-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IQZebfOQfEE+Ikj/elpO1lru83S/cxGVBgZGEBw9CSV5gllhB+o2+WF9XXwIet+7 2miSJ7BUXRxUD7I8VVC/eA== 0001047469-03-038948.txt : 20031202 0001047469-03-038948.hdr.sgml : 20031202 20031202171918 ACCESSION NUMBER: 0001047469-03-038948 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20031202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSFB COMMERCIAL MORT PASS THR CERTS SER 2003-C5 CENTRAL INDEX KEY: 0001269964 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 133320910 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 1933 Act SEC FILE NUMBER: 333-97955-07 FILM NUMBER: 031033349 BUSINESS ADDRESS: STREET 1: 11 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10010 MAIL ADDRESS: STREET 1: 11 MADISON AVE CITY: NEW YORK STATE: NY ZIP: 10010 424B5 1 a2122302z424b5.txt 424B5 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 10, 2003 $840,312,000 (Approximate) COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-C5 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. depositor COLUMN FINANCIAL, INC. PNC BANK, NATIONAL ASSOCIATION KEYBANK NATIONAL ASSOCIATION mortgage loan sellers ---------- We, Credit Suisse First Boston Mortgage Securities Corp., intend to establish a trust fund. The primary assets of that trust fund will consist of a segregated pool of commercial and multifamily mortgage loans. The trust fund will issue 24 classes of certificates, 9 of which are being offered by this prospectus supplement, as listed below. The trust fund will pay interest and/or principal monthly, commencing in January 2004. The offered certificates represent obligations of the trust fund only and do not represent obligations of or interests in us or any of our affiliates. We do not intend to list the offered certificates on any national securities exchange or any automated quotation system of any registered securities association. The underwriters have agreed to purchase the offered certificates from us at a price of 100.48% of the total initial principal balance of the offered certificates plus accrued interest from December 1, 2003. The underwriters propose to offer the offered certificates from time to time for sale in negotiated transactions or otherwise, at market prices prevailing at the time of sale, at prices related to the prevailing market prices or at negotiated prices. INVESTING IN THE OFFERED CERTIFICATES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE S-33 OF THIS PROSPECTUS SUPPLEMENT.
APPROXIMATE INITIAL TOTAL INITIAL PASS-THROUGH ASSUMED FINAL RATED FINAL EXPECTED RATINGS OFFERED CLASS PRINCIPAL BALANCE RATE DISTRIBUTION DATE DISTRIBUTION DATE S&P/FITCH - ------------- ----------------- ------------ ----------------- ----------------- ---------------- Class A-1 .......... $ 82,665,000 3.0930% July 2008 December 2036 AAA/AAA Class A-2 .......... $ 150,368,000 3.8080% September 2008 December 2036 AAA/AAA Class A-3 .......... $ 115,605,000 4.4290% March 2013 December 2036 AAA/AAA Class A-4 .......... $ 370,274,000 4.9000% November 2013 December 2036 AAA/AAA Class B ............ $ 39,416,000 5.0270% November 2013 December 2036 AA/AA Class C ............ $ 15,766,000 5.0570% November 2013 December 2036 AA-/AA- Class D ............ $ 31,532,000 5.1160% November 2013 December 2036 A/A Class E ............ $ 17,343,000 5.2070% December 2013 December 2036 A-/A- Class F ............ $ 17,343,000 5.5060% November 2014 December 2036 BBB+/BBB+
Delivery of the offered certificates, in book-entry form only, will be made on or about December 5, 2003. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Credit Suisse First Boston LLC will act as lead and book running manager. CREDIT SUISSE FIRST BOSTON PNC CAPITAL MARKETS, INC. McDONALD INVESTMENTS A KEYCORP COMPANY WaMu CAPITAL CORP. MERRILL LYNCH & CO. The date of this prospectus supplement is November 20, 2003. [MAP AND PHOTOS] TABLE OF CONTENTS PROSPECTUS SUPPLEMENT IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS ...........................................4 NOTICE TO RESIDENTS OF THE UNITED KINGDOM.....................................4 SUMMARY OF PROSPECTUS SUPPLEMENT..............................................5 RISK FACTORS.................................................................33 CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT.........................53 FORWARD-LOOKING STATEMENTS...................................................53 DESCRIPTION OF THE UNDERLYING MORTGAGE LOANS.................................53 DESCRIPTION OF THE OFFERED CERTIFICATES.....................................114 YIELD AND MATURITY CONSIDERATIONS...........................................134 THE POOLING AND SERVICING AGREEMENT.........................................138 FEDERAL INCOME TAX CONSEQUENCES.............................................164 ERISA CONSIDERATIONS........................................................166 LEGAL INVESTMENT............................................................169 CERTAIN LEGAL ASPECTS.......................................................170 USE OF PROCEEDS.............................................................170 UNDERWRITING................................................................171 LEGAL MATTERS...............................................................172 RATING......................................................................172 GLOSSARY....................................................................174
SCHEDULE TO PROSPECTUS SUPPLEMENT SCHEDULE I -- RATES USED IN DETERMINATION OF CLASS A-SP PASS-THROUGH RATES EXHIBITS TO PROSPECTUS SUPPLEMENT EXHIBIT A-1 -- CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS AND THE RELATED MORTGAGED REAL PROPERTIES EXHIBIT A-2 -- MORTGAGE POOL INFORMATION EXHIBIT B -- FORM OF TRUSTEE REPORT EXHIBIT C -- DECREMENT TABLES FOR THE OFFERED CERTIFICATES EXHIBIT D -- GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES PROSPECTUS IMPORTANT NOTICE ABOUT THE INFORMATION PRESENTED IN THIS PROSPECTUS ..............................................3 AVAILABLE INFORMATION; INCORPORATION BY REFERENCE.............................3 SUMMARY OF PROSPECTUS.........................................................4 RISK FACTORS.................................................................12 CAPITALIZED TERMS USED IN THIS PROSPECTUS....................................29 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP..........................29 USE OF PROCEEDS..............................................................29 DESCRIPTION OF THE TRUST ASSETS..............................................30 YIELD AND MATURITY CONSIDERATIONS............................................53 DESCRIPTION OF THE CERTIFICATES..............................................59 DESCRIPTION OF THE GOVERNING DOCUMENTS.......................................67 DESCRIPTION OF CREDIT SUPPORT................................................77 LEGAL ASPECTS OF MORTGAGE LOANS..............................................79 FEDERAL INCOME TAX CONSEQUENCES..............................................90 STATE AND OTHER TAX CONSEQUENCES............................................124 ERISA CONSIDERATIONS........................................................124 LEGAL INVESTMENT............................................................127 PLAN OF DISTRIBUTION........................................................129 LEGAL MATTERS...............................................................130 FINANCIAL INFORMATION.......................................................130 RATING......................................................................130 GLOSSARY....................................................................132
---------- YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT. S-3 DEALER PROSPECTUS DELIVERY OBLIGATION UNTIL MARCH 7, 2004 (90 DAYS AFTER THE COMMENCEMENT OF THE OFFERING), ALL DEALERS THAT EFFECT TRANSACTIONS IN THE OFFERED CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. THIS IS IN ADDITION TO THE DEALER'S OBLIGATION TO DELIVER A PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS WHEN ACTING AS AN UNDERWRITER AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS We provide information to you about the offered certificates in two separate documents that progressively provide more detail-- - the accompanying prospectus, which provides general information, some of which may not apply to the offered certificates, and - this prospectus supplement, which describes the specific terms of the offered certificates. You should read both this prospectus supplement and the accompanying prospectus in full to obtain material information concerning the offered certificates. In addition, we have filed with the Securities and Exchange Commission a registration statement under the Securities Act of 1933, as amended, with respect to the offered certificates. This prospectus supplement and the accompanying prospectus form a part of that registration statement. However, this prospectus supplement and the accompanying prospectus do not contain all of the information contained in our registration statement. For further information regarding the documents referred to in this prospectus supplement and the accompanying prospectus, you should refer to our registration statement and the exhibits to it. Our registration statement and the exhibits to it can be inspected and copied at prescribed rates at the public reference facilities maintained by the SEC at its public reference section, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its regional offices located at: the midwest regional office, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661; and the northeast regional office, 233 Broadway, New York, New York 10279. Copies of these materials can also be obtained electronically through the SEC's internet web site (http://www.sec.gov). The photographs of mortgaged real properties included in this prospectus supplement are not representative of all the mortgaged real properties that secure the mortgage loans expected to back the offered certificates or of any particular type of mortgaged real property. This prospectus supplement and the accompanying prospectus include cross references to sections in these materials where you can find further related discussions. The Table of Contents in each of this prospectus supplement and the accompanying prospectus identify the pages where these sections are located. NOTICE TO RESIDENTS OF THE UNITED KINGDOM The certificates may only be sold or offered to, and this prospectus supplement and any other invitation or inducement to buy or participate in the certificates may only be communicated to, persons who (i) are outside the United Kingdom; or (ii) have professional experience of participating in unregulated collective investment schemes and of matters relating to investments falling within both Article 14(5) of the Financial Services Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (the "CIS Order") and Article 19(5) of the Financial Services and Markets Act (Financial Promotion) Order 2000 (the "FP Order"); or (iii) are persons falling within Article 22(2)(a) to (d) ("high net worth companies, unincorporated in associations, etc.") of the CIS Order and Article 49(2) of the FP Order (such persons together referred to as "Relevant Persons"). The certificates to which this prospectus supplement relates are available only to Relevant Persons and this prospectus supplement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this communication relates is available only to the Relevant Persons and will be engaged in only with Relevant Persons. Any underwriter communicating any information relating to this prospectus supplement or the certificates in the United Kingdom should be responsible for compliance with all applicable provisions of the Financial Services and Markets Act 2000 and any regulations made thereunder in so doing. S-4 SUMMARY OF PROSPECTUS SUPPLEMENT This summary highlights selected information from this prospectus supplement and does not contain all of the information that you need to consider in making your investment decision. To understand all of the terms of the offered certificates, carefully read this prospectus supplement and the accompanying prospectus. This summary provides an overview of certain information to aid your understanding and is qualified by the full description presented in this prospectus supplement and the accompanying prospectus. TRANSACTION OVERVIEW The offered certificates will be part of a series of commercial mortgage pass-through certificates designated as the Series 2003-C5 Commercial Mortgage Pass-Through Certificates. The series 2003-C5 certificates will consist of 24 classes. The table below identifies and specifies various characteristics for 21 of those classes.
APPROXIMATE INITIAL TOTAL % OF PASS- EXPECTED PRINCIPAL TOTAL INITIAL APPROXIMATE THROUGH RATINGS BALANCE OR PRINCIPAL CREDIT RATE CLASS S&P/FITCH NOTIONAL AMOUNT BALANCE SUPPORT DESCRIPTION - ----- --------- ---------------- ------------- ----------- ------------ A-1 AAA/AAA $ 82,665,000 6.55% 16.00% Fixed A-2 AAA/AAA $ 150,368,000 11.92% 16.00% Fixed A-3 AAA/AAA $ 115,605,000 9.17% 16.00% Fixed A-4 AAA/AAA $ 370,274,000 29.36% 16.00% WAC Cap B AA/AA $ 39,416,000 3.13% 12.88% WAC Cap C AA-/AA- $ 15,766,000 1.25% 11.63% WAC Cap D A/A $ 31,532,000 2.50% 9.13% WAC Cap E A-/A- $ 17,343,000 1.38% 7.75% WAC Cap F BBB+/BBB+ $ 17,343,000 1.38% 6.38% WAC Cap A-1-A AAA/AAA $ 340,549,000 27.00% 16.00% WAC Cap G BBB/BBB $ 14,190,000 1.13% 5.25% WAC Cap H BBB-/BBB- $ 14,189,000 1.12% 4.13% WAC J BB+/BB+ $ 9,460,000 0.75% 3.38% WAC Cap K BB/BB $ 6,307,000 0.50% 2.88% WAC Cap L BB-/BB- $ 6,306,000 0.50% 2.38% WAC Cap M B+/B+ $ 7,883,000 0.63% 1.75% WAC Cap N B/B $ 1,577,000 0.13% 1.63% WAC Cap O B-/B- $ 4,730,000 0.38% 1.25% WAC Cap P NR/NR $ 15,766,490 1.25% 0.00% WAC Cap A-X AAA/AAA $ 1,261,269,490 100.00% N/A Variable IO A-SP AAA/AAA $ 1,149,433,000 91.13% N/A Variable IO ASSUMED INITIAL WEIGHTED PASS- AVERAGE ASSUMED ASSUMED FINAL THROUGH LIFE PRINCIPAL DISTRIBUTION CLASS RATE (YEARS) WINDOW DATE - ----- ------- -------- ----------- -------------- A-1 3.0930% 3.0 1/04-7/08 July 2008 A-2 3.8080% 4.7 7/08- 9/08 September 2008 A-3 4.4290% 6.7 9/08- 3/13 March 2013 A-4 4.9000% 9.7 3/13- 11/13 November 2013 B 5.0270% 9.9 11/13-11/13 November 2013 C 5.0570% 9.9 11/13-11/13 November 2013 D 5.1160% 9.9 11/13-11/13 November 2013 E 5.2070% 10.0 11/13-12/13 December 2013 F 5.5060% 10.6 12/13-11/14 November 2014 A-1-A 4.6250% N/A N/A N/A G 5.5729% N/A N/A N/A H 5.5729% N/A N/A N/A J 5.2255% N/A N/A N/A K 5.2255% N/A N/A N/A L 5.2255% N/A N/A N/A M 5.2255% N/A N/A N/A N 5.2255% N/A N/A N/A O 5.2518% N/A N/A N/A P 5.3308% N/A N/A N/A A-X 0.0644% N/A N/A N/A A-SP 1.0103% N/A N/A N/A
In reviewing the foregoing table, please note that: - Only the class A-1, A-2, A-3, A-4, B, C, D, E and F certificates are offered by this prospectus supplement. - The ratings shown in the foregoing table are those of Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and Fitch, Inc., respectively. "NR" means not rated. - Subject to the discussion under "Rating" in this prospectus supplement, the ratings on the offered certificates address the likelihood of the timely receipt by the holders of all payments of interest to which they are entitled on each distribution date and the ultimate receipt by holders of all payments of principal to which they are entitled on or before the applicable rated final distribution date. The rated final distribution date for each class of offered certificates is the distribution date in December 2036. That is the first distribution date that is at least three (3) years after the end of the amortization term for the mortgage loan with the longest remaining amortization term as of the date of the issuance of the offered certificates. - All of the classes identified in the foregoing table, except the class A-X and A-SP certificates, will have principal balances. S-5 - For purposes of calculating the accrual of interest, the class A-X certificates will, as of any date of determination, have a total notional amount equal to the then total principal balance of the class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G, H, J, K, L, M, N, O and P certificates. - For purposes of calculating the accrual of interest, the class A-SP certificates will have a total notional amount that is-- 1. during the period from the date of initial issuance of the series 2003-C5 certificates through and including the distribution date in December 2004, the sum of (a) the lesser of $72,258,000 and the total principal balance of the class A-1 certificates outstanding from time to time, (b) the lesser of $336,871,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (c) the total principal balance of the class A-2, A-3, A-4, B, C, D and E certificates outstanding from time to time; 2. during the period following the distribution date in December 2004 through and including the distribution date in December 2005, the sum of (a) the lesser of $27,848,000 and the total principal balance of the class A-1 certificates outstanding from time to time, (b) the lesser of $320,486,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (c) the total principal balance of the class A-2, A-3, A-4, B, C, D and E certificates outstanding from time to time; 3. during the period following the distribution date in December 2005 through and including the distribution date in December 2006, the sum of (a) the lesser of $133,438,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $303,586,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (b) the total principal balance of the class A-3, A-4, B, C, D and E certificates outstanding from time to time; 4. during the period following the distribution date in December 2006 through and including the distribution date in December 2007, the sum of (a) the lesser of $64,439,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $271,543,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (b) the total principal balance of the class A-3, A-4, B, C, D and E certificates outstanding from time to time; 5. during the period following the distribution date in December 2007 through and including the distribution date in December 2008, the sum of (a) the lesser of $11,208,000 and the total principal balance of the class A-3 certificates outstanding from time to time, (b) the lesser of $220,283,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (c) the total principal balance of the class A-4, B, C, D and E certificates; 6. during the period following the distribution date in December 2008 through and including the distribution date in December 2009, the sum of (a) the lesser of $349,660,000 and the total principal balance of the class A-4 certificates outstanding from time to time, (b) the lesser of $208,608,000 and the total principal balance of the class A-1-A certificates outstanding from time to time, (c) the total principal balance of the class B, C and D certificates outstanding from time to time and (d) the lesser of $6,605,000 and the total principal balance of the class E certificates outstanding from time to time; 7. during the period following the distribution date in December 2009 through and including the distribution date in December 2010, the sum of (a) the lesser of $309,340,000 and the total principal balance of the class A-4 certificates outstanding from time to time, (b) the lesser of $197,274,000 and the total principal balance of the class A-1-A certificates outstanding from time to time, (c) the total principal balance of the class B and C certificates outstanding from time to time and (d) the lesser of $24,297,000 and the total principal balance of the class D certificates outstanding from time to time; 8. following the distribution date in December 2010, $0. S-6 - The total initial principal balance or the total initial notional amount of any class shown in the table on page S-5 may be larger or smaller depending on, among other things, the actual initial mortgage pool balance, which may be 5% more or less than the amount shown in this prospectus supplement. - Each class identified in the table on page S-5 as having a "Fixed" pass-through rate has a fixed pass-through rate that will remain constant at the initial pass-through rate shown for that class in that table. See "Description of the Offered Certificates--Distributions-- Calculation of Pass-Through Rates" in this prospectus supplement. - Each class identified in the table on page S-5 as having a "WAC" pass-through rate has a variable pass-through rate equal to a weighted average coupon derived from net interest rates on the mortgage loans. - Each class identified in the table on page S-5 as having a "WAC Cap" pass-through rate has a variable pass-through rate equal to the lesser of-- 1. the initial pass-through rate shown for that class in that table (or, in the case of the class G certificates, 5.7450% per annum), and 2. a weighted average coupon derived from the net interest rates on the underlying mortgage loans. See "Description of the Offered Certificates--Distributions-- Calculation of Pass-Through Rates" in this prospectus supplement. - The initial pass-through rates identified in the table on page S-5 for the class G, class H, class A-X and class A-SP certificates are approximate. - The pass-through rate for the class A-X certificates for any interest accrual period will equal the weighted average of the respective strip rates, which we refer to as class A-X strip rates, at which interest accrues from time to time on the respective components of the total notional amount of the class A-X certificates outstanding immediately prior to the related distribution date, with the relevant weighting to be done based upon the relative sizes of those components. Each of those components will be comprised of all or a designated portion of the total principal balance of one of the classes of series 2003-C5 principal balance certificates. In general, the total principal balance of each class of series 2003-C5 principal balance certificates will constitute a separate component of the total notional amount of the class A-X certificates. However, if a portion, but not all, of the total principal balance of any particular class of series 2003-C5 principal balance certificates is identified as being part of the total notional amount of the class A-SP certificates immediately prior to any distribution date, then that identified portion of such total principal balance will represent one separate component of the total notional amount of the class A-X certificates for purposes of calculating the accrual of interest during the related interest accrual period, and the remaining portion of such total principal balance will represent a separate component of the total notional amount of the class A-X certificates for purposes of calculating the accrual of interest during the related interest accrual period. For purposes of accruing interest during any interest accrual period, through and including the November 2010 interest accrual period, on any particular component of the total notional amount of the class A-X certificates immediately prior to the related distribution date, the applicable class A-X strip rate will be calculated as follows: 1. if such particular component consists of the entire total principal balance of any class of series 2003-C5 principal balance certificates, and if such total principal balance also constitutes, in its entirety, a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal the excess, if any, of (a) a weighted average coupon derived from net interest rates on the underlying mortgage loans, over (b) the reference rate specified on Schedule I to this prospectus supplement with respect to the related distribution date; 2. if such particular component consists of a designated portion (but not all) of the total principal balance of any class of series 2003-C5 principal balance certificates, and if such designated portion of such total principal balance also constitutes a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal to the excess, if any, of (a) a weighted average coupon derived from S-7 net interest rates on the underlying mortgage loans, over (b) the reference rate specified on Schedule I hereto with respect to the related distribution date; 3. if such particular component consists of the entire total principal balance of any class of series 2003-C5 principal balance certificates, and if such total principal balance does not, in whole or in part, also constitute a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal the excess, if any, of (a) a weighted average coupon derived from net interest rates on the underlying mortgage loans, over (b) the pass-through rate in effect during the subject interest accrual period for the subject class of series 2003-C5 principal balance certificates; and 4. if such particular component consists of a designated portion (but not all) of the total principal balance of any class of series 2003-C5 principal balance certificates, and if such designated portion of such total principal balance does not also constitute a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal the excess, if any, of (a) a weighted average coupon derived from net interest rates on the underlying mortgage loans, over (b) the pass-through rate in effect during the subject interest accrual period for the subject class of series 2003-C5 principal balance certificates. For purposes of accruing interest on the class A-X certificates during each interest accrual period subsequent to the November 2010 interest accrual period, the total principal balance of each class of series 2003-C5 principal balance certificates will constitute one separate component of the total notional amount of the class A-X certificates, and the applicable class A-X strip rate with respect to each such component for each such interest accrual period will equal the excess, if any, of (a) a weighted average coupon derived from net interest rates on the underlying mortgage loans, over (b) the pass-through rate in effect during the subject interest accrual period for the class of series 2003-C5 principal balance certificates whose principal balance makes up such component. - The pass-through rate for the class A-SP certificates, for each interest accrual period through and including the November 2010 interest accrual period, will equal the weighted average of the respective strip rates, which we refer to as class A-SP strip rates, at which interest accrues from time to time on the respective components of the total notional amount of the class A-SP certificates outstanding immediately prior to the related distribution date, with the relevant weighting to be done based upon the relative sizes of those components. Each of those components will be comprised of all or a designated portion of the total principal balance of a specified class of series 2003-C5 principal balance certificates. If the entire total principal balance of any class of series 2003-C5 principal balance certificates is identified as being part of the total notional amount of the class A-SP certificates immediately prior to any distribution date, then that total principal balance will, in its entirety, represent a separate component of the total notional amount of the class A-SP certificates for purposes of calculating the accrual of interest during the related interest accrual period. If only part of the total principal balance of any class of series 2003-C5 principal balance certificates is identified as being part of the total notional amount of the class A-SP certificates immediately prior to any distribution date, then that particular portion of the total principal balance of that class of series 2003-C5 principal balance certificates will represent one separate component of the total notional amount of the class A-SP certificates for purposes of calculating the accrual of interest during the related interest accrual period. For purposes of accruing interest during any interest accrual period, through and including the November 2010 interest accrual period, on any particular component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, the applicable class A-SP strip rate will equal the excess, if any, of: 1. the lesser of (a) the reference rate specified on Schedule I hereto with respect to the related distribution date and (b) a weighted average coupon derived from net interest rates on the underlying mortgage loans, over 2. the pass-through rate in effect during the subject interest accrual period for the class of series 2003-C5 principal balance certificates whose total principal balance, or a designated portion thereof, comprises such component. S-8 Following the November 2010 interest accrual period, the class A-SP certificates will cease to accrue interest. In connection therewith, the class A-SP certificates will have a 0% pass-through rate for the December 2010 interest accrual period and for each interest accrual period thereafter. - The references to "net interest rates on the underlying mortgage loans" in the preceding bullets mean, as to any particular mortgage loan in the trust fund, an interest rate that is generally equal to in the case of each mortgage loan in the trust fund, the related mortgage interest rate in effect as of the date of initial issuance of the offered certificates, minus the sum of the annual rates at which the related master servicing fee, including the primary servicing fee, and the trustee fee are calculated; provided that, if the subject mortgage loan accrues interest on the basis of the actual number of days elapsed during any one-month interest accrual period in a year assumed to consist of 360 days, then, in some months, the foregoing rate for that mortgage loan will be converted to an annual rate that would generally produce an equivalent amount of interest on the basis of an assumed 360-day year consisting of twelve 30-day months. See "Description of the Offered Certificates--Distributions-- Calculation of Pass-Through Rates" in this prospectus supplement. - As to any given class of offered certificates shown in the table on page S-5, the assumed weighted average life, the assumed principal window and the assumed final distribution date have been calculated assuming, among other things, that-- 1. Seven (7) of the underlying mortgage loans will be repaid in full on their respective anticipated repayment dates, 2. there are otherwise no voluntary or involuntary prepayments with respect to the underlying mortgage loans, and 3. there are no defaults with respect to the underlying mortgage loans. - As to any given class of offered certificates shown in the table on page S-5, the assumed weighted average life is the average amount of time in years between the assumed settlement date for the offered certificates and the payment of each dollar of principal on that class. - As to any given class of offered certificates shown in the table on page S-5, the assumed principal window is the period during which holders of that class would receive distributions of principal. - As to any given class of offered certificates shown in the table on page S-5, the assumed final distribution date is the distribution date on which the last distribution of principal is assumed to be made on that class. - The class R, LR and V certificates are not represented in the table on page S-5. They do not have principal balances, notional amounts or pass-through rates. The document that will govern the issuance of the series 2003-C5 certificates, the creation of the related trust fund and the servicing and administration of the underlying mortgage loans will be a pooling and servicing agreement to be dated as of December 1, 2003, between us, as depositor, and a trustee, a master servicer and a special servicer. The series 2003-C5 certificates will evidence the entire beneficial ownership of a trust fund that we intend to establish. The primary assets of that trust fund will be a segregated pool of commercial and multifamily mortgage loan. Those mortgage loans will provide for monthly debt service payments and, except as described under "--The Underlying Mortgage Loans" below, will have fixed mortgage interest rates in the absence of default. We will acquire those mortgage loans, for deposit in the trust fund, from three separate mortgage loan sellers. S-9 The pool of mortgage loans that we intend to include in the trust fund will have the following general characteristics as of their respective due dates in December 2003. All percentages are approximate. To better understand the following information, see the discussion under "--The Underlying Mortgage Loans" below. Initial mortgage pool balance........................................................ $ 1,261,269,491 Number of mortgage loans............................................................. 153 Number of mortgaged real properties.................................................. 156 Largest cut-off date principal balance............................................... $ 85,405,532 Smallest cut-off date principal balance.............................................. $ 585,529 Average cut-off date principal balance............................................... $ 8,243,591 Highest mortgage interest rate....................................................... 8.120% Lowest mortgage interest rate........................................................ 3.108% Weighted average mortgage interest rate.............................................. 5.453% Longest original term to maturity or anticipated repayment date(1)................... 240 Shortest original term to maturity or anticipated repayment date(1).................. 60 Weighted average original term to maturity or anticipated repayment date(1).......... 110 Longest remaining term to maturity or anticipated repayment date(1).................. 234 Shortest remaining term to maturity or anticipated repayment date(1)................. 50 Weighted average remaining term to maturity or anticipated repayment date(1)......... 105 Highest debt service coverage ratio, based on underwritten net cash flow............. 3.48x Lowest debt service coverage ratio, based on underwritten net cash flow.............. 1.23x Weighted average debt service coverage ratio, based on underwritten net cash flow.... 1.75x Highest cut-off date loan-to-value ratio............................................. 81.6% Lowest cut-off date loan-to-value ratio.............................................. 37.0% Weighted average cut-off date loan-to-value ratio.................................... 68.9%
- ---------- (1) Shown in months. In reviewing the foregoing table, please note that the underwritten net cash flow for any mortgaged real property is an estimated number based on numerous assumptions that may not necessarily reflect recent historical performance and may not ultimately prove to be an accurate prediction of future performance. For purposes of calculating distributions on the respective classes of the series 2003-C5 certificates, the underlying mortgage loans will be divided into the following two loan groups: - Loan group no. 1, which will consist of all of the mortgage loans that are secured by property types other than multifamily and manufactured housing, together with five (5) mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 1 will consist of 94 mortgage loans, with an initial loan group no. 1 balance of $920,720,128, representing approximately 73.00% of the initial mortgage pool balance. - Loan group no. 2, which will consist of all but five (5) of the mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 2 will consist of 59 mortgage loans, with an initial loan group no. 2 balance of $340,549,363, representing approximately 27.00% of the initial mortgage pool balance. Exhibit A-1 to this prospectus supplement identifies which mortgage loans are included in each of loan group no. 1 and loan group no. 2. S-10 RELEVANT PARTIES TRUST FUND................................ CSFB Commercial Mortgage Trust 2003-C5, a New York common law trust, will issue the series 2003-C5 certificates. The primary assets of the issuing trust fund will be the mortgage loans that we are acquiring from the respective mortgage loan sellers. DEPOSITOR................................. Credit Suisse First Boston Mortgage Securities Corp., a Delaware corporation and an affiliate of one of the mortgage loan sellers and one of the underwriters. Our principal executive office is located at Eleven Madison Avenue, New York, New York 10010. All references to "we," "us" and "our" in this prospectus supplement and the accompanying prospectus are intended to mean Credit Suisse First Boston Mortgage Securities Corp. See "Credit Suisse First Boston Mortgage Securities Corp." in the accompanying prospectus. MASTER SERVICER........................... Midland Loan Services, Inc., a Delaware corporation, and an affiliate of PNC Bank, National Association, one of the mortgage loan sellers. Midland's primary servicing offices are located at 10851 Mastin Street, Suite 700, Overland Park, Kansas 66210. See "The Pooling and Servicing Agreement--The Master Servicer" in this prospectus supplement. SPECIAL SERVICER.......................... Clarion Partners, LLC will act as the special servicer with respect to the mortgage loans. The special servicer will be responsible for servicing and administering: - Mortgage loans that, in general, are in default or as to which default is imminent; and - Any real estate acquired by the trust fund upon foreclosure of a related mortgage loan. See "The Pooling and Servicing Agreement--The Special Servicer" in this prospectus supplement. PRIMARY SERVICER.......................... Midland Loan Services, Inc. will act as primary servicer with respect to one hundred forty-seven (147) of the mortgage loans representing 85.38% of the initial mortgage pool balance. KeyCorp Real Estate Capital Markets, Inc. ("KRECM") will act as primary servicer with respect to three (3) of the mortgage loans representing 13.52% of the initial mortgage pool balance. Certain other parties will act as primary servicer with respect to three (3) mortgage loans, representing 1.10% of the initial mortgage pool balance. See "The Pooling and Servicing Agreement--Servicing Under the Pooling and Servicing Agreement" and "--Servicing and Other Compensation and Payment of Expenses." TRUSTEE................................... Wells Fargo Bank Minnesota, N.A., a national banking association. The trustee maintains an office at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951. See "The Pooling and Servicing Agreement--The Trustee" in this prospectus supplement. MAYFAIR MALL LOAN, MASTER SERVICER AND SPECIAL SERVICER...... Notwithstanding the foregoing, the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall will be serviced and administered pursuant to the series 2003-C4 pooling and servicing agreement (the governing document for the Credit Suisse First Boston Mortgage Securities Corp. series 2003-C4 commercial mortgage securitization), which provides for servicing arrangements that are similar but not identical to those under the series 2003-C5 pooling and servicing agreement. In that regard--
S-11 - Wells Fargo Bank Minnesota, N.A., which is the trustee under the series 2003-C4 pooling and servicing agreement, will, in that capacity, be the mortgagee of record for the mortgage loan secured by the Mayfair Mall mortgaged real property; - KeyCorp Real Estate Capital Markets, Inc., which is the master servicer under the series 2003-C4 pooling and servicing agreement, will, in that capacity, be the master servicer for the Mayfair Mall loan; and - Lennar Partners, Inc., which is the special servicer under the series 2003-C4 pooling and servicing agreement, will, in that capacity, be the special servicer of the Mayfair Mall loan. The special servicer under the series 2003-C4 pooling and servicing agreement can be replaced, with or without cause, solely in respect of the Mayfair Mall total loan, consisting of the Mayfair Mall loan and the three Mayfair Mall companion loans, by the holder or holders of such mortgage loans comprising the Mayfair Mall total loan as then represent more than 50% of the total outstanding principal balance of the entire Mayfair Mall total loan; provided that any such holder of a mortgage loan comprising a portion of the Mayfair Mall total loan may delegate or assign its rights in respect of the foregoing to a representative or designee and, in the case of the Mayfair Mall loan included in this trust, that designee will be the series 2003-C5 directing certificateholder. References in this prospectus supplement, however, to the trustee, the master servicer and the special servicer will mean the trustee, the master servicer and the special servicer under the series 2003-C5 pooling and servicing agreement unless the context clearly indicates otherwise. See "Description of the Underlying Mortgage Loans--The Mayfair Mall Loan" in this prospectus supplement. CONTROLLING CLASS OF SERIES 2003-C5 CERTIFICATEHOLDERS........................ At any time of determination, the holders of the most subordinate of the classes of series 2003-C5 certificates (other than class A-X, A-SP, R, LR and V certificates) that has a total principal balance at least equal to 25% of the total initial principal balance of that class, will be the controlling class of series 2003-C5 certificates. If none of those classes of series 2003-C5 certificates has a total principal balance at least equal to 25% of the total initial principal balance of that class, then the controlling class of series 2003-C5 certificateholders will be the holders of the most subordinate of those classes of series 2003-C5 certificates that has a total principal balance greater than zero. See "The Pooling and Servicing Agreement--Realization Upon Mortgage Loans" in this prospectus supplement. If any mortgage loan in the trust fund becomes delinquent as to any balloon payment or becomes 60 days delinquent as to any other monthly debt service payment (in each case without giving effect to any applicable grace period) or becomes a specially serviced mortgage loan as a result of any non-monetary event of default, then the directing certificateholder, a certificateholder of the series 2003-C5 controlling class selected by holders of certificates representing greater than 50% of the total principal balance of the series 2003-C5 controlling class, may, at its option, purchase that mortgage loan from the trust fund at the price and on the terms described under "The Pooling and Servicing Agreement--Realization Upon Mortgage Loans" in this prospectus supplement. Subject to the conditions described under "The Pooling and Servicing Agreement--Realization Upon Mortgage Loans" and "--Replacement of the Special Servicer" in this prospectus supplement, the directing certificateholder may direct the special servicer with respect to various special servicing matters involving the mortgage loans, except that the series 2003-C5 directing
S-12 certificateholder will be entitled to provide such direction with respect to the Mayfair Mall total loan, consisting of the Mayfair Mall loan and the Mayfair Mall companion loans, only in conjunction with the holder or holders of such Mayfair Mall companion loans, that when combined with the Mayfair Mall loan, represent more than 50% of the total outstanding principal balance of the entire Mayfair Mall total loan. Following the occurrence of the particular change-of-control event in respect of the Mayfair Mall loan referred to under "--The Mayfair Mall Loan," the series 2003-C5 directing certificateholder will be entitled to-- - consult with - but, except as contemplated by the prior paragraph, not direct - the special servicer of the Mayfair Mall loan under the series 2003-C4 pooling and servicing agreement to various servicing matters involving the Mayfair Mall loan and the Mayfair Mall companion loans, - purchase the Mayfair Mall loan and/or all three of the Mayfair Mall companion loans under various default scenarios, and - cure defaults with respect to the Mayfair Mall loan and the Mayfair Mall companion loans. With respect to the loan identified on Exhibit A-1 to this prospectus supplement as Stanford Shopping Center, the directing certificateholder will not be entitled to direct the special servicer with respect to various special servicing matters relating to the Stanford Shopping Center loan. Rather, pursuant to the Stanford Shopping Center intercreditor agreement, the holders of more than 50% of the outstanding principal balance of the Stanford Shopping Center total loan will be entitled to direct the special servicer with respect to various special servicing matters relating to the Stanford Shopping Center loan. The Stanford Shopping Center directing certificateholder will also be permitted to remove the special servicer solely for the Stanford Shopping Center loan. UNDERWRITERS.............................. Credit Suisse First Boston LLC, McDonald Investments Inc., WaMu Capital Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated and PNC Capital Markets, Inc. are the underwriters with respect to this offering. Credit Suisse First Boston LLC will be lead and bookrunning manager. Credit Suisse First Boston LLC is an affiliate of us and Column Financial, Inc., one of the mortgage loan sellers. McDonald Investments Inc. is an affiliate of KeyBank National Association, one of the mortgage loan sellers, and of KRECM, the primary servicer of three (3) mortgage loans in the trust fund, including the Mall at Fairfield Commons loan and the Mayfair Mall loan. PNC Capital Markets, Inc. is an affiliate of PNC Bank, National Association, one of the mortgage loan sellers and an affiliate of Midland Loan Services, Inc., a primary servicer and the master servicer. MORTGAGE LOAN SELLERS..................... We will acquire the mortgage loans that are to back the offered certificates from three separate mortgage loan sellers: - Column Financial, Inc., a Delaware corporation and an affiliate of us and one of the underwriters. Column maintains an office at 3414 Peachtree Road, N.E., Suite 1140, Atlanta, Georgia 30326. - PNC Bank, National Association, a national banking association and an affiliate of PNC Capital Markets, Inc., one of the underwriters and an affiliate of Midland Loan Services, Inc., a primary servicer and the master servicer. PNC Bank maintains an office at 249 Fifth Avenue, One PNC Plaza, Pittsburgh, Pennsylvania 15222.
S-13 - KeyBank National Association, a national banking association and an affiliate of McDonald Investments Inc., one of the underwriters and of KRECM, the primary servicer of three (3) mortgage loans in the trust fund, including the Mall at Fairfield Commons loan and the Mayfair Mall loan. KeyBank National Association maintains an office at Key Tower, 127 Public Square, Cleveland, Ohio 44114. See "Description of the Underlying Mortgage Loans--The Mortgage Loan Sellers" in this prospectus supplement. SIGNIFICANT DATES AND PERIODS CUT-OFF DATE.............................. The underlying mortgage loans will be considered part of the trust fund as of their respective due dates in December 2003. All payments and collections received on each of the underlying mortgage loans after its due date in December 2003, excluding any payments or collections that represent amounts due on or before that date, will belong to the trust fund. The respective due dates for the underlying mortgage loans in December 2003 are individually and collectively considered the cut-off date for the trust fund. ISSUE DATE................................ The date of initial issuance for the series 2003-C5 certificates will be on or about December 5, 2003. DUE DATES................................. Subject, in some cases, to a next business day convention, the dates on which monthly installments of principal and/or interest will be due on the underlying mortgage loans are as follows:
% OF INITIAL NUMBER OF MORTGAGE POOL DUE DATE MORTGAGE LOANS BALANCE -------- -------------- ------------- 1st 36 33.48% 11th 117 66.52% DETERMINATION DATE........................ The monthly cut-off for collections on the underlying mortgage loans that are to be distributed, and information regarding the underlying mortgage loans that is to be reported, to the holders of the series 2003-C5 certificates on any distribution date will be the close of business on the determination date in the same month as that distribution date. The determination date will be the 11th calendar day of each month, commencing with January 2004, or, if the 11th calendar day of that month is not a business day, then the next succeeding business day. DISTRIBUTION DATE......................... Distributions on the series 2003-C5 certificates are scheduled to occur monthly, commencing in January 2004. During any given month, the distribution date will be the fourth business day following the determination date in that month. RECORD DATE............................... The record date for each monthly distribution on a series 2003-C5 certificate will be the last business day of the prior calendar month. The registered holders of the series 2003-C5 certificates at the close of business on each record date will be entitled to receive any distribution on those certificates on the following distribution date, except that the final distribution on any offered certificate will only be made upon presentation and surrender of that certificate. COLLECTION PERIOD......................... Amounts available for distribution on the series 2003-C5 certificates on any distribution date will depend on the payments and other collections received, and any advances of payments due, on or with respect to the underlying mortgage loans during the related collection period. Each collection period-- - will relate to a particular distribution date,
S-14 - will begin when the prior collection period ends or, in the case of the first collection period, will begin as of the issue date, and - will end at the close of business on the determination date that occurs in the same month as the related distribution date. INTEREST ACCRUAL PERIOD................... The amount of interest payable with respect to the interest-bearing classes of the series 2003-C5 certificates on any distribution date will be a function of the interest accrued during the related interest accrual period. The interest accrual period for any distribution date will be the calendar month immediately preceding the month in which that distribution date occurs. THE OFFERED CERTIFICATES GENERAL................................... The series 2003-C5 certificates offered by this prospectus supplement are the class A-1, A-2, A-3, A-4, B, C, D, E and F certificates. Each class of offered certificates will have the initial total principal balance and pass-through rate set forth in the table on page S-5 or otherwise described under "--Transaction Overview" above. There are no other securities offered by this prospectus supplement. DISTRIBUTIONS A. GENERAL............................... Funds collected or advanced on the underlying mortgage loans will be distributed on each distribution date, net of specified trust fund expenses including servicing fees, trustee fees and related compensation. B. PRIORITY OF DISTRIBUTIONS............. The trustee will make distributions of interest and, if and when applicable, principal, to the following classes of series 2003-C5 certificateholders, in the following order:
DISTRIBUTION ORDER CLASS ------------------------ --------------------------- 1st A-1, A-2, A-3, A-4, A-1-A, A-X and A-SP 2nd B 3rd C 4th D 5th E 6th F Thereafter The Other Non-Offered Classes, Exclusive of the R, LR and V Classes Allocation of interest distributions among the class A-1, A-2, A-3, A-4, A-1-A, A-X and A-SP certificates are to be made concurrently: - in the case of the A-1, A-2, A-3 and A-4 classes, on a PRO RATA basis in accordance with the respective interest entitlements evidenced by those classes of certificates from available funds attributable to loan group no. 1; - in the case of the A-1-A class, from available funds attributable to loan group no. 2; - in the case of the A-X and A-SP classes, on a PRO RATA basis in accordance with the respective interest entitlements evidenced by those classes, from available funds attributable to loan group no. 1 and/or loan group no. 2; provided that, if the foregoing would result in a shortfall in the interest distributions on any of the A-1, A-2, A-3, A-4, A-1-A, A-X and/or A-SP classes,
S-15 then distributions of interest will be made on those classes of series 2003-C5 certificates, on a PRO RATA basis in accordance with the respective interest entitlements evidenced by those classes, from available funds attributable to the entire mortgage pool. Allocation of principal distributions among the A-1, A-2, A-3, A-4 and A-1-A classes is described under "--Distributions--Principal Distributions" below. The class A-X, A-SP, R, LR and V certificates do not have principal balances and do not entitle holders to distributions of principal. See "Description of the Offered Certificates--Distributions--Priority of Distributions" in this prospectus supplement. C. INTEREST DISTRIBUTIONS................ Each class of series 2003-C5 certificates, other than the class R, LR and V certificates, will bear interest. With respect to each interest-bearing class of series 2003-C5 certificates, that interest will accrue during each interest accrual period based upon: - the pass-through rate with respect to that class for that interest accrual period; - the total principal balance or notional amount, as the case may be, of that class outstanding immediately prior to the related distribution date; and - the assumption that each year consists of twelve 30-day months; provided that the class A-SP certificates will not accrue interest beyond the November 2010 interest accrual period. A whole or partial prepayment on an underlying mortgage loan may not be accompanied by the amount of one (1) full month's interest on the prepayment. These shortfalls (to the extent not covered by the master servicer as described under "The Pooling and Servicing Agreement--Servicing and Other Compensation and Payment of Expenses" in this prospectus supplement) will be allocated to reduce the amount of accrued interest otherwise payable to the holders of the offered certificates PRO RATA, based on the respective amounts of interest payable on all interest-bearing classes of series 2003-C5 certificates. See "Description of the Offered Certificates--Distributions--Interest Distributions" in this prospectus supplement. On each distribution date, subject to available funds and the distribution priorities described under "Distributions--Priority of Distributions" above, you will be entitled to receive your proportionate share of all unpaid distributable interest accrued with respect to your class of offered certificates through the end of the related interest accrual period. See "Description of the Offered Certificates--Distributions--Interest Distributions" and "--Distributions--Priority of Distributions" in this prospectus supplement. D. PRINCIPAL DISTRIBUTIONS............... Subject to-- - available funds, - the distribution priorities described under "Distributions--Priority of Distributions" above, and - the reductions to principal balances described under "--Allocation of Collateral Support Deficits" below,
S-16 the holders of each class of offered certificates will be entitled to receive a total amount of principal over time equal to the total principal balance of their particular class. However, if the master servicer or the trustee reimburses itself out of general collections on the mortgage pool for any advance that it has determined is not recoverable out of collections on the related mortgage loan, then that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed first out of payments and other collections of principal otherwise distributable on the series 2003-C5 certificates, prior to being deemed reimbursed out of payments and other collections of interest otherwise distributable on the series 2003-C5 certificates. Additionally, in the event that any advance (including any interest accrued thereon) with respect to a defaulted mortgage loan remains unreimbursed following the time that such mortgage loan is modified and returned to performing status, the master servicer or trustee will be entitled to reimbursement for such advance (even though such advance is not deemed non-recoverable) out of payments and other collections of principal on the mortgage loans remaining following reimbursement of any nonrecoverable advances therefrom, as described in the preceding paragraph, prior to any distributions of principal on the series 2003-C5 certificates. The trustee must make principal distributions in a specified sequential order, taking account of whether the payments (or advances in lieu thereof) and other collections of principal that are to be distributed were received and/or made with respect to the mortgage loans in loan group no. 1 or mortgage loans in loan group no. 2 such that: - no principal distributions will be made to the holders of any non-offered certificates until the total principal balance of the offered certificates and the class A-1-A certificates is reduced to zero; - no principal distributions will be made to the holders of the class B, C, D or E certificates until, in the case of each of those classes, the total principal balance of all more senior classes of offered certificates and the class A-1-A certificates is reduced to zero; - except as described in the following paragraph, no principal distributions with respect to loan group no. 1 will be made to the holders of the class A-1-A certificates until the total principal balance of the class A-1, A-2, A-3 and/or A-4 certificates is reduced to zero; - except as described in the following paragraph, no distributions of principal with respect to loan group no. 2 will be made to the holders of the class A-1, A-2, A-3 and/or A-4 certificates until the total principal balance of the class A-1-A certificates is reduced to zero; - except as described in the following paragraph, no distributions of principal will be made to the holders of the class A-4 certificates until the total principal balance of the class A-1, A-2 and A-3 certificates is reduced to zero; - except as described in the following paragraph, no distributions of principal will be made to the holders of the class A-3 certificates until the total principal balance of the class A-1 and A-2 certificates is reduced to zero; and - except as described in the following paragraph, no distributions of principal will be made to the holders of the class A-2 certificates until
S-17 the total principal balance of the class A-1 certificates is reduced to zero. Because of the losses on the underlying mortgage loans and/or default-related or other unanticipated trust fund expenses, the total principal balance of the class B, C, D, E, F, G, H, J, K, L, M, N, O and P certificates could be reduced to zero at a time when the class A-1, A-2, A-3, A-4 and A-1-A certificates remain outstanding. Under those circumstances, any principal distributions on the class A-1, A-2, A-3, A-4 and A-1-A certificates will be made on a PRO RATA basis in accordance with the relative sizes of the respective total principal balances of those five classes at the time of the distribution. The total distributions of principal to be made on the series 2003-C5 certificates on any distribution date will be a function of-- - the amount of scheduled payments of principal due or, in some cases, deemed due, on the underlying mortgage loans during the related collection period, which payments are either received as of the end of that collection period or advanced by the master servicer or the trustee, as applicable, and - the amount of any prepayments, including in the form of accelerated amortization on any mortgage loan that remains outstanding past any applicable anticipated repayment date, and other unscheduled collections of previously unadvanced principal with respect to the underlying mortgage loans that are received during the related collection period. The class A-X, A-SP, R, LR and V certificates do not have principal balances. They do not entitle holders to any distributions of principal. See "Description of the Offered Certificates--Distributions--Principal Distributions" and "--Distributions--Priority of Distributions" in this prospectus supplement. E. DISTRIBUTIONS OF PREPAYMENT PREMIUMS AND YIELD MAINTENANCE CHARGES................. Any prepayment premium or yield maintenance charge collected in respect of any of the underlying mortgage loans will be distributed, in the proportions described under "Description of the Offered Certificates--Distributions--Distributions of Static Prepayment Premiums and Yield Maintenance Charges" in this prospectus supplement, to the holders of the class A-X and/or A-SP certificates and/or any holders of class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G or H certificates that are then entitled to receive a portion of the subject principal prepayment. ALLOCATION OF COLLATERAL SUPPORT DEFICITS.......................... As and to the extent described under "Description of the Offered Certificates--Allocation of Collateral Support Deficits" in this prospectus supplement, losses on, and default-related or other unanticipated trust fund expenses attributable to, the underlying mortgage loans will, in general, be allocated to reduce the principal balances of the following classes of series 2003-C5 certificates in the following order:
S-18
REDUCTION ORDER CLASS ---------------------- ---------------------------- 1st P 2nd O 3rd N 4th M 5th L 6th K 7th J 8th H 9th G 10th F 11th E 12th D 13th C 14th B 15th A-1, A-2, A-3, A-4 and A-1-A
Any reduction of the principal balances of the class A-1, A-2, A-3, A-4 and A-1-A certificates will be made on a PRO RATA basis in accordance with the relative sizes of those principal balances at the time of the reduction. ADVANCES OF DELINQUENT MONTHLY DEBT SERVICE PAYMENTS..................... Except as described in the next two paragraphs, the master servicer will be required to make advances with respect to any delinquent scheduled monthly payments, other than balloon payments, of principal and/or interest due on the underlying mortgage loans. The master servicer will be required to make advances for those balloon loans that become defaulted upon their maturity dates on the same amortization schedule as if the maturity date had not occurred. In addition, the trustee must make any of those advances that the master servicer fails to make. As described under "Description of the Offered Certificates--Advances of Delinquent Monthly Debt Service Payments" in this prospectus supplement, any party that makes an advance (including the master servicer with respect to the Mayfair Mall loan) will be entitled to be reimbursed for the advance, together with interest at the prime rate described in that section of this prospectus supplement. Neither the master servicer nor the trustee will advance master servicing fees, primary servicing fees or workout fees. Notwithstanding the foregoing, neither the master servicer nor the trustee will be required to make any advance that it determines will not be recoverable from proceeds of the related mortgage loan. In addition, if any of the adverse events or circumstances that we refer to under "The Pooling and Servicing Agreement--Required Appraisals" in this prospectus supplement, occur or exist with respect to any underlying mortgage loan or the related mortgaged real property, the special servicer will generally be obligated to obtain a new appraisal or, in cases involving mortgage loans with principal balances of $2,000,000 or less, conduct an internal valuation of that property. If, based on that appraisal or other valuation, it is determined that-- - the principal balance of, and other delinquent amounts due under, the subject mortgage loan, exceed - an amount equal to-- 1. 90% of the new appraised/estimated value of that real property, minus 2. any liens on that real property that are prior to the lien of the subject mortgage loan, plus
S-19 3. the amount of related escrow payments, reserve funds and letters of credit which are posted as additional security for payments due on the mortgage loans, then the amount otherwise required to be advanced with respect to interest on the subject mortgage loan will be reduced. That reduction will be in the same proportion that the excess bears to the stated principal balance of the subject mortgage loan. Due to the distribution priorities, any reduction will first reduce the funds available to pay interest on the most subordinate interest-bearing class of series 2003-C5 certificates outstanding. Furthermore, with respect to the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall, the amount required to be advanced may be reduced based on an appraisal performed by the special servicer under, and in accordance with, the series 2003-C4 pooling and servicing agreement, which reduction will be calculated with respect to the Mayfair Mall loan in a manner similar to the calculation described in the preceding paragraph. See "Description of the Offered Certificates--Advances of Delinquent Monthly Debt Service Payments" and "The Pooling and Servicing Agreement--Required Appraisals" in this prospectus supplement. See also "Description of the Certificates--Advances" in the accompanying prospectus. REPORTS TO CERTIFICATEHOLDERS............. On each distribution date, the trustee will provide or make available to the registered holders of the offered certificates a monthly report substantially in the form of Exhibit B to this prospectus supplement. The trustee's report will detail, among other things, the distributions made to the series 2003-C5 certificateholders on that distribution date and the performance of the underlying mortgage loans and the mortgaged real properties. The trustee will also make available to the registered holders of the offered certificates, via its website, any report posted thereon by the depositor. You may also review via the trustee's website or, upon reasonable prior notice, at the trustee's offices during normal business hours, a variety of information and documents that pertain to the underlying mortgage loans and the mortgaged real properties for those loans. We expect that the available information and documents will include loan documents, borrower operating statements, rent rolls and property inspection reports, to the extent received by the trustee. See "Description of the Offered Certificates--Reports to Certificateholders; Available Information" in this prospectus supplement. OPTIONAL TERMINATION...................... The following parties will each in turn, according to the order listed below, have the option to purchase all of the mortgage loans and all other property remaining in the trust fund on any distribution date on which the total principal balance of the underlying mortgage loans from the perspective of the series 2003-C5 certificateholders, based on collections and advances of principal on those mortgage loans previously distributed, and losses on those mortgage loans previously allocated, to the series 2003-C5 certificateholders, is less than 1.0% of the initial mortgage pool balance: - any single holder or group of holders of the majority of the total outstanding principal balance of certificates of the series 2003-C5 controlling class; - the master servicer; and - the special servicer.
S-20 In the event that any party above exercises this option, the trust fund will terminate and all outstanding offered certificates will be retired, as described in more detail in this prospectus supplement. Following the date on which the total principal balance of the offered certificates and class A-1-A, G and H certificates is reduced to zero, the trust fund may also be terminated in connection with an exchange of all the remaining series 2003-C5 certificates for all the mortgage loans and foreclosure properties in the trust fund at the time of the exchange. DENOMINATIONS............................. The offered certificates will be issuable in registered form, in the following denominations:
MULTIPLES IN EXCESS MINIMUM OF MINIMUM CLASS DENOMINATION DENOMINATION ------------- -------------------- ------------------------ A-1 $ 10,000 $ 1 A-2 $ 10,000 $ 1 A-3 $ 10,000 $ 1 A-4 $ 10,000 $ 1 B $ 10,000 $ 1 C $ 10,000 $ 1 D $ 10,000 $ 1 E $ 10,000 $ 1 F $ 10,000 $ 1 CLEARANCE AND SETTLEMENT.................. You will initially hold your offered certificates through The Depository Trust Company, in the United States, or Clearstream Banking, societe anonyme or The Euroclear System, in Europe. As a result, you will not receive a fully registered physical certificate representing your interest in any offered certificate, except under the limited circumstances described under "Description of the Offered Certificates--Registration and Denominations" in this prospectus supplement and "Description of the Certificates--Book-Entry Registration" in the accompanying prospectus. We may elect to terminate the book-entry system through DTC with respect to all or any portion of any class of offered certificates. LEGAL AND INVESTMENT CONSIDERATIONS FEDERAL INCOME TAX CONSEQUENCES........... The trustee or its agent will make elections to treat designated portions of the assets of the trust fund as multiple real estate mortgage investment conduits in a tiered structure under Sections 860A through 860G of the Internal Revenue Code of 1986. Any assets not included in a REMIC will constitute a grantor trust for federal income tax purposes. The offered certificates will be treated as regular interests in a REMIC. This means that they will be treated as newly issued debt instruments for federal income tax purposes. You will have to report income on your offered certificates in accordance with the accrual method of accounting even if you are otherwise a cash method taxpayer. The offered certificates will not represent any interest in the grantor trust referred to above. It is anticipated that the offered certificates will be issued at a premium for federal income tax purposes. When determining the rate of accrual of original issue discount, market discount and premium, if any, for federal income tax purposes, the prepayment assumption will be that, subsequent to the date of any determination--
S-21 - the underlying mortgage loans with anticipated repayment dates will, in each case, be paid in full on that anticipated repayment date, - no underlying mortgage loan will otherwise be prepaid prior to maturity, and - there will be no extension of maturity for any underlying mortgage loan. However, no representation is made as to the actual rate at which the underlying mortgage loans will prepay, if at all. For a more detailed discussion of the federal income tax aspects of investing in the offered certificates, see "Federal Income Tax Consequences" in this prospectus supplement and in the accompanying prospectus. ERISA CONSIDERATIONS...................... The acquisition of an offered certificate by an employee benefit plan or other plan or arrangement subject to the Employee Retirement Income Security Act of 1974, as amended, or to Section 4975 of the Internal Revenue Code of 1986, as amended, could, in some instances, result in a prohibited transaction or other violation of the fiduciary responsibility provisions of these laws. We anticipate, however, that, subject to satisfaction of the conditions referred to under "ERISA Considerations" in this prospectus supplement, retirement plans and other employee benefit plans and arrangements subject to-- - Title I of ERISA, or - Section 4975 of the Internal Revenue Code, will be able to invest in the offered certificates without giving rise to a prohibited transaction. This is based upon individual prohibited transaction exemptions granted to Credit Suisse First Boston LLC and PNC Capital Markets, Inc. by the U.S. Department of Labor. If you are a fiduciary of any retirement plan or other employee benefit plan or arrangement subject to Title I of ERISA or Section 4975 of the Internal Revenue Code or any materially similar provisions of applicable federal, state or local law, you should consult your own legal advisors to determine whether the purchase or holding of the offered certificates could give rise to a transaction that is prohibited under ERISA or Section 4975 of the Internal Revenue Code or applicable similar law. See "ERISA Considerations" in this prospectus supplement and in the accompanying prospectus. LEGAL INVESTMENT.......................... None of the certificates will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. You should consult your own legal advisors to determine whether and to what extent the offered certificates will be legal investments for you. See "Legal Investment" in this prospectus supplement and in the accompanying prospectus. INVESTMENT CONSIDERATIONS................. The rate and timing of payments and other collections of principal on or with respect to the underlying mortgage loans will affect the yield to maturity on each offered certificate. In the case of offered certificates purchased at a discount, a slower than anticipated rate of payments and other collections of principal on the underlying mortgage loans could result in a lower than anticipated yield. In the case of offered certificates purchased at a premium, a faster than anticipated rate of payments and other collections of principal on the underlying mortgage loans could result in a lower than anticipated yield.
S-22 Holders of the class A-1, A-2, A-3 and A-4 certificates will be affected by the rate and timing of payments and other collections of principal of the mortgage loans in loan group no. 1 and, in the absence of significant losses, should be largely unaffected by the rate and timing of payments and other collections of principal on the mortgage loans in loan group no. 2. The yield on the offered certificates with variable or capped pass-through rates could also be adversely affected if the underlying mortgage loans with relatively higher net mortgage interest rates pay principal faster than the mortgage loans with relatively lower net mortgage interest rates. See "Yield and Maturity Considerations" in this prospectus supplement and in the accompanying prospectus. THE UNDERLYING MORTGAGE LOANS GENERAL................................... We intend to include the one hundred fifty-three (153) mortgage loans identified on Exhibit A-1 to this prospectus supplement in the trust fund for the offered certificates. With respect to the mortgage loans identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall, Stanford Shopping Center, Mall at Fairfield Commons, Cambridge Village Apartments, Northgate Village Apartments, Hearthstone Apartments and Jefferson at Montfort, references to mortgage loans in this prospectus supplement include only the Mayfair Mall loan (and not the Mayfair Mall companion loans), the Stanford Shopping Center loan (and not the Stanford Shopping Center companion loans), the Mall at Fairfield Commons loan (and not the Mall at Fairfield Commons companion loan), the Cambridge Village Apartments loan (and not the corresponding B loan), the Northgate Village Apartments loan (and not the corresponding B loan), the Hearthstone Apartments loan (and not the corresponding B loan) and the Jefferson at Montfort loan (and not the Jefferson at Montfort B loan), respectively. In this section, "--The Underlying Mortgage Loans," we provide summary information with respect to those mortgage loans. For more detailed information regarding those mortgage loans, you should review the following sections in this prospectus supplement: - "Description of the Underlying Mortgage Loans," - "Description of the Underlying Mortgage Loans--The Mayfair Mall Loan," "--The Stanford Shopping Center Loan," "--The Mall at Fairfield Commons Loan," "--The A/B Loans" and "--The Jefferson at Montfort Loan," - "Risk Factors--Risks Related to the Underlying Mortgage Loans," - Exhibit A-1--Characteristics of the Underlying Mortgage Loans and the Related Mortgaged Real Properties, and - Exhibit A-2--Mortgage Pool Information. For purposes of calculating distributions on the respective classes of series 2003-C5 certificates, the pool of mortgage loans backing the offered certificates will be divided into the following two loan groups: - Loan group no. 1, which will consist of all of the mortgage loans that are secured by property types other than multifamily and manufactured housing, together with five (5) mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 1 will consist of 94 mortgage loans, with an initial loan group no. 1 balance of
S-23 $920,720,128, representing approximately 73.00% of the initial mortgage pool balance. - Loan group no. 2, which will consist of all but five (5) of the mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 2 will consist of 59 mortgage loans, with an initial loan group no. 2 balance of $340,549,363, representing approximately 27.00% of the initial mortgage pool balance. Exhibit A-1 to this prospectus supplement identifies which mortgage loans are included in each of loan group no. 1 and loan group no. 2. When reviewing the information that we have included in this prospectus supplement with respect to the mortgage loans that are to back the offered certificates, please note that-- - All numerical information provided with respect to the mortgage loans is provided on an approximate basis. - All weighted average information provided with respect to the mortgage loans or any sub-group of those mortgage loans reflects a weighting based on their respective cut-off date principal balances. We will transfer the cut-off date principal balance for each of the mortgage loans to the trust fund. We show the cut-off date principal balance for each of the mortgage loans on Exhibit A-1 to this prospectus supplement. References in this prospectus supplement to the initial mortgage pool balance are to the total cut-off date principal balance of the mortgage loans. - In calculating the cut-off date principal balances of the mortgage loans, we have assumed that-- 1. all scheduled payments of principal and/or interest due on the mortgage loans on or before their respective due dates in December 2003 are timely made, and 2. there are no prepayments or other unscheduled collections of principal with respect to any of the mortgage loans during the period from its due date in November 2003 up to and including its due date in December 2003. - Whenever we refer to the following terms in this prospectus supplement, we intend for them to have the respective meanings specified below: 1. initial mortgage pool balance -- the total cut-off date principal balance of the entire mortgage pool; 2. initial loan group no. 1 balance -- the total cut-off date principal balance of all of loan group no. 1; and 3. initial loan group no. 2 balance -- the total cut-off date principal balance of all of loan group no. 2. - When information with respect to mortgaged real properties is expressed as a percentage of the initial mortgage pool balance, the initial loan group no. 1 balance or the initial loan group no. 2 balance, as the case may be, the percentages are based upon the cut-off date principal balances of the related mortgage loans.
S-24 - Some of the mortgage loans are cross-collateralized and cross-defaulted with one or more other mortgage loans in the trust fund. Except as otherwise indicated, when a mortgage loan is cross-collateralized and cross-defaulted with another mortgage loan, we present the information regarding those mortgage loans as if each of them was secured only by a mortgage lien on the corresponding mortgaged real property identified on Exhibit A-1 to this prospectus supplement. One exception is that each and every mortgage loan in any particular group of cross-collateralized and cross-defaulted mortgage loans is treated as having the same loan-to-value ratio and the same debt service coverage ratio. Other than as described under "Description of the Underlying Mortgage Loans--The Mayfair Mall Loan," "--The Stanford Shopping Center Loan," "--The Mall at Fairfield Commons Loan," "--The A/B Loans" and "--The Jefferson at Montfort Loan," none of the mortgage loans in the trust fund will be cross-collateralized with any loan that is not in the trust fund. - In some cases, an individual mortgage loan is secured by multiple mortgaged real properties. For purposes of providing property-specific information, we have allocated each of those mortgage loans among the related mortgaged real properties based upon-- 1. relative appraised values, 2. relative underwritten net cash flow, or 3. prior allocations reflected in the related loan documents. - If a mortgage loan is secured by multiple parcels of real property and the operation or management of those parcels so warranted, we treat those parcels as a single parcel of real property. - Whenever we refer to a particular mortgaged real property by name, we mean the property identified by that name on Exhibit A-1 to this prospectus supplement. - Statistical information regarding the mortgage loans may change prior to the date of initial issuance of the offered certificates due to changes in the composition of the mortgage pool prior to that date. - The general characteristics of the entire mortgage pool backing the offered certificates are not necessarily representative of the general characteristics of either loan group no. 1 or loan group no. 2. The yield and risk of loss on any class of offered certificates will depend on, among other things, the composition of each of loan group no. 1 and loan group no. 2. The general characteristics of each of those loan groups should also be analyzed when making an investment decision. See "--Additional Statistical Information" below. SOURCE OF THE UNDERLYING MORTGAGE LOANS............................ We are not the originator of the mortgage loans that we intend to include in the trust fund. We will acquire those mortgage loans from three separate sellers. Each of the mortgage loans that will comprise the trust fund was originated or acquired by-- - the related mortgage loan seller from whom we are acquiring the mortgage loan, - an affiliate of the related mortgage loan seller, or
S-25 - a correspondent in the related mortgage loan seller's or its affiliate's conduit lending program. The following table sets forth the number of underlying mortgage loans, and the percentage of initial mortgage pool balance, that we will have acquired from each of the mortgage loan sellers:
NUMBER OF % OF INITIAL MORTGAGE LOAN SELLER MORTGAGE LOANS MORTGAGE POOL BALANCE ----------------------------------- ---------------- ------------------------- Column Financial, Inc. ............ 121 71.71% PNC Bank, National Association .... 30 21.06% KeyBank National Association ...... 2 7.23% ---------------- ------------------------- TOTAL ............................. 153 100.00% ================ ========================= PAYMENT AND OTHER TERMS................... Each of the mortgage loans that we intend to include in the trust fund is the obligation of a borrower to repay a specified sum with interest. Repayment of each of the mortgage loans is secured by a mortgage lien on the ownership and/or leasehold interest of the related borrower or another party in one or more commercial or multifamily real properties. That mortgage lien will be a first priority lien, except for limited permitted encumbrances, which we refer to under "Description of the Underlying Mortgage Loans--General" in, and describe in the glossary to, this prospectus supplement. Most of the mortgage loans that we intend to include in the trust fund are, with limited exceptions, nonrecourse. Even where a mortgage loan that we intend to include in the trust fund is fully recourse, we have not always evaluated the creditworthiness of the subject obligor. Accordingly, all mortgage loans that we will include in the trust fund should be considered nonrecourse. None of the mortgage loans are insured or guaranteed by any governmental agency or instrumentality or by any private mortgage insurer. Each of the mortgage loans currently accrues interest at the annual rate specified with respect to that mortgage loan on Exhibit A-1 to this prospectus supplement. Except as otherwise described below with respect to mortgage loans that have anticipated repayment dates, the mortgage interest rate for each mortgage loan is, in the absence of default, fixed for the entire term of the loan. BALLOON LOANS............................. One hundred forty-three (143) of the mortgage loans that we intend to include in the trust fund, representing 90.02% of the initial mortgage pool balance, of which 85 mortgage loans are in loan group no. 1, representing 86.50% of the initial loan group no. 1 balance, and 58 mortgage loans are in loan group no. 2, representing 99.52% of the initial loan group no. 2 balance, are balloon loans that provide for: - an amortization schedule that is significantly longer than its remaining term to stated maturity or for no amortization prior to stated maturity; - in certain cases, payments of interest only for the entire term of the related mortgage loan; and - in either case above, a substantial payment of principal on its maturity date. LOANS WITH ANTICIPATED REPAYMENT DATES..................................... Seven (7) of the mortgage loans that we intend to include in the trust fund, representing 9.15% of the initial mortgage pool balance, of which all such mortgage loans are in loan group no. 1, representing 12.53% of the initial loan group no. 1 balance, provide material incentives to, but do not require, the related borrower to pay the mortgage loan in full by a specified date prior to
S-26 stated maturity. We consider that date to be the anticipated repayment date for the mortgage loan. There can be no assurance, however, that these incentives will result in any of these mortgage loans being paid in full on or before its anticipated repayment date. The incentives generally include the following: - Commencing on the related anticipated repayment date, the subject mortgage loan will accrue interest in excess of interest at the initial mortgage interest rate. The additional interest will-- 1. be deferred, 2. in some cases, compound, 3. be payable only after the outstanding principal balance of the mortgage loan is paid in full; and 4. be payable only to the holders of the class V certificates, which are not offered by this prospectus supplement. - Commencing no later than the related anticipated repayment date, the subject mortgage loan may be freely prepaid. - Commencing no later than the related anticipated repayment date, cash flow from the related mortgaged real property will be deposited into a lockbox under the control of the master servicer. - Commencing on the related anticipated repayment date, cash flow from the related mortgaged real property that is not otherwise applied to pay the normal monthly debt service payment or to pay or escrow for the payment of various expenses, will be applied to pay down the principal balance of the subject mortgage loan. FULLY AMORTIZING LOANS.................... Three (3) of the mortgage loans that we intend to include in the trust fund, representing 0.84% of the initial mortgage pool balance, of which 2 mortgage loans are in loan group no. 1, representing 0.97% of the initial loan group no. 1 balance, and 1 mortgage loan is in loan group no. 2, representing 0.48% of the initial loan group no. 2 balance, have in each case a payment schedule that provides for the payment of the mortgage loan in full or substantially in full by the maturity date. None of those three (3) mortgage loans, however, has any of the repayment incentives referred to for loans with anticipated repayment dates. LOANS WITH INTEREST ONLY PERIODS.......... Eleven (11) of the balloon mortgage loans, representing 20.77% of the initial mortgage pool balance, of which 7 mortgage loans are in loan group no. 1, representing 21.04% of the initial loan group no. 1 balance, and 4 mortgage loans are in loan group no. 2, representing 20.05% of the initial loan group no. 2 balance, also provide for payments of interest only for various interest only periods. See "--Additional Amortization Periods" below. CROSSED LOANS............................. The trust fund will include two (2) groups of mortgage loans that are cross-collateralized and cross-defaulted within such group. The table below identifies those crossed loans.
% OF INITIAL NUMBER OF MORTGAGE LOAN NAMES PROPERTIES POOL BALANCE ------------------------------------------- --------------- ------------------ 1. Coast Family Medical Center and Anaheim Professional Center.................... 2 1.20% 2. Magnolia Village, Blue Jay Mobile Home Park, Candlelight Manor and Elmwood Mobile Home Park....................... 4 0.90%
S-27 In reviewing the foregoing table, you should note that individual related mortgaged real properties may be released subject to property performance criteria. See "Description of the Underlying Mortgage Loans--Cross- Collateralized Mortgage Loans, Multi-Property Mortgage Loans and Mortgage Loans with Affiliated Borrowers" in this prospectus supplement. MULTI-PROPERTY LOANS...................... The trust fund will include three (3) mortgage loans that are, in each such case, secured by multiple real properties. The table below identifies those multi-property loans.
% OF INITIAL NUMBER OF MORTGAGE LOAN NAMES PROPERTIES POOL BALANCE ------------------------------------------- ---------------- --------------- 1. Mayfair Mall and Office Complex........ 2 6.29% 2. MeriStar Hotel Portfolio............... 2 4.03% 3. Evergreen - Beverly Plaza & Park Plaza. 2 0.42% In reviewing the foregoing table, you should note that individual related mortgaged real properties may be released subject to property performance criteria or upon certain permitted property substitutions. See "Description of the Underlying Mortgage Loans--Cross-Collateralized Mortgage Loans, Multi-Property Mortgage Loans and Mortgage Loans with Affiliated Borrowers" in this prospectus supplement. DEFEASANCE LOANS.......................... One hundred thirty-eight (138) of the mortgage loans that we intend to include in the trust fund, representing 89.31% of the initial mortgage pool balance, of which 84 mortgage loans are in loan group no. 1, representing 90.66% of the initial loan group no. 1 balance, and 54 mortgage loans are in loan group no. 2, representing 85.66% of the initial loan group no. 2 balance, permit the borrower to obtain the release of the related mortgaged real property, or, in the case of some of the crossed loans or multi-property loans, of one or more of the related mortgaged real properties, from the lien of the related mortgage instrument(s) upon the pledge to the trustee of certain noncallable government securities. The government securities must provide for payments that equal or exceed scheduled interest and principal payments due under the related mortgage note. ADDITIONAL COLLATERAL LOANS............... Six (6) mortgage loans, representing 8.27% of the initial mortgage pool balance, of which 5 mortgage loans are in loan group no. 1, representing 11.07% of the initial loan group no. 1 balance, and 1 mortgage loan is in loan group no. 2, representing 0.70% of the initial loan group no. 2 balance, are secured by cash reserves and/or letters of credit that in each such case will: - be released to the related borrower upon satisfaction by the related borrower of certain operating performance related conditions, such as meeting debt service coverage ratio levels and/or satisfying leasing conditions; and - at the discretion of the lender, may be applied to prepay a portion of the subject mortgage loan if such performance related conditions are not satisfied within specified time periods. The total amount of the additional collateral is $5,515,000. See "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Mortgage Loans Which May Require Principal Paydowns" in this prospectus supplement. LOCKBOX TERMS............................. Thirty (30) mortgage loans that we intend to include in the trust fund, representing 53.54% of the initial mortgage pool balance, of which 24 mortgage loans are in loan group no. 1, representing 61.20% of the initial loan group no. 1 balance, and 6 mortgage loans are in loan group no. 2, representing 32.81% of
S-28 the initial loan group no. 2 balance, generally provide that all rents, credit card receipts, accounts receivable payments and other income derived from the related mortgaged real properties will be paid into one of the following types of lockboxes, each of which is described below: HARD LOCKBOX. Income (or some portion thereof sufficient to fund debt service payments) is paid directly to a lockbox account controlled by the applicable master servicer on behalf of the trust fund, except that with respect to multifamily rental properties, income (or some portion thereof sufficient to fund debt service payments) is collected and deposited in the lockbox account by the manager of the mortgaged real property and, with respect to hospitality properties, cash or "over-the-counter" receipts are deposited into the lockbox account by the manager, while credit card receivables will be deposited directly into a lockbox account. SPRINGING LOCKBOX. Income is collected and retained by or is otherwise accessible by the borrower until the occurrence of a triggering event, following which a hard lockbox or modified lockbox is put in place. Examples of triggering events include: - a failure to pay the related mortgage loan in full on or before any related anticipated repayment date; or - a decline, by more than a specified amount, in the net operating income of the related mortgaged real property; or - a failure to meet a specified debt service coverage ratio; or - an event of default under the mortgage. For purposes of this prospectus supplement, a springing lockbox can be either an account that is currently under the control of both the lender and the borrower, but which comes under the sole control of the lender upon the occurrence of the triggering event, or an account that is required to be established by the borrower (but to be under the sole control of the lender) upon the occurrence of the triggering event. MODIFIED LOCKBOX. Income (or some portion thereof sufficient to fund debt service payments) is collected by the property manager (or, in some cases, the borrower) of the mortgaged real property other than multifamily and hospitality properties and is deposited into the lockbox account within one day of receipt. The borrower has no direct access to the lockbox account. The above-referenced thirty (30) mortgage loans provide for the following types of lockbox accounts:
% OF INITIAL NUMBER OF MORTGAGE TYPE OF LOCKBOX MORTGAGE LOANS POOL BALANCE -------------------------- --------------------- ------------------------ Springing................ 23 35.80% Hard..................... 6 14.18% Modified................. 1 3.56% PREPAYMENT CHARACTERISTICS OF THE MORTGAGE LOANS..................... Each mortgage loan restricts voluntary prepayments in one or more of the following ways: - by prohibiting any voluntary prepayments for a specified period of time after the mortgage loan is originated; and/or
S-29 - by prohibiting any voluntary prepayments for a specified period of time after the mortgage loan is originated, although, for a portion of that period, beginning no sooner than the second anniversary of the date of initial issuance of the offered certificates, the mortgage loan may be defeased; and/or - by requiring that any voluntary principal prepayment made during a specified period of time be accompanied by a prepayment premium or yield maintenance charge. However, as described under "--Additional Collateral Loans" above, some mortgage loans may require partial principal prepayments during the related lock-out period. In addition, the holder of the Mayfair Mall companion loans, the holder of the Stanford Shopping Center companion loan, the holder of the Mall at Fairfield Commons companion loan, with respect to the Cambridge Village Apartments, Hearthstone Apartments and Northgate Village Apartments loans, the respective holders of the corresponding B loan, and the holder of the Jefferson at Montfort B loan will have the right to purchase the related mortgage loan under certain circumstances following a default under such mortgage, which would have the same effect on the offered certificates as a prepayment in full of such loan, except that such purchase will not be accompanied by any prepayment premium or yield maintenance charge. See "Certain Characteristics of the Mortgage Loans--Mayfair Mall Loan," "--The Stanford Shopping Center Loan," "--The Mall at Fairfield Commons Loan," "--The A/B Loans" and "--The Jefferson at Montfort Loan" in this prospectus supplement. Furthermore, if one or more of the principals of the related borrower have incurred or are permitted to incur mezzanine debt, following a default under the related mortgage loan, the holder of the mezzanine loan will have the right to purchase the related mortgage loan, which generally would have the same effect on the offered certificates as a prepayment in full of the related mortgage loan, except that such purchase will not be accompanied by any prepayment premium or yield maintenance charge. As of the cut-off date, all of the mortgage loans that we intend to include in the trust fund were within their respective lock-out periods, and the weighted average of the remaining lock-out and/or defeasance periods was 93 months. All of the mortgage loans in the trust fund that provide for a yield maintenance charge also provide that such yield maintenance charge will not be less than a fixed percentage of the amount prepaid. See "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Prepayment Provisions" in this prospectus supplement. DELINQUENCY STATUS........................ None of the mortgage loans that we intend to include in the trust fund was 30 days or more delinquent in respect of any monthly debt service payment-- - as of the related due date in December 2003, or - at any time during the 12-month period preceding the related due date in December 2003.
S-30 ADDITIONAL STATISTICAL INFORMATION A. GENERAL CHARACTERISTICS............... The pool of mortgage loans that we intend to include in the trust fund will have the following general characteristics as of their respective due dates in December 2003:
MORTGAGE POOL LOAN GROUP NO. 1 LOAN GROUP NO. 2 ----------------- ------------------ ----------------- Initial mortgage pool balance/loan group..................... $ 1,261,269,491 $ 920,720,128 $ 340,549,363 Number of mortgage loans..................................... 153 94 59 Number of mortgaged real properties.......................... 156 97 59 Largest cut-off date principal balance....................... $ 85,405,532 $ 85,405,532 $ 35,000,000 Smallest cut-off date principal balance...................... $ 585,529 $ 585,529 $ 596,740 Average cut-off date principal balance....................... $ 8,243,591 $ 9,794,895 $ 5,772,023 Highest mortgage interest rate............................... 8.120% 7.600% 8.120% Lowest mortgage interest rate................................ 3.108% 3.108% 4.400% Weighted average mortgage interest rate...................... 5.453% 5.473% 5.400% Longest original term to maturity or anticipated repayment date(1)......................................... 240 180 240 Shortest original term to maturity or anticipated repayment date(1)......................................... 60 60 60 Weighted average original term to maturity or anticipated repayment date(1)............................. 110 111 109 Longest remaining term to maturity or anticipated repayment date(1)......................................... 234 175 234 Shortest remaining term to maturity or anticipated repayment date(1)......................................... 50 54 50 Weighted average remaining term to maturity or anticipated repayment date(1)............................. 105 105 103 Highest debt service coverage ratio, based on underwritten net cash flow................................ 3.48x 3.48x 2.53x Lowest debt service coverage ratio, based on underwritten net cash flow................................ 1.23x 1.23x 1.23x Weighted average debt service coverage ratio, based on underwritten net cash flow................................ 1.75x 1.84x 1.50x Highest cut-off date loan-to-value ratio..................... 81.6% 81.6% 79.9% Lowest cut-off date loan-to-value ratio...................... 37.0% 37.0% 39.8% Weighted average cut-off date loan-to-value ratio............ 68.9% 66.7% 75.1%
- ---------- (1) Shown in months. In reviewing the foregoing table, please note that the underwritten net cash flow for any mortgaged real property is an estimated number based on numerous assumptions that may not necessarily reflect recent historical performance and may not ultimately prove to be an accurate prediction of future performance.
S-31 B. GEOGRAPHIC CONCENTRATION.............. The table below shows the number of, and percentage of the initial mortgage pool balance secured by, mortgaged real properties located in the indicated states:
% OF INITIAL NUMBER OF MORTGAGE STATE PROPERTIES POOL BALANCE ----------------------------- ----------------- --------------- 1. California........... 29 26.17% 2. Texas................ 27 14.84% 3. Ohio................. 5 7.82% 4. Wisconsin............ 3 6.48% 5. Florida.............. 16 5.98% 6. Arizona.............. 5 5.14% The remaining mortgaged real properties with respect to the mortgage pool are located throughout twenty-six other states and the District of Columbia. No more than 5% of the initial mortgage pool balance is secured by mortgaged real properties located in any of these other states. In circumstances where a particular pooled mortgage loan is secured by multiple mortgaged real properties located in two or more states, the foregoing information reflects the allocated loan amounts for those properties. C. PROPERTY TYPES........................ The table below shows the number of, and percentage of the initial mortgage pool balance secured by, mortgaged real properties operated for each indicated purpose: % OF INITIAL NUMBER OF MORTGAGE PROPERTY TYPE PROPERTIES POOL BALANCE -------------------------- -------------------- ----------------- Retail.................. 46 39.25% Multifamily............. 64 30.81% Office.................. 25 16.51% Hotel................... 4 5.81% Industrial.............. 9 3.74% Mixed Use............... 5 3.31% Self Storage............ 3 0.56% D. ENCUMBERED INTERESTS.................. The table below shows the number and percentage of the initial mortgage pool balance secured by, mortgaged real properties for which the encumbered interest is as indicated: ENCUMBERED INTEREST % OF INITIAL IN THE MORTGAGED NUMBER OF NET MORTGAGE REAL PROPERTY PROPERTIES POOL BALANCE -------------------------- -------------------- ----------------- Fee...................... 150 86.86% Leasehold................ 4 8.35% Fee/Leasehold............ 2 4.79% E. SIGNIFICANT MORTGAGE LOANS............ The ten (10) largest mortgage loans or groups of cross-collateralized mortgage loans that we intend to include in the trust fund have-- - cut-off date principal balances that range from $28,295,760 to $85,405,532, and - a total cut-off date principal balance of $503,265,075, which represents 39.90% of the initial mortgage pool balance. See "Description of the Underlying Mortgage Loans--Significant Mortgage Loans" in this prospectus supplement.
S-32 RISK FACTORS The risks and uncertainties described below, in addition to those risks described in the prospectus under "Risk Factors," summarize the material risks in connection with the purchase of the offered certificates. All numerical information concerning the mortgage loans is provided on an approximate basis. RISKS RELATED TO THE UNDERLYING MORTGAGE LOANS COMMERCIAL AND MULTIFAMILY LENDING SUBJECTS YOUR INVESTMENT TO SPECIAL RISKS THAT ARE NOT ASSOCIATED WITH SINGLE-FAMILY RESIDENTIAL LENDING. The mortgage loans that we intend to include in the trust fund are secured by the following income-producing property types: - anchored, including shadow anchored, and unanchored retail properties; - multifamily properties; - office properties; - industrial properties; - limited service and full service hotel properties; - mixed-use properties; - manufactured housing properties; and - self storage properties. Commercial and multifamily lending is generally thought to be riskier than single-family residential lending because, among other things, larger loans are made to single borrowers or groups of related borrowers. Furthermore, the risks associated with lending on commercial and multifamily properties are inherently different from those associated with lending on the security of single-family residential properties. For example, repayment of each of the underlying mortgage loans will be dependent on the performance and/or value of the related mortgaged real property. There are additional factors in connection with commercial and multifamily lending, not present in connection with single-family residential lending, which could adversely affect the economic performance of the respective mortgaged real properties that secure the mortgage loans that are to back the offered certificates. Any one of these additional factors, discussed in more detail in this prospectus supplement, could result in a reduction in the level of cash flow from those mortgaged real properties that is required to ensure timely distributions on your offered certificates. THE SOURCE OF REPAYMENT ON YOUR OFFERED CERTIFICATES WILL BE LIMITED TO PAYMENTS AND OTHER COLLECTIONS ON THE UNDERLYING MORTGAGE LOANS. The offered certificates will represent interests solely in the trust fund. The primary assets of the trust fund will be a segregated pool of commercial and multifamily mortgage loans. Accordingly, repayment of the offered certificates will be limited to payments and other collections on the underlying mortgage loans. The mortgage loans will not be an obligation of, or be insured or guaranteed by: - any governmental entity; - any private mortgage insurer; - us; - any mortgage loan seller; - the master servicer; - the special servicer; S-33 - any sub-servicer of the master servicer or the special servicer; - the trustee; or - any of their respective affiliates. REPAYMENT OF EACH OF THE UNDERLYING MORTGAGE LOANS WILL BE DEPENDENT ON THE CASH FLOW PRODUCED BY THE RELATED MORTGAGED PROPERTY, WHICH CAN BE VOLATILE AND INSUFFICIENT TO ALLOW TIMELY DISTRIBUTIONS ON YOUR OFFERED CERTIFICATES, AND ON THE VALUE OF THE RELATED MORTGAGED PROPERTY, WHICH MAY FLUCTUATE OVER TIME. All of the mortgage loans that we intend to include in the trust fund are, with limited exceptions, or should be considered non-recourse loans. If there is a default with respect to any of the underlying mortgage loans, there will generally only be recourse against the specific real property or properties that secure the defaulted mortgage loan and other assets that have been pledged to secure that mortgage loan. Even if a mortgage loan provides for recourse to a borrower or any of its affiliates, it is unlikely the trust fund will ultimately recover any amounts in addition to the liquidation proceeds from the related mortgaged real property or properties. Repayment of loans secured by commercial and multifamily properties typically depends on the cash flow produced by those properties. The ratio of net cash flow to debt service of a mortgage loan secured by an income-producing property is an important measure of the risk of default on the loan. Payment on each mortgage loan that will back the offered certificates will be primarily dependent on: - the net operating income of the related mortgaged real property; - with respect to balloon loans and loans with anticipated repayment dates, the ability of the related borrower to sell the related mortgaged real property or refinance the subject mortgage loan, whether at scheduled maturity or on the anticipated repayment date, in an amount sufficient to repay the subject mortgage loan; and/or - in the event of a default under the subject mortgage loan and a subsequent sale of the related mortgaged real property upon the acceleration of such mortgage loan's maturity, the amount of the sale proceeds, taking into account any adverse effect of a foreclosure proceeding on those sale proceeds. In general, if a mortgage loan has a relatively high loan-to-value ratio or a relatively low debt service coverage ratio, a foreclosure sale is more likely to result in proceeds insufficient to satisfy the outstanding debt. One hundred forty-three (143) of the mortgage loans that we intend to include in the trust fund, representing 90.02% of the initial mortgage pool balance, of which 85 mortgage loans are in loan group no. 1, representing 86.50% of the initial loan group no. 1 balance, and 58 mortgage loans are in loan group no. 2, representing 99.52% of the initial loan group no. 2 balance, are balloon loans; and seven (7) of the mortgage loans that we intend to include in the trust fund, representing 9.15% of the initial mortgage pool balance, of which all seven (7) of those mortgage loans are in loan group no. 1, representing 12.53% of the initial loan group no. 1 balance, provide material incentives for the related borrower to repay the loan by an anticipated repayment date prior to maturity. One hundred twenty-nine (129) of these mortgage loans, representing 66.30% of the initial mortgage pool balance, 62.46% of the initial loan group no. 1 balance and 76.62% of the initial loan group no. 2 balance, respectively, have balloon payments that are scheduled to be due or anticipated repayment dates that are to occur, in each case, during the 12 month period from January 1, 2013 to and including December 31, 2013. Although a mortgage loan may provide the related borrower with incentives to repay the loan by an anticipated repayment date prior to maturity, the failure of that borrower to do so will not be a default under that loan. The cash flows from the operation of commercial and multifamily real properties are volatile and may be insufficient to cover debt service on the related mortgage loan and pay operating expenses at any given time. This may cause the value of a property to decline. Cash flows and property values generally affect: - the ability to cover debt service; - the ability to pay a mortgage loan in full with sales or refinance proceeds; and - the amount of proceeds recovered upon foreclosure. S-34 Cash flows and property values depend upon a number of factors, including: - national, regional and local economic conditions; - local real estate conditions, such as an oversupply of space similar to the space at the related mortgaged real property; - changes or continued weakness in a specific industry segment that is important to the success of the related mortgaged real property; - the nature of expenses of the related mortgaged real property, such as whether expenses are fixed or vary with revenue; - the nature of income from the related mortgaged real property, such as whether rents are fixed or vary with tenant revenues; - the level of required capital expenditures for proper maintenance and improvements demanded by tenants at the related mortgaged real property; - the number and type of tenants at the related mortgaged real property and the duration of their respective leases; - demographic factors; - retroactive changes in building or similar codes that require modifications to the related mortgaged real property; - capable management and adequate maintenance for the related mortgaged real property; - location of the related mortgaged real property; - if the mortgaged real property has uses subject to significant regulation or changes in applicable laws; - perceptions by prospective tenants and, if applicable, their customers, of the safety, convenience, services and attractiveness of the related mortgaged real property; - the age, construction quality and design of the related mortgaged real property; and - whether the related mortgaged real property is readily convertible to alternative uses. ONE OF THE MORTGAGE LOANS THAT WE INTEND TO INCLUDE IN THE TRUST FUND IS BEING SERVICED AND ADMINISTERED PURSUANT TO THE SERVICING ARRANGEMENTS FOR A DIFFERENT SECURITIZATION; THEREFORE, THE SERIES 2003-C5 CERTIFICATEHOLDERS WILL HAVE LIMITED ABILITY TO CONTROL THE SERVICING OF THAT POOLED MORTGAGE LOAN. The mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall is secured on a PARI PASSU basis with three other mortgage loans by a single mortgage instrument encumbering the Mayfair Mall mortgaged real property. The other three mortgage loans will not be included in the trust fund. One of those mortgage loans secured by the Mayfair Mall mortgaged real property has been separately securitized and directly backs the Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-C4. An intercreditor agreement governs the relationship between the holders of the four Mayfair Mall mortgage loans and generally provides that all of those mortgage loans will be serviced and administered pursuant to the series 2003-C4 pooling and servicing agreement (the governing document for the Credit Suisse First Boston Mortgage Securities Corp. series 2003-C4 commercial mortgage securitization). Neither the series 2003-C5 certificateholders nor the trustee on their behalf will have any right, title or interest in or to, or any other claim to any asset of the series 2003-C4 trust fund, including as security for or in satisfaction of any claim it might have arising from the performance or failure of performance by any party under the series 2003-C4 pooling and servicing agreement, except as related to the trust's rights to receive payments of principal and interest on the Mayfair Mall Loan included in the trust fund and certain rights to payments of servicing fees and to reimbursement for advances. However, the trust fund, as the holder of the Mayfair Mall Loan, is a third-party beneficiary of the series 2003-C4 pooling and servicing agreement. Furthermore, the master servicer, the special servicer and trustee under the series 2003-C5 pooling and servicing agreement may not independently exercise remedies following a default with respect to the Mayfair Mall Loan. The holders of the Mayfair Mall Total Loan representing more than 50% of the total unpaid principal balance of the Mayfair Mall Total Loan will be entitled to direct the S-35 servicing parties under the series 2003-C4 pooling and servicing agreement with respect to various servicing matters involving the Mayfair Mall Total Loan. The master servicer and special servicer under the series 2003-C4 pooling and servicing agreement are required to service the Mayfair Mall Total Loan in accordance with the servicing standard set forth in the series 2003-C4 pooling and servicing agreement on behalf of the series 2003-C4 certificateholders, the series 2003-C5 certificateholders and the holders of the other two portions of the Mayfair Mall Total Loan, as a collective whole. See "Description of the Underlying Mortgage Loans--The Mayfair Mall Loan" in this prospectus supplement. TEN PERCENT OR MORE OF THE INITIAL MORTGAGE POOL BALANCE WILL BE REPRESENTED BY MORTGAGE LOANS SECURED BY MULTIFAMILY RENTAL PROPERTIES, THEREBY MATERIALLY EXPOSING OFFERED CERTIFICATEHOLDERS TO RISKS ASSOCIATED WITH THE PERFORMANCE OF MULTIFAMILY RENTAL PROPERTIES. Sixty-four (64) mortgaged real properties, securing mortgage loans that represent 30.81% of the initial mortgage pool balance, are primarily used for multifamily rental purposes. A number of factors may adversely affect the value and successful operation of a multifamily rental property. Some of these factors include: - the number of competing residential developments in the local market, including apartment buildings, manufactured housing communities and site-built single-family homes; - the physical condition and amenities of the subject building in relation to competing buildings; - the subject property's reputation; - applicable state and local regulations designed to protect tenants in connection with evictions and rent increases; - local factory or other large employer closings; - the level of mortgage interest rates to the extent it encourages tenants to purchase single-family housing; - compliance with and continuance of any government housing rental subsidiary programs from which the subject property receives benefits; - distance from employment centers and shopping areas; and - the financial condition of the owner of the subject property. See "Description of the Trust Assets--Mortgage Loans--Various Types of Multifamily and Commercial Properties May Secure Mortgage Loans Underlying a Series of Offered Certificates--Multifamily Rental Properties" in the accompanying prospectus. In addition, multifamily rental properties are part of a market that, in general, is characterized by low barriers to entry. Thus, a particular multifamily rental property market with historically low vacancies could experience substantial new construction and a resultant oversupply of rental units within a relatively short period of time. Since apartments within a multifamily rental property are typically leased on a short-term basis, the tenants residing in a particular property may easily move to alternative multifamily rental properties with more desirable amenities or locations or to single-family housing. Some of the multifamily rental properties that will secure pooled mortgage loans are subject to land use restrictive covenants or contractual covenants in favor of federal or state housing agencies. These covenants normally require that a minimum number or percentage of units be rented to tenants who have incomes that are substantially lower than median incomes in the applicable area or region. These covenants may limit the potential rental rates that may govern rentals at any of those properties, the potential tenant base for any of those properties or both. Some mortgaged real properties entitle their owners to receive low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code. Section 42 of the Internal Revenue Code provides a tax credit for owners of multifamily rental properties meeting the definition of low-income housing who have received a tax credit allocation from the state or local allocating agency. At the time the multifamily rental property is "placed in service," the property owner must make an irrevocable election of one of two set-aside rules: either-- S-36 - at least 20% of the units must be rented to tenants with incomes of 50% or less of the median income, or - at least 40% of the units must be rented to tenants with incomes of 60% or less of the median income. The total amount of tax credits to which the property owner is entitled, is based upon the percentage of total units made available to qualified tenants. Median income is determined by the United States Department of Housing and Urban Development for each metropolitan area or county in the United States and is adjusted annually. The tax credit provisions require that gross rent for each low-income unit not exceed 30% of the annual United States Department of Housing and Urban Development median income, adjusted for household size based on the number of bedrooms in the particular unit. The gross rent charged for a unit must take into account an allowance for utilities. If utilities are paid by the tenant, then the maximum allowable tax credit rent is reduced according to utility allowances, as provided in regulations of the Internal Revenue Service. Under the tax credit provisions, a property owner must comply with the tenant income restrictions and rental restrictions over a minimum of a 15-year compliance period. In addition, agreements governing the multifamily rental property may require an "extended use period," which has the effect of extending the income and rental restrictions for an additional period. In the event a multifamily rental property does not maintain compliance with the tax credit restrictions on tenant income or rental rates or otherwise satisfy the tax credit provisions of the Internal Revenue Code, the property owner may suffer a reduction in the amount of available tax credits and/or face the recapture of all or part of the tax credits related to the period of the noncompliance and face the partial recapture of previously taken tax credits. The loss of tax credits, and the possibility of recapture of tax credits already taken, may provide significant incentive for the property owner to keep the related multifamily rental property in compliance with such tax credit restrictions and to fund any property operating defects. TEN PERCENT OR MORE OF THE INITIAL MORTGAGE POOL BALANCE WILL BE REPRESENTED BY MORTGAGE LOANS SECURED BY RETAIL PROPERTIES, THEREBY MATERIALLY EXPOSING OFFERED CERTIFICATEHOLDERS TO RISKS ASSOCIATED WITH THE PERFORMANCE OF RETAIL PROPERTIES. Forty-six (46) mortgaged real properties, securing mortgage loans that represent 39.25% of the initial mortgage pool balance, are primarily used for retail purposes. A number of factors may adversely affect the value and successful operation of a retail property. Some of these factors include: - the strength, stability, number and quality of the tenants; - tenants' sales; - tenant mix; - whether the subject property is in a desirable location; - the physical condition and amenities of the subject building in relation to competing buildings; - competition from nontraditional sources such as catalog retailers, home shopping networks, electronic media shopping, telemarketing and outlet centers; - whether a retail property is anchored, shadow anchored or unanchored and, if anchored or shadow anchored, the strength, stability, quality and continuous occupancy of the anchor tenant or the shadow anchor, as the case may be, are particularly important factors; and - the financial condition of the owner of the subject property. We consider twenty-one (21) of the subject retail properties, securing 32.42% of the initial mortgage pool balance, to be anchored, including shadow anchored, and twenty-five (25) of the subject retail properties, securing 6.83% of the initial mortgage pool balance, to be unanchored. Retail properties that are anchored have traditionally been perceived as less risky than unanchored properties. As to any given retail property, an anchor tenant is generally understood to be a nationally or regionally recognized tenant whose space is proportionately larger in size than the space occupied by other tenants at the subject property and is important in attracting customers to the subject property. A shadow anchor is a store or business that satisfies the criteria for an anchor tenant, but which may be located at an adjoining property or on a portion of the subject retail property that is not collateral for the related mortgage loan. S-37 See "Description of the Trust Assets--Mortgage Loans--Various Types of Multifamily and Commercial Properties May Secure Mortgage Loans Underlying a Series of Offered Certificates--Retail Properties" in the accompanying prospectus. TEN PERCENT OR MORE OF THE INITIAL MORTGAGE POOL BALANCE WILL BE REPRESENTED BY MORTGAGE LOANS SECURED BY OFFICE PROPERTIES, THEREBY MATERIALLY EXPOSING OFFERED CERTIFICATEHOLDERS TO RISKS ASSOCIATED WITH THE PERFORMANCE OF OFFICE PROPERTIES. Twenty-five (25) mortgaged real properties, securing mortgage loans that represent 16.51% of the initial mortgage pool balance, are primarily used for office purposes. A number of factors may adversely affect the value and successful operation of an office property. Some of these factors include: - the strength, stability, number and quality of the tenants; - accessibility from surrounding highways/streets; - the physical condition and amenities of the subject building in relation to competing buildings, including the condition of the HVAC system, parking and the subject building's compatibility with current business wiring requirements; - whether the area is a desirable business location, including local labor cost and quality, access to transportation, tax environment, including tax benefits, and quality of life issues, such as schools and cultural amenities; and - the financial condition of the owner of the subject property. See "Description of the Trust Assets--Mortgage Loans--Various Types of Multifamily and Commercial Properties May Secure Mortgage Loans Underlying a Series of Offered Certificates--Office Properties" in the accompanying prospectus. FIVE PERCENT OR MORE OF THE INITIAL MORTGAGE POOL BALANCE WILL BE REPRESENTED BY MORTGAGE LOANS SECURED BY HOTEL PROPERTIES, THEREBY MATERIALLY EXPOSING OFFERED CERTIFICATEHOLDERS TO RISKS ASSOCIATED WITH THE PERFORMANCE OF HOTEL PROPERTIES. Four (4) mortgaged real properties, securing mortgage loans that represent 5.81% of the initial mortgage pool balance, are primarily used for hotel purposes. A number of factors may adversely affect the value and successful operation of a hotel property. Some of these factors include: - general economic conditions; - level of business and leisure travel; - the management ability of the property managers; - competition; and - desirability of particular locations. The mortgaged real properties' success in their markets will, in large part, be dependent upon their ability to compete on the basis of access, location, quality of accommodations and room rate structure. The terrorist attacks on September 11, 2001 in New York City, the Washington D.C. area and in Pennsylvania and the United States' implementation of full-scale military operations to combat terrorism have resulted and may continue to result in diminished business and leisure travel throughout the United States. Further, current adverse economic conditions have, and are anticipated to continue, to adversely affect business and leisure demand for hotel accommodations. THREE PERCENT OR MORE OF THE INITIAL MORTGAGE POOL BALANCE WILL BE REPRESENTED BY MORTGAGE LOANS SECURED BY INDUSTRIAL PROPERTIES, THEREBY MATERIALLY EXPOSING OFFERED CERTIFICATEHOLDERS TO RISKS ASSOCIATED WITH THE PERFORMANCE OF INDUSTRIAL PROPERTIES. Nine (9) mortgaged real properties, securing mortgage loans that represent 3.74% of the initial mortgage pool balance, are primarily used for industrial purposes. Industrial properties may be adversely affected by reduced demand for industrial space occasioned by a decline in a particular industry segment and/or by a general slowdown in the economy. In addition, an industrial property that suited the particular needs of its original tenant may be difficult to relet to another tenant or may become functionally obsolete relative to newer properties. S-38 The value and operation of an industrial property depends on-- - location of the property, the desirability of which in a particular instance may depend on-- 1. availability of labor services, 2. proximity to supply sources and customers, and 3. accessibility to various modes of transportation and shipping, including railways, roadways, airline terminals and ports; - building design of the property, the desirability of which in a particular instance may depend on-- 1. ceiling heights, 2. column spacing, 3. number and depth of loading bays, 4. divisibility, 5. floor loading capacities, 6. truck turning radius, 7. overall functionality, and 8. adaptability of the property, because industrial tenants often need space that is acceptable for highly specialized activities; and - the quality and creditworthiness of individual tenants, because industrial properties frequently have higher tenant concentrations. Industrial properties are generally special purpose properties that could not be readily converted to general residential, retail or office use. This will adversely affect their liquidation value. PROPERTY MANAGEMENT IS IMPORTANT TO THE SUCCESSFUL OPERATION OF THE MORTGAGED REAL PROPERTY. The successful operation of a real estate project depends in part on the performance and viability of the property manager. The property manager is generally responsible for: - operating the property and providing building services; - establishing and implementing the rental structure; - managing operating expenses; - responding to changes in the local market; and - advising the borrower with respect to maintenance and capital improvements. Properties deriving revenues primarily from short-term sources, such as hotels and self storage facilities, generally are more management intensive than properties leased to creditworthy tenants under long-term leases. A good property manager, by controlling costs, providing necessary services to tenants and overseeing and performing maintenance or improvements on the property, can improve cash flow, reduce vacancies, reduce leasing and repair costs and preserve building value. On the other hand, management errors can, in some cases, impair short-term cash flow and the long-term viability of an income-producing property. Neither we nor any of the mortgage loan sellers make any representation or warranty as to the skills of any present or future property managers with respect to the mortgaged real properties that will secure the underlying mortgage loans. Furthermore, 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. In addition, certain of the mortgaged real S-39 properties are managed by affiliates of the applicable borrower. If a mortgage loan is in default or undergoing special servicing, this could disrupt the management of the mortgaged real property and may adversely affect cash flow. RELIANCE ON A SINGLE TENANT MAY INCREASE THE RISK THAT CASH FLOW WILL BE INTERRUPTED. Seven (7) mortgaged real properties, representing 6.31% of the initial mortgage pool balance, are, in each case, leased by a single tenant. In addition, twelve (12) other mortgaged real properties, securing 5.48% of the initial mortgage pool balance, have, in each case, a single tenant that occupies 50% or more, but less than 100%, of the space at the particular property. Reliance on a single or major tenant may increase the risk that cash flow will be interrupted, which will adversely affect the ability of a borrower to repay its mortgage loan. LOSSES ON LARGER LOANS MAY ADVERSELY AFFECT DISTRIBUTIONS ON YOUR CERTIFICATES. Certain of the mortgage loans or groups of cross-collateralized mortgage loans that we intend to include in the trust fund have cut-off date principal balances that are substantially higher than the average cut-off date principal balance. In general, these concentrations can result in losses that are more severe than would be the case if the total principal balance of the mortgage loans backing the offered certificates were more evenly distributed. The following chart lists the ten (10) largest mortgage loans or groups of cross-collateralized mortgage loans that are to be included in the trust fund. TEN LARGEST MORTGAGE LOANS OR GROUPS OF CROSS-COLLATERALIZED MORTGAGE LOANS
% OF INITIAL CUT-OFF DATE MORTGAGE PROPERTY/PORTFOLIO NAME PRINCIPAL BALANCE POOL BALANCE ------------------------------------------------- ------------------- ------------ Mall at Fairfield Commons .................... $ 85,405,532 6.77% Mayfair Mall and Office Complex .............. $ 79,343,515 6.29% Stanford Shopping Center ..................... $ 75,000,000 5.95% MeriStar Hotel Portfolio ..................... $ 50,881,109 4.03% Paramount Plaza .............................. $ 44,876,466 3.56% Montalvo Square .............................. $ 42,300,000 3.35% Jefferson at Montfort ........................ $ 35,000,000 2.78% EastBridge Landing ........................... $ 33,689,997 2.67% East Thunderbird Square North ................ $ 28,472,696 2.26% Janss Court .................................. $ 28,295,760 2.24%
MORTGAGE LOANS TO RELATED BORROWERS MAY RESULT IN MORE SEVERE LOSSES ON YOUR OFFERED CERTIFICATES. Certain groups of the mortgage loans that we intend to include in the trust fund were made to the same borrower or to borrowers under common ownership. In some cases, the mortgage loans in any of those groups are not cross-collateralized. Mortgage loans with the same borrower or related borrowers pose additional risks. Among other things: - financial difficulty at one mortgaged real property could cause the owner to defer maintenance at another mortgaged real property in order to satisfy current expenses with respect to the troubled mortgaged real property; and - the owner could attempt to avert foreclosure on one mortgaged real property by filing a bankruptcy petition that might have the effect of interrupting monthly payments for an indefinite period on all of the related mortgage loans. The following table identifies each of those groups of two or more mortgage loans that represent 1.0% or more of the initial mortgage pool balance and that have the same borrower or related borrowers: RELATED BORROWER LOANS
% OF INITIAL CUT-OFF DATE MORTGAGE GROUP PROPERTY/PORTFOLIO NAME PRINCIPAL BALANCE POOL BALANCE --------------- -------------------------------------------- ------------------ ------------ A Serrano Apartments.......................... $ 26,450,000 2.10% Villages of Deerfield Apartments............ 16,641,062 1.32 ----------------- ------------ TOTAL $ 43,091,062 3.42% ================= ============ B Anaheim Professional Center................. $ 9,365,667 0.74% Coast Family Medical Center................. 5,719,224 0.45 ----------------- ------------ TOTAL $ 15,084,891 1.19% ================= ============
S-40 ENFORCEABILITY OF CROSS-COLLATERALIZATION PROVISIONS MAY BE CHALLENGED AND THE BENEFITS OF THESE PROVISIONS MAY OTHERWISE BE LIMITED. Five (5) groups of either cross-collateralized or multi-property mortgage loans that we intend to include in the trust fund, representing 12.84% of the initial mortgage pool balance, are secured by multiple real properties, through cross-collateralization with other mortgage loans that are to be included in the trust fund or otherwise. These arrangements attempt to reduce the risk that one mortgaged real property may not generate enough net operating income to pay debt service. However, arrangements of this type involving more than one borrower could be challenged as a fraudulent conveyance if: - one of the borrowers were to become a debtor in a bankruptcy case, or were to become subject to an action brought by one or more of its creditors outside a bankruptcy case; - the related borrower did not receive fair consideration or reasonably equivalent value in exchange for allowing its mortgaged real property to be encumbered; and - at the time the lien was granted, the borrower was: 1. insolvent; 2. inadequately capitalized; or 3. unable to pay its debts. Furthermore, when multiple real properties secure a mortgage loan or group of cross-collateralized mortgage loans, the amount of the mortgage encumbering any particular one of those properties may be less than the full amount of the related mortgage loan or group of cross-collateralized mortgage loans, generally, to minimize recording tax. This mortgage amount may equal the appraised value or allocated loan amount for the mortgaged real property and will limit the extent to which proceeds from the property will be available to offset declines in value of the other properties securing the same mortgage loan or group of cross-collateralized mortgage loans. Moreover, five (5) groups of either cross-collateralized or multi-property mortgage loans and multi-property mortgage loans that we intend to include in the trust fund, representing 12.84% of the initial mortgage pool balance, are secured by mortgaged real properties located in six (6) different states. Foreclosure actions are brought in state court and the courts of one state cannot exercise jurisdiction over property in another state. Upon a default under any of these mortgage loans, it may not be possible to foreclose on the related mortgaged real properties simultaneously. A BORROWER'S OTHER LOANS MAY REDUCE THE CASH FLOW AVAILABLE TO OPERATE AND MAINTAIN THE RELATED MORTGAGED REAL PROPERTY OR MAY INTERFERE WITH THE TRUST FUND'S RIGHTS UNDER THE RELATED UNDERLYING MORTGAGE LOAN, THEREBY ADVERSELY AFFECTING DISTRIBUTIONS ON YOUR OFFERED CERTIFICATES. As described under "Description of the Underlying Mortgage Loans--Additional Loan and Property Information--Additional Secured Financing" in this prospectus supplement, some mortgaged real properties securing the underlying mortgage loans have been or may be encumbered by, or may allow, subordinate debt. In addition, subject, in some cases, to certain limitations relating to maximum amounts, borrowers generally may incur trade, operational debt or other unsecured debt and enter into equipment and other personal property and fixture financing and leasing arrangements in connection with the ordinary operation and maintenance of the related mortgaged real property. The existence of other debt could: - adversely affect the financial viability of a borrower by reducing the cash flow available to the borrower to operate and maintain the related mortgaged real property; - adversely affect the security interest of the lender in the equipment or other assets acquired through its financings; - complicate bankruptcy proceedings; and - delay foreclosure on the related mortgaged real property. The mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Mall at Fairfield Commons, representing 6.77% of the initial mortgage pool balance, also secures the Mall at Fairfield Commons Companion Loan on a PARI PASSU basis with the Mall at Fairfield Commons Loan. See "Description of the Underlying Mortgage Loans--The Mall at Fairfield Commons Loan." S-41 The mortgaged real property identified on Exhibit A-1 to this prospectus supplement as the Mayfair Mall, representing 6.29% of the initial mortgage pool balance, also secures the Mayfair Mall Companion Loans on a PARI PASSU basis with the Mayfair Mall Loan. See "Description of the Underlying Mortgage Loans--The Mayfair Mall Loan." The mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Stanford Shopping Center, representing 5.95% of the initial mortgage pool balance, also secures the Stanford Shopping Center Companion Loans on a PARI PASSU basis with the Stanford Shopping Center Loan. See "Description of the Underlying Mortgage Loans--The Stanford Shopping Center Loan." In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Montalvo Shopping Center, representing 3.35% of the initial mortgage pool balance, the related mortgage loan documents permit future mezzanine financing only from a mezzanine lender acceptable to the lender and if certain other conditions are satisfied. See "Description of the Underlying Mortgage Loans--Montalvo Square Shopping Center." The mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Jefferson at Montfort, representing 2.78% of the initial mortgage pool balance, also secures the Jefferson at Montfort B Loan on a subordinated basis with the Jefferson at Montfort Loan. See "Description of the Underlying Mortgage Loans--The Jefferson at Montfort." In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as EastBridge Landing, representing 2.67% of the initial mortgage pool balance, the borrower was permitted to maintain $46,200,000 in subordinate debt that is secured by the related mortgaged real property. See "Description of the Underlying Mortgage Loans--EastBridge Landing." The mortgaged real properties identified on Exhibit A-1 to this prospectus supplement as Cambridge Village Apartments, Northgate Village Apartments and Hearthstone Apartments, representing in the aggregate 1.84% of the initial mortgage pool balance, also secure the respective Corresponding B Loan on a subordinated basis with the related A Loan. See "Description of the Underlying Mortgage Loans--The A/B Loans." In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Sands Point Cove Apartments, representing 0.22% of the initial mortgage pool balance, the borrower was permitted to maintain $570,000 in subordinate debt that is secured by the related mortgaged real property. See "--Additional Secured Financing" below. MEZZANINE DEBT CAN ACT AS A DISINCENTIVE TO THE PRINCIPALS OF A BORROWER. If any of the principals in a borrower under one of the mortgage loans that we intend to include in the trust fund pledges its equity interest in that borrower to secure a debt, frequently called mezzanine debt, then: - depending on the use of the proceeds from that loan, the equity interest of that principal in that borrower will be reduced and, further, depending on its remaining equity interest, that principal could be less inclined to infuse that borrower with additional funds in the event that the performance and/or value of the related mortgaged real property declines; and - if that equity interest is foreclosed upon following a default under the mezzanine debt, there could be a change in control of that borrower. As described under "Description of the Underlying Mortgage Loans-- Additional Loan and Property Information--Additional Secured Financing" in this prospectus supplement, we are aware of certain mortgage loans that we intend to include in the trust fund as to which mezzanine financing exists or is permitted to be incurred. SOME BORROWERS UNDER THE UNDERLYING MORTGAGE LOANS WILL NOT BE LIMITED TO OWNING THEIR RESPECTIVE MORTGAGED REAL PROPERTIES, THEREBY INCREASING THE RISK OF BORROWER BANKRUPTCY. The business activities of the borrowers under the mortgage loans may not be limited to owning their respective mortgaged real properties. Accordingly, the financial success of these borrowers may be affected by the performance of their other business activities, including other real estate interests. Those other business activities increase the possibility that the borrower may become bankrupt or insolvent. CHANGES IN MORTGAGE POOL COMPOSITION CAN CHANGE THE NATURE OF YOUR INVESTMENT. If you purchase any class B, C, D, E and/or F certificates, you will be more exposed to risks associated with changes in concentrations of borrower, loan or property characteristics than are persons who own class A-1, class A-2, class A-3 or class A-4 certificates. THE OPERATION OF A MORTGAGED REAL PROPERTY UPON FORECLOSURE OF AN UNDERLYING MORTGAGE LOAN MAY AFFECT THE TAX STATUS OF THE TRUST FUND AND ADVERSELY AFFECT THE OFFERED CERTIFICATES. If the trust fund were to acquire a mortgaged real property pursuant to a foreclosure or delivery of a deed in lieu of foreclosure, the special servicer may be required to retain an S-42 independent contractor to operate and manage the mortgaged real property. Any net income from the operation or management of the property other than qualifying "rents from real property" within the meaning of Section 856(d) of the Internal Revenue Code would subject the trust fund to federal tax on this income at the highest marginal federal corporate tax rate, which is currently 35%, and possibly state or local tax. The risk of taxation being imposed on income derived from the operation of foreclosed property is particularly present in the case of operating businesses, such as hospitality properties. This would reduce net proceeds available for distribution to the series 2003-C5 certificateholders. Rents from real property do not include any rental income based on the net profits of a tenant or sub-tenant or allocable to a service that is non-customary in the area and for the type of building involved. See "Federal Income Tax Consequences" in this prospectus supplement and in the accompanying prospectus. In addition, if the trust fund were to acquire one or more mortgaged real properties pursuant to a foreclosure or deed in lieu of foreclosure, upon acquisition of those mortgaged real properties the trust fund may, in certain jurisdictions (particularly in New York), be required to pay state or local transfer or excise taxes upon liquidation of such properties. Such state or local taxes may reduce net proceeds available for distribution to the series 2003-C5 certificateholders. GEOGRAPHIC CONCENTRATION OF THE MORTGAGED REAL PROPERTIES MAY ADVERSELY AFFECT DISTRIBUTIONS ON YOUR OFFERED CERTIFICATES. The concentration of mortgaged real properties in a specific state or region will make the performance of the mortgage loan pool, as a whole, more sensitive to the following factors in the state or region where the borrowers and the mortgaged real properties are concentrated: - economic conditions, including real estate market conditions; - changes in governmental rules and fiscal policies; - acts of God, which may result in uninsured losses; and - other factors that are beyond the control of the borrowers. The mortgaged real properties are located in thirty-two (32) states and the District of Columbia. The table below sets forth the states in which a significant percentage of the mortgaged real properties are located. Except as set forth below, no state contains more than 5%, by cut-off date principal balance or allocated loan amount, of the mortgaged real properties that secure the underlying mortgage loans. SIGNIFICANT GEOGRAPHIC CONCENTRATIONS OF MORTGAGED REAL PROPERTIES
% OF INITIAL NUMBER OF MORTGAGE STATE PROPERTIES POOL BALANCE -------------------------- -------------------------- ----------------- 1. California............ 29 26.17% 2. Texas................. 27 14.84% 3. Ohio.................. 5 7.82% 4. Wisconsin............. 3 6.48% 5. Florida............... 16 5.98% 6. Arizona............... 5 5.14%
SOME REMEDIES MAY NOT BE AVAILABLE FOLLOWING A MORTGAGE LOAN DEFAULT. The mortgage loans that we intend to include in the trust fund contain "due-on-sale" and "due-on-encumbrance" clauses. These clauses permit the holder of a mortgage loan to accelerate the maturity of the mortgage loan if the related borrower sells or otherwise transfers or encumbers the related mortgaged real property or its interest in the mortgaged real property in violation of the terms of the mortgage. All of the mortgage loans that we intend to include in the trust fund also include a debt-acceleration clause that permits the related lender to accelerate the debt upon specified monetary or non-monetary defaults of the related borrower. The courts of all states will enforce clauses providing for acceleration in the event of a material payment default. The equity courts of a state, however, may refuse the foreclosure or other sale of a mortgaged real property or refuse to permit the acceleration of the indebtedness as a result of a default deemed to be immaterial or if the exercise of these remedies would be inequitable or unjust. Each of the mortgage loans that we intend to include in the trust fund is secured by an assignment of leases and rents from the related borrower, which assignment may be contained within the mortgage instrument. However, in many cases, the related borrower generally may collect rents for so long as there is no default. As a result, the trust fund's rights to these rents will be limited because: S-43 - the trust fund may not have a perfected security interest in the rent payments until the master servicer or special servicer collects them; - the master servicer or special servicer may not be entitled to collect the rent payments without court action; and - the bankruptcy of the related borrower could limit the ability of the master servicer or special servicer to collect the rents. LENDING ON INCOME-PRODUCING REAL PROPERTIES ENTAILS ENVIRONMENTAL RISKS. Under various federal and state laws, a current or previous owner or operator of real property may be liable for the costs of cleanup of environmental contamination on, under, at or emanating from, the property. These laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the contamination. The costs of any required cleanup and the owner's liability for these costs are generally not limited under these laws and could exceed the value of the property and/or the total assets of the owner. Contamination of a property may give rise to a lien on the property to assure the costs of cleanup. An environmental lien may have priority over the lien of an existing mortgage. In addition, the presence of hazardous or toxic substances, or the failure to properly clean up contamination on the property, may adversely affect the owner's or operator's future ability to refinance the property. Certain environmental laws impose liability for releases of asbestos into the air, and govern the responsibility for the removal, encapsulation or disturbance of asbestos-containing materials when the asbestos-containing materials are in poor condition or when a property with asbestos-containing materials undergoes renovation or demolition. Certain laws impose liability for lead-based paint, lead in drinking water, elevated radon gas inside buildings and releases of polychlorinated biphenyl compounds. Third parties may also seek recovery from owners or operators of real property for personal injury or property damage associated with exposure to asbestos, lead, radon, polychlorinated biphenyl compounds and any other contaminants. As described in this prospectus supplement under "Description of the Underlying Mortgage Loans--Underwriting Matters--Environmental Assessments," a third-party environmental consultant conducted some form of environmental investigation with respect to substantially all of the mortgaged real properties securing the mortgage loans that we intend to include in the trust fund. In the case of one hundred thirteen (113) mortgaged real properties, securing 93.93% of the initial mortgage pool balance, a Phase I environmental site assessment that states that it meets ASTM standards or an update (which may have been performed pursuant to a database or transaction screen update) of a previously conducted assessment was conducted during the 12-month period ending on December 11, 2003 and in the case of one hundred fifteen (115) mortgaged real properties, securing 94.76% of the initial mortgage pool balance, such an assessment or update was conducted within a 16-month period ending on December 11, 2003. In the case of forty-one (41) mortgaged real properties, securing 5.24% of the initial mortgage pool balance and covered by environmental insurance, the environmental investigation was limited to only testing for asbestos-containing materials, lead-based paint and/or radon. The environmental insurance policies have coverage limits and do not provide coverage for adverse environmental conditions at levels below legal limits or for conditions involving asbestos and lead based paint. In some cases, a third-party consultant also conducted a Phase II environmental site assessment of the mortgaged real property. The environmental testing at any particular mortgaged real property did not necessarily cover all potential environmental issues. For example, tests for radon, lead-based paint and lead in water were generally performed only at multifamily rental properties and only when the originator of the related mortgage loan believed this test was warranted under the circumstances. In several cases, the environmental testing for a mortgaged real property identified potential and, in some cases, significant environmental issues at nearby properties. If the environmental investigations described above identified material adverse or potentially material adverse environmental conditions at or with respect to any of the respective mortgaged real properties securing a mortgage loan that we intend to include in the trust fund, then: - an environmental consultant investigated those conditions and recommended no further investigations or remediation; - an operations and maintenance plan was required or an escrow reserve was established to cover the estimated costs of obtaining that plan; - those conditions were remediated or abated prior to the closing date; S-44 - a letter was obtained from the applicable regulatory authority stating that no further action was required; - the expenditure of funds reasonably estimated to be necessary to remediate the conditions is not greater than 2% of the outstanding principal balance of the related mortgage loan or an environmental insurance policy was obtained, a letter of credit was provided, an escrow reserve account was established, another party has acknowledged responsibility or an indemnity from a responsible party other than the related borrower was obtained to cover the estimated costs of any required investigation, testing, monitoring or remediation, which in some cases has been estimated to be in excess of $50,000; - in some cases in which it is known that an offsite property is the location of a leaking underground storage tank or groundwater contamination, a responsible party other than the related borrower has been identified under applicable law, and either-- 1. that condition is not known to have affected the mortgaged real property, 2. the responsible party has either received a letter from the applicable regulatory agency stating no further action is required, established a remediation fund, engaged in responsive remediation or provided an indemnity or guaranty to the borrower or the mortgagee/lender, or 3. an environmental insurance policy was obtained; or - in some cases involving mortgage loans with an original principal balance of less than $1,000,000, the borrower expressly agreed to comply with all federal, state and local statutes or regulations respecting the identified adverse environmental condition. In many cases, the environmental investigation described above identified the presence of asbestos-containing materials, lead-based paint and/or radon. Where these substances were present, the environmental consultant often recommended, and the related loan documents generally required, the establishment of an operations and maintenance plan to address the issue or, in some cases involving asbestos-containing materials and/or lead-based paint, an abatement or removal program. In a few cases, the particular asbestos-containing materials and/or lead-based paint was in need of repair or other remediation. This could result in a claim for damages by any party injured by that condition. In some cases, the environmental consultant did not recommend that any action be taken with respect to a potential adverse environmental condition at a mortgaged real property securing a mortgage loan that we intend to include in the trust fund, because a responsible party with respect to that condition had already been identified. There can be no assurance, however, that such a responsible party will be financially able to address the subject condition. Furthermore, any particular environmental testing may not have covered all potential adverse conditions. For example, testing for lead-based paint, asbestos-containing materials, lead in water and radon was done only if the use, age and condition of the subject property warranted that testing. In general, testing was done for lead based paint only in the case of a multifamily property built prior to 1978, for asbestos-containing materials only in the case of a property built prior to 1981 and for radon gas only in the case of a multifamily property. There can be no assurance that-- - the environmental testing referred to above identified all material adverse environmental conditions and circumstances at the subject properties, - the recommendation of the environmental consultant was, in the case of all identified problems, the appropriate action to take, - any of the environmental escrows established with respect to any of the mortgage loans that we intend to include in the trust fund will be sufficient to cover the recommended remediation or other action, or - an environmental insurance policy will cover all or part of a claim asserted against it because such policies are subject to various deductibles, terms, exclusions, conditions and limitations, and have not been extensively interpreted by the courts. S-45 In some cases, the originator of the related mortgage loan-- - agreed to release a principal of the related borrower from its obligations under an environmental or hazardous substances indemnity with respect to the particular mortgaged real property in connection with the delivery of a secured creditor impaired property policy covering that property, or - required a secured creditor impaired property policy because of a specific environmental issue with respect to the particular mortgaged real property. See "Description of the Underlying Mortgage Loans--Underwriting Matters--Environmental Insurance" in this prospectus supplement. APPRAISALS AND MARKET STUDIES MAY INACCURATELY REFLECT THE VALUE OF THE MORTGAGED REAL PROPERTIES. In connection with the origination of each of the mortgage loans that we intend to include in the trust fund, the related mortgaged real property was appraised by an independent appraiser. Appraisals are not guarantees, and may not be fully indicative, of present or future value because: - they represent the analysis and opinion of the appraiser at the time the appraisal is conducted; - there can be no assurance that another appraiser would not have arrived at a different valuation, even if the appraiser used the same general approach to, and the same method of, appraising the mortgaged real property; and - appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller and therefore, could be significantly higher than the amount obtained from the sale of a mortgaged real property under a distress or liquidation sale. PROPERTY MANAGERS AND BORROWERS MAY EACH EXPERIENCE CONFLICTS OF INTEREST IN MANAGING MULTIPLE PROPERTIES. In the case of many of the mortgage loans that we intend to include in the trust fund, the related property managers and borrowers may experience conflicts of interest in the management and/or ownership of the related mortgaged real properties because: - a substantial number of those mortgaged real properties are managed by property managers affiliated with the respective borrowers; - the property managers also may manage additional properties, including properties that may compete with those mortgaged real properties; and - affiliates of the property managers and/or the borrowers, or the property managers and/or the borrowers themselves, also may own other properties, including properties that may compete with those mortgaged real properties. THE MASTER SERVICER AND THE SPECIAL SERVICER MAY EXPERIENCE CONFLICTS OF INTEREST. The master servicer and the special servicer will service loans other than those included in the trust fund in the ordinary course of their businesses. These other loans may be similar to the mortgage loans in the trust fund. The mortgaged real properties securing these other loans may-- - be in the same markets as mortgaged real properties securing mortgage loans in the trust fund, and/or - have owners, obligors and/or property managers in common with mortgaged real properties securing mortgage loans in the trust fund. In these cases, the interests of the master servicer or the special servicer, as applicable, and their other clients may differ from and compete with the interests of the trust fund and these activities may adversely affect the amount and timing of collections on the mortgage loans in the trust fund. Under the pooling and servicing agreement, the master servicer and the special servicer are each required to service the mortgage loans in the trust fund for which it is responsible in the same manner, and with the same care, as similar mortgage loans serviced by it for its own portfolio or the portfolios of third parties. S-46 THE DIRECTING CERTIFICATEHOLDER AND CERTIFICATEHOLDERS MAY EXPERIENCE CONFLICTS OF INTEREST. In the case of certain actions taken by the master servicer or special servicer on behalf of the trust, the directing certificateholder may have the ability to direct and/or approve such certain actions which may result in a conflict of interest between the directing certificateholder and the certificateholders because: - the directing certificateholder may have interests that are adverse to or different from the certificateholders; and - as a result, it is possible that the master servicer or special servicer may take actions that are adverse to certain of the certificateholders. The directing certificateholder will have no liability to any certificateholder for any action that it directs or consents to. MORTGAGE LOANS SECURED BY LEASEHOLD INTERESTS MAY BE SUBJECT TO TERMS OF THE GROUND LEASE AND ARE THEREFORE RISKIER THAN MORTGAGE LOANS SECURED BY FEE ESTATES. Six (6) of the mortgage loans, representing 13.14% of the initial mortgage pool balance, are secured in whole or in material part by leasehold interests with respect to which the related owner of the fee estate has not mortgaged the corresponding fee estate as security for the related mortgage loan. For the purposes of this prospectus supplement, when the ground lessee and ground lessor are both parties to the related mortgage instrument, or have each entered into a mortgage instrument encumbering their respective estates, the interest in the related mortgaged real property has been categorized as a fee simple estate. Additionally, in those cases where the ground lessor has subjected its fee interest to the related mortgage instrument, we have identified the subject underlying mortgage loan as being secured by a fee mortgage. However, a ground lessor's execution of a mortgage over its fee interest to secure the ground lessee's debt may be subject to challenge as a fraudulent conveyance. Among other things, a legal challenge to the granting of any such lien may focus on the benefits realized by the ground lessor from the related mortgage loan. If a court concluded that the ground lessor's granting of the mortgage was an avoidable fraudulent conveyance, it might take actions detrimental to the holders of the certificates, including under certain circumstances, invalidating the mortgage over the ground lessor's fee interest and leaving the mortgage loan secured only by the leasehold interest in the related mortgaged real property. Upon the bankruptcy of a lessor or a lessee under a ground lease, the debtor entity has the right to continue or terminate the ground lease. Pursuant to section 365(h) of the federal bankruptcy code, a ground lessee whose ground lease is terminated by a debtor ground lessor has the right to remain in possession of its leased premises under the rent reserved in the lease for the term of the ground lease, including any renewals, but is not entitled to enforce the obligation of the ground lessor to provide any services required under the ground lease. In the event of concurrent bankruptcy proceedings involving the ground lessor and the ground lessee/borrower, the ground lease could be terminated. 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 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 will 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. Because the possible termination of the related ground lease, lending on a leasehold interest in a real property is riskier than lending on the fee interest in the property. CHANGES IN ZONING LAWS MAY AFFECT ABILITY TO REPAIR OR RESTORE A MORTGAGED REAL PROPERTY. Due to changes in applicable building and zoning ordinances and codes affecting several of the mortgaged real properties that are to secure the underlying mortgage loans, which changes occurred after the construction of the improvements on these properties, these mortgaged real properties may not comply fully with current zoning laws because of: - density; - use; S-47 - parking; - set-back requirements; or - other building related conditions. These changes will not interfere with the current use of the mortgaged real property. However, these changes may limit the ability of the related borrower to rebuild the premises "as is" in the event of a substantial casualty loss which may adversely affect the ability of the borrower to meet its mortgage loan obligations from cash flow. Generally, mortgage loans secured by mortgaged real properties which no longer conform to current zoning ordinances and codes will require, or contain provisions which allow the lender in its reasonable discretion to require, the borrower to maintain "law and ordinance" coverage which, subject to the terms and conditions of such coverage, will insure the increased cost of construction to comply with current zoning ordinances and codes. Insurance proceeds may not be sufficient to pay off the mortgage loan in full. In addition, if the mortgaged real 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 repair or restoration. LENDING ON INCOME-PRODUCING PROPERTIES ENTAILS RISKS RELATED TO PROPERTY CONDITION. All of the mortgaged real properties securing mortgage loans in the trust fund were inspected by engineering firms. However, in the case of five (5) of those mortgaged real properties, securing 1.35% of the initial mortgage pool balance, those inspections were conducted more than 12 months prior to December 11, 2003. The scope of those inspections included an assessment of-- - the structure, exterior walls, roofing, interior construction, mechanical and electrical systems, and - the general condition of the site, buildings and other improvements located at each property. At certain of those properties, the inspections identified conditions requiring escrows to be established for repairs or replacements. In many of these cases, the related originator, if the identified repairs or replacements were deemed material, required the related borrower to fund reserves, or deliver letters of credit or other instruments, to cover the costs of these repairs or replacements. While the aforementioned escrows, when required, were based on recommendations in an engineering report, there can be no assurance that the reserves or letters of credit or other instruments will be sufficient to cover the repairs or replacements. Additionally, there can be no assurance that all conditions requiring repair or replacement have been identified in these inspections. AVAILABILITY OF CASUALTY INSURANCE COVERING DAMAGE FROM TERRORIST ACTS MAY BE LIMITED AND MAY RESULT IN ADDITIONAL COSTS TO BORROWERS. With respect to each of the mortgaged real properties securing a mortgage loan, the related borrower is required under the related mortgage loan documents to maintain comprehensive all-risk casualty insurance or extended coverage insurance (with special form coverage) (which may be provided under a blanket insurance policy as further discussed below) but may not specify the nature of the specific risks required to be covered by such insurance policies. In light of the terrorist attacks in New York City, the Washington, D.C. area and Pennsylvania you should be aware that coverage for acts of terrorism may be available only at rates significantly higher than other types of insurance. See "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Hazard, Liability and Other Insurance" below. The master servicer will use reasonable efforts to cause the borrower to maintain or, if the borrower does not so maintain, the master servicer will maintain all-risk casualty insurance (the cost of which will be payable as a servicing advance) which does not contain any carve-out for terrorist or similar acts to the extent not prohibited by the terms of the related note and mortgage. The master servicer will not be required to call a default under a mortgage loan if the related borrower fails to maintain such insurance, and the master servicer will not be required to maintain such insurance, if the special servicer has determined in accordance with the Servicing Standard that either-- - such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the mortgaged real property and located in or around the region in which such mortgaged real property is located, or - such insurance is not available at any rate. If the related loan documents do not expressly require insurance against acts of terrorism, but permit the mortgagee to require such other insurance as is reasonable, the related borrower may challenge whether maintaining insurance against acts of terrorism is reasonable in light of all the circumstances, including the cost. The master servicer's efforts to require such S-48 insurance may be further impeded if the originating lender did not require the subject borrower to maintain such insurance, regardless of the terms of the related loan documents. In the event that any mortgaged real property securing a mortgage loan sustains damage as a result of an uninsured terrorist or similar act, a default on the related mortgage loan may result and such damaged mortgaged real property may not provide adequate collateral to satisfy all amounts owing under such mortgage loan, which could result in losses on some classes of the certificates. If a borrower is required under the circumstances described above to maintain such insurance for terrorist or similar acts, the borrower may incur higher costs for insurance premiums in obtaining such coverage which would have an adverse effect on the net cash flow of the related mortgaged real properties. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT MAY RESULT IN ADDITIONAL COSTS TO BORROWERS. 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 a mortgaged real property does not comply with the Americans with Disabilities Act of 1990, the related borrower may be required to incur costs to comply with this law. In addition, noncompliance could result in the imposition of fines by the federal government or an award of damages to private litigants. CERTAIN LOANS MAY REQUIRE PRINCIPAL PAYDOWNS WHICH MAY REDUCE THE YIELD ON YOUR OFFERED CERTIFICATES. Some of the mortgage loans that we intend to include in the trust fund may require the related borrower to make, or permit the lender to apply reserve funds to make, partial prepayments if certain conditions, such as meeting certain debt service coverage ratios and/or satisfying certain leasing conditions, have not been satisfied. The required prepayment may need to be made even though the mortgage loan is in its lock-out period. See "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Mortgage Loans Which May Require Principal Paydowns." LITIGATION MAY ADVERSELY AFFECT PROPERTY PERFORMANCE. There may be pending or, from time to time, threatened legal proceedings against the borrowers under the mortgage loans, the managers of the related mortgaged real properties and their respective affiliates, arising out of the ordinary business of those borrowers, managers and affiliates. We cannot assure you that litigation will not have a material adverse effect on your investment. ONE ACTION RULES MAY LIMIT REMEDIES. 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 are secured by mortgaged real properties located where the rule could be applicable. In the case of either a cross-collateralized mortgage loan or a multi-property loan that is secured by mortgaged properties located in multiple states, the special servicer may be required to foreclose first on properties located in states where the "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. RISKS RELATED TO THE OFFERED CERTIFICATES THE TRUST FUND'S ASSETS MAY BE INSUFFICIENT TO ALLOW FOR REPAYMENT IN FULL ON YOUR OFFERED CERTIFICATES. If the assets of the trust fund are insufficient to make distributions on the offered certificates, no other assets will be available for distribution of the deficiency. The offered certificates will represent interests in the trust fund only and will not be obligations of or represent interests in us, any of our affiliates or any other person or entity. The offered certificates have not been guaranteed or insured by any governmental agency or instrumentality or by any other person or entity. THE CLASS B, C, D, E AND F CERTIFICATES ARE SUBORDINATE TO, AND ARE THEREFORE RISKIER THAN, THE CLASS A-1, A-2, A-3, A-4, A-1-A, A-X AND A-SP CERTIFICATES. If you purchase class B, C, D, E or F certificates, then your offered certificates will provide credit support to other more senior classes of offered certificates, as well as the class A-1-A, A-X and A-SP certificates. As a result, you will receive distributions after, and must bear the effects of losses on the underlying mortgage loans before, the holders of those other classes of offered certificates. In addition, if losses and/or shortfalls relating to the trust fund exceed amounts payable out of collections on the trust fund, then the holders of the offered certificates may suffer shortfalls and losses, to the extent the subordination of the class G, H, J, K, L, M, N, O and P certificates is not sufficient to bear such shortfalls or losses. S-49 When making an investment decision, you should consider, among other things-- - the distribution priorities of the respective classes of the series 2003-C5 certificates, - the order in which the principal balances of the respective classes of the series 2003-C5 certificates with principal balances will be reduced in connection with losses and default-related shortfalls, and - the characteristics and quality of the underlying mortgage loans. THE OFFERED CERTIFICATES HAVE UNCERTAIN YIELDS TO MATURITY. The yield on your offered certificates will depend on, among other things-- - the price you paid for your offered certificates, and - the rate, timing and amount of distributions on your offered certificates. The rate, timing and amount of distributions on your offered certificates will depend on-- - the pass-through rate for, and the other payment terms of, your offered certificates, - the rate and timing of payments and other collections of principal on the underlying mortgage loans or, in some cases, a particular group of underlying mortgage loans, - the rate and timing of defaults, and the severity of losses, if any, on the underlying mortgage loans or, in some cases, a particular group of underlying mortgage loans, - the rate, timing, severity and allocation of other shortfalls and expenses that reduce amounts available for distribution on the series 2003-C5 certificates, and - servicing decisions with respect to the underlying mortgage loans or, in some cases, a particular group of underlying mortgage loans. These factors cannot be predicted with any certainty. Accordingly, you may find it difficult to analyze the effect that these factors might have on the yield to maturity of your offered certificates. In the absence of significant losses, holders of the class A-1, A-2, A-3 and A-4 certificates should be concerned with the factors described in the second, third, fourth and fifth bullets of the second preceding paragraph primarily insofar as they relate to the mortgage loans in loan group no. 1. If you purchase your offered certificates at a premium, and if payments and other collections of principal on the underlying mortgage loans occur at a rate faster than you anticipated at the time of your purchase, then your actual yield to maturity may be lower than you had assumed at the time of your purchase. Conversely, if you purchase your offered certificates at a discount, and if payments and other collections of principal on the underlying mortgage loans occur at a rate slower than you anticipated at the time of your purchase, then your actual yield to maturity may be lower than you had assumed at the time of your purchase. Holders of the class A-1, A-2, A-3 and A-4 certificates will be affected by the rate of payments and other collections of principal on the mortgage loans in loan group no. 1 and, in the absence of significant losses, should be largely unaffected by the rate of payments and other collections of principal on the mortgage loans in loan group no. 2. The yield on the offered certificates with variable or capped pass-through rates could also be adversely affected if the underlying mortgage loans with higher mortgage interest rates pay principal faster than the mortgage loans with lower mortgage interest rates. Generally speaking, a borrower is less likely to prepay if prevailing interest rates are at or above the interest rate borne by its mortgage loan. On the other hand, a borrower is more likely to prepay if prevailing rates fall significantly below the interest rate borne by its mortgage loan. Borrowers are less likely to prepay mortgage loans with lock-out periods, yield maintenance charge provisions or prepayment premium provisions, to the extent enforceable, than otherwise identical mortgage loans without these provisions, with shorter lock-out periods, with lower yield maintenance charges or prepayment premiums. None of the master servicer, the special servicer or the trustee will be required to advance any yield maintenance charges or prepayment premiums. S-50 Delinquencies on the underlying mortgage loans, if the delinquent amounts are not advanced, may result in shortfalls in distributions of interest and/or principal to the holders of the offered certificates for the current month. Furthermore, no interest will accrue on this shortfall during the period of time that the payment is delinquent. Even if losses on the underlying mortgage loans are not allocated to a particular class of offered certificates, the losses may affect the weighted average life and yield to maturity of that class of offered certificates. Losses on the underlying mortgage loans, even if not allocated to a class of offered certificates, may result in a higher percentage ownership interest evidenced by those offered certificates in the remaining underlying mortgage loans than would otherwise have resulted absent the loss. The consequent effect on the weighted average life and yield to maturity of the offered certificates will depend upon the characteristics of the remaining mortgage loans in the trust fund. Provisions requiring prepayment consideration may not be enforceable in some states and under federal bankruptcy law, and may constitute interest for usury purposes. Accordingly, no assurance can be given that the obligation to pay a prepayment premium or yield maintenance charge will be enforceable or, if enforceable, that the foreclosure proceeds will be sufficient to pay the prepayment premium or yield maintenance charge in connection with an involuntary prepayment. In general, prepayment premiums and yield maintenance charges will be among the last items payable out of foreclosure proceeds. Additionally, although the collateral substitution provisions related to defeasance are not intended to be, and do not have the same effect on the series 2003-C5 certificateholders as, a prepayment, there can be no assurance that a court would not interpret these provisions as requiring a yield maintenance charge which may be unenforceable or usurious under applicable law. THE RIGHT OF THE MASTER SERVICER, THE SPECIAL SERVICER AND THE TRUSTEE TO RECEIVE INTEREST ON ADVANCES MAY RESULT IN ADDITIONAL LOSSES TO THE TRUST FUND. The master servicer, the special servicer and the trustee (and the series 2003-C4 master servicer, special servicer and trustee with respect to the Mayfair Mall Loan) will each be entitled to receive interest on unreimbursed advances made by it. This interest will generally accrue from the date on which the related advance is made through the date of reimbursement. The right to receive these distributions of interest is senior to the rights of holders to receive distributions on the offered certificates and, consequently, may result in losses being allocated to the offered certificates that would not have resulted absent the accrual of this interest. IF THE MASTER SERVICER OR THE SPECIAL SERVICER PURCHASES SERIES 2003-C5 CERTIFICATES, A CONFLICT OF INTEREST COULD ARISE BETWEEN THEIR DUTIES AND THEIR INTERESTS IN THE SERIES 2003-C5 CERTIFICATES. The master servicer or the special servicer or an affiliate thereof may purchase any class of series 2003-C5 certificates. It is anticipated that the special servicer may purchase all or a portion of the class A-X, A-SP, J, K, L, M, N, O, P and V certificates. However, there can be no assurance that the special servicer or an affiliate of the special servicer will purchase any certificates. The purchase of series 2003-C5 certificates by the master servicer or the special servicer could cause a conflict between its duties under the pooling and servicing agreement and its interest as a holder of a series 2003-C5 certificate, especially to the extent that certain actions or events have a disproportionate effect on one or more classes of series 2003-C5 certificates. THE INTERESTS OF THE HOLDERS OF CERTIFICATES OF THE SERIES 2003-C5 CONTROLLING CLASS MAY BE IN CONFLICT WITH THE INTERESTS OF THE OFFERED CERTIFICATEHOLDERS. The holders of certificates representing a majority interest in the controlling class of series 2003-C5 certificates will be entitled to appoint a representative having the various rights and powers, described under "The Pooling and Servicing Agreement--Specially Serviced Mortgage Loans" and "--Replacement of the Special Servicer" in this prospectus supplement. Among other things, the Directing Certificateholder may remove the series 2003-C5 special servicer for the mortgage loans (other than for the Mayfair Mall Loan and Stanford Shopping Center Loan), with or without cause, and appoint a successor special servicer chosen by it without the consent of the holders of any series 2003-C5 certificates, the trustee, the master servicer or the special servicer, provided that, among other things, each rating agency confirms in writing that the removal and appointment, in and of itself, would not cause a downgrade, qualification or withdrawal of the then current ratings assigned to any class of series 2003-C5 certificates. With respect to the Mayfair Mall Total Loan, the series 2003-C4 special servicer may be removed, with or without cause, by the holders of the Mayfair Mall Total Loan that represent more than 50% of the outstanding principal balance of the Mayfair Mall Total Loan in which case such holders may appoint a successor special servicer chosen by them without the consent of the holders of any series 2003-C5 certificates, the trustee, the master servicer or the special servicer. With respect to the Stanford Shopping Center Total Loan, the special servicer may be removed, with or without cause, by the holders of the Stanford Shopping Center Total Loan that represent more than 50% of the outstanding principal balance of the Stanford Shopping Center Total Loan in which case such holders may appoint a successor special servicer chosen by them without the consent of the holders of any series 2003-C5 certificates, the trustee, the master servicer or the special servicer. With respect to the Mall at Fairfield Commons Total Loan, the Directing Certificateholder may remove the special servicer with or without cause; provided that, if the Directing Certificateholder does not exercise such option, upon an event of default of the special servicer, the Mall at Fairfield Commons Companion Lender may remove the special servicer and appoint a successor special servicer chosen by them with respect to the Mall at Fairfield Commons Total Loan only, without the consent of the holders of any series 2003-C5 certificates, the trustee, the master servicer or the special servicer. In addition, subject to the various conditions, the S-51 Directing Certificateholder can direct various servicing actions by the special servicer with respect to the mortgage loans; provided that with respect to the Stanford Shopping Center Total Loan, the Stanford Shopping Center Control Group will be the party directing the servicing actions by the special servicer with respect to the Stanford Shopping Center Total Loan. You should expect that the Directing Certificateholder will exercise its rights and powers on behalf of the series 2003-C5 controlling class certificateholders, and it will not be liable to any other class of series 2003-C5 certificateholders for doing so. The series 2003-C5 controlling class will initially be a non-offered class of series 2003-C5 certificates. The series 2003-C5 controlling class certificateholders are therefore likely to have interests that conflict with those of the holders of the offered certificates. BOOK-ENTRY REGISTRATION OF THE OFFERED CERTIFICATES MAY REQUIRE YOU TO EXERCISE YOUR RIGHTS THROUGH THE DEPOSITORY TRUST COMPANY. Each class of offered certificates initially will be represented by one or more certificates registered in the name of Cede & Co., as the nominee for The Depository Trust Company, and will not be registered in the names of the related beneficial owners of those certificates or their nominees. As a result, unless and until definitive certificates are issued, beneficial owners of offered certificates will not be recognized as "certificateholders" for certain purposes. Therefore, until you are recognized as a "certificateholder," you will be able to exercise the rights of holders of certificates only indirectly through The Depository Trust Company and its participating organizations. See "Description of the Offered Certificates--Registration and Denominations" in this prospectus supplement. As a beneficial owner holding an offered certificate through the book-entry system, you will be entitled to receive the reports described under "Description of the Offered Certificates--Reports to Certificateholders; Available Information" in this prospectus supplement and notices only through the facilities of The Depository Trust Company and its respective participants or from the trustee, if you have certified to the trustee that you are a beneficial owner of offered certificates using the form annexed to the pooling and servicing agreement. Upon presentation of evidence satisfactory to the trustee of your beneficial ownership interest in the offered certificates, you will be entitled to receive, upon request in writing, copies of monthly reports to certificateholders from the trustee. YOU MAY BE BOUND BY THE ACTIONS OF OTHER SERIES 2003-C5 CERTIFICATEHOLDERS. In some circumstances, the consent or approval of the holders of a specified percentage of the series 2003-C5 certificates will be required to direct, consent to or approve certain actions, including amending the pooling and servicing agreement. In these cases, this consent or approval will be sufficient to bind all holders of series 2003-C5 certificates. LACK OF A SECONDARY MARKET FOR THE OFFERED CERTIFICATES MAY MAKE IT DIFFICULT FOR YOU TO RESELL YOUR OFFERED CERTIFICATES. There currently is no secondary market for the offered certificates. Although the underwriters have advised us that they currently intend to make a secondary market in the offered certificates, they are under no obligation to do so. Accordingly, there can be no assurance that a secondary market for the offered certificates will develop. Moreover, if a secondary market does develop, there can be no assurance that it will provide you with liquidity of investment or that it will continue for the life of the offered certificates. The offered certificates will not be listed on any securities exchange. Lack of liquidity could adversely affect the market value of the offered certificates. The market value of the offered certificates at any time may be affected by many other factors, including then prevailing interest rates, and no representation is made by any person or entity as to what the market value of any offered certificate will be at any time. POTENTIAL DEFAULTS UNDER CERTAIN MORTGAGE LOANS MAY AFFECT THE TIMING AND/OR PAYMENT ON YOUR OFFERED CERTIFICATES. Any defaults that may occur under the mortgage loans may result in shortfalls in the payments on these mortgage loans. Even if these defaults are non-monetary, the master servicer or special servicer may still accelerate the maturity of the related mortgage loan which could result in an acceleration of payments to the series 2003-C5 certificateholders. THE AFTERMATH OF THE TERRORIST ATTACKS ON SEPTEMBER 11, 2001 AND THE MILITARY OPERATIONS IN IRAQ MAY ADVERSELY AFFECT THE VALUE OF YOUR OFFERED CERTIFICATES AND PAYMENTS ON THE UNDERLYING MORTGAGE LOANS On September 11, 2001, terrorist attacks destroyed the World Trade Center Twin Towers in New York City and caused material damage to the Pentagon Building in the Washington, D.C. area. The collapse of the World Trade Center Twin Towers and resulting fires also destroyed much of the remaining structures that comprised the World Trade Center complex and severely damaged several other surrounding buildings. In March 2003 the government of the United States implemented full-scale military operations in Iraq. In addition, the government of the United States has stated that future acts of terrorism may take place. S-52 It is impossible to predict the extent to which terrorist activities may occur in the United States. Furthermore, it is uncertain what effects any past or future terrorist activities (either domestically or internationally), the military operations in Iraq and/or any consequent actions on the part of the United States Government and others will have on U.S. and world financial markets; local, regional and national economies; real estate markets across the U.S.; and/or particular business segments, including those that are important to the performance of the real properties that secure the underlying mortgage loans. Among other things, reduced investor confidence could result in substantial volatility in securities markets and a decline in real estate-related investments. In addition, reduced consumer confidence, as well as a heightened concern for personal safety, could result in a material decline in personal spending and travel. These disruptions and uncertainties could affect the borrowers' abilities to make payments under the mortgage loans, the ability of each transaction party to perform its respective obligations under the transaction documents to which it is a party, the value of the certificates and the ability of an investor to resell the certificates. As a result of the foregoing, defaults on commercial real estate loans could increase; and, regardless of the performance of the underlying mortgage loans, the liquidity and market value of the offered certificates may be impaired. See "Risk Factors--Limited Liquidity of Your Certificates May Have An Adverse Impact on Your Ability To Sell Your Offered Certificates," "--The Market Value of Your Certificates Will Be Sensitive to Factors Unrelated to the Performance of Your Certificates and the Underlying Mortgage Assets" and "--Risks Associated with Commercial or Multifamily Mortgage Loans" in the accompanying prospectus. CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT From time to time we use capitalized terms in this prospectus supplement. A capitalized term used throughout this prospectus supplement will have the meaning assigned to it in the "Glossary" to this prospectus supplement. FORWARD-LOOKING STATEMENTS This prospectus supplement and the accompanying prospectus includes the words "expects," "intends," "anticipates," "estimates," and similar words and expressions. These words and expressions are intended to identify forward- looking statements. Any forward-looking statements are made subject to risks and uncertainties that could cause actual results to differ materially from those stated. These risks and uncertainties include, among other things, declines in general economic and business conditions, increased competition, changes in demographics, changes in political and social conditions, regulatory initiatives and changes in customer preferences, many of which are beyond our control and the control of any other person or entity related to this offering. The forward-looking statements made in this prospectus supplement are accurate as of the date stated on the cover of this prospectus supplement. We have no obligation to update or revise any forward-looking statement. DESCRIPTION OF THE UNDERLYING MORTGAGE LOANS GENERAL We intend to include the one hundred fifty-three (153) mortgage loans identified on Exhibit A-1 to this prospectus supplement in the trust fund. The mortgage pool consisting of those loans will have an initial mortgage pool balance of $1,261,269,491. However, the actual initial mortgage pool balance may be as much as 5% smaller or larger than that amount if any of those mortgage loans are removed from the mortgage pool or any other mortgage loans are added to the mortgage pool. See "--Changes in Mortgage Pool Characteristics" below. For purposes of calculating distributions on the respective classes of the series 2003-C5 certificates, the mortgage loans will be divided into the following two loan groups: - Loan group no. 1, which will consist of all of the mortgage loans that are secured by property types other than multifamily and manufactured housing, together with five (5) mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 1 will consist of 94 mortgage loans, with an initial loan group no. 1 balance of $920,720,128, representing approximately 73.00% of the initial mortgage pool balance. - Loan group no. 2, which will consist of all but five (5) of the mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 2 will consist of 59 mortgage loans, S-53 with an initial loan group no. 2 balance of $340,549,363, representing approximately 27.00% of the initial mortgage pool balance. Exhibit A-1 to this prospectus supplement identifies which mortgage loans are included in each of loan group no. 1 and loan group no. 2. The initial mortgage pool balance will equal the total cut-off date principal balance of all the underlying mortgage loans, the initial loan group no. 1 balance will equal the total cut-off date principal balance of the mortgage loans in loan group no. 1, and the initial loan group no. 2 balance will equal the total cut-off date principal balance of the mortgage loans in loan group no. 2. The cut-off date principal balance of any mortgage loan included in the trust fund is equal to its unpaid principal balance as of its due date in December 2003, after application of all monthly debt service payments due with respect to the mortgage loan on or before that date, whether or not those payments were received. The cut-off date principal balance of each mortgage loan that we intend to include in the trust fund is shown on Exhibit A-1 to this prospectus supplement. Each of the mortgage loans that we intend to include in the trust fund is an obligation of the related borrower to repay a specified sum with interest. Each of those mortgage loans is evidenced by one or more promissory notes and secured by a mortgage, deed of trust or other similar security instrument that creates a mortgage lien on the ownership and/or leasehold interest of the related borrower or another party in one or more commercial or multifamily real properties. That mortgage lien will, in all cases, be a first priority lien, subject only to Permitted Encumbrances. You should consider each of the mortgage loans to be a non-recourse obligation of the related borrower. You should assume that, in the event of a payment default by the related borrower, recourse will be limited to the corresponding mortgaged real property or properties for satisfaction of that borrower's obligations. Even in those cases where recourse to a borrower or guarantor is permitted under the related loan documents, we have not undertaken an evaluation of the financial condition of any of these persons. None of the mortgage loans will be insured or guaranteed by any governmental entity or by any other person. We provide in this prospectus supplement a variety of information regarding the mortgage loans that we intend to include in the trust fund. When reviewing this information, please note that-- - All numerical information provided with respect to the mortgage loans is provided on an approximate basis. - All weighted average information provided with respect to the mortgage loans or any sub-group of mortgage loans reflects a weighting by their respective cut-off date principal balances. - In calculating the cut-off date principal balances of the mortgage loans, we have assumed that-- 1. all scheduled payments of principal and/or interest due on the mortgage loans on or before their respective due dates in December 2003 are timely made, and 2. there are no prepayments or other unscheduled collections of principal with respect to any of the mortgage loans during the period from its due date in November 2003 up to and including its due date in December 2003. - When information with respect to mortgaged real properties is expressed as a percentage of the initial mortgage pool balance, the initial mortgage pool balance, the initial loan group no. 1 balance, or the initial loan group no. 2 balance, as the case may be, the percentages are based upon the cut-off date principal balances of the related mortgage loans. - If a mortgage loan is cross-collateralized and cross-defaulted with one or more other mortgage loans in the trust fund, we have presented the information regarding those mortgage loans as if each of them was secured only by a mortgage lien on the corresponding mortgaged real property identified on Exhibit A-1 to this prospectus supplement. One exception is that each and every mortgage loan in any particular group of cross-collateralized and cross-defaulted mortgage loans is treated as having the same loan-to-value ratio and the same debt service coverage ratio. Other than as described under "Description of the Underlying Mortgage Loans--The Mayfair Mall Loan," "--The Mall at Fairfield Commons," "--The A/B Loans," "--The Stanford Shopping Center Loan" and "--The Jefferson at Montfort Loan," none of the mortgage loans that we intend to include in the trust fund is cross-collateralized with any loan outside of the trust fund. S-54 - In some cases, multiple mortgaged real properties secure a single mortgage loan. For purposes of providing property-specific information, we have allocated that mortgage loan among those properties based upon-- 1. relative appraised values, 2. relative underwritten net cashflow, or 3. prior allocations reflected in the related loan documents. - If multiple parcels of real property secure a single mortgage loan and the operation or management of those parcels so warrant, we treat those parcels as a single real property. - Whenever we refer to a particular mortgaged real property by name, we mean the property identified by that name on Exhibit A-1 to this prospectus supplement. - Statistical information regarding the mortgage loans that we intend to include in the trust fund may change prior to the date of initial issuance of the offered certificates due to changes in the composition of the mortgage pool prior to that date. CROSS-COLLATERALIZED MORTGAGE LOANS, MULTI-PROPERTY MORTGAGE LOANS AND MORTGAGE LOANS WITH AFFILIATED BORROWERS The mortgage pool will include five (5) groups of mortgage loans that are, in each case, individually or through cross-collateralization with other mortgage loans, secured by two or more real properties. However, the amount of the mortgage lien encumbering any particular one of those properties may be less than the full amount of the related mortgage loan or group of cross-collateralized mortgage loans, generally to minimize recording tax. The mortgage amount may equal the appraised value or allocated loan amount for the particular real property. This would limit the extent to which proceeds from that property would be available to offset declines in value of the other mortgaged real properties securing the same mortgage loan or group of cross-collateralized mortgage loans in the trust fund. The table below identifies each group of cross-collateralized mortgage loans that we intend to include in the trust fund.
NUMBER OF STATES WHERE % OF INITIAL MORTGAGE PROPERTY/PORTFOLIO NAMES PROPERTIES ARE LOCATED POOL BALANCE ----------------------------------------------------- ------------------------ ----------------------- 1. Coast Family Medical Center and Anaheim Professional Center.............................. 1 1.20% 2. Magnolia Village, Blue Jay Mobile Home Park, Candlelight Manor and Elmwood Mobile Home Park... 1 0.90%
With respect to the group of crossed-collateralized mortgage loans identified on Exhibit A-1 to this prospectus supplement as Coast Family Medical Center and Anaheim Professional Center, the related borrower under the Coast Family Medical Center loan is entitled to obtain a release of the related mortgaged real property upon the payment in full of such loan, notwithstanding that the Anaheim Professional Center loan has not been paid in full. The table below identifies each group of mortgaged real properties that secure an individual multi-property mortgage loan that we intend to include in the trust fund.
