORIGINAL AMORTIZATION: 360 2002: $3,676,982 REMAINING AMORTIZATION: 357 2003: $3,550,421 (TTM as of 6/30/2003) CALL PROTECTION: L(32), Def(82), O(3) UW NOI: $5,378,114 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $5,097,664 LOCK BOX: Springing APPRAISED VALUE: $68,500,000 ADDITIONAL DEBT: Permitted APPRAISAL DATE: 3/5/2003 ADDITIONAL DEBT TYPE: Purchase Money Interest Security LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $135 -------------- --------------- TI/LC: $0 $20,378 CUT-OFF DATE LTV: 74.3% CapEx: $0 $3,136 MATURITY DATE LTV: 63.6% Other: $5,100,000(1) $0 UW DSCR: 1.36x ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- (1) The IAC - Boston (International Cargo Port) Loan is structured with a $5,100,000 performance holdback. The borrower has 180 days from closing to lease the IAC Property to a tenant occupancy level of 91.5% or greater and to generate sufficient income to support debt service ratio of 1.30x. If the borrower has not met the 91.5% occupancy requirement after 180 days from closing, the $5,100,000 performance holdback (or any undistributed portion thereof) will be used to pay down the outstanding loan balance, prorated based on the actual income level and occupancy rate at the time of pay down, and the IAC - Boston (International Cargo Port) Loan will be re-amortized. ------------------------------------------------------------------------------------------------------------------------------------ SIGNIFICANT TENANTS ------------------------------------------------------------------------------------------------------------------------------------ LEASE MOODY'S/ SQUARE BASE RENT EXPIRATION TENANT NAME PARENT COMPANY S&P(2) FEET % OF GLA PSF YEAR ------------------------------------------------------------------------------------------------------------------------------------ EGL EAGLE GLOBAL LOGISTICS, LP EGL Eagle Global Logistics, LP NR/NR 60,638 16.1% $10.75 2013 TIGHE WAREHOUSING & DISTRIBUTION, INC. Tighe Warehousing & Distribution, Inc. NR/NR 33,711 9.0% $10.85 2004 WALL USA, INC. Wall USA, Inc. NR/NR 28,395 7.6% $14.99 2011 ------------------------------------------------------------------------------------------------------------------------------------
(2) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. 21 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- IAC - BOSTON (INTERNATIONAL CARGO PORT) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SPONSOR -------------------------------------------------------------------------------- The sponsor of the IAC International Cargo Port - Boston Loan is International Airport Centers L.L.C. ("International"). International is the manager of International Cargo Port - Boston L.L.C., the borrowing entity, and was formed in 1995 to construct, own and manage a portfolio of transportation related cargo, warehouse distribution and office properties at major airports throughout the country. International currently owns and manages over 4 million square feet of industrial airport centers. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- COLLATERAL -------------------------------------------------------------------------------- The IAC property consists of an approximately 376,267 square foot facility comprised of approximately 185,224 square feet of office space on two floors, and approximately 191,043 square feet of warehouse space on one level. The warehouse portion of the IAC property is 99.1% leased to eleven (11) tenants, which occupy space ranging from approximately 1,393 square feet to approximately 60,638 square feet. The office portion is 78.3% leased to twenty-one (21) tenants, which occupy space ranging from approximately 758 square feet to approximately 27,885 square feet. Included in the 11 warehouse tenants and the 21 office tenants are 3 tenants that lease both warehouse and office space. The largest tenants on the IAC Property are EGL Eagle Global Logistics, LP (approximately 60,638 square feet), Tighe Warehousing and Distribution, Inc. (approximately 33,711 square feet) and Wall USA, Inc. (approximately 28,395 square feet). Overall, the occupancy rate for the IAC property is approximately 88.9%. The IAC property is leased from the Massachusetts Port Authority ("MPA") pursuant to a ground lease having a 50-year term, which expires on June 30, 2050. The MPA can terminate the ground lease after 10 years upon giving the borrower 12 months prior notice of such termination. The MPA must also pay the borrower the greater of (i) the fair market value of the IAC property or (ii) the amount of debt then encumbering the IAC property together with any prepayment premium. The IAC property is managed by International Airport Centers L.L.C. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- MARKET(1) -------------------------------------------------------------------------------- The Boston, MA metropolitan area has over 146.1 million square feet of office space. The Boston CBD consists of 55.25 million of the total square footage. The subject property is located within the South Boston Waterfront submarket, which is part of the Boston CBD. The Greater Boston office market has seen a significant increase in available space between 2001 and 2002 due to the overall decline in the economy. As of 4th quarter 2002, the South Boston office market reported market vacancy of 12.6% according to Spaulding & Slye's Greater Boston Office Market. Vacancy including sublet space was 17.2%. Fourth quarter 2002 are the most recent reports available (Reis does not cover the subject area and CB Richard Ellis' most recent report is dated 4th quarter 2002). There are no new projects scheduled for construction, however there are currently five buildings under construction totaling approximately 2.4 million square feet. Approximately 45% of the space under construction has been pre-leased. The average gross asking rental rate for the Greater Boston office market was $28.75/SF as of 4th quarter 2002, according to Spaulding & Slye. Overall, Boston's CBD represents the highest rental rates of the six submarkets with rental rates ranging from $26.24/SF to $42.20/SF, with an average of $39.72/SF. The appraiser has determined a rental range of $23.00/SF to $26.00/SF for the subject property based on its location and actual leases signed at the subject property. The Greater Boston industrial market vacancy was 11.8% (16.2% including sublet space) as of 4th quarter 2002 according to Spaulding and Slye's Greater Boston Industrial Market. At year end 2001 the vacancy rate was 9.0% for Greater Boston (15.0% including sublet space). According to Spaulding & Slye, 4th quarter rental rates ranged from approximately $6.50/SF to approximately $14.00/SF net. According to a survey completed by International, within the Logan International Airport industrial market, total off airport industrial space is approximately 3.9 million square feet, with 43% of that space being air cargo space. Total vacancy for the off airport space is 7.1% with all of the vacancy being Class C property. The rental rates range from $8.00/SF to $16.00/SF for this space. The on-airport industrial space is 466,934 square feet. There was no available on-airport space at the time of the survey. Rental rates are generally higher for on-airport space as the access to the cargo terminals is more direct. The appraiser concluded that rental rates for air cargo facilities are less susceptible to depreciating rent levels as a result of demand for the space as companies are being forced to meet tighter delivery schedules in a global economy. Due to the quality and location of the subject, the appraiser determined a market range for the subject property of $12.49/SF to $16.35/SF on a net basis. -------------------------------------------------------------------------------- (1) Certain information from the Real Estate Research Corporation appraisal dated March 5, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
------------------------------------------------------------------------------------------------------------------------------------ LEASE ROLLOVER SCHEDULE ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE % CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET OF GLA BASE RENT OF BASE RENT YEAR EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ------------------------------------------------------------------------------------------------------------------------------------ VACANT NAP 41,762 11.1% NAP NAP 41,762 11.10% NAP NAP 2003 & MTM 1 7,497 2.0 $192,744 3.2% 49,259 13.09% $192,744 3.19% 2004 4 48,987 13.0 561,276 9.3 98,246 26.11% $754,020 12.49% 2005 5 37,420 10.0 944,808 15.7 135,666 36.06% $1,698,828 28.15% 2006 3 13,494 3.6 210,528 3.5 149,160 39.64% $1,909,356 31.64% 2007 2 15,293 4.1 294,072 4.9 164,453 43.71% $2,203,428 36.51% 2008 2 20,621 5.5 251,994 4.9 185,074 49.19% $2,455,422 40.68% 2009 2 9,207 2.5 193,968 3.2 194,281 51.63% $2,649,390 43.90% 2010 4 60,927 16.2 1,797,906 29.8 255,208 67.83% $4,447,296 73.68% 2011 3 33,065 8.8 531,758 8.8 288,273 76.61% $4,979,054 82.50% 2012 1 8,102 2.2 50,232 0.8 296,375 78.77% $5,029,287 83.33% AFTER 2 79,892 21.2 1,006,279 16.7 376,267 100.00% $6,035,566 100.00% --------------- ----------- ----------- ---------- ------------- ----------- -------------- -------------- ----------- ------------- TOTAL 29 376,267 100.0% $6,035,566 100.0% --------------- ----------- ----------- ---------- ------------- ----------- -------------- -------------- ----------- -------------
22 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- IAC - BOSTON (INTERNATIONAL CARGO PORT) -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING IAC INTERNATIONAL CARGO PORT - BOSTON OMITTED] -------------------------------------------------------------------------------- 23 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- SHERATON INNER HARBOR HOTEL -------------------------------------------------------------------------------- [THREE PHOTOS OF SHERATON INNER HARBOR HOTEL OMITTED] 24 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- SHERATON INNER HARBOR HOTEL --------------------------------------------------------------------------------
---------------------------------------------------------------------- ---------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ---------------------------------------------------------------------- ---------------------------------------------------------- ORIGINAL PRINCIPAL BALANCE: $36,000,000 SINGLE ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $36,000,000 TITLE: Fee % OF POOL BY IPB: 3.0% PROPERTY TYPE: Full Service Hotel LOAN SELLER: JPMorgan Chase Bank ROOMS: 337 BORROWER: Lot 10A, Inc. LOCATION: Baltimore, MD SPONSOR: Willard B. Hackerman YEAR BUILT/RENOVATED: 1985/2001 ORIGINATION DATE: 9/17/2003 OCCUPANCY: 71.0% INTEREST RATE: 6.1500% OCCUPANCY DATE: 7/31/2003 INTEREST ONLY PERIOD: NAP HISTORICAL NOI: MATURITY DATE: 9/1/2013 2001: $7,145,502 AMORTIZATION TYPE: Balloon 2002: $5,717,038 ORIGINAL AMORTIZATION: 300 2003: $5,837,275 (TTM as of 7/31/2003) REMAINING AMORTIZATION: 300 UW NOI: $5,997,921 CALL PROTECTION: L(24),Def(92),O(4) UW NET CASH FLOW: $5,204,432 CROSS-COLLATERALIZATION: NAP APPRAISED VALUE: $57,000,000 LOCK BOX: Cash Management Agreement APPRAISAL DATE: 7/1/2003 ADDITIONAL DEBT: NAP ADDITIONAL DEBT TYPE: NAP LOAN PURPOSE: Refinance ----------------------------------- ---------------------------------- ----------------------- ---------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------- RESERVES FINANCIAL INFORMATION ---------------------------------------------------------------------- ---------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/ROOM: $106,825 ---------------- ----------------- Taxes: $0 $84,628 CUT-OFF DATE LTV: 63.2% Insurance: $0 $155,000 MATURITY LTV: 49.2% CapEx (FF&E): $0 $66,124 UW DSCR: 1.84x ----------------------------------- ---------------- ----------------- ---------------------------- --------------- ------------- ------------------------------------------------------------------------------------------------------------------------------------ HISTORICAL OPERATING DATA 1998 1999 2000 2001 2002 TTM (7/31/03) UW ------------------------------------------------------------------------------------------------------------------------------------ Average Daily Rate (ADR).... $136.94 $146.62 $149.15 $149.39 $143.08 $144.92 $146.53 Occupancy %................. 73.2% 75.6% 79.4% 73.4% 73.0% 71.0% 72.0% RevPar...................... $98.53 $106.32 $118.42 $109.60 $104.48 $102.89 $105.50 ------------------------------- -------------- -------------- -------------- ------------- ------------- -------------- ------------
25 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- SHERATON INNER HARBOR HOTEL -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SPONSOR -------------------------------------------------------------------------------- Mr. Willard Hackerman is the President and CEO of Whiting Turner Construction Company. Whiting Turner has completed many notable projects including Raven Stadium in downtown Baltimore. Mr. Hackerman has owned this asset since its construction and has considerable investment in the property. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- COLLATERAL -------------------------------------------------------------------------------- Opened in 1985, the Sheraton Inner Harbor is located in Baltimore's inner harbor and connected to the Baltimore convention center. The Sheraton Inner Harbor Hotel features first-class amenities and services, and 337 guestrooms that offer views of the city and harbor. The Sheraton is one of eight full service hotels serving the Inner Harbor/CBD market. The hotel serves both businesses and tourists; it is convenient to all the Inner Harbor attractions including the central business district, the convention center and both professional sports stadiums (Camden Yards and Ravens Stadium). The hotel features an array of banquet and meeting rooms, a hotel restaurant serving breakfast and lunch, a swimming pool, fitness center, lobby shop, and guest laundry services. The hotel bar is called the Orioles Grill and the Sheraton is the official hotel of the Baltimore Orioles. A major addition to the hotel was the opening of a Morton's Restaurant at the property. The hotel underwent a $3 million room renovation during 2001. The borrower and the manager of the hotel have been involved in a dispute since 1985 over the amount of incentive fees owed to the manager. The manager claims approximately $3.92 million in incentive fees and seeks to recover additional incentive fees through December 2005, the expiration date of the management agreement. The borrower delivered two letters of credit to the lender in connection with this dispute: the first is in the amount of $5 million and may be drawn on to recover any amounts not paid to the lender by the borrower that result in a monetary event of default under the loan; the second is in the amount of $2.8 million (approximately the annual debt service required under the loan) and may be drawn on if the manager terminates the management agreement or fails to renew and the borrower fails to pay the lender any amount that results in a monetary event of default under the loan during the one-year period following such termination or non-renewal. Both letters of credit are subject to reduction or release under certain specified circumstances, including the resolution of the dispute and obtaining a successor manager. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- MARKET(1) -------------------------------------------------------------------------------- The subject property is located in the City of Baltimore in the State of Maryland. Baltimore is situated in the approximate center of Maryland, near the Chesapeake Bay, approximately 45 miles northeast of Washington, D.C. (from city center to city center). The subject property's primary market area is best defined as the City of Baltimore, which covers an approximately 49,183-acre total land area. Baltimore is part of the Baltimore, MD Metropolitan Statistical Area (MSA). The Baltimore, MD MSA encompasses six counties, including Anne Arundel, Baltimore (County), Carroll, Harford, Howard and Queen Annes, as well as the City of Baltimore. Baltimore is Maryland's largest city, and the largest metropolitan area in the state. The city is the 12th largest in the nation. According to Woods & Poole Economics, Inc., Baltimore had approximately 642,000 residents in 2002. The Baltimore/Washington MSA is the fourth-largest consumer market in the nation. Because Baltimore's cost of living index is below the national average, the city has become an increasingly desirable business location. The City of Baltimore was the business, financial, professional, transportation, and cultural center of Maryland until the recession in the early 1990s. An average of 453,300 people worked in Baltimore in the third quarter of 1988, according to figures from the State Department of Labor, Licensing and Regulation. At the end of 1997, that number had fallen by 16 percent, to 381,900. In recent years, downtown Baltimore has undergone an extensive revitalization program. The $223 million spent on the new Ravens football stadium at Camden Yards is the largest public investment ever made in the downtown area. Further projects included Oriole at Camden Yards, the Power Plant, the Gallery at Harborplace, Port Discovery, the National Aquarium, the Maryland Science Center, the Columbus Center of Marine Research, and the Maritime Museum. Although exact statistics regarding the number of workers in the downtown core are not tracked by any agency, the Downtown Partnership of Baltimore, an economic development organization, estimates that about 100,000 people work there today. The tourism and hospitality sector is most vibrant in downtown Baltimore, employing approximately 16,000 workers. The arrival of themed restaurants in 1997 and 1998 - including Planet Hollywood, the Hard Rock Cafe and the ESPN Zone - have expanded the Inner Harbor district. Baltimore's significant investment in leisure attractions has positively affected other areas in the county. -------------------------------------------------------------------------------- (1) Certain information from the Hospitality Valuation Services appraisal dated July 15, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal. 26 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- SHERATON INNER HARBOR HOTEL -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING SHERATON INNER HARBOR HOTEL OMITTED] 27 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- SHERATON INNER HARBOR HOTEL -------------------------------------------------------------------------------- [AERIAL PHOTO OF SHERATON INNER HARBOR OMITTED] 28 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 [THIS PAGE INTENTIONALLY LEFT BLANK] 29 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TINDECO WHARF -------------------------------------------------------------------------------- [FOUR PHOTOS OF TINDECO WHARF OMITTED] 30 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TINDECO WHARF --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $34,000,000 ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $33,952,685 TITLE: Fee % OF POOL BY IPB: 2.8% PROPERTY TYPE: Multifamily LOAN SELLER: JPMorgan Chase Bank UNITS: 240 BORROWER: Tindeco Wharf Partnership LOCATION: Baltimore, MD SPONSOR: Adam Kauffman, Betsy Cohen and Edward YEAR BUILT/RENOVATED: 1914/1985 ORIGINATION DATE: 7/31/2003 OCCUPANCY: 95.4% INTEREST RATE: 5.5500% OCCUPANCY DATE: 7/1/2003 INTEREST ONLY PERIOD: NAP HISTORICAL NOI: MATURITY DATE: 8/1/2013 2001: $3,198,134 AMORTIZATION TYPE: Balloon 2002: $3,443,343 ORIGINAL AMORTIZATION: 300 UW NOI: $3,242,453 REMAINING AMORTIZATION: 299 UW NET CASH FLOW: $3,112,853 CALL PROTECTION: L(24),Def(91),O(4) APPRAISED VALUE: $42,900,000 CROSS-COLLATERALIZATION: NAP APPRAISAL DATE: 5/7/2003 LOCK BOX: Cash Management Agreement ADDITIONAL DEBT: NAP ADDITIONAL DEBT TYPE: NAP LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF $141,470 -------------- --------------- Taxes: $87,569 $43,784 CUT-OFF DATE LTV: 79.1% Insurance: $108,219 $10,822 MATURITY DATE LTV: 60.4% CapEx: $0 $10,750 UW DSCR: 1.24x ----------------------------------- -------------- --------------- ----------------------- -------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------ MULTIFAMILY INFORMATION ------------------------------------------------------------------------------------------------------------------------------------ APPROXIMATE AVERAGE UNIT NET RENTABLE % OF TOTAL AVERAGE MONTHLY AVERAGE MONTHLY UNIT MIX NO. OF UNITS SQUARE FEET SF UNITS ASKING RENT MARKET RENT (1) ------------------------------------------------------------------------------------------------------------------------------------ STUDIO 116 1,079 125,164 48.3% $1,376 $1,389 ONE BEDROOM 39 1,379 53,781 16.3% $1,625 $1,653 TWO BEDROOM 67 1,327 88,909 27.9% $1,574 $1,584 THREE BEDROOM 18 1,397 25,146 7.5% $2,076 $2,078 ---------------------------------- --------------- --------------- --------------- ------------ ------------------ -----------------
(1) Based on information from the appraisal dated May 7, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal. 31 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 --------------------------------------------------------------------------- TINDECO WHARF --------------------------------------------------------------------------- --------------------------------------------------------------------------- SPONSOR --------------------------------------------------------------------------- Our sponsor is Adam Kauffman who was one of the founders of Brandywine Construction & Management Inc. over 20 years ago. Other Borrower principals include Betsy and Edward Cohen. Betsy Cohen was a founder of the Jefferson Bank NJ, which has 31 branches in the Philadelphia region. Betsy Cohen also serves on several Boards of Directors, including Bryn Mawr College, Aetna/USHealthcare and the Board of Community Banks for the Federal Reserve Bank of Philadelphia. Betsy Cohen has served as the Chairman, Chief Executive Officer and trustee of RAIT Reit (NYSE: RAS) since its founding in August 1997. RAIT Investment Trust (NYSE:RAS) is a finance company focused on the mid-sized commercial real estate industry. RAIT provides structured financing to private and corporate owners of real estate, including senior and junior mortgage debt and mezzanine lending, and acquires real estate for its own account. --------------------------------------------------------------------------- COLLATERAL --------------------------------------------------------------------------- Originally built in 1914, the property was home to the Tin Decorating Company as a light manufacturing and warehouse facility. Located on the Inner Harbor of Baltimore, Maryland, the property has unobstructed water-front views as well as a small marina providing individual boat slips. In 1985, the subject property was purchased and fully renovated into a Class B apartment building. In addition to the 240 apartment units, the property has 40,005 square feet of commercial space, a 215-space income-producing parking garage, health club, onsite restaurant and the afore-mentioned boat slips. The main building is five stories high and features a central open courtyard, while the smaller building houses gym facilities. --------------------------------------------------------------------------- --------------------------------------------------------------------------- MARKET(1) --------------------------------------------------------------------------- The property is located at the southwest corner of the intersection of Boston Street and Linwood Avenue in the Canton section of Baltimore. Located roughly 2 miles due east of the CBD, the area is rapidly growing in popularity as an upscale urban neighborhood with young professionals as well as with nearby Johns Hopkins students. Primary access to the area is via the O'Donnell exit of Interstate-95, less than 1.5 miles east of the site. Boston Street connects Canton to Fells Point and is considered the primary arterial where various retailers are located, including a Safeway-anchored shopping center less than 1 mile away. Canton is also accessible by local City bus service as well as Inner Harbor water taxis. The neighborhood's property warehouse properties have repeatedly been redeveloped into loft apartment or office buildings that have gained popularity with young professionals and high-growth corporate users. Baltimore City apartment supply totaled more than 127,000 units at year end 2002, with only approximately 7,000 units (5.5%) added since 1995. This controlled growth has supported the strength of the submarket vacancy rate, which has not exceeded 5% since 1994. The appraiser concluded the average market rents for: a studio unit was $1,389, a 1-bedroom unit was $1,653, a 2-bedroom unit was $1,584, and a 3-bedroom unit was $2,078. --------------------------------------------------------------------------- (1) Certain information from the Integra Realty Resources appraisal dated May 7, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal. 32 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TINDECO WHARF -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING TINDECO WHARF OMITTED] 33 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- CHASEWOOD OFFICE PORTFOLIO -------------------------------------------------------------------------------- [THREE PHOTOS OF CHASEWOOD OFFICE PORTFOLIO OMITTED] 34 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- CHASEWOOD OFFICE PORTFOLIO --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $26,000,000 ASSET/PORTFOLIO: Portfolio CUT-OFF PRINCIPAL BALANCE: $26,000,000 TITLE: Fee % OF POOL BY IPB: 2.2% PROPERTY TYPE: Office LOAN SELLER: JPMorgan Chase Bank SQUARE FOOTAGE: 250,778 BORROWER: CTP Office, Ltd. LOCATION: Houston, TX SPONSOR: CTP Office GP, Inc. YEAR BUILT/RENOVATED: 1985/2001 & 1999 ORIGINATION DATE: 8/5/2003 OCCUPANCY: 93.3% INTEREST RATE: 5.0000% OCCUPANCY DATE: 5/31/2003 INTEREST ONLY PERIOD: NAP NUMBER OF TENANTS: 47 MATURITY DATE: 9/1/2013 HISTORICAL NOI: AMORTIZATION TYPE: Balloon 2001: $2,940,721 ORIGINAL AMORTIZATION: 360 2002: $3,251,464 REMAINING AMORTIZATION: 360 2003: $3,198,548 (TTM as of 5/31/2003) CALL PROTECTION: L(24),Def(92),O(4) UW NOI: $2,968,045 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $2,672,960 LOCK BOX: NAP APPRAISED VALUE: $32,500,000 ADDITIONAL DEBT: NAP APPRAISAL DATE: 6/18/2003 ADDITIONAL DEBT TYPE: NAP LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $104 -------------- --------------- Taxes: $405,569 $40,557 CUT-OFF DATE LTV: 80.0% Insurance: $30,310 $7,578 MATURITY DATE LTV: 65.8% TI/LC: $0 $22,988 UW DSCR: 1.60x CapEx: $0 $3,135 ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- ------------------------------------------------------------------------------------------------------------------------------------ PORTFOLIO PROPERTIES ------------------------------------------------------------------------------------------------------------------------------------ YEAR BUILT/ SQUARE # OF APPRAISED PROPERTY NAME BORROWER LOCATION RENOVATED FEET OCC. TOP TENANTS TENANTS VALUE ------------------------------------------------------------------------------------------------------------------------------------ TWO CHASEWOOD CTP Office, Ltd. Houston, TX 1985/2001 153,226 90.0% RPSI, Inc., Severn Trent 26 $17,500,000 Systems, THREE CHASEWOOD CTP Office, Ltd. Houston, TX 1999 97,552 98.0% Factory Mutual Insurance 21 $15,000,000 Company, Burr Computer Environments, Intel Americas, Inc. ------------ ---------- ------ -------------------------- --------- -------------- Total/WA 250,778 93.3% 47 $32,500,000 -------------------- --------------- ------------ ------------ ---------- ------ -------------------------- --------- -------------- ------------------------------------------------------------------------------------------------------------------------------------ SIGNIFICANT TENANTS ------------------------------------------------------------------------------------------------------------------------------------ MOODY'S/ SQUARE LEASE TENANT NAME PARENT COMPANY S&P(2) FEET % OF GLA BASE RENT PSF EXPIRATION YEAR ------------------------------------------------------------------------------------------------------------------------------------ RPSI, INC. Retriever Payment Systems NR/NR 58,183 23.2% $19.95 2011 SEVERN TRENT SYSTEMS Severn Trent plc A3/A 25,878 10.3% $11.25 2004 FACTORY MUTUAL INSURANCE COMPANY Factory Mutual Insurance Company NR/BBB 11,303 4.5% $22.25 2005 BURR COMPUTER ENVIRONMENTS Burr Computer Environments NR/NR 9,113 3.6% $22.75 2005 INTEL AMERICAS, INC. Intel Corporation (NSDQ: INTC) A1/A+ 7,977 3.2% $22.50 2005 ------------------------------------------------------------------------------------------------------------------------------------
(1) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. 35 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 --------------------------------------------------------------------------- CHASEWOOD OFFICE PORTFOLIO --------------------------------------------------------------------------- --------------------------------------------------------------------------- SPONSOR --------------------------------------------------------------------------- Borrowing entity is CTP Office, Ltd, a TX LP, the sole GP of which is CTP Office GP, LLC and the sole LP of which is GenCap Office Fund I, Ltd. (GOF I). GOF I is a private equity office fund sponsored by GenCap Partners, LP and will ultimately hold $400-$500 million in office assets throughout the US. The majority partner of GOF I is Stichting Pensioenfonds Stork ("SPS"). SPS is a corporate pension fund that was established in 1954 and based in the Netherlands for the benefit of Stork NV. SPS has investments of $4.5 billion Guilders ($2.3 billion US) of which 6% is in real estate holdings. Stork NV makes industrial machines and provides services relating to those machines, such as print systems, package systems for food and beverages, pump systems, pipeline systems, air conditioning systems and petroleum refinery systems. GenCap Partners, L.P. (GenCap) is the asset management and lending division of Genesis Capital Advisors, LLC, a real estate investment advisor based in Dallas. GenCap has invested in the development of 2,807 apartment units and acquired or developed over 840,000 square feet of office properties in the Southeast and Southwestern United States since January 1998. --------------------------------------------------------------------------- --------------------------------------------------------------------------- COLLATERAL --------------------------------------------------------------------------- Chasewood Office Portfolio is comprised of a 153,226 square feet class A-/B+ office building and a 97,552 square feet class A-/B+ office building, totaling 250,778 square feet, built in 1985 & 1999. The two office buildings are part of a master planned office park, Chasewood Technology Park. Two Chasewood is an 8-story 153,226 square feet office Class A-/B+ office building constructed in 1985 on a 3.12-acre site. Three Chasewood is a 4-story 97,552 square feet Class A-/B+ office building constructed in 1999 on a 1.67-acre site by the borrower. The buildings share a five-level parking garage and has 628 parking spaces and 129 surface spaces. The buildings are located in the Northwest section of Houston in the FM 1960 corridor and directly adjacent to the Hewlett Packard headquarters. --------------------------------------------------------------------------- --------------------------------------------------------------------------- MARKET(1) --------------------------------------------------------------------------- Houston is the nation's fourth most populous city, and the largest in the south and southwest. The neighborhood is located in northwest Houston and may be defined as being bound by either side of SH 249 between North Sam Houston Parkway (Beltway 8) and Spring-Cypress Road. More specifically, the property is located at the southwest corner of SH 249 and Chasewood Park Drive. Most of the development around the site is concentrated along the SH 249 and FM 1960 corridors. These two thoroughfares serve as primary intersections within the neighborhood. The intersection of SH 249 and FM 1960 is home to Willowbrook Mall. Compaq's world headquarters is located just west of the subject property. Access to the subject property recently improved with the completion of the SH 249 widening. This roadway was widened from a four-lane road to a six-lane thoroughfare. The average occupancy rate for the subject submarket of 87.6% is higher than that of the overall Houston area market of 84.6%. The average rental rate for the submarket ($16.36) is slightly less as compared to that of the overall Houston area market ($17.89). Absorption for 2002 has been negative for the overall market area and positive for the sub-market. The average occupancy rate for the Class B properties within the sub-market is approximately 88% and approximately 95% for Class A properties. The subject property is considered to be a Class A-/B+ property. --------------------------------------------------------------------------- (1) Certain information from the CB Richard Ellis, Inc. appraisal dated June 18, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
----------------------------------------------------------------------------------------------------------------------------------- LEASE ROLLOVER SCHEDULE ----------------------------------------------------------------------------------------------------------------------------------- NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE % CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET OF GLA BASE RENT OF BASE RENT YEAR EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ----------------------------------------------------------------------------------------------------------------------------------- VACANT NAP 16,741 6.7% NAP NAP 16,741 6.7% NAP NAP 2003 & MTM 6 12,046 4.8 $268,127 5.6% 28,787 11.5% $268,127 5.6% 2004 16 66,937 26.7 1,232,571 25.5 95,724 38.2% $1,500,698 31.1% 2005 17 64,638 25.8 1,453,088 30.1 160,362 63.9% $2,953,786 61.2% 2006 4 12,453 5.0 283,488 5.9 172,815 68.9% $3,237,274 67.1% 2007 3 4,960 2.0 90,468 1.9 177,775 70.9% $3,327,742 68.9% 2008 4 7,818 3.1 174,000 3.6 185,593 74.0% $3,501,742 72.5% 2009 1 7,002 2.8 164,547 3.4 192,595 76.8% $3,666,289 76.0% 2010 0 0 0.0 0 0.0 192,595 76.8% $3,666,289 76.0% 2011 11 58,183 23.2 1,160,684 24.0 250,778 100.0% $4,826,973 100.0% 2012 0 0 0.0 0 0.0 250,778 100.0% $4,826,973 100.0% AFTER 0 0 0.0 0 0.0 250,778 100.0% $4,826,973 100.0% ----------------------------------------------------------------------------------------------------------------------------------- TOTAL 62 250,778 100.0% $4,826,973 100.0% -----------------------------------------------------------------------------------------------------------------------------------
36 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- CHASEWOOD OFFICE PORTFOLIO -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING CHASEWOOD OFFICE PORTFOLIO OMITTED] 37 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TOWER PLACE 200 -------------------------------------------------------------------------------- [TWO PHOTOS OF TOWER PLACE 200 OMITTED] 38 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TOWER PLACE 200 --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL $25,625,000 SINGLE BALANCE: ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $24,431,497 TITLE: Fee % OF POOL BY IPB: 2.0% PROPERTY TYPE: Office LOAN SELLER: NCCI SQUARE FOOTAGE: 259,096 BORROWER: OP&F Tower Inc. LOCATION: Atlanta, GA SPONSOR: Ohio Police & Fire Pension Fund YEAR BUILT/RENOVATED: 1998 ORIGINATION DATE: 12/22/2000 OCCUPANCY: 97.0% (80.5% Physical Occupancy) INTEREST RATE: 8.050% OCCUPANCY DATE: 6/30/2003 INTEREST ONLY PERIOD: NAP NUMBER OF TENANTS: 24 MATURITY DATE: 7/1/2009 HISTORICAL NOI: AMORTIZATION TYPE: Balloon 2001: NAP ORIGINAL AMORTIZATION: 271 2002: $5,326,793 REMAINING AMORTIZATION: 239 2003: $5,269,284 (TTM as of 6/30/2003) CALL PROTECTION: L(0),Gtr1% or YM(67),O(3) UW NOI: $4,220,471 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $3,713,111 LOCK BOX: NAP APPRAISED VALUE: $53,500,000 ADDITIONAL DEBT: Permitted APPRAISAL DATE: 7/8/2003 ADDITIONAL DEBT TYPE: Secondary financing secured by LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $94 -------------- --------------- Taxes: $0 $58,750 CUT-OFF DATE LTV: 45.7% MATURITY DATE LTV: 38.8% UW DSCR: 1.51x ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- ------------------------------------------------------------------------------------------------------------------------------------ SIGNIFICANT TENANTS ------------------------------------------------------------------------------------------------------------------------------------ MOODY'S/ SQUARE LEASE TENANT NAME PARENT COMPANY S&P(1) FEET % OF GLA BASE RENT PSF EXPIRATION YEAR ------------------------------------------------------------------------------------------------------------------------------------ SIEBEL SYSTEMS, INC.(2) Siebel Systems, Inc. NR/BB 42,650 16.5% $25.00 2009 PALMER & CAY HOLDINGS Palmer & Cay Holdings NR/NR 28,927 11.2% $27.87 2009 RETEK, INC. Retek, Inc. NR/NR 28,265 10.9% $28.42 2005 ------------------------------------------------------------------------------------------------------------------------------------
(1) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. (2) Tenant is not currently in occupancy but is contractually obligated to meet all the rent provisions of their lease. The tenant is current on all payments. 39 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TOWER PLACE 200 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SPONSOR -------------------------------------------------------------------------------- The Tower Place 200 borrowing entity is OP&F Tower Inc. a Delaware corporation, wholly owned by The Ohio Police and Fire Pension Fund. The Fund reported holdings of approximately $9.9 billion in net assets and the fund contributed over $25,000,000 in equity to this transaction. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- COLLATERAL -------------------------------------------------------------------------------- The Tower Place 200 is a thirteen (13) story, Class "A" office building is located in Atlanta, GA in the Buckhead submarket. The Tower Place 200 site is a rectangular shaped parcel situated in the eastern portion of the Tower Place development and is delineated by Tower Place Drive to the north and the east and a 6-story parking garage to the south. The Wyndham Garden Hotel borders Tower Place 200 to the west. The property is zoned PD-OC or Planned Development-Office Commercial district. The Tower Place 200 site contains 255,769 net rentable square feet of office space and 3,327 net rentable square feet of retail space. In addition to the 13-story office building, collateral for this loan includes an accompanying 6-story, 676-car capacity parking garage. The building has readily available access to two Metropolitan Atlanta Rapid Transit Authority stations and two Interstate Highways provide access to downtown Atlanta. One of the property's key attributes is its central location and ease of accessibility from every direction. Tower Place 200 is situated near numerous retail malls, hotels and restaurants, and Hartsfield International Airport is approximately fifteen (15) miles from the building. The building design allows for retail and office visibility and frontage. The parking garage is located on a square shaped parcel adjacent to Tower Place 200. The property is 97% leased to twenty-four (24) tenants. The lease expiration schedule is staggered with the effect that the majority of the larger leases are in effect through 2008. The loan on Tower Place 200 was acquired by Nomura. The loan was originated on behalf of Teachers Insurance and Annuity Association of America ("TIAA") in December 2000. Subsequently TIAA acquired an interest in Lowe Enterprises who is acting as an advisor to the Borrower (Ohio Police and Fire Pension Funds). As a result of this potential conflict resulting from TIAA's position as a lender and an advisor to the Borrower, TIAA determined that they needed to sell the loan. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- MARKET(1) -------------------------------------------------------------------------------- The Buckhead submarket consists of 13,844,400 rentable square feet of office space in 94 multi-tenant buildings (15,000 square feet or greater), which is approximately 9% of the Metro Atlanta Office market's GLA. Growth was suspended in this market after third quarter 2001. A further reflection of this change of pace can be seen in the fact that there have been no deliveries of new product over six consecutive quarters. Buckhead has historically maintained a significantly lower vacancy rate than the overall Metro Atlanta market. The increased pressure on rents and occupancy are causing this market to reverse historical trends. However, as the business community sheds more space, absorption rates should stabilize as new deliveries are being held off and the economy begins to reverse negative trends. Development in Buckhead has leveled off since FY 1998, which recorded the delivery of approximately 1.1 million square feet of new product. As of first quarter 2003, there has been no delivery of new space into the submarket. Additionally, there is currently no new space under construction. -------------------------------------------------------------------------------- (1) Certain information from the Landauer Realty Group, Inc. appraisal dated July 8, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
----------------------------------------------------------------------------------------------------------------------------------- LEASE ROLLOVER SCHEDULE ----------------------------------------------------------------------------------------------------------------------------------- NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE % CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET OF GLA BASE RENT OF BASE RENT YEAR EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ----------------------------------------------------------------------------------------------------------------------------------- VACANT NAP 7,764 3.0% NAP NAP 7,764 3.0% NAP NAP 2003 & MTM 1 6,343 2.4 $171,647 2.5% 14,107 5.4% $171,647 2.5% 2004 9 50,157 19.4 1,448,406 21.1 64,264 24.8% $1,620,053 23.6% 2005 6 48,775 18.8 1,388,090 20.2 113,039 43.6% $3,008,144 43.9% 2006 2 13,246 5.1 390,896 5.7 126,285 48.7% $3,399,040 49.6% 2007 1 23,300 9.0 630,517 9.2 149,585 57.7% $4,029,557 58.7% 2008 3 11,865 4.6 315,108 4.6 161,450 62.3% $4,344,665 63.3% 2009 5 94,877 36.6 2,515,307 36.7 256,327 98.9% $6,859,972 100.0% 2010 1 2,769 1.1 0 0.0 259,096 100.0% $6,859,972 100.0% 2011 0 0 0.0 0 0.0 259,096 100.0% $6,859,972 100.0% 2012 0 0 0.0 0 0.0 259,096 100.0% $6,859,972 100.0% AFTER 0 0 0.0 0 0.0 259,096 100.0% $6,859,972 100.0% ------------------------------------------------------------------------------------------------------------------------------------ TOTAL 28 259,096 100.0% $6,859,972 100.0% ------------------------------------------------------------------------------------------------------------------------------------
40 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- TOWER PLACE 200 -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING TOWER PLACE 200 OMITTED] 41 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- LILLIAN VERNON CORPORATION -------------------------------------------------------------------------------- [THREE PHOTOS OF LILLIAN VERNON CORPORATION OMITTED] 42 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- LILLIAN VERNON CORPORATION --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $24,000,000 ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $24,000,000 TITLE: Fee % OF POOL BY IPB: 2.0% PROPERTY TYPE: Industrial LOAN SELLER: JPMorgan Chase Bank SQUARE FOOTAGE: 827,000 BORROWER: GIFT (VA) LLC LOCATION: Virginia Beach, VA SPONSOR: Corporate Property Associates 15 YEAR BUILT/RENOVATED: 1987 ORIGINATION DATE: 8/20/2003 OCCUPANCY: 100.0% INTEREST RATE: 6.2700% OCCUPANCY DATE: 8/20/2003 INTEREST ONLY PERIOD: NAP NUMBER OF TENANTS: 1 MATURITY DATE: 9/1/2023 HISTORICAL NOI: AMORTIZATION TYPE: Fully 2001: NAP(1) ORIGINAL AMORTIZATION: 240 2002: NAP(1) REMAINING AMORTIZATION: 240 2003: NAP(1) CALL PROTECTION: L(24),Def(209),O(7) UW NOI: $3,358,574 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $3,192,347 LOCK BOX: Hard APPRAISED VALUE: $37,400,000 ADDITIONAL DEBT: NAP APPRAISAL DATE: 7/24/2003 ADDITIONAL DEBT TYPE: NAP LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- (1) Lillian Vernon Corporation was the owner/occupant of the property prior to the sale leaseback to the borrowing entity. Lillian Vernon never completed a budget or tracked building operating expenses outside of normal operations which is the reason for the lack of historical NOI. ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $29 -------------- --------------- Taxes: $72,648 $0 CUT-OFF DATE LTV: 64.2% Insurance: $117,975 $0 MATURITY DATE LTV: 1.7% CapEx: $200,000 $15,974 UW DSCR: 1.51x Other: $2,108,432(2) $0 ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- (2) Represents a Debt Service reserve, equal to 1 year's debt service. The reserve will be held for at least 5 years. If Lillian Vernon does not achieve positive cash flow in years four and five of the loan, the reserve term may be extended until they achieve two consecutive years of positive cash flow. In addition, a cash flow sweep will occur if Lillian Vernon files for bankruptcy or if they "Go Dark" and cease operations. The Cash Flow sweep will remain in place until the lease has been affirmed and Lillian Vernon has emerged from bankruptcy or a satisfactory sub-tenant has opened for business. ------------------------------------------------------------------------------------------------------------------------------------ SINGLE TENANT ------------------------------------------------------------------------------------------------------------------------------------ MOODY'S/ SQUARE LEASE TENANT NAME PARENT COMPANY S&P(3) FEET % OF GLA BASE RENT PSF EXPIRATION YEAR ------------------------------------------------------------------------------------------------------------------------------------ LILLIAN VERNON CORPORATION(4) Ripplewood Holdings L.L.C. NR/NR 827,000 100% $4.65 (NNN) 2023 -------------------------------- ---------------------------- ------------- ----------- ----------- ---------------- ---------------
(3) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. (4) On July 2, 2003, Lillian Vernon Corporation was acquired by a private equity fund managed by Ripplewood Holdings L.L.C. Under the terms of the merger, stockholders of Lillian Vernon Corporation received $7.25 in cash for each share. 43 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 --------------------------------------------------------------------------- LILLIAN VERNON CORPORATION --------------------------------------------------------------------------- --------------------------------------------------------------------------- SPONSOR --------------------------------------------------------------------------- The property is owned by an SPE controlled by Corporate Property Associates 15 Incorporated ("CPA(R):15"). Formed in November 2001, Corporate Property Associates 15 Incorporated (CPA(R):15) is the fourteenth in a series of funds created and managed by W. P. Carey & Co. LLC (NYSE:WPC). CPA(R):15 is a publicly held non-traded real estate investment trusts (REIT) that purchases single-tenant corporate properties and leases them back to the original tenant. Founded in 1973, W. P. Carey currently owns and/or manages 550 commercial and industrial facilities throughout the United States and Europe, comprising more than 75 million square feet of space. --------------------------------------------------------------------------- --------------------------------------------------------------------------- COLLATERAL --------------------------------------------------------------------------- The subject property is a single 1- and 2-story warehouse/distribution center completed in 1987 with subsequent additions added in 1992 and 1996. The building contains a total of 827,000 square feet with approximately 85,000 square feet of office and call center space constructed on a mezzanine level in the northwest section of the building. In addition, there is a company cafeteria with adjoining outdoor area and locker room space. The subject is in good condition and could be subdivided for multi-tenant use. It is situated on 61.2 acres and has 1,900 parking spaces. The clear ceiling heights range from 30 feet to 48 feet. There are 18 dock high receiving doors, 24 dock high shipping doors and 5 drive-in doors. The receiving area is located on the south side of the building; while the shipping area is located on the north side. The subject property was acquired in July 2003, by a subsidiary of Corporate Property Associates 15 Incorprated, an investment fund affiliate of W.P. Carey. --------------------------------------------------------------------------- --------------------------------------------------------------------------- TENANT PROFILE --------------------------------------------------------------------------- Lillian Vernon Corporation, ("LVC") is a 52-year old catalog and online retailer that markets gifts, house wares, gardening, Christmas, and children's products and is based in Rye, NY. They are one of the largest specialty catalogs in the United States, publishing seven catalog titles and selling products in the Business to Business and outlet store markets. The National Distribution Center ("subject property") is situated on 61 acres in Virginia Beach, Virginia and totals 827,000 square feet. LVC is one of the first direct marketers to offer personalized items free-of-charge, becoming a trademark. During fiscal year 2003, over 150 million catalogs were mailed in 33 editions generating approximately 3.8 million orders with an average order worth $56.69 and generating revenues of $238 million. At the height of the Christmas season, employment swells to over 4,600 employees from 1,200. LVC was acquired by a private equity fund managed by Ripplewood Holdings LLC on 7/2/2003. Stockholders received $7.25 in cash per share, totaling approximately $61 million. The Stock was previously traded on the AMEX under the symbol "LVC". Following the acquisition, Lillian Vernon, the founder of the Company, will serve as a non-executive Chairman and spokesperson. --------------------------------------------------------------------------- --------------------------------------------------------------------------- MARKET(1) --------------------------------------------------------------------------- The subject property is situated in the Oceana West Corporate Park in Virginia Beach, VA. The property is located on the east side of International Parkway, south of Central Drive and north of London Bridge Road. Access is provided via two curb cuts on International Parkway, one of which is signalized. The subject has frontage and visibility along the east side of International Parkway, while the rear of the property is visible from the west side of London Bridge Road. The subject property is located approximately 6 miles northwest of the CBD and 16 miles northwest of Norfolk International Airport. It is also in close proximity to the Port of Hampton Roads, which is 15 miles northwest. The Port of Hampton Roads is considered to be a major point along the Inland Waterway, which stretches from Maine to Florida. The boundaries of the immediate area are I-264 to the north, Dam Neck Road to the south, Oceana Naval Air Station to the east and Lynnhaven Parkway to the west. The local area has access to London Bridge Road to the east and Lynnhaven Parkway to the west providing local north/south access. Dam Neck Road south of the subject provides local east/west access from its intersection with Route 165 in the west to the coastline in the east. The area is considered to have a well-developed regional roadway system. The region is linked to Richmond (state capitol) in the west by I-64. According to the "Hampton Roads Industrial Survey 2003" completed by Old Dominion Real Estate Center, the Hampton Roads Industrial market contains a total of 91.3 million square feet of industrial space in 2,619 buildings of year-end 2002. The market is further split into the Southside and Peninsula markets, with each containing 66.8 million square feet in 1,967 buildings and 24.4 million square feet in 652 buildings, respectively. There are 11 sub-markets in the Southside market and 4 sub-markets in the Peninsula market. According to the report, the vacancy rate in the overall market was 8%, representing 6.85 million square feet, while vacancy in the Southside market was 7% or 4.38 million square feet and vacancy in the Peninsula market was 10% or 2.47 million square feet. There are a total of 166 buildings included in the subject sub-market containing a total of 5.28 million square feet with an 8% vacancy rate or 407,941 square feet available. The appraiser concluded a market rental rate of $4.65 per square foot for the subject on a NNN basis. --------------------------------------------------------------------------- (1) Certain information from the Landauer Realty Group, Inc. appraisal dated May 1, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal. 44 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- LILLIAN VERNON CORPORATION -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING LILLIAN VERNON CORPORATION OMITTED] 45 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- METRO FOUR OFFICE BUILDING -------------------------------------------------------------------------------- [TWO PHOTOS OF METRO FOUR OFFICE BUILDING OMITTED] 46 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- METRO FOUR OFFICE BUILDING --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $23,000,000 ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $23,000,000 TITLE: Fee % OF POOL BY IPB: 1.9% PROPERTY TYPE: Office LOAN SELLER: NCCI SQUARE FOOTAGE: 144,997 BORROWER: MPW 6359 LLC LOCATION: Springfield, VA SPONSOR: B. Mark Fried YEAR BUILT/RENOVATED: 2003 ORIGINATION DATE: 9/10/2003 OCCUPANCY: 94.4% INTEREST RATE: 6.2300% OCCUPANCY DATE: 7/16/2003 INTEREST ONLY PERIOD: NAP NUMBER OF TENANTS: 5 MATURITY DATE: 9/11/2013 HISTORICAL NOI: AMORTIZATION TYPE: Balloon 2001: NAP (Built in 2003) ORIGINAL AMORTIZATION: 360 2002: NAP (Built in 2003) REMAINING AMORTIZATION: 360 2003: NAP (Built in 2003) CALL PROTECTION: L(24),Def(90),O(6) UW NOI: $2,513,456 CROSS-COLLATERALIZATION: No UW NET CASH FLOW: $2,281,335 LOCK BOX: Soft APPRAISED VALUE: $30,100,000 ADDITIONAL DEBT: No APPRAISAL DATE: 7/25/2003 ADDITIONAL DEBT TYPE: No LOAN PURPOSE: Refinance ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $159 -------------- --------------- Taxes: $0 $25,500 CUT-OFF DATE LTV: 76.4% Insurance: $0 $2,833 MATURITY DATE LTV: 65.2% TI/LC: $0 $17,498 UW DSCR: 1.35x CapEx: $0 $2,417 Other: $0 $33,3331 ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- (1) The loan is structured with a soft lockbox, and rent direction letters have already been obtained. Additionally, a reserve accumulates to $2,300,000 over the first five years of the loan term. This reserve is available to address the rollover risk related to the US Army Corps of Engineers and/or IRS, and is maintained until the loan is retired. The reserve is collected by escrowing (i) $33,333 in months 1 through 48 of the loan term, and (ii) $58,333 in months 49 through 60 of the loan term. Additionally, TI/LC reserves will be collected on a monthly basis. The two reserves will collectively reach a total cap of $3,100,000 by the fifth loan year. Should the aggregate reserve fund be drawn down below the $3,100,000 cap, collection will resume until the aggregate fund is replenished. ------------------------------------------------------------------------------------------------------------------------------------ SIGNIFICANT TENANTS ------------------------------------------------------------------------------------------------------------------------------------ MOODY'S/ SQUARE LEASE TENANT NAME PARENT COMPANY S&P(2) FEET % OF GLA BASE RENT PSF EXPIRATION YEAR ------------------------------------------------------------------------------------------------------------------------------------ US ARMY CORPS OF ENGINEERS The United States Government Aaa/AAA 101,935 70.3% $18.10 2008 OBJECT SCIENCES CORP Object Sciences, Inc. NR/NR 12,951 8.9% $28.72 2010 IRS (GSA) The United States Government Aaa/AAA 10,241 7.1% $30.21 2008 ------------------------------------------------------------------------------------------------------------------------------------
