INDIVIDUAL MORTGAGE LOANS
                 (PRINCIPAL COMMERCIAL FUNDING II, LLC - PWR13)

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REP. NO. 6 - MORTGAGE STATUS; WAIVERS AND MODIFICATIONS
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     LOAN NOS. - 755163 (SHELDON PALMS APARTMENTS) AND 755168 (MANSFIELD VILLAGE
     ---------------------------------------------------------------------------
     SQUARE)
     -------

     EXPLANATION:
     Each of these Mortgage Loans has a Note A (the Mortgage Loan) and a Note B.
     Each Note B will not be held within the trust. Each Note B is subordinate
     to the Mortgage Loan, pursuant to the terms of a Co-Lender Agreement
     between the holders of Note A and Note B.

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REP. NO. 12 - ENVIRONMENTAL CONDITIONS
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     LOAN NO. - 755084 (NORTH BRUNSWICK MANOR)
     ------------------------------------------

     EXPLANATION:
     The Property had four 5,000 gallon UST that contained diesel fuel. These
     tanks were abandoned in November of 1989. At that time the tanks were
     cleaned and filled. Based on the documentation, it appears the closures
     were conducted in accordance with customary practices for tank closures at
     the time they were conducted. However, the documents did not indicate
     whether post closure testing was conducted. Thus, it is possible that
     surrounding soils and/or groundwater may have been impacted by these tanks.
     According to a signed affidavit from a property manager at the Property,
     "There was no evidence of stained soil at the time in question and all work
     was done under the supervision of the appropriate representatives of the
     Township of North Brunswick". David and Jack Halpern provide a guarantee of
     the environmental carve-outs and the LTV is 42.6%.

     LOAN NO. - 755131 (ALOHA MARKET CENTRE)
     ---------------------------------------

     EXPLANATION:
     The Mortgage Property had a dry cleaner that operated at the property since
     1989. In 2000, a subsurface investigation discovered shallow groundwater
     that was impacted with concentrations of PCE up to 27,200 ppb. A sub-slab
     depressurization system was installed in June of 2000 beneath the existing
     Safeway store. The system collects PCE vapors through perforated pipes
     beneath Safeway's floor and funnels the vapors outside. A conditional no
     further action letter was issued by the Oregon Department of Environmental
     Quality ("ODEQ") in March 2003, however a five-year review of the sub-slab
     venting system is required at the property by March 2008. In the event the
     Borrower does not receive on or prior to March 31, 2008 a no-further action
     letter from ODEQ and are instead required to do further remediation work
     costing in excess of $100,000, then Borrower must post a letter of credit
     within 30 days for the amount of the estimated remediation.



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 REP. NO. 14 - INSURANCE
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     LOAN NO. - 755104 (NEW CENTER GREENS)
     -------------------------------------

     EXPLANATION:
     The loss of rents coverage for this Property is $900,000. Twelve months
     coverage would equate to $963,431. The debt service coverage ratio for this
     Mortgage Loan is currently 1.41 times debt service. The loss of rents
     coverage obtained for this loan covers an amount of income that equates to
     debt service coverage of 1.25 times debt service.

     LOAN NO. -755150 (CEDARGATE APARTMENTS)
     ---------------------------------------

     EXPLANATION:
     The insurance certificate shows 80% co-insurance allowed for this Property.
     The building coverage amount is adequate to cover replacement cost for the
     building, and the policy in question is not a blanket policy.

     LOAN NO. -755152 (4003 NEPTUNE STREET)
     --------------------------------------

     EXPLANATION:
     There is no loss of rents coverage for this Property. The single tenant,
     Synovus Bank, has a lease that provides for no rent abatement and no right
     to terminate in the case of a casualty, so loss of rents coverage was
     waived.

     LOAN NO. - 755163 (SHELDON PALMS APARTMENTS)
     --------------------------------------------

     EXPLANATION:
     The apartment complex lies in flood zone AE. Flood insurance was not
     required because the buildings were built so that the lowest floor level is
     10.8 feet in elevation which is above the 10-foot flood zone elevation
     level applicable to the flood zone designation for this Property. The LTV
     is 48.8%.

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REP. NO. 17 - LOCAL LAW COMPLIANCE
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     LOAN NO. - 754996 (2960 POST ROAD)
     ----------------------------------

     EXPLANATION:
     The Mortgage Loan is legal non-conforming because the Property violates the
     front set back lines. Zoning requires a 25 ft. setback and the Property is
     approximately 14 ft. from the property line. It is also legal
     non-conforming because of parking. The Mortgage Loan is 8 spaces short of
     the required 113 spaces. These legal non-conforming uses are permitted
     unless there is damage that is 50% or more of the market value as
     determined by the tax assessor. The LTV for the Mortgage Loan is 26% and
     the loan is structured on a 20-year amortization schedule.