NUMBER OF STATES WHERE % OF INITIAL MORTGAGE PROPERTY/PORTFOLIO NAMES PROPERTIES ARE LOCATED POOL BALANCE ----------------------------------------------------- ------------------------ ----------------------- 1. Mayfair Mall and Office Complex.................. 1 6.29% 2. MeriStar Hotel Portfolio......................... 2 4.03% 3. Evergreen - Beverly Plaza & Park Plaza........... 1 0.42%
The table below shows each group of mortgaged real properties that-- - have the same or affiliated borrowers, and - secure two or more non-cross-collateralized mortgage loans or groups of mortgage loans that we intend to include in the trust fund, which mortgage loans have a total cut-off date principal balance equal to at least 1.0% of the initial mortgage pool balance. S-55 RELATED BORROWER LOANS
% OF INITIAL CUT-OFF DATE MORTGAGE GROUP PROPERTY/PORTFOLIO NAME PRINCIPAL BALANCE POOL BALANCE ---------------- -------------------------------------- --------------------- ---------------- A Serrano Apartments.................... $ 26,450,000 2.10% Villages of Deerfield Apartments...... 16,641,062 1.32 --------------------- ---------------- TOTAL $ 43,091,062 3.42% ===================== ================ B Anaheim Professional Center........... $ 9,365,667 0.74% Coast Family Medical Center........... 5,719,224 0.45 --------------------- ---------------- TOTAL $ 15,084,891 1.19% ===================== ================
PARTIAL RELEASES OF PROPERTY In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall, representing 6.29% of the initial mortgage pool balance, the borrower has the right to obtain a release of one or more vacant, non-income producing and unimproved (or improved only by surface parking areas) parcels or outlots proposed to be transferred to a third party in connection with the expansion or other development of the mortgaged real property, without payment of any consideration or repayment of any principal, subject to satisfaction of stipulated conditions including, delivery to the lender of evidence that would be satisfactory to a prudent lender acting reasonably that the parcel to be released has been legally subdivided from the remaining mortgaged real property, the parcel to be released and the remaining mortgaged real property are each a separate tax lot, and the parcel to be released is not necessary for the remaining mortgaged real property to comply with any zoning, building, land use or parking or other legal requirements applicable to the remaining mortgaged real property. In addition, the borrower must deliver (a) an opinion of counsel that would be acceptable to a prudent lender acting reasonably that the trust fund will not fail to maintain its status as a REMIC solely as a result of the release and (b) rating agency confirmation that the release will not result in a downgrade, withdrawal or qualification of the then current rating assigned to any class of the series 2003-C4 certificates or class of the series 2003-C5 certificates. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as East Thunderbird Square Shopping Center, representing 2.26% of the initial mortgage pool balance, the related borrower may obtain a release of an undeveloped portion of the related mortgaged real property without a partial defeasance or payment of a release price upon satisfaction of various specified criteria, including creation of separate tax parcels, compliance with zoning laws, creation of acceptable cross easements and providing a title policy endorsement. In the case of the mortgage loans identified on Exhibit A-1 to this prospectus supplement as West Highlands Shopping Center and Kroger Retail Center, representing 0.45% and 0.21%, respectively, of the initial mortgage pool balance, the related borrower may obtain a release of an undeveloped portion of the related mortgaged real property without a partial defeasance or payment of a release price upon satisfaction of various specified criteria, including creation of separate tax parcels, compliance with zoning laws, creation of acceptable cross easements and with respect to Kroger Retail Center, providing evidence that the debt service coverage ratio of the remaining property meets specified requirements. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Northwood Plaza Shopping Center, representing 0.20% of the initial mortgage pool balance, the related borrower may obtain a release of an undeveloped portion of the related mortgaged real property upon the payment of $250,000 plus required yield maintenance, and upon satisfaction of various specified criteria, including creation of separate tax parcels, compliance with zoning laws and creation of acceptable cross easements. CERTAIN TERMS AND CONDITIONS OF THE UNDERLYING MORTGAGE LOANS DUE DATES. Subject, in some cases, to a next business day convention, the dates on which monthly installments of principal and interest will be due on the underlying mortgage loans are as follows:
% OF INITIAL NUMBER OF MORTGAGE DUE DATE MORTGAGE LOANS POOL BALANCE ------------ ------------------ ---------------- 1st 36 33.48% 11th 117 66.52%
S-56 MORTGAGE RATES; CALCULATIONS OF INTEREST. In general, each of the mortgage loans that we intend to include in the trust fund bears interest at a mortgage interest rate that, in the absence of default, is fixed until maturity. However, as described under "--ARD Loans" below, each of the ARD Loans will accrue interest after its anticipated repayment date at a rate that is in excess of its mortgage interest rate prior to that date. The current mortgage interest rate for each of the mortgage loans that we intend to include in the trust fund is shown on Exhibit A-1 to this prospectus supplement. As of the cut-off date, those mortgage interest rates ranged from 3.108% per annum to 8.120% per annum, and the weighted average of those mortgage interest rates was 5.453% per annum. Except for ARD Loans that remain outstanding past their respective anticipated repayment dates, none of the mortgage loans that we intend to include in the trust fund provides for negative amortization or for the deferral of interest. One hundred forty-nine (149) of the mortgage loans that we intend to include in the trust fund, representing 93.98% of the initial net mortgage pool balance, accrue interest on an Actual/360 Basis. Four (4) of the mortgage loans that we intend to include in the trust fund, representing 6.02% of the initial net mortgage pool balance, accrue interest on a 30/360 Basis. BALLOON LOANS. One hundred forty-three (143) of the mortgage loans that we intend to include in the trust fund, representing 90.02% of the initial mortgage pool balance, of which 85 mortgage loans are in loan group no. 1, representing 86.50% of the initial loan group no. 1 balance, and 58 mortgage loans are in loan group no. 2, representing 99.52% of the initial loan group no. 2 balance, are balloon loans that provide for: - an amortization schedule that is significantly longer than its remaining term to stated maturity or for no amortization prior to stated maturity; - in certain cases, payments of interest only for the entire term of the related mortgage loan; and - in either case above, a substantial payment of principal on its maturity date. ARD LOANS. Seven (7) of the mortgage loans that we intend to include in the trust fund, representing 9.15% of the initial mortgage pool balance, of which all seven (7) of those mortgage loans are in loan group no. 1, representing 12.53% of the initial loan group no. 1 balance, are balloon loans that provide for: - A maturity date that is generally 25 to 30 years following origination. - The designation of an anticipated repayment date that is generally 10 to 12 years following origination. The anticipated repayment date for each of the ARD Loans is listed on Exhibit A-1 to this prospectus supplement. - The ability of the related borrower to prepay the mortgage loan, without restriction, including without any obligation to pay a yield maintenance charge, at any time on or after a date that is generally one (1) to six (6) months prior to the related anticipated repayment date. - Until its anticipated repayment date, the calculation of interest at its initial mortgage interest rate. - From and after its anticipated repayment date, the accrual of interest at a revised annual rate that is no less than two percentage points over its initial mortgage interest rate. - The deferral of any additional interest accrued with respect to the mortgage loan from and after the related anticipated repayment date at the difference between its revised mortgage interest rate and its initial mortgage interest rate. This Excess Interest may, in some cases, compound at the new revised mortgage interest rate. Any Excess Interest accrued with respect to the mortgage loan following its anticipated repayment date will not be payable until the entire principal balance of the mortgage loan has been paid in full. - From and after its anticipated repayment date, the accelerated amortization of the mortgage loan out of any and all monthly cash flow from the corresponding mortgaged real property which remains after payment of the applicable monthly debt service payments and permitted operating expenses and capital expenditures and the funding of any required reserves. These accelerated amortization payments and the Excess Interest are considered separate from the monthly debt service payments due with respect to the mortgage loan. S-57 In the case of each of the ARD Loans that we intend to include in the trust fund, the related borrower has agreed to enter into a cash management agreement no later than the related anticipated repayment date if it has not already done so. The related borrower or the manager of the corresponding mortgaged real property will be required under the terms of that cash management agreement to deposit or cause the deposit of all revenue from that property received after the related anticipated repayment date into a designated account controlled by the lender under the ARD Loan. FULLY AMORTIZING LOANS. Three (3) of the mortgage loans that we intend to include in the trust fund, representing 0.84% of the initial mortgage pool balance, of which 2 mortgage loans are in loan group no. 1, representing 0.97% of the initial loan group no. 1 balance, and 1 mortgage loan is in loan group no. 2, representing 0.48% of the initial loan group no. 2 balance, are balloon loans that provide for: - a payment schedule that provides for the payment of the subject mortgage loan in full or substantially in full by its maturity date, but - none of the incentives to repayment on a date prior to maturity associated with an ARD Loan. ADDITIONAL AMORTIZATION CONSIDERATIONS. Four (4) of the mortgage loans, representing 8.57% of the initial mortgage pool balance, of which 3 mortgage loans are in loan group no. 1, representing 8.87% of the initial loan group no. 1 balance, and 1 mortgage loan is in loan group no. 2, representing 7.77% of the initial loan group no. 2 balance, also provides for an initial interest only period of up to 12 months after the loan's origination date. Three (3) mortgage loans representing 3.32% of the initial mortgage pool balance, of which each of those three (3) mortgage loans are in loan group no. 2, representing 12.28% of the initial loan group no. 2 balance, provide for initial interest only periods of between 13 to 24 months after the loan's origination date. Four (4) mortgage loans representing 8.89% of the initial mortgage pool balance, of which each of those four (4) mortgage loans are in loan group no. 1, representing 12.17% of the initial loan group no. 1 balance, provide for initial interest only periods of between 60 and 84 months. Some of the pooled mortgage loans will provide, in each case, for a recast of the amortization schedule and an adjustment of the monthly debt service payments on the mortgage loan upon application of specified amounts of condemnation proceeds or insurance proceeds to pay the related unpaid principal balance. PREPAYMENT PROVISIONS. As of origination: - One hundred thirty-eight (138) of the mortgage loans that we intend to include in the trust fund, representing 89.31% of the initial mortgage pool balance, of which 84 mortgage loans are in loan group no. 1, representing 90.66% of the initial loan group no. 1 balance, and 54 mortgage loans are in loan group no. 2, representing 85.66% of the initial loan group no. 2 balance, provided for-- 1. a prepayment lock-out period and/or a defeasance period, during which voluntary principal prepayments are prohibited although, for a portion of that period, beginning no sooner than the second anniversary of the date of initial issuance of the offered certificates, the mortgage loan may be defeased, followed by 2. an open prepayment period during which voluntary principal prepayments may be made without any restriction or prepayment consideration; - Fourteen (14) of the mortgage loans that we intend to include in the trust fund, representing 8.02% of the initial mortgage pool balance, of which 9 mortgage loans are in loan group no. 1, representing 5.68% of the initial loan group no. 1 balance, and 5 mortgage loans are in loan group no. 2, representing 14.34% of the initial loan group no. 2 balance, provided for-- 1. a prepayment lock-out period during which voluntary principal prepayments are prohibited, followed by 2. a prepayment consideration period during which voluntary principal prepayments must be accompanied by a Yield Maintenance Charge, followed by 3. an open prepayment period during which voluntary principal prepayments may be made without any restriction or prepayment consideration; and S-58 - One (1) of the mortgage loans that we intend to include in the trust fund, representing 2.67% of the initial mortgage pool balance, which mortgage loan is in loan group no. 1, representing 3.66% of the initial loan group no. 1 balance, provided for-- 1. a prepayment lock-out period during which voluntary principal prepayments are prohibited, followed by 2. a prepayment consideration period during which voluntary principal prepayments must be accompanied by a Static Prepayment Premium, followed by 3. an open prepayment period during which voluntary principal prepayments may be made without any restriction or prepayment consideration. The open prepayment period, if any, for any mortgage loan may begin seven (7) or fewer payments prior to stated maturity or, in the case of an ARD Loan, prior to the related anticipated repayment date. Notwithstanding otherwise applicable prepayment lock-out periods, partial prepayments of the Additional Collateral Loans will be required under the circumstances described under "--Mortgage Loans Which May Require Principal Paydowns" below. The prepayment terms of the mortgage loans that we intend to include in the trust fund are more particularly described in Exhibit A-2 to this prospectus supplement. For the purposes of this prospectus supplement and the statistical information presented in this prospectus supplement-- - the entire principal balance of each Additional Collateral Loan is deemed to be subject to a prepayment lock-out period for the related remaining prepayment lock-out period set forth on Exhibit A-1 hereto, notwithstanding that required prepayments could occur under that Additional Collateral Loan during that prepayment lock-out period, and - it is assumed that each ARD Loan prepays on the related anticipated repayment date, notwithstanding the fact that prepayments could occur under such ARD Loans prior to that anticipated repayment date and that, in either case, such prepayments would not be accompanied by payment of a Yield Maintenance Charge. PREPAYMENT LOCK-OUT PERIODS. All of the mortgage loans that we intend to include in the trust fund, representing 100% of the initial mortgage pool balance, provide for prepayment lock-out periods as of their respective due dates in December 2003. With respect to those mortgage loans, and taking into account periods during which a defeasance can occur so long as the mortgage loan cannot be voluntarily prepaid: - the maximum remaining prepayment lock-out/defeasance period as of the related due date in December 2003 is two hundred twenty-eight (228) months with respect to the entire mortgage pool, one hundred sixty-nine (169) months with respect to loan group no. 1 and two hundred twenty-eight (228) months with respect to loan group no. 2; - the minimum remaining prepayment lock-out/defeasance period as of the related due date in December 2003 is thirty-two (32) months with respect to the entire mortgage pool, thirty-five (35) months with respect to loan group no. 1 and thirty-two (32) months with respect to loan group no. 2; and - the weighted average remaining prepayment lock-out/defeasance period as of the related due date in December 2003 is ninety-three (93) months with respect to the entire mortgage pool, ninety-five (95) months with respect to loan group no. 1 and eighty-seven (87) months with respect to loan group no. 2. Notwithstanding otherwise applicable prepayment lock-out periods, partial prepayments of the Additional Collateral Loans will be required under the circumstances described under "--Mortgage Loans Which May Require Principal Paydowns" below. PREPAYMENT CONSIDERATION PERIODS. Fifteen (15) of the mortgage loans that we intend to include in the trust fund, representing 10.69% of the initial mortgage pool balance, of which 10 mortgage loans are in loan group no. 1, representing 9.34% of the initial loan group no. 1 balance, and 5 mortgage loans are in loan group no. 2, representing 14.34% of the initial loan group no. 2 balance, provide for a prepayment consideration period during some portion of their respective loan terms S-59 and, in some cases, following an initial prepayment lock-out and/or defeasance period. The relevant prepayment consideration will generally consist of the following: - In the case of all of the mortgage loans with Yield Maintenance Periods, other than the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Ravine Development, representing 2.10% of the initial mortgage pool balance, the related Yield Maintenance Charge will generally equal the greater of (1) a specified percentage of the principal balance of the mortgage loan being prepaid, and (2) 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 payments) or, in the case of an ARD Loan, the anticipated repayment date (including the principal balance scheduled to be due on the related anticipated repayment date), determined by discounting such payments at the Discount Rate, less the amount of principal being prepaid. The term "Discount Rate" shall mean the rate that, when compounded monthly, is equivalent to the Treasury Rate when compounded semi-annually. The term "Treasury Rate" shall mean the yield calculated by the linear interpolation of the yields, as reported in Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the prepayment date, of U.S. Treasury constant maturities with maturity dates (one longer and one shorter) most nearly approximating the maturity or anticipated repayment date. If Release H.15 is no longer published, the lender will select a comparable publication to determine the Treasury Rate. - In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Ravine Development, representing 2.10% of the initial mortgage pool balance, the related Yield Maintenance Charge will generally equal the greater of (A) one percent (1%) of the outstanding principal balance of the mortgage loan being prepaid or (B) 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 payments), determined by discounting such payments at the stated yield to maturity of a United States Treasury bond and/or note having a similar duration as reported in the Wall Street Journal (eastern edition) five (5) business days prior to the prepayment date, less the outstanding principal balance of the mortgage loan (including all accrued and unpaid interest) calculated as of the prepayment date. - In the case of one (1) of the mortgage loans that we intend to include in the trust fund, representing 2.67% of the initial mortgage pool balance, which mortgage loan is in loan group no. 1, representing 3.66% of the initial loan group no. 1 balance, a Static Prepayment Premium in an amount equal to a specified percentage of the amount prepaid. 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 real property is considerably higher than the current outstanding principal balance of that mortgage loan, due to an increase in the value of the mortgaged real property or otherwise, the prepayment consideration may, even in a relatively low interest rate environment, offset entirely or render insignificant any economic benefit to be received by the borrower upon a refinancing or sale of the mortgaged real property. The prepayment consideration provision of a mortgage loan creates an economic disincentive for the borrower to prepay that mortgage loan voluntarily and, accordingly, the related borrower may elect not to prepay that mortgage loan. However, there can be no assurance that the imposition of a Static Prepayment Premium or Yield Maintenance Charge will provide a sufficient disincentive to prevent a voluntary principal prepayment. Furthermore, 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. Even if a borrower does elect to pay a Static Prepayment Premium or Yield Maintenance Charge, the pooling and servicing agreement will provide that amounts received from borrowers will be applied to payments of principal and interest then due and payable on the underlying mortgage loans being prepaid prior to being distributed as prepayment consideration. The mortgage loans generally provide that in the event of an involuntary prepayment made after an event of default has occurred, a Static Prepayment Premium or Yield Maintenance Charge will be due. The enforceability of provisions providing for payments comparable to the prepayment consideration upon an involuntary prepayment is unclear under the laws of a number of states. No assurance can be given that, at the time a Static Prepayment Premium or Yield Maintenance Charge is required to be made on any of the underlying mortgage loans in connection with an involuntary prepayment, the obligation to pay that Static Prepayment Premium or Yield Maintenance Charge will be enforceable under applicable state law. See "Legal Aspects of Mortgage Loans" in the accompanying prospectus. S-60 Neither we nor any of the mortgage loan sellers makes any representation as to the enforceability of the provision of any mortgage loan requiring the payment of a Static Prepayment Premium or Yield Maintenance Charge, or of the collectability of any Static Prepayment Premium or Yield Maintenance Charge. CASUALTY AND CONDEMNATION. In the event of a condemnation or casualty at the mortgaged real property securing any of the mortgage loans, the borrower will generally be required to restore that mortgaged real property. However, the lender may under certain circumstances apply the condemnation award or insurance proceeds to the repayment of debt, which, in the case of substantially all of the underlying mortgage loans, will not require payment of any prepayment consideration. Several of the mortgage loans that we intend to include in the trust fund provide that if casualty or condemnation proceeds are applied to the loan (either because the lender elects and is entitled to such application or, in certain cases of substantial casualty or condemnation, the borrower elects to make a full prepayment of the loan), the borrower will be permitted, subject to conditions specified in the loan documents, to supplement those proceeds with an amount sufficient to prepay all or a portion of the remaining principal balance of the mortgage loan without any prepayment consideration. Some mortgage loans that we intend to include in the trust fund provide that, in the event of a partial prepayment resulting from the occurrence of a casualty or condemnation, the constant monthly debt service payment may be reduced based on the remaining amortization period, the mortgage interest rate and the outstanding principal balance. MORTGAGE LOANS WHICH MAY REQUIRE PRINCIPAL PAYDOWNS. Six (6) of the mortgage loans that we intend to include in the trust fund, representing 8.27% of the initial mortgage pool balance, of which 5 mortgage loans are in loan group no. 1, representing 11.07% of the initial loan group no. 1 balance, and 1 mortgage loan is in loan group no. 2, representing 0.70% of the initial loan group no. 2 balance, are secured by cash reserves and/or letters of credit that in each such case: - will be released to the related borrower upon satisfaction by the related borrower of certain operating performance related conditions, which may include, in some cases, meeting debt service coverage ratio levels and/or satisfying leasing conditions; and - will or, at the discretion of the lender, may be applied to prepay the subject mortgage loan if such performance related conditions are not satisfied within specified time periods. The total amount of that additional collateral is $5,515,000. DEFEASANCE LOANS. One hundred thirty-eight (138) of the mortgage loans that we intend to include in the trust fund, representing 89.31% of the initial mortgage pool balance, of which 84 mortgage loans are in loan group no. 1, representing 90.66% of the initial loan group no. 1 balance, and 54 mortgage loans are in loan group no. 2, representing 85.66% of the initial loan group no. 2 balance, permit the borrower to deliver direct, noncallable U.S. government obligations as substitute collateral. Each of these mortgage loans permits the related borrower, during specified periods and subject to specified conditions, to pledge to the holder of the mortgage loan the requisite amount of direct, non-callable U.S. government obligations and obtain a full or partial release of the mortgaged real property. In general, the U.S. government securities that are to be delivered in connection with the defeasance of any mortgage loan must provide for a series of payments that-- - will be made prior, but as closely as possible, to all successive due dates through and including the maturity date, and - will, in the case of each due date, be in a total amount equal to or greater than the monthly debt service payment, including any applicable balloon payment, scheduled to be due on that date. For purposes of determining the defeasance collateral for an ARD Loan, however, that mortgage loan will be treated as if a balloon payment is due on its anticipated repayment date. If fewer than all of the real properties securing any particular multi-property mortgage loan or group of cross-collateralized mortgage loans are to be released in connection with any defeasance, the requisite defeasance collateral will be calculated based on the allocated loan amount for the properties to be released and the portion of the monthly debt service payments attributable to the defeased loan amount. S-61 In connection with any delivery of defeasance collateral, the related borrower will be required to deliver a security agreement granting the trust fund a first priority security interest in the collateral, together with an opinion of counsel confirming the first priority status of the security interest. The related borrower will be required to pay all costs and expenses with respect to a defeasance. None of the mortgage loans that we intend to include in the trust fund may be defeased prior to the second anniversary of the date of initial issuance of the offered certificates. Neither we nor any of the mortgage loan sellers makes any representation as to the enforceability of the defeasance provisions of any mortgage loan. LOCKBOXES. Thirty (30) of the mortgage loans that we intend to include in the trust fund, representing approximately 53.54% of the initial mortgage pool balance, of which 24 mortgage loans are in loan group no. 1, representing 61.20% of the initial loan group no. 1 balance, and 6 mortgage loans are in loan group no. 2, representing 32.81% of the initial loan group no. 2 balance, generally provide that all rents, credit card receipts, accounts receivables payments and other income derived from the related mortgaged real properties will be paid into one of the following types of lockboxes, each of which is described below. - HARD LOCKBOX. Income (or some portion thereof sufficient to fund debt service payments) is paid directly to a lockbox account controlled by the applicable master servicer on behalf of the trust fund, except that with respect to multifamily properties, income (or some portion thereof sufficient to fund debt service payments) is collected and deposited in the lockbox account by the manager of the mortgaged real property and, with respect to hospitality properties, cash or "over-the-counter" receipts are deposited into the lockbox account by the manager, while credit card receivables will be deposited directly into a lockbox account; - SPRINGING LOCKBOX. Income is collected and retained by or is otherwise accessible by the borrower until the occurrence of a triggering event, following which a hard lockbox or modified lockbox is put in place. Examples of triggering events include: 1. a failure to pay the related mortgage loan in full on or before any related anticipated repayment date; or 2. a decline, by more than a specified amount, in the net operating income of the related mortgaged real property; or 3. a failure to meet a specified debt service coverage ratio; or 4. an event of default under the mortgage. For purposes of this prospectus supplement, a springing lockbox can be either an account that is currently under the control of both the lender and the borrower, but which comes under the sole control of the lender upon the occurrence of the trigger event, or an account that is required to be established by the borrower (but to be under the sole control of the lender) upon the occurrence of the trigger event. - MODIFIED LOCKBOX. Income (or some portion thereof sufficient to fund debt service payments) is collected by the property manager (or, in some cases, the borrower) of the mortgaged real property (other than multifamily and hospitality properties) and is deposited into a lender-controlled lockbox account on a regular basis. The thirty (30) mortgage loans referred to above provide for lockbox accounts as follows:
% OF INITIAL NUMBER OF MORTGAGE TYPE OF LOCKBOX MORTGAGE LOANS POOL BALANCE ------------------------ ------------------ ---------------- Springing.............. 23 35.80% Hard................... 6 14.18% Modified............... 1 3.56%
S-62 For any hard lockbox, income deposited directly into the related lockbox account may not include amounts paid in cash which are paid directly to the related property manager or borrower, notwithstanding requirements to the contrary. Mortgage loans whose terms call for the establishment of a lockbox account require that amounts paid to the property manager or borrower of the related mortgaged real property or "over-the-counter" will be deposited into a lockbox account on a regular basis. Lockbox accounts will not be assets of the trust fund. ESCROW AND RESERVE ACCOUNTS. Many of the mortgage loans that we intend to include in the trust fund provide for the establishment of escrow and/or reserve accounts for the purpose of holding amounts required to be on deposit as reserves for-- - taxes and insurance, - capital improvements, - furniture, fixtures and equipment, and/or - various other purposes. As of the date of initial issuance of the offered certificates, these accounts will be under the sole control of the master servicer or a primary servicer under the direction of the master servicer. In the case of most of the mortgage loans as to which there is this type of account, the account will be funded out of monthly escrow and/or reserve payments by the related borrower or from funds transferred from another account. TAX AND INSURANCE ESCROWS. In the case of one hundred forty-six (146) of the mortgage loans that we intend to include in the trust fund, representing 82.17% of the initial mortgage pool balance, of which 87 mortgage loans are in loan group no. 1, representing 75.58% of the initial loan group no. 1 balance, and 59 mortgage loans are in loan group no. 2, representing 100% of the initial loan group no. 2 balance, escrows were established for taxes and, in the case of one hundred thirty-nine (139) of the mortgage loans that we intend to include in the trust fund, representing 66.76% of the initial mortgage pool balance, of which 80 mortgage loans are in loan group no. 1, representing 54.47% of the initial loan group no. 1 balance, and 59 mortgage loans are in loan group no. 2, representing 100% of the initial loan group no. 2 balance, escrows were established for insurance, in each case either as separate accounts or, if applicable, as sub-accounts of another account. In those cases, the related borrower is generally required to deposit on a monthly basis an amount equal to-- - one-twelfth of the annual real estate taxes and assessments, and/or - one-twelfth of the annual premiums payable on insurance policies that the borrower is required to maintain. If an escrow was established, the funds will be applied by the master servicer to pay for items such as taxes, assessments and insurance premiums at the mortgaged real property. Under some of the other mortgage loans, the insurance carried by the related borrower is in the form of a blanket policy. In these cases, the amount of the escrow is an estimate of the proportional share of the premium allocable to the mortgaged real property, or the related borrower pays the premium directly. In still other cases, no escrow was required because the originator did not deem it necessary for various reasons, including because a tenant at the mortgaged real property is responsible for paying all or a portion of the real estate taxes and assessments and/or insurance premiums directly. RECURRING REPLACEMENT AND TI&LC RESERVES. The table titled "Engineering Reserves, Recurring Replacement Reserves and TI&LC Reserves" on Exhibit A-1 to this prospectus supplement shows for each applicable mortgage loan the reserve deposits that the related borrower has been or is required to make into a separate account or, if applicable, a sub-account of another account for-- - capital replacements, repairs and furniture, fixtures and equipment, or - leasing commissions and tenant improvements. In the case of most of the mortgaged real properties that will secure a mortgage loan that we intend to include in the trust fund, those reserve deposits are initial amounts and may vary over time. In these cases, the related mortgage instrument and/or other related loan documents may provide for applicable reserve deposits to cease upon achieving predetermined maximum amounts in the related reserve account. In addition, in some cases, reserves for leasing commissions and tenant S-63 improvements were determined for specific tenant spaces, in which cases the execution of a lease covering the space could result in the termination and/or release of the corresponding reserve. Under some of the mortgage loans that we intend to include in the trust fund, the related borrowers are permitted to deliver letters of credit from third parties in lieu of establishing and funding the reserve accounts. ENGINEERING RESERVES. The table titled "Engineering Reserves, Recurring Replacement Reserves and TI&LC Reserves" on Exhibit A-1 to this prospectus supplement shows the engineering reserves established at the origination of the corresponding mortgage loans for deferred maintenance items that are required to be corrected within 12 months from origination. In most cases, the engineering reserve is 100% to 125% of the estimated cost to make the required repairs. In some cases, however, the engineering reserve for a mortgaged real property is less than the cost estimate in the related inspection report because-- - the related originator may not have considered various items identified in the related inspection report significant enough to require a reserve, and/or - various items identified in the related inspection report may have been corrected. In the case of several mortgaged real properties securing mortgage loans that we intend to include in the trust fund, the engineering reserve was a significant amount and substantially in excess of the cost estimate set forth in the related inspection report because the related originator required the borrower to establish reserves for the completion of major work that had been commenced. In the case of some mortgaged real properties acquired with the proceeds of the related mortgage loan, the related borrower escrowed an amount substantially in excess of the cost estimate set forth in the related inspection report because it contemplated completing repairs in addition to those shown in the related inspection report. No engineering reserve is required to be replenished. We cannot provide any assurance that the work for which reserves were required will be completed in a timely manner or that the reserved amounts will be sufficient to cover the entire cost of the required work. DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS. Most of the mortgage loans that we intend to include in the trust fund contain both a due-on-sale clause and a due-on-encumbrance clause. In general, except for the permitted transfers discussed in the next paragraph and subject to the discussion under "--Additional Loan and Property Information--Additional Secured Financing" below, these clauses either-- - permit the holder of the related mortgage instrument to accelerate the maturity of the mortgage loan if the borrower sells or otherwise transfers or encumbers the corresponding mortgaged real property, or - prohibit the borrower from doing so without the consent of the holder of the mortgage. Some of the mortgage loans that we intend to include in the trust fund permit one or more of the following types of transfers: - transfers of the corresponding mortgaged real property if specified conditions are satisfied, which conditions normally include-- 1. confirmation in writing by each applicable rating agency that the transfer will not result in a qualification, downgrade or withdrawal of any of its then current ratings of the series 2003-C5 certificates, or 2. the reasonable acceptability of the transferee to the lender; - a transfer of the corresponding mortgaged real property to a person that is affiliated with or otherwise related to the related borrower; - involuntary transfers caused by the death of any owner, general partner or manager of the related borrower; - transfers of the corresponding mortgaged real property or ownership interests in the related borrower to specified persons, entities or types of persons or entities; - issuance by the borrower of new partnership or membership interests, provided this does not result in a change of control of the related borrower; - a transfer of ownership interests for estate planning purposes; S-64 - changes in ownership between existing partners and members of the related borrower; - a transfer of non-controlling ownership interests in the related borrower; or - other transfers similar in nature to the foregoing. HAZARD, LIABILITY AND OTHER INSURANCE. The loan documents for each of the mortgage loans that we intend to include in the trust fund generally require the related borrower to maintain with respect to the corresponding mortgaged real property the following insurance coverage: - hazard insurance in an amount that is, subject to a customary deductible, at least equal to the lesser of-- 1. the outstanding principal balance of the mortgage loan, and 2. the full insurable replacement cost of the improvements located on the insured property; - if any portion of the subject property was in an area identified in the federal register by the Flood Emergency Management Agency as having special flood hazards, flood insurance meeting the requirements of the Federal Insurance Administration guidelines, in an amount that is equal to the least of-- 1. the outstanding principal balance of the related mortgage loan, 2. the replacement cost or the full insurable value of the insured property, and 3. the maximum amount of insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994; - comprehensive general liability insurance against claims for personal and bodily injury, death or property damage occurring on, in or about the insured property, in an amount at least equal to $1,000,000 per occurrence; and - business interruption or rent loss insurance either in an amount not less than 100% of the projected rental income or revenue from the insured property for at least 12 months or, alternatively, in a specified dollar amount. In general, the mortgaged real properties for the mortgage loans that we intend to include in the trust fund are not insured against earthquake risks. In the case of those properties located in California other than those that are manufactured housing communities, a third-party consultant conducted seismic studies to assess the probable maximum loss for the property. In general, when the resulting reports concluded that a mortgaged real property was likely to experience a probable maximum loss equal to or greater than 20% of the estimated replacement cost of the improvements, the related originator required the borrower to-- - obtain earthquake insurance, or - establish reserves to cover the estimated costs of completing seismic retrofitting recommended by the consultant. With respect to each of the mortgaged real properties securing a mortgage loan, the master servicer will use reasonable efforts, consistent with the Servicing Standard, to cause the related borrower to maintain all insurance coverage as is required under the related mortgage loan documents. If the related borrower fails to do so, the master servicer must maintain that insurance coverage, to the extent-- - the trustee has an insurable interest, - the insurance coverage is available at commercially reasonable rates as determined by the Directing Certificateholder, and - any related servicing advance is deemed by the master servicer to be recoverable from collections on the related mortgage loan. S-65 Where insurance coverage at the mortgaged real property for any mortgage loan is left to the lender's discretion, the master servicer will be required to exercise that discretion in a manner consistent with the Servicing Standard, with a view towards requiring insurance comparable to that required under other mortgage loans with express provisions governing such matters. With respect to each of the mortgaged real properties securing a mortgage loan, the related borrower is required under the related mortgage loan documents to maintain comprehensive all-risk casualty insurance or extended coverage insurance (with special form coverage) (which may be provided under a blanket insurance policy as further discussed below) but may not specify the nature of the specific risks required to be covered by such insurance policies. In light of the recent terrorist attacks in New York City, the Washington, D.C. area and Pennsylvania, you should be aware that coverage for terrorist acts may only be available at rates significantly higher than other types of insurance. To give time for private markets to develop a pricing mechanism and to build capacity to absorb future losses that may occur due to terrorism, on November 26, 2002, the Terrorism Risk Insurance Act of 2002 was passed, which established the Terrorism Insurance Program. The Terrorism Insurance Program is administered by the Secretary of the Treasury and through December 31, 2004 (with a potential to extend to December 31, 2005) will provide some financial assistance from the United States government to insurers in the event of another terrorist attack that was the subject of an insurance claim. The program applies to United States risks only and to acts that are committed by an individual or individuals acting on behalf of a foreign person or foreign interest as an effort to influence or coerce United States civilians or the United States government. The Treasury Department will establish procedures for the 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. 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 shall 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. There can be no assurance that upon its expiration subsequent terrorism insurance legislation will be passed. Furthermore, because this 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. Because it is a temporary program, there is no assurance that it will create any long-term changes in the availability and cost of such insurance. The master servicer is required to use reasonable efforts to cause the borrower to maintain or, if the borrower does not so maintain, the master servicer will maintain all-risk casualty insurance or extended coverage insurance (with special form coverage) (the cost of which will be payable as a servicing advance) which does not contain any carve-out for terrorist or similar acts to the extent not prohibited by the terms of the related note or mortgage. The master servicer will not be required to call a default under a mortgage loan if the related borrower fails to maintain such insurance and the master servicer will not be required to maintain such insurance, to the extent, if any, that the cost of such insurance exceeds the maximum cost that the related borrower is required to incur under the related loan documents, or if the special servicer has determined in accordance with the Servicing Standard that either-- - such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the mortgaged real property and located in or around the region in which such mortgaged real property is located, or - such insurance is not available at any rate. Various forms of insurance maintained with respect to one or more of the mortgaged real properties securing a mortgage loan, 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 loans in the trust fund. 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 fund. S-66 The mortgage loans that we intend to include in the trust fund generally provide that insurance and condemnation proceeds in excess of minimum thresholds specified in the related mortgage loan documents are to be applied either-- - to restore the mortgaged real property (with any balance paid to the borrower), or - towards payment of the mortgage loan. If any mortgaged real property is acquired by the trust fund through foreclosure, deed-in-lieu of foreclosure or otherwise following a default on the related mortgage loan, the special servicer will be required to maintain for that property generally the same insurance coverage, to the extent available at commercially reasonable rates (as determined by the Directing Certificateholder), as was previously required under the mortgage instrument that had covered the property. The master servicer and the special servicer may each satisfy its obligations regarding maintenance of the hazard insurance policies referred to in this prospectus supplement by maintaining a blanket insurance policy or master force placed policy insuring against hazard losses on all of the mortgage loans and/or REO Properties for which it is responsible. If any blanket insurance policy or master force placed policy maintained by the master servicer or special servicer contains a deductible clause, however, the master servicer or the special servicer, as the case may be, will be required, in the event of a casualty that would have been covered by an individual policy, to pay out of its own funds all sums that-- - are not paid because of the deductible clause, and - exceed the deductible limitation that pertains to the related mortgage loan or, in the absence of any such deductible limitation, an assumed deductible limitation for an individual policy which is consistent with the Servicing Standard. THE MAYFAIR MALL LOAN The mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall (referred to herein as the "Mayfair Mall Loan") is secured, on a PARI PASSU basis with three other notes (the "Mayfair Mall Companion Loans"), by the related mortgaged real property (the "Mayfair Mall Property"). The Mayfair Mall Loan together with the Mayfair Mall Companion Loans are referred to herein as the "Mayfair Mall Total Loan" and the holders of the Mayfair Mall Companion Loans are referred to herein as the "Mayfair Mall Companion Lenders." Each of the Mayfair Mall Companion Loans has the same interest rate, maturity date and amortization term as the Mayfair Mall Loan. The Mayfair Mall Companion Loans have, as of the cut-off date, an aggregate outstanding principal balance of $119,015,273. The Mayfair Mall Companion Loans are not included in the trust fund. One of the Mayfair Mall Companion Loans has been separately securitized (the "Mayfair Mall Securitized Companion Loan") and directly backs the Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-C4. Legal title to the other two Mayfair Mall Companion Loans that have not been securitized (the "Mayfair Mall Non-Securitized Companion Loans") will initially be held by Column Financial, Inc., which may, at any time, sell or transfer such Mayfair Mall Companion Loans subject to compliance with the requirements of the Mayfair Mall Intercreditor Agreement (as defined below). Column Financial, Inc., as holder of the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans, and the series 2003-C4 trust as holder of the Mayfair Mall Securitized Companion Loan, are parties to an intercreditor agreement (the "Mayfair Mall Intercreditor Agreement"). The Mayfair Mall Total Loan will be serviced pursuant to the series 2003-C4 pooling and servicing agreement. MAYFAIR MALL INTERCREDITOR AGREEMENT. The Mayfair Mall Intercreditor Agreement, provides, among other things, that all amounts received in respect of the Mayfair Mall Total Loan will be paid PRO RATA to the holder of the Mayfair Mall Loan and to each holder of a Mayfair Mall Companion Loan. Pursuant to the Mayfair Mall Intercreditor Agreement, the holders (acting together) of such mortgage loans comprising the Mayfair Mall Total Loan that, as of the relevant time, represent more than 50% of the total outstanding principal balance of the entire Mayfair Mall Total Loan, will be entitled-- - to replace the special servicer under the series 2003-C4 pooling and servicing agreement, with or without cause, solely in respect of the Mayfair Mall Total Loan; and - to direct the special servicer under the series 2003-C4 pooling and servicing agreement with respect to various servicing matters involving the Mayfair Mall Total Loan; S-67 provided that any holder of a mortgage loan comprising the Mayfair Mall Total Loan may delegate or assign its rights in respect of the foregoing to a representative or designee and, in the case of the Mayfair Mall Loan, that designee will be the Directing Certificateholder. In the case of the Mayfair Mall Securitized Companion Loan, that representative will be the series 2003-C4 directing certificateholder. In addition, also pursuant to the Mayfair Mall Intercreditor Agreement, each of the holders of a Mayfair Mall Companion Loan and the Directing Certificateholder (as designee of the trust as holder of the Mayfair Mall Loan) will be entitled (acting individually), directly or through a representative or designee, to-- - consult with--but (except as contemplated by the prior paragraph), not direct--the special servicer under the series 2003-C4 pooling and servicing agreement with respect to various servicing matters involving the Mayfair Mall Total Loan; - purchase the other mortgage loans comprising the Mayfair Mall Total Loan under various default scenarios; provided that the first holder of a portion of the Mayfair Mall Total Loan to exercise such right will be the holder that will be entitled to purchase such other mortgage loans comprising the Mayfair Mall Total Loan; and - cure defaults with respect to the other mortgage loans comprising the Mayfair Mall Total Loan; provided that the purchase option of any holder of a portion of the Mayfair Mall Total Loan described in the second bullet above will generally be subject to the right of the holder of the Mayfair Mall Securitized Companion Loan or its designee to purchase the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans. THE MAYFAIR MALL COMPANION LENDERS CERTAIN RIGHTS AND POWERS OF THE MAYFAIR MALL COMPANION LENDERS. The special servicer under the series 2003-C4 pooling and servicing agreement (the "Mayfair Mall Special Servicer") will be required to notify the master servicer, among others, of its intention to take, or consent to the taking by the series 2003-C4 master servicer (the "Mayfair Mall Master Servicer") of any Mayfair Mall Specially Designated Servicing Action in respect of the Mayfair Mall Total Loan or any related REO Property. The Directing Certificateholder and the Mayfair Mall Companion Lenders will have 10 business days after having been notified in writing of, and having been provided with all reasonably requested information with respect to, the particular action to contact and consult with the Mayfair Mall Special Servicer regarding any Mayfair Mall Specially Designated Servicing Action; provided that, unless the Directing Certificateholder and the Mayfair Mall Companion Lenders (or their designees) are acting as part of the Mayfair Mall Control Group, the Mayfair Mall Special Servicer will not be required to follow any advice of any such holder with respect to any Mayfair Mall Specially Designated Servicing Actions or otherwise. In general, the Mayfair Mall Special Servicer will not be permitted to take any of the Mayfair Mall Specially Designated Servicing Actions with respect to the Mayfair Mall Total Loan or any REO Property as to which a Mayfair Mall Control Group has objected, in writing, within 10 business days of having been notified in writing of, and having been provided with all reasonably requested information with respect to, the particular action; provided that, in the event that the Mayfair Mall Special Servicer determines that immediate action is necessary to protect the interests of the series 2003-C4 certificateholders, the series 2003-C5 certificateholders and the other Mayfair Mall Companion Lenders (as a collective whole), the Mayfair Mall Special Servicer may take, or consent to the Mayfair Mall Master Servicer's taking, a Mayfair Mall Specially Designated Servicing Action with respect to the Mayfair Mall Total Loan or any related REO Property without waiting for the response of any holder of a portion of the Mayfair Mall Total Loan or any other person or entity. In addition, a Mayfair Mall Control Group may direct the Mayfair Mall Special Servicer to take, or to refrain from taking, any actions with respect to the servicing and/or administration of the Mayfair Mall Total Loan (if it is being specially serviced) or any related REO Property that such Mayfair Mall Control Group may consider advisable or as to which provision is otherwise made in the series 2003-C4 pooling and servicing agreement. Notwithstanding the foregoing, no such advice, direction or objection of any Mayfair Mall Control Group contemplated by the foregoing paragraphs may-- - require or cause the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer to violate any applicable law; - require or cause the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer to violate the provisions of the series 2003-C4 pooling and servicing agreement, including those requiring the Mayfair Mall Special Servicer and Mayfair Mall Master Servicer to act in accordance with the servicing standard S-68 under the Series 2003-C4 pooling and servicing agreement and not to impair the status of any REMIC created pursuant to the series 2003-C4 pooling and servicing agreement; - result in any adverse tax consequences with respect to any REMIC or grantor trust created in connection with the series 2003-C4 securitization, this securitization or any securitization involving another Mayfair Mall Companion Loan; - require or cause the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer to violate the terms of a mortgage loan or any applicable intercreditor, co-lender or similar agreement; and - expose the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer, the series 2003-C4 depositor, mortgage loan sellers, trust fund, trustee or their affiliates, officers, directors, employees or agents to any claim, suit or liability or materially expand the scope of Mayfair Mall Special Servicer's or Mayfair Mall Master Servicer's responsibilities under the series 2003-C4 pooling and servicing agreement. Neither the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer will follow any such direction if given by a Mayfair Mall Control Group or initiate any such actions. The "Mayfair Mall Control Group" means the holders of more than 50% of the outstanding principal balance of the Mayfair Mall Total Loan (acting together). The Directing Certificateholder may act in concert with one or more of the Mayfair Mall Companion Lenders to form a Mayfair Mall Control Group or the holders of the Mayfair Mall Companion Loans may form a Mayfair Mall Control Group, which excludes the Directing Certificateholder. PURCHASE OPTION. Prior to entering into any modification of the Mayfair Mall Total Loan that would materially affect the monetary terms of the Mayfair Mall Total Loan, the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer, as applicable, must provide the trust fund, as holder of the Mayfair Mall Loan and the holders of the Mayfair Mall Non-Securitized Companion Loans with notice thereof and with all information that the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer, as applicable, considers material, but in any case including a draft of the agreement, if any, that sets forth such proposed modification. The Directing Certificateholder (as designee of the trust as holder of the Mayfair Mall Loan) and each holder of a Mayfair Mall Non-Securitized Companion Loan will have the right to purchase the Mayfair Mall Securitized Companion Loan at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Mayfair Mall Securitized Companion Loan (exclusive of any applicable liquidation fee), if it notifies the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer, within five business days of receipt of the materials described in the preceding sentence, that it intends to exercise such purchase option; provided that such purchase option will terminate at the end of that five business day period or upon receipt of notice by the Mayfair Mall Special Servicer that the Mayfair Mall Securitized Companion Loan will otherwise be sold pursuant to the series 2003-C4 pooling and servicing agreement; and provided, further, that in connection with any such purchase of the Mayfair Mall Securitized Companion Loan, the purchaser would be required to reimburse parties to the series 2003-C4 pooling and servicing agreement for amounts owing to them with respect to the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans that are not otherwise covered by the purchase price. In the event that any party entitled to do so elects to exercise such purchase option, that party will be required to purchase all the mortgage loans that comprise the Mayfair Mall Total Loan and deliver the applicable purchase price to the Mayfair Mall Master Servicer within three business days after the end of the five business day period referred to in the prior sentence. Under the series 2003-C4 pooling and servicing agreement and the Mayfair Mall Intercreditor Agreement, the Directing Certificateholder and/or one or more of the holders of the Mayfair Mall Non-Securitized Companion Loans will have the right, by written notice to the Mayfair Mall Special Servicer or Mayfair Mall Master Servicer delivered (a) during any Mayfair Mall Cure Period for which any such party is entitled to make a Mayfair Mall Cure Payment (as described below under "--Cure Rights") or (b) at any time that the Mayfair Mall Securitized Companion Loan is being specially serviced and provided that the Mayfair Mall Securitized Companion Loan is then in default or a default with respect thereto is reasonably foreseeable, to purchase the Mayfair Mall Securitized Companion Loan in whole but not in part at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Mayfair Mall Securitized Companion Loan (exclusive of any applicable liquidation fee); provided that in connection with any such purchase of the Mayfair Mall Securitized Companion Loan, the purchaser would be required to reimburse parties to the series 2003-C4 pooling and servicing agreement for amounts owing to them with respect to the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans that are not otherwise covered by the purchase price. Upon the delivery of such notice to the Mayfair Mall Master Servicer and the Mayfair Mall Special Servicer, the relevant party is required to purchase the Mayfair Mall Securitized Companion Loan at the relevant purchase price, on a date not less than five business days nor more than ten business days after the date of the S-69 required notice, which will be established by the Mayfair Mall Special Servicer. The right of any party to purchase the Mayfair Mall Securitized Companion Loan under clause (a) of the first sentence of this paragraph will automatically terminate upon the expiration of the applicable Mayfair Mall Cure Period. The right of any party to purchase the Mayfair Mall Securitized Companion Loan under clause (b) of the first sentence of this paragraph will terminate at such time as it is liquidated, is converted to REO Property or ceases to be specially serviced. The right of the Directing Certificateholder or the holders of the Mayfair Mall Non-Securitized Companion Loans to purchase the Mayfair Mall Securitized Companion Loan under either of the prior paragraphs will, in all cases, be subject to the right of the applicable directing certificateholder under the series 2003-C4 pooling and servicing agreement to purchase the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans. If the applicable directing certificateholder under the series 2003-C4 pooling and servicing agreement elects to purchase the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans, such purchase will be in the same manner and under the same circumstances as set forth above in the prior two paragraphs. CURE RIGHTS. The Mayfair Mall Master Servicer or the Mayfair Mall Special Servicer (depending on whether the Mayfair Mall Securitized Companion Loan is being specially serviced) will be required to deliver to the trust fund as holder of the Mayfair Mall Loan and the holders of the Mayfair Mall Non-Securitized Companion Loans, notice of any monetary or, to the extent the Mayfair Mall Master Servicer or the Mayfair Mall Special Servicer, as the case may be, is aware of it, any material non-monetary default with respect to the Mayfair Mall Securitized Companion Loan. Upon receipt of such notice, the trust fund as holder of the Mayfair Mall Loan and/or the holders of the Mayfair Mall Non-Securitized Companion Loans will have the right to cure defaults with respect to the Mayfair Mall Total Loan during the Mayfair Mall Cure Period; provided, however, that no single cure event can continue for a period of more than 90 consecutive days, nor may all applicable cure events (without double counting concurrent periods) continue for more than 120 days, in the aggregate, in any 365-day period. In the event that such party elects to cure a default that can be cured by making a Mayfair Mall Cure Payment, that party is required to make such Mayfair Mall Cure Payment to the Mayfair Mall Master Servicer. The Mayfair Mall Master Servicer is required to apply such funds to reimburse itself for any advances, together with interest thereon, made in respect of the default so cured and any related trust fund expenses of the series 2003-C4 trust fund. The right of the curing party to be reimbursed for any Mayfair Mall Cure Payment (including the reimbursement of a previous advance and interest thereon made by the Mayfair Mall Master Servicer, the Mayfair Mall Special Servicer or the trustee under the series 2003-C4 pooling and servicing agreement) will be subordinate to the payment of all other amounts due with respect to the Mayfair Mall Total Loan. Any rights described in the foregoing four paragraphs that require approval to be given or action to be taken by the trust fund, as the holder of the Mayfair Mall Loan, will be exercisable by the Directing Certificateholder after the special servicer reviews the action to be taken and recommends that such approval be given or action be taken and the Directing Certificateholder approves of such recommendation. THE MALL AT FAIRFIELD COMMONS LOAN The mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mall at Fairfield Commons (referred to herein as the "Mall at Fairfield Commons Loan") is secured, on a PARI PASSU basis with one other note (the "Mall at Fairfield Commons Companion Loan"), by the related mortgaged real property (the "Mall at Fairfield Commons Property"). The Mall at Fairfield Commons Loan together with the Mall at Fairfield Commons Companion Loan is referred to herein as the "Mall at Fairfield Commons Total Loan" and the holder of the Mall at Fairfield Commons Companion Loan is referred to herein as the "Mall at Fairfield Commons Companion Lender." The Mall at Fairfield Commons Companion Loan has the same interest rate, maturity date and amortization term as the Mall at Fairfield Commons Loan. The Mall at Fairfield Commons Companion Loan has, as of the cut-off date, an aggregate outstanding principal balance of $28,468,511. The Mall at Fairfield Commons Companion Loan is not included in the trust fund. The Mall at Fairfield Commons Companion Loan has been separately securitized and directly backs the Merrill Lynch Mortgage Trust 2003-KEY1 certificates. KeyBank National Association, in its separate capacities as the initial holder of the Mall at Fairfield Commons Loan and as the initial holder of the Mall at Fairfield Commons Companion Loan, has entered into an intercreditor agreement (the "Mall at Fairfield Commons Intercreditor Agreement"). In connection with the securitization of the Mall at Fairfield Commons Companion Loan, the rights and obligations of the Mall at Fairfield Commons Companion Lender under the Mall at Fairfield Commons Intercreditor Agreement have been assigned to the series 2003-KEY1 trust fund. MALL AT FAIRFIELD COMMONS INTERCREDITOR AGREEMENT. The Mall at Fairfield Commons Intercreditor Agreement, provides, among other things, that all amounts received in respect of the Mall at Fairfield Commons Total Loan will be paid PRO RATA to the holder of the Mall at Fairfield Commons Loan and the holder of the Mall at Fairfield Commons Companion Loan. S-70 Pursuant to the Mall at Fairfield Commons Intercreditor Agreement, the holder of the Mall at Fairfield Commons Companion Loan will be entitled, directly or through a representative or designee, to-- - contact and consult with--but not direct--the special servicer with respect to various servicing matters involving the Mall at Fairfield Commons Total Loan; - purchase the Mall at Fairfield Commons Loan under various default scenarios; and - cure defaults with respect to the other mortgage loan comprising the Mall at Fairfield Commons Total Loan. THE MALL AT FAIRFIELD COMMONS COMPANION LENDER CERTAIN RIGHTS AND POWERS OF THE MALL AT FAIRFIELD COMMONS COMPANION LENDER. The special servicer will be required to notify the Mall at Fairfield Commons Companion Lender, among others, of its intention to take, or consent to the master servicer's taking, any Mall at Fairfield Commons Specially Designated Servicing Action in respect of the Mall at Fairfield Commons Total Loan or any related REO Property. The Mall at Fairfield Commons Companion Lender will then have 10 business days following such notice in which to contact and consult with the special servicer. The special servicer will be permitted to take any of the Mall at Fairfield Commons Specially Designated Servicing Actions with respect to the Mall at Fairfield Commons Total Loan or any REO Property even if the Mall at Fairfield Commons Companion Lender has objected. Additionally, in the event that the special servicer determines that immediate action is necessary to protect the interests of the series 2003-C5 certificateholders and the series 2003-KEY1 certificateholders (as a collective whole), the special servicer may take, or consent to the master servicer's taking, a Mall at Fairfield Commons Specially Designated Servicing Action with respect to the Mall at Fairfield Commons Total Loan or any related REO Property without waiting for the response of the Mall at Fairfield Commons Companion Lender or any other person or entity. PURCHASE OPTION. Prior to entering into any modification of the Mall at Fairfield Commons Total Loan that would materially affect the monetary terms of the Mall at Fairfield Commons Total Loan, the special servicer or master servicer, as applicable, must provide the Directing Certificateholder and the Mall at Fairfield Commons Companion Lender with notice thereof and with all information that the special servicer or master servicer, as applicable, considers material, but in any case including a draft of the agreement, if any, that sets forth such proposed modification. The Mall at Fairfield Commons Companion Lender will have the right to purchase the Mall at Fairfield Commons Loan and the Directing Certificateholder (as designee of the trust as holder of the Mall at Fairfield Commons Loan) will have the right to purchase the Mall at Fairfield Commons Companion Loan, in each case, at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Mall at Fairfield Commons Total Loan (exclusive of any applicable liquidation fee), if any such party notifies the special servicer or master servicer, as applicable, within five business days of receipt of the materials described in the preceding sentence, that it intends to exercise such purchase option. Each purchase option will terminate at the end of that five business day period, and, in addition, the Mall at Fairfield Commons Companion Lender's purchase option will terminate upon receipt of notice by the master servicer or the special servicer that the Mall at Fairfield Commons Loan will otherwise be sold pursuant to the series 2003-C5 pooling and servicing agreement. In connection with such purchase of the Mall at Fairfield Commons Loan, the purchaser would be required to reimburse parties to the series 2003-C5 pooling and servicing agreement for amounts owing to them with respect to the Mall at Fairfield Commons Companion Loan that are not otherwise covered by the purchase price. In the event that any party entitled to do so elects to exercise such purchase option, that party must deliver the applicable purchase price to the master servicer within three business days after the end of the five business day period referred to in the prior sentence. Under the series 2003-C5 pooling and servicing agreement and the Mall at Fairfield Commons Intercreditor Agreement, the Mall at Fairfield Commons Companion Lender will have the right, by written notice to the special servicer or master servicer delivered (a) during any Mall at Fairfield Commons Cure Period for which the Mall at Fairfield Commons Companion Lender is entitled to make a Mall at Fairfield Commons Cure Payment (as described below under "--Cure Rights") or (b) at any time that the Mall at Fairfield Commons Loan is being specially serviced and provided that the Mall at Fairfield Commons Loan is then in default or a default with respect thereto is reasonably foreseeable, to purchase the Mall at Fairfield Commons Loan in whole but not in part and the Directing Certificateholder (as designee of the trust as holder of the Mall at Fairfield Commons Loan) will have the right to purchase the Mall at Fairfield Commons Companion Loan, in each case, at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Mall at Fairfield Commons Total Loan (exclusive of any applicable liquidation fee); provided that in connection with any such purchase of the Mall at Fairfield Commons Loan, the purchaser would be required to reimburse parties to the series 2003-C5 pooling and servicing agreement for amounts owing to them with respect to the Mall at Fairfield Commons Companion Loan that are not otherwise covered by S-71 the purchase price. Upon the delivery of such notice to the special servicer or master servicer, the Mall at Fairfield Commons Companion Lender is required to purchase the Mall at Fairfield Commons Loan or the Directing Certificateholder (as designee of the trust as holder of the Mall at Fairfield Commons Loan) is required to purchase the Mall at Fairfield Commons Companion Loan, in each case, at the relevant purchase price, on a date not less than five business days nor more than ten business days after the date of the required notice, which will be established by the special servicer. The right of the Mall at Fairfield Commons Companion Lender to purchase the Mall at Fairfield Commons Loan under clause (a) of the first sentence of this paragraph will automatically terminate upon the expiration of the applicable Mall at Fairfield Commons Cure Period. The right of the Mall at Fairfield Commons Companion Lender to purchase the Mall at Fairfield Commons Loan under clause (b) of the first sentence of this paragraph will terminate at such time as it is liquidated, is converted to REO Property or ceases to be specially serviced. The right of the Directing Certificateholder (as designee of the trust as holder of the Mall at Fairfield Commons Loan) to purchase the Mall at Fairfield Commons Companion Loan under either of the prior paragraphs will, in all cases, be superior to the right of the Mall at Fairfield Commons Companion Lender to purchase the Mall at Fairfield Commons Loan. CURE RIGHTS. The master servicer or special servicer (depending on whether the Mall at Fairfield Commons Loan is being specially serviced) will be required to deliver to the Directing Certificateholder and the Mall at Fairfield Commons Companion Lender, notice of any monetary or, to the extent the master servicer or special servicer, as the case may be, is aware of it, any material non-monetary default with respect to the Mall at Fairfield Commons Total Loan. Upon receipt of such notice, the Directing Certificateholder and the Mall at Fairfield Commons Companion Lender will have the right to cure defaults with respect to the Mall at Fairfield Commons Total Loan during the Mall at Fairfield Commons Cure Period; provided, however, that no single cure event can continue for a period of more than 90 consecutive days, nor may all applicable cure events (without double counting concurrent periods) continue for more than 120 days, in the aggregate, in any 365-day period. In the event that the Directing Certificateholder or Mall at Fairfield Commons Companion Lender elects to cure a default that can be cured by making a Mall at Fairfield Commons Cure Payment, the Directing Certificateholder or the Mall at Fairfield Commons Companion Lender is required to make such Mall at Fairfield Commons Cure Payment to the master servicer. The master servicer is required to apply such funds to reimburse itself for any advances, together with interest thereon, made in respect of the default so cured and any related trust fund expenses of the trust fund. The right of the curing party to be reimbursed for any Mall at Fairfield Commons Cure Payment (including the reimbursement of a previous advance and interest thereon made by the master servicer, special servicer or the trustee) will be subordinate to the payment of all other amounts due with respect to the Mall at Fairfield Commons Total Loan. Any rights described in the foregoing four paragraphs that requires approval to be given or action to be taken by the trust, as holder of the Mall at Fairfield Commons Loan, will be exercisable by the Directing Certificateholder after the special servicer reviews the action to be taken and recommends that such approval be given or action be taken and the Directing Certificateholder approves of such recommendation. THE STANFORD SHOPPING CENTER LOAN The mortgage loan identified on Exhibit A-1 to this prospectus supplement as Stanford Shopping Center (referred to herein as the "Stanford Shopping Center Loan") is secured, on a PARI PASSU basis with two other notes (the "Stanford Shopping Center Companion Loans"), by the related mortgaged real property (the "Stanford Shopping Center Property"). The Stanford Shopping Center Loan together with the Stanford Shopping Center Companion Loans is referred to herein as the "Stanford Shopping Center Total Loan" and the holders of the Stanford Shopping Center Companion Loans are referred to herein as the "Stanford Shopping Center Companion Lenders." The Stanford Shopping Center Companion Loans have the same interest rate, maturity date and amortization term as the Stanford Shopping Center Loan. The Stanford Shopping Center Companion Loans have, as of the cut-off date, an aggregate outstanding principal balance of $90,000,000. The Stanford Shopping Center Companion Loans are not included in the trust fund. Column Financial, Inc. is the current lender under the Stanford Shopping Center Companion Loans and expects to securitize such loans in the future. Column Financial, Inc., as the initial holder of the Stanford Shopping Center Loan and Column Financial, Inc., as the initial holder of the Stanford Shopping Center Companion Loans has entered into an intercreditor agreement (the "Stanford Shopping Center Intercreditor Agreement"). STANFORD SHOPPING CENTER INTERCREDITOR AGREEMENT. The Stanford Shopping Center Intercreditor Agreement, provides, among other things, that all amounts received in respect of the Stanford Shopping Center Total Loan will be paid PRO RATA to the holder of the Stanford Shopping Center Loan and the holders of the Stanford Shopping Center Companion Loans. S-72 Pursuant to the Stanford Shopping Center Intercreditor Agreement, the holders (acting together) of such mortgage loans comprising the Stanford Shopping Center Total Loan that, as of the relevant time, represent more than 50% of the total outstanding principal balance of the entire Stanford Shopping Center Total Loan, will be entitled-- - to replace the special servicer, with or without cause, solely in respect of the Stanford Shopping Center Total Loan; and - to direct the special servicer under the pooling and servicing agreement with respect to various servicing matters involving the Stanford Shopping Center Total Loan; provided that any holder of a mortgage loan comprising the Stanford Shopping Center Total Loan may delegate or assign its rights in respect of the foregoing to a representative or designee and, in the case of the Stanford Shopping Center Loan, that designee will be the Directing Certificateholder. In addition, also pursuant to the Stanford Shopping Center Intercreditor Agreement, the holders of a Stanford Shopping Center Companion Loan and the Directing Certificateholder (as designee of the trust as holder of the Stanford Shopping Center Loan) will be entitled (acting individually), directly or through a representative or designee, to-- - consult with--but (except as contemplated by the prior paragraph), not direct--the special servicer under the pooling and servicing agreement with respect to various servicing matters involving the Stanford Shopping Center Total Loan; - purchase the other mortgage loans comprising the Stanford Shopping Center Total Loan under various default scenarios; provided that the first holder of a portion of the Stanford Shopping Center Total Loan to exercise such right will be the holder that will be entitled to purchase such other mortgage loans comprising the Stanford Shopping Center Total Loan; and - cure defaults with respect to the other mortgage loans comprising the Stanford Shopping Center Total Loan. provided that the purchase option of any holder of a portion of the Stanford Shopping Center Total Loan described in the second bullet above will generally be subject to the right of the Directing Certificateholder (as designee of the trust as holder of the Stanford Shopping Center Loan) to purchase the Stanford Shopping Center Companion Loans. THE STANFORD SHOPPING CENTER COMPANION LENDERS CERTAIN RIGHTS AND POWERS OF THE STANFORD SHOPPING CENTER COMPANION LENDERS. The special servicer under the pooling and servicing agreement will be required to notify the Directing Certificateholder and the Stanford Shopping Center Companion Lenders, among others, of its intention to take, or consent to the taking by the master servicer of any Stanford Shopping Center Specially Designated Servicing Action in respect of the Stanford Shopping Center Total Loan or any related REO Property. The Directing Certificateholder and the Stanford Shopping Center Companion Lenders will have 10 business days after having been notified in writing of, and having been provided with all reasonably requested information with respect to, the particular action to contact and consult with the special servicer regarding any Stanford Shopping Center Specially Designated Servicing Action; provided that, unless the Directing Certificateholder and the Stanford Shopping Center Companion Lenders (or their designees) are acting as part of the Stanford Shopping Center Control Group, the special servicer will not be required to follow any advice of any such holder with respect to any Stanford Shopping Center Specially Designated Servicing Actions or otherwise. In general, the special servicer will not be permitted to take any of the Stanford Shopping Center Specially Designated Servicing Actions with respect to the Stanford Shopping Center Total Loan or any REO Property as to which a Stanford Shopping Center Control Group has objected, in writing, within 10 business days of having been notified in writing of, and having been provided with all reasonably requested information with respect to, the particular action; provided that, in the event that the special servicer determines that immediate action is necessary to protect the interests of the series 2003-C5 certificateholders and the Stanford Shopping Center Companion Lenders (as a collective whole), the special servicer may take, or consent to the master servicer's taking, a Stanford Shopping Center Specially Designated Servicing Action with respect to the Stanford Shopping Center Total Loan or any related REO Property without waiting for the response of any holder of a portion of the Stanford Shopping Center Total Loan or any other person or entity. In addition, a Stanford Shopping Center Control Group may direct the special servicer to take, or to refrain from taking, any actions with respect to the servicing and/or administration of the Stanford Shopping Center Total Loan (if it is S-73 being specially serviced) or any related REO Property that such Stanford Shopping Center Control Group may consider advisable or as to which provision is otherwise made in the pooling and servicing agreement. Notwithstanding the foregoing, no such advice, direction or objection of any Stanford Shopping Center Control Group contemplated by the foregoing paragraphs may-- - require or cause the special servicer or master servicer to violate any applicable law; - require or cause the special servicer or master servicer to violate the provisions of the pooling and servicing agreement, including those requiring the special servicer and master servicer to act in accordance with the Servicing Standard and not to impair the status of any REMIC created pursuant to the pooling and servicing agreement; - require or cause the master servicer or special servicer to violate the terms of a mortgage loan or any applicable intercreditor, co-lender or similar agreement; and - expose the master servicer or special servicer, the depositor, mortgage loan sellers, trust fund, trustee or their affiliates, officers, directors, employees or agents to any claim, suit or liability or materially expand the scope of master servicer's or special servicer's responsibilities under the pooling and servicing agreement. Neither the master servicer or special servicer will follow any such direction if given by a Stanford Shopping Center Control Group or initiate any such actions. The "Stanford Shopping Center Control Group" means the holders of more than 50% of the outstanding principal balance of the Stanford Shopping Center Total Loan (acting together). The Directing Certificateholder may act in concert with one or more of the Stanford Shopping Center Companion Lenders to form a Stanford Shopping Center Control Group or the holders of the Stanford Shopping Center Loans may form a Stanford Shopping Center Control Group, which excludes the Directing Certificateholder. PURCHASE OPTION. Prior to entering into any modification of the Stanford Shopping Center Total Loan that would materially affect the monetary terms of the Stanford Shopping Center Total Loan, the special servicer or master servicer, as applicable, must provide the Directing Certificateholder and the Stanford Shopping Center Companion Lenders with notice thereof and with all information that the special servicer or master servicer, as applicable, considers material, but in any case including a draft of the agreement, if any, that sets forth such proposed modification. The Stanford Shopping Center Companion Lenders will have the right to purchase the Stanford Shopping Center Loan and the Directing Certificateholder (as designee of the trust as holder of the Stanford Shopping Center Loan) will have the right to purchase the Stanford Shopping Center Companion Loans, in each case, at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Stanford Shopping Center Total Loan (exclusive of any applicable liquidation fee), if such party notifies the special servicer or master servicer, as applicable, within five business days of receipt of the materials described in the preceding sentence, that it intends to exercise such purchase option. The Stanford Shopping Center Companion Lenders' purchase option will terminate at the end of that five business day period or upon receipt of notice by the special servicer that the Stanford Shopping Center Loan will otherwise be sold pursuant to the series 2003-C5 pooling and servicing agreement; and provided, further, that in connection with any such purchase of the Stanford Shopping Center Loan, the purchaser would be required to reimburse parties to the series 2003-C5 pooling and servicing agreement for amounts owing to them with respect to the Stanford Shopping Center Companion Loans that are not otherwise covered by the purchase price. In the event that any party entitled to do so elects to exercise such purchase option, that party must deliver the applicable purchase price to the master servicer within three business days after the end of the five business day period referred to in the prior sentence. Under the series 2003-C5 pooling and servicing agreement and the Stanford Shopping Center Intercreditor Agreement, Stanford Shopping Center Companion Lenders will have the right, by written notice to the special servicer or master servicer delivered (a) during any Stanford Shopping Center Cure Period for which the Stanford Shopping Center Companion Lender is entitled to make a Stanford Shopping Center Cure Payment (as described below under "--Cure Rights") or (b) at any time that the Stanford Shopping Center Loan is being specially serviced and provided that the Stanford Shopping Center Loan is then in default or a default with respect thereto is reasonably foreseeable, to purchase the Stanford Shopping Center Loan in whole but not in part and the Directing Certificateholder (as designee of the trust as holder of the Stanford Shopping Center Loan) will have the right to purchase the Stanford Shopping Center Companion Loans, in each case, at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Stanford Shopping Center Total Loan S-74 (exclusive of any applicable liquidation fee); provided that in connection with any such purchase of the Stanford Shopping Center Loan, the purchaser would be required to reimburse parties to the series 2003-C5 pooling and servicing agreement for amounts owing to them with respect to the Stanford Shopping Center Companion Loans that are not otherwise covered by the purchase price. Upon the delivery of such notice to the special servicer or master servicer, the applicable Stanford Shopping Center Companion Lender is required to purchase the Stanford Shopping Center Loan or the Directing Certificateholder (as designee of the trust as holder of the Stanford Shopping Center Loan) is required to purchase the Stanford Shopping Center Companion Loans at the relevant purchase price, on a date not less than five business days nor more than ten business days after the date of the required notice, which will be established by the special servicer. The right of the Stanford Shopping Center Companion Lenders to purchase the Stanford Shopping Center Loan under clause (a) of the first sentence of this paragraph will automatically terminate upon the expiration of the applicable Stanford Shopping Center Cure Period. The right of the Stanford Shopping Center Companion Lenders to purchase the Stanford Shopping Center Loan under clause (b) of the first sentence of this paragraph will terminate at such time as it is liquidated, is converted to REO Property or ceases to be specially serviced. The right of the Directing Certificateholder to purchase the Stanford Shopping Center Companion Loan under either of the prior paragraphs will, in all cases, be superior to the right of the Stanford Shopping Center Companion Lenders to purchase the Stanford Shopping Center Loan. CURE RIGHTS. The master servicer or special servicer (depending on whether the Stanford Shopping Center Loan is being specially serviced) will be required to deliver to the Directing Certificateholder and the Stanford Shopping Center Companion Lenders notice of any monetary or, to the extent the master servicer or special servicer, as the case may be, is aware of it, any material non-monetary default with respect to the Stanford Shopping Center Loan. Upon receipt of such notice, the Directing Certificateholder and the Stanford Shopping Center Companion Lenders will have the right to cure defaults with respect to the Stanford Shopping Center Total Loan during the Stanford Shopping Center Cure Period; provided, however, that no single cure event can continue for a period of more than 90 consecutive days, nor may all applicable cure events (without double counting concurrent periods) continue for more than 120 days, in the aggregate, in any 365-day period. In the event that the Directing Certificateholder or the Stanford Shopping Center Companion Lenders elect to cure a default that can be cured by making a Stanford Shopping Center Cure Payment, the applicable party is required to make such Stanford Shopping Center Cure Payment to the master servicer. The master servicer is required to apply such funds to reimburse itself for any advances, together with interest thereon, made in respect of the default so cured and any related trust fund expenses of the trust fund. The right of the curing party to be reimbursed for any Stanford Shopping Center Cure Payment (including the reimbursement of a previous advance and interest thereon made by the master servicer, special servicer or the trustee) will be subordinate to the payment of all other amounts due with respect to the Stanford Shopping Center Total Loan. Any rights described in the foregoing four paragraphs that requires approval to be given or action to be taken by the trust, as holder of the Stanford Shopping Center Loan, will be exercisable by Directing Certificateholder. THE JEFFERSON AT MONTFORT LOAN The mortgage loan identified on Exhibit A-1 to this prospectus supplement as Jefferson at Montfort (referred to herein as the "Jefferson at Montfort Loan") is secured, on a senior basis with one other note (the "Jefferson at Montfort B Loan"), by the related mortgaged real property (the "Jefferson at Montfort Property"). The Jefferson at Montfort Loan together with the Jefferson at Montfort B Loan is referred to herein as the "Jefferson at Montfort Total Loan" and the holder of the Jefferson at Montfort B Loan is referred to herein as the "Jefferson at Montfort Subordinate Lender." The interest rate of the Jefferson at Montfort B Loan is 10.32% and, as of the cut-off date, has an outstanding principal balance of $5,000,000. The Jefferson at Montfort B Loan is not included in the trust fund. Column Financial, Inc. is the current lender under the Jefferson at Montfort B Loan. Column Financial, Inc., as the initial holder of the Jefferson at Montfort Loan and the Jefferson at Montfort B Loan has entered into an intercreditor agreement (the "Jefferson at Montfort Intercreditor Agreement"). JEFFERSON AT MONTFORT INTERCREDITOR AGREEMENT. Allocation of Payments Between the Jefferson at Montfort Loan and the Jefferson at Montfort B Loan - Payments Prior to Certain Loan Defaults. The right of the holder of the Jefferson at Montfort B Loan to receive payments with respect to the Jefferson at Montfort Total Loan is at all times junior to the right of the holder of the Jefferson at Montfort Loan to receive payments of interest, principal and other amounts from amounts collected with respect to the Jefferson at Montfort Total Loan. S-75 If no default with respect to an obligation of the related borrower to pay money due under the Jefferson at Montfort Total Loan and no other default which causes the Jefferson at Montfort Total Loan to become a specially serviced loan (each a "Triggering Loan Default") has occurred and is continuing, then all amounts tendered by the related borrower or otherwise available for payment on the Jefferson at Montfort Total Loan (including amounts received by the master servicer or the special servicer), whether received in the form of monthly payments, a balloon payment, liquidation proceeds, payment or prepayment of principal, proceeds under title, hazard or other insurance policies or awards or settlements in respect of condemnation proceedings or similar eminent domain proceedings (other than any amounts for required reserves or escrows and other than proceeds, awards or settlements to be applied to the restoration or repair of the mortgaged real property or released to the borrower in accordance with the Servicing Standard or the related loan documents) are (net of any amounts then due to the master servicer, the special servicer or the trustee with respect to the Jefferson at Montfort Total Loan under the pooling and servicing agreement, including any servicing fees and special servicing fees) to be applied in the following order of priority: - FIRST, to the trust fund in an amount equal to interest payments due on the Jefferson at Montfort Loan; - SECOND, to the trust fund in an amount equal to its PRO RATA portion of (i) any principal prepayment on the Jefferson at Montfort Total Loan in accordance with its percentage interest and (ii) scheduled principal payment (including any balloon payment) on the Jefferson at Montfort Total Loan in accordance with its percentage interest; - THIRD, to the holder of the related Jefferson at Montfort B Loan in an amount equal to interest payments due on the Jefferson at Montfort B Loan; - FOURTH, to the holder of the related Jefferson at Montfort B Loan in an amount equal to (i) its PRO RATA portion of any principal prepayment on the Jefferson at Montfort Total Loan in accordance with its percentage interest and (ii) its PRO RATA portion of any scheduled principal payment (including any balloon payment) on the Jefferson at Montfort Total Loan in accordance with its percentage interest; - FIFTH, PRO RATA, (a) to the trust fund, any default interest and late payment charges accrued on the Jefferson at Montfort Loan and (b) to the holder of the Jefferson at Montfort B Loan, any default interest and late payment charges accrued on the Jefferson at Montfort B Loan; - SIXTH, PRO RATA, to: (A) the trust fund, any Yield Maintenance Charges or Static Prepayment Premiums allocable to the Jefferson at Montfort Loan, to the extent actually paid by the related borrower, in accordance with the principal balance of the Jefferson at Montfort Loan so prepaid, and (B) the holder of the Jefferson at Montfort B Loan, any Yield Maintenance Charges or Static Prepayment Premiums allocable to the related Jefferson at Montfort B Loan, to the extent actually paid by the related borrower, in accordance with the principal balance of the Jefferson at Montfort B Loan so prepaid; and - SEVENTH, any excess amount not otherwise applied pursuant to the foregoing clauses will generally be applied as follows: to the trust fund and the holder of the related Jefferson at Montfort B Loan, PRO RATA, in accordance with their initial loan balances. PAYMENTS FOLLOWING CERTAIN LOAN DEFAULTS. If a Triggering Loan Default has occurred and is continuing, the right of the holder of the related Jefferson at Montfort B Loan to receive payments with respect to the Jefferson at Montfort Total Loan will be subordinated to the payment rights of the holder of the Jefferson at Montfort Loan to receive payments from all amounts tendered by the related borrower or otherwise available for payment of the Jefferson at Montfort Total Loan (including amounts received by the applicable master servicer or the applicable special servicer), whether received in the form of monthly payments, a balloon payment, liquidation proceeds, payment or prepayment of principal, proceeds under title, hazard or other insurance policies or awards or settlements in respect of condemnation proceedings or similar eminent domain proceedings (other than proceeds, awards or settlements to be applied to the restoration or repair of the mortgaged real property or released to the borrower in accordance with the Servicing Standard or the related loan documents) are (net of any amounts then due to the applicable master servicer, the applicable special servicer or the trustee with respect to the Jefferson at Montfort Total Loan under the Pooling and Servicing Agreement, including any servicing fees and special servicing fees) required to be applied in the following order of priority: - FIRST, to the trust fund in an amount equal to interest payments due on the Jefferson at Montfort Loan; - SECOND, to the trust fund in an amount equal to the principal balance of the Jefferson at Montfort Loan until paid in full; S-76 - THIRD, to the holder of the related Jefferson at Montfort B Loan in an amount equal to interest payments due on the Jefferson at Montfort B Loan; - FOURTH, to the holder of the related Jefferson at Montfort B Loan in an amount equal to the principal balance of the Jefferson at Montfort B Loan until paid in full; - FIFTH, PRO RATA, to (a) to the trust fund, any default interest and late payment charges accrued on the Jefferson at Montfort Loan and (b) to the holder of the Jefferson at Montfort B Loan, any default interest and late payment charges accrued on the Jefferson at Montfort B Loan; - SIXTH, PRO RATA, to: (A) the trust fund, any Yield Maintenance Charges or Static Prepayment Premiums allocable to the Jefferson at Montfort Loan, to the extent actually paid by the related borrower, in accordance with the principal balance of the Jefferson at Montfort Loan so prepaid, and (B) the holder of the Jefferson at Montfort B Loan, any Yield Maintenance Charges or Static Prepayment Premiums allocable to the related Jefferson at Montfort B Loan, to the extent actually paid by the related borrower, in accordance with the principal balance of the Jefferson at Montfort B Loan so prepaid; and - SEVENTH, any excess amount not otherwise applied pursuant to the foregoing clauses will generally be applied as follows: to the trust fund and the holder of the related Jefferson at Montfort B Loan, PRO RATA, in accordance with their initial loan balances. THE JEFFERSON AT MONTFORT SUBORDINATE LENDER. CERTAIN RIGHTS AND POWERS OF THE JEFFERSON AT MONTFORT SUBORDINATE LENDER. The special servicer under the pooling and servicing agreement will be required to notify the Jefferson at Montfort Subordinate Lender, among others, of its intention to take, or consent to the taking by the master servicer of any Jefferson at Montfort Specially Designated Servicing Action in respect of the Jefferson at Montfort Total Loan or any related REO Property. The Jefferson at Montfort Subordinate Lender will then have 10 business days following such notice in which to contact and consult with the special servicer regarding any item set forth above; provided, that the special servicer will have no obligation to follow any advice of the Jefferson at Montfort Subordinate Lender with respect to any of the Jefferson at Montfort Specially Designated Servicing Actions or otherwise. Additionally, in the event that the special servicer determines that immediate action is necessary to protect the interests of the series 2003-C5 certificateholders and the Jefferson at Montfort Subordinate Lender (as a collective whole), the special servicer may take, or consent to the master servicer's taking, any of the foregoing actions with respect to the Jefferson at Montfort Total Loan or any related REO Property without waiting for the response of the Jefferson at Montfort Subordinate Lender or any other person or entity. Notwithstanding the foregoing, no such advice or objection of the holder of any portion of the Jefferson at Montfort Total Loan contemplated by the foregoing paragraphs may-- - require or cause the special servicer or master servicer to violate any applicable law; - require or cause the special servicer or master servicer to violate the provisions of the pooling and servicing agreement, including those requiring the special servicer or master servicer to act in accordance with the Servicing Standard under the pooling and servicing agreement and not to impair the status of any REMIC created under the pooling and servicing agreement as a REMIC; - require or cause the special servicer or master servicer to violate the terms of a mortgage loan or any applicable intercreditor, co-lender or similar agreement; - expose the special servicer or master servicer, the depositor, mortgage loan sellers, trust fund, trustee or their affiliates, officers, directors, employees or agents to any claim, suit or liability or materially expand the scope of the special servicer's or master servicer's responsibilities under the pooling and servicing agreement. Neither the special servicer nor master servicer will follow any such direction or initiate any such actions. PURCHASE OPTION. Prior to entering into any modification of the Jefferson at Montfort Total Loan that would materially affect the monetary terms of the Jefferson at Montfort Total Loan, the special servicer or master servicer, as applicable, must provide the Jefferson at Montfort Subordinate Lender with notice thereof and with all information that the special servicer or master servicer, as applicable, considers material, but in any case including a draft of the agreement, if S-77 any, that sets forth such proposed modification. The Jefferson at Montfort Subordinate Lender will have the right to purchase the Jefferson at Montfort Loan at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Jefferson at Montfort Loan (exclusive of any applicable liquidation fee), if it notifies the special servicer or master servicer, as applicable, within five business days of receipt of the materials described in the preceding sentence, that it intends to exercise such purchase option; provided that such purchase option will terminate at the end of that five business day period or upon receipt of notice by the special servicer that the Jefferson at Montfort Loan will otherwise be sold pursuant to the pooling and servicing agreement; and provided, further, that in connection with any such purchase of the Jefferson at Montfort Loan, the purchaser would be required to reimburse parties to the pooling and servicing agreement for amounts owing to them with respect to the Jefferson at Montfort B Loan that are not otherwise covered by the purchase price. In the event that any party entitled to do so elects to exercise such purchase option, that party must deliver the applicable purchase price to the master servicer within three business days after the end of the five business day period referred to in the prior sentence. Under the pooling and servicing agreement and the Jefferson at Montfort Intercreditor Agreement, the Jefferson at Montfort Subordinate Lender will have the right, by written notice to the special servicer or master servicer delivered (a) during any Jefferson at Montfort Cure Period for which the Jefferson at Montfort Subordinate Lender is entitled to make a Jefferson at Montfort Cure Payment (as described below under "--Cure Rights") or (b) at any time that the Jefferson at Montfort Loan is being specially serviced and provided that the Jefferson at Montfort Loan is then in default or a default with respect thereto is reasonably foreseeable, to purchase the Jefferson at Montfort Loan in whole but not in part at the same purchase price as if it were being repurchased by the related mortgage loan seller for a material breach of representation or warranty made by such mortgage loan seller with respect to the Jefferson at Montfort Loan (exclusive of any applicable liquidation fee); provided that in connection with any such purchase of the Jefferson at Montfort Loan, the purchaser would be required to reimburse parties to the pooling and servicing agreement for amounts owing to them with respect to the Jefferson at Montfort B Loan that are not otherwise covered by the purchase price. Upon the delivery of such notice to the special servicer or master servicer, the applicable Jefferson at Montfort Subordinate Lender is required to purchase the Jefferson at Montfort Loan at the relevant purchase price, on a date not less than five business days nor more than ten business days after the date of the required notice, which will be established by the special servicer. The right of the Jefferson at Montfort Subordinate Lender to purchase the Jefferson at Montfort Loan under clause (a) of the first sentence of this paragraph will automatically terminate upon the expiration of the applicable Jefferson at Montfort Cure Period. The right of the Jefferson at Montfort Subordinate Lender to purchase the Jefferson at Montfort Loan under clause (b) of the first sentence of this paragraph will terminate at such time as it is liquidated, is converted to REO Property or ceases to be specially serviced. CURE RIGHTS. The master servicer or special servicer (depending on whether the Jefferson at Montfort Loan is being specially serviced) will be required to deliver to the Jefferson at Montfort Subordinate Lender, notice of any monetary or, to the extent the master servicer or special servicer, as the case may be, is aware of it, any material non-monetary default with respect to the Jefferson at Montfort Loan. Upon receipt of such notice, the Jefferson at Montfort Subordinate Lender will have the right to cure defaults with respect to the Jefferson at Montfort Total Loan during the Jefferson at Montfort Cure Period; provided, however, that no single cure event can continue for a period of more than 90 consecutive days, nor may all applicable cure events (without double counting concurrent periods) continue for more than 120 days, in the aggregate, in any 365-day period. In the event that the Jefferson at Montfort Subordinate Lender elects to cure a default that can be cured by making a Jefferson at Montfort Cure Payment, the Jefferson at Montfort Subordinate Lender is required to make such Jefferson at Montfort Cure Payment to the master servicer. The master servicer is required to apply such funds to reimburse itself for any advances, together with interest thereon, made in respect of the default so cured and any related trust fund expenses of the trust fund. The right of the curing party to be reimbursed for any Jefferson at Montfort Cure Payment (including the reimbursement of a previous advance and interest thereon made by the master servicer, special servicer or the trustee) will be subordinate to the payment of all other amounts due with respect to the Jefferson at Montfort Total Loan. THE A/B LOANS GENERAL. In the case of the mortgage loans secured by the mortgaged real properties identified on Exhibit A-1 to this prospectus supplement as Cambridge Village Apartments, Northgate Village Apartments and Hearthstone Apartments (referred to in this prospectus supplement as the "A Loans"), representing in the aggregate 1.84% of the initial mortgage pool balance, each related borrower has encumbered the related mortgaged real property with subordinate debt (each a "Corresponding B Loan"). In each case, the aggregate debt consisting of the A Loan and the Corresponding B Loan (collectively, the "A/B Loan") is secured by a single mortgage or deed of trust. We intend to include the A Loans in the trust fund. The Corresponding B Loans were sold immediately after origination to CBA-Mezzanine Capital Finance, LLC ("CBA"), and will not be included in the trust fund. S-78 Each A Loan and Corresponding B Loan comprising an A/B Loan are cross-defaulted. The outstanding principal balance of each Corresponding B Loan does not exceed five percent (5%) of the underwritten appraised value of the related mortgaged real property that secures the related A/B Loan. Each Corresponding B Loan has an interest rate of 15% per annum and has the same maturity date, amortization schedule and prepayment structure as the related A Loan. For purposes of the information presented in this prospectus supplement with respect to each A Loan, the loan-to-value ratio and debt service coverage ratio information reflects only the indebtedness evidenced by the A Loan and does not take into account the related Corresponding B Loan. The trust fund, as the holder of each A Loan, and the holder of the related Corresponding B Loan will be successor parties to a separate intercreditor agreement (each, an "A/B Loan Intercreditor Agreement") with respect to each A/B Loan. Servicing and administration of each A Loan (and to the extent described below, each Corresponding B Loan) will be performed by the master servicer on behalf of the trust fund (and, in the case of each Corresponding B Loan, on behalf of the holder of that loan). The servicer of each Corresponding B Loan will collect payments with respect to that mortgage loan. The master servicer will provide certain information and reports related to each A/B Loan to the holder of the related Corresponding B Loan, but will not collect payments with respect to such Corresponding B Loan until the occurrence of certain events of default with respect to such A/B Loan described in the related A/B Loan Intercreditor Agreement. The following describes certain provisions of the A/B Loan Intercreditor Agreements, but does not purport to be complete and is subject, and qualified in its entirety by reference to the actual provisions of each A/B Loan Intercreditor Agreement. ALLOCATION OF PAYMENTS BETWEEN THE A LOANS AND THE CORRESPONDING B LOANS. The right of the holder of each Corresponding B Loan to receive payments of interest, principal and other amounts are subordinated to the rights of the holder of the related A Loan to receive such amounts. For each A/B Loan, an "A/B Material Default" consists of the following events: (a) the acceleration of the A Loan or the Corresponding B Loan; (b) the existence of a continuing monetary default; and/or, (c) the filing of a bankruptcy action by, or against, the related borrower. So long as an A/B Material Default has not occurred or, if an A/B Material Default has occurred, but that A/B Material Default is no longer continuing with respect to an A/B Loan, the related borrower under the A/B Loan will make separate payments of principal and interest to the respective holders of the related A Loan and Corresponding B Loan. Escrow and reserve payments will be made to the master servicer on behalf of the trust fund (as the holder of the subject A Loan). Any proceeds under title, hazard or other insurance policies, or awards or settlements in respect of condemnation proceedings or similar exercises of the power of eminent domain, or any other principal prepayment of the A/B Loans (together with any applicable Yield Maintenance Charges), will generally be applied first to the principal balance of the subject A Loan and then to the principal balance of the Corresponding B Loan. If an A/B Material Default occurs and is continuing with respect to an A/B Loan, then all amounts tendered by the related borrower or otherwise available for payment of such A/B Loan will be applied by the master servicer (with any payments received by the holder of the subject Corresponding B Loan after and during such an A/B Material Default to be forwarded to the master servicer), net of certain amounts, in the order of priority set forth in a sequential payment waterfall in the related A/B Loan Intercreditor Agreement, which generally provides that all interest, principal, Yield Maintenance Charges and outstanding expenses with respect to the subject A Loan will be paid in full prior to any application of payments to the Corresponding B Loan. If, after the expiration of the right of the holder of a Corresponding B Loan to purchase the related A Loan (as described below) an A Loan or Corresponding B Loan is modified in connection with a workout so that, with respect to either the A Loan or the Corresponding B Loan, (a) the outstanding principal balance is decreased, (b) payments of interest or principal are waived, reduced or deferred or (c) any other adjustment is made to any of the terms of such mortgage loan, then all payments to the trust fund (as the holder of the A Loan) will be made as though such workout did not occur and the payment terms of the A Loan will remain the same. In that case, the holder of the Corresponding B Loan will bear the full economic effect of all waivers, reductions or deferrals of amounts due on either the A Loan or the Corresponding B Loan attributable to such workout (up to the outstanding principal balance together with accrued interest thereon, of the Corresponding B Loan). SERVICING OF THE A/B LOANS. Each A Loan and the related mortgaged real property will be serviced and administered by the master servicer or the special servicer, as the case may be, pursuant to the pooling and servicing agreement. The master servicer or the special servicer, as the case may be, will service and administer each Corresponding B Loan to the extent described below. The Servicing Standard set forth in the pooling and servicing agreement will require the master servicer and the special servicer to take into account the interests of both the trust fund and the holder of the related Corresponding B Loan when servicing an A/B Loan, with a view to maximizing the realization for both the trust fund and such holder as a collective whole. Any holder of a Corresponding B Loan will be deemed a third party beneficiary of the pooling and servicing agreement to the extent that it relates to the servicing of a Corresponding B Loan. The master servicer and the special servicer have the sole and exclusive authority to service and administer, and to exercise the rights and remedies with respect to, the A/B Loans, and (subject to certain limitations with respect to S-79 modifications and certain rights of the holder of each Corresponding B Loan to purchase the corresponding A Loan) the holder of the Corresponding B Loan has no voting, consent or other rights whatsoever with respect to such master servicer's or such special servicer's administration of, or the exercise of its rights and remedies with respect to, the related A/B Loan. So long as an A/B Loan is a performing mortgage loan, the master servicer will have no obligation to collect payments with respect to the related Corresponding B Loan. A separate servicer of each Corresponding B Loan will be responsible for collecting amounts payable in respect of such Corresponding B Loan. That servicer will have no servicing duties or obligations with respect to the related A Loan or the related mortgaged real property. If an A/B Material Default occurs with respect to an A/B Loan, the master servicer or the special servicer, as the case may be, will (during the continuance of the A/B Material Default) collect and distribute payments for both of the subject A Loan and Corresponding B Loan pursuant to the sequential payment waterfall set forth in the related A/B Loan Intercreditor Agreement. ADVANCES. Neither the master servicer nor the trustee is required to make any monthly debt service advance with respect to a Corresponding B Loan. Neither the holder of a Corresponding B Loan nor any related separate servicer is required to make any monthly debt service advance with respect to the related A Loan or any servicing advance with respect to the related mortgaged real property. The master servicer (and, if applicable, the special servicer or the trustee) will make servicing advances with respect to the mortgaged real properties securing the A/B Loans. No servicing advances will be made by the master servicer for the mortgaged real properties securing the A/B Loans after the principal balance of the related A Loan is reduced to zero. MODIFICATIONS. The ability of the master servicer or the special servicer to enter into any amendment, deferral, extension, modification, increase, renewal, replacement, consolidation, supplement or waiver of any term or provision of a Corresponding B Loan, the related A Loan or the related loan documents, is limited by the rights of the holder of the Corresponding B Loan to approve such modifications and other actions as set forth in the related A/B Loan Intercreditor Agreement; provided that the consent of the holder of a Corresponding B Loan will not be required in connection with any such modification or other action with respect to an A/B Loan after the expiration of such holder's right to purchase the related A Loan. The directing certificateholder may, in some cases, have the right to approve such action by a servicer. The holder of a Corresponding B Loan may not enter into any assumption, amendment, deferral, extension, modification, increase, renewal, replacement, consolidation, supplement or waiver of such Corresponding B Loan or the related loan documents without the prior written consent of the special servicer (which consent will be subject to the approval of the Directing Certificateholder). PURCHASE OF THE A LOAN BY THE HOLDER OF THE CORRESPONDING B LOAN. Upon the occurrence of any one of certain defaults that are set forth in each A/B Loan Intercreditor Agreement and within 30 days of receipt of notice of such defaults, the holder of the subject Corresponding B Loan will have the right to notify the trust that it intends to purchase the related A Loan (with closing of such purchase to occur no more than 30 days following the election to exercise such right) at a purchase price determined under that A/B Loan Intercreditor Agreement and generally equal the sum of (a) the outstanding principal balance of such A Loan, (b) accrued and unpaid interest on the outstanding principal balance of the A Loan (excluding any default interest or other late payment charges), (c) any unreimbursed servicing advances made by the master servicer or the trustee with respect to such A Loan together with any advance interest thereon, (d) reasonable out-of-pocket legal fees and costs incurred in connection with enforcement of such A/B Loan by the master servicer or the special servicer, (e) any interest on any unreimbursed debt service advances made by the master servicer or the trustee with respect to such A Loan, (f) master servicing fees, special servicing fees and trustee's fees payable under the pooling and servicing agreement, and (g) out-of-pocket expenses incurred by the trustee or the master servicer with respect to the A/B Loan together with advance interest thereon. The holder of the Corresponding B Loan does not have any rights to cure any defaults with respect to the A/B Loan. MORTGAGE POOL CHARACTERISTICS A detailed presentation of various characteristics of the mortgage loans that we intend to include in the trust fund, and of the corresponding mortgaged real properties, on an individual basis and in tabular format, is shown on Exhibit A-1 and Exhibit A-2 to this prospectus supplement. The statistics in the tables and schedules on Exhibit A-1 and Exhibit A-2 to this prospectus supplement were derived, in many cases, from information and operating statements furnished by or on behalf of the respective borrowers. The information and the operating statements were generally unaudited and have not been independently verified by us or any of the underwriters. S-80 ADDITIONAL LOAN AND PROPERTY INFORMATION DELINQUENCIES. None of the mortgage loans that we intend to include in the trust fund was as of its due date in December 2003, or has been at any time during the 12-month period preceding that date, 30 days or more delinquent with respect to any monthly debt service payment. TENANT MATTERS. Described and listed below are special considerations regarding tenants at the mortgaged real properties that will secure the mortgage loans-- - Seven (7) of the mortgaged real properties, securing 6.31% of the initial mortgage pool balance, of which all seven (7) of those mortgage loans are in loan group no. 1, securing 8.65% of the initial loan group no. 1 balance, are either wholly owner-occupied or leased to a single tenant. Twelve (12) of the mortgaged real properties, securing 5.48% of the initial mortgage pool balance, of which all twelve (12) of those mortgage loans are in loan group no. 1, securing 7.51% of the initial loan group no. 1 balance, are more than 50%, but less than 100%, owner occupied or leased to a single tenant. - Some of the mortgaged real properties that are retail properties may have Dark Tenants. - A number of companies are Major Tenants at more than one of the mortgaged real properties. - There are several cases in which a particular entity is a tenant at more than one of the mortgaged real properties, and although it may not be a Major Tenant at any of those properties, it is significant to the success of the properties in the aggregate. ADDITIONAL SECURED FINANCING. Those mortgage loans in which the related borrower is not a special purpose entity do not prohibit the borrower from incurring additional unsecured debt. In the case of mortgage loans where the related borrower is a special purpose entity, such borrowers may also be allowed to incur additional unsecured debt from affiliates or third parties to fund trade payables and expenses incurred in the ordinary course of its operation of the related mortgaged real property. In addition, in the case of those mortgage loans which require or allow letters of credit to be posted by the related borrower as additional security for the mortgage loan, in lieu of reserves or otherwise, the related borrower may be obligated to pay fees and expenses associated with the letter of credit and/or to reimburse the letter of credit issuer or others in the event of a draw upon the letter of credit by the lender. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as EastBridge Landing, representing 2.67% of the initial mortgage pool balance, the borrower was permitted to maintain $46,200,000 in subordinate debt that is secured by the related mortgaged real property. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Sands Point Cove Apartments, representing 0.22% of the initial mortgage pool balance, the borrower was permitted to maintain $570,000 in subordinate debt that is secured by the related mortgaged real property. The lender under this subordinate debt has entered into a standstill and subordination agreement with the lender. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Montalvo Shopping Center, representing 3.35% of the initial mortgage pool balance, the related mortgage loan documents permit future mezzanine financing only from a mezzanine lender acceptable to the lender and if certain other conditions are satisfied. See "Description of the Underlying Mortgage Loans--Montalvo Square Shopping Center." In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall, the mortgage loan is secured by the mortgaged real property on a PARI PASSU basis with three other notes that are not included in the trust. That mortgage loan is referred to herein as the "Mayfair Mall Loan." See "--The Mayfair Mall Loan" above. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Stanford Shopping Center, the mortgage loan is secured by the mortgaged real property on a PARI PASSU basis with one other note that is not included in the trust. That mortgage loan is referred to herein as the "Stanford Shopping Center Loan." See "--The Stanford Shopping Center Loan" above. In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Mall at Fairfield Commons, the mortgage loan is secured by the mortgaged real property on a PARI PASSU basis with one other note that is not included in the trust. That mortgage loan is referred to herein as the "Mall at Fairfield Commons Loan." See "--The Mall at Fairfield Commons Loan" above. S-81 In the case of the mortgage loan identified on Exhibit A-1 to this prospectus supplement as Jefferson at Montfort, the mortgaged real property also secures another note on a subordinated basis that is not included in the trust. That mortgage loan is referred to herein as the "Jefferson at Montfort Loan." See "--The Jefferson at Montfort Loan" above. In the case of the mortgage loans identified on Exhibit A-1 to this prospectus supplement as Cambridge Village Apartments, Northgate Village Apartments and Hearthstone Apartments, the related mortgaged real property also secures another note on a subordinated basis, in each case that is not included in the trust. Those mortgage loans are referred to herein as the "A/B Loans." See "--The A/B Loans" above. TITLE, SURVEY AND SIMILAR ISSUES. In the case of certain of the mortgaged real properties securing mortgage loans that we intend to include in the trust fund, the permanent improvements on the subject property encroach over an easement or a setback line or onto another property. In other instances, certain oil, gas or water estates affect a property. Generally in those cases, either (i) the related lender's title policy insures against loss if a court orders the removal of the improvements causing the encroachment or (ii) the respective title and/or survey issue was analyzed by the originating lender and determined not to materially affect the respective mortgaged real property for its intended use. There is no assurance, however, that any such analysis in this regard is correct, or that such determination was made in each and every case. GROUND LEASES. Six (6) of the mortgage loans that we intend to include in the trust fund, representing 13.14% of the initial mortgage pool balance, of which 5 mortgage loans are in loan group no. 1, representing 16.03% of the initial loan group no. 1 balance, and 1 mortgage loan is in loan group no. 2, representing 5.32% of the initial loan group no. 2 balance, are secured by a mortgage lien on the borrower's leasehold interest in all or a material portion of the related mortgaged real property but not by any mortgage lien on the corresponding fee interest. Except as otherwise discussed below, the following is true in each of those cases-- - the related ground lease, after giving effect to all extension options, expires approximately 20 years or more after the stated maturity of the related mortgage loan, - the related ground lessor, has agreed, in the related ground lease or under a separate estoppel or other agreement, to give the holder of the related mortgage loan notice of, and the right to cure, any default or breach by the ground lessee, and - in general, the ground lease or a separate estoppel or other agreement otherwise contains standard provisions that are intended to protect the interests of the holder of the related mortgage loan. UNDERWRITING MATTERS GENERAL. In connection with the origination or acquisition of each of the mortgage loans that we intend to include in the trust fund, the related originator or acquiror of the mortgage loan evaluated the corresponding mortgaged real property or properties in a manner generally consistent with the standards described in this "--Underwriting Matters" section. ENVIRONMENTAL ASSESSMENTS. An independent third-party environmental consultant conducted some form of environmental investigation with respect to substantially all of the mortgaged real properties securing the mortgage loans that we intend to include in the trust fund. In the case of one hundred thirteen (113) of the mortgaged real properties, securing 93.93% of the initial mortgage pool balance, of which 75 mortgaged real properties are in loan group no. 1, securing 95.24% of the initial loan group no. 1 balance, and 38 mortgaged real properties are in loan group no. 2, securing 90.36% of the initial loan group no. 2 balance, a Phase I environmental site assessment that states that it meets ASTM Standards or an update (which may have been performed pursuant to a database or transaction screen update) of a previously conducted assessment was conducted during the 12-month period ending on December 11, 2003 and in the case of one hundred fifteen (115) of the mortgaged real properties, securing 94.76% of the initial mortgage pool balance, of which 76 mortgaged real properties are in loan group no. 1, securing 95.89% of the initial loan group no. 1 balance, and 39 mortgaged real properties are in loan group no. 2, securing 91.71% of the initial loan group no. 2 balance, such an assessment or update was conducted within a 16-month period ending on December 11, 2003. In the case of forty-one (41) of the mortgaged real properties, securing 5.24% of the initial mortgage pool balance, of which 21 mortgaged real properties are in loan group no. 1, securing 4.11% of the initial loan group no. 1 balance, and 20 mortgaged real properties are in loan group no. 2, securing 8.29% of the initial loan group no. 2 balance, and covered by environmental insurance, that environmental investigation was limited to only testing for asbestos-containing materials, lead-based paint and/or radon. The environmental insurance policies have coverage limits and do not provide coverage for adverse environmental conditions at levels below legal limits or for conditions involving asbestos and lead-based paint. In some cases, a third-party consultant also conducted a Phase II environmental site assessment of the mortgaged real property. The environmental testing at any particular mortgaged real property did not necessarily cover all potential environmental issues. For example, tests for radon, lead-based paint and lead in water were S-82 generally performed only at multifamily rental properties and only when the originator of the related mortgage loan believed this testing was warranted under the circumstances. If the environmental investigations described above identified material adverse or potentially material adverse environmental conditions at any of the respective mortgaged real properties securing a mortgage loan that we intend to include in the trust fund, then: - an environmental consultant investigated those conditions and recommended no further investigations or remediation; - an operations and maintenance plan was required or an escrow reserve was established to cover the estimated costs of obtaining that plan; - those conditions were remediated or abated prior to the closing date; - a letter was obtained from the applicable regulatory authority stating that no further action was required; - the expenditure of funds reasonably estimated to be necessary to remediate the conditions is not greater than 2% of the outstanding principal balance of the related mortgage loan or an environmental insurance policy was obtained, a letter of credit was provided, an escrow reserve account was established, another party has acknowledged responsibility or an indemnity from a responsible party other than the related borrower was obtained to cover the estimated costs of any required investigation, testing, monitoring or remediation, which in some cases has been estimated to be in excess of $50,000; - in some cases in which it is known that an offsite property is the location of a leaking underground storage tank or groundwater contamination, a responsible party other than the related borrower has been identified under applicable law, and either-- 1. that condition is not known to have affected the mortgaged real property, 2. the responsible party has either received a letter from the applicable regulatory agency stating no further action is required, established a remediation fund, engaged in responsive remediation or provided an indemnity or guaranty to the borrower or the mortgagee/lender, or 3. an environmental insurance policy was obtained; or - in some cases involving mortgage loans with an original principal balance of less than $1,000,000, the borrower expressly agreed to comply with all federal, state and local statutes or regulations respecting the identified adverse environmental condition. In many cases, the identified condition related to the presence of asbestos-containing materials, lead-based paint and/or radon. Where these substances were present, the environmental consultant often recommended, and the related loan documents required-- - the establishment of an operations and maintenance plan to address the issue, or - in some cases involving asbestos-containing materials and/or lead-based paint, an abatement or removal program. In a few cases, the particular asbestos-containing materials and/or lead-based paint was in need of repair or other remediation. This could result in a claim for damages by any party injured by that condition. In certain cases, the related lender did not require the establishment of an operations and maintenance plan despite the identification of issues involving asbestos-containing materials and/or lead-based paint. In some cases, the environmental consultant did not recommend that any action be taken with respect to a potential adverse environmental condition at a mortgaged real property securing a mortgage loan that we intend to include in the trust fund, because a responsible party with respect to that condition had already been identified. There can be no assurance, however, that such a responsible party will be financially able to address the subject condition. S-83 In some cases where the environmental consultant recommended specific remediation of an adverse environmental condition, the related originator of a mortgage loan that we intend to include in the trust fund required the related borrower generally either: 1. to carry out the specific remedial measures prior to closing; 2. to carry out the specific remedial measures post-closing and, if deemed necessary by the related originator of the mortgage loan, deposit with the lender a cash reserve in an amount generally equal to 100% to 125% of the estimated cost to complete the remedial measures; or 3. to monitor the environmental condition and/or to carry out additional testing, in the manner and within the time frame specified in the related loan documents. Some borrowers under the mortgage loans that we intend to include in the trust fund have not satisfied all post-closing obligations required by the related loan documents with respect to environmental matters. There can be no assurance that recommended operations and maintenance plans have been or will continue to be implemented. In several cases, the environmental reports or testing for a mortgaged real property identified potential and, in some cases, significant environmental issues at nearby properties. The resulting environmental report indicated, however, that-- - the mortgaged real property had not been affected, had been minimally affected or has not likely contributed to any environmental contamination, - the potential for the problem to affect the mortgaged real property was limited, or - a person responsible for remediation, other than the related borrower, had been identified. The information provided by us in this prospectus supplement regarding environmental conditions at the respective mortgaged real properties is based on the environmental site assessments referred to in this "--Underwriting Matters--Environmental Assessments" subsection and has not been independently verified by-- - us, - any of the other parties to the pooling and servicing agreement, - any of the mortgage loan sellers, - any of the underwriters, or - the affiliates of any of these parties. There can be no assurance that the environmental assessments or studies, as applicable, identified all environmental conditions and risks at, or that any environmental conditions will not have a material adverse effect on the value of or cash flow from, one or more of the mortgaged real properties. In some cases, the originator of the related mortgage loan-- - agreed to release a principal of the related borrower from its obligations under an environmental or hazardous substances indemnity with respect to the particular mortgaged real property in connection with the delivery of a secured creditor impaired property policy covering that property, or - required a secured creditor impaired property policy because of a specific environmental issue with respect to the particular mortgaged real property. See "--Environmental Insurance" below. The pooling and servicing agreement requires that the special servicer obtain an environmental site assessment of a mortgaged real property within 12 months prior to acquiring title to the property or assuming its operation. This requirement precludes enforcement of the security for the related mortgage loan until a satisfactory environmental site assessment is obtained or until any required remedial action is taken. There can be no assurance that the requirements of the pooling and S-84 servicing agreement will effectively insulate the trust fund from potential liability for a materially adverse environmental condition at any mortgaged real property. ENVIRONMENTAL INSURANCE. As discussed above, some of the mortgaged real properties securing pooled mortgage loans will, in each case, be covered by an individual or a blanket secured creditor impaired property policy. In general, if required to be obtained by the lender to address environmental issues raised in the environmental investigation conducted in connection with the origination of the related mortgage loan, those policies provide coverage for the following losses, subject to the applicable deductibles, policy terms and exclusions, any maximum loss amount and, further, subject to the various conditions and limitations discussed below: 1. if during the term of the policy, a borrower defaults under its mortgage loan and adverse environmental conditions exist at the related mortgaged real property in concentrations or amounts exceeding maximum levels allowed by applicable environmental laws or standards, the insurer will indemnify the trust fund for the lesser of clean-up costs and the outstanding principal balance of the subject mortgage loan on the date of the default; 2. if the trust fund becomes legally obligated to pay as a result of a claim first made against the trust fund and reported to the insurer during the term of the policy, for bodily injury, property damage or clean-up costs resulting from adverse environmental conditions on, under or emanating from a mortgaged real property, the insurer will defend against and pay that claim; and 3. if the trust fund enforces the related mortgage, the insurer will thereafter pay legally required clean-up costs for adverse environmental conditions at levels above legal limits which exist on or under the acquired mortgaged real property, if those costs were incurred because the insured first became aware of the conditions during the policy period, provided that those conditions were reported to the government in accordance with applicable law. Each of the secured creditor impaired property policies described above requires that the appropriate party associated with the trust fund report a claim as soon as possible during the term of the policy. Not all of those policies pays for unreimbursed servicing advances. In addition to other excluded matters, the policies typically do not cover claims arising out of conditions involving lead-based paint or asbestos. The premium for each of the secured creditor impaired property policies described above, has been or, as of the date of initial issuance of the offered certificates, will have been paid in full. The insurer under all of those policies is American International Group, Inc. or one of its member companies. American International Group, Inc. currently has a rating of "AAA" by Fitch, "Aaa" rating by Moody's, "AAA" by S&P, and "A++" by A. M. Best. PROPERTY CONDITION ASSESSMENTS. All of the mortgaged real properties securing mortgage loans in the trust fund were inspected by third-party engineering firms. However, in the case of five (5) of the mortgaged real properties, securing 1.35% of the initial mortgage pool balance, of which 3 mortgaged real properties are in loan group no. 1, securing 1.24% of the initial loan group no. 1 balance, and 2 mortgaged real properties are in loan group no. 2, securing 1.64% of the initial loan group no. 2 balance, those inspections were conducted more than 12 months prior to December 11, 2003. The scope of those inspections included an assessment of-- - the structure, exterior walls, roofing, interior construction, mechanical and electrical systems, and - the general condition of the site, buildings and other improvements located at each property. The inspections identified various deferred maintenance items and necessary capital improvements at some of the mortgaged real properties. The resulting inspection reports generally included an estimate of cost for any recommended repairs or replacements at a mortgaged real property. When repairs or replacements were recommended and were deemed material by the related originator, the related borrower was required to carry out necessary repairs or replacements and, in some instances, to establish reserves, generally in the amount of 100% to 125% of the cost estimated in the inspection report, to fund deferred maintenance or replacement items that the reports characterized as in need of prompt attention. See the table titled "Engineering Reserves, Recurring Replacement Reserves and TI&LC Reserves" on Exhibit A-1 to this prospectus supplement. There can be no assurance that another inspector would not have discovered additional maintenance problems or risks, or arrived at different, and perhaps significantly different, judgments regarding the problems and risks disclosed by the respective inspection reports and the cost of corrective action. S-85 APPRAISALS AND MARKET STUDIES. An independent appraiser that is state-certified and/or a member of the Appraisal Institute conducted an appraisal of each of the mortgaged real properties securing the mortgage loans we intend to include in the trust fund, in order to establish the approximate value of the mortgaged real property. Those appraisals are the basis for the Most Recent Appraised Values for the respective mortgaged real properties set forth on Exhibit A-1 to this prospectus supplement. In the case of one hundred forty-four (144) of the mortgaged real properties, securing 97.27% of the initial mortgage pool balance, of which 89 mortgaged real properties are in loan group no. 1, securing 97.17% of the initial loan group no. 1 balance, and 55 mortgaged real properties are in loan group no. 2, securing 97.52% of the initial loan group no. 2 balance, those appraisals were conducted within the 12-month period preceding December 11, 2003. Each of the appraisals referred to above represents the analysis and opinions of the appraiser at or before the origination of the related underlying mortgage loan. The appraisals are not guarantees of, and may not be indicative of, the present or future value of the subject mortgaged real property. There can be no assurance that another appraiser would not have arrived at a different valuation of any particular mortgaged real property, even if the appraiser used the same general approach to, and the same method of, appraising that property. Neither we nor any of the underwriters has confirmed the values of the respective mortgaged real properties in the appraisals referred to above. In general, appraisals seek to establish the amount a typically motivated buyer would pay a typically motivated seller. However, this amount could be significantly higher than the amount obtained from the sale of a particular mortgaged real property under a distress or liquidation sale. Implied in the Most Recent Appraised Values shown on Exhibit A-1 to this prospectus supplement, is the contemplation of a sale at a specific date and the passing of ownership from seller to buyer under the following conditions: - buyer and seller are motivated; - both parties are well informed or well advised, and each is acting in what he considers his own best interests; - a reasonable time is allowed to show the property in the open market; - payment is made in terms of cash in U.S. dollars or in comparable financial arrangements; and - the price paid for the property is not adjusted by special or creative financing or sales concessions granted by anyone associated with the sale. Each appraisal of a mortgaged real property referred to above involved a physical inspection of the property and reflects a correlation of the values established through the Sales Comparison Approach, the Income Approach and/or the Cost Approach. Either the appraisal upon which is based the Most Recent Appraised Value for each mortgaged real property shown on Exhibit A-1 to this prospectus supplement, or a separate letter, contains a statement to the effect that the appraisal guidelines set forth in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 were followed in preparing that appraisal. However, neither we, the master servicer, the special servicer, the trustee nor any of the underwriters or mortgage loan sellers has independently verified the accuracy of this statement. In the case of those mortgage loans that are acquisition financing, the related borrower may have acquired the mortgaged real property at a price less than the appraised value on which the mortgage loan was underwritten. ZONING AND BUILDING CODE COMPLIANCE. In connection with the origination of each mortgage loan that we intend to include in the trust fund, the related originator examined whether the use and operation of the related mortgaged real property were in material compliance with zoning, land-use, building, fire and health ordinances, rules, regulations and orders then applicable to the mortgaged real property. Evidence of this compliance may have been in the form of legal opinions, certifications and other correspondence from government officials, title insurance endorsements, engineering or consulting reports, appraisals and/or representations by the related borrower. Where the property as currently operated is a permitted nonconforming use and/or structure, an analysis was generally conducted as to-- - the likelihood that a material casualty would occur that would prevent the property from being rebuilt in its current form, and S-86 - whether existing replacement cost hazard insurance or, if necessary, supplemental law or ordinance coverage would, in the event of a material casualty, be sufficient to-- 1. satisfy the entire mortgage loan, or 2. taking into account the cost of repair, pay down that mortgage loan to a level that the remaining collateral would be adequate security for the remaining loan amount. There is no assurance, however, that any such analysis in this regard is correct, or that the above determinations were made in each and every case. SMALL BALANCE LOANS. When originating mortgage loans under its "small balance loan" program, Column generally follows its standard underwriting procedures, subject to some or all of the following exceptions: - all third-party reports made on the related mortgaged real property are abbreviated and contain less information than the third-party reports on which Column relies for its standard conduit loans; - Column or a third-party hired by Column conducts a site inspection prior to origination; and - review and analysis of environmental conditions of the related mortgaged real property are based on transaction screen assessments or other reduced environmental testing, rather than Phase I environmental site assessments, performed on the mortgaged real property. In addition, the related mortgage loan documents, in some cases, provide for full recourse against the related borrower and, in certain cases, against a principal of such borrower. SIGNIFICANT MORTGAGE LOANS Set forth below are summary discussions of the ten (10) largest mortgage loans, or groups of cross-collateralized mortgage loans, that we intend to include in the trust fund. S-87 MALL AT FAIRFIELD COMMONS LOAN INFORMATION
PRINCIPAL BALANCE(1)(2): ORIGINAL CUT-OFF DATE -------- ------------ MALL AT FAIRFIELD COMMONS LOAN: $ 85,500,000 $ 85,405,532 MALL AT FAIRFIELD COMMONS COMPANION LOAN: $ 28,500,000 $ 28,468,511 ----------------- ----------------- MALL AT FAIRFIELD COMMONS TOTAL LOAN: $ 114,000,000 $ 113,874,043
FIRST PAYMENT DATE: December 1, 2003 MORTGAGE INTEREST RATE(3): 5.450% AMORTIZATION TERM: 360 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: November 1, 2014 MATURITY/ARD BALANCE(4): $69,414,892 BORROWER: MFC Beavercreek, LLC INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until after the date that is three months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(1): $109 UP-FRONT RESERVES: Letter of Credit(5): $4,000,000 ONGOING RESERVES: Tax and Insurance Reserve(6): Yes Replacement Reserve(7): Yes Rollover Reserve(8): Yes LOCKBOX: Springing MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Retail PROPERTY SUB-TYPE: Anchored LOCATION: Beavercreek, OH YEAR BUILT/RENOVATED: 1993/NA SQUARE FEET: 1,046,726(9) OCCUPANCY AT U/W: 99.1%(10) FEE OR LEASEHOLD: Fee
OPERATING COVENANTS/LEASE MAJOR TENANTS NRSF % OF NRSF(9) EXPIRATION - ------------- ---- ------------ --------------- ELDER BEERMAN 150,000 14.33% 10/31/2013 LAZAURS, INC. 149,412 14.27% 1/31/2015 PARISIAN 130,199 12.44% 1/31/2014 SEARS 127,922 12.22% 10/31/2008
PROPERTY MANAGEMENT: Glimcher Properties Limited Partnership U/W NCF: $13,516,797 APPRAISED VALUE: $171,500,000 APPRAISAL DATE: September 15, 2003 CUT-OFF DATE LTV RATIO(1): 66.4% MATURITY/ARD LTV RATIO(1): 54.0% U/W DSCR(1): 1.75x (1) Based on the Mall at Fairfield Commons Total Loan. (2) The Mall at Fairfield Commons Loan is PARI PASSU with the Mall at Fairfield Commons Companion Loan. Unless otherwise stated, calculations presented herein are based on the Mall at Fairfield Commons Total Loan. (3) The Mall at Fairfield Commons Loan and the Mall at Fairfield Commons Companion Loan each have a mortgage interest rate of 5.450% (4) The Mall at Fairfield Commons Total Loan maturity balance is $92,553,190. (5) The borrower was required, at closing, to deliver to the lender a letter of credit in the amount of $4,000,000 to be released to the borrower upon timely satisfaction of specified conditions in connection with completion of construction and occupancy of the premises demised to Galyan's Trading Company, Inc. ("Galyan's"). If the specified conditions are not satisfied within twenty-four months of the closing of the Mall at Fairfield Commons Loan, the lender will be required to draw upon the letter of credit and apply the proceeds to the outstanding principal balance of Mall at Fairfield Commons Total Loan on a PRO RATA basis, and the applicable yield maintenance amount due under the Mall at Fairfield Commons Total Loan will be payable by the borrower from funds other than the proceeds of the letter of credit. (6) The borrower is required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies, provided that the borrower will not be required to make any payments into (i) the tax reserve for the portion of the Mall at Fairfield Commons Property leased to Lazarus, Inc. ("Lazarus") for so long as (A) no event of default exists, (B) the lease with Lazarus requires the tenant to pay taxes directly to the appropriate taxing authority and (C) the borrower furnishes lender with paid tax receipts with respect to the parcel leased to Lazarus in a timely manner or (ii) the insurance reserve for so long as (x) no event of default has occurred and is continuing and (y) the borrower maintains blanket policies and provides lender with evidence of all required coverages. (7) If the debt service coverage ratio for the prior twelve month period is less than 1.35x, the borrower is required to deposit $14,997.58 per month into a replacement reserve to fund ongoing repairs and replacements, provided that the borrower will not be required to make monthly deposits into the replacement reserve when the Mall at Fairfield Commons Property has achieved a debt service coverage ratio of at least 1.35x for at least two consecutive calendar quarters. (8) If the debt service coverage ratio for the prior twelve month period is less than 1.35x, the borrower is required to deposit $45,243.83 per month into a rollover reserve to fund tenant improvement and leasing commission obligations, provided that the borrower will not be required to make monthly deposits into the rollover reserve when the Mall at Fairfield Commons Property has achieved a debt service coverage ratio of at least 1.35x for at least two consecutive calendar quarters. (9) Includes space ground leased to Lazarus, Inc. (149,412 square feet) and all ground-leased pad sites (40,435 square feet). S-88 (10) Occupancy is based on the August 31, 2003 rent roll and does not include ground leased square footage. THE LOAN. The largest loan was originated on October 17, 2003. The Mall at Fairfield Commons Total Loan is secured by a first priority mortgage encumbering a retail shopping mall in Beavercreek, Ohio. The Mall at Fairfield Commons Total Loan is evidenced by two notes, one of which evidences the Mall at Fairfield Commons Loan and the other of which evidences Mall at Fairfield Commons Companion Loan. See "--Other Financing" below. THE BORROWER. The borrower under the Mall at Fairfield Commons Loan is MFC Beavercreek, LLC. The borrower is a single-purpose limited liability company organized under the laws of the State of Delaware. Glimcher Properties Limited Partnership is the sponsor and the sole member of the borrower. Glimcher Properties Limited Partnership is the operating partnership of Glimcher Realty Trust, a fully-integrated, self-administered, and self-managed Maryland Real Estate Investment Trust which owns and manages regional and super regional malls and community shopping centers including single tenant retail properties throughout the central and eastern regions of the United States. THE MALL AT FAIRFIELD COMMONS PROPERTY. The Mall at Fairfield Commons Property is a retail shopping mall located in Beavercreek, Ohio. The Mall at Fairfield Commons Property contains a total of 1,046,726 net rentable square feet, comprised of 856,879 square feet of mall space, 149,412 square feet ground-leased to Lazarus, Inc. and 40,435 square feet of ground-leased pad spaces. Lazarus, Inc. and the pad tenants occupy their space pursuant to ground leases, and neither that property nor the improvements thereon are part of the collateral for the Mall at Fairfield Commons Loan. National anchors include Elder Beerman, JC Penney, Lazarus, Inc., Parisian, Sears and, Galyan's, to be completed in 2005. PROPERTY MANAGEMENT. The Mall at Fairfield Commons Property is managed by Glimcher Properties Limited Partnership and Glimcher Development Corporation, an affiliate of the borrower. The management agreement generally provides for a management fee of 3% of gross income, which is subordinated to the Mall at Fairfield Commons Loan. The management of the Mall at Fairfield Commons Property will be performed by either Glimcher Properties Limited Partnership and Glimcher Development Corporation, or a substitute manager which, in the reasonable judgment of the lender, is a reputable management organization possessing experience in managing properties similar in size, scope, use and value as the Mall at Fairfield Commons Property, provided that the borrower under the Mall at Fairfield Commons Loan shall have obtained prior written confirmation from the applicable rating agencies that such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Mall at Fairfield Commons Loan has the right to require a termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Mall at Fairfield Commons Loan. CASH MANAGEMENT/LOCKBOX. The borrower under the Mall at Fairfield Commons Total Loan must cause the tenants to deposit all rents into a lockbox account under the control of the lender. Unless and until an event of default under the Mall at Fairfield Commons Total Loan or other trigger event occurs under the cash management agreement, the borrower will have access to those funds. OTHER FINANCING. The Mall at Fairfield Commons Loan is secured by the Mall at Fairfield Commons Property on a PARI PASSU basis with the Mall at Fairfield Commons Companion Loan. The Mall at Fairfield Commons Companion Loan is not included in the trust fund. The trust, as holder of the Mall at Fairfield Commons Loan will be a party to an intercreditor agreement. See "--The Mall at Fairfield Commons Loan" above in this prospectus supplement. S-89 MAYFAIR MALL AND OFFICE COMPLEX LOAN INFORMATION
PRINCIPAL BALANCE(1)(2): ORIGINAL CUT-OFF DATE -------- ------------ MAYFAIR MALL LOAN: $ 80,000,000 $ 79,343,515 MAYFAIR MALL COMPANION LOANS: $ 120,000,000 $ 119,015,273 --------------- --------------- MAYFAIR MALL TOTAL LOAN: $ 200,000,000 $ 198,358,788
FIRST PAYMENT DATE: August 11, 2003 MORTGAGE INTEREST RATE(3): 3.108% AMORTIZATION: 360 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: July 11, 2008 MATURITY/ARD BALANCE(4): $71,457,181 BORROWER: Mayfair Property, Inc. INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until the date that is three months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(1): $155 UP-FRONT RESERVES: None ONGOING RESERVES: Tax and Insurance Reserve(5): Yes Rollover Reserve(6): Yes Replacement Reserve(7): Yes LOCKBOX: Hard MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Portfolio PROPERTY TYPE: Retail/Office PROPERTY SUB-TYPE: Anchored/CBD LOCATION: Wauwatosa, WI YEAR BUILT/RENOVATED: 1957/2003 SQUARE FEET: 1,277,483(8) OCCUPANCY AT U/W: 93%(8)(9) FEE OR LEASEHOLD: Fee
% OF LEASE MAJOR TENANT NRSF NRSF(8) EXPIRATION - ------------ ---- ------- ---------- MAYFAIR MALL - RETAIL Marshall Field's 288,596 33.63% 1/31/2007 AMC Theater 89,149 10.39% 4/30/2019 Barnes & Noble 30,925 3.60% 1/31/2014 MAYFAIR MALL - OFFICE COMPLEX: St. Joseph's 54,932 13.10% 9/30/2008 Aurora Health Care 32,118 7.66% 11/30/2011 Firstar Bank Milwaukee NA 11,512 2.75% 12/31/2005
PROPERTY MANAGEMENT: General Growth Management, Inc. U/W NCF: $24,443,593 APPRAISED VALUE: $330,000,000 APPRAISAL DATE: June 5, 2003 CUT-OFF DATE LTV RATIO(1): 60.1% MATURITY/ARD LTV RATIO(1): 54.1% U/W DSCR(1): 2.38x (1) Based on the Mayfair Mall Total Loan. (2) The Mayfair Mall Loan is PARI PASSU with the Mayfair Mall Companion Loans, two of which have a principal balance of $49,589,697 and one that has a principal balance of $19,835,879 as of December 11, 2003. Unless otherwise stated, calculations presented herein are based on the Mayfair Mall Total Loan. (3) The Mayfair Mall Loan and the Mayfair Mall Companion Loan each have a mortgage interest rate of 3.108% per annum. (4) The Mayfair Mall Total Loan maturity balance is $178,642,952. (5) Upon the occurrence and during the continuance of a Trigger Event, the borrower will be required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies. A "Trigger Event" includes the occurrence of: (i) an event of default under the Mayfair Mall Loan or (ii) the debt service coverage ratio is less than 1.35x for the 12 calendar months immediately preceding the date of determination. (6) Upon the occurrence and during the continuance of a Trigger Event, the borrower is required to deposit $119,969 per month into a rollover reserve to fund tenant improvement and leasing obligations until the fund equals $1,439,624. (7) Upon the occurrence and during the continuance of a Trigger Event, the borrower is required to deposit $17,716 per month into a replacement reserve until the fund equals $212,589. (8) Exclusive of a non-owned anchor. (9) Occupancy is based on the July 14, 2003 rent roll. THE LOAN. The second largest loan was originated on June 13, 2003. The Mayfair Mall Total Loan is secured by a first priority mortgage encumbering a regional enclosed mall and office complex located in Wauwatosa, Wisconsin. The Mayfair Mall Total Loan is evidenced by four notes, one of which evidences the Mayfair Mall Loan and three of which evidence the Mayfair Mall Companion Loans. See "--Other Financing" below. THE BORROWER. The borrower under the Mayfair Mall Loan is Mayfair Property, Inc. The borrower is a corporation organized under the laws of the State of Delaware. GGP Ivanhoe II, Inc., is the sole shareholder of the borrower. GGP Ivanhoe II, Inc. has as its majority shareholder GGP Ivanhoe III, Inc., a wholly-owned subsidiary of GGP Limited Partnership. GGP Limited Partnership has as its general partner General Growth Properties, Inc., a Delaware corporation. S-90 General Growth Properties, Inc., was founded in 1954, and owns a diversified portfolio of interests in 169 properties with 146 million square feet of retail space and regional malls in 41 states. It is a fully integrated real estate operation that acquires, develops, manages and leases commercial real estate properties. THE PROPERTY. The Mayfair Mall Property is an enclosed retail mall and office complex in Wauwatosa, Wisconsin, containing 1,277,483 net rentable square feet. National anchors include: Marshall Field's, Boston Store and American Multi-Cinema, Inc. PROPERTY MANAGEMENT. The Mayfair Mall Property is managed by General Growth Management, Inc., an affiliate of the borrower. The management agreement generally provides for a management fee of 2.0% which is subordinated to the Mayfair Mall Loan. The management of the Mayfair Mall Property will be performed by General Growth Management, Inc., or a substitute manager which, in the reasonable judgment of the lender, is a reputable management organization possessing experience in managing properties similar in size, scope, use and value to the Mayfair Mall Property, provided that the borrower shall have obtained prior written confirmation from the applicable rating agencies that such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Mayfair Mall Total Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Mayfair Mall Total Loan. General Growth Management, Inc. manages 126 retail properties comprising approximately 112,667,738 total square feet. General Growth Management, Inc. is headquartered in Chicago, Illinois. CASH MANAGEMENT. The borrower under the Mayfair Mall Loan must cause the tenants of the Mayfair Mall Property to deposit rental payments directly into a lockbox account under the control of the lender. Unless and until an event of default under the Mayfair Mall Total Loan or the debt service coverage ratio is less than 1.35x for the previous twelve calendar months, the borrower will have access to those funds. OTHER FINANCING. The Mayfair Mall Loan is secured by the Mayfair Mall Property on a PARI PASSU basis with the Mayfair Mall Companion Loan. The Mayfair Mall Companion Loans are not included in the Trust. The trust, as holder of the Mayfair Mall Loan will be a party to an intercreditor agreement. See "--The Mayfair Mall Loan" above in this prospectus supplement. S-91 STANFORD SHOPPING CENTER LOAN INFORMATION
PRINCIPAL BALANCE(1)(2): ORIGINAL CUT-OFF DATE -------- ------------ STANFORD SHOPPING CENTER LOAN: $ 75,000,000 $ 75,000,000 STANFORD SHOPPING CENTER COMPANION LOAN: $ 90,000,000 $ 90,000,000 --------------- --------------- STANFORD SHOPPING CENTER TOTAL LOAN: $ 165,000,000 $ 165,000,000
FIRST PAYMENT DATE: October 11, 2003 MORTGAGE INTEREST RATE(2): 3.300% AMORTIZATION TERM: Interest only HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: September 11, 2008 MATURITY/ARD BALANCE(3): $75,000,000 BORROWER: SPG Center, LLC INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/Defeasance until the date that is six months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(1): $119 UP-FRONT RESERVES: None ONGOING RESERVES: Tax and Insurance Reserve(4): Yes Replacement Reserve(5): Yes Rollover Reserve(6): Yes Ground Lease Reserve(7): Yes LOCKBOX: Springing MEZZANINE: Yes(8) PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Retail PROPERTY SUB-TYPE: Anchored LOCATION: Palo Alto, CA YEAR BUILT/RENOVATED: 1956/2002 SQUARE FEET: 1,387,351(9) OCCUPANCY AT U/W: 96%(10) FEE OR LEASEHOLD: Leasehold
LEASE MAJOR TENANTS NRSF % OF NRSF(9) EXPIRATION - ------------- ---- ------------ ---------- BLOOMINGDALE'S(11) 228,986 16.51% 2/28/2029 MACY'S(11) 225,830 16.28% 2/18/2029 NORDSTROM(11) 180,000 12.97% 10/31/2010 NEIMAN MARCUS(11) 120,000 8.65% 6/30/2022
PROPERTY MANAGEMENT: Simon Management Associates, LLC U/W NCF: $18,932,926 APPRAISED VALUE: $335,000,000 APPRAISAL DATE: July 22, 2003 CUT-OFF DATE LTV RATIO(1): 49.3% MATURITY/ARD LTV RATIO(1): 49.3% U/W DSCR(1): 3.43x (1) Based on the Stanford Shopping Center Total Loan. (2) The Stanford Shopping Center Total Loan has an original balance of $165,000,000. The Stanford Shopping Center Loan is PARI PASSU with two Stanford Shopping Center Companion Loans, which each have a principal balance of $45,000,000 as of December 11, 2003. The Stanford Shopping Center Loan and the Stanford Shopping Center Companion Loans each have a mortgage interest rate of 3.300%. Unless otherwise stated, calculations presented herein are based on the Stanford Shopping Center Total Loan. There is also a Member Loan that is secured by partnership distributions and is guaranteed by Simon Property Group. (3) The Stanford Shopping Center Total Loan maturity balance is $165,000,000. (4) Upon the occurrence of and during the continuance of a Lockbox Event, the borrower is required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies; provided that the borrower will not be required to make any payments into the tax and insurance reserve if (x) with respect to (a) or (b) above, following a Lockbox Event, Simon Property Group, L.P. delivers to lender a Guaranty of Taxes and Insurance Premiums or (y) solely with respect to (b) above, the borrower maintains blanket policies prepaid twelve months in advance and provides the lender with evidence of all required coverages. A "Lockbox Event" includes the occurrence of: (i) an event of default under the Stanford Shopping Center Total Loan or (ii) a decline below $11,500,000 in the net operating income for the previous four quarters as of the end of two consecutive calendar quarters. If, after a Lockbox Event, Simon Property Group, L.P.'s credit rating drops below "BBB-," the borrower must deposit and pay to lender an amount equal to the amount that the borrower would have been required to deposit in the reserve account as of such date. (5) Upon the occurrence of and during the continuance of a Lockbox Event, the borrower is required to deposit $8,968 per month into a replacement reserve to fund ongoing repairs and replacements; provided that the borrower will not be required to make any payments into the replacement reserve fund if (i) the balance of the reserve equals or exceeds $215,232 or (ii) if, following a Lockbox Event, Simon Property Group, L.P. delivers to lender a guaranty of the replacement reserve. If, after a Lockbox Event, Simon Property Group, L.P.'s credit rating drops below "BBB-," the borrower must deposit and pay to lender an amount equal to the amount that the borrower would have been required to deposit in the reserve account as of such date. (6) Upon the occurrence of and during the continuance of a Lockbox Event, the borrower is required to deposit $33,333 per month into a rollover reserve to fund tenant improvement and leasing commission obligations; provided that the borrower will not be required to make any payments into the rollover reserve if: (i) the balance of the reserve equals or exceeds $1,000,000 or (ii) if Simon Property Group, L.P. delivers to lender a guaranty of the rollover reserve. If, after a Lockbox Event, Simon Property S-92 Group, L.P.'s credit rating drops below "BBB-," the borrower must deposit and pay to lender an amount equal to the amount that the borrower would have been required to deposit in the reserve account as of such date. (7) Upon the occurrence of and during the continuance of a Lockbox Event, the borrower is required to make a one time deposit of $833,334 into a ground lease reserve. If at any time during a Lockbox Event the amount on deposit in the ground lease reserve account falls below the ground lease deposit, the borrower is required to pay the lender the amount necessary to cause the balance of the ground lease reserve account to equal the ground lease deposit. (8) See "--Other Financing" below. (9) Includes 853,338 square feet of ground leased anchor space. (10) Occupancy is based on the June 30, 2003 rent roll and does not include ground leased square footage. (11) Ground leased anchor. THE LOAN. The third largest loan was originated on August 20, 2003. The Stanford Shopping Center Total Loan is secured by a first priority deed of trust encumbering a leasehold interest in a shopping mall in Palo Alto, California. The Stanford Shopping Center Total Loan is evidenced by three notes, one of which evidences the Stanford Shopping Center Loan and two of which evidence the Stanford Shopping Center Companion Loans. See "--Other Financing" below. THE BORROWER. The borrower under the Stanford Shopping Center Total Loan is SPG Center, LLC. The borrower is a single-purpose limited liability company organized under the laws of the State of Delaware. Simon Property Group, L.P. indirectly owns the borrower. The sponsor, Simon Property Group, L.P. was founded in 1960 and currently owns and manages 235 properties in 36 states throughout the United States. THE STANFORD SHOPPING CENTER PROPERTY. The Stanford Shopping Center Property is a regional mall located in Palo Alto, California. The Stanford Shopping Center was originally built in 1956 and contains 1,387,351 rentable square feet. National anchors include Bloomingdales, Macy's, Nieman Marcus and Nordstrom. PROPERTY MANAGEMENT. The Stanford Shopping Center property is managed by Simon Management Associates, LLC, an affiliate of the borrower. The management agreement generally provides for a management fee of 1.5% of total collections in addition to leasing commissions and other specialized fees, all of which are subordinated to the Stanford Shopping Center Total Loan. The management of the Stanford Shopping Center Property will be performed by either Simon Management Associates, LLC, or a qualified manager, which is a reputable and experienced management organization possessing experience in managing properties similar in size, scope, use and value as the Stanford Shopping Center Property, provided that the borrower shall have obtained prior written confirmation from the applicable rating agencies that the management of the Stanford Shopping Center Property by such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Stanford Shopping Center Total Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Stanford Shopping Center Total Loan. Simon Management Associates, LLC manages 179 shopping centers comprising 170,300,000 total square feet. Simon Management Associates, LLC is headquartered in Indianapolis, Indiana. GROUND LEASE. The Stanford Shopping Center Property is leased to the borrower pursuant to a ground lease with the Trustees of Leland Stanford Junior University. The Stanford Shopping Center Ground Lease expires in August 2054. Rent is payable under the Stanford Shopping Center Ground Lease at the rate of $5,000,000 per year plus a number equal to 25% of adjusted gross revenues less the then annual base ground rent. CASH MANAGEMENT/LOCKBOX. The borrower under the Stanford Shopping Center Total Loan must cause the tenants of the Stanford Shopping Center Property to deposit all rents directly into a lockbox account under the control of the lender. Unless and until an event of default under the Stanford Shopping Center Total Loan or other trigger event occurs under the cash management agreement, the borrower will have access to those funds. OTHER FINANCING. The Stanford Shopping Center Loan is secured by the Stanford Shopping Center Property on a PARI PASSU basis with the Stanford Shopping Center Companion Loans. The Stanford Shopping Center Companion Loan is not included in the Trust. The trust, as holder of the Stanford Shopping Center Loan will be a party to an intercreditor agreement. See "--The Stanford Shopping Center Loan" above in this prospectus supplement. Additionally, SPG Palo Alto Member, LLC, the sole member of the borrower under the Stanford Center Total Loan, is the borrower under a loan (with an aggregate principal balance as of the Cut-off Date of $55,000,000) (the "Member Loan"), made by Column Financial Inc., which is secured by such member's rights to distributions from the borrower under the Stanford Center Total Loan and further secured by a Guaranty Agreement entered into by Simon Property Group, L.P., which guaranties the payment and performance of SPG Palo Alto Member, LLC under the Member Loan. Upon an event of default under the Member Loan, Column's sole recourse under the Member Loan is to foreclose on the member's rights to distributions from the borrower under the Stanford Center Total Loan, or sue Simon Property Group, L.P. under the Guaranty Agreement. S-93 MERISTAR HOTEL PORTFOLIO LOAN INFORMATION ORIGINAL PRINCIPAL BALANCE: $51,000,000 CUT-OFF DATE PRINCIPAL BALANCE: $50,881,109 FIRST PAYMENT DATE: November 11, 2003 MORTGAGE INTEREST RATE: 6.880% AMORTIZATION TERM: 300 months HYPERAMORTIZATION: After October 11, 2013, the interest rate increases by 2% to 8.880% and all excess cash flow is used to reduce the principal balance of the MeriStar Hotel Portfolio Loan until the principal balance is reduced to zero. ARD DATE: October 11, 2013 MATURITY DATE: October 11, 2028 MATURITY/ARD BALANCE: $40,652,182 MeriStar Seelbach SPE, LLC and BORROWER: MeriStar Frazer SPE, LLC INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until the date that is three months prior to the Anticipated Repayment Date. LOAN PER ROOM(1): $98,037 UP-FRONT RESERVES: Engineering Reserve(2): $15,475 ONGOING RESERVES: Tax and Insurance Reserve(3): Yes Replacement Reserve(4): Yes LOCKBOX: Hard MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Portfolio PROPERTY TYPE: Hotel PROPERTY SUB-TYPE: Full Service LOCATION: Frazer, PA and Louisville, KY YEAR BUILT/RENOVATED: Frazer: 1990/2003 Louisville: 1905/2000 ROOMS: Frazer: 198 Louisville: 321 OCCUPANCY AT U/W: N/A FEE OR LEASEHOLD: Fee Interstate Management Company, PROPERTY MANAGEMENT: L.L.C. U/W NCF: $7,303,120 APPRAISED VALUE(5): $68,650,000 APPRAISAL DATE: July 2, 2003 and July 7, 2003 CUT-OFF DATE LTV RATIO(1): 74.1% MATURITY/ARD LTV RATIO: 59.2% U/W DSCR: 1.71x (1) Based on the cut-off date principal balance. (2) The engineering reserve was established at closing to fund immediate repairs. (3) The borrower is required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies. (4) The borrower is required to deposit an amount equal to four percent of gross monthly income from each property each month into a replacement reserve to fund ongoing repairs and replacements. (5) The appraised value of the MeriStar Hotel Portfolio consists of an appraisal of $21,650,000 for the Frazer Property and an appraisal of $47,000,000 for the Louisville property. THE LOAN. The fourth largest loan was originated on September 25, 2003. The MeriStar Hotel Portfolio Loan is secured by a first priority mortgage encumbering a hotel in Frazer, Pennsylvania and a hotel in Louisville, Kentucky. THE BORROWER. The borrowers under the MeriStar Hotel Portfolio Loan are MeriStar Frazer SPE, LLC and MeriStar Seelbach SPE, LLC. The borrowers are both limited liability companies organized under the laws of the State of Delaware. The sponsor, MeriStar Hospitality, is a Maryland corporation and owns and manages 107 properties in 25 states throughout the United States. THE MERISTAR HOTEL PORTFOLIO PROPERTY. The MeriStar Hotel Portfolio Property consists of the Sheraton Great Valley hotel located in Frazer, Pennsylvania and the Hilton Seelbach hotel located in Louisville, Kentucky. Sheraton Great Valley is a 5-story hotel comprising a total of 198 rooms and 229,665 gross square feet. The hotel includes three ballrooms, a lounge, an indoor swimming pool, a restaurant, a fitness center, a business center and a gift shop. Hilton Seelbach is an 11-story hotel comprising a total of 321 rooms and 280,000 gross square feet. The hotel includes approximately 32,000 square feet of meeting space, four restaurants, a fitness center, a concierge lounge, a business center (for concierge level guests) and a gift shop. The sixth floor is designated as a Hilton Honors floor (typically reserved exclusively for Hilton Honors members). The seventh and eighth floors are concierge levels (require elevator card key access). Each of these floors feature upgraded amenities. S-94 PROPERTY MANAGEMENT. The MeriStar Hotel Portfolio Property is managed by Interstate Management Company, L.L.C. The management agreement generally provides for a management fee of not less than 2.5% of the aggregate MeriStar Hotel Portfolio revenues per annum and not greater than 4.0% of aggregate MeriStar Hotel Portfolio revenues per annum which is subordinated to the MeriStar Hotel Portfolio Loan. The management of the MeriStar Hotel Portfolio Property will be performed by either Interstate Management Company, L.L.C., or a substitute manager which, in the reasonable judgment of the lender, is a reputable management organization possessing experience in managing properties similar in size, scope, use and value as the MeriStar Hotel Portfolio Property, provided that the borrower shall have obtained prior written confirmation from the applicable rating agencies that such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the MeriStar Hotel Portfolio Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the MeriStar Hotel Portfolio Loan. Interstate Management Company, LLC manages 107 hotels comprising approximately 27,581 rooms. Interstate Management Company, LLC is headquartered in Arlington, VA. CASH MANAGEMENT/LOCKBOX. The borrower or the property manager must cause all income to be deposited within one business day of receipt directly into a lockbox account under the control of the lender. The rents will be transferred once every business day to an account maintained by the lender from which all required payments and deposits to reserves under the MeriStar Hotel Portfolio Loan will be made. Unless and until an event of default occurs under the MeriStar Hotel Portfolio Loan, the borrower will have access to the remaining funds after all such required payments are made. S-95 PARAMOUNT PLAZA LOAN INFORMATION ORIGINAL PRINCIPAL BALANCE: $45,000,000 CUT-OFF DATE PRINCIPAL BALANCE: $44,876,466 FIRST PAYMENT DATE: October 11, 2003 MORTGAGE INTEREST RATE: 6.150% AMORTIZATION TERM: 360 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: September 11, 2013 MATURITY/ARD BALANCE: $38,334,447 BORROWER: Paramount Plaza, LLC INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until after the date that is three months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(1): $49 UP-FRONT RESERVES: Tax and Insurance Reserve(2): $315,000 Stabilization Reserve(3): 2,000,000 Rollover Reserve(4): $250,000 ONGOING RESERVES: Replacement Reserve(5): Yes Rollover Reserve(4): Yes Debt Service Reserve(6): Yes Lease Termination Payment Reserve(7): Yes LOCKBOX: Modified MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Office PROPERTY SUB-TYPE: Central Business District LOCATION: Los Angeles, CA YEAR BUILT/RENOVATED: 1969/1990 SQUARE FEET: 911,900 OCCUPANCY AT U/W: 84%(8) FEE OR LEASEHOLD: Fee
MAJOR TENANTS NSRF % OF NRSF LEASE EXPIRATION - ------------- ---- --------- ---------------- CA Dept. of Social Services 64,944 7.12% 7/31/2004 Suites 80600, 80700 and 80800 Suite 80500 24,739 2.71% 9/30/2005 - -------------------------------- -------- --------- ---------------- Total 89,683 9.83% Wilshire Business Center 50,887 5.58% 12/31/2006 City of Los Angeles Dept. of Bldg & Safety 36,698 4.02% 1/1/2008