(2) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. 47 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 --------------------------------------------------------------------------- METRO FOUR OFFICE BUILDING --------------------------------------------------------------------------- --------------------------------------------------------------------------- SPONSOR --------------------------------------------------------------------------- The Borrower is MPW 6359, LLC, a Virginia limited liability company. The manager of the borrowing entity is 6359 SPE LLC which has a 0.1% interest in the borrower and is owned by B. Mark Fried, the key principal. Metro Park Associates owns the other 99.9% of the borrower. Metro Park Associates LLC is owned 85% by Metro Park LLC and 15% by Levine MP LLC. Stanley Levine is a retired investor and owns 100% of Levine MP LLC. Metro Park LLC is comprised as follows: B. Mark Fried and his wife Barbara each own 37% and 33% interests respectively and their daughter Leah Fried owns the remaining 30% interest. B. Mark Fried is chairman of the board of the Fried Companies, Inc. a real estate construction, leasing and property management company located in Springfield, Virginia. B. Mark Fried has been involved in the development, ownership and management of commercial real estate for the last 30 years. --------------------------------------------------------------------------- --------------------------------------------------------------------------- COLLATERAL --------------------------------------------------------------------------- Metro Four Office Building is a recently completed, 6-story, sprinklered Class "A" office building totaling 144,997 SF and located at 6359 Walker Lane, Springfield, VA. The property includes unit ownership interests for 480 spaces (3.2/1,000 SF) in a 4-level (above grade) parking garage condominium. The property is situated on approximately 4 acres of land and is part of the 49-acre Metro Office Park Development. Three passenger elevators service the building and the parking garage features one elevator. The property is 94.4% leased to five tenants. The largest tenant is the US Army Corps of Engineers (GSA), occupying 70.3% (101,935 SF) of the building. The occupancy of the four remaining tenants are as follows: Object Sciences, Inc. occupies 8.9% (12,951 SF), IRS (GSA) occupies 7.1% (10,241 SF), Cadd Microsystems occupies 6.2% (8,970 SF), and the Armed Services YMCA (GSA) occupies 1.9% (2,800 SF). --------------------------------------------------------------------------- --------------------------------------------------------------------------- MARKET(1) --------------------------------------------------------------------------- The subject site is located on the south side of Walker Lane, west of Beulah Street, in the Springfield area of Fairfax County, VA. The street address is 6359 Walker Lane. The subject's location, known as Springfield, is located in eastern Fairfax County, adjacent to the City of Alexandria, VA. The subject's Supervision District K, known as the Lee District, extends from Route 1 on the east to the Accotink Creek on the west. The District also extends from the Capital Beltway on the north to the Newington area on the south. The population in this area grew 24% between 1990 and 2001, from 39,919 to 49,461. Over the next five years, the population in this area is expected to grow by 20%, from 49,461 to 59,561. Average income levels in this area grew by 88% between 1990 and 2003, from $57,271 to $107,452. The growth of the subject property's immediate area is attributable to the vast transportation improvements that have been made to the immediate area within the past decade. The subject property's Springfield market has approximately 4,962,380 million square feet of office space with an overall vacancy of approximately 10.6%. It should be recognized that Springfield typically consists of older buildings that were built in the 1980's and are not competitive with the subject property. The subject's commercial park is within GSA acceptable limits to the Metro's new construction, and is proximate to major transportation arteries, ensuring stable demand for this area. --------------------------------------------------------------------------- (1) Certain information from the Continental Wingate Corporation appraisal dated July 25, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
------------------------------------------------------------------------------------------------------------------------------------ LEASE ROLLOVER SCHEDULE ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE % CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET OF GLA BASE RENT OF BASE RENT YEAR EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ------------------------------------------------------------------------------------------------------------------------------------ VACANT NAP 8,100 5.6% NAP NAP 8,100 5.6% NAP NAP 2003 & MTM 0 0 0.0 $0 0.0% 8,100 5.6% $0 0.0% 2004 0 0 0.0 0 0.0 8,100 5.6% $0 0.0% 2005 0 0 0.0 0 0.0 8,100 5.6% $0 0.0% 2006 0 0 0.0 0 0.0 8,100 5.6% $0 0.0% 2007 0 0 0.0 0 0.0 8,100 5.6% $0 0.0% 2008 2 112,176 77.4 2,154,388 75.2 120,276 83.0% $2,154,388 75.2% 2009 0 0 0.0 0 0.0 120,276 83.0% $2,154,388 75.2% 2010 1 12,951 8.9 371,902 13.0 133,227 91.9% $2,526,291 88.2% 2011 0 0 0.0 0 0.0 133,227 91.9% $2,526,291 88.2% 2012 2 11,770 8.1 338,495 11.8 144,997 100.0% $2,864,785 100.0% AFTER 0 0 0.0 0 0.0 144,997 100.0% $2,864,785 100.0% ------------- ----------- ---------- ---------- ------------- ------------ -------------- -------------- -------------- ------------ TOTAL 5 144,997 100.0% $2,864,785 100.0% ------------- ----------- ---------- ---------- ------------- ------------ -------------- -------------- -------------- ------------
48 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- METRO FOUR OFFICE BUILDING -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING METRO FOUR OFFICE BUILDING OMITTED] 49 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- THE PRADO AT SPRING CREEK -------------------------------------------------------------------------------- [THREE PHOTOS OF THE PRADO AT SPRING CREEK OMITTED] 50 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- THE PRADO AT SPRING CREEK --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $21,000,000 ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $21,000,000 TITLE: Fee % OF POOL BY IPB: 1.7% PROPERTY TYPE: Retail - Anchored LOAN SELLER: LaSalle Bank National Association SQUARE FOOTAGE: 152,072 BORROWER: PMAT The Prado, L.L.C. LOCATION: Bonita Springs, FL SPONSOR: James M. Cope, Patrick K. Dempsey, YEAR BUILT/RENOVATED: 2001 Robert A. Whelan ORIGINATION DATE: 8/4/2003 OCCUPANCY: 91.3% INTEREST RATE: 5.4500% OCCUPANCY DATE: 7/31/2003 INTEREST ONLY PERIOD: NAP NUMBER OF TENANTS: 23 MATURITY DATE: 9/1/2008 HISTORICAL NOI: AMORTIZATION TYPE: Balloon 2001: $ 1,697,211 ORIGINAL AMORTIZATION: 360 2002: $ 2,197,153 REMAINING AMORTIZATION: 360 2003: $ 2,042,343 (TTM as of 3/31/2003 ) CALL PROTECTION: L(35),Def(22),O(3) UW NOI: $ 2,141,976 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $ 2,043,694 LOCK BOX: Springing APPRAISED VALUE: $ 26,800,000 ADDITIONAL DEBT: Permitted APPRAISAL DATE: 7/2/2003 ADDITIONAL DEBT TYPE: Mezzanine (Future) LOAN PURPOSE: Acquisition ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $138 -------------- --------------- Taxes: $23,582 CUT-OFF DATE LTV: 78.4% $235,817 Insurance: $0 $0 MATURITY LTV: 72.8% TI/LC: $0 $6,290 UW DSCR: 1.44x CapEx: $0 $1,901 ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- ------------------------------------------------------------------------------------------------------------------------------------ MAJOR TENANTS ------------------------------------------------------------------------------------------------------------------------------------ MOODY'S SQUARE % OF BASE RENT LEASE TENANT NAME PARENT COMPANY S&P(1) FEET GLA SALES PSF PSF EXPIRATION YEAR ------------------------------------------------------------------------------------------------------------------------------------ REGAL CINEMAS Regal Entertainment Group B3/BB- 44,288 29.1% $ 253,000(2) $16.50 2020 STEIN MART Stein Mart Inc. NR/NR 28,000 18.4% $93.00 $7.50 2014 CONGRESS JEWELRY Congress Jewelers NR/NR 10,000 6.6% NAV $11.03 2010 ---------------------------- -------------------------------- ---------- -------- ------- ------------- ----------- ----------------
(1) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. (2) Per screen 51 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 --------------------------------------------------------------------------- THE PRADO AT SPRING CREEK --------------------------------------------------------------------------- --------------------------------------------------------------------------- SPONSOR --------------------------------------------------------------------------- The sponsors of The Prado at Spring Creek Loan are Robert A. Whelan, Patrick K. Dempsey and James M. Cope. The borrowing entity for The Prado at Spring Creek Loan, PMAT The Prado, L.L.C. (the "Prado Borrower"), is a single purpose limited liability company controlled by its managing member, PMAT The Prado Investment, L.L.C., a single purpose entity indirectly owned by each of the sponsors and controlled by PMAT Real Estate Investments, L.L.C. (the "PMAT Manager"). The PMAT Manager is 100% owned by Robert A. Whelan, who until recently was the CFO of Sizeler Property Investors, Inc., a publicly traded apartment and shopping center REIT, which owns and operates 15 shopping centers in four states encompassing in excess of over 3 million square feet of retail space. Messrs. Patrick K. Dempsey and James M. Cope have extensive experience in the origination, structuring, placement and closing of multiple types of real estate transactions. To date Mr. Dempsey has originated and closed more than $900 million of equity and debt transactions. Mr. Cope began acquiring commercial real estate in 1997 and currently owns partnership interests in five industrial properties, two multi-family properties, one retail property and one medical office building. A consent agreement was entered into by and between LaSalle and Kimco Preferred Investor XIV, Inc. (the "Kimco Member"), an equity investor and member in the Prado Borrower, under which LaSalle (i) consented to the admission of the Kimco Member as a member in the Prado Borrower; (ii) agreed to give the Kimco Member notice of a default prior to the commencement of any foreclosure proceeding, acceleration of the maturity date or the exercise of any right or remedy under the loan documents (defined as an "Enforcement Action" under the Consent Agreement); and (iii) acknowledged that under the operating agreement entered into by and between the sponsors and the Kimco Member, the Kimco Member has the right to remove the sponsors from their rights as PMAT Manager and/or their ownership interests in the Prado Borrower and substitute an entity owned and controlled by the Kimco Member as the sole manager of the Prado Borrower and appoint a new property manager for the Prado Property. --------------------------------------------------------------------------- --------------------------------------------------------------------------- COLLATERAL --------------------------------------------------------------------------- The Prado at Spring Creek Property (the "Prado Property") consists of an approximately 152,072 square foot retail and entertainment shopping center located in Bonita Springs, Florida. Phase I (95,636 SF) was completed in 2000 and Phase II (56,436 SF) opened in late 2002. National and regional tenants make up 77% of the rent roll, which includes Stein Mart (NASDAQ: SMRT), Regal Cinemas (NYSE: RGC), Prudential WCI Realty, and Washington Mutual. The Prado Property is currently 91% leased and is still considered to be in the lease-up stage, as it was completed in late 2001. Sales at Stein Mart and Regal Cinemas for fiscal 2002 were $2.6 million ($93/SF) and $3,031,000 ($253,000/screen), respectively. --------------------------------------------------------------------------- --------------------------------------------------------------------------- MARKET(1) --------------------------------------------------------------------------- The subject area is located north of the Naples area and has become one of the strongest growth areas of the MSA. The trade area reflects a strong population growth. Within a 3-mile radius of the site, the population over the last two years has grown at a rate of 4.80 percent while the State of Florida grew by 2.07 percent. Although the growth rate is expected to moderate over the next five years, the 3-mile area is forecast to grow at a compound annual rate of 3.91 percent. Retail sales in the area are much higher than normal. At the end of last year, the Naples MSA had an aggregate retail sales level of $4.5 billion, with average retail sales per household of $39,583. By comparison, Florida had average sales per household of $32,024, while the U.S. was $33,662. The average household income for the country in 2002 was $64,338 and the average for the State of Florida was $58,562. The subject property lies at the southern end of Lee County, which had an average household income of $59,583. In the 3-mile radius, the average household income was estimated at $69,674. Within 1-mile of the property, the average income was estimated at $74,200. The appraiser surveyed several centers considered to be direct comparables with the subject property. The appraiser determined occupancy rates range from 90% to 100%. The subject property center is at the low end of this range, but is still in its initial lease-up, as it was completed last year. Although there has been a significant amount of new construction of retail centers in recent years, retail construction has tended to lag behind the residential growth taking place. The result has been that vacancies have been relatively low in this market once properties have achieved initial lease-up. The appraiser determined market rents for the subject as well as several out lot buildings and several big box retailers, and based on the research, market rents were determined to be as follows: anchor space -$16.50/SF based on a 10 year lease term, out lot space-$26.00/SF based on a 10 year lease term, in-line space>4,000 SF-$19.00/SF based on a 5 year lease term, and typical in-line space-$21.00/SF, based on a 5 year lease term. --------------------------------------------------------------------------- (1) Certain information from the Cushman & Wakefield of Florida, Inc. appraisal dated July 2, 2002. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
------------------------------------------------------------------------------------------------------------------------------------ LEASE ROLLOVER SCHEDULE ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE % CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET OF GLA BASE RENT OF BASE RENT YEAR EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ---------------------------------------------------------------------------------------------------------------------------------- VACANT NAP 13,180 8.7% NAP NAP 13,180 8.7% NAP NAP 2003 & MTM 0 0 0.0 0 0.0% 13,180 8.7% $0 0.0% 2004 2 3,105 2.0 61,664 2.7 16,285 10.7% $61,664 2.7% 2005 8 18,317 12.0 389,767 17.1 34,602 22.8% $451,431 19.8% 2006 4 7,396 4.9 153,411 6.7 41,998 27.6% $604,842 26.6% 2007 3 6,974 4.6 130,968 5.8 48,972 32.2% $735,810 32.3% 2008 0 0 0.0 0 0.0 48,972 32.2% $735,810 32.3% 2009 0 0 0.0 0 0.0 48,972 32.2% $735,810 32.3% 2010 1 10,000 6.6 263,195 11.6 58,972 38.8% $999,005 43.9% 2011 0 0 0.0 0 0.0 58,972 38.8% $999,005 43.9% 2012 3 20,812 13.7 335,052 14.7 79,784 52.5% $1,334,057 58.6% AFTER 2 72,288 47.5 940,752 41.4 152,072 100.0% $2,274,809 100.0% ---------------------------------------------------------------------------------------------------------------------------------- TOTAL 23 152,072 100.0% $2,274,809 100.0% ----------------------------------------------------------------------------------------------------------------------------------
52 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- The Prado at Spring Creek -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING THE PRADO AT SPRING CREEK OMITTED] 53 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- PIILANI SHOPPING CENTER -------------------------------------------------------------------------------- [THREE PHOTOS OF PIILANI SHOPPING CENTER OMITTED] 54 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- PIILANI SHOPPING CENTER --------------------------------------------------------------------------------
------------------------------------------------------------------ -------------------------------------------------------------- LOAN INFORMATION PROPERTY INFORMATION ------------------------------------------------------------------ -------------------------------------------------------------- ORIGINAL PRINCIPAL SINGLE BALANCE: $20,000,000 ASSET/PORTFOLIO: Single Asset CUT-OFF PRINCIPAL BALANCE: $20,000,000 TITLE: Fee % OF POOL BY IPB: 1.7% PROPERTY TYPE: Retail - Shadow Anchored LOAN SELLER: JPMorgan Chase Bank SQUARE FOOTAGE: 65,702 BORROWER: KP Hawaii I, LLC LOCATION: Kihei, HI SPONSOR: F. Ron Krausz YEAR BUILT/RENOVATED: 2000 ORIGINATION DATE: 6/13/2003 OCCUPANCY: 94.4% INTEREST RATE: 5.5900% OCCUPANCY DATE: 6/1/2003 INTEREST ONLY PERIOD: 12 NUMBER OF TENANTS: 30 MATURITY DATE: 7/1/2018 HISTORICAL NOI: AMORTIZATION TYPE: Interest Only - ARD 2001: $2,247,656 ORIGINAL AMORTIZATION: 360 2002: $2,818,726 REMAINING AMORTIZATION: 360 2003: $2,929,342 (TTM as of 4/30/2003) CALL PROTECTION: L(93),Gtr1% or YM(78),O(7) UW NOI: $1,953,694 CROSS-COLLATERALIZATION: NAP UW NET CASH FLOW: $1,872,881 LOCK BOX: Cash Management Agreement APPRAISED VALUE: $25,000,000 ADDITIONAL DEBT: Permitted APPRAISAL DATE: 5/11/2003 ADDITIONAL DEBT TYPE: Mezzanine (Future) LOAN PURPOSE: Acquisition ---------------------------- ------------------------------------- ----------------------- -------------------------------------- ------------------------------------------------------------------ -------------------------------------------------------------- RESERVES FINANCIAL INFORMATION ------------------------------------------------------------------ ------------------------------------------------------------- ESCROWS/RESERVES: INITIAL MONTHLY CUT-OFF DATE LOAN/SF: $304 -------------- --------------- Taxes: $84,375 $14,063 CUT-OFF DATE LTV: 80.0% Insurance: $0 $5,440 MATURITY DATE LTV: 59.4% TI/LC: $0 $5,475 UW DSCR: 1.36x CapEx: $0 $1,259 ----------------------------------- -------------- --------------- ----------------------- -------------------- ----------------- ------------------------------------------------------------------------------------------------------------------------------------ SIGNIFICANT TENANTS ------------------------------------------------------------------------------------------------------------------------------------ LEASE MOODY'S/ SQUARE SALES BASE RENT EXPIRATION TENANT NAME PARENT COMPANY S&P(1) FEET PSF(2) % OF GLA PSF YEAR ------------------------------------------------------------------------------------------------------------------------------------ OUTBACK STEAKHOUSE Outback Steakhouse, Inc. (NYSE: NR/NR 6,000 $467 9.1% $17.80 2010 OSI) ROY'S RESTAURANT Roy's Restaurant NR/NR 6,000 $388 9.1% $30.50 2011 KIHEI-WAILEA MEDICAL CENTER Kihei-Wailea Medical Center NR/NR 5,592 NAV 8.5% $30.16 2012 ------------------------------------------------------------------------------------------------------------------------------------
(1) Ratings provided are for the entity listed in the "Parent Company" field whether or not the parent company guarantees the lease. (2) Sales per square foot for 9-months ending 9/30/2002 55 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 --------------------------------------------------------------------------- PIILANI SHOPPING CENTER --------------------------------------------------------------------------- --------------------------------------------------------------------------- SPONSOR --------------------------------------------------------------------------- KP Hawaii I, LLC, the borrowing entity. Its sole member is Krausz Puente LLC, a California limited liability company. F. Ron Krausz is the guarantor of the non-recourse carveouts on the loan. He is president of Krausz Companies and is responsible for corporate financial planning and strategy, as well as for major tenant lease negotiations and project acquisition, disposition and financing. Krausz Companies was founded in 1966. The company acquires and develops office and retail properties in the Western United States. --------------------------------------------------------------------------- --------------------------------------------------------------------------- COLLATERAL --------------------------------------------------------------------------- Piilani Shopping Center is a shopping center (the "Property") located in the city of Kihei on the island of Maui, Hawaii developed in 2000. The property is shadow anchored by Hilo Hattie and the largest Safeway supermarket on the state of Hawaii. The master planned community of Piilani Village surrounds the area. Piilani Shopping Center is currently the only major shopping center on Piilani Highway. The Property is approximately 94.4% leased to almost thirty tenants including Outback Steakhouse (6,000 square feet), Roy's Restaurant (6,000 square feet) and Kihei-Wailea Medical Center (5,592 square feet). --------------------------------------------------------------------------- --------------------------------------------------------------------------- MARKET(1) --------------------------------------------------------------------------- The subject Property is located on the island of Maui with land area of 727 square miles and a population of 130,335. Being an island, the region has very limited space for new commercial developments and the State of Hawaii's State Conservationist Districts further inhibits future development. The Property is situated on the northwest corner of Piikea Avenue and Piilani Highway in eastern Kihei. Access to the Kihei area is via Mokulele Highway (Highway 35) or Kuihelani Highway (Highway 38) from Kahului or via Honoapiilan Highway (Highway 30) from Wailuku. The main roadways serving the Kihei area are Kihei Road and Piilani Highway. Maui is the second largest island in the Hawaiian chain and lies midway between Oahu and Hawaii. Maui County is the third most populous county in the state. Maui contains the second highest concentration of retail inventory, 3,656,764 sf, 15.9% of the total leasable area, with the island contributing roughly 11% of the total state population. The Island of Maui varies dramatically by location. Wailuku and Kahului are the primary local shopping districts. Kihei is a mixture of both local and tourist shopping areas. Lease rates reflect this diversity with ranges between $12 psf to $300psf and vacancies in the market vary as dramatically between 0% to 10%. --------------------------------------------------------------------------- (1) Certain information from the CB Richard Ellis appraisal dated May 11, 2003. The appraisal relies upon many assumptions, and no representation is made as to the accuracy of the assumptions underlying the appraisal.
------------------------------------------------------------------------------------------------------------------------------------ LEASE ROLLOVER SCHEDULE ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF SQUARE % OF BASE CUMULATIVE CUMULATIVE % CUMULATIVE CUMULATIVE % LEASES FEET % OF GLA BASE RENT RENT SQUARE FEET OF GLA BASE RENT OF BASE RENT YEAR EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING ------------------------------------------------------------------------------------------------------------------------------------ VACANT NAP 3,689 5.6% NAP NAP 3,689 5.6% NAP NAP 2003 & MTM 0 0 0.0 $0 0.0% 3,689 5.6% $0 0.0% 2004 0 0 0.0 0 0.0 3,689 5.6% $0 0.0% 2005 10 14,767 22.5 466,790 24.3 18,456 28.1% $466,790 24.3% 2006 6 10,332 15.7 350,760 18.3 28,788 43.8% $817,550 42.6% 2007 1 2,161 3.3 88,620 4.6 30,949 47.1% $906,170 47.2% 2008 1 3,304 5.0 99,120 5.2 34,253 52.1% $1,005,290 52.4% 2009 0 0 0.0 0 0.0 34,253 52.1% $1,005,290 52.4% 2010 4 11,739 17.9 278,970 14.5 45,992 70.0% $1,284,260 66.9% 2011 3 9,348 14.2 291,916 15.2 55,340 84.2% $1,576,176 82.1% 2012 4 7,634 11.6 252,996 13.2 62,974 95.8% $1,829,172 95.3% AFTER 1 2,728 4.2 90,000 4.7 65,702 100.0% $1,919,172 100.0% ------------------------------------------------------------------------------------------------------------------------------------ TOTAL 30 65,702 100.0% $1,919,172 100.0% ------------------------------------------------------------------------------------------------------------------------------------
56 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- PIILANI SHOPPING CENTER -------------------------------------------------------------------------------- [MAP OF AREA SURROUNDING PIILANI SHOPPING CENTER OMITTED] 57 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 -------------------------------------------------------------------------------- PIILANI SHOPPING CENTER(1) -------------------------------------------------------------------------------- [SITE PLAN OF PIILANI SHOPPING CENTER OMITTED] (1) THE COLLATERAL SECURING THE MORTGAGED PROPERTY DOES NOT INCLUDE SAFEWAY AND HILO HATTIES. 58 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. STRUCTURAL AND COLLATERAL TERM SHEET JPMCC 2003-LN1 [THIS PAGE INTENTIONALLY LEFT BLANK] 59 of 59 THE INFORMATION HEREIN WILL BE SUPERSEDED IN ITS ENTIRETY BY THE INFORMATION CONTAINED IN THE FINAL PROSPECTUS SUPPLEMENT. THIS PAGE MUST BE ACCOMPANIED BY A DISCLAIMER. IF YOU DID NOT RECEIVE SUCH A DISCLAIMER, PLEASE CONTACT YOUR SALES REPRESENTATIVE. [THIS PAGE INTENTIONALLY LEFT BLANK] ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 135 S. LaSalle Street Suite 1625 SERIES 2003-LN1 Prior Payment: N/A Chicago, IL 60603 Next Payment: 11/12/2003 Record Date: 09/30/2003 ABN AMRO ACCT: XX-XXXX-XX-X Administrator: Analyst: REPORTING PACKAGE TABLE OF CONTENTS ==================================================================================================================================== ================================ ==================================================== ====================================== Page(s) Issue Id: JPM03LN1 REMIC Certificate Report Closing Date: Monthly Data File Name: Bond Interest Reconciliation First Payment Date: 10/13/2003 JPM03LN1_YYYYMM_3.zip Cash Reconciliation Summary Assumed Final Payment Date: 10/12/2033 15 Month Historical Loan Status Summary 15 Month Historical Payoff/Loss Summary Historical Collateral Level Prepayment Report Delinquent Loan Detail Mortgage Loan Characteristics Loan Level Detail Specially Serviced Report Modified Loan Detail Realized Loss Detail Appraisal Reduction Detail ================================ ==================================================== ====================================== ====================================================================================================== PARTIES TO THE TRANSACTION ------------------------------------------------------------------------------------------------------ DEPOSITOR: J.P. Morgan Chase Commercial Mortgage Securities Corp. UNDERWRITER: J.P. Morgan Securities Inc., ABN AMRO Incorporated, Nomura Securities International, Inc. MASTER SERVICER: Wells Fargo Bank N.A. SPECIAL SERVICER: ARCap Servicing, Inc. RATING AGENCY: Moody's Investors Service, Inc. /Standard & Poor's Ratings Services/Fitch, Inc. ====================================================================================================== ========================================================================== INFORMATION IS AVAILABLE FOR THIS ISSUE FROM THE FOLLOWING SOURCES -------------------------------------------------------------------------- LaSalle Web Site www.etrustee.net Servicer Website LaSalle Factor Line (800) 246-5761 ========================================================================== ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A WAC: Next Payment: 11/12/2003 WA Life Term: Record Date: 09/30/2003 WA Amort Term: ABN AMRO ACCT: XX-XXXX-XX-X Current Index: Next Index: REMIC CERTIFICATE REPORT ==================================================================================================================================== ORIGINAL OPENING PRINCIPAL PRINCIPAL NEGATIVE CLOSING INTEREST INTEREST PASS-THROUGH CLASS FACE VALUE (1) BALANCE PAYMENT ADJ. OR LOSS AMORTIZATION BALANCE PAYMENT (2) ADJUSTMENT RATE CUSIP Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Per 1,000 Next Rate (3) ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ==================================================================================================================================== Total P&I Payment 0.00 =========================== Notes: (1) N denotes notional balance not included in total (2) Accrued Interest plus/minus Interest Adjustment minus Deferred Interest equals Interest Payment (3) Estimated 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 BOND INTEREST RECONCILIATION ==================================================================================================================================== Deductions Additions --------------------------------- ---------------------------------------------------- Pass Accrued Deferred & Prior Int Accrual Prepay- Other Accrual Thru Certificate Allocable Accretion Interest Int. Short- on prior ment Interest Class Method Days Rate Interest PPIS Interest Loss/Exp falls Due Shortfall (3) Penalties Proceeds (1) ==================================================================================================================================== ------------------------------------------------------------------------------------------------------ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ==================================================================================================================================== ======================================================== ====================== Remaining Distributable Interest Current Period Outstanding Credit Support Certificate Payment (Shortfall)/ Interest ---------------------- Interest (2) Amount Recovery Shortfalls Original Current (4) ======================================================== ====================== -------------------------------------------------------- 0.00 0.00 0.00 ======================================================== ====================== (1) Other Interest Proceeds are additional interest amounts specifically allocated to the bond(s) and used in determining the Distributable Interest of the bonds. (2) Accrued - Deductions + Additional Interest. (3) Where applicable. (4) Determined as follows: (A) the ending balance of all the classes less (B) the sum of (i) the ending balance of the class and (ii) the ending balance of all classes which are not subordinate to the class divided by (A). 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 CASH RECONCILIATION SUMMARY ==================================================================================================================================== ------------------------------------------- ------------------------------------------- ------------------------------------------ INTEREST SUMMARY PRINCIPAL SUMMARY SERVICING FEE SUMMARY ------------------------------------------- ------------------------------------------- ------------------------------------------ Current Scheduled Interest SCHEDULED PRINCIPAL: Current Servicing Fees Less Deferred Interest Current Scheduled Principal Plus Fees Advanced for PPIS Less PPIS Reducing Scheduled Int Advanced Scheduled Principal Less Reduction for PPIS Plus Gross Advance Interest ------------------------------------------- Plus Delinquent Servicing Fees Less ASER Interest Adv Reduction Scheduled Principal ------------------------------------------ Less Other Interest Not Advanced ------------------------------------------- Total Servicing Fees Less Other Adjustment UNSCHEDULED PRINCIPAL: ------------------------------------------ ------------------------------------------- Curtailments Total Advanced Scheduled Principal ------------------------------------------- Liquidation Proceeds UNSCHEDULED INTEREST: Repurchase Proceeds ------------------------------------------- Other Principal Proceeds Prepayment Penalties ------------------------------------------- Yield Maintenance Penalties Total Unscheduled Principal Other Interest Proceeds ------------------------------------------- ------------------------------------------- Remittance Principal Total ------------------------------------------- ------------------------------------------- Remittance P&I Due Trust Less Fees Paid to Servicer ------------------------------------------- Less Fee Strips Paid by Servicer Remittance P&I Due Certs ------------------------------------------- ------------------------------------------- LESS FEES & EXPENSES PAID BY/TO SERVICER ------------------------------------------- ------------------------------------------- ------------------------------------------ Special Servicing Fees POOL BALANCE SUMMARY PPIS SUMMARY Workout Fees ------------------------------------------- ------------------------------------------ Liquidation Fees Balance Count Gross PPIS Interest Due Serv on Advances ------------------------------------------- Reduced by PPIE Non Recoverable Advances Beginning Pool Reduced by Shortfalls in Fees Misc. Fees & Expenses Scheduled Principal Reduced by Other Amounts ------------------------------------------- Unscheduled Principal ------------------------------------------ Plus Trustee Fees Paid by Servicer Deferred Interest PPIS Reducing Scheduled Interest ------------------------------------------- Liquidations ------------------------------------------ Total Unscheduled Fees & Expenses Repurchases PPIS Reducing Servicing Fee ------------------------------------------- ------------------------------------------- ------------------------------------------ Total Interest Due Trust Ending Pool PPIS Due Certificate ------------------------------------------- ------------------------------------------- ------------------------------------------ LESS FEES & EXPENSES PAID BY/TO TRUST ------------------------------------------- ------------------------------------------ Trustee Fee ADVANCE SUMMARY (ADVANCE MADE BY SERVICER) Fee Strips ------------------------------------------ Misc. Fees Principal Interest Interest Reserve Withholding ------------------------------------------ Plus Interest Reserve Deposit Prior Outstanding ------------------------------------------- Plus Current Period Total Less Recovered ------------------------------------------- Less Non Recovered Total Interest Due Certs ------------------------------------------ ------------------------------------------- Ending Outstanding ------------------------------------------ ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 ASSET BACKED FACTS ~ 15 MONTH HISTORICAL LOAN STATUS SUMMARY ============ ================================================================== ================================================ Delinquency Aging Categories Special Event Categories (1) ------------------------------------------------------------------ ------------------------------------------------ Delinq Delinq Delinq Distribution 1 Month 2 Months 3+ Months Foreclosure REO Modifications Specially Serviced Bankruptcy Date # Balance # Balance # Balance # Balance # Balance # Balance # Balance # Balance ============ ================================================================== ================================================ 10/13/03 ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ------------ ------------------------------------------------------------------ ------------------------------------------------ ============ ================================================================== ================================================ (1) Modification, Specially Serviced & Bankruptcy Totals are Included in the Appropriate Delinquency Aging Category. 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 ASSET BACKED FACTS ~ 15 MONTH HISTORICAL PAYOFF/LOSS SUMMARY ==================================================================================================================================== Appraisal Realized Curr Ending Pool (1) Payoffs(2) Penalties Reduct. (2) Liquidations (2) Losses (2) Remaining Term Weighted Avg. Distribution ---------------------------------------------------------------------------------------------------------------------- Date # Balance # Balance # Amount # Balance # Balance # Amount Life Amort. Coupon Remit ==================================================================================================================================== 09/12/03 ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ==================================================================================================================================== (1) Percentage based on pool as of cutoff. (2) Percentage based on pool as of beginning of period. 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 HISTORICAL COLLATERAL LEVEL PREPAYMENT REPORT ==================================================================================================================================== Disclosure Payoff Initial Payoff Penalty Prepayment Maturity Property Geographic Control # Period Balance Type Amount Amount Date Date Type Location ------------------------------------------------------------------------------------------------------------------------------------ ==================================================================================================================================== CURRENT 0 0 CUMULATIVE 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 DELINQUENT LOAN DETAIL ==================================================================================================================================== Paid Outstanding Out. Property Special Disclosure Thru Current P&I P&I Protection Advance Servicer Foreclosure Bankruptcy REO Control # Date Advance Advances** Advances Description (1) Transfer Date Date Date Date ==================================================================================================================================== ==================================================================================================================================== A. P&I Advance - Loan in Grace Period 1. P&I Advance - Loan delinquent 1 month B. P&I Advance - Late Payment but < 1 month delinq 2. P&I Advance - Loan delinquent 2 months 3. P&I Advance - Loan delinquent 3 months or More 4. Matured Balloon/Assumed Scheduled Payment 7. P&I Advance (Foreclosure) 9. P&I Advance (REO) ==================================================================================================================================== ** Outstanding P&I Advances include the current period P&I Advance 09/12/2003 - 07:12 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 MORTGAGE LOAN CHARACTERISTICS ==================================================================================================================================== DISTRIBUTION OF PRINCIPAL BALANCES DISTRIBUTION OF MORTGAGE INTEREST RATES ================================================================= ================================================================= Weighted Average Weighted Average Current Scheduled # of Scheduled % of ------------------ Current Mortgage # of Scheduled % of ------------------ Balances Loans Balance Balance Term Coupon DSCR Interest Rate Loans Balance Balance Term Coupon DSCR ================================================================= ================================================================= ================================================================= 0 0 0.00% ================================================================= Minimum Mortgage Interest Rate 10.0000% Maximum Mortgage Interest Rate 10.0000% ================================================================= 0 0 0.00% ================================================================= Average Scheduled Balance DISTRIBUTION OF REMAINING TERM (BALLOON) Maximum Scheduled Balance ================================================================= Minimum Scheduled Balance Weighted Average ------------------------- Balloon # of Scheduled % of -------------------- Mortgage Loans Loans Balance Balance Term Coupon DSCR DISTRIBUTION OF REMAINING TERM (FULLY AMORTIZING) ================================================================= ================================================================= 0 to 60 Weighted Average 61 to 120 Fully Amortizing # of Scheduled % of ------------------ 121 to 180 Mortgage Loans Loans Balance Balance Term Coupon DSCR 181 to 240 ================================================================= 241 to 360 ================================================================= ================================================================= 0 0 0.00% 0 0 0.00% ================================================================= ================================================================= Minimum Remaining Term Minimum Remaining Term 0 Maximum Remaining Term Maximum Remaining Term 0 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: SERIES 2003-LN1 Prior Payment: Next Payment: ABN AMRO ACCT: XX-XXXX-XX-X Record Date: MORTGAGE LOAN CHARACTERISTICS ==================================================================================================================================== DISTRIBUTION OF DSCR (CURRENT) GEOGRAPHIC DISTRIBUTION =========================================================== ================================================================ Debt Service # of Scheduled % of # of Scheduled % of Coverage Ratio Loans Balance Balance WAMM WAC DSCR Geographic Location Loans Balance Balance WAMM WAC DSCR =========================================================== ================================================================ =========================================================== 0 0 0.00% =========================================================== Maximum DSCR 0.000 Minimum DSCR 0.000 DISTRIBUTION OF DSCR (CUTOFF) =========================================================== Debt Service # of Scheduled % of Coverage Ratio Loans Balance Balance WAMM WAC DSCR =========================================================== =========================================================== ================================================================ 0 0 0.00% 0 0.00% =========================================================== ================================================================ Maximum DSCR 0.00 Minimum DSCR 0.00 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: SERIES 2003-LN1 Prior Payment: Next Payment: ABN AMRO ACCT: XX-XXXX-XX-X Record Date: MORTGAGE LOAN CHARACTERISTICS ==================================================================================================================================== DISTRIBUTION OF PROPERTY TYPES DISTRIBUTION OF LOAN SEASONING =========================================================== =========================================================== # of Scheduled % of # of Scheduled % of Property Types Loans Balance Balance WAMM WAC DSCR Number of Years Loans Balance Balance WAMM WAC DSCR =========================================================== =========================================================== =========================================================== =========================================================== 0 0 0.00% 0 0 0.00% =========================================================== =========================================================== DISTRIBUTION OF AMORTIZATION TYPE DISTRIBUTION OF YEAR LOANS MATURING =========================================================== =========================================================== =========================================================== =========================================================== Amortization # of Scheduled % of # of Scheduled % of Type Loans Balance Balance WAMM WAC DSCR Year Loans Balance Balance WAMM WAC DSCR =========================================================== =========================================================== 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 & Longer =========================================================== =========================================================== 0 0 0.00% =========================================================== =========================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 LOAN LEVEL DETAIL ================================================================================================================================= Operating Ending Spec. Disclosure Property Statement Maturity Principal Note Scheduled Mod. Serv Control # Grp Type State DSCR NOI Date Date Balance Rate P&I Flag Flag ================================================================================================================================= ================================================================================================================================= W/Avg 0.00 0 0 0 ================================================================================================================================= =========================================== Loan Prepayment ASER Status ------------------------- Flag Code(1) Amount Penalty Date =========================================== =========================================== 0 0 =========================================== * NOI and DSCR, if available and reportable under the terms of the Pooling and Servicing Agreement, are based on information obtained from the related borrower, and no other party to the agreement shall be held liable for the accuracy or methodology used to determine such figures. (1) Legend: A. P&I Adv - in Grace Period 1. P&I Adv - delinquent 1 month 7. Foreclosure B. P&I Adv - < one month delinq 2. P&I Adv - delinquent 2 months 8. Bankruptcy 3. P&I Adv - delinquent 3+ months 9. REO 4. Mat. Balloon/Assumed P&I 10. DPO 5. Prepaid in Full 11. Modification 6. Specially Serviced ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 SPECIALLY SERVICED (PART I) ~ LOAN DETAIL ==================================================================================================================================== Balance Remaining Term Disclosure Transfer Loan Status ------------------- Note Maturity -------------- Property NOI Control # Date Code (1) Scheduled Actual Rate Date Life Amort. Type State NOI DSCR Date ==================================================================================================================================== ==================================================================================================================================== (1) Legend: A. P&I Adv - in Grace Period 1. P&I Adv - delinquent 1 month B. P&I Adv - < 1 month delinq. 2. P&I Adv - delinquent 2 months 3. P&I Adv - delinquent 3+ months 4. Mat. Balloon/Assumed P&I 7. Foreclosure 9. REO ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 SPECIALLY SERVICED LOAN DETAIL (PART II) ~ SERVICER COMMENTS ==================================================================================================================================== Disclosure Resolution Control # Strategy Comments ==================================================================================================================================== ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 MODIFIED LOAN DETAIL ==================================================================================================================================== Cutoff Modified Disclosure Modification Maturity Maturity Modification Control # Date Date Date Description ==================================================================================================================================== ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 REALIZED LOSS DETAIL ==================================================================================================================================== Beginning Gross Proceeds Aggregate Net Net Proceeds Disclosure Appraisal Appraisal Scheduled Gross as a % of Liquidation Liquidation as a % of Realized Period Control # Date Value Balance Proceeds Sched Principal Expenses * Proceeds Sched. Balance Loss ==================================================================================================================================== ==================================================================================================================================== Current Total 0.00 0.00 0.00 0.00 0.00 Cumulative 0.00 0.00 0.00 0.00 0.00 ==================================================================================================================================== * Aggregate liquidation expenses also include outstanding P&I advances and unpaid servicing fees, unpaid trustee fees, etc. 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
ABN AMRO J.P MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Statement Date: 10/13/2003 LaSalle Bank N.A. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES Payment Date: 10/13/2003 SERIES 2003-LN1 Prior Payment: N/A Next Payment: 11/12/2003 ABN AMRO ACCT: XX-XXXX-XX-X Record Date: 09/30/2003 APPRAISAL REDUCTION DETAIL ==================================================================================================================================== Remaining Term Appraisal Disclosure Appraisal Scheduled ARA Current P&I Note Maturity -------------- Property ------------ Control # Red. Date Balance Amount Advance ASER Rate Date Life Amort. Type State DSCR Value Date ==================================================================================================================================== ==================================================================================================================================== 09/12/2003 - 07:39 (MXXX-MXXX) (c) 2000 LaSalle Bank N.A.