                                      -2-



     LOAN NO. - 755051 (650 WASHINGTON ROAD)
     ---------------------------------------

     EXPLANATION:
     The Mortgage Loan is legal non-conforming because of parking. The property
     is short 162 parking spaces of the required 282 spaces. Per the zoning
     code, in the event any nonconforming building is destroyed or partially
     destroyed, the nonconforming building may be reconstructed and the
     nonconforming use continued as long as the reconstruction is commenced
     within one year of the date of destruction or damage. There is law and
     ordinance coverage in place.

     LOAN NO. - 755084 (NORTH BRUNSWICK MANOR)
     -----------------------------------------

     EXPLANATION:
     The Mortgage Loan is legal non-conforming because zoning provides for 518
     apartment units for this site and there are currently 644 units, resulting
     in 126 too many units. It is also legal non-conforming because the property
     is short 262 parking spaces of the required 1,288 spaces. These legal
     non-conforming uses are permitted unless 50% or more of the buildings are
     destroyed. The units are in 34 separate buildings. The LTV is 42.6%. There
     is adequate open space to add parking to comply with code.

     LOAN NO. - 755152 (4003 NEPTUNE STREET)
     ---------------------------------------

     EXPLANATION:

     The Mortgage Loan is a potential non-conforming use because any bank built
     with drive thru windows after 1987 requires a special use approval by the
     city. Though the building was built in 1985, the code states that if the
     current use of the building has ceased operations for 180 or more
     consecutive days, the use shall require special use approval. The building,
     while not yet vacant for 180 days, is currently vacant and undergoing
     tenant build out. The Mortgage Loan is fully recourse until the tenant is
     in occupancy and lender has received evidence of the special use approval
     from the City of Tampa.

     LOAN NO. - 755163 (SHELDON PALMS APARTMENTS)
     --------------------------------------------

     EXPLANATION:
     The Mortgage Loan has 2 legal non-conforming uses. Two of the fourteen
     buildings encroach 5 feet into the required 50 feet side set back line. The
     buildings exceed the maximum height requirements by 5 feet. These legal
     non-conforming uses are permitted unless the damage is 50% or more of the
     current assessed value. The 14 separate buildings are sprinklered. Also,
     there is additional space on the Property to move the 2 buildings that
     encroach into the side set back lines if necessary.

     LOAN NO. - 755169 (PARK PLACE APARTMENTS)
     -----------------------------------------

     EXPLANATION:
     The Mortgage Loan has 3 legal non-conforming uses. The Property sits on
     both the front and side property lines while the code set forth a 10-foot
     setback requirement. The Property is currently 34 parking spaces short as
     the code requires 68 parking spaces. And, the current density of 25,849
     square feet of lot per unit and 270 feet width for each unit is 8,151
     square feet less than the required 34,000


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     square feet and 120 feet less than the required 390 feet. These legal
     non-conforming uses are permitted unless the damage is 40% or more of the
     assessed value. In the event that the buildings cannot be rebuilt, then the
     Borrower is required to pay down the loan so that there is at least a 1.20
     debt service coverage ratio. The Borrower's failure to pay down the loan is
     a full recourse default. There is law and ordinance coverage in place.

     LOAN NO. - 755179 (DAWSON FOREST APARTMENTS)
     --------------------------------------------

     EXPLANATION:
     The Mortgage Loan has a legal non-conforming use in that 2 of the 23
     apartment buildings violate the 35 feet height limit, Building 21 is 38.8
     feet tall and Building 20 is 38.9 feet. This legal non-conforming use is
     permitted unless the damage is 75% or more of the fair market value. The
     LTV is 65.8%.

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REP. NO. 23 - OTHER MORTGAGE LIEN
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     LOAN NO. - 755142 (500 MAITLAND DRIVE)
     --------------------------------------

     EXPLANATION:
     The Mortgage Loan permits additional financing secured by the Premises. The
     combined indebtedness shall not exceed 80% of the appraised value with a
     minimum of 1.20x DSCR. A subordination and standstill agreement must be
     executed and the current guarantor may not be a guarantor of the
     subordinate financing. The subordinate lender must be an affiliate of the
     Borrower and have no rights to transfer its interest in the subordinate
     loan. The terms and conditions of the loan documents evidencing or securing
     the financing are subject to Lender's prior approval. The right to obtain
     subordinate debt is personal to the current borrower. The current LTV is
     71.4%.