PROPERTY MANAGEMENT: Jamison Properties, Inc. U/W NCF: $6,931,117 APPRAISED VALUE: $75,000,000 APPRAISAL DATE: May 12, 2003 CUT-OFF DATE LTV RATIO(1): 59.8% MATURITY/ARD LTV RATIO: 51.1% U/W DSCR: 2.11x (1) Based on the cut-off date principal balance. (2) At closing, the borrower deposited six months of taxes and insurance premiums, which amounts can be replaced with a letter of credit. Upon the occurrence and during the continuation of an event of default under the Paramount Plaza Loan, the borrower will be required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies. (3) At closing, the borrower deposited $2,000,000 in a stabilization reserve. Stabilization reserve funds are available for disbursement to the borrower in amounts greater than $500,000 each from April 11, 2004 through December 11, 2004 if the borrower provides evidence that (i) the Paramount Plaza Property has achieved an occupancy rate of not less than 85.0% and (ii) the Paramount Plaza Property has achieved a debt service coverage ratio of at least 1.30x for the immediately preceding six calendar months. Funds not disbursed by lender by December 11, 2004 will be transferred to the rollover reserve. (4) On October 11, 2004, the borrower was required to make an initial deposit of $250,000 into a rollover reserve to fund tenant improvement and leasing commission obligations. Beginning November 11, 2004, the borrower is required to deposit $20,000 per month into the rollover reserve, provided that the borrower is not required to make a deposit to the rollover reserve when the balance equals or exceeds $750,000. However, upon the one-time deposit into the rollover reserve from funds initially on deposit in the stabilization reserve fund, the limit on the balance in the rollover reserve will be $1,000,000 after which the borrower is not required to make a deposit to the rollover reserve for so long as the balance equals or exceeds $1,000,000. (5) The borrower is required to deposit $11,398.42 per month into a replacement reserve to fund ongoing repairs and replacements. (6) If the debt service coverage ratio for the prior six month period is less than 1.20x, the borrower is thereafter required to deposit excess cash flow (minus required payments to other reserves) into a debt service reserve. The entire debt service reserve is available for disbursement to the borrower when the Paramount Plaza Property has achieved a debt service coverage ratio of 1.30x for the previous twelve calendar months. In addition, the lender, at its discretion, may utilize debt service reserve funds to satisfy revenue shortfalls which would otherwise cause an event of default under the Paramount Plaza Loan. (7) If at any time any lease is terminated early, the borrower is required to deposit any lease termination payments received into a lease termination payment reserve to fund resulting lease termination expenditures. (8) Occupancy is based on the May 1, 2003 rent roll. THE LOAN. The fifth largest loan was originated on September 10, 2003. The Paramount Plaza Loan is secured by a first priority mortgage encumbering an office building in Los Angeles, California. S-96 THE BORROWER. The borrower under the Paramount Plaza Loan is Paramount Plaza, LLC. The borrower is a limited liability company organized under the laws of the State of California. JPB 3550 Partners, Inc., a corporation organized under the laws of the State of Delaware, is the sole managing member of the borrower and has a 21.6% membership interest in the borrower. Various other investors own the remaining 78.4% interest in the borrower. The sponsor, David Y. Lee, is the CEO and sole shareholder of JPB 3550 Partners, Inc. and David Y. Lee owns and manages over seven million square feet of office and retail space in the western portion of the United States. THE PARAMOUNT PLAZA PROPERTY. The Paramount Plaza Property is an office building located in Los Angeles, California. The office building contains 911,900 square feet. PROPERTY MANAGEMENT. The Paramount Plaza Property is managed by Jamison Properties, Inc., an affiliate of the borrower. The management agreement generally provides for a management fee equal to the sum of 3.0% of rental income, 4.0% commission on new leases and 2.0% commission on renewal leases, which fees are subordinated to the Paramount Plaza Loan. In the event that the debt service coverage ratio of the Paramount Plaza Property for the prior six calendar months is less than 1.20x, the property manager will not be entitled to any fees. Once the Paramount Plaza Property has achieved a debt service coverage ratio of 1.30x for twelve consecutive calendar months, all accrued and unpaid amounts as well as future fees (as incurred for so long as the debt service coverage ratio continues to exceed 1.20x) will be paid to the property manager. The management of the Paramount Plaza Property will be performed by either Jamison Properties, Inc. or a substitute manager which, in the reasonable judgment of the lender is a reputable management organization possessing experience in managing properties similar in size, scope, use and value as the Paramount Plaza Property, provided that the borrower shall have obtained prior written confirmation from the applicable rating agencies that such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Paramount Plaza Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Paramount Plaza Loan. Jamison Property, Inc. manages over seven million square feet of office and retail space. Jamison Properties, Inc. is headquartered in Los Angeles, CA. CASH MANAGEMENT/LOCKBOX. The borrower or the property manager must cause all rents to be deposited within one business day of receipt directly into a lockbox account under the control of the lender. The rents will be transferred, on the last business day of each week, to an account maintained by the lender from which all required payments and deposits to reserves under the Paramount Plaza Loan will be made. Unless the borrower is required to make deposits to the debt service reserve or there is an event of default, the borrower is entitled to receive the balance of the funds in the account after all such required payments. S-97 MONTALVO SQUARE SHOPPING CENTER LOAN INFORMATION ORIGINAL PRINCIPAL BALANCE: $42,300,000 CUT-OFF DATE PRINCIPAL BALANCE: $42,300,000 FIRST PAYMENT DATE: August 11, 2003 MORTGAGE INTEREST RATE: 5.150% AMORTIZATION TERM(2): 360 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: July 11, 2013 MATURITY/ARD BALANCE: $35,866,680 BORROWER: Montalvo Shopping Center, LLC INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until the date that is three months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(1): $194 UP-FRONT RESERVES: First Generation Rollover Reserve(3): $675,632 Rollover Reserve(4): $150,000 Tax and Insurance Reserve(5): $223,160 ONGOING RESERVES: Tax and Insurance Reserve(5): Yes Replacement Reserve(6): Yes Rollover Reserve(7): Yes Excess Cash Flow Reserve(8): Yes Lease Termination Payment Reserve(9): Yes LOCKBOX: Springing MEZZANINE: None(10) PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Retail PROPERTY SUB-TYPE: Anchored LOCATION: Ventura, CA YEAR BUILT/RENOVATED: 2002/N/A SQUARE FEET: 218,507 OCCUPANCY AT U/W: 89%(11) FEE OR LEASEHOLD: Fee/Leasehold
MAJOR TENANTS: NRSF % OF NRSF LEASE EXPIRATION - -------------- ---- --------- ---------------- Ralph's Grocery Company Store 58,000 26.54% 5/31/2022 LA Fitness International 46,300 21.19% 8/30/2017 Longs Drug Store California 23,112 10.58% 6/30/2022
PROPERTY MANAGEMENT: Parkstone Management Services U/W NCF: $4,237,727 APPRAISED VALUE: $52,900,000 APPRAISAL DATE: March 6, 2003 CUT-OFF DATE LTV RATIO(1): 80.0% MATURITY/ARD LTV RATIO: 67.8% U/W DSCR: 1.53x (1) Based on the cut-off date principal balance. (2) The loan is interest only for the first twelve payment dates until July 2004. (3) At closing, the borrower deposited $675,632 in a first generation rollover reserve to fund tenant improvement and leasing commission obligations associated with leasing 26,744 square feet of new space. If any amounts remain in the first generation rollover reserve after the leasing of this vacant space, the remainder will be deposited in the rollover reserve. (4) At closing, the borrower deposited $150,000 in a rollover reserve to fund tenant improvement and leasing commission obligations. (5) At closing, the borrower deposited $223,160 in a tax and insurance reserve. Upon the borrower's failure to make any monthly insurance payment directly to the provider, the borrower will be required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to pay insurance premiums prior to the expiration of the related policies. The borrower is required to make monthly payments into the tax and insurance reserve to accumulate funds necessary to pay all taxes prior to their due dates. (6) The borrower is required to deposit $2,738 per month into a replacement reserve to fund ongoing repairs and replacements, provided that the borrower is not required to make a deposit to the replacement reserve in any month when the balance of the reserve equals or exceeds $98,568. (7) In addition to an initial deposit, the borrower is required to deposit $10,000 per month into a rollover reserve to fund potential tenant improvements and leasing commission obligations related to currently leased space, provided that the borrower is not required to make a deposit to the rollover reserve in any month when the balance of the reserve equals or exceeds $300,000 plus any amounts transferred from the first generation rollover reserve. (8) If the annualized debt service coverage ratio for the previous month is less than 1.10x, the borrower is thereafter required to deposit excess cash flow into the excess cash flow reserve. Funds in the excess cash flow reserve will be released and the borrower will no longer be required to deposit excess cash flow into the excess cash flow reserve when the Montalvo Square Shopping Center Property has achieved an annualized debt service coverage ratio of 1.20x for six consecutive calendar months. (9) If at any time any lease on the Montalvo Shopping Center Property is terminated early, the borrower is required to deposit any lease termination payment made by the tenant into a lease termination payment reserve. (10) See "--Future Financing" below. (11) Occupancy is based on the October 1, 2003 rent roll. S-98 THE LOAN. The sixth largest Loan was originated on June 16, 2003. The Montalvo Square Shopping Center Loan is secured by a first priority mortgage encumbering the fee interest held by the borrower in a retail shopping center in Ventura, California and a second priority mortgage encumbering the leasehold interest held by the borrower on a small portion of the retail shopping center. THE BORROWER. The borrower under the Montalvo Square Shopping Center Loan is Montalvo Shopping Center, LLC. The borrower is a single-purpose limited liability company organized under the laws of the State of California. Montalvo Square Shopping Center Corp., a corporation organized under the laws of the State of California, is the managing member of the borrower. The managing member, wholly owned by the sponsors, owns a 30% interest in the borrower. Various other investors own the remaining 70% interest in the borrower. The sponsors are Lindsay Parton, John Miller and Dieter Mees. THE MONTALVO SQUARE SHOPPING CENTER PROPERTY. The Montalvo Square Shopping Center Property is a retail shopping center located in Ventura, California. National Anchors include Ralph's, LA Fitness and Longs Drug Store. The Montalvo Square Shopping Center Property contains approximately 218,507 square feet of rentable space. PROPERTY MANAGEMENT. The Montalvo Square Shopping Center Property is managed by Parkstone Management Services, which is not an affiliate of the borrower. The management agreement generally provides for a monthly management fee of the greater of three percent of monthly rental income or $4,850.00, which is subordinated to the Montalvo Square Shopping Center Loan. The management of the Montalvo Square Shopping Center Property will be performed by either Parkstone Management Services, or a substitute manager which, in the reasonable judgment of the lender, is a reputable management organization possessing experience in managing properties similar in size, scope, use and value as the Montalvo Square Shopping Center Property, provided that the borrower under the Montalvo Square Shopping Center Loan shall have obtained prior written confirmation from the applicable rating agencies that such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Montalvo Square Shopping Center Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Montalvo Square Shopping Center Loan. Parkstone Management Services is headquartered in San Diego, CA. CASH MANAGEMENT/LOCKBOX. The borrower must cause all rents from the Montalvo Square Shopping Center Property to be deposited directly into a rent account to which the borrower has access until an event of default under the Montalvo Square Shopping Center Loan or other trigger event occurs under the cash management agreement. Following the occurrence of such a trigger event, a lockbox is to be put into effect under the control of the lender and the borrower will not have access to funds in the lockbox account. FUTURE FINANCING. After July 11, 2006, upon the lender's prior written consent, the members of the Montalvo Square Shopping Center borrower may obtain mezzanine financing provided that (a) the mezzanine lender enters into an intercreditor agreement reasonably satisfactory to the lender, (b) the combined loan-to-value ratio for the Montalvo Square Shopping Center Loan and the mezzanine loan does not exceed 85.0%, (c) the combined debt service coverage ratio for the Montalvo Square Shopping Center Loan and the mezzanine loan is not less than 1.10x and (d) confirmation from the rating agencies that the incurrence of mezzanine debt by such members does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. S-99 JEFFERSON AT MONTFORT LOAN INFORMATION
PRINCIPAL BALANCE: ORIGINAL CUT-OFF DATE -------- ------------ JEFFERSON AT MONTFORT LOAN: $ 35,000,000 $ 35,000,000 JEFFERSON AT MONTFORT B LOAN: $ 5,000,000 $ 5,000,000 ---------------- ---------------- JEFFERSON AT MONTFORT TOTAL LOAN: $ 40,000,000 $ 40,000,000
FIRST PAYMENT DATE: September 11, 2003 MORTGAGE INTEREST RATE: 4.720%(1) AMORTIZATION TERM(2): 360 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: August 11, 2008 MATURITY/ARD BALANCE(3): $33,322,233 BORROWER: Jefferson-Montfort, Ltd. INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until the date that is six months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(4): $52,870 UP-FRONT RESERVES: Engineering Reserve(5): $186,875 ONGOING RESERVES: Tax and Insurance Reserve(6): Yes Replacement Reserve(7): Yes LOCKBOX: Springing MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Multifamily PROPERTY SUB-TYPE: Conventional LOCATION: Dallas, TX YEAR BUILT/RENOVATED: 1995/N/A UNITS: 662 OCCUPANCY AT U/W: 86%(8) FEE OR LEASEHOLD: Fee PROPERTY MANAGEMENT: Henry S. Miller Multi-Management, Inc. U/W NCF: $3,325,612 APPRAISED VALUE: $48,500,000 APPRAISAL DATE: July 1, 2003 CUT-OFF DATE LTV RATIO(4): 72.2% MATURITY/ARD LTV RATIO(4): 68.7% U/W DSCR(4): 1.52x (1) The Jefferson at Montfort B Loan has a mortgage interest rate of 10.32%. (2) The loan is interest only for the first twenty-three payment dates until July 2005. (3) The Jefferson at Montfort Total Loan maturity balance is $38,082,553. (4) Based on the Jefferson at Montfort Loan. (5) The engineering reserve was established at closing to fund immediate repairs. (6) The borrower is required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies. (7) The borrower is required to deposit $11,033.33 per month into a replacement reserve to fund ongoing repairs and replacements. (8) Occupancy is based on the June 3, 2003 rent roll. THE LOAN. The seventh largest Loan was originated on July 18, 2003. The Jefferson at Montfort Total Loan is secured by a first priority mortgage encumbering a multifamily apartment complex in Dallas, Texas. The Jefferson at Montfort Total Loan is evidenced by two notes, one of which evidences the Jefferson at Montfort Loan and the other of which evidences the Jefferson at Montfort B Loan. See "--Other Financing" below. THE BORROWER. The borrower under the Jefferson at Montfort Total Loan is Jefferson-Montfort, Ltd. The borrower is a single-purpose limited partnership organized under the laws of the State of Texas. Jefferson-Montfort GP, Inc., a corporation organized under the laws of Texas, is the general partner of the borrower. The borrower is affiliated with The Henry S. Miller Companies and Robert B. Rowling. The Henry S. Miller Companies was founded in 1914. THE JEFFERSON AT MONTFORT PROPERTY. The Jefferson at Montfort Property is an apartment complex located Dallas, Texas. The apartment complex consists of 662 units and approximately 587,000 square feet of rentable space. PROPERTY MANAGEMENT. The Jefferson at Montfort Property is managed by Henry S. Miller Multi-Management, Inc., an affiliate of the borrower. The management agreement generally provides for a management fee of the greater of three percent of gross collections or $2,000,000, which is subordinated to the Jefferson at Montfort Loan. The management of the property will be performed by either Henry S. Miller Multi-Management, Inc. or a substitute manager, which in the reasonable judgment of the lender, is a reputable management organization possessing experience in managing properties similar in size, scope, use and value as the Jefferson at Montfort Property, provided that the borrower under the Jefferson at Montfort Loan shall have obtained prior written confirmation from the applicable rating agencies that such substitute S-100 management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Jefferson at Montfort Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Jefferson at Montfort Loan. Henry S. Miller Multi-Management is headquartered in Dallas, Texas and owns/manages approximately 4 million square feet of property throughout Texas and Oklahoma. CASH MANAGEMENT/LOCKBOX. The borrower under the Jefferson at Montfort Loan must cause the property manager to deposit all rents directly into a lockbox account under the control of the lender. Unless and until an event of default or other trigger event occurs under the cash management agreement, the borrower will have access to those funds. OTHER FINANCING. The Jefferson at Montfort B Loan is subordinated to the Jefferson at Montfort Loan. The Jefferson at Montfort B Loan is not included in the Trust. The trust, as holder of the Jefferson at Montfort Loan will be a party to an intercreditor agreement. See "--The Jefferson at Montfort Loan" above in this prospectus supplement. S-101 EASTBRIDGE LANDING LOAN INFORMATION ORIGINAL PRINCIPAL BALANCE: $35,000,000 CUT-OFF DATE PRINCIPAL BALANCE: $33,689,997 FIRST PAYMENT DATE: April 1, 2000 MORTGAGE INTEREST RATE: 6.125% AMORTIZATION TERM: 395 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: December 1, 2009 MATURITY/ARD BALANCE: $30,832,227 BORROWER: EastBridge Landing Associates, LLC INTEREST CALCULATION: 30/360 CALL PROTECTION: Lockout/prepayment until the date that is six months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT (1): $161,196 UP-FRONT RESERVES: None ONGOING RESERVES: Tax Reserve(2): Yes Replacement Reserve(3): Yes LOCKBOX: None MEZZANINE: None(4) PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Multifamily PROPERTY SUB-TYPE: Conventional LOCATION: New York, NY YEAR BUILT/RENOVATED: 1998/N/A UNITS: 209 OCCUPANCY AT U/W: 95%(5) FEE OR LEASEHOLD: Fee PROPERTY MANAGEMENT: Wolf Management & Leasing LLC U/W NCF: $4,970,784 APPRAISED VALUE: $91,000,000 APPRAISAL DATE: June 23, 2003 CUT-OFF DATE LTV RATIO: 37.0% MATURITY/ARD LTV RATIO: 33.9% U/W DSCR: 2.02x (1) Based on the cut-off date principal balance. (2) The borrower is required to make monthly payments into a tax reserve to accumulate funds necessary to pay all taxes prior to their respective due dates. (3) The borrower is required to deposit $3,019.00 per month into a replacement reserve to fund ongoing repairs and replacements. (4) See "--Other Financing" below. (5) Occupancy is based on the April 15, 2003 rent roll. THE LOAN. The eighth largest loan was originated on November 3, 1998. The EastBridge Landing Loan is secured by a first priority mortgage encumbering a multifamily building in New York, New York. THE BORROWER. The borrower under the EastBridge Landing Loan is EastBridge Landing Associates LLC. The borrower is a single-purpose limited liability company organized under the laws of the State of New York. Federal Street Operating, LLC, a limited liability company organized under the laws of the State of Delaware, is the managing member of the borrower, a wholly owned subsidiary of the Michigan State Pension Fund and has $380,882,319 assets and $62,647,227 liabilities as of December 31, 2002. The sponsors, Trevor Davis, Aby Rosen and Michael Fuchs, own and manage 10 properties in the State of New York, 9 of which are located in Manhattan. THE EASTBRIDGE LANDING PROPERTY. The EastBridge Landing Property is a multifamily building also containing a commercial tenant at the lower level floors of the building located in New York, New York. The EastBridge Landing Property consists of approximately 19,000 rentable square feet of office space that is leased to NYU Hospital until May 31, 2013 and 209 residential units with approximately 220,000 square feet of space. PROPERTY MANAGEMENT. The EastBridge Landing Property is managed by Wolf Management & Leasing LLC, an affiliate of the borrower. The management agreement generally provides for a management fee of a maximum of 4% which is subordinated to the EastBridge Landing Loan. The management of the EastBridge Landing Property will be performed by either Wolf Management & Leasing LLC or a substitute manager which, in the reasonable judgment of the lender, is a reputable management organization possessing experience in managing properties similar in size, scope, use and value as the EastBridge Landing Property. The lender under the EastBridge Landing Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the EastBridge Landing Loan. Wolf Management & Leasing LLC manages 10 buildings comprising 1,338 units. Wolf Management & Leasing LLC is headquartered in New York, New York. CASH MANAGEMENT/LOCKBOX. None. S-102 OTHER FINANCING. In connection with a permitted sale of 95% of the ownership interest in the borrower under the EastBridge Landing Loan to Federal Street Operating LLC (the resulting managing member of the borrower under the EastBridge Landing Loan), a wholly owned subsidiary of the Michigan State Pension Fund (the "EastBridge Landing Subordinate Lender"), for tax purposes, made an equity contribution to the borrower under the EastBridge Landing Loan in the form of a $46,200,000 subordinate mortgage loan (the "EastBridge Landing Subordinate Loan"), which Subordinate Loan is secured by the EastBridge Landing Property. Such EastBridge Landing Subordinate Loan is fully subordinated to the EastBridge Landing Loan and subject to a subordination and standstill agreement with the lender. The subordinate note evidencing the subordinate financing has an original term of 10 years and is interest only until March 31, 2010 or upon sale of the EastBridge Landing Property. The EastBridge Landing Subordinate Loan intercreditor agreement provides, among other things, that (a) so long as no event of default has occurred under the EastBridge Landing Loan, the EastBridge Landing Subordinate Lender is entitled to receive the debt service payments required under the subordinate loan documents; provided that upon the occurrence of an event of default under the EastBridge Landing Loan, all payments to Federal Street Operating, LLC cease, (b) the EastBridge Landing Subordinate Lender may not initiate any enforcement action with respect to the EastBridge Landing Subordinate Loan, including any foreclosure on the EastBridge Landing Property and (c) the EastBridge Landing Subordinate Loan is not transferable by the EastBridge Landing Subordinate Lender. S-103 EAST THUNDERBIRD SQUARE NORTH LOAN INFORMATION ORIGINAL PRINCIPAL BALANCE: $28,500,000 CUT-OFF DATE PRINCIPAL BALANCE: $28,472,696 FIRST PAYMENT DATE: December 1, 2003 MORTGAGE INTEREST RATE: 6.200% AMORTIZATION TERM: 360 months HYPERAMORTIZATION: N/A ARD DATE: N/A MATURITY DATE: November 1, 2013 MATURITY/ARD BALANCE: $24,313,039 BORROWER: East Thunderbird Square-North, LLC and East Thunderbird Square North Pads, LLC INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until the date that is six months prior to the maturity date. LOAN PER UNIT/SQUARE FOOT(1): $170 UP-FRONT RESERVES: None ONGOING RESERVES: Tax and Insurance Reserve(2): Yes Replacement Reserve(3): Yes Rollover Reserve(4): Yes LOCKBOX: Springing MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Retail PROPERTY SUB-TYPE: Anchored LOCATION: Scottsdale, AZ YEAR BUILT/RENOVATED: 2000/N/A SQUARE FEET: 167,412 OCCUPANCY AT U/W: 92%(5) OWNERSHIP INTEREST: Fee
MAJOR TENANTS NRSF % OF NRSF LEASE EXPIRATION - ------------- ---- --------- ---------------- Ashley Furniture 35,246 21.05% 11/19/2011 Spencer's Appliance 16,130 9.63% 6/29/2013 World Design 10,862 6.49% 11/18/2006
PROPERTY MANAGEMENT: The Raskin Companies U/W NCF: $3,202,894 APPRAISED VALUE: $41,700,000 APPRAISAL DATE: 8/28/2003 CUT-OFF DATE LTV RATIO(1): 68.3% MATURITY/ARD LTV RATIO: 58.3% U/W DSCR: 1.53x (1) Based on the cut-off date principal balance. (2) The borrower is required to make monthly payments into a tax and insurance reserve to accumulate funds necessary to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies. (3) The borrower is required to deposit $2,093.00 per month into a replacement reserve to fund ongoing repairs and replacements; provided that the borrower is not required to make a deposit into this reserve in any month in which its balance equals or exceeds $50,224. (4) The borrower is required to deposit $20,834.00 per month into a rollover reserve to fund tenant improvement and leasing commitment obligations; provided that the borrower is not required to make a deposit into the rollover reserve in any month when the balance of the reserve equals or exceeds $500,000. (5) Occupancy is based on the August 13, 2003 rent roll. THE LOAN. The ninth largest loan was originated on October 1, 2003. The East Thunderbird Square North Loan is secured by two first priority mortgages encumbering a retail shopping center in Scottsdale, Arizona. THE BORROWER. East Thunderbird Square-North, LLC and East Thunderbird Square North Pads, LLC are the co-borrowers under the East Thunderbird Square North Loan. Each such co-borrower is a single-purpose limited liability company organized under the laws of the State of Arizona. Niksar North, Inc., an Arizona corporation, is the managing member of East Thunderbird Square-North, LLC, and Niksar North Pads, Inc., an Arizona corporation, is the managing member of East Thunderbird Square North Pads, LLC. The sponsor, Donald Raskin, is the president of each of Niksar North, Inc. and Niksar North Pads, Inc. THE EAST THUNDERBIRD SQUARE NORTH PROPERTY. The East Thunderbird Square North Property is a 167,412 square foot retail shopping center in Scottsdale, Arizona containing a main building, three multi-tenant pad sites and a freestanding restaurant building. PROPERTY MANAGEMENT. The East Thunderbird Square North Property is managed by the borrowers under the East Thunderbird Square North Loan and by entities affiliated with them. No management fees are charged in connection with such management. S-104 CASH MANAGEMENT/LOCKBOX. From and after any failure of the borrower under the East Thunderbird Square North Loan to pay any amount then due the lender within five (5) days after written notice of such failure, the borrower must cause the tenants of the East Thunderbird Square North Property to deposit rental payments directly into a lockbox account under the control of the lender until such time as such event of default is cured by the borrower under the East Thunderbird Square North Loan. RELEASE PROVISIONS. The borrower under the East Thunderbird Square North Loan may obtain the release of an undeveloped portion of the East Thunderbird Square North Property upon satisfaction of various specified criteria, including creation of separate tax parcels, compliance with zoning laws, creation of acceptable cross easements and providing applicable title policy endorsements. The borrower under the East Thunderbird Square North Loan is not required to pay any release price nor is any partial defeasance required in connection with such release. S-105 JANSS COURT LOAN INFORMATION ORIGINAL PRINCIPAL BALANCE: $28,600,000 CUT-OFF DATE PRINCIPAL BALANCE: $28,295,760 FIRST PAYMENT DATE: April 11, 2003 MORTGAGE INTEREST RATE: 5.950% AMORTIZATION TERM: 324 Months HYPERAMORTIZATION: After March 11, 2013, the interest rate increases by 2% to 7.950% and all excess cash flow is used to reduce the outstanding principal balance on the Janss Court Loan until the principal balance of the Janss Court Loan is reduced to zero. ARD DATE: March 11, 2013 MATURITY DATE: March 11, 2030 MATURITY/ARD BALANCE: $23,075,662 BORROWER: Promenade Gateway, LP INTEREST CALCULATION: Actual/360 CALL PROTECTION: Lockout/defeasance until the date that is six months prior to the anticipated repayment date. LOAN PER UNIT/SQUARE FOOT(1): $225 UP-FRONT RESERVES: Engineering Reserve(2): $ 11,187.00 Rollover Reserve(3): $225,000.00 Morgan Stanley Reserve(4): $ 53,285.00 ONGOING RESERVES: Tax and Insurance Reserve(5): Yes Replacement Reserve(6): Yes Rollover Reserve(7): Yes LOCKBOX: Springing MEZZANINE: None PROPERTY INFORMATION SINGLE ASSET/PORTFOLIO: Single Asset PROPERTY TYPE: Mixed Use PROPERTY SUB-TYPE: Office/Retail/Multifamily LOCATION: Santa Monica, CA YEAR BUILT/RENOVATED: 1989/N/A SQUARE FEET 125,709 OCCUPANCY AT U/W: 91%(8) FEE OR LEASEHOLD: Fee
MAJOR TENANTS NRSF % OF NRSF LEASE EXPIRATION - ------------- ---- --------- ---------------- Plitt Theaters 21,017 16.72% 10/31/2009 Morgan Stanley 16,551 13.17% 1/19/2007 Dean Witter Red Bull North 12,485 9.93% 3/31/2006 America
PROPERTY MANAGEMENT: Owner-managed U/W NCF: $2,932,085 APPRAISED VALUE: $37,500,000 APPRAISAL DATE: February 26, 2003 CUT-OFF DATE LTV RATIO(1) 75.5% MATURITY/ARD LTV RATIO: 61.5% U/W DSCR: 1.38x (1) Based on the cut-off date principal balance. (2) The engineering reserve was established at closing to fund immediate repairs. (3) The rollover reserve was established at closing to fund immediate tenant improvement and leasing commission obligations. (4) The Morgan Stanley reserve was established at closing to serve as additional collateral for the Janss Court Loan with respect to any credits that may be applied against the fixed annual rent that Morgan Stanley is required to pay the borrower under their lease. (5) In addition to the initial deposits, the borrower is required to make monthly payments into a tax and insurance reserve to (a) pay all taxes prior to their respective due dates and (b) pay insurance premiums prior to the expiration of the related policies. (6) The borrower is required to deposit $2,206.75 per month into a replacement reserve to fund ongoing repairs and replacements, provided that the borrower is not required to make a deposit to the replacement reserve in any month when the balance of the reserve equals or exceeds $100,000.00. (7) The borrower is required to deposit $9,625.33 per month into a rollover reserve to fund tenant improvement and leasing commission obligations. (8) Occupancy is based on the August 14, 2003 rent roll. THE LOAN. The tenth largest loan was originated on March 3, 2003. The Janss Court Loan is secured by a first priority mortgage encumbering a mixed use retail, office and multifamily property located in Santa Monica, California. THE BORROWER. The borrower under the Janss Court Loan is Promenade Gateway, LP. The borrower is a single-purpose bankruptcy-remote limited partnership organized under the laws of the State of California. Promenade Equity, Inc., a single-purpose limited partnership organized under the laws of the State of California, is the sole general partner of the Borrower. The sponsors, Joseph Daneshgar and Mehdi Soroudi, own and manage 80 properties in the Los Angeles MSA. THE JANSS COURT PROPERTY. The Janss Court Property is a mixed use retail, office and multifamily property located in Santa Monica, California. The Property has 34,121 of rentable square feet of retail space with leases to Plitt Theaters, Rip S-106 Curl and Broadway Deli. The Property has 58,282 of rentable square feet of office space, which includes Morgan Stanley Dean Witter. The Janss Court Property has 32 residential units. PROPERTY MANAGEMENT. The Janss Court property is owner-managed. If during the term of the Janss Court Loan the borrower retains a manager (which the lender has approved), the lender has the right, in certain circumstances, to require the borrower to replace the manager with a substitute manager which, in the reasonable judgment of the lender, is a reputable management organization, possessing experience in managing properties similar in size, scope, use and value as the Janss Court Property provided that the borrower under the Janss Court Loan shall have obtained prior written confirmation from the applicable rating agencies that such substitute management organization does not cause a downgrade, withdrawal or qualification of the then current ratings of the certificates. The lender under the Janss Court Loan has the right to require termination of the management agreement following the occurrence of, among other circumstances, an event of default under the Janss Court Loan. CASH MANAGEMENT/LOCKBOX. The borrower under the Janss Court loan must cause all rents from the Janss Court Property to be deposited directly into a lockbox account under the control of the lender. Unless and until an event of default or other trigger event occurs under the cash management agreement, the borrower will have access to those funds. S-107 THE MORTGAGE LOAN SELLERS AND THE ORIGINATORS We did not originate any of the mortgage loans that we intend to include in the trust fund. We will acquire those mortgage loans from the following entities: - Column Financial, Inc.--One hundred twenty-one (121) of the mortgage loans that we intend to include in the trust fund, representing 71.71% of the initial mortgage pool balance, of which 72 mortgage loans are in loan group no. 1, representing 70.60% of the initial loan group no. 1 balance, and 49 mortgage loans are in loan group no. 2, representing 74.71% of the initial loan group no. 2 balance; - PNC Bank, National Association--Thirty (30) of the mortgage loans that we intend to include in the trust fund, representing 21.06% of the initial mortgage pool balance, of which 20 mortgage loans are in loan group no. 1, representing 19.50% of the initial loan group no. 1 balance, and 10 mortgage loans are in loan group no. 2, representing 25.29% of the initial loan group no. 2 balance; and - KeyBank National Association--Two (2) of the mortgage loans that we intend to include in the trust fund, representing 7.23% of the initial mortgage pool balance, of which both of those mortgage loans are in loan group no. 1, representing 9.90% of the initial loan group no. 1 balance. COLUMN FINANCIAL, INC. Column is a corporation organized under the laws of Delaware. Its principal offices are in Atlanta, Georgia. Column underwrites and closes multifamily rental and commercial mortgage loans through its own origination offices and various correspondents in local markets across the country. Loan underwriting and quality control procedures are undertaken principally in regional offices located in Atlanta, Georgia; Bethesda, Maryland; Boston, Massachusetts; Chicago, Illinois; Cleveland, Ohio; Dallas, Texas; Denver, Colorado; Houston, Texas; Los Angeles, California; New York, New York; Newport Beach, California; Norwalk, Connecticut; Philadelphia, Pennsylvania; San Francisco, California; Seattle, Washington and Tampa, Florida. Column has originated approximately 5,750 commercial and multifamily rental mortgage loans totaling approximately $47.9 billion since beginning operations in 1993. Column is a wholly-owned subsidiary of Credit Suisse Group and an affiliate of us and Credit Suisse First Boston LLC, one of the underwriters. KEYBANK NATIONAL ASSOCIATION. KeyBank National Association ("KeyBank") is a national banking association and is an affiliate of KeyCorp Real Estate Capital Markets, Inc. ("KRECM"), which is the Mayfair Mall Master Servicer, and of McDonald Investments Inc., one of the underwriters. KeyBank provides financial services, including commercial and multifamily real estate financing, throughout the United States. As of September 30, 2003, KeyBank had total assets of approximately $73.94 billion, total liabilities (including minority interest in consolidated subsidiaries) of approximately $68.84 billion and approximately $5.10 billion in stockholder's equity. The principal executive offices of KeyBank are located at Key Tower, 127 Public Square, Cleveland, Ohio 44114. Its telephone number is (216) 689-6300. KeyBank is a wholly owned subsidiary of KeyCorp. PNC BANK, NATIONAL ASSOCIATION AND AFFILIATES. PNC Bank, National Association is a national banking association with its principal office in Pittsburgh, Pennsylvania. PNC Bank, National Association's business is subject to examination and regulation by United States federal banking authorities. Its primary federal bank regulatory authority is the Office of the Comptroller of the Currency. PNC Bank, National Association is a wholly-owned indirect subsidiary of The PNC Financial Services Group, Inc., a Pennsylvania corporation ("PNC Financial"), and is PNC Financial's principal bank subsidiary. PNC Financial and its subsidiaries offer a wide range of commercial banking, retail banking and trust and asset management services to its customers. At December 31, 2002, PNC Bank, National Association had total consolidated assets representing approximately 90% of PNC Financial's consolidated assets. PNC Bank, National Association is an affiliate of PNC Capital Markets, Inc. Midland Loan Services, Inc. is a wholly owned subsidiary of PNC Bank, National Association. The information set forth in this prospectus supplement regarding the mortgage loan sellers and the originators has, in each case, been provided by the respective party. Neither we nor any of the underwriters makes any representation or warranty as to the accuracy or completeness of that information. ASSIGNMENT OF THE UNDERLYING MORTGAGE LOANS On or before the date of initial issuance of the offered certificates, each of the mortgage loan sellers will, directly or indirectly, transfer to us those mortgage loans that it is including in the securitization, and we will transfer to the trustee all of those mortgage loans. In each case, the transferor will assign the subject mortgage loans, without recourse (except as set forth in the mortgage loan purchase agreement to which it is a party), to the transferee. S-108 In connection with the foregoing transfers, at the closing or at such later date as is permitted under the pooling and servicing agreement, each mortgage loan seller will generally be required to deliver or cause the delivery of the following documents, among others, to the trustee with respect to each of the mortgage loans (other than the Mayfair Mall Loan) as to which it is identified as the mortgage loan seller on Exhibit A-1 to this prospectus supplement: - either-- 1. the original promissory note, endorsed without recourse to the order of the trustee or in blank, or 2. if the original promissory note has been lost, a copy of that note, together with a lost note affidavit and indemnity; - the original or a copy of the mortgage instrument, together with originals or copies of any intervening assignments of that document, in each case, unless the particular document has not been returned from the applicable recording office (in which case, the mortgage loan seller shall provide a written certification to that effect), with evidence of recording on the document or certified by the applicable recording office; - the original or a copy of any separate assignment of leases and rents, together with originals or copies of any intervening assignments of that document, in each case, unless the particular document has not been returned from the applicable recording office (in which case, the mortgage loan seller shall provide a written certification to that effect), with evidence of recording on the document or certified by the applicable recording office; - an executed original assignment of the related mortgage instrument in favor of the trustee (or in the case of the Mayfair Mall Loan, in favor of the trustee under the series 2003-C4 pooling and servicing agreement) or in blank, in recordable form except for missing recording information relating to that mortgage instrument; - an executed original assignment of any separate related assignment of leases and rents in favor of the trustee (or in the case of the Mayfair Mall Loan, in favor of the trustee under the series 2003-C4 pooling and servicing agreement) or in blank, in recordable form except for missing recording information relating to that assignment of leases and rents; - originals or copies of all written assumption, modification and substitution agreements, if any, in those instances where the terms or provisions of the mortgage instrument or promissory note have been modified or the mortgage loan has been assumed; - copies of the letters of credit, if any, and amendments thereto which entitle the trust fund to draw thereon; provided, however, that originals of letters of credit will be delivered to and held by the master servicer; - copies of franchise agreements and franchisor comfort letters, if any, for hospitality properties; - an original or copy of the lender's title insurance policy or, if a title insurance policy has not yet been issued or located, a PRO FORMA title policy or a "marked up" commitment for title insurance, which in either case is binding on the title insurance company; and - in those cases where applicable, the original or a copy of the related ground lease. The trustee, either directly or through a custodian, is required to hold all of the documents delivered to it with respect to the mortgage loans in trust for the benefit of the series 2003-C5 certificateholders under the terms of the pooling and servicing agreement. Within a specified period of time following that delivery, the trustee directly or through a custodian, will be further required to conduct a review of those documents. The scope of the trustee's review of those documents will, in general, be limited solely to confirming that they have been received, that they appear regular on their face (handwritten additions, changes or corrections will not be considered irregularities if initialed by the borrower), that (if applicable) they appear to have been executed and that they purport to relate to a mortgage loan in the trust fund. None of the trustee, the master servicer, the special servicer or any custodian is under any duty or obligation to inspect, review or examine any of the documents relating to the mortgage loans to determine whether the document is valid, effective, enforceable, in recordable form or otherwise appropriate for the represented purpose. S-109 The above loan documents, among others, with respect to the Mayfair Mall Loan (with the exception of the original mortgage note evidencing the Mayfair Mall Loan, which will be delivered to the trustee under the series 2003-C5 pooling and servicing agreement) have been delivered to the trustee under the series 2003-C4 pooling and servicing agreement. If-- - any of the above-described documents required to be delivered by a mortgage loan seller to the trustee is not delivered or is otherwise defective, and - that omission or defect materially and adversely affects the value of, or the interests of any series 2003-C5 certificateholders in, the subject mortgage loan, then the omission or defect will constitute a material document defect as to which the series 2003-C5 certificateholders will have the rights against the applicable mortgage loan seller described under "--Cures, Repurchases and Substitutions" below. Within a specified period of time following the later of-- - the date on which the offered certificates are initially issued, and - the date on which all recording information necessary to complete the subject document is received by the trustee, the trustee or a third-party independent contractor will be required to submit for recording in the real property records of the applicable jurisdiction each of the assignments of recorded loan documents in the trustee's favor described above. Because most of the mortgage loans that we intend to include in the trust fund are newly originated, many of those assignments cannot be completed and recorded until the related mortgage instrument and/or the assignment of leases and rents, reflecting the necessary recording information, is returned from the applicable recording office. REPRESENTATIONS AND WARRANTIES As of the date of initial issuance of the offered certificates, each mortgage loan seller will make, with respect to each mortgage loan that it is selling to us for inclusion in the trust fund (except as described below), specific representations and warranties generally to the effect listed below, together with any other representations and warranties as may be required by the rating agencies. The respective representations and warranties to be made by each mortgage loan seller may not be identical and may be qualified by exceptions disclosed in the mortgage loan purchase agreement between the applicable mortgage loan seller and us. However, the representations and warranties to be made by each mortgage loan seller will generally include, among other things-- 1. the information set forth in the schedule of the mortgage loans attached to the related mortgage loan purchase agreement is true and correct in all material respects; 2. such seller is transferring the mortgage loan free and clear of any and all pledges, liens and/or other security interests except for certain interests in servicing rights being assigned in accordance with the series 2003-C5 pooling and servicing agreement and any related subservicing agreement; 3. no scheduled payment of principal and interest under the mortgage loan was 30 days or more delinquent as of the cut-off date, and the mortgage loan has not been 30 days or more delinquent since origination; 4. the related mortgage constitutes, subject to certain creditors' rights exceptions, a valid and enforceable first priority mortgage lien (subject to certain permitted encumbrances) upon the related mortgaged real property; 5. the assignment of the related mortgage in favor of the trustee constitutes a legal, valid and binding assignment, except as enforcement thereof may be limited by laws affecting the enforcement of creditors' rights; 6. the related assignment of leases and rents establishes and creates, subject to certain creditors' rights exceptions, a valid and enforceable first priority lien (subject to certain permitted encumbrances) in the related borrower's interest in all leases of the mortgaged real property; S-110 7. the mortgage has not been satisfied, canceled, rescinded or subordinated in whole or in material part, and the related mortgaged real property has not been released from the lien of such mortgage, in whole or in material part; 8. except as set forth in a property inspection report or engineering report prepared in connection with the origination of the mortgage loan, the related mortgaged real property is, to the seller's knowledge, free and clear of any material damage that would materially and adversely affect its value as security for the mortgage loan (normal wear and tear excepted) or reserves have been established to remediate such damage; 9. to the seller's knowledge, there is no proceeding pending for the condemnation of all or any material portion of any mortgaged real property; 10. the related mortgaged real property is covered by an American Land Title Association (or an equivalent form of) lender's title insurance policy or a "marked-up" title insurance commitment or the equivalent thereof (for which the required premium has been paid) which evidences such title insurance policy that insures that the related mortgage is a valid, first priority lien on such mortgaged real property, subject only to the exceptions stated therein; 11. the proceeds of the mortgage loan have been fully disbursed and there is no obligation for future advances with respect thereto; 12. an environmental site assessment was performed with respect to the mortgaged real property in connection with the origination of the related mortgage loan, and such seller has no knowledge of any material noncompliance with environmental laws affecting such mortgaged real property that was not disclosed in the report of such assessment; provided, however, as previously described in this prospectus supplement, for certain mortgage loans an environmental insurance policy was obtained in lieu of an environmental site assessment; 13. each mortgage note, mortgage and other agreement executed by or for the benefit of the borrower, any guarantor or their successors and assigns in connection with the mortgage loan is, subject to certain creditors' rights exceptions and other exceptions of general application, the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, and, there is no valid defense, counterclaim or right of rescission available to the related borrower with respect to such mortgage note, mortgage or other agreement, except as such enforcement may be limited by laws affecting the enforcement of creditors' rights; 14. the related mortgaged real property is, and is required pursuant to the related mortgage to be, insured by casualty and liability insurance policies of a type specified in the related mortgage; 15. there are no delinquent and unpaid taxes or assessments affecting the related mortgaged real property that are or may become a lien of priority equal to or higher than the lien of the related mortgage or an escrow of funds has been created for the payment of such taxes and assessments; 16. the related borrower is not, to such seller's knowledge, a debtor in any state or federal bankruptcy or insolvency proceeding; 17. the mortgage loan is not cross-collateralized or cross-defaulted with any loan other than one or more other mortgage loans in the trust fund; 18. except as disclosed herein with respect to crossed loans and multi-property loans, no mortgage requires the holder thereof to release any material portion of the related mortgaged real property from the lien thereof except upon payment in full of the mortgage loan or defeasance, or in certain cases, (a) upon the satisfaction of certain legal and underwriting requirements, or (b) releases of unimproved out-parcels or (c) releases of portions which will not have a material adverse effect on the value of the collateral for the mortgage loan; and 19. to such seller's knowledge, there exists no material default, breach, violation or event of acceleration (and no event which, with the passage of time or the giving of notice, or both, would constitute any of the foregoing) under the related mortgage note or mortgage in any such case to the extent the same materially and adversely affects the value of the mortgage loan and the related mortgaged real property. S-111 The representations and warranties made by each mortgage loan seller as listed and described above will be assigned by us to the trustee under the pooling and servicing agreement. If-- - there exists a breach of any of the above-described representations and warranties made by any mortgage loan seller, and - that breach materially and adversely affects the value of, or the interests of any series 2003-C5 certificateholders in, the subject mortgage loan, then that breach will be a material breach of the representation and warranty. The rights of the series 2003-C5 certificateholders against the applicable warranting party with respect to any material breach are described under "--Cures, Repurchases and Substitutions" below. CURES, REPURCHASES AND SUBSTITUTIONS If a mortgage loan seller has been notified of a defect in any mortgage file or a breach of any of its representations and warranties, or, itself, has discovered any such defect or breach, which, in either case, materially and adversely affects the value of any mortgage loan (including the REO Property acquired in respect of any foreclosed mortgage loan) or any interests of the holders of any class of certificates or the trust therein, then that mortgage loan seller will be required to take one of the following courses of action: - cure such breach or defect in all material respects; or - repurchase the affected mortgage loan. The purchase price for any mortgage loan repurchase will be equal to the sum of-- 1. the outstanding principal balance of such mortgage loan as of the date of purchase, plus 2. all accrued and unpaid interest on such mortgage loan at the related mortgage interest rate in effect from time to time in absence of a default, to but not including the due date in the due period of purchase (which includes unpaid master servicing fees and primary servicing fees), plus 3. all related unreimbursed servicing advances plus, in general, accrued and unpaid interest on related advances at the reimbursement rate (as set forth in the pooling and servicing agreement), plus 4. all expenses incurred (whether paid or then owing) by the master servicer, the special servicer, the depositor and the trustee in respect of the defect or breach giving rise to the repurchase obligation, including any expenses arising out of the enforcement of the repurchase obligation, plus 5. the amount of any special servicing fees accrued on such mortgage loan and if such mortgage loan is repurchased following the expiration of the applicable cure period (as it may be extended as described below) the amount of the liquidation fee payable to the special servicer; or - replace the affected mortgage loan with a Qualified Substitute Mortgage Loan; provided, that in no event shall a substitution occur later than the second anniversary of the closing date; or - for certain breaches, reimburse the trust fund for certain costs. The time period within which the applicable mortgage loan seller must complete the remedy, repurchase or substitution described in the immediately preceding paragraph, will generally be limited to 90 days or less following the earlier of its discovery and receipt of notice of the material breach or material document defect, as the case may be. However, if the applicable mortgage loan seller is diligently attempting to correct the problem, then it will be entitled to as much as an additional 90 days to complete that remedy, repurchase or substitution. In addition to the foregoing, if-- - any mortgage loan is required to be repurchased or substituted as contemplated above, and - such mortgage loan is a crossed loan, S-112 then the applicable defect or breach (as the case may be) will be deemed to constitute a defect or breach (as the case may be) as to any related crossed loan for purposes of the above provisions, and the mortgage loan seller which sold the loan to the depositor will be required to repurchase or substitute for any related crossed loan in accordance with the provisions above unless all of the following conditions would be satisfied if the related mortgage loan seller were to repurchase or substitute for only the affected crossed loans as to which a defect or breach had initially occurred: (i) the debt service coverage ratio for any related crossed loans that remain in the trust for the four calendar quarters immediately preceding the repurchase or substitution is not less than the greater of (a) the debt service coverage ratio for such crossed loans, including the affected crossed loan, for the four calendar quarters immediately preceding the repurchase or substitution and (b) 1.25x, (ii) the loan-to-value ratio for any related crossed loans that remain in the trust (determined at the time of repurchase or substitution based upon an appraisal obtained by the Special Servicer at the expense of the related mortgage loan seller) is not greater than the lesser of (a) the loan-to-value ratio for such crossed loans including the affected crossed loan (determined at the time of repurchase or substitution based upon an appraisal obtained by the Special Servicer at the expense of the related mortgage loan seller) (b) the loan-to-value ratio for such crossed loans including the affected crossed loan set forth in the tables in Exhibit A-1 hereto and (c) 75.0%, and (iii) the trustee receives an opinion of independent counsel to the effect that such repurchase or substitution will not result in the imposition of a tax on the assets of the trust fund or cause any REMIC created under the pooling and servicing agreement to fail to qualify as a REMIC for federal or applicable state tax purposes at any time that any series 2003-C5 certificate is outstanding. In the event that each of the conditions set forth in the preceding sentence would be so satisfied, the related mortgage loan seller may elect either to repurchase or substitute for only the affected crossed loan as to which the defect or breach exists or to repurchase or substitute for the aggregate crossed loans. The determination of the Special Servicer as to whether the conditions set forth above have been satisfied shall be conclusive and binding in the absence of manifest error. To the extent that the related mortgage loan seller repurchases or substitutes for an affected crossed loan in the manner prescribed above while the trustee continues to hold any related crossed loans, the related mortgage loan seller and the depositor have agreed in the mortgage loan purchase agreement to modify, upon such repurchase or substitution, the related loan documents in a manner such that (a) the repurchased or substituted crossed loan and (b) any related crossed loans that remain in the trust would no longer be cross-defaulted or cross-collateralized with one another. Any of the following document defects shall be conclusively presumed materially and adversely to affect the interests of certificateholders in a mortgage loan and be a defect deemed to materially and adversely affect the interest of the certificateholders: - the absence from the mortgage file of the original signed mortgage note, unless the mortgage file contains a signed lost note affidavit and indemnity; - the absence from the mortgage file of the original signed mortgage, unless there is included in the mortgage file a certified copy of the recorded mortgage or a certified copy of the mortgage in the form sent for recording and a certificate stating that the original mortgage was sent for recordation or a copy of the mortgage and the related recording information; - the absence from the mortgage file of the original lender's title insurance policy or a copy thereof (together with all endorsements or riders that were issued with or subsequent to the issuance of such policy), or if the policy has not yet been issued, a binding written commitment (including a pro forma or specimen title insurance policy, which has been accepted or approved in writing by the related title insurance company) relating to such mortgage loan; - the absence from the mortgage file of any intervening assignments required to create an effective assignment to the trustee on behalf of the trust fund, unless there is included in the mortgage file a certified copy of the intervening assignment and a certificate stating that the original intervening assignments were sent for recordation; S-113 - the absence from the mortgage file of any original letter of credit; provided that such defect may be cured by providing a substitute letter of credit or a cash reserve; or - the absence from the mortgage file of any required ground lease. The foregoing obligation to cure, repurchase, provide a substitute mortgage loan or loans or reimburse the trust fund will constitute the sole remedy available to the certificateholders and the trustee for any defect in a mortgage file or any breach of the mortgage loan sellers' representations or warranties regarding the mortgage loans. Any defect or any breach that, in either case, causes any mortgage loan not to be a "qualified mortgage" within the meaning of the REMIC provisions of the Code shall be deemed to materially and adversely affect the interests of certificateholders therein, requiring the related mortgage loan seller to purchase or substitute for the affected mortgage loan from the trust fund within 90 days following the earlier of its receipt of notice or its discovery of the defect or breach at the applicable purchase price or in conformity with the mortgage loan purchase agreement. Each mortgage loan seller has only limited assets with which to fulfill any repurchase/substitution obligations on its part that may arise as a result of a material document defect or a material breach of any of its representations or warranties. There can be no assurance that Column, KeyBank or PNC Bank, as the case may be, has or will have sufficient assets with which to fulfill any repurchase/substitution obligations on its part that may arise. CHANGES IN MORTGAGE POOL CHARACTERISTICS The description in this prospectus supplement of the mortgage pool is based upon the mortgage pool as it is expected to be constituted at the time the offered certificates are issued, with adjustments for the monthly debt service payments due on the mortgage loans on or before their respective due dates in December 2003. Prior to the issuance of the offered certificates, one or more mortgage loans may be removed from the mortgage pool if we consider the removal necessary or appropriate. A limited number of other mortgage loans may be included in the mortgage pool prior to the issuance of the offered certificates, unless including those mortgage loans would materially alter the characteristics of the mortgage pool as described in this prospectus supplement. We believe that the information in this prospectus supplement will be generally representative of the characteristics of the mortgage pool as it will be constituted at the time the offered certificates are issued. However, the range of mortgage interest rates and maturities, as well as the other characteristics of the mortgage loans described in this prospectus supplement, may vary, and the actual initial mortgage pool balance may be as much as 5% larger or smaller than the initial mortgage pool balance specified in this prospectus supplement. A current report on Form 8-K will be available to purchasers of the offered certificates on or shortly after the date of initial issuance of the offered certificates. That current report on Form 8-K will be filed, together with the pooling and servicing agreement, with the SEC within 15 days after the initial issuance of the offered certificates. If mortgage loans are removed from or added to the mortgage pool, that removal or addition will be noted in that current report on Form 8-K. DESCRIPTION OF THE OFFERED CERTIFICATES GENERAL The series 2003-C5 certificates will be issued, on or about December 5, 2003, under a pooling and servicing agreement to be dated as of December 1, 2003, between us, as depositor, and the trustee, the master servicer and the special servicer. They will represent the entire beneficial ownership interest of the trust fund. The assets of the trust fund will include: - the mortgage loans; - any and all payments under and proceeds of the mortgage loans received after their respective due dates in December 2003, in each case exclusive of payments of principal, interest and other amounts due on or before that date; - the loan documents for the mortgage loans; - our rights under each of the mortgage loan purchase agreements; - any REO Properties acquired by the trust fund with respect to defaulted mortgage loans; and S-114 - those funds or assets as from time to time are deposited in the master servicer's collection account described under "The Pooling and Servicing Agreement--Collection Account" in this prospectus supplement, the special servicer's REO account described under "The Pooling and Servicing Agreement--Realization Upon Mortgage Loans," the trustee's distribution account described under "--Distribution Account" below or the trustee's interest reserve account described under "--Interest Reserve Account" below. The series 2003-C5 certificates will include the following classes: - the A-1, A-2, A-3, A-4, B, C, D, E and F classes, which are the classes of series 2003-C5 certificates that are offered by this prospectus supplement; and - the A-1-A, G, H, J, K, L, M, N, O, P, A-X, A-SP, R, LR and V classes, which are the classes of series 2003-C5 certificates that-- 1. will be retained or privately placed by us, and 2. are not offered by this prospectus supplement. Each class of series 2003-C5 certificates, other than the class A-X, A-SP, R, LR and V certificates, will have principal balances. The principal balance of any of these certificates will represent the total distributions of principal to which the holder of the certificate is entitled over time out of payments, or advances in lieu of payments, and other collections on the assets of the trust fund. Accordingly, on each distribution date, the principal balance of each of these certificates will be permanently reduced by any principal distributions actually made with respect to the certificate on that distribution date. See "--Distributions" below. On any particular distribution date, the principal balance of each of these certificates may also be permanently reduced, without any corresponding distribution, in connection with losses on the underlying mortgage loans and default-related and otherwise unanticipated trust fund expenses. See "--Allocation of Collateral Support Deficits" below. The class A-X, A-SP, R, LR and V certificates will not have principal balances, and the holders of those certificates will not be entitled to receive distributions of principal. However, each of the class A-X and A-SP certificates will have a notional amount for purposes of calculating the accrual of interest with respect to that certificate. For purposes of calculating the accrual of interest, the class A-X certificates will, as of any date of determination, have a total notional amount equal to the then total principal balance of the class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G, H, J, K, L, M, N, O and P certificates. For purposes of calculating the accrual of interest, the class A-SP certificates will have a total notional amount that is-- 1. during the period from the date of initial issuance of the series 2003-C5 certificates through and including the distribution date in December 2004, the sum of (a) the lesser of $72,258,000 and the total principal balance of the class A-1 certificates outstanding from time to time, (b) the lesser of $336,871,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (c) the total principal balance of the class A-2, A-3, A-4, B, C, D and E certificates outstanding from time to time; 2. during the period following the distribution date in December 2004 through and including the distribution date in December 2005, the sum of (a) the lesser of $27,848,000 and the total principal balance of the class A-1 certificates outstanding from time to time, (b) the lesser of $320,486,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (c) the total principal balance of the class A-2, A-3, A-4, B, C, D and E certificates outstanding from time to time; 3. during the period following the distribution date in December 2005 through and including the distribution date in December 2006, the sum of (a) the lesser of $133,438,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $303,586,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (b) the total principal balance of the class A-3, A-4, B, C, D and E certificates outstanding from time to time; S-115 4. during the period following the distribution date in December 2006 through and including the distribution date in December 2007, the sum of (a) the lesser of $64,439,000 and the total principal balance of the class A-2 certificates outstanding from time to time, (b) the lesser of $271,543,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (b) the total principal balance of the class A-3, A-4, B, C, D and E certificates outstanding from time to time; 5. during the period following the distribution date in December 2007 through and including the distribution date in December 2008, the sum of (a) the lesser of $11,208,000 and the total principal balance of the class A-3 certificates outstanding from time to time, (b) the lesser of $220,283,000 and the total principal balance of the class A-1-A certificates outstanding from time to time and (c) the total principal balance of the class A-4, B, C, D and E certificates; 6. during the period following the distribution date in December 2008 through and including the distribution date in December 2009, the sum of (a) the lesser of $349,660,000 and the total principal balance of the class A-4 certificates outstanding from time to time, (b) the lesser of $208,608,000 and the total principal balance of the class A-1-A certificates outstanding from time to time, (c) the total principal balance of the class B, C and D certificates outstanding from time to time and (d) the lesser of $6,605,000 and the total principal balance of the class E certificates outstanding from time to time; 7. during the period following the distribution date in December 2009 through and including the distribution date in December 2010, the sum of (a) the lesser of $309,340,000 and the total principal balance of the class A-4 certificates outstanding from time to time, (b) the lesser of $197,274,000 and the total principal balance of the class A-1-A certificates outstanding from time to time, (c) the total principal balance of the class B and C certificates outstanding from time to time and (d) the lesser of $24,297,000 and the total principal balance of the class D certificates outstanding from time to time; 8. following the distribution date in December 2010, $0. In general, principal balances and notional amounts will be reported on a class-by-class basis. In order to determine the principal balance of any of your offered certificates from time to time, you may multiply the original principal balance of that certificate as of the date of initial issuance of the series 2003-C5 certificates, as specified on the face of that certificate, by the then-applicable certificate factor for the relevant class. The certificate factor for any class of offered certificates, as of any date of determination, will equal a fraction, expressed as a percentage, the numerator of which will be the then outstanding total principal balance of that class, and the denominator of which will be the original total principal balance of that class. Certificate factors will be reported monthly in the trustee's report. REGISTRATION AND DENOMINATIONS GENERAL. The offered certificates will be issued in book-entry form in original denominations of $10,000 initial principal balance and any whole dollar denomination in excess of $10,000. Each class of offered certificates will initially be represented by one or more certificates registered in the name of Cede & Co., as nominee of The Depository Trust Company. You will not be entitled to receive an offered certificate issued in fully registered, certificated form, except under the limited circumstances described under "Description of the Certificates--Book-Entry Registration" in the accompanying prospectus. For so long as any class of offered certificates is held in book-entry form-- - all references in this prospectus supplement to actions by holders of those certificates will refer to actions taken by DTC upon instructions received from beneficial owners of those certificates through its participating organizations, and - all references in this prospectus supplement to payments, distributions, remittances, notices, reports and statements made or sent to holders of those certificates will refer to payments, distributions, remittances, notices, reports and statements made or sent to DTC or Cede & Co., as the registered holder of those certificates, for payment or transmittal, as applicable, to the beneficial owners of those certificates through its participating organizations in accordance with DTC's procedures. S-116 The trustee will initially serve as registrar for purposes of providing for the registration of the offered certificates and, if and to the extent physical certificates are issued to the actual beneficial owners of any of the offered certificates, the registration of transfers and exchanges of those certificates. DTC, EUROCLEAR AND CLEARSTREAM, LUXEMBOURG. You will hold your certificates through DTC, in the United States, or Clearstream Banking, societe anonyme, Luxembourg or the Euroclear System, in Europe, if you are a participating organization of the applicable system, or indirectly through organizations that are participants in the applicable system. Clearstream, Luxembourg and Euroclear will hold omnibus positions on behalf of organizations that are participants in either of these systems, through customers' securities accounts in Clearstream, Luxembourg's or Euroclear's names on the books of their respective depositaries. Those depositaries will, in turn, hold those positions in customers' securities accounts in the depositaries' names on the books of DTC. For a discussion of DTC, Euroclear and Clearstream, Luxembourg, see "Description of the Certificates--Book-Entry Registration--DTC, Euroclear and Clearstream, Luxembourg" in the accompanying prospectus. Transfers between participants in DTC will occur in accordance with DTC's rules. Transfers between participants in Clearstream, Luxembourg and Euroclear will occur in accordance with their applicable rules and operating procedures. See "Description of the Certificates--Book-Entry Registration--Holding and Transferring Book-Entry Certificates" in the accompanying prospectus. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly through participants in Clearstream, Luxembourg or Euroclear, on the other, will be accomplished through DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary. 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 and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf by delivering or receiving securities through DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Participants in Clearstream, Luxembourg and Euroclear may not deliver instructions directly to the depositaries. Because of time-zone differences-- - credits of securities in Clearstream, Luxembourg 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 that processing will be reported to the relevant Clearstream, Luxembourg or Euroclear participant on that business day. Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of securities by or through a Clearstream, Luxembourg or Euroclear participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream, Luxembourg or Euroclear cash account only as of the business day following settlement in DTC. For additional information regarding clearance and settlement procedures for the offered certificates and for information with respect to tax documentation procedures relating to the offered certificates, see Exhibit D hereto. Beneficial owners of offered certificates that are not participating organizations in DTC, Clearstream, Luxembourg or Euroclear, but desire to purchase, sell or otherwise transfer ownership or other interests in those certificates, may do so only through participating organizations in DTC, Clearstream, Luxembourg or Euroclear. In addition, those beneficial owners will receive all distributions of principal and interest from the trustee through DTC and its participating organizations. Similarly, reports distributed to holders of the offered certificates pursuant to the pooling and servicing agreement and requests for the consent of those holders will be delivered to the beneficial owners of those certificates only through DTC, Clearstream, Luxembourg, Euroclear and their participating organizations. Under a book-entry format, beneficial owners of offered certificates may experience some delay in their receipt of payments, reports and notices, since these payments, reports and notices will be forwarded by the trustee to Cede & Co., as nominee for DTC. DTC will forward the payments, reports and notices to its participating organizations, which thereafter will forward them to indirect DTC participants, Clearstream, Luxembourg, Euroclear or beneficial owners of the offered certificates, as applicable. Under the rules, regulations and procedures creating and affecting DTC and its operations, DTC is required to make book-entry transfers of offered certificates among participating organizations on whose behalf it acts with respect to the offered certificates and to receive and transmit distributions of principal of, and interest on, the offered certificates. Direct S-117 and indirect DTC participants with which beneficial owners of the offered certificates have accounts with respect to those certificates similarly are required to make book-entry transfers and receive and transmit the payments on behalf of those beneficial owners. Accordingly, although the beneficial owners of offered certificates will not possess the offered certificates, the DTC rules provide a mechanism that will allow them to receive payments on their certificates and will be able to transfer their interests. 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 such certificates are credited, which may or may not be the beneficial owners of the certificates. The participants will remain responsible for keeping account of their holdings on behalf of their customers. DTC's practice is to credit direct participants' accounts on the related distribution date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such date. Disbursement of such distributions by participants to beneficial owners of offered certificates will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of each such participant (and not of DTC, the depositor or any trustee or servicer), subject to any statutory or regulatory requirements as may be in effect from time to time. Under a book-entry system, the beneficial owners of offered certificates may receive payments after the related distribution date. The only holder of the offered certificates will be the nominee of DTC, and the beneficial owners of the offered certificates will not be recognized as certificateholders under the pooling and servicing agreement. Certificate owners will be permitted to exercise the rights of certificateholders under the pooling and servicing agreement only indirectly through the participants, which in turn will exercise their rights through DTC. Because DTC can only act on behalf of direct DTC participants, who in turn act on behalf of indirect DTC participants and certain banks, the ability of a beneficial owner of offered certificates to pledge those certificates to persons or entities that do not participate in the DTC system, or to otherwise act with respect to those certificates, may be limited due to the lack of a physical certificate for those certificates. DTC has advised us that it will take any action permitted to be taken by holders of the offered certificates under the pooling and servicing agreement only at the direction of one or more participating organizations to whose accounts with DTC those 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 participating organizations in DTC whose holdings include those undivided interests. None of the depositor, the master servicer, the certificate registrar, the underwriters, the special servicer or the trustee will have any liability for any actions taken by DTC or its nominee, 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 such beneficial ownership interest. Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the offered certificates among participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. See "Description of the Certificates--Book-Entry Registration--Holding and Transferring Book-Entry Certificates" in the accompanying prospectus. DEFINITIVE CERTIFICATES. Certificates initially issued in book-entry form will be issued in fully registered, certificated form to the beneficial owners of offered certificates or their nominees ("Definitive Certificates"), rather than to DTC or its nominee, only if-- - the depositor advises the trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to such certificates and the depositor is unable to locate a qualified successor; - the depositor, at its option, elects to terminate the book-entry system through DTC with respect to such certificates; or - the trustee determines that Definitive Certificates are required because the trustee has instituted or has been directed to institute judicial proceeding in a court to enforce the rights of the certificateholders under the S-118 certificates, and the trustee has been advised by counsel that in connection with such proceeding it is necessary or appropriate for the trustee to obtain possession of all or any portion of those certificates evidenced in book-entry form. Upon the occurrence of any of the events described in the preceding sentence, the trustee 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 Definitive Certificates representing the offered certificates and upon receipt of instructions from DTC for re-registration, the certificate registrar and the authenticating agent will reissue the offered certificates as definitive certificates issued in the respective certificate balances owned by individual certificate owners, and thereafter the certificate registrar, the trustee, the special servicer and the master servicer will recognize the holders of such Definitive Certificates as certificateholders under the pooling and servicing agreement. DISTRIBUTION ACCOUNT GENERAL. The trustee must establish and maintain an account in which it will hold funds pending their distribution on the series 2003-C5 certificates and from which it will make those distributions. That distribution account must be maintained in a manner and with a depository institution that satisfies rating agency standards for securitizations similar to the one involving the offered certificates. The funds held in the trustee's distribution account may be held in cash or invested in Permitted Investments. Subject to the limitations in the pooling and servicing agreement, any interest or other income earned on funds in the trustee's distribution account will be paid to the trustee as additional compensation. Generally, the trustee will not be obligated, however, to cover any losses resulting from the bankruptcy or insolvency of any depository institution or trust company holding any of those accounts, provided that the trustee may be so obligated if it fails to comply with certain requirements in the pooling and servicing agreement. DEPOSITS. On the business day prior to each distribution date, the master servicer will be required to remit to the trustee for deposit in the distribution account the following funds: - All payments and other collections on the mortgage loans and any REO Properties in the trust fund that are then on deposit in the master servicer's collection account, exclusive of any portion of those payments and other collections that represents one or more of the following: 1. monthly debt service payments due on a due date subsequent to the end of the related collection period; 2. payments and other collections received after the end of the related collection period; 3. amounts that are payable or reimbursable from the master servicer's collection account to any person other than the series 2003-C5 certificateholders, including-- (a) amounts payable to the master servicer or the special servicer as compensation, including master servicing fees, primary servicing fees, special servicing fees, workout fees, liquidation fees, assumption fees, assumption application fees, modification fees, extension fees, consent fees, waiver fees, earnout fees and similar charges and, to the extent not otherwise applied to cover interest on advances with respect to the related mortgage loan, Default Interest and late payment charges, or as indemnification, (b) amounts payable in reimbursement of outstanding advances, together with interest on those advances, and (c) amounts payable with respect to other trust fund expenses; 4. net investment income on the funds in the collection account and certain other accounts; 5. amounts deposited in the master servicer's collection account in error; and 6. all amounts received with respect to the A/B Loans, Stanford Shopping Center Total Loan, Mall at Fairfield Commons Total Loan and the Jefferson at Montfort Total Loan that are required to be paid to the holder of the related Corresponding B Loan, holders of the Stanford Shopping Center S-119 Companion Loans, holder of the Mall at Fairfield Commons Companion Loan and the holder of the Jefferson at Montfort B Loan, respectively, pursuant to the terms of the related intercreditor agreement. - Any advances of delinquent monthly debt service payments made with respect to that distribution date. Solely with respect to the Mall at Fairfield Commons Companion Loan, the master servicer or the primary servicer, as applicable, will be required to remit the amounts referred to in clause 6. above to the master servicer under the series 2003-KEY1 pooling and servicing agreement based on a modified collection period and on an earlier date than required remittances to the trustee with respect to all other mortgage loans included in the trust. See "--Advances of Delinquent Monthly Debt Service Payments" below and "The Pooling and Servicing Agreement--Collection Account" and "--Servicing and Other Compensation and Payment of Expenses" in this prospectus supplement. With respect to each distribution date that occurs during March, commencing in March 2004, the trustee will be required to transfer from its interest reserve account, which we describe under "--Interest Reserve Account" below, to its distribution account the interest reserve amounts that are then being held in that interest reserve account with respect to the mortgage loans that accrue interest on an Actual/360 Basis. WITHDRAWALS. The trustee may from time to time make withdrawals from its distribution account for any of the following purposes: - to pay itself a monthly fee which is described under "The Pooling and Servicing Agreement--Matters Regarding the Trustee" in this prospectus supplement; - to indemnify itself and various related persons as described under "Description of the Governing Documents--Matters Regarding the Trustee" in the accompanying prospectus; - to pay for any opinions of counsel required to be obtained in connection with any amendments to the pooling and servicing agreement; - to pay for the cost of recording the pooling and servicing agreement; - with respect to each distribution date during February of any year and each distribution date during January of any year that is not a leap year, commencing in 2004, to transfer to the trustee's interest reserve account the interest reserve amounts required to be so transferred in that month with respect to the mortgage loans that accrue interest on an Actual/360 Basis; - to pay itself interest and other investment income earned on funds held in the distribution account; - to pay any federal, state and local taxes imposed on the trust, its assets and/or transactions, together with all incidental costs and expenses; and - to pay to the person entitled thereto any amounts deposited in the distribution account in error. On each distribution date, all amounts on deposit in the trustee's distribution account, exclusive of any portion of those amounts that are to be withdrawn for the purposes contemplated in the foregoing paragraph, will represent the Total Available Funds for that date. Total Available Funds will not include amounts on deposit in the trustee's distribution account that represent amounts received in the case of the REO Property related to the Stanford Shopping Center Total Loan, the Mall at Fairfield Commons Total Loan or the Jefferson at Montfort Total Loan that are required to be paid to the holders of the Stanford Shopping Center Companion Loans, the holder of the Mall at Fairfield Commons Companion Loan and the holder of the Jefferson at Montfort B Loan, respectively, pursuant to the terms of the related intercreditor agreement. On each distribution date, the trustee will apply the Total Available Funds to make distributions on the series 2003-C5 certificates. For any distribution date, the Total Available Funds will consist of three separate components: - the portion of those funds that represent Static Prepayment Premiums and Yield Maintenance Charges collected on the mortgage loans as a result of prepayments that occurred during the related collection period, which will be paid to the holders of the class A-X and/or A-SP certificates, and/or any holders of S-120 class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G or H certificates entitled to distributions of the subject principal prepayment, as described under "--Distributions--Distributions of Static Prepayment Premiums and Yield Maintenance Charges" below; - the portion of those funds that represent Excess Interest collected on the ARD Loans in the trust fund during the related collection period, which will be paid to the holders of the class V certificates as described under "--Distributions--Distributions of Excess Interest" below; - the remaining portion of those funds, referred to in this prospectus supplement as the Available P&I Funds, which will be paid to the holders of all the series 2003-C5 certificates, other than the class V certificates, as described under "--Distributions--Priority of Distributions" below. In no event will any amounts allocable to any Corresponding B Loan, Stanford Shopping Center Companion Loan, Mall at Fairfield Commons Companion Loan or Jefferson at Montfort B Loan be available to cover any payments or reimbursements associated with any pooled mortgage loan other than the related A Loan, Stanford Shopping Center Loan, Mall at Fairfield Commons Loan and Jefferson at Montfort Loan, respectively. In addition, any amounts allocable to any Corresponding B Loan, Stanford Shopping Center Companion Loan, Mall at Fairfield Commons Companion Loan or Jefferson at Montfort B Loan will be available to cover payments and/or reimbursements associated with the related A Loan, the Stanford Shopping Center Loan, Mall at Fairfield Commons Loan and the Jefferson at Montfort Loan, respectively, only to the extent described under "Description of the Underlying Mortgage Loans--The Stanford Shopping Center Loan," "--The A/B Loans," "The Mall at Fairfield Commons Loan" and "--The Jefferson at Montfort Loan" in this prospectus supplement. INTEREST RESERVE ACCOUNT The trustee must maintain an account in which it will hold the interest reserve amounts described in the next paragraph with respect to the mortgage loans that accrue interest on an Actual/360 Basis. That interest reserve account must be maintained in a manner and with a depository that satisfies rating agency standards for securitizations similar to the one involving the offered certificates. During January, except in a leap year, and February, of each calendar year, beginning in 2004, the trustee will, on or before the distribution date in that month, withdraw from its distribution account and deposit in its interest reserve account the interest reserve amount with respect to each of the mortgage loans that accrues interest on an Actual/360 Basis and for which the monthly debt service payment due in that month was either received or advanced. In general, that interest reserve amount for each of those mortgage loans will equal one day's interest accrued at the related mortgage interest rate, net of the related master servicing fee rate, the primary servicing fee rate and the trustee fee rate, on the Stated Principal Balance of that loan as of the end of the related collection period. In the case of an ARD Loan, however, the interest reserve amount will not include Excess Interest. During March of each calendar year, beginning in 2004, the trustee will, on or before the distribution date in that month, withdraw from its interest reserve account and deposit in its distribution account any and all interest reserve amounts then on deposit in the interest reserve account with respect to the mortgage loans that accrue interest on an Actual/360 Basis. All interest reserve amounts that are so transferred from the interest reserve account to the distribution account will be included in the Available P&I Funds for the distribution date during the month of transfer. The funds held in the trustee's interest reserve account may be held in cash or invested in Permitted Investments. Subject to the limitations in the pooling and servicing agreement, any interest or other income earned on funds in the trustee's interest reserve account will be paid to the trustee as additional compensation. Generally, the trustee will not be obligated, however, to cover any losses resulting from the bankruptcy or insolvency of any depository institution or trust company holding any of those accounts, provided that the trustee may be so obligated if it fails to comply with certain requirements in the pooling and servicing agreement. DISTRIBUTIONS GENERAL. For purposes of allocating payments on the respective classes of the series 2003-C5 certificates, the underlying mortgage loans will be divided into: - loan group no. 1, which will consist of all of the mortgage loans that are secured by property types other than multifamily and manufactured housing, together with five (5) mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 1 will consist of ninety-four (94) S-121 mortgage loans, with an initial loan group no. 1 principal balance of $920,720,128, representing approximately 73.00% of the initial mortgage pool balance; and - loan group no. 2, which will consist of all but five (5) of the mortgage loans that are secured by multifamily and manufactured housing property types. Loan group no. 2 will consist of fifty-nine (59) mortgage loans, with an initial loan group no. 2 balance of $340,549,363, representing approximately 27.00% of the initial mortgage pool balance. Exhibit A-1 to this prospectus supplement identifies which mortgage loans are included in each of loan group no. 1 and loan group no. 2. On each distribution date, the trustee will, subject to the Total Available Funds and the exception described in the next sentence, make all distributions required to be made on the series 2003-C5 certificates on that date to the holders of record as of the close of business on the last business day of the calendar month preceding the month in which those distributions are to occur. The final distribution of principal and/or interest on any offered certificate, however, will be made only upon presentation and surrender of that certificate at the location to be specified in a notice of the pendency of that final distribution. In order for a series 2003-C5 certificateholder to receive distributions by wire transfer on and after any particular distribution date, that certificateholder must provide the trustee with written wiring instructions no later than the last day of the calendar month preceding the month in which that distribution date occurs. Otherwise, that certificateholder will receive its distributions by check mailed to it. Cede & Co. will be the registered holder of your offered certificates, and you will receive distributions on your offered certificates through DTC and its participating organizations, until physical certificates are issued, if ever. See "--Registration and Denominations" above. Distributions made to a class of series 2003-C5 certificateholders will be allocated among those certificateholders in proportion to their respective percentage interests in that class. INTEREST DISTRIBUTIONS. All of the classes of the series 2003-C5 certificates will bear interest, except for the R, LR and V classes. With respect to each interest-bearing class of the series 2003-C5 certificates, that interest will accrue during each interest accrual period based upon: - the pass-through rate for that class and the related distribution date; - the total principal balance or notional amount, as the case may be, of that class outstanding immediately prior to the related distribution date; and - the assumption that each year consists of twelve 30-day months; provided that no interest will accrue with respect to the class A-SP certificates following the November 2010 interest accrual period. On each distribution date, subject to the Available P&I Funds for that date and the distribution priorities described under "--Priority of Distributions" below, the holders of each interest-bearing class of the series 2003-C5 certificates will be entitled to receive-- - the total amount of interest accrued during the related interest accrual period with respect to that class of certificates, reduced by - the portion of any Net Aggregate Prepayment Interest Shortfall for that distribution date that is allocable to that class of series 2003-C5 certificates. If the holders of any interest-bearing class of the series 2003-C5 certificates do not receive all of the interest to which they are entitled on any distribution date, as described in the prior paragraph, then they will continue to be entitled to receive the unpaid portion of that interest on future distribution dates, subject to available funds for those future distribution dates and the distribution priorities described under "--Priority of Distributions" below. S-122 The portion of any Net Aggregate Prepayment Interest Shortfall for any distribution date that is allocable to any particular interest-bearing class of the series 2003-C5 certificates will equal the product of-- the amount of that Net Aggregate Prepayment Interest Shortfall, multiplied by a fraction-- 1. the numerator of which is the total amount of interest accrued during the related interest accrual period with respect to that class of certificates, and 2. the denominator of which is the total amount of interest accrued during the related interest accrual period with respect to all of the interest-bearing classes of the series 2003-C5 certificates. CALCULATION OF PASS-THROUGH RATES. The pass-through rate applicable to each interest-bearing class of series 2003-C5 certificates for the initial interest accrual period is shown on page S-5. The pass-through rates for the class A-1, A-2 and A-3 certificates for each interest accrual period will, in the case of each of those classes, be fixed at the pass-through rate applicable to the subject class for the initial accrual period. The pass-through rate for the class H certificates for each interest accrual period will, in the case of that class, equal the Weighted Average Net Mortgage Rate. The pass-through rates for the class A-4, B, C, D, E, F, A-1-A, G, J, K, L, M, N, O and P certificates for each interest accrual period will, in the case of each of those classes, equal the lesser of-- 1. the initial pass-through rate shown for that class in the table on page S-5 of this prospectus supplement (or, in the case of the class G certificates, 5.7450% per annum), and 2. the Weighted Average Net Mortgage Rate. The pass-through rate for the class A-X certificates for any interest accrual period will equal the weighted average of the respective strip rates, which we refer to as class A-X strip rates, at which interest accrues from time to time on the respective components of the total notional amount of the class A-X certificates outstanding immediately prior to the related distribution date, with the relevant weighting to be done based upon the relative sizes of those components. Each of those components will be comprised of all or a designated portion of the total principal balance of one of the classes of series 2003-C5 principal balance certificates. In general, the total principal balance of each class of series 2003-C5 principal balance certificates will constitute a separate component of the total notional amount of the class A-X certificates; provided that, if a portion, but not all, of the total principal balance of any particular class of series 2003-C5 principal balance certificates is identified under "--General" above as being part of the total notional amount of the class A-SP certificates immediately prior to any distribution date, then that identified portion of such total principal balance will represent one separate component of the total notional amount of the class A-X certificates for purposes of calculating the accrual of interest during the related interest accrual period and the remaining portion of such total principal balance will represent a separate component of the total notional amount of the class A-X certificates for purposes of calculating the accrual of interest during the related interest accrual period. For purposes of accruing interest during any interest accrual period, through and including the November 2010 interest accrual period, on any particular component of the total notional amount of class A-X certificates immediately prior to the related distribution date, the applicable class A-X strip rate will be calculated as follows: 1. if such particular component consists of the entire total principal balance of any class of series 2003-C5 principal balance certificates, and if such total principal balance also constitutes, in its entirety, a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal the excess, if any, of (1) the Weighted Average Net Mortgage Rate for the related distribution date, over (2) the reference rate specified on Schedule I hereto with respect to the related distribution date; 2. if such particular component consists of a designated portion (but not all) of the total principal balance of any class of series 2003-C5 principal balance certificates and if such designated portion of such total principal balance also constitutes a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal to the excess, if any, of (1) the Weighted Average Net Mortgage Rate for the related distribution date, over (2) the reference rate specified on Schedule I hereto with respect to the related distribution date; S-123 3. if such particular component consists of the entire total principal balance of any class of series 2003-C5 principal balance certificates, and if such total principal balance does not, in whole or in part, also constitute a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal the excess, if any, of (1) the Weighted Average Net Mortgage Rate for the related distribution date, over (2) the pass-through rate in effect during the subject interest accrual period for the subject class of series 2003-C5 principal balance certificates; and 4. if such particular component consists of a designated portion (but not all) of the total principal balance of any class of series 2003-C5 principal balance certificates, and if such designated portion of such total principal balance does not also constitute a component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, then the applicable class A-X strip rate will equal the excess, if any, of (1) the Weighted Average Net Mortgage Rate for the related distribution date, over (2) the pass-through rate in effect during the subject interest accrual period for the subject class of series 2003-C5 principal balance certificates. For purposes of accruing interest on the class A-X certificates during each interest accrual period subsequent to the November 2010 interest accrual period, the total principal balance of each class of series 2003-C5 principal balance certificates will constitute one separate component of the total notional amount of the class A-X certificates, and the applicable class A-X strip rate with respect to each such component for each such interest accrual period will equal the excess, if any, of (a) the Weighted Average Net Mortgage Rate for the related distribution date, over (b) the pass-through rate in effect during the subject interest accrual period for the class of series 2003-C5 principal balance certificates whose principal balance makes up such component. The pass-through rate for the class A-SP certificates, for each interest accrual period through and including the November 2010 interest accrual period, will equal the weighted average of the respective strip rates, which we refer to as class A-SP strip rates, at which interest accrues from time to time on the respective components of the total notional amount of the class A-SP certificates outstanding immediately prior to the related distribution date, with the relevant weighting to be done based upon the relatives sizes of those components. Each of those components will be comprised of all or a designated portion of the total principal balance of any class series of 2003-C5 principal balance certificates. If the entire total principal balance of any class of series 2003-C5 principal balance certificates is identified under "--General" above as being part of the total notional amount of the class A-SP certificates immediately prior to any distribution date, then that total principal balance will, in its entirety, represent a separate component of the total notional amount of the class A-SP certificates for purposes of calculating the accrual of interest during the related interest accrual period. If only part of the total principal balance of any class of series 2003-C5 principal balance certificates is identified as being part of the total notional balance of the class A-SP certificates immediately prior to any distribution date, then that particular portion of the total principal balance of that class of series 2003-C5 principal balance certificates will represent one separate component of the total notional amount of the class A-SP certificates for purposes of calculating the accrual of interest during the related interest accrual period. For purposes of accruing interest during any interest accrual period, through and including the November 2010 interest accrual period, on any particular component of the total notional amount of the class A-SP certificates immediately prior to the related distribution date, the applicable class A-SP strip rate will equal the excess, if any, of: - the lesser of (a) the reference rate specified on Schedule I hereto with respect to the related distribution date and (b) the Weighted Average Net Mortgage Rate for the related distribution date, over - the pass-through rate in effect during the subject interest accrual period for the class of series 2003-C5 principal balance certificates whose total principal balance, or a designated portion thereof, comprises such component. Following the November 2010 interest accrual period, the class A-SP certificates will cease to accrue interest. In connection therewith, the class A-SP certificates will have 0% pass-through rate for the December 2010 interest accrual period and for each interest accrual period thereafter. The calculation of the Weighted Average Net Mortgage Rate will be unaffected by any change in the mortgage interest rate for any underlying mortgage loan, including in connection with any bankruptcy or insolvency of the related borrower or any modification of that mortgage loan agreed to by the master servicer or the special servicer. The class R, LR and V certificates will not be interest-bearing and, therefore, will not have pass-through rates. S-124 PRINCIPAL DISTRIBUTIONS. Subject to the relevant Available P&I Funds and the priority of distributions described under "--Priority of Distributions" below, the total amount of principal payable with respect to each class of the series 2003-C5 certificates, other than the class A-X, A-SP, R, LR and V certificates, on each distribution date, will equal that class' allocable share of the Total Principal Distribution Amount for that distribution date. In general, subject to the Available P&I Funds and the priority of distributions described below, the total amount of principal to which the holders of the class A-1, A-2, A-3, A-4 and A-1-A certificates will be entitled on each distribution date will, in the case of each of those classes, generally equal: - in the case of the class A-1-A certificates, an amount (not to exceed the total principal balance of the class A-1-A certificates outstanding immediately prior to the subject distribution date) equal to the portion of the Total Principal Distribution Amount for the subject distribution date that is attributable to loan group no. 2; - in the case of the class A-1 certificates, an amount (not to exceed the total principal balance of the class A-1 certificates outstanding immediately prior to the subject distribution date) equal to the Total Principal Distribution Amount for the subject distribution date (exclusive of any distributions of principal to which the holders of the class A-1-A certificates are entitled on the subject distribution date as described in the immediately preceding bullet); - in the case of the class A-2 certificates, an amount (not to exceed the total principal balance of the class A-2 certificates outstanding immediately prior to the subject distribution date) equal to the Total Principal Distribution Amount for the subject distribution date (exclusive of any distributions of principal to which the holders of the class A-1-A and/or A-1 certificates are entitled on the subject distribution date as described in the immediately preceding two bullets); - in the case of the class A-3 certificates, an amount (not to exceed the total principal balance of the class A-3 certificates outstanding immediately prior to the subject distribution date) equal to the Total Principal Distribution Amount for the subject distribution date (exclusive of any distributions of principal to which the holders of the class A-1-A, A-1 and/or A-2 certificates are entitled on the subject distribution date as described in the immediately preceding three bullets); and - in the case of the class A-4 certificates, an amount (not to exceed the total principal balance of the class A-4 certificates outstanding immediately prior to the subject distribution date) equal to the Total Principal Distribution Amount for the subject distribution date (exclusive of any distributions of principal to which the holders of the class A-1-A, A-1, A-2 and/or A-3 certificates are entitled on the subject distribution date as described in the immediately preceding four bullets). In addition, if the total principal balance of the class A-1, A-2, A-3 and A-4 certificates is reduced to zero before the total principal balance of the class A-1-A certificates is reduced to zero, then (subject to the Available P&I Funds and the priority of distributions described below) the holders of the class A-1-A certificates, to the extent necessary to reduce the total principal balance of the class A-1-A certificates to zero, will be entitled to an additional distribution of principal up to the portion of the Total Principal Distribution Amount for each distribution date attributable to loan group no. 1 (to the extent such portion of the Total Principal Distribution Amount was not otherwise applied, on such distribution date, to reduce the total principal balance of the class A-1, A-2, A-3, and A-4 certificates to zero). Notwithstanding the foregoing, on each distribution date coinciding with or following the Senior Principal Distribution Cross-Over Date, and in any event on the final distribution date, assuming that any two or more of the A-1, A-2, A-3, A-4 and A-1-A classes are outstanding at that time, distributions of principal on the A-1, A-2, A-3, A-4 and/or A-1-A classes, as applicable, will be made on a PRO RATA basis in accordance with the respective total principal balances of those classes then outstanding, up to the Total Principal Distribution Amount for the subject distribution date. In general, subject to the Available P&I Funds and the priority of distributions described below, the total amount of principal to which the holders of the class B, C, D, E, F, G, H, J, K, L, M, N, O and P certificates will be entitled on each distribution date will, in the case of each of those classes, equal: - the total principal balance of the subject class of series 2003-C5 principal balance certificates outstanding immediately prior to the subject distribution date; and - the excess, if any, of (a) the Total Principal Distribution Amount for the subject distribution date, over (b) the total principal balance of all other classes of series 2003-C5 principal balance certificates that, as S-125 described under "--Distributions--Priority of Distributions" below, are senior in right of distribution to the subject class of series 2003-C5 principal balance certificates. In no event will the holders of the class B, C, D, E, F, G, H, J, K, L, M, N, O and P certificates be entitled to receive any distributions of principal until the total principal balance of the class A-1, A-2, A-3, A-4 and A-1-A certificates is reduced to zero. Furthermore, in no event will the holders of any class of series 2003-C5 principal balance certificates (exclusive of the class A-1, A-2, A-3, A-4 and A-1-A certificates) be entitled to receive any distributions of principal until the total principal balance of all other more senior classes of series 2003-C5 principal balance certificates is reduced to zero. If the master servicer or the trustee reimburses itself out of general collections on the mortgage pool for any advance that it has determined is not recoverable out of collections on the related mortgage loan, then that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed first out of payments and other collections of principal otherwise distributable on the series 2003-C5 certificates, prior to being deemed reimbursed out of payments and other collections of interest otherwise distributable on the series 2003-C5 certificates. Additionally, in the event that any advance (including any interest accrued thereon) with respect to a defaulted mortgage loan remains unreimbursed following the time that such mortgage loan is modified and returned to performing status, the master servicer or trustee will be entitled to reimbursement for such advance (even though such advance is not deemed non-recoverable) out of payments and other collections of principal on the mortgage loans remaining following reimbursement of any nonrecoverable advances therefrom, as described in the preceding paragraph, prior to any distributions of principal on the series 2003-C5 certificates. LOSS REIMBURSEMENT AMOUNTS. As discussed under "--Allocation of Collateral Support Deficits" below, the total principal balance of any class of series 2003-C5 principal balance certificates may be reduced without a corresponding distribution of principal. If that occurs with respect to any class of series 2003-C5 principal balance certificates, then, subject to the Available P&I Funds for each subsequent distribution date and the priority of distributions described below, the holders of that class will be entitled to be reimbursed for the amount of that reduction, without interest. References to "loss reimbursement amount" in this prospectus supplement means, in the case of any class of series 2003-C5 principal balance certificates, for any distribution date, the total amount to which the holders of that class are entitled as reimbursement for all previously unreimbursed reductions, if any, made in the total principal balance of that class on all prior distribution dates as discussed under "--Allocation of Collateral Support Deficits" below. PRIORITY OF DISTRIBUTIONS. On each distribution date, the trustee will apply the Available P&I Funds for that date to make the following distributions in the following order of priority, in each case to the extent of the remaining portion of the Available P&I Funds: 1. concurrently, (a) from the portion of the Available P&I Funds attributable to loan group no. 2, to make distributions of interest to the holders of the class A-1-A certificates up to the total amount of interest distributable with respect to such class on the subject distribution date, (b) from the portion of the Available P&I Funds attributable to loan group no. 1, to make distributions of interest to the holders of the class A-1, A-2, A-3 and A-4 certificates, PRO RATA in accordance with their respective interest entitlements, up to the total amount of interest distributable with respect to each such class on the subject distribution date, and (c) from any and all Available P&I Funds, to make distributions of interest to the holders of the class A-X and A-SP certificates, PRO RATA in accordance with their respective interest entitlements, up to the total amount of interest distributable with respect to each such class on the subject distribution date; provided, however, that if the portion of the Available P&I Funds attributable to either loan group is insufficient to distribute in full the total amount of interest to be distributed with respect to any of those classes as described above, the Available P&I Funds will be allocated among all those classes PRO RATA in proportion to the respective amounts of interest then payable thereon, without regard to loan group; 2. to make distributions of principal to the holders of the class A-1-A certificates, until the total principal balance of the class A-1-A certificates has been reduced to zero, in an amount up to the portion of the Total Principal Distribution Amount for the subject distribution date that is attributable to loan group no. 2; 3. to make distributions of principal to the holders of the class A-1, A-2, A-3, A-4 and A-1-A certificates, sequentially in that order, in each case until the total principal balance of the subject class of series 2003-C5 certificates has been reduced to zero, in an amount up to the Total Principal Distribution Amount for the subject distribution date, exclusive of any distributions of principal made with respect to the class A-1-A certificates on the subject distribution date as described in the immediately preceding clause (2); S-126 4. to reimburse the holders of the class A-1, A-2, A-3, A-4 and A-1-A certificates, in an amount up to, and on a PRO RATA basis in accordance with, the respective loss reimbursement amounts with respect to those classes for the subject distribution date; provided that, on each distribution date coinciding with or following the Senior Principal Distribution Cross-Over Date, and in any event on the final distribution date, assuming any two or more of the A-1, A-2, A-3, A-4 and A-1-A classes are outstanding at that time, the allocations and order of principal distributions described in clauses (2) and (3) above will be ignored and distributions of principal on the A-1, A-2, A-3, A-4 and/or A-1-A classes will be made on a PRO RATA basis in accordance with the respective total principal balances of those classes then outstanding, up to the Total Principal Distribution Amount for the subject distribution date. On each distribution date, following the distributions to be made with respect to the class A-1, A-2, A-3, A-4, A-1-A, A-X and A-SP certificates as described above, the trustee will apply any remaining Available P&I Funds for that date to make distributions of interest, principal and/or loss reimbursement amounts to the respective classes of the series 2003-C5 principal balance certificates (exclusive of the class A-1, A-2, A-3, A-4 and A-1-A), in alphabetical order (i.e., first B, then C, then D, then E, and so forth), in each case to the extent of the remaining Available P&I Funds. With respect to such distributions to be made on each class of the series 2003-C5 principal balance certificates (exclusive of the class A-1, A-2, A-3, A-4 and A-1-A), the trustee will apply the then remaining portion of the Available P&I Funds: - FIRST, to make distributions of interest to the holders of the subject class of series 2003-C5 principal balance certificates, up to the total interest distributable on that class of series 2003-C5 principal balance certificates on the subject distribution date; - SECOND, to make distributions of principal to the holders of the subject class of series 2003-C5 principal balance certificates, until the total principal balance of that class of series 2003-C5 principal balance certificates is reduced to zero, up to an amount equal to the excess, if any, of the Total Principal Distribution Amount for the subject distribution date, over the total principal balance of all other more senior classes of series 2003-C5 principal balance certificates outstanding immediately prior to the subject distribution date, and - THIRD, to reimburse the holders of the subject class of series 2003-C5 principal balance certificates up to the loss reimbursement amount for that class of series 2003-C5 principal balance certificates for the subject distribution date. No distributions will be made with respect to the class B, C, D, E, F, G, H, J, K, L, M, N, O and P certificates out of the Available P&I Funds for any distribution date, unless and until, in the case of each class of those series 2003-C5 certificates, all distributions required to be made from those Available P&I Funds with respect to the class A-1, A-2, A-3, A-4, A-1-A, A-X and A-SP certificates and with respect to each other such class of series 2003-C5 certificates, if any, with an earlier alphabetical class designation, have been so made. If any of the Available P&I Funds for any distribution date remain after all of the foregoing distributions have been made therefrom with respect to the series 2003-C5 interest only certificates and the series 2003-C5 principal balance certificates, then that remaining portion will be distributable to the holders of the class R certificates. DISTRIBUTIONS OF STATIC PREPAYMENT PREMIUMS AND YIELD MAINTENANCE CHARGES. If any Yield Maintenance Charge is collected during any particular collection period in connection with the prepayment of any mortgage loan, then the trustee will distribute that Yield Maintenance Charge as additional interest, on the distribution date corresponding to that collection period, as follows: - the holders of any class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G and H certificates that are then entitled to distributions of principal on that distribution date out of that portion of the Total Principal Distribution Amount for that date that is attributable to the loan group (I.E., loan group no. 1 or loan group no. 2) that includes the prepaid mortgage loan will be entitled to an amount equal to, in the case of each such class, the product of-- 1. the amount of the subject Yield Maintenance Charge, multiplied by 2. a fraction, not greater than one or less than zero, the numerator of which is equal to the excess, if any, of the pass-through rate applicable to that class of series 2003-C5 certificates for the related interest accrual period, over the relevant discount rate, and the denominator of which is equal to S-127 the excess, if any, of the mortgage interest rate for the prepaid mortgage loan, over the relevant discount rate, multiplied by 3. a fraction, not greater than one or less than zero, the numerator of which is equal to the total distributions of principal to be made with respect to that class of series 2003-C5 certificates on that distribution date from that portion of the Total Principal Distribution Amount for that date that is attributable to the loan group that includes the prepaid mortgage loan, and the denominator of which is equal to the portion of the Total Principal Distribution Amount for that distribution date that is attributable to the loan group that includes the prepaid mortgage loan; and - any portion of the subject Yield Maintenance Charge that may remain after any distribution(s) contemplated by the prior bullet will be distributed as follows: 1. for each of the first forty-one (41) distribution dates, if the class A-SP certificates are then outstanding, 2.50% of such amount to the holders of the class A-SP certificates and 97.50% of such amount to the holders of the class A-X certificates; and 2. otherwise, entirely to the holders of the class A-X certificates. For purposes of the foregoing, the relevant discount rate will, in general, be the same discount rate that was used to calculate the subject Yield Maintenance Charge, exclusive of any applicable spread. However, in the case of any mortgage loan that provides for a discount rate that is equal to or based on a U.S. Treasury rate that has not been converted to a monthly equivalent rate, the relevant discount rate for purposes of the foregoing, exclusive of any applicable spread, will be so converted. If any Static Prepayment Premium is collected during any particular collection period in connection with the prepayment of any of the underlying mortgage loans, then the trustee will distribute that Static Prepayment Premium as additional interest, on the distribution date corresponding to that collection period, as follows: - the holders of any class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G and H Certificates that are then entitled to distributions of principal on that distribution date out of that portion of the Total Principal Distribution Amount for that date that is attributable to the loan group (I.E., loan group no. 1 or loan group no. 2) that includes the prepaid mortgage loan will be entitled to an amount equal to, in the case of each such class, the product of-- 1. the amount of the subject Static Prepayment Premium, multiplied by 2. a fraction, not greater than one or less than zero, the numerator of which is equal to the excess, if any, of the pass-through rate applicable to that class of series 2003-C5 certificates for the related interest accrual period, over the relevant discount rate, and the denominator of which is equal to the excess, if any, of the mortgage interest rate for the prepaid mortgage loan, over the relevant discount rate, multiplied by 3. a fraction, not greater than one or less than zero, the numerator of which is equal to the total distributions of principal to be made with respect to that class of series 2003-C5 certificates on that distribution date from that portion of the Total Principal Distribution Amount for that date that is attributable to the loan group that includes the prepaid mortgage loan, and the denominator of which is equal to the portion of the Total Principal Distribution Amount for that distribution date that is attributable to the loan group that includes the prepaid mortgage loan; and - any portion of the subject Static Prepayment Premium that may remain after any distribution(s) contemplated by the prior bullets will be distributable to the holders of the class A-X certificates. After the distribution date on which the last of the offered certificates is retired, 100% of all prepayment consideration collected on the mortgage loans will be distributed to the holders of non-offered classes of the series 2003-C5 certificates. Neither we nor any of the underwriters makes any representation as to-- - the enforceability of any provision of the mortgage loans requiring the payment of any prepayment consideration, or S-128 - the collectability of that prepayment consideration. See "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Prepayment Provisions" in this prospectus supplement. DISTRIBUTIONS OF EXCESS INTEREST. The holders of the class V certificates will be entitled to all amounts, if any, collected on the ARD Loans in the trust fund and applied as Excess Interest (exclusive of any liquidation fees and/or workout fees payable to the special servicer from that Excess Interest). TREATMENT OF REO PROPERTIES Notwithstanding that any mortgaged real property may be acquired as part of the trust fund through foreclosure, deed-in-lieu of foreclosure or otherwise, the related mortgage loan will be treated as having remained outstanding, until the REO Property is liquidated, for purposes of determining-- - distributions on the series 2003-C5 certificates, - allocations of Collateral Support Deficits to the series 2003-C5 certificates, and - the amount of all fees payable to the master servicer, the special servicer and the trustee under the series 2003-C5 pooling and servicing agreement. In connection with the foregoing, that mortgage loan will be taken into account when determining the Weighted Average Net Mortgage Rate, and the Total Principal Distribution Amount for each distribution date. Operating revenues and other proceeds from an REO Property will be applied-- - FIRST, to pay, or to reimburse the master servicer, the special servicer and/or the trustee for the payment of, any costs and expenses incurred in connection with the operation and disposition of the REO Property, and - THEREAFTER, as collections of principal, interest and other amounts due on the related mortgage loan. To the extent described under "--Advances of Delinquent Monthly Debt Service Payments" below, the master servicer and the trustee will be required to advance delinquent monthly debt service payments with respect to each mortgage loan as to which the corresponding mortgaged real property has become an REO Property, in all cases as if the mortgage loan had remained outstanding. ALLOCATION OF COLLATERAL SUPPORT DEFICITS As a result of Collateral Support Deficits, the total Stated Principal Balance of the mortgage loans may decline below the total principal balance of the class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G, H, J, K, L, M, N, O and P certificates. If this occurs following the distributions made to the 2003-C5 certificateholders on any distribution date, then the respective total principal balances of the following classes of the series 2003-C5 certificates are to be sequentially reduced in the following order, until the total principal balance of those classes of series 2003-C5 certificates equals the sum of the total Stated Principal Balance of the mortgage loans (which total Stated Principal Balance will be increased, for this purpose only, by amounts of principal previously used to reimburse nonrecoverable advances and certain advances related to rehabilitated mortgage loans, as described herein under "--Advances of Delinquent Monthly Debt Service Payments" and The Pooling and Servicing Agreement--Servicing and other Compensation and Payment of Expenses--Payment of Expenses; Servicing Advances," other than any such amounts previously used to reimburse advances with respect to mortgage loans that have since become liquidated loans) that will be outstanding immediately following that distribution date. S-129
ORDER OF ALLOCATION CLASS ------------------- ----- 1st P 2nd O 3rd N 4th M 5th L 6th K 7th J 8th H 9th G 10th F 11th E 12th D 13th C 14th B 15th A-1, A-2, A-3, A-4 and A-1-A, PRO RATA based on total principal balances
The above-described reductions in the total principal balances of the respective classes of the series 2003-C5 certificates identified in the foregoing table, will represent an allocation of the Collateral Support Deficits that caused the particular mismatch in balances between the mortgage loans and those classes of series 2003-C5 certificates. In general, Collateral Support Deficits could result from the occurrence of-- - losses and other shortfalls on or in respect of the mortgage loans, including as a result of defaults and delinquencies, the payment to the special servicer of any compensation as described in "The Pooling and Servicing Agreement--Servicing and Other Compensation and Payment of Expenses," the payment of interest on advances (to the extent not covered by Default Interest and late payment charges collected on the related mortgage loans) and certain servicing expenses; and - certain unanticipated, non-mortgage loan specific expenses of the trust fund, including certain reimbursements to the trustee, the master servicer, the special servicer and the depositor and certain federal, state and local taxes, and certain tax-related expenses, payable out of the trust fund as described in this prospectus supplement under "The Pooling and Servicing Agreement." Accordingly, the allocation of Collateral Support Deficits as described above will constitute an allocation of losses and other shortfalls experienced by the trust fund. A class of the series 2003-C5 certificates will be considered outstanding until its certificate balance is reduced to zero; provided, however, that reimbursement of any previously allocated Collateral Support Deficit may thereafter be made to such class. ADVANCES OF DELINQUENT MONTHLY DEBT SERVICE PAYMENTS The master servicer will be required to make, for each distribution date, a total amount of advances of principal and/or interest generally equal to all scheduled monthly debt service payments, other than balloon payments, Excess Interest and Default Interest, and assumed monthly debt service payments, in each case net of master servicing fees, primary servicing fees and workout fees, that-- - were due or deemed due, as the case may be, with respect to the mortgage loans during the related collection period, and - were not paid by or on behalf of the respective underlying borrowers or otherwise collected as of the close of business on the last day of the related collection period. The master servicer, special servicer or trustee will not be required to make a debt service advance with respect to the Stanford Shopping Center Companion Loans, Jefferson at Montfort B Loan, the Mayfair Mall Companion Loans, the Mall at Fairfield Commons Companion Loan or any Corresponding B Loan. Notwithstanding the foregoing, if it is determined that an Appraisal Reduction Amount exists with respect to any mortgage loan in the trust fund then the master servicer will reduce the interest portion, but not the principal portion, of each S-130 monthly debt service advance that it must make with respect to that mortgage loan during the period that the Appraisal Reduction Amount exists. The interest portion of any monthly debt service advance required to be made with respect to any mortgage loan as to which there exists an Appraisal Reduction Amount, will equal the product of-- - the amount of the interest portion of that monthly debt service advance that would otherwise be required to be made for the subject distribution date without regard to this sentence and the prior sentence, multiplied by - a fraction-- 1. the numerator of which is equal to the Stated Principal Balance of the mortgage loan, net of the Appraisal Reduction Amount, and 2. the denominator of which is equal to the Stated Principal Balance of the mortgage loan. With respect to any distribution date, the master servicer will be required to make monthly debt service advances either out of its own funds or, subject to replacement as and to the extent provided in the pooling and servicing agreement, funds held in the master servicer's collection account that are not required to be paid on the series 2003-C5 certificates on that distribution date. If the master servicer fails to make a required monthly debt service advance and the trustee is aware of that failure, the trustee will be obligated to make that advance. The master servicer and the trustee will each be entitled to recover any monthly debt service advance made by it out of its own funds, from collections on the mortgage loan as to which the advance was made. None of the master servicer or the trustee will be obligated to make any monthly debt service advance that, in its judgment, would not ultimately be recoverable out of collections on the related mortgage loan. If the master servicer or the trustee makes a monthly debt service advance with respect to any of the mortgage loans that it subsequently determines will not be recoverable out of collections on that mortgage loan, it may obtain reimbursement for that advance, together with interest accrued on the advance as described in the next paragraph, out of general collections on the mortgage loans and any REO Properties on deposit in the master servicer's collection account from time to time. See "Description of the Certificates--Advances" in the accompanying prospectus and "The Pooling and Servicing Agreement--Collection Account" in this prospectus supplement. Any reimbursement of a nonrecoverable debt service advance (including interest accrued thereon) as described in the second preceding sentence will be deemed to be reimbursed first from payments and other collections of principal on the mortgage loans that are on deposit in the collection account (thereby reducing the amount of principal otherwise distributable on the series 2003-C5 certificates on the related distribution date) prior to application of such reimbursement against any other general collections on deposit therein. The trustee may conclusively rely on the determination of the master servicer regarding the recoverability of any monthly debt service advance. Notwithstanding the foregoing, instead of obtaining reimbursement out of general collections on the mortgage loans and any REO Properties on deposit in the master servicer's collection account immediately, the master servicer or the trustee, as applicable, may, in its sole discretion, elect to obtain reimbursement for such non-recoverable monthly debt service advance over a period of time (not to exceed 6 months without the consent of the Directing Certificateholder or 12 months in any event), with interest thereon at the prime rate described below. At any time after such a determination to obtain reimbursement over time in accordance with the preceding sentence, the master servicer or the trustee, as applicable, may, in its sole discretion, decide to obtain reimbursement from general collections on the mortgage loans immediately. The fact that a decision to recover a non-recoverable monthly debt service advance over time, or not to do so, benefits some classes of series 2003-C5 certificateholders to the detriment of other classes of 2003-C5 certificateholders will not constitute a violation of the Servicing Standard or a breach of the terms of the series 2003-C5 pooling and servicing agreement by any party thereto or a violation of any duty owed by any party thereto to the series 2003-C5 certificateholder. In addition, in the event that any debt service advance (including interest accrued thereon) with respect to a defaulted mortgage loan remains unreimbursed following the time that such mortgage loan is modified and returned to performing status, the master servicer or trustee will be entitled to reimbursement for such advance (even though such advance is not deemed nonrecoverable) from the portion of general collections on deposit in the servicer's collection account which represent collections of principal on the mortgage loans remaining following application of any such principal to reimburse nonrecoverable debt service and servicing advances (thereby reducing the amount of principal otherwise distributable on the series 2003-C5 certificates on the related distribution date). S-131 The master servicer and the trustee will each be entitled to receive interest on monthly debt service advances made by that party out of its own funds. That interest will accrue on the amount of each monthly debt service advance for so long as that advance is outstanding from the date made (or, if made prior to the end of the applicable grace period, from the end of that grace period), at an annual rate equal to the prime rate as published in the "Money Rates" section of THE WALL STREET JOURNAL, as that prime rate may change from time to time. Interest accrued with respect to any monthly debt service advance on a mortgage loan will be payable out of any amounts then on deposit in the master servicer's collection account. Any determination made by the master servicer of the Mall at Fairfield Commons Loan or the master servicer of the Mall at Fairfield Commons Companion Loan regarding the nonrecoverability of any monthly debt service advance with respect to any portion of the Mall at Fairfield Commons Total Loan will be binding on the series 2003-C5 trust fund and the series 2003-KEY1 trust fund. Any determination made by the Mayfair Mall Master Servicer regarding the nonrecoverability of any monthly debt service advance with respect to the Mayfair Mall Securitized Companion Loan will be binding on the series 2003-C5 trust fund. Any determination made by the master servicer of the Stanford Shopping Center Loan or any master servicer of any Stanford Shopping Center Companion Loan (upon the securitization of such loans) regarding the nonrecoverability of any monthly debt service advance with respect to any portion of the Stanford Shopping Center Total Loan will be binding on the series 2003-C5 trust fund and the trust fund or trust funds, as the case may be, containing the Stanford Shopping Center Companion Loans. A monthly debt service payment will be assumed to be due with respect to: - each mortgage loan that is delinquent with respect to its balloon payment beyond the end of the collection period in which its maturity date occurs and as to which no arrangements have been agreed to for the collection of the delinquent amounts, including an extension of maturity; and - each mortgage loan as to which the corresponding mortgaged real property has become an REO Property. The assumed monthly debt service payment deemed due on any mortgage loan described in the prior sentence that is delinquent as to its balloon payment, will equal, for its maturity date and for each successive due date that it remains outstanding and part of the trust fund, the monthly debt service payment that would have been due on the mortgage loan on the relevant date if the related balloon payment had not come due and the mortgage loan had, instead, continued to amortize and accrue interest according to its terms in effect prior to that maturity date. The assumed monthly debt service payment deemed due on any mortgage loan described in the second preceding sentence as to which the related mortgaged real property has become an REO Property, will equal, for each due date that the REO Property remains part of the trust fund, the monthly debt service payment or, in the case of a mortgage loan delinquent with respect to its balloon payment, the assumed monthly debt service payment due or deemed due on the last due date prior to the acquisition of that REO Property. Assumed monthly debt service payments for ARD Loans do not include Excess Interest or accelerated amortization payments. REPORTS TO CERTIFICATEHOLDERS; AVAILABLE INFORMATION TRUSTEE REPORTS. Based solely on information provided on a one-time basis by the respective mortgage loan sellers, and in monthly reports prepared by the master servicer and the special servicer, and in any event delivered to the trustee, the trustee will be required to prepare and make available electronically or, upon written request, provide by first class mail, on each distribution date to each registered holder of a series 2003-C5 certificate, a reporting statement substantially in the form of, and generally containing the information set forth in, Exhibit B to this prospectus supplement. The trustee's reporting statement will detail the distributions on the series 2003-C5 certificates on that distribution date and the performance, both in total and individually to the extent available, of the mortgage loans and the related mortgaged real properties. Recipients will be deemed to have agreed to keep the subject information confidential. The master servicer will be required to provide the standard CMSA investor reporting package to the trustee on a monthly basis; provided that, with respect to the Mall at Fairfield Commons Total Loan, the master servicer or primary servicer, as applicable, will be required to provide the standard CMSA investor reporting package (solely with respect to the Mall at Fairfield Commons Companion Loan based on a modified collection period for that loan) to the master servicer under the series 2003-KEY1 pooling and servicing agreement on an earlier schedule than required for all the other mortgage loans included in the trust. However, due to the time required to collect all the necessary data and enter it onto the master servicer's computer system, the master servicer is not required to provide monthly reports, other than the loan periodic update file of the standard Commercial Mortgage Securities Association investor reporting package, before the distribution date in March 2004. BOOK-ENTRY CERTIFICATES. If you hold your offered certificates in book-entry form through DTC, you may obtain direct access to the monthly reports of the trustee as if you were a registered certificateholder, provided that you deliver a S-132 written certification to the trustee in the form attached to the pooling and servicing agreement confirming your beneficial ownership in the offered certificates and agree to keep the subject information confidential to the extent such information is not available to the general public. Otherwise, until definitive certificates are issued with respect to your offered certificates, the information contained in the trustee's monthly reports will be available to you only to the extent that it is made available through DTC and the DTC participants or is available on the trustee's internet website. Conveyance of notices and other communications by DTC to the DTC participants, and by the DTC participants to beneficial owners of the offered certificates, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. We, the master servicer, the special servicer, the trustee and the certificate registrar are required to recognize as series 2003-C5 certificateholders only those persons in whose names the series 2003-C5 certificates are registered on the books and records of the certificate registrar. INFORMATION AVAILABLE ELECTRONICALLY. The trustee will make the trustee's reports available to the general public each month via the trustee's internet website. In addition, the trustee will also make mortgage loan information as presented in the standard Commercial Mortgage Securities Association investor reporting package formats available via the trustee's internet website in accordance with the terms and provisions of the pooling and servicing agreement. The trustee's internet website will initially be located at "http://www.ctslink.com/cmbs." For assistance with the trustee's internet website certificateholders may call (301) 815-6600. The trustee will make no representations or warranties as to the accuracy or completeness of, and may disclaim responsibility for, any information made available by it for which it is not the original source. The trustee may require registration and the acceptance of a disclaimer, as well as an agreement to keep the subject information confidential, in connection with providing access to its internet website. The trustee will not be liable for the dissemination of information made by it in accordance with the pooling and servicing agreement. OTHER INFORMATION. The pooling and servicing agreement will obligate the trustee to make available at its offices, during normal business hours, upon reasonable advance written notice, or electronically via its website, for review by any holder or beneficial owner of an offered certificate or any person identified to the trustee as a prospective transferee of an offered certificate or any interest in that offered certificates, originals or copies, in paper or electronic form, of, among other things, the following items: - the pooling and servicing agreement, including exhibits, and any amendments to the pooling and servicing agreement; - all monthly reports of the trustee delivered, or otherwise electronically made available, to series 2003-C5 certificateholders since the date of initial issuance of the offered certificates; - all officer's certificates delivered to the trustee by the master servicer and/or the special servicer since the date of initial issuance of the offered certificates, as described under "The Pooling and Servicing Agreement--Evidence as to Compliance" in this prospectus supplement; - all accountant's reports delivered to the trustee with respect to the master servicer and/or the special servicer since the date of initial issuance of the offered certificates, as described under "The Pooling and Servicing Agreement--Evidence as to Compliance" in this prospectus supplement; - the most recent inspection report with respect to each mortgaged real property securing a mortgage loan prepared by the master servicer or the special servicer and delivered to the trustee as described under "The Pooling and Servicing Agreement--Inspections; Collection of Operating Information" in this prospectus supplement; - the most recent appraisal, if any, with respect to each mortgaged real property securing a mortgage loan obtained by the master servicer or the special servicer and delivered to the trustee; - the most recent quarterly and annual operating statement and rent roll for each mortgaged real property securing a mortgage loan and financial statements of the related borrower collected by the master servicer or the special servicer and delivered to the trustee as described under "The Pooling and Servicing Agreement--Inspections; Collection of Operating Information" in this prospectus supplement; and - the mortgage files for the mortgage loans (other than the mortgaged real property securing the Mayfair Mall Loan), including all documents, such as modifications, waivers and amendments, that are to be added S-133 to those mortgage files from time to time and any updated list of exceptions to the trustee's review of the mortgage files for the underlying mortgage loans. Copies of any and all of the foregoing items will be available from the trustee upon request. However, the trustee will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing the copies. In connection with providing access to or copies of the items described above, the trustee may require: - in the case of a registered holder or beneficial owner of an offered certificate, a written confirmation executed by the requesting person or entity, in the form attached to the pooling and servicing agreement, generally to the effect that the person or entity is a registered holder or beneficial owner of offered certificates and will keep the information confidential; and - in the case of a prospective purchaser of an offered certificate or any interest in that offered certificate, confirmation executed by the requesting person or entity, in the form attached to the pooling and servicing agreement, generally to the effect that the person or entity is a prospective purchaser of offered certificates or an interest in offered certificates, is requesting the information for use in evaluating a possible investment in the offered certificates and will otherwise keep the information confidential. VOTING RIGHTS The voting rights for the series 2003-C5 certificates will be allocated as follows: - 99% of the voting rights will be allocated to the class A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G, H, J, K, L, M, N, O and P certificates, in proportion to the respective total principal balances of those classes; - 1% of the voting rights will be allocated to the class A-X and A-SP certificates, in proportion to the respective total notional amounts of those classes; and - 0% of the voting rights will be allocated to the holders of the class R, LR and V certificates. Voting rights allocated to a class of series 2003-C5 certificateholders will be allocated among those certificateholders in proportion to their respective percentage interests in that class. YIELD AND MATURITY CONSIDERATIONS YIELD CONSIDERATIONS GENERAL. The yield on any offered certificate will depend on-- - the price at which the certificate is purchased by an investor, and - the rate, timing and amount of distributions on the certificate. The rate, timing and amount of distributions on any offered certificate will in turn depend on, among other things-- - the pass-through rate for the certificate, - the rate and timing of principal payments, including principal prepayments, and other principal collections on the underlying mortgage loans and the extent to which those amounts are to be applied or otherwise result in reduction of the principal balance of the certificate, - the rate, timing and severity of Collateral Support Deficits and the extent to which those losses and expenses result in the reduction of the principal balance of the certificate, and - the timing and severity of any Net Aggregate Prepayment Interest Shortfalls and the extent to which those shortfalls result in the reduction of the interest distributions on the certificate. PASS-THROUGH RATES. The pass-through rates on the class A-4, B, C, D, E and F certificates will be variable and will be equal to or limited by the Weighted Average Net Mortgage Rate from time to time. The Weighted Average Net Mortgage S-134 Rate would decline if the rate of principal payments on the mortgage loans with higher Net Mortgage Pass-Through Rates was faster than the rate of principal payments on the underlying mortgage loans with lower Net Mortgage Pass-Through Rates. Accordingly, the yields on each of those classes of offered certificates will be sensitive to changes in the relative composition of the mortgage pool as a result of scheduled amortization, voluntary prepayments and liquidations of underlying mortgage loans following default. RATE AND TIMING OF PRINCIPAL PAYMENTS. The yield to maturity on any offered certificates purchased at a discount or a premium will be affected by, the rate and timing of principal distributions made in reduction of the total principal balances of those certificates. In turn, the rate and timing of principal distributions that are paid or otherwise result in reduction of the total principal balance of any offered certificate will be directly related to the rate and timing of principal payments on or with respect to the underlying mortgage loans. Finally, the rate and timing of principal payments on or with respect to the underlying mortgage loans will be affected by their amortization schedules, the dates on which balloon payments are due and the rate and timing of principal prepayments and other unscheduled collections on them, including for this purpose, collections made in connection with liquidations of mortgage loans due to defaults, casualties or condemnations affecting the mortgaged real properties, or purchases or other removals of underlying mortgage loans from the trust fund. Prepayments and other early liquidations of the mortgage loans will result in distributions on the offered certificates of amounts that would otherwise be paid over the remaining terms of the mortgage loans. This will tend to shorten the weighted average lives of the offered certificates. Defaults on the underlying mortgage loans, particularly at or near their maturity dates, may result in significant delays in distributions of principal on the mortgage loans and, accordingly, on the offered certificates, while work-outs are negotiated or foreclosures are completed. These delays will tend to lengthen the weighted average lives of the offered certificates. See "The Pooling and Servicing Agreement--Modifications, Waivers, Amendments and Consents" in this prospectus supplement. In addition, the ability of a borrower under an ARD Loan to repay that loan on the related anticipated repayment date will generally depend on its ability to either refinance the mortgage loan or sell the corresponding mortgaged real property. Also, a borrower may have little incentive to repay its mortgage loan on the related anticipated repayment date if then prevailing interest rates are relatively high. Accordingly, there can be no assurance that any ARD Loan in the trust fund will be paid in full on its anticipated repayment date. The extent to which the yield to maturity on any offered certificate may vary from the anticipated yield will depend upon the degree to which the certificate is purchased at a discount or premium and when, and to what degree payments of principal on the underlying mortgage loans are in turn paid in a reduction of the principal balance of the certificate. If you purchase your offered certificates at a discount, you should consider the risk that a slower than anticipated rate of principal payments on the underlying mortgage loans could result in an actual yield to you that is lower than your anticipated yield. If you purchase your offered certificates at a premium, you should consider the risk that a faster than anticipated rate of principal payments on the underlying mortgage loans could result in an actual yield to you that is lower than your anticipated yield. Because the rate of principal payments on or with respect to the underlying mortgage loans will depend on future events and a variety of factors, no assurance can be given as to that rate or the rate of principal prepayments in particular. DELINQUENCIES AND DEFAULTS ON THE MORTGAGE LOANS. The rate and timing of delinquencies and defaults on the underlying mortgage loans will affect-- - the amount of distributions on your offered certificates, - the yield to maturity of your offered certificates, - the rate of principal distributions on your offered certificates, and - the weighted average life of your offered certificates. Delinquencies on the underlying mortgage loans, unless covered by advances, may result in shortfalls in distributions of interest and/or principal on your offered certificates for the current month. Although any shortfalls in distributions of interest may be made up on future distribution dates, no interest would accrue on those shortfalls. Thus, any shortfalls in distributions of interest would adversely affect the yield to maturity of your offered certificates. S-135 If-- - you calculate the anticipated yield to maturity for your offered certificates based on an assumed rate of default and amount of losses on the underlying mortgage loans that is lower than the rate of default and amount of losses actually experienced, and - the additional losses result in a reduction of the total distributions on or the total principal balance of your offered certificates, then your actual yield to maturity will be lower than you calculated and could, under some scenarios, be negative. The timing of any loss on a liquidated mortgage loan that results in a reduction of the total distributions on or the total principal balance of your offered certificates will also affect your actual yield to maturity, even if the rate of defaults and severity of losses are consistent with your expectations. In general, the earlier your loss occurs, the greater the effect on your yield to maturity. Even if losses on the underlying mortgage loans do not result in a reduction of the total distributions on or the total principal balance of your offered certificates, the losses may still affect the timing of distributions on, and the weighted average life and yield to maturity of, your offered certificates. In addition, if the master servicer or the trustee reimburses itself out of general collections on the mortgage pool for any advance that it has determined is not recoverable out of collections on the related mortgage loan, then that advance (together with accrued interest thereon) will be deemed, to the fullest extent permitted, to be reimbursed first out of payments and other collections of principal otherwise distributable on the series 2003-C5 certificates, prior to being deemed reimbursed out of payments and other collections of interest otherwise distributable on the series 2003-C5 certificates. In the event that any advance (including any interest accrued thereon) with respect to a defaulted mortgage loan remains unreimbursed following the time that such mortgage loan is modified and returned to performing status, the master servicer or trustee will be entitled to reimbursement for such advance (even though such advance is not deemed non-recoverable) out of payments and other collections of principal on the mortgage loans remaining following reimbursement of any nonrecoverable advances therefrom, as described in the preceding paragraph, prior to any distributions of principal on the series 2003-C5 certificates. THE EFFECT OF LOAN GROUPS. Because the mortgage pool has been divided into two loan groups for purposes of calculating distributions on the series 2003-C5 certificates, the holders of the class A-1, A-2, A-3 and A-4 certificates will be affected by the rate, timing and amount of payments and other collections of principal on, and by delinquencies and defaults on, the mortgage loans in loan group no. 1 and, in the absence of significant losses, should be largely unaffected by the rate, timing and amount of payments and other collections of principal on, and by delinquencies and defaults on, the mortgage loans in loan group no. 2. Investors should take this into account when reviewing this "Yield and Maturity Considerations" section. RELEVANT FACTORS. The following factors, among others, will affect the rate and timing of principal payments and defaults and the severity of losses on or with respect to the underlying mortgage loans: - prevailing interest rates; - the terms of the mortgage loans, including-- 1. provisions that impose prepayment lock-out periods or Yield Maintenance Charges, and 2. amortization terms that require balloon payments; - the demographics and relative economic vitality of the areas in which the mortgaged real properties are located; - the general supply and demand for commercial and multifamily rental space of the type available at the mortgaged real properties in the areas in which those properties are located; - the quality of management of the mortgaged real properties; - the servicing of the mortgage loans; S-136 - possible changes in tax laws; and - other opportunities for investment. See "Risk Factors--Risks Related to the Underlying Mortgage Loans," "Description of the Underlying Mortgage Loans" and "The Pooling and Servicing Agreement" in this prospectus supplement and "Description of the Governing Documents" and "Yield and Maturity Considerations--Yield and Prepayment Considerations" in the accompanying prospectus. The rate of prepayment on the mortgage loans in the trust fund is likely to be affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. When the prevailing market interest rate is below the annual rate at which a mortgage loan accrues interest, the related borrower may have an increased incentive to refinance the mortgage loan. Conversely, to the extent prevailing market interest rates exceed the annual rate at which a mortgage loan accrues interest, the related borrower may be less likely to voluntarily prepay the mortgage loan. Assuming prevailing market interest rates exceed the revised mortgage interest rate at which an ARD Loan accrues interest following its anticipated repayment date, the primary incentive for the related borrower to prepay the mortgage loan on or before its anticipated repayment date is to give the borrower access to excess cash flow, all of which, net of the minimum required debt service, approved property expenses and any required reserves, must be applied to pay down principal of the mortgage loan. Accordingly, there can be no assurance that any ARD Loan in the trust fund will be prepaid on or before its anticipated repayment date or on any other date prior to maturity. Depending on prevailing market interest rates, the outlook for market interest rates and economic conditions generally, some underlying borrowers may sell their mortgaged real properties in order to realize their equity in those properties, to meet cash flow needs or to make other investments. In addition, some underlying borrowers may be motivated by federal and state tax laws, which are subject to change, to sell their mortgaged real properties. A number of the underlying borrowers are partnerships. The bankruptcy of the general partner in a partnership may result in the dissolution of the partnership. The dissolution of a borrower partnership, the winding-up of its affairs and the distribution of its assets could result in an acceleration of its payment obligations under the related mortgage loan. We make no representation or warranty regarding: - the particular factors that will affect the rate and timing of prepayments and defaults on the underlying mortgage loans; - the relative importance of those factors; - the percentage of the total principal balance of the underlying mortgage loans that will be prepaid or as to which a default will have occurred as of any particular date; or - the overall rate of prepayment or default on the underlying mortgage loans. DELAY IN DISTRIBUTIONS. Because monthly distributions will not be made on the offered certificates until several days after the due dates for the underlying mortgage loans during the related collection period, your effective yield will be lower than the yield that would otherwise be produced by your pass-through rate and purchase price, assuming that purchase price did not account for a delay. WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES For purposes of this prospectus supplement, the weighted average life of any offered certificate refers to the average amount of time that will elapse from the assumed settlement date of December 8, 2003 until each dollar to be applied in reduction of the total principal balance of those certificates is paid to the investor. For purposes of this "Yield and Maturity Considerations" section, the weighted average life of any offered certificate is determined by: - multiplying the amount of each principal distribution on the certificate by the number of years from the assumed settlement date to the related distribution date; - summing the results; and - dividing the sum by the total amount of the reductions in the principal balance of the certificate. S-137 Accordingly, the weighted average life of any offered certificate will be influenced by, among other things, the rate at which principal of the mortgage loans is paid or otherwise collected or advanced and the extent to which those payments, collections and/or advances of principal are in turn applied in reduction of the principal balance of that certificate. As described in this prospectus supplement, the Total Principal Distribution Amount for each distribution date will be payable first with respect to the class A-1, A-2, A-3, A-4 and/or A-1-A certificates until the total principal balances of those classes are reduced to zero, and will thereafter be distributable entirely with respect to the other classes of offered certificates, with principal balances, sequentially based upon their relative seniority, in each case until the related total principal balance is reduced to zero. As a consequence of the foregoing, the weighted average lives of the class A-1, A-2, A-3, A-4 and A-1-A certificates may be shorter, and the weighted average lives of the other classes of offered certificates may be longer, than would otherwise be the case if the Total Principal Distribution Amount for each distribution date was being paid on a PRO RATA basis among the respective classes of series 2003-C5 certificates with principal balances. The tables set forth in Exhibit C show with respect to each class of offered certificates-- - the weighted average life of that class, and - the percentage of the initial total principal balance of that class that would be outstanding after each of the specified dates, based upon each of the indicated levels of CPR and the Modeling Assumptions. The actual characteristics and performance of the mortgage loans will differ from the assumptions used in calculating the tables on Exhibit C to this prospectus supplement. Those tables are hypothetical in nature and are provided only to give a general sense of how the principal cash flows might behave under the assumed prepayment scenarios. Any difference between the assumptions used in calculating the tables on Exhibit C to this prospectus supplement and the actual characteristics and performance of the mortgage loans, or actual prepayment or loss experience, will affect the percentages of initial total principal balances outstanding over time and the weighted average lives of the class A-1, A-2, A-3, A-4, B, C, D, E and F certificates. You must make your own decisions as to the appropriate prepayment, liquidation and loss assumptions to be used in deciding whether to purchase any offered certificate. We make no representation that-- - the mortgage loans in the trust fund will prepay in accordance with the assumptions set forth in this prospectus supplement at any of the indicated levels of CPR or at any other particular prepayment rate, - all the mortgage loans in the trust fund will prepay in accordance with the assumptions set forth in this prospectus supplement at the same rate, - the mortgage loans in the trust fund that are in a prepayment lock-out period, including any part of that period when defeasance is allowed, will not prepay as a result of involuntary liquidations upon default or otherwise during that period, or - the mortgage loans in the trust fund that are in a period when prepayments must be accompanied by a Yield Maintenance Charge will not voluntarily prepay or will not prepay as a result of involuntary liquidations upon default or otherwise during that period. THE POOLING AND SERVICING AGREEMENT GENERAL The series 2003-C5 certificates will be issued, the trust fund will be created and the mortgage loans (other than the Mayfair Mall Loan) will be serviced and administered under a pooling and servicing agreement to be dated as of December 1, 2003, by and among us, as depositor, and the master servicer, the special servicer and the trustee. Reference is made to the accompanying prospectus for important information in addition to that set forth in this prospectus supplement regarding the terms of the pooling and servicing agreement, in particular the section entitled "Description of the Governing Documents." The trustee will provide a copy of the pooling and servicing agreement to a prospective or actual holder or beneficial owner of an offered certificate, upon written request and, at the trustee's discretion, S-138 payment of a reasonable fee for any expenses. The pooling and servicing agreement will also be made available by the trustee on its website, at the address set forth under "Description of the Offered Certificates--Reports to Certificateholders; Available Information" in this prospectus supplement. In addition, we will arrange for the pooling and servicing agreement to be filed with the SEC by means of the EDGAR System, and it should be available on the SEC's website, the address of which is "http://www.sec.gov." THE MASTER SERVICER Midland Loan Services, Inc. will be the initial master servicer with respect to the mortgage pool. Midland, a wholly-owned subsidiary of PNC Bank, National Association, was incorporated under the laws of the State of Delaware in 1998. Midland is a real estate financial services company that provides loan servicing and asset management for large pools of commercial and multifamily real estate assets. Midland's principal offices are located at 10851 Mastin Street Building 82, Suite 700, Overland Park, Kansas 66210. As of September 30, 2003, Midland was servicing approximately 13,176 commercial and multifamily loans with a principal balance of approximately $79.8 billion. The collateral for these loans is located in all 50 states, the District of Columbia, Puerto Rico and Canada. With respect to those loans, approximately 8,562 of the loans, with a total principal balance of approximately $57.3 billion, pertain to commercial and multifamily mortgage-backed securities. Property type concentrations within the portfolio include multifamily, office, retail, hospitality and other types of income producing properties. Midland also provides commercial loan servicing for newly-originated loans and loans acquired in the secondary market for: - financial institutions, - private investors, and - issuers of commercial and multifamily mortgage-backed securities. Midland is approved as a master servicer, special servicer and primary servicer for investment-grade rated commercial and multifamily mortgage-backed securities by Fitch, Moody's and S&P. Midland has received the highest rankings as a master, primary and special servicer from both Fitch and S&P. S&P ranks Midland as "Strong" and Fitch ranks Midland as "1" for each category. Midland currently maintains an Internet-based investor reporting system, CMBS Investor Insight(R), that contains updated performance information at the portfolio, loan and property levels on the various commercial mortgage-backed securities transactions that it services. Series 2003-C5 certificateholders, prospective transferees and other appropriate parties may obtain access to CMBS Investor Insight(R) through Midland's website, "www.midlandls.com." Midland may require registration and the execution of an access agreement in connection with providing access to CMBS Investor Insight(R). Specific questions about portfolio, loan and property performance may be sent to Midland via e-mail at askmidland@midlandls.com. The information set forth in this prospectus supplement concerning Midland has been provided by it. Neither we nor any of the underwriters makes any representation or warranty as to the accuracy or completeness of this information. THE SPECIAL SERVICER Clarion Partners, LLC ("Clarion"), a New York limited liability company, was established in 1982 as Jones Lang Wooton Realty Advisors and is registered with the Securities and Exchange Commission as a registered investment advisor. In 1998, Clarion became a wholly owned subsidiary of ING Group of the Netherlands (ING). Clarion manages a portfolio of over $10 billion in commercial real estate investments and is currently the named special servicer on over $4.4 billion of CMBS transactions. Clarion, with a staff of nearly 500 employees located in offices in major cities across the country, has been approved as special servicer by S&P, Fitch and Moody's. It is anticipated that Clarion or an affiliate will purchase a significant portion of the certificates. Clarion is headquartered at 230 Park Avenue, 12th Floor, New York, NY 10169. S-139 KEYCORP REAL ESTATE CAPITAL MARKETS, INC. KRECM is a corporation organized under the laws of Ohio. KRECM is the primary servicer of three (3) mortgage loans in the trust fund, including the Mall at Fairfield Commons Loan and the Mayfair Mall Loan. Its principal offices are in Cleveland, Ohio. KRECM is a wholly-owned subsidiary of KeyBank, which is a wholly-owned subsidiary of KeyCorp. THE TRUSTEE Wells Fargo will act as trustee under the pooling and servicing agreement. Wells Fargo is a direct wholly-owned subsidiary of Wells Fargo & Company. It is a national banking association originally chartered in 1872 and is engaged in a wide range of activities typical of a national bank. Wells Fargo will maintain an office at: (a) with respect to certificate transfers and surrenders, Sixth Avenue and Marquette Street, Minneapolis, Minnesota 55479; and (b) for all other purposes, 9062 Old Annapolis Road, Columbia, Maryland 21045-1951. Its CMBS customer service help desk can be contacted at (301) 815-6600. The, master servicer, special servicer, KRECM, trustee and each of their directors, officers, employees, agents and controlling persons will be entitled to indemnification from the trust against any loss, liability or expense incurred without negligence or willful misconduct on their respective parts, arising out of, or in connection with the pooling and servicing agreement and the certificates. ASSIGNMENT OF THE MORTGAGE LOANS On the date of initial issuance of the offered certificates, we will sell, assign, transfer or otherwise convey all of our right, title and interest in and to the mortgage loans, without recourse, to the trustee for the benefit of the holders of the series 2003-C5 certificates. We will also assign to the trustee our rights under the agreements whereby we acquired the mortgage loans from the respective mortgage loan sellers. SERVICING UNDER THE POOLING AND SERVICING AGREEMENT The master servicer and the special servicer must each service and administer the mortgage loans and any REO Properties owned by the trust fund for which it is responsible, directly or through sub-servicers, in accordance with-- - any and all applicable laws, - the express terms of the pooling and servicing agreement, - the express terms of the respective mortgage loans (including, in the case of each A/B Loan, the Stanford Shopping Center Mall Loan, the Mall at Fairfield Commons Loan and the Jefferson at Montfort Loan, the related intercreditor agreement), and - to the extent consistent with the foregoing, the Servicing Standard. In general, the master servicer will be responsible for the servicing and administration of-- - all mortgage loans in the trust fund (other than the Mayfair Mall Loan) as to which no Servicing Transfer Event has occurred, and - all worked-out mortgage loans in the trust fund (other than the Mayfair Mall Loan) as to which no new Servicing Transfer Event has occurred; provided that the master servicer will be responsible for performing such limited duties with respect to the Mayfair Mall Loan as are specifically set forth in the 2003-C5 pooling and servicing agreement. In the event that a Servicing Transfer Event occurs with respect to any mortgage loan in the trust fund (other than the Mayfair Mall Loan), that mortgage loan will not be considered to be "worked out" until all applicable Servicing Transfer Events have ceased to exist as contemplated by the definition of "Servicing Transfer Event" in the glossary to this prospectus supplement. In general, subject to specified requirements and certain consents and approvals of the Directing Certificateholder contained in the pooling and servicing agreement, the special servicer will be responsible for the servicing and administration S-140 of each mortgage loan in the trust fund (other than the Mayfair Mall Loan, which will be specially serviced by Lennar Partners, Inc. pursuant to the series 2003-C4 pooling and servicing agreement) as to which a Servicing Transfer Event has occurred and is continuing. It will also be responsible for the administration of each REO Property in the trust fund. Despite the foregoing, the pooling and servicing agreement will require the master servicer: - to continue to receive payments and, subject to the master servicer's timely receipt of information from the special servicer and the servicers of the Mayfair Mall Total Loan, prepare all reports to the trustee required with respect to any specially serviced assets (including, if applicable, the Mayfair Mall Loan); and - otherwise, to render other incidental services with respect to any specially serviced assets. Neither the master servicer nor the special servicer will have responsibility for the performance by the other of its respective obligations and duties under the pooling and servicing agreement, unless the same party acts in both capacities. The master servicer will transfer servicing of a mortgage loan in the trust fund (other than the Mayfair Mall Loan) to the special servicer upon the occurrence of a Servicing Transfer Event with respect to that mortgage loan. The special servicer will return the servicing of that mortgage loan to the master servicer, and that mortgage loan will be considered to have been worked-out, if and when all Servicing Transfer Events with respect to that mortgage loan cease to exist. One hundred forty-seven (147) of the mortgage loans representing 85.38% of the initial mortgage pool balance will be primarily serviced by Midland. KRECM will act as primary servicer with respect to three (3) of the mortgage loans representing 13.52% of the initial mortgage pool balance. Various other parties will act as primary servicer with respect to three (3) mortgage loans, representing 1.10% of the initial mortgage pool balance. SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES THE MASTER SERVICING FEE. The principal compensation to be paid to the master servicer with respect to its master servicing activities will be the master servicing fee. The master servicing fee: - will be earned with respect to each and every underlying mortgage loan including-- 1. each specially serviced mortgage loan if any, 2. each mortgage loan as to which the corresponding mortgaged real property has become an REO Property, and 3. each mortgage loan as to which defeasance has occurred; and - in the case of each mortgage loan will-- 1. be calculated on the same interest accrual basis as that mortgage loan, 2. accrue at a master servicing fee rate equal to 0.01% per annum (exclusive of any primary servicing fee), 3. accrue on the same principal amount as interest accrues or is deemed to accrue from time to time with respect to that mortgage loan, and 4. be payable monthly from amounts received with respect to interest on that mortgage loan. The master servicer will also be entitled to a primary servicing fee with respect to those mortgage loans, the Stanford Shopping Center Companion Loans and the Jefferson at Montfort B Loan for which it is primary servicer. The mortgage loans not primarily serviced by the master servicer will be serviced by KRECM and various other parties. The rate at which the primary servicing fee for each mortgage loan accrues will be the rate, net of the master servicing fee and the trustee fee set forth in the table entitled "Additional Mortgage Loan Information" (under the heading "Servicing Fees and Trustee Fees") included on Exhibit A-1 of this prospectus supplement. S-141 In the event that Midland resigns or is terminated as master servicer, it will be entitled to retain the Excess Servicing Strip, equal to a portion of the master servicing fee (equal to fees accrued at a rate in excess of 0.005% per annum), except to the extent that any portion of such Excess Servicing Strip is needed to compensate any replacement master servicer for assuming the duties of Midland as master servicer under the pooling and servicing agreement. In the event that Midland resigns or is terminated as primary servicer, it will be entitled to retain its primary servicing fee with respect to those mortgage loans for which it is primary servicer, except to the extent that any such portion of such primary servicing fee is needed to compensate any replacement primary servicer for assuming the duties of Midland as primary servicer under the pooling and servicing agreement. PREPAYMENT INTEREST SHORTFALLS. The pooling and servicing agreement provides that, if any Prepayment Interest Shortfalls are incurred with respect to the mortgage pool during any collection period (other than Prepayment Interest Shortfalls resulting from a principal prepayment accepted by the master servicer (i) with respect to any specially serviced mortgage loan, (ii) as a result of the payment of insurance proceeds or condemnation proceeds, (iii) subsequent to a default under the related mortgage loan documents (provided that the master servicer reasonably believes that acceptance of such prepayment is consistent with the Servicing Standard), (iv) pursuant to applicable law or a court order, (iv) at the request of or with the consent of the Directing Certificateholder or the Special Servicer or (v) as permitted by the related loan documents), the master servicer must make, with respect to each such Prepayment Interest Shortfall, a non-reimbursable payment with respect to the related distribution date in an amount equal to such Prepayment Interest Shortfall attributable to the related mortgage loan for the related collection period. Any payments made by the master servicer with respect to any distribution date to cover Prepayment Interest Shortfalls will be included in the Available P&I Funds for that distribution date, as described under "Description of the Offered Certificates--Distributions" in this prospectus supplement. If the amount of Prepayment Interest Shortfalls incurred with respect to the mortgage pool during any collection period exceeds the sum of-- - any Prepayment Interest Excesses collected with respect to the mortgage pool during that collection period, and - any payments made by the master servicer with respect to the related distribution date to cover those Prepayment Interest Shortfalls, then the resulting Net Aggregate Prepayment Interest Shortfall will be allocated among the respective interest-bearing classes of the series 2003-C5 certificates, in reduction of the interest distributable on those certificates, as and to the extent described under "Description of the Offered Certificates--Distributions--Interest Distributions" in this prospectus supplement. PRINCIPAL SPECIAL SERVICING COMPENSATION. The principal compensation to be paid to the special servicer with respect to its special servicing activities will be-- - the special servicing fee, - the workout fee, and - the liquidation fee. SPECIAL SERVICING FEE. The special servicing fee: - will be earned with respect to-- 1. each specially serviced mortgage loan (other than the Mayfair Mall Loan) if any, and 2. each mortgage loan (other than the Mayfair Mall Loan), as to which the corresponding mortgaged real property has become an REO Property; - in the case of each mortgage loan described in the foregoing bullet, will-- 1. be calculated on the same interest accrual basis as that mortgage loan, 2. accrue at a special servicing fee rate of 0.35% per annum (subject to a minimum of $4,000 per loan per month and, provided that such minimum amount may be reduced by the Directing Certificateholder), and S-142 3. accrue on the same principal amount as interest accrues or is deemed to accrue from time to time with respect to that mortgage loan; and - will be payable monthly from general collections on all the mortgage loans in, and any REO Properties that are on deposit in the master servicer's collection account from time to time. WORKOUT FEE. The special servicer will, in general, be entitled to receive a workout fee with respect to each specially serviced mortgage loan in the trust fund (other than the Mayfair Mall Loan) that has been worked out. The workout fee will be payable out of, and will be calculated by application of a workout fee rate of 1.0% to, each payment of interest, other than Default Interest, and principal received on the mortgage loan for so long as it remains a worked-out mortgage loan. The workout fee with respect to any worked-out mortgage loan will cease to be payable if a new Servicing Transfer Event occurs with respect to that loan. However, a new workout fee would become payable if the mortgage loan again became a worked-out mortgage loan with respect to that new Servicing Transfer Event. If the special servicer is terminated or resigns, it will retain the right to receive any and all workout fees payable with respect to mortgage loans (other than the Mayfair Mall Loan) that were worked out during the period that it acted as special servicer and as to which no new Servicing Transfer Event had occurred as of the time of its termination or resignation. The successor special servicer will not be entitled to any portion of those workout fees. Although workout fees are intended to provide the special servicer with an incentive to better perform its duties, the payment of any workout fee will reduce amounts payable to the series 2003-C5 certificateholders. LIQUIDATION FEE. The special servicer will be entitled to receive a liquidation fee with respect to each specially serviced mortgage loan in the trust fund (other than the Mayfair Mall Loan) for which it obtains a full, partial or discounted payoff from the related borrower. The special servicer will also be entitled to receive a liquidation fee with respect to any specially serviced mortgage loan or REO Property in the trust fund (other than the Mayfair Mall Loan) as to which it receives any liquidation proceeds or condemnation proceeds, except as described in the next paragraph. A liquidation fee will also be payable in connection with the repurchase or replacement of any worked-out mortgage loan in the trust fund (other than the Mayfair Mall Loan) for a material breach of representation or warranty or a material document defect, as described under "Description of the Underlying Mortgage Loans--Cures, Repurchases and Substitutions" in this prospectus supplement, if the repurchase or substitution occurs after the end of the applicable cure period (and any applicable extension thereof). As to each specially serviced mortgage loan and REO Property in the trust fund (other than the Mayfair Mall Loan), the liquidation fee will be payable from, and will be calculated by application of a liquidation fee rate of 1.0% to, the related payment or proceeds, exclusive of liquidation expenses. Despite anything to the contrary described in the prior paragraph, no liquidation fee will be payable based on, or out of, proceeds received in connection with-- - the repurchase or replacement of any mortgage loan in the trust fund for a material breach of representation or warranty or a material document defect as described under "Description of the Underlying Mortgage Loans--Cures, Repurchases and Substitutions" in this prospectus supplement, within the applicable cure period (and any applicable extension thereof); - the purchase of any Defaulted Loan by the special servicer or the Directing Certificateholder, as described under "--Realization Upon Mortgage Loans" below; - the purchase of the Mayfair Mall Loan by any Mayfair Mall Companion Lender upon notice of a pending modification to the Mayfair Mall Total Loan that will materially affect its monetary terms, during the applicable Mayfair Mall Cure Period, as described under "--Mayfair Mall Loan" above; - the purchase of the Mall at Fairfield Commons Loan by the Mall at Fairfield Commons Companion Lender upon notice of a pending modification to the Mall at Fairfield Commons Total Loan that will materially affect its monetary terms, during the applicable Mall at Fairfield Commons Cure Period, as described under "--Mall at Fairfield Commons Loan" above; - the actual purchase of a mortgage loan by a mezzanine lender pursuant to the terms of any related intercreditor agreement unless the purchase price with respect thereto includes the liquidation fee; S-143 - the purchase of any A Loan by the holder of the related Corresponding B Loan within 60 days of receipt by the holder of the related Corresponding B Loan of notice of its option to purchase the related A Loan, as described under "Description of the Underlying Mortgage Loans--The A/B Loans" above; - the purchase of the Stanford Shopping Center Loan or Jefferson at Montfort Loan by the holders of the Stanford Shopping Center Companion Loans or the holder of the Jefferson at Montfort B Loan, respectively, upon notice of a pending modification to the Stanford Shopping Center Total Loan and Jefferson at Montfort Loan, respectively, that will materially affect its monetary terms, during the applicable cure period, as described under "--The Stanford Shopping Center Loan" and "--The Jefferson at Montfort Loan," respectively, above; or - the purchase of all of the mortgage loans and REO Properties in the trust fund by the master servicer, the special servicer or any single certificateholder or group of certificateholders of the series 2003-C5 controlling class in connection with the termination of the trust fund, as described under "--Termination" below. Although liquidation fees are intended to provide the special servicer with an incentive to better perform its duties, the payment of any liquidation fee will reduce amounts payable to the series 2003-C5 certificateholders. ADDITIONAL SERVICING COMPENSATION. As additional master servicing compensation, the master servicer will be entitled to receive the excess, if any, of-- - the amount of all Prepayment Interest Excesses collected with respect to the mortgage pool during any collection period, over - the amount of certain Prepayment Interest Shortfalls incurred with respect to the mortgage pool during that collection period. In addition, the following items collected on the mortgage loans in the trust fund (other than the Mayfair Mall Loan) will be allocated between the master servicer and the special servicer as additional compensation in accordance with the pooling and servicing agreement: - any late payment charges and Default Interest actually collected on a mortgage loan and that are not otherwise applied-- 1. to pay the master servicer or the trustee, as applicable, any unpaid interest on advances made by that party with respect to that mortgage loan or the related mortgaged real property, 2. to reimburse the trust fund for any unreimbursed advances that were made with respect to that mortgage loan or the related mortgaged real property, together with interest on such advances if such interest was paid to the master servicer or the trustee, as applicable, from a source of funds other than late payment charges and Default Interest collected on that mortgage loan, or 3. to Additional Trust Fund Expenses related to that mortgage loan, and - any extension fees, modification fees, assumption fees, assumption application fees, earnout fees, defeasance fees, consent/waiver fees and other comparable transaction fees and charges. The master servicer will be authorized to invest or direct the investment of funds held in its collection account, or in any escrow and/or reserve account maintained by it, in Permitted Investments. See "--Collection Account" below. The master servicer-- - will generally be entitled to retain any interest or other income earned on those funds, and - will be required to cover any losses of principal from its own funds, to the extent those losses are incurred with respect to investments made for the master servicer's benefit. Generally, the master servicer will not be obligated, however, to cover any losses resulting from the bankruptcy or insolvency of any depository institution or trust company holding any of those accounts, provided that the master servicer may be obligated if certain requirements in the pooling and servicing agreement are not complied with. S-144 PAYMENT OF EXPENSES; SERVICING ADVANCES. 