[THIS PAGE INTENTIONALLY LEFT BLANK] PROSPECTUS MORTGAGE PASS-THROUGH CERTIFICATES (ISSUABLE IN SERIES) [CHASE GRAPHIC OMITTED] J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. DEPOSITOR ---------------- J.P. Morgan Chase Commercial Mortgage Securities Corp. will periodically offer certificates in one or more series. Each series of certificates will represent the entire beneficial ownership interest in a trust fund. Distributions on the certificates of any series will be made only from the assets of the related trust fund. The certificates of each series will not represent an obligation of the depositor, any servicer or any of their respective affiliates. Neither the certificates nor any assets in the related trust fund will be guaranteed or insured by any governmental agency or instrumentality or by any other person, unless otherwise provided in the prospectus supplement. The primary asset of the trust fund may include: o multifamily and commercial mortgage loans, including participations therein; o mortgage-backed securities evidencing interests in or secured by multifamily and commercial mortgage loans, including participations therein, and other mortgage-backed securities; o direct obligations of the United States or other government agencies; or o a combination of the assets described above. INVESTING IN THE OFFERED CERTIFICATES INVOLVES RISKS. YOU SHOULD REVIEW THE INFORMATION APPEARING UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 9 OF THIS PROSPECTUS AND IN THE RELATED PROSPECTUS SUPPLEMENT BEFORE PURCHASING ANY OFFERED CERTIFICATE. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. September 15, 2003 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND EACH ACCOMPANYING PROSPECTUS SUPPLEMENT Information about the offered certificates is contained in two separate documents that progressively provide more detail: (a) this prospectus, which provides general information, some of which may not apply to the offered certificates; and (b) the accompanying prospectus supplement for each series, which describes the specific terms of the offered certificates. If the terms of the offered certificates vary between this prospectus and the accompanying prospectus supplement, you should rely on the information in the prospectus supplement. You should rely only on the information contained in this prospectus and the accompanying prospectus supplement. We have not authorized anyone to provide you with information that is different from that contained in this prospectus and the related prospectus supplement. The information in this prospectus is accurate only as of the date of this prospectus. Certain capitalized terms are defined and used in this prospectus to assist you in understanding the terms of the offered certificates and this offering. The capitalized terms used in this prospectus are defined on the pages indicated under the caption "Index of Principal Definitions" beginning on page 108 in this prospectus. In this prospectus, the terms "Depositor," "we," "us" and "our" refer to J.P. Morgan Chase Commercial Mortgage Securities Corp. If you require additional information, the mailing address of our principal executive offices is J.P. Morgan Chase Commercial Mortgage Securities Corp., 270 Park Avenue, New York, New York 10017, and telephone number is (212) 834-9299. ii TABLE OF CONTENTS IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND EACH ACCOMPANYING PROSPECTUS SUPPLEMENT .................................. ii SUMMARY OF PROSPECTUS .......................... 1 RISK FACTORS ................................... 9 Your Ability to Resell Certificates may be Limited Because of Their Characteristics .......................... 9 The Assets of the Trust Fund may not be Sufficient to Pay Your Certificates ...... 9 Prepayments of the Mortgage Assets will Affect the Timing of Your Cash Flow and May Affect Your Yield ........... 10 Ratings Do Not Guarantee Payment and Do Not Address Prepayment Risks .......... 11 Commercial and Multifamily Mortgage Loans Have Risks that May Affect Payments on Your Certificates ............ 12 Borrowers May Be Unable to Make Balloon Payments ......................... 14 Credit Support May Not Cover Losses ......... 14 Assignment of Leases and Rents May Be Limited By State Law ..................... 15 Failure to Comply with Environmental Law May Result in Additional Losses ...... 15 Hazard Insurance May Be Insufficient to Cover all Losses on Mortgaged Properties ............................... 16 Poor Property Management May Adversely Affect the Performance of the Related Mortgaged Property ........... 16 One Action Jurisdiction May Limit the Ability of the Servicer to Foreclose on a Mortgaged Property ..................... 16 Rights Against Tenants may be Limited if Leases are not Subordinate to Mortgage or do not Contain Attornment Provisions .................... 17 If Mortgaged Properties are not in Compliance with Current Zoning Laws Restoration Following a Casualty Loss may be Limited ........................... 17 Inspections of the Mortgaged Properties will be Limited ............... 17 Compliance with Americans with Disabilities Act may result in Additional Losses ........................ 17 Litigation Concerns ......................... 17 Property Insurance .......................... 18 Some Certificates May Not be Appropriate for Benefit Plans ............ 18 Certain Federal Tax Considerations Regarding Residual Certificates .......... 18 Certain Federal Tax Considerations Regarding Original Issue Discount ........ 19 Bankruptcy Proceedings Could Adversely Affect Payments on Your Certificates ............................. 19 Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment .................................. 19 Delinquent and Non-Performing Mortgage Loans Could Adversely Affect Payments on Your Certificates ..... 20 DESCRIPTION OF THE TRUST FUNDS ................. 21 General ..................................... 21 Mortgage Loans .............................. 21 MBS ......................................... 25 Certificate Accounts ........................ 26 Credit Support .............................. 26 Cash Flow Agreements ........................ 26 YIELD AND MATURITY CONSIDERATIONS .............. 27 General ..................................... 27 Pass-Through Rate ........................... 27 Payment Delays .............................. 27 Certain Shortfalls in Collections of Interest ................................. 27 Yield and Prepayment Considerations ......... 28 Weighted Average Life and Maturity .......... 29 Controlled Amortization Classes and Companion Classes ........................ 30 Other Factors Affecting Yield, Weighted Average Life and Maturity ................ 31 THE DEPOSITOR .................................. 33 USE OF PROCEEDS ................................ 33 DESCRIPTION OF THE CERTIFICATES ................ 34 General ..................................... 34 Distributions ............................... 34 Distributions of Interest on the Certificates ............................. 35 Distributions of Principal on the Certificates ............................. 36 Distributions on the Certificates in Respect of Prepayment Premiums or in Respect of Equity Participations ...... 37 Allocation of Losses and Shortfalls ......... 37 Advances in Respect of Delinquencies ........ 37 Reports to Certificateholders ............... 38 Voting Rights ............................... 39 iii Termination ................................ 40 Book-Entry Registration and Definitive Certificates ............................ 40 DESCRIPTION OF THE POOLING AGREEMENTS ................................. 42 General .................................... 42 Assignment of Mortgage Loans; Repurchases ............................. 42 Representations and Warranties; Repurchases ............................. 43 Collection and Other Servicing Procedures .............................. 44 Sub-Servicers .............................. 45 Special Servicers .......................... 45 Certificate Account ........................ 45 Modifications, Waivers and Amendments of Mortgage Loans ............ 48 Realization Upon Defaulted Mortgage Loans ................................... 49 Hazard Insurance Policies .................. 49 Due-on-Sale and Due-on-Encumbrance Provisions .............................. 50 Servicing Compensation and Payment Of Expenses ............................. 50 Evidence as to Compliance .................. 51 Certain Matters Regarding the Master Servicer and the Depositor .............. 51 Events of Default .......................... 51 Amendment .................................. 52 List of Certificateholders ................. 52 The Trustee ................................ 53 Duties of the Trustee ...................... 53 Certain Matters Regarding the Trustee ...... 53 Resignation and Removal of the Trustee ................................. 53 DESCRIPTION OF CREDIT SUPPORT ................. 55 General .................................... 55 Subordinate Certificates ................... 55 Cross-Support Provisions ................... 56 Insurance or Guarantees with Respect to Mortgage Loans ....................... 56 Letter of Credit ........................... 56 Certificate Insurance and Surety Bonds ..... 56 Reserve Funds .............................. 56 Credit Support with Respect to MBS ......... 57 CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS ...................................... 57 General .................................... 57 Types of Mortgage Instruments .............. 57 Leases and Rents ........................... 58 Personalty ................................. 58 Foreclosure ................................ 58 Bankruptcy Laws ............................ 62 Environmental Risks ........................ 65 Due-on-Sale and Due-on-Encumbrance ......... 66 Subordinate Financing ...................... 67 Default Interest and Limitations on Prepayments ............................. 67 Applicability of Usury Laws ................ 67 Soldiers' and Sailors' Civil Relief Act of 1940 .................................... 68 Type of Mortgaged Property ................. 68 Americans with Disabilities Act ............ 68 Forfeiture For Drug, RICO and Money Laundering Violations ................... 69 CERTAIN FEDERAL INCOME TAX CONSEQUENCES ............................... 69 Federal Income Tax Consequences for REMIC Certificates ...................... 70 General .................................... 70 Characterization of Investments in REMIC Certificates ...................... 70 Qualification as a REMIC ................... 71 Taxation of Regular Certificates ........... 73 General ................................. 73 Original Issue Discount ................. 73 Acquisition Premium ..................... 76 Variable Rate Regular Certificates ...... 76 Deferred Interest ....................... 77 Market Discount ......................... 77 Premium ................................. 78 Election to Treat All Interest Under the Constant Yield Method ............ 78 Sale or Exchange of Regular Certificates ......................... 79 Treatment of Losses ..................... 80 Taxation of Residual Certificates .......... 80 Taxation of REMIC Income ................ 80 Basis and Losses ........................ 82 Treatment of Certain Items of REMIC Income and Expense ................... 83 Limitations on Offset or Exemption of REMIC Income ......................... 83 Tax-Related Restrictions on Transfer of Residual Certificates ............. 84 Sale or Exchange of a Residual Certificate .......................... 87 Mark to Market Regulations .............. 88 Taxes That May Be Imposed on the REMIC Pool .............................. 88 iv Prohibited Transactions ..................... 88 Contributions to the REMIC Pool After the Startup Day .......................... 89 Net Income from Foreclosure Property ........ 89 Liquidation of the REMIC Pool ............... 89 Administrative Matters ...................... 89 Limitations on Deduction of Certain Expenses ................................. 90 Taxation of Certain Foreign Investors ....... 90 Regular Certificates ..................... 90 Residual Certificates .................... 91 Backup Withholding ....................... 91 Reporting Requirements ................... 91 Federal Income Tax Consequences for Certificates as to Which no REMIC Election is Made ......................... 93 Standard Certificates .................... 93 General .................................. 93 Tax Status ............................... 93 Premium and Discount ..................... 94 Recharacterization of Servicing Fees ..... 95 Sale or Exchange of Standard Certificates .......................... 95 Stripped Certificates ....................... 96 General .................................. 96 Status of Stripped Certificates .......... 97 Taxation of Stripped Certificates ........ 97 Reporting Requirements and Backup Withholding .............................. 99 Taxation of Certain Foreign Investors ....... 99 STATE AND OTHER TAX CONSIDERATIONS .............................. 100 CERTAIN ERISA CONSIDERATIONS ................... 100 General ..................................... 100 Plan Asset Regulations ...................... 101 Administrative Exemptions ................... 101 Insurance Company General Accounts .......... 101 Unrelated Business Taxable Income; Residual Certificates .................... 102 LEGAL INVESTMENT ............................... 102 METHOD OF DISTRIBUTION ......................... 105 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE .................... 106 LEGAL MATTERS .................................. 106 FINANCIAL INFORMATION .......................... 106 RATING ......................................... 106 INDEX OF PRINCIPAL DEFINITIONS ................. 108 v [THIS PAGE INTENTIONALLY LEFT BLANK] vi SUMMARY OF PROSPECTUS This summary highlights selected information from this document and does not contain all of the information that you need to consider in making an investment decision. Please read this entire prospectus and the accompanying prospectus supplement as well as the terms and provisions of the related pooling and servicing agreement carefully to understand all of the terms of a series of certificates. An Index of Principal Definitions is included at the end of this prospectus. Title of Certificates......... Mortgage pass-through certificates, issuable in series. Depositor..................... J.P. Morgan Chase Commercial Mortgage Securities Corp., a wholly owned subsidiary of JPMorgan Chase Bank, a New York banking corporation, which is a wholly owned subsidiary of J.P. Morgan Chase & Co., a Delaware corporation. Master Servicer............... The master servicer, if any, for a series of certificates will be named in the related prospectus supplement. The master servicer for any series of certificates may be an affiliate of the depositor or a special servicer. Special Servicer.............. One or more special servicers, if any, for a series of certificates will be named, or the circumstances under which a special servicer will be appointed will be described, in the related prospectus supplement. A special servicer for any series of certificates may be an affiliate of the depositor or the master servicer. Trustee....................... The trustee for each series of certificates will be named in the related prospectus supplement. The Trust Assets.............. Each series of certificates will represent in the aggregate the entire beneficial ownership interest in a trust fund consisting primarily of: A. Mortgage Assets............ The mortgage assets with respect to each series of certificates will, in general, consist of a pool of loans secured by liens on, or security interests in: o residential properties consisting of five or more rental or cooperatively-owned dwelling units or shares allocable to a number of those units and the related leases; or o office buildings, shopping centers, retail stores and establishments, hotels or motels, nursing homes, hospitals or other health-care related facilities, mobile home parks, warehouse facilities, mini-warehouse facilities, self-storage facilities, industrial plants, parking lots, mixed use or various other types of income-producing properties described in this prospectus or unimproved land. 1 If so specified in the related prospectus supplement, a trust fund may include mortgage loans secured by liens on real estate projects under construction. No one will guarantee the mortgage loans, unless otherwise provided in the related prospectus supplement. If so specified in the related prospectus supplement, some mortgage loans may be delinquent. In no event will delinquent mortgage loans comprise 20 percent or more of the trust fund at the time the mortgage loans are transferred to the trust fund. As described in the related prospectus supplement, a mortgage loan: o may provide for no accrual of interest or for accrual of interest at a mortgage interest rate that is fixed over its term or that adjusts from time to time, or that the borrower may elect to convert from an adjustable to a fixed mortgage interest rate, or from a fixed to an adjustable mortgage interest rate; o may provide for level payments to maturity or for payments that adjust from time to time to accommodate changes in the mortgage interest rate or to reflect the occurrence of certain events, and may permit negative amortization; o may be fully amortizing or partially amortizing or non-amortizing, with a balloon payment due on its stated maturity date; o may prohibit prepayments over its term or for a certain period and/or require payment of a premium or a yield maintenance penalty in connection with certain prepayments; and o may provide for payments of principal, interest or both, on due dates that occur monthly, quarterly, semi-annually or at another interval specified in the related prospectus supplement. Some or all of the mortgage loans in any trust fund may have been originated by an affiliate of the depositor. See "Description of the Trust Funds--Mortgage Loans" in this prospectus. If specified in the related prospectus supplement, the mortgage assets with respect to a series of certificates may also include, or consist of: o private mortgage participations, mortgage pass-through certificates or other mortgage-backed securities; or o Certificates insured or guaranteed by any of the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the 2 Governmental National Mortgage Association or the Federal Agricultural Mortgage Corporation. Each of the above mortgage assets will evidence an interest in, or will be secured by a pledge of, one or more mortgage loans that conform to the descriptions of the mortgage loans contained in this prospectus. See "Description of the Trust Funds--MBS" in this prospectus. B. Certificate Account ....... Each trust fund will include one or more certificate accounts established and maintained on behalf of the certificateholders. The person or persons designated in the related prospectus supplement will be required to, to the extent described in this prospectus and in that prospectus supplement, deposit all payments and other collections received or advanced with respect to the mortgage assets and other assets in the trust fund into the certificate accounts. A certificate account may be maintained as an interest bearing or a non-interest bearing account, and its funds may be held as cash or invested in certain obligations acceptable to the rating agencies rating one or more classes of the related series of offered certificates. See "Description of the Trust Funds--Certificate Accounts" and "Description of the Pooling Agreements--Certificate Account" in this prospectus. C. Credit Support ............ If so provided in the related prospectus supplement, partial or full protection against certain defaults and losses on the mortgage assets in the related trust fund may be provided to one or more classes of certificates of the related series in the form of subordination of one or more other classes of certificates of that series, which other classes may include one or more classes of offered certificates, or by one or more other types of credit support, such as a letter of credit, insurance policy, guarantee, reserve fund or another type of credit support described in this prospectus, or a combination of these features. The amount and types of any credit support, the identification of any entity providing it and related information will be set forth in the prospectus supplement for a series of offered certificates. See "Risk Factors--Credit Support May Not Cover Losses," "Description of the Trust Funds--Credit Support" and "Description of Credit Support" in this prospectus. D. Cash Flow Agreements....... If so provided in the related prospectus supplement, a trust fund may include guaranteed investment contracts pursuant to which moneys held in the funds and accounts established for the related series will be invested at a specified rate. The trust fund may also 3 include interest rate exchange agreements, interest rate cap or floor agreements, or currency exchange agreements, all of which are designed to reduce the 3 effects of interest rate or currency exchange rate fluctuations on the mortgage assets or on one or more classes of certificates. The principal terms of that guaranteed investment contract or other agreement, including, without limitation, provisions relating to the timing, manner and amount of any corresponding payments and provisions relating to their termination, will be described in the prospectus supplement for the related series. In addition, the related prospectus supplement will contain certain information that pertains to the obligor under any cash flow agreements of this type. See "Description of the Trust Funds--Cash Flow Agreements" in this prospectus. Description of Certificates... We will offer certificates in one or more classes of a series of certificates issued pursuant to a pooling and servicing agreement or other agreement specified in the related prospectus supplement. The certificates will represent in the aggregate the entire beneficial ownership interest in the trust fund created by that agreement. As described in the related prospectus supplement, the certificates of each series, may consist of one or more classes of certificates that, among other things: o are senior or subordinate to one or more other classes of certificates in entitlement to certain distributions on the certificates; o are principal-only certificates entitled to distributions of principal, with disproportionately small, nominal or no distributions of interest; o are interest-only certificates entitled to distributions of interest, with disproportionately small, nominal or no distributions of principal; o provide for distributions of interest on, or principal of, the certificates that begin only after the occurrence of certain events, such as the retirement of one or more other classes of certificates of that series; o provide for distributions of principal of the certificates to be made, from time to time or for designated periods, at a rate that is faster, or slower than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; 4 o provide for controlled distributions of principal to be made based on a specified schedule or other methodology, subject to available funds; or o provide for distributions based on collections of prepayment premiums, yield maintenance penalties or equity participations on the mortgage assets in the related trust fund. Each class of certificates, other than interest-only certificates and residual certificates which are only entitled to a residual interest in the trust fund, will have a stated principal balance. Each class of certificates, other than principal-only certificates and residual certificates, will accrue interest on its stated principal balance or, in the case of interest-only certificates, on a notional amount. Each class of certificates entitled to interest will accrue interest based on a fixed, variable or adjustable pass-through interest rate. The related prospectus supplement will specify the principal balance, notional amount and/or fixed pass-through interest rate, or, in the case of a variable or adjustable pass-through interest rate, the method for determining that rate, as applicable, for each class of offered certificates. The certificates will not be guaranteed or insured by anyone, unless otherwise provided in the related prospectus supplement. See "Risk Factors--The Assets of the Trust Fund may not be Sufficient to Pay Your Certificates" and "Description of the Certificates" in this prospectus. Distributions of Interest on the Certificates ................ Interest on each class of offered certificates, other than certain classes of principal-only certificates and certain classes of residual certificates, of each series will accrue at the applicable fixed, variable or adjustable pass-through interest rate on the principal balance or, in the case of certain classes of interest-only certificates, on the notional amount, outstanding from time to time. Interest will be distributed to you as provided in the related prospectus supplement on specified distribution dates. Distributions of interest with respect to one or more classes of accrual certificates may not begin until the occurrence of certain events, such as the retirement of one or more other classes of certificates, and interest accrued with respect to a class of accrual certificates before the occurrence of that event will either be added to its principal balance or otherwise deferred. Distributions of interest with respect to one or more classes of certificates may be reduced to the extent of certain delinquencies, losses and other contingencies 5 described in this prospectus and in the related prospectus supplement. See "Risk Factors-- Prepayment of the Mortgage Assets will Affect the Timing of Your Cash Flow and May Affect Your Yield"; "Risks Relating to Prepayments and Repurchases" "Yield and Maturity Considerations" and "Description of the Certificates--Distributions of Interest on the Certificates" in this prospectus. Distributions of Principal of the Certificates ................ Each class of certificates of each series, other than certain classes of interest-only certificates and certain classes of residual certificates, will have a principal balance. The principal balance of a class of certificates will represent the maximum amount that you are entitled to receive as principal from future cash flows on the assets in the related trust fund. Distributions of principal with respect to one or more classes of certificates may: o be made at a rate that is faster, and, in some cases, substantially faster, than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; o or may be made at a rate that is slower, and, in some cases, substantially slower, than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; o not commence until the occurrence of certain events, such as the retirement of one or more other classes of certificates of the same series; o be made, subject to certain limitations, based on a specified principal payment schedule resulting in a controlled amortization class of certificates; or o be contingent on the specified principal payment schedule for a controlled amortization class of the same series and the rate at which payments and other collections of principal on the mortgage assets in the related trust fund are received. Unless otherwise specified in the related prospectus supplement, distributions of principal of any class of offered certificates will be made on a pro rata basis among all of the certificates of that class. See "Description of the Certificates--Distributions of Principal on the Certificates" in this prospectus. Advances...................... If provided in the related prospectus supplement, if a trust fund includes mortgage loans, the master servicer, 6 a special servicer, the trustee, any provider of credit support and/or any other specified person may be obligated to make, or have the option of making, certain advances with respect to delinquent scheduled payments of principal and/or interest on those mortgage loans. Any of the advances of principal and interest made with respect to a particular mortgage loan will be reimbursable from subsequent recoveries from the related mortgage loan and otherwise to the extent described in this prospectus and in the related prospectus supplement. If provided in the prospectus supplement for a series of certificates, any entity making these advances may be entitled to receive interest on those advances while they are outstanding, payable from amounts in the related trust fund. If a trust fund includes mortgage participations, pass-through certificates or other mortgage-backed securities, any comparable advancing obligation will be described in the related prospectus supplement. See "Description of the Certificates--Advances in Respect of Delinquencies" in this prospectus. Termination................... If so specified in the related prospectus supplement, the mortgage assets in the related trust fund may be sold, causing an early termination of a series of certificates in the manner set forth in the prospectus supplement. If so provided in the related prospectus supplement, upon the reduction of the principal balance of a specified class or classes of certificates by a specified percentage or amount, the party specified in the prospectus supplement may be authorized or required to bid for or solicit bids for the purchase of all of the mortgage assets of the related trust fund, or of a sufficient portion of the mortgage assets to retire the class or classes, as described in the related prospectus supplement. See "Description of the Certificates--Termination" in this prospectus. Registration of Book-Entry Certificates ................ If so provided in the related prospectus supplement, one or more classes of the offered certificates of any series will be book-entry certificates offered through the facilities of The Depository Trust Company. Each class of book-entry certificates will be initially represented by one or more certificates registered in the name of a nominee of The Depository Trust Company. No person acquiring an interest in a class of book-entry certificates will be entitled to receive definitive certificates of that class in fully registered form, except under the limited circumstances described in this prospectus. See "Risk Factors--Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment" and 7 "Description of the Certificates--Book-Entry Registration and Definitive Certificates" in this prospectus. Certain Federal Income Tax Consequences................. The federal income tax consequences to certificateholders will vary depending on whether one or more elections are made to treat the trust fund or specified portions of the trust fund as one or more "real estate mortgage investment conduits" (each, a "REMIC") under the provisions of the Internal Revenue Code. The prospectus supplement for each series of certificates will specify whether one or more REMIC elections will be made. See "Certain Federal Income Tax Consequences" in this prospectus. Certain ERISA Considerations... If you are a fiduciary of any retirement plans or certain other employee benefit plans and arrangements, including individual retirement accounts, annuities, Keogh plans, and collective investment funds and insurance company general and separate accounts in which those plans, accounts, annuities or arrangements are invested, that are subject to ERISA or Section 4975 of the Internal Revenue Code, you should carefully review with your legal advisors whether the purchase or holding of offered certificates could give rise to a transaction that is prohibited or is not otherwise permissible either under ERISA or the Internal Revenue Code. See "Certain ERISA Considerations" in this prospectus and "ERISA Considerations" in the related prospectus supplement. Legal Investment.............. The applicable prospectus supplement will specify whether the offered certificates will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. If your investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities, then you may be subject to restrictions on investment in the offered certificates. You should consult your own legal advisors for assistance in determining the suitability and consequences to you of the purchase, ownership and sale of the offered certificates. See "Legal Investment" in this prospectus and in the related prospectus supplement. Rating........................ At their dates of issuance, each class of offered certificates will be rated at least investment grade by one or more nationally recognized statistical rating agencies. See "Rating" in this prospectus and "Ratings" in the related prospectus supplement. 8 RISK FACTORS You should carefully consider the following risks and the risks described under "Risk Factors" in the prospectus supplement for the applicable series of certificates before making an investment decision. In particular, distributions on your certificates will depend on payments received on and other recoveries with respect to the mortgage loans. Thus, you should carefully consider the risk factors relating to the mortgage loans and the mortgaged properties. YOUR ABILITY TO RESELL CERTIFICATES MAY BE LIMITED BECAUSE OF THEIR CHARACTERISTICS We cannot assure you that a secondary market for the certificates will develop or, if it does develop, that it will provide you with liquidity of investment or will continue for the life of your certificates. The prospectus supplement for any series of offered certificates may indicate that an underwriter intends to make a secondary market in those offered certificates; however, no underwriter will be obligated to do so. Any resulting secondary market may provide you with less liquidity than any comparable market for certificates that evidence interests in single-family mortgage loans. The primary source of ongoing information regarding the offered certificates of any series, including information regarding the status of the related mortgage assets and any credit support for your certificates, will be the periodic reports delivered to you. See "Description of the Certificates--Reports to Certificateholders" in this prospectus. We cannot assure you that any additional ongoing information regarding your certificates will be available through any other source. The limited nature of the available information in respect of a series of offered certificates may adversely affect its liquidity, even if a secondary market for those certificates does develop. Even if a secondary market does develop with respect to any series or class of certificates, the market value of those certificates will be affected by several factors, including: o The perceived liquidity of the certificates; o The anticipated cash flow of the certificates, which may vary widely depending upon the prepayment and default assumptions applied in respect of the underlying mortgage loans and prevailing interest rates; o The price payable at any given time in respect of certain classes of offered certificates may be extremely sensitive to small fluctuations in prevailing interest rates, particularly, for a class with a relatively long average life, a companion class to a controlled amortization class, a class of interest-only certificates or principal-only certificates; and o The relative change in price for an offered certificate in response to an upward or downward movement in prevailing interest rates may not equal the relative change in price for that certificate in response to an equal but opposite movement in those rates. Accordingly, the sale of your certificates in any secondary market that may develop may be at a discount from the price you paid. We are not aware of any source through which price information about the offered certificates will be generally available on an ongoing basis. Except to the extent described in this prospectus and in the related prospectus supplement, you will have no redemption rights, and the certificates of each series will be subject to early retirement only under certain specified circumstances described in this prospectus and in the related prospectus supplement. See "Description of the Certificates--Termination" in this prospectus. THE ASSETS OF THE TRUST FUND MAY NOT BE SUFFICIENT TO PAY YOUR CERTIFICATES Unless otherwise specified in the related prospectus supplement, o The certificates of any series and the mortgage assets in the related trust fund will not be guaranteed or insured by the depositor or any of its affiliates, by any governmental agency or instrumentality or by any other person or entity; and 9 o The certificates of any series will not represent a claim against or security interest in the trust funds for any other series. Accordingly, if the related trust fund has insufficient assets to make payments on a series of offered certificates, no other assets will be available to make those payments. Additionally, certain amounts on deposit from time to time in certain funds or accounts constituting part of a trust fund may be withdrawn under certain conditions, as described in the related prospectus supplement, for purposes other than the payment of principal of or interest on the related series of certificates. If so provided in the prospectus supplement for a series of certificates consisting of one or more classes of subordinate certificates, if losses or shortfalls in collections have occurred with respect to any distribution date, all or a portion of the amount of these losses or shortfalls will be borne first by one or more classes of the subordinate certificates, and, thereafter, by the remaining classes of certificates in the priority and manner and subject to the limitations specified in the prospectus supplement. PREPAYMENTS OF THE MORTGAGE ASSETS WILL AFFECT THE TIMING OF YOUR CASH FLOW AND MAY AFFECT YOUR YIELD As a result of, among other things, prepayments on the mortgage loans in any trust fund, the amount and timing of distributions of principal and/or interest on the offered certificates of the related series may be highly unpredictable. Prepayments on the mortgage loans in any trust fund will result in a faster rate of principal payments on one or more classes of the related series of certificates than if payments on those mortgage loans were made as scheduled. Thus, the prepayment experience on the mortgage loans in a trust fund may affect the average life of one or more classes of offered certificates of the related series. The rate of principal payments on pools of mortgage loans varies among pools and from time to time is influenced by a variety of economic, demographic, geographic, social, tax, legal and other factors. For example, if prevailing interest rates fall significantly below the mortgage interest rates of the mortgage loans included in a trust fund, then, subject to, among other things, the particular terms of the mortgage loans and the ability of borrowers to get new financing, principal prepayments on those mortgage loans are likely to be higher than if prevailing interest rates remain at or above the rates on those mortgage loans. Conversely, if prevailing interest rates rise significantly above the mortgage interest rates of the mortgage loans included in a trust fund, then principal prepayments on those mortgage loans are likely to be lower than if prevailing interest rates remain at or below the rates on those mortgage loans. We cannot assure you as to the actual rate of prepayment on the mortgage loans in any trust fund or that the rate of prepayment will conform to any model described in this prospectus or in any prospectus supplement. As a result, depending on the anticipated rate of prepayment for the mortgage loans in any trust fund, the retirement of any class of certificates of the related series could occur significantly earlier or later than expected. The extent to which prepayments on the mortgage loans in any trust fund ultimately affect the average life of your certificates will depend on the terms of your certificates. o A class of certificates that entitles the holders of those certificates to a disproportionately large share of the prepayments on the mortgage loans in the related trust fund increases the "call risk" or the likelihood of early retirement of that class if the rate of prepayment is relatively fast; and o A class of certificates that entitles the holders of the certificates to a disproportionately small share of the prepayments on the mortgage loans in the related trust fund increases the likelihood of "extension risk" or an extended average life of that class if the rate of prepayment is relatively slow. As described in the related prospectus supplement, the respective entitlements of the various classes of certificate of any series to receive payments, especially prepayments, of principal of the mortgage loans in the related trust fund may vary based on the occurrence of certain events such 10 as the retirement of one or more classes of certificates of that series, or subject to certain contingencies such as the rate of prepayments and defaults with respect to those mortgage loans. A series of certificates may include one or more controlled amortization classes, which will entitle you to receive principal distributions according to a specified principal payment schedule. Although prepayment risk cannot be eliminated entirely for any class of certificates, a controlled amortization class will generally provide a relatively stable cash flow so long as the actual rate of prepayment on the mortgage loans in the related trust fund remains relatively constant at the rate, or within the range of rates, of prepayment used to establish the specific principal payment schedule for those certificates. Prepayment risk with respect to a given pool of mortgage assets does not disappear, however, and the stability afforded to a controlled amortization class comes at the expense of one or more companion classes of the same series, any of which companion classes may also be a class of offered certificates. In general, and as more specifically described in the related prospectus supplement, a companion class may entitle you to a disproportionately large share of prepayments on the mortgage loans in the related trust fund when the rate of prepayment is relatively fast, or may entitle you to a disproportionately small share of prepayments on the mortgage loans in the related trust fund when the rate of prepayment is relatively slow. As described in the related prospectus supplement, a companion class absorbs some (but not all) of the "call risk" and/or "extension risk" that would otherwise belong to the related controlled amortization class if all payments of principal of the mortgage loans in the related trust fund were allocated on a pro rata basis. A series of certificates may include one or more classes of offered certificates offered at a premium or discount. Yields on those classes of certificates will be sensitive, and in some cases extremely sensitive, to prepayments on the mortgage loans in the related trust fund. Where the amount of interest payable with respect to a class is disproportionately large, as compared to the amount of principal, as with certain classes of interest-only certificates, you might fail to recover your original investment under some prepayment scenarios. The extent to which the yield to maturity of any class of offered certificates may vary from the anticipated yield will depend upon the degree to which they are purchased at a discount or premium and the amount and timing of distributions on those certificates. You should consider, in the case of any offered certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on the mortgage loans could result in an actual yield that is lower than the anticipated yield and, in the case of any offered certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments could result in an actual yield that is lower than the anticipated yield. See "Yield and Maturity Considerations" in this prospectus. RATINGS DO NOT GUARANTEE PAYMENT AND DO NOT ADDRESS PREPAYMENT RISKS Any rating assigned to a class of offered certificates by a rating agency will only reflect its assessment of the probability that you will receive payments to which you are entitled. This rating will not constitute an assessment of the probability that: o principal prepayments on the related mortgage loans will be made; o the degree to which the rate of prepayments might differ from the rate of prepayments that was originally anticipated; or o the likelihood of early optional termination of the related trust fund. Furthermore, the rating will not address the possibility that prepayment of the related mortgage loans at a higher or lower rate than you anticipated may cause you to experience a lower than anticipated yield or that if you purchase a certificate at a significant premium you might fail to recover your initial investment under certain prepayment scenarios. The amount, type and nature of credit support, if any, provided with respect to a series of certificates will be determined on the basis of criteria established by each rating agency rating classes of the certificates of that series. These criteria are sometimes based upon analysis of the 11 behavior of mortgage loans in a larger group. However, we cannot assure you that the historical data supporting that analysis will accurately reflect future experience, or that the data derived from a large pool of mortgage loans will accurately predict the delinquency, foreclosure or loss experience of any particular pool of mortgage loans. In other cases, the criteria may be based upon determinations of the values of the mortgaged properties that provide security for the mortgage loans in the related trust fund. However, we cannot assure you that those values will not decline in the future. See "Description of Credit Support" and "Rating" in this prospectus. COMMERCIAL AND MULTIFAMILY MORTGAGE LOANS HAVE RISKS THAT MAY AFFECT PAYMENTS ON YOUR CERTIFICATES A description of risks associated with investments in mortgage loans is included under "Certain Legal Aspects of Mortgage Loans" in this prospectus. Commercial and multifamily lending generally exposes the lender to a greater risk of loss than one- to-four-family residential lending. Commercial and multifamily lending typically involves larger loans to single borrowers or groups of related borrowers than residential one-to four-family mortgage loans. Further, the repayment of loans secured by income producing properties is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced (for example, if leases are not obtained or renewed), the borrower's ability to repay the loan may be impaired. Commercial and multifamily real estate can be affected significantly by the supply and demand in the market for the type of property securing the loan and, therefore, may be subject to adverse economic conditions. Market values may vary as a result of economic events or governmental regulations outside the control of the borrower or lender that impact the cash flow of the property. For example, some laws, such as the Americans with Disabilities Act, may require modifications to properties, and rent control laws may limit rent collections in the case of multifamily properties. A number of the mortgage loans may be secured by liens on owner-occupied mortgaged properties or on mortgaged properties leased to a single tenant or a small number of significant tenants. Accordingly, a decline in the financial condition of the borrower or a significant tenant, as applicable, may have a disproportionately greater effect on the net operating income from those mortgaged properties than would be the case with respect to mortgaged properties with multiple tenants. Furthermore, the value of any mortgaged property may be adversely affected by risks generally incident to interests in real property, including: o Changes in general or local economic conditions and/or specific industry segments; o Declines in real estate values; o Declines in rental or occupancy rates; o Increases in interest rates, real estate tax rates and other operating expenses; o Changes in governmental rules, regulations and fiscal policies, including environmental legislation; o Acts of God; and o Other factors beyond the control of a master servicer or special servicer. The type and use of a particular mortgaged property may present additional risk. For instance: o Mortgaged properties that operate as hospitals and nursing homes may present special risks to lenders due to the significant governmental regulation of the ownership, operation, maintenance and financing of health care institutions. o Hotel and motel properties are often operated pursuant to franchise, management or operating agreements that may be terminable by the franchisor or operator. Moreover, the transferability of a hotel's operating, liquor and other licenses upon a transfer of the hotel, whether through purchase or foreclosure, is subject to local law requirements. 12 o The ability of a borrower to repay a mortgage loan secured by shares allocable to one or more cooperative dwelling units may depend on the ability of the dwelling units to generate sufficient rental income, which may be subject to rent control or stabilization laws, to cover both debt service on the loan as well as maintenance charges to the cooperative. Further, a mortgage loan secured by cooperative shares is subordinate to the mortgage, if any, on the cooperative apartment building. The economic performance of mortgage loans that are secured by full service hotels, limited service hotels, hotels associated with national franchise chains, hotels associated with regional franchise chains and hotels that are not affiliated with any franchise chain but may have their own brand identity, are affected by various factors, including: o Adverse economic and social conditions, either local, regional or national (which may limit the amount that can be charged for a room and reduce occupancy levels); o Construction of competing hotels or resorts; o Continuing expenditures for modernizing, refurbishing, and maintaining existing facilities prior to the expiration of their anticipated useful lives; o Deterioration in the financial strength or managerial capabilities of the owner and operator of a hotel; and o Changes in travel patterns caused by changes in access, energy prices, strikes, relocation of highways, the construction of additional highways or other factors. Additionally, the hotel and lodging industry is generally seasonal in nature and this seasonality can be expected to cause periodic fluctuations in room and other revenues, occupancy levels, room rates and operating expenses. The demand for particular accommodations may also be affected by changes in travel patterns caused by changes in energy prices, strikes, relocation of highways, the construction of additional highways and other factors. The viability of any hotel property that is the franchisee of a national or regional chain depends in part on the continued existence and financial strength of the franchisor, the public perception of the franchise service mark and the duration of the franchise licensing agreements. The transferability of franchise license agreements may be restricted and, in the event of a foreclosure on that hotel property, the property would not have the right to use the franchise license without the franchisor's consent. Conversely, a lender may be unable to remove a franchisor that it desires to replace following a foreclosure. Further, in the event of a foreclosure on a hotel property, it is unlikely that the trustee (or servicer or special servicer) or purchaser of that hotel property would be entitled to the rights under any existing liquor license for that hotel property. It is more likely that those persons would have to apply for new licenses. We cannot assure you that a new license could be obtained or that it could be obtained promptly. Other multifamily properties, hotels, retail properties, office buildings, mobile home parks, nursing homes and self-storage facilities located in the areas of the mortgaged properties compete with the mortgaged properties to attract residents and customers. The leasing of real estate is highly competitive. The principal means of competition are price, location and the nature and condition of the facility to be leased. A borrower under a mortgage loan competes with all lessors and developers of comparable types of real estate in the area in which the mortgaged property is located. Those lessors or developers could have lower rentals, lower operating costs, more favorable locations or better facilities. While a borrower under a mortgage loan may renovate, refurbish or expand the mortgaged property to maintain it and remain competitive, that renovation, refurbishment or expansion may itself entail significant risk. Increased competition could adversely affect income from and market value of the mortgaged properties. In addition, the business conducted at each mortgaged property may face competition from other industries and industry segments. It is anticipated that some or all of the mortgage loans included in any trust fund will be nonrecourse loans or loans for which recourse may be restricted or unenforceable. As to that 13 mortgage loan, recourse in the event of borrower default will be limited to the specific real property and other assets, if any, that were pledged to secure the mortgage loan. However, even with respect to those mortgage loans that provide for recourse against the borrower and its assets generally, we cannot assure you that enforcement of those recourse provisions will be practicable, or that the assets of the borrower will be sufficient to permit a recovery in respect of a defaulted mortgage loan in excess of the liquidation value of the related mortgaged property. See "Certain Legal Aspects of Mortgage Loans--Foreclosure" in this prospectus. Further, the concentration of default, foreclosure and loss risks in individual mortgage loans in a particular trust fund will generally be greater than for pools of single-family loans because mortgage loans in a trust fund will generally consist of a smaller number of higher balance loans than would a pool of single-family loans of comparable aggregate unpaid principal balance. BORROWERS MAY BE UNABLE TO MAKE BALLOON PAYMENTS Certain of the mortgage loans included in a trust fund may be non-amortizing or only partially amortizing over their terms to maturity and, thus, will require substantial principal payments (that is, balloon payments) at their stated maturity. Mortgage loans of this type involve a greater degree of risk than self-amortizing loans because the ability of a borrower to make a balloon payment typically will depend upon its ability either to refinance the loan or to sell the related mortgaged property. The ability of a borrower to accomplish either of these goals will be affected by: o The value of the related mortgaged property; o The level of available mortgage interest rates at the time of sale or refinancing; o The borrower's equity in the related mortgaged property; o The financial condition and operating history of the borrower and the related mortgaged property; o Tax laws and rent control laws, with respect to certain residential properties; o Medicaid and Medicare reimbursement rates, with respect to hospitals and nursing homes; o Prevailing general economic conditions; and o The availability of credit for loans secured by multifamily or commercial real properties generally. Neither the depositor nor any of its affiliates will be required to refinance any mortgage loan. If described in this prospectus and in the related prospectus supplement, to maximize recoveries on defaulted mortgage loans, the master servicer or a special servicer may, within prescribed limits, extend and modify mortgage loans that are in default or as to which a payment default is reasonably foreseeable. While a master servicer or a special servicer generally will be required to determine that any extension or modification is reasonably likely to produce a greater recovery, taking into account the time value of money, than liquidation, we cannot assure you that any extension or modification will in fact increase the present value of receipts from or proceeds of the affected mortgage loans. CREDIT SUPPORT MAY NOT COVER LOSSES The prospectus supplement for a series of certificates will describe any credit support provided for those certificates. Any use of credit support will be subject to the conditions and limitations described in this prospectus and in the related prospectus supplement, and may not cover all potential losses or risks. For example, it may or may not cover fraud or negligence by a mortgage loan originator or other parties. 14 A series of certificates may include one or more classes of subordinate certificates, if so provided in the related prospectus supplement. Although subordination is intended to reduce the risk to holders of senior certificates of delinquent distributions or ultimate losses, the amount of subordination will be limited and may decline under certain circumstances described in the related prospectus supplement. In addition, if principal payments on one or more classes of certificates of a series are made in a specified order of priority, any limits with respect to the aggregate amount of claims under any related credit support may be exhausted before the principal of the later paid classes of certificates of that series has been repaid in full. As a result, the impact of losses and shortfalls experienced with respect to the mortgage assets may fall primarily upon those subordinate classes of certificates. Moreover, if a form of credit support covers more than one series of certificates, holders of certificates of one series will be subject to the risk that the credit support will be exhausted by the claims of the holders of certificates of one or more other series. The amount of any applicable credit support supporting one or more classes of offered certificates, including the subordination of one or more classes of certificates, will be determined on the basis of criteria established by each rating agency rating those classes of certificates. Such criteria will be based on an assumed level of defaults, delinquencies and losses on the underlying mortgage assets and certain other factors. However, we cannot assure you that the default, delinquency or loss experience on the related mortgage assets will not exceed the assumed levels. See "--Ratings Do Not Guarantee Payment and Do Not Address Prepayment Risk," "Description of the Certificates" and "Description of Credit Support" in this prospectus. ASSIGNMENT OF LEASES AND RENTS MAY BE LIMITED BY STATE LAW Each mortgage loan included in any trust fund secured by mortgaged property that is subject to leases typically will be secured by an assignment of leases and rents pursuant to which the borrower assigns to the lender its right, title and interest as landlord under the leases of the related mortgaged property, and the income derived from those leases, as further security for the related mortgage loan, while retaining a license to collect rents for so long as there is no default. If the borrower defaults, the license terminates and the lender is entitled to collect rents. Some state laws may require that the lender take possession of the mortgaged property and obtain a judicial appointment of a receiver before becoming entitled to collect the rents. In addition, if bankruptcy or similar proceedings are commenced by or in respect of the borrower, the lender's ability to collect the rents may be adversely affected. See "Certain Legal Aspects of Mortgage Loans--Leases and Rents" in this prospectus. FAILURE TO COMPLY WITH ENVIRONMENTAL LAW MAY RESULT IN ADDITIONAL LOSSES Under federal law and the laws of certain states, contamination of real property may give rise to a lien on the property to assure or reimburse the costs of cleanup. In several states, that lien has priority over an existing mortgage lien on that property. In addition, under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be liable for the costs of removal or remediation of hazardous substances or toxic substances on, in or beneath the property. This liability may be imposed without regard to whether the owner knew of, or was responsible for, the presence of those hazardous or toxic substances. The costs of any required remediation and the owner or operator's liability for them as to any property are generally not limited under these laws, ordinances and regulations and could exceed the value of the mortgaged property and the aggregate assets of the owner or operator. In addition, as to the owners or operators of mortgaged properties that generate hazardous substances that are disposed of at "off-site" locations, the owners or operators may be held strictly, jointly and severally liable if there are releases or threatened releases of hazardous substances at the off-site locations where that person's hazardous substances were disposed. Under some environmental laws, such as the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, as well as some state laws, a 15 secured lender (such as the trust) may be liable as an "owner" or "operator" for the costs of dealing with hazardous substances affecting a borrower's or neighboring property, if agents or employees of the lender have participated in the management of the borrower's property. This liability could exist even if a previous owner caused the environmental damage. The trust's potential exposure to liability for cleanup costs may increase if the trust actually takes possession of a borrower's property, or control of its day-to-day operations, as for example through the appointment of a receiver. See "Certain Legal Aspects of the Mortgage Loans--Environmental Risks" in this prospectus. HAZARD INSURANCE MAY BE INSUFFICIENT TO COVER ALL LOSSES ON MORTGAGED PROPERTIES Unless otherwise specified in a prospectus supplement, the master servicer for the related trust fund will be required to cause the borrower on each mortgage loan in that trust fund to maintain the insurance coverage in respect of the related mortgaged property required under the related mortgage, including hazard insurance. The master servicer may satisfy its obligation to cause hazard insurance to be maintained with respect to any mortgaged property through acquisition of a blanket policy. POOR PROPERTY MANAGEMENT MAY ADVERSELY AFFECT THE PERFORMANCE OF THE RELATED MORTGAGED PROPERTY The successful operation of a real estate project also depends upon the performance and viability of the property manager. Properties deriving revenues primarily from short-term sources generally are more management intensive than properties leased to creditworthy tenants under long-term leases. The property manager is generally responsible for: o operating the properties; o providing building services; o establishing and implementing the rental structure; o managing operating expenses; o responding to changes in the local market; and o advising the mortgagor with respect to maintenance and capital improvements. Property managers may not be in a financial condition to fulfill their management responsibilities. Certain of the mortgaged properties are managed by affiliates of the applicable mortgagor. If a mortgage loan is in default or undergoing special servicing, such relationship could disrupt the management of the underlying property. This may adversely affect cash flow. However, the mortgage loans generally permit the lender to remove the property manager upon the occurrence of an event of default, a decline in cash flow below a specified level or the failure to satisfy some other specified performance trigger. ONE ACTION JURISDICTION MAY LIMIT THE ABILITY OF THE SERVICER TO FORECLOSE ON A MORTGAGED PROPERTY Several states (including California) have laws that prohibit more than one "one action" to enforce a mortgage obligation, and some courts have construed the term "one action" broadly. The special servicer may need to obtain advice of counsel prior to enforcing any of the trust fund's rights under any of the mortgage loans that include mortgaged properties where the rule could be applicable. In the case of a mortgage loan secured by mortgaged properties located in multiple states, the special servicer may be required to foreclose first on properties located in states where 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. 16 RIGHTS AGAINST TENANTS MAY BE LIMITED IF LEASES ARE NOT SUBORDINATE TO MORTGAGE OR DO NOT CONTAIN ATTORNMENT PROVISIONS Some of the tenant leases contain provisions that require the tenant to attorn to (that is, recognize as landlord under the lease) a successor owner of the property following foreclosure. Some of the leases may be either subordinate to the liens created by the mortgage loans or else contain a provision that requires the tenant to subordinate the lease if the mortgagee agrees to enter into a non-disturbance agreement. In some states, if tenant leases are subordinate to the liens created by the mortgage loans and such leases do not contain attornment provisions, such leases may terminate upon the transfer of the property to a foreclosing lender or purchaser at foreclosure. Accordingly, in the case of the foreclosure of a mortgaged property located in such a state and leased to one or more desirable tenants under leases that do not contain attornment provisions, such mortgaged property could experience a further decline in value if such tenants' leases were terminated (e.g., if such tenants were paying above-market rents). If a mortgage is subordinate to a lease, the lender will not (unless it has otherwise agreed with the tenant) possess the right to dispossess the tenant upon foreclosure of the property, and if the lease contains provisions inconsistent with the mortgage (e.g., provisions relating to application of insurance proceeds or condemnation awards), the provisions of the lease will take precedence over the provisions of the mortgage. IF MORTGAGED PROPERTIES ARE NOT IN COMPLIANCE WITH CURRENT ZONING LAWS RESTORATION FOLLOWING A CASUALTY LOSS MAY BE LIMITED Due to changes in applicable building and zoning ordinances and codes which have come into effect after the construction of improvements on certain of the mortgaged properties, some improvements may not comply fully with current zoning laws (including density, use, parking and set-back requirements) but qualify as permitted non-conforming uses. Such changes may limit the ability of the related mortgagor to rebuild the premises "as is" in the event of a substantial casualty loss. Such limitations may adversely affect the ability of the mortgagor to meet its mortgage loan obligations from cash flow. Insurance proceeds may not be sufficient to pay off such mortgage loan in full. In addition, if the mortgaged property were to be repaired or restored in conformity with then current law, its value could be less than the remaining balance on the mortgage loan and it may produce less revenue than before such repair or restoration. INSPECTIONS OF THE MORTGAGED PROPERTIES WILL BE LIMITED The mortgaged properties will generally be inspected by licensed engineers at the time the mortgage loans will be originated to assess the structure, exterior walls, roofing interior construction, mechanical and electrical systems and general condition of the site, buildings and other improvements located on the mortgaged properties. There can be no assurance that all conditions requiring repair or replacement will be identified in such inspections. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT MAY RESULT IN ADDITIONAL LOSSES 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 the mortgaged properties do not comply with the act, the mortgagors may be required to incur costs to comply with the act. In addition, noncompliance could result in the imposition of fines by the federal government or an award of damages to private litigants. LITIGATION CONCERNS There may be legal proceedings pending and, from time to time, threatened against the mortgagors or their affiliates relating to the business of or arising out of the ordinary course of business of the mortgagors and their affiliates. There can be no assurance that such litigation will not have a material adverse effect on the distributions to certificateholders. 17 PROPERTY INSURANCE In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements of the property by: o fire; o lightning; o explosion; o smoke; o windstorm and hail; and o riot, strike and civil commotion. Each subject to the conditions and exclusions specified in each policy. The policies covering the mortgaged properties will be underwritten by different insurers under different state laws, and therefore will not contain identical terms and conditions. However, most policies do not typically cover any physical damage resulting from war, revolution, governmental actions, floods and other water-related causes, earth movement, including earthquakes, landslides and mudflows, wet or dry rot, vermin, domestic animals and certain other kinds of risks. Unless the related mortgage specifically requires the mortgagor to insure against physical damage arising from those causes, those losses may be borne, at least in part, by the holders of one or more classes of offered certificates of the related series, to the extent they are not covered by any available credit support. See "Description of the Pooling Agreements--Hazard Insurance Policies" in this prospectus. SOME CERTIFICATES MAY NOT BE APPROPRIATE FOR BENEFIT PLANS Generally, ERISA applies to investments made by employee benefit plans and transactions involving the assets of those plans. Even if ERISA does not apply, similar prohibited transaction rules may apply under Section 4975 of the Internal Revenue Code or materially similar federal, state or local laws. Due to the complexity of regulations that govern those plans, if you are subject to ERISA or Section 4975 of the Internal Revenue Code or to any materially similar federal, state or local law, you are urged to consult your own counsel regarding consequences under ERISA, the Internal Revenue Code or such other similar law of acquisition, ownership and disposition of the offered certificates of any series. See "Certain ERISA Considerations" in this prospectus. CERTAIN FEDERAL TAX CONSIDERATIONS REGARDING RESIDUAL CERTIFICATES If you hold certain classes of certificates that constitute a residual interest in a "real estate mortgage investment conduit" for federal income tax purposes, you will be required to report on your federal income tax returns as ordinary income your pro rata share of the taxable income of the REMIC, regardless of the amount or timing of your receipt of cash payments, as described in "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates" in this prospectus. Accordingly, under certain circumstances, if you hold residual certificates you may have taxable income and tax liabilities arising from your investment during a taxable year in excess of the cash received during that period. The requirement to report your pro rata share of the taxable income and net loss of the REMIC will continue until the principal balances of all classes of certificates of the related series have been reduced to zero, even though you, as a holder of residual certificates, have received full payment of your stated interest and principal. A portion, or, in certain circumstances, all, of your share of the REMIC taxable income may be treated as "excess inclusion" income to you, which: o generally, will not be subject to offset by losses from other activities; o if you are a tax-exempt holder, will be treated as unrelated business taxable income; and o if you are a foreign holder, will not qualify for exemption from withholding tax. 18 If you are an individual and you hold a class of residual certificates, you may be limited in your ability to deduct servicing fees and other expenses of the REMIC. In addition, classes of residual certificates are subject to certain restrictions on transfer. Because of the special tax treatment of classes of residual certificates, the taxable income arising in a given year on a class of residual certificates will not be equal to the taxable income associated with investment in a corporate bond or stripped instrument having similar cash flow characteristics and pre-tax yield. As a result, the after-tax yield on the classes of residual certificates may be significantly less than that of a corporate bond or stripped instrument having similar cash flow characteristics. CERTAIN FEDERAL TAX CONSIDERATIONS REGARDING ORIGINAL ISSUE DISCOUNT Certain classes of certificates of a series may be issued with "original issue discount" for federal income tax purposes, which generally will result in recognition of some taxable income in advance of the receipt of cash attributable to that income. See "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates--Taxation of Regular Certificates" in this prospectus. BANKRUPTCY PROCEEDINGS COULD ADVERSELY AFFECT PAYMENTS ON YOUR CERTIFICATES Under the federal bankruptcy code, the filing of a petition in bankruptcy by or against a borrower will stay the sale of the mortgaged property owned by that borrower, as well as the commencement or continuation of a foreclosure action. In addition, even if a court determines that the value of the mortgaged property is less than the principal balance of the mortgage loan it secures, the court may prevent a lender from foreclosing on the mortgaged property, subject to certain protections available to the lender. As part of a restructuring plan, a court also may reduce the amount of secured indebtedness to the then-current value of the mortgaged property. This action would make the lender a general unsecured creditor for the difference between the then-current value and the amount of its outstanding mortgage indebtedness. A bankruptcy court also may: o grant a debtor a reasonable time to cure a payment default on a mortgage loan; o reduce monthly payments due under a mortgage loan; o change the rate of interest due on a mortgage loan; or o otherwise alter the mortgage loan's repayment schedule. Moreover, the filing of a petition in bankruptcy by, or on behalf of, a junior lienholder may stay the senior lienholder from taking action to foreclose on the junior lien. Additionally, the borrower's trustee or the borrower, as debtor-in-possession, has certain special powers to avoid, subordinate or disallow debts. In certain circumstances, the claims of the trustee may be subordinated to financing obtained by a debtor-in-possession subsequent to its bankruptcy. Under the federal bankruptcy code, the lender will be stayed from enforcing a borrower's assignment of rents and leases. The bankruptcy code also may interfere with the trustee's ability to enforce lockbox requirements. The legal proceedings necessary to resolve these issues can be time consuming and costly and may significantly delay or diminish the receipt of rents. Rents also may escape an assignment to the extent they are used by the borrower to maintain the mortgaged property or for other court authorized expenses. As a result of the foregoing, the trustee's recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the aggregate amount ultimately collected may be substantially less than the amount owed. BOOK-ENTRY SYSTEM FOR CERTAIN CLASSES MAY DECREASE LIQUIDITY AND DELAY PAYMENT If so provided in the related prospectus supplement, one or more classes of the offered certificates of any series will be issued as book-entry certificates. Each class of book-entry 19 certificates will be initially represented by one or more certificates registered in the name of a nominee for The Depository Trust Company, or DTC. Since transactions in the classes of book-entry certificates of any series generally can be effected only through The Depository Trust Company, and its participating organizations: o the liquidity of book-entry certificates in secondary trading market that may develop may be limited because investors may be unwilling to purchase certificates for which they cannot obtain physical certificates; o your ability to pledge certificates to persons or entities that do not participate in the DTC system, or otherwise to take action in respect of the certificates, may be limited due to lack of a physical security representing the certificates; o your access to information regarding the certificates may be limited since conveyance of notices and other communications by The Depository Trust Company to its participating organizations, and directly and indirectly through those participating organizations to you, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect at that time; and o you may experience some delay in receiving distributions of interest and principal on your certificates because distributions will be made by the trustee to DTC and DTC will then be required to credit those distributions to the accounts of its participating organizations and only then will they be credited to your account either directly or indirectly through DTC's participating organizations. See "Description of the Certificates--Book-Entry Registration and Definitive Certificates" in this prospectus. DELINQUENT AND NON-PERFORMING MORTGAGE LOANS COULD ADVERSELY AFFECT PAYMENTS ON YOUR CERTIFICATES If so provided in the related prospectus supplement, the trust fund for a particular series of certificates may include mortgage loans that are past due. In no event will the mortgage loans that are past due comprise 20 percent or more of the trust fund at the time the mortgage loans are transferred to the trust fund. None of the mortgage loans will be non-performing (i.e., more than 90 days delinquent or in foreclosure) at the time the mortgage loans are transferred by the Depositor to a trust fund for a series. If so specified in the related prospectus supplement, a special servicer may perform the servicing of delinquent mortgage loans or mortgage loans that become non-performing after the time they are transferred to a trust fund. Credit support provided with respect to a particular series of certificates may not cover all losses related to those delinquent or non-performing mortgage loans. You should consider the risk that the inclusion of those mortgage loans in the trust fund may adversely affect the rate of defaults and prepayments on the mortgage assets in the trust fund and the yield on your certificates of that series. See "Description of the Trust Funds--Mortgage Loans--General" in this prospectus. 