     LOAN NO. - 755155 (BEL AIR CENTER)
     ----------------------------------

     EXPLANATION:
     The Mortgage Loan permits additional financing secured by the Premises. The
     combined indebtedness shall not exceed 75% of the appraised value with a
     minimum of 1.20x DSCR. A subordination and standstill agreement must be
     executed. The terms and conditions of the loan documents evidencing or
     securing the financing are subject to Lender's prior approval. The current
     LTV is 67.4%.

     LOAN NOS. - 755163 (SHELDON PALMS APARTMENTS) AND 755168 (MANSFIELD VILLAGE
     ---------------------------------------------------------------------------
     SQUARE)
     -------

     EXPLANATION:

     The Mortgaged Property for each of these loans is encumbered by a Note B
     (not held in the trust), which is secured by the mortgage for the Mortgaged
     Property. Each Note B is subordinate to Note A, pursuant to the terms of a
     Co-Lender Agreement between the holders of Note A and Note B.


                                      -4-



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REP. NO. 26 - LICENSES AND PERMITS
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     LOAN NO. - 755107 (TEEL VILLAGE SHOPPING CENTER)
     ------------------------------------------------

     EXPLANATION:
     Final certificate of occupancies have not been received from four tenants
     (the Gandy lease, Enterprise Leasing Company, Little Caesars and Salon Pour
     Vous). The Note is fully recourse until all four certificates of occupancy
     have been obtained. Gandy, Enterprise Leasing Company and Little Caesars
     have all opened for business and the certificates of occupancies are
     anticipated shortly. The loan is 61.3% LTV.

     LOAN NO. - 755152 (4003 NEPTUNE STREET)
     ---------------------------------------

     EXPLANATION:
     The final certificate of occupancy has not been received. The loan is fully
     recourse until the tenant is in occupancy and the certificate has been
     received.

     LOAN NO. - 754493 (ONE CITY CENTER)
     -----------------------------------

     EXPLANATION:
     The Property is part of a condominium association containing the Property,
     an adjacent 23-story 406 unit residential condominium complex called Realm
     Condominiums and a shared parking garage. The city will issue a final
     certificate of occupancy upon completion of the entire project. The
     residential condominiums are still being completed. A temporary certificate
     of occupancy has been received for the Property. There is a $540,000
     holdback for unfinished tenant improvements. The escrow will not be
     released until the final certificate of occupancy has been received.

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REP. NO. 27 - CROSS COLLATERALIZED
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     LOAN NOS. -755163 (SHELDON PALMS APARTMENTS) AND 755168 (MANSFIELD VILLAGE
     --------------------------------------------------------------------------
     SQUARE)
     -------

     EXPLANATION:
     Each of these Mortgage Loans consists of a Note A (which is in the trust)
     and a Note B that is not held in the trust. Each Note A and Note B are
     cross-defaulted.


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REP. NO. 34 - SINGLE PURPOSE ENTITY
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     LOAN NO. - 755084 (NORTH BRUNSWICK MANOR)
     -----------------------------------------

     EXPLANATION:
     The borrowing entity is not a single purpose entity. The LTV is 42.6%.

     LOAN NO. - 755163 (SHELDON PALMS APARTMENTS)
     --------------------------------------------

     EXPLANATION:
     The borrowing entity is not a single purpose entity. The LTV is 48.8%.

     LOAN NO. - 755168 (MANSFIELD VILLAGE SQUARE)
     --------------------------------------------

     EXPLANATION:
     The borrowing entity is not a single purpose entity. The LTV is 58.9%.

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REP. NO. 49 - TAX PARCELS
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     LOAN NO. - 755250 (LAKESIDE MARKETPLACE)
     ----------------------------------------

     EXPLANATION:
     The Property is not separately assessed. The Borrower has made an
     application for the creation of a separate tax parcel. Impounding for real
     estate taxes for the entire tax parcel is permitted following the
     occurrence of an Event of Default. The LTV is 59.7%.

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REP. NO. 51 - TERRORISM INSURANCE
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     LOAN NO. - 755131 (ALOHA MARKET CENTRE)
     ---------------------------------------

     EXPLANATION:
     Terrorism coverage for this property was waived. The loan to value on this
     loan is 55.8%.

     755146: Westlake I & II
     -----------------------

     LOAN NO. - 755146 (WESTLAKE I & II)
     -----------------------------------

     EXPLANATION:
     A stand-alone terrorism insurance policy was purchased for this property by
     the Borrower, as terrorism coverage is excluded from the all-risk policy.
     The stand-alone policy has a $100,000 deductible.

     LOAN NO. - 755171 (AMERICAN BOULEVARD WEST)
     -------------------------------------------

     EXPLANATION:
     Terrorism coverage for this property was waived. The value of the land per
     the appraisal exceeds the loan amount.


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