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. The master servicer and the special servicer will not be entitled to reimbursement for these expenses except as expressly provided in the pooling and servicing agreement. Any and all customary, reasonable and necessary out-of-pocket costs and expenses (including for the remediation of any adverse environmental circumstance or condition at any of the mortgaged real properties) incurred by the master servicer or special servicer in connection with the servicing of a mortgage loan after a default, delinquency or other unanticipated event, or in connection with the administration of any REO Property in the trust fund, will be servicing advances. Servicing advances will be reimbursable from future payments and other collections, including insurance proceeds, condemnation proceeds and liquidation proceeds, received in connection with the related mortgage loan or REO Property. The special servicer will request the master servicer to make required servicing advances with respect to a specially serviced mortgage loan or REO Property (other than the Mayfair Mall Loan) on a monthly basis (except for servicing advances required on an emergency basis). The special servicer must make the request in writing, in a timely manner that does not adversely affect the interests of any series 2003-C5 certificateholders. The master servicer must make the requested servicing advance within a specified number of days following the master servicer's receipt of the request. The special servicer will be required to provide the master servicer any information in its possession as the master servicer may reasonably request to enable the master servicer to determine whether a requested servicing advance would be recoverable from expected collections on the related mortgage loan or REO Property. 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 a responsible officer of the trustee has been notified in writing of such failure, the trustee will make such servicing advance pursuant to the pooling and servicing agreement no later than one business day following the master servicer's failure to make such servicing advances by expiration of any applicable cure period in the definition of a master servicer event of default. Despite the foregoing discussion or anything else to the contrary in this prospectus supplement, neither the master servicer nor the trustee will be obligated to make servicing advances that, in its judgment, would not be ultimately recoverable from expected collections on the related mortgage loan or REO Property. If the master servicer or the trustee makes a servicing advance with respect to any mortgage loan (or any related companion loan or B loan) or related REO Property that it subsequently determines is not recoverable from expected collections on that mortgage loan or REO Property, it may obtain reimbursement for that advance, together with interest on that advance, out of general collections on the mortgage loans and any REO Properties on deposit in the master servicer's collection account from time to time. Any reimbursement of a nonrecoverable servicing advance (including interest accrued thereon) as described in the preceding sentence will be deemed to be reimbursed first from payments and other collections of principal on the mortgage loans that are on deposit in the collection account (thereby reducing the amount of principal otherwise distributable on the series 2003-C5 certificates on the related distribution date) prior to application of such reimbursement against any other general collections on deposit therein. The trustee may conclusively rely on the determination of the master servicer regarding the nonrecoverability of any servicing advance. Notwithstanding the foregoing, instead of obtaining reimbursement out of general collections on the mortgage loans and any REO Properties on deposit in the master servicer's collection account immediately, the master servicer or the trustee, as applicable, may, in its sole discretion, elect to obtain reimbursement for such non-recoverable servicing advance over a period of time (not to exceed 6 months without the consent of the Directing Certificateholder or 12 months in any event), with interest thereon at the prime rate described below. At any time after such a determination to obtain reimbursement over time in accordance with the preceding sentence, the master servicer or the trustee, as applicable, may, in its sole discretion, decide to obtain reimbursement from general collections on the mortgage loans immediately. The fact that a decision to recover a non-recoverable servicing advance over time, or not to do so, benefits some classes of series 2003-C5 certificateholders to the detriment of other classes of 2003-C5 certificateholders will not constitute a violation of the Servicing Standard or a breach of the terms of the series 2003-C5 pooling and servicing agreement by any party thereto or a violation of any duty owed by any party thereto to the series 2003-C5 certificateholder. In addition, in the event that any servicing advance (including interest accrued thereon) with respect to a defaulted mortgage loan remains unreimbursed following the time that such mortgage loan is modified and returned to performing status, the master servicer or trustee will be entitled to reimbursement for such advance (even though such advance is not deemed nonrecoverable) from the portion of general collections on deposit in the servicer's collection account which represent collections of principal on the mortgage loans remaining following application of any such principal to reimburse nonrecoverable debt service and servicing advances (thereby reducing the amount of principal otherwise distributable on the series 2003-C5 certificates on the related distribution date). S-145 The pooling and servicing agreement will require the master servicer, at the direction of the special servicer if a specially serviced asset is involved, to pay directly out of the collection account any servicing expense that, if advanced by the master servicer, would not be recoverable from expected collections on the related mortgage loan or REO Property. This is only to be done, however, when the master servicer, or the special servicer if a specially serviced asset is involved, has determined in accordance with the Servicing Standard that making the payment is in the best interests of the series 2003-C5 certificateholders, as a collective whole. The master servicer and the trustee will be entitled to receive interest on servicing advances made by them. The interest will accrue on the amount of each servicing advance for so long as the servicing advance is outstanding, at a rate per annum equal to the prime rate as published in the "Money Rates" section of THE WALL STREET JOURNAL, as that prime rate may change from time to time. Interest accrued with respect to any servicing advance will be payable out of amounts then on deposit in the collection account. Servicing advances with respect to the Mayfair Mall Loan will generally be made by the Mayfair Mall Master Servicer. REPLACEMENT OF THE SPECIAL SERVICER The holder or holders of more than 50% of the total principal balance of the series 2003-C5 controlling class may, upon not less than 10 days' prior written notice to the respective parties to the pooling and servicing agreement, remove any existing special servicer (except with respect to the Mayfair Mall Loan), with or without cause, and appoint a successor special servicer, except that, if the removal is without cause, the cost of transferring the special servicing responsibilities to a successor special servicer will be the responsibility of the certificateholders of the series 2003-C5 controlling class. However, any such appointment of a successor special servicer will be subject to, among other things, receipt by the trustee of-- 1. written confirmation from each of S&P and Fitch that the appointment will not result in a qualification, downgrade or withdrawal of any of the ratings then assigned thereby to the series 2003-C5 certificates, and 2. the written agreement of the proposed special servicer to be bound by the terms and conditions of the pooling and servicing agreement. With respect to the Mayfair Mall Loan, subject to substantially the same conditions as are contemplated by the prior paragraph, including receipt of rating agency confirmation, a Mayfair Mall Control Group may remove the Mayfair Mall Special Servicer, with or without cause, but only in respect of the Mayfair Mall Total Loan, and appoint a successor special servicer to the terminated special servicer. Unless it is part of the Mayfair Mall Control Group, the Directing Certificateholder may not remove the Mayfair Mall Special Servicer. In connection with any termination as described in the preceding paragraph, the terminated special servicer may be entitled to-- - payment out of the master servicer's collection account for all accrued and unpaid special servicing fees and additional special servicing compensation; - continued rights to indemnification as described under "Description of the Governing Documents--Matters Regarding the Master Servicer, the Special Servicer, the Manager and Us" in the accompanying prospectus; and - continued rights to some or all workout fees as described under "--Servicing and Other Compensation and Payment of Expenses" above. ENFORCEMENT OF "DUE-ON-SALE" AND "DUE-ON-ENCUMBRANCE" CLAUSES The mortgage loans contain provisions in the nature of "due-on-sale" or assumption clauses, which by their terms (a) provide that the mortgage loans will (or, at the lender's option, may) become due and payable upon the sale or other transfer of certain interests in the related mortgaged real property or the related borrower or (b) provide that the mortgage loans may be assumed with, among other conditions, the consent of the lender, in connection with any such sale or other transfer. The master servicer (with respect to performing mortgage loans) (other than with respect to the Mayfair Mall Loan) or the special servicer (with respect to specially serviced mortgage loans) (other than with respect to the Mayfair Mall Loan) S-146 will be required to enforce any such due-on-sale clause or refuse to consent to such assumption, unless the master servicer or special servicer, as applicable, determines, in accordance with the Servicing Standard, that-- - not declaring an event of default under the related mortgage; or - granting such consent would likely result in a greater recovery (or an equal recovery, provided the other conditions for an assumption or a waiver of a due-on-sale clause, if any, are met) on a present value basis (discounting at the related mortgage interest rate), than would enforcement of such clause or the failure to grant such consent. If the master servicer or special servicer, as applicable, determines that-- - not declaring an event of default under the related mortgage; or - granting such consent would likely result in a greater recovery (or an equal recovery, provided the other conditions for an assumption or waiver of a due-on-sale clause, if any, are met), the master servicer or special servicer is authorized to (or may authorize the master servicer or a primary servicer to) take or enter into an assumption agreement from or with the proposed transferee as obligor thereon, provided that-- (1) the taking or entering into such assumption agreement complies with the Servicing Standard and the terms of the related mortgage; (2) in the case of performing mortgage loans, the master servicer has obtained the consent of the directing certificateholder and the special servicer pursuant to the terms of the pooling and servicing agreement; and (3) with respect to any mortgage loan (i) the principal balance of which is $20,000,000 or more, (ii) that is a mortgage loan, part of a cross-collateralized group or a group of mortgage loans identified under the table entitled "Related Borrower Loans" under "Risk Factors--Risks Related to the Mortgage Loans" that, in each case, in the aggregate represents 5% or more of the aggregate outstanding principal balance of all of the mortgage loans at such time or (iii) is one of the ten largest mortgage loans by outstanding principal balance of all of the mortgage loans at such time, the special servicer has received, as written confirmation from S&P and, solely with respect to any mortgage loan that is one of the ten largest mortgage loans by outstanding principal balance of all mortgage loans at such time, Fitch, that such assumption would not, in and of itself, cause a downgrade, qualification or withdrawal of the then current ratings assigned to the series 2003-C5 certificates. The master servicer or special servicer representing the trust in the transaction must use reasonable efforts to require the borrower to pay the cost of any such confirmation. Any such costs not paid by the borrower shall be an expense of the trust fund. Mortgage Loans described in (3) are referred to as "Significant Mortgage Loans." The special servicer is required to provide notice to each of S&P and Fitch of the assumption of any mortgage loan or transfer of a direct or indirect controlling interest in the borrower under a mortgage loan to the extent the special servicer is aware of such transfer which, in each case, is not a Significant Mortgage Loan. No assumption agreement may contain any terms that are different from any term of any mortgage or related mortgage note, except pursuant to the provisions described under "--Realization Upon Mortgage Loans" and "--Modifications, Waivers, Amendments and Consents" below. The special servicer will provide notice to the rating agencies of any waiver of any due-on-sale clause in the event that rating agency confirmation is not required for such waiver. The consent of the master servicer or the special servicer and, except as described in this prospectus supplement, the receipt of a rating confirmation will not be required in the event that the holder of mezzanine debt related to a mortgage loan forecloses upon the equity in a borrower under a mortgage loan. The mortgage loans contain provisions in the nature of a "due-on- encumbrance" clause which provide-- - that the mortgage loans shall (or, at the lender's option, may) become due and payable upon the creation of any additional lien or other encumbrance on the related mortgaged real property or on certain interests in the related borrower; or S-147 - require the consent of the related lender to the creation of any such additional lien or other encumbrance on the related mortgaged real property or on certain interests in the related borrower. The master servicer or the special servicer will be required to enforce such due-on-encumbrance clause and in connection therewith will be required to (i) accelerate payments thereon or (ii) withhold its consent to such lien or encumbrance unless (except with respect to limited circumstances set forth in the pooling and servicing agreement involving easements, rights-of-way and similar agreements)-- - the master servicer or the special servicer determines, in accordance with the Servicing Standard, that such enforcement would result in a greater recovery (or an equal recovery, provided the other conditions for a waiver of a due-on-encumbrance clause, if any, are met) on a present value basis (discounting at the related mortgage interest rate) than would enforcement of such clause or the failure to grant such consent, - in the case of performing mortgage loans, the master servicer has obtained the consent of the directing certificateholder and the special servicer pursuant to the terms of the pooling and servicing agreement; and - with respect to any mortgage loan: (i) the principal balance, of which is $20,000,000 or more, (ii) that represents 2% or more of the aggregate outstanding principal balance of all of the mortgage loans at such time, (iii) that is one of the ten largest mortgage loans by outstanding principal balance of all of the mortgage loans at such time, (iv) that the combined loan-to-value ratio of such mortgage loan and other encumbrance would be greater than or equal to 85.0% or (iv) that the combined debt service coverage ratio of such mortgage loan and other encumbrance would be less than 1.20x, the special servicer receives prior written confirmation from S&P and, solely with respect to any mortgage loan that is one of the ten largest mortgage loans by outstanding principal balance of all mortgage loans at such time, Fitch, that (1) not accelerating payments on the related mortgage loan or (2) granting such consent would not, in and of itself, cause a downgrade, qualification or withdrawal of any of the then current ratings assigned to the series 2003-C5 certificates. The master servicer and the special servicer may authorize a primary servicer to perform certain servicing actions under the pooling and servicing agreement, including waiving due-on-sale and due-on-encumbrance clauses as described above. See "Legal Aspects of Mortgage Loans" in the accompanying prospectus. The special servicer must use reasonable efforts to require the borrower to pay the cost of any such confirmation. Any such costs not paid by the borrower shall be an expense of the trust fund. MODIFICATIONS, WAIVERS, AMENDMENTS AND CONSENTS The pooling and servicing agreement will permit the master servicer, a primary servicer or the special servicer, as applicable, to modify, waive or amend any term of the related mortgage loan (other than the Mayfair Mall Loan) if (a) it determines, in accordance with the Servicing Standard, that it is appropriate to do so and (b) except as described in the following paragraph, such modification, waiver or amendment, will not-- - affect the amount or timing of any scheduled payments of principal, interest or other amount (including Yield Maintenance Charges) payable under the mortgage loan; - affect the obligation of the related borrower to pay a Yield Maintenance Charge or permit a principal prepayment during the applicable lockout period; - except as expressly provided by the related mortgage or in connection with a material adverse environmental condition at the related mortgaged real property, result in a release of the lien of the related Mortgage on any material portion of such mortgaged real property without a corresponding principal prepayment; or - in the judgment of the master servicer or special servicer, as applicable, materially impair the security for the mortgage loan or reduce the likelihood of timely payment of amounts due thereon; provided, that unless the mortgage loan is in default or default is reasonably foreseeable, the master servicer or special servicer, as applicable, has determined (and may rely upon an opinion of counsel in making such determination) that the modification, waiver or amendment will not be a "significant modification" of the mortgage loan within the meaning of Treasury Regulations Section 1.860G-2(b). S-148 Notwithstanding clause (b) of the preceding paragraph, the special servicer may (or, in come cases, may permit the master servicer to) (other than with respect to the Mayfair Mall Loan)-- - reduce the amounts owing under any specially serviced mortgage loan by forgiving principal, accrued interest and/or any Yield Maintenance Charge; - reduce the amount of the monthly payment on any specially serviced mortgage loan, including by way of a reduction in the related mortgage interest rate; - forbear in the enforcement of any right granted under any mortgage note or mortgage relating to a specially serviced mortgage loan; - waive Excess Interest if such waiver conforms to the Servicing Standard; and/or - accept a principal prepayment during any lockout period; provided that the related borrower is in default with respect to the specially serviced mortgage loan or, in the judgment of the special servicer, such default is reasonably foreseeable. However, in no event will the special servicer be permitted to (or permit the master servicer to)-- (1) extend the maturity date of a mortgage loan beyond a date that is three years prior to the rated final distribution date; (2) extend the maturity date of any mortgage loan at an interest rate less than the lower of (a) the interest rate in effect prior to such extension or (b) the then prevailing interest rate for comparable mortgage loans; (3) extend the maturity date of any mortgage loan beyond a date which is 10 years prior to the expiration of the term of the related ground lease if the mortgage loan is secured by a ground lease; or (4) defer interest due on any mortgage loan in excess of 5% of the Stated Principal Balance of such mortgage loan. With respect to clause (3) above, the special servicer is required to give due consideration to the term of the ground lease before extending the maturity date beyond a date which is 20 years prior to the expiration of the term of such ground lease. Neither the master servicer nor the special servicer may permit or modify a mortgage loan to permit a voluntary prepayment of a mortgage loan (other than a specially serviced mortgage loan) on any day other than its due date, unless, among other things, the master servicer or special servicer also collects interest thereon through the due date following the date of such prepayment or unless otherwise permitted under the related mortgage loan documents. Prepayments of specially serviced mortgage loans will be permitted to be made on any day without the payment of interest through the following due date. The special servicer with respect to a specially serviced mortgage loan (other than the Mayfair Mall Loan) will notify the master servicer, the trustee and the rating agencies, and the master servicer with respect to a non-specially serviced mortgage loan (other than the Mayfair Mall Loan) will notify the trustee and the rating agencies, of any modification, waiver or amendment of any term of a mortgage loan and must deliver to the trustee (with a copy to the master servicer) for deposit in the related mortgage file an original counterpart of the agreement related to such modification, waiver or amendment, promptly following the execution thereof (and in any event within 10 business days). Copies of each agreement whereby any such modification, waiver or amendment of any term of any mortgage loan is effected are to be available for review during normal business hours, upon prior request, at the offices of the special servicer. Any modification, amendment or waiver of the Mayfair Mall Total Loan will be handled by the Mayfair Mall Master Servicer or the Mayfair Mall Special Servicer, as applicable, in accordance with the series 2003-C4 pooling and servicing agreement and must be structured so as to affect the Mayfair Mall Loan and the Mayfair Mall Companion Loan, proportionately in accordance with the respective amounts due under those mortgage loans. REQUIRED APPRAISALS Within 60 days following the occurrence of any Appraisal Reduction Event with respect to any of the mortgage loans (other than the Mayfair Mall Loan), the special servicer must obtain an MAI appraisal of the related mortgaged real property from an independent appraiser meeting the qualifications imposed in the pooling and servicing agreement (provided S-149 that in no event shall the period to receive such appraisal exceed 120 days from the occurrence of the event that, with the passage of time, would become such Appraisal Reduction Event), unless-- - an appraisal had previously been obtained within the prior twelve months, and - there has been no material change in the circumstances surrounding the related mortgaged real property subsequent to that appraisal that would, in the judgment of the special servicer, materially affect the value set forth in that earlier appraisal. Notwithstanding the foregoing, if the Stated Principal Balance of the subject mortgage loan is less than $2,000,000, then the special servicer will perform an internal valuation of the related mortgaged real property in lieu of an appraisal. As a result of any appraisal or internal valuation, the special servicer may determine that an Appraisal Reduction Amount exists with respect to the subject mortgage loan (or the Stanford Shopping Center Total Loan, Mall at Fairfield Commons Total Loan, A/B Loan or the Jefferson at Montfort Total Loan). If such appraisal is not received or an internal valuation is not completed, as applicable, by such date, the Appraisal Reduction Amount for the related mortgage loan (or the Stanford Shopping Center Total Loan, Mall at Fairfield Commons Total Loan, A/B Loan or the Jefferson at Montfort Total Loan) will be 25% of the Stated Principal Balance of such mortgage loan (or the Stanford Shopping Center Total Loan, Mall at Fairfield Commons Total Loan, A/B Loan or the Jefferson at Montfort Total Loan) or as of the date of the related Appraisal Reduction Event. An Appraisal Reduction Amount is relevant to the determination of the amount of any advances of delinquent interest required to be made with respect to the affected mortgage loan (or the Stanford Shopping Center Total Loan). See "Description of the Offered Certificates--Advances of Delinquent Monthly Debt Service Payments" in this prospectus supplement. Any Appraisal Reduction Amount with respect to the Mayfair Mall Total Loan will be determined, and allocated to the Mayfair Mall Loan, by the Mayfair Mall Special Servicer under the series 2003-C4 pooling and servicing agreement. If an Appraisal Trigger Event occurs with respect to any mortgage loan in the trust fund (other than the Mayfair Mall Loan), then the special servicer will have an ongoing obligation to obtain or perform, as the case may be, within 30 days of each anniversary of the occurrence of that Appraisal Trigger Event, an update of the prior required appraisal or other valuation. Based upon that update, the special servicer is to redetermine and report to the trustee and the master servicer the new Appraisal Reduction Amount, if any, with respect to the mortgage loan. This ongoing obligation will cease if and when-- - the subject mortgage loan has become a worked-out mortgage loan as contemplated under "--Servicing Under the pooling and servicing agreement" above and has remained current for twelve consecutive monthly payments under the terms of the workout, and - no other Servicing Transfer Event or Appraisal Reduction Event has occurred with respect to the subject mortgage loan during the preceding three months. The cost of each required appraisal, and any update of that appraisal, will be advanced by the master servicer, at the direction of the special servicer, and will be reimbursable to the master servicer as a servicing advance. COLLECTION ACCOUNT GENERAL. The master servicer will be required to establish and maintain a collection account for purposes of holding payments and other collections that it receives with respect to the mortgage loans. That collection account must be maintained in a manner and with a depository institution that satisfies rating agency standards for securitizations similar to the one involving the offered certificates. The collection account will contain sub-accounts that provide for segregation of the amounts received with respect to the A/B Loans, the Mall at Fairfield Commons Companion Loan, the Stanford Shopping Center Companion Loans and the Jefferson at Montfort B Loan. The funds held in the master servicer's collection account may be held as cash or invested in Permitted Investments. Subject to the limitations in the pooling and servicing agreement, any interest or other income earned on funds in the master servicer's collection account will be paid to the master servicer as additional compensation. DEPOSITS. The master servicer must deposit or cause to be deposited in its collection account, within one business day following receipt by it, in the case of payments from borrowers and other collections on the mortgage loans, or as otherwise required under the pooling and servicing agreement, the following payments and collections received or made by S-150 or on behalf of the master servicer with respect to the mortgage loans subsequent to the date of initial issuance of the offered certificates-- - all principal payments collected, including principal prepayments; - all interest payments collected, including late payment charges, Default Interest and Excess Interest (net of master servicing fees and primary servicing fees, and in respect of late payment charges and Default Interest, net of amounts used to offset interest on any advances); - any Static Prepayment Premiums and Yield Maintenance Charges; - any proceeds received under any hazard, flood, title or other insurance policy that provides coverage with respect to a mortgaged real property or the related mortgage loan, and all proceeds received in connection with the condemnation or the taking by right of eminent domain of a mortgaged real property, in each case to the extent not required to be applied to the restoration of the related mortgaged real property or released to the related borrower; - any amounts received and retained in connection with the liquidation of defaulted mortgage loans by foreclosure, deed-in-lieu of foreclosure or as otherwise contemplated under "--Realization Upon Mortgage Loans" below, in each case to the extent not required to be returned to the related borrower; - any amounts paid by a mortgage loan seller in connection with the repurchase or replacement of a mortgage loan by that party as described under "Description of the Underlying Mortgage Loans--Cures, Repurchases and Substitutions" and in this prospectus supplement; - any amounts paid to purchase or otherwise acquire all the mortgage loans and any REO Properties in connection with the termination of the trust fund as contemplated under "--Termination" below; - any amounts paid by a holder of any Corresponding B Loan, Mayfair Mall Companion Loan, Mall at Fairfield Commons Companion Loan, Stanford Shopping Center Companion Loans, Jefferson at Montfort B Loan or a mezzanine lender in connection with any purchase option exercised or cure payment remitted pursuant to the terms of the related intercreditor agreement; - any amounts required to be deposited by the master servicer in connection with losses incurred with respect to Permitted Investments of funds held in the collection account; - all payments required to be paid by the master servicer or received from the special servicer with respect to any deductible clause in any blanket hazard insurance policy or master force placed hazard insurance policy, as described under "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Hazard, Liability and Other Insurance" in this prospectus supplement; - any amount transferred by the special servicer from its REO account; and - any amounts required to be deposited by the master servicer as a reduction in the compensation to the master servicer to cover Prepayment Interest Shortfalls as contemplated under "--Servicing and Other Compensation and Payment of Expenses--Prepayment Interest Shortfalls" above. Upon receipt of any of the amounts described in the first six bullets of the prior paragraph with respect to any specially serviced mortgage loan in the trust fund, the special servicer is required to promptly remit those amounts to the master servicer for deposit in the master servicer's collection account. Any of the amounts described in the first five bullets in the prior paragraph with respect to the Mayfair Mall Loan will, in most cases, be received from the servicing parties under the 2003-C4 pooling and servicing agreement. Notwithstanding the foregoing, after the occurrence of an A/B Material Default with respect to any A/B Loan, for so long as such A/B Material Default is continuing, amounts received with respect to that A/B Loan or the related mortgaged real property will be deposited into an account (which may be a sub-account of the collection account) maintained by the master servicer solely with respect to that A/B Loan and thereafter amounts allocable to the related A Loan will be transferred to the master servicer's collection account. S-151 WITHDRAWALS. The master servicer may make withdrawals from its collection account for any of the following purposes, which are not listed in any order of priority: 1. to remit to the trustee for deposit in the trustee's distribution account described under "Description of the Offered Certificates--Distribution Account" in this prospectus supplement, on the business day preceding each distribution date, all payments and other collections on the mortgage loans and any REO Properties in the trust fund that are then on deposit in the collection account, exclusive of any portion of those payments and other collections that represents one or more of the following-- (a) monthly debt service payments due on a due date subsequent to the end of the related collection period, (b) payments and other collections received by or on behalf of the trust fund after the end of the related collection period, and (c) amounts that are payable or reimbursable from the collection account to any person other than the series 2003-C5 certificateholders in accordance with any of clauses 2. through 18. and clause 20. below; 2. to reimburse itself, the trustee or, in some cases, KRECM, as applicable, for any unreimbursed advances made by that party, as described under "--Servicing and Other Compensation and Payment of Expenses" above and "Description of the Offered Certificates--Advances of Delinquent Monthly Debt Service Payments" in this prospectus supplement, with that reimbursement to be made out of collections on the mortgage loan or REO Property as to which the advance was made; 3. to pay itself, any primary servicer or the trustee, earned and unpaid master servicing fees, primary servicing fees or trustee fees, as applicable, with respect to each mortgage loan in the trust fund, Stanford Shopping Center Companion Loan and Jefferson at Montfort B Loan with that payment to be made out of collections on that mortgage loan that are allocable as interest; 4. to pay the special servicer, out of general collections on the mortgage loans and any REO Properties, earned and unpaid special servicing fees with respect to each mortgage loan in the trust fund (other than for the Mayfair Mall Loan) that is either-- (a) a specially serviced mortgage loan, or (b) a mortgage loan as to which the related mortgaged real property has become an REO Property; 5. to pay the special servicer or, if applicable, any predecessor special servicer, earned and unpaid workout fees and liquidation fees to which it is entitled, with that payment to be made from the sources described under "--Servicing and Other Compensation and Payment of Expenses" above; 6. to reimburse itself, the trustee or, in some cases, KRECM, as applicable, out of general collections on the mortgage loans and any REO Properties, for any unreimbursed advance made by that party as described under "--Servicing and Other Compensation and Payment of Expenses" above and "Description of the Offered Certificates--Advances of Delinquent Monthly Debt Service Payments" in this prospectus supplement, which advance has been determined not to be ultimately recoverable under clause 2. above; provided that the master servicer may reimburse itself in installments as it may choose in its sole discretion; 7. to pay itself, any primary servicer or the trustee, as applicable, unpaid interest accrued on any advance made by that party under the pooling and servicing agreement; 8. to pay itself or the special servicer, as applicable, any items of additional servicing compensation on deposit in the collection account as discussed under "--Servicing and Other Compensation and Payment of Expenses--Additional Servicing Compensation" above; 9. to pay any unpaid liquidation expenses incurred with respect to any liquidated mortgage loan or REO Property in the trust fund (other than the Mayfair Mall Loan); 10. to pay, out of general collections on the mortgage loans and any REO Properties, any servicing expenses that would, if advanced, be nonrecoverable under clause 2. above; S-152 11. to pay, out of general collections on the mortgage loans and any REO Properties, for costs and expenses incurred by the trust fund due to actions taken pursuant to any environmental assessment; 12. to pay itself, the special servicer, the trustee, us or any of their or our respective directors, members, managers, officers, employees and agents (including any primary servicer), as the case may be, out of general collections on the mortgage loans and any REO Properties in the trust fund, any of the reimbursements or indemnities to which we or any of those other persons or entities are entitled as described under "Description of the Governing Documents--Matters Regarding the Master Servicer, the Special Servicer, the Manager and Us" and "--Matters Regarding the Trustee" in the accompanying prospectus; 13. to pay, out of general collections on the mortgage loans and any REO Properties, for (a) the costs of various opinions of counsel related to the servicing and administration of mortgage loans and (b) expenses properly incurred by the trustee in connection with providing tax-related advice to the special servicer; 14. to reimburse itself, the special servicer, the depositor or the trustee, as the case may be, for any unreimbursed expenses reasonably incurred in respect of any breach or defect in respect of a mortgage loan giving rise to a repurchase obligation of a mortgage loan seller, or the enforcement of such obligation, under the related mortgage loan purchase agreement; 15. to pay for-- - the cost of the opinions of counsel for purposes of REMIC administration or amending the pooling and servicing agreement to the extent payable out of the trust fund; and - the cost of obtaining an extension from the Internal Revenue Service for the sale of any REO Property; 16. to pay, out of general collections for any and all federal, state and local taxes imposed on any of the REMICs or their assets or transactions together with incidental expenses; 17. to pay any other items described in this prospectus supplement as being payable from the collection account; 18. to pay to the respective mortgage loan sellers any amounts that represent monthly debt service payments due on the mortgage loans on or before their respective due dates in December 2003 or, in the case of a replacement mortgage loan, during or before the month in which that loan was added to the trust fund; 19. to withdraw amounts deposited in the collection account in error, including amounts received on any mortgage loan or REO Property that has been purchased or otherwise removed from the trust fund; 20. to pay any amounts due and payable under the terms of any A/B Intercreditor Agreement, Stanford Shopping Center Intercreditor Agreement, Jefferson at Montfort Intercreditor Agreement, Mall at Fairfield Commons Intercreditor Agreement or the Mayfair Mall Intercreditor Agreement, which amounts are specified as being payable by the holder of any A Loan, the Stanford Shopping Center Loan, the Jefferson at Montfort Loan, the Mall at Fairfield Commons Loan or the Mayfair Mall Loan, respectively; and 21. to clear and terminate the collection account upon the termination of the pooling and servicing agreement. REALIZATION UPON MORTGAGE LOANS The pooling and servicing agreement grants the Directing Certificateholder an assignable option (a "Purchase Option") to purchase Defaulted Loans from the trust fund in the manner and at the price described below. The Purchase Option held or assigned by a series 2003-C5 certificateholder (if not earlier exercised or declined) will expire at such time as the related class of certificates is no longer the controlling class with respect to the applicable Defaulted Loan. Promptly after the determination that a mortgage loan or a specially serviced mortgaged loan has become a Defaulted Loan, the special servicer will be required to notify the trustee, the master servicer and the Directing Certificateholder of such determination. S-153 Within 60 days after a mortgage loan becomes a Defaulted Loan, the special servicer will be required to determine the fair value of such mortgage loan in accordance with the Servicing Standard and consistent with the guidelines contained in the pooling and servicing agreement. The special servicer will be permitted to change from time to time thereafter, its determination of the fair value of a Defaulted Loan based upon changed circumstances, new information or otherwise, in accordance with the Servicing Standard. In the event that the special servicer or a Directing Certificateholder that is an affiliate of the special servicer proposes to purchase a Defaulted Loan, the master servicer is required pursuant to the pooling and servicing agreement to determine whether the special servicer's determination of fair value for a Defaulted Loan constitutes a fair price in its reasonable judgment. The master servicer shall be entitled to a one-time fee, as specified in the pooling and servicing agreement, in connection with each such fair value determination. All reasonable costs and expenses of the special servicer and master servicer in connection with the determination of the fair value of a Defaulted Loan will be reimbursable as servicing advances. The special servicer must give prompt written notice of its fair value determination to the trustee, the master servicer and the Directing Certificateholders. Each holder of the Purchase Option may, at its option, purchase the Defaulted Loan from the trust fund at a price (the "Option Price") equal to-- - if the special servicer has not yet determined the fair value of the Defaulted Loan, the unpaid principal balance of the Defaulted Loan, plus accrued and unpaid interest on such balance, all related unreimbursed servicing advances together with any unpaid interest on any advance owing to the party or parties that made them, and all accrued special servicing fees and additional trust expenses allocable to such Defaulted Loan whether paid or unpaid and all cost and expenses in connection with the sale, or - if the special servicer has made such fair value determination, the fair value of the Defaulted Loan as determined by the special servicer. If the most recent fair value calculation was made more than 90 days prior to the exercise date of the Purchase Option, then the special servicer must confirm or revise the fair value determination, and the Option Price at which the Defaulted Loan may be purchased will be modified accordingly. Unless and until the Purchase Option with respect to a Defaulted Loan is exercised, the special servicer will be required to pursue such other resolution strategies available under the pooling and servicing agreement, including workout and foreclosure, consistent with the Servicing Standard, but the special servicer will not be permitted to sell the Defaulted Loan other than pursuant to the exercise of the Purchase Option. If not exercised sooner, the Purchase Option with respect to any Defaulted Loan will automatically terminate upon-- - the related mortgagor's cure of all defaults that caused such mortgage loan to be a Defaulted Loan, - the acquisition on behalf of the trust of title to the related mortgaged real property by foreclosure or deed in lieu of foreclosure or - the modification or pay-off (full or discounted) of the Defaulted Loan in connection with a workout. Pursuant to the pooling and servicing agreement, if an event of default on a mortgage loan has occurred and is continuing, the special servicer, on behalf of the trust fund, may at any time institute foreclosure proceedings, exercise any power of sale contained in the related mortgage or otherwise acquire title to the related mortgaged real property. The special servicer shall not, however, acquire title to any mortgaged real property or take any other action with respect to any mortgaged real property that would cause the trustee, for the benefit of the series 2003-C5 certificateholders, or any other specified person to be considered to hold title to, to be a "mortgagee-in-possession" of or to be an "owner" or an "operator" of such mortgaged real property within the meaning of certain federal environmental laws, unless the special servicer has previously received a report prepared by a person who regularly conducts environmental audits (the cost of which report will be a servicing advance) and either-- - such report indicates that (a) the mortgaged real property is in compliance with applicable environmental laws and regulations and (b) there are no circumstances or conditions present at the mortgaged real property for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any applicable environmental laws and regulations; or S-154 - the special servicer, based solely (as to environmental matters and related costs) on the information set forth in such report (taking into account the existence of any environmental insurance), determines that taking such actions as are necessary to bring the mortgaged real property into compliance with applicable environmental laws and regulations and/or taking the actions contemplated by clause (b) above, is reasonably likely to increase the net proceeds of the liquidation of such mortgaged real property, than not taking such actions. As long as servicing of the Mayfair Mall Total Loan is governed by the series 2003-C4 pooling and servicing agreement, neither the master servicer nor the special servicer will be able to take any enforcement action with respect to the Mayfair Mall Loan or the related mortgaged real property. TAX CONSIDERATIONS. If title to any REO Property is acquired by the trust fund, the special servicer, on behalf of the trust fund, will be required to sell the mortgaged real property prior to the close of the third calendar year beginning after the year of acquisition, unless-- - the Internal Revenue Service grants an extension of time to sell such property; or - the trustee receives an opinion of independent counsel to the effect that the holding of the property by the trust fund for such longer period will not result in the imposition of a tax on the assets of the trust fund or cause any REMIC created under the pooling and servicing agreement to fail to qualify as a REMIC for federal or applicable state tax purposes at any time that any series 2003-C5 certificate is outstanding. The special servicer will also be required to ensure that any REO Property acquired by the trust fund by the special servicer is administered so that it constitutes "foreclosure property" within the meaning of Section 860G(a)(8) of the Code at all times, that the sale of such property does not result in the receipt by the trust fund of any "income from nonpermitted assets" as described in Section 860F(a)(2)(B) of the Code. If the trust fund acquires title to any mortgaged real property, the special servicer, on behalf of the trust fund, will retain an independent contractor to manage and operate such property. The retention of an independent contractor, however, will not relieve the special servicer of its obligation to manage such mortgaged real property as required under the pooling and servicing agreement. Generally, neither the upper-tier REMIC nor the lower-tier REMIC will be taxed on income received with respect to a mortgaged real property acquired by the trust fund to the extent that it constitutes "rents from real property," within the meaning of Section 856(d) of the Code and Treasury Regulations thereunder. "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 real 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 real properties are "customary" within the meaning of applicable regulations. It is therefore possible that a portion of the income with respect to a mortgaged real property owned by the trust fund, based on the charges for any non-customary services, or all of such income if such charges are not separately stated or such non-customary services are not performed by an independent contractor, would not constitute "rents from real property." Any of the foregoing types of income and any income from the operation of a trade or business, such as a hotel or parking garage, may instead constitute "net income from foreclosure property," which would be taxable to the lower-tier REMIC at the highest marginal federal corporate rate (currently 35%) and may also be subject to state or local taxes. Because these sources of income, if they exist, are already in place with respect to the mortgaged real properties, it is generally viewed as beneficial to series 2003-C5 certificateholders to permit the trust fund to continue to earn them if it acquires a mortgaged real property, even at the cost of this tax. Any such taxes would be chargeable against the related income for purposes of determining the proceeds available for distribution to holders of series 2003-C5 certificates. See "Federal Income Tax Consequences" in this prospectus supplement. REO ACCOUNT. The special servicer will be required to segregate and hold all funds collected and received in connection with any REO Property held by the trust fund separate and apart from its own funds and general assets. If an REO Property is acquired by the trust fund, the special servicer will be required to establish and maintain an account for the retention of revenues and other proceeds derived from the REO Property. That REO account must be maintained in a manner and with a depository institution that satisfies rating agency standards for securitizations similar to the one involving the offered certificates. The special servicer will be required to deposit, or cause to be deposited, in its REO account, within one S-155 (1) business day following receipt, all net income, insurance proceeds, condemnation proceeds and liquidation proceeds received with respect to each REO Property held by the trust fund. The funds held in this REO account may be held as cash or invested in Permitted Investments. Any interest or other income earned on funds in the special servicer's REO account will be payable to the special servicer, subject to the limitations described in the pooling and servicing agreement. LIQUIDATION PROCEEDS. To the extent that liquidation proceeds collected with respect to any mortgage loan are less than the sum of-- - the outstanding principal balance of such mortgage loan; - interest accrued thereon; - interest accrued on any monthly debt service advance made with respect to such mortgage loan; and - the aggregate amount of outstanding reimbursable expenses (including any unreimbursed servicing advances and unpaid and accrued interest on such advances) incurred with respect to such mortgage loan, then the trust fund will realize a loss in the amount of such shortfall. The trustee, the master servicer and/or the special servicer will be entitled to reimbursement out of the liquidation proceeds recovered on a mortgage loan, prior to the distribution of such liquidation proceeds to series 2003-C5 certificateholders, of any and all amounts that represent unpaid servicing compensation or trustee fee in respect of such mortgage loan, certain unreimbursed expenses incurred with respect to such mortgage loan and any unreimbursed advances made with respect to such mortgage loan. In addition, amounts otherwise distributable on the series 2003-C5 certificates will be further reduced by interest payable to the master servicer or the trustee, as applicable, on any such advances. If any mortgaged real property suffers damage such that the proceeds, if any, of the related hazard insurance policies or flood insurance are insufficient to restore fully the damaged property, the master servicer will not be required to expend its own funds to effect such restoration unless-- - the special servicer determines that such restoration will increase the proceeds to the series 2003-C5 certificateholders on liquidation of the mortgage loan after reimbursement of the special servicer, the master servicer or the trustee, as the case may be, for its expenses; and - the master servicer determines that such expenses will be recoverable by it from related liquidation proceeds. SPECIALLY SERVICED MORTGAGE LOANS. With respect to any mortgage loan (other than the Mayfair Mall Loan)-- - as to which a payment default has occurred at its maturity date (except, if the borrower is making its assumed payment and delivers within 60 days of the maturity date a firm commitment to refinance acceptable to the Directing Certificateholder in which event such mortgage loan would not become a specially serviced mortgage loan until the earlier of (1) 90 days after such payment default, which may be extended to 150 days at the Directing Certificateholders' discretion or (2) the expiration of such commitment); - as to which any monthly payment is more than 60 or more days delinquent; - as to which such borrower has-- (1) filed for, or consented to, bankruptcy, appointment of a receiver or conservator or a similar insolvency proceeding; (2) become the subject of a decree or order for such a proceeding which is not stayed or discharged within 60 days; or (3) has admitted in writing its inability to pay its debts generally as they become due; - as to which the master servicer shall have received notice of the foreclosure or proposed foreclosure of any other lien on the mortgaged real property; S-156 - as to which, in the judgment of the master servicer or the special servicer, a payment default has occurred or is imminent and is not likely to be cured by the borrower within 60 days and, in respect of a determination by the special servicer, the Directing Certificateholder agrees with such determination; - as to which any other default has occurred under the mortgage loan documents that, in the judgment of the master servicer, has materially and adversely affected the value of the related mortgage loan and has continued unremedied for 60 days (irrespective of any grace period specified in the related Mortgage Note), provided that failure of the related borrower to obtain all-risk casualty insurance which does not contain any carve-out for terrorist or similar act shall not apply with respect to this clause if the special servicer has determined in accordance with the Servicing Standard that either-- (1) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the mortgaged real property and located in or around the region in which such mortgaged real property is located, or (2) such insurance is not available at any rate; the master servicer will transfer its servicing responsibilities to the special servicer, but will continue to receive payments on such mortgage loan (including amounts collected by the special servicer), to make certain calculations with respect to such mortgage loan and to make remittances and prepare certain reports to the trustee with respect to such mortgage loan. The special servicer will continue to be responsible for the operation and management of an REO Property. The master servicer will have no responsibility for the performance by the special servicer of its duties under the pooling and servicing agreement. The special servicer will return the full servicing of a Corrected Mortgage Loan to the master servicer. As long as servicing of the Mayfair Mall Total Loan is governed by the series 2003-C4 pooling and servicing agreement, the Mayfair Mall Loan will be considered a specially serviced mortgage loan in accordance with the series 2003-C4 pooling and servicing agreement in generally the same circumstances as is set forth in the third preceding paragraph. A series 2003-C5 controlling class certificateholder is a holder of the most subordinate of the classes of series 2003-C5 certificates (other than the class A-X, A-SP, R, LR and V certificates) that has a total principal balance at least equal to 25% of the total initial principal balance of that class, or if none of the classes of series 2003-C5 certificates has a total principal balance at least equal to 25% of the total initial principal balance of that class, then the holder of the most subordinate of the classes of series 2003-C5 certificates that has a total principal balance greater than zero. The series 2003-C5 controlling class as of the closing date will be the class P certificates. The "Directing Certificateholder" is a certificateholder of the series 2003-C5 controlling class selected by the holders of more than 50% of the total principal balance of in the series 2003-C5 controlling class, as certified by the certificate registrar from time to time; provided, however, that until a Directing Certificateholder is so selected or after receipt of a notice from the holders of more than 50% of the total principal balance of the series 2003-C5 controlling class that a Directing Certificateholder is no longer designated, the series 2003-C5 controlling class certificateholder that beneficially owns the largest aggregate principal balance of the series 2003-C5 controlling class certificates will be the Directing Certificateholder. With respect to the Mayfair Mall Loan, if the Directing Certificateholder is part of the Mayfair Mall Control Group, it will be able to direct various servicing actions of the Mayfair Mall Master Servicer and Mayfair Mall Special Servicer and if not part of a Mayfair Mall Control Group will be able to consult with the Mayfair Mall Master Servicer and Mayfair Mall Special Servicer under the series 2003-C4 pooling and servicing agreement regarding various servicing actions. See "--Mayfair Mall Loan" in this prospectus supplement. With respect to the Stanford Shopping Center Loan, if the Directing Certificateholder is part of the Stanford Shopping Center Control Group, it will be able to direct various servicing actions of the master servicer and special servicer and if not part of a Stanford Shopping Center Control Group will be able to consult with the master servicer and special servicer under the pooling and servicing agreement regarding various servicing actions. See "--Stanford Shopping Center Loan" in this prospectus supplement S-157 ASSET STATUS REPORT. Pursuant to the pooling and servicing agreement, the special servicer is required to prepare and deliver a report (the "Asset Status Report") to each rating agency, the master servicer, the Directing Certificateholder with respect to any mortgage loan (other than the Mayfair Mall Loan) that becomes a Specially Serviced Mortgage Loan within 30 days of any such mortgage loan becoming specially serviced. Any Asset Status Report with respect to any A Loan, the Stanford Shopping Center Loan, the Mall at Fairfield Commons Loan and the Jefferson at Montfort Loan will also be delivered to the holders of the related Corresponding B Loan, Stanford Shopping Center Companion Loans, the Mall at Fairfield Commons Companion Loan and Jefferson at Montfort B Loan, as applicable. Any Asset Status Report prepared by the special servicer will set forth the following information, to the extent reasonably determined, which includes: - a summary of the status of such Specially Serviced Mortgage Loan; - a discussion of the legal and environmental considerations reasonably known to the special servicer, consistent with the Servicing Standard, that are applicable to the exercise of remedies and whether outside legal counsel has been retained; - a current rent roll and income or operating statement available for such mortgaged real property; - a recommendation by the special servicer as to how such Specially Serviced Mortgage Loan might be returned to performing status; - a summary of any proposed actions; and - a status report on any foreclosure actions or other proceedings undertaken with respect to such mortgaged real property. With respect to any mortgage loan that becomes a Specially Serviced Mortgage Loan (excluding the Mayfair Mall Loan), if, within ten business days following delivery of the Asset Status Report, the Directing Certificateholder, does not disapprove in writing of any action proposed to be taken in such Asset Status Report, the Special Servicer is required to implement the recommended action as outlined in such Asset Status Report. If the Directing Certificateholder disapproves in writing such Asset Status Report, the Special Servicer is required to revise and deliver a new Asset Status Report within 30 days after the Directing Certificateholder's disapproval. The Special Servicer shall continue to revise such Asset Status Report until either the Directing Certificateholder fails to disapprove such revised Asset Status Report within ten business days of receipt or the passage of 60 days from the date of preparation of the first Asset Status Report; provided that if the special servicer determines that taking immediate action is necessary and in the best interests of the certificateholders as a collective whole, it will be permitted to take such action. In addition to the foregoing, the special servicer is required to, subject to the Servicing Standard, obtain the consent of the Directing Certificateholder prior to the taking by the special servicer of the following actions-- - any proposed or actual foreclosure upon or comparable conversion of, which may include acquisitions of an REO Property, the ownership of the property or properties securing any specially serviced mortgage loans in the trust fund (other than the Mayfair Mall Loan) as come into and continue in default; - any modification, amendment or waiver of a monetary term (including any change in the timing of payments but excluding the waiver of Default Interest and late payment charges) or any material non-monetary term (excluding any waiver of a due-on-sale or due-on-encumbrance clause, which is covered by clause 9. below) of a mortgage loan in the trust fund (other than the Mayfair Mall Loan); - any acceptance of a discounted payoff with respect to a specially serviced mortgage loan in the trust fund (other than the Mayfair Mall Loan); - any proposed or actual sale of an REO Property out of the trust fund for less than the outstanding principal balance of, and accrued interest (other than Default Interest and Excess-ARD Additional Interest) on, the related mortgage loan, except in connection with a termination of the trust fund as described under "--Termination" below; - any determination to bring an REO Property held by the trust fund into compliance with applicable environmental laws or to otherwise address hazardous material located at the REO Property; S-158 - any release of material collateral for a mortgage loan in the trust fund (other than the Mayfair Mall Loan), other than in accordance with the specific terms of, or upon satisfaction of, that mortgage loan; - any acceptance of substitute or additional collateral for a specially serviced mortgage loan in the trust fund (other than the Mayfair Mall Loan), other than in accordance with the specific terms of that mortgage loan; - any releases of earn-out reserves or related letters of credit with respect to a mortgaged real property securing a mortgage loan in the trust fund (other than the Mayfair Mall Loan) other than in accordance with the specific terms of that mortgage loan; and - any waiver of a due-on-sale or due-on-encumbrance clause in a mortgage loan in the trust fund (other than the Mayfair Mall Loan). If any of the previous listed items is set forth as proposed action in any Asset Status Report, the Special Servicer is required to follow the consultation procedures set forth above under "--Asset Status Report." INSPECTIONS; COLLECTION OF OPERATING INFORMATION The special servicer will be required to physically inspect or cause a physical inspection of the related corresponding mortgaged real property as soon as practicable after any mortgage loan in the trust fund (other than the Mayfair Mall Loan) becomes a specially serviced mortgage loan and annually thereafter for so long as that mortgage loan remains a specially serviced mortgage loan. Beginning in 2004, the master servicer will be required, at its own expense, to physically inspect or cause a physical inspection of each mortgaged real property (other than the related mortgaged real property securing the Mayfair Mall Loan) at least once per calendar year or, in the case of each mortgage loan with an unpaid principal balance of under $2,500,000, once every two (2) years (or at lesser frequency as each rating agency shall have confirmed in writing to the master servicer will not, in and of itself, result in a downgrade, qualification or withdrawal of the then current ratings assigned to any class of series 2003-C5 certificates), if the special servicer has not already done so in that period as contemplated by the preceding sentence. The master servicer and the special servicer will each be required to prepare or cause the preparation of a written report of each inspection performed by it that generally describes the condition of the particular real property and, upon request, deliver such written report in electronic format to the trustee. Most of the mortgages obligate the related borrower to deliver quarterly, and substantially all mortgages require annual, property operating statements. However, there can be no assurance 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 such delivery in the case of an otherwise performing mortgage loan. EVIDENCE AS TO COMPLIANCE On or before April 30 of each year, beginning in 2004, each of the master servicer and the special servicer must: - at its expense, cause a firm of independent public accountants, that is a member of the American Institute of Certified Public Accountants to furnish a statement to the trustee, among others, to the effect that-- 1. the firm has examined the servicing operations of the master servicer or the special servicer, as the case may be, for the previous year, and 2. on the basis of that examination, conducted substantially in compliance with USAP or the Audit Program, the firm confirms that the master servicer or the special servicer, as applicable, has complied during the previous year with the minimum servicing standards, to the extent applicable to multifamily and commercial mortgage loans, identified in USAP or the Audit Program, in all material respects, except for the significant exceptions or errors in records that, in the opinion of the firm, USAP or the Audit Program requires it to report; and - deliver to the trustee, among others, a statement signed by an officer of the master servicer or the special servicer, as the case may be, to the effect that, to the knowledge of that officer, the master servicer or special servicer, as the case may be, has fulfilled its obligations under the pooling and servicing agreement in all material respects throughout the preceding calendar year or, if there has been a material default, specifying each material default known to such officer, the nature and status of such default and the action proposed to be taken with respect thereto. S-159 In rendering its report, the accounting firm referred to in the first bullet of the prior sentence may, as to matters relating to the direct servicing of commercial and multifamily mortgage loans by sub-servicers, rely upon comparable reports of firms of independent certified public accountants rendered on the basis of examinations conducted in accordance with the same standards, within one year of the report, with respect to those sub-servicers. EVENTS OF DEFAULT Each of the following events, circumstances and conditions will be considered events of default under the pooling and servicing agreement: - (a) any failure by the master servicer to make any deposit into the collection account or any other account pursuant to the terms of the pooling and servicing agreement, which failure continues unremedied for two business days or failure by the master servicer to make any remittance required to be made by the master servicer (including any monthly debt service advances) to the trustee for deposit into the distribution account or any other account pursuant to the terms of the pooling and servicing agreement, which failure continues unremedied until 11:00 a.m., eastern standard time, on the distribution date, provided, however, that if the master servicer fails to make any remittance so required, including any monthly debt service advance, to be made by the master servicer on the business day preceding the related distribution date (without regard to any grace period), the master servicer shall pay to the trustee, for the account of the trustee, interest on such late remittance at the prime rate from and including the business day preceding the related distribution date to but excluding the distribution date and (b) any failure by the master servicer to make any required servicing advance within the time specified in the pooling and servicing agreement, which failure remains uncured for fifteen days (or such shorter time as is necessary to avoid the lapse of any required insurance policy or the foreclosure of any tax lien on the related mortgaged real property); - any failure by the special servicer to deposit into the REO Account, or to remit to the master servicer for deposit in the collection account, 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, which failure continues unremedied for two business days; - 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 (or 60 days so long as the master servicer or special servicer, as applicable, is diligently pursuing such cure) after written notice thereof has been given to the master servicer or the special servicer, as the case may be, by any other party to the pooling and servicing agreement; - any breach by the master servicer or the special servicer of a representation or warranty contained in the pooling and servicing agreement which materially and adversely affects the interests of the series 2003-C5 certificateholders and continues unremedied for thirty days after the date on which notice of such breach shall have been given; provided, however, if such breach is capable of being cured and the master servicer or special servicer, as applicable, is diligently pursuing such cure, such thirty-day period shall be extended for an additional thirty days; - 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, as applicable, and certain actions by or on behalf of the master servicer or the special servicer, as applicable indicating its insolvency or inability to pay its obligations and such decree or order shall have remained in force for 60 days; - the trustee has received written notice from Fitch that the continuation of the master servicer or the special servicer in that capacity would result, or has resulted, in a downgrade or withdrawal of any rating then assigned by Fitch to any class of certificates; and - the master servicer is removed from S&P's approved master servicer list, or the special servicer is removed from S&P's approved special servicer list, and the master servicer or special servicer, as the case may be, is not reinstated to that list within 60 days after its removal therefrom. S-160 RIGHTS UPON EVENT OF DEFAULT If an event of default described above under "--Events of Default" above occurs with respect to the master servicer or the special servicer and remains unremedied, the trustee will be authorized, and at the direction of certificateholders entitled to not less than 25% of the series 2003-C5 voting rights, the trustee will be required, to terminate all of the obligations and, with limited exception, all of the rights of the defaulting party under the pooling and servicing agreement and in and to the assets of the trust fund, other than any rights the defaulting party may have as a series 2003-C5 certificateholder, in respect of any unpaid servicing compensation, including the Excess Servicing Strip, if applicable, unreimbursed advances and interest thereon or rights to indemnification. Upon any such termination, subject to the discussion in the next two paragraphs and under "--Replacement of the Special Servicer" above, the trustee must either: - succeed to all of the responsibilities, duties and liabilities of the defaulting party under the pooling and servicing agreement; or - appoint an established mortgage loan servicing institution to act as successor to the defaulting party under the pooling and servicing agreement. Certificateholders entitled to a majority of the series 2003-C5 voting rights may require the trustee to appoint an established mortgage loan servicing institution, or other entity as to which the trustee has received written notice from each rating agency that such appointment would not, in and of itself, result in the downgrade, qualification or withdrawal of the then current ratings assigned to any class of series 2003-C5 certificates, to act as successor to the defaulting party rather than have the trustee act as that successor. It is expected that the master servicer will perform some or all of its servicing duties through primary servicers that cannot be terminated, including by a successor master servicer, except for cause. In general, certificateholders entitled to at least 66 2/3% of the voting rights allocated to each class of series 2003-C5 certificates affected by any event of default may waive the event of default. However, the events of default described in the first bullet under "--Events of Default" above may only be waived by all of the holders of the affected classes of series 2003-C5 certificates. Furthermore, if the trustee is required to spend any monies in connection with any event of default, then that event of default may not be waived unless and until the trustee has been reimbursed, with interest, by the party requesting the waiver. Upon any waiver of an event of default, the event of default will cease to exist and will be deemed to have been remedied for every purpose under the pooling and servicing agreement. No series 2003-C5 certificateholder will have the right under the pooling and servicing agreement to institute any proceeding with respect thereto unless: - that holder previously has given to the trustee written notice of default; - except in the case of a default by the trustee, series 2003-C5 certificateholders entitled to not less than 25% of the series 2003-C5 voting rights have made written request upon the trustee to institute that proceeding in its own name as trustee under the pooling and servicing agreement and have offered to the trustee reasonable indemnity; and - the trustee for 60 days has neglected or refused to institute any such proceeding. The trustee, however, will be under no obligations to exercise any of the trusts or powers vested in it by the pooling and servicing agreement or to make any investigation of matters arising thereunder or to institute, conduct or defend any litigation thereunder or in relation thereto at the request, order or direction of any of the series 2003-C5 certificateholders, unless in the trustee's opinion, those series 2003-C5 certificateholders have offered to the trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred by the trustee as a result. MATTERS REGARDING THE TRUSTEE The trustee is at all times required to be a corporation, bank, trust company or association organized and doing business under the laws of the U.S. or any State of the U.S. or the District of Columbia. Furthermore, the trustee must at all times, among other things-- - be authorized under those laws to exercise trust powers, - have a combined capital and surplus of at least $50,000,000, and S-161 - be subject to supervision or examination by federal or state authority. If the corporation, bank, trust company or association publishes reports of condition at least annually, in accordance with law or the requirements of the supervising or examining authority, then the combined capital and surplus of that corporation, bank, trust company or association will be deemed to be its combined capital and surplus as described in its most recent published report of condition. We, the master servicer, the special servicer and our and their respective affiliates, may from time to time enter into normal banking and trustee relationships with the trustee and its affiliates. The trustee and any of its respective affiliates may hold series 2003-C5 certificates in their own names. In addition, for purposes of meeting the legal requirements of some local jurisdictions, the trustee will have the power to appoint a co-trustee or separate trustee of all or any part of the assets of the trust fund. All rights, powers, duties and obligations conferred or imposed upon the trustee will be conferred or imposed upon the trustee and the separate trustee or co-trustee jointly or, in any jurisdiction in which the trustee shall be incompetent or unqualified to perform some acts, singly upon the separate trustee or co-trustee, who shall exercise and perform its rights, powers, duties and obligations solely at the direction of the trustee. The trustee will be entitled to a monthly fee for its services. That fee will accrue with respect to each and every mortgage loan in the mortgage pool. In each case, that fee will accrue at 0.0019% per annum on the Stated Principal Balance of the subject mortgage loan outstanding from time to time and will be calculated on the same basis as on the subject mortgage loan. The trustee fee is payable out of general collections on the mortgage loans and any REO Properties in the trust fund. The trustee will be authorized to invest or direct the investment of funds held in its distribution account and interest reserve account in Permitted Investments. It will be-- - entitled to retain any interest or other income earned on those funds, and - required to cover any losses of principal of those investments from its own funds. The trustee will not be obligated, however, to cover any losses resulting from the bankruptcy or insolvency of any unaffiliated depository institution or trust company holding the distribution account or the interest reserve account meeting the requirements set forth in the pooling and servicing agreement. See also "Description of the Governing Documents--The Trustee," "--Duties of the Trustee," "--Matters Regarding the Trustee" and "--Resignation and Removal of the Trustee" in the accompanying prospectus. TERMINATION The obligations created by the pooling and servicing agreement will terminate following the earlier of-- 1. the final payment or advance on, or other liquidation of, the last mortgage loan or related REO Property remaining in the trust fund, and 2. the purchase of all of the mortgage loans and REO Properties remaining in the trust fund by any single certificateholder or group of certificateholders of a majority of the total outstanding principal balance of the series 2003-C5 controlling class, the special servicer or the master servicer, in that order of preference, and 3. the distribution date in December 2036. Written notice of termination of the pooling and servicing agreement will be given to each series 2003-C5 certificateholder. The final distribution with respect to each series 2003-C5 certificate will be made only upon surrender and cancellation of that certificate at the office of the series 2003-C5 certificate registrar or at any other location specified in the notice of termination. S-162 Any purchase by any single certificateholder or group of certificateholders of the series 2003-C5 controlling class, the master servicer or the special servicer of all the mortgage loans and REO Properties remaining in the trust fund is required to be made at a price equal to: - the sum of-- 1. the total Stated Principal Balance of all the mortgage loans then included in the trust fund, other than any mortgage loans as to which the mortgaged real properties have become REO Properties, together with-- - all unpaid and unadvanced interest, other than Default Interest and Excess Interest, on those mortgage loans through their respective due dates in the related collection period, and - all unreimbursed advances for those mortgage loans, together with any interest on those advances owing to the parties that made them, and 2. the appraised value of all REO properties then included in the trust fund, as determined by an appraiser mutually agreed upon by the master servicer, the special servicer and the trustee; minus - solely in the case of a purchase by the master servicer or the special servicer, the total of all amounts payable or reimbursable to the purchaser under the pooling and servicing agreement. The purchase will result in early retirement of the then outstanding series 2003-C5 certificates. However, the right of any single certificateholder or group of certificateholders of the series 2003-C5 controlling class, of the master servicer or of the special servicer to make the purchase is subject to the requirement that the total Stated Principal Balance of the mortgage pool be less than 1.0% of the initial mortgage pool balance. The termination price, exclusive of any portion of the termination price payable or reimbursable to any person other than the series 2003-C5 certificateholders, will constitute part of the Available P&I Funds for the final distribution date. Any person or entity making the purchase will be responsible for reimbursing the parties to the pooling and servicing agreement for all reasonable out-of-pocket costs and expenses incurred by those parties in connection with the purchase. Following the date on which the total principal balance of the offered certificates is reduced to zero, any single holder or group of holders of all the remaining series 2003-C5 certificates may exchange those certificates for all mortgage loans and REO Properties remaining in the trust fund at the time of exchange. AMENDMENT In general, the pooling and servicing agreement is subject to amendment as described under "Description of the Governing Documents--Amendment" in the accompanying prospectus. However, no amendment of the pooling and servicing agreement may significantly change the activities of the trust fund without the consent of-- - the holders of the series 2003-C5 certificates entitled to not less than 66 2/3% of the series 2003-C5 voting rights, not taking into account series 2003-C5 certificates held by us or any of our affiliates or agents, and - all of the series 2003-C5 certificateholders that will be adversely affected by the amendment in any material respect. Additionally, absent a material adverse effect on any certificateholder, the pooling and servicing agreement may be amended by the parties thereto without the consent of any of the certificateholders to the extent necessary in order for any mortgage loan seller and their affiliates to obtain accounting "sale" treatment for the mortgage loans under FAS 140. Furthermore, no amendment of the pooling and servicing agreement may adversely affect any holder of any portion of the Mayfair Mall Total Loan, the Mall at Fairfield Commons Total Loan, the Stanford Shopping Center Total Loan and the Jefferson at Montfort Total Loan without the consent of that person. S-163 THE MASTER SERVICER AND THE SPECIAL SERVICER PERMITTED TO BUY CERTIFICATES The master servicer and the special servicer will be permitted to purchase any class of series 2003-C5 certificates. Such a purchase by the master servicer or the special servicer could cause a conflict relating to the master servicer's or the special servicer's duties pursuant to the pooling and servicing agreement and the master servicer's or the special servicer's interest as a holder of the series 2003-C5 certificates, especially to the extent that certain actions or events have a disproportionate effect on one or more classes of certificates. Pursuant to the pooling and servicing agreement, the master servicer or the special servicer are required to administer the related mortgage loans in accordance with the Servicing Standard set forth therein without regard to ownership of any certificate by the master servicer or the special servicer or any affiliate thereof. FEDERAL INCOME TAX CONSEQUENCES GENERAL Upon the initial issuance of the offered certificates, Cadwalader, Wickersham & Taft LLP, our counsel, will deliver its opinion generally to the effect that, assuming compliance with the pooling and servicing agreement, assuming compliance with the 2003-C4 pooling and servicing agreement and other related documents and any amendments thereto and the continued qualification of the REMICs formed under those agreements and subject to any other assumptions set forth in the opinion, each REMIC created under the pooling and servicing agreement (the lower-tier REMIC and the upper-tier REMIC) will qualify as a REMIC under the Internal Revenue Code of 1986 and the arrangement under which the right to Excess Interest is held will be classified as a grantor trust for federal income tax purposes. The assets of the lower-tier REMIC will generally include-- - the mortgage loans, - any REO Properties acquired on behalf of the series 2003-C5 certificateholders with respect to the mortgage loans, - the master servicer's collection account, - the special servicer's REO account, and - the trustee's distribution account and interest reserve account, but will exclude any collections of Excess Interest on the ARD Loans. For federal income tax purposes, - The REMICs will be "tiered," meaning that the upper-tier REMIC will hold as assets the regular interests issued by the lower-tier REMIC. The upper-tier REMIC will issue the class A-X, A-SP, A-1, A-2, A-3, A-4, B, C, D, E, F, A-1-A, G, H, J, K, L, M, N, O and P certificates as "regular interests." The class R and LR certificates will evidence the residual interest in each REMIC for federal income tax purposes; and - The class V certificates will evidence interests in a grantor trust and will generally be treated as representing beneficial ownership of Excess Interest, if any, accrued and received with respect to the ARD Loans. DISCOUNT AND PREMIUM; PREPAYMENT CONSIDERATION For federal income tax reporting purposes, it is anticipated that the offered certificates will be issued at a premium. When determining the rate of accrual of market discount and premium, if any, for federal income tax purposes, the prepayment assumption will be that, subsequent to the date of any determination-- - the ARD Loans in the trust fund will be paid in full on their respective anticipated repayment dates, - no mortgage loan in the trust fund will otherwise be prepaid prior to maturity, and S-164 - there will be no extension of maturity for any mortgage loan in the trust fund. However, no representation is made as to the actual rate at which the mortgage loans will prepay, if at all. See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC Regular Certificates" in the accompanying prospectus. It is anticipated that the classes of the offered certificates will be treated for federal income tax purposes as having been issued at a premium. The amount of amortizable bond premium will depend on the certificateholder's purchase price and the stated redemption price at maturity of the certificate at the time of its acquisition by the certificateholder. If you acquire an interest in any class of offered certificates issued at a premium, you should consider consulting your own tax advisor regarding the possibility of making an election to amortize the premium. See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC Regular Certificates--Premium" in the accompanying prospectus. CHARACTERIZATION OF INVESTMENTS IN OFFERED CERTIFICATES Except to the extent noted below, the offered certificates will be "real estate assets" within the meaning of Section 856(c)(5)(B) of the Internal Revenue Code in the same proportion that the assets of the trust fund would be so treated. In addition, interest, including original issue discount, if any, on the offered certificates will be interest described in Section 856(c)(3)(B) of the Internal Revenue Code to the extent that those certificates are treated as "real estate assets" within the meaning of Section 856(c)(5)(B) of the Internal Revenue Code. Most of the mortgage loans to be included in the trust fund are not secured by real estate used for residential or other purposes prescribed in Section 7701(a)(19)(C) of the Internal Revenue Code. Consequently, the offered certificates will be treated as assets qualifying under that section to only a limited extent. Accordingly, investment in the offered certificates may not be suitable for a thrift institution seeking to be treated as a "domestic building and loan association" under Section 7701(a)(19)(C) of the Internal Revenue Code. The offered certificates will be treated as-- - "qualified mortgages" for another REMIC under Section 860G(a)(3)(C) of the Internal Revenue Code, and - "permitted assets" for a "financial asset securitization investment trust" under Section 860L(c) of the Internal Revenue Code. To the extent an offered certificate represents ownership of an interest in a mortgage loan that is secured in part by cash reserves, that mortgage loan is not secured solely by real estate. Therefore: - a portion of that certificate may not represent ownership of "loans secured by an interest in real property" or other assets described in Section 7701(a)(19)(C) of the Internal Revenue Code; - a portion of that certificate may not represent ownership of "real estate assets" under Section 856(c)(5)(B) of the Internal Revenue Code; and - the interest on that certificate may not constitute "interest on obligations secured by mortgages on real property" within the meaning of Section 856(c)(3)(B) of the Internal Revenue Code. In addition, most of the mortgage loans that we intend to include in the trust fund contain defeasance provisions under which the lender may release its lien on the collateral securing the mortgage loan in return for the borrower's pledge of substitute collateral in the form of government securities. Generally, under the Treasury regulations, if a REMIC releases its lien on real property that secures a qualified mortgage, that mortgage ceases to be a qualified mortgage on the date the lien is released unless certain conditions are satisfied. In order for the defeased mortgage loan to remain a qualified mortgage, the Treasury regulations require that-- 1. the borrower pledges substitute collateral that consist solely of certain government securities, 2. the mortgage loan documents allow that substitution, 3. the lien is released to facilitate the disposition of the property or any other customary commercial transaction, and not as part of an arrangement to collateralize a REMIC offering with obligations that are not real estate mortgages, and 4. the release is not within two (2) years of the startup day of the REMIC. S-165 Following the defeasance of a mortgage loan, regardless of whether the foregoing conditions were satisfied, that mortgage loan would not be treated as a "loan secured by an interest in real property" or a "real estate asset" and interest on that loan would not constitute "interest on obligations secured by real property" for purposes of Sections 7701(a)(19)(C), 856(c)(5)(B) and 856(e)(3)(B) of the Internal Revenue Code, respectively. YIELD MAINTENANCE CHARGES It is not entirely clear under the Internal Revenue Code when the amount of a Static Prepayment Premium or Yield Maintenance Charge should be taxed to the holder of offered certificates entitled to that amount. For federal income tax reporting purposes, the trustee will report Static Prepayment Premiums and Yield Maintenance Charges as income to the holders of offered certificates entitled to those amounts only after the master servicer's actual receipt thereof. The IRS may nevertheless seek to require that an assumed amount of Static Prepayment Premiums and Yield Maintenance Charges be included in payments projected to be made on those offered certificates and that taxable income be reported based on the projected constant yield to maturity of those offered certificates, taking into account such projected Static Prepayment Premiums and Yield Maintenance Charges. If so, the projected Static Prepayment Premiums and Yield Maintenance Charges would be included in income prior to their actual receipt by holders of the applicable offered certificates. If any projected Static Prepayment Premium or Yield Maintenance Charge was not actually received, presumably the holder of an offered certificate would be allowed to claim a deduction or reduction in gross income at the time the unpaid Static Prepayment Premium or Yield Maintenance Charges had been projected to be received. It appears that Static Prepayment Premiums and Yield Maintenance Charges are to be treated as ordinary income rather than capital gain. However, the correct characterization of the income is not entirely clear. We recommend you consult your own tax advisors concerning the treatment of Static Prepayment Premiums and Yield Maintenance Charges. See "Description of the Underlying Mortgage Loans" in this prospectus supplement and "Federal Income Tax Consequences--REMICs--Characterization of Investments in REMIC Certificates" in the accompanying prospectus. ERISA CONSIDERATIONS If you are-- - a fiduciary of a Plan, or - any other person investing "plan assets" of any Plan, you should carefully review with your legal advisors whether the purchase or holding of an offered certificate would be a "prohibited transaction" or would otherwise be impermissible under ERISA or Section 4975 of the Internal Revenue Code. See "ERISA Considerations" in the accompanying prospectus. If a Plan acquires an offered certificate, the assets of the trust fund will be deemed for purposes of ERISA to be assets of the investing Plan, unless certain exceptions apply. See "ERISA Considerations--Plan Asset Regulations" in the accompanying prospectus. However, we cannot predict in advance, nor can there be any continuing assurance, whether those exceptions may be applicable because of the factual nature of the rules set forth in the Plan Asset Regulations. For example, one of the exceptions in the Plan Asset Regulations states that the underlying assets of an entity will not be considered "plan assets" if less than 25% of the value of each class of equity interests is held by "benefit plan investors," which include Plans, as well as employee benefit plans not subject to ERISA, such as governmental plans. This exception is tested, however, immediately after each acquisition of a series 2003-C5 certificate, whether upon initial issuance or in the secondary market. Because there are no relevant restrictions on the purchase and transfer of the series 2003-C5 certificates by Plans, it cannot be assured that benefit plan investors will own less than 25% of each class of the series 2003-C5 certificates. If one of the exceptions in the Plan Asset Regulations applies, the prohibited transaction provisions of ERISA and the Internal Revenue Code will not apply to transactions involving the trust fund's assets. If the trust fund is a Party in Interest with respect to the Plan, the acquisition or holding of offered certificates by that Plan could result in a prohibited transaction, unless the Underwriter Exemption, as discussed below, or some other exemption is available. THE UNDERWRITER EXEMPTION The U.S. Department of Labor has issued individual prohibited transaction exemptions to Credit Suisse First Boston LLC identified as PTE 89-90, as amended by PTE 97-34, PTE 2000-58 and PTE 2002-41 and to PNC Capital Markets, Inc., PTE 98-08, as amended by PTE 2000-58 and PTE 2002-41. Subject to the satisfaction of conditions set forth in it, the S-166 Underwriter Exemption generally exempts from the application of the prohibited transaction provisions of ERISA and the Internal Revenue Code, specified transactions relating to, among other things-- - the servicing and operation of pools of real estate loans, such as the mortgage pool, and - the purchase, sale and holding of mortgage pass-through certificates, such as the offered certificates, that are underwritten by an Exemption-Favored Party. The Underwriter Exemption sets forth five general conditions that must be satisfied for a transaction involving the purchase, sale and holding of an offered certificate to be eligible for exemptive relief under that exemption. The conditions are as follows: - FIRST, the acquisition of the certificate by a Plan must be on terms that are at least as favorable to the Plan as they would be in an arm's-length transaction with an unrelated party; - SECOND, at the time of its acquisition by the Plan, that certificate must be rated in one of the four highest generic rating categories by Fitch, Moody's or S&P; - THIRD, the trustee cannot be an affiliate of any other member of the Restricted Group other than an underwriter; - FOURTH, the following must be true-- 1. the sum of all payments made to and retained by Exemption-Favored Parties must represent not more than reasonable compensation for underwriting the relevant class of certificates, 2. the sum of all payments made to and retained by us in connection with the assignment of the underlying mortgage loans to the trust fund must represent not more than the fair market value of the obligations, and 3. 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 that person's reasonable expenses in connection therewith; and - FIFTH, the investing Plan must be an accredited investor as defined in Rule 501(a)(1) of Regulation D under the Securities Act of 1933, as amended. It is a condition of their issuance that the offered certificates be rated not lower than investment grade by each of S&P and Fitch. In addition, the trustee is not an affiliate of any other member of the Restricted Group. Accordingly, as of the date of initial issuance of the offered certificates, the second and third general conditions set forth above will be satisfied with respect to the offered certificates. A fiduciary of a Plan contemplating the purchase of an offered certificate in the secondary market must make its own determination that, at the time of the purchase, the certificate continues to satisfy the second and third general conditions set forth above. A fiduciary of a Plan contemplating a purchase of an offered certificate, whether in the initial issuance of that certificate or in the secondary market, must make its own determination that the first and fourth general conditions set forth above will be satisfied with respect to that certificate as of the date of the purchase. A Plan's authorizing fiduciary will be deemed to make a representation regarding satisfaction of the fifth general condition set forth above in connection with the purchase of an offered certificate. The Underwriter Exemption also requires that the trust fund meet the following requirements: - the assets of the trust fund must consist solely of assets of the type that have been included in other investment pools; - certificates evidencing interests in those other investment pools must have been rated in one of the four highest generic categories of Fitch, Moody's or S&P for at least one year prior to the Plan's acquisition of an offered certificate; and - certificates evidencing interests 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 an offered certificate. S-167 We believe that these requirements have been satisfied as of the date of this prospectus supplement. If the general conditions of the Underwriter Exemption are satisfied, they may each provide an exemption from the restrictions imposed by Sections 406(a) and 407(a) of ERISA, as well as the excise taxes imposed by Sections 4975(a) and (b) of the Internal Revenue Code by reason of Sections 4975(c)(1)(A) through (D) of the Internal Revenue Code, in connection with-- - the direct or indirect sale, exchange or transfer of offered certificates acquired by a Plan upon initial issuance from us or an Exemption-Favored Party when we are, or a mortgage loan seller, the trustee, the master servicer, the special servicer or any sub-servicer, provider of credit support, Exemption-Favored Party or borrower is, a Party in Interest with respect to the investing Plan, - the direct or indirect acquisition or disposition in the secondary market of offered certificates by a Plan, and - the continued 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 if the acquisition or holding of an offered certificate is-- - on behalf of a Plan sponsored by any member of the Restricted Group, and - by any person who has discretionary authority or renders investment advice with respect to the assets of that Plan. Moreover, if the general conditions of the Underwriter Exemption, as well as other conditions set forth in that exemption, are satisfied, the Underwriter Exemption may also 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 Internal Revenue Code in connection with-- - the direct or indirect sale, exchange or transfer of offered certificates in the initial issuance of those certificates between us or an Exemption-Favored Party and a Plan, when the person who has discretionary authority or renders investment advice with respect to the investment of the assets of the Plan in those certificates is-- 1. a borrower with respect to 5.0% or less of the fair market value of the underlying mortgage loans, or 2. an affiliate of that borrower, - the direct or indirect acquisition or disposition in the secondary market of offered certificates by a Plan, and - the continued holding of offered certificates by a Plan. Further, if the general conditions of the Underwriter Exemption, as well as other conditions set forth in that exemption, are satisfied, the Underwriter 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 Internal Revenue Code by reason of Section 4975(c) of the Internal Revenue Code, for transactions in connection with the servicing, management and operation of the assets of the trust fund. Lastly, if the general conditions of the Underwriter Exemption are satisfied, it may also provide an exemption from the restrictions imposed by Sections 406(a) and 407(a) of ERISA, and the taxes imposed by Section 4975(a) and (b) of the Internal Revenue Code by reason of Sections 4975(c)(1)(A) through (D) of the Internal Revenue Code, if the restrictions are deemed to otherwise apply merely because a person is deemed to be a Party in Interest with respect to an investing plan by virtue of-- - providing services to the Plan, or - having a specified relationship to this person, solely as a result of the Plan's ownership of offered certificates. S-168 Before purchasing an offered certificate, a fiduciary of a Plan should itself confirm that the general and other conditions set forth in the Underwriter Exemption, and the other requirements set forth in that exemption, would be satisfied at the time of the purchase. EXEMPT PLAN A governmental plan as defined in Section 3(32) of ERISA is not subject to ERISA or Section 4975 of the Internal Revenue Code. However, a governmental plan may be subject to a federal, state or local law that is, to a material extent, similar to the foregoing provisions of ERISA or the Internal Revenue Code. A fiduciary of a governmental plan should make its own determination as to the need for and the availability of any exemptive relief under any similar law. FURTHER WARNINGS Any fiduciary of a Plan considering whether to purchase an offered certificate on behalf of that Plan should consult with its counsel regarding the applicability of the fiduciary responsibility and prohibited transaction provisions of ERISA and the Internal Revenue Code to the investment. The sale of offered certificates to a Plan is in no way a representation or warranty by us or any of the underwriters that-- - the investment meets all relevant legal requirements with respect to investments by Plans generally or by any particular Plan, or - the investment is appropriate for Plans generally or for any particular Plan. Persons who have an ongoing relationship with the Michigan State Pension Fund, which is a governmental plan, should note that this plan owns an equity interest in the borrower under the EastBridge Landing Loan. Such persons should consult with counsel regarding whether this relationship would affect their ability to purchase and hold the offered certificates. LEGAL INVESTMENT None of the certificates will constitute "mortgage related securities" for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. As a result, 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. Neither we nor any of the underwriters makes any representation as to the ability of particular investors to purchase the offered certificates under applicable legal investment or other restrictions. All institutions whose investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities should consult with their own legal advisors in determining whether and to what extent the offered certificates-- - are legal investments for them, or - are subject to investment, capital or other restrictions. In addition, investors should consider the applicability of statutes, rules, regulations, orders, guidelines or agreements generally governing investments made by a particular investor, including-- - prudent investor provisions, - percentage-of-assets limits, and - provisions which may restrict or prohibit investment in securities which are not interest bearing or income paying. S-169 There may be other restrictions on the ability of investors, including depository institutions, either to purchase offered certificates or to purchase offered certificates representing more than a specified percentage of the investor's assets. Investors should consult their own legal advisors in determining whether and to what extent the offered certificates are legal investments for the investors. See "Legal Investment" in the accompanying prospectus. CERTAIN LEGAL ASPECTS The mortgaged real properties are subject to compliance with various federal, state, commonwealth and local statutes and regulations. Failure to so comply (together with an inability to remedy any such failure) could result in material diminution in the value of a mortgaged real property which could, together with the limited alternative uses for such mortgaged real property, result in a failure to realize the full principal amount of the related mortgage loan. Any failure to comply with such statutes and regulations, however, would likely result in an event of default by the related borrower under the related mortgage loan documents, enabling the special servicer to pursue remedies available by law or under such mortgage loan documents. ELECTION OF REMEDIES The following discussion contains a summary of certain legal aspects of mortgage loans in California (26.17% of the initial mortgage pool balance), which is general in nature. The summary does not purport to be complete and is qualified in its entirety by reference to the applicable federal, state and Washington, D.C. laws governing the mortgage loans. California and various other states have imposed statutory prohibitions or limitations that limit the remedies of a mortgagee under a mortgage or a beneficiary under a deed of trust. The mortgage loans are limited recourse loans and are, therefore, generally not recourse to the borrowers but limited to the mortgaged real properties. Even if recourse is available pursuant to the terms of the related mortgage loan, certain states have adopted statutes which impose prohibitions against or limitations on such recourse. The limitations described below and similar or other restrictions in other jurisdictions where mortgaged real properties are located may restrict the ability of the master servicer or the special servicer, as applicable, to realize on the related mortgage loan and may adversely affect the amount and timing of receipts on the related mortgage loan. CALIFORNIA LAW. Mortgage loans in California are generally secured by deeds of trust on the related real estate. Foreclosure of a deed of trust in California may be accomplished by a non-judicial trustee's sale under a specific provision in the deed of trust or by judicial foreclosure. Public notice of either the trustee's sale or the judgment of foreclosure is given for a statutory period of time after which the mortgaged real estate may be sold by the trustee, if foreclosed pursuant to the trustee's power of sale, or by court appointed sheriff under a judicial foreclosure. Following a judicial foreclosure sale, the borrower or its successor in interest may, for a period of up to one year, redeem the property. California's "one action rule" requires the lender to exhaust the security afforded under the deed of trust by foreclosure in an attempt to satisfy the full debt before bringing a personal action (if otherwise permitted) against the borrower for recovery of the debt, except in certain cases involving environmentally impaired real property. California case law has held that acts such as an offset of an unpledged account constitute violations of such statutes. Violations of such statutes may result in the loss of some or all of the security under the loan. Other statutory provisions in California limit any deficiency judgment (if otherwise permitted) against the borrower following a foreclosure to the amount by which the indebtedness exceeds the fair value at the time of the public sale and in no event greater than the difference between the foreclosure sale price and the amount of the indebtedness. Further, under California law, once a property has been sold pursuant to a power-of-sale clause contained in a deed of trust, the lender is precluded from seeking a deficiency judgment from the borrower or, under certain circumstances, guarantors. California statutory provisions regarding assignments of rents and leases require that a lender whose loan is secured by such an assignment must exercise a remedy with respect to rents as authorized by statute in order to establish its right to receive the rents after an event of default. Among the remedies authorized by statute is the lender's right to have a receiver appointed under certain circumstances. USE OF PROCEEDS We will use the net proceeds from the sale of the offered certificates to pay part of the purchase price of the mortgage loans that we intend to include in the trust fund. S-170 UNDERWRITING Under the terms and subject to the conditions set forth in an underwriting agreement dated November 20, 2003, we have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston LLC is acting as representative, the following respective principal amounts of the offered certificates:
PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS B UNDERWRITER CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES - -------------------- -------------- -------------- -------------- -------------- -------------- Credit Suisse First Boston LLC $ 82,665,000 $ 150,368,000 $ 115,605,000 $ 370,274,000 $ 39,416,000 McDonald Investments $ 0 $ 0 $ 0 $ 0 $ 0 WaMu Capital Corp. $ 0 $ 0 $ 0 $ 0 $ 0 Merrill Lynch & Co. $ 0 $ 0 $ 0 $ 0 $ 0 PNC Capital Markets, Inc. $ 0 $ 0 $ 0 $ 0 $ 0 ------------ ------------- ------------- ------------- ------------ TOTAL $ 82,665,000 $ 150,368,000 $ 115,605,000 $ 370,274,000 $ 39,416,000 PRINCIPAL PRINCIPAL PRINCIPAL PRINCIPAL AMOUNT OF AMOUNT OF AMOUNT OF AMOUNT OF CLASS C CLASS D CLASS E CLASS F UNDERWRITER CERTIFICATES CERTIFICATES CERTIFICATES CERTIFICATES - -------------------- -------------- -------------- -------------- -------------- Credit Suisse First Boston LLC $ 15,766,000 $ 31,532,000 $ 17,343,000 $ 17,343,000 McDonald Investments $ 0 $ 0 $ 0 $ 0 WaMu Capital Corp. $ 0 $ 0 $ 0 $ 0 Merrill Lynch & Co. $ 0 $ 0 $ 0 $ 0 PNC Capital Markets, Inc. $ 0 $ 0 $ 0 $ 0 ------------ ------------ ------------ ------------ TOTAL $ 15,766,000 $ 31,532,000 $ 17,343,000 $ 17,343,000
The underwriting agreement provides that the underwriters are obligated to purchase all of the offered certificates if any are purchased. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of the non-defaulting underwriters may be increased or the offering of the offered certificates may be terminated. Our proceeds from the sale of the offered certificates will be approximately 100.48% of the total initial principal balance of the offered certificates, plus accrued interest from December 1, 2003, before deducting expenses payable by us. We estimate that our out-of-pocket expenses for this offering will be approximately $4,600,000. The underwriters will offer the offered certificates for sale from time to time in one or more transactions, which may include block transactions, negotiated transactions or otherwise, or a combination of those methods of sale, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The underwriters may do so by selling the offered certificates to or through broker/dealers, who may receive compensation in the form of underwriting discounts, concessions or commissions from the underwriters and/or the purchasers of the offered certificates for whom they may act as agents. In connection with the sale of the offered certificates, the underwriters may be deemed to have received compensation from us in the form of underwriting discounts, and the underwriters may also receive commissions from the purchasers of the offered certificates for whom they may act as agent. The underwriters and any broker/dealers that participate with the underwriters in the distribution of the offered certificates may be deemed to be underwriters, and any discounts or commissions received by them and any profit on the resale of the offered certificates by them may be deemed to be underwriting discounts or commissions. The offered certificates are a new issue of securities with no established trading market. The underwriters have advised us that they currently intend to make a market in the offered certificates. Nevertheless, the underwriters do not have any obligation to make a market, any market making may be discontinued at any time and there can be no assurance that an active public market for the offered certificates will develop. We have agreed to indemnify the underwriters against liabilities under the Securities Act of 1933, as amended, or contribute to payments that the underwriters may be required to make in respect thereof. The mortgage loan sellers have agreed to indemnify us and the underwriters with respect to liabilities under the Securities Act of 1933, as amended, or contribute to payments that we or the underwriters may be required to make in respect thereof, relating to the mortgage loans. The trust fund described in this prospectus supplement may only be promoted (through any communication as referred to in the following restriction or otherwise) by an "authorised person" within the meaning of Article 21(1) of the Financial Services and Markets Act (Financial Promotion) Order 2000 (the "FP Order") and pursuant to the requirements for authorization set forth in Part IV of the Financial Services and Markets Act 2000. The certificates may only be sold or offered to, and this prospectus supplement and any other invitation or inducement to buy or participate in the certificates may only be communicated to, persons who (i) are outside the United Kingdom; or (ii) have professional experience of participating in unregulated collective investment schemes and of matters relating to investments falling within both Article 14(5) of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (the "CIS Order") and Article 19(5) of the FP Order; or (iii) are persons falling within Article 22(2)(a) to (d) (high net worth companies, unincorporated associations, etc.") of the CIS Order and Article 49(2) of the FP Order (such persons together referred to as "Relevant Eligible Persons"). The offered certificates to which this prospectus supplement relates are available only to Relevant Eligible Persons and this prospectus supplement must not be acted on or relied on by persons who are not Relevant Eligible Persons. Any investment or investment activity to S-171 which this communication relates is available only to the Relevant Eligible Persons and will be engaged in only with Relevant Eligible Persons. We expect that delivery of the offered certificates will be made against payment therefor on or about the closing date specified on the cover page of this prospectus supplement, which will be the 12th business day following the date of pricing of the offered certificates (this settlement cycle being referred to as "T+ 12"). Under Rule 15c6-1 of the SEC under the Securities Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in three (3) business days, unless the parties to that trade expressly agree otherwise. Accordingly, purchasers who wish to trade the offered certificates on the date hereof or any date prior to December 8, 2003 will be required, by virtue of the fact that the offered certificates will settle in T+ 12, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement and should consult their own advisor. LEGAL MATTERS Certain legal matters will be passed upon for us and Credit Suisse First Boston LLC by Cadwalader, Wickersham & Taft LLP, New York, New York. RATING It is a condition to their issuance that the respective classes of offered certificates be rated as follows:
CLASS S&P FITCH ----------- ------- --------- A-1 AAA AAA A-2 AAA AAA A-3 AAA AAA A-4 AAA AAA B AA AA C AA- AA- D A A E A- A- F BBB+ BBB+
The ratings on the offered certificates address the likelihood of-- - the timely receipt by their holders of all distributions of interest to which they are entitled on each distribution date, and - the ultimate receipt by their holders of all distributions of principal to which they are entitled on or before the rated final distribution date. The ratings on the offered certificates take into consideration-- - the credit quality of the mortgage pool, - structural and legal aspects associated with the offered certificates, and - the extent to which the payment stream from the mortgage pool is adequate to make distributions of interest and/or principal required under the offered certificates. The ratings on the respective classes of offered certificates do not represent any assessment of-- - the tax attributes of the offered certificates or of the trust fund, - whether or to what extent prepayments of principal may be received on the underlying mortgage loans, - the likelihood or frequency of prepayments of principal on the underlying mortgage loans, - the degree to which the amount or frequency of prepayments of principal on the underlying mortgage loans might differ from those originally anticipated, S-172 - whether or to what extent the interest payable on any class of offered certificates may be reduced in connection with Net Aggregate Prepayment Interest Shortfalls, and - whether and to what extent Default Interest or Excess Interest will be received. Also, a security rating does not represent any assessment of the yield to maturity that investors may experience in the event of rapid prepayments and/or other liquidations of the underlying mortgage loans. In general, the ratings on the offered certificates address credit risk and not prepayment risk. There can be no assurance 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 us to do so may be lower than the rating assigned thereto by S&P or Fitch. 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 organization. Each security rating should be evaluated independently of any other security rating. See "Rating" in the accompanying prospectus. S-173 GLOSSARY The following capitalized terms will have the respective meanings assigned to them in this "Glossary" section whenever they are used in this prospectus supplement, including in any of the exhibits to this prospectus supplement or on the accompanying diskette. "0%/Y" means, with respect to any of the underlying mortgage loans, a duration of Y payments for the open period during which the loan is freely payable. "30/360 BASIS" means the accrual of interest based on a 360-day year consisting of twelve 30-day months. "A LOAN" means, with respect to each A/B Loan, the senior debt component of such loan, which in each case (i) is a mortgage loan included in the trust fund and (ii) is senior in right of payment to the related Corresponding B Loan to the extent set forth in the related A/B Loan Intercreditor Agreement. "A/B LOAN" means, with respect to any of the mortgaged real properties identified on Exhibit A-1 to this prospectus supplement as Cambridge Village Apartments, Northgate Village Apartments and Hearthstone Apartments, respectively, the loan constituting the aggregate indebtedness secured by any such mortgaged real property, which includes the A Loan component of such indebtedness and the related junior Corresponding B Loan. "A/B LOAN INTERCREDITOR AGREEMENT" means, with respect to each A/B Loan, the related Intercreditor Agreement Among Note Holders by and between Column, as holder of the related A Loan, and CBA-Mezzanine Capital Finance, LLC, as holder of the related Corresponding B Loan. "A/B MATERIAL DEFAULT" means with respect to any A/B Loan, one of the following events: (a) either the related A Loan or the related Corresponding B Loan has been accelerated; (b) a continuing monetary default; or (c) a bankruptcy action has been filed against the related borrower. "ACTUAL/360 BASIS" means the accrual of interest based on the actual number of days elapsed during each one-month accrual period in a year assumed to consist of 360 days. "ADDITIONAL COLLATERAL LOAN" means any mortgage loan in the trust fund having the characteristics described under "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--Mortgage Loans Which May Require Principal Paydowns" in this prospectus supplement. "ADDITIONAL TRUST FUND EXPENSE" means an expense of the trust fund that-- - arises out of a default on a mortgage loan or an otherwise unanticipated event, - is not covered by a servicing advance or a corresponding collection from the related borrower, and - does not represent a loss on a mortgage loan arising from the inability of the master servicer and/or special servicer to collect all amounts due and owing under the mortgage loan, including by reason of the fraud or bankruptcy of the borrower or, to the extent not covered by insurance, a casualty of any nature at a mortgaged real property. "AIG" means American International Group, Inc. "ANTICIPATED REPAYMENT DATE" means the date on which ARD Loans begin accruing Excess Interest in accordance with this prospectus supplement. "APPRAISAL REDUCTION AMOUNT" means, for any distribution date and for any mortgage loan as to which any Appraisal Reduction Event has occurred, an amount equal to the excess, if any, of (a) the stated principal balance of such mortgage loan over (b) the excess of (i) (A) 90% of the appraised value of the related mortgaged real property as determined (x) by one or more independent MAI appraisals with respect to any mortgage loan with an outstanding principal balance equal to or in excess of $2,000,000 (the costs of which shall be paid by the special servicer as a servicing advance) or (y) by an independent MAI appraisal (or an update of a prior appraisal) or an internal valuation performed by the special servicer with respect to any mortgage loan with an outstanding principal balance less than $2,000,000, in the case of either (x) or (y), as such appraisal or internal valuation may be adjusted downward by the special servicer in accordance with the Servicing S-174 Standard, without implying any duty to do so, based upon the special servicer's review of such appraisal, internal valuation or such other information as the special servicer deems relevant, plus (B) any letter of credit, reserve, escrow or similar amount held by the master servicer which may be applied to payments on the mortgage loan over (ii) the sum of (a) to the extent not previously advanced by the master servicer or the trustee, all unpaid interest on such mortgage loan at a per annum rate equal to its mortgage rate, (b) all unreimbursed advances in respect of such mortgage loan and interest thereon at the Prime Rate and (c) all currently due and unpaid real estate taxes and assessments, insurance policy premiums, ground rents and all other amounts due and unpaid with respect to such mortgage loan (which taxes, assessments, premiums, ground rents and other amounts have not been subject to an advance by the master servicer or the trustee and/or for which funds have not been escrowed). In the case of the Jefferson at Montfort Loan, any Appraisal Reduction Amount will be calculated in respect of the Jefferson at Montfort Total Loan and the holder of the Jefferson at Montfort B Loan will absorb any Appraisal Reduction Amount until the outstanding principal balance of the Jefferson at Montfort B Loan is reduced to zero and then allocated to the Jefferson at Montfort Loan. In the case of the Stanford Shopping Center Loan and the Mall at Fairfield Commons Loan, any Appraisal Reduction Amount will be calculated in respect of the Stanford Shopping Center Total Loan and the Mall at Fairfield Commons Total Loan, respectively, and then allocated PRO RATA, in the case of the Stanford Shopping Center Total Loan, between the holders of the Stanford Shopping Center Loan and the Stanford Shopping Center Companion Loans and, in the case of the Mall at Fairfield Commons Total Loan, between the holders of the Mall at Fairfield Commons Loan and the Mall at Fairfield Commons Companion Loan. An "Appraisal Reduction Amount" (or the equivalent) with respect to the Mayfair Mall Loan is defined under the series 2003-C4 pooling and servicing agreement and the amount required to be advanced may be reduced based on an appraisal performed by the special servicer under, and in accordance with, the series 2003-C4 pooling and servicing agreement, which reduction will be calculated with respect to the Mayfair Mall Loan in a manner similar to the calculation described in the preceding paragraph. "APPRAISAL REDUCTION EVENT" means, with respect to any mortgage loan in the trust fund (other than the Mayfair Mall Loan), the earliest of any of the following events-- - 120 days after an uncured delinquency (without regard to the application of any grace period) occurs in respect of a mortgage loan; - the date on which a reduction in the amount of monthly payments on a mortgage loan; or a change in any other material economic term of the mortgage loan (other than an extension of its maturity for a period of six months or less), becomes effective as a result of a modification of such mortgage loan by the special servicer; - 60 days after a receiver has been appointed for the borrower of the related mortgaged real property; - 30 days after a borrower declares bankruptcy; - 60 days after the borrower becomes the subject of an undischarged and unstayed decree or order for a bankruptcy proceeding; and - immediately after a mortgaged real property becomes an REO Property; provided, however, that there shall be no reduction in any advance for delinquent monthly debt service payments if an Appraisal Reduction Event shall occur at any time after the aggregate certificate balances of all classes of certificates (other than the series 2003-C5 class A-1, A-2, A-3, A-4 and A-1-A certificates) have been reduced to zero. An "Appraisal Reduction Event" (or the equivalent) with respect to the Mayfair Mall Loan is defined under the series 2003-C4 pooling and servicing agreement and the relevant events may differ from those specified above. "ARD LOAN" means any mortgage loan in the trust fund having the characteristics described in the first paragraph under "Description of the Underlying Mortgage Loans--Certain Terms and Conditions of the Underlying Mortgage Loans--ARD Loans" in this prospectus supplement. "ASSET STATUS REPORT" means the report designated as such and described under, "The Pooling and Servicing Agreement--Asset Status Report" in this prospectus supplement. "ASTM" means the American Society for Testing and Materials. "AUDIT PROGRAM" means the Audit Program for Mortgages serviced for FHLMC. S-175 "AVAILABLE P&I FUNDS" means, with respect to any distribution date, the Total Available Funds for that distribution date, exclusive of any portion of those funds that represents-- - Static Prepayment Premiums, - Yield Maintenance Charges, or - Excess Interest. The trustee will apply the Available P&I Funds as described under "Description of the Offered Certificates--Distributions" in this prospectus supplement to pay principal and accrued interest on the series 2003-C5 certificates on that date. "CERCLA" means the federal Comprehensive Environmental Response, Compensation & Liability Act of 1980, as amended. "CLEARSTREAM, LUXEMBOURG" means Clearstream Banking, societe anonyme. "COLLATERAL SUPPORT DEFICIT" means the amount, if any, by which (i) the aggregate Stated Principal Balance (for purposes of this calculation only, the aggregate Stated Principal Balance will be increased by all prior or current Principal Distribution Adjustment Amounts, other than any portion thereof related to an advance by the master servicer or the trustee on a mortgage loan that a final recovery determination has been made) of the mortgage loans (including any mortgage loan as to which the corresponding mortgaged real property has become an REO Property) expected to be outstanding immediately following such distribution date is less than (ii) the then aggregate certificate balance of the regular certificates after giving effect to distributions of principal on such distribution date. "COLUMN" means Column Financial, Inc. "CORRECTED MORTGAGE LOAN" means any specially serviced mortgage loan that has become a performing mortgage loan, in accordance with its original term or as modified in accordance with the pooling and servicing agreement, for three consecutive monthly payments; provided, that no additional event of default is foreseeable in the reasonable judgment of the special servicer. "COST APPROACH" means the determination of the value of a mortgaged real property arrived at by adding the estimated value of the land to an estimate of the current replacement cost of the improvements, and then subtracting depreciation from all sources. "CPR" means an assumed constant rate of prepayment each month, which is expressed on a per annum basis, relative to the then-outstanding principal balance of a pool of mortgage loans for the life of those loans. The CPR model is the prepayment model that we use in this prospectus supplement. "CUT-OFF DATE LOAN-TO-VALUE RATIO" or "CUT-OFF DATE LTV RATIO" means: - with respect to any underlying mortgage loan, other than a mortgage loan secured, including through cross-collateralization with other mortgage loans, by multiple real properties, the ratio of-- 1. the cut-off-date principal balance of the mortgage loan, to 2. the Most Recent Appraised Value of the related mortgaged real property; and - with respect to any underlying mortgage loan that is secured, including through cross-collateralization, by multiple real properties, the ratio of-- 1. the total cut-off date principal balance of the mortgage loan, and all other mortgage loans with which it is cross-collateralized, to 2. the total Most Recent Appraised Value for all of the related mortgaged real properties. "DARK TENANT" means a tenant that has ceased to occupy its space at a mortgaged real property, but that is obligated to continue, and is, paying rent on that space. S-176 "DEFAULT INTEREST" means any interest that-- - accrues on a defaulted mortgage loan solely by reason of the subject default, and - is in excess of all interest at the regular mortgage interest rate for the mortgage loan, including any Excess Interest accrued on the mortgage loan. "DEFAULTED LOAN" means any mortgage loan that is at least 60 days delinquent in respect of its monthly payments or delinquent in respect of its balloon payment, if any, in each case without giving effect to any grace period permitted by the related mortgage or mortgage note or if any non-monetary event of default occurs that results in the mortgage loan becoming a specially serviced mortgage loan. "DIRECTING CERTIFICATEHOLDER" means the certificateholder of the series 2003-C5 controlling class selected by holders of certificates representing greater than 50% of the total principal balance of the series 2003-C5 controlling class. "DTC" means The Depository Trust Company. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "ESTIMATED ANNUAL OPERATING EXPENSES" means, for each of the mortgaged real properties securing a mortgage loan in the trust fund, the historical annual operating expenses for the property, adjusted upward or downward, as appropriate, to reflect any expense modifications made as discussed below. For purposes of calculating the Estimated Annual Operating Expenses for any mortgaged real property securing a mortgage loan in the trust fund: - the "historical annual operating expenses" for that property normally consist of historical expenses that were generally obtained/estimated-- 1. from operating statements relating to a complete fiscal year of the borrower ended in 2000, 2001 or 2002 or a trailing 12-month period ended in 2003, 2. by annualizing the amount of expenses for partial 2000, 2001, 2002 periods for which operating statements were available, with adjustments for some items deemed inappropriate for annualization, 3. by calculating a stabilized estimate of operating expenses which takes into consideration historical financial statements and material changes in the operating position of the property, such as newly signed leases and market data, or 4. if the property was recently constructed, by calculating an estimate of operating expenses based upon the appraisal of the property or market data; and - the "expense modifications" made to the historical annual operating expenses for that property include-- 1. assuming, in most cases, that a management fee, equal to approximately 3% to 5% of total revenues, was payable to the property manager, 2. adjusting historical expense items upwards or downwards to reflect inflation and/or industry norms for the particular type of property, 3. the underwritten recurring replacement reserve amounts, 4. adjusting historical expenses downwards by eliminating various items which are considered non-recurring in nature or which are considered capital improvements, including recurring capital improvements, 5. in the case of hospitality properties, adjusting historical expenses to reflect reserves for furniture, fixtures and equipment of between 4% and 5% of total revenues, S-177 6. in the case of hospitality properties and some multifamily rental properties, retail properties and industrial properties, adjusting historical expenses upward or downward to result in an expense-to-room or expense-to-total revenues ratio that approximates historical or industry norms, and 7. in the case of mortgaged real properties used primarily for office, retail and industrial purposes, adjusting historical expenses to account for stabilized tenant improvements and leasing commissions at costs consistent with historical trends or prevailing market conditions. The amount of any underwritten recurring replacement reserve amounts and/or underwritten leasing commissions and tenant improvements for each of the mortgaged real properties securing a mortgage loan in the trust fund is shown in the table titled "Engineering Reserves, Recurring Replacement Reserves and TI&LC Reserves" on Exhibit A-1 to this prospectus supplement. The underwritten recurring replacement reserve amounts shown on Exhibit A-1 to this prospectus supplement are expressed as dollars per unit in the case of multifamily rental properties and manufactured housing communities, a percentage of total departmental revenues in the case of hospitality properties and dollars per leasable square foot in the case of other commercial properties. By way of example, Estimated Annual Operating Expenses generally include-- - salaries and wages, - the costs or fees of-- 1. utilities, 2. repairs and maintenance, 3. replacement reserves, 4. marketing, 5. insurance, 6. management, 7. landscaping, 8. security, if provided at the property, and - the amount of taxes, general and administrative expenses, ground lease payments and other costs. Estimated Annual Operating Expenses do not reflect, however, any deductions for debt service, depreciation and amortization or capital expenditures or reserves for any of those items, except as described above. In the case of those mortgaged real properties used in whole or in part for retail, office and industrial purposes, Estimated Annual Operating Expenses include both expenses that may be recovered from tenants and those that are not. In the case of some mortgaged real properties used in whole or in part for retail, office and industrial purposes, Estimated Annual Operating Expenses may have included leasing commissions and tenant improvement costs. However, for some tenants with than average lease terms or which were considered not to require these improvements, adjustments were not made to reflect tenant improvements and leasing commissions. In the case of hospitality properties Estimated Annual Operating Expenses include departmental expenses, reserves for furniture, fixtures and equipment, management fees and, where applicable, franchise fees. "ESTIMATED ANNUAL REVENUES" means, for each of the mortgaged real properties securing a mortgage loan in the trust fund, the base estimated annual revenues for the property, adjusted upward or downward, as appropriate, to reflect any revenue modifications made as discussed below. For purposes of calculating the Estimated Annual Revenues for any mortgaged real property securing a mortgage loan in the trust fund: - the "base estimated annual revenues" for that property were generally assumed to equal-- 1. in the case of a multifamily rental property or a manufactured housing community, the annualized amounts of gross potential rents, S-178 2. in the case of a hospitality property, the estimated average room sales, and 3. in the case of any other commercial property, the monthly contractual base rents as reflected in the rent roll or leases, plus tenant reimbursements; and - the "revenue modifications" made to the base estimated annual revenues for that property include-- 1. adjusting the revenues downwards by applying a combined vacancy and rent loss, including concessions, adjustment that reflected then current occupancy or, in some cases, an occupancy that was itself adjusted for historical trends or market rates of occupancy with consideration to competitive properties, 2. adjusting the revenues upwards to reflect, in the case of some tenants, increases in base rents scheduled to occur during the following 12 months, 3. adjusting the revenues upwards for percentage rents based on contractual requirements, sales history and historical trends and, additionally, for other estimated income consisting of, among other items, late fees, laundry income, application fees, cable television fees, storage charges, electrical pass-throughs, pet charges, janitorial services, furniture rental and parking fees, 4. adjusting the revenues downwards in some instances where rental rates were determined to be significantly above market rates and the subject space was then currently leased to tenants that did not have long-term leases or were believed to be unlikely to renew their leases, and 5. in the case of hospitality properties, adjusting the revenues upwards to include estimated revenues from food and beverage, telephones and other hotel related income. By way of example, Estimated Annual Revenues generally include: - for multifamily rental properties and manufactured housing communities, rental and other revenues, - for hospitality properties, room, food and beverage, telephone and other revenues, and - for other commercial properties, base rent, percentage rent, expense reimbursements and other revenues. In the case of an owner-occupied property for which no leases exist, the Estimated Annual Revenues were-- - determined on the assumption that the property was net leased to a single tenant at market rents, and - derived from rental rate and vacancy information for the surrounding real estate market. "EUROCLEAR" means The Euroclear System. "EXCESS INTEREST": Seven (7) of the mortgage loans, representing 9.15% of the initial mortgage pool balance, are ARD Loans which bear interest at their respective mortgage rates until an Anticipated Repayment Date. Commencing on the respective Anticipated Repayment Date, the ARD Loans will bear interest at a fixed rate (the "Revised Rate") per annum equal to the mortgage rate plus a specified percentage (generally, no more than 2%, so long as the mortgage loan is included in the trust fund). Until the principal balance of each such mortgage loan has been reduced to zero, such mortgage loan will only be required to pay interest at the mortgage rate, and the interest accrued at the excess of the related Revised Rate over the related mortgage interest rate will be deferred (such accrued and deferred interest and interest thereon, if any, is referred to in this prospectus supplement as Excess Interest). "EXCESS SERVICING STRIP" means a portion of the master servicing fee (equal to fees accrued at a rate in excess of 0.005% per annum. "EXEMPTION-FAVORED PARTY" means any of the following-- - Credit Suisse First Boston LLC, - PNC Capital Markets, Inc., S-179 - any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Credit Suisse First Boston LLC or PNC Capital Markets, Inc., and - any member of the underwriting syndicate or selling group of which a person described in the prior four bullets is a manager or co-manager with respect to any particular class of the offered certificates. "FAIR VALUE" means the amount that, in the special servicer's judgment, would be realized in connection with the sale of a Defaulted Loan if it were offered in a commercially reasonable manner and an open bid auction were conducted. "FITCH" means Fitch, Inc. "GAAP" means generally accepted accounting principles. "INCOME APPROACH" means the determination of the value of a mortgaged real property by using the discounted cash flow method of valuation or the direct capitalization method. The discounted cash flow method is used in order to measure the return on a real estate investment and to determine the present value of the future income stream expected to be generated by the mortgaged real property. The future income of the mortgaged real property, as projected over an anticipated holding period, and the resulting net operating incomes or cash flows are then discounted to present value using an appropriate discount rate. The direct capitalization method generally converts an estimate of a single year's income expectancy, or, in some cases, a hypothetical stabilized single year's income expectancy, into an indication of value by dividing the income estimate by an appropriate capitalization rate. An applicable capitalization method and appropriate capitalization rates are developed for use in computations that lead to an indication of value. In utilizing the Income Approach, the appraiser's method of determination of gross income, gross expense and net operating income for the subject property may vary from the method of determining Underwritten Net Operating Income for that property, resulting in variances in the related net operating income values. "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended. "IRS" means the Internal Revenue Service. "JEFFERSON AT MONTFORT B LOAN" means the mortgage loan secured by the mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Jefferson at Montfort on a subordinated basis with the Jefferson at Montfort Loan and not included in the trust fund. "JEFFERSON AT MONTFORT CURE PAYMENT" means any payment made by the holder of the Jefferson at Montfort B Loan to cure a default on the part of the related borrower under the Jefferson at Montfort Total Loan. "JEFFERSON AT MONTFORT CURE PERIOD" means, as regards the Jefferson at Montfort Total Loan, the period within five business days of receipt of notice with respect to a monetary default and within 30 days of notice of a non-monetary default. "JEFFERSON AT MONTFORT LOAN" means the mortgage loan included in the trust fund that is secured by the mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Jefferson at Montfort. "JEFFERSON AT MONTFORT SPECIALLY DESIGNATED SERVICING ACTIONS" means any of the following actions with respect to the Jefferson at Montfort Loan: - any modification, waiver or amendment of a monetary term of the related mortgage loan (other than an extension of the original maturity date for six months or less following the original maturity date and a waiver of Default Interest and/or late payment charges) or a material non-monetary term (excluding any waiver of a "due-on-sale" or "due-on-encumbrance" clause, which is covered below); - any foreclosure or comparable conversion of the ownership of the related mortgaged real property; - any proposed sale of an REO Property that relates to the Jefferson at Montfort Loan other than in connection with the termination of the trust; - any determination to bring the Jefferson at Montfort Property or related REO Property into compliance with applicable environmental laws; - any acceptance of substitute or additional collateral for the related mortgage loan when it has become a specially serviced mortgage loan (other than in accordance with the terms of the related loan documents); S-180 - any acceptance of a discounted payoff with respect to the related mortgage loan when it has become a specially serviced mortgage loan; - any waiver of a "due-on-sale" or "due-on-encumbrance" clause; - any acceptance of an assumption agreement releasing the related borrower from liability under the related mortgage loan; - any release of collateral for the related mortgage loan when it has become a specially serviced mortgage loan (other than in accordance with the terms of, or upon satisfaction of, the related mortgage loan); and such other events as may be expressly provided for in the pooling and servicing agreement. The Jefferson at Montfort Specially Designated Servicing Actions are not intended to limit the Directing Certificateholder's rights to consent to actions taken by the master servicer in respect of the Jefferson at Montfort Loan while such loan is a performing mortgage loan that such Directing Certificateholder otherwise has pursuant to the pooling and servicing agreement. "JEFFERSON AT MONTFORT TOTAL LOAN" means the Jefferson at Montfort Loan and the Jefferson at Montfort B Loan, collectively. "KEYBANK" means KeyBank National Association. "KRECM" means KeyCorp Real Estate Capital Markets, Inc. "LEASABLE SQUARE FOOTAGE," "S.F." or "SQ. FT." means, in the case of any mortgaged real property that is a commercial property, other than a hospitality property, the estimated square footage of the gross leasable area at the property, as reflected in information provided by the related borrower or in the appraisal on which the Most Recent Appraised Value of the property is based. "LOCK/X" means, with respect to any of the underlying mortgage loans, a duration of X payments for the lock-out period during which prepayment is prohibited. "MAJOR TENANT" means the top three (3) tenants of a commercial property including Shadow Anchors, based on the net rentable area of its space. "MALL AT FAIRFIELD COMMONS COMPANION LOAN" means the mortgage loan secured on a PARI PASSU basis with the Mall at Fairfield Commons Loan and NOT included in the trust fund. "MALL AT FAIRFIELD COMMONS COMPANION LENDER" means the lender of the Mall at Fairfield Commons Companion Loan. "MALL AT FAIRFIELD COMMONS CURE PAYMENT" means any payment made by the Directing Certificateholder or the holder of the Mall at Fairfield Commons Companion Loan, as applicable, to cure a default on the part of the related borrower under the Mall at Fairfield Commons Total Loan. "MALL AT FAIRFIELD COMMONS CURE PERIOD" means, as regards the Mall at Fairfield Commons Total Loan, the period within five business days of receipt of notice with respect to a monetary default and within 30 days of notice of a non-monetary default. "MALL AT FAIRFIELD COMMONS INTERCREDITOR AGREEMENT" means the agreement entered into by KeyBank National Association in its capacity as the holder of the Mall at Fairfield Commons Loan and the Mall at Fairfield Commons Companion Loan, providing, among other things, that all amounts received in respect of the Mall at Fairfield Commons Total Loan will be paid PRO RATA to the holder of the Mall at Fairfield Commons Loan and the Mall at Fairfield Commons Companion Lender. "MALL AT FAIRFIELD COMMONS LOAN" means the mortgage loan included in the trust fund that is secured by the mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Mall at Fairfield Commons. S-181 "MALL AT FAIRFIELD COMMONS SPECIALLY DESIGNATED SERVICING ACTIONS" means any of the following actions with respect to the Mall at Fairfield Commons Loan: - any modification, waiver or amendment of a monetary term of the related mortgage loan (other than an extension of the original maturity date for six months or less following the original maturity date and a waiver of Default Interest and/or late payment charges) or a material non-monetary term (excluding any waiver of a "due-on-sale" or "due-on-encumbrance" clause, which is covered below); - any foreclosure or comparable conversion of the ownership of the related mortgaged real property; - any proposed sale of an REO Property that relates to the Mall at Fairfield Commons Loan other than in connection with the termination of the trust fund; - any determination to bring the Mall at Fairfield Commons Property or related REO Property into compliance with applicable environmental laws; - any acceptance of substitute or additional collateral for the related mortgage loan when it has become a specially serviced mortgage loan (other than in accordance with the terms of the related loan documents); - any acceptance of a discounted payoff with respect to the related mortgage loan when it has become specially serviced mortgage loan; - any waiver of a "due-on-sale" or "due-on-encumbrance" clause; - any acceptance of an assumption agreement releasing the related borrower from liability under the related mortgage loan; - any release of collateral for the related mortgage loan when it has become specially serviced mortgage loan (other than in accordance with the terms of, or upon satisfaction of, the related mortgage loan); and such other events as may be expressly provided for in the pooling and servicing agreement. The Mall at Fairfield Commons Specially Designated Servicing Actions are not intended to limit the Directing Certificateholder's rights to consent to actions taken by the master servicer in respect of the Mall at Fairfield Commons Loan while such loan is a performing mortgage loan that such Directing Certificateholder otherwise has pursuant to the pooling and servicing agreement. "MALL AT FAIRFIELD COMMONS TOTAL LOAN" means the Mall at Fairfield Commons Loan and the Mall at Fairfield Commons Companion Loan, collectively. "MANAGER" means, with respect to any mortgaged real property securing a mortgage loan, the property manager, except that, when no management agreement is in place, it is referred to as "owner managed." "MATURITY/ARD BALANCE" means, with respect to any underlying mortgage loan, the unpaid principal balance of the mortgage loan immediately prior to its maturity or, in the case of an ARD Loan, the related anticipated repayment date, according to the payment schedule for the mortgage loan and otherwise assuming no prepayments, defaults or extensions. "MATURITY/ARD LOAN-TO-VALUE RATIO" or "MATURITY/ARD LTV RATIO" means: - with respect to any underlying balloon mortgage loan or ARD Loan, other than a mortgage loan secured, including through cross-collateralization with other mortgage loans, by multiple real properties, the ratio of-- 1. the Maturity/ARD Balance of the mortgage loan, to 2. the Most Recent Appraised Value of the related mortgaged real property; and - with respect to any underlying balloon mortgage loan or ARD Loan that is secured, including through cross-collateralization with other mortgage loans, by multiple real properties, the ratio of-- 1. the total Maturity/ARD Balance of the mortgage loan, and all other mortgage loans with which it is cross-collateralized, to S-182 2. the total Most Recent Appraised Value of all of the related mortgaged real properties. "MAYFAIR MALL CHANGE-OF-CONTROL EVENT" means the event that exists when the total principal balance of the class MM certificates of the series 2003-C4 securitization, net of any Appraisal Reduction Amount (as defined in the series 2003-C4 pooling and servicing agreement) allocable to the Mayfair Mall Securitized Companion Loan, is less than 25% of the initial total principal balance of the class MM certificates of the series 2003-C4 securitization. "MAYFAIR MALL COMPANION LOANS" means the mortgage loans NOT included in the trust fund that are secured by the mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall on a PARI PASSU basis. "MAYFAIR MALL COMPANION LENDERS" means the lenders of the Mayfair Mall Companion Loans, collectively. "MAYFAIR MALL CONTROL GROUP" means the holders of more than 50% of the outstanding principal balance of the Mayfair Mall Total Loan (provided, that the mortgage loans constituting the Mayfair Mall Total Loan are deemed to remain outstanding even if the related mortgaged real property becomes an REO Property), designated, for purposes of objecting to Mayfair Mall Specially Designated Servicing Actions proposed by the Mayfair Mall Special Servicer with respect to the Mayfair Mall Total Loan or any related REO Property, directing the actions of the Mayfair Mall Special Servicer with respect to the Mayfair Mall Total Loan (if it is being specially serviced) or any related REO Property and/or replacing the Mayfair Mall Special Servicer in respect of the Mayfair Mall Total Loan or any related REO Property, all as described under "--The Mayfair Mall Loan" in this prospectus supplement. "MAYFAIR MALL CURE PAYMENT" means any payment made by the applicable series 2003-C4 directing certificateholder, the Directing Certificateholder or any holder of a Mayfair Mall Non-Securitized Companion Loan, as applicable, to cure a default on the part of the related borrower under the Mayfair Mall Total Loan. "MAYFAIR MALL CURE PERIOD" means, as regards the Mayfair Mall Total Loan, the period within five business days of receipt of notice with respect to a monetary default and within 30 days of notice of a non-monetary default. "MAYFAIR MALL INTERCREDITOR AGREEMENT" means the agreement between Column Financial, Inc. in its capacity as the holder of the Mayfair Mall Loan and the Mayfair Mall Non-Securitized Companion Loans and the series 2003-C4 trust fund, as holder of the Mayfair Mall Securitized Companion Loan, providing, among other things, that all amounts received in respect of the Mayfair Mall Total Loan Group will be paid PRO RATA to the holder of the Mayfair Mall Loan and the Mayfair Mall Companion Lenders. "MAYFAIR MALL LOAN" means the mortgage loan secured by the mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Mayfair Mall and included in the trust fund but serviced pursuant to the series 2003-C4 pooling and servicing agreement. "MAYFAIR MALL MASTER SERVICER" means the master servicer under the series 2003-C4 pooling and servicing agreement. "MAYFAIR MALL NON-SECURITIZED COMPANION LOANS" means the Mayfair Mall Companion Loans that are not included in the series 2003-C4 trust fund. "MAYFAIR MALL SECURITIZED COMPANION LOAN" means the Mayfair Mall Companion Loan that directly backs the series 2003-C4 certificates. "MAYFAIR MALL SPECIALLY DESIGNATED SERVICING ACTIONS" means any of the following actions with respect to the Mayfair Mall Loan that is being serviced and/or administered under the series 2003-C4 pooling and servicing agreement: - any modification, waiver or amendment of a monetary term of the related mortgage loan (other than an extension of the original maturity date for six months or less following the original maturity date and a waiver of Default Interest and/or late payment charges) or a material non-monetary term (excluding any waiver of a "due-on-sale" or "due-on-encumbrance" clause, which is covered below); - any foreclosure or comparable conversion of the ownership of the related mortgaged real property; - any proposed sale of an REO Property that relates to the Mayfair Mall Loan other than in connection with the termination of the series 2003-C4 trust; S-183 - any determination to bring the Mayfair Mall Property or related REO Property into compliance with applicable environmental laws; - any acceptance of substitute or additional collateral for the related mortgage loan when it has become a specially serviced mortgage loan (other than in accordance with the terms of the related loan documents); - any acceptance of a discounted payoff with respect to the related mortgage loan when it has become specially serviced mortgage loan; - any waiver of a "due-on-sale" or "due-on-encumbrance" clause; - any acceptance of an assumption agreement releasing the related borrower from liability under the related mortgage loan; - any release of collateral for the related mortgage loan when it has become specially serviced mortgage loan (other than in accordance with the terms of, or upon satisfaction of, the related mortgage loan); and such other events as may be expressly provided for in the series 2003-C4 pooling and servicing agreement (with respect to the Mayfair Mall Loan for which it governs the servicing). "MAYFAIR MALL SPECIAL SERVICER" means the special servicer under the series 2003-C4 pooling and servicing agreement. "MAYFAIR MALL TOTAL LOAN" means the Mayfair Mall Loan and the Mayfair Mall Companion Loans, collectively. "MIDLAND" means Midland Loan Services, Inc. "MODELING ASSUMPTIONS" means, collectively, the following assumptions regarding the series 2003-C5 certificates and the mortgage loans in the trust fund: - the mortgage loans have the characteristics set forth on Exhibit A-1 to this prospectus supplement and the initial mortgage pool balance is approximately $1,261,269,491; - the total initial principal balance or notional amount, as the case may be, of each class of series 2003-C5 certificates is as described in this prospectus supplement; - the pass-through rate for each interest-bearing class of series 2003-C5 certificates is as described in this prospectus supplement; - there are no delinquencies or losses with respect to the mortgage loans; - there are no modifications, extensions, waivers or amendments affecting the monthly debt service payments by borrowers on the mortgage loans; - there are no Appraisal Reduction Amounts with respect to the mortgage loans; - there are no casualties or condemnations affecting the corresponding mortgaged real properties; - each of the mortgage loans provides monthly debt service payments to be due on the first or eleventh day of each month, regardless of whether the subject date is a business day or not; - monthly debt service payments on the mortgage loans are timely received on their respective due dates in each month, regardless of whether the subject date is a business day or not; - no voluntary or involuntary prepayments are received as to any mortgage loan during that mortgage loan's prepayment lock-out period, including any contemporaneous defeasance period, or yield maintenance period; - each ARD Loan is paid in full on its anticipated repayment date; S-184 - except as otherwise assumed in the immediately preceding two bullets, prepayments are made on each of the mortgage loans at the indicated CPRs set forth in the subject tables or other relevant part of this prospectus supplement, without regard to any limitations in those mortgage loans on partial voluntary principal prepayments; - all prepayments on the mortgage loans are assumed to be-- (1) accompanied by a full month's interest, (2) if received during a prepayment premium period, accompanied by the appropriate Static Prepayment Premium, and (3) received on the applicable due date of the relevant month; - no person or entity entitled thereto exercises its right of optional termination as described in this prospectus supplement under "The Pooling and Servicing Agreement--Termination"; - no mortgage loan is required to be repurchased or replaced by the related mortgage loan seller, as described under "Description of the Underlying Mortgage Loans--Cures, Repurchases and Substitutions" in this prospectus supplement; - the only trust fund expenses are the trustee fee, the master servicing fee and the primary servicing fees; - payments on the offered certificates are made on the 15th day of each month, commencing in January 2004; - funds released from the interest reserve account for any mortgage loan that has paid in full will be included in the calculation of net weighted average coupon of the remaining mortgage loans; and - the offered certificates are settled on December 8, 2003, the "Assumed Settlement Date." "MOODY'S" means Moody's Investors Service, Inc. "MOST RECENT APPRAISED VALUE" means, for any mortgaged real property securing a mortgage loan in the trust fund, the "as is" or, if provided, the "as cured" value estimate reflected in the most recent appraisal obtained by or otherwise in the possession of the related mortgage loan seller. The appraiser's "as cured" value, as stated in the appraisal, is generally calculated as the sum of-- - the "as is" value set forth in the related appraisal, plus - the estimated costs, as of the date of the appraisal, of implementing any deferred maintenance required to be undertaken immediately or in the short term under the terms of the related mortgage loan. In general, the amount of costs assumed by the appraiser for these purposes is based on-- - an estimate by the individual appraiser, - an estimate by the related borrower, - the estimate set forth in the property condition assessment conducted in connection with the origination of the related mortgage loan, or - a combination of these estimates. "MOST RECENT DEBT SERVICE COVERAGE RATIO" means: - with respect to any underlying mortgage loan, other than a mortgage loan secured, including through cross-collateralization with other mortgage loans, by multiple mortgaged real properties, the ratio of-- 1. the Most Recent Net Cash Flow for the related mortgaged real property, to S-185 2. twelve times the monthly debt service payment for that mortgage loan due on its due date in August 2002 or, in the case of any mortgage loan that is currently in an interest-only period that ends prior to maturity (or, in the case of an ARD Loan, prior to the anticipated repayment date), on the first due date after amortization begins; and - with respect to any underlying mortgage loan that is secured, including through cross-collateralization with other mortgage loans, by multiple mortgaged real properties, the ratio of-- 1. the total Most Recent Net Cash Flow for those properties, to 2. twelve times the monthly debt service payment(s) for that underlying mortgage loan, and any and all other mortgage loans with which it is cross-collateralized, due on the related due date in August 2002 or, in the case of any underlying mortgage loan that is currently in an interest-only period that ends prior to maturity (or, in the case of an ARD Loan, prior to the anticipated repayment date), on the first due date after amortization begins. "MOST RECENT EXPENSES" means, for any mortgaged real property that secures a mortgage loan in the trust fund, the expenses incurred, or annualized or estimated in some cases, for the property for the 12-month period ended as of the Most Recent Operating Statement Date, based upon the latest available annual or, in some cases, partial-year operating statement and other information furnished by the related borrower. Expenses generally consist of all expenses incurred for the property, including-- - salaries and wages, - the costs or fees of-- 1. utilities, 2. repairs and maintenance, 3. marketing, 4. insurance, 5. management, 6. landscaping, 7. security, if provided at the property, and - the amount of-- 1. real estate taxes, 2. general and administrative expenses, 3. ground lease payments, and 4. other costs. For purposes of the foregoing, expenses do not reflect, however, any deductions for debt service, depreciation, amortization, capital expenditures, leasing commissions and tenant improvements or furniture, fixtures and equipment. In the case of a hospitality property, such expenses also include expenses relating to guest rooms, food and beverage costs, telephone bills and rental and other expenses, as well as operating expenses as general administrative expenses, marketing expenses and franchise fees. In determining the Most Recent Expenses for any property, the related mortgage loan seller may have made adjustments to the financial information provided by the related borrower similar to those used in calculating the Estimated Annual Operating Expenses for that property. S-186 "MOST RECENT NET CASH FLOW" means, with respect to each of the mortgaged real properties that secures a mortgage loan in the trust fund, the Most Recent Net Operating Income less any underwritten recurring replacement reserve amounts. "MOST RECENT NET OPERATING INCOME" means, with respect to each of the mortgaged real properties that secures a mortgage loan in the trust fund, the total cash flow derived from the property that was available for annual debt service on the related mortgage loan, calculated as the Most Recent Revenues less Most Recent Expenses for that property. "MOST RECENT OPERATING STATEMENT DATE" means, with respect to each of the mortgage loans, the date indicated on Exhibit A-1 as the Most Recent Operating Statement Date with respect to the mortgage loan. In general, this date is the end date of the period covered by the latest available annual or, in some cases, partial-year operating statement for the related mortgaged real property. "MOST RECENT REVENUES" means, for any mortgaged real property that secures a mortgage loan in the trust fund, the revenues received, or annualized or estimated in some cases, in respect of the property for the 12-month period ended as of the Most Recent Operating Statement Date, based upon the latest available annual or, in some cases, partial-year operating statement and other information furnished by the related borrower. For purposes of the foregoing, revenues generally consist of all revenues received in respect of the property, including: - for a multifamily rental property or a manufactured housing community, rental and other revenues; - for a hospitality property, guest room rates, food and beverage charges, telephone charges and other revenues; and - for any other commercial property, base rent, percentage rent, expense reimbursements and other revenues. In determining the Most Recent Revenues for any property, the related mortgage loan seller may have made adjustments to the financial information provided by the related borrower similar to those used in calculating the Estimated Annual Revenues for that property. "NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means, with respect to any distribution date, the excess, if any, of: - the total Prepayment Interest Shortfalls incurred with respect to the mortgage pool during the related collection period; over - the sum of-- 1. the total payments made by the master servicer to cover those Prepayment Interest Shortfalls, and 2. the total Prepayment Interest Excesses collected with respect to the mortgage pool during the related collection period. "NET MORTGAGE PASS-THROUGH RATE" means, with respect to any mortgage loan in the trust fund