20 DESCRIPTION OF THE TRUST FUNDS GENERAL The primary assets of each trust fund will consist of: 1. various types of multifamily or commercial mortgage loans, 2. mortgage participations, pass-through certificates or other mortgage-backed securities ("MBS") that evidence interests in, or that are secured by pledges of, one or more of various types of multifamily or commercial mortgage loans, or 3. a combination of mortgage loans and MBS. J.P. Morgan Chase Commercial Mortgage Securities Corp. (the "Depositor") will establish each trust fund. Each mortgage asset will be selected by the Depositor for inclusion in a trust fund from among those purchased, either directly or indirectly, from a prior holder of the mortgage asset (a "Mortgage Asset Seller"), which prior holder may or may not be the originator of that mortgage loan or the issuer of that MBS and may be our affiliate. The mortgage assets will not be guaranteed or insured by the Depositor or any of its affiliates or, unless otherwise provided in the related prospectus supplement, by any governmental agency or instrumentality or by any other person. The discussion under the heading "--Mortgage Loans" below, unless otherwise noted, applies equally to mortgage loans underlying any MBS included in a particular trust fund. MORTGAGE LOANS General. The mortgage loans will be evidenced by promissory notes (the "Mortgage Notes") secured by mortgages, deeds of trust or similar security instruments (the "Mortgages") that create liens on fee or leasehold estates in properties (the "Mortgaged Properties") consisting of o Residential properties consisting of five or more rental or cooperatively-owned dwelling units in high-rise, mid-rise or garden apartment buildings or other residential structures; or o Office buildings, retail stores and establishments, hotels or motels, nursing homes, assisted living facilities, continuum care facilities, day care centers, schools, hospitals or other healthcare related facilities, mobile home parks, warehouse facilities, mini-warehouse facilities, self-storage facilities, distribution centers, transportation centers, industrial plants, parking facilities, entertainment and/or recreation facilities, mixed use properties and/or unimproved land. The multifamily properties may include mixed commercial and residential structures, apartment buildings owned by private cooperative housing corporations ("Cooperatives"), and shares of the Cooperative allocable to one or more dwelling units occupied by non-owner tenants or to vacant units. Each Mortgage will create a first priority or junior priority mortgage lien on a borrower's fee estate in a Mortgaged Property. If a Mortgage creates a lien on a borrower's leasehold estate in a property, then, unless otherwise specified in the related prospectus supplement, the term of that leasehold will exceed the term of the Mortgage Note by at least two years. Unless otherwise specified in the related prospectus supplement, a person other than the Depositor will have originated each mortgage loan, and the originator may be or may have been an affiliate of the Depositor. If so specified in the related prospectus supplement, mortgage assets for a series of certificates may include mortgage loans made on the security of real estate projects under construction. In that case, the related prospectus supplement will describe the procedures and timing for making disbursements from construction reserve funds as portions of the related real estate project are completed. In addition, the mortgage assets for a particular series of 21 certificates may include mortgage loans that are delinquent or non-performing as of the date those certificates are issued. In that case, the related prospectus supplement will set forth, as to those mortgage loans, available information as to the period of the delinquency or non-performance of those loans, any forbearance arrangement then in effect, the condition of the related Mortgaged Property and the ability of the Mortgaged Property to generate income to service the mortgage debt. Default and Loss Considerations with Respect to the Mortgage Loans. Mortgage loans secured by liens on income-producing properties are substantially different from loans made on the security of owner-occupied single-family homes. The repayment of a loan secured by a lien on an income-producing property is typically dependent upon the successful operation of that property (that is, its ability to generate income). Moreover, some or all of the mortgage loans included in a particular trust fund may be non-recourse loans, which means that, absent special facts, recourse in the case of default will be limited to the Mortgaged Property and those other assets, if any, that were pledged to secure repayment of the mortgage loan. Lenders typically look to the Debt Service Coverage Ratio of a loan secured by income-producing property as an important factor in evaluating the risk of default on that loan. Unless otherwise defined in the related prospectus supplement, the "Debt Service Coverage Ratio" of a mortgage loan at any given time is the ratio of (1) the Net Operating Income derived from the related Mortgaged Property for a twelve-month period to (2) the annualized scheduled payments on the mortgage loan and any other loans senior thereto that are secured by the related Mortgaged Property. Unless otherwise defined in the related prospectus supplement, "Net Operating Income" means, for any given period, the total operating revenues derived from a Mortgaged Property during that period, minus the total operating expenses incurred in respect of that Mortgaged Property during that period other than: o non-cash items such as depreciation and amortization, o capital expenditures, and o debt service on the related mortgage loan or on any other loans that are secured by that Mortgaged Property. The Net Operating Income of a Mortgaged Property will fluctuate over time and may or may not be sufficient to cover debt service on the related mortgage loan at any given time. As the primary source of the operating revenues of a non-owner occupied, income-producing property, rental income (and, with respect to a mortgage loan secured by a Cooperative apartment building, maintenance payments from tenant-stockholders of a Cooperative) may be affected by the condition of the applicable real estate market and/or area economy. In addition, properties typically leased, occupied or used on a short-term basis, such as certain healthcare-related facilities, hotels and motels, and mini-warehouse and self-storage facilities, tend to be affected more rapidly by changes in market or business conditions than do properties typically leased for longer periods, such as warehouses, retail stores, office buildings and industrial plants. Commercial properties may be owner-occupied or leased to a small number of tenants. Thus, the Net Operating Income of a commercial property may depend substantially on the financial condition of the borrower or a tenant, and mortgage loans secured by liens on those properties may pose greater risks than loans secured by liens on multifamily properties or on multi-tenant commercial properties. Increases in operating expenses due to the general economic climate or economic conditions in a locality or industry segment, such as increases in interest rates, real estate tax rates, energy costs, labor costs and other operating expenses, and/or to changes in governmental rules, regulations and fiscal policies, may also affect the risk of default on a mortgage loan. As may be further described in the related prospectus supplement, in some cases leases of Mortgaged Properties may provide that the lessee, rather than the borrower/landlord, is responsible for payment of operating expenses ("Net Leases"). However, the existence of these "net of expense" 22 provisions will result in stable Net Operating Income to the borrower/landlord only to the extent that the lessee is able to absorb operating expense increases while continuing to make rent payments. Lenders also look to the Loan-to-Value Ratio of a mortgage loan as a factor in evaluating risk of loss if a property must be liquidated following a default. Unless otherwise defined in the related prospectus supplement, the "Loan-to-Value Ratio" of a mortgage loan at any given time is the ratio (expressed as a percentage) of o the then outstanding principal balance of the mortgage loan and any other loans senior thereto that are secured by the related Mortgaged Property to o the Value of the related Mortgaged Property. The "Value" of a Mortgaged Property is generally its fair market value determined in an appraisal obtained by the originator at the origination of that loan. The lower the Loan-to-Value Ratio, the greater the percentage of the borrower's equity in a Mortgaged Property, and thus (a) the greater the incentive of the borrower to perform under the terms of the related mortgage loan (in order to protect its equity); and (b) the greater the cushion provided to the lender against loss on liquidation following a default. Loan-to-Value Ratios will not necessarily constitute an accurate measure of the risk of liquidation loss in a pool of mortgage loans. For example, the value of a Mortgaged Property as of the date of initial issuance of the related series of certificates may be less than the Value determined at loan origination, and will likely continue to fluctuate from time to time based upon changes in economic conditions, the real estate market and other factors described in this prospectus. Moreover, even when current, an appraisal is not necessarily a reliable estimate of value. Appraised values of income-producing properties are generally based on: o the market comparison method (which compares recent resale value of comparable properties at the date of the appraisal), o the cost replacement method which calculates the cost of replacing the property at that date, o the income capitalization method which projects value based upon the property's projected net cash flow, or o upon a selection from or interpolation of the values derived from those methods. Each of these appraisal methods can present analytical difficulties. It is often difficult to find truly comparable properties that have recently been sold; the replacement cost of a property may have little to do with its current market value; and income capitalization is inherently based on inexact projections of income and expense and the selection of an appropriate capitalization rate and discount rate. Where more than one of these appraisal methods are used and provide significantly different results, an accurate determination of value and, correspondingly, a reliable analysis of default and loss risks, is even more difficult. While we believe that the foregoing considerations are important factors that generally distinguish loans secured by liens on income-producing real estate from single-family mortgage loans, we cannot assure you that all of these factors will in fact have been prudently considered by the originators of the mortgage loans, or that, for a particular mortgage loan, they are complete or relevant. See "Risk Factors--Commercial and Multifamily Mortgage Loans Have Risks that May Affect Payments on Your Certificates" and "--Borrowers May Be Unable to Make Balloon Payments" in this prospectus. Payment Provisions of the Mortgage Loans. In general, each mortgage loan: o will provide for scheduled payments of principal, interest or both, to be made on specified dates ("Due Dates") that occur monthly, quarterly, semi-annually or annually, 23 o may provide for no accrual of interest or for accrual of interest at an interest rate that is fixed over its term or that adjusts from time to time, or that may be converted at the borrower's election from an adjustable to a fixed interest rate, or from a fixed to an adjustable interest rate, o may provide for level payments to maturity or for payments that adjust from time to time to accommodate changes in the interest rate or to reflect the occurrence of certain events, and may permit negative amortization, o may be fully amortizing or partially amortizing or non-amortizing, with a balloon payment due on its stated maturity date, and o may prohibit over its term or for a certain period prepayments (the period of that prohibition, a "Lock-out Period" and its date of expiration, a "Lock-out Date") and/or require payment of a premium or a yield maintenance penalty (a "Prepayment Premium") in connection with certain prepayments, in each case as described in the related prospectus supplement. A mortgage loan may also contain a provision that entitles the lender to a share of appreciation of the related Mortgaged Property, or profits realized from the operation or disposition of that Mortgaged Property or the benefit, if any, resulting from the refinancing of the mortgage loan (this provision, an "Equity Participation"), as described in the related prospectus supplement. If holders of any class or classes of offered certificates of a series will be entitled to all or a portion of an Equity Participation in addition to payments of interest on and/or principal of those offered certificates, the related prospectus supplement will describe the Equity Participation and the method or methods by which distributions will be made to holders of those certificates. Mortgage Loan Information in Prospectus Supplements. Each prospectus supplement will contain certain information pertaining to the mortgage loans in the related trust fund, which will generally be current as of a date specified in the related prospectus supplement and which, to the extent then applicable and specifically known to the Depositor, will include the following: o the aggregate outstanding principal balance and the largest, smallest and average outstanding principal balance of the mortgage loans, o the type or types of property that provide security for repayment of the mortgage loans, o the earliest and latest origination date and maturity date of the mortgage loans, o the original and remaining terms to maturity of the mortgage loans, or the respective ranges of remaining terms to maturity, and the weighted average original and remaining terms to maturity of the mortgage loans, o the original Loan-to-Value Ratios of the mortgage loans, or the range of the Loan-to-Value Ratios, and the weighted average original Loan-to-Value Ratio of the mortgage loans, o the interest rates borne by the mortgage loans, or range of the interest rates, and the weighted average interest rate borne by the mortgage loans, o with respect to mortgage loans with adjustable mortgage interest rates ("ARM Loans"), the index or indices upon which those adjustments are based, the adjustment dates, the range of gross margins and the weighted average gross margin, and any limits on mortgage interest rate adjustments at the time of any adjustment and over the life of the ARM Loan, o information regarding the payment characteristics of the mortgage loans, including, without limitation, balloon payment and other amortization provisions, Lock-out Periods and Prepayment Premiums, 24 o the Debt Service Coverage Ratios of the mortgage loans (either at origination or as of a more recent date), or the range of the Debt Service Coverage Ratios, and the weighted average of the Debt Service Coverage Ratios, and o the geographic distribution of the Mortgaged Properties on a state-by-state basis. In appropriate cases, the related prospectus supplement will also contain certain information available to the Depositor that pertains to the provisions of leases and the nature of tenants of the Mortgaged Properties. If we are unable to tabulate the specific information described above at the time offered certificates of a series are initially offered, we will provide more general information of the nature described above in the related prospectus supplement, and specific information will be set forth in a report which we will make available to purchasers of those certificates at or before the initial issuance of the certificates and will be filed as part of a Current Report on Form 8-K with the Securities and Exchange Commission within fifteen days following that issuance. MBS MBS may include: o private (that is, not guaranteed or insured by the United States or any agency or instrumentality of the United States) mortgage participations, mortgage pass-through certificates or other mortgage-backed securities or o certificates insured or guaranteed by the Federal Home Loan Mortgage Corporation ("FHLMC"), the Federal National Mortgage Association ("FNMA"), the Governmental National Mortgage Association ("GNMA") or the Federal Agricultural Mortgage Corporation ("FAMC") provided that, unless otherwise specified in the related prospectus supplement, each MBS will evidence an interest in, or will be secured by a pledge of, mortgage loans that conform to the descriptions of the mortgage loans contained in this prospectus. Any MBS will have been issued pursuant to a participation and servicing agreement, a pooling and servicing agreement, an indenture or similar agreement (an "MBS Agreement"). The issuer of the MBS (the "MBS Issuer") and/or the servicer of the underlying mortgage loans (the "MBS Servicer") will have entered into the MBS Agreement, generally with a trustee (the "MBS Trustee") or, in the alternative, with the original purchaser or purchasers of the MBS. The MBS may have been issued in one or more classes with characteristics similar to the classes of certificates described in this prospectus. The MBS Issuer, the MBS Servicer or the MBS Trustee will make distributions in respect of the MBS on the dates specified in the related prospectus supplement. The MBS Issuer or the MBS Servicer or another person specified in the related prospectus supplement may have the right or obligation to repurchase or substitute assets underlying the MBS after a certain date or under other circumstances specified in the related prospectus supplement. Reserve funds, subordination or other credit support similar to that described for the certificates under "Description of Credit Support" may have been provided with respect to the MBS. The type, characteristics and amount of credit support, if any, will be a function of the characteristics of the underlying mortgage loans and other factors and generally will have been established on the basis of the requirements of any rating agency that may have assigned a rating to the MBS, or by the initial purchasers of the MBS. The prospectus supplement for a series of certificates that evidence interests in MBS will specify, to the extent available: o the aggregate approximate initial and outstanding principal amount and type of the MBS to be included in the trust fund, o the original and remaining term to stated maturity of the MBS, if applicable, 25 o the pass-through or bond rate of the MBS or the formula for determining the rates, o the payment characteristics of the MBS, o the MBS Issuer, MBS Servicer and MBS Trustee, as applicable, o a description of the credit support, if any, o the circumstances under which the related underlying mortgage loans, or the MBS themselves, may be purchased prior to their maturity, o the terms on which mortgage loans may be substituted for those originally underlying the MBS, o the type of mortgage loans underlying the MBS and, to the extent available to the Depositor and appropriate under the circumstances, the other information in respect of the underlying mortgage loans described under "--Mortgage Loans--Mortgage Loan Information in Prospectus Supplements" above, and o the characteristics of any cash flow agreements that relate to the MBS. CERTIFICATE ACCOUNTS Each trust fund will include one or more certificate accounts established and maintained on behalf of the certificateholders into which the person or persons designated in the related prospectus supplement will, to the extent described in this prospectus and in that prospectus supplement, deposit all payments and collections received or advanced with respect to the mortgage assets and other assets in the trust fund. A certificate account may be maintained as an interest bearing or a non-interest bearing account, and funds held in a certificate account may be held as cash or invested in certain obligations acceptable to each rating agency rating one or more classes of the related series of offered certificates. CREDIT SUPPORT If so provided in the prospectus supplement for a series of certificates, partial or full protection against certain defaults and losses on the mortgage assets in the related trust fund may be provided to one or more classes of certificates of that series in the form of subordination of one or more other classes of certificates of that series or by one or more other types of credit support, such as letters of credit, overcollateralization, insurance policies, guarantees, surety bonds or reserve funds, or a combination of them. The amount and types of credit support, the identification of the entity providing it (if applicable) and related information with respect to each type of credit support, if any, will be set forth in the prospectus supplement for a series of certificates. See "Risk Factors--Credit Support May Not Cover Losses" and "Description of Credit Support" in this prospectus. CASH FLOW AGREEMENTS If so provided in the prospectus supplement for a series of certificates, the related trust fund may include guaranteed investment contracts pursuant to which moneys held in the funds and accounts established for those series will be invested at a specified rate. The trust fund may also include interest rate exchange agreements, interest rate cap or floor agreements, or currency exchange agreements, which agreements are designed to reduce the effects of interest rate or currency exchange rate fluctuations on the mortgage assets on one or more classes of certificates. The principal terms of a guaranteed investment contract or other agreement (any of these agreements, a "Cash Flow Agreement"), and the identity of the Cash Flow Agreement obligor, will be described in the prospectus supplement for a series of certificates. 26 YIELD AND MATURITY CONSIDERATIONS GENERAL The yield on any offered certificate will depend on the price you paid, the fixed, variable or adjustable pass-through interest rate of the certificate and the amount and timing of distributions on the certificate. See "Risk Factors--Prepayment of the Mortgage Assets will Affect the Timing of Your Cash Flow and May Affect Your Yield" in this prospectus. The following discussion contemplates a trust fund that consists solely of mortgage loans. While the characteristics and behavior of mortgage loans underlying an MBS can generally be expected to have the same effect on the yield to maturity and/or weighted average life of a class of certificates as will the characteristics and behavior of comparable mortgage loans, the effect may differ due to the payment characteristics of the MBS. If a trust fund includes MBS, the related prospectus supplement will discuss the effect that the MBS payment characteristics may have on the yield to maturity and weighted average lives of the offered certificates of the related series. PASS-THROUGH RATE The certificates of any class within a series may have a fixed, variable or adjustable pass-through interest rate, which may or may not be based upon the interest rates borne by the mortgage loans in the related trust fund. The prospectus supplement with respect to any series of certificates will specify the pass-through interest rate for each class of offered certificates of that series or, in the case of a class of offered certificates with a variable or adjustable pass-through interest rate, the method of determining the pass-through interest rate; the effect, if any, of the prepayment of any mortgage loan on the pass-through interest rate of one or more classes of offered certificates; and whether the distributions of interest on the offered certificates of any class will be dependent, in whole or in part, on the performance of any obligor under a Cash Flow Agreement. PAYMENT DELAYS With respect to any series of certificates, a period of time will elapse between the date upon which payments on the mortgage loans in the related trust fund are due and the distribution date on which those payments are passed through to certificateholders. That delay will effectively reduce the yield that would otherwise be produced if payments on those mortgage loans were distributed to certificateholders on or near the date they were due. CERTAIN SHORTFALLS IN COLLECTIONS OF INTEREST When a principal prepayment in full or in part is made on a mortgage loan, the borrower is generally charged interest on the amount of that prepayment only through the date of prepayment, instead of through the Due Date for the next succeeding scheduled payment. However, interest accrued on any series of certificates and distributable on them on any distribution date will generally correspond to interest accrued on the mortgage loans to their respective Due Dates during the related Due Period. Unless otherwise specified in the prospectus supplement for a series of certificates, a "Due Period" is a specified time period generally corresponding in length to the time period between distribution dates, and all scheduled payments on the mortgage loans in the related trust fund that are due during a given Due Period will, to the extent received by a specified date (the "Determination Date") or otherwise advanced by the related master servicer or other specified person, be distributed to the holders of the certificates of that series on the next succeeding distribution date. Consequently, if a prepayment on any mortgage loan is distributable to certificateholders on a particular distribution date, but that prepayment is not accompanied by interest on it to the Due Date for that mortgage loan in the related Due Period, then the interest charged to the borrower (net of servicing and administrative fees) may be less (that shortfall, a "Prepayment Interest Shortfall") than the corresponding amount of interest accrued and otherwise payable on the certificates of the 27 related series. If that shortfall is allocated to a class of offered certificates, their yield will be adversely affected. The prospectus supplement for each series of certificates will describe the manner in which those shortfalls will be allocated among the classes of those certificates. If so specified in the prospectus supplement for a series of certificates, the master servicer for that series will be required to apply some or all of its servicing compensation for the corresponding period to offset the amount of those shortfalls. The related prospectus supplement will also describe any other amounts available to offset those shortfalls. See "Description of the Pooling Agreements--Servicing Compensation and Payment of Expenses" in this prospectus. YIELD AND PREPAYMENT CONSIDERATIONS A certificate's yield to maturity will be affected by the rate of principal payments on the mortgage loans in the related trust fund and the allocation of principal to reduce the principal balance (or notional amount, if applicable) of that certificate. The rate of principal payments on the mortgage loans in any trust fund will in turn be affected by the amortization schedules of the mortgage loans (which, in the case of ARM Loans, may change periodically to accommodate adjustments to their mortgage interest rates), the dates on which any balloon payments are due, and the rate of principal prepayments on them (including for this purpose, prepayments resulting from liquidations of mortgage loans due to defaults, casualties or condemnations affecting the Mortgaged Properties, or purchases of mortgage loans out of the related trust fund). Because the rate of principal prepayments on the mortgage loans in any trust fund will depend on future events and a variety of factors (as described more fully below), we cannot assure you as to that rate. The extent to which the yield to maturity of a class of offered certificates of any series may vary from the anticipated yield will depend upon the degree to which they are purchased at a discount or premium and when, and to what degree, payments of principal on the mortgage loans in the related trust fund are in turn distributed on those certificates, or, in the case of a class of interest-only certificates, result in the reduction of its notional amount. An investor should consider, in the case of any offered certificate purchased at a discount, the risk that a slower than anticipated rate of principal payments on the mortgage loans in the related trust fund could result in an actual yield to that investor that is lower than the anticipated yield and, in the case of any offered certificate purchased at a premium, the risk that a faster than anticipated rate of principal payments on those mortgage loans could result in an actual yield to that investor that is lower than the anticipated yield. In addition, if an investor purchases an offered certificate at a discount (or premium), and principal payments are made in reduction of the principal balance or notional amount of that investor's offered certificates at a rate slower (or faster) than the rate anticipated by the investor during any particular period, the consequent adverse effects on that investor's yield would not be fully offset by a subsequent like increase (or decrease) in the rate of principal payments. A class of certificates, including a class of offered certificates, may provide that on any distribution date the holders of those certificates are entitled to a pro rata share of the prepayments on the mortgage loans in the related trust fund that are distributable on that date, to a disproportionately large share (which, in some cases, may be all) of those prepayments, or to a disproportionately small share (which, in some cases, may be none) of those prepayments. As described in the related prospectus supplement, the respective entitlements of the various classes of certificates of any series to receive distributions in respect of payments (and, in particular, prepayments) of principal of the mortgage loans in the related trust fund may vary based on the occurrence of certain events, such as, the retirement of one or more classes of certificates of that series, or subject to certain contingencies, such as, prepayment and default rates with respect to those mortgage loans. In general, the notional amount of a class of interest-only certificates will either (1) be based on the principal balances of some or all of the mortgage assets in the related trust fund or (2) equal the principal balances of one or more of the other classes of certificates of the same series. Accordingly, the yield on those interest-only certificates will be inversely related to the rate 28 at which payments and other collections of principal are received on those mortgage assets or distributions are made in reduction of the principal balances of those classes of certificates, as the case may be. Consistent with the foregoing, if a class of certificates of any series consists of interest-only certificates or principal-only certificates, a lower than anticipated rate of principal prepayments on the mortgage loans in the related trust fund will negatively affect the yield to investors in principal-only certificates, and a higher than anticipated rate of principal prepayments on those mortgage loans will negatively affect the yield to investors in interest-only certificates. If the offered certificates of a series include those certificates, the related prospectus supplement will include a table showing the effect of various assumed levels of prepayment on yields on those certificates. Those tables will be intended to illustrate the sensitivity of yields to various assumed prepayment rates and will not be intended to predict, or to provide information that will enable investors to predict, yields or prepayment rates. We are not aware of any relevant publicly available or authoritative statistics with respect to the historical prepayment experience of a group of multifamily or commercial mortgage loans. However, the extent of prepayments of principal of the mortgage loans in any trust fund may be affected by factors such as: o the availability of mortgage credit, o the relative economic vitality of the area in which the Mortgaged Properties are located, o the quality of management of the Mortgaged Properties, o the servicing of the mortgage loans, o possible changes in tax laws and other opportunities for investment, o the existence of Lock-out Periods, o requirements that principal prepayments be accompanied by Prepayment Premiums, and o by the extent to which these provisions may be practicably enforced. The rate of prepayment on a pool of mortgage loans is also affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. When the prevailing market interest rate is below a mortgage loan's interest rate, a borrower may have an increased incentive to refinance its mortgage loan. Even in the case of ARM Loans, as prevailing market interest rates decline, and without regard to whether the mortgage interest rates on the ARM Loans decline in a manner consistent therewith, the related borrowers may have an increased incentive to refinance for purposes of either (1) converting to a fixed rate loan and thereby "locking in" that rate or (2) taking advantage of a different index, margin or rate cap or floor on another adjustable rate mortgage loan. Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some borrowers may sell Mortgaged Properties in order to realize their equity in the Mortgaged Properties, to meet cash flow needs or to make other investments. In addition, some borrowers may be motivated by federal and state tax laws (which are subject to change) to sell Mortgaged Properties prior to the exhaustion of tax depreciation benefits. We will make no representation as to the particular factors that will affect the prepayment of the mortgage loans in any trust fund, as to the relative importance of those factors, as to the percentage of the principal balance of the mortgage loans that will be paid as of any date or as to the overall rate of prepayment on the mortgage loans. WEIGHTED AVERAGE LIFE AND MATURITY The rate at which principal payments are received on the mortgage loans in any trust fund will affect the ultimate maturity and the weighted average life of one or more classes of the 29 certificates of that series. Weighted average life refers to the average amount of time that will elapse from the date of issuance of an instrument until each dollar allocable as principal of that instrument is repaid to the investor. The weighted average life and maturity of a class of certificates of any series will be influenced by the rate at which principal on the related mortgage loans, whether in the form of scheduled amortization or prepayments (for this purpose, the term "prepayment" includes voluntary prepayments, liquidations due to default and purchases of mortgage loans out of the related trust fund), is paid to that class. Prepayment rates on loans are commonly measured relative to a prepayment standard or model, such as the Constant Prepayment Rate ("CPR") prepayment model or the Standard Prepayment Assumption ("SPA") prepayment model. CPR represents an assumed constant rate of prepayment each month (expressed as an annual percentage) relative to the then outstanding principal balance of a pool of loans for the life of those loans. SPA represents an assumed variable rate of prepayment each month (expressed as an annual percentage) relative to the then outstanding principal balance of a pool of loans, with different prepayment assumptions often expressed as percentages of SPA. For example, a prepayment assumption of 100% of SPA assumes prepayment rates of 0.2% per annum of the then outstanding principal balance of the loans in the first month of the life of the loans and an additional 0.2% per annum in each month thereafter until the thirtieth month. Beginning in the thirtieth month, and in each month thereafter during the life of the loans, 100% of SPA assumes a constant prepayment rate of 6% per annum each month. Neither CPR nor SPA nor any other prepayment model or assumption purports to be a historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any particular pool of loans. Moreover, the CPR and SPA models were developed based upon historical prepayment experience for single-family loans. Thus, it is unlikely that the prepayment experience of the mortgage loans included in any trust fund will conform to any particular level of CPR or SPA. The prospectus supplement with respect to each series of certificates will contain tables, if applicable, setting forth the projected weighted average life of each class of offered certificates of those series and the percentage of the initial principal balance of each class that would be outstanding on specified distribution dates based on the assumptions stated in that prospectus supplement, including assumptions that prepayments on the related mortgage loans are made at rates corresponding to various percentages of CPR or SPA, or at other rates specified in that prospectus supplement. Those tables and assumptions will illustrate the sensitivity of the weighted average lives of the certificates to various assumed prepayment rates and will not be intended to predict, or to provide information that will enable investors to predict, the actual weighted average lives of the certificates. CONTROLLED AMORTIZATION CLASSES AND COMPANION CLASSES A series of certificates may include one or more controlled amortization classes, which will entitle the holders of those certificates to receive principal distributions according to a specified principal payment schedule, which schedule is supported by creating priorities, as described in the related prospectus supplement, to receive principal payments from the mortgage loans in the related trust fund. Unless otherwise specified in the related prospectus supplement, each controlled amortization class will either be a planned amortization class or a targeted amortization class. In general, a planned amortization class has a "prepayment collar," that is, a range of prepayment rates that can be sustained without disruption, that determines the principal cash flow of those certificates. That prepayment collar is not static, and may expand or contract after the issuance of the planned amortization class depending on the actual prepayment experience for the underlying mortgage loans. Distributions of principal on a planned amortization class would be made in accordance with the specified schedule so long as prepayments on the underlying mortgage loans remain at a relatively constant rate within the prepayment collar and, as described below, companion classes exist to absorb "excesses" or "shortfalls" in principal payments on the underlying mortgage loans. If the rate of prepayment 30 on the underlying mortgage loans from time to time falls outside the prepayment collar, or fluctuates significantly within the prepayment collar, especially for any extended period of time, that event may have material consequences in respect of the anticipated weighted average life and maturity for a planned amortization class. A targeted amortization class is structured so that principal distributions generally will be payable on it in accordance with its specified principal payments schedule so long as the rate of prepayments on the related mortgage assets remains relatively constant at the particular rate used in establishing that schedule. A targeted amortization class will generally afford the holders of those certificates some protection against early retirement or some protection against an extended average life, but not both. Although prepayment risk cannot be eliminated entirely for any class of certificates, a controlled amortization class will generally provide a relatively stable cash flow so long as the actual rate of prepayment on the mortgage loans in the related trust fund remains relatively constant at the rate, or within the range of rates, of prepayment used to establish the specific principal payment schedule for those certificates. Prepayment risk with respect to a given pool of mortgage assets does not disappear, however, and the stability afforded to a controlled amortization class comes at the expense of one or more companion classes of the same series, any of which companion classes may also be a class of offered certificates. In general, and as more particularly described in the related prospectus supplement, a companion class will entitle the holders of those certificates to a disproportionately large share of prepayments on the mortgage loans in the related trust fund when the rate of prepayment is relatively fast, and will entitle the holders of those certificates to a disproportionately small share of prepayments on the mortgage loans in the related trust fund when the rate of prepayment is relatively slow. A class of certificates that entitles the holders of those certificates to a disproportionately large share of the prepayments on the mortgage loans in the related trust fund enhances the risk of early retirement of that class, or call risk, if the rate of prepayment is relatively fast; while a class of certificates that entitles the holders of those certificates to a disproportionately small share of the prepayments on the mortgage loans in the related trust fund enhances the risk of an extended average life of that class, or extension risk, if the rate of prepayment is relatively slow. Thus, as described in the related prospectus supplement, a companion class absorbs some (but not all) of the "call risk" and/or "extension risk" that would otherwise belong to the related controlled amortization class if all payments of principal of the mortgage loans in the related trust fund were allocated on a pro rata basis. OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY Balloon Payments; Extensions of Maturity. Some or all of the mortgage loans included in a particular trust fund may require that balloon payments be made at maturity. Because the ability of a borrower to make a balloon payment typically will depend upon its ability either to refinance the loan or to sell the related Mortgaged Property, there is a risk that mortgage loans that require balloon payments may default at maturity, or that the maturity of that mortgage loan may be extended in connection with a workout. In the case of defaults, recovery of proceeds may be delayed by, among other things, bankruptcy of the borrower or adverse conditions in the market where the property is located. In order to minimize losses on defaulted mortgage loans, the master servicer or a special servicer, to the extent and under the circumstances set forth in this prospectus and in the related prospectus supplement, may be authorized to modify mortgage loans that are in default or as to which a payment default is imminent. Any defaulted balloon payment or modification that extends the maturity of a mortgage loan may delay distributions of principal on a class of offered certificates and thereby extend the weighted average life of your certificates and, if those certificates were purchased at a discount, reduce your yield. Negative Amortization. The weighted average life of a class of certificates can be affected by mortgage loans that permit negative amortization to occur. A mortgage loan that provides for the payment of interest calculated at a rate lower than the rate at which interest accrues on it would be expected during a period of increasing interest rates to amortize at a slower rate (and 31 perhaps not at all) than if interest rates were declining or were remaining constant. This slower rate of mortgage loan amortization would correspondingly be reflected in a slower rate of amortization for one or more classes of certificates of the related series. In addition, negative amortization on one or more mortgage loans in any trust fund may result in negative amortization on the certificates of the related series. The related prospectus supplement will describe, if applicable, the manner in which negative amortization in respect of the mortgage loans in any trust fund is allocated among the respective classes of certificates of the related series. The portion of any mortgage loan negative amortization allocated to a class of certificates may result in a deferral of some or all of the interest payable on them, which deferred interest may be added to the principal balance of the certificates. Accordingly, the weighted average lives of mortgage loans that permit negative amortization and that of the classes of certificates to which the negative amortization would be allocated or that would bear the effects of a slower rate of amortization on those mortgage loans, may increase as a result of that feature. Negative amortization also may occur in respect of an ARM Loan that limits the amount by which its scheduled payment may adjust in response to a change in its mortgage interest rate, provides that its scheduled payment will adjust less frequently than its mortgage interest rate or provides for constant scheduled payments notwithstanding adjustments to its mortgage interest rate. Accordingly, during a period of declining interest rates, the scheduled payment on that mortgage loan may exceed the amount necessary to amortize the loan fully over its remaining amortization schedule and pay interest at the then applicable mortgage interest rate, thereby resulting in the accelerated amortization of that mortgage loan. This acceleration in amortization of its principal balance will shorten the weighted average life of that mortgage loan and, correspondingly, the weighted average lives of those classes of certificates entitled to a portion of the principal payments on that mortgage loan. The extent to which the yield on any offered certificate will be affected by the inclusion in the related trust fund of mortgage loans that permit negative amortization, will depend upon (1) whether that offered certificate was purchased at a premium or a discount and (2) the extent to which the payment characteristics of those mortgage loans delay or accelerate the distributions of principal on that certificate or, in the case of an interest-only certificate, delay or accelerate the amortization of the notional amount of that certificate. See "--Yield and Prepayment Considerations" above. Foreclosures and Payment Plans. The number of foreclosures and the principal amount of the mortgage loans that are foreclosed in relation to the number and principal amount of mortgage loans that are repaid in accordance with their terms will affect the weighted average lives of those mortgage loans and, accordingly, the weighted average lives of and yields on the certificates of the related series. Servicing decisions made with respect to the mortgage loans, including the use of payment plans prior to a demand for acceleration and the restructuring of mortgage loans in bankruptcy proceedings, may also have an effect upon the payment patterns of particular mortgage loans and thus the weighted average lives of and yields on the certificates of the related series. Losses and Shortfalls on the Mortgage Assets. The yield on your certificates will directly depend on the extent to which you are required to bear the effects of any losses or shortfalls in collections arising out of defaults on the mortgage loans in the related trust fund and the timing of those losses and shortfalls. In general, the earlier that any loss or shortfall occurs, the greater will be the negative effect on yield for any class of certificates that is required to bear the effects of the shortfall. The amount of any losses or shortfalls in collections on the mortgage assets in any trust fund, to the extent not covered or offset by draws on any reserve fund or under any instrument of credit support, will be allocated among the respective classes of certificates of the related series in the priority and manner, and subject to the limitations, specified in the related prospectus supplement. As described in the related prospectus supplement, those allocations may be effected by a reduction in the entitlements to interest and/or principal balances of one or more classes of certificates, or by establishing a priority of payments among those classes of certificates. 32 The yield to maturity on a class of Subordinate Certificates may be extremely sensitive to losses and shortfalls in collections on the mortgage loans in the related trust fund. Additional Certificate Amortization. In addition to entitling the holders of one or more classes of a series of certificates to a specified portion, which may during specified periods range from none to all, of the principal payments received on the mortgage assets in the related trust fund, one or more classes of certificates of any series, including one or more classes of offered certificates of those series, may provide for distributions of principal of those certificates from: 1. amounts attributable to interest accrued but not currently distributable on one or more classes of accrual certificates, 2. Excess Funds, or 3. any other amounts described in the related prospectus supplement. Unless otherwise specified in the related prospectus supplement, "Excess Funds" will, in general, represent that portion of the amounts distributable in respect of the certificates of any series on any distribution date that represent (1) interest received or advanced on the mortgage assets in the related trust fund that is in excess of the interest currently accrued on the certificates of that series, or (2) Prepayment Premiums, payments from Equity Participations or any other amounts received on the mortgage assets in the related trust fund that do not constitute interest on, or principal of, those certificates. The amortization of any class of certificates out of the sources described in the preceding paragraph would shorten the weighted average life of those certificates and, if those certificates were purchased at a premium, reduce the yield on those certificates. The related prospectus supplement will discuss the relevant factors to be considered in determining whether distributions of principal of any class of certificates out of those sources would have any material effect on the rate at which those certificates are amortized. Optional Early Termination. If so specified in the related prospectus supplement, a series of certificates may be subject to optional early termination through the repurchase of the mortgage assets in the related trust fund by the party or parties specified in the related prospectus supplement, under the circumstances and in the manner set forth in the prospectus supplement. If so provided in the related prospectus supplement, upon the reduction of the principal balance of a specified class or classes of certificates by a specified percentage or amount, the specified party may be authorized or required to solicit bids for the purchase of all of the mortgage assets of the related trust fund, or of a sufficient portion of those mortgage assets to retire that class or classes, as set forth in the related prospectus supplement. In the absence of other factors, any early retirement of a class of offered certificates would shorten the weighted average life of those certificates and, if those certificates were purchased at premium, reduce the yield on those certificates. THE DEPOSITOR J.P. Morgan Chase Commercial Mortgage Securities Corp., the Depositor, is a Delaware corporation organized on September 19, 1994. The Depositor is a wholly owned subsidiary of JPMorgan Chase Bank, a New York banking corporation, which is a wholly owned subsidiary of J.P. Morgan Chase & Co., a Delaware corporation. The Depositor maintains its principal office at 270 Park Avenue, New York, New York 10017. Its telephone number is (212) 834-9299. The Depositor does not have, nor is it expected in the future to have, any significant assets. USE OF PROCEEDS We will apply the net proceeds to be received from the sale of the certificates of any series to the purchase of Trust Assets or use the net proceeds for general corporate purposes. We expect to sell the certificates from time to time, but the timing and amount of offerings of certificates will depend on a number of factors, including the volume of mortgage assets we have acquired, prevailing interest rates, availability of funds and general market conditions. 33 DESCRIPTION OF THE CERTIFICATES GENERAL Each series of certificates will represent the entire beneficial ownership interest in a trust fund. As described in the related prospectus supplement, the certificates of each series, including the offered certificates of that series, may consist of one or more classes of certificates that, among other things: o provide for the accrual of interest on the certificates at a fixed, variable or adjustable rate; o are senior (collectively, "Senior Certificates") or subordinate (collectively, "Subordinate Certificates") to one or more other classes of certificates in entitlement to certain distributions on the certificates; o are principal-only certificates entitled to distributions of principal, with disproportionately small, nominal or no distributions of interest; o are interest-only certificates entitled to distributions of interest, with disproportionately small, nominal or no distributions of principal; o provide for distributions of interest on, or principal of, those certificates that commence only after the occurrence of certain events, such as the retirement of one or more other classes of certificates of that series; o provide for distributions of principal of those certificates to be made, from time to time or for designated periods, at a rate that is faster, and, in some cases, substantially faster, or slower, and, in some cases, substantially slower, than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund; o provide for controlled distributions of principal of those certificates to be made based on a specified payment schedule or other methodology, subject to available funds; or o provide for distributions based on collections of Prepayment Premiums and Equity Participations on the mortgage assets in the related trust fund. Each class of offered certificates of a series will be issued in minimum denominations corresponding to the principal balances or, in case of certain classes of interest-only certificates or residual certificates, notional amounts or percentage interests, specified in the related prospectus supplement. As provided in the related prospectus supplement, one or more classes of offered certificates of any series may be issued in fully registered, definitive form (those certificates, "Definitive Certificates") or may be offered in book-entry format (those certificates, "Book-Entry Certificates") through the facilities of The Depository Trust Company ("DTC"). The offered certificates of each series (if issued as Definitive Certificates) may be transferred or exchanged, subject to any restrictions on transfer described in the related prospectus supplement, at the location specified in the related prospectus supplement, without the payment of any service charges, other than any tax or other governmental charge payable in connection therewith. Interests in a class of Book-Entry Certificates will be transferred on the book-entry records of DTC and its participating organizations. See "Risk Factors--Your Ability to Resell Certificates may be Limited Because of Their Characteristics" and "--Book-Entry System for Certain Classes May Decrease Liquidity and Delay Payment" in this prospectus. DISTRIBUTIONS Distributions on the certificates of each series will be made on each distribution date as specified in the related prospectus supplement from the Available Distribution Amount for that series and that distribution date. Unless otherwise provided in the related prospectus supplement, the "Available Distribution Amount" for any series of certificates and any 34 distribution date will refer to the total of all payments or other collections on or in respect of the mortgage assets and any other assets included in the related trust fund that are available for distribution to the holders of certificates of that series on that date. The particular components of the Available Distribution Amount for any series on each distribution date will be more specifically described in the related prospectus supplement. Except as otherwise specified in the related prospectus supplement, distributions on the certificates of each series, other than the final distribution in retirement of that certificate, will be made to the persons in whose names those certificates are registered at the close of business on the last business day of the month preceding the month in which the applicable distribution date occurs (the "Record Date"), and the amount of each distribution will be determined as of the close of business on the Determination Date specified in the related prospectus supplement. All distributions with respect to each class of certificates on each distribution date will be allocated pro rata among the outstanding certificates in that class. Payments will be made either by wire transfer in immediately available funds to your account at a bank or other entity having appropriate facilities for the transfer, if you have provided the person required to make those payments with wiring instructions no later than the date specified in the related prospectus supplement (and, if so provided in the related prospectus supplement, that you hold certificates in the amount or denomination specified in the prospectus supplement), or by check mailed to the address of that certificateholder as it appears on the certificate register; provided, however, that the final distribution in retirement of any class of certificates (whether Definitive Certificates or Book-Entry Certificates) will be made only upon presentation and surrender of those certificates at the location specified in the notice to certificateholders of the final distribution. DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES Each class of certificates of each series, other than certain classes of principal-only certificates and residual certificates ("Residual Certificates") that have no pass-through interest rate, may have a different pass-through interest rate, which in each case may be fixed, variable or adjustable. The related prospectus supplement will specify the pass-through interest rate or, in the case of a variable or adjustable pass-through interest rate, the method for determining the pass-through interest rate, for each class. Unless otherwise specified in the related prospectus supplement, interest on the certificates of each series will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Distributions of interest in respect of any class of certificates (other than certain classes of certificates that will be entitled to distributions of accrued interest commencing only on the distribution date, or under the circumstances specified in the related prospectus supplement ("Accrual Certificates"), and other than any class of principal-only certificates or Residual Certificates which are not entitled to distributions of interest) will be made on each distribution date based on the Accrued Certificate Interest for that class and that distribution date, subject to the sufficiency of the portion of the Available Distribution Amount allocable to that class on that distribution date. Prior to the time interest is distributable on any class of Accrual Certificates, the amount of Accrued Certificate Interest otherwise distributable on that class will be added to the principal balance of those certificates on each distribution date. With respect to each class of certificates, other than certain classes of interest-only certificates and certain classes of residual certificates, the "Accrued Certificate Interest" for each distribution date will be equal to interest at the applicable pass-through interest rate accrued for a specified time period generally corresponding in length to the time period between distribution dates, on the outstanding principal balance of that class of certificates immediately prior to that distribution date. Unless otherwise provided in the related prospectus supplement, the Accrued Certificate Interest for each distribution date on a class of interest-only certificates will be similarly calculated except that it will accrue on a notional amount that is either: 1. based on the principal balances of some or all of the mortgage assets in the related trust fund, 35 2. equal to the principal balances of one or more other classes of certificates of the same series, or 3. an amount or amounts specified in the applicable prospectus supplement. Reference to a notional amount with respect to a class of interest-only certificates is solely for convenience in making certain calculations and does not represent the right to receive any distributions of principal. If so specified in the related prospectus supplement, the amount of Accrued Certificate Interest that is otherwise distributable on, or, in the case of Accrual Certificates, that may otherwise be added to the principal balance of, one or more classes of the certificates of a series will be reduced to the extent that any Prepayment Interest Shortfalls, as described under "Yield and Maturity Considerations--Certain Shortfalls in Collections of Interest" in this prospectus, exceed the amount of any sums that are applied to offset the amount of those shortfalls. The particular manner in which those shortfalls will be allocated among some or all of the classes of certificates of that series will be specified in the related prospectus supplement. The related prospectus supplement will also describe the extent to which the amount of Accrued Certificate Interest that is otherwise distributable on (or, in the case of Accrual Certificates, that may otherwise be added to the principal balance of) a class of offered certificates may be reduced as a result of any other contingencies, including delinquencies, losses and deferred interest on or in respect of the mortgage assets in the related trust fund. Unless otherwise provided in the related prospectus supplement, any reduction in the amount of Accrued Certificate Interest otherwise distributable on a class of certificates by reason of the allocation to that class of a portion of any deferred interest on or in respect of the mortgage assets in the related trust fund will result in a corresponding increase in the principal balance of that class. See "Risk Factors--Prepayments of the Mortgage Assets will Affect the Timing of Your Cash Flow and May Affect Your Yield" and "Yield and Maturity Considerations" in this prospectus. DISTRIBUTIONS OF PRINCIPAL ON THE CERTIFICATES Each class of certificates of each series, other than certain classes of interest-only certificates and Residual Certificates, will have a principal balance which, at any time, will equal the then maximum amount that the holders of certificates of that class will be entitled to receive in respect of principal out of the future cash flow on the mortgage assets and other assets included in the related trust fund. The outstanding principal balance of a class of certificates will be reduced by distributions of principal made on the certificates from time to time and, if so provided in the related prospectus supplement, further by any losses incurred in respect of the related mortgage assets allocated thereto from time to time. In turn, the outstanding principal balance of a class of certificates may be increased as a result of any deferred interest on or in respect of the related mortgage assets being allocated to that class from time to time, and will be increased, in the case of a class of Accrual Certificates prior to the distribution date on which distributions of interest on the certificates are required to commence, by the amount of any Accrued Certificate Interest in respect of those certificates (reduced as described above). The initial principal balance of each class of a series of certificates will be specified in the related prospectus supplement. As described in the related prospectus supplement, distributions of principal with respect to a series of certificates will be made on each distribution date to the holders of the class or classes of certificates of that series entitled thereto until the principal balances of those certificates have been reduced to zero. Distributions of principal with respect to one or more classes of certificates may be made at a rate that is faster, and, in some cases, substantially faster, than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund. Distributions of principal with respect to one or more classes of certificates may not commence until the occurrence of certain events, including the retirement of one or more other classes of certificates of the same series, or may be made at a rate that is slower, and, in some cases, substantially slower, than the rate at which payments or other collections of principal are received on the mortgage assets in the related trust fund. Distributions of principal with respect to one or more classes of certificates may be made, subject to available funds, based on a specified principal payment schedule. Distributions of principal 36 with respect to one or more classes of certificates may be contingent on the specified principal payment schedule for another class of the same series and the rate at which payments and other collections of principal on the mortgage assets in the related trust fund are received. Unless otherwise specified in the related prospectus supplement, distributions of principal of any class of offered certificates will be made on a pro rata basis among all of the certificates of that class. DISTRIBUTIONS ON THE CERTIFICATES IN RESPECT OF PREPAYMENT PREMIUMS OR IN RESPECT OF EQUITY PARTICIPATIONS If so provided in the related prospectus supplement, Prepayment Premiums or payments in respect of Equity Participations received on or in connection with the mortgage assets in any trust fund will be distributed on each distribution date to the holders of the class of certificates of the related series entitled thereto in accordance with the provisions described in that prospectus supplement. ALLOCATION OF LOSSES AND SHORTFALLS The amount of any losses or shortfalls in collections on the mortgage assets in any trust fund, to the extent not covered or offset by draws on any reserve fund or under any instrument of credit support, will be allocated among the respective classes of certificates of the related series in the priority and manner, and subject to the limitations, specified in the related prospectus supplement. As described in the related prospectus supplement, those allocations may be effected by a reduction in the entitlements to interest and/or principal balances of one or more classes of certificates, or by establishing a priority of payments among the classes of certificates. ADVANCES IN RESPECT OF DELINQUENCIES If provided in the related prospectus supplement, if a trust fund includes mortgage loans, the master servicer, a special servicer, the trustee, any provider of credit support and/or any other specified person may be obligated to advance, or have the option of advancing, on or before each distribution date, from its or their own funds or from excess funds held in the related certificate account that are not part of the Available Distribution Amount for the related series of certificates for that distribution date, an amount up to the aggregate of any payments of principal, other than any balloon payments, and interest that were due on or in respect of those mortgage loans during the related Due Period and were delinquent on the related Determination Date. Advances are intended to maintain a regular flow of scheduled interest and principal payments to holders of the class or classes of certificates entitled thereto, rather than to guarantee or insure against losses. Accordingly, all advances made out of a specific entity's own funds will be reimbursable out of related recoveries on the mortgage loans, including amounts received under any instrument of credit support, respecting which those advances were made (as to any mortgage loan, "Related Proceeds") and those other specific sources as may be identified in the related prospectus supplement, including in the case of a series that includes one or more classes of Subordinate Certificates, collections on other mortgage loans in the related trust fund that would otherwise be distributable to the holders of one or more classes of those Subordinate Certificates. No advance will be required to be made by a master servicer, special servicer or trustee if, in the good faith judgment of the master servicer, special servicer or trustee, as the case may be, that advance would not be recoverable from Related Proceeds or another specifically identified source (each, a "Nonrecoverable Advance"); and, if previously made by a master servicer, special servicer or trustee, a Nonrecoverable Advance will be reimbursable to the advancing party from any amounts in the related certificate account prior to any distributions being made to the related series of certificateholders. If advances have been made by a master servicer, special servicer, trustee or other entity from excess funds in a certificate account, the advancing party will be required to replace those funds in that certificate account on any future distribution date to the extent that funds in that 37 certificate account on that distribution date are less than payments required to be made to the related series of certificateholders on that date. If so specified in the related prospectus supplement, the obligation of a master servicer, special servicer, trustee or other entity to make advances may be secured by a cash advance reserve fund or a surety bond. If applicable, information regarding the characteristics of a surety bond, and the identity of any obligor on that surety bond, will be set forth in the related prospectus supplement. If so provided in the related prospectus supplement, any entity making advances will be entitled to receive interest on those advances for the period that those advances are outstanding at the rate specified in that prospectus supplement, and that entity will be entitled to payment of that interest periodically from general collections on the mortgage loans in the related trust fund prior to any payment to the related series of certificateholders or as otherwise described in the prospectus supplement. The prospectus supplement for any series of certificates evidencing an interest in a trust fund that includes MBS will describe any comparable advancing obligation. REPORTS TO CERTIFICATEHOLDERS On each distribution date, together with the distribution to the holders of each class of the offered certificates of a series, a master servicer or trustee, as provided in the related prospectus supplement, will forward to each holder a statement (a "Distribution Date Statement") that, unless otherwise provided in the related prospectus supplement, will set forth, among other things, in each case to the extent applicable: o the amount of that distribution to holders of that class of offered certificates that was applied to reduce the principal balance of those certificates, expressed as a dollar amount per minimum denomination of the relevant class of offered certificates or per a specified portion of that minimum denomination; o the amount of that distribution to holders of that class of offered certificates that is allocable to Accrued Certificate Interest, expressed as a dollar amount per minimum denomination of the relevant class of offered certificates or per a specified portion of that minimum denomination; o the amount, if any, of that distribution to holders of that class of offered certificates that is allocable to (A) Prepayment Premiums and (B) payments on account of Equity Participations, expressed as a dollar amount per minimum denomination of the relevant class of offered certificates or per a specified portion of that minimum denomination; o the amount, if any, by which that distribution is less than the amounts to which holders of that class of offered certificates are entitled; o if the related trust fund includes mortgage loans, the aggregate amount of advances included in that distribution; o if the related trust fund includes mortgage loans, the amount of servicing compensation received by the related master servicer (and, if payable directly out of the related trust fund, by any special servicer and any sub-servicer) and other customary information as the reporting party deems necessary or desirable, or that a certificateholder reasonably requests, to enable certificateholders to prepare their tax returns; o information regarding the aggregate principal balance of the related mortgage assets on or about that distribution date; o if the related trust fund includes mortgage loans, information regarding the number and aggregate principal balance of those mortgage loans that are delinquent in varying degrees; 38 o if the related trust fund includes mortgage loans, information regarding the aggregate amount of losses incurred and principal prepayments made with respect to those mortgage loans during the specified period, generally equal in length to the time period between distribution dates, during which prepayments and other unscheduled collections on the mortgage loans in the related trust fund must be received in order to be distributed on a particular distribution date; o the principal balance or notional amount, as the case may be, of each class of certificates (including any class of certificates not offered hereby) at the close of business on that distribution date, separately identifying any reduction in that principal balance or notional amount due to the allocation of any losses in respect of the related mortgage assets, any increase in that principal balance or notional amount due to the allocation of any negative amortization in respect of the related mortgage assets and any increase in the principal balance of a class of Accrual Certificates, if any, in the event that Accrued Certificate Interest has been added to that balance; o if the class of offered certificates has a variable pass-through interest rate or an adjustable pass-through interest rate, the pass-through interest rate applicable to that class for that distribution date and, if determinable, for the next succeeding distribution date; o the amount deposited in or withdrawn from any reserve fund on that distribution date, and the amount remaining on deposit in that reserve fund as of the close of business on that distribution date; o if the related trust fund includes one or more instruments of credit support, like a letter of credit, an insurance policy and/or a surety bond, the amount of coverage under that instrument as of the close of business on that distribution date; and o to the extent not otherwise reflected through the information furnished as described above, the amount of credit support being afforded by any classes of Subordinate Certificates. The prospectus supplement for each series of certificates may describe additional information to be included in reports to the holders of the offered certificates of that series. Within a reasonable period of time after the end of each calendar year, the master servicer or trustee for a series of certificates, as the case may be, will be required to furnish to each person who at any time during the calendar year was a holder of an offered certificate of that series a statement containing the information set forth in the first three categories described above, aggregated for that calendar year or the applicable portion of that year during which that person was a certificateholder. This obligation will be deemed to have been satisfied to the extent that substantially comparable information is provided pursuant to any requirements of the Internal Revenue Code of 1986, as amended (the "Code"), as are from time to time in force. See, however, "Description of the Certificates--Book-Entry Registration and Definitive Certificates" in this prospectus. If the trust fund for a series of certificates includes MBS, the ability of the related master servicer or trustee, as the case may be, to include in any Distribution Date Statement information regarding the mortgage loans underlying that MBS will depend on the reports received with respect to that MBS. In those cases, the related prospectus supplement will describe the loan-specific information to be included in the distribution date statements that will be forwarded to the holders of the offered certificates of that series in connection with distributions made to them. VOTING RIGHTS The voting rights evidenced by each series of certificates will be allocated among the respective classes of that series in the manner described in the related prospectus supplement. 