or any distribution date, an annual rate generally equal to: - in the case of a mortgage loan that accrues interest on a 30/360 Basis, a rate per annum equal to the mortgage interest rate in effect for that mortgage loan as of the initial issuance of the series 2003-C5 certificates, minus the sum of the master servicing fee rate, the primary servicing fee rate and the trustee fee rate for that mortgage loan; and - in the case of a mortgage loan that accrues interest on an Actual/360 Basis, an annual rate generally equal to twelve times a fraction, expressed as a percentage-- (1) the numerator of which fraction is, subject to adjustment as described below in this definition, an amount of interest equal to the product of (a) the number of days in the related interest accrual period, multiplied by (b) the Stated Principal Balance of that mortgage loan immediately preceding that distribution date, multiplied by (c) 1/360, multiplied by (d) a rate per annum equal to the mortgage interest rate in effect for that mortgage loan as of the date of the initial issuance of the series 2003-C5 certificates, minus the sum of the master servicing fee rate, the primary servicing fee rate and the trustee fee rate for that mortgage loan, and S-187 (2) the denominator of which is the Stated Principal Balance of that mortgage loan immediately preceding that distribution date. Notwithstanding the foregoing, if the subject distribution date occurs during January, except during a leap year, or February, then the amount of interest referred to in the fractional numerator described in the first bullet of the prior sentence will be decreased to reflect any interest reserve amount with respect to the subject mortgage loan that is transferred from the trustee's distribution account to the trustee's interest reserve account during that month. Furthermore, if the subject distribution date occurs during March, then the amount of interest referred to in the fractional numerator described in the first bullet of the second preceding sentence will be increased to reflect any interest reserve amounts with respect to the subject mortgage loan that are transferred from the trustee's interest reserve account to the trustee's distribution account during that month. "NRSF" means net rentable square footage. "OCCUPANCY RATE AT UNDERWRITING" or "OCCUPANCY RATE AT U/W" means the percentage of leasable square footage, in the case of mortgaged real properties that are commercial properties, other than parking garage properties, or units, in the case of mortgaged real properties that are multifamily rental properties and/or manufactured housing communities, of the subject property that were occupied or leased as of the approximate date of the original underwriting of the related mortgage loan in the trust fund or any later date as we considered appropriate, in any event as reflected in information provided by the related borrower or in the appraisal on which the Most Recent Appraised Value of the property is based. Information shown in this prospectus supplement with respect to any weighted average of Occupancy Rates at Underwriting excludes hospitality properties from the relevant calculations. "OPTION PRICE" means the cash price at which any Defaulted Loan may be purchased under the related Purchase Option, as described under "The Pooling and Servicing Agreement--Realization Upon Mortgage Loans" in this prospectus supplement. "PARTY IN INTEREST" means any person that is a "party in interest" as defined in Section 3(14) of ERISA or a "disqualified person" as defined in Section 4975 of the Internal Revenue Code. "PERMITTED ENCUMBRANCES" means, with respect to any mortgaged real property securing a mortgage loan in the trust fund, any and all of the following-- - the lien of current real property taxes, water charges, sewer rents and assessments not yet delinquent or accruing interest or penalties, - covenants, conditions and restrictions, rights of way, easements and other matters that are of public record, - exceptions and exclusions specifically referred to in the related lender's title insurance policy or, if that policy has not yet been issued, referred to in a PRO FORMA title policy or marked-up commitment, which in either case is binding on the subject title insurance company, - other matters to which like properties are commonly subject, - the rights of tenants, as tenants only, under leases, including subleases, pertaining to the related mortgaged real property, - if the related mortgage loan is cross-collateralized with any other mortgage loan in the trust fund, the lien of the mortgage instrument for that other mortgage loan, and - if the related mortgaged real property is a unit in a condominium, the related condominium declaration. "PERMITTED INVESTMENTS" means the U.S. government securities and other investment grade obligations specified in the pooling and servicing agreement. "PLAN" means any retirement plan or other employee benefit or retirement plan, arrangement or account, including any individual retirement account or Keogh plan, that is subject to Title I of ERISA or Section 4975 of the Internal Revenue Code. "PLAN ASSET REGULATIONS" means the regulations of the U.S. Department of Labor promulgated under ERISA describing what constitutes the assets of a Plan. S-188 "PNC BANK" means PNC Bank, National Association. "PNC FINANCIAL" means The PNC Financial Services Group, Inc., a Pennsylvania corporation. "PREPAYMENT INTEREST EXCESS" means, with respect to any full or partial prepayment of a mortgage loan made by the related borrower during any collection period after the due date for that loan, the amount of any interest collected on that prepayment for the period from and after that due date, less the amount of master servicing fees payable from that interest collection, and exclusive of any Default Interest and Excess Interest included in that interest collection. "PREPAYMENT INTEREST SHORTFALL" means, with respect to any voluntary full or partial voluntary prepayment of a mortgage loan made by the related borrower during any collection period prior to the due date for that loan, the amount of any uncollected interest that would have accrued on that prepayment to, but not including, such due date, less the amount of master servicing fees that would have been payable from that uncollected interest, and exclusive of any portion of that uncollected interest that would have been Default Interest or Excess Interest. "PRIME RATE" means an annual rate equal to the prime rate as published in the "Money Rates" section of THE WALL STREET JOURNAL, as that prime rate may change from time to time. "PRINCIPAL DISTRIBUTION ADJUSTMENT AMOUNT" means with respect to any Distribution Date, the sum of (i) the amount of any nonrecoverable advance that was reimbursed to the master servicer or trustee that was deemed to have been reimbursed out of payments and other collections of principal (as described herein under "--Advances of Delinquent Monthly Debt Service Payments" and "--Payment of Expenses; Servicing Advances) and (ii) any advance that remained unreimbursed following the time that a defaulted mortgage loan is modified and returned to performing status that was reimbursed to the master servicer or trustee, with interest on such advance, that was deemed to have been reimbursed out of payments and other collections of principal (as described herein under "--Advances of Delinquent Monthly Debt Service Payments" and "--Payment of Expenses; Servicing Advances), in each case, during the period since the preceding Distribution Date. "PTE" means prohibited transaction exemption. "PURCHASE OPTION" means, with respect to any Defaulted Loan, the purchase option described under "The Pooling and Servicing Agreement--Realization Upon Mortgage Loans" in this prospectus supplement. "PURCHASE PRICE" means, with respect to any repurchased mortgage loan, the purchase price described under "Description of the Underlying Mortgage Loans----Cures, Repurchases and Substitutions" in this prospectus supplement. "QUALIFIED SUBSTITUTE MORTGAGE LOAN" means 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, whether or not received, not in excess of the Stated Principal Balance of the deleted mortgage loan as of the due date in the calendar month during which the substitution occurs; (b) have a mortgage rate not less than the mortgage rate of the deleted mortgage loan; (c) have the same due date as 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 and the actual number of days elapsed); (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 an original loan-to-value ratio not higher than that of the deleted mortgage loan and a current loan-to-value ratio not higher than the then-current loan-to-value ratio of the deleted mortgage loan; (g) materially comply as of the date of substitution 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 real property that indicates no material adverse environmental conditions with respect to the related mortgaged real property and which will be delivered as a part of the related mortgage file; (i) have an original debt service coverage ratio of not less than the original debt service coverage ratio of the deleted mortgage loan and a current debt service coverage ratio of not less than the current debt service coverage ratio of the deleted mortgage loan; (j) be determined by an opinion of counsel to be a "qualified replacement mortgage" within the meaning of Section 860G(a)(4) of the Code; (k) not have a maturity date after the date that is two years prior to the rated final distribution date; (l) not be substituted for a deleted mortgage loan unless the trustee has received prior confirmation in writing by each of Fitch and S&P that the substitution will not result in the withdrawal, downgrade, or qualification of the then-current rating assigned by any of Fitch or S&P to any class of certificates then rated by Fitch or S&P, respectively (the cost, if any, of obtaining the confirmation to be paid by the applicable mortgage loan seller); (m) have been approved by the Directing Certificateholder in its sole discretion; (n) prohibit defeasance within two years of the closing date; and (o) not be substituted for a deleted mortgage loan if it would result in the termination of the REMIC status of any 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 one or more mortgage S-189 loans are substituted for one or more deleted mortgage loans simultaneously, then the amounts described in clause (a) are required to be determined on the basis of aggregate principal balances and the rates described in clause (b) (provided that no Net Mortgage Pass-Through Rate shall be less than the pass-through rate of any class of certificates) above and the remaining term to stated maturity referred to in clause (e) above are required to be determined on a weighted average basis. When a Qualified Substitute Mortgage Loan is substituted for a deleted mortgage loan, 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. "REMIC" means a "real estate mortgage investment conduit" as defined in Section 860D of the Internal Revenue Code. "REO PROPERTY" means any mortgaged real property that is acquired by the trust fund through foreclosure, deed-in-lieu of foreclosure or otherwise following a default on the corresponding mortgage loan. "RESTRICTED GROUP" means, collectively, the following persons and entities-- - the trustee, - the Exemption-Favored Parties, - us, - the master servicer, - the special servicer, - any sub-servicers, - each of the mortgage loan sellers, - each borrower, if any, with respect to mortgage loans constituting more than 5.0% of the total unamortized principal balance of the mortgage pool as of the date of initial issuance of the offered certificates, and - any and all affiliates of any of the aforementioned persons. "ROOMS" means, in the case of any mortgaged real property that is a hospitality property, the estimated number of rooms and/or suites, without regard to the size of the rooms or the number or size of the rooms in the suites, as reflected in information provided by the related borrower or in the appraisal on which the Most Recent Appraised Value of the property is based. "S&P" means Standard & Poor's Ratings Services, a division of the McGraw Hill Companies, Inc. "SALES COMPARISON APPROACH" means a determination of the value of a mortgaged real property based upon a comparison of that property to similar properties that have been sold recently or for which listing prices or offering figures are known. In connection with that determination, data for generally comparable properties are used and comparisons are made to demonstrate a probable price at which the subject mortgaged real property would sell if offered on the market. "SEC" means the Securities and Exchange Commission. "SENIOR PRINCIPAL DISTRIBUTION CROSS-OVER DATE" means the first distribution date, if any, as of which the total principal balance of the class A-1, A-2, A-3, A-4 and A-1-A certificates outstanding immediately prior to that distribution date, equals or exceeds the sum of: - the total Stated Principal Balance of the mortgage pool that will be outstanding immediately following that distribution date; plus - the lesser of-- 1. the Total Principal Distribution Amount for that distribution date, and S-190 2. the portion of the Available P&I Funds for that distribution date that will remain after all required distributions of interest on the class A-X, A-SP, A-1, A-2, A-3, A-4 and A-1-A certificates have been made on that distribution date. "SERVICING STANDARD" means the standard by which the master servicer and special servicer will service and administer the mortgage loans (including the Stanford Shopping Center Total Loan, the Mall at Fairfield Commons Total Loan and the Jefferson at Montfort Total Loan) that it is obligated to service and administer pursuant to the pooling and servicing agreement on behalf of the trustee and in the best interests of and for the benefit of the certificateholders (and, in the case of the Stanford Shopping Center Total Loan, the Mall at Fairfield Commons Total Loan and the Jefferson at Montfort Total Loan, the holders of the related Stanford Shopping Center Companion Loans, Mall at Fairfield Commons Companion Loan and Jefferson at Montfort B Loan, respectively), as a collective whole, (as determined by the master servicer or the special servicer, as the case may be, in its reasonable judgment), in accordance with applicable law, the terms of the pooling and servicing agreement and the terms of the respective mortgage loans, the Stanford Shopping Center Companion Loans, the Mall at Fairfield Commons Companion Loan and the Jefferson at Montfort B Loan (and, in the case of the Stanford Shopping Center Total Loan, the Mall at Fairfield Commons Total Loan, any A/B Loan and the Jefferson at Montfort Total Loan, the related intercreditor agreements) and, to the extent consistent with the foregoing, further as follows-- - (i) 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, giving due consideration to the customary and usual standards of practice of prudent institutional commercial and multifamily mortgage loan servicers servicing mortgage loans for third parties, and (ii) 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 and multifamily mortgage loans owned by the master servicer or the special servicer, as the case may be, whichever is higher; - with a view to the timely recovery of principal and interest on a net present value basis on the mortgage loans and the best interests of the trust and the certificateholders (or in the case of the Stanford Shopping Center Total Loan, Mall at Fairfield Commons Total Loan and the Jefferson at Montfort Total Loan, the maximization of recovery thereon to the certificateholders and the holders of the Stanford Shopping Center Companion Loans, Mall at Fairfield Commons Companion Loan and Jefferson at Montfort B Loan, as applicable, all taken as a collective whole), as determined by the master servicer or the special servicer, as the case may be, in its reasonable judgment; and - without regard to-- - any relationship that the master servicer or the special servicer, as the case may be, or any affiliate thereof may have with the related borrower, any mortgage loan seller or any other party to the pooling and servicing agreement, - the ownership of any certificate, mezzanine loan or subordinate debt by the master servicer or the special servicer, as the case may be, or by any affiliate thereof, - the master servicer's obligation to make advances, - the special servicer's obligation to request that the master servicer make servicing advances, - the right of the master servicer (or any affiliate thereof) or the special servicer (or any affiliate thereof), as the case may be, to receive reimbursement of costs, or the sufficiency of any compensation payable to it, or with respect to any particular transaction, - the ownership, servicing or management for others of any other mortgage loans or mortgaged properties by the master servicer or special servicer or any affiliate of the master servicer or special servicer, as applicable, - any obligation of the master servicer or any of its affiliates (in their capacity as a mortgage loan seller) to cure a breach of a representation or warranty or repurchase the mortgage loan, or - any debt that the master servicer or special servicer or any affiliate of the master servicer or special servicer, as applicable, has extended to any borrower. S-191 "SERVICING TRANSFER EVENT" means, with respect to any mortgage loan in the trust fund (other than the Mayfair Mall Loan), any of the following events, among others: - a payment default has occurred at its maturity date (except, if the borrower is making its assumed payment and delivers within 60 days of the maturity date a firm commitment to refinance acceptable to the Directing Certificateholder in which event such mortgage loan would not become a specially serviced mortgage loan until the earlier of (1) 90 days after such payment default, which may be extended to 150 days at the Directing Certificateholders' discretion or (2) the expiration of such commitment); - any monthly payment is more than 60 or more days delinquent; - the related borrower has-- (1) filed for, or consented to, bankruptcy, appointment of a receiver or conservator or a similar insolvency proceeding; (2) become the subject of a decree or order for such a proceeding which is not stayed or discharged within 60 days; or (3) has admitted in writing its inability to pay its debts generally as they become due; - the master servicer shall have received notice of the foreclosure or proposed foreclosure of any other lien on the mortgaged real property; - in the judgment of the master servicer, a payment default has occurred or is imminent and is not likely to be cured by the borrower within 60 days; or - any other default has occurred under the mortgage loan documents that, in the judgment of the master servicer or special servicer, has materially and adversely affected the value of the related mortgage loan and has continued unremedied for 60 days (irrespective of any grace period specified in the related mortgage note) and, in respect of a determination by the special servicer, the Directing Certificateholder agrees with such determination, provided that failure of the related borrower to obtain all-risk casualty insurance which does not contain any carve-out for terrorist or similar act shall not apply with respect to this clause if the special servicer has determined in accordance with the Servicing Standard that either-- (1) such insurance is not available at commercially reasonable rates and that such hazards are not commonly insured against for properties similar to the mortgaged real property and located in or around the region in which such mortgaged real property is located, or (2) such insurance is not available at any rate; A Servicing Transfer Event will cease to exist, if and when a specially serviced mortgage loan becomes a Corrected Mortgage Loan. A "Servicing Transfer Event" (or the equivalent) with respect to the Mayfair Mall Loan is defined under the series 2003-C4 pooling and servicing agreement, and the relevant events may differ from those specified above. "SHADOW ANCHOR" means a store or business that materially affects the draw of customers to a retail property, but which may be located at a nearby property or on a portion of the subject retail property that is not collateral for the related mortgage loan. "SIGNIFICANT MORTGAGE LOANS" means, with respect to any mortgage loan (i) the principal balance, of which is $20,000,000 or more, (ii) that is a mortgage loan, part of a group of crossed loans or a group of mortgage loans identified under the table entitled "Related Borrower Loans" under "Risk Factors--Risks Related to the Underlying Mortgage Loans" that, in each case, in the aggregate represents 5% or more of the aggregate outstanding principal balance of all of the mortgage loans at such time or (iii) is one of the ten largest mortgage loans by outstanding principal balance of all of the mortgage loans at such time. "SMMEA" means the Secondary Mortgage Market Enhancement Act of 1984, as amended. S-192 "STANFORD SHOPPING CENTER CONTROL GROUP" means the holders of more than 50% of the outstanding principal balance of the Stanford Shopping Center Total Loan (provided, that the mortgage loans constituting the Stanford Shopping Center Total Loan are deemed to remain outstanding even if the related mortgaged real property becomes an REO Property), designated, for purposes of objecting to Stanford Shopping Center Specially Designated Servicing Actions proposed by the special servicer with respect to the Stanford Shopping Center Total Loan or any related REO Property, directing the actions of the special servicer with respect to the Stanford Shopping Center Total Loan (if it is being specially serviced) or any related REO Property and/or replacing the special servicer in respect of the Stanford Shopping Center Total Loan or any related REO Property, all as described under "--The Stanford Shopping Center Loan" in this prospectus supplement. "STANFORD SHOPPING CENTER COMPANION LOANS" means the mortgage loans secured on a PARI PASSU basis with the Stanford Shopping Center Loan and not included in the trust fund. "STANFORD SHOPPING CENTER CURE PAYMENT" means any payment made by any holder of a Stanford Shopping Center Companion Loan or the Directing Certificateholder, as applicable, to cure a default on the part of the related borrower under the Stanford Shopping Center Total Loan. "STANFORD SHOPPING CENTER CURE PERIOD" means, as regards the Stanford Shopping Center Total Loan, the period within five business days of receipt of notice with respect to a monetary default and within 30 days of notice of a non-monetary default. "STANFORD SHOPPING CENTER LOAN" means the mortgage loan included in the trust fund that is secured by the mortgaged real property identified on Exhibit A-1 to this prospectus supplement as Stanford Shopping Center. "STANFORD SHOPPING CENTER SPECIALLY DESIGNATED SERVICING ACTIONS" means any of the following actions with respect to the Stanford Shopping Center Loan: - any modification, waiver or amendment of a monetary term of the related mortgage loan (other than an extension of the original maturity date for six months or less following the original maturity date and a waiver of Default Interest and/or late payment charges) or a material non-monetary term (excluding any waiver of a "due-on-sale" or "due-on-encumbrance" clause, which is covered below); - any foreclosure or comparable conversion of the ownership of the related mortgaged real property; - any proposed sale of an REO Property that relates to the Stanford Shopping Center Loan other than in connection with the termination of the trust; - any determination to bring the Stanford Shopping Center Property or related REO Property into compliance with applicable environmental laws; - any acceptance of substitute or additional collateral for the related mortgage loan when it has become a specially serviced mortgage loan (other than in accordance with the terms of the related loan documents); - any acceptance of a discounted payoff with respect to the related mortgage loan when it has become a specially serviced mortgage loan; - any waiver of a "due-on-sale" or "due-on-encumbrance" clause; - any acceptance of an assumption agreement releasing the related borrower from liability under the related mortgage loan; - any release of collateral for the related mortgage loan when it has become a specially serviced mortgage loan (other than in accordance with the terms of, or upon satisfaction of, the related mortgage loan); and such other events as may be expressly provided for in the pooling and servicing agreement. The Stanford Shopping Center Specially Designated Servicing Actions are not intended to limit the Directing Certificateholder's rights to consent to actions taken by the master servicer in respect of the Stanford Shopping Center Loan while such loan is a performing mortgage loan that such Directing Certificateholder otherwise has pursuant to the pooling and servicing agreement. "STANFORD SHOPPING CENTER TOTAL LOAN" means the Stanford Shopping Center Loan and the Stanford Shopping Center Companion Loans, collectively. S-193 "STATED PRINCIPAL BALANCE" means, for each mortgage loan in the trust fund and for the Stanford Shopping Center Companion Loans and the Mall at Fairfield Commons Companion Loan, an amount that: - will initially equal its unpaid principal balance as of its due date in December 2003 or, in the case of a replacement mortgage loan, as of the date it is added to the trust fund, after application of all payments of principal due during or prior to the month of such addition to the trust fund, whether or not those payments have been received; and - will be permanently reduced on each subsequent distribution date, to not less than zero, by-- 1. that portion, if any, of the Total Principal Distribution Amount for that distribution date that is attributable to that mortgage loan, and 2. any reduction in the outstanding principal balance of that mortgage loan pursuant to a modification or a bankruptcy proceeding. However, the "Stated Principal Balance" of any mortgage loan in the trust fund will, in all cases, be zero as of the distribution date following the collection period in which it is determined that all amounts ultimately collectible with respect to that mortgage loan or any related REO Property have been received. "STATIC PREPAYMENT PREMIUM" means a form of prepayment consideration payable in connection with any voluntary or involuntary principal prepayment that is calculated solely as a specified percentage of the amount prepaid, which percentage may change over time. "TI/LC or TI&LC" means tenant improvements and leasing commissions. "TOTAL AVAILABLE FUNDS" means, with respect to any distribution date, the total amount of funds available to make distributions on the series 2003-C5 certificates on that date as described under "Description of the Offered Certificates--Distribution Account--Withdrawals" in this prospectus supplement. "TOTAL PRINCIPAL DISTRIBUTION AMOUNT" means: - for any distribution date prior to the final distribution date, an amount equal to the total, without duplication, of the following-- 1. all payments of principal, including voluntary principal prepayments, received by or on behalf of the trust fund with respect to the mortgage loans (but not in respect of the Stanford Shopping Center Companion Loans, Mall at Fairfield Commons Companion Loan or Jefferson at Montfort B Loan) during the related collection period, exclusive of any of those payments that represents a late collection of principal for which an advance was previously made for a prior distribution date or that represents a monthly payment of principal due on or before the due date for the related mortgage loan in December 2003 or on a due date for the related mortgage loan subsequent to the end of the related collection period, 2. all monthly payments of principal received by or on behalf of the trust fund with respect to the mortgage loans prior to, but that are due during, the related collection period, 3. all other collections, including liquidation proceeds, condemnation proceeds, insurance proceeds and repurchase proceeds, that were received by or on behalf of the trust fund with respect to any of the mortgage loans (but not in respect of any Stanford Shopping Center Companion Loans, Mall at Fairfield Commons Companion Loan or Jefferson at Montfort B Loan) or any related REO Properties during the related collection period and that were identified and applied by the master servicer as recoveries of principal of the subject mortgage loan (but not in respect of any Stanford Shopping Center Companion Loans, Mall at Fairfield Commons Companion Loan or Jefferson at Montfort B Loan) or, in the case of an REO Property, of the related mortgage loan, in each case net of any portion of the particular collection that represents a late collection of principal for which an advance of principal was previously made for a prior distribution date or that represents a monthly payment of principal due on or before the due date for the related mortgage in December 2003, and 4. all advances of principal made with respect to the mortgage loans for that distribution date; and S-194 - for the final distribution date, an amount equal to the total Stated Principal Balance of the mortgage pool outstanding immediately prior to that final distribution date. Notwithstanding the foregoing, the Total Principal Distribution Amount will be reduced on any Distribution Date by an amount equal to the Principal Distribution Adjustment Amount calculated with respect to such Distribution Date. The Total Principal Distribution Amount will be increased on any Distribution Date by the amount of any recovery occurring during the related collection period of an amount that was previously advanced with respect to a mortgage loan if such advance was previously reimbursed from principal in a manner that resulted in a Principal Distribution Adjustment Amount on a prior Distribution Date. "UNDERWRITER EXEMPTION" means PTE 89-90, as amended by PTE 97-34, PTE 2000-58 and PTE 2002-41, and PTE 98-08, as amended by PTE 2000-58 and PTE 2002-41. "UNDERWRITTEN DEBT SERVICE COVERAGE RATIO" or "U/W DSCR" means: - with respect to any underlying mortgage loan, other than a mortgage loan secured, including through cross-collateralization with other mortgage loans, by multiple mortgaged real properties, the ratio of-- 1. the Underwritten Net Cash Flow for the related mortgaged real property, to 2. twelve times the monthly debt service payment for that mortgage loan due on the related due date in January 2004 or, in the case of any mortgage loan that is currently in an interest-only period that ends prior to maturity (or, in the case of an ARD Loan, prior to the anticipated repayment date), on the first due date after amortization begins; and - with respect to any underlying mortgage loan that is secured, including through cross-collateralization, by multiple mortgaged real properties, the ratio of-- 1. the total Underwritten Net Cash Flow for those properties, to 2. twelve times the monthly debt service payment(s) for that mortgage loan, and all other mortgage loans with which it is cross-collateralized, due on the related due date in August 2002 or, in the case of any mortgage loan that is currently in an interest-only period that ends prior to maturity (or, in the case of an ARD Loan, prior to the anticipated repayment date), on the first due date after amortization begins. "UNDERWRITTEN EFFECTIVE GROSS INCOME" means, with respect to any mortgaged real property securing a mortgage loan in the trust fund, the Estimated Annual Revenues for that property. "UNDERWRITTEN NET CASH FLOW" or "U/W NCF" means, with respect to each of the mortgaged real properties securing a mortgage loan in the trust fund, the estimated total cash flow from that property expected to be available for annual debt service on the related underlying mortgage loan. In general, that estimate: - was made at the time of origination of the related underlying mortgage loan or in connection with the transactions described in this prospectus supplement; and - is equal to the excess of-- 1. the Estimated Annual Revenues for the property, over 2. the Estimated Annual Operating Expenses for the property. The management fees and reserves assumed in calculating Underwritten Net Cash Flow differ in many cases from actual management fees and reserves actually required under the loan documents for the mortgage loans. In addition, actual conditions at the mortgaged real properties will differ, and may differ substantially, from the conditions assumed in calculating Underwritten Net Cash Flow. In particular, in the case of those mortgaged real properties used for retail, office and industrial purposes, the assumptions regarding tenant vacancies, tenant improvements and leasing commissions, future rental rates, future expenses and other conditions used in calculating Underwritten Net Cash Flow may differ substantially from actual conditions. Furthermore, the Underwritten Net Cash Flow for each of the mortgaged real properties does not reflect the effects of future competition or economic cycles. Accordingly, there can be no assurance that the Underwritten S-195 Net Cash Flow for any of the mortgaged real properties shown on Exhibit A-1 to this prospectus supplement will be representative of the actual future net cash flow for the particular property. Underwritten Net Cash Flow and the revenues and expenditures used to determine Underwritten Net Cash Flow for each of the mortgaged real properties are derived from generally unaudited information furnished by the related borrower. However, in some cases, an accounting firm performed agreed upon procedures, or employees of the related originator performed cash flow verification procedures, that were intended to identify any errors in the information provided by the related borrower. Audits of information furnished by borrowers could result in changes to the information. These changes could, in turn, result in the Underwritten Net Cash Flow shown on Exhibit A-1 to this prospectus supplement being overstated. Net income for any of the underlying real properties as determined under GAAP would not be the same as the Underwritten Net Cash Flow for the property shown on Exhibit A-1 to this prospectus supplement. In addition, Underwritten Net Cash Flow is not a substitute for or comparable to operating income as determined in accordance with GAAP as a measure of the results of the property's operations nor a substitute for cash flows from operating activities determined in accordance with GAAP as a measure of liquidity. "UNDERWRITTEN NET OPERATING INCOME" means, with respect to each of the mortgaged real properties securing a mortgage loan in the trust fund, the Underwritten Net Cash Flow for the property, increased by any and all of the following items that were included in the Estimated Annual Operating Expenses for the property for purposes of calculating that Underwritten Net Cash Flow: - underwritten recurring replacement reserve amounts; - capital improvements, including recurring capital improvements; - in the case of hospitality properties, expenses for furniture, fixtures and equipment; and - in the case of mortgaged real properties used primarily for office, retail and industrial purposes, underwritten leasing commissions and tenant improvements. "UNITED STATES PERSON" means-- - a citizen or resident of the United States, - a domestic partnership, - a domestic corporation, - any estate, other than a foreign estate within the meaning of paragraph (31) of Section 7701(a) of the Internal Revenue Code, and - any trust if-- 1. a court within the United States is able to exercise primary supervision over the administration of the trust fund, and 2. one or more United States Persons have the authority to control all substantial decisions of the trust fund. "UNITS" means-- - in the case of any mortgaged real property that is a multifamily rental property, the estimated number of apartments at the particular property, regardless of the number or size of rooms in the apartments, and - in the case of any mortgaged real property that is a manufactured housing community, the estimated number of pads at the particular property to which a mobile home can be hooked up, in each case, as reflected in information provided by the related borrower or in the appraisal on which the Most Recent Appraised Value is based. "USAP" means the Uniform Single Attestation Program for Mortgage Bankers established by the Mortgage Bankers of America. S-196 "WEIGHTED AVERAGE NET MORTGAGE RATE" means, as to any distribution date, the average, as of such distribution date, of the Net Mortgage Pass-Through Rates of the mortgage loans, weighted by the Stated Principal Balance thereof. "YEAR BUILT" means, with respect to any mortgaged real property securing a mortgage loan in the trust fund, the year when construction of the property was principally completed, as reflected in information provided by the related borrower or in the appraisal on which the Most Recent Appraised Value of the property is based. "YEAR RENOVATED" means, with respect to any mortgaged real property securing a mortgage loan in the trust fund, the year when the most recent substantial renovation of the property, if any, was principally completed, as reflected in information provided by the related borrower or in the appraisal on which the Most Recent Appraised Value of the property is based. "YIELD MAINTENANCE CHARGE" means a form of prepayment consideration payable in connection with any voluntary or involuntary principal prepayment that is calculated pursuant to a yield maintenance formula, including any minimum amount equal to a specified percentage of the amount prepaid. "YIELD MAINTENANCE PERIOD" means, with respect to any mortgage loan that at any time permits voluntary prepayments of principal, if accompanied by a Yield Maintenance Charge, the period during the loan term when such voluntary principal prepayments may be made if accompanied by such Yield Maintenance Charge. "YMx/y" means, with respect to any of the underlying mortgage loans, a duration of y payments for the Yield Maintenance Period during which the loan may be prepaid with a Yield Maintenance Charge that will be no less than x% of the amount prepaid. S-197 SCHEDULE I RATES USED IN DETERMINATION OF CLASS A-SP PASS-THROUGH RATES
DISTRIBUTION DATE REFERENCE RATE DISTRIBUTION DATE REFERENCE RATE - ---------------------- ---------------------- --------------------- -------------------- January 2004 5.54293% July 2007 5.35099% February 2004 5.37532% August 2007 5.52269% March 2004 5.37536% September 2007 5.52251% April 2004 5.54252% October 2007 5.35040% May 2004 5.37493% November 2007 5.52209% June 2004 5.54228% December 2007 5.34912% July 2004 5.37470% January 2008 5.52063% August 2004 5.54205% February 2008 5.34868% September 2004 5.54195% March 2008 5.36997% October 2004 5.37439% April 2008 5.53477% November 2004 5.54173% May 2008 5.36752% December 2004 5.37417% June 2008 5.53433% January 2005 5.37404% July 2008 5.36165% February 2005 5.37394% August 2008 5.68766% March 2005 5.37437% September 2008 5.71641% April 2005 5.54108% October 2008 5.69880% May 2005 5.37354% November 2008 5.88274% June 2005 5.54083% December 2008 5.70310% July 2005 5.37329% January 2009 5.70525% August 2005 5.54057% February 2009 5.70741% September 2005 5.54047% March 2009 5.71362% October 2005 5.37297% April 2009 5.89371% November 2005 5.54026% May 2009 5.71247% December 2005 5.37276% June 2009 5.89448% January 2006 5.37263% July 2009 5.71218% February 2006 5.37254% August 2009 5.89420% March 2006 5.37303% September 2009 5.89405% April 2006 5.53963% October 2009 5.71174% May 2006 5.37215% November 2009 5.89376% June 2006 5.53939% December 2009 5.71144% July 2006 5.37191% January 2010 5.71023% August 2006 5.53913% February 2010 5.71007% September 2006 5.53902% March 2010 5.71086% October 2006 5.37155% April 2010 5.89186% November 2006 5.53875% May 2010 5.70927% December 2006 5.37129% June 2010 5.89120% January 2007 5.35211% July 2010 5.70925% February 2007 5.35198% August 2010 5.89121% March 2007 5.35248% September 2010 5.91270% April 2007 5.52347% October 2010 5.72733% May 2007 5.35137% November 2010 5.91265% June 2007 5.52309% December 2010 5.72723%
I-1 EXHIBIT A-1 CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS AND THE RELATED MORTGAGED REAL PROPERTIES SEE THIS EXHIBIT FOR TABLES TITLED: Locations and Management Companies of the Mortgaged Real Properties Descriptions of the Mortgaged Real Properties Characteristics of the Underlying Mortgage Loans Additional Mortgage Loan Information Major Tenants of the Commercial Properties Engineering Reserves, Recurring Replacement Reserves and TI&LC Reserves Recurring Reserve Cap Information Multifamily Schedule A-1-1 LOCATIONS AND MANAGEMENT COMPANIES OF THE MORTGAGED REAL PROPERTIES
CUT-OFF DATE MORTGAGE LOAN PRINCIPAL LOAN # CROSSED GROUP PROPERTY NAME BALANCE (1) SELLER MANAGEMENT COMPANY - ------- ----- ------------- ----------- ------ ------------------ 1 1 Mall at Fairfield Commons $ 85,405,532 KeyBank Glimcher Properties Limited Partnership 2A 1 Mayfair Mall 69,245,249 Column Financial, Inc. General Growth Management, Inc. 2B 1 Mayfair Office Complex 10,098,266 Column Financial, Inc. General Growth Management, Inc. 3 1 Stanford Shopping Center 75,000,000 Column Financial, Inc. Simon Management Associates, LLC 4A 1 MeriStar Louisville 33,920,740 Column Financial, Inc. Interstate Management Company, L.L.C. 4B 1 MeriStar Frazer 16,960,370 Column Financial, Inc. Interstate Management Company, L.L.C. 5 1 Paramount Plaza 44,876,466 Column Financial, Inc. Jamison Properties, Inc. 6 1 Montalvo Square Shopping Center 42,300,000 Column Financial, Inc. Parkstone Management Services 7 2 Jefferson at Montfort 35,000,000 Column Financial, Inc. Henry S. Miller Multi-Management, Inc. 8 1 EastBridge Landing 33,689,997 Column Financial, Inc. Wolf Management & Leasing, LLC 9 1 East Thunderbird Square Shopping Center North 28,472,696 PNC The Raskin Companies 10 1 Janss Court 28,295,760 Column Financial, Inc. Owner Managed 11 1 Ravine Development 26,515,146 Column Financial, Inc. CB Richard Ellis 12 2 Serrano Apartments 26,450,000 PNC MBS Management Services, Inc. 13 1 Crow Canyon Commons Shopping Center 22,903,652 Column Financial, Inc. J.D. Mercer and Company 14 2 Carlingford Apartments 21,762,334 Column Financial, Inc. NBC Properties 15 1 220 Post Street 21,300,000 Column Financial, Inc. Falcon Real Estate Company 16 2 Kings Crossing I & II 20,891,904 Column Financial, Inc. Weinstein Management Co., Inc. 17 2 Atrium at Market Center 18,124,880 Column Financial, Inc. Southern Management Corporation 18 2 Villages of Deerfield Apartments 16,641,062 PNC MBS Management Services, Inc. 19 1 Baseline Corporate Center 16,438,430 PNC Orsett Properties, Ltd. 20 1 Challenger Business Center 16,329,079 Column Financial, Inc. Taurus Management Services, LLC 21 1 Delphi Building 15,976,947 PNC Jones Lang LaSalle 22 (A) 1 Anaheim Professional Center 9,365,667 PNC Winner-Baird Real Estate 23 (A) 1 Coast Family Medical Center 5,719,224 PNC Winner-Baird Real Estate 24 1 Radisson Hotel Historic Savannah 14,980,678 PNC North Point Hospitality Group 25 2 Breckinridge Court Apartments 14,772,020 PNC Leinbach Company 26 2 Addison at Hampton 14,524,848 Column Financial, Inc. Weinstein Management Co., Inc. 27 1 SouthCourt at South Square 14,423,499 Column Financial, Inc. Owner Managed 28 1 Deer Valley Financial Center 11,604,681 PNC Hannay Investment Properties, Inc. 29 (B) 2 Magnolia Village 3,997,827 Column Financial, Inc. Owner Managed 30 (B) 2 Blue Jay Mobile Home Park 3,976,321 Column Financial, Inc. Owner Managed 31 (B) 2 Candlelight Manor 2,057,746 Column Financial, Inc. Owner Managed 32 (B) 2 Elmwood Mobile Home Park 1,366,860 Column Financial, Inc. Owner Managed 33 1 Shoppes of New Tampa 10,600,000 Column Financial, Inc. Inland Southeast Property Management Corp. 34 1 The Borders and Shoppes at Chestnut Hill 10,434,412 Column Financial, Inc. Thor Equities, LLC 35 1 Tustin Freeway Business Center 9,989,911 PNC Guthrie Asset Management 36 1 Oak Hill Townhomes 9,845,186 PNC Copper Beech Townhome Communities Six (CBTC Six) 37 1 Northlake Square Shopping Center 9,438,742 Column Financial, Inc. Isakson-Barnhart Properties, Inc. 38 2 Stone Hill Apartments 9,262,680 Column Financial, Inc. LEDIC Realty Services, Ltd. 39 2 High Ridge Apartments 9,182,569 PNC SCM Management 40 2 Caleb's Place Townhomes 9,147,744 Column Financial, Inc. Owner Managed 41 2 Northgate Village Apartments 8,402,346 Column Financial, Inc. CNC Investments, Ltd., L.L.P. 42 2 Cambridge Village Apartments 8,119,100 Column Financial, Inc. Owner Managed 43 1 Staybridge Suites 7,440,612 PNC Torgerson Properties, Inc. 44 1 Summerville Plaza Shopping Center 7,379,962 Column Financial, Inc. Glenwood Development Company, L.L.C. 45 1 St. Joseph's/St. Jude's Medical Building 6,967,396 Column Financial, Inc. Owner Managed 46 1 Haynes Plaza 6,814,263 Column Financial, Inc. Owner Managed 47 2 Hearthstone Apartments 6,658,463 Column Financial, Inc. CNC Investments, Ltd., L.L.P. 48 2 Canyon View Apartments 6,653,051 Column Financial, Inc. Preferred Property Management 49 1 South County Medical Plaza 6,593,640 PNC Preferred Community Management 50 1 Crossings at Westland 6,339,552 Column Financial, Inc. Schottenstein Management Company 51 2 Villas of Brandychase 6,205,217 Column Financial, Inc. Owner Managed 52 1 78 Place 6,194,049 PNC Essex Realty Management, Inc. 53 1 Vanowen Medical Office 5,964,095 Column Financial, Inc. Jamison Properties, Inc. 54 1 Bolsa Retail Center 5,844,363 PNC Bridgecreek Development 55 2 Candlewick Apartments 5,811,980 Column Financial, Inc. Bella Management, LLC 56 1 91 Montvale Avenue 5,804,304 PNC Everest Partners, LLC 57 2 Northgate Club Apartments 5,779,340 Column Financial, Inc. KRB Management, Inc. 58 2 Country Village & Oakwood Mobile Home Park 5,750,000 Column Financial, Inc. Follett Investment Properties, Inc. 59 1 Tops Plaza - North Olmsted 5,743,218 KeyBank Visconsi Companies, Ltd. 60 1 West Highlands Shopping Center 5,650,000 Column Financial, Inc. Ethan Christopher Arizona, LLC 61 1 Metcalf 127 Shops 5,531,107 PNC West Star 62A 1 Evergreen - Park Plaza 3,085,346 Column Financial, Inc. TPG Management, Inc. 62B 1 Evergreen - Beverly Plaza 2,182,318 Column Financial, Inc. TPG Management, Inc. 63 1 Gifford Industrial Park 5,176,306 Column Financial, Inc. Birkeland Cooper & Associates, LLC 64 1 Oakley Plaza 5,175,000 Column Financial, Inc. Inland Mid-Atlantic Management Corp. 65 2 Cloverdale Apartments 5,108,073 PNC SHP Management Corp. 66 2 Collins Aire Mobile Home Park 4,900,000 PNC SFK Management 67 1 Chino Hills Promenade 4,887,170 PNC Lions System Management Company 68 2 Hunter's Glen 4,855,437 Column Financial, Inc. LEDIC Realty Services, Ltd. 69 2 Cedar Glen Apartments 4,596,734 Column Financial, Inc. Owner Managed 70 2 College Hills West Apartments 4,587,345 Column Financial, Inc. Lake Quest Enterprises, Inc. 71 1 4601 Eisenhower 4,389,115 Column Financial, Inc. The Mark Winkler Co. 72 1 Joyners Crossing 4,301,596 Column Financial, Inc. Barnett Properties, LLC 73 1 Sedgefield Village Shopping Center 4,281,987 Column Financial, Inc. Glenwood Development Company, L.L.C. LOAN # CROSSED GROUP PROPERTY NAME ADDRESS - ------- ----- ------------- ------- 1 1 Mall at Fairfield Commons 2727 Fairfield Commons 2A 1 Mayfair Mall 2500 North Mayfair Road 2B 1 Mayfair Office Complex 2500 North Mayfair Road 3 1 Stanford Shopping Center 180 El Camino Real 4A 1 MeriStar Louisville 500 Fourth Avenue 4B 1 MeriStar Frazer 707 Lancaster Pike 5 1 Paramount Plaza 3550 & 3580 Wilshire Boulevard 6 1 Montalvo Square Shopping Center 1708-1794 South Victoria Avenue 7 2 Jefferson at Montfort 14332 Montfort Drive 8 1 EastBridge Landing 377 East 33rd Street 9 1 East Thunderbird Square Shopping Center North 14202 North Scottsdale Road 10 1 Janss Court 1453 Third Street Promenade 11 1 Ravine Development 10 Park Avenue 12 2 Serrano Apartments 14723 West Oaks Plaza Drive 13 1 Crow Canyon Commons Shopping Center 3101, 3111, 3205, 3121 and 3211 Crow Canyon Place 14 2 Carlingford Apartments 6005, 6425 and 6525 South Gessner Drive 15 1 220 Post Street 220 Post Street 16 2 Kings Crossing I & II 10002 Castile Court 17 2 Atrium at Market Center 118 North Howard Street and 308 West Fayette Street 18 2 Villages of Deerfield Apartments 14555 Blanco Road 19 1 Baseline Corporate Center 4920 & 4940 South Wendler Drive 20 1 Challenger Business Center 12605 Challenger Parkway 21 1 Delphi Building 1401 Crooks Road 22 (A) 1 Anaheim Professional Center 1801 West Romneya Drive 23 (A) 1 Coast Family Medical Center 17752 Beach Boulevard 24 1 Radisson Hotel Historic Savannah 411 West Bay Street 25 2 Breckinridge Court Apartments 420 Redding Road 26 2 Addison at Hampton 2 Wyndham Drive 27 1 SouthCourt at South Square 3211 Shannon Road 28 1 Deer Valley Financial Center 22601 North 19th Avenue 29 (B) 2 Magnolia Village 1830 Old Mission Road 30 (B) 2 Blue Jay Mobile Home Park 38511 Wilds Road 31 (B) 2 Candlelight Manor 1703 Magnolia Avenue 32 (B) 2 Elmwood Mobile Home Park 3300 South Nova Road 33 1 Shoppes of New Tampa 1646-1950 Bruce B. Downs Blvd 34 1 The Borders and Shoppes at Chestnut Hill 8400 & 8625 Germantown Avenue 35 1 Tustin Freeway Business Center 320-694 B Street and 420-436 6th Street 36 1 Oak Hill Townhomes Valley Vista Drive 37 1 Northlake Square Shopping Center 4135 LaVisa Road 38 2 Stone Hill Apartments 501 W. Central Texas Expressway 39 2 High Ridge Apartments 9353 Viscount Boulevard 40 2 Caleb's Place Townhomes 400 South Old Dixie Highway 41 2 Northgate Village Apartments 5700 North Knoll 42 2 Cambridge Village Apartments 1402 North Valley Parkway 43 1 Staybridge Suites 7821 Elm Creek Boulevard 44 1 Summerville Plaza Shopping Center 680 Bacons Bridge Road 45 1 St. Joseph's/St. Jude's Medical Building 17021 Yorba Linda Blvd 46 1 Haynes Plaza 6500 Hull Street 47 2 Hearthstone Apartments 8801 Cinnamon Creek 48 2 Canyon View Apartments 7400 Pirates Cove Road 49 1 South County Medical Plaza 1300 Vista Hermosa 50 1 Crossings at Westland 36577-36901 Warren Road 51 2 Villas of Brandychase 4512-4591 Barclay Crescent Drive and 3722 Mil-Lake Circle 52 1 78 Place 1050 Los Vallecitos Boulevard 53 1 Vanowen Medical Office 15243 Vanowen Street 54 1 Bolsa Retail Center 10451, 10491 & 10495 Bolsa Avenue 55 2 Candlewick Apartments 3011 Jane Place Northeast 56 1 91 Montvale Avenue 91 Montvale Avenue 57 2 Northgate Club Apartments 4300 Atoll Court 58 2 Country Village & Oakwood Mobile Home Park 920 Clearleaf Drive and 2828 West Highway 21 59 1 Tops Plaza - North Olmsted 26666 Brookpark Road Extension 60 1 West Highlands Shopping Center 6544 West Thomas Road 61 1 Metcalf 127 Shops 12605 Metcalf Avenue 62A 1 Evergreen - Park Plaza 9816-9842 South Western Avenue 62B 1 Evergreen - Beverly Plaza 9601-9623, 9645 & 9649 South Western Avenue 63 1 Gifford Industrial Park 750-760 East Central Avenue & 765-791 Gifford Avenue 64 1 Oakley Plaza 801 Fairview Road 65 2 Cloverdale Apartments 2213 Shed Road 66 2 Collins Aire Mobile Home Park 401 North Timberline Drive 67 1 Chino Hills Promenade 14650 Pipeline Avenue 68 2 Hunter's Glen 1201 Bacon Ranch Road 69 2 Cedar Glen Apartments 5840 Glenmont Drive 70 2 College Hills West Apartments 3425 Millbrook Drive 71 1 4601 Eisenhower 4601 Eisenhower Avenue 72 1 Joyners Crossing 10601 NC Highway 97 73 1 Sedgefield Village Shopping Center 3601-3605 Groometown Road LOAN # CROSSED GROUP PROPERTY NAME CITY COUNTY STATE ZIP CODE - ------- ----- ------------- ---- ------ ----- --------- 1 1 Mall at Fairfield Commons Beavercreek Montgomery OH 45431 2A 1 Mayfair Mall Wauwatosa Milwaukee WI 53226 2B 1 Mayfair Office Complex Wauwatosa Milwaukee WI 53226 3 1 Stanford Shopping Center Palo Alto Santa Clara CA 94304 4A 1 MeriStar Louisville Louisville Jefferson KY 40202 4B 1 MeriStar Frazer Frazer Chester PA 19355 5 1 Paramount Plaza Los Angeles Los Angeles CA 90010 6 1 Montalvo Square Shopping Center Ventura Ventura CA 93003 7 2 Jefferson at Montfort Dallas Dallas TX 75254 8 1 EastBridge Landing New York New York NY 10016 9 1 East Thunderbird Square Shopping Center North Scottsdale Maricopa AZ 85254 10 1 Janss Court Santa Monica Los Angeles CA 90401 11 1 Ravine Development Hanover Township Morris NJ 07960 12 2 Serrano Apartments Houston Harris TX 77082 13 1 Crow Canyon Commons Shopping Center San Ramon Contra Costa CA 94583 14 2 Carlingford Apartments Houston Harris TX 77036 15 1 220 Post Street San Francisco San Francisco CA 94108 16 2 Kings Crossing I & II Richmond Henrico VA 23233 17 2 Atrium at Market Center Baltimore Baltimore City MD 21201 18 2 Villages of Deerfield Apartments San Antonio Bexar TX 78216 19 1 Baseline Corporate Center Phoenix Maricopa AZ 85282 20 1 Challenger Business Center Orlando Orange FL 32826 21 1 Delphi Building Troy Oakland MI 48084 22 (A) 1 Anaheim Professional Center Anaheim Orange CA 92801 23 (A) 1 Coast Family Medical Center Huntington Beach Orange CA 92647 24 1 Radisson Hotel Historic Savannah Savannah Chatham GA 31401 25 2 Breckinridge Court Apartments Lexington Fayette KY 40517 26 2 Addison at Hampton Hampton Hampton City VA 23666 27 1 SouthCourt at South Square Durham Durham NC 27707 28 1 Deer Valley Financial Center Phoenix Maricopa AZ 85027 29 (B) 2 Magnolia Village Edgewater Volusia FL 32132 30 (B) 2 Blue Jay Mobile Home Park Dade Pasco FL 33525 31 (B) 2 Candlelight Manor South Daytona Volusia FL 32119 32 (B) 2 Elmwood Mobile Home Park Port Orange Volusia FL 32119 33 1 Shoppes of New Tampa Wesley Chapel Pasco FL 33543 34 1 The Borders and Shoppes at Chestnut Hill Chestnut Hill Philadelphia PA 19118 35 1 Tustin Freeway Business Center Tustin Orange CA 92780 36 1 Oak Hill Townhomes State College Centre PA 16803 37 1 Northlake Square Shopping Center Atlanta Dekalb GA 30084 38 2 Stone Hill Apartments Killeen Bell TX 76541 39 2 High Ridge Apartments El Paso El Paso TX 79925 40 2 Caleb's Place Townhomes Lady Lake Lake FL 32159 41 2 Northgate Village Apartments San Antonio Bexar TX 78240 42 2 Cambridge Village Apartments Lewisville Denton TX 75077 43 1 Staybridge Suites Maple Grove Hennepin MN 55369 44 1 Summerville Plaza Shopping Center Summerville Dorchester SC 29485 45 1 St. Joseph's/St. Jude's Medical Building Yorba Linda Orange CA 92886 46 1 Haynes Plaza Richmond Richmond City VA 23224 47 2 Hearthstone Apartments San Antonio Bexar TX 78240 48 2 Canyon View Apartments Las Vegas Clark NV 89145 49 1 South County Medical Plaza San Clemente Orange CA 92673 50 1 Crossings at Westland Westland Wayne MI 48185 51 2 Villas of Brandychase Lake Worth and Greenacres Palm Beach FL 33463 52 1 78 Place San Marcos San Diego CA 92069 53 1 Vanowen Medical Office Van Nuys Los Angeles CA 91405 54 1 Bolsa Retail Center Westminster Orange CA 92683 55 2 Candlewick Apartments Albuquerque Bernalillo NM 87111 56 1 91 Montvale Avenue Stoneham Middlesex MA 02180 57 2 Northgate Club Apartments Naples Collier FL 34116 58 2 Country Village & Oakwood Mobile Home Park Bryan Brazos TX 77803 59 1 Tops Plaza - North Olmsted North Olmsted Cuyahoga OH 44070 60 1 West Highlands Shopping Center Phoenix Maricopa AZ 85033 61 1 Metcalf 127 Shops Overland Park Johnson KS 66213 62A 1 Evergreen - Park Plaza Village of Evergreen Park Cook IL 60805 62B 1 Evergreen - Beverly Plaza Chicago Cook IL 60805 63 1 Gifford Industrial Park San Bernardino San Bernardino CA 92408 64 1 Oakley Plaza Asheville Buncombe NC 28803 65 2 Cloverdale Apartments Bossier City Bossier Parish LA 71111 66 2 Collins Aire Mobile Home Park Ft. Collins Larimer CO 80524 67 1 Chino Hills Promenade Chino Hills San Bernardino CA 91709 68 2 Hunter's Glen Killeen Bell TX 76542 69 2 Cedar Glen Apartments Houston Harris TX 77081 70 2 College Hills West Apartments San Angelo Tom Green TX 76904 71 1 4601 Eisenhower Alexandria Alexandria City VA 22304 72 1 Joyners Crossing Rocky Mount Nash NC 27803 73 1 Sedgefield Village Shopping Center Greensboro Guilford NC 27407
LOCATIONS AND MANAGEMENT COMPANIES OF THE MORTGAGED REAL PROPERTIES
CUT-OFF DATE MORTGAGE LOAN PRINCIPAL LOAN # CROSSED GROUP PROPERTY NAME BALANCE (1) SELLER MANAGEMENT COMPANY - ------- ----- ------------- ----------- ------ ------------------ 74 1 Palm Ridge $ 4,170,000 PNC Covey Commercial Real Estate Services 75 2 Point-O-View Apartments 4,077,258 Column Financial, Inc. Owner Managed 76 1 Village Shoppes 4,076,870 Column Financial, Inc. Principle Properties, LLC 77 2 Oak Brook Apartments 3,975,067 Column Financial, Inc. Owner Managed 78 1 Amaranth Building 3,971,612 Column Financial, Inc. DANAC Corporation 79 1 Merit Building 3,933,019 PNC Buchanan Properties 80 1 4260-4310 West Broad Street 3,856,389 Column Financial, Inc. Schottenstein Management Company 81 1 Gateway Center 3,767,790 Column Financial, Inc. Owner Managed 82 1 PNC Advisor Building 3,690,354 PNC Pinnacle Communities 83 1 917 Franklin Office Building 3,681,688 Column Financial, Inc. New Hyde Park, Inc. 84 1 Riverside Business Park 3,627,200 Column Financial, Inc. Birkeland Cooper & Associates, LLC 85 2 Oaks of League City 3,356,425 PNC DeWaard Property Management, Inc. 86 1 Shiloh Center - 7 3,108,837 Column Financial, Inc. Owner Managed 87 1 Storage USA 3,082,422 PNC Storage USA Corporation 88 1 Eckerd's OAK RIDGE 3,055,009 Column Financial, Inc. Owner Managed 89 2 Tiburon Pointe Apartments 2,930,777 Column Financial, Inc. Fisher Corporation 90 2 Mansions North Apartments 2,793,973 PNC McCasland Properties 91 1 Dearborn Town Center 2,785,959 Column Financial, Inc. Owner Managed 92 1 72nd & Cedar Street Office 2,782,169 Column Financial, Inc. Owner Managed 93 2 Sands Point Cove Apartments 2,774,919 Column Financial, Inc. Owner Managed 94 1 Rancho Bernardo Professional Building 2,734,245 Column Financial, Inc. Owner Managed 95 1 Summerfield Renaissance Shopping Center 2,668,406 Column Financial, Inc. Kotis Properties, Inc 96 1 Kroger Retail Center 2,661,315 Column Financial, Inc. Owner Managed 97 1 Coopers Common Plaza 2,633,092 Column Financial, Inc. Eagle Commercial Realty Services 98 2 Diplomat Townhomes 2,586,552 Column Financial, Inc. Southern Community Investors, Inc. 99 1 Chatfield Plaza 2,517,199 Column Financial, Inc. Carruth Properties Company, Inc. 100 1 Northwood Plaza Shopping Center 2,467,572 Column Financial, Inc. GFD Management Inc. 101 1 Shiloh Center - 8 2,447,415 Column Financial, Inc. Owner Managed 102 2 Riverview Terrace 2,426,212 Column Financial, Inc. Jay Five Management Company 103 2 Angelique Apartments 2,389,657 Column Financial, Inc. Exxir Corporation 104 2 Langdon Hall Apartments 2,386,896 Column Financial, Inc. Wisconsin Management Company, Inc. 105 2 Bayou Oaks Apartments 2,368,221 Column Financial, Inc. Owner Managed 106 1 300-304 E 81st Street 2,343,767 Column Financial, Inc. Owner Managed 107 1 10811-10831 Foothill Boulevard 2,280,998 Column Financial, Inc. Alden Management Group 108 2 Brandywine Apartments 2,274,881 PNC McCaslin Property Management 109 1 Fortress Self Storage 2,261,071 Column Financial, Inc. Owner Managed 110 1 Clayton Industrial Park 2,241,092 Column Financial, Inc. Owner Managed 111 1 Eckerd's - Middleton NJ 2,112,950 Column Financial, Inc. Owner Managed 112 1 2701-2751 East Chapman Avenue 1,986,484 Column Financial, Inc. Owner Managed 113 2 Park House Apartments 1,956,183 Column Financial, Inc. Owner Managed 114 1 324 E 77th Street 1,942,426 Column Financial, Inc. Owner Managed 115 2 Buttonwood Square 1,941,506 Column Financial, Inc. Owner Managed 116 1 Huntley Road Retail Center 1,889,399 Column Financial, Inc. Owner managed 117 1 Highway Storage McAllen and Pharr 1,782,009 Column Financial, Inc. Owner Managed 118 1 Powell Plaza 1,754,226 Column Financial, Inc. Owner Managed 119 1 Gold Circle Office Building 1,689,174 Column Financial, Inc. Owner Managed 120 1 Waynesburg Centre 1,644,514 Column Financial, Inc. Owner Managed 121 1 Pierre Plaza Shopping Center 1,637,883 Column Financial, Inc. Owner Managed 122 2 Salem Terrace Apartments 1,628,325 Column Financial, Inc. Owner Managed 123 2 Carefree Valley Resort 1,490,463 Column Financial, Inc. Owner Managed 124 1 290 Fairbanks Center 1,475,449 Column Financial, Inc. Owner Managed 125 1 Scripps Hill Retail Center 1,446,036 Column Financial, Inc. Owner Managed 126 2 Springwood Apartments 1,434,171 Column Financial, Inc. Owner Managed 127 1 Cypress Harbor Mobile Home Park 1,392,438 Column Financial, Inc. Owner Managed 128 2 Casa Del Rey Mobile Home Park 1,391,891 Column Financial, Inc. Owner Managed 129 2 Fort Sedgwick Apartments 1,342,786 Column Financial, Inc. Whittle & Roper, Inc. 130 1 10019 Reisterstown Road 1,280,517 Column Financial, Inc. MacKenzie Management Corporation 131 1 Shops at Canton 1,279,361 Column Financial, Inc. Market Land Company, LLC 132 1 Shiloh Center - 5 1,273,380 Column Financial, Inc. Owner Managed 133 1 Camino Maquilladora Buildings 1,245,716 Column Financial, Inc. Owner Managed 134 1 Meadow Estates Manufactured Housing 1,229,547 Column Financial, Inc. Owner Managed Community 135 1 Evergreen Office 1,192,358 Column Financial, Inc. Owner Managed 136 2 Amberwood Apartments 1,187,014 Column Financial, Inc. Owner Managed 137 1 3200 Commander Industrial Building 1,169,249 Column Financial, Inc. Marquette Properties, Inc. 138 1 Mabury Plaza 1,087,150 Column Financial, Inc. Owner Managed 139 2 Bel Air Mobile Home Communities 1,075,000 Column Financial, Inc. Follett Investment Properties, Inc. 140 2 Park Manor Apartments 998,771 Column Financial, Inc. Owner Managed 141 1 Silverado Office Building 996,925 Column Financial, Inc. Owner Managed 142 1 Pinehollow Business Park 989,673 Column Financial, Inc. DH Investment Company 143 1 Broadway Commons Shopping Center 916,515 Column Financial, Inc. Owner Managed 144 2 Colonial Arms Apartments 910,341 Column Financial, Inc. Owner Managed 145 2 Folger Apartments 896,427 Column Financial, Inc. Owner Managed 146 2 Church Hill Gables 895,693 Column Financial, Inc. Owner Managed 147 2 Morris Manor Apartment 895,311 Column Financial, Inc. Owner Managed 148 2 Halifax Court Apartments 876,021 Column Financial, Inc. Owner Managed 149 2 Ashley Street Apartments 750,390 Column Financial, Inc. Owner Managed LOAN # CROSSED GROUP PROPERTY NAME ADDRESS - ------- ----- ------------- ------- 74 1 Palm Ridge 4350, 4370, and 4380 Palm Avenue 75 2 Point-O-View Apartments 1130 Jack Warner Parkway 76 1 Village Shoppes 1203, 1213 & 1241 North State Road 7 77 2 Oak Brook Apartments 700 North Spence Avenue 78 1 Amaranth Building 19560 Amaranth Drive 79 1 Merit Building 9055 Comprint Court 80 1 4260-4310 West Broad Street 4260-4310 West Broad Street 81 1 Gateway Center 991 South State Road 7 82 1 PNC Advisor Building 265-67 Milburn Avenue 83 1 917 Franklin Office Building 917 Franklin Avenue 84 1 Riverside Business Park 2902-2976 Rubidoux Boulevard 85 2 Oaks of League City 305 Hobbs Road 86 1 Shiloh Center - 7 6500 Hembree Lane 87 1 Storage USA 8002 Warwick Avenue 88 1 Eckerd's OAK RIDGE 5899 South Orange Blossom Trail 89 2 Tiburon Pointe Apartments 16901 Oakmont Drive 90 2 Mansions North Apartments 5113 North Brookline Avenue 91 1 Dearborn Town Center 14615 Warren Avenue 92 1 72nd & Cedar Street Office 1910 South 72nd Street 93 2 Sands Point Cove Apartments 8600 Sands Point Drive 94 1 Rancho Bernardo Professional Building 16776 Bernardo Center Drive 95 1 Summerfield Renaissance Shopping Center 4548 US Hwy 220 North 96 1 Kroger Retail Center 1 Troy Square 97 1 Coopers Common Plaza 2925 and 2945 East Riggs Road 98 2 Diplomat Townhomes 2700 Camp Creek Parkway 99 1 Chatfield Plaza 10789 Bradford Road 100 1 Northwood Plaza Shopping Center 611 North Main Street 101 1 Shiloh Center - 8 6580 Hembree Lane 102 2 Riverview Terrace 130-133 Fordson Avenue 103 2 Angelique Apartments 301-321 West 9th and 323, 617, & 715 West 10th Streets 104 2 Langdon Hall Apartments 633 Langdon Street 105 2 Bayou Oaks Apartments 3030 Lafferty Road 106 1 300-304 E 81st Street 300-304 E. 81st Street 107 1 10811-10831 Foothill Boulevard 10811-10831 Foothill Boulevard 108 2 Brandywine Apartments 1123 Brandywine Lane 109 1 Fortress Self Storage 5219 Plank Road 110 1 Clayton Industrial Park 2502-2518 South Santa Fe Avenue 111 1 Eckerd's - Middleton NJ 200 Wilson Avenue 112 1 2701-2751 East Chapman Avenue 2701-2751 East Chapman Avenue 113 2 Park House Apartments 7945 Mentor Avenue 114 1 324 E 77th Street 324 E 77th Street 115 2 Buttonwood Square 486 South Black Horse Pike 116 1 Huntley Road Retail Center 7000-7014 Huntley Road 117 1 Highway Storage McAllen and Pharr 2223 North 23rd Road and 4002 North Cage Boulevard 118 1 Powell Plaza 6311-6315 FM 1488 119 1 Gold Circle Office Building 13906 Gold Circle 120 1 Waynesburg Centre 8648 Waynesburg Dr Southeast 121 1 Pierre Plaza Shopping Center 2900 East Texas Street 122 2 Salem Terrace Apartments 3400 Salem Road 123 2 Carefree Valley Resort 4506-4306 North Business 77 124 1 290 Fairbanks Center 14095 Northwest Freeway 125 1 Scripps Hill Retail Center 9969 Mira Mesa Blvd 126 2 Springwood Apartments 4201 Woodspring Lane 127 1 Cypress Harbor Mobile Home Park 3400 Cypress Gardens Road 128 2 Casa Del Rey Mobile Home Park 515 53rd Avenue West 129 2 Fort Sedgwick Apartments 2217 Sedgwick Street 130 1 10019 Reisterstown Road 10019 Reisterstown Road 131 1 Shops at Canton 4045 Marietta Highway 132 1 Shiloh Center - 5 6450 Hembree Lane 133 1 Camino Maquilladora Buildings 6930 & 6940 Camino Maquilladora 134 1 Meadow Estates Manufactured Housing Community 917 S. Kennedy Avenue 135 1 Evergreen Office 11640 Arbor Street 136 2 Amberwood Apartments 874 King Road 137 1 3200 Commander Industrial Building 3200 Commander Drive 138 1 Mabury Plaza 1631 and 1641 East 17th Street 139 2 Bel Air Mobile Home Communities 2201 Leonard Road 140 2 Park Manor Apartments 10 Ruth Road 141 1 Silverado Office Building 1150 Silverado Road 142 1 Pinehollow Business Park 2720 South Medford Drive 143 1 Broadway Commons Shopping Center 5954 Broadway Boulevard 144 2 Colonial Arms Apartments 9 North Church Street 145 2 Folger Apartments 411 2nd Street Southeast 146 2 Church Hill Gables 2418 East Franklin Street 147 2 Morris Manor Apartment 27, 31 & 35 East Morris Street 148 2 Halifax Court Apartments 121 West Marion Avenue 149 2 Ashley Street Apartments 173 Ashley St LOAN # CROSSED GROUP PROPERTY NAME CITY COUNTY STATE ZIP CODE - ------- ----- ------------- ---- ------ ----- -------- 74 1 Palm Ridge San Diego San Diego CA 92154 75 2 Point-O-View Apartments Tuscaloosa Tuscaloosa AL 35404 76 1 Village Shoppes Royal Palm Beach Palm Beach FL 33411 77 2 Oak Brook Apartments Goldsboro Wayne NC 28027 78 1 Amaranth Building Germantown Montgomery MD 20874 79 1 Merit Building Gaithersburg Montgomery MD 20877 80 1 4260-4310 West Broad Street Columbus Franklin OH 43228 81 1 Gateway Center Plantation Broward FL 33317 82 1 PNC Advisor Building Milburn Essex NJ 07041 83 1 917 Franklin Office Building Houston Harris TX 77002 84 1 Riverside Business Park Riverside Riverside CA 92509 85 2 Oaks of League City League City Galveston TX 77573 86 1 Shiloh Center - 7 Windsor Sonoma CA 95492 87 1 Storage USA Louisville Jefferson KY 40222 88 1 Eckerd's OAK RIDGE Orlando Orange FL 32839 89 2 Tiburon Pointe Apartments Omaha Sarpy NE 68136 90 2 Mansions North Apartments Oklahoma City Oklahoma OK 73112 91 1 Dearborn Town Center Dearborn Wayne MI 48126 92 1 72nd & Cedar Street Office Omaha Douglas NE 68124 93 2 Sands Point Cove Apartments Houston Harris TX 77036 94 1 Rancho Bernardo Professional Building San Diego San Diego CA 92128 95 1 Summerfield Renaissance Shopping Center Summerfield Guilford NC 27358 96 1 Kroger Retail Center Troy Lincoln MO 63379 97 1 Coopers Common Plaza Chandler Maricopa AZ 85249 98 2 Diplomat Townhomes College Park Fulton GA 30337 99 1 Chatfield Plaza Littleton Jefferson CO 80127 100 1 Northwood Plaza Shopping Center Kernersville Forsyth NC 27284 101 1 Shiloh Center - 8 Windsor Sonoma CA 95492 102 2 Riverview Terrace Cranston Providence RI 02109 103 2 Angelique Apartments Dallas Dallas TX 75208 104 2 Langdon Hall Apartments Madison Dane WI 53703 105 2 Bayou Oaks Apartments Pasadena Harris TX 77502 106 1 300-304 E 81st Street New York New York NY 10028 107 1 10811-10831 Foothill Boulevard Rancho Cucamonga San Bernardino CA 91730 108 2 Brandywine Apartments Norman Cleveland OK 73071 109 1 Fortress Self Storage Fredericksburg Spotsylvania VA 22407 110 1 Clayton Industrial Park Vista San Diego CA 92084 111 1 Eckerd's - Middleton NJ Middleton Monmouth NJ 07758 112 1 2701-2751 East Chapman Avenue Fullerton Orange CA 92831 113 2 Park House Apartments Mentor Lake OH 44060 114 1 324 E 77th Street New York New York NY 10021 115 2 Buttonwood Square Blackwood Camden NJ 08012 116 1 Huntley Road Retail Center Carpentersville Kane IL 60110 117 1 Highway Storage McAllen and Pharr McAllen Hidalgo TX 78501 118 1 Powell Plaza Magnolia Montgomery TX 77354 119 1 Gold Circle Office Building Omaha Douglas NE 68144 120 1 Waynesburg Centre Waynesburg Stark OH 44688 121 1 Pierre Plaza Shopping Center Bossier City Bossier Parish LA 71111 122 2 Salem Terrace Apartments Covington Newton GA 30016 123 2 Carefree Valley Resort Harlingen Cameron TX 78552 124 1 290 Fairbanks Center Houston Harris TX 77040 125 1 Scripps Hill Retail Center San Diego San Diego CA 92131 126 2 Springwood Apartments Tampa Hillsborough FL 33613 127 1 Cypress Harbor Mobile Home Park Winter Haven Polk FL 33884 128 2 Casa Del Rey Mobile Home Park Bradenton Manatee FL 34207 129 2 Fort Sedgwick Apartments Petersburg Petersburg City VA 23805 130 1 10019 Reisterstown Road Owings Mills Baltimore MD 21117 131 1 Shops at Canton Canton Cherokee GA 30114 132 1 Shiloh Center - 5 Windsor Sonoma CA 95492 133 1 Camino Maquilladora Buildings San Diego San Diego CA 92154 134 1 Meadow Estates Manufactured Housing Community Madrid Boone IA 50156 135 1 Evergreen Office Omaha Douglas NE 68144 136 2 Amberwood Apartments Riverdale Clayton GA 30296 137 1 3200 Commander Industrial Building Carrollton Dallas TX 75006 138 1 Mabury Plaza Santa Ana Orange CA 92705 139 2 Bel Air Mobile Home Communities Bryan Brazos TX 77803 140 2 Park Manor Apartments Hyde Park Dutchess NY 12538 141 1 Silverado Office Building La Jolla San Diego CA 92037 142 1 Pinehollow Business Park Lufkin Angelina TX 75901 143 1 Broadway Commons Shopping Center Garland Dallas TX 75043 144 2 Colonial Arms Apartments Schenectady Schenectady NY 12305 145 2 Folger Apartments Washington District of Columbia DC 20003 146 2 Church Hill Gables Richmond Richmond VA 23219 147 2 Morris Manor Apartment Buffalo Erie NY 14214 148 2 Halifax Court Apartments Edgewater Volusia FL 32132 149 2 Ashley Street Apartments Hartford Hartford CT 06114
LOCATIONS AND MANAGEMENT COMPANIES OF THE MORTGAGED REAL PROPERTIES
CUT-OFF DATE MORTGAGE LOAN PRINCIPAL LOAN # CROSSED GROUP PROPERTY NAME BALANCE (1) SELLER MANAGEMENT COMPANY - ------- ----- ------------- ----------- ------ ------------------ 150 2 Royal Palms Apartments $ 721,302 Column Financial, Inc. Owner Managed 151 2 Quartermaster Court Apartments 634,310 PNC Moyanahan Williams, Inc. 152 2 833 Whalley Avenue 596,740 Column Financial, Inc. Owner Managed 153 1 76-80 Lafayette Avenue 585,529 Column Financial, Inc. Owner Managed --------------- TOTAL/WEIGHTED AVERAGE: $ 1,261,269,491 =============== LOAN # CROSSED GROUP PROPERTY NAME ADDRESS - ------- ----- ------------- ------- 150 2 Royal Palms Apartments 1400 Moore Avenue 151 2 Quartermaster Court Apartments 917-929 Mechanic Street 152 2 833 Whalley Avenue 833 Whalley Avenue 153 1 76-80 Lafayette Avenue 76-80 Lafayette Avenue TOTAL/WEIGHTED AVERAGE: LOAN # CROSSED GROUP PROPERTY NAME CITY COUNTY STATE ZIP CODE - ------- ----- ------------- ---- ------ ----- -------- 150 2 Royal Palms Apartments Portland San Patricio TX 78374 151 2 Quartermaster Court Apartments Jeffersonville Clark IN 47130 152 2 833 Whalley Avenue New Haven New Haven CT 06515 153 1 76-80 Lafayette Avenue Suffern Rockland NY 10901 TOTAL/WEIGHTED AVERAGE:
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (B) THE UNDERLYING MORTGAGE LOANS SECURED BY MAGNOLIA VILLAGE, BLUE JAY MOBILE HOME PARK, CANDLELIGHT MANOR AND ELMWOOD MOBILE HOME PARK ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. DESCRIPTIONS OF THE MORTGAGED REAL PROPERTIES
CUT-OFF DATE LOAN PRINCIPAL PROPERTY # CROSSED GROUP PROPERTY NAME BALANCE (1) PROPERTY TYPE SUB-TYPE - ------- ----- ------------- ----------- ------------- -------- 1 1 Mall at Fairfield Commons $ 85,405,532 Retail Anchored 2A 1 Mayfair Mall 69,245,249 Retail Anchored 2B 1 Mayfair Office Complex 10,098,266 Office Central Business District 3 1 Stanford Shopping Center 75,000,000 Retail Anchored 4A 1 MeriStar Louisville 33,920,740 Hotel Full Service 4B 1 MeriStar Frazer 16,960,370 Hotel Full Service 5 1 Paramount Plaza 44,876,466 Office Central Business District 6 1 Montalvo Square Shopping Center 42,300,000 Retail Anchored 7 2 Jefferson at Montfort 35,000,000 Multifamily Conventional 8 1 EastBridge Landing 33,689,997 Multifamily Conventional 9 1 East Thunderbird Square Shopping Center North 28,472,696 Retail Anchored 10 1 Janss Court 28,295,760 Mixed Use Office/Retail/Multifamily 11 1 Ravine Development 26,515,146 Office Suburban 12 2 Serrano Apartments 26,450,000 Multifamily Conventional 13 1 Crow Canyon Commons Shopping Center 22,903,652 Retail Anchored 14 2 Carlingford Apartments 21,762,334 Multifamily Conventional 15 1 220 Post Street 21,300,000 Retail Unanchored 16 2 Kings Crossing I & II 20,891,904 Multifamily Conventional 17 2 Atrium at Market Center 18,124,880 Multifamily Conventional 18 2 Villages of Deerfield Apartments 16,641,062 Multifamily Conventional 19 1 Baseline Corporate Center 16,438,430 Office Suburban 20 1 Challenger Business Center 16,329,079 Office Suburban 21 1 Delphi Building 15,976,947 Industrial N/A 22 (A) 1 Anaheim Professional Center 9,365,667 Office Suburban 23 (A) 1 Coast Family Medical Center 5,719,224 Office Suburban 24 1 Radisson Hotel Historic Savannah 14,980,678 Hotel Full Service 25 2 Breckinridge Court Apartments 14,772,020 Multifamily Conventional 26 2 Addison at Hampton 14,524,848 Multifamily Conventional 27 1 SouthCourt at South Square 14,423,499 Office Suburban 28 1 Deer Valley Financial Center 11,604,681 Office Suburban 29 (B) 2 Magnolia Village 3,997,827 Multifamily Manufactured Housing 30 (B) 2 Blue Jay Mobile Home Park 3,976,321 Multifamily Manufactured Housing 31 (B) 2 Candlelight Manor 2,057,746 Multifamily Manufactured Housing 32 (B) 2 Elmwood Mobile Home Park 1,366,860 Multifamily Manufactured Housing 33 1 Shoppes of New Tampa 10,600,000 Retail Anchored 34 1 The Borders and Shoppes at Chestnut Hill 10,434,412 Retail Anchored 35 1 Tustin Freeway Business Center 9,989,911 Industrial N/A 36 1 Oak Hill Townhomes 9,845,186 Multifamily Conventional 37 1 Northlake Square Shopping Center 9,438,742 Retail Anchored 38 2 Stone Hill Apartments 9,262,680 Multifamily Conventional 39 2 High Ridge Apartments 9,182,569 Multifamily Conventional 40 2 Caleb's Place Townhomes 9,147,744 Multifamily Conventional 41 2 Northgate Village Apartments 8,402,346 Multifamily Conventional 42 2 Cambridge Village Apartments 8,119,100 Multifamily Conventional 43 1 Staybridge Suites 7,440,612 Hotel Limited Service 44 1 Summerville Plaza Shopping Center 7,379,962 Retail Anchored 45 1 St. Joseph's/St. Jude's Medical Building 6,967,396 Office Suburban 46 1 Haynes Plaza 6,814,263 Retail Anchored 47 2 Hearthstone Apartments 6,658,463 Multifamily Conventional 48 2 Canyon View Apartments 6,653,051 Multifamily Conventional 49 1 South County Medical Plaza 6,593,640 Office Suburban 50 1 Crossings at Westland 6,339,552 Retail Anchored 51 2 Villas of Brandychase 6,205,217 Multifamily Conventional 52 1 78 Place 6,194,049 Mixed Use Office/Retail 53 1 Vanowen Medical Office 5,964,095 Office Central Business District 54 1 Bolsa Retail Center 5,844,363 Retail Unanchored 55 2 Candlewick Apartments 5,811,980 Multifamily Conventional 56 1 91 Montvale Avenue 5,804,304 Office Suburban 57 2 Northgate Club Apartments 5,779,340 Multifamily Conventional 58 2 Country Village & Oakwood Mobile Home Park 5,750,000 Multifamily Manufactured Housing 59 1 Tops Plaza - North Olmsted 5,743,218 Retail Anchored 60 1 West Highlands Shopping Center 5,650,000 Retail Anchored 61 1 Metcalf 127 Shops 5,531,107 Retail Unanchored 62A 1 Evergreen - Park Plaza 3,085,346 Retail Unanchored 62B 1 Evergreen - Beverly Plaza 2,182,318 Retail Unanchored 63 1 Gifford Industrial Park 5,176,306 Industrial N/A 64 1 Oakley Plaza 5,175,000 Retail Anchored 65 2 Cloverdale Apartments 5,108,073 Multifamily Conventional 66 2 Collins Aire Mobile Home Park 4,900,000 Multifamily Manufactured Housing 67 1 Chino Hills Promenade 4,887,170 Retail Unanchored 68 2 Hunter's Glen 4,855,437 Multifamily Conventional 69 2 Cedar Glen Apartments 4,596,734 Multifamily Conventional 70 2 College Hills West Apartments 4,587,345 Multifamily Conventional 71 1 4601 Eisenhower 4,389,115 Mixed Use Office/Industrial 72 1 Joyners Crossing 4,301,596 Retail Anchored 73 1 Sedgefield Village Shopping Center 4,281,987 Retail Anchored LOAN UNITS/SQ. FT./ FEE/ YEAR # CROSSED GROUP PROPERTY NAME ROOMS/PADS LEASEHOLD YEAR BUILT RENOVATED - ------- ----- ------------- ---------- --------- ---------- --------- 1 1 Mall at Fairfield Commons 1,046,726 (3) Fee 1993 N/A 2A 1 Mayfair Mall 858,165 Fee 1957 2003 2B 1 Mayfair Office Complex 419,318 Fee 1957 2003 3 1 Stanford Shopping Center 1,387,351 (3) Leasehold 1956 2002 4A 1 MeriStar Louisville 321 Fee 1905 2000 4B 1 MeriStar Frazer 198 Fee 1990 2003 5 1 Paramount Plaza 911,900 Fee 1969 1990 6 1 Montalvo Square Shopping Center 218,507 Fee/Leasehold 2002 N/A 7 2 Jefferson at Montfort 662 Fee 1995 N/A 8 1 EastBridge Landing 209 Fee 1998 N/A 9 1 East Thunderbird Square Shopping Center North 167,412 Fee 2000 N/A 10 1 Janss Court 125,709 Fee 1989 N/A 11 1 Ravine Development 154,776 Fee 2001 N/A 12 2 Serrano Apartments 438 Fee 1999 N/A 13 1 Crow Canyon Commons Shopping Center 228,139 Leasehold 1981 2002 14 2 Carlingford Apartments 810 Fee 1976 2003 15 1 220 Post Street 37,425 Fee 1907 1996 16 2 Kings Crossing I & II 432 Fee 1971 2000 17 2 Atrium at Market Center 173 Fee/Leasehold 1924 2002 18 2 Villages of Deerfield Apartments 300 Fee 1995 N/A 19 1 Baseline Corporate Center 151,221 Fee 1999 N/A 20 1 Challenger Business Center 170,418 Fee 2000 N/A 21 1 Delphi Building 222,597 Fee 1955 1989 22 (A) 1 Anaheim Professional Center 87,237 Fee 1981 N/A 23 (A) 1 Coast Family Medical Center 42,892 Fee 1975 1990 24 1 Radisson Hotel Historic Savannah 150 Fee 2000 N/A 25 2 Breckinridge Court Apartments 382 Fee 1987 N/A 26 2 Addison at Hampton 276 Fee 1986 N/A 27 1 SouthCourt at South Square 130,981 Fee 1999 N/A 28 1 Deer Valley Financial Center 126,569 Fee 2001 N/A 29 (B) 2 Magnolia Village 196 Fee 1986 N/A 30 (B) 2 Blue Jay Mobile Home Park 263 Fee 1975 1985 31 (B) 2 Candlelight Manor 128 Fee 1973 1980 32 (B) 2 Elmwood Mobile Home Park 100 Fee 1962 N/A 33 1 Shoppes of New Tampa 158,662 Fee 2002 N/A 34 1 The Borders and Shoppes at Chestnut Hill 40,570 Fee 1993 N/A 35 1 Tustin Freeway Business Center 184,083 Fee 1970 N/A 36 1 Oak Hill Townhomes 106 Fee 2003 N/A 37 1 Northlake Square Shopping Center 82,556 Fee 1988 N/A 38 2 Stone Hill Apartments 344 Fee 1982 N/A 39 2 High Ridge Apartments 296 Fee 1983 N/A 40 2 Caleb's Place Townhomes 152 Fee 1999 N/A 41 2 Northgate Village Apartments 264 Fee 1985 N/A 42 2 Cambridge Village Apartments 200 Fee 1987 N/A 43 1 Staybridge Suites 119 Fee 1999 N/A 44 1 Summerville Plaza Shopping Center 107,600 Fee 1972 2002 45 1 St. Joseph's/St. Jude's Medical Building 61,640 Fee 1978 N/A 46 1 Haynes Plaza 244,698 Fee 1970 N/A 47 2 Hearthstone Apartments 252 Fee 1983 2002 48 2 Canyon View Apartments 138 Fee 1989 N/A 49 1 South County Medical Plaza 27,522 Fee 2002 N/A 50 1 Crossings at Westland 215,415 Fee 1995 N/A 51 2 Villas of Brandychase 115 Fee 1984 1998 52 1 78 Place 105,618 Fee 1971 2001 53 1 Vanowen Medical Office 64,411 Fee 1971 1998 54 1 Bolsa Retail Center 42,505 Fee 1985 N/A 55 2 Candlewick Apartments 184 Fee 1978 2003 56 1 91 Montvale Avenue 50,648 Fee 1984 N/A 57 2 Northgate Club Apartments 120 Fee 1988 2002 58 2 Country Village & Oakwood Mobile Home Park 509 Fee 1968 N/A 59 1 Tops Plaza - North Olmsted 70,003 Leasehold 2002 N/A 60 1 West Highlands Shopping Center 86,114 Fee 1986 N/A 61 1 Metcalf 127 Shops 56,509 Fee 1997 N/A 62A 1 Evergreen - Park Plaza 22,649 Fee 1986 N/A 62B 1 Evergreen - Beverly Plaza 22,921 Fee 1985 N/A 63 1 Gifford Industrial Park 156,224 Fee 1987 N/A 64 1 Oakley Plaza 118,727 Fee 1988 1996 65 2 Cloverdale Apartments 177 Fee 1981 2000 66 2 Collins Aire Mobile Home Park 328 Fee 1972 1995 67 1 Chino Hills Promenade 41,464 Fee 1989 N/A 68 2 Hunter's Glen 152 Fee 1985 N/A 69 2 Cedar Glen Apartments 211 Fee 1972 2002 70 2 College Hills West Apartments 168 Fee 1984 2000 71 1 4601 Eisenhower 64,474 Fee 1972 1984 72 1 Joyners Crossing 52,207 Fee 2003 N/A 73 1 Sedgefield Village Shopping Center 56,630 Fee 2000 N/A LOAN OCCUPANCY DATE OF # CROSSED GROUP PROPERTY NAME RATE AT U/W OCCUPANCY RATE APPRAISED VALUE - ------- ----- ------------- ----------- -------------- --------------- 1 1 Mall at Fairfield Commons 99% 8/31/2003 $ 171,500,000 2A 1 Mayfair Mall 97% 7/14/2003 288,000,000 2B 1 Mayfair Office Complex 87% 7/14/2003 42,000,000 3 1 Stanford Shopping Center 96% 6/30/2003 335,000,000 4A 1 MeriStar Louisville N/A N/A 47,000,000 4B 1 MeriStar Frazer N/A N/A 21,650,000 5 1 Paramount Plaza 84% 5/1/2003 75,000,000 6 1 Montalvo Square Shopping Center 89% 10/1/2003 52,900,000 7 2 Jefferson at Montfort 86% 6/3/2003 48,500,000 8 1 EastBridge Landing 95% 4/15/2003 91,000,000 9 1 East Thunderbird Square Shopping Center North 92% 8/13/2003 41,700,000 10 1 Janss Court 91% 8/14/2003 37,500,000 11 1 Ravine Development 100% 3/31/2003 41,000,000 12 2 Serrano Apartments 87% 7/11/2003 33,100,000 13 1 Crow Canyon Commons Shopping Center 100% 4/1/2003 32,000,000 14 2 Carlingford Apartments 95% 7/1/2003 28,900,000 15 1 220 Post Street 100% 9/30/2003 31,200,000 16 2 Kings Crossing I & II 94% 6/17/2003 31,550,000 17 2 Atrium at Market Center 94% 9/18/2003 23,100,000 18 2 Villages of Deerfield Apartments 93% 6/9/2003 20,900,000 19 1 Baseline Corporate Center 91% 7/31/2003 21,940,000 20 1 Challenger Business Center 100% 5/1/2003 22,500,000 21 1 Delphi Building 100% 6/30/2003 22,000,000 22 (A) 1 Anaheim Professional Center 92% 8/28/2003 12,500,000 23 (A) 1 Coast Family Medical Center 95% 8/1/2003 8,000,000 24 1 Radisson Hotel Historic Savannah N/A N/A 20,300,000 25 2 Breckinridge Court Apartments 94% 8/11/2003 18,500,000 26 2 Addison at Hampton 98% 7/14/2003 19,000,000 27 1 SouthCourt at South Square 80% 2/28/2003 19,400,000 28 1 Deer Valley Financial Center 83% 4/22/2003 15,500,000 29 (B) 2 Magnolia Village 100% 7/31/2003 5,800,000 30 (B) 2 Blue Jay Mobile Home Park 100% 8/31/2003 5,000,000 31 (B) 2 Candlelight Manor 100% 6/30/2003 2,800,000 32 (B) 2 Elmwood Mobile Home Park 100% 6/30/2003 1,900,000 33 1 Shoppes of New Tampa 98% 8/5/2003 19,100,000 34 1 The Borders and Shoppes at Chestnut Hill 100% 7/31/2003 14,000,000 35 1 Tustin Freeway Business Center 92% 8/1/2003 12,600,000 36 1 Oak Hill Townhomes 99% 9/15/2003 12,330,000 37 1 Northlake Square Shopping Center 96% 8/22/2003 11,900,000 38 2 Stone Hill Apartments 97% 9/1/2003 12,750,000 39 2 High Ridge Apartments 95% 7/30/2003 11,500,000 40 2 Caleb's Place Townhomes 91% 9/3/2003 11,550,000 41 2 Northgate Village Apartments 93% 7/20/2003 10,600,000 42 2 Cambridge Village Apartments 95% 7/28/2003 11,500,000 43 1 Staybridge Suites N/A N/A 11,400,000 44 1 Summerville Plaza Shopping Center 98% 6/30/2003 9,400,000 45 1 St. Joseph's/St. Jude's Medical Building 100% 8/1/2003 9,800,000 46 1 Haynes Plaza 88% 6/25/2003 11,000,000 47 2 Hearthstone Apartments 94% 8/19/2003 8,400,000 48 2 Canyon View Apartments 92% 5/6/2003 8,500,000 49 1 South County Medical Plaza 100% 5/1/2003 9,350,000 50 1 Crossings at Westland 100% 2/21/2003 9,800,000 51 2 Villas of Brandychase 100% 6/1/2003 7,800,000 52 1 78 Place 100% 7/31/2003 12,800,000 53 1 Vanowen Medical Office 100% 8/1/2003 8,300,000 54 1 Bolsa Retail Center 99% 8/1/2003 9,000,000 55 2 Candlewick Apartments 91% 6/30/2003 7,350,000 56 1 91 Montvale Avenue 89% 6/19/2003 7,500,000 57 2 Northgate Club Apartments 99% 7/1/2003 7,800,000 58 2 Country Village & Oakwood Mobile Home Park 87% 6/2/2003 & 8/25/2003 7,300,000 59 1 Tops Plaza - North Olmsted 100% 8/28/2003 7,035,000 60 1 West Highlands Shopping Center 90% 9/22/2003 7,550,000 61 1 Metcalf 127 Shops 98% 4/30/2003 7,000,000 62A 1 Evergreen - Park Plaza 100% 9/2/2003 4,100,000 62B 1 Evergreen - Beverly Plaza 82% 9/2/2003 2,900,000 63 1 Gifford Industrial Park 90% 6/1/2003 7,000,000 64 1 Oakley Plaza 98% 4/24/2003 10,600,000 65 2 Cloverdale Apartments 98% 7/31/2003 6,410,000 66 2 Collins Aire Mobile Home Park 97% 7/31/2003 12,300,000 67 1 Chino Hills Promenade 100% 5/20/2003 7,000,000 68 2 Hunter's Glen 96% 6/19/2003 6,400,000 69 2 Cedar Glen Apartments 95% 5/20/2003 6,350,000 70 2 College Hills West Apartments 97% 10/2/2003 5,750,000 71 1 4601 Eisenhower 100% 10/1/2003 6,100,000 72 1 Joyners Crossing 85% 6/30/2003 5,400,000 73 1 Sedgefield Village Shopping Center 95% 5/31/2003 5,400,000 MOST RECENT MOST MOST MOST LOAN OPERATING STATEMENT RECENT RECENT RECENT # CROSSED GROUP PROPERTY NAME DATE REVENUE EXPENSES NOI - ------- ----- ------------- ---- ------- -------- --- 1 1 Mall at Fairfield Commons 6/30/2003 $ 18,478,299 $ 5,223,881 $ 13,254,419 2A 1 Mayfair Mall 4/30/2003 29,894,641 10,280,670 19,613,971 2B 1 Mayfair Office Complex 4/30/2003 7,568,636 3,371,555 4,197,081 3 1 Stanford Shopping Center 5/31/2003 28,542,784 6,966,109 21,576,675 4A 1 MeriStar Louisville 5/31/03 18,978,999 13,062,233 5,916,766 4B 1 MeriStar Frazer 5/31/2003 7,792,980 5,263,322 2,529,658 5 1 Paramount Plaza 4/30/2003 10,906,860 4,340,099 6,566,761 6 1 Montalvo Square Shopping Center N/A N/A N/A N/A 7 2 Jefferson at Montfort 4/30/2003 6,236,786 2,915,765 3,321,021 8 1 EastBridge Landing 5/31/2003 7,717,128 1,894,650 5,822,478 9 1 East Thunderbird Square Shopping Center North 6/30/2003 4,018,946 898,610 3,120,336 10 1 Janss Court 12/31/02 4,101,236 1,505,617 2,595,619 11 1 Ravine Development 12/31/2002 4,770,563 1,015,100 3,755,463 12 2 Serrano Apartments 6/30/2003 4,026,310 1,862,693 2,163,617 13 1 Crow Canyon Commons Shopping Center 3/31/2003 4,195,340 1,262,124 2,933,216 14 2 Carlingford Apartments 6/30/2003 4,374,372 1,871,965 2,502,407 15 1 220 Post Street N/A N/A N/A N/A 16 2 Kings Crossing I & II 5/31/2003 4,230,461 1,522,983 2,707,478 17 2 Atrium at Market Center N/A N/A N/A N/A 18 2 Villages of Deerfield Apartments 6/30/2003 2,661,179 1,268,011 1,393,168 19 1 Baseline Corporate Center 6/30/2003 2,792,866 929,301 1,863,565 20 1 Challenger Business Center 7/31/2003 2,811,476 538,913 2,272,563 21 1 Delphi Building 6/30/2003 3,511,143 1,459,269 2,051,874 22 (A) 1 Anaheim Professional Center 7/31/2003 1,492,011 567,836 924,175 23 (A) 1 Coast Family Medical Center 7/31/2003 924,637 210,951 713,687 24 1 Radisson Hotel Historic Savannah 8/31/2003 5,941,596 3,692,977 2,248,619 25 2 Breckinridge Court Apartments 7/31/2003 2,494,931 1,023,151 1,471,780 26 2 Addison at Hampton 7/31/2003 2,330,738 929,258 1,401,480 27 1 SouthCourt at South Square 2/28/2003 2,097,964 701,304 1,396,660 28 1 Deer Valley Financial Center 7/31/2003 2,178,279 598,536 1,579,743 29 (B) 2 Magnolia Village 6/30/2003 721,524 202,676 518,848 30 (B) 2 Blue Jay Mobile Home Park 6/30/2003 684,555 218,620 465,935 31 (B) 2 Candlelight Manor 6/30/2003 470,553 197,169 273,384 32 (B) 2 Elmwood Mobile Home Park 6/30/2003 315,568 141,787 173,781 33 1 Shoppes of New Tampa N/A N/A N/A N/A 34 1 The Borders and Shoppes at Chestnut Hill 3/31/2003 1,596,547 283,244 1,313,303 35 1 Tustin Freeway Business Center 6/30/2003 1,378,856 245,606 1,133,250 36 1 Oak Hill Townhomes 8/31/2003 815,760 358,998 456,762 37 1 Northlake Square Shopping Center 2/28/2003 1,461,154 346,001 1,115,153 38 2 Stone Hill Apartments 7/31/2003 2,114,919 918,393 1,196,526 39 2 High Ridge Apartments 6/30/2003 1,797,980 857,865 940,115 40 2 Caleb's Place Townhomes 8/31/2003 1,265,898 344,224 921,674 41 2 Northgate Village Apartments 6/30/2003 1,725,923 836,629 889,294 42 2 Cambridge Village Apartments 6/30/2003 1,547,619 704,966 842,653 43 1 Staybridge Suites 8/31/2003 3,207,058 1,771,905 1,435,153 44 1 Summerville Plaza Shopping Center 6/30/2003 1,045,223 207,390 837,833 45 1 St. Joseph's/St. Jude's Medical Building 5/31/2003 911,208 9,183 902,025 46 1 Haynes Plaza N/A N/A N/A N/A 47 2 Hearthstone Apartments 12/31/2002 1,480,583 803,746 676,837 48 2 Canyon View Apartments 7/31/2003 1,084,650 444,911 639,739 49 1 South County Medical Plaza 6/30/2003 821,737 135,136 686,601 50 1 Crossings at Westland 6/30/2003 1,451,260 552,626 898,634 51 2 Villas of Brandychase 5/31/2003 1,094,565 279,022 815,543 52 1 78 Place 7/31/2003 1,410,743 237,622 1,173,118 53 1 Vanowen Medical Office 4/30/2003 1,342,282 350,599 991,683 54 1 Bolsa Retail Center 6/30/2003 900,470 261,987 638,503 55 2 Candlewick Apartments 2/28/2003 1,121,896 551,971 569,925 56 1 91 Montvale Avenue 6/30/2003 1,178,488 439,399 739,089 57 2 Northgate Club Apartments 7/31/2003 1,056,715 452,299 604,416 58 2 Country Village & Oakwood Mobile Home Park 6/30/2003 1,185,818 540,326 645,492 59 1 Tops Plaza - North Olmsted 7/31/2003 992,861 463,707 529,153 60 1 West Highlands Shopping Center 4/30/2003 1,078,419 383,112 695,307 61 1 Metcalf 127 Shops 6/30/2003 899,962 275,706 624,255 62A 1 Evergreen - Park Plaza 3/31/2003 614,780 210,550 404,230 62B 1 Evergreen - Beverly Plaza 3/31/2003 421,856 131,555 290,301 63 1 Gifford Industrial Park 3/31/2002 809,581 250,306 559,275 64 1 Oakley Plaza 11/30/02 1,142,973 190,601 952,372 65 2 Cloverdale Apartments 7/31/2003 978,994 421,199 557,795 66 2 Collins Aire Mobile Home Park 7/31/2003 1,484,637 527,689 956,948 67 1 Chino Hills Promenade 6/30/2003 877,730 198,764 678,966 68 2 Hunter's Glen 7/31/2003 1,115,904 460,057 655,847 69 2 Cedar Glen Apartments 4/30/2003 1,206,952 718,375 488,577 70 2 College Hills West Apartments 6/30/2003 1,172,530 587,958 584,572 71 1 4601 Eisenhower 8/31/2003 729,037 139,633 589,404 72 1 Joyners Crossing N/A N/A N/A N/A 73 1 Sedgefield Village Shopping Center 12/31/2002 479,992 109,404 370,588 LOAN # CROSSED GROUP PROPERTY NAME U/W NOI U/W NCF (2) - ------- ----- ------------- ------- ----------- 1 1 Mall at Fairfield Commons $ 14,265,306 $ 13,516,797 2A 1 Mayfair Mall 21,066,354 20,894,721 2B 1 Mayfair Office Complex 4,057,937 3,548,872 3 1 Stanford Shopping Center 19,013,028 18,932,926 4A 1 MeriStar Louisville 5,853,070 5,093,915 4B 1 MeriStar Frazer 2,520,923 2,209,205 5 1 Paramount Plaza 7,885,987 6,931,117 6 1 Montalvo Square Shopping Center 4,364,213 4,237,727 7 2 Jefferson at Montfort 3,491,112 3,325,612 8 1 EastBridge Landing 5,027,064 4,970,784 9 1 East Thunderbird Square Shopping Center North 3,374,320 3,202,894 10 1 Janss Court 3,014,478 2,932,085 11 1 Ravine Development 3,483,973 3,208,693 12 2 Serrano Apartments 2,396,912 2,287,412 13 1 Crow Canyon Commons Shopping Center 2,849,437 2,618,510 14 2 Carlingford Apartments 2,440,481 2,237,981 15 1 220 Post Street 2,171,876 2,090,152 16 2 Kings Crossing I & II 2,706,050 2,598,050 17 2 Atrium at Market Center 1,763,242 1,728,642 18 2 Villages of Deerfield Apartments 1,516,118 1,441,117 19 1 Baseline Corporate Center 1,940,394 1,711,064 20 1 Challenger Business Center 2,028,128 1,827,814 21 1 Delphi Building 1,718,306 1,559,668 22 (A) 1 Anaheim Professional Center 1,166,659 1,002,985 23 (A) 1 Coast Family Medical Center 604,310 530,110 24 1 Radisson Hotel Historic Savannah 2,157,221 1,922,832 25 2 Breckinridge Court Apartments 1,485,672 1,386,876 26 2 Addison at Hampton 1,390,783 1,321,783 27 1 SouthCourt at South Square 1,717,825 1,551,510 28 1 Deer Valley Financial Center 1,440,439 1,247,386 29 (B) 2 Magnolia Village 463,936 454,136 30 (B) 2 Blue Jay Mobile Home Park 407,710 394,560 31 (B) 2 Candlelight Manor 229,942 223,542 32 (B) 2 Elmwood Mobile Home Park 151,999 146,949 33 1 Shoppes of New Tampa 1,482,130 1,367,437 34 1 The Borders and Shoppes at Chestnut Hill 1,123,918 1,057,890 35 1 Tustin Freeway Business Center 1,106,778 1,020,566 36 1 Oak Hill Townhomes 1,055,172 1,055,172 37 1 Northlake Square Shopping Center 1,059,527 1,011,885 38 2 Stone Hill Apartments 1,129,770 1,043,770 39 2 High Ridge Apartments 945,271 871,271 40 2 Caleb's Place Townhomes 894,919 856,919 41 2 Northgate Village Apartments 896,794 830,794 42 2 Cambridge Village Apartments 825,919 775,919 43 1 Staybridge Suites 1,218,479 1,218,479 44 1 Summerville Plaza Shopping Center 846,742 749,323 45 1 St. Joseph's/St. Jude's Medical Building 836,214 758,187 46 1 Haynes Plaza 1,067,319 927,212 47 2 Hearthstone Apartments 708,329 645,329 48 2 Canyon View Apartments 703,281 668,781 49 1 South County Medical Plaza 677,655 638,600 50 1 Crossings at Westland 817,611 677,857 51 2 Villas of Brandychase 696,810 668,060 52 1 78 Place 1,113,268 1,008,155 53 1 Vanowen Medical Office 779,288 701,670 54 1 Bolsa Retail Center 675,284 634,302 55 2 Candlewick Apartments 614,417 568,417 56 1 91 Montvale Avenue 651,470 575,486 57 2 Northgate Club Apartments 579,341 549,341 58 2 Country Village & Oakwood Mobile Home Park 657,718 631,968 59 1 Tops Plaza - North Olmsted 520,171 497,079 60 1 West Highlands Shopping Center 655,800 584,303 61 1 Metcalf 127 Shops 615,129 577,369 62A 1 Evergreen - Park Plaza 369,520 346,249 62B 1 Evergreen - Beverly Plaza 278,138 252,492 63 1 Gifford Industrial Park 547,969 469,030 64 1 Oakley Plaza 888,809 772,484 65 2 Cloverdale Apartments 569,901 517,351 66 2 Collins Aire Mobile Home Park 905,310 888,910 67 1 Chino Hills Promenade 612,811 578,298 68 2 Hunter's Glen 609,137 571,137 69 2 Cedar Glen Apartments 493,815 441,065 70 2 College Hills West Apartments 582,478 540,478 71 1 4601 Eisenhower 587,862 524,472 72 1 Joyners Crossing 451,068 436,613 73 1 Sedgefield Village Shopping Center 449,295 428,481
DESCRIPTIONS OF THE MORTGAGED REAL PROPERTIES
CUT-OFF DATE LOAN PRINCIPAL PROPERTY # CROSSED GROUP PROPERTY NAME BALANCE (1) PROPERTY TYPE SUB-TYPE - ------- ----- ------------- ----------- ------------- -------- 74 1 Palm Ridge $ 4,170,000 Retail Unanchored 75 2 Point-O-View Apartments 4,077,258 Multifamily Conventional 76 1 Village Shoppes 4,076,870 Retail Unanchored 77 2 Oak Brook Apartments 3,975,067 Multifamily Conventional 78 1 Amaranth Building 3,971,612 Industrial N/A 79 1 Merit Building 3,933,019 Office Suburban 80 1 4260-4310 West Broad Street 3,856,389 Retail Unanchored 81 1 Gateway Center 3,767,790 Industrial N/A 82 1 PNC Advisor Building 3,690,354 Office Suburban 83 1 917 Franklin Office Building 3,681,688 Office Central Business District 84 1 Riverside Business Park 3,627,200 Industrial N/A 85 2 Oaks of League City 3,356,425 Multifamily Conventional 86 1 Shiloh Center - 7 3,108,837 Retail Unanchored 87 1 Storage USA 3,082,422 Self Storage N/A 88 1 Eckerd's OAK RIDGE 3,055,009 Retail Unanchored 89 2 Tiburon Pointe Apartments 2,930,777 Multifamily Conventional 90 2 Mansions North Apartments 2,793,973 Multifamily Conventional 91 1 Dearborn Town Center 2,785,959 Retail Unanchored 92 1 72nd & Cedar Street Office 2,782,169 Office Suburban 93 2 Sands Point Cove Apartments 2,774,919 Multifamily Conventional 94 1 Rancho Bernardo Professional Building 2,734,245 Office Suburban 95 1 Summerfield Renaissance Shopping Center 2,668,406 Retail Anchored 96 1 Kroger Retail Center 2,661,315 Retail Anchored 97 1 Coopers Common Plaza 2,633,092 Retail Unanchored 98 2 Diplomat Townhomes 2,586,552 Multifamily Conventional 99 1 Chatfield Plaza 2,517,199 Office Suburban 100 1 Northwood Plaza Shopping Center 2,467,572 Retail Anchored 101 1 Shiloh Center - 8 2,447,415 Retail Unanchored 102 2 Riverview Terrace 2,426,212 Multifamily Conventional 103 2 Angelique Apartments 2,389,657 Multifamily Conventional 104 2 Langdon Hall Apartments 2,386,896 Multifamily Conventional 105 2 Bayou Oaks Apartments 2,368,221 Multifamily Conventional 106 1 300-304 E 81st Street 2,343,767 Mixed Use Multifamily/Retail 107 1 10811-10831 Foothill Boulevard 2,280,998 Retail Unanchored 108 2 Brandywine Apartments 2,274,881 Multifamily Conventional 109 1 Fortress Self Storage 2,261,071 Self Storage N/A 110 1 Clayton Industrial Park 2,241,092 Industrial N/A 111 1 Eckerd's - Middleton NJ 2,112,950 Retail Unanchored 112 1 2701-2751 East Chapman Avenue 1,986,484 Office Suburban 113 2 Park House Apartments 1,956,183 Multifamily Conventional 114 1 324 E 77th Street 1,942,426 Multifamily Conventional 115 2 Buttonwood Square 1,941,506 Multifamily Conventional 116 1 Huntley Road Retail Center 1,889,399 Retail Unanchored 117 1 Highway Storage McAllen and Pharr 1,782,009 Self Storage N/A 118 1 Powell Plaza 1,754,226 Retail Unanchored 119 1 Gold Circle Office Building 1,689,174 Office Suburban 120 1 Waynesburg Centre 1,644,514 Retail Anchored 121 1 Pierre Plaza Shopping Center 1,637,883 Retail Unanchored 122 2 Salem Terrace Apartments 1,628,325 Multifamily Conventional 123 2 Carefree Valley Resort 1,490,463 Multifamily Manufactured Housing 124 1 290 Fairbanks Center 1,475,449 Retail Unanchored 125 1 Scripps Hill Retail Center 1,446,036 Retail Unanchored 126 2 Springwood Apartments 1,434,171 Multifamily Conventional 127 1 Cypress Harbor Mobile Home Park 1,392,438 Multifamily Manufactured Housing 128 2 Casa Del Rey Mobile Home Park 1,391,891 Multifamily Manufactured Housing 129 2 Fort Sedgwick Apartments 1,342,786 Multifamily Conventional 130 1 10019 Reisterstown Road 1,280,517 Office Suburban 131 1 Shops at Canton 1,279,361 Retail Unanchored 132 1 Shiloh Center - 5 1,273,380 Retail Unanchored 133 1 Camino Maquilladora Buildings 1,245,716 Industrial N/A 134 1 Meadow Estates Manufactured Housing Community 1,229,547 Multifamily Manufactured Housing 135 1 Evergreen Office 1,192,358 Office Suburban 136 2 Amberwood Apartments 1,187,014 Multifamily Conventional 137 1 3200 Commander Industrial Building 1,169,249 Industrial N/A 138 1 Mabury Plaza 1,087,150 Retail Unanchored 139 2 Bel Air Mobile Home Communities 1,075,000 Multifamily Manufactured Housing 140 2 Park Manor Apartments 998,771 Multifamily Conventional 141 1 Silverado Office Building 996,925 Office Suburban 142 1 Pinehollow Business Park 989,673 Office Central Business District 143 1 Broadway Commons Shopping Center 916,515 Retail Unanchored 144 2 Colonial Arms Apartments 910,341 Multifamily Conventional 145 2 Folger Apartments 896,427 Multifamily Conventional 146 2 Church Hill Gables 895,693 Multifamily Conventional 147 2 Morris Manor Apartment 895,311 Multifamily Conventional 148 2 Halifax Court Apartments 876,021 Multifamily Conventional 149 2 Ashley Street Apartments 750,390 Multifamily Conventional LOAN UNITS/SQ.FT./ FEE/ YEAR OCCUPANCY # CROSSED GROUP PROPERTY NAME ROOMS/PADS LEASEHOLD YEAR BUILT RENOVATED RATE AT U/W - ------- ----- ------------- ---------- --------- ---------- --------- ----------- 74 1 Palm Ridge 27,600 Fee 1979 2000 100% 75 2 Point-O-View Apartments 138 Fee 1984 N/A 93% 76 1 Village Shoppes 36,460 Fee 2002 N/A 100% 77 2 Oak Brook Apartments 100 Fee 1982 2002 96% 78 1 Amaranth Building 45,645 Fee 2000 N/A 100% 79 1 Merit Building 39,902 Fee 1981 N/A 100% 80 1 4260-4310 West Broad Street 94,079 Fee 1963 N/A 100% 81 1 Gateway Center 88,177 Fee 1971 2002 99% 82 1 PNC Advisor Building 13,110 Fee 2002 N/A 100% 83 1 917 Franklin Office Building 38,890 Fee 1904 2000 88% 84 1 Riverside Business Park 119,249 Fee 1971 2002 98% 85 2 Oaks of League City 108 Fee 1987 2003 97% 86 1 Shiloh Center - 7 18,020 Fee 2002 N/A 92% 87 1 Storage USA 66,850 Fee 1999 N/A 84% 88 1 Eckerd's OAK RIDGE 11,760 Fee 2002 N/A 100% 89 2 Tiburon Pointe Apartments 60 Fee 2002 N/A 92% 90 2 Mansions North Apartments 114 Fee 1969 N/A 82% 91 1 Dearborn Town Center 24,974 Fee 1999 2002 91% 92 1 72nd & Cedar Street Office 24,022 Fee 2001 N/A 100% 93 2 Sands Point Cove Apartments 142 Fee 1977 2002 97% 94 1 Rancho Bernardo Professional Building 25,952 Fee 1976 2000 100% 95 1 Summerfield Renaissance Shopping Center 36,840 Fee 1999 N/A 100% 96 1 Kroger Retail Center 52,933 Fee 1986 2001 95% 97 1 Coopers Common Plaza 18,218 Fee 2003 N/A 93% 98 2 Diplomat Townhomes 124 Fee 1971 2002 90% 99 1 Chatfield Plaza 20,034 Fee 2002 N/A 96% 100 1 Northwood Plaza Shopping Center 50,408 Fee 1985 1995 100% 101 1 Shiloh Center - 8 14,210 Fee 2002 N/A 79% 102 2 Riverview Terrace 48 Fee 1972 2002 100% 103 2 Angelique Apartments 134 Fee 1969 2003 99% 104 2 Langdon Hall Apartments 90 Fee 1929 2003 87% 105 2 Bayou Oaks Apartments 88 Fee 1964 2002 84% 106 1 300-304 E 81st Street 11,830 Fee 1910 1980 100% 107 1 10811-10831 Foothill Boulevard 6,508 Fee 2003 N/A 100% 108 2 Brandywine Apartments 104 Fee 1983 N/A 96% 109 1 Fortress Self Storage 55,025 Fee 1999 N/A 96% 110 1 Clayton Industrial Park 51,320 Fee 1962 N/A 91% 111 1 Eckerd's - Middleton NJ 11,347 Fee 2003 N/A 100% 112 1 2701-2751 East Chapman Avenue 30,102 Fee 1975 2002 97% 113 2 Park House Apartments 72 Fee 1963 1997 96% 114 1 324 E 77th Street 20 Fee 1910 1988 100% 115 2 Buttonwood Square 58 Fee 1962 1999 98% 116 1 Huntley Road Retail Center 11,407 Fee 2002 N/A 100% 117 1 Highway Storage McAllen and Pharr 323,943 Fee 1994 N/A 91% 118 1 Powell Plaza 20,790 Fee 2000 N/A 100% 119 1 Gold Circle Office Building 20,889 Fee 1991 N/A 100% 120 1 Waynesburg Centre 44,703 Leasehold 1983 1989 100% 121 1 Pierre Plaza Shopping Center 14,000 Fee 1996 N/A 100% 122 2 Salem Terrace Apartments 70 Fee 1978 2002 93% 123 2 Carefree Valley Resort 273 Fee 1972 2003 84% 124 1 290 Fairbanks Center 10,053 Fee 2000 N/A 100% 125 1 Scripps Hill Retail Center 10,912 Fee 1981 N/A 100% 126 2 Springwood Apartments 57 Fee 1979 2001 96% 127 1 Cypress Harbor Mobile Home Park 90 Fee 1957 2002 100% 128 2 Casa Del Rey Mobile Home Park 74 Fee 1953 2002 99% 129 2 Fort Sedgwick Apartments 56 Fee 1974 2002 96% 130 1 10019 Reisterstown Road 11,018 Fee 1987 2002 100% 131 1 Shops at Canton 10,400 Fee 2001 N/A 100% 132 1 Shiloh Center - 5 7,135 Fee 2002 N/A 100% 133 1 Camino Maquilladora Buildings 38,866 Fee 1991 N/A 100% 134 1 Meadow Estates Manufactured Housing Community 86 Fee 1975 1998 87% 135 1 Evergreen Office 16,874 Fee 1991 N/A 100% 136 2 Amberwood Apartments 53 Fee 1972 1985 94% 137 1 3200 Commander Industrial Building 53,882 Fee 1984 N/A 100% 138 1 Mabury Plaza 11,525 Fee 1978 N/A 81% 139 2 Bel Air Mobile Home Communities 94 Fee 1970 N/A 98% 140 2 Park Manor Apartments 24 Fee 1960 2001 88% 141 1 Silverado Office Building 7,101 Fee 1965 1980 93% 142 1 Pinehollow Business Park 22,457 Fee 1979 N/A 92% 143 1 Broadway Commons Shopping Center 12,600 Fee 1979 N/A 100% 144 2 Colonial Arms Apartments 61 Fee 1927 1999 95% 145 2 Folger Apartments 16 Fee 1910 1998 100% 146 2 Church Hill Gables 17 Fee 1870 2001 94% 147 2 Morris Manor Apartment 54 Fee 1931 2001 91% 148 2 Halifax Court Apartments 28 Fee 1985 N/A 96% 149 2 Ashley Street Apartments 36 Fee 1970 N/A 95% MOST RECENT LOAN DATE OF OPERATING STATEMENT # CROSSED GROUP PROPERTY NAME OCCUPANCY RATE APPRAISED VALUE DATE - ------- ----- ------------- -------------- --------------- ---- 74 1 Palm Ridge 8/1/2003 $ 5,560,000 8/31/2003 75 2 Point-O-View Apartments 8/27/2003 5,750,000 8/31/2003 76 1 Village Shoppes 6/24/2003 6,380,000 5/31/03 77 2 Oak Brook Apartments 6/30/2003 5,000,000 6/30/2003 78 1 Amaranth Building 3/1/2003 6,000,000 5/31/2003 79 1 Merit Building 6/27/2003 5,100,000 5/31/2003 80 1 4260-4310 West Broad Street 2/1/2003 5,400,000 6/30/2003 81 1 Gateway Center 9/1/2003 5,450,000 3/30/2003 82 1 PNC Advisor Building 7/21/2003 4,750,000 6/30/2003 83 1 917 Franklin Office Building 4/1/2003 4,850,000 7/31/2003 84 1 Riverside Business Park 5/8/2003 5,300,000 4/30/2003 85 2 Oaks of League City 6/30/2003 4,200,000 6/30/2003 86 1 Shiloh Center - 7 9/8/2003 4,500,000 N/A 87 1 Storage USA 6/4/2003 4,000,000 6/30/2003 88 1 Eckerd's OAK RIDGE 9/9/2003 4,420,000 8/31/2003 89 2 Tiburon Pointe Apartments 9/3/2003 3,710,000 N/A 90 2 Mansions North Apartments 9/26/2003 3,925,000 6/30/2003 91 1 Dearborn Town Center 8/30/2003 3,850,000 8/31/2003 92 1 72nd & Cedar Street Office 8/31/2003 3,730,000 N/A 93 2 Sands Point Cove Apartments 3/1/2003 4,300,000 3/31/2003 94 1 Rancho Bernardo Professional Building 9/4/2003 4,400,000 10/31/2002 95 1 Summerfield Renaissance Shopping Center 7/31/2003 3,437,000 6/30/2003 96 1 Kroger Retail Center 9/1/2003 3,700,000 6/30/2003 97 1 Coopers Common Plaza 7/31/2003 4,100,000 N/A 98 2 Diplomat Townhomes 9/1/2003 4,200,000 8/31/03 99 1 Chatfield Plaza 5/31/2003 3,310,000 5/31/2003 100 1 Northwood Plaza Shopping Center 6/19/2003 3,400,000 5/31/2003 101 1 Shiloh Center - 8 6/12/2003 3,400,000 N/A 102 2 Riverview Terrace 9/1/2003 3,050,000 5/31/2003 103 2 Angelique Apartments 7/1/2003 3,025,000 6/30/2003 104 2 Langdon Hall Apartments 4/25/2003 3,800,000 7/31/2003 105 2 Bayou Oaks Apartments 8/31/2003 3,090,000 8/30/2003 106 1 300-304 E 81st Street 9/4/2003 4,200,000 4/30/2003 107 1 10811-10831 Foothill Boulevard 6/20/2003 3,600,000 N/A 108 2 Brandywine Apartments 6/19/2003 2,850,000 5/31/2003 109 1 Fortress Self Storage 8/31/2003 3,730,000 8/31/2003 110 1 Clayton Industrial Park 9/1/2003 3,500,000 8/31/2003 111 1 Eckerd's - Middleton NJ 3/29/2003 3,550,000 N/A 112 1 2701-2751 East Chapman Avenue 4/1/2003 2,970,000 3/31/2003 113 2 Park House Apartments 8/1/2003 2,600,000 6/30/2003 114 1 324 E 77th Street 4/16/2003 2,900,000 4/30/2003 115 2 Buttonwood Square 4/10/2003 2,500,000 3/31/2003 116 1 Huntley Road Retail Center 9/1/2003 2,540,000 8/31/2003 117 1 Highway Storage McAllen and Pharr 9/4/2003 2,845,000 7/31/2003 118 1 Powell Plaza 9/1/2003 2,410,000 6/30/2003 119 1 Gold Circle Office Building 8/31/2003 2,270,000 8/31/2003 120 1 Waynesburg Centre 7/31/2003 2,350,000 7/31/2003 121 1 Pierre Plaza Shopping Center 5/7/2003 2,275,000 6/30/2003 122 2 Salem Terrace Apartments 5/27/2003 2,250,000 3/31/2003 123 2 Carefree Valley Resort 10/1/2003 2,050,000 7/30/2003 124 1 290 Fairbanks Center 8/26/2003 2,100,000 3/31/2003 125 1 Scripps Hill Retail Center 9/10/2003 2,300,000 7/31/2003 126 2 Springwood Apartments 7/1/2003 1,800,000 5/31/2003 127 1 Cypress Harbor Mobile Home Park 7/1/2003 1,800,000 7/30/2003 128 2 Casa Del Rey Mobile Home Park 7/31/2003 1,800,000 7/31/2003 129 2 Fort Sedgwick Apartments 9/18/2003 1,750,000 8/15/03 130 1 10019 Reisterstown Road 6/6/2003 1,650,000 4/30/2003 131 1 Shops at Canton 7/24/2003 1,800,000 7/31/2003 132 1 Shiloh Center - 5 5/1/2003 1,900,000 N/A 133 1 Camino Maquilladora Buildings 9/10/2003 2,040,000 9/30/2003 134 1 Meadow Estates Manufactured Housing Community 7/8/2003 1,650,000 6/30/2003 135 1 Evergreen Office 8/31/2003 1,610,000 8/31/2003 136 2 Amberwood Apartments 6/4/2003 2,200,000 5/31/2003 137 1 3200 Commander Industrial Building 6/11/2003 1,650,000 5/11/2003 138 1 Mabury Plaza 7/1/2003 1,750,000 5/31/2003 139 2 Bel Air Mobile Home Communities 5/1/2003 1,350,000 5/31/2003 140 2 Park Manor Apartments 6/1/2003 1,275,000 6/30/2003 141 1 Silverado Office Building 9/10/2003 2,160,000 8/30/2003 142 1 Pinehollow Business Park 3/31/2003 1,450,000 3/31/2003 143 1 Broadway Commons Shopping Center 5/1/2003 1,300,000 4/30/2003 144 2 Colonial Arms Apartments 9/30/2003 1,320,000 6/30/2003 145 2 Folger Apartments 9/11/2003 1,390,000 3/31/2003 146 2 Church Hill Gables 5/9/2003 1,500,000 5/31/2003 147 2 Morris Manor Apartment 8/1/2003 1,230,000 5/31/2003 148 2 Halifax Court Apartments 8/1/2003 1,100,000 3/31/2003 149 2 Ashley Street Apartments 9/24/2003 950,000 8/31/2003 MOST MOST MOST LOAN RECENT RECENT RECENT # CROSSED GROUP PROPERTY NAME REVENUE EXPENSES NOI - ------- ----- ------------- ------- -------- --- 74 1 Palm Ridge $ 614,702 $ 182,358 $ 432,345 75 2 Point-O-View Apartments 932,230 422,012 510,218 76 1 Village Shoppes 564,990 110,116 454,874 77 2 Oak Brook Apartments 746,112 322,582 423,530 78 1 Amaranth Building 678,650 137,794 540,856 79 1 Merit Building 739,355 240,522 498,833 80 1 4260-4310 West Broad Street 727,898 221,261 506,637 81 1 Gateway Center 744,314 201,480 542,834 82 1 PNC Advisor Building 359,130 N/A 359,130 83 1 917 Franklin Office Building 736,871 313,288 423,583 84 1 Riverside Business Park 507,339 185,730 321,609 85 2 Oaks of League City 795,161 427,473 367,688 86 1 Shiloh Center - 7 N/A N/A N/A 87 1 Storage USA 519,204 180,244 338,960 88 1 Eckerd's OAK RIDGE 358,635 1,712 356,923 89 2 Tiburon Pointe Apartments N/A N/A N/A 90 2 Mansions North Apartments 1,042,866 672,631 370,235 91 1 Dearborn Town Center 456,877 137,028 319,849 92 1 72nd & Cedar Street Office N/A N/A N/A 93 2 Sands Point Cove Apartments 772,569 387,723 384,846 94 1 Rancho Bernardo Professional Building 493,879 181,279 312,600 95 1 Summerfield Renaissance Shopping Center 437,895 102,353 335,542 96 1 Kroger Retail Center 464,325 116,504 347,821 97 1 Coopers Common Plaza N/A N/A N/A 98 2 Diplomat Townhomes 753,167 408,897 344,270 99 1 Chatfield Plaza 471,182 124,244 346,938 100 1 Northwood Plaza Shopping Center 450,649 132,028 318,621 101 1 Shiloh Center - 8 N/A N/A N/A 102 2 Riverview Terrace 429,216 184,756 244,460 103 2 Angelique Apartments 782,499 471,767 310,732 104 2 Langdon Hall Apartments 529,094 303,107 225,987 105 2 Bayou Oaks Apartments 525,765 271,393 254,372 106 1 300-304 E 81st Street 429,609 195,817 233,792 107 1 10811-10831 Foothill Boulevard N/A N/A N/A 108 2 Brandywine Apartments 480,248 215,191 265,057 109 1 Fortress Self Storage 747,653 268,880 478,773 110 1 Clayton Industrial Park 417,299 123,553 293,746 111 1 Eckerd's - Middleton NJ N/A N/A N/A 112 1 2701-2751 East Chapman Avenue 427,104 110,630 316,474 113 2 Park House Apartments 448,626 176,109 272,517 114 1 324 E 77th Street 303,970 112,873 191,097 115 2 Buttonwood Square 389,988 111,494 278,494 116 1 Huntley Road Retail Center 292,108 58,976 233,132 117 1 Highway Storage McAllen and Pharr 440,295 213,043 227,252 118 1 Powell Plaza 315,910 49,692 266,218 119 1 Gold Circle Office Building 344,638 132,617 212,021 120 1 Waynesburg Centre 351,184 92,753 258,431 121 1 Pierre Plaza Shopping Center 264,362 32,448 231,914 122 2 Salem Terrace Apartments 427,531 180,992 246,539 123 2 Carefree Valley Resort 320,851 133,627 187,224 124 1 290 Fairbanks Center 239,832 41,580 198,252 125 1 Scripps Hill Retail Center 276,598 78,218 198,380 126 2 Springwood Apartments 335,798 164,239 171,559 127 1 Cypress Harbor Mobile Home Park 239,075 70,632 168,443 128 2 Casa Del Rey Mobile Home Park 249,614 62,045 187,569 129 2 Fort Sedgwick Apartments 301,935 107,388 194,547 130 1 10019 Reisterstown Road 217,561 72,864 144,697 131 1 Shops at Canton 182,799 38,402 144,397 132 1 Shiloh Center - 5 N/A N/A N/A 133 1 Camino Maquilladora Buildings 292,802 79,077 213,725 134 1 Meadow Estates Manufactured Housing Community 196,792 53,937 142,855 135 1 Evergreen Office 244,558 96,878 147,680 136 2 Amberwood Apartments 390,022 245,735 144,287 137 1 3200 Commander Industrial Building 244,087 76,910 167,177 138 1 Mabury Plaza 199,459 61,602 137,857 139 2 Bel Air Mobile Home Communities 247,432 128,197 119,235 140 2 Park Manor Apartments 188,241 88,498 99,743 141 1 Silverado Office Building 317,324 158,193 159,131 142 1 Pinehollow Business Park 200,732 52,073 148,659 143 1 Broadway Commons Shopping Center 185,386 57,869 127,517 144 2 Colonial Arms Apartments 285,754 188,012 97,742 145 2 Folger Apartments 163,154 48,364 114,790 146 2 Church Hill Gables 159,645 55,092 104,553 147 2 Morris Manor Apartment 285,174 183,939 101,235 148 2 Halifax Court Apartments 182,600 49,372 133,228 149 2 Ashley Street Apartments 185,481 137,406 48,075 LOAN # CROSSED GROUP PROPERTY NAME U/W NOI U/W NCF (2) - ------- ----- ------------- ------- ----------- 74 1 Palm Ridge $ 417,542 $ 396,651 75 2 Point-O-View Apartments 532,306 490,906 76 1 Village Shoppes 605,031 557,996 77 2 Oak Brook Apartments 416,796 391,796 78 1 Amaranth Building 457,172 418,330 79 1 Merit Building 452,174 401,281 80 1 4260-4310 West Broad Street 487,813 395,571 81 1 Gateway Center 525,792 484,912 82 1 PNC Advisor Building 357,630 355,008 83 1 917 Franklin Office Building 450,804 395,011 84 1 Riverside Business Park 467,020 411,462 85 2 Oaks of League City 369,442 342,442 86 1 Shiloh Center - 7 364,130 343,789 87 1 Storage USA 334,625 334,625 88 1 Eckerd's OAK RIDGE 335,683 322,159 89 2 Tiburon Pointe Apartments 313,817 301,817 90 2 Mansions North Apartments 356,216 304,346 91 1 Dearborn Town Center 328,154 299,025 92 1 72nd & Cedar Street Office 336,108 306,080 93 2 Sands Point Cove Apartments 347,081 311,581 94 1 Rancho Bernardo Professional Building 369,075 335,034 95 1 Summerfield Renaissance Shopping Center 294,130 284,588 96 1 Kroger Retail Center 338,908 306,619 97 1 Coopers Common Plaza 361,567 341,265 98 2 Diplomat Townhomes 353,462 322,462 99 1 Chatfield Plaza 304,078 264,084 100 1 Northwood Plaza Shopping Center 303,208 275,157 101 1 Shiloh Center - 8 275,858 261,664 102 2 Riverview Terrace 268,473 256,473 103 2 Angelique Apartments 281,997 248,497 104 2 Langdon Hall Apartments 251,486 225,086 105 2 Bayou Oaks Apartments 255,577 233,577 106 1 300-304 E 81st Street 238,083 232,333 107 1 10811-10831 Foothill Boulevard 262,241 254,465 108 2 Brandywine Apartments 269,628 238,428 109 1 Fortress Self Storage 361,833 353,579 110 1 Clayton Industrial Park 313,790 276,632 111 1 Eckerd's - Middleton NJ 317,542 304,493 112 1 2701-2751 East Chapman Avenue 236,194 208,673 113 2 Park House Apartments 253,398 235,398 114 1 324 E 77th Street 189,988 184,988 115 2 Buttonwood Square 227,104 212,604 116 1 Huntley Road Retail Center 223,970 210,254 117 1 Highway Storage McAllen and Pharr 267,387 247,873 118 1 Powell Plaza 206,999 183,041 119 1 Gold Circle Office Building 203,495 177,802 120 1 Waynesburg Centre 247,004 216,442 121 1 Pierre Plaza Shopping Center 224,085 205,825 122 2 Salem Terrace Apartments 223,991 206,491 123 2 Carefree Valley Resort 198,101 192,095 124 1 290 Fairbanks Center 164,932 153,371 125 1 Scripps Hill Retail Center 191,838 179,289 126 2 Springwood Apartments 172,741 158,491 127 1 Cypress Harbor Mobile Home Park 145,067 140,567 128 2 Casa Del Rey Mobile Home Park 144,419 140,669 129 2 Fort Sedgwick Apartments 188,901 174,901 130 1 10019 Reisterstown Road 137,622 120,157 131 1 Shops at Canton 149,239 140,824 132 1 Shiloh Center - 5 155,383 146,936 133 1 Camino Maquilladora Buildings 174,279 156,012 134 1 Meadow Estates Manufactured Housing Community 142,524 138,224 135 1 Evergreen Office 142,425 122,176 136 2 Amberwood Apartments 173,622 160,122 137 1 3200 Commander Industrial Building 140,760 116,513 138 1 Mabury Plaza 121,539 109,898 139 2 Bel Air Mobile Home Communities 121,517 116,817 140 2 Park Manor Apartments 107,798 101,798 141 1 Silverado Office Building 148,999 139,379 142 1 Pinehollow Business Park 150,121 126,536 143 1 Broadway Commons Shopping Center 102,760 97,009 144 2 Colonial Arms Apartments 130,599 115,349 145 2 Folger Apartments 107,202 103,202 146 2 Church Hill Gables 115,799 111,549 147 2 Morris Manor Apartment 152,802 139,302 148 2 Halifax Court Apartments 105,075 98,075 149 2 Ashley Street Apartments 107,527 98,527
DESCRIPTIONS OF THE MORTGAGED REAL PROPERTIES
CUT-OFF DATE LOAN PRINCIPAL PROPERTY # CROSSED GROUP PROPERTY NAME BALANCE (1) PROPERTY TYPE SUB-TYPE - ------- ----- ------------- ----------- ------------- -------- 150 2 Royal Palms Apartments $ 721,302 Multifamily Conventional 151 2 Quartermaster Court Apartments 634,310 Multifamily Conventional 152 2 833 Whalley Avenue 596,740 Multifamily Conventional 153 1 76-80 Lafayette Avenue 585,529 Mixed Use Office/Retail --------------- TOTAL/WEIGHTED AVERAGE: 1,261,269,491 =============== MAXIMUM: MINIMUM: LOAN UNITS/SQ.FT./ FEE/ YEAR OCCUPANCY # CROSSED GROUP PROPERTY NAME ROOMS/PADS LEASEHOLD YEAR BUILT RENOVATED RATE AT U/W - ------- ----- ------------- ---------- --------- ---------- --------- ----------- 150 2 Royal Palms Apartments 48 Fee 1962 2002 98% 151 2 Quartermaster Court Apartments 32 Fee 2002 N/A 100% 152 2 833 Whalley Avenue 14 Fee 1900 2000 100% 153 1 76-80 Lafayette Avenue 10,824 Fee 1968 N/A 92% ---------------------------------- TOTAL/WEIGHTED AVERAGE: 1979 1999 89% ================================== MAXIMUM: 2003 2003 100% MINIMUM: 1870 1980 79% MOST RECENT LOAN DATE OF OPERATING STATEMENT # CROSSED GROUP PROPERTY NAME OCCUPANCY RATE APPRAISED VALUE DATE - ------- ----- ------------- -------------- --------------- ---- 150 2 Royal Palms Apartments 8/26/2003 $ 1,175,000 7/30/2003 151 2 Quartermaster Court Apartments 8/1/2003 980,000 7/31/2003 152 2 833 Whalley Avenue 9/1/2003 750,000 6/30/2003 153 1 76-80 Lafayette Avenue 5/19/2003 1,100,000 5/31/2003 ----------------------------------------------------- TOTAL/WEIGHTED AVERAGE: $ 2,306,572,000 ===================================================== MAXIMUM: $ 335,000,000 MINIMUM: $ 750,000 MOST MOST MOST LOAN RECENT RECENT RECENT # CROSSED GROUP PROPERTY NAME REVENUE EXPENSES NOI - ------- ----- ------------- ------- -------- --- 150 2 Royal Palms Apartments $ 284,638 $ 155,518 $ 129,120 151 2 Quartermaster Court Apartments 211,320 122,312 89,008 152 2 833 Whalley Avenue 140,893 46,303 94,590 153 1 76-80 Lafayette Avenue 151,655 53,854 97,801 ------------------------------------------- TOTAL/WEIGHTED AVERAGE: $ 274,103,232 $ 104,363,285 $ 169,739,965 =========================================== MAXIMUM: $ 29,894,641 $ 13,062,233 $ 21,576,675 MINIMUM: $ 140,893 $ 1,712 $ 48,075 LOAN # CROSSED GROUP PROPERTY NAME U/W NOI U/W NCF (2) - ------- ----- ------------- ------- ----------- 150 2 Royal Palms Apartments $ 113,096 $ 101,096 151 2 Quartermaster Court Apartments 88,553 80,553 152 2 833 Whalley Avenue 73,058 69,558 153 1 76-80 Lafayette Avenue 85,552 75,020 ---------------------------- TOTAL/WEIGHTED AVERAGE: $ 182,899,579 $ 172,019,658 ============================ MAXIMUM: $ 21,066,354 $ 20,894,721 MINIMUM: $ 73,058 $ 69,558
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (B) THE UNDERLYING MORTGAGE LOANS SECURED BY MAGNOLIA VILLAGE, BLUE JAY MOBILE HOME PARK, CANDLELIGHT MANOR AND ELMWOOD MOBILE HOME PARK ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) U/W NCF REFLECTS THE NET CASH FLOW AFTER U/W REPLACEMENT RESERVES, U/W LC'S AND TI'S AND U/W FF&E. (3) SQUARE FOOTAGE NUMBER INCLUDES ANCHOR SPACES UNDER GROUND LEASES. CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS
PERCENTAGE OF ORIGINAL CUT-OFF DATE INITIAL NET LOAN PRINCIPAL PRINCIPAL MORTGAGE # CROSSED GROUP LOAN NAME BALANCE BALANCE (1) POOL BALANCE - - ------- ----- --------- ------- ----------- ------------ 1 1 Mall at Fairfield Commons $ 85,500,000 $ 85,405,532 6.77% 2 1 Mayfair Mall and Office Complex 80,000,000 79,343,515 6.29% 3 1 Stanford Shopping Center 75,000,000 75,000,000 5.95% 4 1 MeriStar Hotel Portfolio 51,000,000 50,881,109 4.03% 5 1 Paramount Plaza 45,000,000 44,876,466 3.56% 6 1 Montalvo Square Shopping Center 42,300,000 42,300,000 3.35% 7 2 Jefferson at Montfort 35,000,000 35,000,000 2.77% 8 1 EastBridge Landing 35,000,000 33,689,997 2.67% 9 1 East Thunderbird Square Shopping Center North 28,500,000 28,472,696 2.26% 10 1 Janss Court 28,600,000 28,295,760 2.24% 11 1 Ravine Development 27,270,000 26,515,146 2.10% 12 2 Serrano Apartments 26,450,000 26,450,000 2.10% 13 1 Crow Canyon Commons Shopping Center 23,000,000 22,903,652 1.82% 14 2 Carlingford Apartments 22,000,000 21,762,334 1.73% 15 1 220 Post Street 21,300,000 21,300,000 1.69% 16 2 Kings Crossing I & II 21,000,000 20,891,904 1.66% 17 2 Atrium at Market Center 18,200,000 18,124,880 1.44% 18 2 Villages of Deerfield Apartments 16,700,000 16,641,062 1.32% 19 1 Baseline Corporate Center 16,455,000 16,438,430 1.30% 20 1 Challenger Business Center 16,400,000 16,329,079 1.29% 21 1 Delphi Building 16,000,000 15,976,947 1.27% 22 (A) 1 Anaheim Professional Center 9,375,000 9,365,667 0.74% 23 (A) 1 Coast Family Medical Center 5,725,000 5,719,224 0.45% 24 1 Radisson Hotel Historic Savannah 15,000,000 14,980,678 1.19% 25 2 Breckinridge Court Apartments 14,800,000 14,772,020 1.17% 26 2 Addison at Hampton 14,600,000 14,524,848 1.15% 27 1 SouthCourt at South Square 14,550,000 14,423,499 1.14% 28 1 Deer Valley Financial Center 11,625,000 11,604,681 0.92% 29 (B) 2 Magnolia Village 4,025,000 3,997,827 0.32% 30 (B) 2 Blue Jay Mobile Home Park 4,000,000 3,976,321 0.32% 31 (B) 2 Candlelight Manor 2,070,000 2,057,746 0.16% 32 (B) 2 Elmwood Mobile Home Park 1,375,000 1,366,860 0.11% 33 1 Shoppes of New Tampa 10,600,000 10,600,000 0.84% 34 1 The Borders and Shoppes at Chestnut Hill 10,500,000 10,434,412 0.83% 35 1 Tustin Freeway Business Center 10,000,000 9,989,911 0.79% 36 1 Oak Hill Townhomes 9,864,000 9,845,186 0.78% 37 1 Northlake Square Shopping Center 9,500,000 9,438,742 0.75% 38 2 Stone Hill Apartments 9,300,000 9,262,680 0.73% 39 2 High Ridge Apartments 9,200,000 9,182,569 0.73% 40 2 Caleb's Place Townhomes 9,200,000 9,147,744 0.73% 41 2 Northgate Village Apartments 8,480,000 8,402,346 0.67% 42 2 Cambridge Village Apartments 8,150,000 8,119,100 0.64% 43 1 Staybridge Suites 7,450,000 7,440,612 0.59% 44 1 Summerville Plaza Shopping Center 7,425,000 7,379,962 0.59% 45 1 St. Joseph's/St. Jude's Medical Building 7,000,000 6,967,396 0.55% 46 1 Haynes Plaza 7,000,000 6,814,263 0.54% 47 2 Hearthstone Apartments 6,720,000 6,658,463 0.53% 48 2 Canyon View Apartments 6,700,000 6,653,051 0.53% 49 1 South County Medical Plaza 6,600,000 6,593,640 0.52% 50 1 Crossings at Westland 6,400,000 6,339,552 0.50% 51 2 Villas of Brandychase 6,240,000 6,205,217 0.49% 52 1 78 Place 6,200,000 6,194,049 0.49% 53 1 Vanowen Medical Office 6,000,000 5,964,095 0.47% 54 1 Bolsa Retail Center 5,850,000 5,844,363 0.46% 55 2 Candlewick Apartments 5,850,000 5,811,980 0.46% 56 1 91 Montvale Avenue 5,810,000 5,804,304 0.46% 57 2 Northgate Club Apartments 5,800,000 5,779,340 0.46% 58 2 Country Village & Oakwood Mobile Home Park 5,750,000 5,750,000 0.46% 59 1 Tops Plaza - North Olmsted 5,760,000 5,743,218 0.46% 60 1 West Highlands Shopping Center 5,650,000 5,650,000 0.45% 61 1 Metcalf 127 Shops 5,545,000 5,531,107 0.44% 62 1 Evergreen - Beverly Plaza & Park Plaza 5,300,000 5,267,663 0.42% 63 1 Gifford Industrial Park 5,200,000 5,176,306 0.41% 64 1 Oakley Plaza 5,175,000 5,175,000 0.41% 65 2 Cloverdale Apartments 5,128,000 5,108,073 0.40% 66 2 Collins Aire Mobile Home Park 4,900,000 4,900,000 0.39% 67 1 Chino Hills Promenade 4,900,000 4,887,170 0.39% 68 2 Hunter's Glen 4,875,000 4,855,437 0.38% 69 2 Cedar Glen Apartments 4,650,000 4,596,734 0.36% 70 2 College Hills West Apartments 4,600,000 4,587,345 0.36% 71 1 4601 Eisenhower 4,400,000 4,389,115 0.35% 72 1 Joyners Crossing 4,320,000 4,301,596 0.34% 73 1 Sedgefield Village Shopping Center 4,300,000 4,281,987 0.34% 74 1 Palm Ridge 4,170,000 4,170,000 0.33% 75 2 Point-O-View Apartments 4,376,000 4,077,258 0.32% 76 1 Village Shoppes 4,100,000 4,076,870 0.32% 77 2 Oak Brook Apartments 4,000,000 3,975,067 0.32% 78 1 Amaranth Building 4,000,000 3,971,612 0.31% ORIGINATION REMAINING ORIGINAL AMORTIZATION AMORTIZATION TERM TO LOAN TERM TERM MATURITY # CROSSED GROUP LOAN NAME (MONTHS) (MONTHS) (MONTHS)(2) - - ------- ----- --------- -------- -------- ----------- 1 1 Mall at Fairfield Commons 360 359 132 2 1 Mayfair Mall and Office Complex 360 355 60 3 1 Stanford Shopping Center Interest Only Interest Only 60 4 1 MeriStar Hotel Portfolio 300 298 120 5 1 Paramount Plaza 360 357 120 6 1 Montalvo Square Shopping Center 360 360 120 7 2 Jefferson at Montfort 360 360 60 8 1 EastBridge Landing 395 359 117 9 1 East Thunderbird Square Shopping Center North 360 359 120 10 1 Janss Court 324 315 120 11 1 Ravine Development 300 277 180 12 2 Serrano Apartments 360 360 120 13 1 Crow Canyon Commons Shopping Center 360 356 120 14 2 Carlingford Apartments 360 350 60 15 1 220 Post Street Interest Only Interest Only 60 16 2 Kings Crossing I & II 360 356 120 17 2 Atrium at Market Center 360 355 120 18 2 Villages of Deerfield Apartments 360 357 120 19 1 Baseline Corporate Center 360 359 120 20 1 Challenger Business Center 360 356 120 21 1 Delphi Building 300 299 120 22 (A) 1 Anaheim Professional Center 360 359 120 23 (A) 1 Coast Family Medical Center 360 359 120 24 1 Radisson Hotel Historic Savannah 300 299 120 25 2 Breckinridge Court Apartments 360 358 120 26 2 Addison at Hampton 360 356 120 27 1 SouthCourt at South Square 300 294 120 28 1 Deer Valley Financial Center 360 358 120 29 (B) 2 Magnolia Village 360 353 120 30 (B) 2 Blue Jay Mobile Home Park 360 354 120 31 (B) 2 Candlelight Manor 360 354 120 32 (B) 2 Elmwood Mobile Home Park 360 354 120 33 1 Shoppes of New Tampa Interest Only Interest Only 84 34 1 The Borders and Shoppes at Chestnut Hill 360 354 120 35 1 Tustin Freeway Business Center 360 359 120 36 1 Oak Hill Townhomes 360 358 120 37 1 Northlake Square Shopping Center 360 354 120 38 2 Stone Hill Apartments 360 356 120 39 2 High Ridge Apartments 360 358 120 40 2 Caleb's Place Townhomes 300 296 120 41 2 Northgate Village Apartments 360 351 120 42 2 Cambridge Village Apartments 360 356 120 43 1 Staybridge Suites 300 299 120 44 1 Summerville Plaza Shopping Center 300 296 120 45 1 St. Joseph's/St. Jude's Medical Building 360 355 120 46 1 Haynes Plaza 180 172 180 47 2 Hearthstone Apartments 360 351 120 48 2 Canyon View Apartments 360 354 60 49 1 South County Medical Plaza 360 359 120 50 1 Crossings at Westland 300 293 120 51 2 Villas of Brandychase 300 296 120 52 1 78 Place 360 359 120 53 1 Vanowen Medical Office 360 354 120 54 1 Bolsa Retail Center 360 359 120 55 2 Candlewick Apartments 360 353 120 56 1 91 Montvale Avenue 360 359 120 57 2 Northgate Club Apartments 360 356 120 58 2 Country Village & Oakwood Mobile Home Park 336 336 120 59 1 Tops Plaza - North Olmsted 312 310 120 60 1 West Highlands Shopping Center 360 360 120 61 1 Metcalf 127 Shops 300 298 120 62 1 Evergreen - Beverly Plaza & Park Plaza 360 354 120 63 1 Gifford Industrial Park 360 356 120 64 1 Oakley Plaza Interest Only Interest Only 84 65 2 Cloverdale Apartments 300 297 120 66 2 Collins Aire Mobile Home Park 360 360 120 67 1 Chino Hills Promenade 360 357 120 68 2 Hunter's Glen 360 356 120 69 2 Cedar Glen Apartments 360 348 120 70 2 College Hills West Apartments 360 357 120 71 1 4601 Eisenhower 360 357 120 72 1 Joyners Crossing 300 297 120 73 1 Sedgefield Village Shopping Center 360 356 120 74 1 Palm Ridge 360 360 120 75 2 Point-O-View Apartments 351 290 120 76 1 Village Shoppes 300 296 120 77 2 Oak Brook Apartments 360 354 120 78 1 Amaranth Building 300 295 120 INITIAL REMAINING INTEREST TERM TO ONLY MORTGAGE LOAN MATURITY PERIOD INTEREST # CROSSED GROUP LOAN NAME (MONTHS)(1)(2) (MONTHS) RATE - - ------- ----- --------- -------------- -------- ---- 1 1 Mall at Fairfield Commons 131 0 5.450% 2 1 Mayfair Mall and Office Complex 55 0 3.108% 3 1 Stanford Shopping Center 57 60 3.300% 4 1 MeriStar Hotel Portfolio 118 0 6.880% 5 1 Paramount Plaza 117 0 6.150% 6 1 Montalvo Square Shopping Center 115 12 5.150% 7 2 Jefferson at Montfort 56 23 4.720% 8 1 EastBridge Landing 72 9 6.125% 9 1 East Thunderbird Square Shopping Center North 119 0 6.200% 10 1 Janss Court 111 0 5.950% 11 1 Ravine Development 157 0 7.600% 12 2 Serrano Apartments 117 6 4.690% 13 1 Crow Canyon Commons Shopping Center 116 0 5.400% 14 2 Carlingford Apartments 50 0 5.460% 15 1 220 Post Street 54 60 5.870% 16 2 Kings Crossing I & II 116 0 4.400% 17 2 Atrium at Market Center 115 0 6.390% 18 2 Villages of Deerfield Apartments 117 0 4.930% 19 1 Baseline Corporate Center 119 0 5.940% 20 1 Challenger Business Center 116 0 5.250% 21 1 Delphi Building 119 0 6.010% 22 (A) 1 Anaheim Professional Center 119 0 6.000% 23 (A) 1 Coast Family Medical Center 119 0 5.930% 24 1 Radisson Hotel Historic Savannah 119 0 6.730% 25 2 Breckinridge Court Apartments 118 0 5.850% 26 2 Addison at Hampton 116 0 4.400% 27 1 SouthCourt at South Square 114 0 5.700% 28 1 Deer Valley Financial Center 118 0 6.200% 29 (B) 2 Magnolia Village 113 0 5.760% 30 (B) 2 Blue Jay Mobile Home Park 114 0 5.700% 31 (B) 2 Candlelight Manor 114 0 5.700% 32 (B) 2 Elmwood Mobile Home Park 114 0 5.700% 33 1 Shoppes of New Tampa 80 84 4.910% 34 1 The Borders and Shoppes at Chestnut Hill 114 0 5.450% 35 1 Tustin Freeway Business Center 119 0 5.930% 36 1 Oak Hill Townhomes 118 0 5.810% 37 1 Northlake Square Shopping Center 114 0 5.300% 38 2 Stone Hill Apartments 116 0 5.600% 39 2 High Ridge Apartments 118 0 5.840% 40 2 Caleb's Place Townhomes 116 0 5.790% 41 2 Northgate Village Apartments 111 0 5.550% 42 2 Cambridge Village Apartments 116 0 5.860% 43 1 Staybridge Suites 119 0 6.870% 44 1 Summerville Plaza Shopping Center 116 0 5.400% 45 1 St. Joseph's/St. Jude's Medical Building 115 0 5.870% 46 1 Haynes Plaza 172 0 6.330% 47 2 Hearthstone Apartments 111 0 5.550% 48 2 Canyon View Apartments 54 0 4.900% 49 1 South County Medical Plaza 119 0 6.170% 50 1 Crossings at Westland 113 0 6.080% 51 2 Villas of Brandychase 116 0 5.900% 52 1 78 Place 119 0 6.190% 53 1 Vanowen Medical Office 114 0 5.650% 54 1 Bolsa Retail Center 119 0 6.170% 55 2 Candlewick Apartments 113 0 5.930% 56 1 91 Montvale Avenue 119 0 6.080% 57 2 Northgate Club Apartments 116 0 6.140% 58 2 Country Village & Oakwood Mobile Home Park 116 24 5.150% 59 1 Tops Plaza - North Olmsted 118 0 5.170% 60 1 West Highlands Shopping Center 115 12 5.300% 61 1 Metcalf 127 Shops 118 0 6.480% 62 1 Evergreen - Beverly Plaza & Park Plaza 114 0 5.560% 63 1 Gifford Industrial Park 116 0 5.000% 64 1 Oakley Plaza 80 84 4.290% 65 2 Cloverdale Apartments 117 0 6.440% 66 2 Collins Aire Mobile Home Park 120 0 5.960% 67 1 Chino Hills Promenade 117 0 6.370% 68 2 Hunter's Glen 116 0 5.600% 69 2 Cedar Glen Apartments 108 0 5.990% 70 2 College Hills West Apartments 117 0 6.140% 71 1 4601 Eisenhower 117 0 6.630% 72 1 Joyners Crossing 117 0 5.890% 73 1 Sedgefield Village Shopping Center 116 0 5.400% 74 1 Palm Ridge 120 0 6.170% 75 2 Point-O-View Apartments 59 0 6.140% 76 1 Village Shoppes 116 0 5.830% 77 2 Oak Brook Apartments 114 0 5.460% 78 1 Amaranth Building 115 0 5.740% FIRST LOAN MONTHLY PAYMENT MATURITY # CROSSED GROUP LOAN NAME PAYMENT(3) DATE DATE - - ------- ----- --------- ---------- ---- ---- 1 1 Mall at Fairfield Commons $ 482,781 12/1/2003 11/1/2014 2 1 Mayfair Mall and Office Complex 341,961 8/11/2003 7/11/2008 3 1 Stanford Shopping Center 209,115 10/11/2003 9/11/2008 4 1 MeriStar Hotel Portfolio 356,563 11/11/2003 10/11/2028 5 1 Paramount Plaza 274,153 10/11/2003 9/11/2013 6 1 Montalvo Square Shopping Center 230,969 8/11/2003 7/11/2013 7 2 Jefferson at Montfort 181,944 9/11/2003 8/11/2008 8 1 EastBridge Landing 204,903 4/1/2000 12/1/2009 9 1 East Thunderbird Square Shopping Center North 174,554 12/1/2003 11/1/2013 10 1 Janss Court 177,568 4/11/2003 3/11/2030 11 1 Ravine Development 203,301 (7) 2/1/2002 1/2/2017 12 2 Serrano Apartments 137,021 10/1/2003 9/1/2013 13 1 Crow Canyon Commons Shopping Center 129,152 9/11/2003 8/11/2013 14 2 Carlingford Apartments 124,362 3/11/2003 2/11/2008 15 1 220 Post Street 105,640 7/11/2003 6/11/2033 16 2 Kings Crossing I & II 105,160 9/11/2003 8/11/2013 17 2 Atrium at Market Center 113,723 8/11/2003 7/11/2013 18 2 Villages of Deerfield Apartments 88,936 10/1/2003 9/1/2013 19 1 Baseline Corporate Center 98,022 12/1/2003 11/1/2013 20 1 Challenger Business Center 90,561 9/11/2003 8/11/2013 21 1 Delphi Building 103,186 12/1/2003 11/1/2013 22 (A) 1 Anaheim Professional Center 56,208 12/1/2003 11/1/2013 23 (A) 1 Coast Family Medical Center 34,067 12/1/2003 11/1/2013 24 1 Radisson Hotel Historic Savannah 103,447 12/1/2003 11/1/2013 25 2 Breckinridge Court Apartments 87,311 11/1/2003 10/1/2013 26 2 Addison at Hampton 73,111 9/11/2003 8/11/2013 27 1 SouthCourt at South Square 91,096 7/11/2003 6/11/2013 28 1 Deer Valley Financial Center 71,200 11/1/2003 10/1/2013 29 (B) 2 Magnolia Village 23,514 6/11/2003 5/11/2013 30 (B) 2 Blue Jay Mobile Home Park 23,216 7/11/2003 6/11/2013 31 (B) 2 Candlelight Manor 12,014 7/11/2003 6/11/2013 32 (B) 2 Elmwood Mobile Home Park 7,981 7/11/2003 6/11/2013 33 1 Shoppes of New Tampa 43,372 9/11/2003 8/11/2010 34 1 The Borders and Shoppes at Chestnut Hill 59,289 7/11/2003 6/11/2013 35 1 Tustin Freeway Business Center 59,506 12/1/2003 11/1/2013 36 1 Oak Hill Townhomes 57,940 11/1/2003 10/1/2013 37 1 Northlake Square Shopping Center 52,754 7/11/2003 6/11/2013 38 2 Stone Hill Apartments 53,389 9/11/2003 8/11/2013 39 2 High Ridge Apartments 54,216 11/1/2003 10/1/2013 40 2 Caleb's Place Townhomes 58,100 9/11/2003 8/11/2013 41 2 Northgate Village Apartments 48,415 4/11/2003 3/11/2013 42 2 Cambridge Village Apartments 48,132 9/11/2003 8/11/2013 43 1 Staybridge Suites 52,039 12/1/2003 11/1/2013 44 1 Summerville Plaza Shopping Center 45,154 9/11/2003 8/11/2013 45 1 St. Joseph's/St. Jude's Medical Building 41,385 8/11/2003 7/11/2013 46 1 Haynes Plaza 60,325 5/11/2003 4/11/2018 47 2 Hearthstone Apartments 38,367 4/11/2003 3/11/2013 48 2 Canyon View Apartments 35,559 7/11/2003 6/11/2008 49 1 South County Medical Plaza 40,295 12/1/2003 11/1/2013 50 1 Crossings at Westland 41,549 6/11/2003 5/11/2028 51 2 Villas of Brandychase 39,824 9/11/2003 8/11/2013 52 1 78 Place 37,933 12/1/2003 11/1/2013 53 1 Vanowen Medical Office 34,634 7/11/2003 6/11/2013 54 1 Bolsa Retail Center 35,716 12/1/2003 11/1/2013 55 2 Candlewick Apartments 34,811 6/11/2003 5/11/2013 56 1 91 Montvale Avenue 35,133 12/1/2003 11/1/2013 57 2 Northgate Club Apartments 35,298 9/11/2003 8/11/2013 58 2 Country Village & Oakwood Mobile Home Park 32,350 9/11/2003 8/11/2013 59 1 Tops Plaza - North Olmsted 33,603 11/1/2003 10/1/2013 60 1 West Highlands Shopping Center 31,375 8/11/2003 7/11/2013 61 1 Metcalf 127 Shops 37,371 11/1/2003 10/1/2013 62 1 Evergreen - Beverly Plaza & Park Plaza 30,293 7/11/2003 6/11/2013 63 1 Gifford Industrial Park 27,915 9/11/2003 8/11/2013 64 1 Oakley Plaza 18,501 9/11/2003 8/11/2010 65 2 Cloverdale Apartments 34,433 10/1/2003 9/1/2013 66 2 Collins Aire Mobile Home Park 29,252 1/1/2004 12/1/2013 67 1 Chino Hills Promenade 30,554 10/1/2003 9/1/2013 68 2 Hunter's Glen 27,986 9/11/2003 8/11/2013 69 2 Cedar Glen Apartments 27,849 1/11/2003 12/11/2012 70 2 College Hills West Apartments 27,995 10/11/2003 9/11/2013 71 1 4601 Eisenhower 28,188 10/11/2003 9/11/2013 72 1 Joyners Crossing 27,544 10/11/2003 9/11/2013 73 1 Sedgefield Village Shopping Center 24,146 9/11/2003 8/11/2013 74 1 Palm Ridge 25,459 1/1/2004 12/1/2013 75 2 Point-O-View Apartments 26,883 12/1/1998 11/1/2008 76 1 Village Shoppes 25,992 9/11/2003 8/11/2013 77 2 Oak Brook Apartments 22,611 7/11/2003 6/11/2013 78 1 Amaranth Building 25,140 8/11/2003 7/11/2013 LOAN PREPAYMENT PROVISION DEFEASANCE # CROSSED GROUP LOAN NAME ARD (4) AS OF ORIGINATION(5) OPTION(6) - - ------- ----- --------- ------- --------------------- ---------- 1 1 Mall at Fairfield Commons N/A Lock/129_0%/3 Yes 2 1 Mayfair Mall and Office Complex N/A Lock/56_0%/4 Yes 3 1 Stanford Shopping Center N/A Lock/53_0%/7 Yes 4 1 MeriStar Hotel Portfolio 10/11/2013 Lock/116_0%/4 Yes 5 1 Paramount Plaza N/A Lock/117_0%/3 Yes 6 1 Montalvo Square Shopping Center N/A Lock/116_0%/4 Yes 7 2 Jefferson at Montfort N/A Lock/53_0%/7 Yes 8 1 EastBridge Landing N/A Lock/80_2%/12_1%/18_0%/7 No 9 1 East Thunderbird Square Shopping Center North N/A Lock/113_0%/7 Yes 10 1 Janss Court 3/11/2013 Lock/113_0%/7 Yes 11 1 Ravine Development N/A Lock/60_YM1/117_0%/3 No 12 2 Serrano Apartments N/A Lock/35_YM1/81_0%/4 No 13 1 Crow Canyon Commons Shopping Center N/A Lock/117_0%/3 Yes 14 2 Carlingford Apartments N/A Lock/56_0%/4 Yes 15 1 220 Post Street 6/11/2008 Lock/55_0%/5 Yes 16 2 Kings Crossing I & II N/A Lock/117_0%/3 Yes 17 2 Atrium at Market Center N/A Lock/114_0%/6 Yes 18 2 Villages of Deerfield Apartments N/A Lock/35_YM1/81_0%/4 No 19 1 Baseline Corporate Center N/A Lock/116_0%/4 Yes 20 1 Challenger Business Center N/A Lock/117_0%/3 Yes 21 1 Delphi Building N/A Lock/116_0%/4 Yes 22 (A) 1 Anaheim Professional Center N/A Lock/116_0%/4 Yes 23 (A) 1 Coast Family Medical Center N/A Lock/116_0%/4 Yes 24 1 Radisson Hotel Historic Savannah N/A Lock/116_0%/4 Yes 25 2 Breckinridge Court Apartments N/A Lock/116_0%/4 Yes 26 2 Addison at Hampton N/A Lock/117_0%/3 Yes 27 1 SouthCourt at South Square N/A Lock/117_0%/3 Yes 28 1 Deer Valley Financial Center N/A Lock/116_0%/4 Yes 29 (B) 2 Magnolia Village N/A Lock/117_0%/3 Yes 30 (B) 2 Blue Jay Mobile Home Park N/A Lock/117_0%/3 Yes 31 (B) 2 Candlelight Manor N/A Lock/117_0%/3 Yes 32 (B) 2 Elmwood Mobile Home Park N/A Lock/117_0%/3 Yes 33 1 Shoppes of New Tampa N/A Lock/40_YM1/41_0%/3 No 34 1 The Borders and Shoppes at Chestnut Hill N/A Lock/117_0%/3 Yes 35 1 Tustin Freeway Business Center N/A Lock/113_0%/7 Yes 36 1 Oak Hill Townhomes N/A Lock/116_0%/4 Yes 37 1 Northlake Square Shopping Center N/A Lock/117_0%/3 Yes 38 2 Stone Hill Apartments N/A Lock/117_0%/3 Yes 39 2 High Ridge Apartments N/A Lock/116_0%/4 Yes 40 2 Caleb's Place Townhomes N/A Lock/117_0%/3 Yes 41 2 Northgate Village Apartments N/A Lock/117_0%/3 Yes 42 2 Cambridge Village Apartments N/A Lock/117_0%/3 Yes 43 1 Staybridge Suites N/A Lock/116_0%/4 Yes 44 1 Summerville Plaza Shopping Center N/A Lock/117_0%/3 Yes 45 1 St. Joseph's/St. Jude's Medical Building N/A Lock/117_0%/3 Yes 46 1 Haynes Plaza N/A Lock/177_0%/3 Yes 47 2 Hearthstone Apartments N/A Lock/117_0%/3 Yes 48 2 Canyon View Apartments N/A Lock/57_0%/3 Yes 49 1 South County Medical Plaza N/A Lock/115_0%/5 Yes 50 1 Crossings at Westland 5/11/2013 Lock/117_0%/3 Yes 51 2 Villas of Brandychase N/A Lock/114_0%/6 Yes 52 1 78 Place N/A Lock/116_0%/4 Yes 53 1 Vanowen Medical Office N/A Lock/117_0%/3 Yes 54 1 Bolsa Retail Center N/A Lock/116_0%/4 Yes 55 2 Candlewick Apartments N/A Lock/114_0%/6 Yes 56 1 91 Montvale Avenue N/A Lock/116_0%/4 Yes 57 2 Northgate Club Apartments N/A Lock/117_0%/3 Yes 58 2 Country Village & Oakwood Mobile Home Park N/A Lock/117_0%/3 Yes 59 1 Tops Plaza - North Olmsted N/A Lock/117_0%/3 Yes 60 1 West Highlands Shopping Center N/A Lock/114_0%/6 Yes 61 1 Metcalf 127 Shops N/A Lock/116_0%/4 Yes 62 1 Evergreen - Beverly Plaza & Park Plaza N/A Lock/116_0%/4 Yes 63 1 Gifford Industrial Park N/A Lock/117_0%/3 Yes 64 1 Oakley Plaza N/A Lock/40_YM1/41_0%/3 No 65 2 Cloverdale Apartments N/A Lock/116_0%/4 Yes 66 2 Collins Aire Mobile Home Park N/A Lock/116_0%/4 Yes 67 1 Chino Hills Promenade N/A Lock/116_0%/4 Yes 68 2 Hunter's Glen N/A Lock/117_0%/3 Yes 69 2 Cedar Glen Apartments N/A Lock/117_0%/3 Yes 70 2 College Hills West Apartments N/A Lock/114_0%/6 Yes 71 1 4601 Eisenhower N/A Lock/117_0%/3 Yes 72 1 Joyners Crossing N/A Lock/117_0%/3 Yes 73 1 Sedgefield Village Shopping Center N/A Lock/117_0%/3 Yes 74 1 Palm Ridge N/A Lock/116_0%/4 Yes 75 2 Point-O-View Apartments N/A Lock/117_0%/3 Yes 76 1 Village Shoppes N/A Lock/117_0%/3 Yes 77 2 Oak Brook Apartments N/A Lock/117_0%/3 Yes 78 1 Amaranth Building N/A Lock/117_0%/3 Yes
CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS
PERCENTAGE OF ORIGINAL CUT-OFF DATE INITIAL NET LOAN PRINCIPAL PRINCIPAL MORTGAGE # CROSSED GROUP LOAN NAME BALANCE BALANCE(1) POOL BALANCE - - ------- ----- --------- ------- ---------- ------------ 79 1 Merit Building $ 3,940,000 $ 3,933,019 0.31% 80 1 4260-4310 West Broad Street 3,900,000 3,856,389 0.31% 81 1 Gateway Center 3,800,000 3,767,790 0.30% 82 1 PNC Advisor Building 3,700,000 3,690,354 0.29% 83 1 917 Franklin Office Building 3,700,000 3,681,688 0.29% 84 1 Riverside Business Park 3,650,000 3,627,200 0.29% 85 2 Oaks of League City 3,360,000 3,356,425 0.27% 86 1 Shiloh Center - 7 3,125,000 3,108,837 0.25% 87 1 Storage USA 3,100,000 3,082,422 0.24% 88 1 Eckerd's OAK RIDGE 3,090,000 3,055,009 0.24% 89 2 Tiburon Pointe Apartments 2,950,000 2,930,777 0.23% 90 2 Mansions North Apartments 2,800,000 2,793,973 0.22% 91 1 Dearborn Town Center 2,815,000 2,785,959 0.22% 92 1 72nd & Cedar Street Office 2,800,000 2,782,169 0.22% 93 2 Sands Point Cove Apartments 2,800,000 2,774,919 0.22% 94 1 Rancho Bernardo Professional Building 2,750,000 2,734,245 0.22% 95 1 Summerfield Renaissance Shopping Center 2,685,000 2,668,406 0.21% 96 1 Kroger Retail Center 2,700,000 2,661,315 0.21% 97 1 Coopers Common Plaza 2,650,000 2,633,092 0.21% 98 2 Diplomat Townhomes 2,600,000 2,586,552 0.21% 99 1 Chatfield Plaza 2,530,000 2,517,199 0.20% 100 1 Northwood Plaza Shopping Center 2,500,000 2,467,572 0.20% 101 1 Shiloh Center - 8 2,460,000 2,447,415 0.19% 102 2 Riverview Terrace 2,440,000 2,426,212 0.19% 103 2 Angelique Apartments 2,400,000 2,389,657 0.19% 104 2 Langdon Hall Apartments 2,400,000 2,386,896 0.19% 105 2 Bayou Oaks Apartments 2,380,000 2,368,221 0.19% 106 1 300-304 E 81st Street 2,350,000 2,343,767 0.19% 107 1 10811-10831 Foothill Boulevard 2,300,000 2,280,998 0.18% 108 2 Brandywine Apartments 2,280,000 2,274,881 0.18% 109 1 Fortress Self Storage 2,300,000 2,261,071 0.18% 110 1 Clayton Industrial Park 2,250,000 2,241,092 0.18% 111 1 Eckerd's - Middleton NJ 2,150,000 2,112,950 0.17% 112 1 2701-2751 East Chapman Avenue 2,000,000 1,986,484 0.16% 113 2 Park House Apartments 1,975,000 1,956,183 0.16% 114 1 324 E 77th Street 1,950,000 1,942,426 0.15% 115 2 Buttonwood Square 1,955,000 1,941,506 0.15% 116 1 Huntley Road Retail Center 1,900,000 1,889,399 0.15% 117 1 Highway Storage McAllen and Pharr 1,800,000 1,782,009 0.14% 118 1 Powell Plaza 1,760,000 1,754,226 0.14% 119 1 Gold Circle Office Building 1,700,000 1,689,174 0.13% 120 1 Waynesburg Centre 1,650,000 1,644,514 0.13% 121 1 Pierre Plaza Shopping Center 1,650,000 1,637,883 0.13% 122 2 Salem Terrace Apartments 1,650,000 1,628,325 0.13% 123 2 Carefree Valley Resort 1,500,000 1,490,463 0.12% 124 1 290 Fairbanks Center 1,480,000 1,475,449 0.12% 125 1 Scripps Hill Retail Center 1,450,000 1,446,036 0.11% 126 2 Springwood Apartments 1,440,000 1,434,171 0.11% 127 1 Cypress Harbor Mobile Home Park 1,400,000 1,392,438 0.11% 128 2 Casa Del Rey Mobile Home Park 1,400,000 1,391,891 0.11% 129 2 Fort Sedgwick Apartments 1,350,000 1,342,786 0.11% 130 1 10019 Reisterstown Road 1,287,000 1,280,517 0.10% 131 1 Shops at Canton 1,285,000 1,279,361 0.10% 132 1 Shiloh Center - 5 1,280,000 1,273,380 0.10% 133 1 Camino Maquilladora Buildings 1,250,000 1,245,716 0.10% 134 1 Meadow Estates Manufactured Housing Community 1,237,500 1,229,547 0.10% 135 1 Evergreen Office 1,200,000 1,192,358 0.09% 136 2 Amberwood Apartments 1,260,000 1,187,014 0.09% 137 1 3200 Commander Industrial Building 1,175,000 1,169,249 0.09% 138 1 Mabury Plaza 1,095,000 1,087,150 0.09% 139 2 Bel Air Mobile Home Communities 1,075,000 1,075,000 0.09% 140 2 Park Manor Apartments 1,009,000 998,771 0.08% 141 1 Silverado Office Building 1,000,000 996,925 0.08% 142 1 Pinehollow Business Park 1,000,000 989,673 0.08% 143 1 Broadway Commons Shopping Center 920,000 916,515 0.07% 144 2 Colonial Arms Apartments 915,000 910,341 0.07% 145 2 Folger Apartments 900,000 896,427 0.07% 146 2 Church Hill Gables 900,000 895,693 0.07% ORIGINATION REMAINING ORIGINAL AMORTIZATION AMORTIZATION TERM TO LOAN TERM TERM MATURITY # CROSSED GROUP LOAN NAME (MONTHS) (MONTHS) (MONTHS) (2) - - ------- ----- --------- -------- -------- ------------ 79 1 Merit Building 360 358 120 80 1 4260-4310 West Broad Street 276 269 120 81 1 Gateway Center 300 294 120 82 1 PNC Advisor Building 360 357 120 83 1 917 Franklin Office Building 360 355 120 84 1 Riverside Business Park 360 354 120 85 2 Oaks of League City 360 359 120 86 1 Shiloh Center - 7 360 355 120 87 1 Storage USA 300 296 120 88 1 Eckerd's OAK RIDGE 264 258 120 89 2 Tiburon Pointe Apartments 360 354 120 90 2 Mansions North Apartments 360 358 120 91 1 Dearborn Town Center 300 292 120 92 1 72nd & Cedar Street Office 360 353 120 93 2 Sands Point Cove Apartments 300 293 120 94 1 Rancho Bernardo Professional Building 360 354 120 95 1 Summerfield Renaissance Shopping Center 360 354 120 96 1 Kroger Retail Center 240 233 84 97 1 Coopers Common Plaza 360 354 120 98 2 Diplomat Townhomes 360 355 120 99 1 Chatfield Plaza 360 355 120 100 1 Northwood Plaza Shopping Center 240 234 120 101 1 Shiloh Center - 8 360 355 120 102 2 Riverview Terrace 300 296 120 103 2 Angelique Apartments 300 297 60 104 2 Langdon Hall Apartments 360 355 120 105 2 Bayou Oaks Apartments 360 355 120 106 1 300-304 E 81st Street 360 357 120 107 1 10811-10831 Foothill Boulevard 300 294 120 108 2 Brandywine Apartments 360 358 120 109 1 Fortress Self Storage 240 232 120 110 1 Clayton Industrial Park 300 297 120 111 1 Eckerd's - Middleton NJ 180 175 180 112 1 2701-2751 East Chapman Avenue 300 295 120 113 2 Park House Apartments 300 293 120 114 1 324 E 77th Street 360 356 120 115 2 Buttonwood Square 360 353 120 116 1 Huntley Road Retail Center 360 354 120 117 1 Highway Storage McAllen and Pharr 240 235 120 118 1 Powell Plaza 360 356 120 119 1 Gold Circle Office Building 360 353 120 120 1 Waynesburg Centre 300 297 120 121 1 Pierre Plaza Shopping Center 240 236 120 122 2 Salem Terrace Apartments 240 234 240 123 2 Carefree Valley Resort 240 237 84 124 1 290 Fairbanks Center 360 357 120 125 1 Scripps Hill Retail Center 360 357 120 126 2 Springwood Apartments 360 356 60 127 1 Cypress Harbor Mobile Home Park 360 355 60 128 2 Casa Del Rey Mobile Home Park 360 354 120 129 2 Fort Sedgwick Apartments 360 355 120 130 1 10019 Reisterstown Road 360 355 120 131 1 Shops at Canton 360 356 120 132 1 Shiloh Center - 5 360 355 120 133 1 Camino Maquilladora Buildings 360 356 120 134 1 Meadow Estates Manufactured Housing Community 300 296 60 135 1 Evergreen Office 360 353 120 136 2 Amberwood Apartments 348 287 120 137 1 3200 Commander Industrial Building 360 355 120 138 1 Mabury Plaza 360 352 120 139 2 Bel Air Mobile Home Communities 336 336 120 140 2 Park Manor Apartments 300 292 120 141 1 Silverado Office Building 360 357 120 142 1 Pinehollow Business Park 270 264 120 143 1 Broadway Commons Shopping Center 300 297 120 144 2 Colonial Arms Apartments 300 296 120 145 2 Folger Apartments 360 356 120 146 2 Church Hill Gables 360 355 120 INITIAL REMAINING INTEREST TERM TO ONLY MORTGAGE LOAN MATURITY PERIOD INTEREST # CROSSED GROUP LOAN NAME (MONTHS)(1)(2) (MONTHS) RATE - - ------- ----- --------- -------------- -------- ---- 79 1 Merit Building 118 0 6.140% 80 1 4260-4310 West Broad Street 113 0 6.080% 81 1 Gateway Center 114 0 5.850% 82 1 PNC Advisor Building 117 0 6.390% 83 1 917 Franklin Office Building 115 0 5.600% 84 1 Riverside Business Park 114 0 5.450% 85 2 Oaks of League City 119 0 5.650% 86 1 Shiloh Center - 7 115 0 5.400% 87 1 Storage USA 116 0 5.800% 88 1 Eckerd's OAK RIDGE 114 0 5.550% 89 2 Tiburon Pointe Apartments 114 0 5.250% 90 2 Mansions North Apartments 118 0 5.250% 91 1 Dearborn Town Center 112 0 6.410% 92 1 72nd & Cedar Street Office 113 0 6.020% 93 2 Sands Point Cove Apartments 113 0 6.380% 94 1 Rancho Bernardo Professional Building 114 0 5.850% 95 1 Summerfield Renaissance Shopping Center 114 0 5.500% 96 1 Kroger Retail Center 77 0 6.200% 97 1 Coopers Common Plaza 114 0 5.350% 98 2 Diplomat Townhomes 115 0 5.400% 99 1 Chatfield Plaza 115 0 5.500% 100 1 Northwood Plaza Shopping Center 114 0 5.800% 101 1 Shiloh Center - 8 115 0 5.450% 102 2 Riverview Terrace 116 0 5.820% 103 2 Angelique Apartments 57 0 5.820% 104 2 Langdon Hall Apartments 115 0 5.150% 105 2 Bayou Oaks Apartments 115 0 5.600% 106 1 300-304 E 81st Street 117 0 6.310% 107 1 10811-10831 Foothill Boulevard 114 0 6.000% 108 2 Brandywine Apartments 118 0 5.050% 109 1 Fortress Self Storage 112 0 6.010% 110 1 Clayton Industrial Park 117 0 6.330% 111 1 Eckerd's - Middleton NJ 175 0 5.760% 112 1 2701-2751 East Chapman Avenue 115 0 6.020% 113 2 Park House Apartments 113 0 6.030% 114 1 324 E 77th Street 116 0 5.750% 115 2 Buttonwood Square 113 0 5.660% 116 1 Huntley Road Retail Center 114 0 5.970% 117 1 Highway Storage McAllen and Pharr 115 0 6.320% 118 1 Powell Plaza 116 0 6.500% 119 1 Gold Circle Office Building 113 0 6.020% 120 1 Waynesburg Centre 117 0 7.340% 121 1 Pierre Plaza Shopping Center 116 0 7.010% 122 2 Salem Terrace Apartments 234 0 5.700% 123 2 Carefree Valley Resort 81 0 6.000% 124 1 290 Fairbanks Center 117 0 5.610% 125 1 Scripps Hill Retail Center 117 0 6.170% 126 2 Springwood Apartments 56 0 5.560% 127 1 Cypress Harbor Mobile Home Park 55 0 5.200% 128 2 Casa Del Rey Mobile Home Park 114 0 5.800% 129 2 Fort Sedgwick Apartments 115 0 5.250% 130 1 10019 Reisterstown Road 115 0 5.520% 131 1 Shops at Canton 116 0 5.180% 132 1 Shiloh Center - 5 115 0 5.400% 133 1 Camino Maquilladora Buildings 116 0 6.310% 134 1 Meadow Estates Manufactured Housing Community 56 0 5.050% 135 1 Evergreen Office 113 0 6.020% 136 2 Amberwood Apartments 59 0 7.100% 137 1 3200 Commander Industrial Building 115 0 5.650% 138 1 Mabury Plaza 112 0 6.160% 139 2 Bel Air Mobile Home Communities 115 24 5.300% 140 2 Park Manor Apartments 112 0 6.510% 141 1 Silverado Office Building 117 0 5.610% 142 1 Pinehollow Business Park 114 0 5.900% 143 1 Broadway Commons Shopping Center 117 0 6.590% 144 2 Colonial Arms Apartments 116 0 6.420% 145 2 Folger Apartments 116 0 5.650% 146 2 Church Hill Gables 115 0 5.750% FIRST LOAN MONTHLY PAYMENT MATURITY # CROSSED GROUP LOAN NAME PAYMENT(3) DATE DATE - - ------- ----- --------- ----------- ---- ---- 79 1 Merit Building $ 23,978 11/1/2003 10/1/2013 80 1 4260-4310 West Broad Street 26,272 6/11/2003 5/11/2026 81 1 Gateway Center 24,136 7/11/2003 6/11/2013 82 1 PNC Advisor Building 23,120 10/1/2003 9/1/2013 83 1 917 Franklin Office Building 21,241 8/11/2003 7/11/2013 84 1 Riverside Business Park 20,610 7/11/2003 6/11/2013 85 2 Oaks of League City 19,395 12/1/2003 11/1/2013 86 1 Shiloh Center - 7 17,548 8/11/2003 7/11/2013 87 1 Storage USA 19,596 9/1/2003 8/1/2013 88 1 Eckerd's OAK RIDGE 20,293 7/11/2003 6/11/2033 89 2 Tiburon Pointe Apartments 16,290 7/11/2003 6/11/2013 90 2 Mansions North Apartments 15,462 11/1/2003 10/1/2013 91 1 Dearborn Town Center 18,849 5/11/2003 4/11/2013 92 1 72nd & Cedar Street Office 16,823 6/11/2003 5/11/2013 93 2 Sands Point Cove Apartments 18,696 6/11/2003 5/11/2013 94 1 Rancho Bernardo Professional Building 16,223 7/11/2003 6/11/2013 95 1 Summerfield Renaissance Shopping Center 15,245 7/11/2003 6/11/2013 96 1 Kroger Retail Center 19,656 6/11/2003 5/11/2010 97 1 Coopers Common Plaza 14,798 7/11/2003 6/11/2013 98 2 Diplomat Townhomes 14,600 8/11/2003 7/11/2013 99 1 Chatfield Plaza 14,365 8/11/2003 7/11/2013 100 1 Northwood Plaza Shopping Center 17,624 7/11/2003 6/11/2013 101 1 Shiloh Center - 8 13,891 8/11/2003 7/11/2013 102 2 Riverview Terrace 15,454 9/11/2003 8/11/2013 103 2 Angelique Apartments 15,200 10/11/2003 9/11/2008 104 2 Langdon Hall Apartments 13,105 8/11/2003 7/11/2013 105 2 Bayou Oaks Apartments 13,663 8/11/2003 7/11/2013 106 1 300-304 E 81st Street 14,561 10/11/2003 9/11/2013 107 1 10811-10831 Foothill Boulevard 14,819 7/11/2003 6/11/2013 108 2 Brandywine Apartments 12,309 11/1/2003 10/1/2013 109 1 Fortress Self Storage 16,491 5/11/2003 4/11/2013 110 1 Clayton Industrial Park 14,954 10/11/2003 9/11/2013 111 1 Eckerd's - Middleton NJ 17,865 8/11/2003 7/11/2018 112 1 2701-2751 East Chapman Avenue 12,910 8/11/2003 7/11/2013 113 2 Park House Apartments 12,761 6/11/2003 5/11/2013 114 1 324 E 77th Street 11,380 9/11/2003 8/11/2013 115 2 Buttonwood Square 11,297 6/11/2003 5/11/2013 116 1 Huntley Road Retail Center 11,355 7/11/2003 6/11/2013 117 1 Highway Storage McAllen and Pharr 13,230 8/11/2003 7/11/2013 118 1 Powell Plaza 11,124 9/11/2003 8/11/2013 119 1 Gold Circle Office Building 10,214 6/11/2003 5/11/2013 120 1 Waynesburg Centre 12,022 10/11/2003 9/11/2028 121 1 Pierre Plaza Shopping Center 12,802 9/11/2003 8/11/2013 122 2 Salem Terrace Apartments 11,537 7/11/2003 6/11/2023 123 2 Carefree Valley Resort 10,746 10/11/2003 9/11/2010 124 1 290 Fairbanks Center 8,506 10/11/2003 9/11/2013 125 1 Scripps Hill Retail Center 8,853 10/11/2003 9/11/2013 126 2 Springwood Apartments 8,230 9/11/2003 8/11/2008 127 1 Cypress Harbor Mobile Home Park 7,688 8/11/2003 7/11/2008 128 2 Casa Del Rey Mobile Home Park 8,215 7/11/2003 6/11/2013 129 2 Fort Sedgwick Apartments 7,455 8/11/2003 7/11/2013 130 1 10019 Reisterstown Road 7,324 8/11/2003 7/11/2013 131 1 Shops at Canton 7,040 9/11/2003 8/11/2013 132 1 Shiloh Center - 5 7,188 8/11/2003 7/11/2013 133 1 Camino Maquilladora Buildings 7,745 9/11/2003 8/11/2013 134 1 Meadow Estates Manufactured Housing Community 7,270 9/11/2003 8/11/2008 135 1 Evergreen Office 7,210 6/11/2003 5/11/2013 136 2 Amberwood Apartments 8,555 12/1/1998 11/1/2008 137 1 3200 Commander Industrial Building 6,783 8/11/2003 7/11/2013 138 1 Mabury Plaza 6,678 5/11/2003 4/11/2013 139 2 Bel Air Mobile Home Communities 6,146 8/11/2003 7/11/2013 140 2 Park Manor Apartments 6,819 5/11/2003 4/11/2013 141 1 Silverado Office Building 5,747 10/11/2003 9/11/2013 142 1 Pinehollow Business Park 6,698 7/11/2003 6/11/2013 143 1 Broadway Commons Shopping Center 6,264 10/11/2003 9/11/2013 144 2 Colonial Arms Apartments 6,132 9/11/2003 8/11/2013 145 2 Folger Apartments 5,195 9/11/2003 8/11/2013 146 2 Church Hill Gables 5,252 8/11/2003 7/11/2013 LOAN PREPAYMENT PROVISION DEFEASANCE # CROSSED GROUP LOAN NAME ARD (4) AS OF ORIGINATION (5) OPTION (6) - - ------- ----- --------- ------- --------------------- ---------- 79 1 Merit Building N/A Lock/116_0%/4 Yes 80 1 4260-4310 West Broad Street 5/11/2013 Lock/117_0%/3 Yes 81 1 Gateway Center N/A Lock/114_0%/6 Yes 82 1 PNC Advisor Building N/A Lock/116_0%/4 Yes 83 1 917 Franklin Office Building N/A Lock/117_0%/3 Yes 84 1 Riverside Business Park N/A Lock/117_0%/3 Yes 85 2 Oaks of League City N/A Lock/116_0%/4 Yes 86 1 Shiloh Center - 7 N/A Lock/117_0%/3 Yes 87 1 Storage USA N/A Lock/116_0%/4 Yes 88 1 Eckerd's OAK RIDGE 6/11/2013 Lock/114_0%/6 Yes 89 2 Tiburon Pointe Apartments N/A Lock/117_0%/3 Yes 90 2 Mansions North Apartments N/A Lock/116_0%/4 Yes 91 1 Dearborn Town Center N/A Lock/114_0%/6 Yes 92 1 72nd & Cedar Street Office N/A Lock/114_0%/6 Yes 93 2 Sands Point Cove Apartments N/A Lock/43_YM1/74_0%/3 No 94 1 Rancho Bernardo Professional Building N/A Lock/117_0%/3 Yes 95 1 Summerfield Renaissance Shopping Center N/A Lock/117_0%/3 Yes 96 1 Kroger Retail Center N/A Lock/78_0%/6 Yes 97 1 Coopers Common Plaza N/A Lock/117_0%/3 Yes 98 2 Diplomat Townhomes N/A Lock/117_0%/3 Yes 99 1 Chatfield Plaza N/A Lock/117_0%/3 Yes 100 1 Northwood Plaza Shopping Center N/A Lock/117_0%/3 Yes 101 1 Shiloh Center - 8 N/A Lock/117_0%/3 Yes 102 2 Riverview Terrace N/A Lock/117_0%/3 Yes 103 2 Angelique Apartments N/A Lock/57_0%/3 Yes 104 2 Langdon Hall Apartments N/A Lock/117_0%/3 Yes 105 2 Bayou Oaks Apartments N/A Lock/41_YM1/76_0%/3 No 106 1 300-304 E 81st Street N/A Lock/39_YM1/77_0%/4 No 107 1 10811-10831 Foothill Boulevard N/A Lock/117_0%/3 Yes 108 2 Brandywine Apartments N/A Lock/116_0%/4 Yes 109 1 Fortress Self Storage N/A Lock/116_0%/4 Yes 110 1 Clayton Industrial Park N/A Lock/114_0%/6 Yes 111 1 Eckerd's - Middleton NJ N/A Lock/174_0%/6 Yes 112 1 2701-2751 East Chapman Avenue N/A Lock/114_0%/6 Yes 113 2 Park House Apartments N/A Lock/114_0%/6 Yes 114 1 324 E 77th Street N/A Lock/40_YM1/76_0%/4 No 115 2 Buttonwood Square N/A Lock/114_0%/6 Yes 116 1 Huntley Road Retail Center N/A Lock/114_0%/6 Yes 117 1 Highway Storage McAllen and Pharr N/A Lock/114_0%/6 Yes 118 1 Powell Plaza N/A Lock/40_YM1/77_0%/3 No 119 1 Gold Circle Office Building N/A Lock/114_0%/6 Yes 120 1 Waynesburg Centre 9/11/2013 Lock/39_YM1/78_0%/3 No 121 1 Pierre Plaza Shopping Center N/A Lock/114_0%/6 Yes 122 2 Salem Terrace Apartments N/A Lock/234_0%/6 Yes 123 2 Carefree Valley Resort N/A Lock/78_0%/6 Yes 124 1 290 Fairbanks Center N/A Lock/114_0%/6 Yes 125 1 Scripps Hill Retail Center N/A Lock/114_0%/6 Yes 126 2 Springwood Apartments N/A Lock/54_0%/6 Yes 127 1 Cypress Harbor Mobile Home Park N/A Lock/54_0%/6 Yes 128 2 Casa Del Rey Mobile Home Park N/A Lock/114_0%/6 Yes 129 2 Fort Sedgwick Apartments N/A Lock/116_0%/4 Yes 130 1 10019 Reisterstown Road N/A Lock/117_0%/3 Yes 131 1 Shops at Canton N/A Lock/117_0%/3 Yes 132 1 Shiloh Center - 5 N/A Lock/117_0%/3 Yes 133 1 Camino Maquilladora Buildings N/A Lock/40_YM1/77_0%/3 No 134 1 Meadow Estates Manufactured Housing Community N/A Lock/54_0%/6 Yes 135 1 Evergreen Office N/A Lock/114_0%/6 Yes 136 2 Amberwood Apartments N/A Lock/114_0%/6 Yes 137 1 3200 Commander Industrial Building N/A Lock/117_0%/3 Yes 138 1 Mabury Plaza N/A Lock/44_YM1/73_0%/3 No 139 2 Bel Air Mobile Home Communities N/A Lock/117_0%/3 Yes 140 2 Park Manor Apartments N/A Lock/114_0%/6 Yes 141 1 Silverado Office Building N/A Lock/114_0%/6 Yes 142 1 Pinehollow Business Park N/A Lock/116_0%/4 Yes 143 1 Broadway Commons Shopping Center N/A Lock/117_0%/3 Yes 144 2 Colonial Arms Apartments N/A Lock/114_0%/6 Yes 145 2 Folger Apartments N/A Lock/114_0%/6 Yes 146 2 Church Hill Gables N/A Lock/114_0%/6 Yes
CHARACTERISTICS OF THE UNDERLYING MORTGAGE LOANS
PERCENTAGE OF ORIGINAL CUT-OFF DATE INITIAL NET LOAN PRINCIPAL PRINCIPAL MORTGAGE # CROSSED GROUP LOAN NAME BALANCE BALANCE(1) POOL BALANCE - - ------- ----- --------- ------- ---------- ------------ 147 2 Morris Manor Apartment $ 900,000 $ 895,311 0.07% 148 2 Halifax Court Apartments 880,000 876,021 0.07% 149 2 Ashley Street Apartments 760,000 750,390 0.06% 150 2 Royal Palms Apartments 725,000 721,302 0.06% 151 2 Quartermaster Court Apartments 635,000 634,310 0.05% 152 2 833 Whalley Avenue 600,000 596,740 0.05% 153 1 76-80 Lafayette Avenue 587,500 585,529 0.05% ------------------------------------------------- TOTAL/WEIGHTED AVERAGE: $ 1,268,299,000 $ 1,261,269,491 100.0% ================================================= MAXIMUM: $ 85,500,000 $ 85,405,532 6.77% MINIMUM: $ 587,500 $ 585,529 0.05% ORIGINATION REMAINING ORIGINAL AMORTIZATION AMORTIZATION TERM TO LOAN TERM TERM MATURITY # CROSSED GROUP LOAN NAME (MONTHS) (MONTHS) (MONTHS)(2) - - ------- ----- --------- -------- -------- ----------- 147 2 Morris Manor Apartment 300 296 120 148 2 Halifax Court Apartments 360 355 120 149 2 Ashley Street Apartments 240 234 120 150 2 Royal Palms Apartments 300 296 120 151 2 Quartermaster Court Apartments 360 358 216 152 2 833 Whalley Avenue 360 354 120 153 1 76-80 Lafayette Avenue 300 297 120 ------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 345 340 110 ================================================ MAXIMUM: 395 360 240 MINIMUM: 180 172 60 INITIAL REMAINING INTEREST TERM TO ONLY MORTGAGE LOAN MATURITY PERIOD INTEREST # CROSSED GROUP LOAN NAME (MONTHS)(1)(2) (MONTHS) RATE - - ------- ----- --------- ---------------- -------- ---- 147 2 Morris Manor Apartment 116 0 6.290% 148 2 Halifax Court Apartments 115 0 6.000% 149 2 Ashley Street Apartments 114 0 6.000% 150 2 Royal Palms Apartments 116 0 6.410% 151 2 Quartermaster Court Apartments 214 0 8.120% 152 2 833 Whalley Avenue 114 0 6.090% 153 1 76-80 Lafayette Avenue 117 0 7.290% --------------------------------------- TOTAL/WEIGHTED AVERAGE: 105 5.453% ======================================= MAXIMUM: 234 8.120% MINIMUM: 50 3.108% FIRST LOAN MONTHLY PAYMENT MATURITY # CROSSED GROUP LOAN NAME PAYMENT(3) DATE DATE - - ------- ----- --------- ---------- ---- ---- 147 2 Morris Manor Apartment $ 5,959 9/11/2003 8/11/2013 148 2 Halifax Court Apartments 5,276 8/11/2003 7/11/2013 149 2 Ashley Street Apartments 5,445 7/11/2003 6/11/2013 150 2 Royal Palms Apartments 4,855 9/11/2003 8/11/2013 151 2 Quartermaster Court Apartments 4,713 11/1/2003 10/1/2021 152 2 833 Whalley Avenue 3,632 7/11/2003 6/11/2013 153 1 76-80 Lafayette Avenue 4,262 10/11/2003 9/11/2013 ------------------------------------------- TOTAL/WEIGHTED AVERAGE: $ 7,170,958 7/20/2003 4/4/2014 =========================================== MAXIMUM: $ 482,781 1/1/2004 6/11/2033 MINIMUM: $ 3,632 12/1/1998 2/11/2008 LOAN PREPAYMENT PROVISION DEFEASANCE # CROSSED GROUP LOAN NAME ARD (4) AS OF ORIGINATION (5) OPTION (6) - - ------- ----- --------- ------- --------------------- ---------- 147 2 Morris Manor Apartment N/A Lock/114_0%/6 Yes 148 2 Halifax Court Apartments N/A Lock/114_0%/6 Yes 149 2 Ashley Street Apartments N/A Lock/114_0%/6 Yes 150 2 Royal Palms Apartments N/A Lock/114_0%/6 Yes 151 2 Quartermaster Court Apartments N/A Lock/212_0%/4 Yes 152 2 833 Whalley Avenue N/A Lock/42_YM1/75_0%/3 No 153 1 76-80 Lafayette Avenue N/A Lock/114_0%/6 Yes TOTAL/WEIGHTED AVERAGE: MAXIMUM: MINIMUM:
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (B) THE UNDERLYING MORTGAGE LOANS SECURED BY MAGNOLIA VILLAGE, BLUE JAY MOBILE HOME PARK, CANDLELIGHT MANOR AND ELMWOOD MOBILE HOME PARK ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. (3) FOR MORTGAGE LOANS CLASSIFIED AS INTEREST ONLY, THE MONTHLY PAYMENT REPRESENTS THE AVERAGE OF ONE FULL YEAR OF INTEREST PAYMENTS. (4) ANTICIPATED REPAYMENT DATE. (5) PREPAYMENT PROVISION AS OF ORIGINATION: LOCK/(x) = LOCKOUT OR DEFEASANCE FOR (x) PAYMENTS YMA/(y) = GREATER OF YIELD MAINTENANCE PREMIUM AND A% PREPAYMENT FOR (Y) PAYMENTS A%/(x) = A% PREPAYMENT FOR (x) PAYMENTS 0%/(x) = PREPAYABLE AT PAR FOR (x) PAYMENTS (6) "YES" MEANS THAT DEFEASANCE IS PERMITTED NOTWITHSTANDING THE LOCKOUT PERIOD. (7) FOR THE PERIOD BETWEEN FEBRUARY 1, 2007 AND JANUARY 1, 2012, THE MONTHLY PAYMENT WILL BE $225,813. FROM FEBRUARY 1, 2012 THROUGH THE END OF THE LOAN TERM, THE MONTHLY PAYMENT WILL BE $258,292.40. ADDITIONAL MORTGAGE LOAN INFORMATION
CUT-OFF DATE LOAN PRINCIPAL APPRAISED CUT-OFF DATE # CROSSED GROUP LOAN NAME BALANCE(1) VALUE LTV RATIO(1)(2) - ------- ----- --------- ----------- ----- ----------------- 1 1 Mall at Fairfield Commons $ 85,405,532 $ 171,500,000 66.4% 2 1 Mayfair Mall and Office Complex 79,343,515 330,000,000 60.1% 3 1 Stanford Shopping Center 75,000,000 335,000,000 49.3% 4 1 MeriStar Hotel Portfolio 50,881,109 68,650,000 74.1% 5 1 Paramount Plaza 44,876,466 75,000,000 59.8% 6 1 Montalvo Square Shopping Center 42,300,000 52,900,000 80.0% 7 2 Jefferson at Montfort 35,000,000 48,500,000 72.2% 8 1 EastBridge Landing 33,689,997 91,000,000 37.0% 9 1 East Thunderbird Square Shopping Center North 28,472,696 41,700,000 68.3% 10 1 Janss Court 28,295,760 37,500,000 75.5% 11 1 Ravine Development 26,515,146 41,000,000 64.7% 12 2 Serrano Apartments 26,450,000 33,100,000 79.9% 13 1 Crow Canyon Commons Shopping Center 22,903,652 32,000,000 71.6% 14 2 Carlingford Apartments 21,762,334 28,900,000 75.3% 15 1 220 Post Street 21,300,000 31,200,000 68.3% 16 2 Kings Crossing I & II 20,891,904 31,550,000 66.2% 17 2 Atrium at Market Center 18,124,880 23,100,000 78.5% 18 2 Villages of Deerfield Apartments 16,641,062 20,900,000 79.6% 19 1 Baseline Corporate Center 16,438,430 21,940,000 74.9% 20 1 Challenger Business Center 16,329,079 22,500,000 72.6% 21 1 Delphi Building 15,976,947 22,000,000 72.6% 22 (A) 1 Anaheim Professional Center 9,365,667 12,500,000 74.9% 23 (A) 1 Coast Family Medical Center 5,719,224 8,000,000 71.5% 24 1 Radisson Hotel Historic Savannah 14,980,678 20,300,000 73.8% 25 2 Breckinridge Court Apartments 14,772,020 18,500,000 79.8% 26 2 Addison at Hampton 14,524,848 19,000,000 76.4% 27 1 SouthCourt at South Square 14,423,499 19,400,000 74.3% 28 1 Deer Valley Financial Center 11,604,681 15,500,000 74.9% 29 (B) 2 Magnolia Village 3,997,827 5,800,000 73.5% 30 (B) 2 Blue Jay Mobile Home Park 3,976,321 5,000,000 73.5% 31 (B) 2 Candlelight Manor 2,057,746 2,800,000 73.5% 32 (B) 2 Elmwood Mobile Home Park 1,366,860 1,900,000 73.5% 33 1 Shoppes of New Tampa 10,600,000 19,100,000 55.5% 34 1 The Borders and Shoppes at Chestnut Hill 10,434,412 14,000,000 74.5% 35 1 Tustin Freeway Business Center 9,989,911 12,600,000 79.3% 36 1 Oak Hill Townhomes 9,845,186 12,330,000 79.8% 37 1 Northlake Square Shopping Center 9,438,742 11,900,000 79.3% 38 2 Stone Hill Apartments 9,262,680 12,750,000 72.6% 39 2 High Ridge Apartments 9,182,569 11,500,000 79.8% 40 2 Caleb's Place Townhomes 9,147,744 11,550,000 79.2% 41 2 Northgate Village Apartments 8,402,346 10,600,000 79.3% 42 2 Cambridge Village Apartments 8,119,100 11,500,000 70.6% 43 1 Staybridge Suites 7,440,612 11,400,000 65.3% 44 1 Summerville Plaza Shopping Center 7,379,962 9,400,000 78.5% 45 1 St. Joseph's/St. Jude's Medical Building 6,967,396 9,800,000 71.1% 46 1 Haynes Plaza 6,814,263 11,000,000 61.9% 47 2 Hearthstone Apartments 6,658,463 8,400,000 79.3% 48 2 Canyon View Apartments 6,653,051 8,500,000 78.3% 49 1 South County Medical Plaza 6,593,640 9,350,000 70.5% 50 1 Crossings at Westland 6,339,552 9,800,000 64.7% 51 2 Villas of Brandychase 6,205,217 7,800,000 79.6% 52 1 78 Place 6,194,049 12,800,000 48.4% 53 1 Vanowen Medical Office 5,964,095 8,300,000 71.9% 54 1 Bolsa Retail Center 5,844,363 9,000,000 64.9% 55 2 Candlewick Apartments 5,811,980 7,350,000 79.1% 56 1 91 Montvale Avenue 5,804,304 7,500,000 77.4% 57 2 Northgate Club Apartments 5,779,340 7,800,000 74.1% 58 2 Country Village & Oakwood Mobile Home Park 5,750,000 7,300,000 78.8% 59 1 Tops Plaza - North Olmsted 5,743,218 7,035,000 81.6% 60 1 West Highlands Shopping Center 5,650,000 7,550,000 74.8% 61 1 Metcalf 127 Shops 5,531,107 7,000,000 79.0% 62 1 Evergreen - Beverly Plaza & Park Plaza 5,267,663 7,000,000 75.3% 63 1 Gifford Industrial Park 5,176,306 7,000,000 73.9% 64 1 Oakley Plaza 5,175,000 10,600,000 48.8% 65 2 Cloverdale Apartments 5,108,073 6,410,000 79.7% 66 2 Collins Aire Mobile Home Park 4,900,000 12,300,000 39.8% 67 1 Chino Hills Promenade 4,887,170 7,000,000 69.8% 68 2 Hunter's Glen 4,855,437 6,400,000 75.9% 69 2 Cedar Glen Apartments 4,596,734 6,350,000 72.4% 70 2 College Hills West Apartments 4,587,345 5,750,000 79.8% MATURITY/ LOAN MATURITY/ARD ARD LTV MOST RECENT # CROSSED GROUP LOAN NAME BALANCE(3) RATIO(2)(3)(4) NOI - ------- ----- --------- ------------ ----------------- -------------- 1 1 Mall at Fairfield Commons $ 69,414,892 54.0% $ 13,254,419 2 1 Mayfair Mall and Office Complex 71,457,181 54.1% 23,811,052 3 1 Stanford Shopping Center 75,000,000 49.3% 21,576,675 4 1 MeriStar Hotel Portfolio 40,652,182 59.2% 8,446,424 5 1 Paramount Plaza 38,334,447 51.1% 6,566,761 6 1 Montalvo Square Shopping Center 35,866,680 67.8% N/A 7 2 Jefferson at Montfort 33,322,233 68.7% 3,321,021 8 1 EastBridge Landing 30,832,227 33.9% 5,822,478 9 1 East Thunderbird Square Shopping Center North 24,313,039 58.3% 3,120,336 10 1 Janss Court 23,075,662 61.5% 2,595,619 11 1 Ravine Development 10,661,962 26.0% 3,755,463 12 2 Serrano Apartments 21,833,989 66.0% 2,163,617 13 1 Crow Canyon Commons Shopping Center 19,156,463 59.9% 2,933,216 14 2 Carlingford Apartments 20,425,414 70.7% 2,502,407 15 1 220 Post Street 21,300,000 68.3% N/A 16 2 Kings Crossing I & II 16,921,866 53.6% 2,707,478 17 2 Atrium at Market Center 15,614,871 67.6% N/A 18 2 Villages of Deerfield Apartments 13,699,489 65.5% 1,393,168 19 1 Baseline Corporate Center 13,931,254 63.5% 1,863,565 20 1 Challenger Business Center 13,594,715 60.4% 2,272,563 21 1 Delphi Building 12,395,142 56.3% 2,051,874 22 (A) 1 Anaheim Professional Center 7,951,218 63.6% 924,175 23 (A) 1 Coast Family Medical Center 4,845,505 60.6% 713,687 24 1 Radisson Hotel Historic Savannah 11,897,944 58.6% 2,248,619 25 2 Breckinridge Court Apartments 12,497,833 67.6% 1,471,780 26 2 Addison at Hampton 11,764,726 61.9% 1,401,480 27 1 SouthCourt at South Square 11,155,040 57.5% 1,396,660 28 1 Deer Valley Financial Center 9,918,299 64.0% 1,579,743 29 (B) 2 Magnolia Village 3,390,188 62.3% 518,848 30 (B) 2 Blue Jay Mobile Home Park 3,362,665 62.3% 465,935 31 (B) 2 Candlelight Manor 1,740,179 62.3% 273,384 32 (B) 2 Elmwood Mobile Home Park 1,155,916 62.3% 173,781 33 1 Shoppes of New Tampa 10,600,000 55.5% N/A 34 1 The Borders and Shoppes at Chestnut Hill 8,759,205 62.6% 1,313,303 35 1 Tustin Freeway Business Center 8,463,763 67.2% 1,133,250 36 1 Oak Hill Townhomes 8,319,641 67.5% 456,762 37 1 Northlake Square Shopping Center 7,887,658 66.3% 1,115,153 38 2 Stone Hill Apartments 7,794,162 61.1% 1,196,526 39 2 High Ridge Apartments 7,766,596 67.5% 940,115 40 2 Caleb's Place Townhomes 7,075,107 61.3% 921,674 41 2 Northgate Village Apartments 7,096,915 67.0% 889,294 42 2 Cambridge Village Apartments 6,884,464 59.9% 842,653 43 1 Staybridge Suites 5,935,579 52.1% 1,435,153 44 1 Summerville Plaza Shopping Center 5,632,945 59.9% 837,833 45 1 St. Joseph's/St. Jude's Medical Building 5,915,416 60.4% 902,025 46 1 Haynes Plaza 109,009 1.0% N/A 47 2 Hearthstone Apartments 5,623,971 67.0% 676,837 48 2 Canyon View Apartments 6,170,665 72.6% 639,739 49 1 South County Medical Plaza 5,625,510 60.2% 686,601 50 1 Crossings at Westland 4,971,292 50.7% 898,634 51 2 Villas of Brandychase 4,816,854 61.8% 815,543 52 1 78 Place 5,287,627 41.3% 1,173,118 53 1 Vanowen Medical Office 5,036,307 60.7% 991,683 54 1 Bolsa Retail Center 4,986,248 55.4% 638,503 55 2 Candlewick Apartments 4,952,561 67.4% 569,925 56 1 91 Montvale Avenue 4,939,211 65.9% 739,089 57 2 Northgate Club Apartments 4,940,007 63.3% 604,416 58 2 Country Village & Oakwood Mobile Home Park 4,880,742 66.9% 645,492 59 1 Tops Plaza - North Olmsted 4,434,972 63.0% 529,153 60 1 West Highlands Shopping Center 4,811,058 63.7% 695,307 61 1 Metcalf 127 Shops 4,363,675 62.3% 624,255 62 1 Evergreen - Beverly Plaza & Park Plaza 4,436,446 63.4% 694,531 63 1 Gifford Industrial Park 4,275,854 61.1% 559,275 64 1 Oakley Plaza 5,175,000 48.8% 952,372 65 2 Cloverdale Apartments 4,029,801 62.9% 557,795 66 2 Collins Aire Mobile Home Park 4,151,282 33.8% 956,948 67 1 Chino Hills Promenade 4,200,609 60.0% 678,966 68 2 Hunter's Glen 4,085,650 63.8% 655,847 69 2 Cedar Glen Apartments 3,942,744 62.1% 488,577 70 2 College Hills West Apartments 3,917,495 68.1% 584,572 LOAN MOST RECENT U/W U/W # CROSSED GROUP LOAN NAME DSCR NOI NCF(5) - ------- ----- --------- ----------- --------------- --------------- 1 1 Mall at Fairfield Commons 1.72x $ 14,265,306 $ 13,516,797 2 1 Mayfair Mall and Office Complex 2.29 25,124,291 24,443,593 3 1 Stanford Shopping Center 3.89 19,013,028 18,932,926 4 1 MeriStar Hotel Portfolio 1.80 8,373,993 7,303,120 5 1 Paramount Plaza 1.71 7,885,987 6,931,117 6 1 Montalvo Square Shopping Center N/A 4,364,213 4,237,727 7 2 Jefferson at Montfort 1.45 3,491,112 3,325,612 8 1 EastBridge Landing 2.35 5,027,064 4,970,784 9 1 East Thunderbird Square Shopping Center North 1.48 3,374,320 3,202,894 10 1 Janss Court 1.18 3,014,478 2,932,085 11 1 Ravine Development 1.43 3,483,973 3,208,693 12 2 Serrano Apartments 1.32 2,396,912 2,287,412 13 1 Crow Canyon Commons Shopping Center 1.74 2,849,437 2,618,510 14 2 Carlingford Apartments 1.54 2,440,481 2,237,981 15 1 220 Post Street N/A 2,171,876 2,090,152 16 2 Kings Crossing I & II 2.06 2,706,050 2,598,050 17 2 Atrium at Market Center N/A 1,763,242 1,728,642 18 2 Villages of Deerfield Apartments 1.24 1,516,118 1,441,117 19 1 Baseline Corporate Center 1.55 1,940,394 1,711,064 20 1 Challenger Business Center 1.91 2,028,128 1,827,814 21 1 Delphi Building 1.22 1,718,306 1,559,668 22 (A) 1 Anaheim Professional Center 1.22 1,166,659 1,002,985 23 (A) 1 Coast Family Medical Center 1.75 604,310 530,110 24 1 Radisson Hotel Historic Savannah 1.81 2,157,221 1,922,832 25 2 Breckinridge Court Apartments 1.29 1,485,672 1,386,876 26 2 Addison at Hampton 1.52 1,390,783 1,321,783 27 1 SouthCourt at South Square 1.13 1,717,825 1,551,510 28 1 Deer Valley Financial Center 1.85 1,440,439 1,247,386 29 (B) 2 Magnolia Village 1.75 463,936 454,136 30 (B) 2 Blue Jay Mobile Home Park 1.75 407,710 394,560 31 (B) 2 Candlelight Manor 1.75 229,942 223,542 32 (B) 2 Elmwood Mobile Home Park 1.75 151,999 146,949 33 1 Shoppes of New Tampa N/A 1,482,130 1,367,437 34 1 The Borders and Shoppes at Chestnut Hill 1.75 1,123,918 1,057,890 35 1 Tustin Freeway Business Center 1.57 1,106,778 1,020,566 36 1 Oak Hill Townhomes 0.66 1,055,172 1,055,172 37 1 Northlake Square Shopping Center 1.69 1,059,527 1,011,885 38 2 Stone Hill Apartments 1.73 1,129,770 1,043,770 39 2 High Ridge Apartments 1.28 945,271 871,271 40 2 Caleb's Place Townhomes 1.27 894,919 856,919 41 2 Northgate Village Apartments 1.42 896,794 830,794 42 2 Cambridge Village Apartments 1.37 825,919 775,919 43 1 Staybridge Suites 2.30 1,218,479 1,218,479 44 1 Summerville Plaza Shopping Center 1.37 846,742 749,323 45 1 St. Joseph's/St. Jude's Medical Building 1.66 836,214 758,187 46 1 Haynes Plaza N/A 1,067,319 927,212 47 2 Hearthstone Apartments 1.33 708,329 645,329 48 2 Canyon View Apartments 1.42 703,281 668,781 49 1 South County Medical Plaza 1.42 677,655 638,600 50 1 Crossings at Westland 1.52 817,611 677,857 51 2 Villas of Brandychase 1.65 696,810 668,060 52 1 78 Place 2.56 1,113,268 1,008,155 53 1 Vanowen Medical Office 2.20 779,288 701,670 54 1 Bolsa Retail Center 1.40 675,284 634,302 55 2 Candlewick Apartments 1.25 614,417 568,417 56 1 91 Montvale Avenue 1.62 651,470 575,486 57 2 Northgate Club Apartments 1.36 579,341 549,341 58 2 Country Village & Oakwood Mobile Home Park 1.60 657,718 631,968 59 1 Tops Plaza - North Olmsted 1.26 520,171 497,079 60 1 West Highlands Shopping Center 1.66 655,800 584,303 61 1 Metcalf 127 Shops 1.39 615,129 577,369 62 1 Evergreen - Beverly Plaza & Park Plaza 1.78 647,658 598,741 63 1 Gifford Industrial Park 1.43 547,969 469,030 64 1 Oakley Plaza 3.77 888,809 772,484 65 2 Cloverdale Apartments 1.35 569,901 517,351 66 2 Collins Aire Mobile Home Park 2.72 905,310 888,910 67 1 Chino Hills Promenade 1.84 612,811 578,298 68 2 Hunter's Glen 1.84 609,137 571,137 69 2 Cedar Glen Apartments 1.30 493,815 441,065 70 2 College Hills West Apartments 1.62 582,478 540,478 LOAN U/W ADMINISTRATIVE # CROSSED GROUP LOAN NAME DSCR(6) FEES - ------- ----- --------- -------- ---- 1 1 Mall at Fairfield Commons 1.75x 0.0519% 2 1 Mayfair Mall and Office Complex 2.38 0.0119% 3 1 Stanford Shopping Center 3.43 0.0319% 4 1 MeriStar Hotel Portfolio 1.71 0.0319% 5 1 Paramount Plaza 2.11 0.0319% 6 1 Montalvo Square Shopping Center 1.53 0.0319% 7 2 Jefferson at Montfort 1.52 0.0319% 8 1 EastBridge Landing 2.02 0.0319% 9 1 East Thunderbird Square Shopping Center North 1.53 0.1019% 10 1 Janss Court 1.38 0.0319% 11 1 Ravine Development 1.32 0.0319% 12 2 Serrano Apartments 1.39 0.1019% 13 1 Crow Canyon Commons Shopping Center 1.69 0.0319% 14 2 Carlingford Apartments 1.50 0.0319% 15 1 220 Post Street 1.65 0.0319% 16 2 Kings Crossing I & II 2.06 0.0319% 17 2 Atrium at Market Center 1.27 0.0319% 18 2 Villages of Deerfield Apartments 1.35 0.0819% 19 1 Baseline Corporate Center 1.45 0.1119% 20 1 Challenger Business Center 1.68 0.0319% 21 1 Delphi Building 1.26 0.1119% 22 (A) 1 Anaheim Professional Center 1.49 0.1119% 23 (A) 1 Coast Family Medical Center 1.30 0.1119% 24 1 Radisson Hotel Historic Savannah 1.55 0.0819% 25 2 Breckinridge Court Apartments 1.32 0.0819% 26 2 Addison at Hampton 1.51 0.0319% 27 1 SouthCourt at South Square 1.42 0.0319% 28 1 Deer Valley Financial Center 1.46 0.1119% 29 (B) 2 Magnolia Village 1.52 0.0319% 30 (B) 2 Blue Jay Mobile Home Park 1.52 0.0319% 31 (B) 2 Candlelight Manor 1.52 0.0319% 32 (B) 2 Elmwood Mobile Home Park 1.52 0.0319% 33 1 Shoppes of New Tampa 2.63 0.0319% 34 1 The Borders and Shoppes at Chestnut Hill 1.49 0.0319% 35 1 Tustin Freeway Business Center 1.43 0.0819% 36 1 Oak Hill Townhomes 1.52 0.0819% 37 1 Northlake Square Shopping Center 1.60 0.0319% 38 2 Stone Hill Apartments 1.63 0.0319% 39 2 High Ridge Apartments 1.34 0.1319% 40 2 Caleb's Place Townhomes 1.23 0.0319% 41 2 Northgate Village Apartments 1.43 0.0319% 42 2 Cambridge Village Apartments 1.34 0.0319% 43 1 Staybridge Suites 1.95 0.1319% 44 1 Summerville Plaza Shopping Center 1.38 0.0319% 45 1 St. Joseph's/St. Jude's Medical Building 1.53 0.0319% 46 1 Haynes Plaza 1.28 0.0319% 47 2 Hearthstone Apartments 1.40 0.0319% 48 2 Canyon View Apartments 1.57 0.0319% 49 1 South County Medical Plaza 1.32 0.1119% 50 1 Crossings at Westland 1.36 0.0619% 51 2 Villas of Brandychase 1.40 0.0319% 52 1 78 Place 2.21 0.1119% 53 1 Vanowen Medical Office 1.69 0.0319% 54 1 Bolsa Retail Center 1.48 0.1119% 55 2 Candlewick Apartments 1.36 0.0319% 56 1 91 Montvale Avenue 1.37 0.1319% 57 2 Northgate Club Apartments 1.30 0.0319% 58 2 Country Village & Oakwood Mobile Home Park 1.63 0.0319% 59 1 Tops Plaza - North Olmsted 1.23 0.0519% 60 1 West Highlands Shopping Center 1.55 0.0319% 61 1 Metcalf 127 Shops 1.29 0.1119% 62 1 Evergreen - Beverly Plaza & Park Plaza 1.65 0.0319% 63 1 Gifford Industrial Park 1.40 0.0319% 64 1 Oakley Plaza 3.48 0.0319% 65 2 Cloverdale Apartments 1.25 0.1319% 66 2 Collins Aire Mobile Home Park 2.53 0.0819% 67 1 Chino Hills Promenade 1.58 0.1119% 68 2 Hunter's Glen 1.70 0.0319% 69 2 Cedar Glen Apartments 1.32 0.0319% 70 2 College Hills West Apartments 1.61 0.0319%
ADDITIONAL MORTGAGE LOAN INFORMATION