39 Certificateholders will generally not have a right to vote, except with respect to required consents to certain amendments to the agreement pursuant to which the certificates are issued and as otherwise specified in the related prospectus supplement. See "Description of the Pooling Agreements--Amendment" in this prospectus. The holders of specified amounts of certificates of a particular series will have the right to act as a group to remove the related trustee and also upon the occurrence of certain events which if continuing would constitute an event of default on the part of the related master servicer. See "Description of the Pooling Agreements--Events of Default," and "--Resignation and Removal of the Trustee" in this prospectus. TERMINATION The obligations created by the pooling and servicing or other agreement creating a series of certificates will terminate following: o the final payment or other liquidation of the last mortgage asset underlying the series or the disposition of all property acquired upon foreclosure of any mortgage loan underlying the series, and o the payment to the certificateholders of the series of all amounts required to be paid to them. Written notice of termination will be given to each certificateholder of the related series, and the final distribution will be made only upon presentation and surrender of the certificates of that series at the location to be specified in the notice of termination. If so specified in the related prospectus supplement, a series of certificates may be subject to optional early termination through the repurchase of the mortgage assets in the related trust fund by the party or parties specified in the prospectus supplement, in the manner set forth in the prospectus supplement. If so provided in the related prospectus supplement, upon the reduction of the principal balance of a specified class or classes of certificates by a specified percentage or amount, a party designated in the prospectus supplement may be authorized or required to bid for or solicit bids for the purchase of all the mortgage assets of the related trust fund, or of a sufficient portion of those mortgage assets to retire those class or classes, in the manner set forth in the prospectus supplement. BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES If so provided in the prospectus supplement for a series of certificates, one or more classes of the offered certificates of that series will be offered in book-entry format through the facilities of The Depository Trust Company, and that class will be represented by one or more global certificates registered in the name of DTC or its nominee. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking corporation" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations ("Participants") and facilitate the clearance and settlement of securities transactions between Participants through electronic computerized book-entry changes in their accounts, thereby eliminating the need for physical movement of securities certificates. "Direct Participants", which maintain accounts with DTC, include securities brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system also is available to others like banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). Purchases of Book-Entry Certificates under the DTC system must be made by or through Direct Participants, which will receive a credit for the Book-Entry Certificates on DTC's records. 40 The ownership interest of each actual purchaser of a Book-Entry Certificate (a "Certificate Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Certificate Owners will not receive written confirmation from DTC of their purchases, but Certificate Owners are expected to receive written confirmations providing details of those transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which each Certificate Owner entered into the transaction. Transfers of ownership interest in the Book-Entry Certificates are to be accomplished by entries made on the books of Participants acting on behalf of Certificate Owners. Certificate Owners will not receive certificates representing their ownership interests in the Book-Entry Certificates, except in the event that use of the book-entry system for the Book-Entry Certificates of any series is discontinued as described below. DTC has no knowledge of the actual Certificate Owners of the Book-Entry Certificates; DTC's records reflect only the identity of the Direct Participants to whose accounts those certificates are credited, which may or may not be the Certificate Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Certificate Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Distributions on the Book-Entry Certificates will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the related distribution date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on that date. Disbursement of those distributions by Participants to Certificate Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of that Participant (and not of DTC, the Depositor or any trustee or master servicer), subject to any statutory or regulatory requirements as may be in effect from time to time. Under a book-entry system, Certificate Owners may receive payments after the related distribution date. Unless otherwise provided in the related prospectus supplement, the only certificateholder of record will be the nominee of DTC, and the Certificate Owners will not be recognized as certificateholders under the agreement pursuant to which the certificates are issued. Certificate Owners will be permitted to exercise the rights of certificateholders under that agreement only indirectly through the Participants who in turn will exercise their rights through DTC. The Depositor is informed that DTC will take action permitted to be taken by a certificateholder under that agreement only at the direction of one or more Participants to whose account with DTC interests in the Book-Entry Certificates are credited. Because DTC can act only on behalf of Participants, who in turn act on behalf of Indirect Participants and certain Certificate Owners, the ability of a Certificate Owner to pledge its interest in Book-Entry Certificates to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of its interest in Book-Entry Certificates, may be limited due to the lack of a physical certificate evidencing that interest. Unless otherwise specified in the related prospectus supplement, certificates initially issued in book-entry form will be issued as Definitive Certificates to Certificate Owners or their nominees, rather than to DTC or its nominee, only if o the Depositor advises the trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to those certificates and the Depositor is unable to locate a qualified successor or o the Depositor, at its option, elects to terminate the book-entry system through DTC with respect to those certificates. Upon the occurrence of either of the events described above, DTC will be required to notify all Participants of the availability through DTC of Definitive Certificates. Upon surrender by DTC 41 of the certificate or certificates representing a class of Book-Entry Certificates, together with instructions for registration, the trustee for the related series or other designated party will be required to issue to the Certificate Owners identified in those instructions the Definitive Certificates to which they are entitled, and thereafter the holders of those Definitive Certificates will be recognized as certificateholders of record under the related agreement pursuant to which the certificates are issued. DESCRIPTION OF THE POOLING AGREEMENTS GENERAL The certificates of each series will be issued pursuant to a pooling and servicing agreement or other agreement specified in the related prospectus supplement (in either case, a "Pooling Agreement"). In general, the parties to a Pooling Agreement will include the Depositor, a trustee, a master servicer and, in some cases, a special servicer appointed as of the date of the Pooling Agreement. However, a Pooling Agreement may include a Mortgage Asset Seller as a party, and a Pooling Agreement that relates to a trust fund that consists solely of MBS may not include a master servicer or other servicer as a party. All parties to each Pooling Agreement under which certificates of a series are issued will be identified in the related prospectus supplement. If so specified in the related prospectus supplement, an affiliate of the Depositor, or the Mortgage Asset Seller or an affiliate of the Mortgage Asset Seller, may perform the functions of master servicer or special servicer. Any party to a Pooling Agreement may own certificates. A form of a Pooling Agreement has been filed as an exhibit to the Registration Statement of which this prospectus is a part. However, the provisions of each Pooling Agreement will vary depending upon the nature of the certificates to be issued and the nature of the related trust fund. The following summaries describe certain provisions that may appear in a Pooling Agreement under which certificates that evidence interests in mortgage loans will be issued. The prospectus supplement for a series of certificates will describe any provision of the related Pooling Agreement that materially differs from the description contained in this prospectus and, if the related trust fund includes MBS, will summarize all of the material provisions of the related Pooling Agreement. The summaries in this prospectus do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the Pooling Agreement for each series of certificates and the description of those provisions in the related prospectus supplement. We will provide a copy of the Pooling Agreement (without exhibits) that relates to any series of certificates without charge upon written request of a holder of a certificate of that series addressed to J.P. Morgan Chase Commercial Mortgage Securities Corp., 270 Park Avenue, New York, New York 10017, Attention: President. ASSIGNMENT OF MORTGAGE LOANS; REPURCHASES At the time of issuance of any series of certificates, we will assign (or cause to be assigned) to the designated trustee the mortgage loans to be included in the related trust fund. The trustee will, concurrently with the assignment, deliver the certificates to or at the direction of the Depositor in exchange for the mortgage loans and the other assets to be included in the trust fund for that series. Each mortgage loan will be identified in a schedule. That schedule generally will include detailed information that pertains to each mortgage loan included in the related trust fund, which information will typically include the address of the related Mortgaged Property and type of that property; the mortgage interest rate and, if applicable, the applicable index, gross margin, adjustment date and any rate cap information; the original and remaining term to maturity; the original amortization term; and the original and outstanding principal balance. With respect to each mortgage loan to be included in a trust fund, we will deliver (or cause to be delivered) to the related trustee (or to a custodian appointed by the trustee) certain loan documents which, unless otherwise specified in the related prospectus supplement, will include 42 the original Mortgage Note endorsed, without recourse, to the order of the trustee, the original Mortgage, or a certified copy, in each case with evidence of recording indicated on it and an assignment of the Mortgage to the trustee in recordable form. Unless otherwise provided in the prospectus supplement for a series of certificates, the related Pooling Agreement will require us or another party to the agreement to promptly cause each assignment of Mortgage to be recorded in the appropriate public office for real property records. The trustee (or a custodian appointed by the trustee) for a series of certificates will be required to review the mortgage loan documents delivered to it within a specified period of days after receipt of the mortgage loan documents, and the trustee (or that custodian) will hold those documents in trust for the benefit of the certificateholders of that series. Unless otherwise specified in the related prospectus supplement, if that document is found to be missing or defective, and that omission or defect, as the case may be, materially and adversely affects the interests of the certificateholders of the related series, the trustee (or that custodian) will be required to notify the master servicer and the Depositor, and one of those persons will be required to notify the relevant Mortgage Asset Seller. In that case, and if the Mortgage Asset Seller cannot deliver the document or cure the defect within a specified number of days after receipt of that notice, then, except as otherwise specified below or in the related prospectus supplement, the Mortgage Asset Seller will be obligated to repurchase the related mortgage loan from the trustee at a price that will be specified in the related prospectus supplement. If so provided in the prospectus supplement for a series of certificates, a Mortgage Asset Seller, in lieu of repurchasing a mortgage loan as to which there is missing or defective loan documentation, will have the option, exercisable upon certain conditions and/or within a specified period after initial issuance of that series of certificates, to replace those mortgage loans with one or more other mortgage loans, in accordance with standards that will be described in the prospectus supplement. Unless otherwise specified in the related prospectus supplement, this repurchase or substitution obligation will constitute the sole remedy to holders of the certificates of any series or to the related trustee on their behalf for missing or defective loan documentation and neither the Depositor nor, unless it is the Mortgage Asset Seller, the master servicer will be obligated to purchase or replace a mortgage loan if a Mortgage Asset Seller defaults on its obligation to do so. Notwithstanding the foregoing, if a document has not been delivered to the related trustee (or to a custodian appointed by the trustee) because that document has been submitted for recording, and neither that document nor a certified copy, in either case with evidence of recording on it, can be obtained because of delays on the part of the applicable recording office, then, unless otherwise specified in the related prospectus supplement, the Mortgage Asset Seller will not be required to repurchase or replace the affected mortgage loan on the basis of that missing document so long as it continues in good faith to attempt to obtain that document or that certified copy. REPRESENTATIONS AND WARRANTIES; REPURCHASES Unless otherwise provided in the prospectus supplement for a series of certificates, the Depositor will, with respect to each mortgage loan in the related trust fund, make or assign, or cause to be made or assigned, certain representations and warranties (the person making those representations and warranties, the "Warranting Party") covering, by way of example: o the accuracy of the information set forth for that mortgage loan on the schedule of mortgage loans delivered upon initial issuance of the certificates; o the enforceability of the related Mortgage Note and Mortgage and the existence of title insurance insuring the lien priority of the related Mortgage; o the Warranting Party's title to the mortgage loan and the authority of the Warranting Party to sell the mortgage loan; and o the payment status of the mortgage loan. It is expected that in most cases the Warranting Party will be the Mortgage Asset Seller; however, the Warranting Party may also be an affiliate of the Mortgage Asset Seller, the 43 Depositor or an affiliate of the Depositor, the master servicer, a special servicer or another person acceptable to the Depositor. The Warranting Party, if other than the Mortgage Asset Seller, will be identified in the related prospectus supplement. Unless otherwise provided in the related prospectus supplement, each Pooling Agreement will provide that the master servicer and/or trustee will be required to notify promptly any Warranting Party of any breach of any representation or warranty made by it in respect of a mortgage loan that materially and adversely affects the interests of the certificateholders of the related series. If that Warranting Party cannot cure that breach within a specified period following the date on which it was notified of the breach, then, unless otherwise provided in the related prospectus supplement, it will be obligated to repurchase that mortgage loan from the trustee at a price that will be specified in the related prospectus supplement. If so provided in the prospectus supplement for a series of certificates, a Warranting Party, in lieu of repurchasing a mortgage loan as to which a breach has occurred, will have the option, exercisable upon certain conditions and/or within a specified period after initial issuance of that series of certificates, to replace that mortgage loan with one or more other mortgage loans, in accordance with standards that will be described in the prospectus supplement. Unless otherwise specified in the related prospectus supplement, this repurchase or substitution obligation will constitute the sole remedy available to holders of the certificates of any series or to the related trustee on their behalf for a breach of representation and warranty by a Warranting Party and neither the Depositor nor the master servicer, in either case unless it is the Warranting Party, will be obligated to purchase or replace a mortgage loan if a Warranting Party defaults on its obligation to do so. In some cases, representations and warranties will have been made in respect of a mortgage loan as of a date prior to the date upon which the related series of certificates is issued, and thus may not address events that may occur following the date as of which they were made. However, we will not include any mortgage loan in the trust fund for any series of certificates if anything has come to our attention that would cause us to believe that the representations and warranties made in respect of that mortgage loan will not be accurate in all material respects as of the date of issuance. The date as of which the representations and warranties regarding the mortgage loans in any trust fund were made will be specified in the related prospectus supplement. COLLECTION AND OTHER SERVICING PROCEDURES The master servicer for any trust fund, directly or through sub-servicers, will be required to make reasonable efforts to collect all scheduled payments under the mortgage loans in that trust fund, and will be required to follow the same collection procedures as it would follow with respect to mortgage loans that are comparable to the mortgage loans in that trust fund and held for its own account, provided those procedures are consistent with: 1. the terms of the related Pooling Agreement and any related instrument of credit support included in that trust fund, 2. applicable law, and 3. the servicing standard specified in the related Pooling Agreement and prospectus supplement (the "Servicing Standard"). The master servicer for any trust fund, directly or through sub-servicers, will also be required to perform as to the mortgage loans in that trust fund various other customary functions of a servicer of comparable loans, including maintaining escrow or impound accounts, if required under the related Pooling Agreement, for payment of taxes, insurance premiums, ground rents and similar items, or otherwise monitoring the timely payment of those items; attempting to collect delinquent payments; supervising foreclosures; negotiating modifications; conducting property inspections on a periodic or other basis; managing (or overseeing the management of) Mortgaged Properties acquired on behalf of that trust fund through foreclosure, deed-in-lieu of foreclosure or otherwise (each, an "REO Property"); and maintaining servicing records relating to 44 those mortgage loans. Unless otherwise specified in the related prospectus supplement, the master servicer will be responsible for filing and settling claims in respect of particular mortgage loans under any applicable instrument of credit support. See "Description of Credit Support" in this prospectus. SUB-SERVICERS A master servicer may delegate its servicing obligations in respect of the mortgage loans serviced thereby to one or more third-party servicers; provided that, unless otherwise specified in the related prospectus supplement, the master servicer will remain obligated under the related Pooling Agreement. A sub-servicer for any series of certificates may be an affiliate of the Depositor or master servicer. Unless otherwise provided in the related prospectus supplement, each sub-servicing agreement between a master servicer and a sub-servicer (a "Sub-Servicing Agreement") will provide that, if for any reason the master servicer is no longer acting in that capacity, the trustee or any successor master servicer may assume the master servicer's rights and obligations under that Sub-Servicing Agreement. A master servicer will be required to monitor the performance of sub-servicers retained by it and will have the right to remove a sub-servicer retained by it at any time it considers removal to be in the best interests of certificateholders. Unless otherwise provided in the related prospectus supplement, a master servicer will be solely liable for all fees owed by it to any sub-servicer, irrespective of whether the master servicer's compensation pursuant to the related Pooling Agreement is sufficient to pay those fees. Each sub-servicer will be reimbursed by the master servicer that retained it for certain expenditures which it makes, generally to the same extent the master servicer would be reimbursed under a Pooling Agreement. See "--Certificate Account" and "--Servicing Compensation and Payment of Expenses" in this prospectus. SPECIAL SERVICERS To the extent so specified in the related prospectus supplement, one or more special servicers may be a party to the related Pooling Agreement or may be appointed by the master servicer or another specified party. A special servicer for any series of certificates may be an affiliate of the Depositor or the master servicer. A special servicer may be entitled to any of the rights, and subject to any of the obligations, described in this prospectus in respect of a master servicer. The related prospectus supplement will describe the rights, obligations and compensation of any special servicer for a particular series of certificates. The master servicer will not be liable for the performance of a special servicer. CERTIFICATE ACCOUNT General. The master servicer, the trustee and/or a special servicer will, as to each trust fund that includes mortgage loans, establish and maintain or cause to be established and maintained one or more separate accounts for the collection of payments on or in respect of those mortgage loans, which will be established so as to comply with the standards of each rating agency that has rated any one or more classes of certificates of the related series. A certificate account may be maintained as an interest-bearing or a non-interest-bearing account and the funds held in a certificate account may be invested pending each succeeding distribution date in United States government securities and other obligations that are acceptable to each rating agency that has rated any one or more classes of certificates of the related series ("Permitted Investments"). Unless otherwise provided in the related prospectus supplement, any interest or other income earned on funds in a certificate account will be paid to the related master servicer, trustee or any special servicer as additional compensation. A certificate account may be maintained with the related master servicer, special servicer or Mortgage Asset Seller or with a depository institution that is an affiliate of any of the foregoing or of the Depositor, provided that it complies with applicable rating agency standards. If permitted by the applicable rating agency or agencies and so specified in the related prospectus supplement, a certificate account may contain funds 45 relating to more than one series of mortgage pass-through certificates and may contain other funds representing payments on mortgage loans owned by the related master servicer or any special servicer or serviced by either on behalf of others. Deposits. Unless otherwise provided in the related Pooling Agreement and described in the related prospectus supplement, a master servicer, trustee or special servicer will be required to deposit or cause to be deposited in the certificate account for each trust fund that includes mortgage loans, within a certain period following receipt (in the case of collections on or in respect of the mortgage loans) or otherwise as provided in the related Pooling Agreement, the following payments and collections received or made by the master servicer, the trustee or any special servicer subsequent to the cut-off date (other than payments due on or before the cut-off date): 1. all payments on account of principal, including principal prepayments, on the mortgage loans; 2. all payments on account of interest on the mortgage loans, including any default interest collected, in each case net of any portion retained by the master servicer or any special servicer as its servicing compensation or as compensation to the trustee; 3. all proceeds received under any hazard, title or other insurance policy that provides coverage with respect to a Mortgaged Property or the related mortgage loan or in connection with the full or partial condemnation of a Mortgaged Property (other than proceeds applied to the restoration of the property or released to the related borrower in accordance with the customary servicing practices of the master servicer (or, if applicable, a special servicer) and/or the terms and conditions of the related Mortgage) (collectively, "Insurance and Condemnation Proceeds") and all other amounts received and retained in connection with the liquidation of defaulted mortgage loans or property acquired by foreclosure or otherwise ("Liquidation Proceeds"), together with the net operating income (less reasonable reserves for future expenses) derived from the operation of any Mortgaged Properties acquired by the trust fund through foreclosure or otherwise; 4. any amounts paid under any instrument or drawn from any fund that constitutes credit support for the related series of certificates as described under "Description of Credit Support" in this prospectus; 5. any advances made as described under "Description of the Certificates--Advances in Respect of Delinquencies" in this prospectus; 6. any amounts paid under any Cash Flow Agreement, as described under "Description of the Trust Funds--Cash Flow Agreements" in this prospectus; 7. all proceeds of the purchase of any mortgage loan, or property acquired in respect of a mortgage loan, by the Depositor, any Mortgage Asset Seller or any other specified person as described under "--Assignment of Mortgage Loans; Repurchases" and "--Representations and Warranties; Repurchases" in this prospectus, all proceeds of the purchase of any defaulted mortgage loan as described under "--Realization Upon Defaulted Mortgage Loans" in this prospectus, and all proceeds of any mortgage asset purchased as described under "Description of the Certificates--Termination" in this prospectus (all of the foregoing, also "Liquidation Proceeds"); 8. any amounts paid by the master servicer to cover Prepayment Interest Shortfalls arising out of the prepayment of mortgage loans as described under "--Servicing Compensation and Payment of Expenses" in this prospectus; 46 9. to the extent that this item does not constitute additional servicing compensation to the master servicer or a special servicer, any payments on account of modification or assumption fees, late payment charges, Prepayment Premiums or Equity Participations with respect to the mortgage loans; 10. all payments required to be deposited in the certificate account with respect to any deductible clause in any blanket insurance policy described under "--Hazard Insurance Policies" in this prospectus; 11. any amount required to be deposited by the master servicer or the trustee in connection with losses realized on investments for the benefit of the master servicer or the trustee, as the case may be, of funds held in the certificate account; and 12. any other amounts required to be deposited in the certificate account as provided in the related Pooling Agreement and described in the related prospectus supplement. Withdrawals. Unless otherwise provided in the related Pooling Agreement and described in the related prospectus supplement, a master servicer, trustee or special servicer may make withdrawals from the certificate account for each trust fund that includes mortgage loans for any of the following purposes: 1. to make distributions to the certificateholders on each distribution date; 2. to pay the master servicer, the trustee or a special servicer any servicing fees not previously retained by them out of payments on the particular mortgage loans as to which those fees were earned; 3. to reimburse the master servicer, a special servicer, the trustee or any other specified person for any unreimbursed amounts advanced by it as described under "Description of the Certificates--Advances in Respect of Delinquencies" in this prospectus, the reimbursement to be made out of amounts received that were identified and applied by the master servicer or a special servicer, as applicable, as late collections of interest on and principal of the particular mortgage loans with respect to which the advances were made or out of amounts drawn under any form of credit support with respect to those mortgage loans; 4. to reimburse the master servicer, the trustee or a special servicer for unpaid servicing fees earned by it and certain unreimbursed servicing expenses incurred by it with respect to mortgage loans in the trust fund and properties acquired in respect of the mortgage loans, the reimbursement to be made out of amounts that represent Liquidation Proceeds and Insurance and Condemnation Proceeds collected on the particular mortgage loans and properties, and net income collected on the particular properties, with respect to which those fees were earned or those expenses were incurred or out of amounts drawn under any form of credit support with respect to those mortgage loans and properties; 5. to reimburse the master servicer, a special servicer, the trustee or other specified person for any advances described in clause (3) above made by it and/or any servicing expenses referred to in clause (4) above incurred by it that, in the good faith judgment of the master servicer, special servicer, trustee or other specified person, as applicable, will not be recoverable from the amounts described in clauses (3) and (4), respectively, the reimbursement to be made from amounts collected on other mortgage loans in the same trust fund or, if so provided by the related Pooling Agreement and described in the related prospectus supplement, only from that portion of amounts collected on those other mortgage loans that is otherwise distributable on one or more classes of Subordinate Certificates of the related series; 47 6. if described in the related prospectus supplement, to pay the master servicer, a special servicer, the trustee or any other specified person interest accrued on the advances described in clause (3) above made by it and the servicing expenses described in clause (4) above incurred by it while they remain outstanding and unreimbursed; 7. if and as described in the related prospectus supplement, to pay for costs and expenses incurred by the trust fund for environmental site assessments performed with respect to Mortgaged Properties that constitute security for defaulted mortgage loans, and for any containment, clean-up or remediation of hazardous wastes and materials present on those Mortgaged Properties; 8. to reimburse the master servicer, the special servicer, the Depositor, or any of their respective directors, officers, employees and agents, as the case may be, for certain expenses, costs and liabilities incurred thereby, as described under "--Certain Matters Regarding the Master Servicer and the Depositor" in this prospectus; 9. if described in the related prospectus supplement, to pay the fees of trustee; 10. to reimburse the trustee or any of its directors, officers, employees and agents, as the case may be, for certain expenses, costs and liabilities incurred thereby, as described under "--Certain Matters Regarding the Trustee" in this prospectus; 11. if described in the related prospectus supplement, to pay the fees of any provider of credit support; 12. if described in the related prospectus supplement, to reimburse prior draws on any form of credit support; 13. to pay the master servicer, a special servicer or the trustee, as appropriate, interest and investment income earned in respect of amounts held in the certificate account as additional compensation; 14. to pay (generally from related income) for costs incurred in connection with the operation, management and maintenance of any Mortgaged Property acquired by the trust fund by foreclosure or otherwise; 15. if one or more elections have been made to treat the trust fund or designated portions of the trust fund as a REMIC, to pay any federal, state or local taxes imposed on the trust fund or its assets or transactions, as described under "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates" and "--Taxes That May Be Imposed on the REMIC Pool" in this prospectus; 16. to pay for the cost of an independent appraiser or other expert in real estate matters retained to determine a fair sale price for a defaulted mortgage loan or a property acquired in respect a defaulted mortgage loan in connection with the liquidation of that mortgage loan or property; 17. to pay for the cost of various opinions of counsel obtained pursuant to the related Pooling Agreement for the benefit of certificateholders; 18. to make any other withdrawals permitted by the related Pooling Agreement and described in the related prospectus supplement; and 19. to clear and terminate the certificate account upon the termination of the trust fund. MODIFICATIONS, WAIVERS AND AMENDMENTS OF MORTGAGE LOANS A master servicer or special servicer may agree to modify, waive or amend any term of any mortgage loan serviced by it in a manner consistent with the applicable Servicing Standard. For example, the related prospectus supplement may provide that a mortgage loan may be amended to extend the maturity date or change the interest rate. 48 REALIZATION UPON DEFAULTED MORTGAGE LOANS A borrower's failure to make required mortgage loan payments may mean that operating income is insufficient to service the mortgage debt, or may reflect the diversion of that income from the servicing of the mortgage debt. In addition, a borrower that is unable to make mortgage loan payments may also be unable to make timely payment of taxes and insurance premiums and to otherwise maintain the related Mortgaged Property. In general, the master servicer or the special servicer, if any, for a series of certificates will be required to monitor any mortgage loan in the related trust fund that is in default, evaluate whether the causes of the default can be corrected over a reasonable period without significant impairment of the value of the related Mortgaged Property, initiate corrective action in cooperation with the borrower if cure is likely, inspect the related Mortgaged Property and take any other actions as are consistent with the Servicing Standard. A significant period of time may elapse before the servicer is able to assess the success of the corrective action or the need for additional initiatives. The time within which the servicer can make the initial determination of appropriate action, evaluate the success of corrective action, develop additional initiatives, institute foreclosure proceedings and actually foreclose (or accept a deed to a Mortgaged Property in lieu of foreclosure) on behalf of the certificateholders may vary considerably depending on the particular mortgage loan, the Mortgaged Property, the borrower, the presence of an acceptable party to assume the mortgage loan and the laws of the jurisdiction in which the Mortgaged Property is located. If a borrower files a bankruptcy petition, the master servicer may not be permitted to accelerate the maturity of the related mortgage loan or to foreclose on the related Mortgaged Property for a considerable period of time, and that mortgage loan may be restructured in the resulting bankruptcy proceedings. See "Certain Legal Aspects of Mortgage Loans" in this prospectus. The related prospectus supplement will describe the remedies available to a servicer in connection with a default on a mortgage loan. Such remedies include instituting foreclosure proceedings, exercising any power of sale contained in mortgage, obtaining a deed in lieu of foreclosure or otherwise acquire title to the related Mortgaged Property, by operation of law or otherwise. HAZARD INSURANCE POLICIES Unless otherwise specified in the related prospectus supplement, each Pooling Agreement will require the master servicer to cause each mortgage loan borrower to maintain a hazard insurance policy that provides for the coverage required under the related Mortgage or, if the Mortgage permits the mortgagee to dictate to the borrower the insurance coverage to be maintained on the related Mortgaged Property, the coverage consistent with the requirements of the Servicing Standard. Unless otherwise specified in the related prospectus supplement, the coverage generally will be in an amount equal to the lesser of the principal balance owing on that mortgage loan and the replacement cost of the related Mortgaged Property. The ability of a master servicer to assure that hazard insurance proceeds are appropriately applied may be dependent upon its being named as an additional insured under any hazard insurance policy and under any other insurance policy referred to below, or upon the extent to which information concerning covered losses is furnished by borrowers. All amounts collected by a master servicer under that policy (except for amounts to be applied to the restoration or repair of the Mortgaged Property or released to the borrower in accordance with the master servicer's normal servicing procedures and/or to the terms and conditions of the related Mortgage and Mortgage Note) will be deposited in the related certificate account. The Pooling Agreement may provide that the master servicer may satisfy its obligation to cause each borrower to maintain a hazard insurance policy by maintaining a blanket policy insuring against hazard losses on all of the mortgage loans in a trust fund. If the blanket policy contains a deductible clause, the master servicer will be required, in the event of a casualty covered by the blanket policy, to deposit in the related certificate account all sums that would have been deposited in that certificate account but for that deductible clause. 49 In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements of the property by fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and civil commotion, subject to the conditions and exclusions specified in each policy. Although the policies covering the Mortgaged Properties will be underwritten by different insurers under different state laws in accordance with different applicable state forms, and therefore will not contain identical terms and conditions, most policies typically do not cover any physical damage resulting from war, revolution, governmental actions, floods and other water-related causes, earth movement (including earthquakes, landslides and mudflows), wet or dry rot, vermin, domestic animals and certain other kinds of risks. Accordingly, a Mortgaged Property may not be insured for losses arising from that cause unless the related Mortgage specifically requires, or permits the mortgagee to require, that coverage. The hazard insurance policies covering the Mortgaged Properties will typically contain co-insurance clauses that in effect require an insured at all times to carry insurance of a specified percentage, generally 80% to 90%, of the full replacement value of the improvements on the property in order to recover the full amount of any partial loss. If the insured's coverage falls below this specified percentage, those clauses generally provide that the insurer's liability in the event of partial loss does not exceed the lesser of (1) the replacement cost of the improvements less physical depreciation and (2) that proportion of the loss as the amount of insurance carried bears to the specified percentage of the full replacement cost of those improvements. DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS Certain of the mortgage loans may contain a due-on-sale clause that entitles the lender to accelerate payment of the mortgage loan upon any sale or other transfer of the related Mortgaged Property made without the lender's consent. Certain of the mortgage loans may also contain a due-on-encumbrance clause that entitles the lender to accelerate the maturity of the mortgage loan upon the creation of any other lien or encumbrance upon the Mortgaged Property. Unless otherwise provided in the related prospectus supplement, the master servicer will determine whether to exercise any right the trustee may have under that provision in a manner consistent with the Servicing Standard. Unless otherwise specified in the related prospectus supplement, the master servicer will be entitled to retain as additional servicing compensation any fee collected in connection with the permitted transfer of a Mortgaged Property. See "Certain Legal Aspects of Mortgage Loans--Due-on-Sale and Due-on-Encumbrance" in this prospectus. SERVICING COMPENSATION AND PAYMENT OF EXPENSES Unless otherwise specified in the related prospectus supplement, a master servicer's primary servicing compensation with respect to a series of certificates will come from the periodic payment to it of a specified portion of the interest payments on each mortgage loan in the related trust fund. Because that compensation is generally based on a percentage of the principal balance of each mortgage loan outstanding from time to time, it will decrease in accordance with the amortization of the mortgage loans. The prospectus supplement with respect to a series of certificates may provide that, as additional compensation, the master servicer may retain all or a portion of late payment charges, Prepayment Premiums, modification fees and other fees collected from borrowers and any interest or other income that may be earned on funds held in the certificate account. Any sub-servicer will receive a portion of the master servicer's compensation as its sub-servicing compensation. In addition to amounts payable to any sub-servicer, a master servicer may be required, to the extent provided in the related prospectus supplement, to pay from amounts that represent its servicing compensation certain expenses incurred in connection with the administration of the related trust fund, including, without limitation, payment of the fees and disbursements of independent accountants and payment of expenses incurred in connection with distributions and 50 reports to certificateholders. Certain other expenses, including certain expenses related to mortgage loan defaults and liquidations and, to the extent so provided in the related prospectus supplement, interest on those expenses at the rate specified in the prospectus supplement, and the fees of any special servicer, may be required to be borne by the trust fund. If provided in the related prospectus supplement, a master servicer may be required to apply a portion of the servicing compensation otherwise payable to it in respect of any period to Prepayment Interest Shortfalls. See "Yield and Maturity Considerations--Certain Shortfalls in Collections of Interest" in this prospectus. EVIDENCE AS TO COMPLIANCE Unless otherwise provided in the related prospectus supplement, each Pooling Agreement will require, on or before a specified date in each year, the master servicer to cause a firm of independent public accountants to furnish to the trustee a statement to the effect that, on the basis of the examination by that firm conducted substantially in compliance with either the Uniform Single Audit Program for Mortgage Bankers or the Audit Program for Mortgages serviced for FHLMC, the servicing by or on behalf of the master servicer of mortgage loans under pooling and servicing agreements substantially similar to each other (which may include that Pooling Agreement) was conducted through the preceding calendar year or other specified twelve month period in compliance with the terms of those agreements except for any significant exceptions or errors in records that, in the opinion of the firm, either the Audit Program for Mortgages serviced for FHLMC, or paragraph 4 of the Uniform Single Audit Program for Mortgage Bankers, requires it to report. Each Pooling Agreement will also require, on or before a specified date in each year, the master servicer to furnish to the trustee a statement signed by one or more officers of the master servicer to the effect that the master servicer has fulfilled its material obligations under that Pooling Agreement throughout the preceding calendar year or other specified twelve month period. CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR The related prospectus supplement will describe certain protections afforded to a servicer under the related Pooling Agreement. For example, the Pooling Agreement may permit the servicer to resign from its obligations under the Pooling Agreement provided certain conditions are met. In addition, the Pooling Agreement may provide that none of the master servicer, the Depositor or any director, officer, employee or agent of either of them will be under any liability to the related trust fund or certificateholders for any action taken, or not taken, in good faith pursuant to the Pooling Agreement or for errors in judgment. The Pooling Agreement may also provide that the master servicer, the Depositor and any director, officer, employee or agent of either of them will be entitled to indemnification by the related trust fund against any loss, liability or expense incurred in connection with any legal action that relates to the Pooling Agreement or the related series of certificates. In addition, the Pooling Agreement may provide that none of the servicer, special servicer or the depositor will be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its responsibilities under the Pooling Agreement. EVENTS OF DEFAULT Each prospectus supplement will describe the events which will trigger a default (each an "Event of Default"). For example, the related prospectus supplement may provide that a default will occur if a servicer fails to make remittance as required under the Pooling Agreement, if a special servicer fails to make the required deposit, or if either the servicer or special servicer materially fails to perform any of its obligations contained in the related Pooling Agreement. The related prospectus supplement will describe the remedies available if an Event of Default occurs with respect to the master servicer under a Pooling Agreement, which remedies may 51 include the termination of all of the rights and obligations of the master servicer as master servicer under the Pooling Agreement. AMENDMENT Unless otherwise specified in the related prospectus supplement, each Pooling Agreement may be amended, without the consent of any of the holders of the related series of certificates 1. to cure any ambiguity, 2. to correct a defective provision in the Pooling Agreement or to correct, modify or supplement any of its provisions that may be inconsistent with any other of its provisions, 3. to add any other provisions with respect to matters or questions arising under the Pooling Agreement that are not inconsistent with its provisions, 4. to comply with any requirements imposed by the Code, or 5. for any other purpose specified in the related prospectus supplement; provided that the amendment (other than an amendment for the specific purpose referred to in clause (4) above) may not (as evidenced by an opinion of counsel to an effect satisfactory to the trustee) adversely affect in any material respect the interests of any holder; and provided further that the amendment (other than an amendment for one of the specific purposes referred to in clauses (1) through (4) above) must be acceptable to each applicable rating agency. Unless otherwise specified in the related prospectus supplement, each Pooling Agreement may also be amended, with the consent of the holders of the related series of certificates entitled to not less than 51% (or other percentage specified in the related prospectus supplement) of the voting rights for that series allocated to the affected classes, for any purpose. However, unless otherwise specified in the related prospectus supplement, that amendment may not: 1. reduce in any manner the amount of, or delay the timing of, payments received or advanced on mortgage loans that are required to be distributed in respect of any certificate without the consent of the holder of that certificate, 2. adversely affect in any material respect the interests of the holders of any class of certificates, in a manner other than as described in clause (1), without the consent of the holders of all certificates of that class, or 3. modify the amendment provisions of the Pooling Agreement described in this paragraph without the consent of the holders of all certificates of the related series. Unless otherwise specified in the related prospectus supplement, the trustee will be prohibited from consenting to any amendment of a Pooling Agreement pursuant to which one or more REMIC elections are to be or have been made unless the trustee shall first have received an opinion of counsel to the effect that the amendment will not result in the imposition of a tax on the related trust fund or cause the related trust fund, or the designated portion, to fail to qualify as a REMIC at any time that the related certificates are outstanding. LIST OF CERTIFICATEHOLDERS Unless otherwise specified in the related prospectus supplement, upon written request of three or more certificateholders of record made for purposes of communicating with other holders of certificates of the same series with respect to their rights under the related Pooling Agreement, the trustee or other specified person will afford those certificateholders access during normal business hours to the most recent list of certificateholders of that series held by that person. If that list is of a date more than 90 days prior to the date of receipt of that certificateholder's request, then that person, if not the registrar for that series of certificates, will be required to request from that registrar a current list and to afford those requesting certificateholders access thereto promptly upon receipt. 52 THE TRUSTEE The trustee under each Pooling Agreement will be named in the related prospectus supplement. The commercial bank, national banking association, banking corporation or trust company that serves as trustee may have typical banking relationships with the Depositor and its affiliates and with any master servicer or special servicer and its affiliates. DUTIES OF THE TRUSTEE The trustee for each series of certificates will make no representation as to the validity or sufficiency of the related Pooling Agreement, the certificates or any underlying mortgage loan or related document and will not be accountable for the use or application by or on behalf of the master servicer for that series of any funds paid to the master servicer or any special servicer in respect of the certificates or the underlying mortgage loans, or any funds deposited into or withdrawn from the certificate account or any other account for that series by or on behalf of the master servicer or any special servicer. If no Event of Default has occurred and is continuing, the trustee for each series of certificates will be required to perform only those duties specifically required under the related Pooling Agreement. However, upon receipt of any of the various certificates, reports or other instruments required to be furnished to it pursuant to the related Pooling Agreement, a trustee will be required to examine those documents and to determine whether they conform to the requirements of that agreement. CERTAIN MATTERS REGARDING THE TRUSTEE As described in the related prospectus supplement, the fees and normal disbursements of any trustee may be the expense of the related master servicer or other specified person or may be required to be borne by the related trust fund. Unless otherwise specified in the related prospectus supplement, the trustee for each series of certificates will be entitled to indemnification, from amounts held in the certificate account for that series, for any loss, liability or expense incurred by the trustee in connection with the trustee's acceptance or administration of its trusts under the related Pooling Agreement. However, the indemnification will not extend to any loss, liability or expense that constitutes a specific liability imposed on the trustee pursuant to the related Pooling Agreement, or to any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence on the part of the trustee in the performance of its obligations and duties under the Pooling Agreement, or by reason of its reckless 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 Agreement. Unless otherwise specified in the related prospectus supplement, the trustee for each series of certificates will be entitled to execute any of its trusts or powers under the related Pooling Agreement or perform any of its duties under that Pooling 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. RESIGNATION AND REMOVAL OF THE TRUSTEE A trustee will be permitted at any time to resign from its obligations and duties under the related Pooling Agreement by giving written notice to the Depositor, the servicer, the special servicer and to all certificateholders. Upon receiving this notice of resignation, the Depositor, or other person as may be specified in the related prospectus supplement, will be required to use its best efforts to promptly appoint a successor trustee. 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 related Pooling Agreement, or if at any time the trustee becomes incapable of acting, or if certain events of, or 53 proceedings in respect of, bankruptcy or insolvency occur with respect to the trustee, the Depositor will be authorized to remove the trustee and appoint a successor trustee. In addition, holders of the certificates of any series entitled to at least 51% (or other percentage specified in the related prospectus supplement) of the voting rights for that series may at any time, with or without cause, remove the trustee under the related Pooling Agreement and appoint a successor trustee. 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. 54 DESCRIPTION OF CREDIT SUPPORT GENERAL Credit support may be provided with respect to one or more classes of the certificates of any series, or with respect to the related mortgage assets. Credit support may be in the form of letters of credit, overcollateralization, the subordination of one or more classes of certificates, insurance policies, surety bonds, guarantees or reserve funds, or any combination of the foregoing. If so provided in the related prospectus supplement, any form of credit support may provide credit enhancement for more than one series of certificates to the extent described in that prospectus supplement. Unless otherwise provided in the related prospectus supplement for a series of certificates, the credit support will not provide protection against all risks of loss and will not guarantee payment to certificateholders of all amounts to which they are entitled under the related Pooling Agreement. If losses or shortfalls occur that exceed the amount covered by the related credit support or that are not covered by that credit support, certificateholders will bear their allocable share of deficiencies. Moreover, if a form of credit support covers more than one series of certificates, holders of certificates of one series will be subject to the risk that the credit support will be exhausted by the claims of the holders of certificates of one or more other series before the former receive their intended share of that coverage. If credit support is provided with respect to one or more classes of certificates of a series, or with respect to the related mortgage assets, the related prospectus supplement will include a description of o the nature and amount of coverage under the credit support, o any conditions to payment under the credit support not otherwise described in this prospectus, o any conditions under which the amount of coverage under the credit support may be reduced and under which that credit support may be terminated or replaced and o the material provisions relating to the credit support. Additionally, the related prospectus supplement will set forth certain information with respect to the obligor under any instrument of credit support, including o a brief description of its principal business activities; o its principal place of business, place of incorporation and the jurisdiction under which it is chartered or licensed to do business, o if applicable, the identity of regulatory agencies that exercise primary jurisdiction over the conduct of its business and o its total assets, and its stockholders' equity or policyholders' surplus, if applicable, as of a date that will be specified in the prospectus supplement. See "Risk Factors--Credit Support May Not Cover Losses" in this prospectus. SUBORDINATE CERTIFICATES If so specified in the related prospectus supplement, one or more classes of certificates of a series may be Subordinate Certificates. To the extent specified in the related prospectus supplement, the rights of the holders of Subordinate Certificates to receive distributions from the certificate account on any distribution date will be subordinated to the corresponding rights of the holders of Senior Certificates. If so provided in the related prospectus supplement, the subordination of a class may apply only in the event of (or may be limited to) certain types of losses or shortfalls. The related prospectus supplement will set forth information concerning the method and amount of subordination provided by a class or classes of Subordinate Certificates in a series and the circumstances under which that subordination will be available. 55 CROSS-SUPPORT PROVISIONS If the mortgage assets in any trust fund are divided into separate groups, each supporting a separate class or classes of certificates of the related series, credit support may be provided by cross-support provisions requiring that distributions be made on Senior Certificates evidencing interests in one group of mortgage assets prior to distributions on Subordinate Certificates evidencing interests in a different group of mortgage assets within the trust fund. The prospectus supplement for a series that includes a cross-support provision will describe the manner and conditions for applying those provisions. INSURANCE OR GUARANTEES WITH RESPECT TO MORTGAGE LOANS If so provided in the prospectus supplement for a series of certificates, mortgage loans included in the related trust fund will be covered for certain default risks by insurance policies or guarantees. To the extent deemed by the Depositor to be material, a copy of that instrument will accompany the Current Report on Form 8-K to be filed with the SEC within 15 days of issuance of the certificates of the related series. LETTER OF CREDIT If so provided in the prospectus supplement for a series of certificates, deficiencies in amounts otherwise payable on those certificates or certain classes of those certificates will be covered by one or more letters of credit, issued by a bank or financial institution specified in the prospectus supplement (the "L/C Bank"). Under a letter of credit, the L/C Bank will be obligated to honor draws under a letter of credit in an aggregate fixed dollar amount, net of unreimbursed payments, generally equal to a percentage specified in the related prospectus supplement of the aggregate principal balance of the mortgage assets on the related cut-off date or of the initial aggregate principal balance of one or more classes of certificates. If so specified in the related prospectus supplement, the letter of credit may permit draws only in the event of certain types of losses and shortfalls. The amount available under the letter of credit will, in all cases, be reduced to the extent of the unreimbursed payments under the letter of credit and may otherwise be reduced as described in the related prospectus supplement. The obligations of the L/C Bank under the letter of credit for each series of certificates will expire at the earlier of the date specified in the related prospectus supplement or the termination of the trust fund. A copy of that letter of credit will accompany the Current Report on Form 8-K to be filed with the SEC within 15 days of issuance of the certificates of the related series. CERTIFICATE INSURANCE AND SURETY BONDS If so provided in the prospectus supplement for a series of certificates, insurance policies and/or surety bonds provided by one or more insurance companies or sureties of the insurance companies will cover deficiencies in amounts otherwise payable on those certificates or certain classes. Those instruments may cover, with respect to one or more classes of certificates of the related series, timely distributions of interest and/or full distributions of principal on the basis of a schedule of principal distributions set forth in or determined in the manner specified in the related prospectus supplement. The related prospectus supplement will describe any limitations on the draws that may be made under that instrument. A copy of that instrument will accompany the Current Report on Form 8-K to be filed with the SEC within 15 days of issuance of the certificates of the related series. RESERVE FUNDS If so provided in the prospectus supplement for a series of certificates, deficiencies in amounts otherwise payable on those certificates or certain classes of those certificates will be covered, to the extent of available funds, by one or more reserve funds in which cash, a letter of credit, short-term debt obligations, a demand note or a combination of those features will be 56 deposited, in the amounts specified in the prospectus supplement. If so specified in the related prospectus supplement, the reserve fund for a series may also be funded over time by a specified amount of the collections received on the related mortgage assets. Amounts on deposit in any reserve fund for a series, together with the reinvestment income on those amounts, if any, will be applied for the purposes, in the manner, specified in the related prospectus supplement. If so specified in the related prospectus supplement, reserve funds may be established to provide protection only against certain types of losses and shortfalls. Following each distribution date, amounts in a reserve fund in excess of any amount required to be maintained in that reserve fund may be released from it under the conditions specified in the related prospectus supplement. If so specified in the related prospectus supplement, amounts deposited in any reserve fund will be invested in short-term debt obligations. Unless otherwise specified in the related prospectus supplement, any reinvestment income or other gain from those investments will be credited to the related reserve fund for that series, and any loss resulting from those investments will be charged to that reserve fund. However, that income may be payable to any related master servicer or another service provider as additional compensation for its services. The reserve fund, if any, for a series will not be a part of the trust fund unless otherwise specified in the related prospectus supplement. CREDIT SUPPORT WITH RESPECT TO MBS If so provided in the prospectus supplement for a series of certificates, any MBS included in the related trust fund and/or the related underlying mortgage loans may be covered by one or more of the types of credit support described in this prospectus. The related prospectus supplement will specify, as to each form of credit support, the information indicated above with respect to the credit support for each series, to the extent that information is material and available. CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS The following discussion contains general summaries of certain legal aspects of loans secured by commercial and multifamily residential properties. Because those legal aspects are governed by applicable state law, which laws may differ substantially, the summaries do not purport to be complete, to reflect the laws of any particular state, or to encompass the laws of all states in which the security for the mortgage loans, or mortgage loans underlying any MBS, is situated. Accordingly, the summaries are qualified in their entirety by reference to the applicable laws of those states. See "Description of the Trust Funds--Mortgage Loans" in this prospectus. GENERAL Each mortgage loan will be evidenced by a promissory note or bond and secured by an instrument granting a security interest in real property, which may be a mortgage, deed of trust or a deed to secure debt, depending upon the prevailing practice and law in the state in which the related Mortgaged Property is located. Mortgages, deeds of trust and deeds to secure debt are in this prospectus collectively referred to as "mortgages." A mortgage creates a lien upon, or grants a title interest in, the real property covered thereby, and represents the security for the repayment of the indebtedness customarily evidenced by a promissory note. The priority of the lien created or interest granted will depend on the terms of the mortgage and, in some cases, on the terms of separate subordination agreements or intercreditor agreements with others that hold interests in the real property, the knowledge of the parties to the mortgage and, generally, the order of recordation of the mortgage in the appropriate public recording office. However, the lien of a recorded mortgage will generally be subordinate to later-arising liens for real estate taxes and assessments and other charges imposed under governmental police powers. TYPES OF MORTGAGE INSTRUMENTS There are two parties to a mortgage: a mortgagor who is the borrower and usually the owner of the subject property, and a mortgagee, who is the lender. In contrast, a deed of trust is 57 a three-party instrument, among a trustor who is the equivalent of a borrower, a trustee to whom the real property is conveyed, and a beneficiary, who is the lender, for whose benefit the conveyance is made. Under a deed of trust, the trustor grants the property, irrevocably until the debt is paid, in trust and generally with a power of sale, to the trustee to secure repayment of the indebtedness evidenced by the related mortgage note. A deed to secure debt typically has two parties. The grantor (the borrower) conveys title to the real property to the grantee (the lender) generally with a power of sale, until the time the debt is repaid. In a case where the borrower is a land trust, there would be an additional party because a land trustee holds legal title to the property under a land trust agreement for the benefit of the borrower. At origination of a mortgage loan involving a land trust, the borrower executes a separate undertaking to make payments on the mortgage note. The mortgagee's authority under a mortgage, the trustee's authority under a deed of trust and the grantee's authority under a deed to secure debt are governed by the express provisions of the related instrument, the law of the state in which the real property is located, certain federal laws (including, without limitation, the Soldiers' and Sailors' Civil Relief Act of 1940) and, in some deed of trust transactions, the directions of the beneficiary. LEASES AND RENTS Mortgages that encumber income-producing property often contain an assignment of rents and leases, pursuant to which the borrower assigns to the lender the borrower's right, title and interest as landlord under each lease and the income derived therefrom, while, unless rents are to be paid directly to the lender, retaining a revocable license to collect the rents for so long as there is no default. If the borrower defaults, the license terminates and the lender is entitled to collect the rents. Local law may require that the lender take possession of the property and/or obtain a court-appointed receiver before becoming entitled to collect the rents. In most states, hotel and motel room revenue are considered accounts receivable under the Uniform Commercial Code, also known as the UCC, in cases where hotels or motels constitute loan security, the borrower as additional security for the loan generally pledges the revenue. In general, the lender must file financing statements in order to perfect its security interest in the revenue and must file continuation statements, generally every five years, to maintain perfection of that security interest. Even if the lender's security interest in room revenue is perfected under the UCC, it may be required to commence a foreclosure action or otherwise take possession of the property in order to collect the room revenue following a default. See "--Bankruptcy Laws" below. PERSONALTY In the case of certain types of mortgaged properties, for instance hotels, motels and nursing homes, personal property (to the extent owned by the borrower and not previously pledged) may constitute a significant portion of the property's value as security. The creation and enforcement of liens on personal property are governed by the UCC. Accordingly, if a borrower pledges personal property as security for a mortgage loan, the lender generally must file UCC financing statements in order to perfect its security interest in that personal property, and must file continuation statements, generally every five years, to maintain that perfection. FORECLOSURE General. Foreclosure is a legal procedure that allows the lender to recover its mortgage debt by enforcing its rights and available legal remedies under the mortgage. If the borrower defaults in payment or performance of its obligations under the mortgage note or mortgage, the lender has the right to institute foreclosure proceedings to sell the real property at public auction to satisfy the indebtedness. Foreclosure procedures vary from state to state. Two primary methods of foreclosing a mortgage are judicial foreclosure, involving court proceedings, and non-judicial foreclosure 58 pursuant to a power of sale granted in the mortgage instrument. Other foreclosure procedures are available in some states, but they are either infrequently used or available only in limited circumstances. A foreclosure action is subject to most of the delays and expenses of other lawsuits if defenses are raised or counterclaims are interposed, and sometimes requires several years to complete. Moreover, as discussed below, even a non-collusive, regularly conducted foreclosure sale may be challenged as a fraudulent conveyance, regardless of the parties' intent, if a court determines that the sale was for less than fair consideration and that the sale occurred while the borrower was insolvent and within a specified period prior to the borrower's filing for bankruptcy protection. Judicial Foreclosure. A judicial foreclosure proceeding is conducted in a court having jurisdiction over the Mortgaged Property. Generally, the action is initiated by the service of legal pleadings upon all parties having a subordinate interest of record in the real property and all parties in possession of the property, under leases or otherwise, whose interests are subordinate to the mortgage. Delays in completion of the foreclosure may occasionally result from difficulties in locating defendants. When the lender's right to foreclose is contested, the legal proceedings can be time-consuming. Upon successful completion of a judicial foreclosure proceeding, the court generally issues a judgment of foreclosure and appoints a referee or other officer to conduct a public sale of the Mortgaged Property, the proceeds of which are used to satisfy the judgment. Those sales are made in accordance with procedures that vary from state to state. Equitable Limitations on Enforceability of Certain Provisions. United States courts have traditionally imposed general equitable principles to limit the remedies available to lenders in foreclosure actions. These principles are generally designed to relieve borrowers from the effects of mortgage defaults perceived as harsh or unfair. Relying on those principles, a court may alter the specific terms of a loan to the extent it considers necessary to prevent or remedy an injustice, undue oppression or overreaching, or may require the lender to undertake affirmative actions to determine the cause of the borrower's default and the likelihood that the borrower will be able to reinstate the loan. In some cases, courts have substituted their judgment for the lenders and have required that lenders reinstate loans or recast payment schedules in order to accommodate borrowers who are suffering from a temporary financial disability. In other cases, courts have limited the right of the lender to foreclose in the case of a non-monetary default, such as a failure to adequately maintain the mortgaged property or an impermissible further encumbrance of the mortgaged property. Finally, some courts have addressed the issue of whether federal or state constitutional provisions reflecting due process concerns for adequate notice require that a borrower receive notice in addition to statutorily-prescribed minimum notice. For the most part, these cases have upheld the reasonableness of the notice provisions or have found that a public sale under a mortgage providing for a power of sale does not involve sufficient state action to trigger constitutional protections. Non-Judicial Foreclosure/Power of Sale. Foreclosure of a deed of trust is generally accomplished by a non-judicial trustee's sale pursuant to a power of sale typically granted in the deed of trust. A power of sale may also be contained in any other type of mortgage instrument if applicable law so permits. A power of sale under a deed of trust allows a non-judicial public sale to be conducted generally following a request from the beneficiary/lender to the trustee to sell the property upon default by the borrower and after notice of sale is given in accordance with the terms of the mortgage and applicable state law. In some states, prior to that sale, the trustee under the deed of trust must record a notice of default and notice of sale and send a copy to the borrower and to any other party who has recorded a request for a copy of a notice of default and notice of sale. In addition, in some states the trustee must provide notice to any other party having an interest of record in the real property, including junior lienholders. A notice of sale must be posted in a public place and, in most states, published for a specified period of time in one or more newspapers. The borrower or junior lienholder may then have the right, during a reinstatement period required in some states, to cure the default by paying the entire actual amount in arrears (without regard to the acceleration of the indebtedness), plus the lender's 59 expenses incurred in enforcing the obligation. In other states, the borrower or the junior lienholder is not provided a period to reinstate the loan, but has only the right to pay off the entire debt to prevent the foreclosure sale. Generally, state law governs the procedure for public sale, the parties entitled to notice, the method of giving notice and the applicable time periods. Public Sale. A third party may be unwilling to purchase a mortgaged property at a public sale because of the difficulty in determining the value of that property at the time of sale, due to, among other things, redemption rights which may exist and the possibility of physical deterioration of the property during the foreclosure proceedings. Potential buyers may be reluctant to purchase property at a foreclosure sale as a result of the 1980 decision of the United States Court of Appeals for the Fifth Circuit in Durrett v. Washington National Insurance Company and other decisions that have followed its reasoning. The court in Durrett held that even a non-collusive, regularly conducted foreclosure sale was a fraudulent transfer under the federal bankruptcy code, as amended from time to time (11 U.S.C.) (the "Bankruptcy Code") and, thus, could be rescinded in favor of the bankrupt's estate, if (1) the foreclosure sale was held while the debtor was insolvent and not more than one year prior to the filing of the bankruptcy petition and (2) the price paid for the foreclosed property did not represent "fair consideration," which is "reasonably equivalent value" under the Bankruptcy Code. Although the reasoning and result of Durrett in respect of the Bankruptcy Code was rejected by the United States Supreme Court in May 1994, the case could nonetheless be persuasive to a court applying a state fraudulent conveyance law which has provisions similar to those construed in Durrett. For these reasons, it is common for the lender to purchase the mortgaged property for an amount equal to the lesser of fair market value and the underlying debt and accrued and unpaid interest plus the expenses of foreclosure. Generally, state law controls the amount of foreclosure costs and expenses which may be recovered by a lender. Thereafter, subject to the mortgagor's right in some states to remain in possession during a redemption period, if applicable, the lender will become the owner of the property and have both the benefits and burdens of ownership of the mortgaged property. For example, the lender will have the obligation to pay debt service on any senior mortgages, to pay taxes, obtain casualty insurance and to make those repairs at its own expense as are necessary to render the property suitable for sale. Frequently, the lender employs a third party management company to manage and operate the property. The costs of operating and maintaining a commercial or multifamily residential property may be significant and may be greater than the income derived from that property. The costs of management and operation of those mortgaged properties which are hotels, motels or restaurants or nursing or convalescent homes or hospitals may be particularly significant because of the expertise, knowledge and, with respect to nursing or convalescent homes or hospitals, regulatory compliance, required to run those operations and the effect which foreclosure and a change in ownership may have on the public's and the industry's, including franchisors', perception of the quality of those operations. The lender will commonly obtain the services of a real estate broker and pay the broker's commission in connection with the sale of the property. Depending upon market conditions, the ultimate proceeds of the sale of the property may not equal the amount of the mortgage against the property. Moreover, a lender commonly incurs substantial legal fees and court costs in acquiring a mortgaged property through contested foreclosure and/or bankruptcy proceedings. Furthermore, a few states require that any environmental contamination at certain types of properties be cleaned up before a property may be resold. In addition, a lender may be responsible under federal or state law for the cost of cleaning up a mortgaged property that is environmentally contaminated. See "--Environmental Risks" below. Generally state law controls the amount of foreclosure expenses and costs, including attorneys' fees, that may be recovered by a lender. The holder of a junior mortgage that forecloses on a mortgaged property does so subject to senior mortgages and any other prior liens, and may be obliged to keep senior mortgage loans current in order to avoid foreclosure of its interest in the property. In addition, if the foreclosure of a junior mortgage triggers the enforcement of a "due-on-sale" clause contained in a senior 60 mortgage, the junior mortgagee could be required to pay the full amount of the senior mortgage indebtedness or face foreclosure. Rights of Redemption. The purposes of a foreclosure action are to enable the lender to realize upon its security and to bar the borrower, and all persons who have interests in the property that are subordinate to that of the foreclosing lender, from exercise of their "equity of redemption." The doctrine of equity of redemption provides that, until the property encumbered by a mortgage has been sold in accordance with a properly conducted foreclosure and foreclosure sale, those having interests that are subordinate to that of the foreclosing lender have an equity of redemption and may redeem the property by paying the entire debt with interest. Those having an equity of redemption must generally be made parties and joined in the foreclosure proceeding in order for their equity of redemption to be terminated. The equity of redemption is a common-law (non-statutory) right which should be distinguished from post-sale statutory rights of redemption. In some states, after sale pursuant to a deed of trust or foreclosure of a mortgage, the borrower and foreclosed junior lienors are given a statutory period in which to redeem the property. In some states, statutory redemption may occur only upon payment of the foreclosure sale price. In other states, redemption may be permitted if the former borrower pays only a portion of the sums due. The effect of a statutory right of redemption is to diminish the ability of the lender to sell the foreclosed property because the exercise of a right of redemption would defeat the title of any purchaser through a foreclosure. Consequently, the practical effect of the redemption right is to force the lender to maintain the property and pay the expenses of ownership until the redemption period has expired. In some states, a post-sale statutory right of redemption may exist following a judicial foreclosure. Anti-Deficiency Legislation. Some or all of the mortgage loans may be nonrecourse loans, as to which recourse in the case of default will be limited to the Mortgaged Property and those other assets, if any, that were pledged to secure the mortgage loan. However, even if a mortgage loan by its terms provides for recourse to the borrower's other assets, a lender's ability to realize upon those assets may be limited by state law. For example, in some states a lender cannot obtain a deficiency judgment against the borrower following foreclosure or sale under a deed of trust. A deficiency judgment is a personal judgment against the former borrower equal to the difference between the net amount realized upon the public sale of the real property and the amount due to the lender. Other statutes may require the lender to exhaust the security afforded under a mortgage before bringing a personal action against the borrower. In certain other states, the lender has the option of bringing a personal action against the borrower on the debt without first exhausting that security; however, in some of those states, the lender, following judgment on that personal action, may be deemed to have elected a remedy and thus may be precluded from foreclosing upon the security. Consequently, lenders in those states where an election of remedy provision exists will usually proceed first against the security. Finally, other statutory provisions, designed to protect borrowers from exposure to large deficiency judgments that might result from bidding at below-market values at the foreclosure sale, limit any deficiency judgment to the excess of the outstanding debt over the fair market value of the property at the time of the sale. Leasehold Risks. Mortgage loans may be secured by a mortgage on the borrower's leasehold interest in a ground lease. Leasehold mortgage loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of the borrower. The most significant of these risks is that if the borrower's leasehold were to be terminated upon a lease default, the leasehold mortgagee would lose its security. This risk may be lessened if the ground lease requires the lessor to give the leasehold mortgagee notices of lessee defaults and an opportunity to cure them, permits the leasehold estate to be assigned to and by the leasehold mortgagee or the purchaser at a foreclosure sale, and contains certain other protective provisions typically included in a "mortgageable" ground lease. Cooperative Shares. Mortgage loans may be secured by a security interest on the borrower's ownership interest in shares, and the proprietary leases appurtenant thereto, 61 allocable to cooperative dwelling units that may be vacant or occupied by non-owner tenants. Those loans are subject to certain risks not associated with mortgage loans secured by a lien on the fee estate of a borrower in real property. This kind of loan typically is subordinate to the mortgage, if any, on the Cooperative's building which, if foreclosed, could extinguish the equity in the building and the proprietary leases of the dwelling units derived from ownership of the shares of the Cooperative. Further, transfer of shares in a Cooperative are subject to various regulations as well as to restrictions under the governing documents of the Cooperative, and the shares may be cancelled in the event that associated maintenance charges due under the related proprietary leases are not paid. Typically, a recognition agreement between the lender and the Cooperative provides, among other things, the lender with an opportunity to cure a default under a proprietary lease. Under the laws applicable in many states, "foreclosure" on Cooperative shares is accomplished by a sale in accordance with the provisions of Article 9 of the UCC and the security agreement relating to the shares. Article 9 of the UCC requires that a sale be conducted in a "commercially reasonable" manner, which may be dependent upon, among other things, the notice given the debtor and the method, manner, time, place and terms of the sale. Article 9 of the UCC provides that the proceeds of the sale will be applied first to pay the costs and expenses of the sale and then to satisfy the indebtedness secured by the lender's security interest. A recognition agreement, however, generally provides that the lender's right to reimbursement is subject to the right of the Cooperative to receive sums due under the proprietary leases. BANKRUPTCY LAWS The Bankruptcy Code and related state laws may interfere with or affect the ability of a lender to realize upon collateral and/or to enforce a deficiency judgment. For example, under the Bankruptcy Code, virtually all actions (including foreclosure actions and deficiency judgment proceedings) are automatically stayed upon the filing of the bankruptcy petition, and, usually, no interest or principal payments are made during the course of the bankruptcy case. The delay and the consequences of a delay caused by an automatic stay can be significant. Also, under the Bankruptcy Code, the filing of a petition in bankruptcy by or on behalf of a junior lienor may stay the senior lender from taking action to foreclose out a junior lien. Under the Bankruptcy Code, provided certain substantive and procedural safeguards for the lender are met, the amount and terms of a mortgage secured by property of the debtor may be modified. In addition under certain circumstances, the outstanding amount of the loan secured by the real property may be reduced to the then-current value of the property (with a corresponding partial reduction of the amount of the lender's security interest) pursuant to a confirmed plan or lien avoidance proceeding, thus leaving the lender a general unsecured creditor for the difference between the value and the outstanding balance of the loan. Other modifications may include the reduction in the amount of each scheduled payment, which reduction may result from a reduction in the rate of interest and/or the alteration of the repayment schedule (with or without affecting the unpaid principal balance of the loan), and/or an extension (or reduction) of the final maturity date. Some courts have approved bankruptcy plans, based on the particular facts of the reorganization case, that effected the curing of a mortgage loan default by paying arrearages over a number of years. Also, under federal bankruptcy law, a bankruptcy court may permit a debtor through its rehabilitative plan to de-accelerate a secured loan and to reinstate the loan even though the lender accelerated the mortgage loan and final judgment of foreclosure had been entered in state court (provided no sale of the property had yet occurred) prior to the filing of the debtor's petition. If this is done the full amount due under the original loan may never repaid. The Bankruptcy Code has been amended to provide that a lender's perfected pre-petition security interest in leases, rents and hotel revenues continues in the post-petition leases, rents and hotel revenues, unless a bankruptcy court orders to the contrary "based on the equities of the case." Thus, unless a court orders otherwise, revenues from a mortgaged property generated after the date the bankruptcy petition is filed will normally constitute "cash collateral" under the 62 Bankruptcy Code. Debtors may only use cash collateral upon obtaining the lender's consent or a prior court order finding that the lender's interest in the mortgaged property and the cash collateral is "adequately protected" as the term is defined and interpreted under the Bankruptcy Code. It should be noted, however, that the court may find that the lender has no security interest in either pre-petition or post-petition revenues if the court finds that the loan documents do not contain language covering accounts, room rents, or other forms of personalty necessary for a security interest to attach to hotel revenues. Federal bankruptcy law provides generally that rights and obligation under an unexpired lease of the debtor/lessee may not be terminated or modified at any time after the commencement of a case under the Bankruptcy Code solely because of a provision in the lease to that effect or because of certain other similar events. This prohibition on so-called "ipso facto clauses" could limit the ability of the trustee to exercise certain contractual remedies with respect to the leases on any mortgaged property. In addition, Section 362 of the Bankruptcy Code operates as an automatic stay of, among other things, any act to obtain possession of property from a debtor's estate, which may delay a trustee's exercise of those remedies in the event that a lessee becomes the subject of a proceeding under the Bankruptcy Code. For example, a mortgagee would be stayed from enforcing an assignment of the lease by a borrower related to a mortgaged property if the related borrower was in a bankruptcy proceeding. The legal proceedings necessary to resolve the issues could be time-consuming and might result in significant delays in the receipt of the assigned rents. Similarly, the filing of a petition in bankruptcy by or on behalf of a lessee of a mortgaged property would result in a stay against the commencement or continuation of any state court proceeding for past due rent, for accelerated rent, for damages or for a summary eviction order with respect to a default under the related lease that occurred prior to the filing of the lessee's petition. Rents and other proceeds of a mortgage loan may also escape an assignment if the assignment is not fully perfected under state law prior to commencement of the bankruptcy proceeding. In addition, the Bankruptcy Code generally provides that a trustee or debtor-in-possession may, subject to approval of the court, (a) assume the lease and retain it or assign it to a third party or (b) reject the lease. If the lease is assumed, the trustee in bankruptcy on behalf of the lessee, or the lessee as debtor-in-possession, or the assignee, if applicable, must cure any defaults under the lease, compensate the lessor for its losses and provide the lessor with "adequate assurance" of future performance. However, these remedies may, in fact, be insufficient and the lessor may be forced to continue under the lease with a lessee that is a poor credit risk or an unfamiliar tenant if the lease was assigned. If the lease is rejected, the rejection generally constitutes a breach of the executory contract or unexpired lease immediately before the date of filing the petition. As a consequence, the other party or parties to the lease, such as the borrower, as lessor under a lease, would have only an unsecured claim against the debtor for damages resulting from the breach, which could adversely affect the security for the related mortgage loan. In addition, pursuant to Section 502(b)(6) of the Bankruptcy Code, a lessor's damages for lease rejection in respect of future rent installments are limited to the rent reserved by the lease, without acceleration, for the greater of one year or 15 percent, not to exceed three years, of the remaining term of the lease. If a trustee in bankruptcy on behalf of a lessor, or a lessor as debtor-in-possession, rejects an unexpired lease of real property, the lessee may treat the lease as terminated by the rejection or, in the alternative, the lessee may remain in possession of the leasehold for the balance of the term and for any renewal or extension of the term that is enforceable by the lessee under applicable nonbankruptcy law. The Bankruptcy Code provides that if a lessee elects to remain in possession after a rejection of a lease, the lessee may offset against rents reserved under the lease for the balance of the term after the date of rejection of the lease, and the related renewal or extension of the lease, any damages occurring after that date caused by the nonperformance of any obligation of the lessor under the lease after that date. In a bankruptcy or similar proceeding of a borrower, action may be taken seeking the recovery, as a preferential transfer or on other grounds, of any payments made by the borrower, 63 or made directly by the related lessee, under the related mortgage loan to the trust fund. Payments on long-term debt may be protected from recovery as preferences if they are payments in the ordinary course of business made on debts incurred in the ordinary course of business. Whether any particular payment would be protected depends upon the facts specific to a particular transaction. A trustee in bankruptcy, in some cases, may be entitled to collect its costs and expenses in preserving or selling the mortgaged property ahead of payment to the lender. In certain circumstances, a debtor in bankruptcy may have the power to grant liens senior to the lien of a mortgage, and analogous state statutes and general principles of equity may also provide a borrower with means to halt a foreclosure proceeding or sale and to force a restructuring of a mortgage loan on terms a lender would not otherwise accept. Moreover, the laws of certain states also give priority to certain tax liens over the lien of a mortgage or deed of trust. Under the Bankruptcy Code, if the court finds that actions of the mortgagee have been unreasonable, the lien of the related mortgage may be subordinated to the claims of unsecured creditors. Certain of the borrowers may be partnerships. The laws governing limited partnerships in certain states provide that the commencement of a case under the Bankruptcy Code with respect to a general partner will cause a person to cease to be a general partner of the limited partnership, unless otherwise provided in writing in the limited partnership agreement. This provision may be construed as an "ipso facto" clause and, in the event of the general partner's bankruptcy, may not be enforceable. Certain limited partnership agreements of the borrowers may provide that the commencement of a case under the Bankruptcy Code with respect to the related general partner constitutes an event of withdrawal (assuming the enforceability of the clause is not challenged in bankruptcy proceedings or, if challenged, is upheld) that might trigger the dissolution of the limited partnership, the winding up of its affairs and the distribution of its assets, unless (i) at the time there was at least one other general partner and the written provisions of the limited partnership permit the business of the limited partnership to be carried on by the remaining general partner and that general partner does so or (ii) the written provisions of the limited partnership agreement permit the limited partners to agree within a specified time frame (often 60 days) after the withdrawal to continue the business of the limited partnership and to the appointment of one or more general partners and the limited partners do so. In addition, the laws governing general partnerships in certain states provide that the commencement of a case under the Bankruptcy Code or state bankruptcy laws with respect to a general partner of the partnerships triggers the dissolution of the partnership, the winding up of its affairs and the distribution of its assets. Those state laws, however, may not be enforceable or effective in a bankruptcy case. The dissolution of a borrower, the winding up of its affairs and the distribution of its assets could result in an acceleration of its payment obligation under the borrower's mortgage loan, which may reduce the yield on the certificates in the same manner as a principal prepayment. In addition, the bankruptcy of the general or limited partner of a borrower that is a partnership, or the bankruptcy of a member of a borrower that is a limited liability company or the bankruptcy of a shareholder of a borrower that is a corporation may provide the opportunity in the bankruptcy case of the partner, member or shareholder to obtain an order from a court consolidating the assets and liabilities of the partner, member or shareholder with those of the mortgagor pursuant to the doctrines of substantive consolidation or piercing the corporate veil. In such a case, the respective mortgaged property, for example, would become property of the estate of the bankrupt partner, member or shareholder. Not only would the mortgaged property be available to satisfy the claims of creditors of the partner, member or shareholder, but an automatic stay would apply to any attempt by the trustee to exercise remedies with respect to the mortgaged property. However, such an occurrence should not affect the trustee's status as a secured creditor with respect to the mortgagor or its security interest in the mortgaged property. 64 ENVIRONMENTAL RISKS Real property pledged as security for a mortgage loan may be subject to certain environmental risks. Under federal law, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (also known as "CERCLA") and the laws of certain states, failure to perform the remediation required or demanded by the state or federal government of any condition or circumstance that o may pose an imminent or substantial endangerment to the public health or welfare or the environment, o may result in a release or threatened release of any hazardous material, or o may give rise to any environmental claim or demand, may give rise to a lien on the property to ensure the reimbursement of remedial costs incurred by the federal or state government. In several states, the lien has priority over the lien of an existing mortgage against the property. Of particular concern may be those mortgaged properties which are, or have been, the site of manufacturing, industrial or disposal activity. Those environmental risks may give rise to (a) a diminution in value of property securing a mortgage note or the inability to foreclose against the property or (b) in certain circumstances as more fully described below, liability for clean-up costs or other remedial actions, which liability could exceed the value of the property, the aggregate assets of the owner or operator, or the principal balance of the related indebtedness. The state of the law is currently unclear as to whether and under what circumstances cleanup costs, or the obligation to take remedial actions, could be imposed on a secured lender. Under the laws of some states and under CERCLA, a lender may become liable as an "owner" or an "operator" of a contaminated mortgaged property for the costs of remediation of releases or threatened releases of hazardous substances at the mortgaged property. The liability may attach if the lender or its agents or employees have participated in the management of the operations of the borrower, even though the environmental damage or threat was caused by a prior owner, operator, or other third party. Excluded from CERCLA's definition of "owner or operator" is any person "who, without participating in the management of a facility, holds indicia of ownership primarily to protect his security interest" (the "secured-creditor exemption"). This exemption for holders of a security interest such as a secured lender applies only in circumstances when the lender seeks to protect its security interest in the contaminated facility or property. Thus, if a lender's activities encroach on the actual management of that facility or property or of the borrower, the lender faces potential liability as an "owner or operator" under CERCLA. Similarly, when a lender forecloses and takes title to a contaminated facility or property (whether it holds the facility or property as an investment or leases it to a third party), under some circumstances the lender may incur potential CERCLA liability. Amendments to CERCLA provide examples of permissible actions that may be undertaken by a lender holding security in a contaminated facility without exceeding the bounds of the secured-creditor exemption, subject to certain conditions and limitations. Additionally, the amendments provide certain protections from CERCLA liability as an "owner or operator" to a lender who forecloses on contaminated property, as long as it seeks to divest itself of the facility at the earliest practicable commercially reasonable time on commercially reasonable terms. The amendments also limit the liability of lenders under the federal Solid Waste Disposal Act for costs of responding to leaking underground storage tanks. However, the protections afforded lenders under the amendments are subject to terms and conditions that have not been clarified by the courts. Moreover, the CERCLA secured-creditor exemption does not necessarily affect the potential for liability in actions under other federal or state laws which may impose liability on "owners or operators" but do not incorporate the secured-creditor exemption. Furthermore, the secured-creditor exemption does not protect lenders from other bases of CERCLA liability, such as that imposed on "generators" or "transporters" of hazardous substances. 65 Environmental clean-up costs may be substantial. It is possible that those costs could become a liability of the applicable trust fund and occasion a loss to certificateholders if those remedial costs were incurred. In a few states, transfers of some types of properties are conditioned upon clean-up of contamination prior to transfer. It is possible that a property securing a mortgage loan could be subject to these transfer restrictions. If this occurs, and if the lender becomes the owner upon foreclosure, the lender may be required to clean up the contamination before selling the property. The cost of remediating hazardous substance contamination at a property can be substantial. If a lender is or becomes liable, it can bring an action for contribution against the owner or operator that created the environmental hazard, but that person or entity may be without substantial assets. Accordingly, it is possible that these costs could become a liability of a trust fund and occasion a loss to certificateholders of the related series. To reduce the likelihood of this kind of loss, and unless otherwise provided in the related prospectus supplement, the related Pooling Agreement will provide that the master servicer may not, on behalf of the trust fund, acquire title to a Mortgaged Property or take over its operation unless the master servicer, based on a report prepared by a person who regularly conducts environmental site assessments, has made the determination that it is appropriate to do so. There can be no assurance that any environmental site assessment obtained by the master servicer will detect all possible environmental contamination or conditions or that the other requirements of the related pooling and servicing agreement, even if fully observed by the master servicer, will in fact insulate the related trust fund from liability with respect to environmental matters. Even when a lender is not directly liable for cleanup costs on property securing loans, if a property securing a loan is contaminated, the value of the security is likely to be affected. In addition, a lender bears the risk that unanticipated cleanup costs may jeopardize the borrower's repayment. Neither of these two issues is likely to pose risks exceeding the amount of unpaid principal and interest of a particular loan secured by a contaminated property, particularly if the lender declines to foreclose on a mortgage secured by the property. If a lender forecloses on a mortgage secured by a property the operations of which are subject to environmental laws and regulations, the lender will be required to operate the property in accordance with those laws and regulations. Compliance may entail substantial expense. In addition, a lender may be obligated to disclose environmental conditions on a property to government entities and/or to prospective buyers, including prospective buyers at a foreclosure sale or following foreclosure. That disclosure may decrease the amount that prospective buyers are willing to pay for the affected property and thereby lessen the ability of the lender to recover its investment in a loan upon foreclosure. DUE-ON-SALE AND DUE-ON-ENCUMBRANCE Certain of the mortgage loans may contain "due-on-sale" and "due-on-encumbrance" clauses that purport to permit the lender to accelerate the maturity of the loan if the borrower transfers or encumbers the related Mortgaged Property. In recent years, court decisions and legislative actions placed substantial restrictions on the right of lenders to enforce those clauses in many states. By virtue, however, of the Garn-St Germain Depository Institutions Act of 1982 (the "Garn Act"), effective October 15, 1982, which purports to preempt state laws that prohibit the enforcement of due-on-sale clauses by providing among other matters, that "due-on-sale" clauses in certain loans made after the effective date of the Garn Act are enforceable, within certain limitations as set forth in the Garn Act, a master servicer may nevertheless have the right to accelerate the maturity of a mortgage loan that contains a "due-on-sale" provision upon transfer of an interest in the property, regardless of the master servicer's ability to demonstrate that a sale threatens its legitimate security interest. 66 SUBORDINATE FINANCING Certain of the mortgage loans may not restrict the ability of the borrower to use the Mortgaged Property as security for one or more additional loans. Where a borrower encumbers a mortgaged property with one or more junior liens, the senior lender is subjected to additional risk. First, the borrower may have difficulty servicing and repaying multiple loans. Moreover, if the subordinate financing permits recourse to the borrower, as is frequently the case, and the senior loan does not, a borrower may have more incentive to repay sums due on the subordinate loan. Second, acts of the senior lender that prejudice the junior lender or impair the junior lender's security may create a superior equity in favor of the junior lender. For example, if the borrower and the senior lender agree to an increase in the principal amount of or the interest rate payable on the senior loan, the senior lender may lose its priority to the extent any existing junior lender is harmed or the borrower is additionally burdened. Third, if the borrower defaults on the senior loan and/or any junior loan or loans, the existence of junior loans and actions taken by junior lenders can impair the security available to the senior lender and can interfere with or delay the taking of action by the senior lender. Moreover, the bankruptcy of a junior lender may operate to stay foreclosure or similar proceedings by the senior lender. DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS Mortgage notes and mortgages may contain provisions that obligate the borrower to pay a late charge or additional interest if payments are not timely made, and in some circumstances, may prohibit prepayments for a specified period and/or condition prepayments upon the borrower's payment of prepayment fees or yield maintenance penalties. In certain states, there are or may be specific limitations upon the late charges which a lender may collect from a borrower for delinquent payments. Certain states also limit the amounts that a lender may collect from a borrower as an additional charge or fee if the loan is prepaid. In addition, the enforceability of provisions that provide for prepayment fees or penalties upon an involuntary prepayment is unclear under the laws of many states. APPLICABILITY OF USURY LAWS Title V of the Depository Institutions Deregulation and Monetary Control Act of 1980 ("Title V") provides that state usury limitations shall not apply to certain types of residential, including multifamily but not commercial, first mortgage loans originated by certain lenders after March 31, 1980. A similar Federal statute was in effect with respect to mortgage loans made during the first three months of 1980. The statute authorized any state to reimpose interest rate limits by adopting, before April 1, 1983, a law or constitutional provision that expressly rejects application of the federal law. In addition, even where Title V is not so rejected, any state is authorized by the law to adopt a provision limiting discount points or other charges on mortgage loans covered by Title V. Certain states have taken action to reimpose interest rate limits and/or to limit discount points or other charges. In any state in which application of Title V has been expressly rejected or a provision limiting discount points or other charges has been adopted, no mortgage loan originated after the date of that state action will (if originated after that rejection or adoption) be eligible for inclusion in a trust fund unless (1) the mortgage loan provides for an interest rate, discount points and charges as are permitted in that state or (2) the mortgage loan provides that the terms are to be construed in accordance with the laws of another state under which the interest rate, discount points and charges would not be usurious and the borrower's counsel has rendered an opinion that the choice of law provision would be given effect. Statutes differ in their provisions as to the consequences of a usurious loan. One group of statutes requires the lender to forfeit the interest due above the applicable limit or impose a specified penalty. Under this statutory scheme, the borrower may cancel the recorded mortgage or deed of trust upon paying its debt with lawful interest, and the lender may foreclose, but only for the debt plus lawful interest. A second group of statutes is more severe. A violation of this 67 type of usury law results in the invalidation of the transaction, thereby permitting the borrower to cancel the recorded mortgage or deed of trust without any payment or prohibiting the lender from foreclosing. SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940 Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the "Relief Act"), a borrower who enters military service after the origination of that borrower's mortgage loan, including a borrower who was in reserve status and is called to active duty after origination of the mortgage loan, may not be charged interest, including fees and charges, above an annual rate of 6% during the period of that borrower's active duty status, unless a court orders otherwise upon application of the lender. The Relief Act applies to individuals who are members of the Army, Navy, Air Force, Marines, National Guard, Reserves, Coast Guard and officers of the U.S. Public Health Service assigned to duty with the military. Because the Relief Act applies to individuals who enter military service, including reservists who are called to active duty, after origination of the related mortgage loan, no information can be provided as to the number of loans with individuals as borrowers that may be affected by the Relief Act. Application of the Relief Act would adversely affect, for an indeterminate period of time, the ability of any servicer to collect full amounts of interest on certain of the mortgage loans. Any shortfalls in interest collections resulting from the application of the Relief Act would result in a reduction of the amounts distributable to the holders of the related series of certificates, and would not be covered by advances or, unless otherwise specified in the related prospectus supplement, any form of credit support provided in connection with those certificates. In addition, the Relief Act imposes limitations that would impair the ability of the servicer to foreclose on an affected mortgage loan during the borrower's period of active duty status, and, under certain circumstances, during an additional three-month period thereafter. TYPE OF MORTGAGED PROPERTY The lender may be subject to additional risk depending upon the type and use of the Mortgaged Property in question. For instance, Mortgaged Properties which are hospitals, nursing homes or convalescent homes may present special risks to lenders in large part due to significant governmental regulation of the operation, maintenance, control and financing of health care institutions. Mortgages on Mortgaged Properties which are owned by the borrower under a condominium form of ownership are subject to the declaration, by-laws and other rules and regulations of the condominium association. Mortgaged Properties which are hotels or motels may present additional risk to the lender in that: 1. hotels and motels are typically operated pursuant to franchise, management and operating agreements which may be terminable by the operator; and 2. the transferability of the hotel's operating, liquor and other licenses to the entity acquiring the hotel either through purchase or foreclosure is subject to the vagaries of local law requirements. In addition, Mortgaged Properties which are multifamily properties or cooperatively owned multifamily properties may be subject to rent control laws, which could impact the future cash flows of those properties. AMERICANS WITH DISABILITIES ACT Under Title III of the Americans with Disabilities Act of 1990 (the "ADA"), in order to protect individuals with disabilities, public accommodations (such as hotels, restaurants, shopping centers, hospitals, schools and social service center establishments) must remove architectural and communication barriers which are structural in nature from existing places of public accommodation to the extent "readily achievable." In addition, under the ADA, alterations to a place of public accommodation or a commercial facility are to be made so that, to the maximum 68 extent feasible, the altered portions are readily accessible to and usable by disabled individuals. The "readily achievable" standard takes into account, among other factors, the financial resources of the affected site, owner, landlord or other applicable person. In addition to imposing a possible financial burden on the borrower in its capacity as owner or landlord, the ADA may also impose these requirements on a foreclosing lender who succeeds to the interest of the borrower as owner or landlord. Furthermore, since the "readily achievable" standard may vary depending on the financial condition of the owner or landlord, a foreclosing lender who is financially more capable than the borrower of complying with the requirements of the ADA may be subject to more stringent requirements than those to which the borrower is subject. FORFEITURE FOR DRUG, RICO AND MONEY LAUNDERING VIOLATIONS Federal law provides that property purchased or improved with assets derived from criminal activity or otherwise tainted, or used in the commission of certain offenses, can be seized and ordered forfeited to the United States of America. The offenses which can trigger such a seizure and forfeiture include, among others, violations of the Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy Act, the anti-money laundering laws and regulations, including the USA Patriot Act of 2001 and the regulations issued pursuant to that Act, as well as the narcotic drug laws. In many instances, the United States may seize the property even before a conviction occurs. In the event of a forfeiture proceeding, a lender may be able to establish its interest in the property by proving that (1) its mortgage was executed and recorded before the commission of the illegal conduct from which the assets used to purchase or improve the property were derived or before any other crime upon which the forfeiture is based, or (2) the lender, at the time of the execution of the mortgage, "did not know or was reasonably without cause to believe that the property was subject to forfeiture." However, there is no assurance that such defense will be successful. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The following is a general discussion of the anticipated material federal income tax consequences of the purchase, ownership and disposition of certificates. The discussion below does not purport to address all federal income tax consequences that may be applicable to particular categories of investors, some of which may be subject to special rules. The authorities on which this discussion is based are subject to change or differing interpretations, and any change or interpretation could apply retroactively. No rulings have been or will be sought from the IRS with respect to any of the federal income tax consequences discussed below. Accordingly, the IRS may take contrary positions. This discussion reflects the applicable provisions of the Code as well as regulations (the "REMIC Regulations") promulgated by the U.S. Department of Treasury (the "Treasury"). Investors should consult their own tax advisors in determining the federal, state, local and other tax consequences to them of the purchase, ownership and disposition of certificates. For purposes of this discussion, (1) references to the mortgage loans include references to the mortgage loans underlying MBS included in the mortgage assets and (2) where the applicable prospectus supplement provides for a fixed retained yield with respect to the mortgage loans underlying a series of certificates, references to the mortgage loans will be deemed to refer to that portion of the mortgage loans held by the trust fund which does not include the Retained Interest. References to a "holder" or "certificateholder" in this discussion generally mean the beneficial owner of a certificate. 69 FEDERAL INCOME TAX CONSEQUENCES FOR REMIC CERTIFICATES GENERAL With respect to a particular series of certificates, an election may be made to treat the trust fund or one or more segregated pools of assets in the trust fund as one or more REMICs within the meaning of Code Section 860D. A trust fund or a portion of a trust fund as to which a REMIC election is made will be referred to as a "REMIC Pool." For purposes of this discussion, certificates of a series as to which one or more REMIC elections are made are referred to as "REMIC Certificates" and will consist of one or more classes of "Regular Certificates" and one class of Residual Certificates in the case of each REMIC Pool. Qualification as a REMIC requires ongoing compliance with certain conditions. With respect to each series of REMIC Certificates, Cadwalader, Wickersham & Taft LLP, counsel to the Depositor, will deliver its opinion generally to the effect that, assuming: 1. the making of an election, 2. compliance with the Pooling Agreement and any other governing documents and 3. compliance with any changes in the law, including any amendments to the Code or applicable Treasury regulations under the Code, each REMIC Pool will qualify as a REMIC. In that case, the Regular Certificates will be considered to be "regular interests" in the REMIC Pool and generally will be treated for federal income tax purposes as if they were newly originated debt instruments, and the Residual Certificates will be considered to be "residual interests" in the REMIC Pool. The prospectus supplement for each series of certificates will indicate whether one or more REMIC elections with respect to the related trust fund will be made, in which event references to "REMIC" or "REMIC Pool" below shall be deemed to refer to that REMIC Pool. If so specified in the applicable prospectus supplement, the portion of a trust fund as to which a REMIC election is not made may be treated as a grantor trust for federal income tax purposes. See "--Federal Income Tax Consequences for Certificates as to Which No REMIC Election Is Made" below. CHARACTERIZATION OF INVESTMENTS IN REMIC CERTIFICATES REMIC Certificates held by a domestic building and loan association will constitute "a regular or residual interest in a REMIC" within the meaning of Code Section 7701(a)(19)(C)(xi), but only in the same proportion that the assets of the REMIC Pool would be treated as "loans . . . secured by an interest in real property which is . . . residential real property" (such as single family or multifamily properties, but not commercial properties) within the meaning of Code Section 7701(a)(19)(C)(v) or as other assets described in Code Section 7701(a)(19)(C), and otherwise will not qualify for that treatment. REMIC Certificates held by a real estate investment trust will constitute "real estate assets" within the meaning of Code Section 856(c)(5)(B), and interest, including original issue discount, on the Regular Certificates and income with respect to Residual Certificates will be considered "interest on obligations secured by mortgages on real property or on interests in real property" within the meaning of Code Section 856(c)(3)(B) if received by a real estate investment trust in the same proportion that, for both purposes, the assets of the REMIC Pool would be so treated. If at all times 95% or more of the assets of the REMIC Pool qualify for each of the foregoing respective treatments, the REMIC Certificates will qualify for the corresponding status in their entirety. Mortgage Loans held by the REMIC Pool that have been defeased with U.S. Treasury obligations will not qualify for the foregoing treatments. For purposes of Code Section 856(c)(5)(B), payments of principal and interest on the mortgage loans that are reinvested pending distribution to holders of REMIC Certificates qualify for that treatment. Where two REMIC Pools are a part of a tiered structure they will be treated as one REMIC for purposes of the tests described above respecting asset ownership of more or less than 95%. Regular Certificates will be "qualified mortgages" for another REMIC for purposes of 70 Code Section 860G(a)(3) and "permitted assets" for a financial asset securitization investment trust for purposes of Section 860L(c). REMIC Certificates held by a regulated investment company will not constitute "Government Securities" within the meaning of Code Section 851(b)(3)(A)(i). REMIC Certificates held by certain financial institutions will constitute an "evidence of indebtedness" within the meaning of Code Section 582(c)(1). QUALIFICATION AS A REMIC In order for the REMIC Pool to qualify as a REMIC, there must be ongoing compliance on the part of the REMIC Pool with the requirements set forth in the Code. The REMIC Pool must fulfill an asset test, which requires that no more than a de minimis portion of the assets of the REMIC Pool, as of the close of the third calendar month beginning after the "Startup Day" (which for purposes of this discussion is the date of issuance of the REMIC Certificates) and at all times thereafter, may consist of assets other than "qualified mortgages" and "permitted investments." The REMIC Regulations provide a safe harbor pursuant to which the de minimis requirement is met if at all times the aggregate adjusted basis of the nonqualified assets is less than 1% of the aggregate adjusted basis of all the REMIC Pool's assets. An entity that fails to meet the safe harbor may nevertheless demonstrate that it holds no more than a de minimis amount of nonqualified assets. A REMIC also must provide "reasonable arrangements" to prevent its residual interest from being held by "disqualified organizations" and must furnish applicable tax information to transferors or agents that violate this requirement. The Pooling Agreement for each series will contain a provision designed to meet this requirement. See "--Taxation of Residual Certificates--Tax-Related Restrictions on Transfer of Residual Certificates--Disqualified Organizations" below. A qualified mortgage is any obligation that is principally secured by an interest in real property and that is either transferred to the REMIC Pool on the Startup Day in exchange for regular or residual interests, or is purchased by the REMIC Pool within a three-month period thereafter pursuant to a fixed price contract in effect on the Startup Day. Qualified mortgages include (i) whole mortgage loans, such as the mortgage loans, (ii) certificates of beneficial interest in a grantor trust that holds mortgage loans, including certain of the MBS, (iii) regular interests in another REMIC, such as MBS in a trust as to which a REMIC election has been made, (iv) loans secured by timeshare interests and (v) loans secured by shares held by a tenant stockholder in a cooperative housing corporation, provided, in general: 1. the fair market value of the real property security (including buildings and structural components) is at least 80% of the principal balance of the related mortgage loan or mortgage loan underlying the mortgage certificate either at origination or as of the Startup Day (an original loan-to-value ratio of not more than 125% with respect to the real property security), or 2. substantially all the proceeds of the mortgage loan or the underlying mortgage loan were used to acquire, improve or protect an interest in real property that, at the origination date, was the only security for the mortgage loan or underlying mortgage loan. If the mortgage loan has been substantially modified other than in connection with a default or reasonably foreseeable default, it must meet the loan-to-value test in (1) of the preceding sentence as of the date of the last modification or at closing. A qualified mortgage includes a qualified replacement mortgage, which is any obligation that would have been treated as a qualified mortgage if it were transferred to the REMIC Pool on the Startup Day and that is received either (1) in exchange for any qualified mortgage within a three-month period thereafter or (2) in exchange for a defective obligation within a two-year period thereafter. A "defective obligation" includes o a mortgage in default or as to which default is reasonably foreseeable, o a mortgage as to which a customary representation or warranty made at the time of transfer to the REMIC Pool has been breached, 71 o a mortgage that was fraudulently procured by the mortgagor, and o a mortgage that was not in fact principally secured by real property (but only if the mortgage is disposed of within 90 days of discovery). A mortgage loan that is defective as described in the 4th clause in the immediately preceding sentence that is not sold or, if within two years of the Startup Day, exchanged, within 90 days of discovery, ceases to be a qualified mortgage after that 90-day period. Permitted investments include cash flow investments, qualified reserve assets, and foreclosure property. A cash flow investment is an investment, earning a return in the nature of interest, of amounts received on or with respect to qualified mortgages for a temporary period, not exceeding 13 months, until the next scheduled distribution to holders of interests in the REMIC Pool. A qualified reserve asset is any intangible property held for investment that is part of any reasonably required reserve maintained by the REMIC Pool to provide for payments of expenses of the REMIC Pool or amounts due on the regular or residual interests in the event of defaults (including delinquencies) on the qualified mortgages, lower than expected reinvestment returns, prepayment interest shortfalls and certain other contingencies. The reserve fund will be disqualified if more than 30% of the gross income from the assets in the fund for the year is derived from the sale or other disposition of property held for less than three months, unless required to prevent a default on the regular interests caused by a default on one or more qualified mortgages. A reserve fund must be reduced "promptly and appropriately" as payments on the mortgage loans are received. Foreclosure property is real property acquired by the REMIC Pool in connection with the default or imminent default of a qualified mortgage, provided the Depositor had no knowledge that the mortgage loan would go into default at the time it was transferred to the REMIC Pool. Foreclosure property generally must be disposed of prior to the close of the third calendar year following the acquisition of the property by the REMIC Pool, with an extension that may be granted by the IRS. In addition to the foregoing requirements, the various interests in a REMIC Pool also must meet certain requirements. All of the interests in a REMIC Pool must be either of the following: (1) one or more classes of regular interests or (2) a single class of residual interests on which distributions, if any, are made pro rata. A regular interest is an interest in a REMIC Pool that is issued on the Startup Day with fixed terms, is designated as a regular interest, and unconditionally entitles the holder to receive a specified principal amount (or other similar amount), and provides that interest payments (or other similar amounts), if any, at or before maturity either are payable based on a fixed rate or a qualified variable rate, or consist of a specified, nonvarying portion of the interest payments on qualified mortgages. The specified portion may consist of a fixed number of basis points, a fixed percentage of the total interest, or a fixed or qualified variable or inverse variable rate on some or all of the qualified mortgages minus a different fixed or qualified variable rate. The specified principal amount of a regular interest that provides for interest payments consisting of a specified, nonvarying portion of interest payments on qualified mortgages may be zero. A residual interest is an interest in a REMIC Pool other than a regular interest that is issued on the Startup Day and that is designated as a residual interest. An interest in a REMIC Pool may be treated as a regular interest even if payments of principal with respect to that interest are subordinated to payments on other regular interests or the residual interest in the REMIC Pool, and are dependent on the absence of defaults or delinquencies on qualified mortgages or permitted investments, lower than reasonably expected returns on permitted investments, unanticipated expenses incurred by the REMIC Pool or prepayment interest shortfalls. Accordingly, the Regular Certificates of a series will constitute one or more classes of regular interests, and the Residual Certificates for each REMIC Pool of that series will constitute a single class of residual interests on which distributions are made pro rata. If an entity, such as the REMIC Pool, fails to comply with one or more of the ongoing requirements of the Code for REMIC status during any taxable year, the Code provides that the entity will not be treated as a REMIC for that year and thereafter. In this event, an entity with 72 multiple classes of ownership interests may be treated as a separate association taxable as a corporation under Treasury regulations, and the Regular Certificates may be treated as equity interests in the REMIC Pool. The Code, however, authorizes the Treasury Department to issue regulations that address situations where failure to meet one or more of the requirements for REMIC status occurs inadvertently and in good faith, and disqualification of the REMIC Pool would occur absent regulatory relief. Investors should be aware, however, that the Conference Committee Report to the Tax Reform Act of 1986 (the "Reform Act") indicates that the relief may be accompanied by sanctions, such as the imposition of a corporate tax on all or a portion of the REMIC Pool's income for the period of time in which the requirements for REMIC status are not satisfied. TAXATION OF REGULAR CERTIFICATES General. A regular interest will be treated as a newly originated debt instrument for federal income tax purposes. In general, interest, original issue discount and market discount on a Regular Certificate will be treated as ordinary income to a holder of the Regular Certificate (the "Regular Certificateholder") as they accrue, and principal payments on a Regular Certificate will be treated as a return of capital to the extent of the Regular Certificateholder's basis in the Regular Certificate allocable thereto (other than accrued market discount not yet reported as ordinary income). Regular Certificateholders must use the accrual method of accounting with regard to Regular Certificates, regardless of the method of accounting otherwise used by those Regular Certificateholders. Original Issue Discount. Accrual Certificates and principal-only certificates will be, and other classes of Regular Certificates may be, issued with "original issue discount" within the meaning of Code Section 1273(a). Holders of any class of Regular Certificates having original issue discount generally must include original issue discount in ordinary income for federal income tax purposes as it accrues, in accordance with the constant yield method that takes into account the compounding of interest, in advance of receipt of the cash attributable to that income. The following discussion is based in part on Treasury regulations (the "OID Regulations") under Code Sections 1271 through 1275 and in part on the provisions of the Reform Act. Regular Certificateholders should be aware, however, that the OID Regulations do not adequately address certain issues relevant to prepayable securities, such as the Regular Certificates. To the extent those issues are not addressed in those regulations, the Depositor intends to apply the methodology described in the Conference Committee Report to the Reform Act. We cannot assure you that the IRS will not take a different position as to those matters not currently addressed by the OID Regulations. Moreover, the OID Regulations include an anti-abuse rule allowing the IRS to apply or depart from the OID Regulations where necessary or appropriate to ensure a reasonable tax result in light of the applicable statutory provisions. A tax result will not be considered unreasonable under the anti-abuse rule in the absence of a substantial effect on the present value of a taxpayer's tax liability. Investors are advised to consult their own tax advisors as to the discussion in this prospectus and the appropriate method for reporting interest and original issue discount with respect to the Regular Certificates. Each Regular Certificate, except to the extent described below with respect to a Regular Certificate on which principal is distributed by random lot ("Random Lot Certificates"), will be treated as a single installment obligation for purposes of determining the original issue discount includible in a Regular Certificateholder's income. The total amount of original issue discount on a Regular Certificate is the excess of the "stated redemption price at maturity" of the Regular Certificate over its "issue price." The issue price of a class of Regular Certificates offered pursuant to this prospectus generally is the first price at which a substantial amount of Regular Certificates of that class is sold to the public (excluding bond houses, brokers and underwriters). Although unclear under the OID Regulations, the Depositor intends to treat the issue price of a class as to 73 which there is no substantial sale as of the issue date or that is retained by the Depositor as the fair market value of that class as of the issue date. The issue price of a Regular Certificate also includes the amount paid by an initial Regular Certificateholder for accrued interest that relates to a period prior to the issue date of the Regular Certificate, unless the Regular Certificateholder elects on its federal income tax return to exclude that amount from the issue price and to recover it on the first distribution date. The stated redemption price at maturity of a Regular Certificate always includes the original principal amount of the Regular Certificate, but generally will not include distributions of stated interest if those interest distributions constitute "qualified stated interest." Under the OID Regulations, qualified stated interest generally means interest payable at a single fixed rate or a qualified variable rate (as described below) provided that those interest payments are unconditionally payable at intervals of one year or less during the entire term of the Regular Certificate. Because there is no penalty or default remedy in the case of nonpayment of interest with respect to a Regular Certificate, it is possible that no interest on any class of Regular Certificates will be treated as qualified stated interest. However, except as provided in the following three sentences or in the applicable prospectus supplement, because the underlying mortgage loans provide for remedies in the event of default, we intend to treat interest with respect to the Regular Certificates as qualified stated interest. Distributions of interest on an Accrual Certificate, or on other Regular Certificates with respect to which deferred interest will accrue, will not constitute qualified stated interest, in which case the stated redemption price at maturity of the Regular Certificates includes all distributions of interest as well as principal on those Regular Certificates. Likewise, we intend to treat an "interest only" class, or a class on which interest is substantially disproportionate to its principal amount, a so-called "super-premium" class, as having no qualified stated interest. Where the interval between the issue date and the first distribution date on a Regular Certificate is shorter than the interval between subsequent distribution dates, the interest attributable to the additional days will be included in the stated redemption price at maturity. Under a de minimis rule, original issue discount on a Regular Certificate will be considered to be zero if the original issue discount is less than 0.25% of the stated redemption price at maturity of the Regular Certificate multiplied by the weighted average maturity of the Regular Certificate. For this purpose, the weighted average maturity of the Regular Certificate is computed as the sum of the amounts determined by multiplying the number of full years (i.e., rounding down partial years) from the issue date until each distribution is scheduled to be made by a fraction, the numerator of which is the amount of each distribution included in the stated redemption price at maturity of the Regular Certificate and the denominator of which is the stated redemption price at maturity of the Regular Certificate. The Conference Committee Report to the Reform Act provides that the schedule of distributions should be determined in accordance with the assumed rate of prepayment of the mortgage loans (the "Prepayment Assumption") and the anticipated reinvestment rate, if any, relating to the Regular Certificates. The Prepayment Assumption with respect to a Series of Regular Certificates will be set forth in the related prospectus supplement. Holders generally must report de minimis original issue discount pro rata as principal payments are