CUT-OFF DATE LOAN PRINCIPAL APPRAISED CUT-OFF DATE # CROSSED GROUP LOAN NAME BALANCE(1) VALUE LTV RATIO(1)(2) - ------- ----- --------- ----------- -------- ----------------- 71 1 4601 Eisenhower $ 4,389,115 $ 6,100,000 72.0% 72 1 Joyners Crossing 4,301,596 5,400,000 79.7% 73 1 Sedgefield Village Shopping Center 4,281,987 5,400,000 79.3% 74 1 Palm Ridge 4,170,000 5,560,000 75.0% 75 2 Point-O-View Apartments 4,077,258 5,750,000 70.9% 76 1 Village Shoppes 4,076,870 6,380,000 63.9% 77 2 Oak Brook Apartments 3,975,067 5,000,000 79.5% 78 1 Amaranth Building 3,971,612 6,000,000 66.2% 79 1 Merit Building 3,933,019 5,100,000 77.1% 80 1 4260-4310 West Broad Street 3,856,389 5,400,000 71.4% 81 1 Gateway Center 3,767,790 5,450,000 69.1% 82 1 PNC Advisor Building 3,690,354 4,750,000 77.7% 83 1 917 Franklin Office Building 3,681,688 4,850,000 75.9% 84 1 Riverside Business Park 3,627,200 5,300,000 68.4% 85 2 Oaks of League City 3,356,425 4,200,000 79.9% 86 1 Shiloh Center - 7 3,108,837 4,500,000 69.1% 87 1 Storage USA 3,082,422 4,000,000 77.1% 88 1 Eckerd's OAK RIDGE 3,055,009 4,420,000 69.1% 89 2 Tiburon Pointe Apartments 2,930,777 3,710,000 79.0% 90 2 Mansions North Apartments 2,793,973 3,925,000 71.2% 91 1 Dearborn Town Center 2,785,959 3,850,000 72.4% 92 1 72nd & Cedar Street Office 2,782,169 3,730,000 74.6% 93 2 Sands Point Cove Apartments 2,774,919 4,300,000 64.5% 94 1 Rancho Bernardo Professional Building 2,734,245 4,400,000 62.1% 95 1 Summerfield Renaissance Shopping Center 2,668,406 3,437,000 77.6% 96 1 Kroger Retail Center 2,661,315 3,700,000 71.9% 97 1 Coopers Common Plaza 2,633,092 4,100,000 64.2% 98 2 Diplomat Townhomes 2,586,552 4,200,000 61.6% 99 1 Chatfield Plaza 2,517,199 3,310,000 76.0% 100 1 Northwood Plaza Shopping Center 2,467,572 3,400,000 72.6% 101 1 Shiloh Center - 8 2,447,415 3,400,000 72.0% 102 2 Riverview Terrace 2,426,212 3,050,000 79.5% 103 2 Angelique Apartments 2,389,657 3,025,000 79.0% 104 2 Langdon Hall Apartments 2,386,896 3,800,000 62.8% 105 2 Bayou Oaks Apartments 2,368,221 3,090,000 76.6% 106 1 300-304 E 81st Street 2,343,767 4,200,000 55.8% 107 1 10811-10831 Foothill Boulevard 2,280,998 3,600,000 63.4% 108 2 Brandywine Apartments 2,274,881 2,850,000 79.8% 109 1 Fortress Self Storage 2,261,071 3,730,000 60.6% 110 1 Clayton Industrial Park 2,241,092 3,500,000 64.0% 111 1 Eckerd's - Middleton NJ 2,112,950 3,550,000 59.5% 112 1 2701-2751 East Chapman Avenue 1,986,484 2,970,000 66.9% 113 2 Park House Apartments 1,956,183 2,600,000 75.2% 114 1 324 E 77th Street 1,942,426 2,900,000 67.0% 115 2 Buttonwood Square 1,941,506 2,500,000 77.7% 116 1 Huntley Road Retail Center 1,889,399 2,540,000 74.4% 117 1 Highway Storage McAllen and Pharr 1,782,009 2,845,000 62.6% 118 1 Powell Plaza 1,754,226 2,410,000 72.8% 119 1 Gold Circle Office Building 1,689,174 2,270,000 74.4% 120 1 Waynesburg Centre 1,644,514 2,350,000 70.0% 121 1 Pierre Plaza Shopping Center 1,637,883 2,275,000 72.0% 122 2 Salem Terrace Apartments 1,628,325 2,250,000 72.4% 123 2 Carefree Valley Resort 1,490,463 2,050,000 72.7% 124 1 290 Fairbanks Center 1,475,449 2,100,000 70.3% 125 1 Scripps Hill Retail Center 1,446,036 2,300,000 62.9% 126 2 Springwood Apartments 1,434,171 1,800,000 79.7% 127 1 Cypress Harbor Mobile Home Park 1,392,438 1,800,000 77.4% 128 2 Casa Del Rey Mobile Home Park 1,391,891 1,800,000 77.3% 129 2 Fort Sedgwick Apartments 1,342,786 1,750,000 76.7% 130 1 10019 Reisterstown Road 1,280,517 1,650,000 77.6% 131 1 Shops at Canton 1,279,361 1,800,000 71.1% 132 1 Shiloh Center - 5 1,273,380 1,900,000 67.0% 133 1 Camino Maquilladora Buildings 1,245,716 2,040,000 61.1% 134 1 Meadow Estates Manufactured Housing Community 1,229,547 1,650,000 74.5% 135 1 Evergreen Office 1,192,358 1,610,000 74.1% 136 2 Amberwood Apartments 1,187,014 2,200,000 54.0% 137 1 3200 Commander Industrial Building 1,169,249 1,650,000 70.9% 138 1 Mabury Plaza 1,087,150 1,750,000 62.1% 139 2 Bel Air Mobile Home Communities 1,075,000 1,350,000 79.6% 140 2 Park Manor Apartments 998,771 1,275,000 78.3% MATURITY/ LOAN MATURITY/ARD ARD LTV MOST RECENT # CROSSED GROUP LOAN NAME BALANCE (3) RATIO(2)(3)(4) NOI - ------- ----- --------- ----------- ----------------- --- 71 1 4601 Eisenhower $ 3,799,493 62.3% $ 589,404 72 1 Joyners Crossing 3,333,197 61.7% N/A 73 1 Sedgefield Village Shopping Center 3,581,426 66.3% 370,588 74 1 Palm Ridge 3,554,619 63.9% 432,345 75 2 Point-O-View Apartments 3,684,593 64.1% 510,218 76 1 Village Shoppes 3,157,365 49.5% 454,874 77 2 Oak Brook Apartments 3,337,881 66.8% 423,530 78 1 Amaranth Building 3,071,206 51.2% 540,856 79 1 Merit Building 3,355,718 65.8% 498,833 80 1 4260-4310 West Broad Street 2,871,773 53.2% 506,637 81 1 Gateway Center 2,928,412 53.7% 542,834 82 1 PNC Advisor Building 3,173,685 66.8% 359,130 83 1 917 Franklin Office Building 3,101,199 63.9% 423,583 84 1 Riverside Business Park 3,044,867 57.5% 321,609 85 2 Oaks of League City 2,819,946 67.1% 367,688 86 1 Shiloh Center - 7 2,603,012 57.8% N/A 87 1 Storage USA 2,384,823 59.6% 338,960 88 1 Eckerd's OAK RIDGE 2,159,793 48.9% 356,923 89 2 Tiburon Pointe Apartments 2,445,433 65.9% N/A 90 2 Mansions North Apartments 2,321,008 59.1% 370,235 91 1 Dearborn Town Center 2,210,420 57.4% 319,849 92 1 72nd & Cedar Street Office 2,376,781 63.7% N/A 93 2 Sands Point Cove Apartments 2,196,728 51.1% 384,846 94 1 Rancho Bernardo Professional Building 2,322,330 52.8% 312,600 95 1 Summerfield Renaissance Shopping Center 2,243,347 65.3% 335,542 96 1 Kroger Retail Center 2,121,624 57.3% 347,821 97 1 Coopers Common Plaza 2,203,726 53.7% N/A 98 2 Diplomat Townhomes 2,165,707 51.6% 344,270 99 1 Chatfield Plaza 2,113,998 63.9% 346,938 100 1 Northwood Plaza Shopping Center 1,626,858 47.8% 318,621 101 1 Shiloh Center - 8 2,052,305 60.4% N/A 102 2 Riverview Terrace 1,878,373 61.6% 244,460 103 2 Angelique Apartments 2,164,274 71.5% 310,732 104 2 Langdon Hall Apartments 1,983,268 52.2% 225,987 105 2 Bayou Oaks Apartments 1,994,825 64.6% 254,372 106 1 300-304 E 81st Street 2,011,144 47.9% 233,792 107 1 10811-10831 Foothill Boulevard 1,781,520 49.5% N/A 108 2 Brandywine Apartments 1,877,827 65.9% 265,057 109 1 Fortress Self Storage 1,508,989 40.5% 478,773 110 1 Clayton Industrial Park 1,761,789 50.3% 293,746 111 1 Eckerd's - Middleton NJ 28,678 0.8% N/A 112 1 2701-2751 East Chapman Avenue 1,550,352 52.2% 316,474 113 2 Park House Apartments 1,531,528 58.9% 272,517 114 1 324 E 77th Street 1,641,757 56.6% 191,097 115 2 Buttonwood Square 1,641,658 65.7% 278,494 116 1 Huntley Road Retail Center 1,610,264 63.4% 233,132 117 1 Highway Storage McAllen and Pharr 1,195,158 42.0% 227,252 118 1 Powell Plaza 1,514,510 62.8% 266,218 119 1 Gold Circle Office Building 1,443,046 63.6% 212,021 120 1 Waynesburg Centre 1,333,889 56.8% 258,431 121 1 Pierre Plaza Shopping Center 1,123,847 49.4% 231,914 122 2 Salem Terrace Apartments 35,753 1.6% 246,539 123 2 Carefree Valley Resort 1,172,498 57.2% 187,224 124 1 290 Fairbanks Center 1,240,624 59.1% 198,252 125 1 Scripps Hill Retail Center 1,235,937 53.7% 198,380 126 2 Springwood Apartments 1,339,188 74.4% 171,559 127 1 Cypress Harbor Mobile Home Park 1,295,268 72.0% 168,443 128 2 Casa Del Rey Mobile Home Park 1,180,503 65.6% 187,569 129 2 Fort Sedgwick Apartments 1,119,172 64.0% 194,547 130 1 10019 Reisterstown Road 1,076,050 65.2% 144,697 131 1 Shops at Canton 1,062,812 59.0% 144,397 132 1 Shiloh Center - 5 1,066,195 56.1% N/A 133 1 Camino Maquilladora Buildings 1,069,884 52.4% 213,725 134 1 Meadow Estates Manufactured Housing Community 1,102,119 66.8% 142,855 135 1 Evergreen Office 1,018,621 63.3% 147,680 136 2 Amberwood Apartments 1,086,460 49.4% 144,287 137 1 3200 Commander Industrial Building 986,353 59.8% 167,177 138 1 Mabury Plaza 933,223 53.3% 137,857 139 2 Bel Air Mobile Home Communities 916,099 67.9% 119,235 140 2 Park Manor Apartments 794,883 62.3% 99,743 LOAN MOST RECENT U/W U/W # CROSSED GROUP LOAN NAME DSCR NOI NCF(5) - ------- ----- --------- ---- --- ------- 71 1 4601 Eisenhower 1.56x $ 587,862 $ 524,472 72 1 Joyners Crossing N/A 451,068 436,613 73 1 Sedgefield Village Shopping Center 1.21 449,295 428,481 74 1 Palm Ridge 1.36 417,542 396,651 75 2 Point-O-View Apartments 1.45 532,306 490,906 76 1 Village Shoppes 1.31 605,031 557,996 77 2 Oak Brook Apartments 1.47 416,796 391,796 78 1 Amaranth Building 1.66 457,172 418,330 79 1 Merit Building 1.73 452,174 401,281 80 1 4260-4310 West Broad Street 1.31 487,813 395,571 81 1 Gateway Center 1.73 525,792 484,912 82 1 PNC Advisor Building 1.29 357,630 355,008 83 1 917 Franklin Office Building 1.44 450,804 395,011 84 1 Riverside Business Park 1.08 467,020 411,462 85 2 Oaks of League City 1.38 369,442 342,442 86 1 Shiloh Center - 7 N/A 364,130 343,789 87 1 Storage USA 1.44 334,625 334,625 88 1 Eckerd's OAK RIDGE 1.41 335,683 322,159 89 2 Tiburon Pointe Apartments N/A 313,817 301,817 90 2 Mansions North Apartments 2.00 356,216 304,346 91 1 Dearborn Town Center 1.29 328,154 299,025 92 1 72nd & Cedar Street Office N/A 336,108 306,080 93 2 Sands Point Cove Apartments 1.56 347,081 311,581 94 1 Rancho Bernardo Professional Building 1.43 369,075 335,034 95 1 Summerfield Renaissance Shopping Center 1.78 294,130 284,588 96 1 Kroger Retail Center 1.34 338,908 306,619 97 1 Coopers Common Plaza N/A 361,567 341,265 98 2 Diplomat Townhomes 1.79 353,462 322,462 99 1 Chatfield Plaza 1.78 304,078 264,084 100 1 Northwood Plaza Shopping Center 1.37 303,208 275,157 101 1 Shiloh Center - 8 N/A 275,858 261,664 102 2 Riverview Terrace 1.25 268,473 256,473 103 2 Angelique Apartments 1.52 281,997 248,497 104 2 Langdon Hall Apartments 1.27 251,486 225,086 105 2 Bayou Oaks Apartments 1.42 255,577 233,577 106 1 300-304 E 81st Street 1.31 238,083 232,333 107 1 10811-10831 Foothill Boulevard N/A 262,241 254,465 108 2 Brandywine Apartments 1.79 269,628 238,428 109 1 Fortress Self Storage 2.38 361,833 353,579 110 1 Clayton Industrial Park 1.43 313,790 276,632 111 1 Eckerd's - Middleton NJ N/A 317,542 304,493 112 1 2701-2751 East Chapman Avenue 1.87 236,194 208,673 113 2 Park House Apartments 1.66 253,398 235,398 114 1 324 E 77th Street 1.36 189,988 184,988 115 2 Buttonwood Square 1.95 227,104 212,604 116 1 Huntley Road Retail Center 1.61 223,970 210,254 117 1 Highway Storage McAllen and Pharr 1.31 267,387 247,873 118 1 Powell Plaza 1.81 206,999 183,041 119 1 Gold Circle Office Building 1.52 203,495 177,802 120 1 Waynesburg Centre 1.58 247,004 216,442 121 1 Pierre Plaza Shopping Center 1.39 224,085 205,825 122 2 Salem Terrace Apartments 1.65 223,991 206,491 123 2 Carefree Valley Resort 1.41 198,101 192,095 124 1 290 Fairbanks Center 1.83 164,932 153,371 125 1 Scripps Hill Retail Center 1.75 191,838 179,289 126 2 Springwood Apartments 1.59 172,741 158,491 127 1 Cypress Harbor Mobile Home Park 1.78 145,067 140,567 128 2 Casa Del Rey Mobile Home Park 1.86 144,419 140,669 129 2 Fort Sedgwick Apartments 2.02 188,901 174,901 130 1 10019 Reisterstown Road 1.45 137,622 120,157 131 1 Shops at Canton 1.61 149,239 140,824 132 1 Shiloh Center - 5 N/A 155,383 146,936 133 1 Camino Maquilladora Buildings 2.10 174,279 156,012 134 1 Meadow Estates Manufactured Housing Community 1.59 142,524 138,224 135 1 Evergreen Office 1.47 142,425 122,176 136 2 Amberwood Apartments 1.27 173,622 160,122 137 1 3200 Commander Industrial Building 1.76 140,760 116,513 138 1 Mabury Plaza 1.57 121,539 109,898 139 2 Bel Air Mobile Home Communities 1.55 121,517 116,817 140 2 Park Manor Apartments 1.15 107,798 101,798 LOAN U/W ADMINISTRATIVE # CROSSED GROUP LOAN NAME DSCR(6) FEES - ------- ----- --------- -------- ---- 71 1 4601 Eisenhower 1.55x 0.0319% 72 1 Joyners Crossing 1.32 0.0319% 73 1 Sedgefield Village Shopping Center 1.48 0.0319% 74 1 Palm Ridge 1.30 0.1319% 75 2 Point-O-View Apartments 1.52 0.0319% 76 1 Village Shoppes 1.79 0.0319% 77 2 Oak Brook Apartments 1.44 0.0319% 78 1 Amaranth Building 1.39 0.0319% 79 1 Merit Building 1.39 0.1319% 80 1 4260-4310 West Broad Street 1.25 0.0619% 81 1 Gateway Center 1.67 0.0319% 82 1 PNC Advisor Building 1.28 0.0819% 83 1 917 Franklin Office Building 1.55 0.0819% 84 1 Riverside Business Park 1.66 0.0319% 85 2 Oaks of League City 1.47 0.1819% 86 1 Shiloh Center - 7 1.63 0.0319% 87 1 Storage USA 1.42 0.1319% 88 1 Eckerd's OAK RIDGE 1.32 0.0319% 89 2 Tiburon Pointe Apartments 1.54 0.0319% 90 2 Mansions North Apartments 1.64 0.1319% 91 1 Dearborn Town Center 1.32 0.0319% 92 1 72nd & Cedar Street Office 1.52 0.0319% 93 2 Sands Point Cove Apartments 1.39 0.0319% 94 1 Rancho Bernardo Professional Building 1.72 0.0319% 95 1 Summerfield Renaissance Shopping Center 1.56 0.0319% 96 1 Kroger Retail Center 1.30 0.0319% 97 1 Coopers Common Plaza 1.92 0.0319% 98 2 Diplomat Townhomes 1.84 0.0319% 99 1 Chatfield Plaza 1.53 0.0319% 100 1 Northwood Plaza Shopping Center 1.30 0.0319% 101 1 Shiloh Center - 8 1.57 0.0319% 102 2 Riverview Terrace 1.38 0.0319% 103 2 Angelique Apartments 1.36 0.0319% 104 2 Langdon Hall Apartments 1.43 0.0319% 105 2 Bayou Oaks Apartments 1.42 0.0319% 106 1 300-304 E 81st Street 1.33 0.0319% 107 1 10811-10831 Foothill Boulevard 1.43 0.0319% 108 2 Brandywine Apartments 1.61 0.1319% 109 1 Fortress Self Storage 1.79 0.0319% 110 1 Clayton Industrial Park 1.54 0.0319% 111 1 Eckerd's - Middleton NJ 1.42 0.0319% 112 1 2701-2751 East Chapman Avenue 1.35 0.0319% 113 2 Park House Apartments 1.54 0.0319% 114 1 324 E 77th Street 1.35 0.0319% 115 2 Buttonwood Square 1.57 0.0319% 116 1 Huntley Road Retail Center 1.54 0.0319% 117 1 Highway Storage McAllen and Pharr 1.56 0.0319% 118 1 Powell Plaza 1.37 0.0319% 119 1 Gold Circle Office Building 1.45 0.0319% 120 1 Waynesburg Centre 1.50 0.0319% 121 1 Pierre Plaza Shopping Center 1.34 0.0319% 122 2 Salem Terrace Apartments 1.49 0.0319% 123 2 Carefree Valley Resort 1.49 0.0319% 124 1 290 Fairbanks Center 1.50 0.0319% 125 1 Scripps Hill Retail Center 1.69 0.0319% 126 2 Springwood Apartments 1.60 0.0319% 127 1 Cypress Harbor Mobile Home Park 1.52 0.0319% 128 2 Casa Del Rey Mobile Home Park 1.43 0.0319% 129 2 Fort Sedgwick Apartments 1.96 0.0319% 130 1 10019 Reisterstown Road 1.37 0.0319% 131 1 Shops at Canton 1.67 0.0319% 132 1 Shiloh Center - 5 1.70 0.0319% 133 1 Camino Maquilladora Buildings 1.68 0.0319% 134 1 Meadow Estates Manufactured Housing Community 1.58 0.0319% 135 1 Evergreen Office 1.41 0.0319% 136 2 Amberwood Apartments 1.56 0.0319% 137 1 3200 Commander Industrial Building 1.43 0.0319% 138 1 Mabury Plaza 1.37 0.0319% 139 2 Bel Air Mobile Home Communities 1.58 0.0319% 140 2 Park Manor Apartments 1.24 0.0319%
ADDITIONAL MORTGAGE LOAN INFORMATION
CUT-OFF DATE LOAN PRINCIPAL APPRAISED CUT-OFF DATE # CROSSED GROUP LOAN NAME BALANCE(1) VALUE LTV RATIO(1)(2) - ------- ----- --------- ----------- --------- ----------------- 141 1 Silverado Office Building $ 996,925 $ 2,160,000 46.2% 142 1 Pinehollow Business Park 989,673 1,450,000 68.3% 143 1 Broadway Commons Shopping Center 916,515 1,300,000 70.5% 144 2 Colonial Arms Apartments 910,341 1,320,000 69.0% 145 2 Folger Apartments 896,427 1,390,000 64.5% 146 2 Church Hill Gables 895,693 1,500,000 59.7% 147 2 Morris Manor Apartment 895,311 1,230,000 72.8% 148 2 Halifax Court Apartments 876,021 1,100,000 79.6% 149 2 Ashley Street Apartments 750,390 950,000 79.0% 150 2 Royal Palms Apartments 721,302 1,175,000 61.4% 151 2 Quartermaster Court Apartments 634,310 980,000 64.7% 152 2 833 Whalley Avenue 596,740 750,000 79.6% 153 1 76-80 Lafayette Avenue 585,529 1,100,000 53.2% ----------------------------------------------------- TOTAL/WEIGHTED AVERAGE: $ 1,261,269,491 $ 2,306,572,000 68.9% ===================================================== MAXIMUM: $ 85,405,532 $ 335,000,000 81.6% MINIMUM: $ 585,529 $ 750,000 37.0% MATURITY/ LOAN MATURITY/ARD ARD LTV MOST RECENT # CROSSED GROUP LOAN NAME BALANCE(3) RATIO(2)(3)(4) NOI - ------- ----- --------- ------------ ----------------- --------------- 141 1 Silverado Office Building $ 838,259 38.8% $ 159,131 142 1 Pinehollow Business Park 720,130 49.7% 148,659 143 1 Broadway Commons Shopping Center 726,499 55.9% 127,517 144 2 Colonial Arms Apartments 718,680 54.4% 97,742 145 2 Folger Apartments 755,432 54.3% 114,790 146 2 Church Hill Gables 757,809 50.5% 104,553 147 2 Morris Manor Apartment 703,884 57.2% 101,235 148 2 Halifax Court Apartments 746,533 67.9% 133,228 149 2 Ashley Street Apartments 498,413 52.5% 48,075 150 2 Royal Palms Apartments 569,259 48.4% 129,120 151 2 Quartermaster Court Apartments 461,213 47.1% 89,008 152 2 833 Whalley Avenue 510,303 68.0% 94,590 153 1 76-80 Lafayette Avenue 474,224 43.1% 97,801 ----------------------------------------------------- TOTAL/WEIGHTED AVERAGE: $ 1,057,931,506 57.6% $ 169,739,965 ===================================================== MAXIMUM: $ 75,000,000 74.4% $ 23,811,052 MINIMUM: $ 28,678 0.8% $ 48,075 LOAN MOST RECENT U/W U/W # CROSSED GROUP LOAN NAME DSCR NOI NCF(5) - ------- ----- --------- ---- --- ------- 141 1 Silverado Office Building 2.17x $ 148,999 $ 139,379 142 1 Pinehollow Business Park 1.56 150,121 126,536 143 1 Broadway Commons Shopping Center 1.62 102,760 97,009 144 2 Colonial Arms Apartments 1.12 130,599 115,349 145 2 Folger Apartments 1.78 107,202 103,202 146 2 Church Hill Gables 1.59 115,799 111,549 147 2 Morris Manor Apartment 1.23 152,802 139,302 148 2 Halifax Court Apartments 1.99 105,075 98,075 149 2 Ashley Street Apartments 0.60 107,527 98,527 150 2 Royal Palms Apartments 2.01 113,096 101,096 151 2 Quartermaster Court Apartments 1.57 88,553 80,553 152 2 833 Whalley Avenue 2.09 73,058 69,558 153 1 76-80 Lafayette Avenue 1.71 85,552 75,020 ------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 1.81x $ 182,899,579 $ 172,019,658 ================================================= MAXIMUM: 3.89x $ 25,124,291 $ 24,443,593 MINIMUM: 0.60x $ 73,058 $ 69,558 LOAN U/W ADMINISTRATIVE # CROSSED GROUP LOAN NAME DSCR (6) FEES - ------- ----- --------- -------- ---- 141 1 Silverado Office Building 2.02x 0.0319% 142 1 Pinehollow Business Park 1.57 0.0319% 143 1 Broadway Commons Shopping Center 1.29 0.0319% 144 2 Colonial Arms Apartments 1.57 0.0319% 145 2 Folger Apartments 1.66 0.0319% 146 2 Church Hill Gables 1.77 0.0319% 147 2 Morris Manor Apartment 1.95 0.0319% 148 2 Halifax Court Apartments 1.55 0.0319% 149 2 Ashley Street Apartments 1.51 0.0319% 150 2 Royal Palms Apartments 1.74 0.0319% 151 2 Quartermaster Court Apartments 1.42 0.0819% 152 2 833 Whalley Avenue 1.60 0.0319% 153 1 76-80 Lafayette Avenue 1.47 0.0319% ---------- TOTAL/WEIGHTED AVERAGE: 1.75x ========== MAXIMUM: 3.48x MINIMUM: 1.23x
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (B) THE UNDERLYING MORTGAGE LOANS SECURED BY MAGNOLIA VILLAGE, BLUE JAY MOBILE HOME PARK, CANDLELIGHT MANOR AND ELMWOOD MOBILE HOME PARK ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF CROSS-COLLATERALIZED AND CROSS-DEFAULTED UNDERLYING MORTGAGE LOANS, THE COMBINED LTV IS PRESENTED FOR EACH AND EVERY RELATED UNDERLYING MORTGAGE LOAN. (3) AT MATURITY WITH RESPECT TO BALLOON LOANS OR AT THE ARD IN THE CASE OF ARD LOANS. THERE CAN BE NO ASSURANCE THAT THE VALUE OF ANY PARTICULAR MORTGAGED PROPERTY WILL NOT HAVE DECLINED FROM THE ORIGINAL APPRAISAL VALUE. (4) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. (5) U/W NCF REFLECTS THE NET CASH FLOW AFTER U/W REPLACEMENT RESERVES, U/W LC'S AND TI'S AND U/W FF&E. (6) U/W DSCR IS BASED ON THE AMOUNT OF THE MONTHLY PAYMENTS PRESENTED. IN THE CASE OF CROSS-COLLATERALIZED AND CROSS-DEFAULTED UNDERLYING MORTGAGE LOANS THE COMBINED U/W DSCR IS PRESENTED FOR EACH AND EVERY RELATED UNDERLYING MORTGAGE LOAN. MAJOR TENANTS OF THE COMMERCIAL PROPERTIES
CUT-OFF LOAN DATE PRINCIPAL # CROSSED GROUP PROPERTY NAME BALANCE (1) PROPERTY TYPE SQ. FT. - ------- ----- ------------- ----------- ------------- ------- 1 1 Mall at Fairfield Commons $ 85,405,532 Retail 1,046,726(2) 2A 1 Mayfair Mall 69,245,249 Retail 858,165 2B 1 Mayfair Office Complex 10,098,266 Office 419,318 3 1 Stanford Shopping Center 75,000,000 Retail 1,387,351(2) 5 1 Paramount Plaza 44,876,466 Office 911,900 6 1 Montalvo Square Shopping Center 42,300,000 Retail 218,507 9 1 East Thunderbird Square Shopping Center North 28,472,696 Retail 167,412 10 1 Janss Court 28,295,760 Mixed Use 125,709 11 1 Ravine Development 26,515,146 Office 154,776 13 1 Crow Canyon Commons Shopping Center 22,903,652 Retail 228,139 15 1 220 Post Street 21,300,000 Retail 37,425 19 1 Baseline Corporate Center 16,438,430 Office 151,221 20 1 Challenger Business Center 16,329,079 Office 170,418 21 1 Delphi Building 15,976,947 Industrial 222,597 22 (A) 1 Anaheim Professional Center 9,365,667 Office 87,237 23 (A) 1 Coast Family Medical Center 5,719,224 Office 42,892 27 1 SouthCourt at South Square 14,423,499 Office 130,981 28 1 Deer Valley Financial Center 11,604,681 Office 126,569 33 1 Shoppes of New Tampa 10,600,000 Retail 158,662 34 1 The Borders and Shoppes at Chestnut Hill 10,434,412 Retail 40,570 35 1 Tustin Freeway Business Center 9,989,911 Industrial 184,083 37 1 Northlake Square Shopping Center 9,438,742 Retail 82,556 44 1 Summerville Plaza Shopping Center 7,379,962 Retail 107,600 45 1 St. Joseph's/St. Jude's Medical Building 6,967,396 Office 61,640 46 1 Haynes Plaza 6,814,263 Retail 244,698 49 1 South County Medical Plaza 6,593,640 Office 27,522 50 1 Crossings at Westland 6,339,552 Retail 215,415 52 1 78 Place 6,194,049 Mixed Use 105,618 53 1 Vanowen Medical Office 5,964,095 Office 64,411 54 1 Bolsa Retail Center 5,844,363 Retail 42,505 56 1 91 Montvale Avenue 5,804,304 Office 50,648 59 1 Tops Plaza - North Olmsted 5,743,218 Retail 70,003 60 1 West Highlands Shopping Center 5,650,000 Retail 86,114 61 1 Metcalf 127 Shops 5,531,107 Retail 56,509 62A 1 Evergreen - Park Plaza 3,085,346 Retail 22,649 62B 1 Evergreen - Beverly Plaza 2,182,318 Retail 22,921 63 1 Gifford Industrial Park 5,176,306 Industrial 156,224 64 1 Oakley Plaza 5,175,000 Retail 118,727 67 1 Chino Hills Promenade 4,887,170 Retail 41,464 71 1 4601 Eisenhower 4,389,115 Mixed Use 64,474 72 1 Joyners Crossing 4,301,596 Retail 52,207 73 1 Sedgefield Village Shopping Center 4,281,987 Retail 56,630 74 1 Palm Ridge 4,170,000 Retail 27,600 76 1 Village Shoppes 4,076,870 Retail 36,460 78 1 Amaranth Building 3,971,612 Industrial 45,645 79 1 Merit Building 3,933,019 Office 39,902 80 1 4260-4310 West Broad Street 3,856,389 Retail 94,079 81 1 Gateway Center 3,767,790 Industrial 88,177 82 1 PNC Advisor Building 3,690,354 Office 13,110 83 1 917 Franklin Office Building 3,681,688 Office 38,890 84 1 Riverside Business Park 3,627,200 Industrial 119,249 86 1 Shiloh Center - 7 3,108,837 Retail 18,020 88 1 Eckerd's OAK RIDGE 3,055,009 Retail 11,760 91 1 Dearborn Town Center 2,785,959 Retail 24,974 92 1 72nd & Cedar Street Office 2,782,169 Office 24,022 94 1 Rancho Bernardo Professional Building 2,734,245 Office 25,952 95 1 Summerfield Renaissance Shopping Center 2,668,406 Retail 36,840 96 1 Kroger Retail Center 2,661,315 Retail 52,933 97 1 Coopers Common Plaza 2,633,092 Retail 18,218 99 1 Chatfield Plaza 2,517,199 Office 20,034 100 1 Northwood Plaza Shopping Center 2,467,572 Retail 50,408 101 1 Shiloh Center - 8 2,447,415 Retail 14,210 106 1 300-304 E 81st Street 2,343,767 Mixed Use 11,830 107 1 10811-10831 Foothill Boulevard 2,280,998 Retail 6,508 110 1 Clayton Industrial Park 2,241,092 Industrial 51,320 111 1 Eckerd's - Middleton NJ 2,112,950 Retail 11,347 112 1 2701-2751 East Chapman Avenue 1,986,484 Office 30,102 116 1 Huntley Road Retail Center 1,889,399 Retail 11,407 118 1 Powell Plaza 1,754,226 Retail 20,790 119 1 Gold Circle Office Building 1,689,174 Office 20,889 120 1 Waynesburg Centre 1,644,514 Retail 44,703 121 1 Pierre Plaza Shopping Center 1,637,883 Retail 14,000 124 1 290 Fairbanks Center 1,475,449 Retail 10,053 125 1 Scripps Hill Retail Center 1,446,036 Retail 10,912 130 1 10019 Reisterstown Road 1,280,517 Office 11,018 131 1 Shops at Canton 1,279,361 Retail 10,400 132 1 Shiloh Center - 5 1,273,380 Retail 7,135 133 1 Camino Maquilladora Buildings 1,245,716 Industrial 38,866 135 1 Evergreen Office 1,192,358 Office 16,874 137 1 3200 Commander Industrial Building 1,169,249 Industrial 53,882 138 1 Mabury Plaza 1,087,150 Retail 11,525 141 1 Silverado Office Building 996,925 Office 7,101 142 1 Pinehollow Business Park 989,673 Office 22,457 143 1 Broadway Commons Shopping Center 916,515 Retail 12,600 153 1 76-80 Lafayette Avenue 585,529 Mixed Use 10,824 MAJOR LOAN TENANT # 1 # CROSSED GROUP PROPERTY NAME NAME - ------- ----- ------------- ---- 1 1 Mall at Fairfield Commons Elder Beerman 2A 1 Mayfair Mall Marshall Field's 2B 1 Mayfair Office Complex St Joseph's (Mayfair Atrium) 3 1 Stanford Shopping Center Bloomingdale's 5 1 Paramount Plaza California Department of Social Services 6 1 Montalvo Square Shopping Center Ralph's Grocery Company Store 9 1 East Thunderbird Square Shopping Center North Ashley Furniture 10 1 Janss Court Plitt Theatres 11 1 Ravine Development Metropolitan Life Insurance Company 13 1 Crow Canyon Commons Shopping Center Albertson's 15 1 220 Post Street Saks Fifth Avenue 19 1 Baseline Corporate Center Centex Home Equity 20 1 Challenger Business Center Adaptec, Inc. 21 1 Delphi Building Delphi Corporation 22 (A) 1 Anaheim Professional Center Anaheim Memorial Medical Cntr 23 (A) 1 Coast Family Medical Center Center for Special Surgery 27 1 SouthCourt at South Square EMD Pharmaceuticals 28 1 Deer Valley Financial Center Blackboard Campuswide, Inc. 33 1 Shoppes of New Tampa Beall's Department Store 34 1 The Borders and Shoppes at Chestnut Hill Borders 35 1 Tustin Freeway Business Center Foster Printing Company 37 1 Northlake Square Shopping Center Best Buy 44 1 Summerville Plaza Shopping Center Piggly Wiggly 45 1 St. Joseph's/St. Jude's Medical Building St. Jude Heritage Health Foundation dba St. Joseph 46 1 Haynes Plaza Haynes Furniture 49 1 South County Medical Plaza San Clemente Medical 50 1 Crossings at Westland Value City Department Stores 52 1 78 Place QuadraMed Corporation 53 1 Vanowen Medical Office Central Medical Group 54 1 Bolsa Retail Center Anh Minh Mkt 56 1 91 Montvale Avenue Guertin Elkerton & Associates, Inc. 59 1 Tops Plaza - North Olmsted Tops Markets, LLC 60 1 West Highlands Shopping Center La Mansion 61 1 Metcalf 127 Shops Danish Inspirations of Overland Park, Inc. 62A 1 Evergreen - Park Plaza The Avenue 62B 1 Evergreen - Beverly Plaza Catherine's, Inc. 63 1 Gifford Industrial Park USP Remote Coding Center 64 1 Oakley Plaza Baby Superstore 67 1 Chino Hills Promenade Sizzler 71 1 4601 Eisenhower Meridian One Corporation 72 1 Joyners Crossing Food Lion 73 1 Sedgefield Village Shopping Center Food Lion 74 1 Palm Ridge San Diego County Superindendent of Schools 76 1 Village Shoppes Martino Tire 78 1 Amaranth Building Target Sales 79 1 Merit Building Glen Construction Company 80 1 4260-4310 West Broad Street Hobby Lobby 81 1 Gateway Center C&M Marine Pro 82 1 PNC Advisor Building The PNC Financial Services Group, Inc. 83 1 917 Franklin Office Building Aniden 84 1 Riverside Business Park Platinum One Enterprises 86 1 Shiloh Center - 7 CSK Auto Inc. (Kragen) 88 1 Eckerd's OAK RIDGE Eckerd's Drugstore 91 1 Dearborn Town Center Arabian Towncenter 92 1 72nd & Cedar Street Office Regent Financial Corp 94 1 Rancho Bernardo Professional Building Century 21 95 1 Summerfield Renaissance Shopping Center Food Lion, Inc. 96 1 Kroger Retail Center Kroger 97 1 Coopers Common Plaza Dr. Jacobi & Walden, DDS, PC 99 1 Chatfield Plaza Dr. Alan Goral DDS 100 1 Northwood Plaza Shopping Center Food Lion 101 1 Shiloh Center - 8 Sleep City 106 1 300-304 E 81st Street Yorkville Emporium 107 1 10811-10831 Foothill Boulevard Chipotle Mexican Grill 110 1 Clayton Industrial Park Casanova Meat Co. 111 1 Eckerd's - Middleton NJ Eckerd's Drugstore 112 1 2701-2751 East Chapman Avenue College of Information Technology 116 1 Huntley Road Retail Center Baird & Warner 118 1 Powell Plaza Take One Video 119 1 Gold Circle Office Building W.E. Stevens & Company, P.C. 120 1 Waynesburg Centre Town & Country IGA 121 1 Pierre Plaza Shopping Center AT&T Wireless 124 1 290 Fairbanks Center Sprint PCS 125 1 Scripps Hill Retail Center Filippi's Pizza 130 1 10019 Reisterstown Road Summerfield, Willen, Esq. 131 1 Shops at Canton Subway 132 1 Shiloh Center - 5 Patelco Credit Union 133 1 Camino Maquilladora Buildings Express Automotive Certificate 135 1 Evergreen Office Smart Enterprises, LLC 137 1 3200 Commander Industrial Building Components and More 138 1 Mabury Plaza Futon Factory 141 1 Silverado Office Building Western General Mortgage 142 1 Pinehollow Business Park Arcadis G&M, Inc. 143 1 Broadway Commons Shopping Center Payless Shoes 153 1 76-80 Lafayette Avenue Brooker Engineering MAJOR MAJOR LOAN TENANT # 1 TENANT # 1 LEASE # CROSSED GROUP PROPERTY NAME SQ. FT. EXPIRATION DATE - ------- ----- ------------- ------- ---------------- 1 1 Mall at Fairfield Commons 150,000 10/31/2013 2A 1 Mayfair Mall 288,596 1/31/2007 2B 1 Mayfair Office Complex 54,932 9/30/2008 3 1 Stanford Shopping Center 228,986(3) 2/28/2029 5 1 Paramount Plaza 89,683 7/1/2004 6 1 Montalvo Square Shopping Center 58,000 5/31/2022 9 1 East Thunderbird Square Shopping Center North 35,246 11/19/2011 10 1 Janss Court 21,017 10/31/2009 11 1 Ravine Development 154,776 6/30/2016 13 1 Crow Canyon Commons Shopping Center 57,921 2/1/2018 15 1 220 Post Street 37,425 11/1/2016 19 1 Baseline Corporate Center 30,000 6/14/2008 20 1 Challenger Business Center 99,604 4/30/2008 21 1 Delphi Building 222,597 3/31/2008 22 (A) 1 Anaheim Professional Center 11,544 8/1/2006 23 (A) 1 Coast Family Medical Center 10,000 6/30/2013 27 1 SouthCourt at South Square 44,374 1/31/2006 28 1 Deer Valley Financial Center 55,411 1/31/2008 33 1 Shoppes of New Tampa 54,379 10/31/2022 34 1 The Borders and Shoppes at Chestnut Hill 18,538 1/31/2010 35 1 Tustin Freeway Business Center 39,695 12/31/2005 37 1 Northlake Square Shopping Center 52,644 1/31/2015 44 1 Summerville Plaza Shopping Center 40,500 6/30/2013 45 1 St. Joseph's/St. Jude's Medical Building 61,640 10/29/2010 46 1 Haynes Plaza 200,000 11/30/2020 49 1 South County Medical Plaza 13,761 6/30/2017 50 1 Crossings at Westland 99,574 1/31/2016 52 1 78 Place 41,306 5/21/2008 53 1 Vanowen Medical Office 6,166 6/30/2012 54 1 Bolsa Retail Center 4,700 9/30/2003 56 1 91 Montvale Avenue 8,469 7/1/2008 59 1 Tops Plaza - North Olmsted 57,357 9/30/2026 60 1 West Highlands Shopping Center 13,000 10/31/2010 61 1 Metcalf 127 Shops 15,006 10/31/2008 62A 1 Evergreen - Park Plaza 5,688 1/31/2014 62B 1 Evergreen - Beverly Plaza 5,790 10/31/2008 63 1 Gifford Industrial Park 18,689 6/22/2005 64 1 Oakley Plaza 43,000 7/1/2006 67 1 Chino Hills Promenade 6,600 12/31/2010 71 1 4601 Eisenhower 28,657 8/31/2009 72 1 Joyners Crossing 33,807 6/1/2023 73 1 Sedgefield Village Shopping Center 37,930 2/28/2021 74 1 Palm Ridge 5,400 3/15/2009 76 1 Village Shoppes 7,058 11/30/2012 78 1 Amaranth Building 29,000 1/18/2011 79 1 Merit Building 14,782 4/30/2006 80 1 4260-4310 West Broad Street 55,135 12/31/2011 81 1 Gateway Center 2,800 MTM 82 1 PNC Advisor Building 13,110 6/30/2018 83 1 917 Franklin Office Building 6,487 6/1/2005 84 1 Riverside Business Park 10,337 1/31/2005 86 1 Shiloh Center - 7 5,660 8/31/2012 88 1 Eckerd's OAK RIDGE 11,760 9/11/2027 91 1 Dearborn Town Center 6,125 8/31/2006 92 1 72nd & Cedar Street Office 7,404 3/31/2007 94 1 Rancho Bernardo Professional Building 3,945 6/30/2006 95 1 Summerfield Renaissance Shopping Center 33,000 5/4/2019 96 1 Kroger Retail Center 45,133 3/31/2012 97 1 Coopers Common Plaza 2,600 3/31/2008 99 1 Chatfield Plaza 3,001 5/31/2005 100 1 Northwood Plaza Shopping Center 33,558 2/2/2016 101 1 Shiloh Center - 8 4,087 9/30/2008 106 1 300-304 E 81st Street 1,700 3/1/2004 107 1 10811-10831 Foothill Boulevard 2,508 5/1/2018 110 1 Clayton Industrial Park 5,760 5/31/2008 111 1 Eckerd's - Middleton NJ 11,347 3/25/2023 112 1 2701-2751 East Chapman Avenue 6,354 MTM 116 1 Huntley Road Retail Center 3,162 8/31/2007 118 1 Powell Plaza 3,000 12/31/2004 119 1 Gold Circle Office Building 3,975 3/31/2005 120 1 Waynesburg Centre 15,472 12/31/2015 121 1 Pierre Plaza Shopping Center 4,000 10/31/2008 124 1 290 Fairbanks Center 3,224 12/31/2006 125 1 Scripps Hill Retail Center 4,032 10/31/2004 130 1 10019 Reisterstown Road 3,503 6/30/2008 131 1 Shops at Canton 1,600 2/28/2007 132 1 Shiloh Center - 5 3,500 11/30/2011 133 1 Camino Maquilladora Buildings 3,428 5/31/2005 135 1 Evergreen Office 3,679 1/31/2007 137 1 3200 Commander Industrial Building 23,032 12/31/2004 138 1 Mabury Plaza 2,160 12/31/2003 141 1 Silverado Office Building 1,158 5/14/2005 142 1 Pinehollow Business Park 6,281 7/31/2005 143 1 Broadway Commons Shopping Center 2,700 11/30/2005 153 1 76-80 Lafayette Avenue 2,390 5/31/2005 MAJOR LOAN TENANT # 2 # CROSSED GROUP PROPERTY NAME NAME - ------- ----- ------------- ---------- 1 1 Mall at Fairfield Commons Lazarus 2A 1 Mayfair Mall AMC Theater 2B 1 Mayfair Office Complex Aurora Health Care (Mayfair Atrium) 3 1 Stanford Shopping Center Macy's 5 1 Paramount Plaza Wilshire Business Center 6 1 Montalvo Square Shopping Center L.A. Fitness International 9 1 East Thunderbird Square Shopping Center North Spencer's Appliance 10 1 Janss Court Morgan Stanley Dean Witter 11 1 Ravine Development N/A 13 1 Crow Canyon Commons Shopping Center Rite Aid 15 1 220 Post Street N/A 19 1 Baseline Corporate Center CH2M Hill Industries 20 1 Challenger Business Center Anteon Corporation 21 1 Delphi Building N/A 22 (A) 1 Anaheim Professional Center Anaheim Therapy Svcs. 23 (A) 1 Coast Family Medical Center Post Surgical Recovery Center 27 1 SouthCourt at South Square Wachovia Bank 28 1 Deer Valley Financial Center Performance Software, Inc. 33 1 Shoppes of New Tampa Publix Supermarket 34 1 The Borders and Shoppes at Chestnut Hill Express/Express Men 35 1 Tustin Freeway Business Center Smith Lithographic Arts 37 1 Northlake Square Shopping Center Lucky Key Restaurant 44 1 Summerville Plaza Shopping Center Goodwill 45 1 St. Joseph's/St. Jude's Medical Building N/A 46 1 Haynes Plaza Harbor Freight 49 1 South County Medical Plaza Saddleback Medical 50 1 Crossings at Westland Value City Furniture 52 1 78 Place Danh Truong & Tasia Le Truong 53 1 Vanowen Medical Office Western Urologic 54 1 Bolsa Retail Center Nguyen Hue Restaurant 56 1 91 Montvale Avenue NorthShore Cataract and Laser Center, LLC 59 1 Tops Plaza - North Olmsted Blockbuster, Inc. 60 1 West Highlands Shopping Center Family Dollar Store 61 1 Metcalf 127 Shops Dimensions, Inc. 62A 1 Evergreen - Park Plaza Wendy's 62B 1 Evergreen - Beverly Plaza Coconuts 63 1 Gifford Industrial Park M & L Pharmaceutical 64 1 Oakley Plaza Bi-Lo, Inc. 67 1 Chino Hills Promenade Goodyear Tire & Rubber 71 1 4601 Eisenhower Water Management, Inc. 72 1 Joyners Crossing Family Dollar 73 1 Sedgefield Village Shopping Center Dollar General 74 1 Palm Ridge Kentucky Fried Chicken 76 1 Village Shoppes Jiffy Lube 78 1 Amaranth Building Vintage Cleaners 79 1 Merit Building The Roof Center, Inc. 80 1 4260-4310 West Broad Street Media Play Group 81 1 Gateway Center Mario Moreno 82 1 PNC Advisor Building N/A 83 1 917 Franklin Office Building Woodfill & Pressler, LLP 84 1 Riverside Business Park Chief Automotive 86 1 Shiloh Center - 7 Carpet Store 88 1 Eckerd's OAK RIDGE N/A 91 1 Dearborn Town Center Al Ajami Restaurant 92 1 72nd & Cedar Street Office Midwest Spine, L.L.C. 94 1 Rancho Bernardo Professional Building Sylvan Center 95 1 Summerfield Renaissance Shopping Center Ballet Arts Studio 96 1 Kroger Retail Center Peg's Pets 97 1 Coopers Common Plaza Oxford Cleaners 99 1 Chatfield Plaza Title America 100 1 Northwood Plaza Shopping Center Dollar General 101 1 Shiloh Center - 8 Quizno's Classic Subs 106 1 300-304 E 81st Street JEJ Cleaners 107 1 10811-10831 Foothill Boulevard T-Mobile USA, Inc. 110 1 Clayton Industrial Park Stone Surfaces 111 1 Eckerd's - Middleton NJ N/A 112 1 2701-2751 East Chapman Avenue Christian Law Center 116 1 Huntley Road Retail Center Shins Cleaners 118 1 Powell Plaza Southland Title Company 119 1 Gold Circle Office Building Adams Inc. 120 1 Waynesburg Centre Top Value Hardware 121 1 Pierre Plaza Shopping Center Games Exchange 124 1 290 Fairbanks Center Pearle Vision 125 1 Scripps Hill Retail Center Faiez "Paul" Kato 130 1 10019 Reisterstown Road Wilner & Scherr, P.A. 131 1 Shops at Canton More Than Mail 132 1 Shiloh Center - 5 CPS Properties 133 1 Camino Maquilladora Buildings California Freight Handlers 135 1 Evergreen Office Great Plains One Call, Inc. 137 1 3200 Commander Industrial Building Dymatize Enterprises 138 1 Mabury Plaza Togo's Eatery 141 1 Silverado Office Building Promote La Jolla 142 1 Pinehollow Business Park Copy Duplicating Products 143 1 Broadway Commons Shopping Center The Check Store 153 1 76-80 Lafayette Avenue Suffern Green Grocer MAJOR MAJOR LOAN TENANT # 2 TENANT # 2 LEASE # CROSSED GROUP PROPERTY NAME SQ. FT. EXPIRATION DATE - - ------- ----- ------------- ------- --------------- 1 1 Mall at Fairfield Commons 149,412(3) 1/31/2015 2A 1 Mayfair Mall 89,149 4/30/2019 2B 1 Mayfair Office Complex 32,118 11/30/2011 3 1 Stanford Shopping Center 225,830(3) 2/28/2029 5 1 Paramount Plaza 50,887 12/31/2006 6 1 Montalvo Square Shopping Center 46,300 8/30/2017 9 1 East Thunderbird Square Shopping Center North 16,130 6/29/2013 10 1 Janss Court 16,551 1/19/2007 11 1 Ravine Development N/A N/A 13 1 Crow Canyon Commons Shopping Center 42,352 11/1/2005 15 1 220 Post Street N/A N/A 19 1 Baseline Corporate Center 22,482 3/31/2005 20 1 Challenger Business Center 21,499 7/31/2006 21 1 Delphi Building N/A N/A 22 (A) 1 Anaheim Professional Center 4,681 8/1/2008 23 (A) 1 Coast Family Medical Center 10,000 6/30/2013 27 1 SouthCourt at South Square 18,596 10/31/2006 28 1 Deer Valley Financial Center 9,067 6/30/2004 33 1 Shoppes of New Tampa 55,400 4/30/2017 34 1 The Borders and Shoppes at Chestnut Hill 12,882 1/31/2009 35 1 Tustin Freeway Business Center 18,903 7/31/2007 37 1 Northlake Square Shopping Center 5,606 11/30/2015 44 1 Summerville Plaza Shopping Center 18,470 1/31/2010 45 1 St. Joseph's/St. Jude's Medical Building N/A N/A 46 1 Haynes Plaza 12,000 5/14/2008 49 1 South County Medical Plaza 13,761 6/30/2017 50 1 Crossings at Westland 49,718 1/31/2016 52 1 78 Place 30,000 4/9/2011 53 1 Vanowen Medical Office 4,808 MTM 54 1 Bolsa Retail Center 2,760 10/31/2006 56 1 91 Montvale Avenue 8,271 12/1/2007 59 1 Tops Plaza - North Olmsted 5,208 2/28/2013 60 1 West Highlands Shopping Center 11,934 4/29/2010 61 1 Metcalf 127 Shops 4,000 11/30/2006 62A 1 Evergreen - Park Plaza 3,300 9/11/2007 62B 1 Evergreen - Beverly Plaza 4,000 8/31/2008 63 1 Gifford Industrial Park 14,650 8/31/2005 64 1 Oakley Plaza 42,317 9/1/2016 67 1 Chino Hills Promenade 6,380 9/30/2005 71 1 4601 Eisenhower 14,968 5/31/2008 72 1 Joyners Crossing 8,000 12/31/2008 73 1 Sedgefield Village Shopping Center 7,700 4/30/2008 74 1 Palm Ridge 4,500 12/31/2020 76 1 Village Shoppes 4,200 8/31/2017 78 1 Amaranth Building 8,140 10/31/2011 79 1 Merit Building 8,757 2/28/2007 80 1 4260-4310 West Broad Street 36,000 1/31/2008 81 1 Gateway Center 2,620 10/31/2003 82 1 PNC Advisor Building N/A N/A 83 1 917 Franklin Office Building 6,457 3/1/2009 84 1 Riverside Business Park 8,569 11/30/2003 86 1 Shiloh Center - 7 2,003 3/31/2008 88 1 Eckerd's OAK RIDGE N/A N/A 91 1 Dearborn Town Center 5,200 5/31/2015 92 1 72nd & Cedar Street Office 6,990 6/14/2008 94 1 Rancho Bernardo Professional Building 2,008 8/31/2004 95 1 Summerfield Renaissance Shopping Center 1,920 10/31/2003 96 1 Kroger Retail Center 2,400 5/1/2004 97 1 Coopers Common Plaza 1,800 3/31/2008 99 1 Chatfield Plaza 2,655 6/14/2007 100 1 Northwood Plaza Shopping Center 8,450 12/31/2005 101 1 Shiloh Center - 8 1,617 7/31/2007 106 1 300-304 E 81st Street 200 12/1/2003 107 1 10811-10831 Foothill Boulevard 2,500 4/1/2013 110 1 Clayton Industrial Park 3,200 1/30/2006 111 1 Eckerd's - Middleton NJ N/A N/A 112 1 2701-2751 East Chapman Avenue 1,977 MTM 116 1 Huntley Road Retail Center 1,598 6/30/2011 118 1 Powell Plaza 1,800 12/31/2006 119 1 Gold Circle Office Building 3,191 6/30/2005 120 1 Waynesburg Centre 11,541 12/31/2015 121 1 Pierre Plaza Shopping Center 2,960 3/14/2005 124 1 290 Fairbanks Center 1,797 12/30/2011 125 1 Scripps Hill Retail Center 2,000 6/14/2007 130 1 10019 Reisterstown Road 1,534 6/30/2009 131 1 Shops at Canton 1,600 4/30/2008 132 1 Shiloh Center - 5 2,627 4/30/2008 133 1 Camino Maquilladora Buildings 6,962 6/30/2005 135 1 Evergreen Office 2,625 2/8/2005 137 1 3200 Commander Industrial Building 19,869 7/31/2005 138 1 Mabury Plaza 1,935 2/28/2006 141 1 Silverado Office Building 550 8/31/2005 142 1 Pinehollow Business Park 3,022 12/31/2005 143 1 Broadway Commons Shopping Center 1,562 1/31/2005 153 1 76-80 Lafayette Avenue 1,500 7/31/2006 MAJOR LOAN TENANT # 3 # CROSSED GROUP PROPERTY NAME NAME - - ------- ----- ------------- --------- 1 1 Mall at Fairfield Commons Parisian 2A 1 Mayfair Mall Barnes & Noble 2B 1 Mayfair Office Complex Firstar Bank Milwaukee NA (Mayfair Bank Tower) 3 1 Stanford Shopping Center Nordstrom 5 1 Paramount Plaza Los Angeles Department of Building and Safety 6 1 Montalvo Square Shopping Center Longs Drug Stores California, Inc. 9 1 East Thunderbird Square Shopping Center North World Design 10 1 Janss Court Red Bull North America 11 1 Ravine Development N/A 13 1 Crow Canyon Commons Shopping Center Loehmann's 15 1 220 Post Street N/A 19 1 Baseline Corporate Center Agilent Technologies 20 1 Challenger Business Center Pulau Electronics Corporation 21 1 Delphi Building N/A 22 (A) 1 Anaheim Professional Center US Dept of Veteran Affairs 23 (A) 1 Coast Family Medical Center Barry Schwartz, MD 27 1 SouthCourt at South Square Merrill Lynch 28 1 Deer Valley Financial Center D.H. Blattner & Sons, Inc. 33 1 Shoppes of New Tampa Tropical Realty 34 1 The Borders and Shoppes at Chestnut Hill Joseph A. Bank 35 1 Tustin Freeway Business Center Cavalry Chapel of Tustin 37 1 Northlake Square Shopping Center Catherine's, Inc. 44 1 Summerville Plaza Shopping Center Eckerd Drugs 45 1 St. Joseph's/St. Jude's Medical Building N/A 46 1 Haynes Plaza Duron 49 1 South County Medical Plaza N/A 50 1 Crossings at Westland Jo-Ann Stores, Inc. 52 1 78 Place Computer Education Institute 53 1 Vanowen Medical Office OB-Gyn Medical 54 1 Bolsa Retail Center D. Khanh Restaurant 56 1 91 Montvale Avenue Hospital Billing & Collection Services, Ltd. 59 1 Tops Plaza - North Olmsted Second National Bank 60 1 West Highlands Shopping Center Sherwin William's #8064 61 1 Metcalf 127 Shops Cutting Loose, Inc. 62A 1 Evergreen - Park Plaza Physiotherapy Associate 62B 1 Evergreen - Beverly Plaza BJ's Market and Bakery 63 1 Gifford Industrial Park Cheung Ja Kim 64 1 Oakley Plaza Western Auto Supply 67 1 Chino Hills Promenade Bright Star Preschool 71 1 4601 Eisenhower ABM Industries 72 1 Joyners Crossing Subway 73 1 Sedgefield Village Shopping Center N/A 74 1 Palm Ridge Cabrillo Federal Credit Union 76 1 Village Shoppes Brake World 78 1 Amaranth Building IMATEK 79 1 Merit Building Buchanan Partners 80 1 4260-4310 West Broad Street Boston Market 81 1 Gateway Center Practical Counter Tops 82 1 PNC Advisor Building N/A 83 1 917 Franklin Office Building Brent Coon & Associates, PC 84 1 Riverside Business Park Lighthouse Resource 86 1 Shiloh Center - 7 Curves for Women 88 1 Eckerd's OAK RIDGE N/A 91 1 Dearborn Town Center Arab American Child Center 92 1 72nd & Cedar Street Office Quick & McFarlin, PC 94 1 Rancho Bernardo Professional Building SDSU 95 1 Summerfield Renaissance Shopping Center Qwik Pack & Ship 96 1 Kroger Retail Center Jag's Salon 97 1 Coopers Common Plaza Chuen & Ying Ong 99 1 Chatfield Plaza Fairfield Homes 100 1 Northwood Plaza Shopping Center Monterrey Mexican 101 1 Shiloh Center - 8 Wolf Coffee 106 1 300-304 E 81st Street N/A 107 1 10811-10831 Foothill Boulevard Starbucks 110 1 Clayton Industrial Park Golbin Studios 111 1 Eckerd's - Middleton NJ N/A 112 1 2701-2751 East Chapman Avenue Gati Tax & Business Consultant 116 1 Huntley Road Retail Center Randall Oaks Animal 118 1 Powell Plaza Wilkins Cleaners 119 1 Gold Circle Office Building Omaha Foot Specialist 120 1 Waynesburg Centre Dollar General 121 1 Pierre Plaza Shopping Center Pediatric Dental 124 1 290 Fairbanks Center Gentle Dental 125 1 Scripps Hill Retail Center Don Lucio's Mexican Fast Food 130 1 10019 Reisterstown Road Howard Kahn & Associates, P.A. 131 1 Shops at Canton Oxford Cleaners 132 1 Shiloh Center - 5 Cash Station 133 1 Camino Maquilladora Buildings Larson Irrigation 135 1 Evergreen Office Honorable Lee Terry 137 1 3200 Commander Industrial Building Acclivus Corporation 138 1 Mabury Plaza Mabury Cleaners 141 1 Silverado Office Building Mark Lippman 142 1 Pinehollow Business Park DH Investment Co. 143 1 Broadway Commons Shopping Center Papa John's Pizza 153 1 76-80 Lafayette Avenue K.R. Securities MAJOR MAJOR LOAN TENANT # 3 TENANT # 3 LEASE # CROSSED GROUP PROPERTY NAME SQ. FT. EXPIRATION DATE - - ------- ----- ------------- ------- --------------- 1 1 Mall at Fairfield Commons 130,199 1/31/2014 2A 1 Mayfair Mall 30,925 1/31/2014 2B 1 Mayfair Office Complex 11,512 12/31/2005 3 1 Stanford Shopping Center 180,000(3) 10/31/2010 5 1 Paramount Plaza 36,698 1/1/2008 6 1 Montalvo Square Shopping Center 23,112 6/30/2022 9 1 East Thunderbird Square Shopping Center North 10,862 11/18/2006 10 1 Janss Court 12,485 3/31/2006 11 1 Ravine Development N/A N/A 13 1 Crow Canyon Commons Shopping Center 15,000 10/1/2007 15 1 220 Post Street N/A N/A 19 1 Baseline Corporate Center 13,506 1/31/2006 20 1 Challenger Business Center 15,995 12/31/2005 21 1 Delphi Building N/A N/A 22 (A) 1 Anaheim Professional Center 4,332 9/1/2008 23 (A) 1 Coast Family Medical Center 3,812 4/30/2006 27 1 SouthCourt at South Square 9,116 11/30/2010 28 1 Deer Valley Financial Center 5,336 4/30/2004 33 1 Shoppes of New Tampa 5,400 2/28/2008 34 1 The Borders and Shoppes at Chestnut Hill 5,150 1/31/2006 35 1 Tustin Freeway Business Center 14,516 11/30/2007 37 1 Northlake Square Shopping Center 4,160 2/28/2006 44 1 Summerville Plaza Shopping Center 10,908 3/14/2020 45 1 St. Joseph's/St. Jude's Medical Building N/A N/A 46 1 Haynes Plaza 3,420 1/31/2008 49 1 South County Medical Plaza N/A N/A 50 1 Crossings at Westland 46,160 1/31/2010 52 1 78 Place 19,312 2/1/2009 53 1 Vanowen Medical Office 4,270 4/30/2004 54 1 Bolsa Retail Center 2,270 12/31/2004 56 1 91 Montvale Avenue 4,600 1/1/2004 59 1 Tops Plaza - North Olmsted 4,645 11/30/2012 60 1 West Highlands Shopping Center 5,000 4/30/2004 61 1 Metcalf 127 Shops 3,141 7/31/2009 62A 1 Evergreen - Park Plaza 3,175 11/30/2005 62B 1 Evergreen - Beverly Plaza 3,600 11/30/2006 63 1 Gifford Industrial Park 13,200 4/30/2007 64 1 Oakley Plaza 10,560 5/1/2004 67 1 Chino Hills Promenade 4,320 6/30/2005 71 1 4601 Eisenhower 8,677 6/30/2012 72 1 Joyners Crossing 1,300 5/31/2006 73 1 Sedgefield Village Shopping Center N/A N/A 74 1 Palm Ridge 2,400 4/30/2004 76 1 Village Shoppes 4,174 9/30/2012 78 1 Amaranth Building 8,505 8/31/2011 79 1 Merit Building 6,273 12/31/2008 80 1 4260-4310 West Broad Street 2,944 5/25/2010 81 1 Gateway Center 2,560 12/31/2003 82 1 PNC Advisor Building N/A N/A 83 1 917 Franklin Office Building 6,075 12/1/2007 84 1 Riverside Business Park 8,402 3/31/2004 86 1 Shiloh Center - 7 1,753 9/30/2007 88 1 Eckerd's OAK RIDGE N/A N/A 91 1 Dearborn Town Center 4,489 7/31/2012 92 1 72nd & Cedar Street Office 3,532 1/31/2008 94 1 Rancho Bernardo Professional Building 1,876 6/30/2005 95 1 Summerfield Renaissance Shopping Center 1,920 5/31/2007 96 1 Kroger Retail Center 1,200 9/30/2004 97 1 Coopers Common Plaza 1,600 8/31/2013 99 1 Chatfield Plaza 2,640 4/30/2008 100 1 Northwood Plaza Shopping Center 4,320 12/31/2006 101 1 Shiloh Center - 8 1,555 9/30/2007 106 1 300-304 E 81st Street N/A N/A 107 1 10811-10831 Foothill Boulevard 1,500 4/1/2013 110 1 Clayton Industrial Park 2,880 5/31/2007 111 1 Eckerd's - Middleton NJ N/A N/A 112 1 2701-2751 East Chapman Avenue 1,188 MTM 116 1 Huntley Road Retail Center 1,467 6/30/2007 118 1 Powell Plaza 1,530 1/1/2005 119 1 Gold Circle Office Building 3,147 6/30/2005 120 1 Waynesburg Centre 8,000 6/30/2006 121 1 Pierre Plaza Shopping Center 2,400 8/31/2003 124 1 290 Fairbanks Center 1,756 9/19/2011 125 1 Scripps Hill Retail Center 1,606 6/14/2005 130 1 10019 Reisterstown Road 1,488 6/30/2005 131 1 Shops at Canton 1,600 11/30/2006 132 1 Shiloh Center - 5 1,008 11/30/2006 133 1 Camino Maquilladora Buildings 5,948 10/31/2004 135 1 Evergreen Office 2,547 12/31/2005 137 1 3200 Commander Industrial Building 10,981 2/29/2004 138 1 Mabury Plaza 1,720 10/31/2009 141 1 Silverado Office Building 422 1/19/2005 142 1 Pinehollow Business Park 2,855 12/31/2005 143 1 Broadway Commons Shopping Center 1,500 4/30/2004 153 1 76-80 Lafayette Avenue 1,170 8/31/2005
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) SQUARE FOOTAGE NUMBER INCLUDES ANCHOR SPACES UNDER GROUND LEASES. (3) TENANT OCCUPIES SPACE PURSUANT TO A GROUND LEASE. ENGINEERING RESERVES, RECURRING REPLACEMENT RESERVES AND TI&LC RESERVES
CONTRACTUAL U/W ENGINEERING RECURRING RECURRING LC & TI LOAN RESERVE AT REPLACEMENT REPLACEMENT RESERVE AT # CROSSED GROUP LOAN NAME ORIGINATION RESERVE/FF&E RESERVE/FF&E ORIGINATION - --- ------- ----- --------- ----------- ------------ ------------ ----------- 1 1 Mall at Fairfield Commons N/A N/A $ 214,220 N/A 2 1 Mayfair Mall and Office Complex N/A N/A $ 255,497 N/A 3 1 Stanford Shopping Center N/A N/A $ 80,102 N/A 4 1 MeriStar Hotel Portfolio $ 15,475 4% 4% N/A 5 1 Paramount Plaza N/A $ 136,781 $ 136,785 N/A 6 1 Montalvo Square Shopping Center N/A $ 32,856 $ 32,777 $ 150,000 7 2 Jefferson at Montfort $ 186,875 $ 132,400 $ 165,500 N/A 8 1 EastBridge Landing N/A $ 36,228 $ 56,280 N/A 9 1 East Thunderbird Square Shopping Center North N/A $ 25,116 $ 24,420 N/A 10 1 Janss Court $ 11,187 $ 26,481 $ 26,660 $ 225,000 11 1 Ravine Development N/A N/A $ 30,955 N/A 12 2 Serrano Apartments $ 400,000 $ 109,500 $ 109,500 N/A 13 1 Crow Canyon Commons Shopping Center $ 7,238 $ 45,628 $ 38,784 $ 112,500 14 2 Carlingford Apartments $ 1,000,000 $ 202,500 $ 202,500 N/A 15 1 220 Post Street N/A N/A $ 5,614 N/A 16 2 Kings Crossing I & II N/A $ 86,400 $ 108,000 N/A 17 2 Atrium at Market Center N/A $ 43,250 $ 34,600 N/A 18 2 Villages of Deerfield Apartments $ 300,000 $ 75,000 $ 75,000 N/A 19 1 Baseline Corporate Center N/A $ 29,880 $ 30,240 N/A 20 1 Challenger Business Center N/A $ 25,563 $ 25,563 N/A 21 1 Delphi Building N/A $ 33,390 $ 33,390 N/A 22 (A) 1 Anaheim Professional Center N/A $ 17,336 $ 17,447 N/A 23 (A) 1 Coast Family Medical Center $ 67,588 $ 8,578 $ 8,578 N/A 24 1 Radisson Hotel Historic Savannah N/A $ 163,500 4% N/A 25 2 Breckinridge Court Apartments $ 300,000 $ 95,508 $ 98,796 N/A 26 2 Addison at Hampton N/A $ 55,200 $ 69,000 N/A 27 1 SouthCourt at South Square $ 10,938 N/A $ 19,647 N/A 28 1 Deer Valley Financial Center N/A $ 25,320 $ 25,314 N/A 29 (B) 2 Magnolia Village N/A N/A $ 9,800 N/A 30 (B) 2 Blue Jay Mobile Home Park N/A N/A $ 13,150 N/A 31 (B) 2 Candlelight Manor N/A N/A $ 6,400 N/A 32 (B) 2 Elmwood Mobile Home Park N/A N/A $ 5,050 N/A 33 1 Shoppes of New Tampa N/A N/A $ 23,799 N/A 34 1 The Borders and Shoppes at Chestnut Hill $ 6,875 $ 6,214 $ 6,214 N/A 35 1 Tustin Freeway Business Center $ 348,340 $ 30,270 $ 30,270 $ 50,000 36 1 Oak Hill Townhomes N/A $ 31,800 $ 31,800 N/A 37 1 Northlake Square Shopping Center $ 38,800 $ 14,860 $ 15,686 N/A 38 2 Stone Hill Apartments $ 115,536 $ 86,000 $ 86,000 N/A 39 2 High Ridge Apartments $ 163,500 $ 74,000 $ 74,000 N/A 40 2 Caleb's Place Townhomes N/A $ 30,400 $ 38,000 N/A 41 2 Northgate Village Apartments $ 126,188 $ 66,000 $ 66,000 N/A 42 2 Cambridge Village Apartments $ 6,500 $ 50,000 $ 50,000 N/A 43 1 Staybridge Suites N/A 4% 4% N/A 44 1 Summerville Plaza Shopping Center $ 28,162 N/A $ 16,140 N/A 45 1 St. Joseph's/St. Jude's Medical Building $ 10,423 $ 9,408 $ 9,412 N/A 46 1 Haynes Plaza N/A N/A $ 36,705 N/A 47 2 Hearthstone Apartments $ 15,900 $ 63,000 $ 63,000 N/A 48 2 Canyon View Apartments $ 4,469 $ 34,500 $ 34,500 N/A 49 1 South County Medical Plaza N/A $ 5,504 $ 5,504 N/A 50 1 Crossings at Westland N/A $ 31,476 $ 32,312 N/A 51 2 Villas of Brandychase $ 12,750 $ 28,750 $ 28,750 N/A 52 1 78 Place N/A $ 15,843 $ 24,718 N/A 53 1 Vanowen Medical Office N/A $ 12,882 $ 12,882 N/A 54 1 Bolsa Retail Center N/A $ 6,376 $ 7,226 N/A 55 2 Candlewick Apartments $ 184,010 $ 46,000 $ 46,000 N/A 56 1 91 Montvale Avenue N/A $ 15,554 $ 15,555 N/A 57 2 Northgate Club Apartments $ 7,500 $ 24,000 $ 30,000 N/A 58 2 Country Village & Oakwood Mobile Home Park $ 14,375 N/A $ 25,750 N/A 59 1 Tops Plaza - North Olmsted $ 17,250 $ 10,500 $ 10,500 N/A 60 1 West Highlands Shopping Center $ 27,950 $ 17,328 $ 18,084 $ 107,268 61 1 Metcalf 127 Shops N/A $ 8,484 $ 8,476 N/A 62 1 Evergreen - Beverly Plaza & Park Plaza $ 10,625 $ 6,840 $ 9,114 N/A CONTRACTUAL TAX & LOAN RECURRING U/W INSURANCE # CROSSED GROUP LOAN NAME LC & TI LC & TI ESCROWS - --- ------- ----- --------- ----------- ------------ ------------ 1 1 Mall at Fairfield Commons N/A $ 534,289 Tax 2 1 Mayfair Mall and Office Complex N/A $ 425,201 None 3 1 Stanford Shopping Center N/A N/A None 4 1 MeriStar Hotel Portfolio N/A N/A Both 5 1 Paramount Plaza N/A $ 818,085 None 6 1 Montalvo Square Shopping Center $ 120,000 $ 93,709 Tax 7 2 Jefferson at Montfort N/A N/A Both 8 1 EastBridge Landing N/A N/A Tax 9 1 East Thunderbird Square Shopping Center North $ 250,008 $ 147,006 Both 10 1 Janss Court $ 115,504 $ 55,733 Both 11 1 Ravine Development N/A $ 244,325 Both 12 2 Serrano Apartments N/A N/A Both 13 1 Crow Canyon Commons Shopping Center N/A $ 192,143 Both 14 2 Carlingford Apartments N/A N/A Both 15 1 220 Post Street N/A $ 76,110 Both 16 2 Kings Crossing I & II N/A N/A Both 17 2 Atrium at Market Center N/A N/A Both 18 2 Villages of Deerfield Apartments N/A N/A Both 19 1 Baseline Corporate Center $ 125,004 $ 199,086 Both 20 1 Challenger Business Center $ 85,209 $ 174,751 Both 21 1 Delphi Building $ 120,000 $ 125,248 Tax 22 (A) 1 Anaheim Professional Center $ 150,000 $ 146,226 Both 23 (A) 1 Coast Family Medical Center $ 50,000 $ 65,620 Both 24 1 Radisson Hotel Historic Savannah N/A N/A Both 25 2 Breckinridge Court Apartments N/A N/A Both 26 2 Addison at Hampton N/A N/A Both 27 1 SouthCourt at South Square $ 125,000 $ 146,668 Both 28 1 Deer Valley Financial Center $ 100,008 $ 167,739 Both 29 (B) 2 Magnolia Village N/A N/A Both 30 (B) 2 Blue Jay Mobile Home Park N/A N/A Both 31 (B) 2 Candlelight Manor N/A N/A Both 32 (B) 2 Elmwood Mobile Home Park N/A N/A Both 33 1 Shoppes of New Tampa N/A $ 90,894 None 34 1 The Borders and Shoppes at Chestnut Hill N/A $ 59,814 Both 35 1 Tustin Freeway Business Center $ 36,000 $ 55,942 Both 36 1 Oak Hill Townhomes N/A N/A Both 37 1 Northlake Square Shopping Center $ 20,000 $ 31,956 Both 38 2 Stone Hill Apartments N/A N/A Both 39 2 High Ridge Apartments N/A N/A Both 40 2 Caleb's Place Townhomes N/A N/A Both 41 2 Northgate Village Apartments N/A N/A Both 42 2 Cambridge Village Apartments N/A N/A Both 43 1 Staybridge Suites N/A N/A Both 44 1 Summerville Plaza Shopping Center $ 35,004 $ 81,279 Both 45 1 St. Joseph's/St. Jude's Medical Building $ 129,444 $ 68,615 Both 46 1 Haynes Plaza N/A $ 103,402 None 47 2 Hearthstone Apartments N/A N/A Both 48 2 Canyon View Apartments N/A N/A Both 49 1 South County Medical Plaza $ 24,000 $ 33,551 Both 50 1 Crossings at Westland $ 60,000 $ 107,442 Tax 51 2 Villas of Brandychase N/A N/A Both 52 1 78 Place $ 50,000 $ 80,395 Both 53 1 Vanowen Medical Office $ 36,000 $ 64,736 Both 54 1 Bolsa Retail Center $ 35,000 $ 33,756 Both 55 2 Candlewick Apartments N/A N/A Both 56 1 91 Montvale Avenue $ 60,000 $ 60,430 Both 57 2 Northgate Club Apartments N/A N/A Both 58 2 Country Village & Oakwood Mobile Home Park N/A N/A Both 59 1 Tops Plaza - North Olmsted N/A $ 12,592 Tax 60 1 West Highlands Shopping Center N/A $ 53,413 Both 61 1 Metcalf 127 Shops $ 20,004 $ 29,284 Both 62 1 Evergreen - Beverly Plaza & Park Plaza $ 33,600 $ 39,803 Both
ENGINEERING RESERVES, RECURRING REPLACEMENT RESERVES AND TI&LC RESERVES
CONTRACTUAL U/W ENGINEERING RECURRING RECURRING LC & TI LOAN RESERVE AT REPLACEMENT REPLACEMENT RESERVE AT # CROSSED GROUP LOAN NAME ORIGINATION RESERVE/FF&E RESERVE/FF&E ORIGINATION - --- ------- ----- --------- ----------- ------------ ------------ ----------- 63 1 Gifford Industrial Park $ 2,500 N/A $ 23,434 $ 50,000 64 1 Oakley Plaza N/A N/A $ 17,809 N/A 65 2 Cloverdale Apartments $ 210,200 $ 21,989 $ 52,550 N/A 66 2 Collins Aire Mobile Home Park N/A $ 24,600 $ 16,400 N/A 67 1 Chino Hills Promenade $ 5,000 $ 6,220 $ 9,015 N/A 68 2 Hunter's Glen $ 59,052 $ 38,000 $ 38,000 N/A 69 2 Cedar Glen Apartments $ 30,125 $ 52,750 $ 52,750 N/A 70 2 College Hills West Apartments $ 5,262 $ 42,000 $ 42,000 N/A 71 1 4601 Eisenhower $ 44,125 $ 9,671 $ 9,671 $ 25,000 72 1 Joyners Crossing N/A N/A $ 7,831 N/A 73 1 Sedgefield Village Shopping Center N/A N/A $ 8,495 $ 45,000 74 1 Palm Ridge $ 16,625 $ 8,688 $ 3,465 $ 500,000 75 2 Point-O-View Apartments N/A $ 56,994 $ 41,400 N/A 76 1 Village Shoppes N/A N/A $ 5,469 N/A 77 2 Oak Brook Apartments $ 47,375 N/A $ 25,000 N/A 78 1 Amaranth Building N/A $ 3,456 $ 8,647 N/A 79 1 Merit Building N/A $ 5,985 $ 7,980 N/A 80 1 4260-4310 West Broad Street N/A $ 14,112 $ 14,112 N/A 81 1 Gateway Center $ 2,500 N/A $ 14,990 $ 105,000 82 1 PNC Advisor Building N/A $ 2,622 $ 2,622 N/A 83 1 917 Franklin Office Building $ 2,688 $ 5,834 $ 6,792 $ 50,000 84 1 Riverside Business Park N/A N/A $ 19,080 $ 50,000 85 2 Oaks of League City $ 17,500 $ 27,000 $ 27,000 N/A 86 1 Shiloh Center - 7 N/A N/A $ 2,703 N/A 87 1 Storage USA N/A $ 10,044 $ 10,028 N/A 88 1 Eckerd's OAK RIDGE N/A N/A $ 1,764 N/A 89 2 Tiburon Pointe Apartments N/A $ 15,000 $ 12,000 N/A 90 2 Mansions North Apartments $ 51,870 $ 51,876 $ 51,870 N/A 91 1 Dearborn Town Center $ 625 N/A $ 3,746 $ 20,000 92 1 72nd & Cedar Street Office N/A N/A $ 6,006 N/A 93 2 Sands Point Cove Apartments $ 13,906 $ 35,500 $ 35,500 N/A 94 1 Rancho Bernardo Professional Building $ 5,062 $ 5,065 $ 5,190 N/A 95 1 Summerfield Renaissance Shopping Center N/A N/A $ 5,894 N/A 96 1 Kroger Retail Center $ 134,875 N/A $ 7,940 N/A 97 1 Coopers Common Plaza N/A N/A $ 2,733 $ 20,840 98 2 Diplomat Townhomes $ 10,000 N/A $ 31,000 N/A 99 1 Chatfield Plaza N/A N/A $ 3,005 N/A 100 1 Northwood Plaza Shopping Center N/A N/A $ 8,051 N/A 101 1 Shiloh Center - 8 N/A N/A $ 2,124 N/A 102 2 Riverview Terrace $ 31,530 $ 12,000 $ 12,000 N/A 103 2 Angelique Apartments $ 8,250 $ 33,500 $ 33,500 N/A 104 2 Langdon Hall Apartments $ 217,800 $ 26,400 $ 26,400 N/A 105 2 Bayou Oaks Apartments $ 24,375 $ 22,000 $ 22,000 N/A 106 1 300-304 E 81st Street $ 13,812 $ 5,250 $ 5,750 N/A 107 1 10811-10831 Foothill Boulevard N/A N/A $ 976 N/A 108 2 Brandywine Apartments $ 31,200 $ 31,200 $ 31,200 N/A 109 1 Fortress Self Storage N/A $ 8,254 $ 8,254 N/A 110 1 Clayton Industrial Park $ 5,000 N/A $ 7,698 $ 45,000 111 1 Eckerd's - Middleton NJ N/A N/A $ 1,702 N/A 112 1 2701-2751 East Chapman Avenue N/A N/A $ 8,429 $ 77,316 113 2 Park House Apartments $ 52,375 $ 18,000 $ 18,000 N/A 114 1 324 E 77th Street $ 56,250 $ 5,000 $ 5,000 N/A 115 2 Buttonwood Square $ 27,187 $ 14,500 $ 14,500 N/A 116 1 Huntley Road Retail Center N/A N/A $ 1,711 $ 20,000 117 1 Highway Storage McAllen and Pharr $ 2,500 N/A $ 19,514 N/A 118 1 Powell Plaza $ 3,250 N/A $ 3,119 N/A 119 1 Gold Circle Office Building $ 5,562 N/A $ 4,804 $ 50,000 120 1 Waynesburg Centre $ 51,000 N/A $ 6,705 N/A 121 1 Pierre Plaza Shopping Center $ 2,303 N/A $ 2,100 $ 40,000 122 2 Salem Terrace Apartments $ 2,500 $ 17,500 $ 17,500 N/A 123 2 Carefree Valley Resort $ 56,625 $ 6,006 $ 6,006 N/A 124 1 290 Fairbanks Center $ 2,812 N/A $ 1,508 N/A 125 1 Scripps Hill Retail Center $ 937 N/A $ 1,637 $ 30,000 126 2 Springwood Apartments N/A $ 14,250 $ 14,250 N/A 127 1 Cypress Harbor Mobile Home Park $ 4,500 N/A $ 4,500 N/A 128 2 Casa Del Rey Mobile Home Park $ 2,750 $ 3,750 $ 3,750 N/A 129 2 Fort Sedgwick Apartments $ 2,625 $ 14,000 $ 14,000 N/A 130 1 10019 Reisterstown Road $ 6,250 $ 1,941 $ 2,204 N/A 131 1 Shops at Canton N/A N/A $ 1,560 N/A 132 1 Shiloh Center - 5 N/A N/A $ 1,070 N/A CONTRACTUAL TAX & LOAN RECURRING U/W INSURANCE # CROSSED GROUP LOAN NAME LC & TI LC & TI ESCROWS - ------- ----- --------- ------- ------- ------- 63 1 Gifford Industrial Park $ 24,000 $ 55,505 Both 64 1 Oakley Plaza N/A $ 98,516 None 65 2 Cloverdale Apartments N/A N/A Both 66 2 Collins Aire Mobile Home Park N/A N/A Both 67 1 Chino Hills Promenade $ 12,000 $ 25,498 Both 68 2 Hunter's Glen N/A N/A Both 69 2 Cedar Glen Apartments N/A N/A Both 70 2 College Hills West Apartments N/A N/A Both 71 1 4601 Eisenhower $ 35,170 $ 53,719 Both 72 1 Joyners Crossing $ 12,000 $ 6,624 Both 73 1 Sedgefield Village Shopping Center $ 15,000 $ 12,319 Both 74 1 Palm Ridge $ 20,004 $ 17,426 Both 75 2 Point-O-View Apartments N/A N/A Both 76 1 Village Shoppes $ 25,000 $ 41,566 Tax 77 2 Oak Brook Apartments N/A N/A Both 78 1 Amaranth Building $ 24,996 $ 30,195 Both 79 1 Merit Building $ 25,000 $ 42,912 Both 80 1 4260-4310 West Broad Street $ 60,000 $ 78,130 Tax 81 1 Gateway Center N/A $ 25,890 Both 82 1 PNC Advisor Building N/A N/A Both 83 1 917 Franklin Office Building $ 43,194 $ 49,001 Both 84 1 Riverside Business Park $ 48,000 $ 36,478 Both 85 2 Oaks of League City N/A N/A Both 86 1 Shiloh Center - 7 $ 17,043 $ 17,638 Both 87 1 Storage USA N/A N/A Both 88 1 Eckerd's OAK RIDGE N/A $ 11,760 Insurance 89 2 Tiburon Pointe Apartments N/A N/A Both 90 2 Mansions North Apartments N/A N/A Both 91 1 Dearborn Town Center $ 2,607 $ 25,383 Both 92 1 72nd & Cedar Street Office $ 37,044 $ 24,022 Both 93 2 Sands Point Cove Apartments N/A N/A Both 94 1 Rancho Bernardo Professional Building $ 37,989 $ 28,851 Both 95 1 Summerfield Renaissance Shopping Center N/A $ 3,648 Both 96 1 Kroger Retail Center N/A $ 24,349 Both 97 1 Coopers Common Plaza N/A $ 17,569 Both 98 2 Diplomat Townhomes N/A N/A Both 99 1 Chatfield Plaza $ 20,040 $ 36,989 Both 100 1 Northwood Plaza Shopping Center $ 20,004 $ 20,000 Both 101 1 Shiloh Center - 8 $ 14,162 $ 12,070 Both 102 2 Riverview Terrace N/A N/A Both 103 2 Angelique Apartments N/A N/A Both 104 2 Langdon Hall Apartments N/A N/A Both 105 2 Bayou Oaks Apartments N/A N/A Both 106 1 300-304 E 81st Street N/A N/A Both 107 1 10811-10831 Foothill Boulevard N/A $ 6,800 Both 108 2 Brandywine Apartments N/A N/A Both 109 1 Fortress Self Storage N/A N/A Both 110 1 Clayton Industrial Park N/A $ 29,460 Both 111 1 Eckerd's - Middleton NJ N/A $ 11,347 Both 112 1 2701-2751 East Chapman Avenue N/A $ 19,092 Both 113 2 Park House Apartments N/A N/A Both 114 1 324 E 77th Street N/A N/A Both 115 2 Buttonwood Square N/A N/A Both 116 1 Huntley Road Retail Center $ 18,571 $ 12,005 Both 117 1 Highway Storage McAllen and Pharr N/A N/A Both 118 1 Powell Plaza $ 45,290 $ 20,839 Both 119 1 Gold Circle Office Building $ 24,000 $ 20,889 Both 120 1 Waynesburg Centre N/A $ 23,857 Both 121 1 Pierre Plaza Shopping Center N/A $ 16,160 Both 122 2 Salem Terrace Apartments N/A N/A Both 123 2 Carefree Valley Resort N/A N/A Both 124 1 290 Fairbanks Center N/A $ 10,053 Both 125 1 Scripps Hill Retail Center N/A $ 10,912 Both 126 2 Springwood Apartments N/A N/A Both 127 1 Cypress Harbor Mobile Home Park N/A N/A Both 128 2 Casa Del Rey Mobile Home Park N/A N/A Both 129 2 Fort Sedgwick Apartments N/A N/A Both 130 1 10019 Reisterstown Road $ 15,000 $ 15,261 Both 131 1 Shops at Canton $ 5,000 $ 6,855 Both 132 1 Shiloh Center - 5 $ 7,135 $ 7,377 Both
ENGINEERING RESERVES, RECURRING REPLACEMENT RESERVES AND TI&LC RESERVES
CONTRACTUAL U/W ENGINEERING RECURRING RECURRING LC & TI LOAN RESERVE AT REPLACEMENT REPLACEMENT RESERVE AT # CROSSED GROUP LOAN NAME ORIGINATION RESERVE/FF&E RESERVE/FF&E ORIGINATION - ------- ----- --------- ----------- ------------ ------------ ----------- 133 1 Camino Maquilladora Buildings $ 14,456 N/A $ 6,607 N/A 134 1 Meadow Estates Manufactured Housing Community $ 17,500 $ 4,300 $ 4,300 N/A 135 1 Evergreen Office $ 4,250 N/A $ 3,375 $ 30,000 136 2 Amberwood Apartments $ 13,875 $ 13,250 $ 13,500 N/A 137 1 3200 Commander Industrial Building $ 4,487 N/A $ 8,082 $ 75,000 138 1 Mabury Plaza N/A N/A $ 2,190 $ 40,000 139 2 Bel Air Mobile Home Communities N/A N/A $ 4,700 N/A 140 2 Park Manor Apartments $ 12,438 $ 6,000 $ 6,000 N/A 141 1 Silverado Office Building $ 625 N/A $ 2,519 N/A 142 1 Pinehollow Business Park $ 2,300 $ 3,369 $ 4,491 N/A 143 1 Broadway Commons Shopping Center $ 3,500 N/A $ 1,890 $ 10,000 144 2 Colonial Arms Apartments $ 6,875 $ 15,250 $ 15,250 N/A 145 2 Folger Apartments $ 50,000 $ 4,000 $ 4,000 N/A 146 2 Church Hill Gables $ 2,500 $ 4,250 $ 4,250 N/A 147 2 Morris Manor Apartment $ 81,813 $ 13,500 $ 13,500 N/A 148 2 Halifax Court Apartments N/A $ 7,000 $ 7,000 N/A 149 2 Ashley Street Apartments $ 27,250 $ 9,000 $ 9,000 N/A 150 2 Royal Palms Apartments $ 143,580 $ 12,000 $ 12,000 N/A 151 2 Quartermaster Court Apartments N/A $ 8,237 $ 8,000 N/A 152 2 833 Whalley Avenue $ 4,375 $ 3,500 $ 3,500 N/A 153 1 76-80 Lafayette Avenue $ 11,325 N/A $ 2,490 N/A CONTRACTUAL TAX & LOAN RECURRING U/W INSURANCE # CROSSED GROUP LOAN NAME LC & TI LC & TI ESCROWS - ------- ----- --------- ------- ------- ------- 133 1 Camino Maquilladora Buildings N/A $ 11,660 Both 134 1 Meadow Estates Manufactured Housing Community N/A N/A Both 135 1 Evergreen Office $ 36,000 $ 16,874 Both 136 2 Amberwood Apartments N/A N/A Both 137 1 3200 Commander Industrial Building $ 16,164 $ 16,165 Both 138 1 Mabury Plaza $ 20,000 $ 9,451 Both 139 2 Bel Air Mobile Home Communities N/A N/A Both 140 2 Park Manor Apartments N/A N/A Both 141 1 Silverado Office Building N/A $ 7,101 Both 142 1 Pinehollow Business Park $ 17,966 $ 19,094 Both 143 1 Broadway Commons Shopping Center $ 7,103 $ 3,861 Both 144 2 Colonial Arms Apartments N/A N/A Both 145 2 Folger Apartments N/A N/A Both 146 2 Church Hill Gables N/A N/A Both 147 2 Morris Manor Apartment N/A N/A Both 148 2 Halifax Court Apartments N/A N/A Both 149 2 Ashley Street Apartments N/A N/A Both 150 2 Royal Palms Apartments N/A N/A Both 151 2 Quartermaster Court Apartments N/A N/A Both 152 2 833 Whalley Avenue N/A N/A Both 153 1 76-80 Lafayette Avenue N/A $ 8,042 Both
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (B) THE UNDERLYING MORTGAGE LOANS SECURED BY MAGNOLIA VILLAGE, BLUE JAY MOBILE HOME PARK, CANDLELIGHT MANOR AND ELMWOOD MOBILE HOME PARK ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. RECURRING RESERVE CAP INFORMATION
CONTRACTUAL CONTRACTUAL CONTRACTUAL CUT-OFF DATE RECURRING RECURRING RECURRING LOAN PRINCIPAL REPLACEMENT REPLACEMENT LC & TI # CROSSED GROUP PROPERTY NAME BALANCE (1) RESERVE RESERVE CAP RESERVE - ------- ----- ------------- ----------- ------- ----------- -------- 5 1 Paramount Plaza $ 44,876,466 $ 136,781 N/A N/A 6 1 Montalvo Square Shopping Center 42,300,000 $ 32,856 Capped at $98,568 $ 120,000 9 1 East Thunderbird Square Shopping Center North 28,472,696 $ 25,116 Capped at $50,224 $ 250,008 10 1 Janss Court 28,295,760 $ 26,481 Capped at $100,000 $ 115,504 16 2 Kings Crossing I & II 20,891,904 $ 86,400 Capped at $172,800 N/A 19 1 Baseline Corporate Center 16,438,430 $ 29,880 Capped at $89,607 $ 125,004 22 (A) 1 Anaheim Professional Center 9,365,667 $ 17,336 N/A $ 150,000 24 1 Radisson Hotel Historic Savannah 14,980,678 $ 163,500 Capped at $1,500,000 N/A 25 2 Breckinridge Court Apartments 14,772,020 $ 95,508 Capped at $191,000 N/A 26 2 Addison at Hampton 14,524,848 $ 55,200 Capped at $110,400 N/A 27 1 SouthCourt at South Square 14,423,499 N/A N/A $ 125,000 28 1 Deer Valley Financial Center 11,604,681 $ 25,320 Capped at $50,628 $ 100,008 35 1 Tustin Freeway Business Center 9,989,911 $ 30,270 N/A $ 36,000 36 1 Oak Hill Townhomes 9,845,186 $ 31,800 Capped at $63,600 N/A 37 1 Northlake Square Shopping Center 9,438,742 $ 14,860 N/A $ 20,000 40 2 Caleb's Place Townhomes 9,147,744 $ 30,400 Capped at $91,200 N/A 44 1 Summerville Plaza Shopping Center 7,379,962 N/A N/A $ 35,004 45 1 St. Joseph's/St. Jude's Medical Building 6,967,396 $ 9,408 Capped at $47,040 $ 129,444 48 2 Canyon View Apartments 6,653,051 $ 34,500 Cappe at $103,500 N/A 50 1 Crossings at Westland 6,339,552 $ 31,476 Capped at $96,936 $ 60,000 52 1 78 Place 6,194,049 $ 15,843 Capped at $47,529 $ 50,000 53 1 Vanowen Medical Office 5,964,095 $ 12,882 Capped at $30,000 $ 36,000 54 1 Bolsa Retail Center 5,844,363 $ 6,376 N/A $ 35,000 56 1 91 Montvale Avenue 5,804,304 $ 15,554 N/A $ 60,000 61 1 Metcalf 127 Shops 5,531,107 $ 8,484 N/A $ 20,004 62 1 Evergreen - Beverly Plaza & Park Plaza 5,267,663 $ 6,840 Capped at $20,000 $ 33,600 63 1 Gifford Industrial Park 5,176,306 N/A N/A $ 24,000 65 2 Cloverdale Apartments 5,108,073 $ 21,989 Capped at $210,200 N/A 66 2 Collins Aire Mobile Home Park 4,900,000 $ 24,600 Capped at $49,200 N/A 67 1 Chino Hills Promenade 4,887,170 $ 6,220 N/A $ 12,000 72 1 Joyners Crossing 4,301,596 N/A N/A $ 12,000 73 1 Sedgefield Village Shopping Center 4,281,987 N/A N/A $ 15,000 76 1 Village Shoppes 4,076,870 N/A N/A $ 25,000 78 1 Amaranth Building 3,971,612 $ 3,456 N/A $ 24,996 79 1 Merit Building 3,933,019 $ 5,985 N/A $ 25,000 80 1 4260-4310 West Broad Street 3,856,389 $ 14,112 Capped at $40,000 $ 60,000 83 1 917 Franklin Office Building 3,681,688 $ 5,834 N/A $ 43,194 84 1 Riverside Business Park 3,627,200 N/A N/A $ 48,000 86 1 Shiloh Center - 7 3,108,837 N/A N/A $ 17,043 90 2 Mansions North Apartments 2,793,973 $ 51,876 Capped at $51,870 N/A 91 1 Dearborn Town Center 2,785,959 N/A N/A $ 2,607 97 1 Coopers Common Plaza 2,633,092 N/A N/A N/A 99 1 Chatfield Plaza 2,517,199 N/A N/A $ 20,040 100 1 Northwood Plaza Shopping Center 2,467,572 N/A N/A $ 20,004 101 1 Shiloh Center - 8 2,447,415 N/A N/A $ 14,162 108 2 Brandywine Apartments 2,274,881 $ 31,200 Capped at $31,200 N/A 112 1 2701-2751 East Chapman Avenue 1,986,484 N/A N/A N/A 130 1 10019 Reisterstown Road 1,280,517 $ 1,941 N/A $ 15,000 131 1 Shops at Canton 1,279,361 N/A N/A $ 5,000 132 1 Shiloh Center - 5 1,273,380 N/A N/A $ 7,135 137 1 3200 Commander Industrial Building 1,169,249 N/A N/A $ 16,164 142 1 Pinehollow Business Park 989,673 $ 3,369 Capped at $10,000 $ 17,966 CONTRACTUAL RECURRING CONTRACTUAL LOAN LC & TI OTHER # CROSSED GROUP PROPERTY NAME RESERVE CAP RESERVE - ------- ----- ------------- ----------- ------- 5 1 Paramount Plaza Capped at $750,000 N/A 6 1 Montalvo Square Shopping Center Capped at $300,000 N/A 9 1 East Thunderbird Square Shopping Center North Capped at $500,000 N/A 10 1 Janss Court N/A N/A 16 2 Kings Crossing I & II N/A N/A 19 1 Baseline Corporate Center Capped at $375,000 N/A 22 (A) 1 Anaheim Professional Center Capped at $300,000 N/A 24 1 Radisson Hotel Historic Savannah N/A N/A 25 2 Breckinridge Court Apartments N/A N/A 26 2 Addison at Hampton N/A N/A 27 1 SouthCourt at South Square Capped at $500,000 N/A 28 1 Deer Valley Financial Center Capped at $400,000 N/A 35 1 Tustin Freeway Business Center Capped at $144,000 N/A 36 1 Oak Hill Townhomes N/A N/A 37 1 Northlake Square Shopping Center Capped at $40,000 N/A 40 2 Caleb's Place Townhomes N/A N/A 44 1 Summerville Plaza Shopping Center Capped at $70,000 N/A 45 1 St. Joseph's/St. Jude's Medical Building N/A N/A 48 2 Canyon View Apartments N/A N/A 50 1 Crossings at Westland Capped at $150,000 N/A 52 1 78 Place Capped at $150,000 N/A 53 1 Vanowen Medical Office Capped at $150,000 N/A 54 1 Bolsa Retail Center Capped at $140,000 N/A 56 1 91 Montvale Avenue Capped at $120,000 N/A 61 1 Metcalf 127 Shops Capped at $80,000 N/A 62 1 Evergreen - Beverly Plaza & Park Plaza Capped at $75,000 N/A 63 1 Gifford Industrial Park Capped at $100,000 N/A 65 2 Cloverdale Apartments N/A N/A 66 2 Collins Aire Mobile Home Park N/A N/A 67 1 Chino Hills Promenade Capped at $36,000 N/A 72 1 Joyners Crossing Capped at $48,000 $ 10,140(2) 73 1 Sedgefield Village Shopping Center Capped at $45,000 N/A 76 1 Village Shoppes Capped at $50,000 N/A 78 1 Amaranth Building 1) $50,000 on or before 7/11/2008; N/A 2) an unlimited amount between 7/11/2008 and Target Lease-up and 3) $100,000 from and after Target Lease-Up 79 1 Merit Building Capped at $100,000 N/A 80 1 4260-4310 West Broad Street Capped at $300,000 N/A 83 1 917 Franklin Office Building Capped at $220,000 N/A 84 1 Riverside Business Park Capped at $60,000 N/A 86 1 Shiloh Center - 7 Capped at $51,129 N/A 90 2 Mansions North Apartments N/A N/A 91 1 Dearborn Town Center Capped at $30,000 N/A 97 1 Coopers Common Plaza Capped at $54,630 N/A 99 1 Chatfield Plaza Capped at $75,000 N/A 100 1 Northwood Plaza Shopping Center Capped at $40,000 N/A 101 1 Shiloh Center - 8 Capped at $42,486 N/A 108 2 Brandywine Apartments N/A N/A 112 1 2701-2751 East Chapman Avenue Capped at $77,316 N/A 130 1 10019 Reisterstown Road Capped at $40,000 N/A 131 1 Shops at Canton Capped at $25,000 N/A 132 1 Shiloh Center - 5 Capped at $21,405 N/A 137 1 3200 Commander Industrial Building $125,000, unless leases expiring in 2004 are N/A replaced then cap shall be $50,000. 142 1 Pinehollow Business Park Capped at $50,000 N/A CONTRACTUAL CONTRACTUAL LOAN OTHER RESERVE OTHER RESERVE # CROSSED GROUP PROPERTY NAME DESCRIPTION CAP - ------- ----- ------------- ----------- --- 5 1 Paramount Plaza N/A N/A 6 1 Montalvo Square Shopping Center N/A N/A 9 1 East Thunderbird Square Shopping Center North N/A N/A 10 1 Janss Court N/A N/A 16 2 Kings Crossing I & II N/A N/A 19 1 Baseline Corporate Center N/A N/A 22 (A) 1 Anaheim Professional Center N/A N/A 24 1 Radisson Hotel Historic Savannah N/A N/A 25 2 Breckinridge Court Apartments N/A N/A 26 2 Addison at Hampton N/A N/A 27 1 SouthCourt at South Square N/A N/A 28 1 Deer Valley Financial Center N/A N/A 35 1 Tustin Freeway Business Center N/A N/A 36 1 Oak Hill Townhomes N/A N/A 37 1 Northlake Square Shopping Center N/A N/A 40 2 Caleb's Place Townhomes N/A N/A 44 1 Summerville Plaza Shopping Center N/A N/A 45 1 St. Joseph's/St. Jude's Medical Building N/A N/A 48 2 Canyon View Apartments N/A N/A 50 1 Crossings at Westland N/A N/A 52 1 78 Place N/A N/A 53 1 Vanowen Medical Office N/A N/A 54 1 Bolsa Retail Center N/A N/A 56 1 91 Montvale Avenue N/A N/A 61 1 Metcalf 127 Shops N/A N/A 62 1 Evergreen - Beverly Plaza & Park Plaza N/A N/A 63 1 Gifford Industrial Park N/A N/A 65 2 Cloverdale Apartments N/A N/A 66 2 Collins Aire Mobile Home Park N/A N/A 67 1 Chino Hills Promenade N/A N/A 72 1 Joyners Crossing Master Lease Reserve N/A 73 1 Sedgefield Village Shopping Center N/A N/A 76 1 Village Shoppes N/A N/A 78 1 Amaranth Building N/A N/A 79 1 Merit Building N/A N/A 80 1 4260-4310 West Broad Street N/A N/A 83 1 917 Franklin Office Building N/A N/A 84 1 Riverside Business Park N/A N/A 86 1 Shiloh Center - 7 N/A N/A 90 2 Mansions North Apartments N/A N/A 91 1 Dearborn Town Center N/A N/A 97 1 Coopers Common Plaza N/A N/A 99 1 Chatfield Plaza N/A N/A 100 1 Northwood Plaza Shopping Center N/A N/A 101 1 Shiloh Center - 8 N/A N/A 108 2 Brandywine Apartments N/A N/A 112 1 2701-2751 East Chapman Avenue N/A N/A 130 1 10019 Reisterstown Road N/A N/A 131 1 Shops at Canton N/A N/A 132 1 Shiloh Center - 5 N/A N/A 137 1 3200 Commander Industrial Building N/A N/A 142 1 Pinehollow Business Park N/A N/A
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY ANAHEIM PROFESSIONAL CENTER AND COAST FAMILY MEDICAL CENTER ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. (1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) THE SELLER ON THE LOAN HAS MASTER LEASED A SPACE IN ORDER TO GUARANTEE AN OCCUPANCY OF 90%. AS SUCH, THE AMOUNT OF THIS RESERVE CHANGES EVERY MONTH AS THE OCCUPANCY CHANGES. MULTIFAMILY SCHEDULE
UTILITIES LOAN TENANT # # CROSSED GROUP PROPERTY NAME PROPERTY SUB-TYPE PAYS ELEVATORS - - ------- ----- ------------- ----------------- --------- --------- 7 2 Jefferson at Montfort Conventional Electric/Water 0 8 1 EastBridge Landing Conventional Electric 4 12 2 Serrano Apartments Conventional Electric/Water 0 14 2 Carlingford Apartments Conventional Electric 3 16 2 Kings Crossing I & II Conventional Electric 0 17 2 Atrium at Market Center Conventional None 5 18 2 Villages of Deerfield Apartments Conventional Electric/Water/Sewer 0 25 2 Breckinridge Court Apartments Conventional Electric 0 26 2 Addison at Hampton Conventional Water/Sewer 0 29 A 2 Magnolia Village Manufactured Housing Electric/Gas 0 30 A 2 Blue Jay Mobile Home Park Manufactured Housing Electric/Gas 0 31 A 2 Candlelight Manor Manufactured Housing Electric/Gas 0 32 A 2 Elmwood Mobile Home Park Manufactured Housing Electric/Gas 0 36 1 Oak Hill Townhomes Conventional Electric/Sewer/Water 0 38 2 Stone Hill Apartments Conventional Electric 0 39 2 High Ridge Apartments Conventional Electric/Gas/Water 0 40 2 Caleb's Place Townhomes Conventional Electric 0 41 2 Northgate Village Apartments Conventional Electric/Water 0 42 2 Cambridge Village Apartments Conventional Electric/Water/Sewer 0 47 2 Hearthstone Apartments Conventional Electric/Water 0 48 2 Canyon View Apartments Conventional Electric 0 51 2 Villas of Brandychase Conventional Electric/Water 0 55 2 Candlewick Apartments Conventional Electric/Gas 0 57 2 Northgate Club Apartments Conventional Electric 0 58 2 Country Village & Oakwood Mobile Home Park Manufactured Housing Electric/Gas 0 65 2 Cloverdale Apartments Conventional Electric 0 66 2 Collins Aire Mobile Home Park Manufactured Housing N/A 0 68 2 Hunter's Glen Conventional Electric 0 69 2 Cedar Glen Apartments Conventional Electric/Water 0 70 2 College Hills West Apartments Conventional Electric 0 75 2 Point-O-View Apartments Conventional Electric/Water/Sewer 0 77 2 Oak Brook Apartments Conventional Electric 0 85 2 Oaks of League City Conventional Electric 0 89 2 Tiburon Pointe Apartments Conventional Electric/Gas 0 90 2 Mansions North Apartments Conventional Electric 0 93 2 Sands Point Cove Apartments Conventional Electric/Gas/Water/Sewer 0 98 2 Diplomat Townhomes Conventional Electric/Gas 0 102 2 Riverview Terrace Conventional Electric 0 103 2 Angelique Apartments Conventional Electric 0 104 2 Langdon Hall Apartments Conventional Electric 1 105 2 Bayou Oaks Apartments Conventional Electric 0 108 2 Brandywine Apartments Conventional Electric/Water 0 113 2 Park House Apartments Conventional N/A 0 114 1 324 E 77th Street Conventional Electric/Gas 0 115 2 Buttonwood Square Conventional Electric 0 122 2 Salem Terrace Apartments Conventional Electric/Gas 0 123 2 Carefree Valley Resort Manufactured Housing Electric/Gas/Water/Sewer/Trash 0 126 2 Springwood Apartments Conventional Electric/Water/Sewer/Trash 0 127 1 Cypress Harbor Mobile Home Park Manufactured Housing Electric/Gas/Trash 0 128 2 Casa Del Rey Mobile Home Park Manufactured Housing Electric/Gas 0 129 2 Fort Sedgwick Apartments Conventional Electric 0 134 1 Meadow Estates Manufactured Housing Community Manufactured Housing Electric/Gas/Water/Sewer/Trash 0 136 2 Amberwood Apartments Conventional Electric 0 139 2 Bel Air Mobile Home Communities Manufactured Housing Electric/Gas/Water/Sewer/Trash 0 140 2 Park Manor Apartments Conventional Electric 0 144 2 Colonial Arms Apartments Conventional Electric 1 145 2 Folger Apartments Conventional Electric 0 146 2 Church Hill Gables Conventional Electric 0 147 2 Morris Manor Apartment Conventional Electric/Gas 0 148 2 Halifax Court Apartments Conventional Electric 0 149 2 Ashley Street Apartments Conventional Electric 0 150 2 Royal Palms Apartments Conventional Electric/Water/Sewer 0 151 2 Quartermaster Court Apartments Conventional Electric 0 152 2 833 Whalley Avenue Conventional Electric/Gas 0 SUBJECT SUBJECT SUBJECT SUBJECT SUBJECT SUBJECT LOAN STUDIO STUDIO STUDIO 1 BR 1 BR 1 BR # CROSSED GROUP PROPERTY NAME UNITS AVG. RENT MAX. RENT UNITS AVG. RENT MAX. RENT - - ------- ----- ------------- ------- --------- --------- ------- --------- --------- 7 2 Jefferson at Montfort N/A N/A N/A 416 $ 795 $ 1,168 8 1 EastBridge Landing 59 $ 2,108 $ 2,516 58 $ 2,857 $ 4,361 12 2 Serrano Apartments N/A N/A N/A 220 $ 784 $ 1,120 14 2 Carlingford Apartments N/A N/A N/A 570 $ 425 $ 450 16 2 Kings Crossing I & II N/A N/A N/A 78 $ 727 $ 845 17 2 Atrium at Market Center 58 $ 890 $ 1,079 101 $ 1,222 $ 1,590 18 2 Villages of Deerfield Apartments N/A N/A N/A 148 $ 616 $ 1,370 25 2 Breckinridge Court Apartments 90 $ 450 $ 490 157 $ 497 $ 616 26 2 Addison at Hampton N/A N/A N/A 192 $ 637 $ 1,450 29 A 2 Magnolia Village N/A N/A N/A N/A N/A N/A 30 A 2 Blue Jay Mobile Home Park N/A N/A N/A N/A N/A N/A 31 A 2 Candlelight Manor N/A N/A N/A N/A N/A N/A 32 A 2 Elmwood Mobile Home Park N/A N/A N/A N/A N/A N/A 36 1 Oak Hill Townhomes N/A N/A N/A N/A N/A N/A 38 2 Stone Hill Apartments 72 $ 430 $ 430 127 $ 544 $ 600 39 2 High Ridge Apartments N/A N/A N/A 192 $ 487 $ 625 40 2 Caleb's Place Townhomes N/A N/A N/A N/A N/A N/A 41 2 Northgate Village Apartments N/A N/A N/A 144 $ 498 $ 622 42 2 Cambridge Village Apartments N/A N/A N/A 112 $ 693 $ 714 47 2 Hearthstone Apartments 40 $ 421 $ 795 160 $ 496 $ 619 48 2 Canyon View Apartments N/A N/A N/A 30 $ 651 $ 700 51 2 Villas of Brandychase N/A N/A N/A N/A N/A N/A 55 2 Candlewick Apartments N/A N/A N/A 116 $ 462 $ 520 57 2 Northgate Club Apartments N/A N/A N/A 60 $ 673 $ 699 58 2 Country Village & Oakwood Mobile Home Park N/A N/A N/A N/A N/A N/A 65 2 Cloverdale Apartments N/A N/A N/A 64 $ 373 $ 385 66 2 Collins Aire Mobile Home Park N/A N/A N/A N/A N/A N/A 68 2 Hunter's Glen N/A N/A N/A 96 $ 579 $ 660 69 2 Cedar Glen Apartments N/A N/A N/A 133 $ 438 $ 567 70 2 College Hills West Apartments N/A N/A N/A 71 $ 518 $ 615 75 2 Point-O-View Apartments N/A N/A N/A 34 $ 472 $ 475 77 2 Oak Brook Apartments N/A N/A N/A 40 $ 559 $ 575 85 2 Oaks of League City N/A N/A N/A 27 $ 614 $ 870 89 2 Tiburon Pointe Apartments N/A N/A N/A 12 $ 587 $ 595 90 2 Mansions North Apartments N/A N/A N/A 76 $ 221 $ 1,025 93 2 Sands Point Cove Apartments N/A N/A N/A 92 $ 423 $ 425 98 2 Diplomat Townhomes N/A N/A N/A 12 $ 543 $ 550 102 2 Riverview Terrace N/A N/A N/A N/A N/A N/A 103 2 Angelique Apartments N/A N/A N/A 96 $ 495 $ 525 104 2 Langdon Hall Apartments 75 $ 516 $ 575 10 $ 684 $ 760 105 2 Bayou Oaks Apartments N/A N/A N/A 25 $ 421 $ 475 108 2 Brandywine Apartments N/A N/A N/A 24 $ 360 $ 365 113 2 Park House Apartments N/A N/A N/A 18 $ 526 $ 535 114 1 324 E 77th Street 1 $ 1,499 $ 1,499 17 $ 1,340 $ 1,900 115 2 Buttonwood Square N/A N/A N/A 48 $ 553 $ 600 122 2 Salem Terrace Apartments N/A N/A N/A 20 $ 500 $ 533 123 2 Carefree Valley Resort N/A N/A N/A N/A N/A N/A 126 2 Springwood Apartments 12 $ 396 $ 400 35 $ 455 $ 485 127 1 Cypress Harbor Mobile Home Park N/A N/A N/A N/A N/A N/A 128 2 Casa Del Rey Mobile Home Park N/A N/A N/A N/A N/A N/A 129 2 Fort Sedgwick Apartments N/A N/A N/A 28 $ 419 $ 440 134 1 Meadow Estates Manufactured Housing Community N/A N/A N/A N/A N/A N/A 136 2 Amberwood Apartments N/A N/A N/A N/A N/A N/A 139 2 Bel Air Mobile Home Communities N/A N/A N/A N/A N/A N/A 140 2 Park Manor Apartments N/A N/A N/A 8 $ 688 $ 700 144 2 Colonial Arms Apartments 41 $ 402 $ 465 16 $ 469 $ 550 145 2 Folger Apartments 5 $ 811 $ 1,050 11 $ 958 $ 1,095 146 2 Church Hill Gables N/A N/A N/A 9 $ 870 $ 990 147 2 Morris Manor Apartment 2 $ 385 $ 400 48 $ 495 $ 520 148 2 Halifax Court Apartments N/A N/A N/A N/A N/A N/A 149 2 Ashley Street Apartments 6 $ 395 $ 395 24 $ 489 $ 495 150 2 Royal Palms Apartments N/A N/A N/A 16 $ 428 $ 495 151 2 Quartermaster Court Apartments N/A N/A N/A N/A N/A N/A 152 2 833 Whalley Avenue N/A N/A N/A 12 $ 765 $ 800 SUBJECT SUBJECT SUBJECT SUBJECT SUBJECT SUBJECT LOAN 2 BR 2 BR 2 BR 3 BR 3 BR 3 BR # CROSSED GROUP PROPERTY NAME UNITS AVG. RENT MAX. RENT UNITS AVG. RENT MAX. RENT - - ------- ----- ------------- ------- --------- --------- ------- --------- --------- 7 2 Jefferson at Montfort 231 $ 1,111 $ 1,432 15 $ 1,455 $ 1,564 8 1 EastBridge Landing 28 $ 4,373 $ 5,500 2 $ 5,526 $ 5,800 12 2 Serrano Apartments 178 $ 925 $ 1,255 40 $ 1,374 $ 1,815 14 2 Carlingford Apartments 240 $ 545 $ 610 N/A N/A N/A 16 2 Kings Crossing I & II 197 $ 817 $ 975 157 $ 1,006 $ 2,900 17 2 Atrium at Market Center 14 $ 1,448 $ 1,495 N/A N/A N/A 18 2 Villages of Deerfield Apartments 136 $ 805 $ 935 16 $ 865 $ 1,110 25 2 Breckinridge Court Apartments 135 $ 654 $ 764 N/A N/A N/A 26 2 Addison at Hampton 84 $ 843 $ 1,050 N/A N/A N/A 29 A 2 Magnolia Village N/A N/A N/A N/A N/A N/A 30 A 2 Blue Jay Mobile Home Park N/A N/A N/A N/A N/A N/A 31 A 2 Candlelight Manor N/A N/A N/A N/A N/A N/A 32 A 2 Elmwood Mobile Home Park N/A N/A N/A N/A N/A N/A 36 1 Oak Hill Townhomes N/A N/A N/A 106 $ 1,122 $ 1,312 38 2 Stone Hill Apartments 145 $ 620 $ 675 N/A N/A N/A 39 2 High Ridge Apartments 104 $ 639 $ 715 N/A N/A N/A 40 2 Caleb's Place Townhomes 108 $ 700 $ 935 44 $ 811 $ 995 41 2 Northgate Village Apartments 120 $ 655 $ 741 N/A N/A N/A 42 2 Cambridge Village Apartments 88 $ 862 $ 906 N/A N/A N/A 47 2 Hearthstone Apartments 52 $ 674 $ 765 N/A N/A N/A 48 2 Canyon View Apartments 80 $ 747 $ 800 28 $ 903 $ 950 51 2 Villas of Brandychase 58 $ 766 $ 810 57 $ 865 $ 920 55 2 Candlewick Apartments 68 $ 585 $ 605 N/A N/A N/A 57 2 Northgate Club Apartments 60 $ 786 $ 849 N/A N/A N/A 58 2 Country Village & Oakwood Mobile Home Park N/A N/A N/A N/A N/A N/A 65 2 Cloverdale Apartments 78 $ 475 $ 475 27 $ 565 $ 565 66 2 Collins Aire Mobile Home Park N/A N/A N/A N/A N/A N/A 68 2 Hunter's Glen 56 $ 695 $ 745 N/A N/A N/A 69 2 Cedar Glen Apartments 77 $ 572 $ 649 1 $ 675 $ 675 70 2 College Hills West Apartments 89 $ 660 $ 750 8 $ 821 $ 840 75 2 Point-O-View Apartments 68 $ 620 $ 625 36 $ 760 $ 775 77 2 Oak Brook Apartments 48 $ 669 $ 690 12 $ 810 $ 825 85 2 Oaks of League City 81 $ 663 $ 945 N/A N/A N/A 89 2 Tiburon Pointe Apartments 48 $ 683 $ 705 N/A N/A N/A 90 2 Mansions North Apartments 38 $ 361 $ 1,325 N/A N/A N/A 93 2 Sands Point Cove Apartments 50 $ 520 $ 550 N/A N/A N/A 98 2 Diplomat Townhomes 101 $ 628 $ 690 11 $ 769 $ 800 102 2 Riverview Terrace 48 $ 823 $ 900 N/A N/A N/A 103 2 Angelique Apartments 30 $ 587 $ 625 8 $ 693 $ 700 104 2 Langdon Hall Apartments 1 $ 960 $ 960 2 $ 1,318 $ 1,360 105 2 Bayou Oaks Apartments 53 $ 594 $ 640 10 $ 703 $ 725 108 2 Brandywine Apartments 80 $ 410 $ 415 N/A N/A N/A 113 2 Park House Apartments 54 $ 583 $ 610 N/A N/A N/A 114 1 324 E 77th Street 2 $ 2,300 $ 2,300 N/A N/A N/A 115 2 Buttonwood Square 10 $ 667 $ 741 N/A N/A N/A 122 2 Salem Terrace Apartments 50 $ 538 $ 575 N/A N/A N/A 123 2 Carefree Valley Resort N/A N/A N/A N/A N/A N/A 126 2 Springwood Apartments 10 $ 601 $ 645 N/A N/A N/A 127 1 Cypress Harbor Mobile Home Park N/A N/A N/A N/A N/A N/A 128 2 Casa Del Rey Mobile Home Park N/A N/A N/A N/A N/A N/A 129 2 Fort Sedgwick Apartments 28 $ 469 $ 500 N/A N/A N/A 134 1 Meadow Estates Manufactured Housing Community N/A N/A N/A N/A N/A N/A 136 2 Amberwood Apartments 53 $ 607 $ 674 N/A N/A N/A 139 2 Bel Air Mobile Home Communities N/A N/A N/A N/A N/A N/A 140 2 Park Manor Apartments 16 $ 788 $ 850 N/A N/A N/A 144 2 Colonial Arms Apartments 4 $ 650 $ 650 N/A N/A N/A 145 2 Folger Apartments N/A N/A N/A N/A N/A N/A 146 2 Church Hill Gables 7 $ 905 $ 1,020 N/A N/A N/A 147 2 Morris Manor Apartment 4 $ 559 $ 575 N/A N/A N/A 148 2 Halifax Court Apartments 28 $ 547 $ 565 N/A N/A N/A 149 2 Ashley Street Apartments 6 $ 614 $ 625 N/A N/A N/A 150 2 Royal Palms Apartments 31 $ 523 $ 580 1 $ 565 $ 565 151 2 Quartermaster Court Apartments 22 $ 492 $ 575 10 $ 650 $ 650 152 2 833 Whalley Avenue 2 $ 925 $ 950 N/A N/A N/A SUBJECT SUBJECT SUBJECT SUBJECT SUBJECT SUBJECT LOAN 4 BR 4 BR 4 BR 5 BR 5 BR 5 BR # CROSSED GROUP PROPERTY NAME UNITS AVG. RENT MAX. RENT UNITS AVG. RENT MAX. RENT - - ------- ----- ------------- ------- --------- --------- ------- --------- --------- 7 2 Jefferson at Montfort N/A N/A N/A N/A N/A N/A 8 1 EastBridge Landing 2 $ 7,825 $ 7,825 N/A N/A N/A 12 2 Serrano Apartments N/A N/A N/A N/A N/A N/A 14 2 Carlingford Apartments N/A N/A N/A N/A N/A N/A 16 2 Kings Crossing I & II N/A N/A N/A N/A N/A N/A 17 2 Atrium at Market Center N/A N/A N/A N/A N/A N/A 18 2 Villages of Deerfield Apartments N/A N/A N/A N/A N/A N/A 25 2 Breckinridge Court Apartments N/A N/A N/A N/A N/A N/A 26 2 Addison at Hampton N/A N/A N/A N/A N/A N/A 29 A 2 Magnolia Village N/A N/A N/A N/A N/A N/A 30 A 2 Blue Jay Mobile Home Park N/A N/A N/A N/A N/A N/A 31 A 2 Candlelight Manor N/A N/A N/A N/A N/A N/A 32 A 2 Elmwood Mobile Home Park N/A N/A N/A N/A N/A N/A 36 1 Oak Hill Townhomes N/A N/A N/A N/A N/A N/A 38 2 Stone Hill Apartments N/A N/A N/A N/A N/A N/A 39 2 High Ridge Apartments N/A N/A N/A N/A N/A N/A 40 2 Caleb's Place Townhomes N/A N/A N/A N/A N/A N/A 41 2 Northgate Village Apartments N/A N/A N/A N/A N/A N/A 42 2 Cambridge Village Apartments N/A N/A N/A N/A N/A N/A 47 2 Hearthstone Apartments N/A N/A N/A N/A N/A N/A 48 2 Canyon View Apartments N/A N/A N/A N/A N/A N/A 51 2 Villas of Brandychase N/A N/A N/A N/A N/A N/A 55 2 Candlewick Apartments N/A N/A N/A N/A N/A N/A 57 2 Northgate Club Apartments N/A N/A N/A N/A N/A N/A 58 2 Country Village & Oakwood Mobile Home Park N/A N/A N/A N/A N/A N/A 65 2 Cloverdale Apartments 8 $ 635 $ 635 N/A N/A N/A 66 2 Collins Aire Mobile Home Park N/A N/A N/A N/A N/A N/A 68 2 Hunter's Glen N/A N/A N/A N/A N/A N/A 69 2 Cedar Glen Apartments N/A N/A N/A N/A N/A N/A 70 2 College Hills West Apartments N/A N/A N/A N/A N/A N/A 75 2 Point-O-View Apartments N/A N/A N/A N/A N/A N/A 77 2 Oak Brook Apartments N/A N/A N/A N/A N/A N/A 85 2 Oaks of League City N/A N/A N/A N/A N/A N/A 89 2 Tiburon Pointe Apartments N/A N/A N/A N/A N/A N/A 90 2 Mansions North Apartments N/A N/A N/A N/A N/A N/A 93 2 Sands Point Cove Apartments N/A N/A N/A N/A N/A N/A 98 2 Diplomat Townhomes N/A N/A N/A N/A N/A N/A 102 2 Riverview Terrace N/A N/A N/A N/A N/A N/A 103 2 Angelique Apartments N/A N/A N/A N/A N/A N/A 104 2 Langdon Hall Apartments N/A N/A N/A N/A N/A N/A 105 2 Bayou Oaks Apartments N/A N/A N/A N/A N/A N/A 108 2 Brandywine Apartments N/A N/A N/A N/A N/A N/A 113 2 Park House Apartments N/A N/A N/A N/A N/A N/A 114 1 324 E 77th Street N/A N/A N/A N/A N/A N/A 115 2 Buttonwood Square N/A N/A N/A N/A N/A N/A 122 2 Salem Terrace Apartments N/A N/A N/A N/A N/A N/A 123 2 Carefree Valley Resort N/A N/A N/A N/A N/A N/A 126 2 Springwood Apartments N/A N/A N/A N/A N/A N/A 127 1 Cypress Harbor Mobile Home Park N/A N/A N/A N/A N/A N/A 128 2 Casa Del Rey Mobile Home Park N/A N/A N/A N/A N/A N/A 129 2 Fort Sedgwick Apartments N/A N/A N/A N/A N/A N/A 134 1 Meadow Estates Manufactured Housing Community N/A N/A N/A N/A N/A N/A 136 2 Amberwood Apartments N/A N/A N/A N/A N/A N/A 139 2 Bel Air Mobile Home Communities N/A N/A N/A N/A N/A N/A 140 2 Park Manor Apartments N/A N/A N/A N/A N/A N/A 144 2 Colonial Arms Apartments N/A N/A N/A N/A N/A N/A 145 2 Folger Apartments N/A N/A N/A N/A N/A N/A 146 2 Church Hill Gables N/A N/A N/A N/A N/A N/A 147 2 Morris Manor Apartment N/A N/A N/A N/A N/A N/A 148 2 Halifax Court Apartments N/A N/A N/A N/A N/A N/A 149 2 Ashley Street Apartments N/A N/A N/A N/A N/A N/A 150 2 Royal Palms Apartments N/A N/A N/A N/A N/A N/A 151 2 Quartermaster Court Apartments N/A N/A N/A N/A N/A N/A 152 2 833 Whalley Avenue N/A N/A N/A N/A N/A N/A
(A) THE UNDERLYING MORTGAGE LOANS SECURED BY MAGNOLIA VILLAGE, BLUE JAY MOBILE HOME PARK, CANDLELIGHT MANOR AND ELMWOOD MOBILE HOME PARK ARE CROSS-COLLATERALIZED AND CROSS-DEFAULTED, RESPECTIVELY. EXHIBIT A-2 MORTGAGE POOL INFORMATION SEE THIS EXHIBIT FOR TABLES TITLED: Underlying Mortgage Loan Contributor Mortgage Interest Rates Cut-off Date Principal Balances Original Amortization Terms Original Terms to Stated Maturity Remaining Amortization Terms Remaining Terms to Stated Maturity Years Built/Years Renovated Occupancy Rates at Underwriting Mortgaged Real Properties by State Underlying Mortgage Loans by Amortization Type Underlying Mortgaged Real Properties by Ownership Interest Underwritten Debt Service Coverage Ratios Cut-off Date Loan-to-Value Ratios Mortgaged Real Properties by Property Type Mortgaged Real Properties by Property Sub-Type Prepayment Provision as of Cut-off Date Prepayment Option Mortgage Pool Prepayment Profile A-2-1 UNDERLYING MORTGAGE LOAN CONTRIBUTOR
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE MORTGAGE LOAN SELLER LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Column Financial, Inc. 121 $ 904,442,967 71.71% 5.324% 1.83x 67.6% PNC 30 265,677,774 21.06% 5.901% 1.47 73.9% KeyBank 2 91,148,750 7.23% 5.432% 1.72 67.4% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGE INTEREST RATES
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE RANGE OF MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE MORTGAGE INTEREST RATES LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 3.108% - 5.000% 11 $ 295,455,686 23.43% 3.906% 2.33x 63.2% 5.001% - 5.500% 30 278,921,724 22.11% 5.350% 1.62 72.8% 5.501% - 5.750% 25 92,328,755 7.32% 5.630% 1.51 74.0% 5.751% - 6.000% 33 211,682,913 16.78% 5.891% 1.46 73.9% 6.001% - 7.000% 48 350,676,017 27.80% 6.337% 1.63 66.7% 7.001% - 7.500% 4 5,054,940 0.40% 7.171% 1.46 64.9% 7.501% - 8.120% 2 27,149,456 2.15% 7.612% 1.32 64.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM MORTGAGE INTEREST RATE: 8.120% MINIMUM MORTGAGE INTEREST RATE: 3.108% WTD. AVG. MORTGAGE INTEREST RATE: 5.453%
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. CUT-OFF DATE PRINCIPAL BALANCES (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE PRINCIPAL BALANCES LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- $585,529 - 750,000 4 $ 2,537,881 0.20% 6.965% 1.56x 64.6% 750,001 - 1,000,000 10 9,126,067 0.72% 6.073% 1.61 68.5% 1,000,001 - 1,250,000 7 8,186,035 0.65% 5.946% 1.52 67.9% 1,250,001 - 1,500,000 11 15,173,352 1.20% 5.592% 1.58 73.3% 1,500,001 - 2,000,000 11 19,852,129 1.57% 6.189% 1.46 71.4% 2,000,001 - 2,500,000 13 30,058,478 2.38% 5.751% 1.47 69.3% 2,500,001 - 3,000,000 11 29,868,605 2.37% 5.740% 1.57 70.5% 3,000,001 - 4,000,000 14 51,079,961 4.05% 5.763% 1.46 73.4% 4,000,001 - 4,500,000 6 25,296,826 2.01% 6.012% 1.49 73.6% 4,500,001 - 5,000,000 5 23,826,686 1.89% 6.011% 1.76 67.3% 5,000,001 - 7,500,000 24 145,570,879 11.54% 5.791% 1.55 72.0% 7,500,001 - 10,000,000 9 82,753,944 6.56% 5.744% 1.45 77.3% 10,000,001 - 15,000,000 7 91,340,137 7.24% 5.630% 1.59 73.4% 15,000,001 - 30,000,000 13 280,101,891 22.21% 5.738% 1.50 72.7% 30,000,001 - 50,000,000 4 155,866,463 12.36% 5.552% 1.80 63.1% 50,000,001 - $85,405,532 4 290,630,156 23.04% 4.506% 2.35 61.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM CUT-OFF DATE PRINCIPAL BALANCE (1): $ 85,405,532 MINIMUM CUT-OFF DATE PRINCIPAL BALANCE (1): $ 585,529 AVERAGE CUT-OFF DATE PRINCIPAL BALANCE (1): $ 8,243,591
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. ORIGINAL AMORTIZATION TERMS (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE ORIGINAL AMORTIZATION MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE TERMS (MONTHS) (1) LOANS BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- Interest Only 4 $ 112,075,000 8.89% 3.986% 3.02x 53.5% 180 - 300 46 247,380,581 19.61% 6.420% 1.47 71.7% 301 - 395 103 901,813,910 71.50% 5.371% 1.67 70.1% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM ORIGINAL AMORTIZATION TERM (MONTHS): (3) 395 MINIMUM ORIGINAL AMORTIZATION TERM (MONTHS): (3) 180 WTD. AVG. ORIGINAL AMORTIZATION TERM (MONTHS): (3) 345
(1) THERE ARE 7 MORTGAGE LOANS THAT HAVE INITIAL INTEREST ONLY PERIODS RANGING FROM 6 TO 24 MONTHS. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (3) DOES NOT INCLUDE LOANS WITH INTEREST ONLY PAYMENTS UNTIL ARD/MATURITY DATE. ORIGINAL TERMS TO STATED MATURITY (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE ORIGINAL TERMS MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE TO STATED MATURITY (MONTHS) (1) LOANS BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 60 - 84 14 $ 265,431,490 21.04% 4.034% 2.41x 61.2% 85 - 120 133 872,727,475 69.19% 5.810% 1.57 71.7% 121 - 240 6 123,110,526 9.76% 5.984% 1.62 65.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 240 MINIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 60 WTD. AVG. ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 110
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSE OF THE FOREGOING TABLE. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. REMAINING AMORTIZATION TERMS
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE REMAINING AMORTIZATION MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE TERMS (MONTHS) LOANS BALANCE (1) BALANCE RATES U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Interest Only 4 $ 112,075,000 8.89% 3.986% 3.02x 53.5% 172 - 250 10 23,606,241 1.87% 6.150% 1.41 66.5% 251 - 300 38 229,038,613 18.16% 6.446% 1.48 72.1% 301 - 355 49 300,154,412 23.80% 4.979% 1.72 71.3% 356 - 360 52 596,395,225 47.29% 5.559% 1.64 69.5% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM REMAINING AMORTIZATION TERM (MONTHS): (1)(2) 360 MINIMUM REMAINING AMORTIZATION TERM (MONTHS): (1)(2) 172 WTD. AVG. REMAINING AMORTIZATION TERM (MONTHS): (1)(2) 340
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) DOES NOT INCLUDE LOANS WITH INTEREST ONLY PAYMENTS UNTIL THE ARD/MATURITY DATE. REMAINING TERMS TO STATED MATURITY (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE REMAINING TERMS MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE TO STATED MATURITY (MONTHS) (1) LOANS BALANCE (2) BALANCE RATES U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 50 - 84 17 $ 304,385,759 24.13% 4.306% 2.35x 58.6% 85 - 114 41 176,115,900 13.96% 5.760% 1.47 73.9% 115 - 120 89 657,657,305 52.14% 5.803% 1.57 73.0% 121 - 234 6 123,110,526 9.76% 5.984% 1.62 65.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 234 MINIMUM REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 50 WTD. AVG. REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 105
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSE OF THE FOREGOING TABLE. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. YEARS BUILT/YEARS RENOVATED (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE RANGE OF YEARS REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE BUILT/RENOVATED (1) PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 1962 - 1975 10 $ 35,223,407 2.79% 5.864% 1.45x 72.7% 1976 - 1985 24 93,587,770 7.42% 5.901% 1.50 73.2% 1986 - 1990 16 174,759,745 13.86% 5.752% 1.60 71.2% 1991 - 1995 11 167,097,388 13.25% 5.315% 1.64 68.7% 1996 - 1999 20 168,349,488 13.35% 5.734% 1.66 66.2% 2000 - 2003 75 622,251,692 49.34% 5.240% 1.90 68.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 156 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MOST RECENT YEAR BUILT/RENOVATED (1): 2003 OLDEST YEAR BUILT/RENOVATED (1): 1962 WTD. AVG. YEAR BUILT/RENOVATED (1): 1996
(1) YEARS BUILT/RENOVATED REFLECTS THE LATER OF THE YEAR BUILT AND YEAR RENOVATED. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. OCCUPANCY RATES AT UNDERWRITING (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE RANGE OF REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE OCCUPANCY RATES AT U/W (1) PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 79% - 85% 11 $ 90,658,203 7.19% 5.983% 1.78x 67.3% 86% - 90% 14 153,926,594 12.20% 4.950% 1.55 74.8% 91% - 93% 22 163,873,435 12.99% 5.809% 1.45 74.4% 94% - 95% 16 154,203,964 12.23% 5.723% 1.61 66.3% 96% - 97% 18 202,044,660 16.02% 3.912% 2.57 59.6% 98% - 100% 71 423,260,236 33.56% 5.781% 1.60 69.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 152 $ 1,187,967,091 94.19% 5.367% 1.75x 68.7% ======================================================================================
MAXIMUM OCCUPANCY RATE AT U/W (1): 100% MINIMUM OCCUPANCY RATE AT U/W (1): 79% WTD. AVG. OCCUPANCY RATE AT U/W (1): 94%
(1) HOTEL PROPERTIES ARE NOT INCLUDED. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY STATE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE STATE PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- California 29 $ 330,023,178 26.17% 5.217% 2.05x 65.4% Southern California (1) 23 203,989,894 16.17% 5.827% 1.64 70.3% Northern California (1) 6 126,033,284 9.99% 4.231% 2.71 57.7% Texas 27 187,212,863 14.84% 5.301% 1.46 75.8% Ohio 5 98,605,835 7.82% 5.501% 1.69 67.7% Wisconsin 3 81,730,411 6.48% 3.168% 2.35 60.2% Florida 16 75,454,325 5.98% 5.558% 1.66 71.4% Arizona 5 64,798,899 5.14% 6.021% 1.51 71.6% Kentucky 3 51,775,182 4.11% 6.522% 1.58 75.9% Virginia 7 51,119,680 4.05% 4.966% 1.74 68.9% New York 7 41,366,142 3.28% 6.154% 1.91 42.2% North Carolina 7 37,293,128 2.96% 5.459% 1.71 72.6% Pennsylvania 3 37,239,968 2.95% 6.196% 1.60 75.7% New Jersey 4 34,259,956 2.72% 7.246% 1.34 66.5% Georgia 6 31,100,672 2.47% 6.082% 1.59 73.5% Maryland 4 27,310,028 2.17% 6.219% 1.31 76.5% Michigan 3 25,102,459 1.99% 6.072% 1.29 70.6% Nebraska 4 8,594,479 0.68% 5.757% 1.50 76.0% Minnesota 1 7,440,612 0.59% 6.870% 1.95 65.3% Colorado 2 7,417,199 0.59% 5.804% 2.19 52.1% South Carolina 1 7,379,962 0.59% 5.400% 1.38 78.5% Illinois 3 7,157,062 0.57% 5.668% 1.62 75.1% Louisiana 2 6,745,956 0.53% 6.578% 1.27 77.8% Nevada 1 6,653,051 0.53% 4.900% 1.57 78.3% New Mexico 1 5,811,980 0.46% 5.930% 1.36 79.1% Massachusetts 1 5,804,304 0.46% 6.080% 1.37 77.4% Kansas 1 5,531,107 0.44% 6.480% 1.29 79.0% Oklahoma 2 5,068,854 0.40% 5.160% 1.63 75.1% Alabama 1 4,077,258 0.32% 6.140% 1.52 70.9% Missouri 1 2,661,315 0.21% 6.200% 1.30 71.9% Rhode Island 1 2,426,212 0.19% 5.820% 1.38 79.5% Connecticut 2 1,347,130 0.11% 6.040% 1.55 79.3% Iowa 1 1,229,547 0.10% 5.050% 1.58 74.5% District of Columbia 1 896,427 0.07% 5.650% 1.66 64.5% Indiana 1 634,310 0.05% 8.120% 1.42 64.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 156 $ 1,261,269,491 100% 5.453% 1.75x 68.9% ======================================================================================
(1) SOUTHERN CALIFORNIA CONSISTS OF MORTGAGED REAL PROPERTIES LOCATED IN CALIFORNIA WITH ZIP CODES LESS THAN OR EQUAL TO 93600. NORTHERN CALIFORNIA CONSISTS OF MORTGAGED REAL PROPERTIES LOCATED IN CALIFORNIA WITH ZIP CODES GREATER THAN 93600. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERLYING MORTGAGE LOANS BY AMORTIZATION TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE LOAN TYPE LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Balloon 140 $ 1,044,566,619 82.82% 5.512% 1.63x 70.2% ARD (2) 7 115,372,333 39.15% 6.366% 1.57 72.6% Interest Only 3 90,775,000 7.20% 3.544% 3.34 50.0% Fully Amortizing 3 10,555,538 0.84% 6.119% 1.34 63.0% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) INCLUDES THE 220 POST STREET LOAN, WHICH IS AN ARD LOAN THAT PROVIDES FOR INTEREST ONLY PAYMENTS UNTIL THE ARD DATE. UNDERLYING MORTGAGED REAL PROPERTIES BY OWNERSHIP INTEREST
NUMBER OF WEIGHTED UNDERLYING PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE FEE/LEASEHOLD PROPERTIES BALANCE (1) BALANCE RATES U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Fee 150 $ 1,095,553,227 86.86% 5.597% 1.65x 69.6% Leasehold 4 105,291,384 8.35% 3.922% 2.90 56.2% Fee/Leasehold 2 60,424,880 4.79% 5.522% 1.45 79.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 156 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERWRITTEN DEBT SERVICE COVERAGE RATIOS
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE RANGE OF MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE U/W DSCRs LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 1.23 - 1.25 5 $ 24,854,195 1.97% 5.854% 1.24x 78.6% 1.26 - 1.35 25 176,324,912 13.98% 6.212% 1.31 73.2% 1.36 - 1.40 17 117,738,854 9.33% 5.587% 1.38 76.2% 1.41 - 1.45 15 71,537,723 5.67% 5.786% 1.43 75.0% 1.46 - 1.50 12 73,474,148 5.83% 5.782% 1.49 74.2% 1.51 - 1.60 38 235,864,073 18.70% 5.513% 1.54 74.6% 1.61 - 1.70 19 117,933,553 9.35% 5.549% 1.66 71.8% 1.71 - 2.00 12 161,874,175 12.83% 5.995% 1.75 68.5% 2.01 - 3.00 8 201,492,856 15.98% 4.695% 2.24 55.6% 3.01 - 3.48 2 80,175,000 6.36% 3.364% 3.43 49.3% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM U/W DSCR: 3.48x MINIMUM U/W DSCR: 1.23x WTD. AVG. U/W DSCR: 1.75
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. CUT-OFF DATE LOAN-TO-VALUE RATIOS (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE LOAN-TO-VALUE RATIOS (1) LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 37.0% - 40.0% 2 $ 38,589,997 3.06% 6.104% 2.08x 37.4% 40.1% - 50.0% 4 87,365,974 6.93% 3.590% 3.33 49.2% 50.1% - 60.0% 7 62,601,419 4.96% 5.956% 2.12 58.7% 60.1% - 70.0% 38 351,320,705 27.85% 5.260% 1.81 64.8% 70.1% - 72.5% 21 126,982,048 10.07% 5.524% 1.50 71.6% 72.6% - 74.5% 21 167,250,855 13.26% 6.130% 1.55 73.6% 74.6% - 75.5% 10 107,292,887 8.51% 5.839% 1.46 75.2% 75.6% - 77.5% 11 44,894,253 3.56% 5.313% 1.51 76.6% 77.6% - 78.5% 8 42,737,447 3.39% 5.875% 1.37 78.3% 78.6% - 81.6% 31 232,233,906 18.41% 5.449% 1.43 79.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
MAXIMUM CUT-OFF DATE LTV RATIO (1): 81.6% MINIMUM CUT-OFF DATE LTV RATIO (1): 37.0% WTD. AVG. CUT-OFF DATE LTV RATIO (1): 68.9%
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY PROPERTY TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Retail 46 $ 495,044,889 39.25% 4.903% 2.01x 65.7% Multifamily 64 388,648,956 30.81% 5.473% 1.55 71.9% Office 25 208,173,700 16.51% 6.004% 1.64 68.7% Hotel 4 73,302,399 5.81% 6.848% 1.70 73.1% Industrial 9 47,165,824 3.74% 5.818% 1.41 72.3% Mixed Use 5 41,808,219 3.31% 6.096% 1.52 69.7% Self Storage 3 7,125,502 0.56% 5.997% 1.57 68.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 156 $ 1,261,269,491 100.00% 5.453% 1.75x 68.9% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY PROPERTY SUB-TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE PROPERTY REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE SUB-TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- RETAIL Anchored 21 $ 408,927,668 32.42% 4.682% 2.11x 64.9% Unanchored 25 86,117,221 6.83% 5.954% 1.53 69.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 46 $ 495,044,889 39.25% 4.903% 2.01x 65.7% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003.
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL NET MORTGAGE WEIGHTED AVERAGE PROPERTY REAL PRINCIPAL MORTGAGE POOL INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE SUB-TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- MULTIFAMILY Conventional 53 $ 360,020,863 28.54% 5.463% 1.53x 72.1% Manufactured Housing 11 28,628,093 2.27% 5.596% 1.71 69.4% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 64 $ 388,648,956 30.81% 5.473% 1.55x 71.9% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. PREPAYMENT PROVISION AS OF CUT-OFF DATE
WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE WEIGHTED PERCENTAGE OF REMAINING REMAINING REMAINING AVERAGE RANGE OF NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS REMAINING REMAINING TERMS TO MORTGAGE PRINCIPAL MORTGAGE POOL PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY STATED MATURITY (YEARS) LOANS BALANCE (1) BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (2) - ---------------------------------------------------------------------------------------------------------------------------------- 4.00 - 4.99 12 $ 250,768,985 19.88% 4.2 4.2 4.2 4.6 5.00 - 9.49 23 141,045,086 11.18% 6.6 7.1 7.7 8.1 9.50 - 9.99 110 737,274,893 58.45% 8.9 9.4 9.4 9.7 10.00 - 19.99 8 132,180,526 10.48% 9.4 11.4 11.4 11.7 ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 7.8 8.3 8.4 8.7 ======================================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. PREPAYMENT OPTION
WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE WEIGHTED PERCENTAGE OF REMAINING REMAINING REMAINING AVERAGE NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS REMAINING MORTGAGE PRINCIPAL MORTGAGE POOL PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY PREPAYMENT OPTION LOANS BALANCE (1) BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (2) - ---------------------------------------------------------------------------------------------------------------------------------- Lockout / Defeasance 138 $ 1,126,440,608 89.31% 8.3 8.3 8.3 8.7 Lockout / Yield Maintenance 14 101,138,886 8.02% 2.9 9.8 9.8 10.1 Lockout / Penalty 1 33,689,997 2.67% 2.9 2.9 5.4 6.0 ------------------------------------------------------------------------------------------------------ TOTAL/WEIGHTED AVERAGE: 153 $ 1,261,269,491 100.00% 7.8 8.3 8.4 8.7 ======================================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. MORTGAGE POOL PREPAYMENT PROFILE (1)
NUMBER OF MONTHS SINCE MORTGAGE OUTSTANDING % OF POOL YIELD PREPAYMENT % OF POOL DATE CUT-OFF DATE LOANS BALANCE (mm) LOCKOUT MAINTENANCE PREMIUM OPEN TOTAL - ------------------------------------------------------------------------------------------------------------------------ DEC-03 0 153 $ 1,261.3 100.00% 0.00% 0.00% 0.00% 100.0% DEC-04 12 153 $ 1,245.7 100.00% 0.00% 0.00% 0.00% 100.0% DEC-05 24 153 $ 1,228.4 100.00% 0.00% 0.00% 0.00% 100.0% DEC-06 36 153 $ 1,209.7 93.92% 3.41% 2.68% 0.00% 100.0% DEC-07 48 153 $ 1,189.7 87.58% 8.02% 2.68% 1.72% 100.0% DEC-08 60 141 $ 931.6 86.59% 10.04% 3.37% 0.00% 100.0% DEC-09 72 140 $ 881.6 89.38% 10.37% 0.00% 0.25% 100.0% DEC-10 84 136 $ 842.9 91.28% 8.72% 0.00% 0.00% 100.0% DEC-11 96 136 $ 822.1 91.34% 8.66% 0.00% 0.00% 100.0% DEC-12 108 135 $ 795.8 86.46% 8.59% 0.00% 4.95% 100.0% DEC-13 120 6 $ 93.4 81.86% 18.14% 0.00% 0.00% 100.0% DEC-14 132 5 $ 19.5 22.92% 77.08% 0.00% 0.00% 100.0% DEC-15 144 5 $ 16.6 21.67% 78.33% 0.00% 0.00% 100.0% DEC-16 156 5 $ 13.5 19.81% 0.00% 0.00% 80.19% 100.0% DEC-17 168 4 $ 1.7 100.00% 0.00% 0.00% 0.00% 100.0% DEC-18 180 2 $ 1.1 100.00% 0.00% 0.00% 0.00% 100.0% DEC-19 192 2 $ 1.0 100.00% 0.00% 0.00% 0.00% 100.0% DEC-20 204 2 $ 0.8 100.00% 0.00% 0.00% 0.00% 100.0% DEC-21 216 1 $ 0.2 100.00% 0.00% 0.00% 0.00% 100.0% DEC-22 228 1 $ 0.1 100.00% 0.00% 0.00% 0.00% 100.0%
(1) CALCULATED ASSUMING THAT NO MORTGAGE LOAN PREPAYS, DEFAULTS OR IS REPURCHASED PRIOR TO STATED MATURITY, EXCEPT THAT THE ARD LOANS ARE ASSUMED TO PAY IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES. OTHERWISE CALCULATED BASED ON MATURITY ASSUMPTIONS TO BE SET FORTH IN THE FINAL PROSPECTUS SUPPLEMENT. MORTGAGE POOL INFORMATION FOR LOAN GROUP NO. 1 SEE THIS EXHIBIT FOR TABLES TITLED: Underlying Mortgage Loan Contributor Mortgage Interest Rates Cut-off Date Principal Balances Original Amortization Terms Original Terms to Stated Maturity Remaining Amortization Terms Remaining Terms to Stated Maturity Years Built/Years Renovated Occupancy Rates at Underwriting Mortgaged Real Properties by State Underlying Mortgage Loans by Amortization Type Underlying Mortgaged Real Properties by Ownership Interest Underwritten Debt Service Coverage Ratios Cut-off Date Loan-to-Value Ratios Mortgaged Real Properties by Property Type Mortgaged Real Properties by Property Sub-Type Prepayment Provision as of Cut-off Date Prepayment Option Mortgage Pool Prepayment Profile A-2-2 UNDERLYING MORTGAGE LOAN CONTRIBUTOR
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE MORTGAGE LOAN SELLER LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Column Financial, Inc. 72 $ 650,006,916 70.60% 5.284% 1.95x 65.0% PNC 20 179,564,462 19.50% 6.178% 1.49 72.4% KeyBank 2 91,148,750 9.90% 5.432% 1.72 67.4% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGE INTEREST RATES
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE MORTGAGE INTEREST RATES LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 3.108% - 5.000% 5 $ 175,294,821 19.04% 3.390% 2.85x 55.3% 5.001% - 5.500% 20 232,043,458 25.20% 5.351% 1.64 72.4% 5.501% - 5.750% 11 43,228,133 4.70% 5.651% 1.50 72.0% 5.751% - 6.000% 18 135,625,089 14.73% 5.904% 1.49 73.3% 6.001% - 7.000% 36 304,145,555 33.03% 6.342% 1.67 65.3% 7.001% - 7.500% 3 3,867,926 0.42% 7.193% 1.43 68.3% 7.501% - 7.600% 1 26,515,146 2.88% 7.600% 1.32 64.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM MORTGAGE INTEREST RATE: 7.600% MINIMUM MORTGAGE INTEREST RATE: 3.108% WTD. AVG. MORTGAGE INTEREST RATE: 5.473%
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. CUT-OFF DATE PRINCIPAL BALANCES (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE PRINCIPAL BALANCES LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- $585,529 - 750,000 1 $ 585,529 0.06% 7.290% 1.47x 53.2% 750,001 - 1,000,000 3 2,903,113 0.32% 6.018% 1.64 61.4% 1,000,001 - 1,250,000 5 5,924,020 0.64% 5.832% 1.50 68.6% 1,250,001 - 1,500,000 6 8,147,180 0.88% 5.525% 1.57 71.0% 1,500,001 - 2,000,000 8 14,326,115 1.56% 6.338% 1.43 69.9% 2,000,001 - 2,500,000 7 16,154,865 1.75% 5.947% 1.48 64.2% 2,500,001 - 3,000,000 7 18,782,384 2.04% 5.841% 1.55 71.2% 3,000,001 - 4,000,000 10 35,774,321 3.89% 5.815% 1.45 72.1% 4,000,001 - 4,500,000 5 21,219,568 2.30% 5.988% 1.49 74.1% 4,500,001 - 5,000,000 1 4,887,170 0.53% 6.370% 1.58 69.8% 5,000,001 - 7,500,000 17 103,604,756 11.25% 5.834% 1.60 69.3% 7,500,001 - 10,000,000 4 38,639,506 4.20% 5.762% 1.51 78.4% 10,000,001 - 15,000,000 5 62,043,269 6.74% 5.865% 1.68 71.1% 15,000,001 - 30,000,000 8 176,231,711 19.14% 6.097% 1.49 70.7% 30,000,001 - 50,000,000 3 120,866,463 13.13% 5.793% 1.88 60.5% 50,000,001 - $85,405,532 4 290,630,156 31.57% 4.506% 2.35 61.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM CUT-OFF DATE PRINCIPAL BALANCE (1): $ 85,405,532 MINIMUM CUT-OFF DATE PRINCIPAL BALANCE (1): $ 585,529 AVERAGE CUT-OFF DATE PRINCIPAL BALANCE (1): $ 9,794,895
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. ORIGINAL AMORTIZATION TERMS (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE ORIGINAL AMORTIZATION MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE TERMS (MONTHS) (1) LOANS BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- Interest Only 4 $ 112,075,000 12.17% 3.986% 3.02x 53.5% 180 - 300 32 209,977,676 22.81% 6.490% 1.49 70.8% 301 - 395 58 598,667,452 65.02% 5.395% 1.74 67.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM ORIGINAL AMORTIZATION TERM (MONTHS): (3) 395 MINIMUM ORIGINAL AMORTIZATION TERM (MONTHS): (3) 180 WTD. AVG. ORIGINAL AMORTIZATION TERM (MONTHS): (3) 342
(1) THERE ARE 3 MORTGAGE LOANS THAT HAVE INITIAL INTEREST ONLY PERIODS RANGING FROM 6 TO 24 MONTHS. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (3) DOES NOT INCLUDE LOANS WITH INTEREST ONLY PAYMENTS UNTIL ARD/MATURITY DATE. ORIGINAL TERMS TO STATED MATURITY (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE ORIGINAL TERMS MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE TO STATED MATURITY (MONTHS) (1) LOANS BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 60 - 84 8 $ 196,701,815 21.36% 3.677% 2.72x 56.7% 85 - 120 82 603,170,423 65.51% 5.958% 1.60 70.1% 121 - 180 4 120,847,891 13.13% 5.977% 1.62 65.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 180 MINIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 60 WTD. AVG. ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 111
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSE OF THE FOREGOING TABLE. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. REMAINING AMORTIZATION TERMS
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REMAINING AMORTIZATION MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE TERMS (MONTHS) LOANS BALANCE (1) BALANCE RATES U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Interest Only 4 $ 112,075,000 12.17% 3.986% 3.02x 53.5% 172 - 250 7 19,737,063 2.14% 6.204% 1.39 65.1% 251 - 300 25 190,240,613 20.66% 6.520% 1.50 71.4% 301 - 355 25 188,628,718 20.49% 4.583% 1.88 68.3% 356 - 360 33 410,038,735 44.53% 5.769% 1.68 67.4% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM REMAINING AMORTIZATION TERM (MONTHS): (1)(2) 360 MINIMUM REMAINING AMORTIZATION TERM (MONTHS): (1)(2) 172 WTD. AVG. REMAINING AMORTIZATION TERM (MONTHS): (1)(2) 337
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) DOES NOT INCLUDE LOANS WITH INTEREST ONLY PAYMENTS UNTIL THE ARD/MATURITY DATE. REMAINING TERMS TO STATED MATURITY (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REMAINING TERMS MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE TO STATED MATURITY (MONTHS) (1) LOANS BALANCE (2) BALANCE RATES U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 54 - 84 9 $ 230,391,811 25.02% 4.035% 2.62x 53.8% 85 - 114 24 121,931,379 13.24% 5.768% 1.49 72.7% 115 - 120 57 447,549,047 48.61% 5.997% 1.59 71.9% 121 - 175 4 120,847,891 13.13% 5.977% 1.62 65.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 175 MINIMUM REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 54 WTD. AVG. REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 105
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSE OF THE FOREGOING TABLE. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. YEARS BUILT/YEARS RENOVATED (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF YEARS REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE BUILT/RENOVATED (1) PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 1962 - 1975 5 $ 23,487,185 2.55% 6.143% 1.37x 70.8% 1976 - 1985 14 47,435,497 5.15% 6.078% 1.49 70.8% 1986 - 1990 11 126,692,900 13.76% 5.933% 1.66 69.2% 1991 - 1995 8 110,556,326 12.01% 5.533% 1.68 67.3% 1996 - 1999 13 120,842,071 13.12% 5.941% 1.77 61.2% 2000 - 2003 46 491,706,150 53.40% 5.136% 1.99 66.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 97 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MOST RECENT YEAR BUILT/RENOVATED (1): 2003 OLDEST YEAR BUILT/RENOVATED (1): 1962 WTD. AVG. YEAR BUILT/RENOVATED (1): 1997
(1) YEARS BUILT/RENOVATED REFLECTS THE LATER OF THE YEAR BUILT AND YEAR RENOVATED. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. OCCUPANCY RATES AT UNDERWRITING (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE OCCUPANCY RATES AT U/W (1) PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 79% - 85% 8 $ 84,005,546 9.12% 6.018% 1.80x 66.8% 86% - 90% 8 80,754,374 8.77% 5.081% 1.60 74.8% 91% - 93% 13 107,685,581 11.70% 6.016% 1.48 72.4% 94% - 95% 4 46,352,523 5.03% 6.038% 1.84 47.2% 96% - 97% 6 160,448,745 17.43% 3.441% 2.79 56.5% 98% - 100% 54 368,170,960 39.99% 5.817% 1.62 68.8% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 93 $ 847,417,729 92.04% 5.354% 1.85x 66.1% ======================================================================================
MAXIMUM OCCUPANCY RATE AT U/W (1): 100% MINIMUM OCCUPANCY RATE AT U/W (1): 79% WTD. AVG. OCCUPANCY RATE AT U/W (1): 95%
(1) HOTEL PROPERTIES ARE NOT INCLUDED. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY STATE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE STATE PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- California 29 $ 330,023,178 35.84% 5.217% 2.05x 65.4% Southern California (1) 23 203,989,894 22.16% 5.827% 1.64 70.3% Northern California (1) 6 126,033,284 13.69% 4.231% 2.71 57.7% Ohio 4 96,649,653 10.50% 5.491% 1.69 67.6% Wisconsin 2 79,343,515 8.62% 3.108% 2.38 60.1% Arizona 5 64,798,899 7.04% 6.021% 1.51 71.6% Florida 6 39,221,187 4.26% 5.298% 1.91 66.6% New York 4 38,561,719 4.19% 6.135% 1.94 39.9% Pennsylvania 3 37,239,968 4.04% 6.196% 1.60 75.7% Kentucky 2 37,003,162 4.02% 6.790% 1.69 74.3% North Carolina 6 33,318,060 3.62% 5.458% 1.74 71.8% New Jersey 3 32,318,450 3.51% 7.342% 1.32 65.8% Georgia 3 25,698,780 2.79% 6.128% 1.57 75.7% Michigan 3 25,102,459 2.73% 6.072% 1.29 70.6% Virginia 3 13,464,449 1.46% 6.374% 1.45 65.0% Texas 7 11,768,810 1.28% 5.952% 1.49 71.2% Maryland 3 9,185,148 1.00% 5.881% 1.39 72.5% Minnesota 1 7,440,612 0.81% 6.870% 1.95 65.3% South Carolina 1 7,379,962 0.80% 5.400% 1.38 78.5% Illinois 3 7,157,062 0.78% 5.668% 1.62 75.1% Massachusetts 1 5,804,304 0.63% 6.080% 1.37 77.4% Nebraska 3 5,663,702 0.62% 6.020% 1.48 74.4% Kansas 1 5,531,107 0.60% 6.480% 1.29 79.0% Missouri 1 2,661,315 0.29% 6.200% 1.30 71.9% Colorado 1 2,517,199 0.27% 5.500% 1.53 76.0% Louisiana 1 1,637,883 0.18% 7.010% 1.34 72.0% Iowa 1 1,229,547 0.13% 5.050% 1.58 74.5% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 97 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
(1) SOUTHERN CALIFORNIA CONSISTS OF MORTGAGED REAL PROPERTIES LOCATED IN CALIFORNIA WITH ZIP CODES LESS THAN OR EQUAL TO 93600. NORTHERN CALIFORNIA CONSISTS OF MORTGAGED REAL PROPERTIES LOCATED IN CALIFORNIA WITH ZIP CODES GREATER THAN 93600. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERLYING MORTGAGE LOANS BY AMORTIZATION TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE LOAN TYPE LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Balloon 82 $ 705,645,582 76.64% 5.566% 1.70x 67.9% ARD (2) 7 115,372,333 12.53% 6.366% 1.57 72.6% Interest Only 3 90,775,000 9.86% 3.544% 3.34 50.0% Fully Amortizing 2 8,927,213 0.97% 6.195% 1.31 61.3% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) INCLUDES THE 220 POST STREET LOAN, WHICH IS AN ARD LOAN THAT PROVIDES FOR INTEREST ONLY PAYMENTS UNTIL THE ARD DATE. UNDERLYING MORTGAGED REAL PROPERTIES BY OWNERSHIP INTEREST
NUMBER OF WEIGHTED UNDERLYING PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE FEE/LEASEHOLD PROPERTIES BALANCE (1) BALANCE RATES U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Fee 92 $ 773,128,744 83.97% 5.702% 1.71x 67.4% Leasehold 4 105,291,384 11.44% 3.922% 2.90 56.2% Fee/Leasehold 1 42,300,000 4.59% 5.150% 1.53 80.0% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 97 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERWRITTEN DEBT SERVICE COVERAGE RATIOS
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE U/W DSCRs LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 1.23 - 1.25 2 $ 9,599,608 1.04% 5.536% 1.24x 77.5% 1.26 - 1.35 18 99,109,208 10.76% 6.526% 1.30 69.7% 1.36 - 1.40 10 65,022,407 7.06% 5.845% 1.38 74.1% 1.41 - 1.45 9 52,378,992 5.69% 5.857% 1.43 74.5% 1.46 - 1.50 8 45,236,602 4.91% 5.942% 1.48 73.3% 1.51 - 1.60 20 150,552,019 16.35% 5.770% 1.54 74.8% 1.61 - 1.70 12 87,512,810 9.50% 5.557% 1.67 70.5% 1.71 - 2.00 7 155,432,531 16.88% 6.010% 1.75 68.6% 2.01 - 3.00 6 175,700,952 19.08% 4.695% 2.25 54.8% 3.01 - 3.48 2 80,175,000 8.71% 3.364% 3.43 49.3% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM U/W DSCR: 3.48x MINIMUM U/W DSCR: 1.23x WTD. AVG. U/W DSCR: 1.84x
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. CUT-OFF DATE LOAN-TO-VALUE RATIOS (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE LOAN-TO-VALUE RATIOS (1) LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 37.0% - 40.0% 1 $ 33,689,997 3.66% 6.125% 2.02x 37.0% 40.1% - 50.0% 4 87,365,974 9.49% 3.590% 3.33 49.2% 50.1% - 60.0% 5 60,518,712 6.57% 5.936% 2.14 58.8% 60.1% - 70.0% 30 319,518,054 34.70% 5.294% 1.80 64.8% 70.1% - 72.5% 15 70,766,658 7.69% 5.824% 1.52 71.5% 72.6% - 74.5% 13 138,424,307 15.03% 6.199% 1.56 73.7% 74.6% - 75.5% 8 83,574,371 9.08% 5.933% 1.45 75.1% 75.6% - 77.5% 6 20,411,070 2.22% 5.831% 1.44 76.9% 77.6% - 78.5% 4 15,019,238 1.63% 5.671% 1.39 78.1% 78.6% - 81.6% 8 91,431,747 9.93% 5.450% 1.48 79.8% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
MAXIMUM CUT-OFF DATE LTV RATIO (1): 81.6% MINIMUM CUT-OFF DATE LTV RATIO (1): 37.0% WTD. AVG. CUT-OFF DATE LTV RATIO (1): 66.7%
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY PROPERTY TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Retail 46 $ 495,044,889 53.77% 4.903% 2.01x 65.7% Office 25 208,173,700 22.61% 6.004% 1.64 68.7% Hotel 4 73,302,399 7.96% 6.848% 1.70 73.1% Multifamily 5 48,099,594 5.22% 5.991% 1.86 49.1% Industrial 9 47,165,824 5.12% 5.818% 1.41 72.3% Mixed Use 5 41,808,219 4.54% 6.096% 1.52 69.7% Self Storage 3 7,125,502 0.77% 5.997% 1.57 68.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 97 $ 920,720,128 100.00% 5.473% 1.84x 66.7% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY PROPERTY SUB-TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE PROPERTY REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE SUB-TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- RETAIL Anchored 21 $ 408,927,668 44.41% 4.682% 2.11x 64.9% Unanchored 25 86,117,221 9.35% 5.954% 1.53 69.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 46 $ 495,044,889 53.77% 4.903% 2.01x 65.7% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003.
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE PROPERTY REAL PRINCIPAL LOAN GROUP NO. 1 INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE SUB-TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ----------------------------------------------------------------------------------------------------------------------------- MULTIFAMILY Conventional 3 $ 45,477,609 4.94% 6.041% 1.88x 47.5% Manufactured Housing 2 2,621,985 0.28% 5.130% 1.55 76.0% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 5 $ 48,099,594 5.22% 5.991% 1.86x 49.1% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. PREPAYMENT PROVISION AS OF CUT-OFF DATE
WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE WEIGHTED PERCENTAGE OF REMAINING REMAINING REMAINING AVERAGE RANGE OF NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS REMAINING REMAINING TERMS TO MORTGAGE PRINCIPAL LOAN GROUP NO. 1 PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY STATED MATURITY (YEARS) LOANS BALANCE (1) BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (2) - ------------------------------------------------------------------------------------------------------------------------------------ 4.00 - 4.99 5 $ 178,265,500 19.36% 4.2 4.2 4.2 4.6 5.00 - 9.49 13 102,415,895 11.12% 5.8 6.4 7.3 7.7 9.50 - 9.99 71 515,020,842 55.93% 9.3 9.4 9.4 9.7 10.00 - 19.99 5 125,017,891 13.58% 9.3 11.3 11.3 11.6 -------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 7.9 8.3 8.4 8.8 ========================================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. PREPAYMENT OPTION
WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE WEIGHTED PERCENTAGE OF REMAINING REMAINING REMAINING AVERAGE NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS REMAINING MORTGAGE PRINCIPAL LOAN GROUP NO. 1 PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY PREPAYMENT OPTION LOANS BALANCE (1) BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (2) - ------------------------------------------------------------------------------------------------------------------------------------ Lockout / Defeasance 84 $ 834,722,187 90.66% 8.4 8.4 8.4 8.8 Lockout / Yield Maintenance 9 52,307,944 5.68% 3.0 10.2 10.2 10.5 Lockout / Penalty 1 33,689,997 3.66% 2.9 2.9 5.4 6.0 -------------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 94 $ 920,720,128 100.00% 7.9 8.3 8.4 8.8 ========================================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. LOAN GROUP NO. 1 MORTGAGE POOL PREPAYMENT PROFILE (1)
NUMBER OF MONTHS SINCE MORTGAGE OUTSTANDING % OF POOL YIELD PREPAYMENT % OF POOL DATE CUT-OFF DATE LOANS BALANCE (mm) LOCKOUT MAINTENANCE PREMIUM OPEN TOTAL - --------------------------------------------------------------------------------------------------------------------- DEC-03 0 94 $ 920.7 100.00% 0.00% 0.00% 0.00% 100.0% DEC-04 12 94 $ 909.2 100.00% 0.00% 0.00% 0.00% 100.0% DEC-05 24 94 $ 896.6 100.00% 0.00% 0.00% 0.00% 100.0% DEC-06 36 94 $ 883.2 96.33% 0.00% 3.67% 0.00% 100.0% DEC-07 48 94 $ 868.8 90.62% 5.70% 3.67% 0.00% 100.0% DEC-08 60 89 $ 684.2 88.32% 7.09% 4.59% 0.00% 100.0% DEC-09 72 88 $ 639.2 92.25% 7.41% 0.00% 0.34% 100.0% DEC-10 84 85 $ 606.8 94.99% 5.01% 0.00% 0.00% 100.0% DEC-11 96 85 $ 591.4 95.08% 4.92% 0.00% 0.00% 100.0% DEC-12 108 85 $ 574.9 89.96% 4.75% 0.00% 5.29% 100.0% DEC-13 120 4 $ 91.8 81.55% 18.45% 0.00% 0.00% 100.0% DEC-14 132 3 $ 18.0 16.47% 83.53% 0.00% 0.00% 100.0% DEC-15 144 3 $ 15.2 14.42% 85.58% 0.00% 0.00% 100.0% DEC-16 156 3 $ 12.2 11.23% 0.00% 0.00% 88.77% 100.0% DEC-17 168 2 $ 0.5 100.00% 0.00% 0.00% 0.00% 100.0%
(1) CALCULATED ASSUMING THAT NO MORTGAGE LOAN PREPAYS, DEFAULTS OR IS REPURCHASED PRIOR TO STATED MATURITY, EXCEPT THAT THE ARD LOANS ARE ASSUMED TO PAY IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES. OTHERWISE CALCULATED BASED ON MATURITY ASSUMPTIONS TO BE SET FORTH IN THE FINAL PROSPECTUS SUPPLEMENT. MORTGAGE POOL INFORMATION FOR LOAN GROUP NO. 2 SEE THIS EXHIBIT FOR TABLES TITLED: Underlying Mortgage Loan Contributor Mortgage Interest Rates Cut-off Date Principal Balances Original Amortization Terms Original Terms to Stated Maturity Remaining Amortization Terms Remaining Terms to Stated Maturity Years Built/Years Renovated Occupancy Rates at Underwriting Mortgaged Real Properties by State Underlying Mortgage Loans by Amortization Type Underlying Mortgaged Real Properties by Ownership Interest Underwritten Debt Service Coverage Ratios Cut-off Date Loan-to-Value Ratios Mortgaged Real Properties by Property Type Mortgaged Real Properties by Property Sub-Type Prepayment Provision as of Cut-off Date Prepayment Option Mortgage Pool Prepayment Profile A-2-3 UNDERLYING MORTGAGE LOAN CONTRIBUTOR
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE MORTGAGE LOAN SELLER LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Column Financial, Inc. 49 $ 254,436,051 74.71% 5.425% 1.52x 74.4% PNC 10 86,113,312 25.29% 5.324% 1.44 77.1% ------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% =====================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGE INTEREST RATES
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE MORTGAGE INTEREST RATES LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 4.400% - 5.000% 6 $ 120,160,865 35.28% 4.658% 1.56x 74.7% 5.001% - 5.500% 10 46,878,266 13.77% 5.348% 1.56 75.0% 5.501% - 5.750% 14 49,100,622 14.42% 5.611% 1.53 75.8% 5.751% - 6.000% 15 76,057,824 22.33% 5.867% 1.42 75.1% 6.001% - 7.000% 12 46,530,463 13.66% 6.300% 1.38 76.0% 7.001% - 7.500% 1 1,187,014 0.35% 7.100% 1.56 54.0% 7.501% - 8.120% 1 634,310 0.19% 8.120% 1.42 64.7% ------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% =====================================================================================
MAXIMUM MORTGAGE INTEREST RATE: 8.120% MINIMUM MORTGAGE INTEREST RATE: 4.400% WTD. AVG. MORTGAGE INTEREST RATE: 5.400%
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. CUT-OFF DATE PRINCIPAL BALANCES (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE PRINCIPAL BALANCES LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- $596,741 - 750,000 3 $ 1,952,352 0.57% 6.868% 1.59x 68.0% 750,001 - 1,000,000 7 6,222,954 1.83% 6.099% 1.60 71.8% 1,000,001 - 1,250,000 2 2,262,014 0.66% 6.245% 1.57 66.2% 1,250,001 - 1,500,000 5 7,026,171 2.06% 5.669% 1.60 76.0% 1,500,001 - 2,000,000 3 5,526,014 1.62% 5.803% 1.54 75.3% 2,000,001 - 2,500,000 6 13,903,613 4.08% 5.524% 1.45 75.2% 2,500,001 - 3,000,000 4 11,086,220 3.26% 5.568% 1.60 69.3% 3,000,001 - 4,000,000 4 15,305,640 4.49% 5.642% 1.49 76.5% 4,000,001 - 4,500,000 1 4,077,258 1.20% 6.140% 1.52 70.9% 4,500,001 - 5,000,000 4 18,939,516 5.56% 5.919% 1.80 66.7% 5,000,001 - 7,500,000 7 41,966,123 12.32% 5.686% 1.42 78.4% 7,500,001 - 10,000,000 5 44,114,438 12.95% 5.728% 1.40 76.4% 10,000,001 - 15,000,000 2 29,296,868 8.60% 5.131% 1.41 78.1% 15,000,001 - 30,000,000 5 103,870,180 30.50% 5.128% 1.52 75.9% 30,000,001 - $35,000,000 1 35,000,000 10.28% 4.720% 1.52 72.2% ------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% =====================================================================================
MAXIMUM CUT-OFF DATE PRINCIPAL BALANCE (1): $ 35,000,000 MINIMUM CUT-OFF DATE PRINCIPAL BALANCE (1): $ 596,741 AVERAGE CUT-OFF DATE PRINCIPAL BALANCE (1): $ 5,772,023
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. ORIGINAL AMORTIZATION TERMS (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE ORIGINAL AMORTIZATION MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE TERMS (MONTHS) (1) LOANS BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 240 - 300 14 $ 37,402,905 10.98% 6.024% 1.37x 76.7% 301 - 360 45 303,146,458 89.02% 5.323% 1.52 74.9% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM ORIGINAL AMORTIZATION TERM (MONTHS): 360 MINIMUM ORIGINAL AMORTIZATION TERM (MONTHS): 240 WTD. AVG. ORIGINAL AMORTIZATION TERM (MONTHS): 352
(1) THERE ARE 4 MORTGAGE LOANS THAT HAVE INITIAL INTEREST ONLY PERIODS RANGING FROM 6 TO 24 MONTHS. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. ORIGINAL TERMS TO STATED MATURITY (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE ORIGINAL TERMS MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE TO STATED MATURITY (MONTHS) (1) LOANS BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ------------------------------------------------------------------------------------------------------------------------ 60 - 84 6 $ 68,729,675 20.18% 5.055% 1.51x 74.2% 85 - 120 51 269,557,052 79.15% 5.479% 1.50 75.4% 121 - 240 2 2,262,635 0.66% 6.378% 1.47 70.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 240 MINIMUM ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 60 WTD. AVG. ORIGINAL TERM TO STATED MATURITY (MONTHS) (1): 109
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSE OF THE FOREGOING TABLE. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. REMAINING AMORTIZATION TERMS
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REMAINING AMORTIZATION MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE TERMS (MONTHS) LOANS BALANCE (1) BALANCE RATES U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 234 - 250 3 $ 3,869,178 1.14% 5.874% 1.49x 73.8% 251 - 300 13 38,798,000 11.39% 6.084% 1.38 75.7% 301 - 355 24 111,525,695 32.75% 5.650% 1.46 76.4% 356 - 360 19 186,356,491 54.72% 5.098% 1.55 74.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM REMAINING AMORTIZATION TERM (MONTHS) (1): 360 MINIMUM REMAINING AMORTIZATION TERM (MONTHS) (1): 234 WTD. AVG. REMAINING AMORTIZATION TERM (MONTHS) (1): 347
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. REMAINING TERMS TO STATED MATURITY (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED RANGE OF UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REMAINING TERMS MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE TO STATED MATURITY (MONTHS) (1) LOANS BALANCE (2) BALANCE RATES U/W DSCR LTV RATIO (2) - ------------------------------------------------------------------------------------------------------------------------ 50 - 84 8 $ 73,993,948 21.73% 5.148% 1.52x 73.7% 85 - 114 17 54,184,522 15.91% 5.741% 1.44 76.4% 115 - 120 32 210,108,258 61.70% 5.390% 1.51 75.3% 121 - 234 2 2,262,635 0.66% 6.378% 1.47 70.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 234 MINIMUM REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 50 WTD. AVG. REMAINING TERM TO STATED MATURITY (MONTHS) (1)(2): 103
(1) IN THE CASE OF ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSE OF THE FOREGOING TABLE. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. YEARS BUILT/YEARS RENOVATED (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF YEARS REAL PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE BUILT/RENOVATED (1) PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 1962 - 1975 5 $ 11,736,223 3.45% 5.306% 1.61x 76.5% 1976 - 1985 10 46,152,273 13.55% 5.718% 1.51 75.6% 1986 - 1990 5 48,066,845 14.11% 5.275% 1.43 76.5% 1991 - 1995 3 56,541,062 16.60% 4.889% 1.56 71.6% 1996 - 1999 7 47,507,417 13.95% 5.206% 1.38 78.9% 2000 - 2003 29 130,545,542 38.33% 5.633% 1.53 74.4% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MOST RECENT YEAR BUILT/RENOVATED (1): 2003 OLDEST YEAR BUILT/RENOVATED (1): 1962 WTD. AVG. YEAR BUILT/RENOVATED (1): 1994
(1) YEARS BUILT/RENOVATED REFLECTS THE LATER OF THE YEAR BUILT AND YEAR RENOVATED. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. OCCUPANCY RATES AT UNDERWRITING (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF REAL PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE OCCUPANCY RATES AT U/W (1) PROPERTIES BALANCE (2) BALANCE RATE U/W DSCR LTV RATIO (2) - ---------------------------------------------------------------------------------------------------------------------- 82% - 85% 3 $ 6,652,656 1.95% 5.543% 1.53x 73.5% 86% - 90% 6 73,172,220 21.49% 4.805% 1.49 74.9% 91% - 93% 9 56,187,854 16.50% 5.411% 1.41 78.3% 94% - 95% 12 107,851,441 31.67% 5.587% 1.51 74.5% 96% - 97% 12 41,595,914 12.21% 5.731% 1.70 71.7% 98% - 100% 17 55,089,276 16.18% 5.543% 1.45 76.1% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM OCCUPANCY RATE AT U/W (1): 100% MINIMUM OCCUPANCY RATE AT U/W (1): 82% WTD. AVG. OCCUPANCY RATE AT U/W (1): 93%
(1) HOTEL PROPERTIES ARE NOT INCLUDED. (2) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY STATE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE STATE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Texas 20 $ 175,444,054 51.52% 5.257% 1.46x 76.1% Virginia 4 37,655,231 11.06% 4.462% 1.84 70.4% Florida 10 36,233,139 10.64% 5.839% 1.39 76.6% Maryland 1 18,124,880 5.32% 6.390% 1.27 78.5% Kentucky 1 14,772,020 4.34% 5.850% 1.32 79.8% Nevada 1 6,653,051 1.95% 4.900% 1.57 78.3% New Mexico 1 5,811,980 1.71% 5.930% 1.36 79.1% Georgia 3 5,401,892 1.59% 5.864% 1.67 63.2% Louisiana 1 5,108,073 1.50% 6.440% 1.25 79.7% Oklahoma 2 5,068,854 1.49% 5.160% 1.63 75.1% Colorado 1 4,900,000 1.44% 5.960% 2.53 39.8% Alabama 1 4,077,258 1.20% 6.140% 1.52 70.9% North Carolina 1 3,975,067 1.17% 5.460% 1.44 79.5% Nebraska 1 2,930,777 0.86% 5.250% 1.54 79.0% New York 3 2,804,423 0.82% 6.411% 1.57 73.5% Rhode Island 1 2,426,212 0.71% 5.820% 1.38 79.5% Wisconsin 1 2,386,896 0.70% 5.150% 1.43 62.8% Ohio 1 1,956,183 0.57% 6.030% 1.54 75.2% New Jersey 1 1,941,506 0.57% 5.660% 1.57 77.7% Connecticut 2 1,347,131 0.40% 6.040% 1.55 79.3% District of Columbia 1 896,427 0.26% 5.650% 1.66 64.5% Indiana 1 634,310 0.19% 8.120% 1.42 64.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERLYING MORTGAGE LOANS BY AMORTIZATION TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE LOAN TYPE LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Balloon 58 $ 338,921,037 99.52% 5.398% 1.50x 75.1% Fully Amortizing 1 1,628,325 0.48% 5.700% 1.49 72.4% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERLYING MORTGAGED REAL PROPERTIES BY OWNERSHIP INTEREST
NUMBER OF WEIGHTED UNDERLYING PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE FEE/LEASEHOLD PROPERTIES BALANCE (1) BALANCE RATES U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Fee 58 $ 322,424,483 94.68% 5.344% 1.51x 74.9% Fee/Leasehold 1 18,124,880 5.32% 6.390% 1.27 78.5% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. UNDERWRITTEN DEBT SERVICE COVERAGE RATIOS
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE U/W DSCRs LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 1.23 - 1.25 3 $ 15,254,588 4.48% 6.055% 1.24x 79.3% 1.26 - 1.35 7 77,215,705 22.67% 5.808% 1.32 77.6% 1.36 - 1.40 7 52,716,447 15.48% 5.270% 1.39 78.8% 1.41 - 1.45 6 19,158,731 5.63% 5.591% 1.43 76.3% 1.46 - 1.50 4 28,237,547 8.29% 5.525% 1.50 75.5% 1.51 - 1.60 18 85,312,055 25.05% 5.057% 1.53 74.0% 1.61 - 1.70 7 30,420,743 8.93% 5.525% 1.64 75.6% 1.71 - 2.00 5 6,441,644 1.89% 5.654% 1.86 66.0% 2.01 - 2.53 2 25,791,904 7.57% 4.696% 2.15 61.2% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM U/W DSCR: 2.53x MINIMUM U/W DSCR: 1.23x WTD. AVG. U/W DSCR: 1.50x
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. CUT-OFF DATE LOAN-TO-VALUE RATIOS (1)
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED UNDERLYING CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE RANGE OF CUT-OFF DATE MORTGAGE PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE LOAN-TO-VALUE RATIOS (1) LOANS BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- 39.8% - 50.0% 1 $ 4,900,000 1.44% 5.960% 2.53x 39.8% 50.1% - 60.0% 2 2,082,707 0.61% 6.519% 1.65 56.5% 60.1% - 70.0% 8 31,802,651 9.34% 4.923% 1.89 65.3% 70.1% - 72.5% 6 56,215,390 16.51% 5.146% 1.48 71.8% 72.6% - 74.5% 8 28,826,548 8.46% 5.798% 1.52 73.3% 74.6% - 75.5% 2 23,718,516 6.96% 5.507% 1.50 75.3% 75.6% - 77.5% 5 24,483,183 7.19% 4.880% 1.56 76.4% 77.6% - 78.5% 4 27,718,209 8.14% 5.986% 1.36 78.4% 78.6% - 79.9% 23 140,802,159 41.35% 5.448% 1.39 79.6% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
MAXIMUM CUT-OFF DATE LTV RATIO (1): 79.9% MINIMUM CUT-OFF DATE LTV RATIO (1): 39.8% WTD. AVG. CUT-OFF DATE LTV RATIO (1): 75.1%
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY PROPERTY TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE REAL PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- Multifamily 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. MORTGAGED REAL PROPERTIES BY PROPERTY SUB-TYPE
WEIGHTED NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED MORTGAGED CUT-OFF DATE INITIAL MORTGAGE WEIGHTED AVERAGE PROPERTY REAL PRINCIPAL LOAN GROUP NO. 2 INTEREST AVERAGE CUT-OFF DATE PROPERTY TYPE SUB-TYPE PROPERTIES BALANCE (1) BALANCE RATE U/W DSCR LTV RATIO (1) - ---------------------------------------------------------------------------------------------------------------------- MULTIFAMILY Conventional 50 $ 314,543,255 92.36% 5.380% 1.48x 75.6% Manufactured Housing 9 26,006,108 7.64% 5.643% 1.73 68.7% -------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 5.400% 1.50x 75.1% ======================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. PREPAYMENT PROVISION AS OF CUT-OFF DATE
WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE WEIGHTED PERCENTAGE OF REMAINING REMAINING REMAINING AVERAGE RANGE OF NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS REMAINING REMAINING TERMS TO MORTGAGE PRINCIPAL LOAN GROUP NO. 2 PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY STATED MATURITY (YEARS) LOANS BALANCE (1) BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (2) - ------------------------------------------------------------------------------------------------------------------------------- 4.00 - 4.99 7 $ 72,503,486 21.29% 4.1 4.1 4.1 4.5 5.00 - 9.49 10 38,629,191 11.34% 8.4 8.9 8.9 9.2 9.50 - 9.99 39 222,254,051 65.26% 8.0 9.4 9.4 9.7 10.00 - 19.99 3 7,162,635 2.10% 12.5 12.5 12.5 12.9 -------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 7.3 8.2 8.2 8.6 ==================================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. PREPAYMENT OPTION
WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE WEIGHTED PERCENTAGE OF REMAINING REMAINING REMAINING AVERAGE NUMBER OF CUT-OFF DATE INITIAL LOCKOUT LOCKOUT LOCKOUT PLUS REMAINING MORTGAGE PRINCIPAL LOAN GROUP NO. 2 PERIOD PLUS YM PERIOD PREMIUM PERIOD MATURITY PREPAYMENT OPTION LOANS BALANCE (1) BALANCE (YEARS) (YEARS) (YEARS) (YEARS) (2) - ------------------------------------------------------------------------------------------------------------------------------- Lockout / Defeasance 54 $ 291,718,421 85.66% 8.1 8.1 8.1 8.4 Lockout / Yield Maintenance 5 48,830,942 14.34% 2.7 9.4 9.4 9.7 -------------------------------------------------------------------------------------------------- TOTAL/WEIGHTED AVERAGE: 59 $ 340,549,363 100.00% 7.3 8.2 8.2 8.6 ==================================================================================================
(1) ASSUMES A CUT-OFF DATE IN DECEMBER 2003. (2) IN THE CASE OF THE ARD LOANS, THE ANTICIPATED REPAYMENT DATE IS ASSUMED TO BE THE MATURITY DATE FOR THE PURPOSES OF THE INDICATED COLUMN. LOAN GROUP NO. 2 MORTGAGE POOL PREPAYMENT PROFILE (1)
NUMBER OF MONTHS SINCE MORTGAGE OUTSTANDING % OF POOL YIELD PREPAYMENT % OF POOL DATE CUT-OFF DATE LOANS BALANCE (mm) LOCKOUT MAINTENANCE PREMIUM OPEN TOTAL - ------------------------------------------------------------------------------------------------------------------------- DEC-03 0 59 $ 340.5 100.00% 0.00% 0.00% 0.00% 100.0% DEC-04 12 59 $ 336.5 100.00% 0.00% 0.00% 0.00% 100.0% DEC-05 24 59 $ 331.8 100.00% 0.00% 0.00% 0.00% 100.0% DEC-06 36 59 $ 326.5 87.38% 12.62% 0.00% 0.00% 100.0% DEC-07 48 59 $ 320.9 79.33% 14.29% 0.00% 6.38% 100.0% DEC-08 60 52 $ 247.4 81.82% 18.18% 0.00% 0.00% 100.0% DEC-09 72 52 $ 242.5 81.82% 18.18% 0.00% 0.00% 100.0% DEC-10 84 51 $ 236.1 81.74% 18.26% 0.00% 0.00% 100.0% DEC-11 96 51 $ 230.6 81.75% 18.25% 0.00% 0.00% 100.0% DEC-12 108 50 $ 221.0 77.35% 18.57% 0.00% 4.08% 100.0% DEC-13 120 2 $ 1.6 100.00% 0.00% 0.00% 0.00% 100.0% DEC-14 132 2 $ 1.5 100.00% 0.00% 0.00% 0.00% 100.0% DEC-15 144 2 $ 1.4 100.00% 0.00% 0.00% 0.00% 100.0% DEC-16 156 2 $ 1.3 100.00% 0.00% 0.00% 0.00% 100.0% DEC-17 168 2 $ 1.2 100.00% 0.00% 0.00% 0.00% 100.0% DEC-18 180 2 $ 1.1 100.00% 0.00% 0.00% 0.00% 100.0% DEC-19 192 2 $ 1.0 100.00% 0.00% 0.00% 0.00% 100.0% DEC-20 204 2 $ 0.8 100.00% 0.00% 0.00% 0.00% 100.0% DEC-21 216 1 $ 0.2 100.00% 0.00% 0.00% 0.00% 100.0% DEC-22 228 1 $ 0.1 100.00% 0.00% 0.00% 0.00% 100.0%
(1) CALCULATED ASSUMING THAT NO MORTGAGE LOAN PREPAYS, DEFAULTS OR IS REPURCHASED PRIOR TO STATED MATURITY, EXCEPT THAT THE ARD LOANS ARE ASSUMED TO PAY IN FULL ON THEIR RESPECTIVE ANTICIPATED REPAYMENT DATES. OTHERWISE CALCULATED BASED ON MATURITY ASSUMPTIONS TO BE SET FORTH IN THE FINAL PROSPECTUS SUPPLEMENT. EXHIBIT B FORM OF TRUSTEE REPORT B-1 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 DISTRIBUTION DATE STATEMENT TABLE OF CONTENTS
STATEMENT SECTIONS PAGE(S) ------------------ ------- Certificate Distribution Detail 2 Certificate Factor Detail 3 Reconciliation Detail 4 Other Required Information 5 Cash Reconciliation 6 Ratings Detail 7 Current Mortgage Loan and Property Stratification Tables 8 - 10 Mortgage Loan Detail 11 Principal Prepayment Detail 12 Historical Detail 13 Delinquency Loan Detail 14 Specially Serviced Loan Detail 15 - 16 Modified Loan Detail 17 Liquidated Loan Detail 18
DEPOSITOR Credit Suisse First Boston Mortgage Securities Corp. Eleven Madison Avenue New York, NY 10010 Contact: General Information Number Phone Number: (212) 325-2000 MASTER SERVICER Midland Loan Services, Inc. 10851 Mastin Street, Bldg. 82 Suite 700 Overland Park, KS 66210 Contact: Brad Hauger Phone Number: (913) 253-9000 SPECIAL SERVICER Clarion Partners, LLC 335 Madison Avenue, 7th Floor New York, NY 10017 Contact: Bruce G. Morrison Phone Number: (212) 883-2500 This report has been compiled from information provided to Wells Fargo Bank MN, N.A. by various third parties, which may include the Master Servicer, Special Servicer and others. Wells Fargo Bank MN, N.A. has not independently confirmed the accuracy of information received from these third parties and assumes no duty to do so. Wells Fargo Bank MN, N.A. expressly disclaims any responsibility for the accuracy or completeness of information furnished by third parties. Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 1 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 CERTIFICATE DISTRIBUTION DETAIL
Realized Loss / Current Pass-Through Original Beginning Principal Interest Prepayment Additional Trust Total Ending Subordination Class CUSIP Rate Balance Balance Distribution Distribution Premium Fund Expenses Distribution Balance Level - ------------------------------------------------------------------------------------------------------------------------------------ A-1 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% A-2 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% A-3 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% A-4 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% B 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% C 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% D 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% E 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% F 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% G 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% H 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% J 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% K 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% L 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% M 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% N 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% O 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% P 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% R 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% LR 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% V 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00% - ------------------------------------------------------------------------------------------------------------------------------------ Totals - ------------------------------------------------------------------------------------------------------------------------------------
Original Beginning Ending Class CUSIP Pass-Through Notional Notional Interest Prepayment Total Notional Rate Amount Amount Distribution Premium Distribution Amount - ----------------------------------------------------------------------------------------- A-X 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 A-SP 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 A-1-A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00 - -----------------------------------------------------------------------------------------
(1) Calculated by taking (A) the sum of the ending certificate balance of all classes less (B) the sum of (i) the ending certificate balance of the designated class and (ii) the ending certificate balance of all classes which are not subordinate to the designated class and dividing the result by (A). Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 2 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 CERTIFICATE FACTOR DETAIL
Realized Loss / Beginning Principal Interest Prepayment Additional Trust Ending Class CUSIP Balance Distribution Distribution Premium Fund Expenses Balance - ----------------------------------------------------------------------------------------------------- A-1 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 A-2 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 A-3 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 A-4 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 B 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 C 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 D 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 E 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 F 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 G 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 H 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 J 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 K 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 L 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 M 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 N 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 O 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 P 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 R 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 LR 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 V 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
Beginning Ending Notional Interest Prepayment Notional Class CUSIP Amount Distribution Premium Amount - --------------------------------------------------------------------- A-X 0.00000000 0.00000000 0.00000000 0.00000000 A-SP 0.00000000 0.00000000 0.00000000 0.00000000 A-1-A 0.00000000 0.00000000 0.00000000 0.00000000
Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 3 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 RECONCILIATION DETAIL ADVANCE SUMMARY P & I Advances Outstanding 0.00 Servicing Advances Outstanding 0.00 Reimbursement for Interest on P & I 0.00 Advances paid from general collections Reimbursement for Interest on Servicing 0.00 Advances paid from general collections
MASTER SERVICING FEE SUMMARY Current Period Accrued Master Servicing Fees 0.00 Less Master Servicing Fees on Delinquent Payments 0.00 Less Reductions to Master Servicing Fees 0.00 Plus Master Servicing Fees for Delinquent Payments Received 0.00 Plus Adjustments for Prior Master Servicing Calculation 0.00 Total Master Servicing Fees Collected 0.00
CERTIFICATE INTEREST RECONCILIATION
Accrued Uncovered Certificate Unpaid Optimal Interest Interest Certificate Prepayment Indemnification Deferred Interest Interest Distribution Shortfall Interest Class Interest Interest Shortfall Expenses Amount Shortfall Amount Amount Amount Distribution - --------------------------------------------------------------------------------------------------------------------------------- A-1 A-2 A-3 A-4 A-X A-SP B C D E F A-1-A G H J K L M N O P - --------------------------------------------------------------------------------------------------------------------------------- Total - --------------------------------------------------------------------------------------------------------------------------------- Remaining Unpaid Distributable CLASS Certificate Interest - --------------------------- A-1 A-2 A-3 A-4 A-X A-SP B C D E F A-1-A G H J K L M N O P - --------------------------- Total - ---------------------------
Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 4 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 OTHER REQUIRED INFORMATION Available Distribution Amount 0.00 Aggregate Number of Outstanding Loans 0 Aggregate Unpaid Principal Balance of Loans 0.00 Aggregate Stated Principal Balance of Loans 0.00 Aggregate Amount of Servicing Fee 0.00 Aggregate Amount of Special Servicing Fee 0.00 Aggregate Amount of Trustee Fee 0.00 Aggregate Amount of Primary Servicing Fee 0.00 Aggregate Trust Fund Expenses 0.00 Specially Serviced Loans not Delinquent Number of Outstanding Loans 0 Aggregate Unpaid Principal Balance 0.00
Appraisal Reduction Amount
Appraisal Cumulative Most Recent Loan Reduction ASER App. Red. Number Amount Amount Date - --------------------------------------------- - --------------------------------------------- Total - ---------------------------------------------
Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 5 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 CASH RECONCILIATION DETAIL TOTAL FUNDS COLLECTED INTEREST: Interest paid or advanced 0.00 Interest reductions due to Non-Recoverability Determinations 0.00 Interest Adjustments 0.00 Deferred Interest 0.00 Net Prepayment Interest Shortfall 0.00 Net Prepayment Interest Excess 0.00 Extension Interest 0.00 Interest Reserve Withdrawal 0.00 ---------- TOTAL INTEREST COLLECTED 0.00 PRINCIPAL: Scheduled Principal 0.00 Unscheduled Principal 0.00 Principal Prepayments 0.00 Collection of Principal after Maturity Date 0.00 Recoveries from Liquidation and Insurance Proceeds 0.00 Excess of Prior Principal Amounts paid 0.00 Curtailments 0.00 Negative Amortization 0.00 Principal Adjustments 0.00 ---------- TOTAL PRINCIPAL COLLECTED 0.00 OTHER: Prepayment Penalties/Yield Maintenance 0.00 Repayment Fees 0.00 Borrower Option Extension Fees 0.00 Equity Payments Received 0.00 Net Swap Counterparty Payments Received 0.00 ---------- TOTAL OTHER COLLECTED 0.00 ---------- TOTAL FUNDS COLLECTED 0.00 ========== TOTAL FUNDS DISTRIBUTED FEES: Master Servicing Fee 0.00 Trustee Fee 0.00 Certificate Administration Fee 0.00 Insurer Fee 0.00 Miscellaneous Fee 0.00 ---------- TOTAL FEES 0.00 ADDITIONAL TRUST FUND EXPENSES: Reimbursement for Interest on Advances 0.00 ASER Amount 0.00 Special Servicing Fee 0.00 Reduction of funds due to Non-Recoverability Determinations 0.00 Rating Agency Expenses 0.00 Attorney Fees & Expenses 0.00 Bankruptcy Expense 0.00 Taxes Imposed on Trust Fund 0.00 Non-Recoverable Advances 0.00 Other Expenses 0.00 ---------- TOTAL ADDITIONAL TRUST FUND EXPENSES 0.00 INTEREST RESERVE DEPOSIT 0.00 PAYMENTS TO CERTIFICATEHOLDERS & OTHERS: Interest Distribution 0.00 Principal Distribution 0.00 Prepayment Penalties/Yield Maintenance 0.00 Borrower Option Extension Fees 0.00 Equity Payments Paid 0.00 Net Swap Counterparty Payments Paid 0.00 ---------- TOTAL PAYMENTS TO CERTIFICATEHOLDERS & OTHERS 0.00 ---------- TOTAL FUNDS DISTRIBUTED 0.00 ==========
Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 6 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 RATINGS DETAIL
Original Ratings Current Ratings (1) ------------------------------------------------- Class CUSIP Fitch Moody's S & P Fitch Moody's S & P - ----------------------------------------------------------------- A-1 A-2 A-3 A-4 A-X A-SP B C D E F A-1-A G H J K L M N O P
NR - Designates that the class was not rated by the above agency at the time of original issuance. X - Designates that the above rating agency did not rate any classes in this transaction at the time of original issuance. N/A - Data not available this period. 1) For any class not rated at the time of original issuance by any particular rating agency, no request has been made subsequent to issuance to obtain rating information, if any, from such rating agency. The current ratings were obtained directly from the applicable rating agency within 30 days of the payment date listed above. The ratings may have changed since they were obtained. Because the ratings may have changed, you may want to obtain current ratings directly from the rating agencies. Fitch, Inc. One State Street Plaza New York, New York 10004 (212) 908-0500 Moody's Investors Service 99 Church Street New York, New York 10007 (212) 553-0300 Standard & Poor's Rating Services 55 Water Street New York, New York 10041 (212) 438-2430 Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 7 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES SCHEDULED BALANCE
% of Scheduled # of Scheduled Agg. WAM Weighted Balance Loans Balance Bal. (2) WAC Avg DSCR (1) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Totals - --------------------------------------------------------------------------------
STATE (3)
% of # of Scheduled Agg. WAM Weighted State Loans Balance Bal. (2) WAC Avg DSCR (1) ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ Totals ------------------------------------------------------------------------------
See footnotes on last page of this section. Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 8 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES DEBT SERVICE COVERAGE RATIO (1)
% of Debt Service # of Scheduled Agg. WAM Weighted Coverage Ratio Loans Balance Bal. (2) WAC Avg DSCR (1) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Totals - -------------------------------------------------------------------------------
NOTE RATE
% of Note # of Scheduled Agg. WAM Weighted Rate Loans Balance Bal. (2) WAC Avg DSCR (1) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Totals - -------------------------------------------------------------------------------
PROPERTY TYPE (3)
% of Property # of Scheduled Agg. WAM Weighted Type Props Balance Bal. (2) WAC Avg DSCR (1) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Totals - -------------------------------------------------------------------------------
SEASONING
% of # of Scheduled Agg. WAM Weighted Seasoning Loans Balance Bal. (2) WAC Avg DSCR (1) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Totals - -------------------------------------------------------------------------------
See footnotes on last page of this section. Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 9 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS)
% of Anticipated Remaining # of Scheduled Agg. WAM Weighted Term (2) Loans Balance Bal. (2) WAC Avg DSCR (1) - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- Totals - ----------------------------------------------------------------------------------
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS)
% of Remaining Amortization # of Scheduled Agg. WAM Weighted Term Loans Balance Bal. (2) WAC Avg DSCR (1) - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- Totals - ----------------------------------------------------------------------------------
REMAINING STATED TERM (FULLY AMORTIZING LOANS)
% of Remaining Stated # of Scheduled Agg. WAM Weighted Term Loans Balance Bal. (2) WAC Avg DSCR (1) - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- Totals - ----------------------------------------------------------------------------------
AGE OF MOST RECENT NOI
% of Age of Most # of Scheduled Agg. WAM Weighted Recent NOI Loans Balance Bal. (2) WAC Avg DSCR (1) - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- Totals - ----------------------------------------------------------------------------------
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures become available from borrowers on an asset level. In all cases the most current DSCR provided by the Servicer is used. To the extent that no DSCR is provided by the Servicer, information from the offering document is used. The Trustee makes no representations as to the accuracy of the data provided by the borrower for this calculation. (2) Anticipated Remaining Term and WAM are each calculated based upon the term from the current month to the earlier of the Anticipated Repayment Date, if applicable, and the Maturity Date. (3) Data in this table was calculated by allocating pro-rata the current loan information to the properties based upon the Cut-off Date balance of each property as disclosed in the offering document. Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 10 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 MORTGAGE LOAN DETAIL
Anticipated Neg. Beginning Ending Paid Loan Property Interest Principal Gross Repayment Maturity Amort Scheduled Scheduled Thru Number ODCR Type (1) City State Payment Payment Coupon Date Date (Y/N) Balance Balance Date - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- Totals - -------------------------------------------------------------------------------------------------------------------------------- Appraisal Appraisal Res. Mod. Loan Reduction Reduction Strat. Code Number Date Amount (2) (3) - ----------------------------------------------- - ----------------------------------------------- Totals - -----------------------------------------------
(1) PROPERTY TYPE CODE MF - Multi-Family RT - Retail HC - Health Care IN - Industrial WH - Warehouse MH - Mobile Home Park OF - Office MU - Mixed Use LO - Lodging SS - Self Storage OT - Other (2) RESOLUTION STRATEGY CODE 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD (3) MODIFICATION CODE 1 - Maturity Date Extension 2 - Amortization Change 3 - Principal Write-Off 4 - Combination Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 11 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 PRINCIPAL PREPAYMENT DETAIL
Principal Prepayment Amount Prepayment Premium Offering Document -------------------------------------------------------------------------------------------- Loan Number Cross-Reference Payoff Amount Curtailment Amount Percentage Premium Yield Maintenance Charge - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- Totals - -------------------------------------------------------------------------------------------------------------------------------
Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 12 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 HISTORICAL DETAIL
Delinquencies - ------------------------------------------------------------------------------------------------------------------------- Distribution 30-59 Days 60-89 Days 90 Days or More Foreclosure REO Modifications Date # Balance # Balance # Balance # Balance # Balance # Balance - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- Prepayments Rate and Maturities - -------------------------------------------------------------------------------- Distribution Curtailments Payoff Next Weighted Avg. Date # Amount # Amount Coupon Remit WAM - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Note: Foreclosure and REO Totals are excluded from the delinquencies aging categories. Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 13 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 DELINQUENCY LOAN DETAIL
Offering # of Current Outstanding Status of Resolution Document Months Paid Through P & I P & I Mortgage Strategy Servicing Loan Number Cross-Reference Delinq. Date Advances Advances ** Loan (1) Code (2) Transfer Date - --------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------- Totals - --------------------------------------------------------------------------------------------------------------- Actual Outstanding Foreclosure Principal Servicing Bankruptcy REO Loan Number Date Balance Advances Date Date - ----------------------------------------------------------------- - ----------------------------------------------------------------- Totals - -----------------------------------------------------------------
(1) STATUS OF MORTGAGE LOAN A - Payment Not Received But Still in Grace Period B - Late Payment But Less Than 1 Month Delinquent 0 - Current 1 - One Month Delinquent 2 - Two Months Delinquent 3 - Three or More Months Delinquent 4 - Assumed Scheduled Payment (Performing Matured Balloon) 7 - Foreclosure 9 - REO (2) RESOLUTION STRATEGY CODE 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed In Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD ** Outstanding P & I Advances include the current period advance. Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 14 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 SPECIALLY SERVICED LOAN DETAIL - PART 1
Offering Servicing Resolution Net Loan Document Transfer Strategy Scheduled Property Interest Actual Operating DSCR Number Cross-Reference Date Code (1) Balance Type (2) State Rate Balance Income Date DSCR - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Remaining Loan Note Maturity Amortization Number Date Date Term - -------------------------------------------------------- - --------------------------------------------------------
(1) RESOLUTION STRATEGY CODE 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD (2) PROPERTY TYPE CODE MF - Multi-Family RT - Retail HC - Health Care IN - Industrial WH - Warehouse MH - Mobile Home Park OF - Office MU - Mixed Use LO - Lodging SS - Self Storage OT - Other Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 15 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 SPECIALLY SERVICED LOAN DETAIL - PART 2
Offering Resolution Site Loan Document Strategy Inspection Appraisal Appraisal Other REO Number Cross-Reference Code (1) Date Phase 1 Date Date Value Property Revenue Comment - ------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------
(1) RESOLUTION STRATEGY CODE 1 - Modification 2 - Foreclosure 3 - Bankruptcy 4 - Extension 5 - Note Sale 6 - DPO 7 - REO 8 - Resolved 9 - Pending Return to Master Servicer 10 - Deed in Lieu Of Foreclosure 11 - Full Payoff 12 - Reps and Warranties 13 - Other or TBD Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 16 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 MODIFIED LOAN DETAIL
Offering Loan Document Pre-Modification Number Cross-Reference Balance Modification Date Modification Description - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- Totals - -----------------------------------------------------------------------------------------------
Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 17 of 18 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2003-C5 [WELLS FARGO LOGO] For Additional Information, please contact WELLS FARGO BANK MINNESOTA, N.A. CTSLink Customer Service CORPORATE TRUST SERVICES (301) 815-6600 9062 OLD ANNAPOLIS ROAD Reports Available on the World Wide Web COLUMBIA, MD 21045-1951 @ www.ctslink.com/cmbs PAYMENT DATE: 01/16/2004 RECORD DATE: 12/31/2003 LIQUIDATED LOAN DETAIL
Final Recovery Offering Gross Proceeds Aggregate Net Loan Determination Document Appraisal Appraisal Actual Gross as a % of Liquidation Liquidation Number Date Cross-Reference Date Value Balance Proceeds Actual Balance Expenses * Proceeds - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ Current Total - ------------------------------------------------------------------------------------------------------------------------------------ Cumulative Total - ------------------------------------------------------------------------------------------------------------------------------------ Net Proceeds Repurchased Loan as a % of Realized by Seller Number Actual Balance Loss (Y/N) - ------------------------------------------------------- - ------------------------------------------------------- Current Total - ------------------------------------------------------- Cumulative Total - -------------------------------------------------------
* Aggregate liquidation expenses also include outstanding P & I advances and unpaid fees (servicing, trustee, etc.). Copyright 2003, Wells Fargo Bank Minnesota, N.A. Page 18 of 18 EXHIBIT C DECREMENT TABLES FOR THE OFFERED CERTIFICATES PERCENT OF CLASS CERTIFICATE BALANCE OUTSTANDING FOR: CLASS A-1 CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 86 86 86 86 86 December 2005..................... 71 71 71 71 71 December 2006..................... 55 54 52 50 15 December 2007..................... 37 27 17 7 0 December 2008 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 3.0 2.9 2.8 2.7 2.5
CLASS A-2 CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 99 December 2008 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 4.7 4.7 4.6 4.5 4.3
CLASS A-3 CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 97 85 76 71 70 December 2009..................... 58 58 58 58 56 December 2010..................... 30 30 30 30 30 December 2011..................... 17 17 17 17 17 December 2012..................... 2 0 0 0 0 December 2013 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 6.7 6.6 6.5 6.4 6.3
CLASS A-4 CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 100 100 100 100 100 December 2009..................... 100 100 100 100 100 December 2010..................... 100 100 100 100 100 December 2011..................... 100 100 100 100 100 December 2012..................... 100 100 99 98 93 December 2013 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 9.7 9.6 9.6 9.6 9.4
C-1 CLASS B CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 100 100 100 100 100 December 2009..................... 100 100 100 100 100 December 2010..................... 100 100 100 100 100 December 2011..................... 100 100 100 100 100 December 2012..................... 100 100 100 100 100 December 2013 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 9.9 9.9 9.9 9.9 9.6
CLASS C CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 100 100 100 100 100 December 2009..................... 100 100 100 100 100 December 2010..................... 100 100 100 100 100 December 2011..................... 100 100 100 100 100 December 2012..................... 100 100 100 100 100 December 2013 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 9.9 9.9 9.9 9.9 9.7
CLASS D CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 100 100 100 100 100 December 2009..................... 100 100 100 100 100 December 2010..................... 100 100 100 100 100 December 2011..................... 100 100 100 100 100 December 2012..................... 100 100 100 100 100 December 2013 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 9.9 9.9 9.9 9.9 9.7
C-2 CLASS E CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 100 100 100 100 100 December 2009..................... 100 100 100 100 100 December 2010..................... 100 100 100 100 100 December 2011..................... 100 100 100 100 100 December 2012..................... 100 100 100 100 100 December 2013 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 10.0 10.0 9.9 9.9 9.7
CLASS F CERTIFICATES
FOLLOWING DISTRIBUTION DATE IN-- 0% CPR 25% CPR 50% CPR 75% CPR 100% CPR -------- --------- --------- --------- ----------- Issue Date........................ 100% 100% 100% 100% 100% December 2004..................... 100 100 100 100 100 December 2005..................... 100 100 100 100 100 December 2006..................... 100 100 100 100 100 December 2007..................... 100 100 100 100 100 December 2008..................... 100 100 100 100 100 December 2009..................... 100 100 100 100 100 December 2010..................... 100 100 100 100 100 December 2011..................... 100 100 100 100 100 December 2012..................... 100 100 100 100 100 December 2013..................... 75 75 75 75 75 December 2014 and thereafter...... 0 0 0 0 0 Weighted average life (in years).. 10.6 10.6 10.6 10.5 10.5
C-3 EXHIBIT D GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES Except in limited circumstances, the globally offered Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2003-C5, Class A-1, Class A-2, Class A-3, Class A-4, Class B, Class C, Class D, Class E and Class F, will be available only in book-entry form. The book-entry certificates will be tradable as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle in same-day funds. Secondary market trading between investors holding book-entry certificates through Clearstream, Luxembourg and Euroclear will be conducted in the ordinary way in accordance with their normal rules and operating procedures and in accordance with conventional Eurobond practice, which is seven (7) calendar days' settlement. Secondary market trading between investors holding book-entry certificates through DTC will be conducted according to the rules and procedures applicable to U.S. corporate debt obligations. Secondary cross-market trading between member organizations of Clearstream, Luxembourg or Euroclear and DTC participants holding book-entry certificates will be accomplished on a delivery against payment basis through the respective depositaries of Clearstream, Luxembourg and Euroclear, in that capacity, as DTC participants. As described under "Certain U.S. Federal Income Tax Documentation Requirements" below, non-U.S. holders of book-entry certificates will be subject to U.S. withholding taxes unless those holders meet specific requirements and deliver appropriate U.S. tax documents to the securities clearing organizations of their participants. INITIAL SETTLEMENT All certificates of each class of offered certificates will be held in book-entry form by DTC in the name of Cede & Co. as nominee of DTC. Investors' interests in the book-entry certificates will be represented through financial institutions acting on their behalf as direct and indirect DTC participants. As a result, Clearstream, Luxembourg and Euroclear will hold positions on behalf of their member organizations through their respective depositaries, which in turn will hold positions in accounts as DTC participants. Investors' securities custody accounts will be credited with their holdings against payment in same-day funds on the settlement date. Investors electing to hold their book-entry certificates through Clearstream, Luxembourg or Euroclear accounts will follow the settlement procedures applicable to conventional Eurobonds, except that there will be no temporary global security and no "lock up" or restricted period. Global securities will be credited to the securities custody accounts on the settlement date against payment in same-day funds. SECONDARY MARKET TRADING Since the purchaser determines the place of delivery, it is important to establish at the time of the trade where both the purchaser's and seller's accounts are located to ensure that settlement can be made on the desired value date. TRADING BETWEEN DTC PARTICIPANTS. Secondary market trading between DTC participants will be settled in same-day funds. TRADING BETWEEN CLEARSTREAM, LUXEMBOURG AND/OR EUROCLEAR PARTICIPANTS. Secondary market trading between member organizations of Clearstream, Luxembourg or Euroclear will be settled using the procedures applicable to conventional Eurobonds in same-day funds. TRADING BETWEEN DTC SELLER AND CLEARSTREAM, LUXEMBOURG OR EUROCLEAR PURCHASER. When book-entry certificates are to be transferred from the account of a DTC participant to the account of a member organization of Clearstream, Luxembourg or Euroclear, the purchaser will send instructions to Clearstream, Luxembourg or Euroclear through that member organization at least one business day prior to settlement. Clearstream, Luxembourg or Euroclear, as the case may be, will instruct the respective depositary to receive the book-entry certificates against payment. Payment will include D-1 interest accrued on the book-entry certificates from and including the last coupon distribution date to and excluding the settlement date, calculated on the basis of a year of 360 days consisting of twelve 30-day months. Payment will then be made by the respective depositary to the DTC participant's account against delivery of the book-entry certificates. After settlement has been completed, the book-entry certificates will be credited to the respective clearing system and by the clearing system, in accordance with its usual procedures, to the account of the member organization of Clearstream, Luxembourg or Euroclear, as the case may be. The securities credit will appear the next day, European time, and the cash debit will be back-valued to, and the interest on the book-entry certificates will accrue from, the value date, which would be the preceding day when settlement occurred in New York. If settlement is not completed on the intended value date, which means the trade fails, the Clearstream, Luxembourg or Euroclear cash debit will be valued instead as of the actual settlement date. Member organizations of Clearstream, Luxembourg and Euroclear will need to make available to the respective clearing systems the funds necessary to process same-day funds settlement. The most direct means of doing so is to pre-position funds for settlement, either from cash on hand or existing lines of credit, as they would for any settlement occurring within Clearstream, Luxembourg or Euroclear. Under this approach, they may take on credit exposure to Clearstream, Luxembourg or Euroclear until the book-entry certificates are credited to their accounts one day later. As an alternative, if Clearstream, Luxembourg or Euroclear has extended a line of credit to them, member organizations of Clearstream, Luxembourg or Euroclear can elect not to pre-position funds and allow that credit line to be drawn upon to finance settlement. Under this procedure, the member organizations purchasing book-entry certificates would incur overdraft charges for one day, assuming they cleared the overdraft when the book-entry certificates were credited to their accounts. However, interest on the book-entry certificates would accrue from the value date. Therefore, in many cases the investment income on the book-entry certificates earned during that one-day period may substantially reduce or offset the amount of those overdraft charges, although this result will depend on the cost of funds of the respective member organization of Clearstream, Luxembourg or Euroclear. Since the settlement is taking place during New York business hours, DTC participants can employ their usual procedures for sending book-entry certificates to the respective depositary for the benefit of member organizations of Clearstream, Luxembourg or Euroclear. The sale proceeds will be available to the DTC seller on the settlement date. Thus, to the DTC participant a cross-market transaction will settle no differently than a trade between two DTC participants. TRADING BETWEEN CLEARSTREAM, LUXEMBOURG OR EUROCLEAR SELLER AND DTC PURCHASER. Due to time zone differences in their favor, member organizations of Clearstream, Luxembourg or Euroclear may employ their customary procedures for transactions in which book-entry certificates are to be transferred by the respective clearing system, through the respective depositary, to a DTC participant. The seller will send instructions to Clearstream, Luxembourg or Euroclear through a member organization of Clearstream, Luxembourg or Euroclear at least one business day prior to settlement. In these cases, Clearstream, Luxembourg or Euroclear, as appropriate, will instruct the respective depositary to deliver the book-entry certificates to the DTC participant's account against payment. Payment will include interest accrued on the book-entry certificates from and including the last coupon distribution date to and excluding the settlement date, calculated on the basis of a year of 360 days consisting of twelve 30-day months. The payment will then be reflected in the account of the member organization of Clearstream, Luxembourg or Euroclear the following day, and receipt of the cash proceeds in the account of that member organization of Clearstream, Luxembourg or Euroclear would be back-valued to the value date, which would be the preceding day, when settlement occurred in New York. Should the member organization of Clearstream, Luxembourg or Euroclear have a line of credit with its respective clearing system and elect to be in debit in anticipation of receipt of the sale proceeds in its account, the back-valuation will extinguish any overdraft charges incurred over the one-day period. If settlement is not completed on the intended value date, which means the trade fails, receipt of the cash proceeds in the account of the member organization of Clearstream, Luxembourg or Euroclear would be valued instead as of the actual settlement date. Finally, day traders that use Clearstream, Luxembourg or Euroclear and that purchase book-entry certificates from DTC participants for delivery to member organizations of Clearstream, Luxembourg or Euroclear should note that these trades would automatically fail on the sale side unless affirmative action were taken. At least three techniques should be readily available to eliminate this potential problem: - borrowing through Clearstream, Luxembourg or Euroclear for one day, until the purchase side of the day trade is reflected in their Clearstream, Luxembourg or Euroclear accounts, in accordance with the clearing system's customary procedures; - borrowing the book-entry certificates in the United States from a DTC participant no later than one day prior to settlement, which would allow sufficient time for the book-entry certificates to be reflected in their Clearstream, Luxembourg or Euroclear accounts in order to settle the sale side of the trade; or D-2 - staggering the value dates for the buy and sell sides of the trade so that the value date for the purchase from the DTC participant is at least one day prior to the value date for the sale to the member organization of Clearstream, Luxembourg or Euroclear. CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS A holder that is not a "United States person" (a "U.S. person") within the meaning of Section 7701(a)(30) of the Internal Revenue Code (a "non-U.S. holder") holding a book-entry certificate through Clearstream, Luxembourg, Euroclear or DTC may be subject to U.S. withholding tax at a rate of 30% unless such holder provides certain documentation to the issuer of such holder's book-entry certificate, the paying agent or any other entity required to withhold tax (any of the foregoing, a "U.S. withholding agent") establishing an exemption from withholding. A non-U.S. holder may be subject to 30% withholding unless each U.S. withholding agent receives: 1. from a non-U.S. holder that is classified as a corporation for U.S. federal income tax purposes or is an individual, and is eligible for the benefits of the portfolio interest exemption or an exemption (or reduced rate) based on a treaty, a duly completed and executed IRS Form W-8BEN (or any successor form); 2. from a non-U.S. holder that is eligible for an exemption on the basis that the holder's income from the certificate is effectively connected to its U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or any successor form); 3. from a non-U.S. holder that is classified as a partnership for U.S. federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or any successor form) with all supporting documentation (as specified in the U.S. Treasury regulations) required to substantiate exemptions from withholding on behalf of its partners; certain partnerships may enter into agreements with the IRS providing for different documentation requirements and it is recommended that such partnerships consult their tax advisors with respect to these certification rules; 4. from a non-U.S. holder that is an intermediary (I.E., a person acting as a custodian, a broker, nominee or otherwise as an agent for the beneficial owner of a certificate): (a) if the intermediary is a "qualified intermediary" within the meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury regulations (a "qualified intermediary"), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)-- (i) stating the name, permanent residence address and qualified intermediary employer identification number of the qualified intermediary and the country under the laws of which the qualified intermediary is created, incorporated or governed, (ii) certifying that the qualified intermediary has provided, or will provide, a withholding statement as required under section 1.1441-1(e)(5)(v) of the U.S. Treasury regulations, (iii) certifying that, with respect to accounts it identifies on its withholding statement, the qualified intermediary is not acting for its own account but is acting as a qualified intermediary, and (iv) providing any other information, certifications, or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information and certifications described in section 1.1441-1(e)(3)(ii) or 1.1441-1(e)(5)(v) of the U.S. Treasury regulations; or (b) if the intermediary is not a qualified intermediary (a "nonqualified intermediary"), a duly completed and executed IRS Form W-8IMY (or any successor or substitute form)-- (i) stating the name and permanent residence address of the nonqualified intermediary and the country under the laws of which the nonqualified intermediary is created, incorporated or governed, (ii) certifying that the nonqualified intermediary is not acting for its own account, D-3 (iii) certifying that the nonqualified intermediary has provided, or will provide, a withholding statement that is associated with the appropriate IRS Forms W-8 and W-9 required to substantiate exemptions from withholding on behalf of such nonqualified intermediary's beneficial owners, and (iv) providing any other information, certifications or statements that may be required by the IRS Form W-8IMY or accompanying instructions in addition to, or in lieu of, the information, certifications, and statements described in section 1.1441-1(e)(3)(iii) or (iv) of the U.S. Treasury regulations; or 5. from a non-U.S. holder that is a trust, depending on whether the trust is classified for U.S. federal income tax purposes as the beneficial owner of the certificate, either an IRS Form W-8BEN or W-8IMY; any non-U.S. holder that is a trust should consult its tax advisors to determine which of these forms it should provide. All non-U.S. holders will be required to update the above-listed forms and any supporting documentation in accordance with the requirements under the U.S. Treasury regulations. These forms generally remain in effect for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect. Under certain circumstances, an IRS Form W-8BEN, if furnished with a taxpayer identification number, remains in effect until the status of the beneficial owner changes, or a change in circumstances makes any information on the form incorrect. In addition, all holders, including holders that are U.S. persons, holding book-entry certificates through Clearstream, Luxembourg, Euroclear or DTC may be subject to backup withholding at a rate of 28% (increasing to 31% after 2010) unless the holder-- - provides the appropriate IRS Form W-8 (or any successor or substitute form), duly completed and executed, if the holder is a non-U.S. holder; - provides a duly completed and executed IRS Form W-9, if the holder is a U.S. person; or - can be treated as a "exempt recipient" within the meaning of section 1.6049-4(c)(1)(ii) of the U.S. Treasury regulations (E.G., a corporation or a financial institution such as a bank). This summary does not deal with all of the aspects of U.S. federal income tax withholding or backup withholding that may be relevant to investors that are non-U.S. holders. Such holders are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of book-entry certificates. D-4 PROSPECTUS CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., THE DEPOSITOR COMMERCIAL/MULTIFAMILY MORTGAGE PASS-THROUGH CERTIFICATES, ISSUABLE IN SERIES Our name is Credit Suisse First Boston Mortgage Securities Corp. We intend to offer from time to time commercial/multifamily mortgage pass-through certificates. These offers may be made through one or more different methods, including offerings through underwriters. We do not currently intend to list the offered certificates of any series on any national securities exchange or the NASDAQ stock market. See "Plan of Distribution."