received, and that income will be capital gain if the Regular Certificate is held as a capital asset. However, under the OID Regulations, Regular Certificateholders may elect to accrue all de minimis original issue discount as well as market discount and market premium under the constant yield method. See "--Election to Treat All Interest Under the Constant Yield Method" below. A Regular Certificateholder generally must include in gross income for any taxable year the sum of the "daily portions," as defined below, of the original issue discount on the Regular Certificate accrued during an accrual period for each day on which it holds the Regular Certificate, including the date of purchase but excluding the date of disposition. We intend to treat the monthly period ending on the day before each distribution date as the accrual period. With respect to each Regular Certificate, a calculation will be made of the original issue discount that accrues during each successive full accrual period, or shorter period from the date of original issue, that ends on the day before the related distribution date on the Regular Certificate. The 74 Conference Committee Report to the Reform Act states that the rate of accrual of original issue discount is intended to be based on the Prepayment Assumption. Other than as discussed below with respect to a Random Lot Certificate, the original issue discount accruing in a full accrual period would be the excess, if any, of 1. the sum of (a) the present value of all of the remaining distributions to be made on the Regular Certificate as of the end of that accrual period that are included in the Regular Certificate's stated redemption price at maturity and (b) the distributions made on the Regular Certificate during the accrual period that are included in the Regular Certificate's stated redemption price at maturity, over 2. the adjusted issue price of the Regular Certificate at the beginning of the accrual period. The present value of the remaining distributions referred to in the preceding sentence is calculated based on: 1. the yield to maturity of the Regular Certificate at the issue date, 2. events (including actual prepayments) that have occurred prior to the end of the accrual period, and 3. the Prepayment Assumption. For these purposes, the adjusted issue price of a Regular Certificate at the beginning of any accrual period equals the issue price of the Regular Certificate, increased by the aggregate amount of original issue discount with respect to the Regular Certificate that accrued in all prior accrual periods and reduced by the amount of distributions included in the Regular Certificate's stated redemption price at maturity that were made on the Regular Certificate in those prior periods. The original issue discount accruing during any accrual period (as determined in this paragraph) will then be divided by the number of days in the period to determine the daily portion of original issue discount for each day in the period. With respect to an initial accrual period shorter than a full accrual period, the daily portions of original issue discount must be determined according to an appropriate allocation under any reasonable method. Under the method described above, the daily portions of original issue discount required to be included in income by a Regular Certificateholder generally will increase to take into account prepayments on the Regular Certificates as a result of prepayments on the mortgage loans that exceed the Prepayment Assumption, and generally will decrease, but not below zero for any period, if the prepayments are slower than the Prepayment Assumption. An increase in prepayments on the mortgage loans with respect to a Series of Regular Certificates can result in both a change in the priority of principal payments with respect to certain classes of Regular Certificates and either an increase or decrease in the daily portions of original issue discount with respect to those Regular Certificates. In the case of a Random Lot Certificate, we intend to determine the yield to maturity of that certificate based upon the anticipated payment characteristics of the class as a whole under the Prepayment Assumption. In general, the original issue discount accruing on each Random Lot Certificate in a full accrual period would be its allocable share of the original issue discount with respect to the entire class, as determined in accordance with the preceding paragraph. However, in the case of a distribution in retirement of the entire unpaid principal balance of any Random Lot Certificate, or portion of that unpaid principal balance, (a) the remaining unaccrued original issue discount allocable to that certificate (or to that portion) will accrue at the time of that distribution, and (b) the accrual of original issue discount allocable to each remaining certificate of the class (or the remaining unpaid principal balance of a partially redeemed Random Lot Certificate after a distribution of principal has been received) will be adjusted by reducing the present value of the remaining payments on that class and the adjusted issue price of that class to the extent attributable to the portion of the unpaid principal balance of the class that was distributed. We believe that the foregoing treatment is consistent with the "pro rata prepayment" rules of the OID Regulations, but with the rate of accrual of original issue discount 75 determined based on the Prepayment Assumption for the class as a whole. You are advised to consult your tax advisors as to this treatment. Acquisition Premium. A purchaser of a Regular Certificate at a price greater than its adjusted issue price but less than its stated redemption price at maturity will be required to include in gross income the daily portions of the original issue discount on the Regular Certificate reduced pro rata by a fraction, the numerator of which is the excess of its purchase price over the adjusted issue price and the denominator of which is the excess of the remaining stated redemption price at maturity over the adjusted issue price. Alternatively, a subsequent purchaser may elect to treat all of the acquisition premium under the constant yield method, as described below under the heading "--Election to Treat All Interest Under the Constant Yield Method" below. Variable Rate Regular Certificates. Regular Certificates may provide for interest based on a variable rate. Under the OID Regulations, interest is treated as payable at a variable rate if, generally: 1. the issue price does not exceed the original principal balance by more than a specified amount, and 2. the interest compounds or is payable at least annually at current values of (a) one or more "qualified floating rates," (b) a single fixed rate and one or more qualified floating rates, (c) a single "objective rate," or (d) a single fixed rate and a single objective rate that is a "qualified inverse floating rate." A floating rate is a qualified floating rate if variations in the rate can reasonably be expected to measure contemporaneous variations in the cost of newly borrowed funds, where the rate is subject to a fixed multiple that is greater than 0.65, but not more than 1.35. The rate may also be increased or decreased by a fixed spread or subject to a fixed cap or floor, or a cap or floor that is not reasonably expected as of the issue date to affect the yield of the instrument significantly. An objective rate (other than a qualified floating rate) is a rate that is determined using a single fixed formula and that is based on objective financial or economic information, provided that the information is not (1) within the control of the issuer or a related party or (2) unique to the circumstances of the issuer or a related party. A qualified inverse floating rate is a rate equal to a fixed rate minus a qualified floating rate that inversely reflects contemporaneous variations in the cost of newly borrowed funds; an inverse floating rate that is not a qualified floating rate may nevertheless be an objective rate. A class of Regular Certificates may be issued under this prospectus that does not have a variable rate under the OID Regulations, for example, a class that bears different rates at different times during the period it is outstanding so that it is considered significantly "front-loaded" or "back-loaded" within the meaning of the OID Regulations. It is possible that a class of this type may be considered to bear "contingent interest" within the meaning of the OID Regulations. The OID Regulations, as they relate to the treatment of contingent interest, are by their terms not applicable to Regular Certificates. However, if final regulations dealing with contingent interest with respect to Regular Certificates apply the same principles as the current regulations, those regulations may lead to different timing of income inclusion than would be the case under the variable interest regulations. Furthermore, application of those principles could lead to the characterization of gain on the sale of contingent interest Regular Certificates as ordinary income. Investors should consult their tax advisors regarding the appropriate treatment of any Regular Certificate that does not pay interest at a fixed rate or variable rate as described in this paragraph. Under the REMIC Regulations, a Regular Certificate (1) bearing a rate that qualifies as a variable rate under the OID Regulations that is tied to current values of a variable rate (or the 76 highest, lowest or average of two or more variable rates), including a rate based on the average cost of funds of one or more financial institutions, or a positive or negative multiple of a rate (plus or minus a specified number of basis points), or that represents a weighted average of rates on some or all of the mortgage loans, including a rate that is subject to one or more caps or floors, or (2) bearing one or more of these variable rates for one or more periods or one or more fixed rates for one or more periods, and a different variable rate or fixed rate for other periods qualifies as a regular interest in a REMIC. Accordingly, unless otherwise indicated in the applicable prospectus supplement, we intend to treat Regular Certificates that qualify as regular interests under this rule in the same manner as obligations bearing a variable rate for original issue discount reporting purposes. The amount of original issue discount with respect to a Regular Certificate bearing a variable rate of interest will accrue in the manner described above under "--Original Issue Discount" with the yield to maturity and future payments on that Regular Certificate generally to be determined by assuming that interest will be payable for the life of the Regular Certificate based on the initial rate (or, if different, the value of the applicable variable rate as of the pricing date) for the relevant class. Unless otherwise specified in the applicable prospectus supplement, we intend to treat variable interest as qualified stated interest, other than variable interest on an interest-only or super-premium class, which will be treated as non-qualified stated interest includible in the stated redemption price at maturity. Ordinary income reportable for any period will be adjusted based on subsequent changes in the applicable interest rate index. Although unclear under the OID Regulations, unless required otherwise by applicable final regulations, we intend to treat Regular Certificates bearing an interest rate that is a weighted average of the net interest rates on mortgage loans or Mortgage Certificates having fixed or adjustable rates, as having qualified stated interest, except to the extent that initial "teaser" rates cause sufficiently "back-loaded" interest to create more than de minimis original issue discount. The yield on those Regular Certificates for purposes of accruing original issue discount will be a hypothetical fixed rate based on the fixed rates, in the case of fixed rate mortgage loans, and initial "teaser rates" followed by fully indexed rates, in the case of adjustable rate mortgage loans. In the case of adjustable rate mortgage loans, the applicable index used to compute interest on the mortgage loans will be the index in effect on the pricing date (or possibly the issue date), and in the case of initial teaser rates, will be deemed to be in effect beginning with the period in which the first weighted average adjustment date occurring after the issue date occurs. Adjustments will be made in each accrual period either increasing or decreasing the amount of ordinary income reportable to reflect the actual pass-through interest rate on the Regular Certificates. Deferred Interest. Under the OID Regulations, all interest on a Regular Certificate as to which there may be deferred interest is includible in the stated redemption price at maturity thereof. Accordingly, any deferred interest that accrues with respect to a class of Regular Certificates may constitute income to the holders of such Regular Certificates prior to the time distributions of cash with respect to such deferred interest are made. Market Discount. A purchaser of a Regular Certificate also may be subject to the market discount rules of Code Section 1276 through 1278. Under these Code sections and the principles applied by the OID Regulations in the context of original issue discount, "market discount" is the amount by which the purchaser's original basis in the Regular Certificate (exclusive of accrued qualified stated interest) (1) is exceeded by the then-current principal amount of the Regular Certificate or (2) in the case of a Regular Certificate having original issue discount, is exceeded by the adjusted issue price of that Regular Certificate at the time of purchase. The purchaser generally will be required to recognize ordinary income to the extent of accrued market discount on the Regular Certificate as distributions includible in the stated redemption price at maturity of the Regular Certificate are received, in an amount not exceeding that distribution. The market discount would accrue in 77 a manner to be provided in Treasury regulations and should take into account the Prepayment Assumption. The Conference Committee Report to the Reform Act provides that until regulations are issued, the market discount would accrue either (1) on the basis of a constant interest rate or (2) in the ratio of stated interest allocable to the relevant period to the sum of the interest for that period plus the remaining interest as of the end of that period, or in the case of a Regular Certificate issued with original issue discount, in the ratio of original issue discount accrued for the relevant period to the sum of the original issue discount accrued for that period plus the remaining original issue discount as of the end of that period. You also generally will be required to treat a portion of any gain on a sale or exchange of the Regular Certificate as ordinary income to the extent of the market discount accrued to the date of disposition under one of the foregoing methods, less any accrued market discount previously reported as ordinary income as partial distributions in reduction of the stated redemption price at maturity were received. You will be required to defer deduction of a portion of the excess of the interest paid or accrued on indebtedness incurred to purchase or carry a Regular Certificate over the interest distributable on those Regular Certificates. The deferred portion of an interest expense in any taxable year generally will not exceed the accrued market discount on the Regular Certificate for that year. The deferred interest expense is, in general, allowed as a deduction not later than the year in which the related market discount income is recognized or the Regular Certificate is disposed of. As an alternative to the inclusion of market discount in income on the foregoing basis, you may elect to include market discount in income currently as it accrues on all market discount instruments you acquired in that taxable year or thereafter, in which case the interest deferral rule will not apply. See "--Election to Treat All Interest Under the Constant Yield Method" below regarding an alternative manner in which that election may be deemed to be made. Market discount with respect to a Regular Certificate will be considered to be zero if the market discount is less than 0.25% of the remaining stated redemption price at maturity of the Regular Certificate multiplied by the weighted average maturity of the Regular Certificate (determined as described above in the third paragraph under "Original Issue Discount") remaining after the date of purchase. It appears that de minimis market discount would be reported in a manner similar to de minimis original issue discount. See "--Original Issue Discount" above. Treasury regulations implementing the market discount rules have not yet been issued, and therefore investors should consult their own tax advisors regarding the application of these rules. You should also consult Revenue Procedure 92-67 concerning the elections to include market discount in income currently and to accrue market discount on the basis of the constant yield method. Premium. A Regular Certificate purchased at a cost, excluding any portion of the cost attributable to accrued qualified stated interest, greater than its remaining stated redemption price at maturity generally is considered to be purchased at a premium. If you hold a Regular Certificate as a "capital asset" within the meaning of Code Section 1221, you may elect under Code Section 171 to amortize that premium under the constant yield method. Final regulations with respect to amortization of bond premium do not by their terms apply to prepayable obligations such as the Regular Certificates. However, the Conference Committee Report to the Reform Act indicates a Congressional intent that the same rules that will apply to the accrual of market discount on installment obligations will also apply to amortizing bond premium under Code Section 171 on installment obligations such as the Regular Certificates, although it is unclear whether the alternatives to the constant yield method described above under "Market Discount" are available. Amortizable bond premium will be treated as an offset to interest income on a Regular Certificate rather than as a separate deduction item. See "--Election to Treat All Interest Under the Constant Yield Method" below regarding an alternative manner in which the Code Section 171 election may be deemed to be made. Election to Treat All Interest Under the Constant Yield Method. A holder of a debt instrument such as a Regular Certificate may elect to treat all interest that accrues on the instrument using the constant yield method, with none of the interest being 78 treated as qualified stated interest. For purposes of applying the constant yield method to a debt instrument subject to an election, (1) "interest" includes stated interest, original issue discount, de minimis original issue discount, market discount and de minimis market discount, as adjusted by any amortizable bond premium or acquisition premium and (2) the debt instrument is treated as if the instrument were issued on the holder's acquisition date in the amount of the holder's adjusted basis immediately after acquisition. It is unclear whether, for this purpose, the initial Prepayment Assumption would continue to apply or if a new prepayment assumption as of the date of the holder's acquisition would apply. A holder generally may make an election on an instrument by instrument basis or for a class or group of debt instruments. However, if the holder makes an election with respect to a debt instrument with amortizable bond premium or with market discount, the holder is deemed to have made elections to amortize bond premium or to report market discount income currently as it accrues under the constant yield method, respectively, for all debt instruments acquired by the holder in the same taxable year or thereafter. The election is made on the holder's federal income tax return for the year in which the debt instrument is acquired and is irrevocable except with the approval of the IRS. You should consult their own tax advisors regarding the advisability of making an election. Sale or Exchange of Regular Certificates. If you sell or exchange a Regular Certificate, you will recognize gain or loss equal to the difference, if any, between the amount received (other than amounts allocable to accrued interest) and your adjusted basis in the Regular Certificate. The adjusted basis of a Regular Certificate generally will equal the cost of the Regular Certificate to the seller, increased by any original issue discount or market discount previously included in the seller's gross income with respect to the Regular Certificate and reduced by amounts included in the stated redemption price at maturity of the Regular Certificate that were previously received by the seller, by any amortized premium and by previously recognized losses. Except as described above with respect to market discount, and except as provided in this paragraph, any gain or loss on the sale or exchange of a Regular Certificate realized by an investor who holds the Regular Certificate as a capital asset will be capital gain or loss and will be long-term or short-term depending on whether the Regular Certificate has been held for the applicable holding period (described below). That gain will be treated as ordinary income as follows: 1. if a Regular Certificate is held as part of a "conversion transaction" as defined in Code Section 1258(c), up to the amount of interest that would have accrued on the Regular Certificateholder's net investment in the conversion transaction at 120% of the appropriate applicable Federal rate under Code Section 1274(d) in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior distribution of property that was held as a part of that transaction, 2. in the case of a non-corporate taxpayer, to the extent the taxpayer has made an election under Code Section 163(d)(4) to have net capital gains taxed as investment income at ordinary rates, or 3. to the extent that the gain does not exceed the excess, if any, of (a) the amount that would have been includible in the gross income of the holder if its yield on the Regular Certificate were 110% of the applicable Federal rate as of the date of purchase, over (b) the amount of income actually includible in the gross income of that holder with respect to the Regular Certificate. In addition, gain or loss recognized from the sale of a Regular Certificate by certain banks or thrift institutions will be treated as ordinary income or loss pursuant to Code Section 582(c). Long-term capital gains of certain non-corporate taxpayers generally are taxed at lower rates than ordinary income or short-term capital gains of those taxpayers for property held for more than one year. The maximum tax rate for corporations is the same with respect to both ordinary income and capital gains. 79 Investors that recognize a loss on a sale or exchange of the Regular Certificates for federal income tax purposes in excess of certain threshold amounts should consult their tax advisors as to the need to file IRS Form 8886 (disclosing certain potential tax shelters) on their federal income tax returns. Treatment of Losses. Holders of Regular Certificates will be required to report income with respect to Regular Certificates on the accrual method of accounting, without giving effect to delays or reductions in distributions attributable to defaults or delinquencies on the mortgage loans allocable to a particular class of Regular Certificates, except to the extent it can be established that those losses are uncollectible. Accordingly, the holder of a Regular Certificate may have income, or may incur a diminution in cash flow as a result of a default or delinquency, but may not be able to take a deduction (subject to the discussion below) for the corresponding loss until a subsequent taxable year. In this regard, investors are cautioned that while they may generally cease to accrue interest income if it reasonably appears that the interest will be uncollectible, the IRS may take the position that original issue discount must continue to be accrued in spite of its uncollectibility until the debt instrument is disposed of in a taxable transaction or becomes worthless in accordance with the rules of Code Section 166. Under Code Section 166, holders of Regular Certificates that are corporations or that otherwise hold the Regular Certificates in connection with a trade or business should in general be allowed to deduct, as an ordinary loss, a loss sustained during the taxable year on account of those Regular Certificates becoming wholly or partially worthless, and, in general, holders of Regular Certificates that are not corporations and do not hold the Regular Certificates in connection with a trade or business will be allowed to deduct as a short-term capital loss any loss with respect to principal sustained during the taxable year on account of a portion of any class or subclass of those Regular Certificates becoming wholly worthless. Although the matter is not free from doubt, non-corporate holders of Regular Certificates should be allowed a bad debt deduction at that time as the principal balance of any class or subclass of those Regular Certificates is reduced to reflect losses resulting from any liquidated mortgage loans. The IRS, however, could take the position that non-corporate holders will be allowed a bad debt deduction to reflect those losses only after all mortgage loans remaining in the trust fund have been liquidated or that class of Regular Certificates has been otherwise retired. The IRS could also assert that losses on the Regular Certificates are deductible based on some other method that may defer those deductions for all holders, such as reducing future cash flow for purposes of computing original issue discount. This may have the effect of creating "negative" original issue discount which would be deductible only against future positive original issue discount or otherwise upon termination of the class. You are urged to consult your own tax advisors regarding the appropriate timing, amount and character of any loss sustained with respect to the Regular Certificates. While losses attributable to interest previously reported as income should be deductible as ordinary losses by both corporate and non-corporate holders, the IRS may take the position that losses attributable to accrued original issue discount may only be deducted as short-term capital losses by non-corporate holders not engaged in a trade or business. Special loss rules are applicable to banks and thrift institutions, including rules regarding reserves for bad debts. Banks and thrift institutions are advised to consult their tax advisors regarding the treatment of losses on Regular Certificates. TAXATION OF RESIDUAL CERTIFICATES Taxation of REMIC Income. Generally, the "daily portions" of REMIC taxable income or net loss will be includible as ordinary income or loss in determining the federal taxable income of holders of Residual Certificates ("Residual Certificateholders"), and will not be taxed separately to the REMIC Pool. The daily portions of REMIC taxable income or net loss of a Residual Certificateholder are determined by allocating the REMIC Pool's taxable income or net loss for each calendar quarter 80 ratably to each day in that quarter and by allocating that daily portion among the Residual Certificateholders in proportion to their respective holdings of Residual Certificates in the REMIC Pool on that day. REMIC taxable income is generally determined in the same manner as the taxable income of an individual using the accrual method of accounting, except that: 1. the limitations on deductibility of investment interest expense and expenses for the production of income do not apply, 2. all bad loans will be deductible as business bad debts, and 3. the limitation on the deductibility of interest and expenses related to tax-exempt income will apply. The REMIC Pool's gross income includes interest, original issue discount income and market discount income, if any, on the mortgage loans, reduced by amortization of any premium on the mortgage loans, plus income from amortization of issue premium, if any, on the Regular Certificates, plus income on reinvestment of cash flows and reserve assets, plus any cancellation of indebtedness income upon allocation of realized losses to the Regular Certificates. The REMIC Pool's deductions include interest and original issue discount expense on the Regular Certificates, servicing fees on the mortgage loans, other administrative expenses of the REMIC Pool and realized losses on the mortgage loans. The requirement that Residual Certificateholders report their pro rata share of taxable income or net loss of the REMIC Pool will continue until there are no certificates of any class of the related series outstanding. The taxable income recognized by a Residual Certificateholder in any taxable year will be affected by, among other factors, the relationship between the timing of recognition of interest and original issue discount or market discount income or amortization of premium with respect to the mortgage loans, on the one hand, and the timing of deductions for interest (including original issue discount) on the Regular Certificates or income from amortization of issue premium on the Regular Certificates, on the other hand. In the event that an interest in the mortgage loans is acquired by the REMIC Pool at a discount, and one or more of those mortgage loans is prepaid, the Residual Certificateholder may recognize taxable income without being entitled to receive a corresponding amount of cash because (1) the prepayment may be used in whole or in part to make distributions in reduction of principal on the Regular Certificates and (2) the discount on the mortgage loans which is includible in income may exceed the deduction allowed upon those distributions on those Regular Certificates on account of any unaccrued original issue discount relating to those Regular Certificates. When there is more than one class of Regular Certificates that distribute principal sequentially, this mismatching of income and deductions is particularly likely to occur in the early years following issuance of the Regular Certificates when distributions in reduction of principal are being made in respect of earlier classes of Regular Certificates to the extent that those classes are not issued with substantial discount. If taxable income attributable to that kind of mismatching is realized, in general, losses would be allowed in later years as distributions on the later classes of Regular Certificates are made. Taxable income may also be greater in earlier years than in later years as a result of the fact that interest expense deductions, expressed as a percentage of the outstanding principal amount of that series of Regular Certificates, may increase over time as distributions in reduction of principal are made on the lower yielding classes of Regular Certificates, whereas to the extent that the REMIC Pool includes fixed rate mortgage loans, interest income with respect to any given mortgage loan will remain constant over time as a percentage of the outstanding principal amount of that loan. Consequently, Residual Certificateholders must have sufficient other sources of cash to pay any federal, state or local income taxes due as a result of that mismatching or unrelated deductions against which to offset that income, subject to the discussion of "excess inclusions" below under "--Limitations on Offset or Exemption of REMIC Income." The timing of that mismatching of income and deductions described in this paragraph, if present with respect to a series of certificates, may have a significant adverse effect upon the Residual Certificateholder's after-tax rate of return. 81 Basis and Losses. The amount of any net loss of the REMIC Pool that you may take into account is limited to the adjusted basis of the Residual Certificate as of the close of the quarter (or time of disposition of the Residual Certificate if earlier), determined without taking into account the net loss for the quarter. The initial adjusted basis of a purchaser of a Residual Certificate is the amount paid for that Residual Certificate. The adjusted basis will be increased by the amount of taxable income of the REMIC Pool reportable by the Residual Certificateholder and will be decreased (but not below zero), first, by a cash distribution from the REMIC Pool and, second, by the amount of loss of the REMIC Pool reportable by the Residual Certificateholder. Any loss that is disallowed on account of this limitation may be carried over indefinitely with respect to the Residual Certificateholder as to whom that loss was disallowed and may be used by that Residual Certificateholder only to offset any income generated by the same REMIC Pool. You will not be permitted to amortize directly the cost of your Residual Certificate as an offset to its share of the taxable income of the related REMIC Pool. However, that taxable income will not include cash received by the REMIC Pool that represents a recovery of the REMIC Pool's basis in its assets. That recovery of basis by the REMIC Pool will have the effect of amortization of the issue price of the Residual Certificates over their life. However, in view of the possible acceleration of the income of Residual Certificateholders described under "--Taxation of REMIC Income" above, the period of time over which the issue price is effectively amortized may be longer than the economic life of the Residual Certificates. A Residual Certificate may have a negative value if the net present value of anticipated tax liabilities exceeds the present value of anticipated cash flows. The REMIC Regulations appear to treat the issue price of a residual interest as zero rather than a negative amount for purposes of determining the REMIC Pool's basis in its assets. Regulations have been proposed addressing the federal income tax treatment of "inducement fees" received by transferee of noneconomic REMIC residual interests. The proposed regulations would require inducement fees to be included in income over a period reasonably related to the period in which the related REMIC residual interest is expected to generate taxable income or net loss to its holder. Under two proposed safe harbor methods, inducement fees would be permitted to be included in income (i) in the same amounts and over the same period that the taxpayer uses for financial reporting purposes, provided that such period is not shorter than the period the REMIC is expected to generate taxable income or (ii) ratably over the remaining anticipated weighted average life of all the regular and residual interests issued by the REMIC, determined based on actual distributions projected as remaining to be made on such interests under the Prepayment Assumption. If the holder of a residual interest sells or otherwise disposes of the residual interest, any unrecognized portion of the inducement fee would be required to be taken into account at the time of the sale or disposition. If these rules are adopted without change, they will apply to taxable years ending on or after the date that they are published as final regulations, and consequently these rules may govern the treatment of any inducement fee received in connection with the purchase of the Residual Certificates. Prospective purchasers of the Residual Certificates should consult with their tax advisors regarding the effect of these proposed regulations. Further, to the extent that your initial adjusted basis (other than an original holder) in the Residual Certificate is greater that the corresponding portion of the REMIC Pool's basis in the mortgage loans, you will not recover a portion of that basis until termination of the REMIC Pool unless future Treasury regulations provide for periodic adjustments to the REMIC income otherwise reportable by that holder. The REMIC Regulations currently in effect do not so provide. See "--Treatment of Certain Items of REMIC Income and Expense--Market Discount" below regarding the basis of mortgage loans to the REMIC Pool and "--Sale or Exchange of a Residual Certificate" below regarding possible treatment of a loss upon termination of the REMIC Pool as a capital loss. 82 Treatment of Certain Items of REMIC Income and Expense. Although we intend to compute REMIC income and expense in accordance with the Code and applicable regulations, the authorities regarding the determination of specific items of income and expense are subject to differing interpretations. We make no representation as to the specific method that will be used for reporting income with respect to the mortgage loans and expenses with respect to the Regular Certificates, and different methods could result in different timing of reporting of taxable income or net loss to you or differences in capital gain versus ordinary income. Original Issue Discount and Premium. Generally, the REMIC Pool's deductions for original issue discount and income from amortization of issue premium on the Regular Certificates will be determined in the same manner as original issue discount income on Regular Certificates as described under "--Taxation of Regular Certificates--Original Issue Discount" and "--Variable Rate Regular Certificates," without regard to the de minimis rule described in that section, and "--Premium" above. Deferred Interest. Any deferred interest that accrues with respect to any adjustable rate mortgage loans held by the REMIC Pool will constitute income to the REMIC Pool and will be treated in a manner similar to the deferred interest that accrues with respect to Regular Certificates as described under "--Taxation of Regular Certificates--Deferred Interest" above. Market Discount. The REMIC Pool will have market discount income in respect of mortgage loans if, in general, their unpaid principal balances exceed the basis of the REMIC Pool allocable to those mortgage loans. The REMIC Pool's basis in those mortgage loans is generally the fair market value of the mortgage loans immediately after the transfer of the mortgage loans to the REMIC Pool. The REMIC Regulations provide that the basis is equal in the aggregate to the issue prices of all regular and residual interests in the REMIC Pool (or the fair market value at the Closing Date, in the case of a retained class). In respect of mortgage loans that have market discount to which Code Section 1276 applies, the accrued portion of the market discount would be recognized currently as an item of ordinary income in a manner similar to original issue discount. Market discount income generally should accrue in the manner described under "--Taxation of Regular Certificates--Market Discount" above. Premium. Generally, if the basis of the REMIC Pool in the mortgage loans exceeds the unpaid principal balances of the mortgage loans, the REMIC Pool will be considered to have acquired those mortgage loans at a premium equal to the amount of that excess. As stated above, the REMIC Pool's basis in mortgage loans is the fair market value of the mortgage loans, based on the aggregate of the issue prices (or the fair market value of retained classes) of the regular and residual interests in the REMIC Pool immediately after the transfer of the mortgage loans to the REMIC Pool. In a manner analogous to the discussion above under "--Taxation of Regular Certificates--Premium," a REMIC Pool that holds a mortgage loan as a capital asset under Code Section 1221 may elect under Code Section 171 to amortize premium on whole mortgage loans or mortgage loans underlying MBS that were originated after September 27, 1985 or MBS that are REMIC regular interests under the constant yield method. Amortizable bond premium will be treated as an offset to interest income on the mortgage loans, rather than as a separate deduction item. To the extent that the mortgagors with respect to the mortgage loans are individuals, Code Section 171 will not be available for premium on mortgage loans, including underlying mortgage loans, originated on or prior to September 27, 1985. Premium with respect to those mortgage loans may be deductible in accordance with a reasonable method regularly employed by the related holder. The allocation of the premium pro rata among principal payments should be considered a reasonable method; however, the IRS may argue that the premium should be allocated in a different manner, such as allocating the premium entirely to the final payment of principal. Limitations on Offset or Exemption of REMIC Income. A portion or all of the REMIC taxable income includible in determining your federal income tax liability will be subject to special treatment. That portion, referred to as the "excess 83 inclusion," is equal to the excess of REMIC taxable income for the calendar quarter allocable to a Residual Certificate over the daily accruals for that quarterly period of (1) 120% of the long-term applicable Federal rate that would have applied to the Residual Certificate if it were a debt instrument, on the Startup Day under Code Section 1274(d), multiplied by (2) the adjusted issue price of such Residual Certificate at the beginning of that quarterly period. For this purpose, the adjusted issue price of a Residual Certificate at the beginning of a quarter is the issue price of the Residual Certificate, plus the amount of those daily accruals of REMIC income described in this paragraph for all prior quarters, decreased by any distributions made with respect to that Residual Certificate prior to the beginning of that quarterly period. Accordingly, the portion of the REMIC Pool's taxable income that will be treated as excess inclusions will be a larger portion of that income as the adjusted issue price of the Residual Certificates diminishes and all such taxable income will be so treated if the adjusted price of the Residual Certificate is zero. The portion of your REMIC taxable income consisting of the excess inclusions generally may not be offset by other deductions, including net operating loss carryforwards, on your return. However, net operating loss carryovers are determined without regard to excess inclusion income. Further, if you are an organization subject to the tax on unrelated business income imposed by Code Section 511, the excess inclusions will be treated as unrelated business taxable income to you for purposes of Code Section 511. In addition, REMIC taxable income is subject to 30% withholding tax with respect to certain persons who are not U.S. Persons, as defined below under "--Tax-Related Restrictions on Transfer of Residual Certificates--Foreign Investors" below, and that portion attributable to excess inclusions is not eligible for any reduction in the rate of withholding tax, by treaty or otherwise. See "--Taxation of Certain Foreign Investors--Residual Certificates" below. Finally, if a real estate investment trust or a regulated investment company owns a Residual Certificate, a portion (allocated under Treasury regulations yet to be issued) of dividends paid by the real estate investment trust or a regulated investment company could not be offset by net operating losses of its shareholders, would constitute unrelated business taxable income for tax-exempt shareholders, and would be ineligible for reduction of withholding to certain persons who are not U.S. Persons. In addition, the Code provides three rules for determining the effect of excess inclusions on your alternative minimum taxable income of a Residual Certificateholder. First, your alternative minimum taxable income is determined without regard to the special rule, discussed above, that taxable income cannot be less than excess inclusions. Second, your alternative minimum taxable income for a taxable year cannot be less than the excess inclusions for the year. Third, the amount of any alternative minimum tax net operating loss deduction must be computed without regard to any excess inclusions. Tax-Related Restrictions on Transfer of Residual Certificates. Disqualified Organizations. If any legal or beneficial interest in a Residual Certificate is transferred to a Disqualified Organization (as defined below), a tax would be imposed in an amount equal to the product of (1) the present value of the total anticipated excess inclusions with respect to that Residual Certificate for periods after the transfer and (2) the highest marginal federal income tax rate applicable to corporations. The REMIC Regulations provide that the anticipated excess inclusions are based on actual prepayment experience to the date of the transfer and projected payments based on the Prepayment Assumption. The present value rate equals the applicable Federal rate under Code Section 1274(d) as of the date of the transfer for a term ending with the last calendar quarter in which excess inclusions are expected to accrue. The tax generally would be imposed on the transferor of the Residual Certificate, except that where the transfer is through an agent, including a broker, nominee or other middleman, for a Disqualified Organization, the tax would instead be imposed on that agent. However, a transferor of a Residual Certificate would in no event be liable for the tax with respect to a transfer if the transferee furnishes to the transferor an affidavit that the transferee is not a Disqualified Organization and, as of the time of the transfer, the transferor does not have actual knowledge that the affidavit is false. The tax also may be waived by the Treasury Department if the Disqualified Organization promptly disposes of the residual interest and the transferor pays 84 income tax at the highest corporate rate on the excess inclusions for the period the Residual Certificate is actually held by the Disqualified Organization. In addition, if a Pass-Through Entity (as defined below) has excess inclusion income with respect to a Residual Certificate during a taxable year and a Disqualified Organization is the record holder of an equity interest in that entity, then a tax is imposed on the entity equal to the product of (1) the amount of excess inclusions on the Residual Certificate that are allocable to the interest in the Pass-Through Entity during the period the interest is held by the Disqualified Organization, and (2) the highest marginal federal corporate income tax rate. This tax would be deductible from the ordinary gross income of the Pass-Through Entity for the taxable year. The Pass-Through Entity would not be liable for the tax if it has received an affidavit from the record holder that it is not a Disqualified Organization or stating the holder's taxpayer identification number and, during the period that person is the record holder of the Residual Certificate, the Pass-Through Entity does not have actual knowledge that the affidavit is false. If an "electing large partnership" holds a Residual Certificate, all interests in the electing large partnership are treated as held by Disqualified Organizations for purposes of the tax imposed upon a Pass-Through Entity by Section 860E(c) of the Code. An exception to this tax, otherwise available to a Pass-Through Entity that is furnished certain affidavits by record holders of interests in the entity and that does not know the affidavits are false, is not available to an electing partnership. For these purposes: 1. "Disqualified Organization" means the United States, any state or one of their political subdivisions, any foreign government, any international organization, any agency or instrumentality of any of the foregoing (provided, that the term does not include an instrumentality if all of its activities are subject to tax and a majority of its board of directors is not selected by one of those governmental entities), any cooperative organization furnishing electric energy or providing telephone service to persons in rural areas as described in Code Section 1381(a)(2)(C), and any organization (other than a farmers' cooperative described in Code Section 521) that is exempt from taxation under the Code unless that organization is subject to the tax on unrelated business income imposed by Code Section 511, 2. "Pass-Through Entity" means any regulated investment company, real estate investment trust, common trust fund, partnership, trust or estate and certain corporations operating on a cooperative basis. Except as may be provided in Treasury regulations, any person holding an interest in a Pass-Through Entity as a nominee for another will, with respect to that interest, be treated as a Pass-Through Entity, and 3. an "electing large partnership" means any partnership having more than 100 members during the preceding tax year (other than certain service partnerships and commodity pools), which elect to apply simplified reporting provisions under the Code. The Pooling Agreement with respect to a series of certificates will provide that no legal or beneficial interest in a Residual Certificate may be transferred unless (1) the proposed transferee provides to the transferor and the trustee an affidavit providing its taxpayer identification number and stating that the transferee is the beneficial owner of the Residual Certificate, is not a Disqualified Organization and is not purchasing the Residual Certificates on behalf of a Disqualified Organization (i.e., as a broker, nominee or other middleman), and (2) the transferor provides a statement in writing to the Depositor and the trustee that it has no actual knowledge that the affidavit is false. Moreover, the Pooling Agreement will provide that any attempted or purported transfer in violation of these transfer restrictions will be null and void and will vest no rights in any purported transferee. Each Residual Certificate with respect to a series will bear a legend referring to the restrictions on transfer, and each Residual Certificateholder will be deemed to have agreed, as a condition of ownership of the Residual Certificates, to any amendments to the related Pooling Agreement required under the Code or applicable Treasury 85 regulations to effectuate the foregoing restrictions. Information necessary to compute an applicable excise tax must be furnished to the IRS and to the requesting party within 60 days of the request, and the Depositor or the trustee may charge a fee for computing and providing that information. Noneconomic Residual Interests. The REMIC Regulations would disregard certain transfers of Residual Certificates, in which case the transferor would continue to be treated as the owner of the Residual Certificates and thus would continue to be subject to tax on its allocable portion of the net income of the REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual interest" (as defined below) to a Residual Certificateholder (other than a Residual Certificateholder who is not a U.S. Person, as defined under "--Foreign Investors" below) is disregarded for all federal income tax purposes if a significant purpose of the transferor is to impede the assessment or collection of tax. A residual interest in a REMIC, including a residual interest with a positive value at issuance, is a "noneconomic residual interest" unless, at the time of the transfer, (1) the present value of the expected future distributions on the residual interest at least equals the product of the present value of the anticipated excess inclusions and the highest corporate income tax rate in effect for the year in which the transfer occurs, and (2) the transferor reasonably expects that the transferee will receive distributions from the REMIC at or after the time at which taxes accrue on the anticipated excess inclusions in an amount sufficient to satisfy the accrued taxes. The anticipated excess inclusions and the present value rate are determined in the same manner as set forth under "--Disqualified Organizations" above. The REMIC Regulations explain that a significant purpose to impede the assessment or collection of tax exists if the transferor, at the time of the transfer, either knew or should have known that the transferee would be unwilling or unable to pay taxes due on its share of the taxable income of the REMIC. Under the REMIC Regulations, as amended July 19, 2002, a safe harbor is provided if (1) the transferor conducted, at the time of the transfer, a reasonable investigation of the financial condition of the transferee and found that the transferee historically had paid its debts as they came due and found no significant evidence to indicate that the transferee would not continue to pay its debts as they came due in the future, (2) the transferee represents to the transferor that it understands that, as the holder of the noneconomic residual interest, the transferee may incur tax liabilities in excess of cash flows generated by the interest and that the transferee intends to pay taxes associated with holding the residual interest as they become due, (3) the transferee represents to the transferor that it will not cause income from the Residual Certificate to be attributable to a foreign permanent establishment or fixed base (within the meaning of an applicable income tax treaty) of the transferee or any other person and (4) either the "formula test" or the "assets test," (each described below) is satisfied. The Pooling Agreement with respect to each series of certificates will require the transferee of a Residual Certificate to certify to the matters in clauses (1), (2) and (3) of the preceding sentence as part of the affidavit described under the heading "--Disqualified Organizations" above. The transferor must have no actual knowledge or reason to know that those statements are false. The formula test is satisfied if the present value of the anticipated tax liabilities associated with holding the noneconomic residual interest cannot exceed the sum of (i) the present value of any consideration given to the transferee to acquire the interest; (ii) the present value of the expected future distributions on the interest; and (iii) the present value of the anticipated tax savings associated with holding the interest as the REMIC generates losses. For purposes of these computations, the transferee is assumed to pay tax at the highest rate of tax specified in Section 11(b)(1) of the Code (currently 35%) or, in certain circumstances, the alternative minimum tax rate. Further, present values generally are computed using a discount rate equal to the short-term Federal rate set forth in Section 1274(d) of the Code for the month of the transfer and the compounding period used by the transferee. 86 The assets test is satisfied if (i) the transferee must be a domestic "C" corporation (other than a corporation exempt from taxation or a regulated investment company or real estate investment trust) that meets certain gross and net asset tests (generally, $100 million of gross assets and $10 million of net assets for the current year and the two preceding fiscal years); (ii) the transferee must agree in writing that any subsequent transferee of the residual interest would meet the requirements for a safe harbor transfer; and (iii) the facts and circumstances known to the transferor on or before the date of the transfer must not reasonably indicate that the taxes associated with ownership of the residual interest will not be paid by the transferee. Foreign Investors. The REMIC Regulations provide that the transfer of a Residual Certificate that has "tax avoidance potential" to a "foreign person" will be disregarded for all federal tax purposes. This rule appears intended to apply to a transferee who is not a U.S. Person (as defined below), unless the transferee's income is effectively connected with the conduct of a trade or business within the United States. A Residual Certificate is deemed to have tax avoidance potential unless, at the time of the transfer, (1) the future value of expected distributions equals at least 30% of the anticipated excess inclusions after the transfer, and (2) the transferor reasonably expects that the transferee will receive sufficient distributions from the REMIC Pool at or after the time at which the excess inclusions accrue and prior to the end of the next succeeding taxable year for the accumulated withholding tax liability to be paid. If the Non-U.S. Person transfers the Residual Certificates back to a U.S. Person, the transfer will be disregarded and the foreign transferor will continue to be treated as the owner unless arrangements are made so that the transfer does not have the effect of allowing the transferor to avoid tax on accrued excess inclusions. The prospectus supplement relating to a series of certificates may provide that a Residual Certificate may not be purchased by or transferred to any person that is not a U.S. Person or may describe the circumstances and restrictions pursuant to which a transfer may be made. The term "U.S. Person" means a citizen or resident of the United States, a corporation or partnership (except to the extent provided in applicable Treasury regulations) created or organized in or under the laws of the United States, any state, or the District of Columbia, including any entity treated as a corporation or partnership for federal income tax purposes, an estate that is subject to United States federal income tax regardless of the source of its income, or a trust if a court within the United States is able to exercise primary supervision over the administration of that trust, and one or more such U.S. Persons have the authority to control all substantial decisions of that trust (or, to the extent provided in applicable Treasury regulations, certain trusts in existence on August 20, 1996 which are eligible to elect to be treated as U.S. Persons). Sale or Exchange of a Residual Certificate. Upon the sale or exchange of a Residual Certificate, you will recognize gain or loss equal to the excess, if any, of the amount realized over your adjusted basis, as described under "--Taxation of Residual Certificates--Basis and Losses" above, in the Residual Certificate at the time of the sale or exchange. In addition to reporting the taxable income of the REMIC Pool, you will have taxable income to the extent that any cash distribution to you from the REMIC Pool exceeds the adjusted basis on that distribution date. That income will be treated as gain from the sale or exchange of the Residual Certificates. It is possible that the termination of the REMIC Pool may be treated as a sale or exchange of Residual Certificates, in which case, you will have an adjusted basis in the Residual Certificates remaining when your interest in the REMIC Pool terminates, and if you hold the Residual Certificate as a capital asset under Code Section 1221, then you will recognize a capital loss at that time in the amount of the remaining adjusted basis. Any gain on the sale of Residual Certificates will be treated as ordinary income (1) if you hold the Residual Certificates as part of a "conversion transaction" as defined in Code Section 1258(c), up to the amount of interest that would have accrued on your net investment in the conversion transaction at 120% of the appropriate applicable Federal rate in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior disposition of property that was held as a part of that transaction or (2) if 87 you are a non-corporate taxpayer, to the extent that you have made an election under Code Section 163(d)(4) to have net capital gains taxed as investment income at ordinary income rates. In addition, gain or loss recognized from the sale of a Residual Certificate by certain banks or thrift institutions will be treated as ordinary income or loss pursuant to Code Section 582(c). The Conference Committee Report to the Reform Act provides that, except as provided in Treasury regulations yet to be issued, the wash sale rules of Code Section 1091 will apply to dispositions of Residual Certificates where the seller of those certificates, during the period beginning six months before the sale or disposition of the Residual Certificate and ending six months after the sale or disposition, acquires (or enters into any other transaction that results in the application of Section 1091) any residual interest in any REMIC or any interest in a "taxable mortgage pool" (such as a non-REMIC owner trust) that is economically comparable to a Residual Certificate. Mark to Market Regulations. The IRS has issued regulations, the "Mark to Market Regulations," under Code Section 475 relating to the requirement that a securities dealer mark to market securities held for sale to customers. This mark-to-market requirement applies to all securities of a dealer, except to the extent that the dealer has specifically identified a security as held for investment. The Mark to Market Regulations provide that, for purposes of this mark-to-market requirement, a Residual Certificate is not treated as a security and thus may not be marked to market. The Mark to Market Regulations apply to all Residual Certificates acquired on or after January 4, 1995. TAXES THAT MAY BE IMPOSED ON THE REMIC POOL Prohibited Transactions. Income from certain transactions by the REMIC Pool, called prohibited transactions, will not be part of the calculation of income or loss includible in the federal income tax returns of Residual Certificateholders, but rather will be taxed directly to the REMIC Pool at a 100% rate. Prohibited transactions generally include 1. the disposition of a qualified mortgage other than for: (a) substitution within two years of the Startup Day for a defective (including a defaulted) obligation (or repurchase in lieu of substitution of a defective (including a defaulted) obligation at any time) or for any qualified mortgage within three months of the Startup Day, (b) foreclosure, default or imminent default of a qualified mortgage, (c) bankruptcy or insolvency of the REMIC Pool, or (d) a qualified (complete) liquidation, 2. the receipt of income from assets that are not the type of mortgages or investments that the REMIC Pool is permitted to hold, 3. the receipt of compensation for services or 4. the receipt of gain from disposition of cash flow investments other than pursuant to a qualified liquidation. Notwithstanding (1) and (4) it is not a prohibited transaction to sell REMIC Pool property to prevent a default on Regular Certificates as a result of a default on qualified mortgages or to facilitate a clean-up call, generally, an optional termination to save administrative costs when no more than a small percentage of the certificates is outstanding. The REMIC Regulations indicate that the modification of a mortgage loan generally will not be treated as a disposition if it is occasioned by a default or reasonably foreseeable default, an assumption of the mortgage loan, the waiver of a due-on-sale or due-on-encumbrance clause or the conversion of an interest rate by a mortgagor pursuant to the terms of a convertible adjustable rate mortgage loan. 88 Contributions to the REMIC Pool After the Startup Day. In general, the REMIC Pool will be subject to a tax at a 100% rate on the value of any property contributed to the REMIC Pool after the Startup Day. Exceptions are provided for cash contributions to the REMIC Pool: 1. during the three months following the Startup Day, 2. made to a qualified reserve fund by a Residual Certificateholder, 3. in the nature of a guarantee, 4. made to facilitate a qualified liquidation or clean-up call, and 5. as otherwise permitted in Treasury regulations yet to be issued. Net Income from Foreclosure Property. The REMIC Pool will be subject to federal income tax at the highest corporate rate on "net income from foreclosure property," determined by reference to the rules applicable to real estate investment trusts. Generally, property acquired by foreclosure or deed in lieu of foreclosure would be treated as "foreclosure property" for a period ending with the third calendar year following the year of acquisition of that property, with a possible extension. Net income from foreclosure property generally means gain from the sale of a foreclosure property that is inventory property and gross income from foreclosure property other than qualifying rents and other qualifying income for a real estate investment trust. It is not anticipated that the REMIC Pool will receive income or contributions subject to tax under the preceding three paragraphs, except as described in the applicable prospectus supplement with respect to net income from foreclosure property on a commercial or multifamily residential property that secured a mortgage loan. In addition, unless otherwise disclosed in the applicable prospectus supplement, it is not anticipated that any material state income or franchise tax will be imposed on a REMIC Pool. LIQUIDATION OF THE REMIC POOL If a REMIC Pool adopts a plan of complete liquidation, within the meaning of Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in the REMIC Pool's final tax return a date on which that adoption is deemed to occur, and sells all of its assets (other than cash) within a 90-day period beginning on the date of the adoption of the plan of liquidation, the REMIC Pool will not be subject to the prohibited transaction rules on the sale of its assets, provided that the REMIC Pool credits or distributes in liquidation all of the sale proceeds plus its cash (other than amounts retained to meet claims) to holders of Regular Certificates and Residual Certificateholders within the 90-day period. ADMINISTRATIVE MATTERS The REMIC Pool will be required to maintain its books on a calendar year basis and to file federal income tax returns for federal income tax purposes in a manner similar to a partnership. The form for that income tax return is Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return. The trustee will be required to sign the REMIC Pool's returns. Treasury regulations provide that, except where there is a single Residual Certificateholder for an entire taxable year, the REMIC Pool will be subject to the procedural and administrative rules of the Code applicable to partnerships, including the determination by the IRS of any adjustments to, among other things, items of REMIC income, gain, loss, deduction or credit in a unified administrative proceeding. The Residual Certificateholder owning the largest percentage interest in the Residual Certificates will be obligated to act as "tax matters person," as defined in applicable Treasury regulations, with respect to the REMIC Pool. Each Residual Certificateholder will be deemed, by acceptance of the Residual Certificates, to have agreed (1) to the appointment of the tax matters person as provided in the preceding sentence and (2) to the irrevocable designation of the trustee as agent for performing the functions of the tax matters person. 89 LIMITATIONS ON DEDUCTION OF CERTAIN EXPENSES An investor who is an individual, estate or trust will be subject to limitation with respect to certain itemized deductions described in Code Section 67, to the extent that those itemized deductions, in the aggregate, do not exceed 2% of the investor's adjusted gross income. In addition, Code Section 68 provides that itemized deductions otherwise allowable for a taxable year of an individual taxpayer will be reduced by the lesser of (1) 3% of the excess, if any, of adjusted gross income over a statutory threshold or (2) 80% of the amount of itemized deductions otherwise allowable for that year. In the case of a REMIC Pool, those deductions may include deductions under Code Section 212 for the servicing fee and all administrative and other expenses relating to the REMIC Pool, or any similar expenses allocated to the REMIC Pool with respect to a regular interest it holds in another REMIC. Those investors who hold REMIC Certificates either directly or indirectly through certain pass-through entities may have their pro rata share of those expenses allocated to them as additional gross income, but may be subject to those limitations on deductions. In addition, those expenses are not deductible at all for purposes of computing the alternative minimum tax, and may cause those investors to be subject to significant additional tax liability. Temporary Treasury regulations provide that the additional gross income and corresponding amount of expenses generally are to be allocated entirely to the holders of Residual Certificates in the case of a REMIC Pool that would not qualify as a fixed investment trust in the absence of a REMIC election. However, that additional gross income and limitation on deductions will apply to the allocable portion of those expenses to holders of Regular Certificates, as well as holders of Residual Certificates, where those Regular Certificates are issued in a manner that is similar to pass-through certificates in a fixed investment trust. In general, that allocable portion will be determined based on the ratio that a REMIC Certificateholder's income, determined on a daily basis, bears to the income of all holders of Regular Certificates and Residual Certificates with respect to a REMIC Pool. As a result, individuals, estates or trusts holding REMIC Certificates (either directly or indirectly through a grantor trust, partnership, S corporation, REMIC, or certain other pass-through entities described in the foregoing temporary Treasury regulations) may have taxable income in excess of the interest income at the pass-through rate on Regular Certificates that are issued in a single class or otherwise consistently with fixed investment trust status or in excess of cash distributions for the related period on Residual Certificates. Unless otherwise indicated in the applicable prospectus supplement, all those expenses will be allocable to the Residual Certificates. TAXATION OF CERTAIN FOREIGN INVESTORS Regular Certificates. Interest, including original issue discount, distributable to Regular Certificateholders who are non-resident aliens, foreign corporations, or other Non-U.S. Persons (as defined below), will be considered "portfolio interest" and, therefore, generally will not be subject to 30% United States withholding tax, provided that the Non-U.S. Person (1) is not a "10-percent shareholder" within the meaning of Code Section 871(h)(3)(B) or a controlled foreign corporation described in Code Section 881(c)(3)(C) and (2) provides the trustee, or the person who would otherwise be required to withhold tax from those distributions under Code Section 1441 or 1442, with an appropriate statement, signed under penalties of perjury, identifying the beneficial owner and stating, among other things, that the beneficial owner of the Regular Certificate is a Non-U.S. Person. If that statement, or any other required statement, is not provided, 30% withholding will apply unless reduced or eliminated pursuant to an applicable tax treaty or unless the interest on the Regular Certificate is effectively connected with the conduct of a trade or business within the United States by the Non-U.S. Person. In the latter case, the Non-U.S. Person will be subject to United States federal income tax at regular rates. Prepayment Premiums distributable to Regular Certificateholders who are Non-U.S. Persons may be subject to 30% United States withholding tax. Investors who are Non-U.S. Persons should consult their own tax advisors regarding the specific tax consequences to them of owning a Regular Certificate. The term "Non-U.S. Person" means any person who is not a U.S. Person. 90 The IRS has issued regulations which provide new methods of satisfying the beneficial ownership certification requirement described above. These regulations require, in the case of Regular Certificates held by a foreign partnership, that (1) the certification described above be provided by the partners rather than by the foreign partnership and (2) the partnership provide certain information, including a United States taxpayer identification number. A look-through rule would apply in the case of tiered partnerships. Non-U.S. Persons should consult their own tax advisors concerning the application of the certification requirements in these regulations. Residual Certificates. The Conference Committee Report to the Reform Act indicates that amounts paid to Residual Certificateholders who are Non-U.S. Persons are treated as interest for purposes of the 30% (or lower treaty rate) United States withholding tax. Treasury regulations provide that amounts distributed to Residual Certificateholders may qualify as "portfolio interest," subject to the conditions described in "--Regular Certificates" above, but only to the extent that (1) the mortgage loans (including mortgage loans underlying certain MBS) were issued after July 18, 1984 and (2) the trust fund or segregated pool of assets in the trust fund (as to which a separate REMIC election will be made), to which the Residual Certificate relates, consists of obligations issued in "registered form" within the meaning of Code Section 163(f)(1). Generally, whole mortgage loans will not be, but MBS and regular interests in another REMIC Pool will be, considered obligations issued in registered form. Furthermore, a Residual Certificateholder will not be entitled to any exemption from the 30% withholding tax (or lower treaty rate) to the extent of that portion of REMIC taxable income that constitutes an "excess inclusion." See "--Taxation of Residual Certificates--Limitations on Offset or Exemption of REMIC Income" above. If the amounts paid to Residual Certificateholders who are Non-U.S. Persons are effectively connected with the conduct of a trade or business within the United States by Non-U.S. Persons, 30% (or lower treaty rate) withholding will not apply. Instead, the amounts paid to Non-U.S. Persons will be subject to United States federal income tax at regular rates. If 30% (or lower treaty rate) withholding is applicable, those amounts generally will be taken into account for purposes of withholding only when paid or otherwise distributed (or when the Residual Certificate is disposed of) under rules similar to withholding upon disposition of debt instruments that have original issue discount. See "--Tax-Related Restrictions on Transfer of Residual Certificates--Foreign Investors" above concerning the disregard of certain transfers having "tax avoidance potential." Investors who are Non-U.S. Persons should consult their own tax advisors regarding the specific tax consequences to them of owning Residual Certificates. BACKUP WITHHOLDING Distributions made on the Regular Certificates, and proceeds from the sale of the Regular Certificates to or through certain brokers, may be subject to a "backup" withholding tax under Code Section 3406 at a current rate of 28% (which rate will be increased to 31% commencing after 2010) on "reportable payments" (including interest distributions, original issue discount, and, under certain circumstances, principal distributions) unless the Regular Certificateholder complies with certain reporting and/or certification procedures, including the provision of its taxpayer identification number to the trustee, its agent or the broker who effected the sale of the Regular Certificate, or that certificateholder is otherwise an exempt recipient under applicable provisions of the Code. Any amounts to be withheld from distribution on the Regular Certificates would be refunded by the IRS or allowed as a credit against the Regular Certificateholder's federal income tax liability. The New Regulations will change certain of the rules relating to certain presumptions currently available relating to information reporting and backup withholding. Non-U.S. Persons are urged to contact their own tax advisors regarding the application to them of backup and withholding and information reporting. REPORTING REQUIREMENTS Reports of accrued interest, original issue discount and information necessary to compute the accrual of any market discount on the Regular Certificates will be made annually to the IRS and 91 to individuals, estates, non-exempt and non-charitable trusts, and partnerships who are either holders of record of Regular Certificates or beneficial owners who own Regular Certificates through a broker or middleman as nominee. All brokers, nominees and all other non-exempt holders of record of Regular Certificates (including corporations, non-calendar year taxpayers, securities or commodities dealers, real estate investment trusts, investment companies, common trust funds, thrift institutions and charitable trusts) may request that information for any calendar quarter by telephone or in writing by contacting the person designated in IRS Publication 938 with respect to a particular series of Regular Certificates. Holders through nominees must request that information from the nominee. The IRS's Form 1066 has an accompanying Schedule Q, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation. Treasury regulations require that Schedule Q be furnished by the REMIC Pool to each Residual Certificateholder by the end of the month following the close of each calendar quarter (41 days after the end of a quarter under proposed Treasury regulations) in which the REMIC Pool is in existence. Treasury regulations require that, in addition to the foregoing requirements, information must be furnished quarterly to Residual Certificateholders, furnished annually, if applicable, to holders of Regular Certificates, and filed annually with the IRS concerning Code Section 67 expenses, see "--Limitations on Deduction of Certain Expenses" above, allocable to those holders. Furthermore, under those regulations, information must be furnished quarterly to Residual Certificateholders, furnished annually to holders of Regular Certificates, and filed annually with the IRS concerning the percentage of the REMIC Pool's assets meeting the qualified asset tests described under "--Status of REMIC Certificates" above. 92 FEDERAL INCOME TAX CONSEQUENCES FOR CERTIFICATES AS TO WHICH NO REMIC ELECTION IS MADE STANDARD CERTIFICATES General. In the event that no election is made to treat a trust fund (or a segregated pool of assets in the trust fund) with respect to a series of certificates that are not designated as "--Stripped Certificates," as described below, as a REMIC (certificates of that kind of series are referred to as "Standard Certificates"), in the opinion of Cadwalader, Wickersham & Taft LLP the trust fund will be classified as a grantor trust under subpart E, Part 1 of subchapter J of the Code and not as an association taxable as a corporation or a "taxable mortgage pool" within the meaning of Code Section 7701(i). Where there is no fixed retained yield with respect to the mortgage loans underlying the Standard Certificates, the holder of a Standard Certificate (a "Standard Certificateholder") in that series will be treated as the owner of a pro rata undivided interest in the ordinary income and corpus portions of the trust fund represented by its Standard Certificate and will be considered the beneficial owner of a pro rata undivided interest in each of the mortgage loans, subject to the discussion under "--Recharacterization of Servicing Fees" below. Accordingly, the holder of a Standard Certificate of a particular series will be required to report on its federal income tax return its pro rata share of the entire income from the mortgage loans represented by its Standard Certificate, including interest at the coupon rate on those mortgage loans, original issue discount (if any), prepayment fees, assumption fees, and late payment charges received by the master servicer, in accordance with that Standard Certificateholder's method of accounting. A Standard Certificateholder generally will be able to deduct its share of the servicing fee and all administrative and other expenses of the trust fund in accordance with its method of accounting, provided that those amounts are reasonable compensation for services rendered to that trust fund. However, investors who are individuals, estates or trusts who own Standard Certificates, either directly or indirectly through certain pass-through entities, will be subject to limitation with respect to certain itemized deductions described in Code Section 67, including deductions under Code Section 212 for the servicing fee and all the administrative and other expenses of the trust fund, to the extent that those deductions, in the aggregate, do not exceed two percent of an investor's adjusted gross income. In addition, Code Section 68 provides that itemized deductions otherwise allowable for a taxable year of an individual taxpayer will be reduced by the lesser of (1) 3% of the excess, if any, of adjusted gross income over a statutory threshold, or (2) 80% of the amount of itemized deductions otherwise allowable for that year. As a result, those investors holding Standard Certificates, directly or indirectly through a pass-through entity, may have aggregate taxable income in excess of the aggregate amount of cash received on those Standard Certificates with respect to interest at the pass-through rate on those Standard Certificates. In addition, those expenses are not deductible at all for purposes of computing the alternative minimum tax, and may cause the investors to be subject to significant additional tax liability. Moreover, where there is fixed retained yield with respect to the mortgage loans underlying a series of Standard Certificates or where the servicing fee is in excess of reasonable servicing compensation, the transaction will be subject to the application of the "stripped bond" and "stripped coupon" rules of the Code, as described under "--Stripped Certificates" and "--Recharacterization of Servicing Fees," below. Tax Status. In the opinion of Cadwalader, Wickersham & Taft LLP, Standard Certificates will have the following status for federal income tax purposes: 1. Standard Certificate owned by a "domestic building and loan association" within the meaning of Code Section 7701(a)(19) will be considered to represent "loans....secured by an interest in real property which is . . . residential real property" within the meaning of Code Section 7701(a)(19)(C)(v), provided that the real property securing the mortgage loans represented by that Standard Certificate is of the type described in that section of the Code. 93 2. Standard Certificate owned by a real estate investment trust will be considered to represent "real estate assets" within the meaning of Code Section 856(c)(5)(B) to the extent that the assets of the related trust fund consist of qualified assets, and interest income on those assets will be considered "interest on obligations secured by mortgages on real property" to such extent within the meaning of Code Section 856(c)(3)(B). 3. Standard Certificate owned by a REMIC will be considered to represent an "obligation...which is principally secured by an interest in real property" within the meaning of Code Section 860G(a)(3)(A) to the extent that the assets of the related trust fund consist of "qualified mortgages" within the meaning of Code Section 860G(a)(3). 4. Standard Certificate owned by a financial asset securitization investment trust will be considered to represent "permitted assets" within the meaning of Code Section 860L(c). Premium and Discount. Standard Certificateholders are advised to consult with their tax advisors as to the federal income tax treatment of premium and discount arising either upon initial acquisition of Standard Certificates or thereafter. Premium. The treatment of premium incurred upon the purchase of a Standard Certificate will be determined generally as described under "--Federal Income Tax Consequences for REMIC Certificates--Taxation of Residual Certificates--Treatment of Certain Items of REMIC Income and Expense--Premium" above. Original Issue Discount. The original issue discount rules will be applicable to a Standard Certificateholder's interest in those mortgage loans as to which the conditions for the application of those sections are met. Rules regarding periodic inclusion of original issue discount income are applicable to mortgages of corporations originated after May 27, 1969, mortgages of noncorporate mortgagors (other than individuals) originated after July 1, 1982, and mortgages of individuals originated after March 2, 1984. Under the OID Regulations, the original issue discount could arise by the charging of points by the originator of the mortgages in an amount greater than a statutory de minimis exception, including a payment of points currently deductible by the borrower under applicable Code provisions or, under certain circumstances, by the presence of "teaser rates" on the mortgage loans. Original issue discount must generally be reported as ordinary gross income as it accrues under a constant interest method that takes into account the compounding of interest, in advance of the cash attributable to that income. Unless indicated otherwise in the applicable prospectus supplement, no prepayment assumption will be assumed for purposes of that accrual. However, Code Section 1272 provides for a reduction in the amount of original issue discount includible in the income of a holder of an obligation that acquires the obligation after its initial issuance at a price greater than the sum of the original issue price and the previously accrued original issue discount, less prior payments of principal. Accordingly, if the mortgage loans acquired by a Standard Certificateholder are purchased at a price equal to the then unpaid principal amount of the mortgage loans, no original issue discount attributable to the difference between the issue price and the original principal amount of the mortgage loans (i.e., points) will be includible by that holder. Market Discount. Standard Certificateholders also will be subject to the market discount rules to the extent that the conditions for application of those sections are met. Market discount on the mortgage loans will be determined and will be reported as ordinary income generally in the manner described under "--Federal Income Tax Consequences for REMIC Certificates-- Taxation of Regular Certificates--Market Discount" above, except that the ratable accrual methods described there will not apply and it is unclear whether a Prepayment Assumption would apply. Rather, the holder will accrue market discount pro rata over the life of the mortgage loans, unless the constant yield method is elected. Unless indicated otherwise in the applicable prospectus supplement, no prepayment assumption will be assumed for purposes of that accrual. 94 Recharacterization of Servicing Fees. If the servicing fee paid to the master servicer were deemed to exceed reasonable servicing compensation, the amount of that excess would represent neither income nor a deduction to certificateholders. In this regard, there are no authoritative guidelines for federal income tax purposes as to either the maximum amount of servicing compensation that may be considered reasonable in the context of this or similar transactions or whether, in the case of the Standard Certificate, the reasonableness of servicing compensation should be determined on a weighted average or loan-by-loan basis. If a loan-by-loan basis is appropriate, the likelihood that the amount would exceed reasonable servicing compensation as to some of the mortgage loans would be increased. IRS guidance indicates that a servicing fee in excess of reasonable compensation ("excess servicing") will cause the mortgage loans to be treated under the "stripped bond" rules. That guidance provides safe harbors for servicing deemed to be reasonable and requires taxpayers to demonstrate that the value of servicing fees in excess of those amounts is not greater than the value of the services provided. Accordingly, if the IRS' approach is upheld, a servicer who receives a servicing fee in excess of those amounts would be viewed as retaining an ownership interest in a portion of the interest payments on the mortgage loans. Under the rules of Code Section 1286, the separation of ownership of the right to receive some or all of the interest payments on an obligation from the right to receive some or all of the principal payments on the obligation would result in treatment of those mortgage loans as "stripped coupons" and "stripped bonds." Subject to the de minimis rule discussed under "--Stripped Certificates" below, each stripped bond or stripped coupon could be considered for this purpose as a non-interest bearing obligation issued on the date of issue of the Standard Certificates, and the original issue discount rules of the Code would apply to that holder. While Standard Certificateholders would still be treated as owners of beneficial interests in a grantor trust for federal income tax purposes, the corpus of the trust could be viewed as excluding the portion of the mortgage loans the ownership of which is attributed to the master servicer, or as including that portion as a second class of equitable interest. Applicable Treasury regulations treat that arrangement as a fixed investment trust, since the multiple classes of trust interests should be treated as merely facilitating direct investments in the trust assets and the existence of multiple classes of ownership interests is incidental to that purpose. In general, a recharacterization should not have any significant effect upon the timing or amount of income reported by a Standard Certificateholder, except that the income reported by a cash method holder may be slightly accelerated. See "--Stripped Certificates" below for a further description of the federal income tax treatment of stripped bonds and stripped coupons. Sale or Exchange of Standard Certificates. Upon sale or exchange of a Standard Certificate, a Standard Certificateholder will recognize gain or loss equal to the difference between the amount realized on the sale (other than amounts allocable to accrued interest) and its aggregate adjusted basis in the mortgage loans and the other assets represented by the Standard Certificate. In general, the aggregate adjusted basis will equal the Standard Certificateholder's cost for the Standard Certificate, increased by the amount of any income previously reported with respect to the Standard Certificate and decreased by the amount of any losses previously reported with respect to the Standard Certificate and the amount of any distributions received on those Standard Certificates. Except as provided above with respect to market discount on any mortgage loans, and except for certain financial institutions subject to the provisions of Code Section 582(c), that gain or loss would be capital gain or loss if the Standard Certificate was held as a capital asset. However, gain on the sale of a Standard Certificate will be treated as ordinary income (1) if a Standard Certificate is held as part of a "conversion transaction" as defined in Code Section 1258(c), up to the amount of interest that would have accrued on the Standard Certificateholder's net investment in the conversion transaction at 120% of the appropriate applicable Federal rate in effect at the time the taxpayer entered into the transaction minus any amount previously treated as ordinary income with respect to any prior disposition of property that was held as a part of that transaction or (2) in the case of a non-corporate taxpayer, to the extent the taxpayer has made 95 an election under Code Section 163(d)(4) to have net capital gains taxed as investment income at ordinary income rates. Long-term capital gains of certain non-corporate taxpayers generally are subject to lower tax rates than ordinary income or short-term capital gains of those taxpayers for property held for more than one year. The maximum tax rate for corporations is the same with respect to both ordinary income and capital gains. Investors that recognize a loss on a sale or exchange of the Standard Certificates for federal income tax purposes in excess of certain threshold amounts should consult their tax advisors as to the need to file IRS Form 8886 (disclosing certain potential tax shelters) on their federal income tax returns. STRIPPED CERTIFICATES General. Pursuant to Code Section 1286, the separation of ownership of the right to receive some or all of the principal payments on an obligation from ownership of the right to receive some or all of the interest payments results in the creation of "stripped bonds" with respect to principal payments and "stripped coupons" with respect to interest payments. For purposes of this discussion, certificates that are subject to those rules will be referred to as "Stripped Certificates." Stripped Certificates include interest-only certificates entitled to distributions of interest, with disproportionately small, nominal or no distributions of principal and principal-only certificates entitled to distributions of principal, with disproportionately small, nominal or no distributions of interest as to which no REMIC election is made. The certificates will be subject to those rules if: 1. we or any of our affiliates retain, for our own account or for purposes of resale, in the form of fixed retained yield or otherwise, an ownership interest in a portion of the payments on the mortgage loans, 2. the master servicer is treated as having an ownership interest in the mortgage loans to the extent it is paid, or retains, servicing compensation in an amount greater than reasonable consideration for servicing the mortgage loans (See "--Standard Certificates--Recharacterization of Servicing Fees" above), and 3. certificates are issued in two or more classes or subclasses representing the right to non-pro-rata percentages of the interest and principal payments on the mortgage loans. In general, a holder of a Stripped Certificate will be considered to own "stripped bonds" with respect to its pro rata share of all or a portion of the principal payments on each mortgage loan and/or "stripped coupons" with respect to its pro rata share of all or a portion of the interest payments on each mortgage loan, including the Stripped Certificate's allocable share of the servicing fees paid to the master servicer, to the extent that those fees represent reasonable compensation for services rendered. See discussion under "--Standard Certificates-- Recharacterization of Servicing Fees" above. Although not free from doubt, for purposes of reporting to Stripped Certificateholders, the servicing fees will be allocated to the Stripped Certificates in proportion to the respective entitlements to distributions of each class, or subclass, of Stripped Certificates for the related period or periods. The holder of a Stripped Certificate generally will be entitled to a deduction each year in respect of the servicing fees, as described under "--Standard Certificates--General" above, subject to the limitation described there. Code Section 1286 treats a stripped bond or a stripped coupon as an obligation issued at an original issue discount on the date that the stripped interest is purchased. Although the treatment of Stripped Certificates for federal income tax purposes is not clear in certain respects at this time, particularly where the Stripped Certificates are issued with respect to a Mortgage Pool containing variable-rate mortgage loans, in the opinion of Cadwalader, Wickersham & Taft LLP (1) the trust fund will be treated as a grantor trust under subpart E, Part 1 of subchapter J of the Code and not as an association taxable as a corporation or a "taxable mortgage pool" within 96 the meaning of Code Section 7701(i), and (2) each Stripped Certificate should be treated as a single installment obligation for purposes of calculating original issue discount and gain or loss on disposition. This treatment is based on the interrelationship of Code Section 1286, Code Sections 1272 through 1275, and the OID Regulations. While under Code Section 1286 computations with respect to Stripped Certificates arguably should be made in one of the ways described under "--Taxation of Stripped Certificates--Possible Alternative Characterizations" below, the OID Regulations state, in general, that two or more debt instruments issued by a single issuer to a single investor in a single transaction should be treated as a single debt instrument for original issue discount purposes. The applicable Pooling Agreement will require that the trustee make and report all computations described below using this aggregate approach, unless substantial legal authority requires otherwise. Furthermore, Treasury regulations issued December 28, 1992 provide for the treatment of a Stripped Certificate as a single debt instrument issued on the date it is purchased for purposes of calculating any original issue discount. In addition, under these regulations, a Stripped Certificate that represents a right to payments of both interest and principal may be viewed either as issued with original issue discount or market discount, as described below, at a de minimis original issue discount, or, presumably, at a premium. This treatment suggests that the interest component of that Stripped Certificate would be treated as qualified stated interest under the OID Regulations, other than in the case of an interest-only Stripped Certificate or a Stripped Certificate on which the interest is substantially disproportionate to the principal amount. Further, these final regulations provide that the purchaser of a Stripped Certificate will be required to account for any discount as market discount rather than original issue discount if either (1) the initial discount with respect to the Stripped Certificate was treated as zero under the de minimis rule, or (2) no more than 100 basis points in excess of reasonable servicing is stripped off the related mortgage loans. This market discount would be reportable as described under "--Federal Income Tax Consequences for REMIC Certificates--Taxation of Regular Certificates--Market Discount" above, without regard to the de minimis rule there, assuming that a prepayment assumption is employed in that computation. Status of Stripped Certificates. No specific legal authority exists as to whether the character of the Stripped Certificates, for federal income tax purposes, will be the same as that of the mortgage loans. Although the issue is not free from doubt, in the opinion of Cadwalader, Wickersham & Taft LLP, Stripped Certificates owned by applicable holders should be considered to represent "real estate assets" within the meaning of Code Section 856(c)(5)(B), "obligation[s] principally secured by an interest in real property" within the meaning of Code Section 860G(a)(3)(A), and "loans . . . secured by an interest in real property which is . . . residential real property" within the meaning of Code Section 7701(a)(19)(C)(v), and interest (including original issue discount) income attributable to Stripped Certificates should be considered to represent "interest on obligations secured by mortgages on real property" within the meaning of Code Section 856(c)(3)(B), provided that in each case the mortgage loans and interest on those mortgage loans qualify for that treatment. Taxation of Stripped Certificates. Original Issue Discount. Except as described under "--General" above, each Stripped Certificate will be considered to have been issued at an original issue discount for federal income tax purposes. Original issue discount with respect to a Stripped Certificate must be included in ordinary income as it accrues, in accordance with a constant interest method that takes into account the compounding of interest, which may be prior to the receipt of the cash attributable to that income. Based in part on the OID Regulations and the amendments to the original issue discount sections of the Code made by the Reform Act, the amount of original issue discount required to be included in the income of a holder of a Stripped Certificate (referred to in this discussion as a "Stripped Certificateholder") in any taxable year likely will be computed generally as described under "--Federal Income Tax Consequences for REMIC Certificates--Taxation of Regular Certificates--Original Issue Discount" and "--Variable Rate Regular Certificates" above. 97 However, with the apparent exception of a Stripped Certificate qualifying as a market discount obligation, as described under "--General" above, the issue price of a Stripped Certificate will be the purchase price paid by each holder of the Stripped Certificate, and the stated redemption price at maturity will include the aggregate amount of the payments, other than qualified stated interest to be made on the Stripped Certificate to that Stripped Certificateholder, presumably under the Prepayment Assumption. If the mortgage loans prepay at a rate either faster or slower than that under the Prepayment Assumption, a Stripped Certificateholder's recognition of original issue discount will be either accelerated or decelerated and the amount of the original issue discount will be either increased or decreased depending on the relative interests in principal and interest on each mortgage loan represented by that Stripped Certificateholder's Stripped Certificate. While the matter is not free from doubt, the holder of a Stripped Certificate should be entitled in the year that it becomes certain, assuming no further prepayments, that the holder will not recover a portion of its adjusted basis in that Stripped Certificate to recognize an ordinary loss, if it is a corporation, or a short-term capital loss, if it is not a corporation and does not hold the Stripped Certificate in connection with a trade or business, equal to that portion of unrecoverable basis. As an alternative to the method described above, the fact that some or all of the interest payments with respect to the Stripped Certificates will not be made if the mortgage loans are prepaid could lead to the interpretation that the interest payments are "contingent" within the meaning of the OID Regulations. The OID Regulations, as they relate to the treatment of contingent interest, are by their terms not applicable to prepayable securities such as the Stripped Certificates. However, if final regulations dealing with contingent interest with respect to the Stripped Certificates apply the same principles as the OID Regulations, those regulations may lead to different timing of income inclusion that would be the case under the OID Regulations. Furthermore, application of those principles could lead to the characterization of gain on the sale of contingent interest Stripped Certificates as ordinary income. Investors should consult their tax advisors regarding the appropriate tax treatment of Stripped Certificates. Sale or Exchange of Stripped Certificates. Sale or exchange of a Stripped Certificate prior to its maturity will result in gain or loss equal to the difference, if any, between the amount received and the Stripped Certificateholder's adjusted basis in that Stripped Certificate, as described under "--Federal Income Tax Consequences for REMIC Certificates--Taxation of Regular Certificates--Sale or Exchange of Regular Certificates" above. To the extent that a subsequent purchaser's purchase price is exceeded by the remaining payments on the Stripped Certificates by more than the statutory de minimis amount, that subsequent purchaser will be required for federal income tax purposes to accrue and report that excess as if it were original issue discount in the manner described above. It is not clear for this purpose whether the assumed prepayment rate that is to be used in the case of a Stripped Certificateholder other than an original Stripped Certificateholder should be the Prepayment Assumption or a new rate based on the circumstances at the date of subsequent purchase. Investors that recognize a loss on a sale or exchange of the Stripped Certificates for federal income tax purposes in excess of certain threshold amounts should consult their tax advisors as to the need to file IRS Form 8886 (disclosing certain potential tax shelters) on their federal income tax returns. Purchase of More Than One Class of Stripped Certificates. Where an investor purchases more than one class of Stripped Certificates, it is currently unclear whether for federal income tax purposes those classes of Stripped Certificates should be treated separately or aggregated for purposes of the rules described above. Possible Alternative Characterizations. The characterizations of the Stripped Certificates discussed above are not the only possible interpretations of the applicable Code provisions. For example, the Stripped Certificateholder may be treated as the owner of 98 1. one installment obligation consisting of that Stripped Certificate's pro rata share of the payments attributable to principal on each mortgage loan and a second installment obligation consisting of that Stripped Certificate's pro rata share of the payments attributable to interest on each mortgage loan, 2. as many stripped bonds or stripped coupons as there are scheduled payments of principal and/or interest on each mortgage loan or 3. a separate installment obligation for each mortgage loan, representing the Stripped Certificate's pro rata share of payments of principal and/or interest to be made with respect thereto. Alternatively, the holder of one or more classes of Stripped Certificates may be treated as the owner of a pro rata fractional undivided interest in each mortgage loan to the extent that the Stripped Certificate, or classes of Stripped Certificates in the aggregate, represent the same pro rata portion of principal and interest on that mortgage loan, and a stripped bond or stripped coupon (as the case may be), treated as an installment obligation or contingent payment obligation, as to the remainder. Final regulations issued regarding original issue discount on stripped obligations make the foregoing interpretations less likely to be applicable. The preamble to those regulations states that they are premised on the assumption that an aggregation approach is appropriate for determining whether original issue discount on a stripped bond or stripped coupon is de minimis, and solicits comments on appropriate rules for aggregating stripped bonds and stripped coupons under Code Section 1286. Because of these possible varying characterizations of Stripped Certificates and the resultant differing treatment of income recognition, Stripped Certificateholders are urged to consult their own tax advisors regarding the proper treatment of Stripped Certificates for federal income tax purposes. REPORTING REQUIREMENTS AND BACKUP WITHHOLDING The trustee will furnish, within a reasonable time after the end of each calendar year, to each Standard Certificateholder or Stripped Certificateholder at any time during that year, the information, prepared on the basis described above, as the trustee deems to be necessary or desirable to enable those certificateholders to prepare their federal income tax returns. The information will include the amount of original issue discount accrued on certificates held by persons other than certificateholders exempted from the reporting requirements. The amounts required to be reported by the trustee may not be equal to the proper amount of original issue discount required to be reported as taxable income by a certificateholder, other than an original certificateholder that purchased at the issue price. In particular, in the case of Stripped Certificates, unless provided otherwise in the applicable prospectus supplement, the reporting will be based upon a representative initial offering price of each class of Stripped Certificates. The trustee will also file the original issue discount information with the IRS. If a certificateholder fails to supply an accurate taxpayer identification number or if the Secretary of the Treasury determines that a certificateholder has not reported all interest and dividend income required to be shown on his federal income tax return, backup withholding at a current rate of 28.0% (which rate will be increased to 31% commencing after 2010) may be required in respect of any reportable payments, as described under "--Federal Income Tax Consequences for REMIC Certificates--Backup Withholding" above. TAXATION OF CERTAIN FOREIGN INVESTORS To the extent that a certificate evidences ownership in mortgage loans that are issued on or before July 18, 1984, interest or original issue discount paid by the person required to withhold tax under Code Section 1441 or 1442 to nonresident aliens, foreign corporations, or other Non-U.S. Persons generally will be subject to 30% United States withholding tax, or a lower rate as may be provided for interest by an applicable tax treaty. Accrued original issue discount recognized by the Standard Certificateholder or Stripped Certificateholder on the sale or exchange of that certificate also will be subject to federal income tax at the same rate. 99 Treasury regulations provide that interest or original issue discount paid by the trustee or other withholding agent to a Non-U.S. Person evidencing ownership interest in mortgage loans issued after July 18, 1984 will be "portfolio interest" and will be treated in the manner, and those persons will be subject to the same certification requirements, described under "--Federal Income Tax Consequences for REMIC Certificates--Taxation of Certain Foreign Investors--Regular Certificates" above. STATE AND OTHER TAX CONSIDERATIONS In addition to the federal income tax consequences described in "Certain Federal Income Tax Consequences" above, you should consider the state and local tax consequences of the acquisition, ownership, and disposition of the offered certificates. State tax law may differ substantially from the corresponding federal law, and the discussion above does not purport to describe any aspect of the tax laws of any state or other jurisdiction. Thus, you should consult your own tax advisors with respect to the various tax consequences of investments in the offered certificates. CERTAIN ERISA CONSIDERATIONS GENERAL The Employee Retirement Income Security Act of 1974, as amended, or ERISA, and the Code impose certain requirements on retirement plans, and on certain other employee benefit plans and arrangements, including individual retirement accounts and annuities, Keogh plans, collective investment funds, insurance company separate accounts and some insurance company general accounts in which those plans, accounts or arrangements are invested that are subject to the fiduciary responsibility provisions of ERISA and Section 4975 of the Code (all of which are referred to as "Plans"), and on persons who are fiduciaries with respect to Plans, in connection with the investment of Plan assets. Certain employee benefit plans, such as governmental plans (as defined in ERISA Section 3(32)), and, if no election has been made under Section 410(d) of the Code, church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements. However, those plans may be subject to the provisions of other applicable federal, state or local law ("Similar Law") materially similar to the foregoing provisions of ERISA or the Code. Moreover, those plans, if qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code, are subject to the prohibited transaction rules set forth in Section 503 of the Code. ERISA generally imposes on Plan fiduciaries certain general fiduciary requirements, including those of investment prudence and diversification and the requirement that a Plan's investments be made in accordance with the documents governing the Plan. In addition, ERISA and the Code prohibit a broad range of transactions involving assets of a Plan and persons ("Parties in Interest") who have certain specified relationships to the Plan, unless a statutory, regulatory or administrative exemption is available. Certain Parties in Interest that participate in a prohibited transaction may be subject to an excise tax imposed pursuant to Section 4975 of the Code, unless a statutory, regulatory or administrative exemption is available. These prohibited transactions generally are set forth in Section 406 of ERISA and Section 4975 of the Code. Special caution should be exercised before the assets of a Plan are used to purchase an offered certificate if, with respect to those assets, the Depositor, the master servicer or the trustee or one of their affiliates, either: (a) has investment discretion with respect to the investment of those assets of that Plan; or (b) has authority or responsibility to give, or regularly gives, investment advice with respect to those assets for a fee and pursuant to an agreement or understanding that the advice will serve as a primary basis for investment decisions with respect to those assets and that the advice will be based on the particular investment needs of the Plan; or (c) is an employer maintaining or contributing to the Plan. Before purchasing any offered certificates with Plan assets, a Plan fiduciary should consult with its counsel and determine whether there exists any prohibition to that purchase under the 100 requirements of ERISA or Section 4975 of the Code, whether any prohibited transaction class exemption or any individual administrative prohibited transaction exemption (as described below) applies, including whether the appropriate conditions set forth in those exemptions would be met, or whether any statutory prohibited transaction exemption is applicable, and further should consult the applicable prospectus supplement relating to that series of offered certificates. Fiduciaries of plans subject to a Similar Law should consider the need for, and the availability of, an exemption under such applicable Similar Law. PLAN ASSET REGULATIONS A Plan's investment in offered certificates may cause the Trust Assets to be deemed Plan assets. Section 2510.3-101 of the regulations of the United States Department of Labor ("DOL") provides that when a Plan acquires an equity interest in an entity, the Plan's assets include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless certain exceptions not applicable to this discussion apply, or unless the equity participation in the entity by "benefit plan investors" (that is, Plans and certain employee benefit plans not subject to ERISA) is not "significant." For this purpose, in general, equity participation in a trust fund will be "significant" on any date if, immediately after the most recent acquisition of any certificate, 25% or more of any class of certificates is held by benefit plan investors. In general, any person who has discretionary authority or control respecting the management or disposition of Plan assets, and any person who provides investment advice with respect to those assets for a fee, is a fiduciary of the investing Plan. If the Trust Assets constitute Plan assets, then any party exercising management or discretionary control regarding those assets, such as a master servicer, a special servicer or any sub-servicer, may be deemed to be a Plan "fiduciary" with respect to the investing Plan, and thus subject to the fiduciary responsibility provisions and prohibited transaction provisions of ERISA and the Code. In addition, if the Trust Assets constitute Plan assets, the purchase of offered certificates by a Plan, as well as the operation of the trust fund, may constitute or involve a prohibited transaction under ERISA or the Code. ADMINISTRATIVE EXEMPTIONS Several underwriters of mortgage-backed securities have applied for and obtained individual administrative ERISA prohibited transaction exemptions (the "Exemptions") which can only apply to the purchase and holding of mortgage-backed securities which, among other conditions, are sold in an offering with respect to which that underwriter serves as the sole or a managing underwriter, or as a selling or placement agent. If one of the Exemptions might be applicable to a series of certificates, the related prospectus supplement will refer to the possibility, as well as provide a summary of the conditions to the applicability. The DOL has promulgated amendments (the "Amendments") to the Exemptions that, among other changes, permit Plans to purchase subordinated certificates rated in any of the four highest ratings categories (provided that all other requirements of the Exemptions are met). Plan fiduciaries should, and other potential investors who may be analyzing the potential liquidity of their investment may wish to, consult with their advisors regarding the Amendments. INSURANCE COMPANY GENERAL ACCOUNTS Sections I and III of Prohibited Transaction Class Exemption ("PTCE") 95-60 exempt from the application of the prohibited transaction provisions of Sections 406(a), 406(b) and 407(a) of ERISA and Section 4975 of the Code transactions in connection with the acquisition of a security (such as a certificate issued by a trust fund) as well as the servicing, management and operation of a trust (such as the trust fund) in which an insurance company general account has an interest as a result of its acquisition of certificates issued by the trust, provided that certain conditions are satisfied. If these conditions are met, insurance company general accounts investing assets that are treated as assets of Plans would be allowed to purchase certain classes of certificates which 101 do not meet the ratings requirements of the Exemptions. All other conditions of the Exemptions would have to be satisfied in order for PTCE 95-60 to be available. Before purchasing any class of offered certificates, an insurance company general account seeking to rely on Sections I and III of PTCE 95-60 should itself confirm that all applicable conditions and other requirements have been satisfied. The Small Business Job Protection Act of 1996 added a new Section 401(c) to ERISA, which provides certain exemptive relief from the provisions of Part 4 of Title I of ERISA and Section 4975 of the Code, including the prohibited transaction restrictions imposed by ERISA and the related excise taxes imposed by the Code, for transactions involving an insurance company general account. Pursuant to Section 401(c) of ERISA, the DOL issued regulations ("401(c) Regulations"), generally effective July 5, 2001, to provide guidance for the purpose of determining, in cases where insurance policies supported by an insured's general account are issued to or for the benefit of a Plan on or before December 31, 1998, which general account assets constitute Plan assets. Any assets of an insurance company general account which support insurance policies issued to a Plan after December 31, 1998 or issued to Plans on or before December 31, 1998 for which the insurance company does not comply with the 401(c) Regulations may be treated as Plan assets. In addition, because Section 401(c) of ERISA does not relate to insurance company separate accounts, separate account assets are still generally treated as Plan assets of any Plan invested in that separate account. Insurance companies contemplating the investment of general account assets in the offered certificates should consult with their counsel with respect to the applicability of Section 401(c) of ERISA. UNRELATED BUSINESS TAXABLE INCOME; RESIDUAL CERTIFICATES The purchase of a Residual Certificate by any employee benefit plan qualified under Code Section 401(a) and exempt from taxation under Code Section 501(a), including most varieties of Plans, may give rise to "unrelated business taxable income" as described in Code Sections 511-515 and 860E. Further, prior to the purchase of Residual Certificates, a prospective transferee may be required to provide an affidavit to a transferor that it is not, nor is it purchasing a Residual Certificate on behalf of, a "Disqualified Organization," which term as defined above includes certain tax-exempt entities not subject to Code Section 511 including certain governmental plans, as discussed above under the caption "Certain Federal Income Tax Consequences--Federal Income Tax Consequences for REMIC Certificates--Taxation of Residual Certificates--Tax-Related Restrictions on Transfer of Residual Certificates--Disqualified Organizations." Due to the complexity of these rules and the penalties imposed upon persons involved in prohibited transactions, it is particularly important that potential investors who are Plan fiduciaries or who are investing Plan assets consult with their counsel regarding the consequences under ERISA and the Code of their acquisition and ownership of certificates. The sale of certificates to an employee benefit plan is in no respect a representation by the Depositor or the Underwriter that this investment meets all relevant legal requirements with respect to investments by plans generally or by any particular plan, or that this investment is appropriate for plans generally or for any particular plan. LEGAL INVESTMENT If so specified in the related prospectus supplement, the offered certificates will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"). Generally, the only classes of offered certificates which will qualify as "mortgage related securities" will be those that (1) are rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization; and (2) are part of a series evidencing interests in a trust fund consisting of loans secured by first liens on real estate and originated by certain types of originators specified in SMMEA. The appropriate characterization of those certificates not qualifying as "mortgage related securities" ("Non-SMMEA Certificates") under various legal investment restrictions, and thus the ability of 102 investors subject to these restrictions to purchase those certificates, may be subject to significant interpretive uncertainties. Accordingly, investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult their own legal advisors in determining whether and to what extent the Non-SMMEA Certificates constitute legal investments for them. Those classes of offered certificates qualifying as "mortgage related securities," will constitute legal investments for persons, trusts, corporations, partnerships, associations, business trusts and business entities, including depository institutions, insurance companies, trustees and pension funds, created pursuant to or existing under the laws of the United States or of any state, including the District of Columbia and Puerto Rico, whose authorized investments are subject to state regulation to the same extent that, under applicable law, obligations issued by or guaranteed as to principal and interest by the United States or any of its agencies or instrumentalities constitute legal investments for those entities. Under SMMEA, a number of states enacted legislation, on or prior to the October 3, 1991 cut-off for those enactments, limiting to various extents the ability of certain entities (in particular, insurance companies) to invest in "mortgage related securities" secured by liens on residential, or mixed residential and commercial properties, in most cases by requiring the affected investors to rely solely upon existing state law, and not SMMEA. Pursuant to Section 347 of the Riegle Community Development and Regulatory Improvement Act of 1994, which amended the definition of "mortgage related security" to include, in relevant part, offered certificates satisfying the rating and qualified originator requirements for "mortgage related securities," but evidencing interests in a trust fund consisting, in whole or in part, of first liens on one or more parcels of real estate upon which are located one or more commercial structures, states were authorized to enact legislation, on or before September 23, 2001, specifically referring to Section 347 and prohibiting or restricting the purchase, holding or investment by state-regulated entities in those types of offered certificates. Accordingly, the investors affected by any state legislation overriding the preemptive effect of SMMEA will be authorized to invest in offered certificates qualifying as "mortgage related securities" only to the extent provided in that legislation. SMMEA also amended the legal investment authority of federally-chartered depository institutions as follows: federal savings and loan associations and federal savings banks may invest in, sell or otherwise deal in "mortgage related securities" without limitation as to the percentage of their assets represented thereby, federal credit unions may invest in those securities, and national banks may purchase those securities for their own account without regard to the limitations generally applicable to investment securities set forth in 12 U.S.C. Section 24 (Seventh), subject in each case to those regulations as the applicable federal regulatory authority may prescribe. In this connection, the Office of the Comptroller of the Currency (the "OCC") has amended 12 C.F.R. Part 1 to authorize national banks to purchase and sell for their own account, without limitation as to a percentage of the bank's capital and surplus (but subject to compliance with certain general standards in 12 C.F.R. Section 1.5 concerning "safety and soundness" and retention of credit information), certain "Type IV securities," defined in 12 C.F.R. Section 1.2(m) to include certain "commercial mortgage-related securities" and "residential mortgage-related securities." As so defined, "commercial mortgage-related security" and "residential mortgage-related security" mean, in relevant part, "mortgage related security" within the meaning of SMMEA, provided that, in the case of a "commercial mortgage-related security," it "represents ownership of a promissory note or certificate of interest or participation that is directly secured by a first lien on one or more parcels of real estate upon which one or more commercial structures are located and that is fully secured by interests in a pool of loans to numerous obligors." In the absence of any rule or administrative interpretation by the OCC defining the term "numerous obligors," no representation is made as to whether any class of offered certificates will qualify as "commercial mortgage-related securities," and thus as "Type IV securities," for investment by national banks. The National Credit Union Administration (the "NCUA") has adopted rules, codified at 12 C.F.R. Part 703, which permit federal credit unions to 103 invest in "mortgage related securities" under certain limited circumstances, other than stripped mortgage related securities, residual interests in mortgage related securities, and commercial mortgage related securities, subject to compliance with general rules governing investment policies and practices; however, credit unions approved for the NCUA's "investment pilot program" under C.F.R. Section 703.19 may be able to invest in those prohibited forms of securities, while "RegFlex credit unions" may invest in commercial mortgage related securities under certain conditions pursuant to 12 C.F.R. Section 742.4(b)(2). The Office of Thrift Supervision (the "OTS") has issued Thrift Bulletin 13a (December 1, 1998), "Management of Interest Rate Risk, Investment Securities, and Derivatives Activities," and Thrift Bulletin 73a (December 18, 2001), "Investing in Complex Securities," which thrift institutions subject to the jurisdiction of the OTS should consider before investing in any of the offered certificates. All depository institutions considering an investment in the offered certificates should review the "Supervisory Policy Statement on Investment Securities and End-User Derivatives Activities" (the "1998 Policy Statement") of the Federal Financial Institutions Examination Council, which has been adopted by the Board of Governors of the Federal Reserve System, the OCC, the Federal Deposit Insurance Corporation and the OTS, effective May 26, 1998, and by the NCUA, effective October 1, 1998. The 1998 Policy Statement sets forth general guidelines which depository institutions must follow in managing risks (including market, credit, liquidity, operational (transaction), and legal risks) applicable to all securities (including mortgage pass-through securities and mortgage-derivative products) used for investment purposes. Institutions whose investment activities are subject to regulation by federal or state authorities should review rules, policies and guidelines adopted from time to time by those authorities before purchasing any offered certificates, as certain classes may be deemed unsuitable investments, or may otherwise be restricted, under those rules, policies or guidelines (in certain instances irrespective of SMMEA). The foregoing does not take into consideration the applicability of statutes, rules, regulations, orders, guidelines or agreements generally governing investments made by a particular investor, including, but not limited to, "prudent investor" provisions, percentage-of-assets limits, provisions which may restrict or prohibit investment in securities which are not "interest bearing" or "income paying," and, with regard to any offered certificates issued in book-entry form, provisions which may restrict or prohibit investments in securities which are issued in book-entry form. Except as to the status of certain classes of offered certificates as "mortgage related securities," no representations are made as to the proper characterization of offered certificates for legal investment purposes, financial institution regulatory purposes, or other purposes, or as to the ability of particular investors to purchase offered certificates under applicable legal investment restrictions. The uncertainties described above (and any unfavorable future determinations concerning legal investment or financial institution regulatory characteristics of the offered certificates) may adversely affect the liquidity of the offered certificates. Accordingly, all investors whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the offered certificates of any class constitute legal investments or are subject to investment, capital or other restrictions, and, if applicable, whether SMMEA has been overridden in any jurisdiction relevant to that investor. 104 METHOD OF DISTRIBUTION The offered certificates offered by this prospectus and by the related prospectus supplements will be offered in series through one or more of the methods described below. The prospectus supplement prepared for each series will describe the method of offering being utilized for that series and will state our net proceeds from that sale. We intend that offered certificates will be offered through the following methods from time to time and that offerings may be made concurrently through more than one of these methods or that an offering of a particular series of certificates may be made through a combination of two or more of these methods. Those methods are as follows: 1. by negotiated firm commitment underwriting and public offering by one or more underwriters specified in the related prospectus supplement; 2. by placements through one or more placement agents specified in the related prospectus supplement primarily with institutional investors and dealers; and 3. through direct offerings by the Depositor If underwriters are used in a sale of any offered certificates (other than in connection with an underwriting on a best efforts basis), those certificates will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices to be determined at the time of sale or at the time of commitment. The underwriters may be broker-dealers affiliated with us. Their identities and material relationships to us will be set forth in the related prospectus supplement. The managing underwriter or underwriters with respect to the offer and sale of a particular series of certificates will be set forth in the cover of the prospectus supplement relating to that series and the members of the underwriting syndicate, if any, will be named in that prospectus supplement. In connection with the sale of the offered certificates, underwriters may receive compensation from us or from purchasers of the offered certificates in the form of discounts, concessions or commissions. Underwriters and dealers participating in the distribution of the offered certificates may be deemed to be underwriters in connection with those offered certificates, and any discounts or commissions received by them from us and any profit on the resale of offered certificates by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended (the "Securities Act"). It is anticipated that the underwriting agreement pertaining to the sale of any series of certificates will provide that the obligations of the underwriters will be subject to certain conditions precedent, that the underwriters will be obligated to purchase all offered certificates if any are purchased (other than in connection with an underwriting on a best efforts basis) and that we will indemnify the several underwriters, and each person, if any, who controls that underwriter within the meaning of Section 15 of the Securities Act, against certain civil liabilities, including liabilities under the Securities Act, or will contribute to payments required to be made in respect of these liabilities. The prospectus supplement with respect to any series offered by placements through dealers will contain information regarding the nature of that offering and any agreements to be entered into between us and purchasers of offered certificates of that series. We anticipate that the offered certificates offered by this prospectus and the related prospectus supplement will be sold primarily to institutional investors. Purchasers of offered certificates, including dealers, may, depending on the facts and circumstances of those purchases, be deemed to be "underwriters" within the meaning of the Securities Act in connection with reoffers and sales by them of offered certificates. You should consult with your legal advisors in this regard prior to any similar reoffer or sale. 105 As to each series of certificates, only those classes rated in an investment grade rating category by any rating agency will be offered by this prospectus. We may initially retain any unrated class and we may sell it at any time to one or more institutional investors. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE With respect to each series of certificates offered by this prospectus, there are incorporated in this prospectus and in the related prospectus supplement by reference all documents and reports filed or caused to be filed by the Depositor with respect to a trust fund pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, that relate specifically to the related series of certificates. The Depositor will provide or cause to be provided without charge to each person to whom this prospectus is delivered in connection with the offering of one or more classes of offered certificates, upon written or oral request of that person, a copy of any or all documents or reports incorporated in this prospectus by reference, in each case to the extent the documents or reports relate to one or more of the classes of offered certificates, other than the exhibits to those documents (unless the exhibits are specifically incorporated by reference in those documents). Requests to the Depositor should be directed in writing to its principal executive offices at 270 Park Avenue, New York, New York 10017, Attention: President, or by telephone at (212) 834-9299. The Depositor has determined that its financial statements will not be material to the offering of any Offered Certificates. The Depositor filed a registration statement (the "Registration Statement") relating to the certificates with the Securities and Exchange Commission. This prospectus is part of the Registration Statement, but the Registration Statement includes additional information. Copies of the Registration Statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, Washington, D.C. 20549, upon payment of the prescribed charges, or may be examined free of charge at the Securities and Exchange Commission's offices, 450 Fifth Street N.W., Washington, D.C. 20549 or at the regional offices of the Securities and Exchange Commission located at Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661-2511. The Securities and Exchange Commission also maintains a site on the World Wide Web at "http://www.sec.gov" at which you can view and download copies of reports, proxy and information statements and other information filed electronically through the Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system. The Depositor has filed the Registration Statement, including all exhibits thereto, through the EDGAR system, so the materials should be available by logging onto the Securities and Exchange Commission's Web site. The Securities and Exchange Commission maintains computer terminals providing access to the EDGAR system at each of the offices referred to above. LEGAL MATTERS The validity of the certificates of each series and certain federal income tax matters will be passed upon for us by Cadwalader, Wickersham & Taft LLP, New York, New York or such other counsel as may be specified in the applicable prospectus supplement. FINANCIAL INFORMATION A new trust fund will be formed with respect to each series of certificates, and no trust fund will engage in any business activities or have any assets or obligations prior to the issuance of the related series of certificates. Accordingly, no financial statements with respect to any trust fund will be included in this prospectus or in the related prospectus supplement. RATING It is a condition to the issuance of any class of offered certificates that they shall have been rated not lower than investment grade, that is, in one of the four highest rating categories, by at least one rating agency. 106 Ratings on mortgage pass-through certificates address the likelihood of receipt by the holders of those certificates of all collections on the underlying mortgage assets to which those holders are entitled. These ratings address the structural, legal and issuer-related aspects associated with those certificates, the nature of the underlying mortgage assets and the credit quality of the guarantor, if any. Ratings on mortgage pass-through certificates do not represent any assessment of the likelihood of principal prepayments by borrowers or of the degree by which those prepayments might differ from those originally anticipated. As a result, you might suffer a lower than anticipated yield, and, in addition, holders of stripped interest certificates in extreme cases might fail to recoup their initial investments. A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating organization. Each security rating should be evaluated independently of any other security rating. 107 INDEX OF PRINCIPAL DEFINITIONS PAGE ---- 1998 Policy Statement ................. 104 401(c) Regulations .................... 102 Accrual Certificates .................. 35 Accrued Certificate Interest .......... 35 ADA ................................... 68 Amendments ............................ 101 ARM Loans ............................. 24 Available Distribution Amount ......... 34 Bankruptcy Code ....................... 60 Book-Entry Certificates ............... 34 Cash Flow Agreement ................... 26 CERCLA ................................ 65 Certificate Owner ..................... 41 certificateholder ..................... 69 Code .................................. 39 Cooperatives .......................... 21 CPR ................................... 30 Debt Service Coverage Ratio ........... 22 defective obligation .................. 71 Definitive Certificates ............... 34 Depositor ............................. 21 Determination Date .................... 27 Direct Participants ................... 40 Disqualified Organization ............. 85 Distribution Date Statement ........... 38 DOL ................................... 101 DTC ................................... 34 Due Dates ............................. 23 Due Period ............................ 27 EDGAR ................................. 106 electing large partnership ............ 85 Equity Participation .................. 24 Event of Default ...................... 51 Excess Funds .......................... 33 excess servicing ...................... 95 Exemptions ............................ 101 FAMC .................................. 25 FHLMC ................................. 25 FNMA .................................. 25 foreclosure ........................... 62 Garn Act .............................. 66 GNMA .................................. 25 holder ................................ 69 Indirect Participants ................. 40 Insurance and Condemnation Proceeds ........................... 46 L/C Bank .............................. 56 Liquidation Proceeds .................. 46 PAGE ---- Loan-to-Value Ratio ................... 23 Lock-out Date ......................... 24 Lock-out Period ....................... 24 market discount ....................... 77 MBS ................................... 21 MBS Agreement ......................... 25 MBS Issuer ............................ 25 MBS Servicer .......................... 25 MBS Trustee ........................... 25 Mortgage Asset Seller ................. 21 Mortgage Notes ........................ 21 Mortgaged Properties .................. 21 Mortgages ............................. 21 NCUA .................................. 103 Net Leases ............................ 22 Net Operating Income .................. 22 Nonrecoverable Advance ................ 37 Non-SMMEA Certificates ................ 102 Non-U.S. Person ....................... 90 OCC ................................... 103 OID Regulations ....................... 73 OTS ................................... 104 Participants .......................... 40 Parties in Interest ................... 100 Pass-Through Entity ................... 85 Permitted Investments ................. 45 Plans ................................. 100 Pooling Agreement ..................... 42 prepayment ............................ 30 Prepayment Assumption ................. 74 prepayment collar ..................... 30 Prepayment Interest Shortfall ......... 27 Prepayment Premium .................... 24 PTCE .................................. 101 Random Lot Certificates ............... 73 Record Date ........................... 35 Reform Act ............................ 73 Registration Statement ................ 106 Regular Certificateholder ............. 73 Regular Certificates .................. 70 Related Proceeds ...................... 37 Relief Act ............................ 68 REMIC ................................. 8 REMIC Certificates .................... 70 REMIC Pool. ........................... 70 REMIC Regulations ..................... 69 REO Property .......................... 44 Residual Certificateholders ........... 80 108 PAGE ---- Residual Certificates .............. 35 secured-creditor exemption ......... 65 Securities Act ..................... 105 Senior Certificates ................ 34 Servicing Standard ................. 44 Similar Law ........................ 100 SMMEA .............................. 102 SPA ................................ 30 Standard Certificateholder ......... 93 Standard Certificates .............. 93 PAGE ---- Startup Day ........................ 71 Stripped Certificateholder ......... 97 Subordinate Certificates ........... 34 Sub-Servicing Agreement ............ 45 Title V ............................ 67 Treasury ........................... 69 U.S. Person ........................ 87 Value .............................. 23 Warranting Party ................... 43 109 [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] [THIS PAGE INTENTIONALLY LEFT BLANK.] The attached diskette contains a Microsoft Excel1, Version 5.0 spreadsheet file (the "Spreadsheet File") that can be put on a user-specified hard drive or network drive. The Spreadsheet File is "JPMCC 2003-LN1.xls." It provides, in electronic format, certain statistical information that appears under the caption "Description of the Mortgage Pool" in the prospectus supplement and in Annex A-1, Annex A-2, Annex B and Annex C to the prospectus supplement. Defined terms used in the Spreadsheet File but not otherwise defined in the Spreadsheet File shall have the respective meanings assigned to them in the prospectus supplement. All the information contained in the Spreadsheet File is subject to the same limitations and qualifications contained in this prospectus supplement. To the extent that the information in electronic format contained in the attached diskette is different from statistical information that appears under the caption "Description of the Mortgage Pool" in the prospectus supplement and in Annex A-1, Annex A-2, Annex B and Annex C to the prospectus supplement, the information in electronic format is superseded by the related information in print format. Prospective investors are advised to read carefully and should rely solely on the final prospectus supplement and accompanying prospectus relating to the Certificates in making their investment decision. Open the file as you would normally open any spreadsheet in Microsoft Excel. Before the file is displayed, a message will appear notifying you that the file is Read Only. Click the "READ ONLY" button and, after the file is opened, a securities law legend will be displayed. READ THE LEGEND CAREFULLY. --------- 1Microsoft Excel is a registered trademark of Microsoft Corporation. ================================================================================ YOU SHOULD RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ATTACHED PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. WE ARE NOT OFFERING THESE CERTIFICATES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. ----------------------- TABLE OF CONTENTS PROSPECTUS SUPPLEMENT Summary of Certificates .......................... S-7 Summary of Terms ................................. S-9 Risk Factors ..................................... S-28 Description of the Mortgage Pool ................. S-61 Description of the Certificates .................. S-89 Servicing of the Mortgage Loans .................. S-121 Yield and Maturity Considerations ................ S-143 Certain Federal Income Tax Consequences .......... S-151 Method of Distribution ........................... S-152 Legal Matters .................................... S-153 Ratings .......................................... S-153 Legal Investment ................................. S-154 ERISA Considerations ............................. S-154 Index of Principal Definitions ................... S-157
PROSPECTUS Summary of Prospectus ............................ 1 Risk Factors ..................................... 9 Description of the Trust Funds ................... 21 Yield and Maturity Considerations ................ 27 The Depositor .................................... 34 Use of Proceeds .................................. 34 Description of the Certificates .................. 35 Description of the Pooling Agreements ............ 43 Description of Credit Support .................... 56 Certain Legal Aspects of Mortgage Loans .......... 58 Certain Federal Income Tax Consequences .......... 71 State and Other Tax Considerations ............... 102 Certain ERISA Considerations ..................... 102 Legal Investment ................................. 104 Method of Distribution ........................... 106 Incorporation of Certain Information by Reference ...................................... 107 Legal Matters .................................... 108 Financial Information ............................ 108 Rating ........................................... 108 Index of Principal Definitions ................... 110
DEALERS WILL BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS UNDERWRITERS OF THESE CERTIFICATES AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING THESE CERTIFICATES WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS UNTIL DECEMBER , 2003. ================================================================================ $732,086,000 (APPROXIMATE) [CHASE LOGO] J.P. MORGAN CHASE COMMERCIAL MORTGAGE SECURITIES CORP. Class A-1 Certificates $258,300,000 Class A-2 Certificates $380,415,000 Class B Certificates $ 34,638,000 Class C Certificates $ 13,553,000 Class D Certificates $ 30,120,000 Class E Certificates $ 15,060,000
---------------------------- P R O S P E C T U S S U P P L E M E N T ---------------------------- JPMORGAN ABN AMRO INCORPORATED [NOMURA LOGO] CREDIT SUISSE FIRST BOSTON SEPTEMBER , 2003 ================================================================================