THE OFFERED CERTIFICATES: THE TRUST ASSETS: The offered certificates will be issuable in series. The assets of each of our trusts will include-- Each series of offered certificates will-- - mortgage loans secured by first and junior liens on, - - have its own series designation; or security interests in, various interests in commercial and multifamily real properties; - - consist of one or more classes with various payment characteristics; - mortgage-backed securities that directly or indirectly evidence interests in, or are directly or - - evidence beneficial ownership interests in a trust indirectly secured by, those types of mortgage loans; established by us; and or - - be payable solely out of the related trust assets. - some combination of those types of mortgage loans and mortgage-backed securities. No governmental agency or instrumentality will insure or Trust assets may also include letters of credit, surety guarantee payment on the offered certificates. Neither we bonds, insurance policies, guarantees, credit derivatives, nor any of our affiliates are responsible for making reserve funds, guaranteed investment contracts, interest payments on the offered certificates if collections on the rate exchange agreements, interest rate cap or floor related trust assets are insufficient. agreements, currency exchange agreements, or other similar instruments and agreements.
In connection with each offering, we will prepare a supplement to this prospectus in order to describe in more detail the particular certificates being offered and the related trust assets. In that document, we will also state the price to public for each class of offered certificates or explain the method for determining that price. In that document, we will also identify the applicable lead or managing underwriter(s), if any, and provide information regarding the relevant underwriting arrangements and the underwriters' compensation. You may not purchase the offered certificates of any series unless you have also received the prospectus supplement for that series. You should carefully consider the risk factors beginning on page 12 in this prospectus, as well as those set forth in the related prospectus supplement, prior to investing. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the offered certificates or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is November 10, 2003. TABLE OF CONTENTS
Page ---- IMPORTANT NOTICE ABOUT THE INFORMATION PRESENTED IN THIS PROSPECTUS................3 AVAILABLE INFORMATION; INCORPORATION BY REFERENCE..................................3 SUMMARY OF PROSPECTUS..............................................................4 RISK FACTORS......................................................................12 CAPITALIZED TERMS USED IN THIS PROSPECTUS.........................................29 CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP...............................29 USE OF PROCEEDS...................................................................29 DESCRIPTION OF THE TRUST ASSETS...................................................30 YIELD AND MATURITY CONSIDERATIONS.................................................53 DESCRIPTION OF THE CERTIFICATES...................................................59 DESCRIPTION OF THE GOVERNING DOCUMENTS............................................67 DESCRIPTION OF CREDIT SUPPORT.....................................................77 LEGAL ASPECTS OF MORTGAGE LOANS...................................................79 FEDERAL INCOME TAX CONSEQUENCES...................................................90 STATE AND OTHER TAX CONSEQUENCES.................................................124 ERISA CONSIDERATIONS.............................................................124 LEGAL INVESTMENT.................................................................127 PLAN OF DISTRIBUTION.............................................................129 LEGAL MATTERS....................................................................130 FINANCIAL INFORMATION............................................................130 RATING...........................................................................130 GLOSSARY.........................................................................132
2 IMPORTANT NOTICE ABOUT THE INFORMATION PRESENTED IN THIS PROSPECTUS When deciding whether to invest in any of the offered certificates, you should only rely on the information contained in this prospectus and the related prospectus supplement. We have not authorized any dealer, salesman or other person to give any information or to make any representation that is different. In addition, information in this prospectus or any related prospectus supplement is current only as of the date on its cover. By delivery of this prospectus and any related prospectus supplement, we are not offering to sell any securities, and are not soliciting an offer to buy any securities, in any state where the offer and sale is not permitted. AVAILABLE INFORMATION; INCORPORATION BY REFERENCE We have filed with the SEC a registration statement under the Securities Act of 1933, as amended, with respect to the certificates offered by this prospectus. This prospectus forms a part of the registration statement. This prospectus and the related prospectus supplement do not contain all of the information with respect to an offering that is contained in the registration statement. For further information regarding the documents referred to in this prospectus and the related prospectus supplement, you should refer to the registration statement and its exhibits. You can inspect the registration statement and its exhibits, and make copies of these documents at prescribed rates, at the public reference facilities maintained by the SEC at its Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549, and at its Regional Offices located as follows: in the case of the Midwest Regional Office, 500 West Madison Street, Chicago, Illinois 60661; and in the case of the Northeast Regional Office, 233 Broadway, New York, New York 10279. You can also obtain copies of these materials electronically through the SEC's Web site (http://www.sec.gov). In connection with each series of offered certificates, we will file or arrange to have filed with the SEC with respect to the related trust any periodic reports that are required under the Securities Exchange Act of 1934, as amended. All documents and reports that are so filed for the related trust prior to the termination of an offering of certificates are incorporated by reference into, and should be considered a part of, this prospectus. Upon request, we will provide without charge to each person receiving this prospectus in connection with an offering, a copy of any or all documents or reports that are so incorporated by reference. All requests should be directed to us in writing at Eleven Madison Avenue, New York, New York 10010, telephone number (212) 325-2000. 3 SUMMARY OF PROSPECTUS This summary contains selected information from this prospectus. It does not contain all of the information you need to consider in making your investment decision. To understand all of the terms of a particular offering of certificates, you should read carefully this prospectus and the related prospectus supplement in full. WHO WE ARE............................ Credit Suisse First Boston Mortgage Securities Corp. Our principal offices are located at Eleven Madison Avenue, New York, New York 10010, telephone number (212) 325-2000. We are a wholly-owned subsidiary of Credit Suisse First Boston Management Corporation, which in turn is a wholly-owned subsidiary of Credit Suisse First Boston, Inc. See "Credit Suisse First Boston Mortgage Securities Corp." THE SECURITIES BEING OFFERED.......... The securities that will be offered by this prospectus and the related prospectus supplements consist of commercial/multifamily mortgage pass-through certificates. These certificates will be issued in series, and each series will, in turn, consist of one or more classes. Each class of offered certificates must, at the time of issuance, be assigned an investment grade rating by at least one nationally recognized statistical rating organization. Typically, the four highest rating categories, within which there may be sub-categories or gradations to indicate relative standing, signify investment grade. See "Rating." Each series of offered certificates will evidence beneficial ownership interests in a trust established by us and containing the assets described in this prospectus and the related prospectus supplement. THE OFFERED CERTIFICATES MAY BE ISSUED WITH OTHER CERTIFICATES........ We may not publicly offer all the commercial/multifamily mortgage pass-through certificates evidencing interests in one of our trusts. We may elect to retain some of those certificates, to place some privately with institutional investors or to deliver some to the applicable seller as partial consideration for the related mortgage assets. In addition, some of those certificates may not satisfy the rating requirement for offered certificates described under "--The Securities Being Offered" above. THE GOVERNING DOCUMENTS............... In general, a pooling and servicing agreement or other similar agreement or collection of agreements will govern, among other things-- - the issuance of each series of offered certificates; - the creation of and transfer of assets to the related trust; and - the servicing and administration of those assets. The parties to the governing document(s) for a series of offered certificates will always include us and a trustee. We will be responsible for establishing the trust relating to each series of offered certificates. In addition, we will transfer or arrange for the transfer of the initial trust assets to that trust. In general, the trustee for a series of offered certificates will be responsible for, among other things, making payments and preparing and disseminating various reports to the holders of those offered certificates.
4 If the trust assets for a series of offered certificates include mortgage loans, the parties to the governing document(s) will also include-- - a master servicer that will generally be responsible for performing customary servicing duties with respect to those mortgage loans that are not defaulted or otherwise problematic in any material respect; and - a special servicer that will generally be responsible for servicing and administering those mortgage loans that are defaulted or otherwise problematic in any material respect and real estate assets acquired as part of the related trust with respect to defaulted mortgage loans. The same person or entity, or affiliated entities, may act as both master servicer and special servicer for any trust. If the trust assets for a series of offered certificates include mortgage-backed securities, the parties to the governing document(s) may also include a manager that will be responsible for performing various administrative duties with respect to those mortgage-backed securities. If the related trustee assumes those duties, however, there will be no manager. In the related prospectus supplement, we will identify the trustee and any master servicer, special servicer or manager for each series of offered certificates and their respective duties. See "Description of the Governing Documents." CHARACTERISTICS OF THE MORTGAGE ASSETS................................ The trust assets with respect to any series of offered certificates will, in general, include mortgage loans. Each of those mortgage loans will constitute the obligation of one or more persons to repay a debt. The performance of that obligation will be secured by a first or junior lien on, or security interest in, the ownership, leasehold or other interest(s) of the related borrower or another person in or with respect to one or more commercial or multifamily real properties. In particular, those properties may include-- - rental or cooperatively-owned buildings with multiple dwelling units; - retail properties related to the sale of consumer goods and other products, or related to providing entertainment, recreational or personal services, to the general public; - office buildings; - hospitality properties; - casino properties; - health care-related facilities; - industrial facilities;
5 - warehouse facilities, mini-warehouse facilities and self-storage facilities; - restaurants, taverns and other establishments involved in the food and beverage industry; - manufactured housing communities, mobile home parks and recreational vehicle parks; - recreational and resort properties; - arenas and stadiums; - churches and other religious facilities; - parking lots and garages; - mixed use properties; - other income-producing properties; and/or - unimproved land. The mortgage loans underlying a series of offered certificates may have a variety of payment terms. For example, any of those mortgage loans-- - may provide for the accrual of interest at a mortgage interest rate that is fixed over its term, that resets on one or more specified dates or that otherwise adjusts from time to time; - may provide for the accrual of interest at a mortgage interest rate 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; - may provide for no accrual of interest; - may provide for level payments to stated maturity, for payments that reset in amount on one or more specified dates or for payments that otherwise adjust from time to time to accommodate changes in the mortgage interest rate or to reflect the occurrence of specified events; - may be fully amortizing or, alternatively, may be partially amortizing or nonamortizing, with a substantial payment of principal due on its stated maturity date; - may permit the negative amortization or deferral of accrued interest;
6 - may prohibit some or all voluntary prepayments or require payment of a premium, fee or charge in connection with those prepayments; - may permit defeasance and the release of real property collateral in connection with that defeasance; - may provide for payments of principal, interest or both, on due dates that occur monthly, bi-monthly, quarterly, semi-annually, annually or at some other interval; and/or - may have two or more component parts, each having characteristics that are otherwise described in this prospectus as being attributable to separate and distinct mortgage loans. Most, if not all, of the mortgage loans underlying a series of offered certificates will be secured by liens on real properties located in the United States, its territories and possessions. However, some of those mortgage loans may be secured by liens on real properties located outside the United States, its territories and possessions, provided that foreign mortgage loans do not represent more than 10% of the related mortgage asset pool, by balance. We do not originate mortgage loans. However, some or all of the mortgage loans included in one of our trusts may be originated by our affiliates. Neither we nor any of our affiliates will guarantee or insure repayment of any of the mortgage loans underlying a series of offered certificates. Unless we expressly state otherwise in the related prospectus supplement, no governmental agency or instrumentality will guarantee or insure repayment of any of the mortgage loans underlying a series of offered certificates. See "Description of the Trust Assets--Mortgage Loans." The trust assets with respect to any series of offered certificates may also include mortgage participations, mortgage pass-through certificates, collateralized mortgage obligations and other mortgage-backed securities, that evidence an interest in, or are secured by a pledge of, one or more mortgage loans of the type described above. We will not include a mortgage-backed security among the trust assets with respect to any series of offered certificates unless-- - the security has been registered under the Securities Act of 1933, as amended; or - we would be free to publicly resell the security without registration. See "Description of the Trust Assets--Mortgage-Backed Securities." We will describe the specific characteristics of the mortgage assets underlying a series of offered certificates in the related prospectus supplement.
7 In general, the total outstanding principal balance of the mortgage assets transferred by us to any particular trust will equal or exceed the initial total outstanding principal balance of the related series of certificates. In the event that the total outstanding principal balance of the related mortgage assets initially delivered by us to the related trustee is less than the initial total outstanding principal balance of any series of certificates, we may deposit or arrange for the deposit of cash or liquid investments on an interim basis with the related trustee to cover the shortfall. For 90 days following the date of initial issuance of that series of certificates, we will be entitled to obtain a release of the deposited cash or investments if we deliver or arrange for delivery of a corresponding amount of mortgage assets. If we fail, however, to deliver mortgage assets sufficient to make up the entire shortfall, any of the cash or, following liquidation, investments remaining on deposit with the related trustee will be used by the related trustee to pay down the total principal balance of the related series of certificates, as described in the related prospectus supplement. SUBSTITUTION, ACQUISITION AND REMOVAL OF MORTGAGE ASSETS............ If so specified in the related prospectus supplement, we or another specified person or entity may be permitted, at our or its option, but subject to the conditions specified in that prospectus supplement, to acquire from the related trust particular mortgage assets underlying a series of certificates in exchange for-- - cash that would be applied to pay down the principal balances of certificates of that series; and/or - other mortgage loans or mortgage-backed securities that-- 1. conform to the description of mortgage assets in this prospectus; and 2. satisfy the criteria set forth in the related prospectus supplement. In addition, if so specified in the related prospectus supplement, the related trustee may be authorized or required, to apply collections on the mortgage assets underlying a series of offered certificates to acquire new mortgage loans or mortgage-backed securities that-- - conform to the description of mortgage assets in this prospectus; and - satisfy the criteria set forth in the related prospectus supplement. No replacement of mortgage assets or acquisition of new mortgage assets will be permitted if it would result in a qualification, downgrade or withdrawal of the then-current rating assigned by any rating agency to any class of affected offered certificates.
8 CHARACTERISTICS OF THE OFFERED CERTIFICATES.......................... An offered certificate may entitle the holder to receive-- - a stated principal amount; - interest on a principal balance or notional amount, at a fixed, variable or adjustable pass-through rate; - specified, fixed or variable portions of the interest, principal or other amounts received on the related mortgage assets; - payments of principal, with disproportionate, nominal or no payments of interest; - payments of interest, with disproportionate, nominal or no payments of principal; - payments of interest or principal that commence only as of a specified date or only after the occurrence of specified events, such as the payment in full of the interest and principal outstanding on one or more other classes of certificates of the same series; - payments of principal to be made, from time to time or for designated periods, at a rate that is-- 1. faster and, in some cases, substantially faster, or 2. slower and, in some cases, substantially slower, than the rate at which payments or other collections of principal are received on the related mortgage assets; - payments of principal to be made, subject to available funds, based on a specified principal payment schedule or other methodology; or - payments of all or part of the prepayment or repayment premiums, fees and charges, equity participations payments or other similar items received on the related mortgage assets. Any class of offered certificates may be senior or subordinate to one or more other classes of certificates of the same series, including a non-offered class of certificates of that series, for purposes of some or all payments and/or allocations of losses. A class of offered certificates may have two or more component parts, each having characteristics that are otherwise described in this prospectus as being attributable to separate and distinct classes. We will describe the specific characteristics of each class of offered certificates in the related prospectus supplement. See "Description of the Certificates."
9 CREDIT SUPPORT AND REINVESTMENT, INTEREST RATE AND CURRENCY RELATED PROTECTION FOR THE OFFERED CERTIFICATES.................. Some classes of offered certificates may be protected in full or in part against defaults and losses, or select types of defaults and losses, on the related mortgage assets through the subordination of one or more other classes of certificates of the same series or by other types of credit support. The other types of credit support may include a letter of credit, a surety bond, an insurance policy, a guarantee, a credit derivative or a reserve fund. We will describe the credit support, if any, for each class of offered certificates in the related prospectus supplement. The trust assets with respect to any series of offered certificates may also include any of the following agreements-- - guaranteed investment contracts in accordance with which moneys held in the funds and accounts established with respect to those offered certificates will be invested at a specified rate; - interest rate exchange agreements, interest rate cap or floor agreements, or other agreements and arrangements designed to reduce the effects of interest rate fluctuations on the related mortgage assets or on one or more classes of those offered certificates; or - currency exchange agreements or other agreements and arrangements designed to reduce the effects of currency exchange rate fluctuations with respect to the related mortgage assets and one or more classes of those offered certificates. We will describe the types of reinvestment, interest rate and currency related protection, if any, for each class of offered certificates in the related prospectus supplement. See "Risk Factors," "Description of the Trust Assets" and "Description of Credit Support." ADVANCES WITH RESPECT TO THE MORTGAGE ASSETS....................... If the trust assets for a series of offered certificates include mortgage loans, then, as and to the extent described in the related prospectus supplement, the related master servicer, the related special servicer, the related trustee, any related provider of credit support and/or any other specified person may be obligated to make, or may have the option of making, advances with respect to those mortgage loans to cover-- - delinquent scheduled payments of principal and/or interest, other than balloon payments; - property protection expenses; - other servicing expenses; or - any other items specified in the related prospectus supplement.
10 Any party making advances will be entitled to reimbursement from subsequent recoveries on the related mortgage loan and as otherwise described in this prospectus or the related prospectus supplement. That party may also be entitled to receive interest on its advances for a specified period. See "Description of the Certificates--Advances." If the trust assets for a series of offered certificates include mortgage-backed securities, we will describe in the related prospectus supplement any comparable advancing obligations with respect to those mortgage-backed securities or the underlying mortgage loans. OPTIONAL TERMINATION.................. We will describe in the related prospectus supplement any circumstances in which a specified party is permitted or obligated to purchase or sell any of the mortgage assets underlying a series of offered certificates. In particular, a master servicer, special servicer or other designated party may be permitted or obligated to purchase or sell-- - all the mortgage assets in any particular trust, thereby resulting in a termination of the trust; or - that portion of the mortgage assets in any particular trust as is necessary or sufficient to retire one or more classes of offered certificates of the related series. See "Description of the Certificates--Termination." CERTAIN FEDERAL INCOME TAX CONSEQUENCES.......................... Any class of offered certificates will constitute or evidence ownership of-- - regular interests or residual interests in a real estate mortgage investment conduit under Sections 860A through 860G of the Internal Revenue Code of 1986; or - interests in a grantor trust under subpart E of Part I of subchapter J of the Internal Revenue Code of 1986. See "Federal Income Tax Consequences." CERTAIN ERISA CONSIDERATIONS.......... If you are a fiduciary of a retirement plan or other employee benefit plan or arrangement, you should review with your legal advisor whether the purchase or holding of offered certificates could give rise to a transaction that is prohibited or is not otherwise permissible under applicable law. See "ERISA Considerations." LEGAL INVESTMENT...................... If your investment authority is subject to legal restrictions, you should consult your legal advisor to determine whether and to what extent the offered certificates constitute a legal investment for you. We will specify in the related prospectus supplement which classes of the offered certificates will constitute mortgage related securities for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended. See "Legal Investment."
11 RISK FACTORS You should consider the following factors, as well as the factors set forth under "Risk Factors" in the related prospectus supplement, in deciding whether to purchase any offered certificates. LIMITED LIQUIDITY OF YOUR CERTIFICATES MAY HAVE AN ADVERSE IMPACT ON YOUR ABILITY TO SELL YOUR OFFERED CERTIFICATES The offered certificates may have limited or no liquidity. We cannot assure you that a secondary market for your offered certificates will develop. There will be no obligation on the part of anyone to establish a secondary market. Even if a secondary market does develop for your offered certificates, it may provide you with less liquidity than you anticipated and it may not continue for the life of your offered certificates. We will describe in the related prospectus supplement the information that will be available to you with respect to your offered certificates. The limited nature of the information may adversely affect the liquidity of your offered certificates. We do not currently intend to list the offered certificates on any national securities exchange or the NASDAQ stock market. Lack of liquidity will impair your ability to sell your offered certificates and may prevent you from doing so at a time when you may want or need to. Lack of liquidity could adversely affect the market value of your offered certificates. We do not expect that you will have any redemption rights with respect to your offered certificates. If you decide to sell your offered certificates, you may have to sell them at a discount from the price you paid for reasons unrelated to the performance of your offered certificates or the related mortgage assets. Pricing information regarding your offered certificates may not be generally available on an ongoing basis. THE MARKET VALUE OF YOUR CERTIFICATES WILL BE SENSITIVE TO FACTORS UNRELATED TO THE PERFORMANCE OF YOUR CERTIFICATES AND THE UNDERLYING MORTGAGE ASSETS. The market value of your certificates can decline even if those certificates and the underlying mortgage assets are performing at or above your expectations. The market value of your certificates will be sensitive to fluctuations in current interest rates. However, a change in the market value of your certificates as a result of an upward or downward movement in current interest rates may not equal the change in the market value of your certificates as a result of an equal but opposite movement in interest rates. The market value of your certificates will also be influenced by the supply of and demand for commercial mortgage-backed securities generally. The supply of commercial mortgage-backed securities will depend on, among other things, the amount of commercial and multifamily mortgage loans, whether newly originated or held in portfolio, that are available for securitization. A number of factors will affect investors' demand for commercial mortgage-backed securities, including-- - the availability of alternative investments that offer high yields or are perceived as being a better credit risk, having a less volatile market value or being more liquid; - legal and other restrictions that prohibit a particular entity from investing in commercial mortgage-backed securities or limit the amount or types of commercial mortgage-backed securities that it may acquire; - investors' perceptions regarding the commercial and multifamily real estate markets which may be adversely affected by, among other things, a decline in real estate values or an increase in defaults and foreclosures on mortgage loans secured by income-producing properties; and - investors' perceptions regarding the capital markets in general, which may be adversely affected by political, social and economic events completely unrelated to the commercial and multifamily real estate markets. 12 If you decide to sell your certificates, you may have to sell at discount from the price you paid for reasons unrelated to the performance of your certificates or the related mortgage assets. Pricing information regarding your certificates may not be generally available on an ongoing basis. LIMITED ASSETS OF EACH TRUST MAY ADVERSELY IMPACT YOUR ABILITY TO RECOVER YOUR INVESTMENT IN THE EVENT OF LOSS ON THE UNDERLYING MORTGAGE ASSETS The offered certificates do not represent obligations of any person or entity and do not represent a claim against any assets other than those of the related trust. Unless the related prospectus supplement states otherwise, no governmental agency or instrumentality will guarantee or insure payment on the offered certificates. In addition, neither we nor our affiliates are responsible for making payments on the offered certificates if collections on the related trust assets are insufficient. If the related trust assets are insufficient to make payments on your offered certificates, no other assets will be available to you for payment of the deficiency, and you will bear the resulting loss. Any advances made by a master servicer or other party with respect to the mortgage assets underlying your offered certificates are intended solely to provide liquidity and not credit support. The party making those advances will have a right to reimbursement, probably with interest, which is senior to your right to receive payment on your offered certificates. PREPAYMENT CONSIDERATIONS; VARIABILITY IN AVERAGE LIFE OF OFFERED CERTIFICATES; SPECIAL YIELD CONSIDERATIONS THE TERMS OF THE UNDERLYING MORTGAGE LOANS WILL AFFECT PAYMENTS ON YOUR OFFERED CERTIFICATES. Each of the mortgage loans underlying the offered certificates will specify the terms on which the related borrower must repay the outstanding principal amount of the loan. The rate, timing and amount of scheduled payments of principal may vary, and may vary significantly, from mortgage loan to mortgage loan. The rate at which the underlying mortgage loans amortize will directly affect the rate at which the principal balance or notional amount of your offered certificates is paid down or otherwise reduced. In addition, any mortgage loan underlying the offered certificates may permit the related borrower during some or all of the loan term to prepay the loan. In general, a borrower will be more likely to prepay its mortgage loan when it has an economic incentive to do so, such as obtaining a larger loan on the same underlying real property or a lower or otherwise more advantageous interest rate through refinancing. If a mortgage loan includes some form of prepayment restriction, the likelihood of prepayment should decline. These restrictions may include-- - an absolute or partial prohibition against voluntary prepayments during some or all of the loan term; or - a requirement that voluntary prepayments be accompanied by some form of prepayment premium, fee or charge during some or all of the loan term. In many cases, however, there will be no restriction associated with the application of insurance proceeds or condemnation proceeds as a prepayment of principal. THE TERMS OF THE UNDERLYING MORTGAGE LOANS DO NOT PROVIDE ABSOLUTE CERTAINTY AS REGARDS THE RATE, TIMING AND AMOUNT OF PAYMENTS ON YOUR OFFERED CERTIFICATES. Notwithstanding the terms of the mortgage loans backing your offered certificates, the amount, rate and timing of payments and other collections on those mortgage loans will, to some degree, be unpredictable because of borrower defaults and because of casualties and condemnations with respect to the underlying real properties. The investment performance of your offered certificates may vary materially and adversely from your expectations due to-- - the rate of prepayments and other unscheduled collections of principal on the underlying mortgage loans being faster or slower than you anticipated; or - the rate of defaults on the underlying mortgage loans being faster, or the severity of losses on the underlying mortgage loans being greater, than you anticipated. The actual yield to you, as a holder of an offered certificate, may not equal the yield you anticipated at the time of your purchase, and the total return on investment that you expected may not be realized. In deciding whether to purchase any offered certificates, you should make an independent decision as to the appropriate prepayment, default and loss assumptions 13 to be used. If the trust assets underlying your offered certificates include mortgage-backed securities, the terms of those securities may lessen or increase the effects to you that may result from prepayments, defaults and losses on the mortgage loans that ultimately back those securities. PREPAYMENTS ON THE UNDERLYING MORTGAGE LOANS WILL AFFECT THE AVERAGE LIFE OF YOUR OFFERED CERTIFICATES; AND THE RATE AND TIMING OF THOSE PREPAYMENTS MAY BE HIGHLY UNPREDICTABLE. Payments of principal and/or interest on your offered certificates will depend upon, among other things, the rate and timing of payments on the related mortgage assets. Prepayments on the underlying mortgage loans may result in a faster rate of principal payments on your offered certificates, thereby resulting in a shorter average life for your offered certificates than if those prepayments had not occurred. The rate and timing of principal prepayments on pools of mortgage loans varies among pools and is influenced by a variety of economic, demographic, geographic, social, tax and legal factors. Accordingly, neither you nor we can predict the rate and timing of principal prepayments on the mortgage loans underlying your offered certificates. As a result, repayment of your offered certificates could occur significantly earlier or later, and the average life of your offered certificates could be significantly shorter or longer, than you expected. The extent to which prepayments on the underlying mortgage loans ultimately affect the average life of your offered certificates depends on the terms and provisions of your offered certificates. A class of offered certificates may entitle the holders to a pro rata share of any prepayments on the underlying mortgage loans, to all or a disproportionately large share of those prepayments, or to none or a disproportionately small share of those prepayments. If you are entitled to a disproportionately large share of any prepayments on the underlying mortgage loans, your offered certificates may be retired at an earlier date. If, however, you are only entitled to a small share of the prepayments on the underlying mortgage loans, the average life of your offered certificates may be extended. Your entitlement to receive payments, including prepayments, of principal of the underlying mortgage loans may-- - vary based on the occurrence of specified events, such as the retirement of one or more other classes of certificates of the same series; or - be subject to various contingencies, such as prepayment and default rates with respect to the underlying mortgage loans. We will describe the terms and provisions of your offered certificates more fully in the related prospectus supplement. CERTIFICATES PURCHASED AT A PREMIUM OR A DISCOUNT WILL BE SENSITIVE TO THE RATE OF PRINCIPAL PAYMENT. 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 underlying mortgage loans. 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. THE NATURE OF RATINGS ARE LIMITED AND WILL NOT GUARANTEE THAT YOU WILL RECEIVE ANY PROJECTED RETURN ON YOUR OFFERED CERTIFICATES 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 principal prepayments on the related mortgage loans will be made; - of the degree to which the rate of prepayments might differ from the rate of prepayments that was originally anticipated; or - of the likelihood of early optional termination of the related trust fund. 14 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 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. RISKS ASSOCIATED WITH COMMERCIAL OR MULTIFAMILY MORTGAGE LOANS MANY OF THE MORTGAGE LOANS UNDERLYING YOUR OFFERED CERTIFICATES WILL BE NONRECOURSE. You should consider all of the mortgage loans underlying your offered certificates to be nonrecourse loans. This means that, in the event of a default, recourse will be limited to the related real property or properties securing the defaulted mortgage loan. In those cases where recourse to a borrower or guarantor is permitted by the loan documents, we generally will not undertake any evaluation of the financial condition of that borrower or guarantor. Consequently, full and timely payment on each mortgage loan underlying your offered certificates will depend on one or more of the following-- - the sufficiency of the net operating income of the applicable real property; - the market value of the applicable real property at or prior to maturity; and - the ability of the related borrower to refinance or sell the applicable real property. In general, the value of a multifamily or commercial property will depend on its ability to generate net operating income. The ability of an owner to finance a multifamily or commercial property will depend, in large part, on the property's value and ability to generate net operating income. Unless we state otherwise in the related prospectus supplement, none of the mortgage loans underlying your offered certificates will be insured or guaranteed by any governmental entity or private mortgage insurer. The risks associated with lending on multifamily and commercial properties are inherently different from those associated with lending on the security of single-family residential properties. This is because multifamily rental and commercial real estate lending involves larger loans and, as described above, repayment is dependent upon the successful operation and value of the related real estate project. MANY RISK FACTORS ARE COMMON TO MOST OR ALL MULTIFAMILY AND COMMERCIAL PROPERTIES. The following factors, among others, will affect the ability of a multifamily or commercial property to generate net operating income and, accordingly, its value-- - the age, design and construction quality of the property; - perceptions regarding the safety, convenience and attractiveness of the property; - the characteristics of the neighborhood where the property is located; - the proximity and attractiveness of competing properties; - the existence and construction of competing properties; - the adequacy of the property's management and maintenance; 15 - national, regional or local economic conditions, including plant closings, industry slowdowns and unemployment rates; - local real estate conditions, including an increase in or oversupply of comparable commercial or residential space; - demographic factors; - customer tastes and preferences; - retroactive changes in building codes; and - changes in governmental rules, regulations and fiscal policies, including environmental legislation. Particular factors that may adversely affect the ability of a multifamily or commercial property to generate net operating income include-- - an increase in interest rates, real estate taxes and other operating expenses; - an increase in the capital expenditures needed to maintain the property or make improvements; - a decline in the financial condition of a major tenant and, in particular, a sole tenant or anchor tenant; - an increase in vacancy rates; - a decline in rental rates as leases are renewed or replaced; and - natural disasters and civil disturbances such as earthquakes, hurricanes, floods, eruptions or riots. The volatility of net operating income generated by a multifamily or commercial property over time will be influenced by many of the foregoing factors, as well as by-- - the length of tenant leases; - the creditworthiness of tenants; - the rental rates at which leases are renewed or replaced; - 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 maintain or replace tenants. Therefore, commercial and multifamily properties with short-term or less creditworthy sources of revenue and/or relatively high operating costs, such as those operated as hospitality and self-storage properties, can be expected to have more volatile cash flows than commercial and multifamily properties with medium- to long-term leases from creditworthy tenants and/or relatively low operating costs. A decline in the real estate market will tend to have a more immediate effect on the net operating income of commercial and multifamily properties with short-term revenue sources and may lead to higher rates of delinquency or defaults on the mortgage loans secured by those properties. 16 THE SUCCESSFUL OPERATION OF A MULTIFAMILY OR COMMERCIAL PROPERTY DEPENDS ON TENANTS. Generally, multifamily and commercial properties are subject to leases. The owner of a multifamily or commercial property typically uses lease or rental payments for the following purposes-- - to pay for maintenance and other operating expenses associated with the property; - to fund repairs, replacements and capital improvements at the property; and - to service mortgage loans secured by, and any other debt obligations associated with operating, the property. Factors that may adversely affect the ability of a multifamily or commercial property to generate net operating income from lease and rental payments include-- - an increase in vacancy rates, which may result from tenants deciding not to renew an existing lease or discontinuing operations; - an increase in tenant payment defaults; - a decline in rental rates as leases are entered into, renewed or extended at lower rates; - an increase in the capital expenditures needed to maintain the property or to make improvements; and - a decline in the financial condition of a major or sole tenant. Various factors that will affect the operation and value of a commercial property include-- - the business operated by the tenants; - the creditworthiness of the tenants; and - the number of tenants. DEPENDENCE ON A SINGLE TENANT OR A SMALL NUMBER OF TENANTS MAKES A PROPERTY RISKIER COLLATERAL. In those cases where an income-producing property is leased to a single tenant or is primarily leased to one or a small number of major tenants, a deterioration in the financial condition or a change in the plan of operations of any of those tenants can have particularly significant effects on the net operating income generated by the property. If any of those tenants defaults under or fails to renew its lease, the resulting adverse financial effect on the operation of the property will be substantially more severe than would be the case with respect to a property occupied by a large number of less significant tenants. An income-producing property operated for retail, office or industrial purposes also may be adversely affected by a decline in a particular business or industry if a concentration of tenants at the property is engaged in that business or industry. TENANT BANKRUPTCY ADVERSELY AFFECTS PROPERTY PERFORMANCE. The bankruptcy or insolvency of a major tenant, or a number of smaller tenants, at a commercial property may adversely affect the income produced by the property. Under the U.S. 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 unless there is 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 any earlier surrender of the leased premises; plus - an amount, not to exceed three years' rent, equal to the greater of one year's rent and 15% of the remaining reserved rent. 17 THE SUCCESS OF AN INCOME-PRODUCING PROPERTY DEPENDS ON RELETTING VACANT SPACES. The operations at an income-producing property will be adversely affected if the owner or property manager is unable to renew leases or relet space on comparable terms when existing leases expire and/or become defaulted. Even if vacated space is successfully relet, the costs associated with reletting, including tenant improvements and leasing commissions in the case of income-producing properties operated for retail, office or industrial purposes, can be substantial and could reduce cash flow from the income-producing properties. Moreover, if a tenant at a income-producing property defaults in its lease obligations, the landlord 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 property. If an income-producing property has multiple tenants, re-leasing expenditures may be more frequent than in the case of a property with fewer tenants, thereby reducing the cash flow generated by the multi-tenanted property. Multi-tenanted properties may also experience higher continuing vacancy rates and greater volatility in rental income and expenses. PROPERTY VALUE MAY BE ADVERSELY AFFECTED EVEN WHEN CURRENT OPERATING INCOME IS NOT. Various factors may affect the value of multifamily and commercial properties without affecting their current net operating income, including--- - changes in interest rates; - the availability of refinancing sources; - changes in governmental regulations, licensing or fiscal policy; - changes in zoning or tax laws; and - potential environmental or other legal liabilities. PROPERTY MANAGEMENT MAY AFFECT PROPERTY OPERATIONS AND VALUE. The operation of an income-producing property will depend upon the property manager's performance and viability. The property manager generally is responsible for-- - responding to changes in the local market; - planning and implementing the rental structure, including staggering durations of leases and establishing levels of rent payments; - operating the property and providing building services; - managing operating expenses; and - ensuring that maintenance and capital improvements are carried out in a timely fashion. Income-producing properties that derive revenues primarily from short-term rental commitments, such as hospitality or self-storage properties, generally require more intensive management than properties leased to tenants under long-term leases. By controlling costs, providing appropriate and efficient services to tenants and maintaining improvements in good condition, a property manager can-- - maintain or improve occupancy rates, business and cash flow; - reduce operating and repair costs; and - preserve building value. On the other hand, management errors can, in some cases, impair the long term viability of an income-producing property. 18 MAINTAINING A PROPERTY IN GOOD CONDITION MAY BE COSTLY. The owner may be required to expend a substantial amount to maintain, renovate or refurbish a commercial or multifamily property. Failure to do so may materially impair the property's ability to generate cash flow. The effects of poor construction quality will increase over time in the form of increased maintenance and capital improvements. Even superior construction will deteriorate over time if management does not schedule and perform adequate maintenance in a timely fashion. There can be no assurance that an income-producing property will generate sufficient cash flow to cover the increased costs of maintenance and capital improvements in addition to paying debt service on the mortgage loan(s) that may encumber that property. COMPETITION WILL ADVERSELY AFFECT THE PROFITABILITY AND VALUE OF AN INCOME-PRODUCING PROPERTY. Some income-producing properties are located in highly competitive areas. Comparable income-producing properties located in the same area compete on the basis of a number of factors including-- - rental rates; - location; - type of business or services and amenities offered; and - nature and condition of the particular property. The profitability and value of an income-producing property may be adversely affected by a comparable property that-- - offers lower rents; - has lower operating costs; - offers a more favorable location; or - offers better facilities. Costs of renovating, refurbishing or expanding an income-producing property in order to remain competitive can be substantial. VARIOUS TYPES OF INCOME-PRODUCING PROPERTIES MAY PRESENT SPECIAL RISKS. The relative importance of any factor affecting the value or operation of an income-producing property will depend on the type and use of the property. In addition, the type and use of a particular income-producing property may present special risks. For example-- - Health care-related facilities and casinos are subject to significant governmental regulation of the ownership, operation, maintenance and/or financing of those properties; - Multifamily rental properties, manufactured housing communities and mobile home parks may be subject to rent control or rent stabilization laws and laws governing landlord/tenant relationships; - Hospitality and restaurant properties are often operated under franchise, management or operating agreements, which may be terminable by the franchisor or operator. Moreover, the transferability of a hotel's or restaurant's operating, liquor and other licenses upon a transfer of the hotel or restaurant is subject to local law requirements; - Depending on their location, recreational and resort properties, properties that provide entertainment services, hospitality properties, restaurants and taverns, mini-warehouses and self-storage facilities tend to be adversely affected more quickly by a general economic downturn than other types of commercial properties; - Marinas will be affected by various statutes and government regulations that govern the use of, and construction on, rivers, lakes and other waterways; 19 - Some recreational and hospitality properties may have seasonal fluctuations and/or may be adversely affected by prolonged unfavorable weather conditions; - Churches and other religious facilities may be highly dependent on donations which are likely to decline as economic conditions decline; and - Properties used as gas stations, automotive sales and service centers, dry cleaners, warehouses and industrial facilities may be more likely to have environmental issues. Additionally, many types of commercial properties are not readily convertible to alternative uses if the original use is not successful or may require significant capital expenditures to effect any conversion to an alternative use. For example, a mortgaged real property may not be readily convertible due to restrictive covenants related to the property. In addition, converting commercial properties to alternate uses generally requires substantial capital expenditures. As a result, the liquidation value of any of those types of property would be substantially less than would otherwise be the case. See "Description of the Trust Assets--Mortgage Loans--Various Types of Multifamily and Commercial Properties May Secure Mortgage Loans Underlying a Series of Offered Certificates." BORROWERS MAY BE UNABLE TO MAKE BALLOON PAYMENTS. Any of the mortgage loans underlying your offered certificates may be nonamortizing or only partially amortizing. The borrower under a mortgage loan of that type is required to make substantial payments of principal and interest, which are commonly called balloon payments, on the maturity date of the loan. The ability of the borrower to make a balloon payment depends upon the borrower's ability to refinance or sell the real property securing the loan. The ability of the borrower to refinance or sell the property will be affected by a number of factors, including-- - the fair market value and condition of the underlying real property; - the level of interest rates; - the borrower's equity in the underlying real property; - the borrower's financial condition; - the operating history of the underlying real property; - changes in zoning and tax laws; - changes in competition in the relevant area; - changes in rental rates in the relevant area; - changes in governmental regulation and fiscal policy; - prevailing general and regional economic conditions; - the state of the fixed income and mortgage markets; and - the availability of credit for multifamily rental or commercial properties. Neither we nor any of our affiliates will be obligated to refinance any mortgage loan underlying your offered certificates. The related master servicer or special servicer may, within prescribed limits, extend and modify mortgage loans underlying your offered certificates that are in default or as to which a payment default is imminent in order to maximize recoveries on the defaulted loans. The related master servicer or special servicer is only required to determine that any extension or modification is reasonably likely to produce a greater recovery than a liquidation of the real property securing 20 the defaulted loan. There is a risk that the decision of the master servicer or special servicer to extend or modify a mortgage loan may not in fact produce a greater recovery. BORROWER CONCENTRATION WITHIN A TRUST EXPOSES INVESTORS TO GREATER RISK OF DEFAULT AND LOSS A particular borrower or group of related borrowers may be associated with multiple real properties securing the mortgage loans underlying a series of offered certificates. The bankruptcy or insolvency of, or other financial problems with respect to, that borrower or group of borrowers could have an adverse effect on the operation of all of the related real properties and on the ability of those properties to produce sufficient cash flow to make required payments on the related mortgage loans. For example, if a borrower or group of related borrowers that owns or controls several real properties experiences financial difficulty at one of those properties, it could defer maintenance at another of those properties in order to satisfy current expenses with respect to the first property. That borrower or group of related borrowers could also attempt to avert foreclosure by filing a bankruptcy petition that might have the effect of interrupting debt service payments on all the related mortgage loans for an indefinite period. In addition, multiple real properties owned by the same borrower or related borrowers are likely to have common management. This would increase the risk that financial or other difficulties experienced by the property manager could have a greater impact on the owner of the related loans. LOAN CONCENTRATION WITHIN A TRUST EXPOSES INVESTORS TO GREATER RISK OF DEFAULT AND LOSS Any of the mortgage assets in one of our trusts may be substantially larger than the other assets in that trust. In general, the inclusion in a trust of one or more mortgage assets that have outstanding principal balances that are substantially larger than the other mortgage assets in the trust can result in losses that are more severe, relative to the size of the related mortgage asset pool, than would be the case if the aggregate balances of that pool were distributed more evenly. GEOGRAPHIC CONCENTRATION WITHIN A TRUST EXPOSES INVESTORS TO GREATER RISK OF DEFAULT AND LOSS If a material concentration of mortgage loans underlying a series of offered certificates is secured by real properties in a particular locale, state or region, then the holders of those certificates will have a greater exposure to-- - any adverse economic developments that occur in the locale, state or region where the properties are located; - changes in the real estate market where the properties are located; - changes in governmental rules and fiscal policies in the governmental jurisdiction where the properties are located; and - acts of nature, including floods, tornadoes and earthquakes, in the areas where properties are located. CHANGES IN POOL COMPOSITION WILL CHANGE THE NATURE OF YOUR INVESTMENT The mortgage loans underlying any series of offered certificates will amortize at different rates and mature on different dates. In addition, some of those mortgage loans may be prepaid or liquidated. As a result, the relative composition of the related mortgage asset pool will change over time. If you purchase certificates with a pass-through rate that is equal to or calculated based upon a weighted average of interest rates on the underlying mortgage loans, your pass-through rate will be affected, and may decline, as the relative composition of the mortgage pool changes. In addition, as payments and other collections of principal are received with respect to the underlying mortgage loans, the remaining mortgage pool backing your certificates may exhibit an increased concentration with respect to property type, number and affiliation of borrowers and geographic location. ADJUSTABLE RATE MORTGAGE LOANS MAY ENTAIL GREATER RISKS OF DEFAULT TO LENDERS THAN FIXED RATE MORTGAGE LOANS Some or all of the mortgage loans underlying a series of offered certificates may provide for adjustments to their respective mortgage interest rates and corresponding adjustments to their respective periodic debt service payments. As the 21 periodic debt service payment for any of those mortgage loans increases, the likelihood that cash flow from the underlying real property will be insufficient to make that periodic debt service payment and pay operating expenses also increases. SUBORDINATE DEBT INCREASES THE LIKELIHOOD THAT A BORROWER WILL DEFAULT ON A MORTGAGE LOAN BACKING YOUR CERTIFICATES Certain mortgage loans included in one of our trusts may either- - prohibit the related borrower from encumbering the related real property with additional secured debt, or - require the consent of the holder of the mortgage loan prior to so encumbering the related real property. However, a violation of this prohibition may not become evident until the affected mortgage loan otherwise defaults, and a lender, such as one of our trusts, may not realistically be able to prevent a borrower from incurring subordinate debt. The existence of any secured subordinated indebtedness increases the difficulty of refinancing a mortgage loan at the loan's maturity. In addition, the related borrower may have difficulty repaying multiple loans. 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 out the junior lien. See "Legal Aspects of Mortgage Loans--Subordinate Financing". JUNIOR MORTGAGE LOANS MAY UNDERLIE YOUR OFFERED CERTIFICATES AND WILL CAUSE GREATER RISKS OF LOSS THAN FIRST MORTGAGE LOAN To the extent specified in the related prospectus supplement, certain mortgage loans may be secured primarily by junior mortgages. In the case of liquidation, mortgage loans underlying the offered certificates are entitled to satisfaction from proceeds that remain from the sale of the related mortgaged property after the mortgage loans senior to those junior mortgage loans have been satisfied. If there are not sufficient funds to satisfy those junior mortgage loans and senior mortgage loans, the junior mortgage loan would suffer a loss and, accordingly, one or more classes of certificates would bear that loss. Therefore, any risks of deficiencies associated with first mortgage loans will be greater with respect to junior mortgage loans. THE TYPE OF MORTGAGOR MAY ENTAIL RISK Mortgage loans made to partnerships, corporations or other entities may entail risks of loss from delinquency and foreclosure that are greater than those of mortgage loans made to individuals. The mortgagor's sophistication and form of organization may increase the likelihood of protracted litigation or bankruptcy in default situations. CREDIT SUPPORT IS LIMITED AND MAY NOT BE SUFFICIENT TO PREVENT LOSS ON YOUR OFFERED CERTIFICATES The prospectus supplement for a series of certificates will describe any credit support provided for that series. 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. 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 or 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 for one or more classes of offered certificates, including the subordination of one or more other classes of certificates, will be determined on the basis of criteria established by each rating agency rating those classes of certificates. Such criteria will be based on a assumed level of defaults, delinquencies 22 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 "--The Nature of Ratings Are Limited and Will Not Guarantee that You Will Receive Any Projected Return on Your Offered Certificates" above and "Description of the Certificates" and "Description of Credit Support" in this prospectus. THE ENFORCEABILITY OF SOME PROVISIONS IN THE MORTGAGE LOANS UNDERLYING YOUR OFFERED CERTIFICATES MAY BE CHALLENGED CROSS-COLLATERALIZATION ARRANGEMENTS. It may be possible to challenge cross-collateralization arrangements involving more than one borrower as a fraudulent conveyance, even if the borrowers are related. If one of those borrowers were to become a debtor in a bankruptcy case, creditors of the bankrupt party or the representative of the bankruptcy estate of the bankrupt party could seek to have the bankruptcy court avoid any lien granted by the bankrupt party to secure repayment of another borrower's loan. In order to do so, the court would have to determine that-- - the bankrupt party-- 1. was insolvent at the time of granting the lien, 2. was rendered insolvent by the granting of the lien, 3. was left with inadequate capital, or 4. was not able to pay its debts as they matured; and - the bankrupt party did not, when it allowed its property to be encumbered by a lien securing the other borrower's loan, receive fair consideration or reasonably equivalent value for pledging its property for the equal benefit of the other borrower. If the court were to conclude that the granting of the lien was an avoidable fraudulent conveyance, it could nullify the lien or security instrument effecting the cross-collateralization. The court could also allow the bankrupt party to recover payments it made under the avoided cross-collateralization. PREPAYMENT PREMIUMS, FEES AND CHARGES. Under the laws of a number of states, the enforceability of any mortgage loan provisions that require payment of a prepayment premium, fee or charge upon an involuntary prepayment, is unclear. If those provisions were unenforceable, borrowers would have an incentive to default in order to prepay their loans. DUE-ON-SALE AND DEBT ACCELERATION CLAUSES. Some or all of the mortgage loans included in one of our trusts may contain a due-on-sale clause, which permits the lender, with some exceptions, to accelerate the maturity of the mortgage loan upon the sale, transfer or conveyance of-- - the related real property; or - a majority ownership interest in the related borrower. We anticipate that all of the mortgage loans included in one of our trusts will contain some form of debt-acceleration clause, which permits the lender to accelerate the debt upon specified monetary or non-monetary defaults by the related borrower. The courts of all states will enforce acceleration clauses in the event of a material payment default. The equity courts of any state, however, may refuse to allow the foreclosure of a mortgage, deed of trust or other security instrument or to permit the acceleration of the indebtedness if-- - the default is deemed to be immaterial; - the exercise of those remedies would be inequitable or unjust; or - the circumstances would render the acceleration unconscionable. 23 ASSIGNMENTS OF LEASES. Some or all of the mortgage loans included in one of our trusts may be secured by, among other things, an assignment of leases and rents. Under that document, the related borrower will assign its right, title and interest as landlord under the leases on the related real property and the income derived from those leases to the lender as further security for the related mortgage loan, while retaining a license to collect rents for so long as there is no default. In the event the borrower defaults, the license terminates and the lender is entitled to collect rents. In some cases, those assignments may not be perfected as security interests prior to actual possession of the cash flow. Accordingly, state law may require that the lender take possession of the property and obtain a judicial appointment of a receiver before becoming entitled to collect the rents. In addition, the commencement of bankruptcy or similar proceedings by or with respect to the borrower will adversely affect the lender's ability to collect the rents. See "Legal Aspects of Mortgage Loans--Bankruptcy Laws." DEFEASANCE. A mortgage loan underlying a series of offered certificates may permit the related borrower, during the periods specified and subject to the conditions set forth in the loan, to pledge to the holder of the mortgage loan a specified amount of direct, non-callable United States government securities and thereby obtain a release of the related mortgaged property. The cash amount which a borrower must expend to purchase, or must deliver to a master servicer in order for the master servicer to purchase, the required United States government securities may be in excess of the principal balance of the mortgage loan. A court could interpret that excess amount as a form of prepayment premium or could take it into account for usury purposes. In some states, some forms of prepayment premiums are unenforceable. If the payment of that excess amount were held to be unenforceable, the remaining portion of the cash amount to be delivered may be insufficient to purchase the requisite amount of United States government securities. CHANGES IN ZONING LAWS MAY ADVERSELY AFFECT THE USE OR VALUE OF A REAL PROPERTY Due to changes in zoning requirements since the construction thereof, an income-producing property may not comply with current zoning laws, including density, use, parking and set back requirements. Accordingly, the property may be a permitted non-conforming structure or the operation of the property may be a permitted non-conforming use. This means that the owner is not required to alter the property's structure or use to comply with the new law, but the owner may be limited in its ability to rebuild the premises "as is" in the event of a substantial casualty loss. This may adversely affect the cash flow available following the casualty. If a substantial casualty were to occur, insurance proceeds may not be sufficient to pay a mortgage loan secured by the property in full. In addition, if the property were repaired or restored in conformity with the current law, its value or revenue-producing potential may be less than that which existed before the casualty. COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT OF 1990 MAY BE EXPENSIVE 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. If a property does not currently comply with that Act, the owner of the non-conforming property may be required to incur significant costs in order to effect compliance with that Act. This will reduce the amount of cash flow available to cover other required maintenance and capital improvements and to pay debt service on the mortgage loan(s) that may encumber that property. There can be no assurance that the owner will have sufficient funds to cover the costs necessary to comply with that Act. In addition, noncompliance could result in the imposition of fines by the federal government or an award of damages to private litigants. LITIGATION MAY ADVERSELY AFFECT A BORROWER'S ABILITY TO REPAY ITS MORTGAGE LOAN The owner of a multifamily or commercial property may be a defendant in a litigation arising out of, among other things, the following-- - breach of contract involving a tenant, a supplier or other party; - negligence resulting in a personal injury; or - responsibility for an environmental problem. Litigation will divert the owner's attention from operating its property. If the litigation were decided adversely to the owner, the award to the plaintiff may adversely affect the owner's ability to repay a mortgage loan secured by the property. 24 SPECIAL HAZARD LOSSES MAY CAUSE YOU TO SUFFER LOSSES ON YOUR OFFERED CERTIFICATES In general, the standard form of fire and extended coverage policy covers physical damage to or destruction of the improvements of a property by fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and civil commotion, subject to the conditions and exclusions specified in the related policy. Most insurance policies typically do not cover any physical damage resulting from, among other things-- - war; - revolution; - governmental actions; - floods and other water-related causes; - earth movement, including earthquakes, landslides and mudflows; - wet or dry rot; - vermin; and - domestic animals. Unless the related mortgage loan documents specifically require the borrower to insure against physical damage arising from these causes, then the resulting losses may be borne by you as a holder of offered certificates. ENVIRONMENTAL RISKS We cannot provide any assurance-- - as to the degree of environmental testing conducted at any of the real properties securing the mortgage loans that back your offered certificates; - that the environmental testing conducted by or on behalf of the applicable originators or any other parties in connection with the origination of those mortgage loans or otherwise identified all adverse environmental conditions and risks at the related real properties; - that the results of the environmental testing were accurately evaluated in all cases; - that the related borrowers have implemented or will implement all operations and maintenance plans and other remedial actions recommended by any environmental consultant that may have conducted testing at the related real properties; or - that the recommended action will fully remediate or otherwise address all the identified adverse environmental conditions and risks. Environmental site assessments vary considerably in their content, quality and cost. Even when adhering to good professional practices, environmental consultants will sometimes not detect significant environmental problems because to do an exhaustive environmental assessment would be far too costly and time-consuming to be practical. In addition, the current environmental condition of a real property securing a mortgage loan underlying your offered certificates could be adversely affected by-- - tenants at the property, such as gasoline stations or dry cleaners; or 25 - conditions or operations in the vicinity of the property, such as leaking underground storage tanks at another property nearby. Various environmental laws may make a current or previous owner or operator of real property liable for the costs of removal or remediation of hazardous or toxic substances on, under or adjacent to the property. Those laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of the hazardous or toxic substances. For example, there are laws that impose liability for release of asbestos containing materials into the air or require the removal or containment of the materials. The owner's liability for any required remediation generally is unlimited and could exceed the value of the property and/or the total assets of the owner. In addition, the presence of hazardous or toxic substances, or the failure to remediate the adverse environmental condition, may adversely affect the owner's or operator's ability to use the affected property. In some states, contamination of a property may give rise to a lien on the property to ensure the costs of cleanup. Depending on the state, this lien may have priority over the lien of an existing mortgage, deed of trust or other security instrument. In addition, third parties may seek recovery from owners or operators of real property for personal injury associated with exposure to hazardous substances, including asbestos and lead-based paint. Persons who arrange for the disposal or treatment of hazardous or toxic substances may be liable for the costs of removal or remediation of the substances at the disposal or treatment facility. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, as well as other federal and state laws, provide that a secured lender, such as one of our trusts, may be liable as an "owner" or "operator" of the real property, regardless of whether the borrower or a previous owner caused the environmental damage, if-- - agents or employees of the lender are deemed to have participated in the management of the borrower; or - the lender actually takes possession of a borrower's property or control of its day-to-day operations, including through the appointment of a receiver or foreclosure. Although recently enacted legislation clarifies the activities in which a lender may engage without becoming subject to liability under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and similar federal laws, that legislation has no applicability to state environmental laws. Moreover, future laws, ordinances or regulations could impose material environmental liability. Federal law requires owners of residential housing constructed prior to 1978 to disclose to potential residents or purchasers-- - any condition on the property that causes exposure to lead-based paint; and - the potential hazards to pregnant women and young children, including that the ingestion of lead-based paint chips and/or the inhalation of dust particles from lead-based paint by children can cause permanent injury, even at low levels of exposure. Property owners may be liable for injuries to their tenants resulting from exposure under various laws that impose affirmative obligations on property owners of residential housing containing lead-based paint. DELINQUENT MORTGAGE LOANS MAY UNDERLIE YOUR OFFERED CERTIFICATES AND ADVERSELY AFFECT THE YIELD ON YOUR OFFERED CERTIFICATES The related prospectus supplement may provide that certain delinquent mortgage loans underlie a series of offered certificates. Unless the related prospectus supplement provides otherwise, the special servicer may service these mortgage loans. The same entity may act as both master servicer and special servicer. Any credit enhancement provided with respect to a particular series of certificates may not cover all losses related to delinquent mortgage loans, and you should consider the risk that the inclusion of delinquent mortgage loans in the trust may adversely affect the rate of defaults and prepayments on the mortgage loans and accordingly the yield on your certificates. CERTAIN FEDERAL INCOME TAX CONSEQUENCES REGARDING RESIDUAL CERTIFICATES INCLUSION OF TAXABLE INCOME IN EXCESS OF CASH RECEIVED. If you own a certificate that is a residual interest in a real estate mortgage investment conduit, or REMIC, for federal income tax purposes, you will have to report on your income tax 26 return as ordinary income your pro rata share of the taxable income of that REMIC, regardless of the amount or timing of your possible receipt of any cash on the certificate. As a result, your offered certificate may have phantom income early in the term of the REMIC because the taxable income from the certificate may exceed the amount of economic income, if any, attributable to the certificate. While you will have a corresponding amount of tax losses later in the term of the REMIC, the present value of the phantom income may significantly exceed the present value of the tax losses. Therefore, the after-tax yield on any REMIC residual certificate may be significantly less than that of a corporate bond or other instrument having similar cash flow characteristics. In fact, some offered certificates that are residual interests, may have a negative value. You will have to report your share of the taxable income and net loss of the REMIC until all the certificates in the related series have a principal balance of zero. See "Federal Income Tax Consequences--REMICs." SOME TAXABLE INCOME OF A RESIDUAL INTEREST CAN NOT BE OFFSET UNDER THE INTERNAL REVENUE CODE OF 1986. A portion of the taxable income from a REMIC residual certificate may be treated as excess inclusions under the Internal Revenue Code of 1986. You will have to pay tax on the excess inclusions regardless of whether you have other credits, deductions or losses. In particular, the tax on excess inclusion-- - generally will not be reduced by losses from other activities; - for a tax-exempt holder, will be treated as unrelated business taxable income; and - for a foreign holder, will not qualify for any exemption from withholding tax. INDIVIDUALS AND CERTAIN ENTITIES SHOULD NOT INVEST IN REMIC RESIDUAL CERTIFICATES. The fees and non-interest expenses of a REMIC will be allocated pro rata to certificates that are residual interests in the REMIC. However, individuals will only be able to deduct these expenses as miscellaneous itemized deductions, which are subject to numerous restrictions and limitations under the Internal Revenue Code of 1986. Therefore, the certificates that are residual interests generally are not appropriate investments for-- - individuals; - estates; - trusts beneficially owned by any individual or estate; and - pass-through entities having any individual, estate or trust as a shareholder, member or partner. TRANSFER LIMITATIONS. In addition, the REMIC residual certificates will be subject to numerous transfer restrictions. These restrictions will reduce your ability to liquidate a REMIC residual certificate. For example, unless we indicate otherwise in the related prospectus supplement, you will not be able to transfer a REMIC residual certificate to a foreign person under the Internal Revenue Code of 1986 or to partnerships that have any non-United States persons as partners. See "Federal Income Tax Consequences--REMICs--Taxation of Owners of REMIC Residual Certificates." BORROWER BANKRUPTCY PROCEEDINGS CAN DELAY AND IMPAIR RECOVERY ON A MORTGAGE LOAN UNDERLYING YOUR OFFERED CERTIFICATES Under the U.S. Bankruptcy Code, the filing of a petition in bankruptcy by or against a borrower will stay the sale of a real property owned by that borrower, as well as the commencement or continuation of a foreclosure action. In addition, if a court determines that the value of a real property is less than the principal balance of the mortgage loan it secures, the court may reduce the amount of secured indebtedness to the then-value of the property. This would make the lender a general unsecured creditor for the difference between the then-value of the property and the amount of its outstanding mortgage indebtedness. 27 A bankruptcy court also may-- - grant a debtor a reasonable time to cure a payment default on a mortgage loan; - reduce monthly payments due under a mortgage loan; - change the rate of interest due on a mortgage loan; or - otherwise alter a mortgage loan's repayment schedule. Furthermore, the borrower, as debtor-in-possession, or its bankruptcy trustee has special powers to avoid, subordinate or disallow debts. In some circumstances, the claims of a secured lender, such as one of our trusts, may be subordinated to financing obtained by a debtor-in-possession subsequent to its bankruptcy. Under the U.S. Bankruptcy Code, a lender will be stayed from enforcing a borrower's assignment of rents and leases. The U.S. Bankruptcy Code also may interfere with a lender's ability to enforce lockbox requirements. The legal proceedings necessary to resolve these issues can be time consuming and may significantly delay the receipt of rents. Rents also may escape an assignment to the extent they are used by borrower to maintain its property or for other court authorized expenses. As a result of the foregoing, the related trust's recovery with respect to borrowers in bankruptcy proceedings may be significantly delayed, and the total amount ultimately collected may be substantially less than the amount owed. TAXES ON FORECLOSURE PROPERTY WILL REDUCE AMOUNTS AVAILABLE TO MAKE PAYMENTS ON THE OFFERED CERTIFICATES One of our trusts may be designated, in whole or in part, as a real estate mortgage investment conduit for federal income tax purposes. If that trust acquires a real property through a foreclosure or deed in lieu of foreclosure, then the related special servicer may be required to retain an independent contractor to operate and manage the property. Receipt of the following types of income on that property will subject the trust to federal, and possibly state or local, tax on that income at the highest marginal corporate tax rate-- - any net income from that operation and management that does not consist of qualifying rents from real property within the meaning of Section 856(d) of the Internal Revenue Code of 1986; and - any rental income based on the net profits of a tenant or sub-tenant or allocable to a service that is non-customary in the area and for the type of building involved. These taxes would reduce the net proceeds available for payment with respect to the related offered certificates. BOOK-ENTRY REGISTRATION MAY LIMIT YOUR ABILITY TO EXERCISE YOUR RIGHTS, PROVIDE ONLY LIMITED INFORMATION, AND AFFECT PAYMENT AND TRANSFERABILITY OF YOUR OFFERED CERTIFICATES Your offered certificates may be issued in book-entry form through the facilities of the Depository Trust Company. As a result-- - you will be able to exercise your rights as a certificateholder only indirectly through the Depository Trust Company and its participating organizations; - you may have only limited access to information regarding your offered certificates; - you may suffer delays in the receipt of payments on your offered certificates; and - your ability to pledge or otherwise take action with respect to your offered certificates may be limited due to the lack of a physical certificate evidencing your ownership of those certificates. See "Description of the Certificates--Book-Entry Registration." 28 POTENTIAL CONFLICTS OF INTEREST CAN AFFECT A PERSON'S PERFORMANCE The master servicer or special servicer for one of our trusts, or any of their respective affiliates, may purchase certificates evidencing interests in that trust. In addition, the master servicer or special servicer for one of our trusts, or any of their respective affiliates, may have interests in, or other financial relationships with, borrowers under the related mortgage loans. In servicing the mortgage loans in any of our trusts, the related master servicer and special servicer will each be required to observe the terms of the governing document(s) for the related series of offered certificates and, in particular, to act in accordance with the servicing standard described in the related prospectus supplement. You should consider, however, that either of these parties, if it or an affiliate owns certificates, or has financial interests in or other financial dealings with any of the related borrowers, may have interests when dealing with the mortgage loans underlying your offered certificates that are in conflict with your interests. For example, if the related special servicer owns any certificates, it could seek to mitigate the potential loss on its certificates from a troubled mortgage loan by delaying enforcement in the hope of realizing greater proceeds in the future. However, this action by a special servicer could result a lower recovery to the related trust than would have been the case if the special servicer had not delayed in taking enforcement action. Furthermore, the master servicer or special servicer for any of our trusts may service existing and new loans for third parties, including portfolios of loans similar to the mortgage loans included in that trust. The properties securing these other loans may be in the same markets as and compete with the properties securing mortgage loans in our trust. Accordingly, that master servicer or special servicer may be acting on behalf of parties with conflicting interests. CAPITALIZED TERMS USED IN THIS PROSPECTUS From time to time we use capitalized terms in this prospectus. Each of those capitalized terms will have the meaning assigned to it in the "Glossary" attached to this prospectus. CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. We were incorporated in Delaware on December 31, 1985. We were organized, among other things, for the purpose of serving as a private secondary mortgage market conduit. We are a wholly-owned subsidiary of Credit Suisse First Boston Management Corporation, who is a wholly-owned subsidiary of Credit Suisse First Boston, Inc. Our principal executive offices are located at Eleven Madison Avenue, New York, New York 10010. Our telephone number is 212-325-2000. We do not have, and do not expect to have in the future, any significant assets. Neither we nor any of our affiliates will guarantee any of the mortgage assets included in one of our trusts. Furthermore, unless we indicate otherwise in the related prospectus supplement, no governmental agency or instrumentality will guarantee or insure any of those mortgage assets. USE OF PROCEEDS Unless otherwise specified in the related prospectus supplement, the net proceeds to be received from the sale of the offered certificates of any series will be applied by us to the purchase of assets for the related trust or will be used by us to cover expenses related to that purchase and the issuance of those certificates. You may review a breakdown of the estimated expenses of issuing and distributing the certificates in Part II, Item 14 of the registration statement of which this prospectus forms a part. See "Available Information; Incorporation by Reference" for information concerning obtaining a copy of the registration statement. Also see "Underwriting" in the related prospectus supplement for information concerning the proceeds to us from the sale of the particular offered certificates. We expect to sell the offered certificates from time to time, but the timing and amount of offerings of those certificates will depend on a number of factors, including the volume of mortgage assets acquired by us, prevailing interest rates, availability of funds and general market conditions. We expect to sell the offered certificates from time to time, but the timing and amount of offerings of those certificates will depend on a number of factors, including the volume of mortgage assets acquired by us, prevailing interest rates, availability of funds and general market conditions. 29 DESCRIPTION OF THE TRUST ASSETS GENERAL We will be responsible for establishing the trust underlying each series of offered certificates. The assets of the trust will primarily consist of-- - various types of multifamily and/or commercial mortgage loans; - mortgage participations, pass-through certificates, collateralized mortgage obligations or other mortgage-backed securities that directly or indirectly evidence interests in, or are secured by pledges of, one or more of various types of multifamily and/or commercial mortgage loans; or - a combination of mortgage loans and mortgage-backed securities of the types described above. We do not originate mortgage loans. Accordingly, we must acquire each of the mortgage loans to be included in one of our trusts from the originator or a subsequent assignee. In some cases, that originator or subsequent assignee will be one of our affiliates. Unless we indicate otherwise in the related prospectus supplement, we will acquire, directly or through one of our affiliates, in the secondary market, any mortgage-backed security to be included in one of our trusts. MORTGAGE LOANS GENERAL. Each mortgage loan underlying the offered certificates will constitute the obligation of one or more persons to repay a debt. That obligation will be evidenced by a promissory note or bond. In addition, that obligation will be secured by a mortgage, deed of trust or other security instrument that creates a first or junior lien on, or security interest in, an interest in one or more of the following types of real property-- - rental or cooperatively-owned buildings with multiple dwelling units; - retail properties related to the sale of consumer goods and other products to the general public, such as shopping centers, malls, factory outlet centers, automotive sales centers, department stores and other retail stores, grocery stores, specialty shops, convenience stores and gas stations; - retail properties related to providing entertainment, recreational and personal services to the general public, such as movie theaters, fitness centers, bowling alleys, salons, dry cleaners and automotive service centers; - office properties; - hospitality properties, such as hotels, motels and other lodging facilities; - casino properties; - health care-related properties, such as hospitals, skilled nursing facilities, nursing homes, congregate care facilities and, in some cases, assisted living centers and senior housing; - industrial properties; - warehouse facilities, mini-warehouse facilities and self-storage facilities; - restaurants, taverns and other establishments involved in the food and beverage industry; - manufactured housing communities, mobile home parks and recreational vehicle parks; 30 - recreational and resort properties, such as recreational vehicle parks, golf courses, marinas, ski resorts and amusement parks; - arenas and stadiums; - churches and other religious facilities; - parking lots and garages; - mixed use properties; - other income-producing properties; and - unimproved land. The real property interests that may be encumbered in order to secure a mortgage loan underlying your offered certificates, include-- - a fee interest or estate, which consists of ownership of the property for an indefinite period; - an estate for years, which consists of ownership of the property for a specified period of years; - a leasehold interest or estate, which consists of a right to occupy and use the property for a specified period of years, subject to the terms and conditions of a lease; - shares in a cooperative corporation which owns the property; or - any other real estate interest under applicable local law. Any of these real property interests may be subject to deed restrictions, easements, rights of way and other matters of public record with respect to the related property. In addition, the use of, and improvements that may be constructed on, any particular real property will, in most cases, be subject to zoning laws and other legal restrictions. Most, if not all, of the mortgage loans underlying a series of offered certificates will be secured by liens on real properties located in the United States, its territories and possessions. However, some of those mortgage loans may be secured by liens on real properties located outside the United States, its territories and possessions, provided that foreign mortgage loans do not represent more than 10% of the related mortgage asset pool, by balance. If we so indicate in the related prospectus supplement, one or more of the mortgage loans underlying a series of offered certificates may be secured by a junior lien on the related real property. However, the loan or loans secured by the more senior liens on that property may not be included in the related trust. The primary risk to the holder of a mortgage loan secured by a junior lien on a real property is the possibility that the foreclosure proceeds remaining after payment of the loans secured by more senior liens on that property will be insufficient to pay the junior loan in full. In a foreclosure proceeding, the sale proceeds are applied-- - first, to the payment of court costs and fees in connection with the foreclosure; - second, to the payment of real estate taxes; and - third, to the payment of any and all principal, interest, prepayment or acceleration penalties, and other amounts owing to the holder of the senior loans. The claims of the holders of the senior loans must be satisfied in full before the holder of the junior loan receives any payments with respect to the junior loan. If a lender forecloses on a junior loan, it does so subject to any related senior loans. 31 If we so indicate in the related prospectus supplement, the mortgage loans underlying a series of offered certificates may be delinquent as of the date the certificates are initially issued. In those cases, we will describe in the related prospectus supplement-- - the period of the delinquency; - any forbearance arrangement then in effect; - the condition of the related real property; and - the ability of the related real property to generate income to service the mortgage debt. We will not, however, transfer any mortgage loan to a trust if we know that the mortgage loan is, at the time of transfer, more than 90 days delinquent with respect to any scheduled payment of principal or interest or in foreclosure. VARIOUS TYPES OF MULTIFAMILY AND COMMERCIAL PROPERTIES MAY SECURE MORTGAGE LOANS UNDERLYING A SERIES OF OFFERED CERTIFICATES. The mortgage loans underlying a series of offered certificates may be secured by numerous types of multifamily and commercial properties. As we discuss below under "--Mortgage Loans--Default and Loss Considerations with Respect to Commercial and Multifamily Mortgage Loans," the adequacy of an income-producing property as security for a mortgage loan depends in large part on its value and ability to generate net operating income. Set forth below is a discussion of some of the various factors that may affect the value and operations of the indicated types of multifamily and commercial properties. MULTIFAMILY RENTAL PROPERTIES. Factors affecting the value and operation of a multifamily rental property include-- - the physical attributes of the property, such as its age, appearance, amenities and construction quality; - the types of services offered at the property; - the location of the property; - the characteristics of the surrounding neighborhood, which may change over time; - the rents charged for dwelling units at the property relative to the rents charged for comparable units at competing properties; - the ability of management to provide adequate maintenance and insurance; - the property's reputation; - the level of mortgage interest rates, which may encourage tenants to purchase rather than lease housing; - the existence or construction of competing or alternative residential properties, including other apartment buildings and complexes, manufactured housing communities, mobile home parks and single-family housing; - the ability of management to respond to competition; - the tenant mix and whether the property is primarily occupied by workers from a particular company or type of business, personnel from a local military base or students; - adverse local, regional or national economic conditions, which may limit the amount that may be charged for rents and may result in a reduction in timely rent payments or a reduction in occupancy levels; 32 - state and local regulations, which may affect the property owner's ability to increase rent to the market rent for an equivalent apartment; - the extent to which the property is subject to land use restrictive covenants or contractual covenants that require that units be rented to low income tenants; - the extent to which the cost of operating the property, including the cost of utilities and the cost of required capital expenditures, may increase; and - the extent to which increases in operating costs may be passed through to tenants. Because units in a multifamily rental property are leased to individuals, usually for no more than a year, the property is likely to respond relatively quickly to a downturn in the local economy or to the closing of a major employer in the area. Some states regulate the relationship of an owner and its tenants at a multifamily rental property. Among other things, these states may-- - require written leases; - require good cause for eviction; - require disclosure of fees; - prohibit unreasonable rules; - prohibit retaliatory evictions; - prohibit restrictions on a resident's choice of unit vendors; - limit the bases on which a landlord may increase rent; or - prohibit a landlord from terminating a tenancy solely by reason of the sale of the owner's building. 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. Some counties and municipalities also impose rent control regulations on apartment buildings. These regulations may limit rent increases to-- - fixed percentages; - percentages of increases in the consumer price index; - increases set or approved by a governmental agency; or - increases determined through mediation or binding arbitration. In many cases, the rent control laws do not provide for decontrol of rental rates upon vacancy of individual units. Any limitations on a landlord's ability to raise rents at a multifamily rental property may impair the landlord's ability to repay a mortgage loan secured by the property or to meet operating costs. Some multifamily rental properties are subject to land use restrictive covenants or contractual covenants in favor of federal or state housing agencies. These covenants generally require that a minimum number or percentage of units be rented to tenants who have incomes that are substantially lower than median incomes in the area or region. These covenants may limit the potential rental rates that may be charged at a multifamily rental property, the potential tenant base for the property 33 or both. An owner may subject a multifamily rental property to these covenants in exchange for tax credits or rent subsidies. When the credits or subsidies cease, net operating income will decline. Some mortgage loans underlying the offered certificates will be secured by-- - the related borrower's interest in multiple units in a residential condominium project; and - the related voting rights in the owners' association for the project. Due to the nature of condominiums, a default on any of those mortgage loans will not allow the related special servicer the same flexibility in realizing on the real property collateral as is generally available with respect to multifamily rental properties that are not condominiums. The rights of other unit owners, the governing documents of the owners' association and the state and local laws applicable to condominiums must be considered and respected. Consequently, servicing and realizing upon the collateral for those mortgage loans could subject the related trust to greater delay, expense and risk than a loan secured by a multifamily rental property that is not a condominium. COOPERATIVELY-OWNED APARTMENT BUILDINGS. Some multifamily properties are owned or leased by cooperative corporations. In general, each shareholder in the corporation is entitled to occupy a particular apartment unit under a long-term proprietary lease or occupancy agreement. A tenant/shareholder of a cooperative corporation must make a monthly maintenance payment to the corporation. The monthly maintenance payment represents a tenant/shareholder's PRO RATA share of the corporation's-- - mortgage loan payments; - real property taxes; - maintenance expenses; and - other capital and ordinary expenses of the property. These monthly maintenance payments are in addition to any payments of principal and interest the tenant/shareholder must make on any loans of the tenant/shareholder secured by its shares in the corporation. A cooperative corporation is directly responsible for building maintenance and payment of real estate taxes and hazard and liability insurance premiums. A cooperative corporation's ability to meet debt service obligations on a mortgage loan secured by, and to pay all other operating expenses of, the cooperatively owned property depends primarily upon the receipt of-- - maintenance payments from the tenant/shareholders; and - any rental income from units or commercial space that the cooperative corporation might control. A cooperative corporation may have to impose special assessments on the tenant/shareholders in order to pay unanticipated expenditures. Accordingly, a cooperative corporation is highly dependent on the financial well being of its tenant/shareholders. A cooperative corporation's ability to pay the amount of any balloon payment due at the maturity of a mortgage loan secured by the cooperatively owned property depends primarily on its ability to refinance the property. In a typical cooperative conversion plan, the owner of a rental apartment building contracts to sell the building to a newly formed cooperative corporation. Shares are allocated to each apartment unit by the owner or sponsor. The current tenants have a specified period to subscribe at prices discounted from the prices to be offered to the public after that period. As part of the consideration for the sale, the owner or sponsor receives all the unsold shares of the cooperative corporation. In general the sponsor controls the corporation's board of directors and management for a limited period of time. If the sponsor holds the shares allocated to a large number of apartment units, the lender on a mortgage loan secured by a cooperatively owned property may be adversely affected by a decline in the creditworthiness of the sponsor. 34 Many cooperative conversion plans are non-eviction plans. Under a non-eviction plan, a tenant at the time of conversion who chooses not to purchase shares is entitled to reside in its apartment unit as a subtenant from the owner of the shares allocated to that unit. Any applicable rent control or rent stabilization laws would continue to be applicable to the subtenancy. In addition, the subtenant may be entitled to renew its lease for an indefinite number of years with continued protection from rent increases above those permitted by any applicable rent control and rent stabilization laws. The owner/shareholder is responsible for the maintenance payments to the cooperative corporation without regard to whether it receives rent from the subtenant or whether the rent payments are lower than maintenance payments on the unit. Newly-formed cooperative corporations typically have the greatest concentration of non-tenant/shareholders. RETAIL PROPERTIES. The term "retail property" encompasses a broad range of properties at which businesses sell consumer goods and other products and provide various entertainment, recreational or personal services to the general public. Some examples of retail properties include-- - shopping centers; - factory outlet centers; - malls; - automotive sales and service centers; - consumer oriented businesses; - department stores; - grocery stores; - convenience stores; - specialty shops; - gas stations; - movie theaters; - fitness centers; - bowling alleys; - salons; and - dry cleaners. Unless owner occupied, retail properties generally derive all or a substantial percentage of their income from lease payments from commercial tenants. Therefore, it is important for the owner of a retail property to attract and keep tenants, particularly significant tenants, that are able to meet their lease obligations. In order to attract tenants, the owner of a retail property may be required-- - to lower rents; - to grant a potential tenant a free rent or reduced rent period; - to improve the condition of the property generally; or - to make at its own expense, or grant a rent abatement to cover, tenant improvements for a potential tenant. 35 A prospective tenant will also be interested in the number and type of customers that it will be able to attract at a particular retail property. The ability of a tenant at a particular retail property to attract customers will be affected by a number of factors related to the property and the surrounding area, including-- - competition from other retail properties; - perceptions regarding the safety, convenience and attractiveness of the property; - perceptions regarding the safety of the surrounding area; - demographics of the surrounding area; - the strength and stability of the local, regional and national economies; - traffic patterns and access to major thoroughfares; - the visibility of the property; - availability of parking; - the particular mixture of the goods and services offered at the property; - customer tastes, preferences and spending patterns; and - the drawing power of other tenants. The success of a retail property is often dependent on the success of its tenants' businesses. A significant component of the total rent paid by tenants of retail properties is often tied to a percentage of gross sales or revenues. Declines in sales or revenues of the tenants will likely cause a corresponding decline in percentage rents and/or impair the tenants' ability to pay their rent or other occupancy costs. A default by a tenant under its lease could result in delays and costs in enforcing the landlord's rights. Retail properties would be directly and adversely affected by a decline in the local economy and reduced consumer spending. Repayment of a mortgage loan secured by a retail property will be affected by the expiration of space leases at the property and the ability of the borrower to renew or relet the space on comparable terms. Even if vacant space is successfully relet, the costs associated with reletting, including tenant improvements, leasing commissions and free rent, may be substantial and could reduce cash flow from a retail property. The presence or absence of an anchor tenant in a multi-tenanted retail property can be important. Anchor tenants play a key role in generating customer traffic and making the center desirable for other tenants. An anchor tenant is, in general, a retail tenant whose space is substantially larger in size than that of other tenants at the same retail property and whose operation is vital in attracting customers to the property. At some retail properties, the anchor tenant owns the space it occupies. In those cases where the property owner does not control the space occupied by the anchor tenant, the property owner may not be able to take actions with respect to the space that it otherwise typically would, such as granting concessions to retain an anchor tenant or removing an ineffective anchor tenant. In some cases, an anchor tenant may cease to operate at the property, thereby leaving its space unoccupied even though it continues to own or pay rent on the vacant space. If an anchor tenant ceases operations at a retail property, other tenants at the property may be entitled to terminate their leases prior to the scheduled termination date or to pay rent at a reduced rate for the remaining term of the lease. Various factors will adversely affect the economic performance of an anchored retail property, including-- - an anchor tenant's failure to renew its lease; - termination of an anchor tenant's lease; - the bankruptcy or economic decline of an anchor tenant or a self-owned anchor; 36 - the cessation of the business of a self-owned anchor or of an anchor tenant, notwithstanding its continued ownership of the previously occupied space or its continued payment of rent, as the case may be; or - a loss of an anchor tenant's ability to attract shoppers. Retail properties may also face competition from sources outside a given real estate market or with lower operating costs. For example, all of the following compete with more traditional department stores and specialty shops for consumer dollars-- - factory outlet centers; - discount shopping centers and clubs; - catalogue retailers; - television shopping networks and programs; - internet web sites; and - telemarketing. Similarly, home movie rentals and pay-per-view movies provide alternate sources of entertainment to movie theaters. Continued growth of these alternative retail outlets and entertainment sources, which are often characterized by lower operating costs, could adversely affect the rents collectible at retail properties. Gas stations, automotive sales and service centers and dry cleaners also pose unique environmental risks because of the nature of their businesses and the types of products used or sold in those businesses. OFFICE PROPERTIES. Factors affecting the value and operation of an office property include-- - the number and quality of the tenants, particularly significant tenants, at the property; - the physical attributes of the building in relation to competing buildings; - the location of the property with respect to the central business district or population centers; - demographic trends within the metropolitan area to move away from or towards the central business district; - social trends combined with space management trends, which may change towards options such as telecommuting or hoteling to satisfy space needs; - tax incentives offered to businesses or property owners by cities or suburbs adjacent to or near where the building is located; - local competitive conditions, such as the supply of office space or the existence or construction of new competitive office buildings; - the quality and philosophy of building management; - access to mass transportation; and - changes in zoning laws. 37 Office properties may be adversely affected by an economic decline in the business operated by their tenants. The risk associated with that economic decline is increased if revenue is dependent on a single tenant or if there is a significant concentration of tenants in a particular business or industry. Office properties are also subject to competition with other office properties in the same market. Competitive factors affecting an office property include-- - rental rates; - the building's age, condition and design, including floor sizes and layout; - access to public transportation and availability of parking; and - amenities offered to its tenants, including sophisticated building systems, such as fiber optic cables, satellite communications or other basic building technological features. The cost of refitting office space for a new tenant is often higher than for other property types. The success of an office property also depends on the local economy. Factors influencing a company's decision to locate in a given area include-- - the cost and quality of labor; - tax incentives; and - quality of life matters, such as schools and cultural amenities. The strength and stability of the local or regional economy will affect an office property's ability to attract stable tenants on a consistent basis. A central business district may have a substantially different economy from that of a suburb. HOSPITALITY PROPERTIES. Hospitality properties may involve different types of hotels and motels, including-- - full service hotels; - resort hotels with many amenities; - limited service hotels; - hotels and motels associated with national or regional franchise chains; - hotels that are not affiliated with any franchise chain but may have their own brand identity; and - other lodging facilities. Factors affecting the economic performance of a hospitality property include-- - the location of the property and its proximity to major population centers or attractions; - the seasonal nature of business at the property; - the level of room rates relative to those charged by competitors; - quality and perception of the franchise affiliation; 38 - economic conditions, either local, regional or national, which may limit the amount that can be charged for a room and may result in a reduction in occupancy levels; - the existence or construction of competing hospitality properties; - nature and quality of the services and facilities; - financial strength and capabilities of the owner and operator; - the need for continuing expenditures for modernizing, refurbishing and maintaining existing facilities; - increases in operating costs, which may not be offset by increased room rates; - the property's dependence on business and commercial travelers and tourism; and - changes in travel patterns caused by changes in access, energy prices, labor strikes, relocation of highways, the reconstruction of additional highways or other factors. Because limited service hotels and motels are relatively quick and inexpensive to construct and may quickly reflect a positive value, an over-building of these hotels and motels could occur in any given region, which would likely adversely affect occupancy and daily room rates. Further, because rooms at hospitality properties are generally rented for short periods of time, hospitality properties tend to be more sensitive to adverse economic conditions and competition than many other types of commercial properties. Additionally, the revenues of some hospitality properties, particularly those located in regions whose economies depend upon tourism, may be highly seasonal in nature. Hospitality properties may be operated under franchise agreements. The continuation of a franchise is typically subject to specified operating standards and other terms and conditions. The franchisor periodically inspects its licensed properties to confirm adherence to its operating standards. The failure of the hospitality property to maintain those standards or adhere to those other terms and conditions could result in the loss or cancellation of the franchise license. It is possible that the franchisor could condition the continuation of a franchise license on the completion of capital improvements or the making of capital expenditures that the owner of the hospitality property determines are too expensive or are otherwise unwarranted in light of the operating results or prospects of the property. In that event, the owner of the hospitality property may elect to allow the franchise license to lapse. In any case, if the franchise is terminated, the owner of the hospitality property may seek to obtain a suitable replacement franchise or to operate property independently of a franchise license. The loss of a franchise license could have a material adverse effect upon the operations or value of the hospitality property because of the loss of associated name recognition, marketing support and centralized reservation systems provided by the franchisor. The viability of any hospitality property that is a franchise of a national or a regional hotel or motel chain is dependent upon-- - the continued existence and financial strength of the franchisor; - the public perception of the franchise service mark; and - the duration of the franchise licensing agreement. The transferability of franchise license agreements may be restricted. The consent of the franchisor would be required for the continued use of the franchise license by the hospitality property following a foreclosure. 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 hospitality property, the lender or other purchaser of the hospitality property may not be entitled to the rights under any associated liquor license. That party would be required to apply in its own right for a new liquor license. There can be no assurance that a new license could be obtained or that it could be obtained promptly. 39 CASINO PROPERTIES. Factors affecting the economic performance of a casino property include-- - location, including proximity to or easy access from major population centers; - appearance; - economic conditions, either local, regional or national, which may limit the amount of disposable income that potential patrons may have for gambling; - the existence or construction of competing casinos; - dependence on tourism; and - local or state governmental regulation. Competition among major casinos may involve attracting patrons by-- - providing alternate forms of entertainment, such as performers and sporting events; and - offering low-priced or free food and lodging. Casino owners may expend substantial sums to modernize, refurbish and maintain existing facilities. The ownership and operation of casino properties is often subject to local or state governmental regulation. A government agency or authority may have jurisdiction over or influence with respect to the foreclosure of a casino property or the bankruptcy of its owner or operator. In some jurisdictions, it may be necessary to receive governmental approval before foreclosing, thereby resulting in substantial delays to a lender. Gaming licenses are not transferable, including in connection with a foreclosure. There can be no assurance that a lender or another purchaser in foreclosure or otherwise will be able to obtain the requisite approvals to continue operating the foreclosed property as a casino. Any given state or municipality that currently allows legalized gambling could pass legislation banning it. The loss of a gaming license for any reason would have a material adverse effect on the value of a casino property. HEALTH CARE-RELATED PROPERTIES. Health-care related properties include-- - hospitals; - skilled nursing facilities; - nursing homes; - congregate care facilities; and - in some cases, assisted living centers and housing for seniors. Health care-related facilities, particularly nursing homes, may receive a substantial portion of their revenues from government reimbursement programs, primarily Medicaid and Medicare. Medicaid and Medicare are subject to-- - statutory and regulatory changes; - retroactive rate adjustments; - administrative rulings; 40 - policy interpretations; - delays by fiscal intermediaries; and - government funding restrictions. All of the foregoing can adversely affect revenues from the operation a health care-related facility. Moreover, governmental payors have employed cost-containment measures that limit payments to health care providers. In addition, there are currently under consideration various proposals for national health care relief that could further limit these payments. Providers of long-term nursing care and other medical services are highly regulated by federal, state and local law. They are subject to numerous factors which can increase the cost of operation, limit growth and, in extreme cases, require or result in suspension or cessation of operations, including-- - federal and state licensing requirements; - facility inspections; - rate setting; - reimbursement policies; and - laws relating to the adequacy of medical care, distribution of pharmaceuticals, use of equipment, personnel operating policies and maintenance of and additions to facilities and services. Under applicable federal and state laws and regulations, Medicare and Medicaid reimbursements generally may not be made to any person other than the provider who actually furnished the related material goods and services. Accordingly, in the event of foreclosure on a health care-related facility, neither a lender nor other subsequent lessee or operator of the property would generally be entitled to obtain from federal or state governments any outstanding reimbursement payments relating to services furnished at the property prior to foreclosure. Furthermore, in the event of foreclosure, there can be no assurance that a lender or other purchaser in a foreclosure sale would be entitled to the rights under any required licenses and regulatory approvals. The lender or other purchaser may have to apply in its own right for those licenses and approvals. There can be no assurance that a new license could be obtained or that a new approval would be granted. Health care-related facilities are generally special purpose properties that could not be readily converted to general residential, retail or office use. This will adversely affect their liquidation value. Furthermore, transfers of health care-related facilities are subject to regulatory approvals under state, and in some cases federal, law not required for transfers of most other types of commercial properties. INDUSTRIAL PROPERTIES. Industrial properties may be adversely affected by reduced demand for industrial space occasioned by a decline in a particular industry segment and/or by a general slowdown in the economy. In addition, an industrial property that suited the particular needs of its original tenant may be difficult to relet to another tenant or may become functionally obsolete relative to newer properties. The value and operation of an industrial property depends on-- - location of the property, the desirability of which in a particular instance may depend on-- 1. availability of labor services, 2. proximity to supply sources and customers, and 3. accessibility to various modes of transportation and shipping, including railways, roadways, airline terminals and ports; 41 - building design of the property, the desirability of which in a particular instance may depend on-- 1. ceiling heights, 2. column spacing, 3. number and depth of loading bays, 4. divisibility, 5. floor loading capacities, 6. truck turning radius, 7. overall functionality, and 8. adaptability of the property, because industrial tenants often need space that is acceptable for highly specialized activities; and - the quality and creditworthiness of individual tenants, because industrial properties frequently have higher tenant concentrations. Industrial properties are generally special purpose properties that could not be readily converted to general residential, retail or office use. This will adversely affect their liquidation value. WAREHOUSE, MINI-WAREHOUSE AND SELF-STORAGE FACILITIES. Warehouse, mini-warehouse and self-storage properties are considered vulnerable to competition because both acquisition costs and break-even occupancy are relatively low. In addition, it would require substantial capital expenditures to convert a warehouse, mini-warehouse or self-storage property to an alternative use. This will materially impair the liquidation value of the property if its operation for storage purposes becomes unprofitable due to decreased demand, competition, age of improvements or other factors. Successful operation of a warehouse, mini-warehouse or self-store property depends on-- - building design; - location and visibility; - tenant privacy; - efficient access to the property; - proximity to potential users, including apartment complexes or commercial users; - services provided at the property, such as security; - age and appearance of the improvements; and - quality of management. RESTAURANTS AND TAVERNS. Factors affecting the economic viability of individual restaurants, taverns and other establishments that are part of the food and beverage service industry include-- - competition from facilities having businesses similar to a particular restaurant or tavern; - perceptions by prospective customers of safety, convenience, services and attractiveness; 42 - the cost, quality and availability of food and beverage products; - negative publicity, resulting from instances of food contamination, food-borne illness and similar events; - changes in demographics, consumer habits and traffic patterns; - the ability to provide or contract for capable management; and - retroactive changes to building codes, similar ordinances and other legal requirements. Adverse economic conditions, whether local, regional or national, may limit the amount that may be charged for food and beverages and the extent to which potential customers dine out. Because of the nature of the business, restaurants and taverns tend to respond to adverse economic conditions more quickly than do many other types of commercial properties. Furthermore, the transferability of any operating, liquor and other licenses to an entity acquiring a bar or restaurant, either through purchase or foreclosure, is subject to local law requirements. The food and beverage service industry is highly competitive. The principal means of competition are-- - segment; - product; - price; - value; - quality; - service; - convenience; - location; and - the nature and condition of the restaurant facility. A restaurant or tavern operator competes with the operators of comparable establishments in the area in which its restaurant or tavern is located. Other restaurants could have-- - lower operating costs; - more favorable locations; - more effective marketing; - more efficient operations; or - better facilities. The location and condition of a particular restaurant or tavern will affect the number of customers and, to an extent, the prices that may be charged. The characteristics of an area or neighborhood in which a restaurant or tavern is located may change over time or in relation to competing facilities. Also, the cleanliness and maintenance at a restaurant or tavern will affect its appeal to customers. In the case of a regionally- or nationally-known chain restaurant, there may be costly expenditures for renovation, refurbishment or expansion, regardless of its condition. 43 Factors affecting the success of a regionally- or nationally-known chain restaurant include-- - actions and omissions of any franchisor, including management practices that-- 1. adversely affect the nature of the business, or 2. require renovation, refurbishment, expansion or other expenditures; - the degree of support provided or arranged by the franchisor, including its franchisee organizations and third-party providers of products or services; and - the bankruptcy or business discontinuation of the franchisor or any of its franchisee organizations or third-party providers. Chain restaurants may be operated under franchise agreements. Those agreements typically do not contain provisions protective of lenders. A borrower's rights as franchisee typically may be terminated without informing the lender, and the borrower may be precluded from competing with the franchisor upon termination. In addition, a lender that acquires title to a restaurant site through foreclosure or similar proceedings may be restricted in the use of the site or may be unable to succeed to the rights of the franchisee under the related franchise agreement. The transferability of a franchise may be subject to other restrictions. Also, federal and state franchise regulations may impose additional risk, including the risk that the transfer of a franchise acquired through foreclosure or similar proceedings may require registration with governmental authorities or disclosure to prospective transferees. MANUFACTURED HOUSING COMMUNITIES, MOBILE HOME PARKS AND RECREATIONAL VEHICLE PARKS. Manufactured housing communities and mobile home parks consist of land that is divided into "spaces" or "home sites" that are primarily leased to owners of the individual mobile homes or other housing units. The home owner often invests in site-specific improvements such as carports, steps, fencing, skirts around the base of the home, and landscaping. The land owner typically provides private roads within the park, common facilities and, in many cases, utilities. Due to relocation costs and, in some cases, demand for homesites, the value of a mobile home or other housing unit in place in a manufactured housing community or mobile home park is generally higher, and can be significantly higher, than the value of the same unit not placed in a manufactured housing community or mobile home park. As a result, a well-operated manufactured housing community or mobile home park that has achieved stabilized occupancy is typically able to maintain occupancy at or near that level. For the same reason, a lender that provided financing for the home of a tenant who defaulted in his or her space rent generally has an incentive to keep rental payments current until the home can be resold in place, rather than to allow the unit to be removed from the park. In general, the individual mobile homes and other housing units will not constitute collateral for a mortgage loan underlying a series of offered certificates. Recreational vehicle parks lease spaces primarily or exclusively for motor homes, travel trailers and portable truck campers, primarily designed for recreational, camping or travel use. In general, parks that lease recreational vehicle spaces can be viewed as having a less stable tenant population than parks occupied predominantly by mobile homes. However, it is not unusual for the owner of a recreational vehicle to leave the vehicle at the park on a year-round basis or to use the vehicle as low cost housing and reside in the park indefinitely. Factors affecting the successful operation of a manufactured housing community, mobile home park or recreational vehicle park include-- - the number of comparable competing properties in the local market; - the age, appearance and reputation of the property; - the quality of management; and - the types of facilities and services it provides. 44 Manufactured housing communities and mobile home parks also compete against alternative forms of residential housing, including-- - multifamily rental properties; - cooperatively-owned apartment buildings; - condominium complexes; and - single-family residential developments. Recreational vehicle parks also compete against alternative forms of recreation and short-term lodging, such as staying at a hotel at the beach. Manufactured housing communities, mobile home parks and recreational vehicle parks are special purpose properties that could not be readily converted to general residential, retail or office use. This will adversely affect the liquidation value of the property if its operation as a manufactured housing community, mobile home park or recreational vehicle park, as the case may be, becomes unprofitable due to competition, age of the improvements or other factors. Some states regulate the relationship of an owner of a manufactured housing community or mobile home park and its tenants in a manner similar to the way they regulate the relationship between a landlord and tenant at a multifamily rental property. In addition, some states also regulate changes in the use of a manufactured housing community or mobile home park and require that the owner give written notice to its tenants a substantial period of time prior to the projected change. In addition to state regulation of the landlord-tenant relationship, numerous counties and municipalities impose rent control on manufactured housing communities and mobile home parks. These ordinances may limit rent increases to-- - fixed percentages; - percentages of increases in the consumer price index; - increases set or approved by a governmental agency; or - increases determined through mediation or binding arbitration. In many cases, the rent control laws either do not permit vacancy decontrol or permit vacancy decontrol only in the relatively rare event that the mobile home or manufactured housing unit is removed from the homesite. Local authority to impose rent control on manufactured housing communities and mobile home parks is pre-empted by state law in some states and rent control is not imposed at the state level in those states. In some states, however, local rent control ordinances are not pre-empted for tenants having short-term or month-to-month leases, and properties there may be subject to various forms of rent control with respect to those tenants. RECREATIONAL AND RESORT PROPERTIES. Any mortgage loan underlying a series of offered certificates may be secured by a golf course, marina, ski resort, amusement park or other property used for recreational purposes or as a resort. Factors affecting the economic performance of a property of this type include-- - the location and appearance of the property; - the appeal of the recreational activities offered; - the existence or construction of competing properties, whether are not they offer the same activities; - the need to make capital expenditures to maintain, refurbish, improve and/or expand facilities in order to attract potential patrons; - geographic location and dependence on tourism; 45 - changes in travel patterns caused by changes in energy prices, strikes, location of highways, construction of additional highways and similar factors; - seasonality of the business, which may cause periodic fluctuations in operating revenues and expenses; - sensitivity to weather and climate changes; and - local, regional and national economic conditions. A marina or other recreational or resort property located next to water will also be affected by various statutes and government regulations that govern the use of, and construction on, rivers, lakes and other waterways. Because of the nature of the business, recreational and resort properties tend to respond to adverse economic conditions more quickly than do many other types of commercial properties. Recreational and resort properties are generally special purpose properties that are not readily convertible to alternative uses. This will adversely affect their liquidation value. ARENAS AND STADIUMS. The success of an arena or stadium generally depends on its ability to attract patrons to a variety of events, such as sporting events, musical events, theatrical events, animal shows, and circuses. The ability to attract patrons is dependent on, among others, the following factors-- - the appeal of the particular event; - the cost of admission; - perceptions by prospective patrons of the safety, convenience, services and attractiveness of the arena or stadium; - perceptions by prospective patrons of the safety of the surrounding area; and - the alternative forms of entertainment available in the particular locale. In some cases, an arena's or stadium's success will depend on its ability to attract and keep a sporting team as a tenant. An arena or stadium may become unprofitable, or unacceptable to a tenant of that type, due to decreased attendance, competition and age of improvements. Often, substantial expenditures must be made to modernize, refurbish and/or maintain existing facilities. Arenas and stadiums are special purpose properties which cannot be readily convertible to alternative uses. This will adversely affect their liquidation value. CHURCHES AND OTHER RELIGIOUS FACILITIES. Churches and other religious facilities generally depend on charitable donations to meet expenses and pay for maintenance and capital expenditures. The extent of those donations is dependent on the attendance at any particular religious facility and the extent to which attendees are prepared to make donations, which is influenced by a variety of social, political and economic factors. Donations may be adversely affected by economic conditions, whether local, regional or national. Religious facilities are special purpose properties that are not readily convertible to alternative uses. This will adversely affect their liquidation value. 46 PARKING LOTS AND GARAGES. The primary source of income for parking lots and garages is the rental fees charged for parking spaces. Factors affecting the success of a parking lot or garage include-- - the number of rentable parking spaces and rates charged; - the location of the lot or garage and, in particular, its proximity to places where large numbers of people work, shop or live; - the amount of alternative parking spaces in the area; - the availability of mass transit; and - the perceptions of the safety, convenience and services of the lot or garage. UNIMPROVED LAND. The value of unimproved land is largely a function of its potential use. This may depend on-- - its location; - its size; - the surrounding neighborhood; and - local zoning laws. DEFAULT AND LOSS CONSIDERATIONS WITH RESPECT TO COMMERCIAL AND MULTIFAMILY MORTGAGE LOANS. Mortgage loans secured by liens on income-producing properties are substantially different from mortgage 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 the property; and - its ability to generate income sufficient to make payments on the loan. This is particularly true because most or all of the mortgage loans underlying the offered certificates will be nonrecourse loans. The debt service coverage ratio of a multifamily or commercial mortgage loan is an important measure of the likelihood of default on the loan. In general, the debt service coverage ratio of a multifamily or commercial mortgage loan at any given time is the ratio of-- - the amount of income derived or expected to be derived from the related real property for a twelve-month period that is available to pay debt service; to - the annualized scheduled payments of principal and/or interest on the mortgage loan and any other senior loans that are secured by the related real property. The amount described in the first bullet point of the preceding sentence is often a highly subjective number based on a variety of assumptions regarding, and adjustments to, revenues and expenses with respect to the related real property. We will provide a more detailed discussion of its calculation in the related prospectus supplement. The cash flow generated by a multifamily or commercial property will generally fluctuate over time and may or may not be sufficient to-- - make the loan payments on the related mortgage loan; - cover operating expenses; and 47 - fund capital improvements at any given time. Operating revenues of a nonowner-occupied, income-producing property may be affected by the condition of the applicable real estate market and/or area economy. Properties leased, occupied or used on a short-term basis, such as-- - some health care-related facilities; - hotels and motels; - recreational vehicle parks; and - mini-warehouse and self-storage facilities, tend to be affected more rapidly by changes in market or business conditions than do properties typically leased for longer periods, such as-- - warehouses; - retail stores; - office buildings; and - industrial facilities. Some commercial properties may be owner-occupied or leased to a small number of tenants. Accordingly, the operating revenues may depend substantially on the financial condition of the borrower or one or a few tenants. Mortgage loans secured by liens on owner-occupied and single tenant properties may pose a greater likelihood of default and loss than loans secured by liens on multifamily properties or on multi-tenant commercial properties. Increases in property operating expenses can increase the likelihood of a borrower default on a multifamily or commercial mortgage loan secured by the property. Increases in property operating expenses may result from-- - increases in energy costs and labor costs; - increases in interest rates and real estate tax rates; and - changes in governmental rules, regulations and fiscal policies. Some net leases of commercial properties may provide that the lessee, rather than the borrower/landlord, is responsible for payment of operating expenses. However, a net lease will result in stable net operating income to the borrower/landlord only if the lessee is able to pay the increased operating expense while also continuing to make rent payments. Lenders also look to the loan-to-value ratio of a mortgage loan as a factor in evaluating the likelihood of loss if a property is liquidated following a default. In general, the loan-to-value ratio of a multifamily or commercial mortgage loan at any given time is the ratio, expressed as a percentage, of-- - the then outstanding principal balance of the mortgage loan and any other senior loans that are secured by the related real property; to - the estimated value of the related real property based on an appraisal, a cash flow analysis, a recent sales price or another method or benchmark of valuation. 48 A low loan-to-value ratio means the borrower has a large amount of its own equity in the multifamily or commercial property that secures its loan. In these circumstances-- - the borrower has a greater incentive to perform under the terms of the related mortgage loan in order to protect that equity; and - the lender has greater protection against loss on liquidation following a borrower default. Loan-to-value ratios are not necessarily an accurate measure of the likelihood of liquidation loss in a pool of multifamily and commercial mortgage loans. For example, the value of a multifamily or commercial property as of the date of initial issuance of a series of offered certificates may be less than the estimated value determined at loan origination. The value of any real property, in particular a multifamily or commercial property, will likely fluctuate from time to time. Moreover, even a current appraisal is not necessarily a reliable estimate of value. Appraised values of income-producing properties are generally based on-- - the market comparison method, which takes into account the recent resale value of comparable properties at the date of the appraisal; - the cost replacement method, which takes into account the cost of replacing the property at the date of the appraisal; - the income capitalization method, which takes into account the property's projected net cash flow; or - a selection from the values derived from the foregoing methods. Each of these appraisal methods presents analytical difficulties. For example-- - 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. If more than one appraisal method is used and significantly different results are produced, an accurate determination of value and, correspondingly, a reliable analysis of the likelihood of default and loss, is even more difficult. The value of a multifamily or commercial property will be affected by property performance. As a result, if a multifamily or commercial mortgage loan defaults because the income generated by the related property is insufficient to pay operating costs and expenses as well as debt service, then the value of the property will decline and a liquidation loss may occur. We believe that the foregoing considerations are important factors that generally distinguish mortgage loans secured by liens on income-producing real estate from single-family mortgage loans. However, the originators of the mortgage loans underlying your offered certificates may not have considered all of those factors for all or any of those loans. PAYMENT PROVISIONS OF THE MORTGAGE LOANS. Each of the mortgage loans included in one of our trusts will have the following features-- - an original term to maturity of not more than approximately 40 years; and - scheduled payments of principal, interest or both, to be made on specified dates, that occur monthly, bi-monthly, quarterly, semi-annually, annually or at some other interval. 49 A mortgage loan included in one of our trusts may also include terms that-- - provide for the accrual of interest at a mortgage interest rate that is fixed over its term, that resets on one or more specified dates or that otherwise adjusts from time to time; - provide for the accrual of interest at a mortgage interest rate 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; - provide for no accrual of interest; - provide for level payments to stated maturity, for payments that reset in amount on one or more specified dates or for payments that otherwise adjust from time to time to accommodate changes in the coupon rate or to reflect the occurrence of specified events; - be fully amortizing or, alternatively, may be partially amortizing or nonamortizing, with a substantial payment of principal due on its stated maturity date; - permit the negative amortization or deferral of accrued interest; - permit defeasance and the release of the real property collateral in connection with that defeasance; and/or - prohibit some or all voluntary prepayments or require payment of a premium, fee or charge in connection with those prepayments. MORTGAGE LOAN INFORMATION IN PROSPECTUS SUPPLEMENTS. We will describe in the related prospectus supplement the characteristics of the mortgage loans that we will include in any of our trusts. In general, we will provide in the related prospectus supplement, among other items, the following information on the particular mortgage loans in one of our trusts-- - the total outstanding principal balance and the largest, smallest and average outstanding principal balance of the mortgage loans; - the type or types of property that provide security for repayment of the mortgage loans; - the earliest and latest origination date and maturity date of the mortgage loans; - the original and remaining terms to maturity of the mortgage loans, or the range of each of those terms to maturity, and the weighted average original and remaining terms to maturity of the mortgage loans; - loan-to-value ratios of the mortgage loans either at origination or as of a more recent date, or the range of those loan-to-value ratios, and the weighted average of those loan-to-value ratios; - the mortgage interest rates of the mortgage loans, or the range of those mortgage interest rates, and the weighted average mortgage interest rate of the mortgage loans; - if any mortgage loans have adjustable mortgage interest rates, the index or indices upon which the 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 loan; - information on the payment characteristics of the mortgage loans, including applicable prepayment restrictions; - debt service coverage ratios of the mortgage loans either at origination or as of a more recent date, or the range of those debt service coverage ratios, and the weighted average of those debt service coverage ratios; and 50 - the geographic distribution of the properties securing the mortgage loans on a state-by-state basis. If we are unable to provide the specific information described above at the time a series of offered certificates is initially offered, we will provide-- - more general information in the related prospectus supplement; and - specific information in a report which will be filed with the SEC as part of a Current Report on Form 8-K within 15 days following the issuance of those certificates. If any mortgage loan, or group of related mortgage loans, included in one of our trusts represents a material concentration of credit risk, we will include in the related prospectus supplement financial statements or other financial information on the related real property or properties. MORTGAGE-BACKED SECURITIES The mortgage backed-securities underlying a series of offered certificates may include-- - mortgage participations, mortgage pass-through certificates, collateralized mortgage obligations or other mortgage-backed securities that are not insured or guaranteed by any governmental agency or instrumentality; or - certificates issued and/or insured or guaranteed by Freddie Mac, Fannie Mae, Ginnie Mae, Farmer Mac, or another federal or state governmental agency or instrumentality. In addition, each of those mortgage-backed securities will directly or indirectly evidence an interest in, or be secured by a pledge of, multifamily and/or commercial mortgage loans. Each mortgage-backed security included in one of our trusts-- - will have been registered under the Securities Act of 1933, as amended; - will be exempt from the registration requirements of that Act; - will have been held for at least the holding period specified in Rule 144(k) under that Act; or - may otherwise be resold by us publicly without registration under that Act. We will describe in the related prospectus supplement the characteristics of the mortgage-backed securities that we will include in any of our trusts. In general, we will provide in the related prospectus supplement, among other items, the following information on the particular mortgage-backed securities included in one of our trusts-- - the initial and outstanding principal amount(s) and type of the securities; - the original and remaining term(s) to stated maturity of the securities; - the pass-through or bond rate(s) of the securities or the formula for determining those rate(s); - the payment characteristics of the securities; - the identity of the issuer(s), servicer(s) and trustee(s) for the securities; - a description of the related credit support, if any; - the type of mortgage loans underlying the securities; 51 - the circumstances under which the related underlying mortgage loans, or the securities themselves, may be purchased prior to maturity; - the terms and conditions for substituting mortgage loans backing the securities; and - the characteristics of any agreements or instruments providing interest rate protection to the securities. With respect to any mortgage-backed security included in one of our trusts, we will provide in our reports filed under the Securities Exchange Act of 1934, as amended, the same information regarding the security as is provided by the issuer of the security in its own reports filed under that Act, if the security was publicly offered, or in the reports the issuer of the security provides to the related trustee, if the security was privately issued. SUBSTITUTION, ACQUISITION AND REMOVAL OF MORTGAGE ASSETS If so specified in the related prospectus supplement, we or another specified person or entity may be permitted, at our or its option, but subject to the conditions specified in that prospectus supplement, to acquire from the related trust particular mortgage assets underlying a series of offered certificates in exchange for-- - cash that would be applied to pay down the principal balances of the certificates of that series; and/or - other mortgage loans or mortgage-backed securities that-- 1. conform to the description of mortgage assets in this prospectus, and 2. satisfy the criteria set forth in the related prospectus supplement. In addition, if so specified in the related prospectus supplement, the trustee may be authorized or required to apply collections on the related mortgage assets to acquire new mortgage loans or mortgage-backed securities that-- - conform to the description of mortgage assets in this prospectus; and - satisfy the criteria set forth in the related prospectus supplement. No replacement of mortgage assets or acquisition of new mortgage assets will be permitted if it would result in a qualification, downgrade or withdrawal of the then-current rating assigned by any rating agency to any class of affected offered certificates. UNDELIVERED MORTGAGE ASSETS In general, the total outstanding principal balance of the mortgage assets transferred by us to any particular trust will equal or exceed the initial total outstanding principal balance of the related series of certificates. In the event that the total outstanding principal balance of the related mortgage assets initially delivered by us to the related trustee is less than the initial total outstanding principal balance of any series of certificates, we may deposit or arrange for the deposit of cash or liquid investments on an interim basis with the related trustee to cover the shortfall. For 90 days following the date of initial issuance of that series of certificates, we will be entitled to obtain a release of the deposited cash or investments if we deliver or arrange for delivery of a corresponding amount of mortgage assets. If we fail, however, to deliver mortgage assets sufficient to make up the entire shortfall, any of the cash or, following liquidation, investments remaining on deposit with the related trustee will be used by the related trustee to pay down the total principal balance of the related series of certificates, as described in the related prospectus supplement. ACCOUNTS The trust assets underlying a series of offered certificates will include one or more accounts established and maintained on behalf of the holders. All payments and collections received or advanced on the mortgage assets and other trust assets will be deposited and held in those accounts. We will identify and describe those accounts, and will further describe the deposits to and withdrawals from those accounts, in the related prospectus supplement. 52 CREDIT SUPPORT The holders of any class of offered certificates may be the beneficiaries of credit support designed to protect them partially or fully against all or particular defaults and losses on the related mortgage assets. The types of credit support that may benefit the holders of a class of offered certificates include-- - the subordination or one or more other classes of certificates of the same series; - a letter of credit; - a surety bond; - an insurance policy; - a guarantee; - a credit derivative; and/or - a reserve fund. In the related prospectus supplement, we will describe the amount and types of any credit support benefiting the holders of a class of offered certificates. ARRANGEMENTS PROVIDING REINVESTMENT, INTEREST RATE AND CURRENCY RELATED PROTECTION The trust assets for a series of offered certificates may include guaranteed investment contracts in accordance with which moneys held in the funds and accounts established for that series will be invested at a specified rate. Those trust assets may also include-- - interest rate exchange agreements; - interest rate cap agreements; - interest rate floor agreements; - currency exchange agreements; or - other agreements or arrangements designed to reduce the effects of interest rate or currency exchange rate fluctuations with respect to the related mortgage assets and one or more classes of offered certificates. In the related prospectus supplement, we will describe any agreements or other arrangements designed to protect the holders of a class of offered certificates against shortfalls resulting from movements or fluctuations in interest rates or currency exchange rates. If applicable, we will also identify any obligor under the agreement or other arrangement. YIELD AND MATURITY CONSIDERATIONS GENERAL The yield on your offered certificates will depend on-- - the price you paid for your offered certificates; - the pass-through rate on your offered certificates; and - the amount and timing of payments on your offered certificates. 53 The following discussion contemplates a trust established by us that consists only of mortgage loans. If one of our trusts also includes a mortgage-backed security, the payment terms of that security will soften or enhance the effects that the characteristics and behavior of mortgage loans backing that security can have on the yield to maturity and/or weighted average life of a class of offered certificates. If one of our trusts includes a mortgage-backed security, we will discuss in the related prospectus supplement the effect, if any, that the security may have on the yield to maturity and weighted average lives of the related offered certificates. PASS-THROUGH RATE A class of interest-bearing offered certificates may have a fixed, variable or adjustable pass-through rate. We will specify in the related prospectus supplement the pass-through rate for each class of interest-bearing offered certificates or, if the pass-through rate is variable or adjustable, the method of determining the pass-through rate. PAYMENT DELAYS There will be a delay between the date on which payments on the underlying mortgage loans are due and the date on which those payments are passed through to you and other investors. That delay will reduce the yield that would otherwise be produced if those payments were passed through on your offered certificates on the same date that they were due. YIELD AND PREPAYMENT CONSIDERATIONS The yield to maturity on your offered certificates will be affected by the rate of principal payments on the underlying mortgage loans and the allocation of those principal payments to reduce the principal balance or notional amount of your offered certificates. The rate of principal payments on those mortgage loans will be affected by the following-- - the amortization schedules of the mortgage loans, which may change from time to time to reflect, among other things, changes in mortgage interest rates or partial prepayments of principal; - the dates on which any balloon payments are due; and - the rate of principal prepayments on the mortgage loans, including voluntary prepayments by borrowers and involuntary prepayments resulting from liquidations, casualties or purchases of mortgage loans. Because the rate of principal prepayments on the mortgage loans underlying your offered certificates will depend on future events and a variety of factors, we cannot give you any assurance as to that rate. The extent to which the yield to maturity of your offered certificates may vary from your anticipated yield will depend upon-- - whether you purchased your offered certificates at a discount or premium and, if so, the extent of that discount or premium; and - when, and to what degree, payments of principal on the underlying mortgage loans are applied or otherwise result in the reduction of the principal balance or notional amount of your offered certificates. If you purchase your offered certificates at a discount, you should consider the risk that a slower than anticipated rate of principal payments on the underlying mortgage loans could result in an actual yield to you that is lower than your anticipated yield. If you purchase your offered certificates at a premium, you should consider the risk that a faster than anticipated rate of principal payments on the underlying mortgage loans could result in an actual yield to you that is lower than your anticipated yield. If your offered certificates entitle you to payments of interest, with disproportionate, nominal or no payments of principal, you should consider that your yield will be extremely sensitive to prepayments on the underlying mortgage loans and, under some prepayment scenarios, may be negative. 54 If a class of offered certificates accrues interest on a notional amount, that notional amount will, in general, either-- - be based on the principal balances of some or all of the mortgage assets in the related trust; or - equal the total principal balance of one or more of the other classes of certificates of the same series. Accordingly, the yield on that class of certificates will be inversely related to, as applicable, the rate at which-- - payments and other collections of principal are received on the mortgage assets referred to in the first bullet point of the prior sentence; or - payments are made in reduction of the total principal balance of the class or classes of certificates referred to in the second bullet point of the prior sentence. The extent of prepayments of principal of the mortgage loans underlying your offered certificates may be affected by a number of factors, including-- - the availability of mortgage credit; - the relative economic vitality of the area in which the related real properties are located; - the quality of management of the related real properties; - the servicing of the mortgage loans; - possible changes in tax laws; and - other opportunities for investment. In general, those factors that increase-- - the attractiveness of selling or refinancing a commercial or multifamily property; or - the likelihood of default under a commercial or multifamily mortgage loan, would be expected to cause the rate of prepayment to accelerate. In contrast, those factors having an opposite effect would be expected to cause the rate of prepayment to slow. The rate of principal payments on the mortgage loans underlying your offered certificates may also be affected by the existence and enforceability of prepayment restrictions, such as-- - prepayment lock-out periods; and - requirements that voluntary principal prepayments be accompanied by prepayment premiums, fees or charges. If enforceable, those provisions could constitute either an absolute prohibition, in the case of a prepayment lock-out period, or a disincentive, in the case of a prepayment premium, fee or charge, to a borrower's voluntarily prepaying its mortgage loan, thereby slowing the rate of prepayments. 55 The rate of prepayment on a pool of mortgage loans is likely to be affected by prevailing market interest rates for mortgage loans of a comparable type, term and risk level. As prevailing market interest rates decline, a borrower may have an increased incentive to refinance its mortgage loan. Even in the case of adjustable rate mortgage loans, as prevailing market interest rates decline, the related borrowers may have an increased incentive to refinance for the following purposes-- - to convert to a fixed rate loan and thereby lock in that rate; or - to take advantage of a different index, margin or rate cap or floor on another adjustable rate mortgage loan. Subject to prevailing market interest rates and economic conditions generally, a borrower may sell a real property in order to-- - realize its equity in the property; - meet cash flow needs; or - make other investments. Additionally, some borrowers may be motivated by federal and state tax laws, which are subject to change, to sell their properties prior to the exhaustion of tax depreciation benefits. We make no representation as to-- - the particular factors that will affect the prepayment of the mortgage loans underlying any series of offered certificates; - the relative importance of those factors; - the percentage of the principal balance of those mortgage loans that will be paid as of any date; or - the overall rate of prepayment on those mortgage loans. WEIGHTED AVERAGE LIFE AND MATURITY The rate at which principal payments are received on the mortgage loans underlying any series of offered certificates will affect the ultimate maturity and the weighted average life of one or more classes of those certificates. In general, 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 offered certificates will be influenced by the rate at which principal on the underlying mortgage loans is paid to that class, whether in the form of-- - scheduled amortization; or - prepayments, including-- 1. voluntary prepayments by borrowers, and 2. involuntary prepayments resulting from liquidations, casualties or condemnations and purchases of mortgage loans out of the related trust. Prepayment rates on loans are commonly measured relative to a prepayment standard or model, such as the CPR prepayment model or the SPA prepayment model. CPR represents an assumed constant rate of prepayment each month, expressed as an annual percentage, relative to the then outstanding principal balance of a pool of mortgage 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 mortgage loans, with different prepayment assumptions often 56 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 those loans in the first month of the life of the loans and an additional 0.2% per annum in each month thereafter until the 30th month. Beginning in the 30th 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 is a historical description of prepayment experience or a prediction of the anticipated rate of prepayment of any particular pool of mortgage loans. Moreover, the CPR and SPA models were developed based upon historical prepayment experience for single-family mortgage loans. It is unlikely that the prepayment experience of the mortgage loans underlying your offered certificates will conform to any particular level of CPR or SPA. In the prospectus supplement for a series of offered certificates, we will include tables, if applicable, setting forth-- - the projected weighted average life of each class of those offered certificates with principal balances; and - the percentage of the initial total principal balance of each class of those offered certificates that would be outstanding on specified dates, based on the assumptions stated in that prospectus supplement, including assumptions regarding prepayments on the underlying mortgage loans. Those tables and assumptions illustrate the sensitivity of the weighted average lives of those offered certificates to various assumed prepayment rates and are not intended to predict, or to provide information that will enable you to predict, the actual weighted average lives of your offered certificates. OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY BALLOON PAYMENTS; EXTENSIONS OF MATURITY. Some or all of the mortgage loans underlying a series of offered certificates may require that balloon payments be made at maturity. 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 real property. If a borrower is unable to refinance or sell the related real property, there is a possibility that the borrower may default on the mortgage loan or that the maturity of the mortgage loan may be extended in connection with a workout. If a borrower defaults, recovery of proceeds may be delayed by-- - the bankruptcy of the borrower; or - adverse economic conditions in the market where the related real property is located. In order to minimize losses on defaulted mortgage loans, the related master servicer or special servicer may be authorized within prescribed limits to modify mortgage loans that are in default or as to which a payment default is reasonably foreseeable. Any defaulted balloon payment or modification that extends the maturity of a mortgage loan may delay payments of principal on your offered certificates and extend the weighted average life of your offered certificates. NEGATIVE AMORTIZATION. The weighted average life of a class of offered certificates can be affected by mortgage loans that permit negative amortization to occur. Those are the mortgage loans that provide for the current payment of interest calculated at a rate lower than the rate at which interest accrues on the mortgage loan, with the unpaid portion of that interest being added to the related principal balance. Negative amortization most commonly occurs with respect to an adjustable rate mortgage 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 57 - provides for constant scheduled payments regardless of adjustments to its mortgage interest rate. Negative amortization on one or more mortgage loans in any of our trusts may result in negative amortization on a related class of offered certificates. We will describe in the related prospectus supplement, if applicable, the manner in which negative amortization with respect to the underlying mortgage loans is allocated among the respective classes of a series of offered certificates. The portion of any mortgage loan negative amortization allocated to a class of offered certificates may result in a deferral of some or all of the interest payable on those certificates. Deferred interest may be added to the total principal balance of a class of offered certificates. In addition, an adjustable rate mortgage loan that permits negative amortization would be expected during a period of increasing interest rates to amortize, if at all, at a slower rate than if interest rates were declining or were remaining constant. This slower rate of mortgage loan amortization would be reflected in a slower rate of amortization for one or more classes of certificates of the related series. Accordingly, there may be an increase in the weighted average lives of those classes of certificates to which any mortgage loan negative amortization would be allocated or that would bear the effects of a slower rate of amortization of the underlying mortgage loans. The extent to which the yield on your offered certificates may be affected by any negative amortization on the underlying mortgage loans will depend, in part, upon whether you purchase your offered certificates at a premium or a discount. During a period of declining interest rates, the scheduled payment on an adjustable rate 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. The result is the accelerated amortization of the mortgage loan. The acceleration in amortization of a mortgage loan will shorten the weighted average lives of those classes of certificates that entitle their holders to a portion of the principal payments on the mortgage loan. FORECLOSURES AND PAYMENT PLANS. The weighted average life of and yield on your offered certificates will be affected by-- - the number of foreclosures with respect to the underlying mortgage loans; and - the principal amount of the foreclosed mortgage loans in relation to the principal amount of those mortgage loans that are repaid in accordance with their terms. Servicing decisions made with respect to the underlying mortgage loans, including the use of payment plans prior to a demand for acceleration and the restructuring of mortgage loans in bankruptcy proceedings or otherwise, may also affect the payment patterns of particular mortgage loans and, as a result, the weighted average life of and yield on your offered certificates. LOSSES AND SHORTFALLS ON THE MORTGAGE ASSETS. The yield on your offered certificates will directly depend on the extent to which you are required to bear the effects of any losses or shortfalls in collections on the underlying mortgage loans and the timing of those losses and shortfalls. In general, the earlier that you bear any loss or shortfall, the greater will be the negative effect on the yield of your offered certificates. The amount of any losses or shortfalls in collections on the mortgage assets in any of our trusts will, to the extent not covered or offset by draws on any reserve fund or under any instrument of credit support, be allocated among the various classes of certificates of the related series in the priority and manner, and subject to the limitations, that we specify in the related prospectus supplement. As described in the related prospectus supplement, those allocations may be effected by the following-- - a reduction in the entitlements to interest and/or the total principal balances of one or more classes of certificates; and/or - the establishment of a priority of payments among classes of certificates. If you purchase subordinated certificates, the yield to maturity on those certificates may be extremely sensitive to losses and shortfalls in collections on the underlying mortgage loans. 58 ADDITIONAL CERTIFICATE AMORTIZATION. If your offered certificates have a principal balance, then they entitle you to a specified portion of the principal payments received on the underlying mortgage loans. They may also entitle you to payments of principal from the following sources-- - amounts attributable to interest accrued but not currently payable on one or more other classes of certificates of the applicable series; - interest received or advanced on the underlying mortgage assets that is in excess of the interest currently accrued on the certificates of the applicable series; - prepayment premiums, fees and charges, payments from equity participations or any other amounts received on the underlying mortgage assets that do not constitute interest or principal; or - any other amounts described in the related prospectus supplement. The amortization of your offered certificates out of the sources described in the prior paragraph would shorten their weighted average life and, if your offered certificates were purchased at a premium, reduce their yield to maturity. DESCRIPTION OF THE CERTIFICATES GENERAL Each series of offered certificates, together with any non-offered certificates of the same series, will represent the entire beneficial ownership interest in a trust established by us. Each series of offered certificates will consist of one or more classes. Any non-offered certificates of that series will likewise consist of one or more classes. A series of certificates consists of all those certificates that-- - have the same series designation; - were issued under the same Governing Document; and - represent beneficial ownership interests in the same trust. A class of certificates consists of all those certificates of a particular series that-- - have the same class designation; and - have the same payment terms. The respective classes of offered and non-offered certificates of any series may have a variety of payment terms. An offered certificate may entitle the holder to receive-- - a stated principal amount, which will be represented by its principal balance; - interest on a principal balance or notional amount, at a fixed, variable or adjustable pass-through rate; - specified, fixed or variable portions of the interest, principal or other amounts received on the related mortgage assets; - payments of principal, with disproportionate, nominal or no payments of interest; - payments of interest, with disproportionate, nominal or no payments of principal; 59 - payments of interest or principal that commence only as of a specified date or only after the occurrence of specified events, such as the payment in full of the interest and principal outstanding on one or more other classes of certificates of the same series; - payments of principal to be made, from time to time or for designated periods, at a rate that is-- 1. faster and, in some cases, substantially faster, or 2. slower and, in some cases, substantially slower, than the rate at which payments or other collections of principal are received on the related mortgage assets; - payments of principal to be made, subject to available funds, based on a specified principal payment schedule or other methodology; or - payments of all or part of the prepayment or repayment premiums, fees and charges, equity participations payments or other similar items received on the related mortgage assets. Any class of offered certificates may be senior or subordinate to one or more other classes of certificates of the same series, including a non-offered class of certificates of that series, for purposes of some or all payments and/or allocations of losses or other shortfalls. A class of offered certificates may have two or more component parts, each having characteristics that are described in this prospectus as being attributable to separate and distinct classes. For example, a class of offered certificates may have a total principal balance on which it accrues interest at a fixed, variable or adjustable rate. That class of offered certificates may also accrue interest on a total notional amount at a different fixed, variable or adjustable rate. In addition, a class of offered certificates may accrue interest on one portion of its total principal balance or notional amount at one fixed, variable or adjustable rate and on another portion of its total principal balance or notional amount at a different fixed, variable or adjustable rate. Each class of offered certificates will be issued in minimum denominations corresponding to specified principal balances, notional amounts or percentage interests, as described in the related prospectus supplement. A class of offered certificates may be issued in fully registered, definitive form and evidenced by physical certificates or may be issued in book-entry form through the facilities of The Depository Trust Company. Offered certificates held in fully registered, definitive form 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, except for any tax or other governmental charge payable in connection with the transfer or exchange. Interests in offered certificates held in book-entry form will be transferred on the book-entry records of DTC and its participating organizations. If we so specify in the related prospectus supplement, we will arrange for clearance and settlement through Clearstream Banking, societe anonyme or the Euroclear System, for so long as they are participants in DTC. PAYMENTS ON THE CERTIFICATES GENERAL. Payments on a series of offered certificates may occur monthly, bi-monthly, quarterly, semi-annually, annually or at any other specified interval. In the prospectus supplement for each series of offered certificates, we will identify-- - the periodic payment date for that series; and - the record date as of which certificateholders entitled to payments on any particular payment date will be established. 60 All payments with respect to a class of offered certificates on any payment date will be allocated pro rata among the outstanding certificates of that class in proportion to the respective principal balances, notional amounts or percentage interests, as the case may be, of those certificates. Payments on an offered certificate will be made to the holder entitled thereto either-- - by wire transfer of immediately available funds to the account of that holder at a bank or similar entity, provided that the holder has furnished the party making the payments with wiring instructions no later than the applicable record date and has satisfied any other conditions specified in the related prospectus supplement; or - by check mailed to the address of that holder as it appears in the certificate register, in all other cases. In general, the final payment on any offered certificate will be made only upon presentation and surrender of that certificate at the location specified to the holder in notice of final payment. PAYMENTS OF INTEREST. In the case of each class of interest-bearing offered certificates, interest will accrue from time to time, at the applicable pass-through rate and in accordance with the applicable interest accrual method, on the total outstanding principal balance or notional amount of that class. The pass-through rate for a class of interest-bearing offered certificates may be fixed, variable or adjustable. We will specify in the related prospectus supplement the pass-through rate for each class of interest-bearing offered certificates or, in the case of a variable or adjustable pass-through rate, the method for determining that pass-through rate. Interest may accrue with respect to any offered certificate on the basis of-- - a 360-day year consisting of twelve 30-day months; - the actual number of days elapsed during each relevant period in a year assumed to consist of 360 days; - the actual number of days elapsed during each relevant period in a normal calendar year; or - any other method identified in the related prospectus supplement. We will identify the interest accrual method for each class of offered certificates in the related prospectus supplement. Subject to available funds and any adjustments to interest entitlements described in the related prospectus supplement, accrued interest with respect to each class of interest-bearing offered certificates will normally be payable on each payment date. However, in the case of some classes of interest-bearing offered certificates, payments of accrued interest will only begin on a particular payment date or under the circumstances described in the related prospectus supplement. Prior to that time, the amount of accrued interest otherwise payable on that class will be added to its total principal balance on each date or otherwise deferred as described in the related prospectus supplement. If a class of offered certificates accrues interest on a total notional amount, that total notional amount, in general, will be either-- - based on the principal balances of some or all of the related mortgage assets; or - equal to the total principal balances of one or more other classes of certificates of the same series. Reference to the notional amount of any certificate is solely for convenience in making calculations of interest and does not represent the right to receive any payments of principal. We will describe in the related prospectus supplement the extent to which the amount of accrued interest that is payable on, or that may be added to the total principal balance of, a class of interest-bearing offered certificates may be reduced as a result of any contingencies, including shortfalls in interest collections due to prepayments, delinquencies, losses and deferred interest on the related mortgage assets. 61 PAYMENTS OF PRINCIPAL. An offered certificate may or may not have a principal balance. If it does, that principal balance outstanding from time to time will represent the maximum amount that the holder of that certificate will be entitled to receive as principal out of the future cash flow on the related mortgage assets and the other related trust assets. The total outstanding principal balance of any class of offered certificates will be reduced by-- - payments of principal actually made to the holders of that class; and - if and to the extent that we so specify in the related prospectus supplement, losses of principal on the related mortgage assets that are allocated to or are required to be borne by that class. A class of interest-bearing offered certificates may provide that payments of accrued interest will only begin on a particular payment date or under the circumstances described in the related prospectus supplement. If so, the total outstanding principal balance of that class may be increased by the amount of any interest accrued, but not currently payable, on that class. We will describe in the related prospectus supplement any other adjustments to the total outstanding principal balance of a class of offered certificates. Unless we so state in the related prospectus supplement, the initial total principal balance of all classes of a series will not be greater than the total outstanding principal balance of the related mortgage assets transferred by us to the related trust. We will specify the expected initial total principal balance of each class of offered certificates in the related prospectus supplement. The payments of principal to be made on a series of offered certificates from time to time will, in general, be a function of the payments, other collections and advances received or made as described in the related prospectus supplement. Payments of principal on a series of offered certificates may also be made from the following sources-- - amounts attributable to interest accrued but not currently payable on one or more other classes of certificates of the applicable series; - interest received or advanced on the underlying mortgage assets that is in excess of the interest currently accrued on the certificates of the applicable series; - prepayment premiums, fees and charges, payments from equity participations or any other amounts received on the underlying mortgage assets that do not constitute interest or principal; or - any other amounts described in the related prospectus supplement. We will describe in the related prospectus supplement the principal entitlement of each class of offered certificates on each payment date. ALLOCATION OF LOSSES AND SHORTFALLS If and to the extent that any losses or shortfalls in collections on the mortgage assets in any of our trusts are not covered or offset by delinquency advances or draws on any reserve fund or under any instrument of credit support, they will be allocated among the various 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, the allocations may be effected as follows-- - by reducing the entitlements to interest and/or the total principal balances of one or more of those classes; and/or - by establishing a priority of payments among those classes. See "Description of Credit Support." 62 ADVANCES If any trust established by us includes mortgage loans, then as and to the extent described in the related prospectus supplement, the related master servicer, the related special servicer, the related trustee, any related provider of credit support and/or any other specified person may be obligated to make, or may have the option of making, advances with respect to those mortgage loans to cover-- - delinquent payments of principal and/or interest, other than balloon payments; - property protection expenses; - other servicing expenses; or - any other items specified in the related prospectus supplement. If there are any limitations with respect to a party's advancing obligations, we will discuss those limitations in the related prospectus supplement. Advances are intended to maintain a regular flow of scheduled interest and principal payments to certificateholders. Advances are not a guarantee against losses. The advancing party will be entitled to recover all of its advances out of-- - subsequent recoveries on the related mortgage loans, including amounts drawn under any fund or instrument constituting credit support; and - any other specific sources identified in the related prospectus supplement. If and to the extent that we so specify in the related prospectus supplement, any entity making advances will be entitled to receive interest on some or all of those advances for a specified period during which they are outstanding at the rate specified in that prospectus supplement. That entity may be entitled to payment of interest on its outstanding advances-- - periodically from general collections on the mortgage assets in the related trust, prior to any payment to the related series of certificateholders; or - at any other times and from any other sources as we may describe in the related prospectus supplement. If any trust established by us includes mortgage-backed securities, we will discuss in the related prospectus supplement any comparable advancing obligations with respect to those securities or the mortgage loans that back them. REPORTS TO CERTIFICATEHOLDERS On or about each payment date, the related master servicer, manager or trustee will forward to each offered certificateholder a statement substantially in the form, or specifying the information, set forth in the related prospectus supplement. In general, that statement will include information regarding-- - the payments made on that payment date with respect to the applicable class of offered certificates; and - the recent performance of the mortgage assets. Within a reasonable period of time after the end of each calendar year, the related master servicer, manager or trustee, 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 a statement containing information regarding the principal, interest and other amounts paid on the applicable class of offered certificates, aggregated for-- - that calendar year; or - the applicable portion of that calendar year during which the person was a certificateholder. 63 The obligation to provide that annual statement will be deemed to have been satisfied by the related master servicer, manager or trustee, as the case may be, to the extent that substantially comparable information is provided in accordance with any requirements of the Internal Revenue Code of 1986. If one of our trusts includes mortgage-backed securities, the ability of the related master servicer, manager or trustee, as the case may be, to include in any payment date statement information regarding the mortgage loans that back those securities will depend on comparable reports being received with respect to them. VOTING RIGHTS Voting rights will be allocated among the respective classes of offered and non-offered certificates of each series in the manner described in the related prospectus supplement. Certificateholders will generally not have a right to vote, except-- - with respect to those amendments to the governing documents described under "Description of the Governing Documents--Amendment"; or - as otherwise specified in this prospectus or in the related prospectus supplement. As and to the extent described in the related prospectus supplement, the certificateholders entitled to a specified amount of the voting rights for a particular series will have the right to act as a group to remove or replace the related trustee, master servicer, special servicer or manager. In general, that removal or replacement must be for cause. We will identify exceptions in the related prospectus supplement. TERMINATION The trust for each series of offered certificates will terminate and cease to exist following-- - the final payment or other liquidation of the last mortgage asset in that trust; and - the payment, or provision for payment, to the certificateholders of that series of all amounts required to be paid to them. Written notice of termination of a trust will be given to each affected certificateholder. The final payment will be made only upon presentation and surrender of the certificates of the related series at the location to be specified in the notice of termination. If we so specify in the related prospectus supplement, one or more designated parties will be entitled to purchase all of the mortgage assets underlying a series of offered certificates, thereby effecting early retirement of the certificates and early termination of the related trust. We will describe in the related prospectus supplement the circumstances under which that purchase may occur. If we so specify in the related prospectus supplement, one or more certificateholders will be entitled to exchange all of the certificates of a particular series for all of the mortgage assets underlying that series, thereby effecting early termination of the related trust. We will describe in the related prospectus supplement the circumstances under which that exchange may occur. In addition, if we so specify in the related prospectus supplement, on a specified date or upon the reduction of the total principal balance of a specified class or classes of certificates by a specified percentage or amount, a party designated in the related prospectus supplement may be authorized or required to solicit bids for the purchase of all the mortgage assets of the related trust or of a sufficient portion of the mortgage assets to retire that class or those classes of certificates. The solicitation of bids must be conducted in a commercially reasonable manner, and assets will, in general, be sold at their fair market value. If the fair market value of the mortgage assets being sold is less than their unpaid balance, then the certificateholders of one or more classes of certificates may receive an amount less than the total principal balance of, and accrued and unpaid interest on, their certificates. 64 BOOK-ENTRY REGISTRATION GENERAL. Any class of offered certificates may be issued in book-entry form through the facilities of DTC. If so, that class will be represented by one or more global certificates registered in the name of DTC or its nominee. If we so specify in the related prospectus supplement, we will arrange for clearance and settlement through the Euroclear System or Clearstream Banking, societe anonyme, for so long as they are participants in DTC. DTC, EUROCLEAR AND CLEARSTREAM, LUXEMBOURG. 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 under the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created to hold securities for participants in the DTC system and to facilitate the clearance and settlement of securities transactions between those participants through electronic computerized book-entry changes in their accounts, thereby eliminating the need for physical movement of securities certificates. Organizations that maintain accounts with DTC include securities brokers and dealers, banks, trust companies and clearing corporations and may include other organizations. DTC is owned by a number of its participating organizations and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that directly or indirectly clear through or maintain a custodial relationship with one of the organizations that maintains an account with DTC. The rules applicable to DTC and its participating organizations are on file with the SEC. It is our understanding that Clearstream, Luxembourg holds securities for its member organizations and facilitates the clearance and settlement of securities transactions between its member organizations through electronic book-entry changes in accounts of those organizations, thereby eliminating the need for physical movement of certificates. Transactions may be settled in Clearstream, Luxembourg in any of 28 currencies, including United States dollars. Clearstream, Luxembourg provides to its member organizations, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream, Luxembourg interfaces with domestic securities markets in over 30 countries through established depository and custodial relationships. Clearstream, Luxembourg is registered as a bank in Luxembourg. It is subject to regulation by the Banque Centrale du Luxembourg, which supervises Luxembourg banks. Clearstream, Luxembourg's customers are world-wide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Clearstream, Luxembourg's U.S. customers are limited to securities brokers and dealers, and banks. Currently, Clearstream, Luxembourg has approximately 2,000 customers located in over 80 countries, including all major European countries, Canada and the United States. Indirect access to Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of Clearstream, Luxembourg. Clearstream, Luxembourg and Euroclear have established an electronic bridge between their two systems across which their respective participants may settle trades with each other. It is our understanding that Euroclear holds securities for its member organizations and facilitates clearance and settlement of securities transactions between its member organizations through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Over 150,000 different securities are accepted for settlement through Euroclear, the majority of which are domestic securities from over 30 markets. Transactions may be settled in Euroclear in any of over 32 currencies, including United States dollars. The Euroclear system includes various other services, including securities lending and borrowing and interfaces with domestic markets in several countries generally similar to the arrangements for cross-market transfers with DTC described below in this "--Book-Entry Registration" section. Euroclear is operated by Euroclear Bank S.A./N.V., as Euroclear Operator, under a license agreement with Euroclear Clearance System Public Limited Company. The Euroclear Operator is regulated and examined by the Belgian Banking and Finance Commission and the National Bank of Belgium. All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance 65 accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not Euroclear Clearance System. Indirect access to the Euroclear system is also available to other firms that clear through or maintain a custodial relationship with a member organization of Euroclear, either directly or indirectly. Euroclear and Clearstream, Luxembourg have established an electronic bridge between their two systems across which their respective participants may settle trades with each other. Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Euroclear Terms and Conditions. The Euroclear Terms and Conditions govern transfers of securities and cash within the Euroclear system, withdrawal of securities and cash from the Euroclear system, and receipts of payments with respect to securities in the Euroclear system. All securities in the Euroclear system are held on a fungible basis without attribution of specific securities to specific securities clearance accounts. The Euroclear Operator acts under the Euroclear Terms and Conditions only on behalf of member organizations of Euroclear and has no record of or relationship with persons holding through those member organizations. The information in this prospectus concerning DTC, Euroclear and Clearstream, Luxembourg, and their book-entry systems, has been obtained from sources believed to be reliable, but we do not take any responsibility for the accuracy or completeness of that information. HOLDING AND TRANSFERRING BOOK-ENTRY CERTIFICATES. Purchases of book-entry certificates under the DTC system must be made by or through, and will be recorded on the records of, the Financial Intermediary that maintains the beneficial owner's account for that purpose. In turn, the Financial Intermediary's ownership of those certificates will be recorded on the records of DTC or, alternatively, if the Financial Intermediary does not maintain an account with DTC, on the records of a participating firm that acts as agent for the Financial Intermediary, whose interest will in turn be recorded on the records of DTC. A beneficial owner of book-entry certificates must rely on the foregoing procedures to evidence its beneficial ownership of those certificates. DTC has no knowledge of the actual beneficial 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 actual beneficial owners. The participants in the DTC system will remain responsible for keeping account of their holdings on behalf of their customers. Transfers between participants in the DTC system will be effected in the ordinary manner in accordance with DTC's rules and will be settled in same-day funds. Transfers between direct account holders at Euroclear and Clearstream, Luxembourg, or between persons or entities participating indirectly in Euroclear or Clearstream, Luxembourg, will be effected in the ordinary manner in accordance with their respective procedures and in accordance with DTC's rules. Cross-market transfers between direct participants in DTC, on the one hand, and member organizations at Euroclear or Clearstream, Luxembourg, on the other, will be effected through DTC in accordance with DTC's rules and the rules of Euroclear or Clearstream, Luxembourg, as applicable. These cross-market transactions will require, among other things, delivery of instructions by the applicable member organization to Euroclear or Clearstream, Luxembourg, as the case may be, in accordance with the rules and procedures and within deadlines, Brussels time, established in Euroclear or Clearstream, Luxembourg, as the case may be. If the transaction complies with all relevant requirements, Euroclear or Clearstream, Luxembourg, as the case may be, will then deliver instructions to its depositary to take action to effect final settlement on its behalf. Because of time-zone differences, the securities account of a member organization of Euroclear or Clearstream, Luxembourg purchasing an interest in a global certificate from a DTC participant that is not a member organization, will be credited during the securities settlement processing day, which must be a business day for Euroclear or Clearstream, Luxembourg, as the case may be, immediately following the DTC settlement date. Transactions in interests in a book-entry certificate settled during any securities settlement processing day will be reported to the relevant member organization of Euroclear or Clearstream, Luxembourg on the same day. Cash received in Euroclear or Clearstream, Luxembourg as a result of sales of interests in a book-entry certificate by or through a member organization of Euroclear or Clearstream, Luxembourg, as the case may be, to a DTC participant that is not a member organization will be received with value on the DTC settlement date, but will not be available in the relevant Euroclear or Clearstream, Luxembourg cash account until the business day following settlement in DTC. The related prospectus supplement will contain additional information regarding clearance and settlement procedures for the book-entry certificates and with respect to tax documentation procedures relating to the book-entry certificates. Conveyance of notices and other communications by DTC to DTC participants, and by DTC participants to Financial Intermediaries and beneficial owners, will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. 66 Payments on the book-entry certificates will be made to DTC. DTC's practice is to credit DTC participants' accounts on the related payment 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 payments by DTC participants to Financial Intermediaries and beneficial 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 - the sole responsibility of each of those DTC participants, subject to any statutory or regulatory requirements in effect from time to time. Under a book-entry system, beneficial owners may receive payments after the related payment date. The only "certificateholder" of book-entry certificates will be DTC or its nominee. Parties to the governing documents for any series of offered certificates need not recognize beneficial owners of book-entry certificates as "certificateholders." The beneficial owners of book-entry certificates will be permitted to exercise the rights of "certificateholders" only indirectly through the DTC participants, who in turn will exercise their rights through DTC. We have been informed that DTC will take action permitted to be taken by a "certificateholder" only at the direction of one or more DTC participants. DTC may take conflicting actions with respect to the book-entry certificates to the extent that those actions are taken on behalf of Financial Intermediaries whose holdings include those certificates. Because DTC can act only on behalf of DTC participants, who in turn act on behalf of Financial Intermediaries and beneficial owners of the applicable book-entry securities, the ability of a beneficial owner to pledge its interest in a class of book-entry certificates to persons or entities that do not participate in the DTC system, or otherwise to take actions with respect to its interest in a class of book-entry certificates, may be limited due to the lack of a physical certificate evidencing that interest. ISSUANCE OF DEFINITIVE CERTIFICATES. Unless we specify otherwise in the related prospectus supplement, beneficial owners of offered certificates initially issued in book-entry form will not be able to obtain physical certificates that represent those offered certificates, unless-- - we advise the related trustee in writing that DTC is no longer willing or able to discharge properly its responsibilities as depository with respect to those offered certificates and we are unable to locate a qualified successor; or - we elect, at our option, to terminate the book-entry system through DTC with respect to those offered certificates. Upon the occurrence of either of the two events described in the prior paragraph, the related trustee or another designated party will be required to notify all DTC participants of the availability through DTC of physical certificates with respect to the affected offered certificates. Upon surrender by DTC of the certificate or certificates representing a class of book-entry offered certificates, together with instructions for registration, the related trustee or other designated party will be required to issue to the beneficial owners identified in those instructions physical certificates representing those offered certificates. DESCRIPTION OF THE GOVERNING DOCUMENTS GENERAL The "Governing Document" for purposes of issuing the offered certificates of each series will be a pooling and servicing agreement or other similar agreement or collection of agreements. In general, the parties to the Governing Document for a series of offered certificates will include us, a trustee, a master servicer and a special servicer. However, if the related trust assets include mortgage-backed securities, the Governing Document may include a manager as a party, but may not include a master servicer, special servicer or other servicer as a party. We will identify in the related prospectus supplement the parties to the Governing Document for a series of offered certificates. If we so specify in the related prospectus supplement, a party from whom we acquire mortgage assets or one of its affiliates may perform the functions of master servicer, special servicer or manager for the trust to which we transfer those 67 assets. If we so specify in the related prospectus supplement, the same person or entity may act as both master servicer and special servicer for one of our trusts. Any party to the Governing Document for a series of offered certificates, or any of its affiliates, may own certificates issued thereunder. However, except in limited circumstances, including with respect to required consents to amendments to the Governing Document for a series of offered certificates, certificates that are held by the related master servicer, special servicer or manager will not be allocated voting rights. A form of a pooling and servicing agreement has been filed as an exhibit to the registration statement of which this prospectus is a part. However, the provisions of the Governing Document for each series of offered certificates will vary depending upon the nature of the certificates to be issued thereunder and the nature of the related trust assets. The following summaries describe select provisions that may appear in the Governing Document for each series of offered certificates. The prospectus supplement for each series of offered certificates will provide material additional information regarding the Governing Document for that series. The summaries in this prospectus do not purport to be complete, and you should refer to the provisions of the Governing Document for your offered certificates and, further, to the description of those provisions in the related prospectus supplement. We will provide a copy of the Governing Document, exclusive of exhibits, that relates to your offered certificates, without charge, upon written request addressed to our principal executive offices specified under "Credit Suisse First Boston Mortgage Securities Corp." ASSIGNMENT OF MORTGAGE ASSETS At the time of initial issuance of any series of offered certificates, we will assign or cause to be assigned to the designated trustee the mortgage assets and any other assets to be included in the related trust. We will specify in the related prospectus supplement all material documents to be delivered, and all other material actions to be taken, by us or any prior holder of the related mortgage assets in connection with that assignment. We will also specify in the related prospectus supplement any remedies available to the related certificateholders, or the related trustee on their behalf, in the event that any of those material documents are not delivered or any of those other material actions are not taken as required. Concurrently with that assignment, the related trustee will deliver to us or our designee the certificates of that series in exchange for the mortgage assets and the other assets to be included in the related trust. Each mortgage asset included in one of our trusts will be identified in a schedule appearing as an exhibit to the related Governing Document. That schedule generally will include detailed information about each mortgage asset transferred to the related trust, including-- - in the case of a mortgage loan-- 1. the address of the related real property, 2. the mortgage interest rate and, if applicable, the applicable index, gross margin, adjustment date and any rate cap information, 3. the remaining term to maturity, 4. the remaining amortization term if that mortgage loan is a balloon loan, and 5. the outstanding principal balance; and - in the case of a mortgage-backed security-- 1. the outstanding principal balance, and 2. the pass-through rate or coupon rate. 68 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO MORTGAGE ASSETS Unless otherwise specified in the related prospectus supplement, the unaffiliated seller of a mortgage loan to us or any of our affiliates (or the master servicer, if the unaffiliated seller is also the master servicer under the Governing Document) will have made representations and warranties in respect of the mortgage loans it is selling to us or our affiliates. Those representations and warranties will generally include, among other things-- - with respect to each mortgaged property, that title insurance or, in the case of mortgaged properties located in areas where title insurance policies are generally not available, an attorney's opinion of title and any required hazard insurance was effective at the origination of each mortgage loan, and that each policy remained in effect on the date of purchase of the mortgage loan from the unaffiliated seller; - that the unaffiliated seller had good title to each mortgage loan; - with respect to each mortgaged property, that each mortgage constituted a valid first lien on the mortgaged property, subject only to permissible title insurance exceptions and other permitted encumbrances, unless otherwise specified in the related prospectus supplement; - that, to the unaffiliated seller's knowledge, there were no delinquent tax or assessment liens against the mortgaged property; and - that each mortgage loan was current as to all required debt service payments (unless otherwise specified in the related prospectus supplement). The unaffiliated seller in respect of a mortgage loan will make its representations and warranties to us or our affiliates as of the date of sale. A substantial period of time may have elapsed between such date and the date of the initial issuance a series of offered certificate and the particular mortgage loan. Because the representations and warranties do not address events that may occur following the sale of a mortgage loan by it, its repurchase obligation described below will not arise if, on or after the date of the sale of a mortgage loan by the unaffiliated seller to us or our affiliates, the relevant event occurs that would have given rise to such an obligation. 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 of an unaffiliated seller will not be accurate and complete in all material respects in respect of that mortgage loan as of the date listed in the related prospectus supplement. The related prospectus supplement may provide that we will make certain representations and warranties for the benefit of holders of certificates in respect of a mortgage loan that relate to the period commencing on the date of sale of that mortgage loan to us or our affiliates. Unless otherwise set forth or specified in the related prospectus supplement, upon the discovery of the breach of any representation or warranty made by an unaffiliated seller in respect of a mortgage loan that materially and adversely affects the interests of holders of the related series, that unaffiliated seller or, if so specified in the related prospectus supplement, the master servicer will be obligated to repurchase the mortgage loan at a purchase price that, unless otherwise specified in the related prospectus supplement, will equal to 100% of the unpaid principal balance thereof at the date of repurchase or, in the case of a series of certificates as to which the we have elected to treat the related trust as a REMIC, at a price as may be necessary to avoid a tax on a prohibited transaction, as described in Section 860F(a) of the Internal Revenue Code of 1986 as amended, in each case together with accrued interest at the pass-through rate to the first day of the month following the repurchase and the amount of any unreimbursed advances made by the master servicer in respect of such mortgage loan. The master servicer or other specified party to the related Governing Document will be required to enforce this obligation of the unaffiliated seller for the benefit of the trustee and the certificateholders, following the practices it would employ in its good faith business judgment were it the owner of such mortgage loan. Unless otherwise specified in the applicable prospectus supplement and subject to the ability of the unaffiliated seller or the master servicer to deliver substitute mortgage loans for certain mortgage loans as described below, this repurchase obligation constitutes the sole remedy available to the certificateholders of the affected series for a breach of a representation or warranty by an unaffiliated seller. Any obligation of the master servicer to purchase a mortgage loan if an unaffiliated seller defaults on its obligation to do so is subject to limitations, and no assurance can be given that an unaffiliated seller will carry out its repurchase obligation with respect to the mortgage loans. If and as specified in the related prospectus supplement, we will make representations and warranties with respect to the mortgage loans in a mortgage pool. Upon a breach of any representation or warranty by us that materially and adversely 69 affects the interests of the certificateholders, we will be obligated either to cure the breach in all material respects or to purchase the related mortgage loan at the purchase price set forth above. Unless otherwise specified in the applicable prospectus supplement and subject to our ability to deliver substitute mortgage loans for certain mortgage loans as described below, this repurchase obligation constitutes the sole remedy available to the certificateholders or the trustee for a breach of representation or warranty by us. The proceeds for the repurchase of a mortgage loan will be distributed into one or more accounts as called for under the related Governing Document. Within the period of time specified in the related prospectus supplement, following the issuance of a series of certificates, we, the master servicer or the unaffiliated seller, as the case may be, may deliver to the trustee mortgage loans in substitution for any one or more of the mortgage loans initially included in the trust but which do not conform in one or more respects to the description thereof contained in the related prospectus supplement, as to which a breach of a representation or warranty is discovered, which breach materially and adversely affects the interests of the certificateholders, or as to which a document in the related mortgage loan file is defective in any material respect. Unless otherwise specified in the related prospectus supplement, the required characteristics of any substitute mortgage loan will generally include, among other things, that the substitute mortgage loan on the date of substitution, will-- - have an outstanding principal balance, after deduction of all scheduled payments due in the month of substitution, not in excess of the outstanding principal balance of the removed mortgage loan, with the amount of any shortfall to be distributed to certificateholders in the month of substitution; - have a per annum interest rate not less than, and not more than 1% greater than, the per annum interest rate of the removed mortgage loan; - have a remaining term to maturity not greater than, and not more than one year less than, that of the removed mortgage loan; and - comply with all the representations and warranties set forth in the Governing Document as of the date of substitution. COLLECTION AND OTHER SERVICING PROCEDURES WITH RESPECT TO MORTGAGE LOANS The Governing Document for each series of offered certificates will govern the servicing and administration of any mortgage loans included in the related trust. In general, the related master servicer and special servicer, directly or through sub-servicers, will be obligated to service and administer for the benefit of the related certificateholders the mortgage loans in any of our trusts. The master servicer and the special servicer will be required to service and administer those mortgage loans in accordance with applicable law and, further, in accordance with the terms of the related Governing Document, the mortgage loans themselves and any instrument of credit support included in that trust. Subject to the foregoing, the master servicer and the special servicer will each have full power and authority to do any and all things in connection with that servicing and administration that it may deem necessary and desirable. As part of its servicing duties, each of the master servicer and the special servicer for one of our trusts will be required to make reasonable efforts to collect all payments called for under the terms and provisions of the related mortgage loans that it services. In general, each of the master servicer and the special servicer for one of our trusts will be obligated to follow the same collection procedures as it would follow for comparable mortgage loans held for its own account, provided that-- - those procedures are consistent with the terms of the related Governing Document; and - they do not impair recovery under any instrument of credit support included in the related trust. 70 Consistent with the foregoing, the master servicer and the special servicer will each be permitted, in its discretion, to waive any default interest or late payment charge in connection with collecting a late payment on any defaulted mortgage loan. The master servicer and/or the special servicer for one or our trusts, directly or through sub-servicers, will also be required to perform various other customary functions of a servicer of comparable loans, including-- - maintaining escrow or impound accounts for the payment of taxes, insurance premiums, ground rents and similar items, or otherwise monitoring the timely payment of those items; - ensuring that the related properties are properly insured; - attempting to collect delinquent payments; - supervising foreclosures; - negotiating modifications; - responding to borrower requests for partial releases of the encumbered property, easements, consents to alteration or demolition and similar matters; - protecting the interests of certificateholders with respect to senior lienholders; - conducting inspections of the related real properties on a periodic or other basis; - collecting and evaluating financial statements for the related real properties; - managing or overseeing the management of real properties acquired on behalf of the trust through foreclosure, deed-in-lieu of foreclosure or otherwise; and - maintaining servicing records relating to mortgage loans in the trust. We will specify in the related prospectus supplement when, and the extent to which, servicing of a mortgage loan is to be transferred from a master servicer to a special servicer. In general, a special servicer for any of our trusts will be responsible for the servicing and administration of-- - mortgage loans that are delinquent with respect to a specified number of scheduled payments; - mortgage loans as to which there is a material non-monetary default; - mortgage loans as to which the related borrower has-- 1. entered into or consented to bankruptcy, appointment of a receiver or conservator or similar insolvency proceeding, or 2. become the subject of a decree or order for such a proceeding which has remained in force, undischarged or unstayed for a specified number of days; and - real properties acquired as part of the trust with respect to defaulted mortgage loans. The related Governing Document also may provide that if a default on a mortgage loan in the related trust has occurred or, in the judgment of the related master servicer, a payment default is reasonably foreseeable, the related master servicer may elect to transfer the servicing of that mortgage loan, in whole or in part, to the related special servicer. When the circumstances no longer warrant a special servicer's continuing to service a particular mortgage loan, such as when the related borrower is paying in accordance with the forbearance arrangement entered into between the special servicer and that borrower, the master servicer will generally resume the servicing duties with respect to the particular mortgage loan. 71 A borrower's failure to make required mortgage loan payments may mean that operating income from the related real property 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 otherwise to maintain and insure the related real property. In general, with respect to each series of offered certificates, the related special servicer will be required to monitor any mortgage loan in the related trust 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 real property, initiate corrective action in cooperation with the mortgagor if cure is likely, inspect the related real property and take any other actions as it deems necessary and appropriate. A significant period of time may elapse before a special servicer is able to assess the success of any corrective action or the need for additional initiatives. The time within which a special servicer can-- - make the initial determination of appropriate action; - evaluate the success of corrective action; - develop additional initiatives; - institute foreclosure proceedings and actually foreclose; or - accept a deed to a real property in lieu of foreclosure, on behalf of the certificateholders of the related series, may vary considerably depending on the particular mortgage loan, the related real property, the borrower, the presence of an acceptable party to assume the mortgage loan and the laws of the jurisdiction in which the related real property is located. If a borrower files a bankruptcy petition, the special servicer may not be permitted to accelerate the maturity of the defaulted loan or to foreclose on the related real property for a considerable period of time. See "Legal Aspects of Mortgage Loans--Bankruptcy Laws." A special servicer for one of our trusts may also perform limited duties with respect to mortgage loans in that trust for which the related master servicer is primarily responsible, such as-- - performing property inspections; and - collecting and evaluating financial statements. A master servicer for one of our trusts may perform limited duties with respect to any mortgage loan in that trust for which the related special servicer is primarily responsible, such as-- - continuing to receive payments on the mortgage loan; - making calculations with respect to the mortgage loan; and - making remittances and preparing reports to the related trustee and/or certificateholders with respect to the mortgage loan. The duties of the master servicer and special servicer for your series will be more fully described in the related prospectus supplement. Unless we state otherwise in the related prospectus supplement, the master servicer for your series will be responsible for filing and settling claims with respect to particular mortgage loans for your series under any applicable instrument of credit support. See "Description of Credit Support" in this prospectus. SUB-SERVICERS A master servicer or special servicer may delegate its servicing obligations to one or more third-party servicers or sub-servicers. However, unless we specify otherwise in the related prospectus supplement, the master servicer or special servicer will remain obligated under the related Governing Document. Each sub-servicing agreement between a master 72 servicer or special servicer, as applicable, and a sub-servicer must provide for servicing of the applicable mortgage loans consistent with the related Governing Document. Any master servicer and special servicer for one of our trusts will each be required to monitor the performance of sub-servicers retained by it. Unless we specify otherwise in the related prospectus supplement, any master servicer or special servicer for one of our trusts will be solely liable for all fees owed by it to any sub-servicer, regardless of whether the master servicer's or special servicer's compensation under the related Governing Document is sufficient to pay those fees. Each sub-servicer will be entitled to reimbursement from the master servicer or special servicer, as the case may be, that retained it, for expenditures which it makes, generally to the same extent the master servicer or special servicer would be reimbursed under the related Governing Document. COLLECTION OF PAYMENTS ON MORTGAGE-BACKED SECURITIES Unless we specify otherwise in the related prospectus supplement, if a mortgage-backed security is included among the trust assets underlying any series of offered certificates, then-- - that mortgage-backed security will be registered in the name of the related trustee or its designee; - the related trustee will receive payments on that mortgage-backed security; and - subject to any conditions described in the related prospectus supplement, the related trustee or a designated manager will, on behalf and at the expense of the trust, exercise all rights and remedies with respect to that mortgaged-backed security, including the prosecution of any legal action necessary in connection with any payment default. MATTERS REGARDING THE MASTER SERVICER, THE SPECIAL SERVICER, THE MANAGER AND US Unless we specify otherwise in the related prospectus supplement, no master servicer, special servicer or manager for any of our trusts may resign from its obligations in that capacity, except upon-- - the appointment of, and the acceptance of that appointment by, a successor to the resigning party and receipt by the related trustee of written confirmation from each applicable rating agency that the resignation and appointment will not result in a withdrawal or downgrade of any rating assigned by that rating agency to any class of certificates of the related series; or - a determination that those obligations are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by the resigning party. In general, no resignation will become effective until the related trustee or other successor has assumed the obligations and duties of the resigning master servicer, special servicer or manager, as the case may be. With respect to each series of offered certificates, we and the related master servicer, special servicer and/or manager, if any, will in each case be obligated to perform only those duties specifically required under the related Governing Document. In no event will we or any master servicer, special servicer or manager for one of our trusts, or any of our or its respective members, managers, directors, officers, employees or agents, be under any liability to that trust or the related certificateholders for any action taken, or not taken, in good faith under the related Governing Document or for errors in judgment. Neither we nor any of those other persons or entities will be protected, however, against any liability that would otherwise be imposed by reason of-- - willful misfeasance, bad faith, or negligence in the performance of obligations or duties under the Governing Document for any series of offered certificates; or - reckless disregard of those obligations and duties. 73 Furthermore, the Governing Document for each series of offered certificates will entitle us, the master servicer, special servicer and/or manager for the related trust, and our and their respective members, managers, directors, officers, employees and agents, to indemnification out of the related trust assets for any loss, liability or expense incurred in connection with any claim or legal action that relates to that Governing Document or series of offered certificates or to the related trust. The indemnification will not extend, however, to any loss, liability or expense-- - specifically required to be borne by the relevant party, without right of reimbursement, under the terms of that Governing Document; - incurred in connection with any legal action against the relevant party resulting from any breach of a representation or warranty made in that Governing Document; or - incurred in connection with any legal action against the relevant party resulting from any willful misfeasance, bad faith or negligence in the performance of obligations or duties under that Governing Document. Neither we nor any master servicer, special servicer or manager for the related trust will be under any obligation to appear in, prosecute or defend any legal action unless-- - the action is related to the respective responsibilities of that party under the Governing Document for the affected series of offered certificates; and - either-- 1. that party is specifically required to bear the expense of the action, or 2. the action will not, in its opinion, involve that party in any ultimate expense or liability for which it would not be reimbursed under the Governing Document for the affected series of offered certificates. However, we and each of those other parties may undertake any legal action that may be necessary or desirable with respect to the enforcement or protection of the rights and duties of the parties to the Governing Document for any series of offered certificates and the interests of the certificateholders of that series under that Government Document. In that event, the legal expenses and costs of the action, and any liability resulting from the action, will be expenses, costs and liabilities of the related trust and payable out of related trust assets. With limited exception, any person or entity-- - into which we or any related master servicer, special servicer or manager may be merged or consolidated; - resulting from any merger or consolidation to which we or any related master servicer, special servicer or manager is a party; or - succeeding to our business or the business of any related master servicer, special servicer or manager, will be the successor of us or that master servicer, special servicer or manager, as the case may be, under the Governing Document for a series of offered certificates. The compensation arrangements with respect to any master servicer, special servicer or manager for any of our trusts will be set forth in the related prospectus supplement. In general, that compensation will be payable out of the related trust assets. EVENTS OF DEFAULT We will identify in the related prospectus supplement the various events of default under the Governing Document for each series of offered certificates for which any related master servicer, special servicer or manager may be terminated in that capacity. 74 AMENDMENT The Governing Document for each series of offered certificates may be amended by the parties thereto, without the consent of any of the holders of those certificates, or of any non-offered certificates of the same series, for the following reasons-- 1. to cure any ambiguity; 2. to correct, modify or supplement any provision in the Governing Document which may be inconsistent with any other provision in that document or to correct any error; 3. to make any other provisions with respect to matters or questions arising under the Governing Document that are not inconsistent with the existing provisions of that document; 4. to maintain a rating or ratings assigned to a series of certificates. Further, the Governing Document may also provide that the parties to the Governing Document may amend it without the consent of the holders of certificates to modify, eliminate or add provisions that are necessary to maintain the qualification of any REMIC created under the Governing Document as a REMIC while certificates remain outstanding. Any action taken to maintain REMIC status must be necessary or helpful to maintain REMIC status as evidenced by an opinion of counsel acceptable to the related trustee. The Governing Document may also provide that any amendment made to it must be accompanied by an opinion of counsel stating that the amendment will not adversely affect the REMIC status of any series of certificates. The prospectus supplement for an individual series of certificates may describe other or different provisions concerning the amendment of the Governing Document. However, no amendment of the Governing Document for any series of offered certificates covered solely by clause 3. of the first paragraph of this "--Amendment" section, may adversely affect in any material respect the interests of any holders of offered or non-offered certificates of that series as evidenced by an opinion of counsel acceptable to us and the trustee for the related series. In general, the Governing Document for a series of offered certificates may also be amended by the parties to that document, with the consent of the holders of offered and non-offered certificates representing, in total, not less than 51%, or any other percentage specified in the related prospectus supplement, of all the voting rights allocated to those classes of that series that are materially affected by the amendment. However, the Governing Document for a series of offered certificates may not be amended to-- - reduce in any manner the amount of, or delay the timing of, payments received on the related mortgage assets which are required to be distributed on any offered or non-offered certificate of that series without the consent of the holder of that certificate; - adversely affect in any material respect the interests of the holders of any class of offered or non-offered certificates of that series in any other manner without the consent of the holders of all certificates of that class; - modify the provisions of the Governing Document relating to amendments of that document without the consent of the holders of all offered and non-offered certificates of that series then outstanding; or - alter the servicing standard set forth in the Governing Document without the consent of the holders of all offered and non-offered certificates of that series then outstanding. THE TRUSTEE The trustee for each series of offered certificates will be named in the related prospectus supplement. The commercial bank, banking association, banking corporation or trust company that serves as trustee for any series of offered certificates may have typical banking relationships with us and our affiliates and with any of the other parties to the related 75 Governing Document and its affiliates. The related Governing Document requires that the trustee may not be affiliated with us, the master servicer or the special servicer, and that it must satisfy additional requirements concerning minimum capital and surplus. DUTIES OF THE TRUSTEE The trustee for each series of offered certificates will not-- - make any representation as to the validity or sufficiency of those certificates, the related Governing Document or any underlying mortgage asset or related document; or - be accountable for the use or application by or on behalf of any other party to the related Governing Document of any funds paid to that party with respect to those certificates or the underlying mortgage assets. If no event of default has occurred and is continuing under the related Governing Document, the trustee for each series of offered certificates will be required to perform only those duties specifically required under the related Governing Document. However, upon receipt of any of the various certificates, reports or other instruments required to be furnished to it under the related Governing Document, the trustee must examine those documents and determine whether they conform to the requirements of that Governing Document. MATTERS REGARDING THE TRUSTEE As and to the extent described in the related prospectus supplement, the fees and normal disbursements of the trustee for any series of offered certificates may be the expense of the related master servicer or other specified person or may be required to be paid by the related trust assets. The trustee for each series of offered certificates will be entitled to indemnification, out of related trust assets, for any loss, liability or expense incurred by that trustee in connection with its acceptance or administration of its trusts under the related Governing Document. No trustee for any series of offered certificates will be liable for any action reasonably taken, suffered or omitted by it in good faith and believed by it to be authorized by the related Governing Document. No trustee for any series of offered certificates will be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties under the related Governing Document, or in the exercise of any of its rights or powers, if it has reasonable grounds for believing that repayment of those funds or adequate indemnity against that risk or liability is not reasonably assured to it. The trustee for each series of offered certificates will be entitled to execute any of its trusts or powers and perform any of its duties under the related Governing Document, either directly or by or through agents or attorneys. The trustee will not be responsible for any willful misconduct or gross negligence on the part of any agent or attorney appointed by it with due care. RESIGNATION AND REMOVAL OF THE TRUSTEE The trustee for any series of offered certificates may resign at any time. We will be obligated to appoint a successor to a resigning trustee. We may also remove the trustee for any series of offered certificates if that trustee ceases to be eligible to continue under the related Governing Document or if that trustee becomes insolvent. Unless we indicate otherwise in the related prospectus supplement, the trustee for any series of offered certificates may also be removed at any time by the holders of the offered and non-offered certificates of that series evidencing not less than 51%, or any other percentage specified in the related prospectus supplement, of the voting rights for that series. However, if the removal was without cause, the certificateholders effecting the removal may be responsible for any costs and expenses incurred by the terminated trustee in connection with its removal. Any resignation or removal of a trustee and appointment of a successor trustee will not become effective until acceptance of the appointment by the successor trustee. 76 DESCRIPTION OF CREDIT SUPPORT GENERAL Credit support may be provided with respect to one or more classes of the offered certificates of any series or with respect to the related mortgage assets. That credit support may be in the form of any of the following-- - the subordination of one or more other classes of certificates of the same series; - the use of a letter of credit, a surety bond, an insurance policy, a guarantee or a credit derivative; - the establishment of one or more reserve funds; or - any combination of the foregoing. If and to the extent described in the related prospectus supplement, any of the above forms of credit support may provide credit enhancement for non-offered certificates, as well as offered certificates, or for more than one series of certificates. If you are the beneficiary of any particular form of credit support, that credit support may not protect you against all risks of loss and will not guarantee payment to you of all amounts to which you are entitled under your offered certificates. If losses or shortfalls occur that exceed the amount covered by that credit support or that are of a type not covered by that credit support, you will bear your allocable share of deficiencies. Moreover, if that credit support covers the offered certificates of more than one class or series and total losses on the related mortgage assets exceed the amount of that credit support, it is possible that the holders of offered certificates of other classes and/or series will be disproportionately benefited by that credit support to your detriment. If you are the beneficiary of any particular form of credit support, we will include in the related prospectus supplement a description of the following-- - the nature and amount of coverage under that credit support; - any conditions to payment not otherwise described in this prospectus; - any conditions under which the amount of coverage under that credit support may be reduced and under which that credit support may be terminated or replaced; and - the material provisions relating to that credit support. Additionally, we will set forth in the related prospectus supplement information with respect to the obligor, if any, under any instrument of credit support. SUBORDINATE CERTIFICATES If and to the extent described in the related prospectus supplement, one or more classes of certificates of any series may be subordinate to one or more other classes of certificates of that series. If you purchase subordinate certificates, your right to receive payments out of collections and advances on the related trust assets on any payment date will be subordinated to the corresponding rights of the holders of the more senior classes of certificates. If and to the extent described in the related prospectus supplement, the subordination of a class of certificates may not cover all types of losses or shortfalls. In the related prospectus supplement, we 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. If the mortgage assets in any trust established by us 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 payments be made on senior certificates evidencing interests in one group of those mortgage assets prior to payments on 77 subordinate certificates evidencing interests in a different group of those mortgage assets. We will describe in the related prospectus supplement the manner and conditions for applying any cross-support provisions. INSURANCE OR GUARANTEES WITH RESPECT TO MORTGAGE LOANS The mortgage loans included in any trust established by us may be covered for some default risks by insurance policies or guarantees. If so, we will describe in the related prospectus supplement the nature of those default risks and the extent of that coverage. LETTERS OF CREDIT If and to the extent described in the related prospectus supplement, deficiencies in amounts otherwise payable on a series of offered certificates or select classes of those certificates will be covered by one or more letters of credit, issued by a bank or other financial institution specified in the related prospectus supplement. The issuer of a letter of credit will be obligated to honor draws under that letter of credit in a total fixed dollar amount, net of unreimbursed payments under the letter of credit, generally equal to a percentage specified in the related prospectus supplement of the total principal balance of some or all of the related mortgage assets as of the date the related trust was formed or of the initial total principal balance of one or more classes of certificates of the applicable series. The letter of credit may permit draws only in the event of select types of losses and shortfalls. The amount available under the letter of credit will, in all cases, be reduced to the extent of the unreimbursed payments thereunder and may otherwise be reduced as described in the related prospectus supplement. The obligations of the letter of credit issuer under the letter of credit for any series of offered certificates will expire at the earlier of the date specified in the related prospectus supplement or the termination of the related trust. CERTIFICATE INSURANCE AND SURETY BONDS If and to the extent described in the related prospectus supplement, deficiencies in amounts otherwise payable on a series of offered certificates or select classes of those certificates will be covered by insurance policies or surety bonds provided by one or more insurance companies or sureties. Those instruments may cover, with respect to one or more classes of the offered certificates of the related series, timely payments of interest and principal or timely payments of interest and payments of principal on the basis of a schedule of principal payments set forth in or determined in the manner specified in the related prospectus supplement. We will describe in the related prospectus supplement any limitations on the draws that may be made under any of those instruments. CREDIT DERIVATIVES If and to the extent described in the related prospectus supplement, deficiencies in amounts otherwise payable on a series of offered certificates or select classes of those certificates will be covered by credit derivatives, such as credit default swaps and total return swaps. A credit derivative is a financial instrument designed to offset losses and shortfalls derived from the credit risk of an underlying or reference asset or the credit risk of an underlying or reference credit. We will describe in the related prospectus supplement when and how payments are made under the particular instrument and the specific credit risk that is being covered. RESERVE FUNDS If and to the extent described in the related prospectus supplement, deficiencies in amounts otherwise payable on a series of offered certificates or select 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, permitted investments, a demand note or a combination of the foregoing, will be deposited, in the amounts specified in the related prospectus supplement. If and to the extent described in the related prospectus supplement, the reserve fund for the related series of offered certificates may also be funded over time. Amounts on deposit in any reserve fund for a series of offered certificates will be applied for the purposes, in the manner, and to the extent specified in the related prospectus supplement. If and to the extent described in the related prospectus supplement, reserve funds may be established to provide protection only against select types of losses and shortfalls. Following each payment date for the related series of offered certificates, amounts in a reserve fund in excess of any required balance may be released from the reserve fund under the conditions and to the extent specified in the related prospectus supplement. 78 CREDIT SUPPORT WITH RESPECT TO MBS If and to the extent described in the related prospectus supplement, any mortgage-backed security included in one of our trusts and/or the mortgage loans that back that security may be covered by one or more of the types of credit support described in this prospectus. We will specify in the related prospectus supplement, as to each of those forms of credit support, the information indicated above with respect to that mortgage-backed security, to the extent that the information is material and available. LEGAL ASPECTS OF MORTGAGE LOANS Most, if not all, of the mortgage loans underlying a series of offered certificates will be secured by multifamily and commercial properties in the United States, its territories and possessions. However, some of those mortgage loans may be secured by multifamily and commercial properties outside the United States, its territories and possessions. The following discussion contains general summaries of select legal aspects of mortgage loans secured by multifamily and commercial properties in the United States. Because these legal aspects are governed by applicable state law, which may differ substantially from state to state, the summaries do not purport to be complete, to reflect the laws of any particular state, or to encompass the laws of all jurisdictions in which the security for the mortgage loans underlying the offered certificates is situated. Accordingly, you should be aware that the summaries are qualified in their entirety by reference to the applicable laws of those states. See "Description of the Trust Assets--Mortgage Loans." If a significant percentage of mortgage loans underlying a series of offered certificates are secured by properties in a particular state, we will discuss the relevant state laws, to the extent they vary materially from this discussion, in the related prospectus supplement. GENERAL Each mortgage loan underlying a series of offered certificates will be evidenced by a note or bond and secured by an instrument granting a security interest in real property. The instrument granting a security interest in real property 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 that real property is located. Mortgages, deeds of trust and deeds to secure debt are often collectively referred to in this prospectus as "mortgages." A mortgage creates a lien upon, or grants a title interest in, the real property covered by the mortgage, 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; - 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 - in general, 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 owner of the encumbered interest in the real property; and - a mortgagee, who is the lender. In general, the mortgagor is also the borrower. 79 In contrast, a deed of trust is a three-party instrument. The parties to a deed of trust are-- - the trustor, who is the equivalent of a mortgagor; - the trustee to whom the real property is conveyed; and - the beneficiary for whose benefit the conveyance is made, who is the lender. Under a deed of trust, the trustor grants the property, irrevocably until the debt is paid, in trust and generally with a power of sale, to the trustee to secure repayment of the indebtedness evidenced by the related note. A deed to secure debt typically has two parties. Under a deed to secure debt, the grantor, who is the equivalent of a mortgagor, conveys title to the real property to the grantee, who is the lender, generally with a power of sale, until the debt is repaid. Where the borrower is a land trust, there would be an additional party because legal title to the property is held by a land trustee under a land trust agreement for the benefit of the borrower. At origination of a mortgage loan involving a land trust, the borrower may execute a separate undertaking to make payments on the mortgage note. In no event is the land trustee personally liable for the mortgage note obligation. The mortgagee's authority under a mortgage, the trustee's authority under a deed of trust and the grantee's authority under a deed to secure debt are governed by-- - the express provisions of the related instrument; - the law of the state in which the real property is located; - various federal laws; and - in some deed of trust transactions, the directions of the beneficiary. INSTALLMENT CONTRACTS The mortgage loans underlying your offered certificates may consist of installment contracts. Under an installment contract the seller retains legal title to the property and enters into an agreement with the purchaser for payment of the purchase price, plus interest, over the term of the installment contract. Only after full performance by the borrower of the contract is the seller obligated to convey title to the real estate to the purchaser. During the period that the installment contract is in effect, the purchaser is generally responsible for maintaining the property in good condition and for paying real estate taxes, assessments and hazard insurance premiums associated with the property. The seller's enforcement of an installment contract varies from state to state. Generally, installment contracts provide that upon a default by the purchaser, the purchaser loses his or her right to occupy the property, the entire indebtedness is accelerated, and the purchaser's equitable interest in the property is forfeited. The seller in this situation does not have to foreclose in order to obtain title to the property, although in some cases a quiet title action is in order if the purchaser has filed the installment contract in local land records and an ejectment action may be necessary to recover possession. In a few states, particularly in cases of purchaser default during the early years of an installment contract, the courts will permit ejectment of the purchaser and a forfeiture of his or her interest in the property. However, most state legislatures have enacted provisions by analogy to mortgage law protecting borrowers under installment contracts from the harsh consequences of forfeiture. Under those statutes, a judicial or nonjudicial foreclosure may be required, the seller may be required to give notice of default and the borrower may be granted some grace period during which the contract may be reinstated upon full payment of the default amount and the purchaser may have a post-foreclosure statutory redemption right. In other states, courts in equity may permit a purchaser with significant investment in the property under an installment contract for the sale of real estate to share in the proceeds of sale of the property after the indebtedness is repaid or may otherwise refuse to enforce the forfeiture clause. Nevertheless, generally speaking, the seller's procedures for obtaining possession and clear title under an installment contract for the sale of real 80 estate in a given state are simpler and less time-consuming and costly than are the procedures for foreclosing and obtaining clear title to a mortgaged property. LEASES AND RENTS A mortgage that encumbers an income-producing property often contains an assignment of rents and leases and/or may be accompanied by a separate assignment of rents and leases. Under an assignment of rents and leases, the borrower assigns to the lender the borrower's right, title and interest as landlord under each lease and the income derived from each lease. However, the borrower retains a revocable license to collect the rents, provided there is no default and the rents are not directly paid to the lender. If the borrower defaults, the license terminates and the lender is entitled to collect the rents. Local law may require that the lender take possession of the property and/or obtain a court-appointed receiver before becoming entitled to collect the rents. In most states, hotel and motel room rates are considered accounts receivable under the UCC. Room rates are generally pledged by the borrower as additional security for the loan when a mortgage loan is secured by a hotel or motel. In general, the lender must file financing statements in order to perfect its security interest in the room rates and must file continuation statements, generally every five years, to maintain that perfection. Mortgage loans secured by hotels or motels may be included in one of our trusts even if the security interest in the room rates was not perfected or the requisite UCC filings were allowed to lapse. A lender will generally be required to commence a foreclosure action or otherwise take possession of the property in order to enforce its rights to collect the room rates following a default, even if the lender's security interest in room rates is perfected under applicable nonbankruptcy law. In the bankruptcy setting, the lender will be stayed from enforcing its rights to collect hotel and motel room rates. However, the room rates will constitute cash collateral and cannot be used by the bankrupt borrower-- - without a hearing or the lender's consent; or - unless the lender's interest in the room rates is given adequate protection. For purposes of the foregoing, the adequate protection may include a cash payment for otherwise encumbered funds or a replacement lien on unencumbered property, in either case equal in value to the amount of room rates that the bankrupt borrower proposes to use. See "--Bankruptcy Laws" below. PERSONALTY Some types of income-producing real properties, such as hotels, motels and nursing homes, may include personal property, which may, to the extent it is owned by the borrower and not previously pledged, 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 the personal property and must file continuation statements, generally every five years, to maintain that perfection. Mortgage loans secured in part by personal property may be included in one of our trusts even if the security interest in the personal property was not perfected or the requisite UCC filings were allowed to lapse. FORECLOSURE GENERAL. Foreclosure is a legal procedure that allows the lender to recover its mortgage debt by enforcing its rights and available legal remedies under the mortgage. If the borrower defaults in payment or performance of its obligations under the note or mortgage, the lender has the right to institute foreclosure proceedings to sell the real property security at public auction to satisfy the indebtedness. FORECLOSURE PROCEDURES VARY FROM STATE TO STATE. The two primary methods of foreclosing a mortgage are-- - judicial foreclosure, involving court proceedings; and - nonjudicial foreclosure under a power of sale granted in the mortgage instrument. 81 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. A foreclosure action sometimes requires several years to complete. JUDICIAL FORECLOSURE. A judicial foreclosure proceeding is conducted in a court having jurisdiction over the mortgaged property. Generally, a lender initiates the action 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. The court generally issues a judgment of foreclosure and appoints a referee or other officer to conduct a public sale of the mortgaged property upon successful completion of a judicial foreclosure proceeding. The proceeds of that public sale are used to satisfy the judgment. The procedures that govern these public sales vary from state to state. EQUITABLE AND OTHER LIMITATIONS ON ENFORCEABILITY OF PARTICULAR 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 these 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; - 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; - require the lender to reinstate a loan or recast a payment schedule in order to accommodate a borrower that is suffering from a temporary financial disability; or - limit the right of the lender to foreclose in the case of a nonmonetary default, such as-- 1. a failure to adequately maintain the mortgaged property, or 2. an impermissible further encumbrance of the mortgaged property. 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 - found that a public sale under a mortgage providing for a power of sale does not involve sufficient state action to trigger constitutional protections. In addition, some states may have statutory protection such as the right of the borrower to reinstate its mortgage loan after commencement of foreclosure proceedings but prior to a foreclosure sale. 82 NONJUDICIAL FORECLOSURE/POWER OF SALE. In states permitting nonjudicial foreclosure proceedings, foreclosure of a deed of trust is generally accomplished by a nonjudicial trustee's sale under a power of sale typically granted in the deed of trust. A power of sale may also be contained in any other type of mortgage instrument if applicable law so permits. A power of sale under a deed of trust allows a nonjudicial public sale to be conducted generally following-- - a request from the beneficiary/lender to the trustee to sell the property upon default by the borrower; and - notice of sale is given in accordance with the terms of the deed of trust and applicable state law. In some states, prior to a nonjudicial public sale, the trustee under the deed of trust must-- - record a notice of default and notice of sale; and - send a copy of those notices to the borrower and to any other party who has recorded a request for a copy of them. 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. Some states require a reinstatement period during which the borrower or junior lienholder may have the right to cure the default by paying the entire actual amount in arrears, without regard to the acceleration of the indebtedness, plus the lender's expenses incurred in enforcing the obligation. In other states, the borrower or the junior lienholder has only the right to pay off the entire debt to prevent the foreclosure sale. Generally, state law governs the procedure for public sale, the parties entitled to notice, the method of giving notice and the applicable time periods. PUBLIC SALE. A third party may be unwilling to purchase a mortgaged property at a public sale because of-- - the difficulty in determining the exact status of title to the property due to, among other things, redemption rights that may exist; and - the possibility that physical deterioration of the property may have occurred during the foreclosure proceedings. As a result of the foregoing, it is common for the lender to purchase the mortgaged property and become its owner, subject to the borrower's right in some states to remain in possession during a redemption period. In that case, the lender will have both the benefits and burdens of ownership, including the obligation to pay debt service on any senior mortgages, to pay taxes, to obtain casualty insurance and to make repairs necessary to render the property suitable for sale. The costs of operating and maintaining a commercial or multifamily residential property may be significant and may be greater than the income derived from that property. The lender also will commonly obtain the services of a real estate broker and pay the broker's commission in connection with the sale or lease of the property. Whether, the ultimate proceeds of the sale of the property equal the lender's investment in the property depends upon market conditions. Moreover, because of the expenses associated with acquiring, owning and selling a mortgaged property, a lender could realize an overall loss on the related mortgage loan even if the mortgaged property is sold at foreclosure, or resold after it is acquired through foreclosure, for an amount equal to the full outstanding principal amount of the loan plus accrued interest. The holder of a junior mortgage that forecloses on a mortgaged property does so subject to senior mortgages and any other prior liens. In addition, it may be obliged to keep senior mortgage loans current in order to avoid foreclosure of its interest in the property. Furthermore, if the foreclosure of a junior mortgage triggers the enforcement of a due-on-sale clause contained in a senior mortgage, the junior mortgagee could be required to pay the full amount of the senior mortgage indebtedness 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 exercising their equity of redemption. 83 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 to the foreclosure proceeding in order for their equity of redemption to be terminated. The equity of redemption is a common-law, nonstatutory right which should be distinguished from post-sale statutory rights of redemption. In some states, the borrower and foreclosed junior lienors are given a statutory period in which to redeem the property after sale under a deed of trust or foreclosure of a mortgage. 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. A statutory right of redemption will diminish the ability of the lender to sell the foreclosed property because the exercise of a right of redemption would defeat the title of any purchaser through a foreclosure. Consequently, the practical effect of the redemption right is to force the lender to maintain the property and pay the expenses of ownership until the redemption period has expired. In some states, a post-sale statutory right of redemption may exist following a judicial foreclosure, but not following a trustee's sale under a deed of trust. ANTI-DEFICIENCY LEGISLATION. Some or all of the mortgage loans underlying a series of offered certificates may be nonrecourse loans. Recourse in the case of a default on a non-recourse mortgage loan will be limited to the mortgaged property and any other assets 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 other states, the lender has the option of bringing a personal action against the borrower on the debt without first exhausting the security, but in doing so, the lender may be deemed to have elected a remedy and thus may be precluded from foreclosing upon the security. Consequently, lenders will usually proceed first against the security in states where an election of remedy provision exists. Finally, other statutory provisions 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. These other statutory provisions are intended to protect borrowers from exposure to large deficiency judgments that might result from bidding at below-market values at the foreclosure sale. LEASEHOLD CONSIDERATIONS. Some or all of the mortgage loans underlying a series of offered certificates may be secured by a mortgage on the borrower's leasehold interest under a ground lease. Leasehold mortgage loans are subject to some 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 other protective provisions typically required by prudent lenders to be included in a ground lease. Some mortgage loans underlying a series of offered certificates, however, may be secured by ground leases which do not contain these provisions. COOPERATIVE SHARES. Some or all of the mortgage loans underlying a series of offered certificates may be secured by a security interest on the borrower's ownership interest in shares, and the proprietary leases belonging to those shares, allocable to cooperative dwelling units that may be vacant or occupied by nonowner tenants. Loans secured in this manner are subject to some risks not associated with mortgage loans secured by a lien on the fee estate of a borrower in real property. Loans secured in this manner typically are subordinate to the mortgage, if any, on the cooperative's building. That mortgage, 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 is subject to various regulations as well as to restrictions under the governing documents of the cooperative. The shares may be canceled in the event that associated maintenance charges due under the related proprietary leases are not paid. Typically, a recognition agreement 84 between the lender and the cooperative provides, among other things, that the lender may 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 corporation to receive sums due under the proprietary leases. BANKRUPTCY LAWS Operation of the U.S. Bankruptcy Code and related state laws may interfere with or affect the ability of a lender to realize upon collateral or to enforce a deficiency judgment. For example, under the U.S. Bankruptcy Code, virtually all actions, including foreclosure actions and deficiency judgment proceedings, to collect a debt are automatically stayed upon the filing of the bankruptcy petition. Often, no interest or principal payments are made during the course of the bankruptcy case. The delay caused by an automatic stay and its consequences can be significant. Also, under the U.S. 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 the junior lien. Under the U.S. Bankruptcy Code, the amount and terms of a mortgage loan secured by a lien on property of the debtor may be modified provided that substantive and procedural safeguards protective of the lender are met. A bankruptcy court may, among other things-- - reduce the secured portion of the outstanding amount of the loan to the then-current value of the property, thereby leaving the lender a general unsecured creditor for the difference between the then-current value of the property and the outstanding balance of the loan; - reduce the amount of each scheduled payment, by means of a reduction in the rate of interest and/or an alteration of the repayment schedule, with or without affecting the unpaid principal balance of the loan; - extend or shorten the term to maturity of the loan; - permit the bankrupt borrower to cure of the subject loan default by paying the arrearage over a number of years; or - permit the bankrupt borrower, through its rehabilitative plan, to reinstate the loan payment schedule even if the lender has obtained a final judgment of foreclosure prior to the filing of the debtor's petition. Federal bankruptcy law may also interfere with or affect the ability of a secured lender to enforce the borrower's assignment of rents and leases related to the mortgaged property. A lender may be stayed from enforcing the assignment under the U.S. Bankruptcy Code. In addition, the legal proceedings necessary to resolve the issue could be time-consuming, and result in delays in the lender's receipt of the rents. However, recent amendments to the U.S. Bankruptcy Code may minimize the impairment of the lender's ability to enforce the borrower's assignment of rents and leases. In addition to the inclusion of hotel revenues within the definition of cash collateral as noted above, the amendments provide that a pre-petition security interest in rents or hotel revenues is designed to overcome those cases holding that a security interest in rents is unperfected under the laws of some states until the lender has taken some further action, such as commencing foreclosure or obtaining a receiver prior to activation of the assignment of rents. 85 A borrower's ability to make payment on a mortgage loan may be impaired by the commencement of a bankruptcy case relating to the tenant under a lease of the related property. Under the U.S. Bankruptcy Code, the filing of a petition in bankruptcy by or on behalf of a tenant results in a stay in bankruptcy against the commencement or continuation of any state court proceeding for-- - past due rent; - accelerated rent; - damages; or - a summary eviction order with respect to a default under the lease that occurred prior to the filing of the tenant's bankruptcy petition. In addition, the U.S. Bankruptcy Code generally provides that a trustee or debtor-in-possession may, subject to approval of the court-- - assume the lease and either retain it or assign it to a third party; or - reject the lease. If the lease is assumed, the trustee, debtor-in-possession or assignee, if applicable, must cure any defaults under the lease, compensate the lessor for its losses and provide the lessor with adequate assurance of future performance. These remedies may be insufficient, and any assurances provided to the lessor may be inadequate. If the lease is rejected, the lessor will be treated, except potentially to the extent of any security deposit, as an unsecured creditor with respect to its claim for damages for termination of the lease. The U.S. Bankruptcy Code also limits a lessor's damages for lease rejection to-- - the rent reserved by the lease without regard to acceleration for the greater of one year, or 15%, not to exceed three years, of the remaining term of the lease; plus - unpaid rent to the earlier of the surrender of the property or the lessee's bankruptcy filing. ENVIRONMENTAL CONSIDERATIONS GENERAL. A lender may be subject to environmental risks when taking a security interest in real property. Of particular concern may be properties that are or have been used for industrial, manufacturing, military or disposal activity. Those environmental risks include the possible diminution of the value of a contaminated property or, as discussed below, potential liability for clean-up costs or other remedial actions that could exceed the value of the property or the amount of the lender's loan. In some circumstances, a lender may decide to abandon a contaminated real property as collateral for its loan rather than foreclose and risk liability for clean-up costs. SUPERLIEN LAWS. Under the laws of many states, contamination on a property may give rise to a lien on the property for clean-up costs. In several states, that lien has priority over all existing liens, including those of existing mortgages. In these states, the lien of a mortgage may lose its priority to that superlien. CERCLA. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, imposes strict liability on present and past "owners" and "operators" of contaminated real property for the costs of clean-up. A secured lender may be liable as an "owner" or "operator" of a contaminated mortgaged property if agents or employees of the lender have participated in the management of the property or the operations of the borrower. Liability may exist even if the lender did not cause or contribute to the contamination and regardless of whether the lender has actually taken possession of the contaminated mortgaged property through foreclosure, deed in lieu of foreclosure or otherwise. Moreover, liability is not limited to the original or unamortized principal balance of a loan or to the value of the property securing a loan. Excluded from CERCLA's definition of "owner" or "operator," however, is a person who, without participating in the management of the facility, holds indicia of ownership primarily to protect his security interest. This is the so called "secured creditor exemption." 86 The Asset Conservation, Lender Liability and Deposit Insurance Act of 1996 amended, among other things, the provisions of CERCLA with respect to lender liability and the secured creditor exemption. The Lender Liability Act offers substantial protection to lenders by defining the activities in which a lender can engage and still have the benefit of the secured creditor exemption. In order for a lender to be deemed to have participated in the management of a mortgaged property, the lender must actually participate in the operational affairs of the property of the borrower. The Lender Liability Act provides that "merely having the capacity to influence, or unexercised right to control" operations does not constitute participation in management. A lender will lose the protection of the secured creditor exemption only if-- - it exercises decision-making control over a borrower's environmental compliance and hazardous substance handling and disposal practices; or - assumes day-to-day management of operational functions of a mortgaged property. The Lender Liability Act also provides that a lender will continue to have the benefit of the secured creditor exemption even if it forecloses on a mortgaged property, purchases it at a foreclosure sale or accepts a deed-in-lieu of foreclosure, provided that the lender seeks to sell that property at the earliest practicable commercially reasonable time on commercially reasonable terms. OTHER FEDERAL AND STATE LAWS. Many states have statutes similar to CERCLA, and not all those statutes provide for a secured creditor exemption. In addition, under federal law, there is potential liability relating to hazardous wastes and underground storage tanks under the federal Resource Conservation and Recovery Act. Some federal, state and local laws, regulations and ordinances govern the management, removal, encapsulation or disturbance of asbestos-containing materials. These laws, as well as common law standards, may-- - impose liability for releases of or exposure to asbestos-containing materials; and - provide for third parties to seek recovery from owners or operators of real properties for personal injuries associated with those releases. Federal law requires owners of residential housing constructed prior to 1978 to disclose to potential residents or purchasers any known lead-based paint hazards and will impose treble damages for any failure to disclose. In addition, the ingestion of lead-based paint chips or dust particles by children can result in lead poisoning. If lead-based paint hazards exist at a property, then the owner of that property may be held liable for injuries and for the costs of removal or encapsulation of the lead-based paint. In a few states, transfers of some types of properties are conditioned upon cleanup of contamination prior to transfer. In these cases, a lender that becomes the owner of a property through foreclosure, deed in lieu of foreclosure or otherwise, may be required to clean up the contamination before selling or otherwise transferring the property. Beyond statute-based environmental liability, there exist common law causes of action related to hazardous environmental conditions on a property, such as actions based on nuisance or on toxic tort resulting in death, personal injury or damage to property. While it may be more difficult to hold a lender liable under common law causes of action, unanticipated or uninsured liabilities of the borrower may jeopardize the borrower's ability to meet its loan obligations. Federal, state and local environmental regulatory requirements change often. It is possible that compliance with a new regulatory requirement could impose significant compliance costs on a borrower. These costs may jeopardize the borrower's ability to meet its loan obligations. ADDITIONAL CONSIDERATIONS. The cost of remediating hazardous substance contamination at a property can be substantial. If a lender becomes liable, it can bring an action for contribution against the owner or operator who created the environmental hazard. However, that individual or entity may be without substantial assets. Accordingly, it is possible that the costs could become a liability of the related trust and occasion a loss to the related certificateholders. If the operations on a foreclosed property are subject to environmental laws and regulations, the lender will be required to operate the property in accordance with those laws and regulations. This compliance may entail substantial expense, especially in the case of industrial or manufacturing properties. 87 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. This disclosure may decrease the amount that prospective buyers are willing to pay for the affected property, sometimes substantially. DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS Some or all of the mortgage loans underlying a series of offered certificates 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 a mortgaged property. In recent years, court decisions and legislative actions placed substantial restrictions on the right of lenders to enforce these clauses in many states. However, the Garn-St Germain Depository Institutions Act of 1982 generally preempts state laws that prohibit the enforcement of due-on-sale clauses and permits lenders to enforce these clauses in accordance with their terms, subject to the limitations prescribed in that Act and the regulations promulgated thereunder. JUNIOR LIENS; RIGHTS OF HOLDERS OF SENIOR LIENS Any of our trusts may include mortgage loans secured by junior liens, while the loans secured by the related senior liens may not be included in that trust. The primary risk to holders of mortgage loans secured by junior liens is the possibility that adequate funds will not be received in connection with a foreclosure of the related senior liens to satisfy fully both the senior loans and the junior loan. In the event that a holder of a senior lien forecloses on a mortgaged property, the proceeds of the foreclosure or similar sale will be applied as follows-- - FIRST, to the payment of court costs and fees in connection with the foreclosure; - SECOND, to real estate taxes; - THIRD, in satisfaction of all principal, interest, prepayment or acceleration penalties, if any, and any other sums due and owing to the holder of the senior liens; and - LAST, in satisfaction of all principal, interest, prepayment and acceleration penalties, if any, and any other sums due and owing to the holder of the junior liens. SUBORDINATE FINANCING Some mortgage loans underlying a series of offered certificates may not restrict the ability of the borrower to use the mortgaged property as security for one or more additional loans, or the restrictions may be unenforceable. Where a borrower encumbers a mortgaged property with one or more junior liens, the senior lender is subjected to the following additional risks-- - the borrower may have difficulty servicing and repaying multiple loans; - 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; - acts of the senior lender that prejudice the junior lender or impair the junior lender's security, such as the senior lender's agreeing to an increase in the principal amount of or the interest rate payable on the senior loan, may create a superior equity in favor of the junior lender; - 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; and - the bankruptcy of a junior lender may operate to stay foreclosure or similar proceedings by the senior lender. 88 DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS Notes and mortgages may contain provisions that obligate the borrower to pay a late charge or additional interest if payments are not timely made. They may also contain provisions that prohibit prepayments for a specified period and/or condition prepayments upon the borrower's payment of prepayment premium, fee or charge. In some states, there are or may be specific limitations upon the late charges that a lender may collect from a borrower for delinquent payments. Some states also limit the amounts that a lender may collect from a borrower as an additional charge if the loan is prepaid. In addition, the enforceability of provisions that provide for prepayment premiums, fees and charges 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 provides that state usury limitations shall not apply to various types of residential, including multifamily, first mortgage loans originated by particular lenders after March 31, 1980. Title V authorized any state to reimpose interest rate limits by adopting, before April 1, 1983, a law or constitutional provision that expressly rejects application of the federal law. In addition, even where Title V is not 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. Some states have taken action to reimpose interest rate limits and/or to limit discount points or other charges. AMERICANS WITH DISABILITIES ACT Under Title III of the Americans with Disabilities Act of 1990 and rules promulgated thereunder, in order to protect individuals with disabilities, owners of public accommodations, such as hotels, restaurants, shopping centers, hospitals, schools and social service center establishments, must remove architectural and communication barriers which are structural in nature from existing places of public accommodation to the extent "readily achievable." In addition, under the ADA, alterations to a place of public accommodation or a commercial facility are to be made so that, to the maximum extent feasible, 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 property 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 requirements on a foreclosing lender who succeeds to the interest of the borrower as owner or landlord. Furthermore, because the "readily achievable" standard may vary depending on the financial condition of the owner or landlord, a foreclosing lender that 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. SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940 Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended, a borrower who enters military service after the origination of the 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 the 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 a master servicer or special servicer to collect full amounts of interest on an affected mortgage loan. Any shortfalls in interest collections resulting from the application of the Relief Act would result in a reduction of the amounts payable to the holders of certificates of the related series, 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 the certificates. In addition, the Relief Act imposes limitations that would impair the ability of a master servicer or special servicer to foreclose on an affected mortgage loan during the borrower's period of active duty status and, under some circumstances, during an additional three month period after the active duty status ceases. 89 FORFEITURES IN DRUG AND RICO PROCEEDINGS Federal law provides that property owned by persons convicted of drug-related crimes or of criminal violations of the Racketeer Influenced and Corrupt Organizations statute can be seized by the government if the property was used in, or purchased with the proceeds of, those crimes. Under procedures contained in the comprehensive Crime Control Act of 1984, the government may seize the property even before conviction. The government must publish notice of the forfeiture proceeding and may give notice to all parties "known to have an alleged interest in the property," including the holders of mortgage loans. A lender may avoid forfeiture of its interest in the property if it establishes that-- - its mortgage was executed and recorded before commission of the crime upon which the forfeiture is based; or - the lender was, at the time of execution of the mortgage, "reasonably without cause to believe" that the property was used in, or purchased with the proceeds of, illegal drug or RICO activities. FEDERAL INCOME TAX CONSEQUENCES GENERAL This is a general discussion of the material federal income tax consequences of owning the offered certificates. To the extent it relates to matters of law or legal conclusions, it represents the opinion of our counsel, subject to any qualifications as may be expressed in this discussion. Unless we otherwise specify in the related prospectus supplement, our counsel for each series will be Cadwalader, Wickersham & Taft LLP, Sidley Austin Brown & Wood llp, or Orrick, Herrington & Sutcliffe (as provided in the related prospectus supplement). This discussion is directed to certificateholders that hold the offered certificates as "capital assets" within the meaning of Section 1221 of the Internal Revenue Code of 1986, which we will refer to throughout this "Federal Income Tax Consequences" section as the "Code". It does not discuss all federal income tax consequences that may be relevant to owners of offered certificates, particularly as to investors subject to special treatment under the Code, including-- - banks; - insurance companies; and - foreign investors. Further, this discussion and any legal opinions referred to in this discussion are based on authorities that can change, or be differently interpreted, with possible retroactive effect. 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. Investors and preparers of tax returns should be aware that under applicable Treasury regulations a provider of advice on specific issues of law is not considered an income tax return preparer unless the advice is-- - given with respect to events that have occurred at the time the advice is rendered; and - is directly relevant to the determination of an entry on a tax return. Accordingly, even if this discussion addresses an issue regarding the tax treatment of the owner of the offered certificates, investors should consult their own tax advisors regarding that issue. Investors should do so not only as to federal taxes, but also state and local taxes. See "State and Other Tax Consequences". 90 The following discussion addresses securities of two general types-- - "REMIC certificates" representing interests in a trust, or a portion thereof, as to which a specified person or entity will make a "real estate mortgage investment conduit", or "REMIC", election under Sections 860A through 860G of the Code; and - "grantor trust certificates" representing interests in a trust or a portion thereof, as to which no REMIC election will be made. We will indicate in the prospectus supplement for each series whether the related trustee, another party to the related Governing Document or an agent appointed by that trustee or other party, in any event, a tax administrator, will make a REMIC election for the related trust. If the related tax administrator is required to make a REMIC election, we also will identify in the related prospectus supplement all regular interests and residual interests in the resulting REMIC. The following discussion is limited to certificates offered under this prospectus. In addition, this discussion applies only to the extent that the related trust or a portion thereof holds only mortgage loans. If a trust holds assets other than mortgage loans, such as mortgage-backed securities, we will disclose in the related prospectus supplement the tax consequences associated with those other assets being included. In addition, if agreements other than guaranteed investment contracts are included in a trust to provide interest rate protection for the related offered certificates, the anticipated material tax consequences associated with those agreements also will be discussed in the related prospectus supplement. See "Description of the Trust Assets--Arrangements Providing Reinvestment, Interest Rate and Currency Related Protection". The following discussion is based in part on the rules governing original issue discount in Sections 1271-1273 and 1275 of the Code and in the Treasury regulations issued under those sections. It is also based in part on the rules governing REMICs in Sections 860A-860G of the Code and in the Treasury regulations issued under those sections, which we will refer to as the "REMIC Regulations". The regulations relating to original issue discount do not adequately address certain issues relevant to, and in some instances provide that they are not applicable to, securities such as the offered certificates. REMICS GENERAL. With respect to each series of offered certificates as to which the related tax administrator will make a REMIC election, our counsel will deliver its opinion generally to the effect that, assuming compliance with all provisions of the related Governing Document, and subject to certain assumptions set forth in the opinion-- - the related trust, or the relevant designated portion of the trust, will qualify as a REMIC; and - those offered certificates of that series will be considered to evidence ownership of-- 1. REMIC "regular interests", or 2. REMIC "residual interests". We refer in this discussion to-- - certificates that evidence REMIC "regular interests" as the "REMIC regular certificates"; and - certificates that represent REMIC "residual interests" as the "REMIC residual certificates". If an entity electing to be treated as a REMIC fails to comply with the ongoing requirements of the Code for REMIC status, it may lose its REMIC status. If so, the entity may become taxable as a corporation. Therefore, the related certificates may not be given the tax treatment summarized below. Although the Code authorizes the Treasury Department to issue regulations providing relief in the event of an inadvertent termination of REMIC status, the Treasury Department has not done so. Any relief mentioned above, moreover, may be accompanied by sanctions. These sanctions could include the imposition of a corporate tax on all or a portion of a trust's income for the period in which the requirements for REMIC status are not satisfied. The Governing Document with respect to each REMIC will include provisions designed to maintain its status as a REMIC under the Code. 91 QUALIFICATION AS A REMIC. In order to qualify as a REMIC, an entity must comply with the requirements set forth in the Code. The REMIC must fulfill an asset test, which requires that no more than a DE MINIMIS portion of the assets of the REMIC, as of the close of the third calendar month beginning after the "Startup Day" and at all times thereafter, may consist of assets other than "qualified mortgages" and "permitted investments". The "Startup Day" for the purposes of this discussion is the date of issuance of the REMIC certificates. 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'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 Governing Document for each series will contain a provision designed to meet this requirement. See "--Sales of REMIC Certificates" and "--Tax and Restrictions on Transfers of REMIC Residual Certificates to Certain 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 on the Startup Day or is purchased by the REMIC within a three-month period thereafter pursuant to a fixed price contract in effect on the Startup Day. Qualified mortgages include-- - whole mortgage loans, such as the mortgage loans; - certificates of beneficial interest in a grantor trust that holds mortgage loans, including certain mortgage backed securities; - regular interests in another REMIC, such as mortgage backed securities in a trust as to which a REMIC election has been made; - loans secured by timeshare interests and loans secured by shares held by a tenant stockholder in a cooperative housing corporation, provided, in general that: 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 significantly modified other than in connection with a default or reasonably foreseeable default, it must meet the loan-to-value test in (1) above as of the date of the last significant modification or at closing. A qualified mortgage includes a qualified replacement mortgage, which is any property that would have been treated as a qualified mortgage if it were transferred to the REMIC on the Startup Day and that is received either-- - in exchange for any qualified mortgage within a three-month period thereafter; or - in exchange for a "defective obligation" within a two-year period thereafter. A "defective obligation" includes-- - a mortgage in default or as to which default is reasonably foreseeable; - a mortgage as to which a customary representation or warranty made at the time of transfer to the REMIC has been breached; - a mortgage that was fraudulently procured by the mortgagor; and - 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). 92 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. A qualified reserve asset is any intangible property held for investment that is part of any reasonably required reserve maintained by the REMIC to provide for payments of expenses of the REMIC 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 in connection with the default or imminent default of a qualified mortgage, provided that we had no knowledge that the mortgage loan would go into default at the time it was transferred to the REMIC. 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, with an extension that may be granted by the IRS. In addition to the foregoing requirements, the various interests in a REMIC also must meet certain requirements. All of the interests in a REMIC must be either of the following-- - one or more classes of regular interests; or - a single class of residual interests on which distributions, if any, are made pro rata. A regular interest is an interest in a REMIC 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 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 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, 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 or prepayment interest shortfalls. Accordingly, the REMIC regular certificates of a series will constitute one or more classes of regular interests, and the REMIC residual certificates for each REMIC of that series will constitute a single class of residual interests on which distributions are made PRO RATA. CHARACTERIZATION OF INVESTMENTS IN REMIC CERTIFICATES. Unless we state otherwise in the related prospectus supplement, the offered certificates that are REMIC 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; and - "loans secured by an interest in real property" or other assets described in Section 7701(a)(19)(C) of the Code in the hands of a thrift institution, in the same proportion that the assets of the related REMIC are so treated. 93 However, to the extent that the REMIC assets constitute mortgage loans on property not used for residential or certain other prescribed purposes, the related offered certificates will not be treated as assets qualifying under Section 7701(a)(19)(C). If 95% or more of the assets of the REMIC qualify for any of the foregoing characterizations at all times during a calendar year, the related offered certificates will qualify for the corresponding status in their entirety for that calendar year. In addition, unless provided otherwise in the related prospectus supplement, offered certificates that are REMIC regular certificates will be-- - "qualified mortgages" within the meaning of Section 860G(a)(3) of the Code in the hands of another REMIC; and - "permitted assets" under Section 860L(c)(1)(G) of the Code for a financial asset securitization investment trust or "FASIT". Finally, interest, including original issue discount, on offered certificates that are REMIC regular certificates, and income allocated to offered certificates that are REMIC residual certificates, will be interest described in Section 856(c)(3)(B) of the Code if received by a real estate investment trust, to the extent that these certificates are treated as "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code. The related tax administrator will determine the percentage of the REMIC's assets that constitute assets described in the above-referenced sections of the Code with respect to each calendar quarter based on the average adjusted basis of each category of the assets held by the REMIC during that calendar quarter. The related tax administrator will report those determinations to certificateholders in the manner and at the times required by applicable Treasury regulations. The assets of the REMIC will include, in addition to mortgage loans, collections on mortgage loans held pending payment on the related offered certificates and any property acquired by foreclosure held pending sale, and may include amounts in reserve accounts. It is unclear whether property acquired by foreclosure held pending sale, and amounts in reserve accounts, would be considered to be part of the mortgage loans, or whether these assets otherwise would receive the same treatment as the mortgage loans for purposes of the above-referenced sections of the Code. In addition, in some instances, the mortgage loans may not be treated entirely as assets described in those sections of the Code. If so, we will describe in the related prospectus supplement those mortgage loans that are characterized differently. The Treasury regulations do provide, however, that cash received from collections on mortgage loans held pending payment is considered part of the mortgage loans for purposes of Section 856(c)(5)(B) of the Code, relating to real estate investment trusts. To the extent a REMIC certificate represents ownership of an interest in a mortgage loan that is secured in part by the related borrower's interest in a bank account, that mortgage loan is not secured solely by real estate, and therefore-- - a portion of that certificate may not represent ownership of "loans secured by an interest in real property" or other assets described in Section 7701(a)(19)(C) of the Code; - a portion of that certificate may not represent ownership of "real estate assets" under Section 856(c)(5)(B) of the Code; and - the interest on that certificate may not constitute "interest on obligations secured by mortgages on real property" within the meaning of Section 856(c)(3)(B) of the Code. TIERED REMIC STRUCTURES. For certain series of REMIC certificates, the related tax administrator may make two or more REMIC elections as to the related trust for federal income tax purposes. As to each of these series of REMIC certificates, our counsel will opine that each portion of the related trust as to which a REMIC election is to be made will qualify as a REMIC. Each of these series will be treated as one REMIC solely for purposes of determining-- - whether the related REMIC certificates will be "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code; - whether the related REMIC certificates will be "loans secured by an interest in real property" under Section 7701(a)(19)(C) of the Code; and 94 - whether the interest/income on the related REMIC certificates is interest described in Section 856(c)(3)(B) of the Code. TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES. GENERAL. Except as otherwise stated in this discussion, the Code treats REMIC regular certificates as debt instruments issued by the REMIC and not as ownership interests in the REMIC or its assets. Holders of REMIC regular certificates that otherwise report income under the cash method of accounting must nevertheless report income with respect to REMIC regular certificates under the accrual method. ORIGINAL ISSUE DISCOUNT. Certain REMIC regular certificates may be issued with "original issue discount" within the meaning of Section 1273(a) of the Code. Any holders of REMIC regular certificates issued with original issue discount generally will have to include original issue discount in income as it accrues, in accordance with the constant yield method described below, prior to the receipt of the cash attributable to that income. The IRS has issued regulations under Sections 1271 to 1275 of the Code generally addressing the treatment of debt instruments issued with original issue discount. Section 1272(a)(6) of the Code provides special rules applicable to the accrual of original issue discount on, among other things, REMIC regular certificates. The Treasury Department has not issued regulations under that section. You should be aware, however, that Section 1272(a)(6) and the regulations under Sections 1271 to 1275 of the Code do not adequately address certain issues relevant to, or are not applicable to, prepayable securities such as the offered certificates. We recommend that you consult with your own tax advisor concerning the tax treatment of your certificates. The Code requires, in computing the accrual of original issue discount on REMIC regular certificates, that a reasonable assumption be used concerning the rate at which borrowers will prepay the mortgage loans held by the related REMIC. Further, adjustments must be made in the accrual of that original issue discount to reflect differences between the prepayment rate actually experienced and the assumed prepayment rate. The prepayment assumption is to be determined in a manner prescribed in Treasury regulations that the Treasury Department has not yet issued. The Conference Committee Report accompanying the Tax Reform Act of 1986 (the "Committee Report") indicates that the regulations should provide that the prepayment assumption used with respect to a REMIC regular certificate is determined once, at initial issuance, and must be the same as that used in pricing. The prepayment assumption used in reporting original issue discount for each series of REMIC regular certificates will be consistent with this standard and will be disclosed in the related prospectus supplement. However, neither we nor any other person will make any representation that the mortgage loans underlying any series of REMIC regular certificates will in fact prepay at a rate conforming to the prepayment assumption or at any other rate or that the IRS will not challenge on audit the prepayment assumption used. The original issue discount, if any, on a REMIC regular certificate will be the excess of its stated redemption price at maturity over its issue price. The issue price of a particular class of REMIC regular certificates will be the first cash price at which a substantial amount of those certificates are sold, excluding sales to bond houses, brokers and underwriters. If less than a substantial amount of a particular class of REMIC regular certificates is sold for cash on or prior to the related date of initial issuance of those certificates, the issue price for that class will be the fair market value of that class on the date of initial issuance. Under the Treasury regulations, the stated redemption price of a REMIC regular certificate is equal to the total of all payments to be made on that certificate other than qualified stated interest. Qualified stated interest is interest that is unconditionally payable at least annually, during the entire term of the instrument, at-- - a single fixed rate; - a qualified floating rate; - an objective rate; - a combination of a single fixed rate and one or more qualified floating rates; - a combination of a single fixed rate and one qualified inverse floating rate; or 95 - a combination of qualified floating rates that does not operate in a manner that accelerates or defers interest payments on the REMIC regular certificate. In the case of REMIC regular certificates bearing adjustable interest rates, the determination of the total amount of original issue discount and the timing of the inclusion thereof will vary according to the characteristics of those certificates. If the original issue discount rules apply to those certificates, we will describe in the related prospectus supplement the manner in which those rules will be applied with respect to those certificates in preparing information returns to the certificateholders and the IRS. Certain classes of REMIC regular certificates may provide that the first interest payment with respect to those certificates be made more than one month after the date of initial issuance, a period that is longer than the subsequent monthly intervals between interest payments. Assuming the accrual period for original issue discount is the monthly period that ends on each payment date, then, as a result of this long first accrual period, some or all interest payments may be required to be included in the stated redemption price of the REMIC regular certificate and accounted for as original issue discount. Because interest on REMIC regular certificates must in any event be accounted for under an accrual method, applying this analysis would result in only a slight difference in the timing of the inclusion in income of the yield on the REMIC regular certificates. In addition, if the accrued interest to be paid on the first payment date is computed with respect to a period that begins prior to the date of initial issuance, a portion of the purchase price paid for a REMIC regular certificate will reflect that accrued interest. In those cases, information returns provided to the certificateholders and the IRS will be based on the position that the portion of the purchase price paid for the interest accrued prior to the date of initial issuance is treated as part of the overall cost of the REMIC regular certificate. Therefore, the portion of the interest paid on the first payment date in excess of interest accrued from the date of initial issuance to the first payment date is included in the stated redemption price of the REMIC regular certificate. However, the Treasury regulations state that all or some portion of this accrued interest may be treated as a separate asset, the cost of which is recovered entirely out of interest paid on the first payment date. It is unclear how an election to do so would be made under these regulations and whether this election could be made unilaterally by a certificateholder. Notwithstanding the general definition of original issue discount, original issue discount on a REMIC regular certificate will be considered to be DE MINIMIS if it is less than 0.25% of the stated redemption price of the certificate multiplied by its weighted average maturity. For this purpose, the weighted average maturity of a REMIC regular certificate is computed as the sum of the amounts determined, as to each payment included in the stated redemption price of the certificate, by multiplying-- - the number of complete years, rounding down for partial years, from the date of initial issuance, until that payment is expected to be made, presumably taking into account the prepayment assumption; by - a fraction-- 1. the numerator of which is the amount of the payment, and 2. the denominator of which is the stated redemption price at maturity of the certificate. Under the Treasury regulations, original issue discount of only a DE MINIMIS amount, other than DE MINIMIS original issue discount attributable to a so-called teaser interest rate or an initial interest holiday, will be included in income as each payment of stated principal is made, based on the product of: - the total amount of the DE MINIMIS original issue discount, and - a fraction-- 1. the numerator of which is the amount of the principal payment, and 2. the denominator of which is the outstanding stated principal amount of the subject REMIC regular certificate. 96 The Treasury regulations also would permit you to elect to accrue DE MINIMIS original issue discount into income currently based on a constant yield method. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Market Discount" below for a description of that election under the applicable Treasury regulations. If original issue discount on a REMIC regular certificate is in excess of a DE MINIMIS amount, the holder of the certificate must include in ordinary gross income the sum of the daily portions of original issue discount for each day during its taxable year on which it held the certificate, including the purchase date but excluding the disposition date. In the case of an original holder of a REMIC regular certificate, the daily portions of original issue discount will be determined as described below. As to each accrual period, the related tax administrator will calculate the original issue discount that accrued during that accrual period. For these purposes, an accrual period is, unless we otherwise state in the related prospectus supplement, the period that begins on a date that corresponds to a payment date, or in the case of the first accrual period, begins on the date of initial issuance, and ends on the day immediately preceding the following payment date. The portion of original issue discount that accrues in any accrual period will equal the excess, if any, of-- - the sum of-- 1. the present value, as of the end of the accrual period, of all of the payments remaining to be made on the subject REMIC regular certificate, if any, in future periods, presumably taking into account the prepayment assumption, and 2. the payments made on that certificate during the accrual period of amounts included in the stated redemption price; over - the adjusted issue price of the subject REMIC regular certificate at the beginning of the accrual period. The adjusted issue price of a REMIC regular certificate is-- - the issue price of the certificate; increased by - the aggregate amount of original issue discount previously accrued on the certificate; reduced by - the amount of all prior payments of amounts included in its stated redemption price. The present value of the remaining payments referred to in item 1 of the second preceding sentence, will be calculated-- - assuming that payments on the REMIC regular certificate will be received in future periods based on the related mortgage loans being prepaid at a rate equal to the prepayment assumption; - using a discount rate equal to the original yield to maturity of the certificate, based on its issue price and the assumption that the related mortgage loans will be prepaid at a rate equal to the prepayment assumption; and - taking into account events, including actual prepayments, that have occurred before the close of the accrual period. The original issue discount accruing during any accrual period, computed as described above, will be allocated ratably to each day during the accrual period to determine the daily portion of original issue discount for that day. 97 A subsequent purchaser of a REMIC regular certificate that purchases the certificate at a cost, excluding any portion of that cost attributable to accrued qualified stated interest, that is less than its remaining stated redemption price, will also be required to include in gross income the daily portions of any original issue discount with respect to the certificate. However, the daily portion will be reduced, if the cost is in excess of its adjusted issue price, in proportion to the ratio that the excess bears to the aggregate original issue discount remaining to be accrued on the certificate. The adjusted issue price of a REMIC regular certificate, as of any date of determination, equals the sum of: - the adjusted issue price or, in the case of the first accrual period, the issue price, of the certificate at the beginning of the accrual period which includes that date of determination; and - the daily portions of original issue discount for all days during the accrual period prior to that date of determination. If the foregoing method for computing original issue discount results in a negative amount of original issue discount as to any accrual period with respect to a REMIC regular certificate held by you, the amount of original issue discount accrued for that accrual period will be zero. You may not deduct the negative amount currently. Instead, you will only be permitted to offset the negative amount against future positive original issue discount, if any, attributable to the certificate. Although not free from doubt, it is possible that you may be permitted to recognize a loss to the extent your basis in the certificate exceeds the maximum amount of payments that you could ever receive with respect to the certificate. However, any such loss may be a capital loss, which is limited in its deductibility. The foregoing considerations are particularly relevant to certificates that have no, or a disproportionately small, amount of principal because they can have negative yields if the mortgage loans held by the related REMIC prepay more quickly than anticipated. See "Risk Factors--Prepayment Considerations; Variability in Average Life of Offered Certificates; Special Yield Considerations". The Treasury regulations in some circumstances permit the holder of a debt instrument to recognize original issue discount under a method that differs from that used by the issuer. Accordingly, it is possible that you may be able to select a method for recognizing original issue discount that differs from that used by the trust in preparing reports to you and the IRS. Prospective purchasers of the REMIC regular certificates should consult their tax advisors concerning the tax treatment of these certificates in this regard. MARKET DISCOUNT. You will be considered to have purchased a REMIC regular certificate at a market discount if-- - in the case of a certificate issued without original issue discount, you purchased the certificate at a price less than its remaining stated principal amount; or - in the case of a certificate issued with original issue discount, you purchased the certificate at a price less than its adjusted issue price. If you purchase a REMIC regular certificate with more than a DE MINIMIS amount of market discount, you will recognize gain upon receipt of each payment representing stated redemption price. Under Section 1276 of the Code, you generally will be required to allocate the portion of each payment representing some or all of the stated redemption price first to accrued market discount not previously included in income. You must recognize ordinary income to that extent. You may elect to include market discount in income currently as it accrues rather than including it on a deferred basis in accordance with the foregoing. If made, this election will apply to all market discount bonds acquired by you on or after the first day of the first taxable year to which this election applies. The Treasury regulations also permit you to elect to accrue all interest and discount, including DE MINIMIS market or original issue discount, in income as interest, and to amortize premium, based on a constant yield method. Your making this election with respect to a REMIC regular certificate with market discount would be deemed to be an election to include market discount in income currently with respect to all other debt instruments with market discount that you acquire during the taxable year of the election or thereafter, and possibly previously acquired instruments. Similarly, your making this election as to a certificate acquired at a premium would be deemed to be an election to amortize bond premium with respect to all debt instruments having amortizable bond premium that you own or acquire. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Premium" below. Each of the elections described above to accrue interest and discount and to amortize premium, with respect to a certificate on a constant yield method or as interest would be irrevocable except with the approval of the IRS. 98 However, market discount with respect to a REMIC regular certificate will be considered to be DE MINIMIS for purposes of Section 1276 of the Code if the market discount is less than 0.25% of the remaining stated redemption price of the certificate multiplied by the number of complete years to maturity remaining after the date of its purchase. In interpreting a similar rule with respect to original issue discount on obligations payable in installments, the Treasury regulations refer to the weighted average maturity of obligations. It is likely that the same rule will be applied with respect to market discount, presumably taking into account the prepayment assumption. If market discount is treated as DE MINIMIS under this rule, it appears that the actual discount would be treated in a manner similar to original issue discount of a DE MINIMIS amount. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount" above. This treatment would result in discount being included in income at a slower rate than discount would be required to be included in income using the method described above. Section 1276(b)(3) of the Code specifically authorizes the Treasury Department to issue regulations providing for the method for accruing market discount on debt instruments, the principal of which is payable in more than one installment. Until regulations are issued by the Treasury Department, certain rules described in the Committee Report apply. The Committee Report indicates that in each accrual period, you may accrue market discount on a REMIC regular certificate held by you, at your option-- - on the basis of a constant yield method; - in the case of a certificate issued without original issue discount, in an amount that bears the same ratio to the total remaining market discount as the stated interest paid in the accrual period bears to the total amount of stated interest remaining to be paid on the certificate as of the beginning of the accrual period; or - in the case of a certificate issued with original issue discount, in an amount that bears the same ratio to the total remaining market discount as the original issue discount accrued in the accrual period bears to the total amount of original issue discount remaining on the certificate at the beginning of the accrual period. The prepayment assumption used in calculating the accrual of original issue discount is also used in calculating the accrual of market discount. To the extent that REMIC regular certificates provide for monthly or other periodic payments throughout their term, the effect of these rules may be to require market discount to be includible in income at a rate that is not significantly slower than the rate at which the discount would accrue if it were original issue discount. Moreover, in any event a holder of a REMIC regular certificate generally will be required to treat a portion of any gain on the sale or exchange of the certificate as ordinary income to the extent of the market discount accrued to the date of disposition under one of the foregoing methods, less any accrued market discount previously reported as ordinary income. Further, Section 1277 of the Code may require you to defer a portion of your interest deductions for the taxable year attributable to any indebtedness incurred or continued to purchase or carry a REMIC regular certificate purchased with market discount. For these purposes, the DE MINIMIS rule referred to above applies. Any deferred interest expense would not exceed the market discount that accrues during the related taxable year and is, in general, allowed as a deduction not later than the year in which the related market discount is includible in income. If you have elected, however, to include market discount in income currently as it accrues, the interest deferral rule described above would not apply. PREMIUM. A REMIC regular certificate purchased at a cost, excluding any portion of the cost attributable to accrued qualified stated interest, that is greater than its remaining stated redemption price will be considered to be purchased at a premium. You may elect under Section 171 of the Code to amortize the premium under the constant yield method over the life of the certificate. If you elect to amortize bond premium, bond premium would be amortized on a constant yield method and would be applied as an offset against qualified stated interest. If made, this election will apply to all debt instruments having amortizable bond premium that you own or subsequently acquire. The IRS has issued regulations on the amortization of bond premium, but they specifically do not apply to holders of REMIC regular certificates. The Treasury regulations also permit you to elect to include all interest, discount and premium in income based on a constant yield method, further treating you as having made the election to amortize premium generally. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Market Discount" above. The Committee Report states that the same rules that apply to accrual of market discount and require the use of a prepayment assumption in accruing market discount with respect to REMIC regular certificates without regard to whether those certificates have original issue discount, will also apply in amortizing bond premium under Section 171 of the Code. 99 Whether you will be treated as holding a REMIC regular certificate with amortizable bond premium will depend on-- - the purchase price paid for your certificate; and - the payments remaining to be made on your certificate at the time of its acquisition by you. If you acquire an interest in any class of REMIC regular certificates issued at a premium, you should consider consulting your own tax advisor regarding the possibility of making an election to amortize the premium. REALIZED LOSSES. Under Section 166 of the Code, if you are either a corporate holder of a REMIC regular certificate or a noncorporate holder of a REMIC regular certificate that acquires the certificate in connection with a trade or business, you should be allowed to deduct, as ordinary losses, any losses sustained during a taxable year in which your certificate becomes wholly or partially worthless as the result of one or more realized losses on the related mortgage loans. However, if you are a noncorporate holder that does not acquire a REMIC regular certificate in connection with a trade or business, it appears that-- - you will not be entitled to deduct a loss under Section 166 of the Code until your certificate becomes wholly worthless; and - the loss will be characterized as a short-term capital loss. You will also have to accrue interest and original issue discount with respect to your REMIC regular certificate, without giving effect to any reductions in payments attributable to defaults or delinquencies on the related mortgage loans, until it can be established that those payment reductions are not recoverable. As a result, your taxable income in a period could exceed your economic income in that period. If any amounts previously included in taxable income are not ultimately received due to a loss on the related mortgage loans, you should be able to recognize a loss or reduction in income. However, the law is unclear with respect to the timing and character of this loss or reduction in income. TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES. GENERAL. Although a REMIC is a separate entity for federal income tax purposes, the Code does not subject a REMIC to entity-level taxation, except with regard to prohibited transactions and certain other transactions. See "--REMICs--Prohibited Transactions Tax and Other Taxes" below. Rather, a holder of REMIC residual certificates must generally take in income the taxable income or net loss of the related REMIC. Accordingly, the Code treats the REMIC residual certificates much differently than it would if they were direct ownership interests in the related mortgage loans or debt instruments issued by the related REMIC. Holders of REMIC residual certificates generally will be required to report their daily portion of the taxable income or, subject to the limitations noted in this discussion, the net loss of the related REMIC for each day during a calendar quarter that they own those certificates. For this purpose, the taxable income or net loss of the REMIC will be allocated to each day in the calendar quarter ratably using a "30 days per month/90 days per quarter/360 days per year" convention unless we otherwise disclose in the related prospectus supplement. These daily amounts then will be allocated among the holders of the REMIC residual certificates in proportion to their respective ownership interests on that day. Any amount included in the certificateholders' gross income or allowed as a loss to them by virtue of this paragraph will be treated as ordinary income or loss. The taxable income of the REMIC will be determined under the rules described below in "--REMICs--Taxation of Owners of REMIC Residual Certificates--Taxable Income of the REMIC". Holders of REMIC residual certificates must report the taxable income of the related REMIC without regard to the timing or amount of cash payments by the REMIC until the REMIC's termination. Income derived from the REMIC residual certificates will be "portfolio income" for the purposes of the limitations under Section 469 of the Code on the deductibility of "passive losses". A holder of a REMIC residual certificate that purchased the certificate from a prior holder also will be required to report on its federal income tax return amounts representing its daily share of the taxable income, or net loss, of the related REMIC for each day that it holds the REMIC residual certificate. These daily amounts generally will equal the amounts of taxable income or net loss determined as described above. The Committee Report indicates that certain modifications of the general rules may be made, by regulations, legislation or otherwise, to reduce or increase the income of a holder of a REMIC residual certificate. These modifications would occur when a holder purchases the REMIC residual certificate from a prior 100 holder at a price other than the adjusted basis that the REMIC residual certificate would have had in the hands of an original holder of that certificate. The Treasury regulations, however, do not provide for these modifications. Any payments that you receive from the seller of a REMIC residual certificate in connection with the acquisition of that certificate will be income to you. Although it is possible that these payments would be includible in income immediately upon receipt, the IRS might assert that you should include these payments in income over time according to an amortization schedule or according to some other method. Because of the uncertainty concerning the treatment of these payments, we recommend that you consult your tax advisor concerning the treatment of these payments for income tax purposes. Tax liability with respect to the amount of income that holders of REMIC residual certificates will be required to report, will often exceed the amount of cash payments received from the related REMIC for the corresponding period. Consequently, you should have-- - other sources of funds sufficient to pay any federal income taxes due as a result of your ownership of REMIC residual certificates; or - unrelated deductions against which income may be offset. See, however, the rules discussed below relating to-- - "excess inclusions"; - residual interests without "significant value"; and - "noneconomic" residual interests. The fact that the tax liability associated with this income allocated to you may exceed the cash payments received by you for the corresponding period may significantly and adversely affect their after-tax rate of return. This disparity between income and payments may not be offset by corresponding losses or reductions of income attributable to your certificates until subsequent tax years. Even then, the extra income may not be completely offset due to changes in the Code, tax rates or character of the income or loss. Therefore, the REMIC residual certificates will ordinarily have a negative value at the time of issuance. See "Risk Factors--Certain Federal Income Tax Consequences Regarding Residual Certificates". TAXABLE INCOME OF THE REMIC. The taxable income of a REMIC will equal-- - the income from the mortgage loans and other assets of the REMIC; plus - any cancellation of indebtedness income due to the allocation of realized losses to those REMIC certificates, constituting "regular interests" in the REMIC; less - the following items-- 1. the deductions allowed to the REMIC for interest, including original issue discount but reduced by any premium on issuance, on any class of REMIC certificates constituting "regular interests" in the REMIC, whether offered or not, 2. amortization of any premium on the mortgage loans held by the REMIC, 3. bad debt losses with respect to the mortgage loans held by the REMIC, and 4. except as described below, servicing, administrative and other expenses. For purposes of determining its taxable income, a REMIC will have an initial aggregate basis in its assets equal to the sum of the issue prices of all REMIC certificates, or in the case of REMIC certificates not sold initially, their fair market values. The aggregate basis will be allocated among the mortgage loans and the other assets of the REMIC in proportion to their respective fair market values. The issue price of any REMIC certificates offered hereby will be determined in the manner described above under "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue 101 Discount". The issue price of a REMIC certificate received in exchange for an interest in mortgage loans or other property will equal the fair market value of the interests in the mortgage loans or other property. Accordingly, if one or more classes of REMIC certificates are retained initially rather than sold, the related tax administrator may be required to estimate the fair market value of these interests in order to determine the basis of the REMIC in the mortgage loans and other property held by the REMIC. Subject to possible application of the DE MINIMIS rules, the method of accrual by a REMIC of original issue discount income and market discount income with respect to mortgage loans that it holds will be equivalent to the method for accruing original issue discount income for holders of REMIC regular certificates. That method is a constant yield method taking into account the prepayment assumption. However, a REMIC that acquires loans at a market discount must include that market discount in income currently, as it accrues, on a constant yield basis. See "--REMICs--Taxation of Owners of REMIC Regular Certificates" above, which describes a method for accruing the discount income that is analogous to that required to be used by a REMIC as to mortgage loans with market discount that it holds. A REMIC will acquire a mortgage loan with discount, or premium, to the extent that the REMIC's basis, determined as described in the preceding paragraph, is different from its stated redemption price. Discount will be includible in the income of the REMIC as it accrues, in advance of receipt of the cash attributable to that income, under a method similar to the method described above for accruing original issue discount on the REMIC regular certificates. A REMIC probably will elect under Section 171 of the Code to amortize any premium on the mortgage loans that it holds. Premium on any mortgage loan to which this election applies may be amortized under a constant yield method, presumably taking into account the prepayment assumption. A REMIC will be allowed deductions for interest, including original issue discount, on all of the certificates that constitute "regular interests" in the REMIC, whether or not offered hereby, as if those certificates were indebtedness of the REMIC. Original issue discount will be considered to accrue for this purpose as described above under "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount". However, the DE MINIMIS rule described in that section will not apply in determining deductions. If a class of REMIC regular certificates is issued at a price in excess of the stated redemption price of that class, the net amount of interest deductions that are allowed to the REMIC in each taxable year with respect to those certificates will be reduced by an amount equal to the portion of that excess that is considered to be amortized in that year. It appears that this excess should be amortized under a constant yield method in a manner analogous to the method of accruing original issue discount described above under "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount". As a general rule, the taxable income of a REMIC will be determined as if the REMIC were an individual having the calendar year as its taxable year and using the accrual method of accounting. However, no item of income, gain, loss or deduction allocable to a prohibited transaction will be taken into account. See "--REMICs--Prohibited Transactions Tax and Other Taxes" below. Further, the limitation on miscellaneous itemized deductions imposed on individuals by Section 67 of the Code will not be applied at the REMIC level so that the REMIC will be allowed full deductions for servicing, administrative and other noninterest expenses in determining its taxable income. All those expenses will be allocated as a separate item to the holders of the related REMIC certificates, subject to the limitation of Section 67 of the Code. See "--REMICs--Taxation of Owners of REMIC Residual Certificates--Pass-Through of Miscellaneous Itemized Deductions" below. If the deductions allowed to the REMIC exceed its gross income for a calendar quarter, the excess will be the net loss for the REMIC for that calendar quarter. BASIS RULES, NET LOSSES AND DISTRIBUTIONS. The adjusted basis of a REMIC residual certificate will be equal to-- - the amount paid for that REMIC residual certificate; increased by - amounts included in the income of the holder of that REMIC residual certificate; and decreased, but not below zero, by - distributions made, and by net losses allocated, to the holder of that REMIC residual certificate. A holder of a REMIC residual certificate is not allowed to take into account any net loss for any calendar quarter to the extent that the net loss exceeds the adjusted basis to that holder as of the close of that calendar quarter, determined without regard to that net loss. Any loss that is not currently deductible by reason of this limitation may be carried forward 102 indefinitely to future calendar quarters and, subject to the same limitation, may be used only to offset income from the REMIC residual certificate. Any distribution on a REMIC residual certificate will be treated as a nontaxable return of capital to the extent it does not exceed the holder's adjusted basis in the REMIC residual certificate. To the extent a distribution on a REMIC residual certificate exceeds the holder's adjusted basis, it will be treated as gain from the sale of that REMIC residual certificate. A holder's basis in a REMIC residual certificate will initially equal the amount paid for the certificate and will be increased by that holder's allocable share of taxable income of the related REMIC. However, these increases in basis may not occur until the end of the calendar quarter, or perhaps the end of the calendar year, with respect to which the related REMIC's taxable income is allocated to that holder. To the extent the initial basis of the holder of a REMIC residual certificate is less than the payments to that holder, and increases in the initial basis either occur after these distributions or, together with the initial basis, are less than the amount of these distributions, gain will be recognized to that holder on these distributions. This gain will be treated as gain from the sale of its REMIC residual certificate. The effect of these rules is that a holder of a REMIC residual certificate may not amortize its basis in a REMIC residual certificate, but may only recover its basis-- - through distributions; - through the deduction of any net losses of the REMIC; or - upon the sale of its REMIC residual certificate. See "--REMICs--Sales of REMIC Certificates" below. For a discussion of possible modifications of these rules that may require adjustments to income of a holder of a REMIC residual certificate other than an original holder, see "--REMICs--Taxation of Owners of REMIC Residual Certificates--General" above. These adjustments could require a holder of a REMIC residual certificate to account for any difference between the cost of the certificate to the holder and the adjusted basis if the certificate would have been in the hands of an original holder. Regulations have been proposed addressing the federal income tax treatment of "inducement fees" received by transferees 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 (a) 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 (b) 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 REMIC 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 REMIC residual certificates. Prospective purchasers of the REMIC residual certificates should consult with their tax advisors regarding the effect of these proposed regulations. EXCESS INCLUSIONS. Any excess inclusions with respect to a REMIC residual certificate will be subject to federal income tax in all events. In general, the excess inclusions with respect to a REMIC residual certificate for any calendar quarter will be the excess, if any, of-- - the daily portions of REMIC taxable income allocable to that certificate; over - the sum of the daily accruals for each day during the quarter that the certificate was held by that holder. 103 The daily accruals of a holder of a REMIC residual certificate will be determined by allocating to each day during a calendar quarter its ratable portion of a numerical calculation. That calculation is the product of the adjusted issue price of the REMIC residual certificate at the beginning of the calendar quarter and 120% of the long-term Federal rate in effect on the date of initial issuance. For this purpose, the adjusted issue price of a REMIC residual certificate as of the beginning of any calendar quarter will be equal to-- - the issue price of the certificate; increased by - the sum of the daily accruals for all prior quarters; and decreased, but not below zero; by - any payments made with respect to the certificate before the beginning of that quarter. The issue price of a REMIC residual certificate is the initial offering price to the public at which a substantial amount of the REMIC residual certificates were sold, but excluding sales to bond houses, brokers and underwriters or, if no sales have been made, their initial value. The long-term Federal rate is an average of current yields on Treasury securities with a remaining term of greater than nine years, computed and published monthly by the IRS. Although it has not done so, the Treasury Department has authority to issue regulations that would treat the entire amount of income accruing on a REMIC residual certificate as excess inclusions if the REMIC residual interest evidenced by that certificate is considered not to have significant value. For holders of REMIC residual certificates, excess inclusions-- - will not be permitted to be offset by deductions, losses or loss carryovers from other activities; - will be treated as unrelated business taxable income to an otherwise tax-exempt organization; and - will not be eligible for any rate reduction or exemption under any applicable tax treaty with respect to the United States withholding tax imposed on payments to holders of REMIC residual certificates that are foreign investors. See, however, "--REMICs--Foreign Investors in REMIC Certificates" below. Furthermore, for purposes of the alternative minimum tax-- - excess inclusions will not be permitted to be offset by the alternative tax net operating loss deduction; and - alternative minimum taxable income may not be less than the taxpayer's excess inclusions. This last rule has the effect of preventing non-refundable tax credits from reducing the taxpayer's income tax to an amount lower than the alternative minimum tax on excess inclusions. In the case of any REMIC residual certificates held by a real estate investment trust, or REIT, the aggregate excess inclusions with respect to these REMIC residual certificates will be allocated among the shareholders of the REIT in proportion to the dividends received by the shareholders from the REIT. Any amount so allocated will be treated as an excess inclusion with respect to a REMIC residual certificate as if held directly by the shareholder. The aggregate excess inclusions referred to in the previous sentence will be reduced, but not below zero, by any REIT taxable income, within the meaning of Section 857(b)(2) of the Code, other than any net capital gain. Treasury regulations yet to be issued could apply a similar rule to-- - regulated investment companies; - common trust funds; and - certain cooperatives. The Treasury regulations, however, currently do not address this subject. 104 NONECONOMIC REMIC RESIDUAL CERTIFICATES. Under the Treasury regulations, transfers of "noneconomic" REMIC residual certificates will be disregarded for all federal income tax purposes if "a significant purpose of the transfer was to enable the transferor to impede the assessment or collection of tax". If a transfer is disregarded, the purported transferor will continue to remain liable for any taxes due with respect to the income on the "noneconomic" REMIC residual certificate. The Treasury regulations provide that a REMIC residual certificate is noneconomic unless, based on the prepayment assumption and on any required or permitted clean up calls, or required liquidation provided for in the related Governing Document-- - the present value of the expected future payments on the REMIC residual certificate equals at least the present value of the expected tax on the anticipated excess inclusions; and - the transferor reasonably expects that the transferee will receive payments with respect to the REMIC residual certificate at or after the time the taxes accrue on the anticipated excess inclusions in an amount sufficient to satisfy the accrued taxes. The present value calculation referred to above is calculated using the applicable Federal rate for obligations whose term ends on the close of the last quarter in which excess inclusions are expected to accrue with respect to the REMIC residual certificate. This rate is computed and published monthly by the IRS. Accordingly, all transfers of REMIC residual certificates that may constitute noneconomic residual interests will be subject to certain restrictions under the terms of the related Governing Document that are intended to reduce the possibility of any transfer being disregarded. These restrictions will require an affidavit-- - from each party to the transfer, stating that no purpose of the transfer is to impede the assessment or collection of tax; - from the prospective transferee, providing certain representations as to its financial condition and providing a representation that it understands that, as the holder of the noneconomic interest, the transferee may incur tax liabilities in excess of cash flows generated by the residual interest and the transferee intends to pay the taxes associated with the residual interest as they become due; and - from the prospective transferor, stating that it has made a reasonable investigation to determine the transferee's historic payment of its debts and ability to continue to pay its debts as they come due in the future; and - from the prospective transferee, stating that it will not cause income from the REMIC residual certificate to be attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of the transferee or any other person, and the REMIC residual certificate, is, in fact, not transferred to such permanent establishment or fixed base. In addition, the Treasury has issued final regulations, which require that one of the following two tests be satisfied in order to obtain safe harbor protection from possible disregard of a transfer of a REMIC residual certificate: - the present value of the anticipated tax liabilities associated with holding the REMIC residual interest were less than or equal to the sum of-- 1. the present value of any consideration given to the transferee to acquire the interest; 2. the present value of the expected future distributions on the interest; and 3. the present value of the anticipated tax savings associated with the holding of the interest as the REMIC generates losses. For purposes of these computations, the transferee is assumed to pay tax at the highest corporate rate of tax (currently 35%) or, in certain circumstances, the alternative minimum tax rate. Present values would be computed using a discount rate equal to a short-term Federal rate set forth in Section 1274(d) of the Code for the month of such transfer and the compounding period used by the transferee; or 105 - 1. 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); 2. the transferee must agree in writing that any subsequent transfer of the residual interest would meet the requirements for a safe harbor transfer; and 3. 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 REMIC residual interest will not be paid by the transferee. Unless otherwise stated in the related prospectus supplement, the Governing Document requires that all transferees of residual certificates furnish an affidavit as to the applicability of the safe harbor, unless the transferor waives the requirement that the transferee do so. Prospective investors should consult their own tax advisors as to the applicability and effect of these safe harbor tests. Prior to purchasing a REMIC residual certificate, prospective purchasers should consider the possibility that a purported transfer of a REMIC residual certificate to another party at some future date may be disregarded in accordance with the above-described rules. This would result in the retention of tax liability by the transferor in respect of that purported transfer. We will disclose in the related prospectus supplement whether the offered REMIC residual certificates may be considered "noneconomic" residual interests under the Treasury regulations. However, we will base any disclosure that a REMIC residual certificate will not be considered "noneconomic" upon certain assumptions. Further, we will make no representation that a REMIC residual certificate will not be considered "noneconomic" for purposes of the above-described rules. See "--REMICs --Taxation of Owners of REMIC Residual Certificates--Foreigners May Not Hold REMIC Residual Certificates" below for additional restrictions applicable to transfers of certain REMIC residual certificates to foreign persons and to United States partnerships that have any non-United States persons as partners. MARK-TO-MARKET RULES. Regulations under Section 475 of the Code provide a REMIC residual certificate is not treated as a security for purposes of Section 475 of the Code. Thus, a REMIC residual certificate is not subject to the mark-to-market rules. FOREIGNERS MAY NOT HOLD REMIC RESIDUAL CERTIFICATES. Unless we otherwise state in the related prospectus supplement, transfers of REMIC residual certificates to investors that are foreign persons under the Code and to United States partnerships that have any non-United States persons as partners will be prohibited under the related Governing Document. If transfers of REMIC residual certificates to investors that are foreign persons are permitted pursuant to the related Governing Document, we will describe in the related prospectus supplement additional restrictions applicable to transfers of certain REMIC residual certificates to these persons. PASS-THROUGH OF MISCELLANEOUS ITEMIZED DEDUCTIONS. Fees and expenses of a REMIC generally will be allocated to the holders of the related REMIC residual certificates. The applicable Treasury regulations indicate, however, that in the case of a REMIC that is similar to a single class grantor trust, all or a portion of these fees and expenses should be allocated to the holders of the related REMIC regular certificates. Unless we state otherwise in the related prospectus supplement, however, these fees and expenses will be allocated to holders of the related REMIC residual certificates in their entirety and not to the holders of the related REMIC regular certificates. If the holder of a REMIC certificate receives an allocation of fees and expenses in accordance with the preceding discussion, and if that holder is-- - an individual; - an estate or trust; or 106 - a pass-through entity beneficially owned by one or more individuals, estates or trusts, then-- - an amount equal to this individual's, estate's or trust's share of these fees and expenses will be added to the gross income of this holder; and - the individual's, estate's or trust's share of these fees and expenses will be treated as a miscellaneous itemized deduction allowable subject to the limitation of Section 67 of the Code, which permits the deduction of these fees and expenses only to the extent they exceed in the aggregate 2% of a taxpayer's adjusted gross income. In addition, Section 68 of the Code provides that the amount of itemized deductions otherwise allowable for an individual whose adjusted gross income exceeds a specified amount will be reduced by the lesser of-- - 3% of the excess, if any, of adjusted gross income over a statutory inflation-adjusted amount, or; - 80% of the amount of itemized deductions otherwise allowable for such year. Such limitations will be phased out beginning in 2006 and eliminated in 2009. Furthermore, in determining the alternative minimum taxable income of a holder of a REMIC certificate that is-- - an individual, - an estate or trust, or - a pass-through entity beneficially owned by one or more individuals, estates or trusts, no deduction will be allowed for the holder's allocable portion of servicing fees and other miscellaneous itemized deductions of the REMIC, even though an amount equal to the amount of these fees and other deductions will be included in the holder's gross income. The amount of additional taxable income reportable by holders of REMIC certificates that are subject to the limitations of either Section 67 or Section 68 of the Code, or the complete disallowance of the related expenses for alternative minimum tax purposes, may be substantial. Accordingly, REMIC certificates to which these expenses are allocated will generally not be appropriate investments for-- - an individual; - an estate or trust; or - a pass-through entity beneficially owned by one or more individuals, estates or trusts. We recommend that prospective investors consult with their tax advisors prior to making an investment in a REMIC certificate to which these expenses are allocated. SALES OF REMIC CERTIFICATES. If a REMIC certificate is sold, the selling certificateholder will recognize gain or loss equal to the difference between the amount realized on the sale and its adjusted basis in the REMIC certificate. The adjusted basis of a REMIC regular certificate generally will equal-- - the cost of the certificate to that certificateholder; increased by 107 - income reported by that certificateholder with respect to the certificate, including original issue discount and market discount income; and reduced, but not below zero, by - payments on the certificate received by that certificateholder, amortized premium and realized losses allocated to the certificate and previously deducted by the certificateholder. The adjusted basis of a REMIC residual certificate will be determined as described above under "--REMICs--Taxation of Owners of REMIC Residual Certificates--Basis Rules, Net Losses and Distributions". Except as described below, any gain or loss from your sale of a REMIC certificate will be capital gain or loss, provided that you hold the certificate as a capital asset within the meaning of Section 1221 of the Code, which is generally property held for investment. In addition to the recognition of gain or loss on actual sales, the Code requires the recognition of gain, but not loss, upon the "constructive sale of an appreciated financial position". A constructive sale of an appreciated financial position occurs if a taxpayer enters into certain transactions or series of transactions that have the effect of substantially eliminating the taxpayer's risk of loss and opportunity for gain with respect to the financial instrument. Debt instruments that-- - entitle the holder to a specified principal amount; - pay interest at a fixed or variable rate; and - are not convertible into the stock of the issuer or a related party, cannot be the subject of a constructive sale for this purpose. Because most REMIC regular certificates meet this exception, Section 1259 will not apply to most REMIC regular certificates. However, REMIC regular certificates that have no, or a disproportionately small amount of, principal, can be the subject of a constructive sale. Finally, a taxpayer may elect to have net capital gain taxed at ordinary income rates rather than capital gains rates in order to include the net capital gain in total net investment income for the taxable year. A taxpayer would do so because of the rule that limits the deduction of interest on indebtedness incurred to purchase or carry property held for investment to a taxpayer's net investment income. The Code provides for lower rates as to long-term capital gains than those applicable to the short-term capital gains and ordinary income recognized or received by individuals. No rate differential exists for corporations. In addition, the distinction between a capital gain or loss and ordinary income or loss is relevant for other purposes to both individuals and corporations. Gain from the sale of a REMIC regular certificate that might otherwise be a capital gain will be treated as ordinary income to the extent that the gain does not exceed the excess, if any, of-- - the amount that would have been includible in the seller's income with respect to that REMIC regular certificate assuming that income had accrued thereon at a rate equal to 110% of the applicable Federal rate determined as of the date of purchase of the certificate, which is a rate based on an average of current yields on Treasury securities having a maturity comparable to that of the certificate based on the application of the prepayment assumption to the certificate; over - the amount of ordinary income actually includible in the seller's income prior to that sale. In addition, gain recognized on the sale of a REMIC regular certificate by a seller who purchased the certificate at a market discount will be taxable as ordinary income in an amount not exceeding the portion of that discount that accrued during the period the certificate was held by the seller, reduced by any market discount included in income under the rules described above under "--REMICs--Taxation of Owners of REMIC Regular Certificates--Market Discount" and "--Premium". REMIC certificates will be "evidences of indebtedness" within the meaning of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale of a REMIC certificate by a bank or thrift institution to which that section of the Code applies will be ordinary income or loss. 108 A portion of any gain from the sale of a REMIC regular certificate that might otherwise be capital gain may be treated as ordinary income to the extent that a holder holds the certificate as part of a "conversion transaction" within the meaning of Section 1258 of the Code. A conversion transaction generally is one in which the taxpayer has taken two or more positions in the same or similar property that reduce or eliminate market risk, if substantially all of the taxpayer's return is attributable to the time value of the taxpayer's net investment in that transaction. The amount of gain so realized in a conversion transaction that is recharacterized as ordinary income generally will not exceed the amount of interest that would have accrued on the taxpayer's net investment at 120% of the appropriate applicable Federal rate at the time the taxpayer enters into the conversion transaction, subject to appropriate reduction for prior inclusion of interest and other ordinary income items from the transaction. Holders that recognize a loss on a sale or exchange of a REMIC regular certificate for federal income tax purposes in excess of certain threshold amounts should consult their tax advisors as to the need to file IRS Form 8886 (disclosing certain potential tax shelters) on their federal income tax returns. Except as may be provided in Treasury regulations yet to be issued, a loss realized on the sale of a REMIC residual certificate will be subject to the "wash sale" rules of Section 1091 of the Code, if during the period beginning six months before, and ending six months after, the date of that sale, the seller of that certificate-- - reacquires that same REMIC residual certificate; - acquires any other residual interest in a REMIC; or - acquires any similar interest in a "taxable mortgage pool", as defined in Section 7701(i) of the Code. In that event, any loss realized by the holder of a REMIC residual certificate on the sale will not be recognized or deductible currently, but instead will be added to that holder's adjusted basis in the newly-acquired asset. PROHIBITED TRANSACTIONS TAX AND OTHER TAXES. The Code imposes a tax on REMICs equal to 100% of the net income derived from prohibited transactions. In general, subject to certain specified exceptions, a prohibited transaction includes-- - the disposition of a non-defaulted mortgage loan, - the receipt of income from a source other than a mortgage loan or certain other permitted investments, - the receipt of compensation for services, or - the gain from the disposition of an asset purchased with collections on the mortgage loans for temporary investment pending payment on the REMIC certificates. It is not anticipated that any REMIC will engage in any prohibited transactions as to which it would be subject to this tax. In addition, certain contributions to a REMIC made after the day on which the REMIC issues all of its interests could result in the imposition of a tax on the REMIC equal to 100% of the value of the contributed property. The related Governing Document will include provisions designed to prevent the acceptance of any contributions that would be subject to this tax. REMICs also are subject to federal income tax at the highest corporate rate on net income from foreclosure property, determined by reference to the rules applicable to REITs. Net income from foreclosure property generally means income from foreclosure property other than qualifying rents and other qualifying income for a REIT. Under certain circumstances, the special servicer may be authorized to conduct activities with respect to a mortgaged property acquired by a trust that causes the trust to incur this tax if doing so would, in the reasonable discretion of the special servicer, maximize the net after-tax proceeds to certificateholders. However, under no circumstance will the special servicer cause the acquired mortgaged property to cease to be a "permitted investment" under Section 860G(a)(5) of the Code. 109 Unless we otherwise disclose in the related prospectus supplement, it is not anticipated that any material state or local income or franchise tax will be imposed on any REMIC. Unless we state otherwise in the related prospectus supplement, and to the extent permitted by then applicable laws, any tax on prohibited transactions, certain contributions or net income from foreclosure property, and any state or local income or franchise tax, that may be imposed on the REMIC will be borne by the related trustee, tax administrator, master servicer, special servicer or manager, in any case out of its own funds, provided that-- - the person has sufficient assets to do so; and - the tax arises out of a breach of that person's obligations under select provisions of the related Governing Document. Any tax not borne by one of these persons would be charged against the related trust resulting in a reduction in amounts payable to holders of the related REMIC certificates. TAX AND RESTRICTIONS ON TRANSFERS OF REMIC RESIDUAL CERTIFICATES TO CERTAIN ORGANIZATIONS. If a REMIC residual certificate is transferred to a disqualified organization, a tax will be imposed in an amount equal to the product of-- - the present value of the total anticipated excess inclusions with respect to the REMIC residual certificate for periods after the transfer; and - the highest marginal federal income tax rate applicable to corporations. The value of the anticipated excess inclusions is discounted using the applicable Federal rate for obligations whose term ends on the close of the last quarter in which excess inclusions are expected to accrue with respect to the REMIC residual certificate. The anticipated excess inclusions must be determined as of the date that the REMIC residual certificate is transferred and must be based on-- - events that have occurred up to the time of the transfer; - the prepayment assumption; and - any required or permitted clean up calls or required liquidation provided for in the related Governing Document. The tax on transfers to disqualified organizations generally would be imposed on the transferor of the REMIC residual certificate, except when the transfer is through an agent for a disqualified organization. In that case, the tax would instead be imposed on the agent. However, a transferor of a REMIC 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. In addition, if a pass-through entity includes in income excess inclusions with respect to a REMIC residual certificate, and a disqualified organization is the record holder of an interest in that entity, then a tax will be imposed on that entity equal to the product of-- - the amount of excess inclusions on the certificate that are allocable to the interest in the pass-through entity held by the disqualified organization; and - the highest marginal federal income tax rate imposed on corporations. 110 A pass-through entity will not be subject to this tax for any period, however, if each record holder of an interest in that pass-through entity furnishes to that pass-through entity-- - the holder's social security number and a statement under penalties of perjury that the social security number is that of the record holder; or - a statement under penalties of perjury that the record holder is not a disqualified organization. If an electing large partnership holds a REMIC residual certificate, all interests in the electing large partnership are treated as held by disqualified organizations for purposes of the tax imposed on pass-through entities described in the second preceding paragraph. This tax on electing large partnerships must be paid even if each record holder of an interest in that partnership provides a statement mentioned in the prior paragraph. For these purposes, a "disqualified organization" means-- - the United States; - any State or political subdivision thereof; - any foreign government; - any international organization; - any agency or instrumentality of the foregoing, except for instrumentalities described in Section 168(h)(2)(D) of the Code or Freddie Mac; - any organization, other than a cooperative described in Section 521 of the Code, that is exempt from federal income tax, except if it is subject to the tax imposed by Section 511 of the Code; or - any organization described in Section 1381(a)(2)(C) of the Code. For these purposes, a "pass-through entity" means any-- - regulated investment company; - real estate investment trust; - trust; - partnership; or - certain other entities described in Section 860E(e)(6) of the Code. For these purposes, an "electing large partnership" means any partnership having more than 100 members during the preceding tax year which elects to apply simplified reporting provisions under the Code, except for certain service partnerships and commodity pools. In addition, a person holding an interest in a pass-through entity as a nominee for another person will, with respect to that interest, be treated as a pass-through entity. Moreover, an entity will not qualify as a REMIC unless there are reasonable arrangements designed to ensure that-- - the residual interests in the entity are not held by disqualified organizations; and - the information necessary for the application of the tax described herein will be made available. 111 We will include in the related Governing Document restrictions on the transfer of REMIC residual certificates and certain other provisions that are intended to meet this requirement, and we will discuss those restrictions and provisions in any prospectus supplement relating to the offering of any REMIC residual certificate. TERMINATION. A REMIC will terminate immediately after the payment date following receipt by the REMIC of the final payment in respect of the related mortgage loans or upon a sale of the REMIC's assets following the adoption by the REMIC of a plan of complete liquidation. The last payment on a REMIC regular certificate will be treated as a payment in retirement of a debt instrument. In the case of a REMIC residual certificate, if the last payment on that certificate is less than the REMIC residual certificateholder's adjusted basis in the certificate, that holder should, but may not, be treated as realizing a capital loss equal to the amount of that difference. REPORTING AND OTHER ADMINISTRATIVE MATTERS. Solely for purposes of the administrative provisions of the Code, a REMIC will be treated as a partnership and holders of the related REMIC residual certificates will be treated as partners. Unless we otherwise state in the related prospectus supplement, the related tax administrator will file REMIC federal income tax returns on behalf of the REMIC, and will be designated as and will act as or on behalf of the tax matters person with respect to the REMIC in all respects. As, or as agent for, the tax matters person, the related tax administrator, subject to certain notice requirements and various restrictions and limitations, generally will have the authority to act on behalf of the REMIC and the holders of the REMIC residual certificates in connection with the administrative and judicial review of the REMIC's-- - income; - deductions; - gains; - losses; and - classification as a REMIC. Holders of REMIC residual certificates generally will be required to report these REMIC items consistently with their treatment on the related REMIC's tax return. In addition, these holders may in some circumstances be bound by a settlement agreement between the related tax administrator, as, or as agent for, the tax matters person, and the IRS concerning any REMIC item. Adjustments made to the REMIC's tax return may require these holders to make corresponding adjustments on their returns. An audit of the REMIC's tax return, or the adjustments resulting from that audit, could result in an audit of a holder's return. No REMIC will be registered as a tax shelter pursuant to Section 6111 of the Code. Any person that holds a REMIC residual certificate as a nominee for another person may be required to furnish to the related REMIC, in a manner to be provided in Treasury regulations, the name and address of that other person, as well as other information. Reporting of interest income, including any original issue discount, with respect to REMIC regular certificates is required annually, and may be required more frequently under Treasury regulations. These information reports generally are required to be sent or made readily available through electronic means to individual holders of REMIC regular certificates and the IRS. Holders of REMIC regular certificates that are-- - corporations; - trusts; - securities dealers; and - certain other non-individuals, 112 will be provided interest and original issue discount income information and the information set forth in the following paragraphs. This information will be provided upon request in accordance with the requirements of the applicable regulations. The information must be provided by the later of-- - 30 days after the end of the quarter for which the information was requested; or - two weeks after the receipt of the request. Reporting with respect to REMIC residual certificates, including-- - income; - excess inclusions; - investment expenses; and - relevant information regarding qualification of the REMIC's assets, will be made as required under the Treasury regulations, generally on a quarterly basis. As applicable, the REMIC regular certificate information reports will include a statement of the adjusted issue price of the REMIC regular certificate at the beginning of each accrual period. In addition, the reports will include information required by regulations with respect to computing the accrual of any market discount. Because exact computation of the accrual of market discount on a constant yield method would require information relating to the holder's purchase price that the REMIC may not have, the regulations only require that information pertaining to the appropriate proportionate method of accruing market discount be provided. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Market Discount". Unless we otherwise specify in the related prospectus supplement, the responsibility for complying with the foregoing reporting rules will be borne by the tax administrator for the subject REMIC. BACKUP WITHHOLDING WITH RESPECT TO REMIC CERTIFICATES. Payments of interest and principal, as well as payments of proceeds from the sale of REMIC certificates, may be subject to the "backup withholding tax" under Section 3406 of the Code if recipients of these payments-- - fail to furnish to the payor certain information, including their taxpayer identification numbers; or - otherwise fail to establish an exemption from this tax. Any amounts deducted and withheld from a payment to a recipient would be allowed as a credit against the recipient's federal income tax. Furthermore, certain penalties may be imposed by the IRS on a recipient of payments that is required to supply information but that does not do so in the proper manner. FOREIGN INVESTORS IN REMIC CERTIFICATES. A holder of an offered certificate that is-- - a foreign person; and - not subject to federal income tax as a result of any direct or indirect connection to the United States in addition to its ownership of that certificate; will normally not be subject to United States federal income or withholding tax in respect of a payment on an offered certificate. To avoid withholding tax, that holder must comply with certain identification requirements. These requirements include delivery of a statement, signed by the certificateholder under penalties of perjury, certifying that the certificateholder is a foreign person and providing the name, address and such other information with respect to the certificateholder as may be required by regulations issued by the Treasury Department. 113 For these purposes, a "foreign person" is anyone other than a United States person. A "United States person" is-- - a citizen or resident of the United States; - a corporation, partnership or other entity created or organized in, or under the laws of, the United States, any state or the District of Columbia; - an estate whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States; or - a trust as to which-- 1. a court in the United States is able to exercise primary supervision over the administration of the trust, and 2. one or more United States persons have the authority to control all substantial decisions of the trust. In addition, to the extent provided in the Treasury Regulations, a trust will be a United States person if it was in existence on August 20, 1996 and it elected to be treated as a United States person. It is possible that the IRS may assert that the foregoing tax exemption should not apply with respect to a REMIC regular certificate held by a person or entity that owns directly or indirectly a 10% or greater interest in the related REMIC residual certificates. If the holder does not qualify for exemption, payments of interest, including payments in respect of accrued original issue discount, to that holder may be subject to a tax rate of 30%, subject to reduction under any applicable tax treaty. It is possible, under regulations promulgated under Section 881 of the Code concerning conduit financing transactions, that the exemption from withholding taxes described above may also not be available to a holder who is a foreign person and either-- - owns 10% or more of one or more underlying mortgagors; or - if the holder is a controlled foreign corporation, is related to one or more mortgagors in the applicable trust. Further, it appears that a REMIC regular certificate would not be included in the estate of a nonresident alien individual and would not be subject to United States estate taxes. However, it is recommended that certificateholders who are nonresident alien individuals consult their tax advisors concerning this question. Unless we otherwise state in the related prospectus supplement, the related Governing Document will prohibit transfers of REMIC residual certificates to investors that are-- - foreign persons, or - United States persons, if classified as a partnership under the Code, unless all of their beneficial owners are United States persons. GRANTOR TRUSTS CLASSIFICATION OF GRANTOR TRUSTS. With respect to each series of grantor trust certificates, our counsel will deliver its opinion to the effect that, assuming compliance with all provisions of the related Governing Document, the related trust, or relevant portion thereof, will be classified as a grantor trust under subpart E, part I of subchapter J of the Code and not as a partnership or an association taxable as a corporation. 114 For purposes of the following discussion-- - A grantor trust certificate representing an undivided equitable ownership interest in the principal of the mortgage loans constituting the related grantor trust, together with interest (if any) thereon at a pass-through rate, will be referred to as a "grantor trust fractional interest certificate"; and - A grantor trust certificate representing ownership of all or a portion of the difference between-- 1. interest paid on the mortgage loans constituting the related grantor trust, minus 2. the sum of-- - normal administration fees, and - interest paid to the holders of grantor trust fractional interest certificates issued with respect to that grantor trust, will be referred to as a "grantor trust strip certificate". A grantor trust strip certificate may also evidence a nominal ownership interest in the principal of the mortgage loans constituting the related grantor trust. CHARACTERIZATION OF INVESTMENTS IN GRANTOR TRUST CERTIFICATES. GRANTOR TRUST FRACTIONAL INTEREST CERTIFICATES. Unless we otherwise disclose in the related prospectus supplement, any offered certificates that are grantor trust fractional interest certificates will generally represent interests in-- - "loans...secured by an interest in real property" within the meaning of Section 7701(a)(19)(C)(v) of the Code, but only to the extent that the underlying mortgage loans have been made with respect to property that is used for residential or certain other prescribed purposes; - "obligation[s] (including any participation or certificate of beneficial ownership therein) which... [are] principally secured by an interest in real property" within the meaning of Section 860G(a)(3) of the Code; - "permitted assets" within the meaning of Section 860L(c) of the Code; and - "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code. In addition, interest on offered certificates that are grantor trust fractional interest certificates will, to the same extent, be considered "interest on obligations secured by mortgages on real property or on interests in real property" within the meaning of Section 856(c)(3)(B) of the Code. GRANTOR TRUST STRIP CERTIFICATES. Even if grantor trust strip certificates evidence an interest in a grantor trust-- - consisting of mortgage loans that are "loans... secured by an interest in real property" within the meaning of Section 7701(a)(19)(C)(v) of the Code; - consisting of mortgage loans that are "real estate assets" within the meaning of Section 856(c)(5)(B) of the Code; and - the interest on which is "interest on obligations secured by mortgages on real property" within the meaning of Section 856(c)(3)(A) of the Code, it is unclear whether the grantor trust strip certificates, and the income therefrom, will be so characterized. We recommend that prospective purchasers to which the characterization of an investment in grantor trust strip certificates is material consult their tax advisors regarding whether the grantor trust strip certificates, and the income therefrom, will be so characterized. 115 The grantor trust strip certificates will be-- - "obligation[s] (including any participation or certificate of beneficial ownership therein) which... [are] principally secured by an interest in real property" within the meaning of Section 860G(a)(3)(A) of the Code; and - in general, "permitted assets" within the meaning of Section 860L(c) of the Code. TAXATION OF OWNERS OF GRANTOR TRUST FRACTIONAL INTEREST CERTIFICATES. GENERAL. Holders of a particular series of grantor trust fractional interest certificates generally-- - will be required to report on their federal income tax returns their shares of the entire income from the mortgage loans, including amounts used to pay reasonable servicing fees and other expenses, and - will be entitled to deduct their shares of any reasonable servicing fees and other expenses. Because of stripped interests, market or original issue discount, or premium, the amount includible in income on account of a grantor trust fractional interest certificate may differ significantly from interest paid or accrued on the underlying mortgage loans. Section 67 of the Code allows an individual, estate or trust holding a grantor trust fractional interest certificate directly or through certain pass-through entities a deduction for any reasonable servicing fees and expenses only to the extent that the aggregate of the holder's miscellaneous itemized deductions exceeds two percent of the holder's adjusted gross income. Section 68 of the Code reduces the amount of itemized deductions otherwise allowable for an individual whose adjusted gross income exceeds a specified amount. The amount of additional taxable income reportable by holders of grantor trust fractional interest certificates who are subject to the limitations of either Section 67 or Section 68 of the Code may be substantial. Further, certificateholders, other than corporations, subject to the alternative minimum tax may not deduct miscellaneous itemized deductions in determining their alternative minimum taxable income. Although it is not entirely clear, it appears that in transactions in which multiple classes of grantor trust certificates, including grantor trust strip certificates, are issued, any fees and expenses should be allocated among those classes of grantor trust certificates. The method of this allocation should recognize that each class benefits from the related services. In the absence of statutory or administrative clarification as to the method to be used, we currently expect that information returns or reports to the IRS and certificateholders will be based on a method that allocates these fees and expenses among classes of grantor trust certificates with respect to each period based on the payments made to each class during that period. The federal income tax treatment of grantor trust fractional interest certificates of any series will depend on whether they are subject to the stripped bond rules of Section 1286 of the Code. Grantor trust fractional interest certificates may be subject to those rules if-- - a class of grantor trust strip certificates is issued as part of the same series; or - we or any of our affiliates retain, for our or its own account or for purposes of resale, a right to receive a specified portion of the interest payable on an underlying mortgage loan. Further, the IRS has ruled that an unreasonably high servicing fee retained by a seller or servicer will be treated as a retained ownership interest in mortgage loans that constitutes a stripped coupon. We will include in the related prospectus supplement information regarding servicing fees paid out of the assets of the related trust to-- - a master servicer; - a special servicer; 116 - any sub-servicer; or - their respective affiliates. With respect to certain categories of debt instruments, Section 1272(a)(6) of the Code requires the use of a reasonable prepayment assumption in accruing original issue discount, and adjustments in the accrual of original issue discount when prepayments do not conform to the prepayment assumption. Legislation enacted in 1997 extended the section to cover investments in any pool of debt instruments the yield on which may be affected by reason of prepayments. The precise application of Section 1272(a)(6) of the Code to pools of debt instruments, is unclear in certain respects. For example, it is uncertain whether a prepayment assumption will be applied collectively to all of a taxpayer's investments in these pools of debt instruments, or on an investment-by-investment basis. Similarly, it is not clear whether the assumed prepayment rate as to investments in grantor trust fractional interest certificates is to be determined based on conditions at the time of the first sale of the certificate or, with respect to any holder, at the time of purchase of the certificate by that holder. We recommend that certificateholders consult their tax advisors concerning reporting original issue discount, market discount and premium with respect to grantor trust fractional interest certificates. IF STRIPPED BOND RULES APPLY. If the stripped bond rules apply, each grantor trust fractional interest certificate will be treated as having been issued with "original issue discount" within the meaning of Section 1273(a) of the Code. This is subject, however, to the discussion below regarding-- - the treatment of certain stripped bonds as market discount bonds; and - DE MINIMIS market discount. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--Market Discount" below. The holder of a grantor trust fractional interest certificate will report interest income from its grantor trust fractional interest certificate for each month, to the extent it constitutes "qualified stated interest," in accordance with its normal method of accounting. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount" above for a definition of "qualified stated interest". The original issue discount on a grantor trust fractional interest certificate will be the excess of the certificate's stated redemption price over its issue price. The issue price of a grantor trust fractional interest certificate as to any purchaser will be equal to the price paid by that purchaser of the grantor trust fractional interest certificate. The stated redemption price of a grantor trust fractional interest certificate will be-- - the sum of all payments to be made on that certificate; - other than qualified stated interest, if any; and - the certificate's share of reasonable servicing fees and other expenses. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond Rules Do Not Apply" for a definition of qualified stated interest. In general, the amount of income that accrues in any month would equal the product of-- - the holder's adjusted basis in the grantor trust fractional interest certificate at the beginning of the related month, as defined in "--Grantor Trusts--Sales of Grantor Trust Certificates"; and - the yield of that grantor trust fractional interest certificate to the holder. The yield would be computed as the rate, that, if used to discount the holder's share of future payments on the related mortgage loans, would cause the present value of those future payments to equal the price at which the holder purchased the certificate. This rate is compounded based on the regular interval between payment dates. In computing yield 117 under the stripped bond rules, a certificateholder's share of future payments on the related mortgage loans will not include any payments made in respect of any ownership interest in those mortgage loans retained by us, a master servicer, a special servicer, a sub-servicer, or our or their respective affiliates, but will include the certificateholder's share of any reasonable servicing fees and other expenses, and is based generally on the method described in Section 1272(a)(6) of the Code. The precise means of applying that method is uncertain in various respects, however. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--General." In the case of a grantor trust fractional interest certificate acquired at a price equal to the principal amount of the related mortgage loans allocable to that certificate, the use of a prepayment assumption generally would not have any significant effect on the yield used in calculating accruals of interest income. In the case, however, of a grantor trust fractional interest certificate acquired at a price less than or greater than the principal amount, respectively, the use of a reasonable prepayment assumption would increase or decrease the yield. Therefore, the use of this prepayment assumption would accelerate or decelerate, respectively, the reporting of income. In the absence of statutory or administrative clarification, we currently expect that information reports or returns to the IRS and certificateholders will be based on-- - a prepayment assumption determined when certificates are offered and sold hereunder, which we will disclose in the related prospectus supplement; and - a constant yield computed using a representative initial offering price for each class of certificates. However, neither we nor any other person will make any representation that-- - the mortgage loans in any of our trusts will in fact prepay at a rate conforming to the prepayment assumption used or any other rate; or - the prepayment assumption will not be challenged by the IRS on audit. Certificateholders also should bear in mind that the use of a representative initial offering price will mean that the information returns or reports that we send, even if otherwise accepted as accurate by the IRS, will in any event be accurate only as to the initial certificateholders of each series who bought at that price. Under Treasury Regulation Section 1.1286-1, certain stripped bonds are to be treated as market discount bonds. Accordingly, any purchaser of this type of bond is to account for any discount on the bond as market discount rather than original issue discount. This treatment only applies, however, if immediately after the most recent disposition of the bond by a person stripping one or more coupons from the bond and disposing of the bond or coupon-- - there is no original issue discount or only a DE MINIMIS amount of original issue discount; or - the annual stated rate of interest payable on the original bond is no more than one percentage point lower than the gross interest rate payable on the related mortgage loans, before subtracting any servicing fee or any stripped coupon. If interest payable on a grantor trust fractional interest certificate is more than one percentage point lower than the gross interest rate payable on the related mortgage loans, we will disclose that fact in the related prospectus supplement. If the original issue discount or market discount on a grantor trust fractional interest certificate determined under the stripped bond rules is less than the product of-- - 0.25% of the stated redemption price; and - the weighted average maturity of the related mortgage loans, then the original issue discount or market discount will be considered to be DE MINIMIS. Original issue discount or market discount of only a DE MINIMIS amount will be included in income in the same manner as DE MINIMIS original issue discount and market discount described in "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond Rules Do Not Apply" and "--Market Discount" below. 118 IF STRIPPED BOND RULES DO NOT APPLY. Subject to the discussion below on original issue discount, if the stripped bond rules do not apply to a grantor trust fractional interest certificate, the certificateholder will be required to report its share of the interest income on the related mortgage loans in accordance with the certificateholder's normal method of accounting. In that case, the original issue discount rules will apply, even if the stripped bond rules do not apply, to a grantor trust fractional interest certificate to the extent it evidences an interest in mortgage loans issued with original issue discount. The original issue discount, if any, on mortgage loans will equal the difference between-- - the stated redemption price of the mortgage loans; and - their issue price. For a definition of "stated redemption price", see "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount" above. In general, the issue price of a mortgage loan will be the amount received by the borrower from the lender under the terms of the mortgage loan. If the borrower separately pays points to the lender that are not paid for services provided by the lender, such as commitment fees or loan processing costs, the amount of points paid reduces the issue price. The stated redemption price of a mortgage loan will generally equal its principal amount. The determination as to whether original issue discount will be considered to be DE MINIMIS will be calculated using the same test as in the REMIC discussion. See "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount" above. In the case of mortgage loans bearing adjustable or variable interest rates, we will describe in the related prospectus supplement the manner in which these rules will be applied with respect to the mortgage loans by the related trustee or master servicer, as applicable, in preparing information returns to certificateholders and the IRS. If original issue discount is in excess of a DE MINIMIS amount, all original issue discount with respect to a mortgage loan will be required to be accrued and reported in income each month, based generally on the method described in Section 1272(a)(6) of the Code. The precise means of applying that method is uncertain in various respects, however. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--General." A purchaser of a grantor trust fractional interest certificate may purchase the grantor trust fractional interest certificate at a cost less than the certificate's allocable portion of the aggregate remaining stated redemption price of the underlying mortgage loans. In that case, the purchaser will also be required to include in gross income the certificate's daily portions of any original issue discount with respect to those mortgage loans. However, each daily portion will be reduced, if the cost of the grantor trust fractional interest certificate to the purchaser is in excess of the certificate's allocable portion of the aggregate adjusted issue prices of the underlying mortgage loans. The reduction will be approximately in proportion to the ratio that the excess bears to the certificate's allocable portion of the aggregate original issue discount remaining to be accrued on those mortgage loans. The adjusted issue price of a mortgage loan on any given day equals the sum of-- - the adjusted issue price or the issue price, in the case of the first accrual period, of the mortgage loan at the beginning of the accrual period that includes that day, and - the daily portions of original issue discount for all days during the accrual period prior to that day. The adjusted issue price of a mortgage loan at the beginning of any accrual period will equal-- - the issue price of the mortgage loan; increased by - the aggregate amount of original issue discount with respect to the mortgage loan that accrued in prior accrual periods; and reduced by - the amount of any payments made on the mortgage loan in prior accrual periods of amounts included in its stated redemption price. 119 In the absence of statutory or administrative clarification, we currently expect that information reports or returns to the IRS and certificateholders will be based on-- - a prepayment assumption determined when the certificates are offered and sold hereunder and disclosed in the related prospectus supplement; and - a constant yield computed using a representative initial offering price for each class of certificates. However, neither we nor any other person will make any representation that-- - the mortgage loans will in fact prepay at a rate conforming to the prepayment assumption or any other rate; or - the prepayment assumption will not be challenged by the IRS on audit. Certificateholders also should bear in mind that the use of a representative initial offering price will mean that the information returns or reports, even if otherwise accepted as accurate by the IRS, will in any event be accurate only as to the initial certificateholders of each series who bought at that price. MARKET DISCOUNT. If the stripped bond rules do not apply to a grantor trust fractional interest certificate, a certificateholder may be subject to the market discount rules of Sections 1276 through 1278 of the Code to the extent an interest in a mortgage loan is considered to have been purchased at a market discount. A mortgage loan is considered to have been purchased at a market discount if-- - in the case of a mortgage loan issued without original issue discount, it is purchased at a price less than its remaining stated redemption price; or - in the case of a mortgage loan issued with original issue discount, it is purchased at a price less than its adjusted issue price. If market discount is in excess of a DE MINIMIS amount, the holder generally must include in income in each month the amount of the discount that has accrued, under the rules described below, through that month that has not previously been included in income. However, the inclusion will be limited, in the case of the portion of the discount that is allocable to any mortgage loan, to the payment of stated redemption price on the mortgage loan that is received by or, for accrual method certificateholders, due to, the trust in that month. A certificateholder may elect to include market discount in income currently as it accrues, under a constant yield method based on the yield of the certificate to the holder, rather than including it on a deferred basis in accordance with the foregoing. This market discount will be accrued generally on the method described in Section 1272(a)(6) of the Code. The precise means of applying that method is uncertain in various respects, however. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--General." We recommend that certificateholders consult their own tax advisors concerning accrual of market discount with respect to grantor trust fractional interest certificates. Certificateholders should also refer to the related prospectus supplement to determine whether and in what manner the market discount will apply to the underlying mortgage loans purchased at a market discount. To the extent that the underlying mortgage loans provide for periodic payments of stated redemption price, you may be required to include market discount in income at a rate that is not significantly slower than the rate at which that discount would be included in income if it were original issue discount. Market discount with respect to mortgage loans may be considered to be DE MINIMIS and, if so, will be includible in income under DE MINIMIS rules similar to those described under "--REMICs--Taxation of Owners of REMIC Regular Certificates--Original Issue Discount" above. Further, under the rules described under "--REMICs--Taxation of Owners of REMIC Regular Certificates--Market Discount" above, any discount that is not original issue discount and exceeds a DE MINIMIS amount may require the deferral of interest expense deductions attributable to accrued market discount not yet includible in income, unless an election 120 has been made to report market discount currently as it accrues. This rule applies without regard to the origination dates of the underlying mortgage loans. PREMIUM. If a certificateholder is treated as acquiring the underlying mortgage loans at a premium, which is a price in excess of their remaining stated redemption price, the certificateholder may elect under Section 171 of the Code to amortize the portion of that premium allocable to mortgage loans originated after September 27, 1985 using a constant yield method. Amortizable premium is treated as an offset to interest income on the related debt instrument, rather than as a separate interest deduction. However, premium allocable to mortgage loans originated before September 28, 1985 or to mortgage loans for which an amortization election is not made, should-- - be allocated among the payments of stated redemption price on the mortgage loan; and - be allowed as a deduction as those payments are made or, for an accrual method certificateholder, due. It appears that a prepayment assumption should be used in computing amortization of premium allowable under Section 171 of the Code similar to that described for calculating the accrual of market discount of grantor trust fractional interest certificates, based generally on the method described in Section 1272(a)(6) of the Code. The precise means of applying that method is uncertain in various respects, however. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--General." TAXATION OF OWNERS OF GRANTOR TRUST STRIP CERTIFICATES. The "stripped coupon" rules of Section 1286 of the Code will apply to the grantor trust strip certificates. Except as described above under "--Grantor Trust Funds--Taxation of Owners of Grantor Trust Fractional Interest Certificates--If Stripped Bond Rules Apply", no regulations or published rulings under Section 1286 of the Code have been issued and some uncertainty exists as to how it will be applied to securities, such as the grantor trust strip certificates. Accordingly, we recommend that you consult your tax advisors concerning the method to be used in reporting income or loss with respect to those certificates. The Treasury regulations promulgated under the original discount rules do not apply to stripped coupons, although they provide general guidance as to how the original issue discount sections of the Code will be applied. Under the stripped coupon rules, it appears that original issue discount will be required to be accrued in each month on the grantor trust strip certificates based on a constant yield method. In effect, you would include as interest income in each month an amount equal to the product of your adjusted basis in the grantor trust strip certificate at the beginning of that month and the yield of the grantor trust strip certificate to you. This yield would be calculated based on-- - the price paid for that grantor trust strip certificate by you; and - the projected payments remaining to be made thereon at the time of the purchase; plus - an allocable portion of the projected servicing fees and expenses to be paid with respect to the underlying mortgage loans. Such yield will accrue generally on the method described in Section 1272(a)(6) of the Code. The precise means of applying that method is uncertain in various respects, however. See "--Grantor Trusts--Taxation of Owners of Grantor Trust Fractional Interest Certificates--General." If the method for computing original issue discount under Section 1272(a)(6) results in a negative amount of original issue discount as to any accrual period with respect to a grantor trust strip certificate, the amount of original issue discount allocable to that accrual period will be zero. That is, no current deduction of the negative amount will be allowed to you. You will instead only be permitted to offset that negative amount against future positive original issue discount, if any, attributable to that certificate. Although not free from doubt, it is possible that you may be permitted to deduct a loss to the extent your basis in the certificate exceeds the maximum amount of payments you could ever receive with respect to that certificate. However, any loss may be a capital loss, which is limited in its deductibility. The foregoing considerations are particularly relevant to grantor trust certificates with no, or disproportionately small, amounts of principal, which can have negative yields under circumstances that are not default related. See "Risk Factors--Prepayment Considerations; Variability in Average Life of Offered Certificates; Special Yield Considerations" above. 121 The accrual of income on the grantor trust strip certificates will be significantly slower using a prepayment assumption than if yield is computed assuming no prepayments. In the absence of statutory or administrative clarification, we currently expect that information returns or reports to the IRS and certificateholders will be based on-- - the prepayment assumption we will disclose in the related prospectus supplement; and - a constant yield computed using a representative initial offering price for each class of certificates. However, neither we nor any other person will make any representation that-- - the mortgage loans in any of our trusts will in fact prepay at a rate conforming to the prepayment assumption or at any other rate; or - the prepayment assumption will not be challenged by the IRS on audit. We recommend that prospective purchasers of the grantor trust strip certificates consult their tax advisors regarding the use of the prepayment assumption. Certificateholders also should bear in mind that the use of a representative initial offering price will mean that the information returns or reports, even if otherwise accepted as accurate by the IRS, will in any event be accurate only as to the initial certificateholders of each series who bought at that price. SALES OF GRANTOR TRUST CERTIFICATES. Any gain or loss recognized on the sale or exchange of a grantor trust certificate by an investor who holds that certificate as a capital asset, will be capital gain or loss, except as described below. The amount recognized equals the difference between-- - the amount realized on the sale or exchange of a grantor trust certificate; and - its adjusted basis. The adjusted basis of a grantor trust certificate generally will equal-- - its cost; increased by - any income reported by the seller, including original issue discount and market discount income; and reduced, but not below zero, by - any and all-- 1. previously reported losses, 2. amortized premium, and 3. payments with respect to that grantor trust certificate. As of the date of this prospectus, the Code provides for lower rates as to long-term capital gains than those applicable to the short-term capital gains and ordinary income realized or received by individuals. No rate differential exists for corporations. In addition, the distinction between a capital gain or loss and ordinary income or loss remains relevant for other purposes. Gain or loss from the sale of a grantor trust certificate may be partially or wholly ordinary and not capital in certain circumstances. Gain attributable to accrued and unrecognized market discount will be treated as ordinary income. Gain or loss recognized by banks and other financial institutions subject to Section 582(c) of the Code will be treated as ordinary income. Furthermore, a portion of any gain that might otherwise be capital gain may be treated as ordinary income to the extent that the grantor trust certificate is held as part of a "conversion transaction" within the meaning of Section 1258 of the 122 Code. A conversion transaction generally is one in which the taxpayer has taken two or more positions in the same or similar property that reduce or eliminate market risk, if substantially all of the taxpayer's return is attributable to the time value of the taxpayer's net investment in the transaction. The amount of gain realized in a conversion transaction that is recharacterized as ordinary income generally will not exceed the amount of interest that would have accrued on the taxpayer's net investment at 120% of the appropriate applicable Federal rate, at the time the taxpayer enters into the conversion transaction, subject to appropriate reduction for prior inclusion of interest and other ordinary income items from the transaction. The Code requires the recognition of gain upon the constructive sale of an appreciated financial position. A constructive sale of an appreciated financial position occurs if a taxpayer enters into certain transactions or series of transactions that have the effect of substantially eliminating the taxpayer's risk of loss and opportunity for gain with respect to the financial instrument. Debt instruments that-- - entitle the holder to a specified principal amount; - pay interest at a fixed or variable rate; and - are not convertible into the stock of the issuer or a related party, cannot be the subject of a constructive sale for this purpose. Because most grantor trust certificates meet this exception, this Section will not apply to most grantor trust certificates. However, certain grantor trust certificates have no, or a disproportionately small, amount of principal and these certificates can be the subject of a constructive sale. Finally, a taxpayer may elect to have net capital gain taxed at ordinary income rates rather than capital gains rates in order to include the net capital gain in total net investment income for the relevant taxable year. This election would be done for purposes of the rule that limits the deduction of interest on indebtedness incurred to purchase or carry property held for investment to a taxpayer's net investment income. Holders that recognize a loss on a sale or exchange of a grantor trust certificate for federal income tax purposes in excess of certain threshold amounts should consult their tax advisors as to the need to file IRS Form 8886 (disclosing certain potential tax shelters) on their federal income tax returns. GRANTOR TRUST REPORTING. Unless otherwise provided in the related prospectus supplement, the related tax administrator will furnish or make readily available through electronic means to each holder of a grantor trust certificate with each payment a statement setting forth the amount of the payment allocable to principal on the underlying mortgage loans and to interest thereon at the related pass-through rate. In addition, the related tax administrator will furnish, within a reasonable time after the end of each calendar year, to each person or entity that was the holder of a grantor trust certificate at any time during that year, information regarding-- - the amount of servicing compensation received by a master servicer or special servicer; and - all other customary factual information the reporting party deems necessary or desirable to enable holders of the related grantor trust certificates to prepare their tax returns. The reporting party will furnish comparable information to the IRS as and when required by law to do so. Because the rules for accruing discount and amortizing premium with respect to grantor trust certificates are uncertain in various respects, there is no assurance the IRS will agree with the information reports of those items of income and expense. Moreover, those information reports, even if otherwise accepted as accurate by the IRS, will in any event be accurate only as to the initial certificateholders that bought their certificates at the representative initial offering price used in preparing the reports. On June 30, 2002, the Service published proposed regulations, which will, when effective, establish a reporting framework for interests in widely held fixed investment trusts similar to that for regular interests in REMICs. A widely-held fixed investment trust is defined as any entity that is a United States person and is classified as a trust under Treasury Regulation Section 301.7701-4(c) in which any interest is held by a middleman, which includes, but is not limited to-- - a custodian of a person's account; 123 - a nominee; and - a broker holding an interest for a customer in street name. These regulations are proposed to be effective for calendar years beginning on or after the date that the final regulations are published in the Federal Register. BACKUP WITHHOLDING. In general, the rules described under "--REMICs--Backup Withholding with Respect to REMIC Certificates" above will also apply to grantor trust certificates. FOREIGN INVESTORS. In general, the discussion with respect to REMIC regular certificates under "--REMICs--Foreign Investors in REMIC Certificates" above applies to grantor trust certificates. However, unless we otherwise specify in the related prospectus supplement, grantor trust certificates will be eligible for exemption from U.S. withholding tax, subject to the conditions described in the discussion above, only to the extent the related mortgage loans were originated after July 18, 1984. To the extent that interest on a grantor trust certificate would be exempt under Sections 871(h)(1) and 881(c) of the Code from United States withholding tax, and the certificate is not held in connection with a certificateholder's trade or business in the United States, the certificate will not be subject to United States estate taxes in the estate of a nonresident alien individual. STATE AND OTHER TAX CONSEQUENCES In addition to the federal income tax consequences described in "Federal Income Tax Consequences", potential investors should consider the state and local tax consequences concerning the offered certificates. State tax law may differ substantially from the corresponding federal law, and the discussion above does not purport to describe any aspect of the tax laws of any state or other jurisdiction. Therefore, we recommend that prospective investors consult their tax advisors with respect to the various tax consequences of investments in the offered certificates. ERISA CONSIDERATIONS GENERAL Title I of ERISA and Section 4975 of the Code impose various requirements on-- - Plans; and - persons that are fiduciaries with respect to Plans, in connection with the investment of the assets of a Plan. For purposes of this discussion, Plans may include individual retirement accounts and annuities, Keogh plans and collective investment funds and separate accounts, including as applicable, insurance company general accounts, in which other Plans are invested. Governmental plans and, if they have not made an election under Section 410(d) of the Code, church plans, are not subject to ERISA requirements. However, these plans may be subject to provisions of other applicable federal and state law that are materially similar to the provisions of ERISA and the Code. Any of those plans which is qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code, however, is subject to the prohibited transaction rules in Section 503 of the Code. ERISA imposes general fiduciary requirements on a fiduciary that is investing the assets of a Plan, including-- - investment prudence and diversification; and - compliance with the investing Plan's governing the documents. Section 406 of ERISA and Section 4975 of the Code also prohibit a broad range of transactions involving the assets of a Plan and a Party in Interest with respect to that Plan, unless a statutory or administrative exemption exists. 124 The types of transactions between Plans and Parties in Interest that are prohibited include-- - sales, exchanges or leases of property; - loans or other extensions of credit; and - the furnishing of goods and services. Parties in Interest that participate in a prohibited transaction may be subject to an excise tax imposed under Section 4975 of the Code or a penalty imposed under Section 502(i) of ERISA, unless a statutory or administrative exemption is available. In addition, the persons involved in the prohibited transaction may have to cancel the transaction and pay an amount to the affected Plan for any losses realized by that Plan or profits realized by those persons. In addition, individual retirement accounts involved in the prohibited transaction may be disqualified, which would result in adverse tax consequences to the owner of the account. PLAN ASSET REGULATIONS A Plan's investment in offered certificates may cause the underlying mortgage assets and other assets of the related trust to be deemed assets of that Plan. The Plan Asset Regulations provide that when a Plan acquires an equity interest in an entity, the assets of that Plan or arrangement include both that equity interest and an undivided interest in each of the underlying assets of the entity, unless an exception applies. One such exception occurs when the equity participation in the entity by benefit plan investors, which include both Plans and some employee benefit plans not subject to ERISA, is not significant. The equity participation by benefit plan investors will be significant on any date if 25% or more of the value of any class of equity interests in the entity is held by benefit plan investors. The percentage owned by benefit plan investors is determined by excluding the investments of the following persons-- - those with discretionary authority or control over the assets of the entity; - those who provide investment advice directly or indirectly for a fee with respect to the assets of the entity; and - those who are affiliates of the persons described in the preceding two bullets. In the case of one of our trusts, investments by us, by the related trustee, the related master servicer, the related special servicer or any other party with discretionary authority over the related trust assets, or by the affiliates of these persons, will be excluded. A fiduciary of an investing Plan is any person who-- - has discretionary authority or control over the management or disposition of the assets of that Plan; or - provides investment advice with respect to the assets of that Plan for a fee. If the mortgages and other assets included in one of our trusts are Plan assets, then any party exercising management or discretionary control regarding those assets, such as the related trustee, master servicer or special servicer, or affiliates of any of these parties, may be-- - deemed to be a fiduciary with respect to the investing Plan; and - subject to the fiduciary responsibility provisions of ERISA. In addition, if the mortgages and other assets included in one of our trusts are Plan assets, then the operation of that trust may involve prohibited transactions under ERISA or the Code. For example, if a borrower with respect to a mortgage loan in that trust is a Party in Interest to an investing Plan, then the purchase by that Plan of offered certificates evidencing interests in that trust, could be a prohibited loan between that Plan and the Party in Interest. 125 The Plan Asset Regulations provide that where a Plan purchases a "guaranteed governmental mortgage pool certificate," the assets of that Plan include the certificate but do not include any of the mortgages underlying the certificate. The Plan Asset Regulations include in the definition of a "guaranteed governmental mortgage pool certificate" some certificates issued and/or guaranteed by Freddie Mac, Ginnie Mae, Fannie Mae, or Farmer Mac. Accordingly, even if these types of mortgaged-backed securities were deemed to be assets of a Plan, the underlying mortgages would not be treated as assets of that Plan. Private label mortgage participations, mortgage pass-through certificates or other mortgage-backed securities are not "guaranteed governmental mortgage pool certificates" within the meaning of the Plan Asset Regulations. In addition, the acquisition or holding of offered certificates by or on behalf of a Plan could give rise to a prohibited transaction if we or the related trustee, master servicer or special servicer or any related underwriter, sub-servicer, tax administrator, manager, borrower or obligor under any credit enhancement mechanism, or one of their affiliates, is or becomes a Party in Interest with respect to an investing Plan. If you are the fiduciary of a Plan, you should consult your counsel and review the ERISA discussion in the related prospectus supplement before purchasing any offered certificates. UNDERWRITER'S EXEMPTION It is expected that Credit Suisse First Boston LLC will be the sole, lead or co-lead underwriter in each underwritten offering of certificates made by this prospectus. The U.S. Department of Labor issued PTE 89-90 to a predecessor in interest to Credit Suisse First Boston LLC. Subject to the satisfaction of the conditions specified in that exemption, as amended, including by PTE 97-34, PTE 2000-58 and PTE 2002-41, PTE 89-90 generally exempts from the application of the prohibited transaction provisions of ERISA and the Code, various transactions relating to, among other things-- - the servicing and operation of some mortgage assets pools, such as the types of mortgage asset pools that will be included in our trusts; and - the purchase, sale and holding of some certificates evidencing interests in those pools that are underwritten by Credit Suisse First Boston LLC or any person affiliated with Credit Suisse First Boston LLC, such as particular classes of the offered certificates. The related prospectus supplement will state whether PTE 89-90 or other similar exemption is or may be available with respect to any offered certificates underwritten by Credit Suisse First Boston LLC or other underwriters. INSURANCE COMPANY GENERAL ACCOUNTS The Small Business Job Protection Act of 1996 added a new Section 401(c) to ERISA, which provides relief from the fiduciary and prohibited transaction provisions of ERISA and the Code for transactions involving an insurance company general account. This relief is in addition to any exemption that may be available under PTCE 95-60 for the purchase and holding of certain classes of offered certificates by an insurance company general account. Under Section 401(c) of ERISA, the U.S. Department of Labor issued a final regulation on January 5, 2000, providing guidance for determining, in cases where insurance policies supported by an insurer's general account are issued to or for the benefit of a Plan on or before December 31, 1998, which general account assets are Plan assets. That regulation generally provides that, if the specified requirements are satisfied with respect to insurance policies issued on or before December 31, 1998, the assets of an insurance company general account will not be 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 a Plan on or before December 31, 1998 for which the insurance company does not comply with the requirements set forth in the final regulation under Section 401(c) of ERISA, may be treated as Plan assets. In addition, because Section 401(c) of ERISA and the regulation issued under Section 401(c) of ERISA do not relate to insurance company separate accounts, separate account assets are still treated as Plan assets, invested in the separate account. If you are an insurance company are contemplating the investment of general account assets in offered certificates, you should consult your legal counsel as to the applicability of Section 401(c) of ERISA and PTCE 95-60. 126 CONSULTATION WITH COUNSEL If you are a fiduciary for a Plan and you intend to purchase offered certificates on behalf of or with assets of that Plan, you should-- - consider your general fiduciary obligations under ERISA; and - consult with your legal counsel as to-- 1. the potential applicability of ERISA and the Code to investment, and 2. the availability of any prohibited transaction exemption in connection with investment. TAX EXEMPT INVESTORS A Plan that is exempt from federal income taxation under Section 501 of the Code will be subject to federal income taxation to the extent that its income is "unrelated business taxable income" within the meaning of Section 512 of the Code. LEGAL INVESTMENT If and to the extent specified in the related prospectus supplement, the offered certificates of any series may constitute mortgage related securities for purposes of SMMEA. Mortgage related securities are legal investments for entities-- - that are created or existing under the laws of the United States or any state, including the District of Columbia and Puerto Rico; and - whose authorized investments are subject to state regulations, 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 are legal investments for those entities. Prior to December 31, 1996, classes of offered certificates would be mortgage related securities for purposes of SMMEA only if they-- - were rated in one of the two highest rating categories by at least one nationally recognized statistical rating organization; and - evidenced interests in a trust consisting of loans directly secured by a first lien on a single parcel of real estate upon which is located a dwelling or mixed residential and commercial structure, which loans had been originated by the types of originators specified in SMMEA. Further, under SMMEA as originally enacted, if a state enacted legislation on or before October 3, 1991 that specifically limited the legal investment authority of any entities referred to in the preceding paragraph with respect to mortgage related securities under that definition, offered certificates would constitute legal investments for entities subject to the legislation only to the extent provided in that legislation. A number of states enacted laws limiting the authority of certain entities, particularly insurance companies, to invest in "mortgage related securities." Effective December 31, 1996, the definition of "mortgage related security" was modified to include among the types of loans to which the securities may relate, loans secured by first liens on "one or more parcels of real estate upon which is located one or more commercial structures." In addition, the related legislative history states that this expanded definition includes multifamily loans secured by more than one parcel of real estate upon which is located more than one structure. Through September 23, 2001, any state may enact legislation limiting the extent to which mortgage related securities under this expanded definition would constitute legal investments under that state's laws. However, any limiting legislation cannot affect the validity of a contract to purchase, hold or invest in, or require the sale or disposition of, mortgage related securities, if the contract or purchase predated that legislation. 127 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 by those securities; - federal credit unions may invest in mortgage related securities; and - national banks may purchase mortgage related securities for their own account without regard to the limitations generally applicable to investment securities prescribed in 12 U.S.C. Section 24 (Seventh), subject in each case to the regulations that the applicable federal regulatory authority may prescribe. 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 general standards in 12 C.F.R. Section 1.5 concerning "safety and soundness" and retention of credit information, "Type IV securities," which are defined in 12 C.F.R. Section 1.2(1) to include some commercial mortgage-related securities and residential mortgage-related securities. As defined in that rule, "commercial mortgage-related security" and "residential mortgage-related security" mean, in relevant part, a 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," we make no representation 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 NCUA has adopted rules, codified at 12 C.F.R. Part 703, which permit federal credit unions to invest in mortgage related securities under limited circumstances, other than stripped mortgage related securities, residual interests in mortgage related securities and commercial mortgage related securities, unless the credit union has obtained written approval from the NCUA to participate in the investment pilot program described in 12 C.F.R. Section 703.140. The OTS has issued Thrift Bulletin 13a (December 1, 1998), "Management of Interest Rate Risk, Investment Securities, and Derivatives Activities," 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" of the Federal Financial Institutions Examination Council, which has been adopted by the Board of Governors of the Federal Reserve System, the FDIC, the OCC and the OTS effective May 26, 1998, and by the NCUA effective October 1, 1998. That 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. There may be other restrictions, by way of statute, rule, regulation, order, guideline, policy statement, agreement or otherwise, on your ability either to purchase one or more classes of offered certificates of any series or to purchase offered certificates representing more than a specified percentage of your assets. Except as to the status of some classes as "mortgage related securities," we make no representations as to the proper characterization of any class of offered certificates for legal investment or other purposes. Also, we make no representations as to the ability of particular investors to purchase any class of offered certificates under applicable legal investment restrictions. These uncertainties may adversely affect the liquidity of any class of offered certificates. Accordingly, if your investment activities are subject to legal investment laws and regulations, regulatory capital requirements or review by regulatory authorities, you should consult with your legal advisor in determining whether and to what extent-- - the offered certificates of any class and series constitute legal investments or are subject to investment, capital or other restrictions; and - if applicable, SMMEA has been overridden in a State whose laws govern your investments. 128 PLAN OF DISTRIBUTION The certificates offered by this prospectus and the related prospectus supplements will be offered in series through one or more of the methods described in the next paragraph. The prospectus supplement prepared for the offered certificates of each series will describe the method of offering being utilized for those certificates and will state the net proceeds to us from the sale of those certificates. We intend that offered certificates will be offered through the following methods from time to time. We further intend that offerings may be made concurrently through more than one of these methods or that an offering of the offered certificates of a particular series may be made through a combination of two or more of these methods. The methods are as follows-- - by negotiated firm commitment or best efforts underwriting and public offering by one or more underwriters which may include one of our affiliate corporations, Credit Suisse First Boston LLC, as specified in the related prospectus supplement; - by placements by us with institutional investors through dealers; and - by direct placements by us with institutional investors. In addition, if specified in the related prospectus supplement, the offered certificates of a series may be offered in whole or in part to the seller of the mortgage assets that would back those certificates. Furthermore, the related trust assets for any series of offered certificates may include other securities, the offering of which was registered under the registration statement of which this prospectus is a part. If underwriters are used in a sale of any offered certificates, other than in connection with an underwriting on a best efforts basis, the offered certificates will be acquired by the underwriters for their own account. These certificates may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices to be determined at the time of sale or at the time of commitment therefor. The managing underwriter or underwriters with respect to the offer and sale of offered certificates of a particular series will be described on the cover of the prospectus supplement relating to the series and the members of the underwriting syndicate, if any, will be named in the relevant prospectus supplement. 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 payment of the offered certificates may be deemed to be underwriters in connection with those certificates. In addition, any discounts or commissions received by them from us and any profit on the resale of those offered certificates by them may be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended. It is anticipated that the underwriting agreement pertaining to the sale of the offered certificates of any series will provide that-- - the obligations of the underwriters will be subject to various conditions precedent; - the underwriters will be obligated to purchase all the certificates if any are purchased, other than in connection with an underwriting on a best efforts basis; and - in limited circumstances, we will indemnify the several underwriters and the underwriters will indemnify us against civil liabilities relating to disclosure in our registration statement, this prospectus or any of the related prospectus supplements, including liabilities under the Securities Act of 1933, as amended, or will contribute to payments required to be made with respect to any liabilities. The prospectus supplement with respect to any series offered by placements through dealers will contain information regarding the nature of the offering and any agreements to be entered into between us and purchasers of offered certificates of that series. 129 We anticipate that the offered certificates will be sold primarily to institutional investors. Purchasers of offered certificates, including dealers, may, depending on the facts and circumstances of the purchases, be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended, in connection with reoffers and sales by them of offered certificates. Holders of offered certificates should consult with their legal advisors in this regard prior to any reoffer or sale. LEGAL MATTERS Unless otherwise specified in the related prospectus supplement, particular legal matters in connection with the certificates of each series, including some federal income tax consequences, will be passed upon for us by-- - Cadwalader, Wickersham & Taft LLP; - Sidley Austin Brown & Wood LLP; or - Orrick, Herrington & Sutcliffe LLP. FINANCIAL INFORMATION A new trust will be formed with respect to each series of offered certificates. None of those trusts will engage in any business activities or have any assets or obligations prior to the issuance of the related series of offered certificates. Accordingly, no financial statements with respect to any trust will be included in this prospectus or in the related prospectus supplement. We have determined that our financial statements will not be material to the offering of any offered certificates. RATING It is a condition to the issuance of any class of offered certificates that, at the time of issuance, at least one nationally recognized statistical rating organization has rated those certificates in one of its generic rating categories which signifies investment grade. Typically, the four highest rating categories, within which there may be sub-categories or gradations indicating relative standing, signify investment grade. Ratings on mortgage pass-through certificates address the likelihood of receipt by the holders of all payments of interest and/or principal to which they are entitled. These ratings address the structural, legal and issuer-related aspects associated with the certificates, the nature of the underlying mortgage assets and the credit quality of any third-party credit enhancer. The rating(s) on a class of offered certificates will not represent any assessment of-- - whether the price paid for those certificates is fair; - whether those certificates are a suitable investment for any particular investor; - the tax attributes of those certificates or of the related trust; - the yield to maturity or, if they have principal balances, the average life of those certificates; - the likelihood or frequency of prepayments of principal on the underlying mortgage loans; - the degree to which the amount or frequency of prepayments on the underlying mortgage loans might differ from those originally anticipated; - whether or to what extent the interest payable on those certificates may be reduced in connection with interest shortfalls resulting from the timing of voluntary prepayments; - the likelihood that any amounts other than interest at the related mortgage interest rates and principal will be received with respect to the underlying mortgage loans; or 130 - if those certificates provide solely or primarily for payments of interest, whether the holders, despite receiving all payments of interest to which they are entitled, would ultimately recover their initial investments in those certificates. 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. 131 GLOSSARY The following capitalized terms will have the respective meanings assigned to them in this "Glossary" section whenever they are used in this prospectus. "ADA" means the Americans with Disabilities Act of 1990, as amended. "CERCLA" means the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. "CODE" means the Internal Revenue Code of 1986, as amended. "COMMITTEE REPORT" means the Conference Committee Report accompanying the Tax Reform Act of 1986. "CPR" means an assumed constant rate of prepayment each month, which is expressed on a per annum basis, relative to the then-scheduled principal balance of a pool of mortgage loans for the life of those loans. "DISQUALIFIED ORGANIZATION" means-- - the United States; - any State or political subdivision of the United States; - any foreign government; - any international organization; - any agency or instrumentality of the foregoing, except for instrumentalities described in Section 168(h)(2)(D) of the Code or Freddie Mac; - any organization, other than a cooperative described in Section 521 of the Code, that is exempt from federal income tax, except if it is subject to the tax imposed by Section 511 of the Code; or - any organization described in Section 1381(a)(2)(C) of the Code. "ELECTING LARGE PARTNERSHIP" means any partnership having more than 100 members during the preceding tax year which elects to apply simplified reporting provisions under the Code, except for some service partnerships and commodity pools. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "EUROCLEAR OPERATOR" means Euroclear Bank, Brussels, Belgium office, as operator of the Euroclear System. "EUROCLEAR TERMS AND CONDITIONS" means the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System and, to the extent that it applies to the operation of the Euroclear System, Belgian law. "FANNIE MAE" means the Federal National Mortgage Association. "FARMER MAC" means the Federal Agricultural Mortgage Corporation. "FASIT" means a financial asset securitization trust, within the meaning of, and formed in accordance with, the Small Business Job Protection Act of 1996 and Sections 860I through 860L of the Code. "FDIC" means the Federal Deposit Insurance Corporation. 132 "FINANCIAL INTERMEDIARY" means a brokerage firm, bank, thrift institution or other financial intermediary that maintains an account of a beneficial owner of securities. "FREDDIE MAC" means the Federal Home Loan Mortgage Corporation. "GINNIE MAE" means the Government National Mortgage Association. "GOVERNING DOCUMENT" means the pooling and servicing agreement or other similar agreement or collection of agreements, which governs the issuance of a series of offered certificates. "IRS" means the Internal Revenue Service. "LENDER LIABILITY ACT" means the Asset Conservation, Lender Liability and Deposit Insurance Act of 1996, as amended. "NET INCOME FROM FORECLOSURE PROPERTY" means income from foreclosure property other than qualifying rents and other qualifying income for a REIT. "NCUA" means the National Credit Union Administration. "OCC" means the Office of the Comptroller of the Currency. "OTS" means the Office of Thrift Supervision. "PARTY IN INTEREST" means any person that is a "party in interest" within the meaning of ERISA or a "disqualified person" within the meaning of the Code. "PASS-THROUGH ENTITY" means any-- - regulated investment company; - real estate investment trust; - trust; - partnership; or - other entities described in Section 860E(e)(6) of the Internal Revenue Code. "PLAN" means any retirement plan or other employee benefit plan, arrangement or account that is subject to the fiduciary responsibility provisions of the ERISA or Section 4975 of the Code. "PLAN ASSET REGULATIONS" means the regulations of the U.S. Department of Labor promulgated under ERISA relating to what constitutes assets of a Plan. "PTCE" means a prohibited transaction class exemption issued by the U.S. Department of Labor. "PTE" means a prohibited transaction exemption issued by the U.S. Department of Labor. "REIT" means a real estate investment trust within the meaning of Section 856(a) of the Code. "RELIEF ACT" means the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. "REMIC" means a real estate mortgage investment conduit, within the meaning of, and formed in accordance with, the Tax Reform Act of 1986 and Sections 860A through 860G of the Code. "SEC" means the Securities and Exchange Commission. 133 "SMMEA" means the Secondary Mortgage Market Enhancement Act of 1984, as amended. "SPA" means standard prepayment assumption. "UCC" means, for any jurisdiction, the Uniform Commercial Code as in effect in that jurisdiction. "U.S. PERSON" means-- - a citizen or resident of the United States; - a corporation, partnership or other entity created or organized in, or under the laws of, the United States, any state or the District of Columbia; - an estate whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States; or - a trust as to which-- 1. a court in the United States is able to exercise primary supervision over the administration of the trust, and 2. one or more United States persons have the authority to control all substantial decisions of the trust. In addition, to the extent provided in the Treasury Regulations, a trust will be a U.S. Person if it was in existence on August 20, 1996 and it elected to be treated as a U.S. Person. 134 The attached diskette contains one spreadsheet file that can be put on a user-specified hard drive or network drive. This spreadsheet file is "CSFB 2003-C5.XLS." The spreadsheet file "CSFB 2003-C5.XLS" is a Microsoft Excel(1), Version 5.0 spreadsheet. The spreadsheet file provides, in electronic format, statistical information that appears under the caption "Description of the Underlying Mortgage Loans" in, and on Exhibits A-1 and A-2 to, this prospectus supplement. Defined terms used, but not otherwise defined, in the spreadsheet file will have the respective meanings assigned to them in the glossary to this prospectus supplement. All the information contained in the spreadsheet file is subject to the same limitations and qualifications contained in this prospectus supplement. Prospective investors are strongly urged to read this prospectus supplement and accompanying prospectus in its entirety prior to accessing the spreadsheet file. - ---------- (1) Microsoft Excel is a registered trademark of Microsoft Corporation. (This page has been left blank intentionally.) -----END PRIVACY-ENHANCED MESSAGE-----